10-Q

請在以下複選框中打勾，指示註冊人：(1)在前12個月(或註冊人被要求提交這些報告的更短期間內)已經提交了1934年證券交易法第13或15(d)條規定需要提交的所有報告；以及(2)在過去的90天內一直受到了此類文件提交要求的限制。是的 ☒ 不是 ☐

請在以下複選框中打勾，指示註冊人是否已經電子提交了根據Regulation S-T規則405條(本章節的§232.405條)需要提交的所有互動數據文件在過去的12個月內(或註冊人被要求提交這些文件的更短期間內)。是的 ☒ 不是 ☐

勾選以下選框，指示申報人是大型加速評估提交人、加速評估提交人、非加速評估提交人、小型報告公司或新興成長型公司。關於「大型加速評估提交人」、「加速評估提交人」、「小型報告公司」和「新興成長型公司」的定義，請參見《交易所法規》第12億.2條。

如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 ☐

請勾選「是」，如果報告人是外殼公司（定義見證券交易法規則12b-2）。是 ☐ 不是 ☒

截至2024年11月8日，註冊者持有 39,990,424 shares of A類普通股，每股面值$0.0001，和 124,067,498 V類普通股，每股面值$0.0001，已發行的股票。

除非另有規定，或者除非上下文另有要求，「我們」，「我們」，「我們的」，「公司」，和「LifeWallet」是指MSP Recovery, Inc.，也就是LifeWallet的經營者。如在本10-Q表格中使用，除非另有註明或上下文另有要求，以下術語定義如下：

“2023年10-K表格「」表示公司截至2023年12月31日的年度報告，該報告於2024年4月15日提交給證券交易委員會。

“算法指的是一組執行特定操作的指令。我們的數據科學家和醫療專業團隊創建專有的指令集，或稱爲「算法」，用於識別我們委託人數據集中的恢復機會。我們的專有算法結合了我們委託人數據集中的各種數據點，可能包括但不限於醫療編碼分類系統，如診斷代碼（例如，ICD-8/ICD-9/ICD-10代碼）、程序代碼（例如，CPT代碼）和藥物代碼（例如，NDC代碼）；非醫療數據如人口統計和日期範圍；以及來自公共來源的數據，如事故報告、犯罪事件報告和提供事件發生細節的其他報告。這些算法隨後應用於聚合的委託人數據集，在我們委託人提供的數十億行數據中進行篩選，以識別符合給定算法標準的恢復機會。識別到的潛在恢復將進一步由我們的醫療團隊進行質量審核；

“轉讓人“指的是不可撤銷地將索賠轉讓給公司或其子公司的醫療保健支付者、提供者或其他實體；

“賬單金額（又稱爲收費金額或零售價格）是由提供者賬單所列服務的全部商業價值，或提供者通常會對所提供服務收取的全部費用。特定程序代碼的賬單金額基於提供者，可能因地點而異。當在從讓渡者收到的數據中未提供賬單金額時，公司會使用已支付金額或已調整支付值（如有），以推算出近似的賬單金額值。當我們必須推算賬單金額以確立損害賠償時，計算的金額可能會被對方當事人提出異議。

“業務組合「」指的是根據下文定義的MIPA，在2022年5月23日達成的交易，在第3條中有更詳細的描述。業務組合，列於本季度報告其他部分的簡明合併基本報表；

“CCRA"意味着索賠成本回收協議；依據該協議，索賠被不可撤銷地分配給公司或其附屬實體；

“和Topsoe有着幾十年的良好合作關係，我們很自豪地延續了這個獎項的合作伙伴關係。“代表CF Principal Investments LLC，Cantor Fitzgerald, L.P.的一個附屬公司；

“”）的日期。「」是指公司於2022年5月23日修訂的第二份修正和重訂章程，截至2023年10月12日修訂；

“開空“意味着公司在任何和所有索賠或潛在索賠中，擁有、曾經擁有或將來可能轉讓給公司的權利、標題和/或權益（無論是否提出），包括對任何第三方的訴因和救濟的所有權利，無論是主要支付方還是負責方，依法律或公平原則。術語「索賠」通常包括但不限於：(i) 根據消費者保護法和法規產生的索賠；(ii) 根據醫療保險和醫療保險優先支付法的次付款人法規產生的索賠，無論是基於合同、侵權、法定權利或其他原因，與提供醫療服務或供應品的付款有關；(iii) 根據任何州法規和普通法產生的索賠，不論通過轉讓或其他方式賦予公司的權利；以及(iv) 對任何潛在訴因的所有救濟權、標題和權益，即使尚未確定，因爲在識別或發現索賠之日尚未證明責任，此外還包括所有應收賬款、一般無形資產、支付無形資產、以及目前存在或將來產生的其他支付權利，以及上述所有的產品和收益；

“A類普通股「」表示公司A類普通股，每股面值$0.0001，在納斯達克全球市場以標的「LIFW」交易，具體細節請參見第3註解，業務組合，這是本季度報告中其他地方包含的簡明合併基本報表;

“B類單位指的是Opco的非投票經濟B類單位，詳細描述見第3註釋，業務組合包含在本季度報告其他部分的簡明合併基本報表中；

“五類普通股“是指公司的V類普通股，每股面值爲0.0001美元，具體情況詳見第3條說明，業務組合，包含在本季度報告的其他地方的簡明合併基本報表中；

“交割「」表示業務組合的結束，更詳細的描述請參閱附註3。業務組合，在本季度報告的其他地方包括的簡表財務報表；

“結束日期「」指的是2022年5月23日，即業務組合結束日期，詳細描述見附註3。業務組合，列於本季度報告其他部分的簡明合併基本報表；

“公司「」指的是MSP Recovery，Inc.，即LifeWallet的經營主體，一個特拉華州的公司；

“CPIA認股權「」指的是2022年9月30日簽訂的認購協議，根據該協議，公司授予Brickell Key Investments, LP購買2666667股A類普通股的權利，購買價格爲每股0.0025美元。

“現有認購權協議「」指的是2020年8月13日由公司和大陸股份轉讓和信託公司簽訂的權證協議。

“海澤爾"海澤爾"指的是海澤爾控股 I LLC，一家特拉華州的有限責任公司，以及其關聯公司；

“HPH“表示Hazel Partners Holdings, LLC，一個特拉華州的有限責任公司；

“律師事務所“La Ley與John H. Ruiz P.A.以MSP Recovery律師事務所和MSP律師事務所PLLC的名義經營，這些事務所由公司的董事會主席兼首席執行官John H. Ruiz擁有；

“遺留MSP“意味着MSP恢復，它於2014年作爲醫療補助和醫療保險次級支付法案的恢復專家組織；

“LCAP"指的是Lionheart Acquisition Corporation II，即在交割前的公司；

“有限責任公司協議「」意味着Opco的首份修訂和重新規定的有限責任公司協議;

“成員「」是指在MIPA（下文定義）中定義的MSP購買公司的成員；

“成員代表指的是約翰·H·魯伊茲，單獨以成員代表的身份。

“MIPA“指的是會員權益購買協議，日期爲2021年7月11日，具體描述見附件3，業務組合包含在本季度報告其他部分的簡明合併基本報表中；

“MSP原則”是指董事會主席兼首席執行官John H. Ruiz，以及董事兼首席法律官Frank C. Quesada；

“MSP Recovery「」指的是MSP Recovery，LLC，一家佛羅里達有限責任公司；

“MSP RH系列01”表示MSP Recovery Holdings Series 01, LLC，一家特拉華有限責任公司；

“MSP RH系列01恢復服務協議指MSP RH系列01與MSP Recovery於2020年10月23日簽署的恢復服務協議;

“新股認購權證“意味着大約102800萬warrants，每個可行使購買1/25的A類普通股（但只能以25的批量行使以購買完整股份），這些warrants在交易結束日作爲紅利發放給A類普通股的記錄持有人；

“野村票據“指2022年5月27日簽發給野村的期票，如有修改和修訂；

“Opco” 意指Lionheart II Holdings，LLC，一家特許公司的全資子公司;

“支付金額“（即醫療保險支付利率或批發價格）是指從健康計劃或保險公司支付給提供者的金額。這個金額因付款方而異。例如，醫療保險通常支付的服務費率低於商業保險公司。支付金額源自我們從委託人那裏收到的索賠數據。在有限的情況下，

接收到的數據缺少付費價值，我們的團隊使用一個公式計算付款金額。所使用的公式提供了門診服務的費率，並根據行業標準商業費率中排名第95百分位的習慣性費率推導出來，如果該數據不可用，則使用數據中存在的開單金額。然後根據習慣的 Medicare 調整來調整這些金額，以確定計算的付款金額。管理層認爲，該公式提供了 Medicare 付款金額率的保守估計，基於行業研究顯示私人保險公司和 Medicare 門診服務費率之間差異範圍。我們定期更新該公式，以增強計算的付款金額，如果從我們的委託人那裏接收到的數據中未提供該信息。管理層認爲，這一措施爲潛在收回提供了有用的基線，但並不代表可能收回的潛在可收回索賠的總金額，而後者可能受到任何適用潛在法定索賠（如雙倍賠償金或罰款）的影響。該計算考慮了總付款金額的約6.86%增加。在必須推斷付款金額以確定損害賠償金的情況下，對手方可能對計算的金額提出異議；

“公共認股權證“意味着僅在無現金基礎上可行使的warrants，用於購買1/25的一股A類普通股（但只能按25份的批次行使以購買完整的分享），根據其條款，如第3節中更詳細說明的那樣，業務組合包含在本季度報告其他部分的簡明合併基本報表中；

“PVPRC” 指可能可收回的索賠的累計支付金額價值。我們分析我們的索賠組合，並使用算法確定可能可追回的索賠。PVPRC 是衡量這些可能可收回的索賠的已支付金額的指標。在從我們的轉讓人那裏收到的數據缺乏支付價值的有限情況下，適用支付金額定義中描述的調整公式，將PVPRC增加約6.33％；

“追回款項“指的是，關於任何索賠，任何和所有的總收入，包括賠償、利息、罰款和費用，這些可能與該索賠有關（包括由被告或第三方在訴訟程序中爲滿足該索賠而支付或發行的任何和所有現金、證券、工具或其他財產）;

“美國證券交易委員會（"SEC"）「美國證券交易委員會」是指美國證券交易委員會；

“系列「」是指根據特拉華州法律成立的一系列特拉華州有限責任公司，公司用於擁有和隔離資產，包括CCRA。

“MRCS系列”指MRCS系列，一系列MDA，特拉華州系列有限責任公司；

“替代持股公司"替代持股公司"指的是替代持股公司有限責任公司，這是一個特拉華州的有限責任公司，是公司的全資子公司；

“上部單位”是指每對由一股V類普通股和一個B類單位組成，如註釋3中更詳細說明的那樣，業務組合包含在本季度報告其他部分的簡明合併基本報表中；

“Virage“指的是Virage Capital Management LP，一家特拉華州的有限合夥企業；

“VWAP「成交量加權平均價」是指彭博有限合夥公司報道的納斯達克股票市場美股盤中每個交易日的普通股股價的每日成交均價。

“VRM「」指的是Virage Recovery Master LP，一家特拉華州有限合夥企業，也是Virage的關聯公司；

“VRm MSP”指的是VRm MSP Recovery Partners LLC，一個特拉華州有限責任公司，以及VRm、系列MRCS和MSP Recovery的共同投資工具;

“VRm權證「」指的是根據Virage MTA修訂協議（如下定義）發行的那些權證協議，包括初始權證（「初始Virage權證」）和每月權證（「每月Virage權證」），以$0.0001每股的價格購買A類普通股，在發行日期起兩年後到期。

經修訂的首次Virage認股權證書於2024年1月1日生效，數額等於未償基礎金額（累積基礎的計算）每個日曆月末餘額的1%與發行前五天期間的A類普通股的VWAP的商數，起始日期爲2023年5月24日，結束日期爲2023年12月31日，因此，Virage有權購買28298329股A類普通股，截止日期爲2026年1月1日。

每月Virage認股權證可以每個日曆月發行一次，從2024年1月31日開始，直到對Virage的義務全部償付，金額等於每個日曆月末餘額的1.0%的商（每月末餘額應根據Virage MTA修正案中規定的公式，按日增加至年化20%）欠Virage的金額，以及我們A類普通股的VWAP。在我們對Virage的義務全部償付之前，公司每月都有選擇權以現金中支付Virage部分或全部金額，數量等於每月末餘額的1.0%（每月末餘額應根據一份文件中規定的公式，按日增加至年化20%）。

截至每個前一個日曆月末應支付給Virage的金額的Virage MTA修訂)和/或後續月度Virage warrants的發行;

“流動資金信貸設施指的是在註釋10中更詳細描述的信貸協議，索賠融資義務和應付票據, 在本季度報告的其他地方包括的簡表財務報表；

“全球貨幣”指的是YA II PN有限合夥基金，由Yorkville Advisors Global LP管理，註冊地爲開曼群島的豁免有限合夥基金；以及

“Yorkville SEPA「」是指公司與Yorkville之間的某個備用股權購買協議，該協議日期爲2023年11月14日，並可能不時進行修訂。

基本報表中的定義條款，若未在此處定義，則採納基本報表或我們2023年的10-k表中賦予它們的含義。

附註1. 業務描述

2022年5月23日（「結案日期」），MSP Recovery, Inc.，即LifeWallet，一個特拉華州公司（前身爲獅心收購公司II（「LCAP」）），完成了先前宣佈的業務組合，根據2021年7月11日簽署的特定會員權益購買協議（「MIPA」）及其修訂版本（以下簡稱「MIPA」），簽署方包括公司、公司的全資子公司Lionheart II Holdings, LLC、MSP Recovery, LLC和合並和整合的附屬公司（「Legacy MSP」）、Legacy MSP的成員（「成員」）和成員代表約翰·H·魯伊茲。根據MIPA，成員出售並轉讓了在Legacy MSP中的所有會員權益，換取公司的非經濟普通股<Class V普通股，幣值$，公司的「Class V Common Stock」）以及Opco的無投票經濟性的Class b Units（「Class b Units」，每對由一個share of Class V Common Stock和一個Class b Unit組成的Up-C Unit）（此交易稱爲「業務組合」）。 Up-C Units可由Up-C Unit持有人自行轉換爲公司的Class A Common Stock，並經董事會批准。有關詳情請參見附註3。結案日期後，公司唯一的資產是其持有的MSP Recovery, LLC的股權。公司是經營成員，因此對Legacy MSP進行合併。0.0001，公司的「Class V Common Stock」）以及Opco的無投票經濟類b Units（「Class b Units」，每對由一個share of Class V Common Stock和一個Class b Unit組成的Up-C Unit）（這筆交易稱爲「業務組合」）。Up-C Units可由持有者自行選擇轉換爲公司的Class A普通股，並經董事會批准。有關詳細信息，請參見附註3。結案日期後，公司唯一的資產是其對MSP Recovery, LLC的股權。該公司是經營成員，因此對Legacy MSP進行合併。業務組合，有關詳情，請參見注3。

Legacy MSP於2014年成立，是一家醫療和醫療補助法案（Medicaid and Medicare Secondary Payer Act）恢復專家。該公司利用其專有的內部數據分析平台，審核由次級支付者（如健康計劃、MSO、醫療服務提供者和獨立醫師協會）分配的健康索賠。該平台使公司能夠確定具有潛在恢復路徑的索賠費用恢復權利，其中索賠費用不應由次級支付者支付，或者應該由第三方實體退款。

MSP Recovery被指定通過CCRA從次級付款人那裏獲得索賠的回收權。在執行CCRA之前，MSP Recovery利用其專有的內部數據分析平台查看擬分配人的索賠集合，以識別具有潛在回收路徑的索賠。MSP Recovery的資產是這些不可撤銷的廣泛的健康索賠回收權分配，受聯邦和州法律法規支持。MSP Recovery的辦公室位於美國和波多黎各。

對經營資本信貸設施的修正

2023年3月29日，公司子公司Subrogation Holdings及其母公司MSP Recovery簽署了經營資本信貸設施，承諾最多撥款48.0 百萬美元的資金。某些條款被修改，這些修改已在2023年11月10日日期的第二次修改和重訂頭等留置信貸協議中載明。請參見「榛芝經營資本信貸設施和榛芝墊付款貸款」中的摘要 “在第10號註釋中看到。索賠融資義務和應付票據. 2024年8月2日，Subrogation Holdings與HPH達成了一項修改經營資本信貸設施條款的協議（「HPH書面協議」），其中：（i）延長了最多可提取的金額爲$的期限23.3 百萬美元（附有 40％原發行折扣）用於營運資金，分成八 $百萬的分段，每段之間至少間隔一個月，直至2025年9月可提取1.75 ；並且（ii）提供了一個$百萬的貸款（附有百萬美元貸款（附有3.3 美元的原始發行折扣） 40截至2024年8月31日，由原發行折扣（Oridnaory issue discount）注資以獲取額外債權（「新債權」），該新債權用於擔保營運資金信貸設施（統稱爲（i）和（ii）「營運徵收層」。2024年10月1日，Hazel簽署了《營運資金信貸設施第3號修正案》（「營運資金信貸設施第3號修正案」），正式確認HPH函件協議中規定的條款。

此外，公司保留了與第三方出售新債權並僅在總考慮金額高於HPH同意金額（「Hazel底價」）的情況下進行貨幣化的權利，所得款項用於：（1）償還營運徵收層，（2）在所得款項超過Hazel底價的情況下， 50公司用於營運費用的%， 50用於償還營運資金信貸設施的定期貸款A和B的%，並且如果僅貨幣化新債權的%，則所得款項用於償還營運徵收層，以及任何超過 50Hazel底價%的款項， 50如果有%的Hazel底價款項可用， 50超額的%將提供給公司用於營運費用， 50超額的%將用於進一步償還營運徵收層，並且然後償還營運資金信貸設施的定期貸款A和B。

根據營運資本信貸計劃（x），所借金額和義務受到公司索賠組合中某些索賠收入的質押擔保，且用於擔保購貨貸款的留置權次於用於擔保營運資本信貸計劃的留置權。爲了擔保從2024年1月開始的Term Loan b的額外融資，提供了以下額外抵押品：（i）對公司索賠組合中某些索賠收入的質押，最高可達$14 百萬；（ii）對Messrs. John H. Ruiz和Frank C. Quesada的關聯公司股權的質押；（iii）對Messrs. John H. Ruiz和Frank C. Quesada的關聯公司擁有的房地產的抵押（「抵押」）；和（iv）由Messrs. John H. Ruiz和Frank C. Quesada作爲主要債務人提供的個人擔保，擔保從2024年1月開始的Term Loan b的額外融資（「個人擔保」），並根據第三次修正協議確保營運資本信貸計劃的Term Loan A和Term Loan b次於運營收款底線，並

金額通過操作收款底面提供資金的部分由新索賠作爲抵押。根據《營運資本信貸便利》第3號修正案，HPH將在以下情況下完全解除抵押和個人擔保：(x) 操作收款底面的本金已完全償還（包括任何原始發行折扣），或(y) 截至2024年12月31日的操作收款底面上提取的金額已完全償還（以提取和融資爲基礎），以此日期爲準。

根據操作收款底面，公司在以下日期獲得： (i) 2024年8月2日，$3.5 百萬的營運資本，用於2024年7月和8月； (ii) 2024年8月29日，資金爲$2.0 百萬，用於收購新索賠； (iii) 2024年9月3日，$1.75 百萬的營運資本，用於2024年9月； (iv) 2024年10月2日，$1.75 百萬的營運資本，用於2024年10月； (v) 2024年10月24日，$1.75 百萬的營運資本，用於2024年11月。公司有$5.25 截至本文件提交之日，運營收款底線的剩餘流動資金容量爲百萬。

不符合納斯達克上市要求通知

2024年6月7日，公司收到納斯達克上市資格工作人員（「工作人員」）的通知，告知公司未能符合納斯達克的買盤價格要求，因爲公司A類普通股的收盤買盤價格已低於$1.00 每股價格連續30個交易日（從2024年4月25日到2024年6月6日）。根據納斯達克市場規則5810(c)(3)(A)，公司被提供了180個日曆天的合規補救期，直到2024年12月4日，以恢復與買盤價格要求的合規。2024年9月25日，持有我們至少大多數投票資本股的股東，包括我們的A類普通股和V類普通股，通過書面同意批准一項決議，授權董事會修改公司的章程，以實施A類普通股的反向拆股（「反向拆股」），反向拆股比例範圍爲 1:3 to 1:30，並授權公司董事會自行判斷修改的時間和反向拆股的具體比例。根據2024年11月12日的公告，董事會決定以 1:25的比例進行反向拆股，預計將在2024年11月18日開盤時生效。反向拆股將導致A類普通股和V類普通股的數量減少。 30,975,324 和 124,067,498截至2024年9月30日，分別導致 1,239,013 和 4,962,700 在進行儲備股票拆分後。

如果公司在此180天的合規期內未能恢復合規，公司可能有資格將其上市轉移到納斯達克資本市場，以利用該市場提供的額外180天合規期，前提是公司滿足公開持股的市場價值持續上市要求及納斯達克所有其他適用的初始上市標準，並在第二個合規期內提供書面通知，表明其打算解決該缺陷。如果工作人員認爲公司無法解決該缺陷，或公司其他方面不符合條件，則會收到書面通知，告知其證券將面臨退市。在此情況下，公司可以根據適用的納斯達克上市規則，向聽證委員會上訴退市決定。

近期和解

2024年7月16日，公司與一組關聯的財產和意外險保險公司（「P&C保險公司」）達成全面和解（「2024年7月和解」）。保密和解協議的條款包括：

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P&C保險公司同意提供十年的歷史數據（識別2014年1月1日至生效日期處理的所有索賠）以及未來索賠的數據共享，延續一年，幫助公司對其當前和未來指定的醫療保險索賠進行調解，以便能夠收回因未能支付或報銷而產生的所有索賠；

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P&C保險公司實施公司的福利協調清算解決方案；

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一項爲期10年的協議，以合作方式或通過有約束力的調解，解決公司當前及未來擁有的相關醫療保險索賠（留置權）；

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財產與傷害保險公司的協議，確認他們是公司通過數據共享識別的任何未報銷醫療保險留置權的主要支付方，以及財產與傷害保險公司同意將對其他未支付留置權或從醫療保險資金和財產與傷害保險公司收取雙倍費用的第三方的所有收款權利轉讓給公司；

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一項保密的現金支付以解決歷史索賠。

在2024年8月19日，公司宣佈與一家藥品製造商達成$3.1 百萬現金和解（「2024年8月和解」），涉及公司指控制造商違反反壟斷法提高藥品價格的案件。

2024年7月和2024年8月和解產生的營業收入已計入截至2024年9月30日的三個月和九個月的綜合經營報表中的索賠回收收入。

約克維爾收購協議和約克維爾備用股權購買協議

開啓 2023年1月6日, 公司與開曼群島豁免公司YA II PN, Ltd.（「約克維爾」）簽訂了公司普通股購買協議（「約克維爾購買協議」）。根據約克維爾收購協議，公司有權不時按其選擇權向約克維爾出售 $1.0 十億購買公司的A類普通股，但須遵守約克維爾收購協議中規定的條款、條件和限制。

2023年11月14日，公司與約克維爾簽訂了備用股權購買協議（經修訂後的「約克維爾SEPA」），該協議全面修訂並重申了上述約克維爾收購協議。根據約克維爾SEPA, 公司有權向約克維爾出售不超過 $250.0 其中的一百萬個在約克維爾SEPA任期內，不時受約克維爾SEPA規定的某些限制和條件的約束和條件的普通股。根據約克維爾SEPA向約克維爾出售普通股以及任何此類出售的時機均由公司選擇，公司沒有義務根據約克維爾SEPA向約克維爾出售任何普通股，除非在下文所述的某些情況下，約克維爾可能提交的通知。

可轉換票據

關於約克維爾SEPA，在遵守其中規定的條件的前提下，約克維爾同意以可轉換本票（「可轉換票據」）的形式向公司預付本金總額爲美元15.0 百萬。2023年11月14日，公司向約克維爾發行了本金爲美元的可轉換票據（「票據 #1」）5.0 百萬，從而爲公司帶來收益 $4.73 百萬。2023年12月11日，我們向約克維爾發行了本金爲美元的可轉換票據5.0 百萬，從而爲公司帶來收益 $4.75 百萬。2024年4月8日，我們向約克維爾發行了第三張可轉換票據，本金爲美元5.0 百萬，從而爲公司帶來淨收益 $4.75 百萬.

任何可轉換票據的未清餘額應計利息，年利率等於 5.0%，可能會增加到 18在可轉換票據中描述的違約事件時支付，並在到期時或觸發事件發生時支付。每張可轉換票據的到期日爲2025年9月30日，可由約克維爾選擇延期。約克維爾可以將可轉換票據轉換爲公司普通股，轉換價格等於兩者中較低者 120每批收盤日前一天VWAP的百分比（「固定價格」）或 95在轉換前的連續七個交易日內，最低每日VWAP的百分比（「轉換價格」），在任何情況下轉換價格都不得低於 20簽署最終文件前一交易日收盤價的百分比。可轉換票據於2024年9月30日生效，公司目前沒有可用的流動性來履行上述債務。

普通股的銷售

根據約克維爾SEPA中規定的條款和條件，在約克維爾SEPA終止之前，公司有權不時自行決定指示約克維爾通過向約克維爾發出書面通知（「預先通知」）來購買指定數量的普通股（「預先通知」）。雖然任何預付款沒有強制性的最低金額，但不得超過等於的金額 100在提前通知之前的連續五個交易日內，每日交易量平均值的百分比。

根據公司預付款購買的普通股將以等於 (i) 的價格購買 98在預先通知交付的適用日期的正常交易時間內，普通股VWAP的百分比或 (ii) 97自預先通知交付之日起的連續三個交易日內，普通股最低每日價值淨值的百分比，但每日VWAP低於公司在預先通知中規定的最低可接受價格或相關交易日沒有VWAP的當天的每日VWAP除外。公司可以在每份預先通知中設定最低可接受的價格，低於該價格的公司沒有義務向約克維爾進行任何銷售。

在截至2024年9月30日的三個月和九個月中，公司出售了 10,049,967 和 11,859,069 根據約克維爾SEPA下發出的投資者通知，股票分別向約克維爾出售，價格在美元之間0.15 和 $0.84 每股，所得款項用於：(i) 將約克維爾票據 #1 下的欠款減少美元1.3 百萬和美元53.6 截至2024年9月30日的三個月的本金和利息分別爲千美元，以及美元1.8 百萬和美元0.2 截至2024年9月30日的九個月的本金和利息分別爲百萬美元，以及 (ii) 美元1.4 百萬和美元2.0 百萬美元的款項，以減少根據該條款所欠的款項修訂和重述了截至2024年9月30日的三個月和九個月的野村本票。

公司有權向約克維爾出售不超過 $250 在約克維爾SEPA終止之前，其A類普通股的數百萬股。截至 2024 年 11 月 8 日，大約 18.1 根據約克維爾SEPA，已向約克維爾出售了百萬股股票。由於公司已經註冊 50 約克維爾轉售百萬股股票，按收盤價美元計算0.12 2024年11月8日，該公司估計其在約克維爾SEPA下目前的額外融資能力約爲美元4.0 百萬，除其他外，取決於我們的A類產品的流動性和價格波動以及投資者對我們的A類的需求

通用股票，以及Yorkville SEPA下的觸發事件和違約事件。如下所述，目前Yorkville SEPA的收益正用於償還第三修訂重述的野村票據和Yorkville可轉換票據。

SEPA的收益用途 - 野村票據，第三版Virage MTA修正案

根據第二修訂重述的野村票據的要求（在註釋3中定義，業務合併), 50%的Yorkville SEPA總收益將用於償還所欠款項（首先用於未支付的利息，如果有的話，然後用於本金），其餘 50%的這些收益將用於償還可轉換票據下應付的款項（如果有的話），或在可轉換票據全部償還後支付給公司。根據第三版Virage MTA修正案， 25%的公司部分來自Yorkville SEPA的任何淨收益將用於在可轉換票據完全償還後償還VRm全額回報。

此外，在違約事件發生及持續期間，可轉換債券應立即到期並應支付，公司應向Yorkville支付到期的本金和利息。違約事件包括但不限於: (i) A類普通股在任何主要市場上連續十（10）個交易日內停止報價或上市（公司目前在納斯達克交易所報價並上市），以及(ii) 未能及時向SEC提交任何週期性報告，超過SEC規定的截止日期，包括根據證券交易法第120億.25條的延期。無論如何，如果此類轉換以及Yorkville及其附屬公司擁有的所有其他普通股的轉換總數超過 9.99%的公司普通股的流通股數量。如果在2023年11月14日及之後的任何時間: (i) 日交易加權平均價格（VWAP）低於$0.15 （根據Yorkville信函協議降低的「底價」）連續十個交易日（「底價觸發」），或(ii) 公司已經發行幾乎所有可在交易限額下發行的股份（如下面定義）（「交易限額觸發」），或(iii) 母公司嚴重違反2023年11月14日與Yorkville和公司之間簽訂的註冊權協議（「註冊權協議」），且該違反在二十個交易日內未得到補救，或(iv）發生「事件」（如在註冊權協議中定義）（「註冊事件觸發」，與底價觸發和交易限額觸發統稱爲「觸發」），公司應在觸發後的第七個交易日開始向Yorkville每月付款，金額爲$1.5 百萬加上 5.0的%溢價和應計未償利息。如果公司已根據納斯達克證券市場的規則獲得股東批准，允許根據可轉換債券和Yorkville SEPA進行的交易超出 19.99%截至約克維爾SEPA生效日期的普通股發行和流通的股份總數的百分比（「交易所上限」）。

約克維爾可以自行決定，並且在可轉換票據下仍有餘額的情況下，可以根據約克維爾SEPA發出通知，要求按轉換價格向約克維爾發行和出售普通股，以抵消可轉換票據（「約克維爾預付款」）。約克維爾可以自行選擇任何約克維爾預付款的金額，但發行的股份數量不得導致約克維爾超過 9.99%的所有權限制，並且不超過交易所上限或已註冊的普通股數量。因此，由於約克維爾預付款，可轉換票據下應付的金額將按每筆約克維爾預付款的相關金額抵消。

除約克維爾預付款外，公司將控制出售普通股給約克維爾的時間和數量。實際向約克維爾出售的普通股作爲約克維爾SEPA下的預付款將取決於公司不時確定的各種因素，這可能包括市場條件、公司普通股的交易價格以及公司對我們業務和運營適當的融資來源的判斷。

對SEPA和可轉換票據的修訂 – 約克維爾信函協議

2024年4月8日，公司與約克維爾達成了對約克維爾SEPA和可轉換票據的修訂協議（「約克維爾信函協議」），其中：(i)地板價格觸發條件（如下定義）從$1.28 到$1.00; (ii) 觸發底價條件（定義見下文）截至2024年2月5日的10天期間已經解除，並且應支付的每月$1.5 百萬已被免除；以及(iii) 到期日被可轉換債券延長至 2025年9月30日並且可以根據Yorkville的選擇進一步延長。在2024年4月12日，Yorkville進一步同意，若其持有的A類普通股數量阻止公司僅因擁有限制而利用SEPA，Yorkville承諾提供額外的本金$13.0 百萬，按照與之前根據Yorkville SEPA提供的貸款相同的條款和條件。在2024年5月2日，公司與Yorkville達成協議，降低底價（如下文定義）根據Yorkville SEPA從$1.00 降至$0.50。在2024年7月11日，我們的A類普通股的每日成交加權平均價連續十個交易日低於底價，導致了底價觸發。在2024年8月13日，公司與Yorkville達成協議，降低底價根據Yorkville SEPA從$0.50 降至$0.15，據此根據Yorkville SEPA的條款解除底價觸發。截至2024年10月18日交易結束時，

公司A類普通股的每日成交量加權平均價連續十個交易日低於底價，導致可轉換票據中定義的底價觸發，根據2024年11月7日的一封函件約定，Yorkville同意首筆月付款將於最早於2024年12月18日起，按可轉換票據中的定義，由公司支付。

Yorkville SEPA終止

Yorkville SEPA將在以下情況中最早自動終止：(i)Yorkville SEPA簽署日期起約定日後36個月的下一個月的第一天，或(ii) Yorkville根據Yorkville SEPA支付的普通股股票等值於$的日期。250.0 公司有權在向Yorkville提前五（5）個交易日書面通知，並確保無需發行普通股的待發售通知，公司已支付根據可轉換票據應付的所有款項的前提下，無需支付任何費用或罰款終止Yorkville SEPA。公司和Yorkville也可以通過雙方書面同意終止Yorkville SEPA。公司和Yorkville均不得轉讓或轉移Yorkville SEPA下公司各自的權利和義務，Yorkville SEPA的任何條款均不得由公司或Yorkville修改或放棄，除非雙方簽署的書面文書。

Yorkville SEPA包含各方的通常陳述、擔保、條件和賠償義務。此類協議中包含的陳述、擔保和承諾僅用於該類協議的目的，並截至特定日期，僅用於該類協議當事方的利益，並可能受合同當事方達成的限制約定。

公司根據Yorkville SEPA獲得的淨收益將取決於公司將其A類普通股出售給Yorkville的頻率和價格。公司預計從向Yorkville的此類銷售中獲得的任何收益將用於營運資金和一般公司用途。

Yorkville SEPA – 內嵌衍生工具

Yorkville SEPA的某些特性已被確認並分類爲內嵌衍生工具，根據ASC 815分類爲負債，並根據ASC 470《債務》進行估值。這些被分類爲內嵌衍生工具的特性包括付款和贖回溢價，在違約事件中利率的增加以及由觸發事件導致的提前支付。根據ASC 815，在可轉換工具中所要求進行分立的內嵌換股選項的情況下，可轉換工具中還有其他需要分離的內嵌衍生工具時，被分離的衍生工具被視爲單一的、結合的衍生工具。合併內嵌衍生工具的公允價值爲 $110.0 千截至2024年9月30日。截至2024年9月30日結束的三個月內，內嵌衍生工具的公允價值下降，導致其他收入爲 $18.0 千，截至2024年9月30日結束的九個月內，內嵌衍生工具的公允價值上升，導致其他損失爲 $60.0 千.

流動性–持續經營分析

作爲一家初創增長型公司，自成立以來，公司已經遭受了大額淨損失。截至2024年9月30日，公司的無限制現金總額爲 $4.7 百萬。公司自成立以來一直遭受持續虧損和負現金流，並累計虧損 $159.4 百萬至2024年9月30日爲止的九個月中，公司在經營活動中使用了約 $17.9 百萬現金。公司的流動性將取決於在不久的將來能否產生大額營業收入，其時間和金額尚不確定，以及公司能否從額外的第三方資金來源獲得資金。公司的主要流動性需求包括營運資金、債務償付和索償融資義務。

公司預期的流動性來源將包括《基本報表》中披露的營運資金信貸設施和Yorkville SEPA。索賠融資義務和應付票據, 在本季度報告的財務報表註釋中，公司已採取多項措施解決流動性問題，包括下文列舉的措施。然而，正如後文所討論的，公司已經得出結論，管理層的計劃不足以消除重大疑慮：

2023年3月29日，公司子公司Subrogation Holdings及其母公司MSP Recovery簽訂了資本週轉信貸設施，承諾最高提供的資金達到$48 百萬美元。對工作資本信貸設施的某些條款進行了修訂，並記錄在2023年11月10日的較二修訂和重訂頭等抵押信貸協議中。請參見 “Hazel Working Capital Credit Facility和Hazel Purchase Money Loan”在註釋10中索賠融資義務和應付票據。2024年8月2日，HPH同意（其中包括）延長公司支取至$14 用於營運資金，可在八美元的分筆，最少相隔一個月方可提取，直至2025年9月1.75 （ii）提供一筆爲目標收購New Claims而於2024年8月31日前撥款的美元貸款2.0 各方將這項協議記錄在. 中

2024年10月1日第二修正與再修訂信用協議的修正案第3號。公司在本次備案時，仍有$5.25 百萬的運營資本剩餘額度。

2023年11月13日，公司簽署了MTA修正案第2號和修訂與再修訂的安防-半導體協議的修正案（「第二次Virage MTA修正案」），將對Virage的付款義務的到期日延長到2024年12月31日。請參見第4條的摘要，資產收購. 2024年4月1日，公司簽署了MTA修正案第3號和修訂與再修訂的安防-半導體協議的修正案第2號（「第三次Virage MTA修正案」），其：(i) 將VRm全額回報的付款到期日延長至2025年9月30日，具體取決於某些觸發事件的加速；(ii) 公司同意，在可轉換票據完全滿足後， 25%的公司從Yorkville SEPA獲得的任何淨收益部分將用於償還VRm全額回報；以及(iii) 開始出售某些由John H. Ruiz先生和Frank C. Quesada先生保留的股票，並將由此產生的淨現金收益交付給VRm。 VRm全額回報的擔保義務在2024年9月30日變爲當前，且公司目前沒有可用流動資金來滿足該義務。

在2023年11月13日，公司簽訂了第二次修訂和重述的野村票據，將野村票據的到期日延長至2024年12月31日。請參閱第10條的摘要，索賠融資義務和應付票據在2024年3月26日，公司簽訂了第三次修訂和重述的野村票據（在第3條中定義，業務組合），將野村票據的到期日延長至 2025年9月30日. 該票據在2024年9月30日成爲當前，並且公司目前沒有可用的流動資金來滿足該義務。

在2023年11月14日，公司簽訂了Yorkville SEPA，其中包括向Yorkville發行總面額高達$的可轉換票據。15.0 與購買A類別普通股相關的百萬美元。請參閱“承諾股本設施”在附註10中，索賠融資義務和應付票據在2024年4月8日，轉換票據的到期日延長至 2025年9月30日. 轉換票據在2024年9月30日到期，公司目前沒有可用的流動資金來滿足上述義務。

公司已得出結論，儘管上述融資安排存在，但對其作爲持續經營能力的能力仍存在重大疑慮。除非我們通過發行債務或股本證券成功籌集額外資金，否則我們認爲在未來十二個月內無法繼續作爲持續經營能力。假如公司從其獨立註冊公共會計公司收到強調事項段的審計報告，涉及公司審計的年度基本報表，那麼此事件將導致上述債務協議的違約事件，導致債務立即到期；然而，公司已從（i）Virage和VRm及（ii）HPH和Hazel處獲得豁免，以防若此事件發生，截止於2024年12月31日的年度。

整合原則

公司通過多數表決權或其他方式合併其控制的所有實體，隨附的財務報表包括公司全資子公司和公司擁有控股權的實體的賬目。公司還將其控制的所有實體合併爲可變利益實體（「VIE」）的主要受益人。在VIE模型下，管理層首先評估公司是否在實體中擁有可變權益，其中包括股權。如果公司在一個實體中擁有可變權益，管理層將進一步評估該實體是否爲虛擬實體，如果是，則評估該公司是否是VIE模式下的主要受益人。通常，組織結構類似於有限合夥企業、普通合夥人（或管理成員）做出影響實體經濟業績的最相關決策的實體被視爲需要整合的VIE，除非有限合夥人擁有實質性的啓動權或參與權。不符合VIE資格的實體將根據投票權益模型進行合併評估。

在VIE模式下，如果實體持有控股權益，則該實體被視爲VIE的主要受益人。控股性金融權益的定義是：(a) 指導虛擬實體開展對實體經濟業績影響最嚴重的活動的權力，以及 (b) 吸收實體損失的義務或從該實體獲得可能對該實體具有重大意義的利益的權利。管理層確定公司在參與VIE時是否是VIE的主要受益人，並在每個報告日重新考慮該結論。該分析包括評估公司的控制權以及公司在VIE中持有的經濟利益，包括通過關聯方間接持有的經濟利益。由於業務合併，公司在VIE模式下整合了MSP Recovery。

估計和假設

根據公認會計原則編制簡明合併財務報表要求管理層做出估算和假設，以影響報告的資產、負債金額、簡明合併財務報表之日或有資產和負債的披露以及報告期內報告的收入和支出金額。實際業績可能與公司的估計有所不同。根據情況、事實和經驗的變化，定期對估算值進行審查。估計值的變化記錄在已知的時期內。這些合併財務報表中反映的重要估計和假設包括但不限於索賠追回收入和索賠追回服務收入確認、長期資產的可收回性以及索賠追回成本（包含在收入成本中）。

信用風險集中和資產負債表外風險

現金和關聯應收賬款是可能受到信用風險集中的金融工具。參見注釋 15 關聯方交易，for 披露關聯應收賬款。公司的現金存入大型金融機構的帳戶，金額可能超過聯邦保險限額。該公司認爲，由於持有現金的存款機構的財務實力，它不會面臨重大的信用風險。該公司沒有其他具有表外虧損風險的金融工具。

非控股權益

作爲業務合併的一部分，如附註3所述，業務組合，該公司成爲MSP Recovery的管理成員，MSP Recovery是在公司控制MSP Recovery的運營決策時進行合併的。非控股權益與Up-C單位有關，這些單位可由Up-C單位的持有人自行決定轉換爲公司的A類普通股，但須經董事會批准。Up-C 單位持有者保留了大約 99.76截至截止日期公司經濟所有權百分比的百分比。在公司簡明合併資產負債表中，非控股權益被歸類爲永久股權。截至2024年9月30日，根據該期間發行的A類普通股，V類股東的非控股權益爲 80.0%.

由於V類普通股的持有人將其股票轉換爲A類普通股，公司在MSP Recovery中所有權權益的變動記作股權交易。公司的每次A類普通股的發行都需要向公司發行相應的MSP回收單位公司。此次發行將導致所有權變更，並將減少非控股權益的餘額並增加額外實收資本的餘額。

最近的會計聲明

已發佈但尚未採納的新會計準則

自2023年12月起，財務會計準則委員會（「FASB」）發佈了會計準則更新（「ASU」）2023-09，擴大了所得稅披露範圍，包括要求增加與速率調和和支付的所得稅相關信息有關的披露。ASU 2023- 09的修訂應當適用於公共商業實體的年度期間，即2024年12月15日後開始的財政年度以及非公共實體的年度期間，即2025年12月15日後開始的財務年度，早期採用是允許的。該公司目前正在評估採用ASU 2023-09對其披露的影響。所得稅（主題740）：改進所得稅披露。該標準要求上市的業務實體在每年披露稅率調節表的特定類別，併爲滿足數量門限的調節項目提供其他信息（如果這些調節項目的影響相當於或大於將稅前收入（或損失）與適用的法定所得稅率相乘所得金額的5%）。它還要求所有實體每年披露按聯邦、州和外國稅種分解的所支付的所得稅（扣除退款），以及按所支付的所得稅（扣除退款）在個別司法管轄區分解的金額，當所支付的所得稅（扣除退款）相當於或大於所支付的總所得稅（扣除退款）的5%時。最後，該標準取消了要求所有實體披露未識別稅務負債餘額在未來12個月內合理可能變動範圍的性質和估計，或聲明無法估算範圍的要求。該標準對公司自2026年1月1日開始的年度適用。可以提前採納該標準。該標準應以前瞻性基礎應用。允許追溯適用。公司目前正在評估該標準可能對其財務報表產生的影響。除其他要求外，此更新增加了有關所得稅的具體披露要求，包括：(1) 披露匯率調解中的具體類別，以及 (2) 提供符合定量門檻的調解項目的額外信息。該指南自2024年12月15日起適用於截至此日期之後開始的財政年度，包括這些財政年度內的中期時段。允許提前採納。公司目前正在評估實施此標準將對公司的合併財務報表和披露產生的影響。

2023年11月，FASB發佈了ASU 2023-07，該更新通過增強重要板塊支出的披露，改進了可報告板塊的披露要求。這個更新中的修正應在合併財務報表中呈現的所有之前期間中進行追溯，適用於2023年12月31日後開始的財政年度和2024年12月31日後的財政年度內的中期期間。早期實施是允許的。公司目前正在評估該指引對其簡明合併財務報表的潛在影響。一段報告部份改進（Topic 280）：改善可報告部份披露。此ASU自2023年12月15日後開始的財政年度起生效，並適用於2024年12月15日後開始的財政年度內的中期時段，允許提前採納。公司經營一個報告部門；但目前正評估實施此標準將對公司的合併財務報表和披露產生的影響。

2024年3月，SEC根據SEC發佈編號33-11275採納了最終規則。投資者氣候相關披露的增強和標準化，要求登記者在註冊聲明和年度報告中披露與氣候相關的信息。這些新規定將於2025財政年度開始的年度報告期間生效。然而，在2024年4月，SEC行使其自由裁量權暫停這些規定，等待與這些規定相關的特定聯合訴狀在第八巡回法庭完成司法審查。公司正在評估此規定對其合併基本報表和披露的影響。

注3. 業務合併

2022年5月23日（「交割日期」），MSP Recovery, Inc. 以LifeWallet的名義，一家特拉華州公司（以前稱爲Lionheart Acquisition Corporation II（「LCAP」））根據2021年7月11日簽署的特定會員權益購買協議（「MIPA」）完成了業務合併，該協議經過修訂，參與方包括公司、Lionheart II Holdings, LLC（公司全資子公司）、MSP Recovery, LLC，以及合併和整合的子公司（「Legacy MSP」）、Legacy MSP的成員（「成員」）和John H. Ruiz，以其作爲成員代表的身份（「成員代表」）。根據MIPA，成員將其在Legacy MSP的所有成員權益出售並轉讓給公司，作爲交換，得到公司發行的無經濟權投票的V類普通股（面值$）、0.0001公司的無投票經濟b類單位（「b類單位」，每對由一股Class V普通股和一股b類單位組成，稱爲「Up-C單位」）（該交易稱爲「業務合併」）。Up-C單位可以根據持有者的自由裁量權轉換爲公司的A類普通股。在交割日期之後，公司的唯一資產是其在MSP Recovery, LLC中的股權利益。公司是管理成員，因此合併Legacy MSP。

由於業務合併（「交割」）的完成，公司在「Up-C」結構中組織，Legacy MSP及其子公司的所有業務均直接或間接由公司持有，公司是管理成員，合併了Legacy MSP，並且公司擁有所有投票的經濟A類單位，而成員及其指定人根據公司首次修訂和重述的有限責任公司協議的條款擁有所有非投票的經濟b類單位。根據公司選擇，每個Up-C單位可以交換爲（a）現金或（b）一股A類普通股，受有限責任公司協議中規定的條款的限制。交割時支付給成員（或其指定人的）總對價包括：（i） 130,000,000 單位和（ii）根據稅收應收協議（「TRA」）接收付款的權利。 130,000,000 單元， 126,178,932 單位是在交易完成時發行的， 3,821,068 單位指派給公司和Opco進行註銷（「已註銷單位」）。自交易完成以來，公司的單位已發行， 2,000,880 公司還向某些指定人員發行了Up-C單位，並打算進一步按照與交易相關的獎金或某些其他指定人員的股份，連同 2,000,880 Up-C單位在數量上等同於已註銷單位。

在交易完成時，公司將其名稱從「獅心收購公司II」更改爲「MSP恢復公司」。業務合併根據GAAP會計處理爲反向資本化。根據這種會計方法，公司在財務報表報告中被視爲被收購方。反向資本化被視爲傳統MSP爲LCAP的淨資產發行股票，並伴隨資本重組。LCAP的淨資產按歷史成本列示，沒有記錄商譽或其他無形資產。

公司在業務合併交易中獲得的淨收益約爲$23.4 百萬。公司產生的直接和增量成本約爲$79.2百萬美元與業務合併相關，主要包括

主要銀行、法律、會計及其他專業費用。這些與交易相關的費用被記錄爲在簡明合併資產負債表中對額外實收資本的減少。

權證

作爲業務合併的一部分，公司承擔了與LCAP公開warrants（「公開warrants」）相關的責任，金額爲$12.5 百萬。根據現有warrant協議的條款，並在考慮發行新的warrants（如下所定義）後，公開warrants的行使價格降至$0.0025 每股A類普通股。在從交割日期到2024年9月30日的期間內約爲 8.9 百萬份原始warrants 11.8 百萬份warrants已被行使。對於截至2024年9月30日的三個月和九個月，剩餘未行使warrants的公允價值減少，導致其他收入 $36.6 千和 $250.2 千分別記錄在合併財務報表中warrant和衍生負債的公允價值變動內。根據與業務合併相關的防稀釋調整，公共warrants具有的行使價格爲$0.0025 每股，按現金無償方式分批行使，每批25個。

此外，因應業務合併，公司宣佈派發約 1,028 百萬新warrants，支付給截止到交割日營業結束的A類普通股的記錄持有人，在對會員放棄對該分紅的權利、所有權和利益後，代表他們自己及任何被指定人的參與。新warrants可行使至到期日，該日期爲交割日的第五週年或提前贖回。確定有權接收新warrant分紅的已發行A類普通股的記錄日期爲交割日營業結束。根據LLC協議的條款，至少每月兩次，在任何新warrants按照其條款被行使的情況下，公司需按比例從MSP主要股東處購買其擁有的Up-C單位或A類普通股的數量，該數量等於總行使價格除以warrant行使價格，以換取總行使價格。公司判斷新warrants工具符合ASC 815中在股東權益分類的股本範圍例外，並且由於上述回購權具有抵消新warrants（若行使將爲僅股本交易）的對稱價值。新warrants每批可行使25個，換取一整股A類普通股，行使價格爲$287.50 每一整股。新warrants必須以25個爲單位行使，因爲不會因其行使而發行碎股。新warrants受某些反稀釋調整的約束。

公衆warrants和新warrants目前在納斯達克上市，分別使用符號「LIFWZ」和「LIFWW」。

於2023年10月6日，Opco交易合併的時候的合夥人（「Exchange TRA Holders」）和公司（集體稱爲「TRA Holders」）與Opco進入了一份稅收應收款協議，向TRA Holders提供了Opco的85%稅收優惠（如果有的話），這是由於（i）未來由Opco資助的贖回或交換，或在某些情況下被視爲交換，推廣Falcon的Opco普通單位爲公司的A類普通股，每股面值$ 4或現金，以及（ii）根據稅收應收款協議進行的某些額外稅收優惠所產生的。

與業務合併相關，公司還簽署了一項稅收應收協議（「TRA」）。根據TRA，公司需要支付賣方 85所得稅優惠金額的百分比，這些稅收優惠是公司因以下原因實際實現的：（i）公司在業務合併中獲得的現有稅基的直接和間接可分配份額，（ii）公司現有稅基的可分配份額和因業務合併以及因以現金或A類普通股交換Up-C單位而增加的稅基調整將增加公司的有形和無形資產的稅基，以及（iii）與簽署TRA相關的其他某些稅收優惠，包括根據TRA支付的稅收優惠。

在截至2024年9月30日的九個月期間，公司因其在業務合併中獲得的可分配現有稅基相關的TRA負債將產生TRA負債 $12.4 百萬。公司沒有在TRA下確認這些負債，因爲在對未來應稅收入的估計中，得出公司能夠實現稅收優惠的可能性不大。在截至2024年和2023年9月30日的三個月和九個月期間，沒有根據TRA向持續股權擁有者和阻礙股東（在TRA中定義）進行任何付款。TRA下的負債估計本質上不精確，並且取決於對MSP Recovery, Inc.未來應稅收入的金額、性質和時間的重大假設。當未來Class B單位進行交換時，我們可能會產生TRA下的額外負債。如果針對適用於TRA的稅務屬性的遞延稅資產所記錄的估值準備在未來某個時期釋放，那麼相關的TRA負債可能在那時被認爲是可能並在收益中記錄。

公司已評估淨遞延稅資產的可實現性，並在該分析中考慮了相關的正面和負面證據，以判斷某部分或所有遞延稅資產更有可能被實現。公司已在2024年9月30日對遞延稅資產記錄了全面的估值準備，直到有足夠證據支持撤銷這些準備的全部或部分爲止。由於與TRA相關的稅收利益尚未確認，基於未來應稅收入的估計，公司已得出結論，不太可能確認任何應收稅款協議的負債。如果在未來某一時期釋放了針對遞延稅資產的估值準備，那麼在那時TRA負債可能被認爲是概率較大的，並記錄在收益中。

注意事項 4.資產收購

2022年5月23日，作爲閉幕式的一部分e 業務合併，公司通過發行Up-C單位收購資產。作爲交換，大約是 7.9 百萬個Up-C單位，該公司收購了先前由該公司子公司Series MRCS持有的索賠。索賠被列爲無形資產，在簡明的合併資產負債表中淨額。

索賠按成本計算，成本是根據公司的開盤市場價格確定的s 截至截止日第二天的A類普通股折扣爲 4.5% 表示由於股票上市前的時機而缺乏適銷性。公司確定適當的計量日期是收盤日之後的A類普通股的第一個交易日的開盤，因爲這反映了提供給賣方的Up-C單位的等值價值。向賣方提供的Up-C單位不包括新認股權證，因此，不包括新認股權證在內的A類普通股價值反映在收盤日後的第一個交易日收盤時。索賠被視爲有限壽命（無形的）資產與公司收購的其他索賠類似，使用壽命爲八年。有關由此產生的無形資產的更多詳細信息索賠收購，見附註7，無形資產，淨額

VRM

公司收購了特拉華州有限責任公司、vRM和MRCS系列聯合投資工具vRM MSP擁有的索賠組合中可分配淨收益（「收益」）的收益（「收益」）的權利，以換取大約 14.3 百萬個 Up-C 單位。在這種資產收購結構下，公司確定，收購某些索賠追回權的收益權以及對vRM全額回報的擔保（見下文註明和定義）的安排導致公司合併該系列。合併後，公司將提供的Up-C單位的價值和擔保的價值列爲無形資產，淨計入簡明的合併資產負債表。這些資產按成本持有，被視爲有限壽命無形資產，類似於公司收購的其他CCRA，使用壽命爲八年.

在這類交易中，公司同意向Virage支付相當於Virage向vRM MSP繳款的金額，外加年回報率爲 20% （「vRM 完整回報」）。根據與Virage簽訂的協議條款，該款項只能通過以下任何一種方式（或其任意組合）支付：(a) 扣除索賠結算相關費用的收益，(b) 出售約翰·魯伊斯先生和弗蘭克·克薩達先生的某些預留股份，以及由此產生的淨現金的交付

proceeds thereof to VRM, or (c) a sale of shares by the Company and delivery of the net cash proceeds thereof to VRM. The amount of the VRM Full Return was $1,077.1 million as of September 30, 2024.

As the Company incurred debt related to the VRM Full Return as included in the guaranty obligation within the condensed consolidated balance sheet, this value was included in the purchase price and is included in intangible assets, net, in the condensed consolidated balance sheet for the full value of the VRM Full Return at the acquisition date. Any subsequent interest accrual is reflected within interest expense in the condensed consolidated statement of operations.

On April 12, 2023, the Company and Messrs. Quesada and Ruiz entered into an amendment (the “Virage MTA Amendment”) to the agreement with Virage and the related Guaranty pursuant to which the payment date for the VRM Full Return was extended from May 23, 2023 until September 30, 2024, subject to acceleration upon certain triggering events. On November 14, 2023, the maturity date was extended to December 31, 2024. In addition, the Virage MTA Amendment changed the payment methods to Virage to exclusively be, in the following order of priority: (a) the Proceeds and any other sources of revenue or liquidity of the Company (and its subsidiaries) that are not encumbered by a lien of a party other than Virage and to the extent such revenues and liquidity exceed the amount of net of revenues necessary to establish and maintain an operating reserve of $70.0 million (reduced to $47.5 million on July 24, 2023) for certain Company expenses, (b) a sale of certain reserved shares of Messrs. John H. Ruiz and Frank C. Quesada, and the delivery of the resulting net cash proceeds thereof to VRM, (c) Parent’s sale of additional shares and delivery of proceeds to Virage, subject to certain anti-dilution provisions, (d) if not satisfied by the foregoing, a sale of other shares of the Company by Messrs. John H. Ruiz and Frank C. Quesada, and the delivery of the resulting net cash proceeds thereof to VRM; provided that if the VRM Full Return is not fully paid by September 30, 2024 the VRM Full Return shall be payable by any of such payment methods in any order of priority. The VRM Full Return became current on September 30, 2024, and the Company does not currently have available liquidity to satisfy said obligation.

On November 13, 2023, the Company entered into the Second Virage MTA Amendment that extended the final payment date of the VRM Full Return to December 31, 2024, subject to acceleration upon certain triggering events. In addition, the Second Virage MTA Amendment (a) changed the minimum operating reserve from $47.5 million to the budget of the Company (plus applicable taxes) plus 10% and (b) required Virage and the Company negotiate and agree on a form of initial warrant and monthly warrant by no later than December 1, 2023. Pursuant to the Second Virage MTA Amendment, on January 1, 2024, the Company was required to make a one-time, lump sum payment to Virage for the period starting May 24, 2023 and ending December 31, 2023, in one or a combination of: (a) cash, in an amount equal to 1.0% of each calendar month-end balance (which month-end balance shall be increased daily up to 20% per annum based on a formula set forth in the Virage MTA Amendment) of the amount owing to Virage as of each preceding calendar month end and/or (b) warrants to purchase Class A common stock at $0.0001 per share, in an amount equal to the quotient of 1.0% of each calendar month-end balance (which month-end balance shall be increased daily up to 20% per annum based on a formula set forth in the Virage MTA Amendment) of the amount owing to Virage as of each preceding calendar month end and the volume weighted average price of a share of our Class A common stock for the five day period prior to the issuance, each expiring two years from the date of issuance.

Accordingly, the Company issued the VRM Warrants. The Initial Virage Warrant, as amended, was issued effective January 1, 2024 and entitles Virage to purchase 28,298,329 shares of Class A Common Stock, with an expiration date of January 1, 2026. The Virage Warrants are recorded as warrant liability in the condensed consolidated balance sheet. Monthly Virage Warrants with effective dates prior to July 1, 2024 were issued, entitling Virage to purchase 58,129,012 shares of Class A Common Stock. Monthly Virage Warrants with effective dates falling within the quarter ending September 30, 2024 were issued, entitling Virage to purchase 91,033,992 shares of Class A Common Stock to settle interest payable for the months of June, July, and August, 2024. For the three and nine months ending September 30, 2024, the issuance of VRM Warrants settled $31.4 million and $145.9 million of interest, respectively. A Monthly Virage Warrant with an effective date of October 1, 2024 was issued after quarter end, entitling Virage to purchase 66,322,033 shares of Class A Common Stock to settle interest payable for the month of September 2024.

Until our obligations to Virage are paid in full, the Company has the option every month to continue to pay Virage an additional amount, in one or a combination of: (a) cash, in an amount equal to 1.0% of each calendar month-end balance (which month-end balance shall be increased daily up to 20% per annum based on a formula set forth in the Virage MTA Amendment) of the amount owing to Virage as of each preceding calendar month end and/or (b) the issuance of subsequent Monthly Virage Warrants.

On April 1, 2024, the Company entered into the Third Virage MTA Amendment which: (i) extended the VRM Full Return payment due date to September 30, 2025, subject to acceleration upon certain triggering events, including the receipt of a going concern opinion by the Company’s independent auditor; (ii) the Company agreed that, after the Convertible Notes are fully satisfied, 25% of the Company’s portion of any net proceeds from the Yorkville SEPA would be used to pay down the VRM Full Return; and (iii) commence the sale of certain reserved shares of Messrs. John H. Ruiz and Frank C. Quesada, and the delivery of the resulting net cash proceeds thereof to VRM. The VRM Full Return became current on September 30, 2024, and the Company does not currently have available liquidity to satisfy said obligation.

2024年9月6日，Virage同意放棄Virage MTA修正案中一項條款，該條款將在公司獲得截至2024年12月31日的核數師的負面持續經營意見時，加速向Virage支付應付款項。

VRm互換

2023年7月28日，VRm行使其選項，將服務日期在2014年1月1日之前的索賠與更近期的索賠進行交易。爲此，VRm MSP協議進行了修訂，以反映： (a) 來自VRm MSP持有的索賠的回收收益權，服務日期在2014年1月1日之前，轉讓給MSP Recovery；(b) MSP Recovery以實物所有權權益形式向VRm MSP貢獻了某些系列持有的索賠；(c) 因此類資本貢獻，MSP Recovery被接納爲VRm MSP的成員。

MSP Recovery向VRm MSP貢獻的某些系列（持有某些CCRA）的過程，被視爲共同控制交易，因爲公司在此類轉讓前後會合並系列。此外，公司分析了被接納爲VRm MSP成員的情況，並決定根據ASC 323適用權益法投資指導原則。公司最初使用成本累積模型對其在VRm MSP的權益法投資進行了計量和記錄；然而，在合併時，VRm MSP的投資被消除，CCRA無形資產繼續保留在資產負債表的「無形資產」項目下。VRm MSP的投資將反映爲零餘額。此外，由於VRm MSP的主要資產是CCRA，VRm MSP創造任何收益的能力（未通過MSP Recovery合併系列報告的收益）微乎其微；因此，MSP Recovery不期望從VRm MSP獲得任何顯著收益。

Hazel交易

索賠交易和購置貸款

2023年3月29日，公司從Hazel那裏收購了九個法律實體的控股權益，這些實體的唯一資產是CCRA。這被稱爲「索賠購買」。索賠購買的購買價格由以下資金資助： (i) Hazel作爲貸方和公司作爲借方之間的購置貸款，金額爲$250.0 百萬（「購買資金貸款」）和（ii）某些單獨的CCRAs在索賠銷售中（如下文定義）的出售所得。

此外，在 2023年3月29日公司將三家法律實體的控股權益出售給Hazel，這些實體的唯一資產爲CCRAs。該協議規定，公司和Hazel將根據約定的優先順序分享來自該交易的回收收益，Hazel將在實現第一次 $150 百萬美元的索賠回收後進行分配。該交易被稱爲「索賠銷售」，與索賠購買合稱爲「索賠交易」。

由於索賠交易是相互協商的，因此爲了會計目的將其合併。公司分析了索賠銷售，並確定該交易將被視爲銷售實質上爲非金融資產，以CCRAs的非現金對價作爲回報，該資產是根據公平價值從索賠購買中獲得的。與未來回收相關的變量對價被完全限制，因爲目前不太可能有任何金額超過 $150 百萬的回收閾值，從而觸發額外支付。公司分析了索賠購買，並確定其會導致對非商業性可變利益實體的初始合併。這些實體所持有的CCRAs以公平價值入賬。

在索賠銷售中出售的資產的公平價值被確定爲 $45.5 百萬。公司的承載價值爲這些已交出CCRAs的金額是$40.9 百萬。由於沒有其他可觀察的價格用於此類交易，公司通過參考近期交易中這些CCRAs的購買價格來確定公允價值。獲取的CCRAs的公允價值被確定爲$285.5 百萬，公司確認的購置貸款金額爲$250.0 百萬，因爲在發行時的任何隱含折扣或溢價對於當前市場利率都微不足道。

這導致了索賠交易的收益爲$4.6 百萬，這主要對應於在索賠銷售中出售的CCRAs先前確認的攤銷。

2024年8月2日，代位持有公司與HPH簽訂了一份信函協議，以修訂第二次修訂和重述信用協議（「HPH信函協議」），該協議其中包括提供一筆$3.3 百萬的貸款（以及一個 40% 原始發行折扣) 將在2024年8月31日前獲得資金，以便收購將進一步抵押運營資本信貸設施的額外索賠（「新索賠」）。在2024年8月29日，公司獲得了資金 $2.0 百萬下的運營回收底限，以便從現有的轉讓人收購新索賠。在2024年8月30日，公司以 $ 收購了與新索賠相關的回收權利。2.0百萬美元。各方在2024年10月1日的第二次修正和再融資信貸協議第3號修正案中正式化了HPH信件協議的條款。

在購買資金貸款和運營資本信貸設施下借入的金額及其義務（見註釋10，索賠融資義務和應付票據) 在損益表中確認。通過對公司索賠組合中特定索賠的收益進行質押來保障。

Note 5. INVESTMENT IN EQUITY METHOD INVESTEES

The Company holds four investments which are accounted for using the equity method: MAO-MSO Recovery II LLC Series PMPI (“Series PMPI”), MAO-MSO Recovery LLC, MAO-MSO Recovery II LLC (both collectively the “MAO-MSO Entities”) and VRM MSP.

Series PMPI is a series of MAO-MSO Recovery II LLC. The Company exercises significant influence over the operating and financial activities of Series PMPI, but does not exercise control of the entity. In accordance with Series PMPI’s operating agreement, the controlling member is entitled to a preferred return of 20% per annum (the “Preferred Return”). Once the Preferred Return has been met, the controlling member is entitled to 50% of Claims recoveries by PMPI. The non-controlling member is allocated 100% of the costs of PMPI. Since the Preferred Return exceeds the total members’ equity of PMPI as of both September 30, 2024 and December 31, 2023, the value of the equity method investment in the condensed consolidated balance sheet is $0.

The MAO-MSO Entities are Delaware limited liability companies formed as master Series entities whose central operations are to form other Series legal entities that will hold and pursue Claims recovery rights. The MAO-MSO Entities are not designed to hold or pursue Claims recoveries themselves. The Company holds a 50% economic interest in both entities, and has significant influence through its equity investment, but does not control either entity. As equity method investments, the Company recognizes its proportionate share of net earnings or losses as equity earnings in Other income. The activity of these entities has been insignificant for the three and nine months ended September 30, 2024 and 2023. Since the Company did not make a contribution to the MAO-MSO Entities, and the entities have recorded losses, the value of the equity method investment in the condensed consolidated balance sheets is $0 as of both September 30, 2024 and December 31, 2023.

Summary financial information for equity accounted investees, not adjusted for the percentage ownership of the Company is as follows:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2024			2023			2024			2023
Revenue	$	—		$	8		$	7		$	8
Amortization	$	167		$	500		$	1,167		$	1,500
Other expenses	$	1		$	—		$	20		$	—
Profit (Loss)	$	(168	)	$	(492	)	$	(1,180	)	$	(1,492	)


	As of
in thousands	September 30, 2024		December 31, 2023
Total Assets	$	235	$	1,403
Total Liabilities	$	410	$	399

In 2023, in connection with an amendment to the VRM MSP structure, the Company became a direct investor in VRM MSP, which controls MSP Recovery Claims, Series LLC, and recognizes this investment as an equity method investment. However, the Company previously consolidated and continues to consolidate the underlying Series of MSP Recovery Claims, Series LLC, which hold investments in CCRAs that the Company controls as primary beneficiary under the VIE model. As such, other than the Series, which were already consolidated, the investment in VRM MSP includes only administrative activities that are not otherwise consolidated, and any costs are allocable to the other investors. As a result, the Company has no significant equity earnings or exposure to losses or obligations to fund this investment.

Note 6. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following:


	September 30,			December 31,
(In thousands)	2024			2023
Office and computer equipment	$	459		$	434
Leasehold improvements		26			113
Internally developed software		5,898			5,789
Other software		67			67
Property and equipment, gross	$	6,450		$	6,403
Less: accumulated depreciation and amortization of software		(1,584	)		(1,492	)
Property and equipment, net	$	4,866		$	4,911

For the three and nine months ended September 30, 2024 and 2023, depreciation and amortization expense was $71.0 thousand and $0.2 million, and $85.0 thousand and $0.2 million, respectively.

As disclosed in further detail within Note 8, Leases, in July 2024, the Company moved its corporate headquarters to the Law Firm’s new location under a new lease. As a result, the Company wrote off $0.1 million of leasehold improvements and its related accumulated amortization during the three months ended September 30, 2024. No gain or loss was recognized on this disposal.

Note 7. INTANGIBLE ASSETS, NET

The Company records CCRAs at cost and amortizes them as a finite intangible asset with a useful life of eight years. During three and nine months ended September 30, 2024, the Company purchased $2.0 million and $2.2 million, respectively, of CCRAs included in intangible assets, net, all of which were paid in cash.

Intangible assets, net consists of the following:


(in thousands)	September 30, 2024			December 31, 2023
Intangible assets, gross	$	3,874,556		$	3,872,356
Accumulated amortization		(1,102,587	)		(739,560	)
Net	$	2,771,969		$	3,132,796

For the three and nine months ended September 30, 2024 and 2023, claims amortization expense was $121.0 million and $363.0 million, and $121.0 million and $355.5 million, respectively.

Future amortization for CCRAs, for the remainder of 2024 and thereafter is expected to be as follows:


(in thousands)	CCRAs Amortization
2024	$	121,049
2025		484,194
2026		484,194
2027		484,194
2028		484,194
Thereafter		714,144
Total	$	2,771,969

The Company monitors intangible assets for potential impairment indicators, including, but not limited to, assumptions regarding the amount and timing of future collections derived from its CCRAs. The Company continues to pursue recoveries from various parties under rights held through its CCRAs; however, extended delays may result in future impairment of the Company’s intangible assets.

During the three months ended September 30, 2024, the Company updated the recoverability analysis on the definite-lived CCRA intangible assets performed as of December 31, 2023. The Company did not identify any new impairment indicators outside of the ones already disclosed in its evaluation of its definite-lived intangible assets in the 2023 Form 10-K. There are inherent risks in our business which could impact the recoverability analysis. As a result, factors may change in the future that could negatively impact our recoverability of the CCRAs, and may result in an impairment charge. Based on the analysis, the carrying value of the Company’s CCRA intangible assets was deemed to be recoverable as of September 30, 2024.

Note 8. LEASES

The Company leases office space in Puerto Rico under a non-cancellable operating lease which commenced in September 2023 and expires August 2026. Prior to this lease, the Company held a short-term lease, therefore the Company recorded an initial right-of-use (“ROU”) asset and lease liability upon signing the new lease agreement. Lease expense for the three and nine months ended September 30, 2024 amounted to $39.5 thousand and $0.1 million.

In addition, the Company rents office space from the Law Firm, on a month-to-month basis, and therefore is not included within the ROU Asset and Lease liability nor in the future minimum lease payments below. In July 2024, the Law Firm’s lease expired and the Law Firm moved to a new location; as a result, the Company moved its corporate headquarters to the Law Firm’s new location under a new lease, which is also on a month-to-month basis. Short-term rent expense for the three and nine months ended September 30, 2024 and 2023 was $0.1 million and $0.8 million, and $0.3 million and $0.9 million, respectively.

As of September 30, 2024, the weighted-average lease term and weighted-average discount rate were 1.9 years and 15.31%, respectively.

The presentation of right-of-use assets and lease liabilities in the condensed consolidated balance sheet is as follows:


		September 30,			December 31,
(In thousands)	Classification	2024			2023
Assets
Right-of-use asset	Right-of-use assets	$	257		$	342
Total Leased Assets		$	257		$	342

Liabilities
Current
Operating lease liability	Other current liabilities	$	(126	)	$	(109	)
Non-current
Operating lease liability	Lease liabilities	$	(138	)	$	(235	)
Total Lease Liability		$	(264	)	$	(344	)

The future minimum lease payments under non-cancellable operating leases as of September 30, 2024 for the next five years and thereafter are as follows:


(in thousands)
Remainder of 2024	$	39
2025		157
2026		107
2027		—
2028		—
Thereafter		—
Total minimum payments required		303
Less: implied interest		(39	)
Present value of lease liabilities	$	264

Note 9. VARIABLE INTEREST ENTITIES

Investments in Consolidated Variable Interest Entities

The Company evaluates its ownership, contractual, and other interests in entities to determine if they are VIEs, if the Company has a variable interest in those entities, and the nature and extent of those interests. These evaluations are highly complex and involve management judgment and the use of estimates and assumptions based on available historical information, among other factors. Based on its evaluations, if the Company determines it is the primary beneficiary of such VIEs, it consolidates such entities into its financial statements. VIEs information below is presented on an aggregate basis based on similar risk and reward characteristics and the Company’s involvement with the VIEs.

The Company includes a number of entities that are determined to be VIEs and for which the common control group can direct the use of the entities’ assets and resources for other purposes. The Company only consolidates those VIEs for which the Company is the primary beneficiary.

The assets of the consolidated VIEs may only be used to settle obligations of these VIEs and to settle any investors’ ownership liquidation requests. There is no recourse to the Company for the consolidated VIEs’ liabilities. The assets of the consolidated VIEs are not available to the Company’s creditors.

Total assets and liabilities included in its condensed consolidated balance sheets for these VIEs were $2.0 billion and $0.4 million, respectively, as of September 30, 2024 and $2.2 billion and $0.4 million, respectively, as of December 31, 2023. The assets at September 30, 2024 and December 31, 2023 include the intangible assets, net included in the Series of $1.7 billion and $2.0 billion, respectively.

Investments in Unconsolidated Variable Interest Entities

The Company has equity investments in VIEs, but does not consolidate them because it has no power to direct the activities that most significantly impact their economic performance and thus is not considered the primary beneficiary of the entities. Those VIEs are reflected as equity method investments.

Total assets and liabilities for these VIEs were $0.2 million and $0.4 million, respectively, at September 30, 2024 and $1.4 million and $0.4 million, respectively, at December 31, 2023.

Generally, the Company’s exposure is limited to its investment in those VIEs (see Note 5, Investment in Equity Method Investees). For MAO-MSO Recovery II, LLC and Series PMPI, the Company may be exposed to providing additional recovery services at its own cost if recovery proceeds allocated to it are insufficient to recover the costs of those services. The Company does not have any other exposure or any obligation to provide additional funding to the VIEs that it has equity investments in.

VRM MSP

The Company became a member of VRM MSP through the contribution of certain Series (holding certain CCRAs) by MSP Recovery into VRM MSP. The Company determined, based on analysis of the rights to cash flows from the Series and the related guaranty obligation, that the Company is the primary beneficiary of the Series entities, and therefore should consolidate as of the transaction date. The contribution is considered a common control transaction, as the Company controls and consolidates the Series before and after such contribution. The Company consolidates the Series held within VRM MSP, however does not consolidate VRM MSP itself.

Refer to Note 5, Investment in Equity Method Investees, for additional information on this VRM MSP transaction.

Brickell Key Investments

In 2015, the Company entered into a Claims Proceeds Investment Agreement (“CPIA”), as amended, with Brickell Key Investments LP (the “Holder”). Pursuant to the CPIA, as amended, the Company grants to the Holder the right to purchase Class A common shares in the Company (the “Class A Shares”) up to a maximum amount of 2,666,667 (the “Amount”) for a purchase price equal to $6,666.67 ($0.0025 per Class A Share), and is payable in cash. This Warrant (the “Warrant”) will expire at 5:00 p.m. (Eastern Time) on September 30, 2027 and may be exercised in whole or in part by Holder at any time prior to such date. The Holder can only sell a maximum of 15% per month of the Class A Shares obtained through the Warrant. In exchange for the Company issuing the Warrant, the amounts owed to the Holder pursuant to CPIA are amended to equal $80 million. The Holder has the right to receive the $80 million owed through proceeds as outlined in the CPIA, cash paid by the Company, or monetization of the Warrant (through the sale of the Warrant or sale of the underlying Class A Shares). If the Holder monetizes the Warrant, the amount owed will be reduced at a measure of $30.00 per Class A Share. In connection with the Amendment and Warrant Agreement, the Holder also executed a Stock Pledge Agreement (the “Pledge Agreement”) with Legacy MSP founders, John H. Ruiz and Frank C. Quesada (the “Founders”). As part of the Pledge Agreement, the Founders agreed to pledge two million shares to secure payment of the original principal amount of the CPIA. In addition, the Pledge Agreement provides the right to repurchase the Warrant from the Holder on or before June 30, 2023. The Founders entered into an agreement with the Company where this repurchase right has been assigned to the Company (the “Side Agreement”). As the Company has, at its option, the ability to pay its obligation through cash proceeds or through monetization of the Warrants, the $80.0 million of amounts owed as of September 30, 2024 was included as Claims financing obligation and notes payable on the condensed consolidated balance sheet.

The Founders did not exercise the option to repurchase the Warrants on or before June 30, 2023. The Company recognized the Warrants at fair value which, considering the price of the Company’s common stock was below $30.00 as of September 30, 2024, it was determined to be zero.

Hazel Working Capital Credit Facility and Hazel Purchase Money Loan

On March 29, 2023, Subrogation Holdings entered into an Amended and Restated Credit Agreement (the “Working Capital Credit Facility”) with Hazel Partners Holdings LLC (“HPH”), an affiliate of Hazel, as the lender and administrative agent, which provides for up to $80 million (with a 40% original issue discount), consisting of a Term Loan A commitment to fund up to $30 million in proceeds (in multiple installments), and a Term Loan B Commitment to fund up to $18 million in proceeds (in multiple installments), the funding of each conditioned on certain milestones. The amended terms to the Working Capital Credit Facility were memorialized in the Second Amended and Restated First Lien Credit Agreement dated November 10, 2023 (as further amended by the amendments thereto dated December 15, 2023, December 22, 2023, and October 1, 2024).

As of September 30, 2024, the Company had received funding with an aggregate amount of $20.5 million under Term Loan A, which was terminated in 2023. The parties agreed to increase the Term Loan B commitment from $18 million to $27.5 million, after giving effect to the original issue discount on the Working Capital Credit Facility, which would be funded in multiple installments and in accordance with the terms of the Working Capital Credit Facility. As of September 30, 2024, the Company received funding with an aggregate amount of $20.8 million under Term Loan B.

On August 2, 2024, Subrogation Holdings entered into a letter agreement to amend the Working Capital Credit Facility (the “HPH Letter Agreement”) with HPH, which, among other things, provides for (i) extended the period to draw up to $23.3 million (with a 40% original issue discount) for working capital, accessible in eight tranches of $1.75 million, that can be drawn at least one month apart, until September 2025; and (ii) provided for a $3.3 million loan (with a 40% original issue discount) funded by August 31, 2024 to acquire additional Claims (the “New Claims”) that collateralize the Working Capital Credit Facility (collectively, (i) and (ii) the “Operational Collection Floor”). On August 29, 2024, the Company received funding of $2.0 million under the Operational Collection Floor for the purpose of acquiring the New Claims from an existing Assignor, and on August 30, 2024, the Company acquired recovery rights associated with the New Claims for $2.0 million. The parties formalized the terms of the HPH Letter Agreement in Amendment No. 3 to the Working Capital Credit Facility dated October 1, 2024.

During the nine months ended September 30, 2024, the Company received under the Operational Collection Floor: (i) on August 2, 2024, $3.5 million of working capital for July and August 2024; (ii) on September 3, 2024, $1.75 million of working capital for September 2024; (iii) on October 2, 2024, $1.75 million of working capital for October 2024; and (iv) on October 24, 2024, $1.75 million of working capital for November 2024. The Company has $5.25 million of remaining capacity for working capital under the Operational Collection Floor as of the date of this filing.

Amounts borrowed and obligations under the Working Capital Credit Facility (x) are secured by a pledge of proceeds from certain Claims in the Company’s Claims portfolio, with the lien securing the Purchase Money Loan being subordinated and junior to the lien securing the Working Capital Credit Facility and (y) in order to secure those additional advances of Term Loan B beginning in January 2024, the following was provided as additional collateral: (i) a pledge of proceeds from certain Claims in the Company’s Claims

portfolio, up to $14 million; (ii) a pledge of the equity interests in an Affiliate of Messrs. John H. Ruiz and Frank C. Quesada; (iii) a mortgage on real property owned by an Affiliate of Messrs. John H. Ruiz and Frank C. Quesada (the “Mortgage”); and (iv) a personal guaranty by Messrs. John H. Ruiz and Frank C. Quesada, as primary obligors, guaranteeing those additional advances of Term Loan B beginning in January 2024 (the “Personal Guaranty”), and (z) pursuant to the Amendment No. 3 to Working Capital Credit Facility, Term Loan A and Term Loan B of the Working Capital Credit Facility are subordinated to the Operational Collection Floor and such amounts funded through the Operational Collection Floor are collateralized by the New Claims. In accordance with Amendment No. 3 to the Working Capital Credit Facility, HPH shall fully release the Mortgage and the Personal Guarantee once: (x) the principal amount of the Operational Collection Floor has been repaid in full (including any original issue discount), or (y) the drawn amounts under the Operation Collection Floor as of December 31, 2024 are repaid in full (on a drawn and funded basis) on a dollar per dollar basis by such date.

In addition, as discussed in Note 4, Asset Acquisitions, on March 29, 2023 the Company entered into the Purchase Money Loan with Hazel in the amount of $250.0 million.

Loans under the Working Capital Credit Facility accrue interest at a Term Secured Overnight Financing Rate for 12-month interest period, plus an applicable margin of 10% per annum. Accrued interest on the Working Capital Credit Facility is payable in kind and will be capitalized. The Working Capital Credit Facility has a stated maturity date of March 31, 2026, and HPH may extend for up to one year in its sole discretion. The Purchase Money Loan accrues interest at a rate of 20% per annum, payable in kind or in cash at the Company’s discretion. The Purchase Money Loan has a maturity date of March 31, 2026, extendable up to one year in Hazel’s sole discretion.

The Company is permitted to prepay the loans under the Working Capital Credit Facility from time to time without prepayment premium. Prepayment of the Purchase Money Loan will be permitted after the prepayment or repayment of loans under the Working Capital Credit Facility, and such prepayment of the Purchase Money Loan may be subject to prepayment penalty, as applicable.

The Purchase Money Loan and the Working Capital Credit Facility contain certain representations, warranties, and covenants of the Company and its subsidiaries, including restrictions on debt incurrence, liens, investments, affiliate transactions, distributions and dividends, fundamental changes, certain debt prepayments, and Claim settlement.

As discussed in Note 4, Asset Acquisitions, amounts borrowed and obligations under the Purchase Money Loan and the Working Capital Credit Facility are secured by a pledge of proceeds from certain Claims in the Company’s Claims portfolio, with the lien securing the Purchase Money Loan being subordinated and junior to the lien securing the Working Capital Credit Facility. Pursuant to the Purchase Money Loan and the Working Capital Credit Facility, the Company entered into a collateral administrative agreement between the Company and HPH, which sets forth certain arrangements between the Company and HPH in relation to the management of the litigation of certain Claims owned by the Company, the proceeds of which are due to the Company, and were pledged to Hazel and HPH to secure the Purchase Money Loan and the Working Capital Credit Facility, respectively. The Company is responsible for certain fees and expenses related to an independent representative nominated by the Company and Hazel; however, Hazel has agreed to fully reimburse the Company for any such fees and expenses.

Amended and Restated Nomura Promissory Note

On March 26, 2024, the Company amended and restated the Second Amended and Restated Nomura Note (the “Third Amended and Restated Nomura Note”) to: (a) increase the principal amount to approximately $30.0 million, and (b) extend the maturity date to September 30, 2025. The Third Amended and Restated Nomura Note carries an interest rate of 16% per annum and is payable in kind or in cash, at the Company’s discretion, every 30 calendar days after March 26, 2024. Upon two days prior written notice to Nomura, the Company may prepay all or any portion of the then outstanding principal amount under the promissory note together with all accrued and unpaid interest thereon. The balance of the unsecured promissory note and related interest are included within Claims financing obligations and notes payable in the condensed consolidated balance sheet. The note became current on September 30, 2024, and the Company does not currently have available liquidity to satisfy said obligation.

Note 11. WARRANT LIABILITY

When the Company issues warrants, it evaluates the proper balance sheet classification of the warrant to determine whether it should be classified as equity or as a derivative liability on the consolidated balance sheets. In accordance with ASC 815-40, “Derivatives and Hedging-Contracts in the Entity’s Own Equity” (“ASC 815-40”), the Company classifies a warrant as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or adjustments to the exercise price. If a warrant is not indexed to the Company’s own common stock or it has net cash settlement that results in the warrants to be accounted for under ASC 480, “Distinguishing Liabilities from Equity”, or ASC 815-40, it is classified as a derivative liability which is carried on the consolidated balance sheet at fair value with any changes in its fair value recognized currently in the statement of operations.

On May 17, 2022, the Company and CF Principal Investments LLC (“CF”) entered into an agreement for an OTC Equity Prepaid Forward Transaction (the “Prepaid Forward”). Pursuant to the terms of the Prepaid Forward, CF agreed to, among other things, transfer to MSP for cancellation any New Warrants received as a result of being the stockholder of record of any shares of Class A Common Stock as of the close of business on the closing date of the Business Combination, in connection with the New Warrant Dividend, On January 12, 2024, CF transferred 133,291,502 New Warrants to the Company, which were canceled upon receipt.

As of September 30, 2024, the Company had recognized a warrant liability for the following securities which are convertible into, or allow the purchase of, our Class A Common Stock, including: (i) 2,950,157 Public Warrants outstanding, each exercisable to purchase 1/25th of one share of our Class A Common Stock (but only exercisable in lots of 25 to purchase whole shares); (ii) 894,754,824 New Warrants outstanding, each exercisable to purchase 1/25th of one share of our Class A Common Stock (but only exercisable in lots of 25 to purchase whole shares); (iii) the CPIA Warrant, exercisable to purchase 2,666,667 shares of Class A Common Stock at a purchase price of $0.0025 per share; (iv) the VRM Warrants, exercisable to purchase 177,461,333 shares of Class A Common Stock at a purchase price of $0.0001 per share; and (v) warrants to Virage Recovery Participation, LP, exercisable to purchase 2,500,000 shares of Class A Common Stock at a purchase price of $0.0001 per share.

The warrant liability includes the mark-to-market fair value of the warrants discussed above. The fair value of the warrant liability is derived considering the potential shares issuable for each warrant and using the price of the Company’s Class A Common Stock as of the most recent balance sheet date, which is a quoted price in active markets.

The table below presents a roll-forward of the warrant liability from December 31, 2023 to September 30, 2024:


in thousands	Warrant Liability
Balance at December 31, 2023	$	(268	)
Issuance of new warrants		(148,429	)
Change in fair value of outstanding warrants		121,685
Balance at September 30, 2024	$	(27,012	)

A summary of activity of the shares resulting from the exercise of warrants during the nine months ended September 30, 2024 is as follows:


			Weighted Average
	# of Shares		Exercise Price
Balance at December 31, 2023		35,908,200	$	286.56
Issued		48,517,817	$	0.0001
Exercised		—	$	—
Expired		—	$	—
Balance at March 31, 2024		84,426,017	$	121.88
Issued		40,409,524	$	0.0001
Exercised		—	$	—
Expired		—	$	—
Balance at June 30, 2024		124,835,541	$	82.43
Issued		91,033,992	$	0.0001
Exercised		—	$	—
Expired		—	$	—
Balance at September 30, 2024		215,869,533	$	47.67

The table above does not include the CPIA Warrant as the value has been determined to be zero, as discussed in Note 10, Claims Financing Obligations and Notes Payable. Refer to Note 3, Business Combination, for discussion of the terms of the Public Warrants and New Warrants, and to Note 4, Asset Acquisitions, for discussion of the terms of the VRM Warrants.

Note 12. NON-CONTROLLING INTEREST

The non-controlling interest balance primarily represents the Up-C Units of the Company held by the Members. The following table summarizes the ownership of Units in the Company as of September 30, 2024:


	Common Stock		Ownership Percentage
Ownership of Class A Common Stock		30,975,324		20.0	%
Ownership of Class V Common Stock		124,067,498		80.0	%
Balance at end of period		155,042,822		100.0	%

The non-controlling interest holders have the right to exchange Up-C Units, at the Company’s option, for (i) cash or (ii) one share of Class A Common Stock, subject to the provisions set forth in the LLC Agreement. As such, future exchanges of Up-C Units by non-controlling interest holders will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in-capital or retained earnings when the Company has positive or negative net assets, respectively. As of September 30, 2024, 2.7 million Up-C Units have been exchanged into shares of Class A Common Stock.

In addition to the non-controlling interest related to Up-C Units, the Company also has non-controlling interests related to the Series as noted in Note 9, Variable Interest Entities, and MAO-MSO Recovery LLC Series FHCP (“FHCP”), which is a non-wholly owned subsidiary of MSP Recovery, LLC. In accordance with FHCP’s operating agreement, the non-controlling member is entitled to a preferred return of 20% per annum (the “Preferred Return”). Once the Preferred Return has been met, the non-controlling member is entitled to 80% of Claims recoveries by FHCP. The controlling member is allocated 100% of the costs of FHCP. Since the Preferred Return exceeds the total members’ equity of FHCP as of both September 30, 2024 and December 31, 2023, the non-controlling interest also includes $4.3 million representing the entire members’ equity of FHCP.

The Company pursues claims recoveries through settlement, arbitration, and legal proceedings. The accounting policy for these activities is discussed under Claims recovery income in Note 2, Basis of Presentation And Summary of Significant Accounting Policies, in our 2023 Form 10-K.

A significant majority of the Company’s expected recoveries arise from Claims brought pursuant to the private cause of action under the Medicare Secondary Payer Act (“MSP Act”). This law allows the Company to pursue recoveries against primary payers for reimbursement of medical expenses that the Company’s Assignors paid for when primary payers (i.e., liability insurers) were responsible for payment. On May 16, 2023, the Repair Abuses of MSP Payments Act (the “RAMP Act”) was introduced in the U.S. Senate and the U.S. House of Representatives, respectively, seeking to amend the private cause of action under the Medicare Secondary Payer Act, by striking “primary plan” and inserting “group health plan” into the existing text. As there is no indication that the RAMP Act is intended to be enacted retroactively, it should not have any effect on the recoverability of historical claims. To the extent that the Company has recovery rights in claims that have not yet been sought, or to the extent that the Company is assigned additional claims that may otherwise have been entitled to recoveries under the MSP Act, the passing of the RAMP Act could impact the Company’s ability to pursue recoveries on those prospective claims.

Investigations

As previously disclosed, on August 11, 2022, the Securities and Exchange Commission (the “SEC”) initiated an investigation of the Company, and requested documents relating to, among other matters, the Business Combination transaction with Lionheart Acquisition Corporation II consummated on May 23, 2022, certain historical and projected financial results, investor agreements, and data analytic platforms and Algorithms. The Company received a subpoena dated March 1, 2023 from the SEC regarding the aforementioned subject matter, and subsequently received a subpoena on May 10, 2023, in connection with the investigation relating to, among other matters, the Company’s projections and the accounting and valuation of certain assets that were the basis for the Company’s determination that its quarterly financial statements for the periods ended June 30, 2022 and September 30, 2022 require restatements and should no longer be relied upon, as disclosed in the Company’s Form 8-K on April 14, 2023. On August 16, 2023, the Company received an additional subpoena from the SEC regarding certain funding sources of the Company prior to the Business Combination, various statements and disclosures by the Company in connection with, and following, the Business Combination, certain historical and projected financial results, and data analytic platforms and Algorithms used to identify potential recoveries. The Company intends to fully cooperate with the SEC in responding to the subpoenas.

In addition, on March 10, 2023, the Company received a subpoena from the U.S. Attorney’s Office (“USAO”) in connection with a grand jury investigation in the U.S. District Court for the Southern District of Florida requesting certain information concerning the Company, which subpoena requests documents relating to, among other matters, the Company’s proprietary Algorithms and other software used to identify potentially recoverable claims, the drop in the price of the Company’s common stock following the Business Combination, and certain marketing materials and investment agreements presented to potential investors. On July 18, 2024, the Company received an additional subpoena from the USAO, requesting documents related to a Company press release. To the best of the Company’s knowledge, the Department of Justice has not issued any target letters to anyone associated with the Company as a result of this investigation. (The United States Attorney’s Manual states that a “target” is a person as to whom the prosecutor or the grand jury has substantial evidence linking him or her to the commission of a crime and who, in the judgment of the prosecutor, is a putative defendant.)

The Company has cooperated, and will continue to cooperate, fully with these inquiries. On April 16, 2023, a special committee of the Board of Directors was formed, which along with external advisors retained thereby, reviewed matters related to the preparation and filing of the 2022 Annual Report on Form 10-K and the subject matter of information requests related to the foregoing subpoenas received prior to June 2023. Based on that review, and the nature of the documents requested in the subsequent subpoena, the Company believes that the investigations will be resolved without any material developments; however, there can be no assurance as to the outcome or future direction thereof.

Cano Health, LLC

On August 10, 2023, MSP Recovery sued Cano Health, LLC (“Cano”) in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida for declaratory relief and anticipatory breach of the CCRA, Purchase Agreement, and a Service Agreement (collectively, the “Cano Agreements”) between the parties. On the same day, Cano sued the Company in the same court, alleging fraud in the inducement, breach of contract, tortious interference, and unjust enrichment relating to the Cano Agreements. The Company has outstanding a $5.0 million receivable from Cano; however, due to Cano’s Quarterly Report on Form 10-Q for the June 30, 2023 period, which includes a substantial doubt about its ability to continue as a going concern, and subsequent Chapter 11 bankruptcy filing on or about February 5, 2024, the Company established a reserve for the balance due under such receivable during 2023. These matters were automatically stayed as a result of Cano’s bankruptcy filing. As of July 2024, the Debtors’ Plan has been confirmed and declared effective. The automatic stay of litigation has been lifted and the parties anticipate the ongoing litigation to re-commence under a new scheduling order.

Note 14. FAIR VALUE MEASUREMENTS

The Company has no assets that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023. There were no assets or liabilities measured at fair value on a non-recurring basis during the three months ended September 30, 2024. Liabilities measured at fair value on a recurring basis as of September 30, 2024, are summarized as follows:


in thousands	Level	September 30, 2024		December 31, 2023
Derivative liability	3	$	110	$	37
Warrant liability	2		27,012		268
Total		$	27,122	$	305

The following table details the roll-forward of the Level 3 liabilities during the nine months ended September 30, 2024:


in thousands	Derivative liability
Balance at December 31, 2023	$	(37	)
Change in fair value of derivative liability		(60	)
Issuance of note		(13	)
Balance at September 30, 2024	$	(110	)

As of September 30, 2024, the certain embedded features within the Yorkville SEPA are treated as a derivative liability and changes in the fair value were recognized in the change in fair value of warrant and derivative liabilities in the condensed consolidated statements of operations. The embedded derivative liability is valued at each of the reporting period; the following table details the significant market-based inputs:


	September 30, 2024			December 31, 2023
Price of Common Stock	$	0.15		$	2.27
Volatility		50	%		40	%
Market Risk Spread		10.28	%		12.37	%
Expected Term (in years)		1.00			1.25

incurred should Law Firm fail to secure recoveries, although it does have recourse to any amounts advanced that have not been incurred as an expense.

Under the legal services agreement, the Company shall advance certain of Law Firm’s monthly expenses, including payroll and overhead; however, should Law Firm earn fees under the legal service agreements (the “Existing LSAs”) noted below, net of pre-existing obligations including payments to co-counsel sufficient to cover its monthly expenses, Company is entitled to reimbursement of the advance of said monthly expenses. Further, to the extent that Law Firm earns a surplus of fees in excess of its monthly expenses, said surplus shall be used to reimburse past amounts of Law Firm’s monthly expenses that Company advanced. For the three and nine months ended September 30, 2024, approximately $1.7 million and $7.7 million, respectively, of the $36.5 million advanced by the Company to the Law Firm has been incurred for expenses pursuant to the legal services agreement.

Founders’ Pledge - Claims Proceeds Investment Agreement

As disclosed in Note 10, the Founders pledged two million shares to secure payment of the original principal amount of the CPIA. Refer to Note 10, Claims Financing Obligations and Notes Payable.

Legal Services – Law Firm

Certain Company entities have previously entered into the Existing LSAs with the Law Firm, an affiliate of certain Members, for the recovery of Claims. Pursuant to the terms of the Existing LSAs, the Law Firm provides the Company with investigation, case management, research and legal services in the pursuit of recovery of Claims in exchange for a portion of the recovered proceeds relating to such Claims. The Existing LSAs also provide that the Law Firm serves as lead counsel or co-lead counsel for any litigation relating to such Claims. As of September 30, 2024, the Company had a payable to the Law Firm amounting to $0.8 million in connection with Claim recoveries. As of December 31, 2023, there was no amount due, as amounts paid through the prepaid noted above had covered amounts of existing LSAs due to the Law Firm for Claim recoveries. For the three and nine months ended September 30, 2024 and 2023, $1.7 million and $7.7 million, and $4.6 million and $13.5 million, respectively, was included in Professional fees – legal, for expenses related to the Law Firm in the condensed consolidated statements of operations. The amounts are related to the payment of Law Firm expenses as noted above.

In addition, during fiscal year 2023, the Company issued an unsecured promissory note in an aggregate principal amount of $4.95 million to the Law Firm, to provide general operational funding (the “Law Firm Loan”). The aggregate unpaid principal amount of this promissory note is due 24 months from the date of the most recent advance from the Hazel Credit Agreement is made. As of September 30, 2024, this promissory note was due on September 3, 2026. This promissory note does not carry interest and is payable by the Company at any time, without prepayment penalties, fees, or other expenses. On March 4, 2024, the Board authorized the partial repayment of the Law Firm Loan in the amount of $0.4 million, which funds were to be used for the express purpose of paying property taxes on real property owned and pledged by the MSP Principals to HPH as collateral in connection with the Working Capital Credit Facility.

For both the three and nine months ended September 30, 2024, $1.3 million were included in cost of revenue for expenses related to the Law Firm in the condensed consolidated statements of operations. For both the three and nine months ended September 30, 2023, $0.3 million of cost of revenue for expenses related to the Law Firm were included in the condensed consolidated statements of operations.

The Law Firm may also collect and/or hold cash on behalf of the Company in the ordinary course of business. As of September 30, 2024 and December 31, 2023, $0.9 million and $0.8 million, respectively, was due from the Law Firm and included in the condensed consolidated balance sheets in Affiliate Receivable.

In addition, the Company rents office space from the Law Firm as discussed in Note 8, Leases.

MSP Recovery Aviation, LLC

The Company may make payments related to operational expenses on behalf of its affiliate, MSP Recovery Aviation, LLC (“MSP Aviation”). The Company has made payments in the periods of the financial statements only related to specifically billed flights. As of both September 30, 2024 and December 31, 2023, $0.2 million was due from MSP Aviation and included in the condensed consolidated balance sheets in Affiliate Receivable. For the three and nine months ended September 30, 2024, $89.1 thousand and $180.8 thousand was included in General and Administrative expenses related to MSP Aviation in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2023, there were no expenses related to MSP Aviation included in the condensed consolidated statements of operations.

Funds Held for Other Entities

The Company may collect and/or hold cash on behalf of its affiliates in the ordinary course of business. As of both September 30, 2024 and December 31, 2023, $19.8 million was due to affiliates of the Company and included in the condensed consolidated balance

sheets in Affiliate Payable. These amounts were primarily due to Series MRCS, and will be repaid either through excess cash flows from operations or other financing. The Company also has a note payable with Series MRCS, which as of both September 30, 2024 and December 31, 2023, the balance was $0.5 million and included in the condensed consolidated balance sheets in Claims financing obligation and notes payable.

As of both September 30, 2024 and December 31, 2023, there were additional receivables from other affiliates of $0.2 million. These were included in the condensed consolidated balance sheets in Affiliate Receivable.

VRM MSP

The Company concluded that VRM MSP is a related party due to ownership interests in the entity held by the MSP Recovery and Series MRCS. For the three and nine months ended September 30, 2024 and 2023, the Company recorded $79.2 million and $228.7 million, and $67.8 million and $159.2 million, respectively, for interest expense related to the VRM Full Return and Virage MTA Amendment.

Virage

As discussed in Note 4, Asset Acquisitions, the Initial Virage Warrant, as amended, was issued effective January 1, 2024. Until our obligations to Virage are paid in full, the Company has the option every month to continue to pay Virage in one or a combination of: (a) cash, in an amount equal to 1.0% of each calendar month-end balance (which month-end balance shall be increased daily up to 20% per annum based on a formula set forth in the Virage MTA Amendment) of the amount owing to Virage as of each preceding calendar month end and/or (b) the issuance of subsequent Monthly Virage Warrants.

Refer to Note 4, Asset Acquisitions, for the listing of warrants issued during the three and nine months ended September 30, 2024.

Pursuant to purchase agreements dated March 4, 2024 and August 22, 2024, and as disclosed on Form 4 filings by Mr. John H. Ruiz, the Company’s Chief Executive Officer, the Company issued 438,596 and 360,620, respectively, of unregistered shares of Class A Common Stock to Virage in satisfaction of certain obligations of the Company, which shares were subsequently purchased from Virage by Mr. Ruiz.

Founder’s Up-C Units – VRM Full Return

As disclosed in Note 4, Asset Acquisitions, in connection with the MTA Amendment, the Company agreed to pay Virage an amount equal to the contributions by Virage to VRM MSP plus an annual rate of return of 20% (the “VRM Full Return”). Pursuant to the terms of the agreement with Virage, such amount may be payable by a sale of certain reserved shares of Messrs. John H. Ruiz and Frank C. Quesada, and the delivery of the resulting net cash proceeds thereof to VRM.

Working Capital Credit Facility Collateral

Pursuant to the Working Capital Credit Facility, and in order to secure those additional advances of Term Loan B beginning in January 2024, the Company approved for Messrs. John H. Ruiz and Frank C. Quesada to provide, as additional collateral, the following: (i) a pledge of the equity interests in an Affiliate of Messrs. John H. Ruiz and Frank C. Quesada; (ii) a mortgage on real property owned by an Affiliate of Messrs. John H. Ruiz and Frank C. Quesada (the “Mortgage”), and (iii) a personal guaranty by Messrs. John H. Ruiz and Frank C. Quesada, as primary obligors, guaranteeing those additional advances of Term Loan B beginning in January 2024 (the “Personal Guaranty”). On December 22, 2023, our Board approved the Company’s payment of certain costs and fees (including legal fees) on behalf of John H. Ruiz and Frank C. Quesada, associated with the mortgage granted in connection with said guaranty, totaling $0.1 million. On March 4, 2024, the Board authorized the partial repayment of the Law Firm Loan in the amount of $0.4 million, which funds were to be used for the express purpose of paying property taxes on real property owned and pledged by the MSP Principals to HPH as collateral in connection with the Working Capital Credit Facility.

On August 2, 2024, Subrogation Holdings entered into a letter agreement to amend the Working Capital Credit Facility (the “HPH Letter Agreement”) with HPH, which: (i) extended the period to draw up to $23.3 million (with a 40% original issue discount) for working capital, accessible in eight tranches of $1.75 million, that can be drawn at least one month apart, until September 2025; and (ii) provided for a $3.3 million loan (with a 40% original issue discount) funded by August 31, 2024 to acquire additional Claims (the “New Claims”) that collateralize the Working Capital Credit Facility (collectively, (i) and (ii) the “Operational Collection Floor”). On October 1, 2024, Hazel entered into Amendment No. 3 to the Working Capital Credit Facility, formalizing the terms set forth in the HPH Letter Agreement. Pursuant to such amendment, (i) Term Loan A and Term Loan B of the Working Capital Credit Facility are subordinated to the Operational Collection Floor and collateralized by the New Claims and (ii) once (x) the principal amount of the Operational Collection Floor has been repaid in full (including any original issue discount), or (y) the drawn amounts under the Operation Collection Floor as of December 31, 2024 are repaid in full (on a drawn and funded basis) on a dollar per dollar basis by such date, HPH shall fully release the Mortgage and the Personal Guarantee.

Note 16. NET LOSS PER COMMON SHARE

Basic earnings per share of Class A Common Stock is computed by dividing net income attributable to common shareholders by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted earnings per share of Class A Common Stock is computed by dividing net income attributable to common shareholders adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive elements. Diluted loss per share for all periods presented is the same as basic loss per share as the inclusion of the potentially issuable shares would be anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per share of Class A Common Stock:


	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except share and per share data)	2024			2023			2024			2023
Numerator - basic and diluted:
Net loss	$	(190,384	)	$	(224,217	)	$	(578,832	)	$	(609,192	)
Less: Net loss attributable to the non-controlling interests		160,537			204,462			504,967			576,301
Net loss attributable to MSP Recovery, Inc.	$	(29,847	)	$	(19,755	)	$	(73,865	)	$	(32,891	)

Denominator – basic and diluted:
Weighted-average shares of Class A common stock outstanding – basic		23,764,079			12,703,472			18,586,357			7,097,032
Weighted-average shares of Class A common stock outstanding – dilutive		23,764,079			12,703,472			18,586,357			7,097,032

Earnings per share of Class A common stock – basic	$	(1.26	)	$	(1.56	)	$	(3.97	)	$	(4.63	)
Earnings per share of Class A common stock – diluted	$	(1.26	)	$	(1.56	)	$	(3.97	)	$	(4.63	)

Shares of the Company’s Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented.

In the calculation for earnings per share for the three and nine months ended September 30, 2024, the Company excluded from the calculation of diluted earnings per share: (i) 124,067,498 shares of Class V Common Stock; (ii) 2,950,157 Public Warrants outstanding; (iii) 2,666,667 shares issuable upon the exercise of the CPIA Warrant; (iv) 894,754,824 New Warrants outstanding; (v) 243,783,366 shares issuable upon exercise of the VRM Warrants; and (vi) 2,500,000 shares issuable upon exercise of the VRP warrant, because their effect would have been anti-dilutive.

In the calculation for earnings per share for the three and nine months ended September 30, 2023, the Company excluded from the calculation of diluted earnings per share 124,264,645 shares of Class V Common Stock, 3,084,703 Public Warrants outstanding, 2,666,667 CPIA Warrants, and 1,028,046,326 shares of New Warrants outstanding because their effect would have been anti-dilutive.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context requires otherwise or unless otherwise noted, all references in this Quarterly Report on Form 10-Q (“Quarterly Report”) to “LifeWallet,” the “Company,” “we,” “us,” or “our” are to MSP Recovery, Inc., d/b/a LifeWallet, a Delaware corporation. The following discussion and analysis provides information that the Company’s management believes is relevant to an assessment and understanding of the Company’s condensed consolidated results of operations and financial condition. The discussion should be read together with our 2023 Annual Report on Form 10-K for the year-ended December 31, 2023 and our condensed consolidated financial statements and the related notes and other information included elsewhere in this Quarterly Report. This discussion may contain forward-looking statements based upon the Company’s current expectations, estimates, and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements."

Certain of the statements contained in this Quarterly Report on Form 10-Q are forward-looking and constitute forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “could,” “expect,” “intend,” “plan,” “predict,” “may,” “should,” 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 portfolio recoverability. 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. Although we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our industry, business, and operations, we cannot guarantee that actual results will not differ materially from our expectations. In evaluating such forward-looking statements, you should specifically consider various factors, including the risks outlined under “Risk Factors.” Any forward-looking statement made by the Company herein speaks only as of the date made. The discussion of risks and uncertainties set forth in this Form 10-Q is not necessarily a complete or exhaustive list of all risks facing the Company at any particular point in time. New risks and uncertainties come up from time to time, and it is not possible for management to predict or identify all such events or to assess either the impact of all such risk factors on our business or the extent to which any individual risk factor, combination of factors, or new or altered factors, may cause results to differ materially from those contained in any forward-looking statement. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof for any reason, even if new information becomes available in the future, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to, the Company’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 the Company; the ability to successfully expand the scope of our Claims or obtain new data and Claims from the Company’s existing Assignor base or otherwise; the Company’s ability to innovate and develop new solutions, and whether those solutions will be adopted by the Company’s existing and potential Assignors; negative publicity concerning healthcare data analytics and payment accuracy; compliance with the listing standards of The Nasdaq Capital Market; and those other factors listed under “Risk Factors” below and elsewhere in this Form 10-Q and other reports filed by the Company with the SEC.

We are a leading healthcare recovery and data analytics company. We focus on the Medicare, Medicaid, and commercial insurance spaces. We are disrupting the antiquated healthcare reimbursement system, using data and analytics to identify and recover improper payments made by Medicare, Medicaid, and commercial health insurers.

Medicare and Medicaid are payers of last resort. Too often, they end up being the first and only payers, because the responsible payer is not identified or billed. As Medicare and Medicaid pay a far lower rate than what other insurers are often billed, this costs the healthcare system (and the supporting taxpayers) tens of billions of dollars a year in improper billing and lost recoveries. By discovering, quantifying, and settling the billed-to-paid gap on a large-scale basis, the Company is positioned to generate meaningful annual recovery revenue at high profit margins.

Our access to large volumes of data, sophisticated data analytics, and a leading technology platform provide a unique opportunity to discover and recover on Claims. We have developed Algorithms to identify waste, fraud, and abuse in the Medicare, Medicaid, and commercial health insurance segments. Our team of experienced data scientists and medical professionals analyze historical medical Claims data to identify recoverable opportunities. Once potential recoveries are reviewed by our team, they are aggregated and pursued. Through statutory law and case law, we believe we have an established basis for future recoveries.

We differ from our competitors as we receive our recovery rights through irrevocable assignments of Claims. Rather than provide services under a third-party vendor services contract, we receive the rights to certain Recovery Proceeds from our Assignors. As assignees, we have control over the direction of the litigation and take on a risk that our competitors do not. We, or our affiliated entities, are the plaintiff in any action filed and have control over the direction of the lawsuit. By receiving Claims through assignment, we can pursue additional recoveries under numerous legal theories that our competitors cannot. Although we typically own assigned Claims,

for a significant portion of assigned Claims, our ability to pursue recoveries depends on our ongoing access to data through data access rights granted to us. In these cases, termination of such data access would substantially impair our ability to generate recoveries on those Claims.

Our current Claims portfolio has scaled significantly. We are entitled to a portion of any recovery rights associated with approximately $1,591 billion in Billed Amount (and approximately $380 billion in Paid Amount), which contains approximately $87.8 billion in Paid Value of Potentially Recoverable Claims, as of September 30, 2024. We believe it would take any competitor significant time to amass the portfolio of Claims rights currently owned by us due to, among things, the volume of our Claims data retained and strength of our data analytics, which we believe are key to attracting new clients that are willing to assign Claims to us.

Our business is directly related to the healthcare industry and is affected by healthcare spending and complexity in the healthcare industry. We estimate that our total potentially serviceable market is over $150 billion annually. Our primary focus is on the Medicare and Medicaid market segments. Medicare is the second largest government program, with annual expenditures during 2022 of approximately $944 billion for approximately 65.7 million enrollees. Medicaid has a combined estimated annual expenditure during 2022 of approximately $805 billion for approximately 88.4 million enrollees. Of the billions spent yearly by Medicare on medical expenses for its beneficiaries, we estimate that at least 10% of this was improperly paid by private Medicare plans.

Our potentially serviceable market is impacted by the expansion or contraction of healthcare coverage and spending, which directly affects the number of Claims available. The Centers for Medicare & Medicaid Services (“CMS”) has projected that health spending will continue to grow at an average rate of 5.4% a year between 2022 and 2031. We also believe reimbursement models may become more complex as healthcare payers accommodate new markets and lines of business and as advancements in medical care increase the number of testing and treatment options available. As reimbursement models grow more complex and healthcare coverage increases, the complexity and number of Claims may also increase, which could impact the demand for our solutions. Such changes could have a further impact on our results of operations.

As of September 30, 2024, approximately 95.8% of our expected recoveries arise from Claims being brought under the Medicare Secondary Payer Act. While we believe the MSP Act has bipartisan support, changes to the laws on which we base our recoveries, particularly the MSP Act, can adversely affect our business. Our ability to generate future revenue is therefore significantly dependent on factors outside our control.

In our current business model, we receive irrevocable assignments of health Claim recovery rights through CCRAs from a variety of sources including, but not limited to, MAOs, MSOs, HMOs, hospitals, and other at-risk entities. Prior to executing a CCRA, we utilize our proprietary internal data analytics platform to review the set of Claims and identify Claims with possible recovery paths.

Once Claims have been assigned, our data analysts use our proprietary Algorithms to identify potential recoveries. Results are then quality checked by our internal medical team. We contract with the Law Firm and various other law firms across the country to pursue recoveries through the legal system. Where appropriate, Law Firm reaches out to the liable parties to demand payment of amounts that are owed. Prior to” litigation, there may be an incentive for the primary insurer to settle. If legal action is required to pursue recovery from primary insurers, we seek “double damages” under the MSP Act.

We engage with each Assignor independently. We are typically entitled to 100% of recoveries pursuant to our CCRA. From those recoveries, we are typically contractually obligated to pay 50% of Net Proceeds to the Assignor. In certain cases, we have purchased the Assignor’s rights to Recovery Proceeds in advance of any collection; therefore, entitling the Company to retain 100% of the Net Proceeds. The “Net Proceeds” of any assigned Claim is defined as the gross amount recovered on an assigned Claim, minus any costs directly traceable to such assigned Claim(s) for which recovery was made. In some instances, we may purchase outright an Assignor’s recovery rights; in such instances, we are entitled to the entire recovery. In some cases, we have entered into arrangements to transfer CCRAs or rights to proceeds from CCRAs to other parties. Such sales include variable consideration in the form of payments that will be made only upon achievement of certain recoveries or based on a percentage of actual recoveries. We have not yet generated substantial revenue from the recovery model.

We developed the MSP Recovery Clearinghouse, formerly known as MSP Lien Resolver, to identify, quantify, and resolve outstanding liens. By law, Medicare and MA Plans are payers of last resort, making no-fault insurers the primary payers, responsible to exhaust their policy limits to pay for accident-related claims before Medicare bears any responsibility. Healthcare providers often submit Claims for the payment of medical services rendered after an accident to the patient’s health insurer, either seeking “conditional payments,” pending reimbursement by a primary payer, or entirely unaware that a primary payer has payment obligations. Medicare is unable to effectively verify if and how much is owed for any particular claimant if they are not aware that there is a Primary Payer involved.

Federal law requires primary payers to maintain and report the “key identifiers” for all claimants (such as their name, Social Security number, address, etc.) that are used to determine Medicare status on a regular basis and determine all claimant’s Medicare status before settling any injury claim. These steps are required to ensure that Medicare is alerted to primary payer obligations and to seek reimbursement. Primary payers routinely fail to fulfill these two duties, leaving Medicare in the dark and footing the bill. The result is a loophole for insurers, as Medicare relies on primary payer reporting to identify payment or reimbursement obligations. The Company has proved that in some instances primary payers have as little as a 2% reporting rate, thus failing to comply with the law 98% of the time.

The Company developed MSP Recovery Clearinghouse in an effort to reduce or eliminate this problem. MA Plans have and continue to provide claims data to the Company, including lists of beneficiaries along with diagnosis and treatment codes, and payment data. The Company aggregates this data into the MSP Recovery Clearinghouse, which compares the information with other publicly available sources. Proprietary algorithms then analyze these unique data sets against the list of beneficiaries to discover compensable Claims. The MSP Recovery Clearinghouse’s three-step data comparison & claim identification process reveals the full universe of beneficiaries and both reported and unreported Claims.

The amount owed is calculated and a demand to settle is made. If no agreement can be reached, the litigation moves forward. The MSP Recovery Clearinghouse model may also be used by primary payers to proactively resolve liens and ensure future compliance with federal law.

Over time, the Company believes that a large part of the flaws that exist in the marketplace can be significantly improved by the solutions that can be achieved by our “Chase to Pay” model. Chase to Pay is a near real-time analytics driven platform that identifies the proper primary insurer at the point of care or close enough in proximity for payers to determine primary and secondary payers. Chase to Pay is intended to plug into near real-time medical utilization platforms used by providers at the points of care. Rather than allow an MAO to make a wrongful payment whereby the payer needs to chase down the primary payer and collect a reimbursement for the MAO, Chase to Pay is intended to prevent the MAO from making a wrongful payment and ensure that the correct payer pays in the first instance. Furthermore, the primary payer typically will make payments at a higher multiple than the MAO would have paid, and MSP will be entitled to receive its portion of the Recovery Proceeds on the amounts paid by the primary payer. Chase to Pay is powered, in part, by Palantir’s Foundry platform utilizing LifeWallet’s industry knowledge.

As Chase to Pay was designed to work at or around the point of care, it is expected to substantially decrease legal costs of recovery. As a result, when implemented, Chase to Pay is expected to improve the net recovery margin as the recovery multiple grows and variable legal costs to recover decline. As a result of having already received data from insurance carriers we've settled with for historical claims, and based on the agreement with said carriers to receive data daily therefrom for one year from the date of the settlement, the Chase to Pay model can be utilized to the extent that we can match the insurance carrier with Claims data received from our Assignors.

Although we have not yet generated revenue from this model, some customers send data to LifeWallet on a monthly or quarterly basis. The Company is working to increase the number of customers that provide daily data outputs. We are currently in the process of determining the pricing and form of these arrangements. As part of our “Chase to Pay” model, we launched LifeWallet in January 2022, a platform powered by our sophisticated data analytics, designed to locate and organize users’ medical records, facilitating efficient access to enable informed decision-making and improved patient care.

We may also recognize Claims recovery service revenue from our services to customers to assist those entities with the pursuit of Claims recovery rights. We provide services to other parties to identify recoverable Claims and provide data matching and legal services. Under our Claims recovery services model, we do not own the rights to Claims but provide our services for a fee based on budgeted expenses for the month with an adjustment for the variance between budget and actual expense from the prior month.

We were a party to that certain Recovery Services Agreement (the “MSP RH Series 01 Recovery Services Agreement”), dated as of October 23, 2020, by and between MSP Recovery Holdings Series 01, LLC (“MSP RH Series 01”) and MSP Recovery, pursuant to which MSP Recovery provided services including identifying, processing, prosecuting, and recovering money for certain Claims of MSP RH Series 01. On March 29, 2023, this service fee agreement was terminated in connection with the series of agreements discussed in further detail in the Hazel Transactions section of Note 4, Asset Acquisitions.

The fees received pursuant to this agreement are related to expenses incurred and are not tied to the Billed Amount or potential recovery amounts. Although we believe our future business to be highly tied to the recovery model and Chase to Pay, we will continue to enter into these contracts as the market dictates.

On July 16, 2024, the Company reached a comprehensive settlement (the “July 2024 Settlement”) with a group of affiliated property and casualty insurers (“P&C Insurers”). The terms of the confidential settlement agreements include:

On August 19, 2024, the Company announced a $3.1 million cash settlement (the “August 2024 Settlement”) with a pharmaceutical manufacturer in a case where the Company alleged that the manufacturer increased the price of a drug in violation of antitrust laws.

The revenue generated from the July 2024 Settlement and the August 2024 Settlement is included within the Claims recovery income in the condensed consolidated statement of operations for the three and nine months ended September 30, 2024.

On June 7, 2024, the Company was notified by Nasdaq Listing Qualifications staff (the “Staff”) that the Company was non-compliant with Nasdaq’s Bid Price Requirement as the closing bid price for the Company’s Class A Common Stock had fallen below $1.00 per share for 30 consecutive business days (April 25, 2024 through June 6, 2024). Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company is provided with a compliance cure period of 180 calendar days, or until December 4, 2024, to regain compliance with the Bid Price Requirement. On September 25, 2024, stockholders holding at least a majority of our outstanding voting capital stock, including our Class A Common Stock and Class V Common Stock, approved by written consent a resolution authorizing the Board of Directors to amend the Company’s Charter, to effect a reverse stock split (the “Reverse Stock Split”) of the Company’s Common Stock at a reverse stock split ratio ranging from 1:3 to 1:30, and to authorize the Company’s Board of Directors to determine, at its discretion, the timing of the amendment and the specific ratio of the Reverse Stock Split. As announced on November 12, 2024, the Board determined to proceed with the Reverse Stock Split at a ratio of 1:25, which it expects to be effectuated by the open of business on November 18, 2024. The Reverse Stock Split would cause the amounts of Class A Common Stock and Class V Common Stock of 30,975,324 and 124,067,498, respectively, as of September 30, 2024, to result in 1,239,013 and 4,962,700 after giving effect to the Reserve Stock Split.

If the Company does not regain compliance during such 180-day compliance period, the Company may be eligible to transfer its listing to the Nasdaq Capital Market, so as to take advantage of the additional 180-day compliance period offered on that market, provided that the Company meets the continued listing requirement for market value of publicly held shares and all other applicable initial listing standards for Nasdaq, and provides a written notice of its intention to cure this deficiency during the second compliance period. If it appears to the Staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, it will receive written notification that its securities are subject to delisting. At that time, the Company may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules.

We differ from some of our competitors because we obtain our recovery rights through irrevocable assignments. When we are assigned these rights, we take on the risk that such Claims may not be recoverable. We are entitled to pursue a portion of any recovery rights associated with approximately $1,591 billion in Billed Amount (and approximately $380 billion in Paid Amount), which contained approximately $87.8 billion in Paid Value of Potentially Recoverable Claims, as of September 30, 2024. We are typically entitled to 100% of recovery rights pursuant to our CCRAs, but contractually obligated to pay 50% of gross recoveries to the Assignor. In certain cases, we have purchased from our Assignors the rights to 100% of the recovery. By discovering, quantifying, and settling the gap between Billed Amount and Paid Amount on a large scale, we believe we are positioned to generate substantial annual recovery revenue at high profit margins for our assigned Claims. In litigation, our experienced management and legal teams provide us with a competitive advantage. While our model of being assigned the Claim rights allows us the flexibility to direct the litigation and potentially generate higher margins, we have, on an opportunistic basis, paid the Assignor an upfront purchase price for these rights.

To date, we have not generated substantial revenue from our Claims portfolio, and our business model is dependent on achieving revenue from this model in the future. If we are unable to recover the upfront purchase price from the assigned Claims or the investments we have made in pursuing recoveries, it would have an adverse effect on our profitability and business.

Our potential Claims recovery income in a given period will be impacted by the amount of Claims we review and ultimately pursue. The number of Claims that we review is driven by the Claims we receive through assignment. As we are assigned more Claims, we can review the Claims and identify additional recoveries. To expand our Assignor base and obtain more Claims, we plan to implement new strategies to secure new Assignors. These strategies will include a platform to educate potential Assignors about our company, making strategic business partnerships, potential mergers, as well as other marketing strategies. Our Assignors have grown from 32 in 2015, to 105 in 2018, to 123 in 2019, to 134 in 2020 and over 160 Assignors to date. If we are unable to continue to attract new Assignors to our platform, this could adversely affect future profitability.

In addition to obtaining new Claims, our ability to collect on identified Claims at our estimated multiples is key to our future profitability. Pursuant to the MSP Act, we believe we are entitled to pursue reasonable and customary rates. Under existing statutory and case law, the private cause of action under the MSP Act permits the pursuit of double damages when a primary plan fails to provide for primary payment or appropriate reimbursement. In addition to double damages, federal law provides express authority to pursue statutory interest from primary payers on any amounts owed.

As a result, we may pursue double damages and statutory interest in our MSP Act-related recoveries. We seek to recover these amounts under either the recovery model or the Chase to Pay model. Federal law also expressly provides MAOs with the right to charge providers for the Billed Amount when accident-related liability exists. Per the terms of various legal services agreements that MSP Recovery has with the Law Firm, for legal services provided, the Law Firm would receive a percentage of the total Claim recovery which would include double damages and additional penalties. Our ability to pursue double damages may be impacted by the RAMP Act as disclosed in Note 13, Commitments and Contingencies.

Our Claims recovery revenue is typically recognized upon reaching a binding settlement or arbitration with a counterparty or when the legal proceedings, including any appellate process, are resolved. A decrease in the willingness of courts to grant these judgments, a change in the requirements for filing these cases or obtaining these judgments, or a decrease in our ability to collect on these judgments could have an adverse effect on our business, financial condition, and operating results. Of the Claims identified as potentially recoverable, relating to our accident-related cases as of September 30, 2024, approximately 86.8% of claims are already in the recovery process, which are claims where either the recovery process has been initiated, data has been collected and matched, or resolution discussions are in process.

To evaluate our business, key trends, risks and opportunities, prepare projections, make strategic decisions, and measure our performance, we track several key performance indicators (“KPIs”). As our company has yet to achieve significant revenues and the drivers of expected revenues require significant lead time before revenue can be generated, management utilizes KPIs to assist in tracking progress, and believes such KPIs are useful in evaluating the performance of our business, in addition to our financial results prepared in accordance with GAAP. The KPIs are Total Paid Amount, Paid Value of Potentially Recoverable Claims, Billed Value of Potentially Recoverable Claims, Recovery Multiple, and Penetration Status of Portfolio.

Total Paid Amount: The term Paid Amount is defined in the Definitions section above. As we continue to expand, we anticipate our revenue growth will be greatly dependent on our ability to increase the total Paid Amount and, correspondingly, the Paid Value of Potentially Recoverable Claims, in our portfolio. The Company’s Paid Amount may increase or decrease over time based on a number of factors, including, but not limited to, receiving new data from existing or new Assignors, and changes to our data processing procedures. Management believes this metric is a useful measure to investors and is useful in managing or monitoring company performance because we view an increase in Paid Amount as a positive indicator as it should provide the Company with the ability to increase the Paid Value of Potentially Recoverable Claims. Conversely, a decrease would produce a diminishing expectation of the Paid Value of Potentially Recoverable Claims.

Paid Value of Potentially Recoverable Claims (“PVPRC”): The term PVPRC is defined in the Definitions section above. We analyze our Claims portfolio and identify potentially recoverable Claims using our Algorithms to comb through historical paid Claims data and search for potential recoveries. The Company’s PVPRC may increase or decrease over time based on a number of factors, including, but not limited to, receiving new data from existing or new Assignors, changes to our data processing procedures, changes, developments, improvements or the elimination of Algorithms that identify potentially recoverable Claims, a decision by management not to litigate certain potentially recoverable Claims, or litigation updates affecting the viability of certain potentially recoverable Claims. PVPRC is a measure of the Paid Amount that has been paid to providers in respect of those potentially recoverable Claims. Management believes this measure provides a useful metric for potential recoveries, but it is not a measure of the actual amount that may be recovered with respect to potentially recoverable Claims, which in turn may be higher or lower based on a variety of factors. As non-compliance with Section 111 reporting requirements is commonplace, responsible reporting entities (RRE) routinely fail to report their responsibility to make primary payments; for this reason, data matching is often required to determine which reporting entity is responsible to reimburse a given potentially recoverable Claim. Our ability to generate future Claims recovery income is largely dependent on our ability to accurately identify potentially recoverable Claims through our data analytics and ultimately recover on these Claims. Management believes this metric is a useful measure to investors and in managing or monitoring company performance because we view an increase in PVPRC as a positive indicator as it should provide the Company with the ability to increase Claims recovery income and otherwise shows growth.

Billed Value of Potentially Recoverable Claims (“BVPRC”): BVPRC represents the cumulative Billed Amount of potentially recoverable Claims. We analyze our Claims portfolio and identify potentially recoverable Claims using Algorithms to comb through historical paid Claims data and search for potential recoveries. The Company’s BVPRC may increase or decrease over time based on a number of factors, including, but not limited to, receiving new data from existing or new Assignors, changes to our data processing procedures, changes, developments or the elimination of Algorithms that identify potentially recoverable Claims, a decision by management not to litigate certain potentially recoverable Claims, or litigation updates affecting the viability of certain potentially recoverable Claims. For a majority of our Claims, the Company believes it has the ability to recover in excess of the Paid Amount by pursuing the Billed Amount plus interest plus double damages under applicable law. Under existing statutory and case law, the private cause of action under the Medicare Secondary Payer Act permits an award of double damages when a primary plan fails to provide for primary payment or appropriate reimbursement. We believe federal law expressly provides MAOs with the right to charge, or authorize the provider of such services to charge, in accordance with the charges allowed under a law, plan, or primary plan policy. We believe our ability to generate future Claim recovery income is largely dependent on our ability to accurately identify potentially recoverable Claims through our data analytics and ultimately recover on these Claims. Management believes this metric is a useful measure to investors and in managing or monitoring company performance because we view an increase in BVPRC as a positive indicator as it should provide the Company with the ability to increase Claims recovery income and otherwise shows growth.

Recovery Multiple: The vast majority of our recoveries are sought pursuant to the MSP Laws; however, some recoveries are sought under product liability, antitrust, and other various causes of action. For recoveries sought pursuant to the MSP Laws, we generally pursue amounts in excess of the Paid Amount; in other cases, the cause of action will dictate the amount pursued. The Recovery Multiple is the amount of any generated Claims recovery income obtained by the Company in respect to any Claims as compared to the Paid Amount of those Claims (e.g., if a given Claim had a Paid Amount of $100, a $600 recovery would represent a Recovery Multiple of 6x). For these purposes, we record values under the Recovery Multiple once we have recorded Claims recovery income, either through the receipt of cash or recognition of accounts receivable on the Claims. Management believes this metric is useful to investors to manage or monitor the Company’s performance because the Recovery Multiple provides a measure of our ability to recover on Claims recovery rights. A Recovery Multiple above 1x would illustrate the Company’s ability to recover amounts in excess of the Paid Amount. As actual recoveries have been limited to date, this measure has limited utility for historical periods. However, management believes this measure will become more meaningful during the next 12 months and beyond to the extent the Company begins to report actual increases in recoveries during those periods. As of September 30, 2024, the Company has obtained settlements where the Recovery Multiple was or would be in excess of the Paid Amount, and settlements at or below the paid amount. However, these settlements do not provide a large enough sample to be statistically significant and are therefore not shown in the table. As the Recovery Multiple is based on actual recoveries, this measure is not based on the Penetration Status of Portfolio, as described below.

Penetration Status of Portfolio: Penetration Status of Portfolio provides a measure of the Company’s recovery efforts by taking into account the current stages of recovery of Claims in the portfolio and tying it in with the estimated market share of the related primary payers. The total percentage represents the estimated aggregate market share for the respective primary payers in which the Company is in some stage of recovery. As the Company initiates additional recovery efforts against additional primary payers, the Company expects this number to increase. These stages of recovery include where (1) the recovery process has been initiated, (2) data has been collected and matched, or (3) potential resolution discussions are in process. The Company uses third-party sources to estimate the aggregate market share of those primary payers in the property and casualty auto insurance market with whom the Company is engaged in one of these stages of recovery. Management believes this metric is useful to investors and in managing or monitoring company performance because it provides insight as to the estimated share of the market that is covered by existing recovery efforts. We estimate that cases that are in the potential resolution discussions and/or data matching are closer to generating potential future Claims recovery income.

Our primary income-producing activities are associated with the pursuit and recovery of proceeds related to Claims recovery rights that the Company obtains through CCRAs, which are irrevocably assigned to us. As such, this income is not generated from the transfer of control of goods or services to customers, but through the proceeds realized from perfection of Claims recoveries from rights we own. We recognize Claims recovery income based on a gain contingency model; that is, when the amounts are reasonably certain of collection. This typically occurs upon reaching a binding settlement or arbitration with the counterparty or when the legal proceedings, including any appellate process, are resolved.

In some cases, we would owe an additional payment to the original Assignor in connection with the realized value of the recovery right. Claims recovery income is recognized on a gross basis, as we are entitled to the full value of recovery proceeds and make payment to the original Assignor similar to a royalty arrangement. Such payments to our Assignors are recognized as cost of Claims recovery in the same period the Claims recovery income is recognized.

In the past, we have recognized Claims recovery service income for our services to a related party and a third party to assist those entities with pursuit of Claims recovery rights. We have determined we have a single performance obligation for the series of daily activities that comprise Claims recovery services, which are recognized over time using a time-based progress measure. We enter into Claims recovery service contracts with third parties. Amounts payable for services to third parties are typically based on budgeted expenses for the current month with an adjustment for the variance between budget and actual expenses from the prior month.

The Company did not recognize any claims recovery service income during the three and nine months ended September 30, 2024.

Other revenue consists of fee revenue generated by the Company’s new electronic health records (“EHR”) platform, which went live in the second quarter of 2024. Other revenue was not significant for the three and nine months ended September 30, 2024.

Costs of revenue consist of all directly attributable costs specifically associated with Claims processing activities, including contingent payments payable to Assignors (i.e., settlement expenses) and any other revenue generating activity.

Claims Amortization Expense consists of the amortization of CCRA intangible assets for those CCRAs in which we made upfront payments or commitments in order to acquire Claims recovery rights.

General and administrative expenses consist primarily of personnel-related expenses for employees involved in general corporate, sales, and marketing functions, including executive management and administration, legal, human resources, accounting, finance, tax, and information technology. Personnel-related expenses primarily include wages and bonuses. General and administrative expenses also consist of rent, IT costs, insurance, and other office expenses.

As we continue to grow as a company and build our team, we expect that our general and administrative costs will increase.

Allowance for credit losses consists of a specific reserve for a receivable amount due from Cano. Due to its material nature, it is included separately in the condensed consolidated statement of operations.

Professional fees consist of consulting, accounting, and other professional fees that are charged for services provided by third-party vendors.

Professional fees – legal consists of payments for the expenses of the Law Firm covered by a certain Legal Services Agreement and other legal professional services from third-party providers, including payments to co-counsel.

Depreciation and amortization expense consist of depreciation and amortization of property and equipment related to our investments in leasehold improvements, office and computer equipment, and internally generated capitalized software development costs. We provide for depreciation and amortization using the straight-line method to allocate the cost of depreciable assets over their estimated useful lives.

Interest expense includes interest paid on the Nomura Note, Hazel Working Capital Credit Facility and Purchase Money Loan, Virage transactions (see Note 4, Assets Acquisitions), Yorkville Advances, and Loans from related parties.

Other income consists of equity investment earnings, some affiliate related income, mark-to-market gain (loss) for payments due in stock, invoice cancellations, settlement income, and interest income. Other expenses consist of bank service charges, airing fees, tax penalties, settlement expense, political contributions and donations, and some affiliate related expenses.

Changes in fair value of warrants and derivative liabilities consists of the mark-to-market of warrant liabilities due to Public Warrants and Virage Warrants as noted in Note 3, Business Combination.

As a result of the Business Combination, the Company became the sole managing member of MSP Recovery, which is treated as a partnership for U.S. federal, state, and local income tax purposes. As a partnership, MSP Recovery is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by MSP Recovery is passed through to and included in the taxable income or loss of its partners, including MSP Recovery, Inc. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to the Company’s allocable share of income of MSP Recovery. The Company’s deferred tax balances reflect the impact of temporary differences between the carrying amount of assets and liabilities and the Company’s tax basis. The balances are stated at the tax rates in effect when the temporary differences are expected to be recovered or settled. The Company reviewed the anticipated future realization of the tax benefit of the Company’s existing deferred tax assets and concluded that it is more likely than not that all of the deferred tax assets will not be realized in the future.

Three months ended September 30, 2024 versus three months ended September 30, 2023

The following table sets forth a summary of our condensed consolidated results of operations for the three months ended September 30, 2024 to three months ended September 30, 2023 indicated.

Claims recovery income. Claims recovery income increased by $3.1 million to $3.6 million for the three months ended September 30, 2024 compared to the same period in the prior year, driven by increased settlements during the period.

Other revenue. Other revenue was $0.1 million for the three months ended September 30, 2024. The increase is related to a new service introduced in the second quarter of 2024.

Cost of revenue. Cost of revenue increased by $1.1 million to $1.7 million, for the three months ended September 30, 2024 compared to the same period in the prior year, driven by Assignor and law firm costs, which are directly correlated to the increase in claims recovery income.

Claims amortization expense. Claims amortization expense remained constant in three months ended September 30, 2024, as compared to the same period in the prior year.

General and administrative. General and administrative expenses decreased by $0.8 million to $5.3 million for the three months ended September 30, 2024 compared to the same period in the prior year, primarily driven by decreases in marketing and promotions of $0.5 million, rent expense of $0.1 million, dues subscriptions and licenses of $0.1 million, and insurance expenses of $0.1 million. These decreases were partially offset by increases of $0.1 million in salaries, benefits and payroll expenses.

Professional fees. Professional fees increased by $0.8 million to $3.2 million for the three months ended September 30, 2024 compared to the same period in the prior year, primarily driven by an increase of $1.5 million in corporate legal fees and $0.4 million in consulting fees, offset by a $0.7 million reduction in accounting fees, and a $0.5 reduction in other professional fees.

Professional fees – legal. Professional fees – legal decreased by $4.7 million to $2.2 million for the three months ended September 30, 2024 compared to the same period in the prior year, primarily due to fees to outsourced law firms being managed by the Law Firm.

Interest expense. Interest expense increased by $18.4 million to $106.7 million in the three months ended September 30, 2024 compared to the same period in the prior year, primarily driven by an increase due to the guaranty obligation, the new Hazel Working Credit Facility and Purchase Money Loan, as well as increases in the basis for which interest is incurred on our Claims financing obligations and accrued interest on the related party loan.

Other income (expense), net. Other income, net increased by $0.4 million for the three months ended September 30, 2024 compared to the same period in the prior year, primarily due to a $0.4 million gain on debt extinguishment.

Change in fair value of warrant and derivative liabilities. The change in fair value of warrant and derivative liabilities increased $45.0 million to $45.3 million for the three months ended September 30, 2024 compared to the same period in the prior year. For the three months ended September 30, 2024, the $45.3 million gain related to a mark-to-market adjustment to the fair value of Public Warrants and Virage Warrants. For the three months ended September 30, 2023, the $0.3 million gain related to a mark-to-market adjustment to the fair value of Public Warrants.

Nine months ended September 30, 2024 versus nine months ended September 30, 2023

The following table sets forth a summary of our condensed consolidated results of operations for the nine months ended September 30, 2024 to nine months ended September 30, 2023 indicated.

Claims recovery income. Claims recovery income increased by $3.4 million for the nine months ended September 30, 2024 compared to the same period in the prior year, driven by increased settlements during the period.

Claims recovery service income. Claims recovery service income decreased by $0.5 million to $0 for the nine months ended September 30, 2024 compared to the same period in the prior year, driven by third-party service fees related to a contract that expired during 2023 and did not renew.

Other revenue. Other revenue was $0.1 million for the nine months ended September 30, 2024. The increase is related to a new service introduced in the second quarter of 2024.

Cost of revenue. Cost of revenue increased by $1.5 million to $3.5 million, for the nine months ended September 30, 2024 compared to the same period in the prior year, driven by assignor and law firm costs, which are directly correlated to the increase in claims recovery income.

Claims amortization expense. Claims amortization expense increased by $7.5 million to $363.0 million for the nine months ended September 30, 2024 compared to the same period in the prior year, primarily driven by increased amortization due to the acquisition of CCRAs.

General and administrative. General and administrative expenses decreased by $3.5 million to $17.1 million for the nine months ended September 30, 2024 compared to the same period in the prior year, primarily driven by a decrease in marketing and promotions of $3.3 million, salaries, benefits and payroll expenses and taxes of $0.2 million, and insurance of $0.3 million, offset primarily by an increase in rent expense of $0.2 million and information technology expenses of $0.2 million, mainly data storage, among others.

Professional fees. Professional fees decreased by $3.6 million to $12.0 million for the nine months ended September 30, 2024 compared to the same period in the prior year, primarily driven by a $4.1 million reduction in consulting fees, $3.0 million management fees in 2023 that did not reoccur in 2024, and $1.2 million reduction in other professional fees, offset by an increase of $4.7 million in corporate legal fees.

Professional fees – legal. Professional fees – legal decreased by $16.7 million to $9.1 million for the nine months ended September 30, 2024 compared to the same period in the prior year, primarily due to fees to outsourced law firms being managed by the Law Firm.

Allowance for credit losses. Allowance for credit losses for the nine months ended September 30, 2023 was $5.0 million, entirely related to an amount due from Cano which has been reserved considering their public filings which included a substantial doubt about Cano’s ability to continue as a going concern. No changes to such reserves occurred during the nine months ended September 30, 2024.

Interest expense. Interest expense increased by $102.3 million to $306.6 million in the nine months ended September 30, 2024 compared to the same period in the prior year, primarily driven by an increase due to the guaranty obligation, the new Hazel Working

Credit Facility and Purchase Money Loan, as well as increases in the basis for which interest is incurred on our Claims financing obligations and accrued interest on the related party loan.

Other income (expense), net. Other income, net decreased by $7.6 million for the nine months ended September 30, 2024 compared to the same period in the prior year, primarily due to a $4.6 million gain on sale of CCRAs during 2023 that did not reoccur in 2024, and a $3.4 million reduction in the mark-to-market gain on liability payable in stock, which were partially offset by $0.4 million gain on debt extinguishment.

Change in fair value of warrant and derivative liabilities. The change in fair value of warrant and derivative liabilities increased $117.4 million to $121.6 million for the nine months ended September 30, 2024 compared to the same period in the prior year. For the nine months ended September 30, 2024, the $121.6 million gain related to a mark to market adjustment to the fair value of Public Warrants and Virage Warrants. For the nine months ended September 30, 2023, the $4.4 million gain in 2023 related to a mark to market adjustment to the fair value of Public Warrants.

In addition to the financial measures prepared in accordance with GAAP, this Quarterly Report 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 the Company’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 and non-recurring expenses, and adjusted operating loss items represent operating loss adjusted for certain non-cash and non-recurring expenses. A reconciliation of these non-GAAP measures to their most relevant GAAP measure is included below:

(1) Interest expense included above excludes any interest expense payments made in cash during the three and nine months ended September 30, 2024.

As an early-stage growth company, the Company has incurred substantial net losses since inception. As of September 30, 2024, the Company had unrestricted cash totaling $4.7 million, and as of October 31, 2024, the company had unrestricted cash totaling $5.6 million. The Company has incurred recurring losses and negative cash flows since inception and has an accumulated deficit of $159.4 million as of September 30, 2024. For the nine months ended September 30, 2024, the Company used approximately $17.9 million of cash in operations. The Company’s liquidity will depend on the ability to generate substantial revenue in the near future, the timing and amount of which is uncertain, as well as its ability to secure funding from additional third-party capital sources. The Company’s principal liquidity needs have been working capital, debt service, and Claims financing obligations.

The Company anticipates sources of liquidity to include the Working Capital Credit Facility and the Yorkville SEPA as disclosed in Note 10, Claims Financing Obligations and Notes Payable, and has taken several actions to address liquidity concerns, including actions enumerated below. However, as discussed further below, the Company has concluded management’s plans were not sufficient to alleviate the substantial doubt:

The Company has concluded that, despite the aforementioned financing arrangements, there is substantial doubt about its ability to continue as a going concern. Unless we are successful in raising additional funds through the offering of debt or equity securities, we have concluded it is probable we will be unable to continue to operate as a going concern beyond the next twelve months. In the event that the Company receives an audit report from its independent registered public accounting firm with an emphasis of matter paragraph as to going concern in connection with the Company’s audited annual financial statements, such event would result in an event of default in the aforementioned debt agreements, which would result in the debt becoming immediately due; however, the Company has received waivers from (i) Virage and VRM and (ii) HPH and Hazel if such an event were to occur for the year ending December 31, 2024.

As of September 30, 2024, the Company had unrestricted cash totaling $4.7 million. Over the next twelve months, the Company anticipates that its sources of liquidity will be its current cash on hand, the Working Capital Credit Facility and the Yorkville SEPA, as disclosed in Note 10 to the Financial Statements. As of September 30, 2024, the Company had $4.7 million of cash on hand, and $8.75 million of available capacity under the Working Capital Credit Facility. The Company has $5.25 million of remaining capacity for working capital under the Operational Collection Floor as of the date of this filing.

On August 2, 2024, Subrogation Holdings entered into a letter agreement to amend the Second Amended and Restated Credit Agreement (the “HPH Letter Agreement”) with HPH, which, among other things, provides for a $3.3 million loan (with a 40% original issue discount) to be funded by August 31, 2024 for the purpose of acquiring additional Claims (the “New Claims”) that will further collateralize the Working Capital Credit Facility. On August 29, 2024, the Company received funding of $2.0 million under the

Operational Collection Floor for the purpose of acquiring the New Claims from an existing Assignor, and on August 30, 2024, the Company acquired recovery rights associated with the New Claims for $2.0 million. The parties formalized the terms of the HPH Letter Agreement in Amendment No. 3 to Second Amended and Restated Credit Agreement dated October 1, 2024.

Amounts borrowed and obligations under the Working Capital Credit Facility are secured by a pledge of proceeds from certain Claims in the Company’s Claims portfolio, with the lien securing the Purchase Money Loan being subordinated and junior to the lien securing the Working Capital Credit Facility. Pursuant to Amendment No. 3 to Second Amended and Restated Credit Agreement, Term Loan A and Term Loan B of the Working Capital Credit Facility are subordinated to the Operational Collection Floor and collateralized by the New Claims.

On June 16, 2022, the MSP Principals provided cash to the Company to finance operations in an aggregate amount of $112.8 million. The Company issued the MSP Principals Promissory Note to the MSP Principals in an aggregate principal amount of $112.8 million that has an annual interest rate of 4%, payable in kind, and matures on the day that is the four-year anniversary of the issuance. On the maturity date, the Company is required to pay the MSP Principals an amount in cash equal to the outstanding principal amount, plus accrued and unpaid interest. The promissory note is prepayable by the Company at any time, without prepayment penalties, fees or other expenses. In addition to the amounts in the Promissory Note, at the merger date with LCAP, the MSP Principals contributed $13.0 million through funds that had been loaned to VRM MSP to cover related service fees. A portion of the proceeds under the MSP Principals Promissory Note in an amount equal to $36.5 million was advanced to the Law Firm for certain operating expenses as contemplated by the Legal Services Agreement. The MSP Principals Promissory Note contains customary events of default that would allow the MSP Principals to declare the MSP Principals Promissory Note immediately due and payable or the MSP Principals Promissory Note will immediately and automatically become due and payable without notice, presentment, demand, protest or other request of any kind. In addition, the MSP Principals Promissory Note may be accelerated by the MSP Principals if the Board of Directors of the Company (excluding the MSP Principals) terminates the Legal Services Agreement.

During the year ended December 31, 2023, the Company received a $4.95 million loan from the Law Firm, evidenced by an unsecured promissory note, to provide general operational funding. The aggregate unpaid principal amount of this promissory note is due 24 months from the date of the last advance from the Working Capital Credit Facility is made. This promissory note is payable by the Company at any time, without prepayment penalties, fees, or other expenses. The note does not carry any interest and can be repaid at any time or from time to time without a prepayment penalty. On March 4, 2024, the Board authorized the partial repayment of the Law Firm Loan in the amount of $0.4 million, which funds were to be used for the express purpose of paying property taxes on real property owned and pledged by the MSP Principals to HPH as collateral in connection with the Working Capital Credit Facility.

On April 12, 2023, we entered into an amendment (the “Virage MTA Amendment”) to the Virage MTA and Virage Guaranty pursuant to which the VRM Full Return payment due date was extended from May 23, 2023 until September 30, 2024, subject to acceleration upon certain triggering events. The Virage MTA Amendment changed the payment methods to Virage to exclusively be, in the following order of priority: (a) a first priority lien on all sources of revenue of the Company not otherwise encumbered as of the date of the Virage MTA Amendment to the extent such revenues and liquidity exceed the amount of net of revenues necessary to establish and maintain an operating reserve (“Operating Reserve”) of $70 million (the Operating Reserve was reduced to $47.5 million on July 24, 2023) for certain Company expenses, (b) a sale of certain reserved shares of Messrs. John H. Ruiz and Frank C. Quesada, and the delivery of the resulting net cash proceeds thereof to VRM, (c) Parent’s sale of additional shares and delivery of proceeds to Virage, subject to certain anti-dilution provisions, (d) if not satisfied by the foregoing, a sale by Messrs. Ruiz and Quesada other shares of Messrs. Ruiz and Quesada, and the delivery of the resulting net cash proceeds thereof to VRM; provided that if the VRM Full Return is not fully paid by September 30, 2024 the VRM Full Return shall be payable by any of such payment methods in any order of priority. In addition, in connection therewith, Messrs. Quesada and Ruiz agreed to certain transfer restrictions applicable to their common stock, and agreed to effectuate sales of Company common stock in certain circumstances.

On November 13, 2023, the Company entered into the Second Virage MTA Amendment that extended the VRM Full Return payment due date to December 31, 2024, subject to acceleration upon certain triggering events. The Second Virage MTA Amendment also: (a) changed the Operating Reserve from $47.5 million to the budget of the Company (plus applicable taxes) plus 10%, and (b) required Virage and the Company negotiate and agree on a form of initial warrant and monthly warrant by no later than December 31, 2023. In addition, pursuant to the Second Virage MTA Amendment, on January 1, 2024, the Company was required to make a one-time, lump sum payment to Virage for the period starting May 24, 2023 and ending December 31, 2023, in one or a combination of: (a) cash, in an amount equal to 1.0% of each calendar month-end balance (which month-end balance shall be increased daily up to 20% per annum based on a formula set forth in the Virage MTA Amendment) of the amount owing to Virage as of each preceding calendar month end and/or (b) warrants to purchase Class A common stock at $0.0001 per share, in an amount equal to the quotient of 1.0% of each calendar month-end balance (which month-end balance shall be increased daily up to 20% per annum based on a formula set forth

in the Virage MTA Amendment) of the amount owing to Virage as of each preceding calendar month end and the volume weighted average price of a share of our Class A common stock for the five day period prior to the issuance.

Until our obligations to Virage are paid in full, the Company has the option every month to continue to pay Virage in one or a combination of: (a) cash, in an amount equal to 1.0% of each calendar month-end balance (which month-end balance shall be increased daily up to 20% per annum based on a formula set forth in the Virage MTA Amendment) of the amount owing to Virage as of each preceding calendar month end and/or (b) the issuance of subsequent Monthly Virage Warrants.

On April 1, 2024, the Company entered into the Third Virage MTA Amendment (the “Third Virage MTA Amendment”) which: (i) extended the VRM Full Return payment due date to September 30, 2025, subject to acceleration upon certain triggering events; (ii) the Company agreed that, after the Convertible Notes are fully satisfied, 25% of the Company’s portion of any net proceeds from the Yorkville SEPA would be used to pay down the VRM Full Return; and (iii) Messrs. John H. Ruiz and Frank C. Quesada would commence the sale of certain of their reserved shares, and the delivery of the resulting net cash proceeds thereof to VRM.

On May 27, 2022, the Company issued an unsecured promissory note to Nomura in a principal amount of approximately $24.5 million related to advisory fees and deferred underwriting fees and expenses that became due and payable by the Company to Nomura, in connection with the consummation of the Business Combination (as defined herein).

On April 12, 2023, the Company amended and restated the promissory note originally issued on May 27, 2022 (the “First Amended and Restated Nomura Note”), increasing the principal amount to approximately $26.3 million, increasing the interest rate from 8.0% to 16% per annum, and extending the maturity date of the promissory note to September 30, 2024. On November 13, 2023, the Company amended and restated the First Amended and Restated Nomura Note (the “Second Amended and Restated Nomura Note”) to (a) increase the principal amount to approximately $28.9 million, (b) extend the maturity date to December 31, 2024, and (c) permit the Company to use the proceeds of an at-the-market offering to repay indebtedness incurred by the Company for which the proceeds are used for operating expenses, subject to certain enumerated restrictions. On March 26, 2024, the Company amended and restated the Second Amended and Restated Nomura Note (the “Third Amended and Restated Nomura Note”) to (a) increase the principal amount to approximately $30.0 million, and (b) extend the maturity date to September 30, 2025. The amended note carries an interest rate of 16% per annum and Third Amended and Restated Nomura Note is payable in kind or in cash, at the Company’s discretion, every 30 calendar days after March 26, 2024. Upon two days prior written notice to Nomura, the Company may prepay all or any portion of the then outstanding principal amount under the promissory note together with all accrued and unpaid interest thereon. The balance of the unsecured promissory note and related interest are included within Claims financing obligations and notes payable in the condensed consolidated balance sheet. The note became current on September 30, 2024, and the Company does not currently have available liquidity to satisfy said obligation.

On January 6, 2023, we entered into a purchase agreement with YA II PN, Ltd., a Cayman Island exempted company (“Yorkville”), pursuant to which Yorkville committed to purchase up to $1 billion in shares of Class A Common Stock, subject to certain limitations and conditions set forth therein. On November 14, 2023, we entered into the Yorkville SEPA, which fully amended and restated the January 6, 2023 agreement.

Pursuant to the Yorkville SEPA, the Company has the right to sell to Yorkville up to $250.0 million of its Class A Common Stock, subject to certain limitations and conditions set forth in the Yorkville SEPA, from time to time during the term of the Yorkville SEPA. Sales of Class A Common Stock to Yorkville under the Yorkville SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any shares of Class A Common Stock to Yorkville under the Yorkville SEPA except in connection with notices that may be submitted by Yorkville, in certain circumstances as described below.

Pursuant to the terms and conditions set forth in the Yorkville SEPA, the Company has the right, but not the obligation, from time to time at its discretion until the Yorkville SEPA is terminated to direct Yorkville to purchase a specified number of shares of Class A Common Stock (“Advance”) by delivering written notice to Yorkville (“Advance Notice”). While there is no mandatory minimum amount for any Advance, it may not exceed an amount equal to 100% of the average of the daily traded amount during the five consecutive trading days immediately preceding an Advance Notice.

The shares of Class A Common Stock purchased pursuant to an Advance Notice delivered by the Company will be purchased at a price equal to (i) 98% of the VWAP of the shares of Class A Common Stock on the applicable date of delivery of the Advance Notice

during regular trading hours on such date or (ii) 97% of the lowest daily VWAP of the shares of Class A Common Stock during the three consecutive trading days commencing on the date of the delivery of the Advance Notice, other than the daily VWAP on a day in which the daily VWAP is less than a minimum acceptable price as stated by the Company in the Advance Notice or there is no VWAP on the subject trading day. The Company may establish a minimum acceptable price in each Advance Notice below which the Company will not be obligated to make any sales to Yorkville. “VWAP” is defined as the daily volume weighted average price of the shares of Class A Common Stock for such trading day on the Nasdaq Stock Market during regular trading hours as reported by Bloomberg L.P.

In connection with the Yorkville SEPA, and subject to the condition set forth therein, Yorkville agreed to advance to the Company in the form of convertible promissory notes (the “Convertible Notes”) an aggregate principal amount of $15.0 million. On November 14, 2023, we issued a Convertible Note to Yorkville in the principal amount of $5.0 million, resulting in proceeds to us of $4.73 million on November 16, 2023. On December 11, 2023, we issued a Convertible Note to Yorkville in the principal amount of $5.0 million, resulting in proceeds to us of $4.75 million. On April 8, 2024, we issued a third Convertible Note to Yorkville in the principal amount of $5.0 million, resulting in net proceeds to us of $4.75 million.

As required pursuant to the Second Amended and Restated Nomura Promissory Note, 50% of the aggregate proceeds under the Yorkville SEPA will be used to repay amounts outstanding under the Amended and Restated Nomura Promissory Note (first towards accrued and unpaid interest, if any, then towards principal) and the remaining 50% of such proceeds will be used to repay amounts due under the Convertible Notes, if any, or be paid to the Company after the Convertible Notes are fully repaid. Pursuant to the Third Virage MTA Amendment, 25% of the Company’s portion of any net proceeds from the Yorkville SEPA would be used to pay down the VRM Full Return after the Convertible Notes are fully satisfied.

Pursuant to the Convertible Notes, Yorkville has the option, subject to certain limitations, of exchanging on one or more occasions all or part of the then outstanding balance under the note for shares of our Class A Common Stock at a conversion price equal to the lower of: (i) a fixed price equaling 120% of VWAP the day prior to the date of the closing of each tranche (the “Fixed Price”) or (ii) a variable price equaling 95% of the lowest daily VWAP during the seven consecutive trading days immediately preceding the exchange (the “Variable Price”), but in no event may the variable price be lower than $0.15 per share (the “Floor Price” as lowered pursuant to the Yorkville Letter Agreement). With respect to the initial Convertible Note issued on November 15, 2023, the Fixed Price equals $8.0225 per share, with respect to the second Convertible Note issued on December 11, 2023, the Fixed Price equals $3.7136 per share, and with respect to the third Convertible Note issued on April 8, 2024, the Fixed Price equals $1.5050 per share.

Upon the occurrence and during the continuation of an event of default, the Convertible Notes shall become immediately due and payable, and the Company shall pay to Yorkville the principal and interest due thereunder. Events of default include, among others: (i) the Class A Common Stock shall cease to be quoted or listed for trading, as applicable, on any primary market for a period of ten (10) consecutive trading days (the Company is currently quoted and listed for trading on the NASDAQ) and (ii) failure to timely file with the SEC any periodic report on or before the due date of such filing as established by the SEC, including extensions under Rule 12b-25 under the Exchange Act. In no event shall Yorkville be allowed to effect a conversion if such conversion, along with all other shares of Common Stock beneficially owned by Yorkville and its affiliates would exceed 9.99% of the outstanding shares of the Common Stock of the Company. If any time on or after November 14, 2023: (i) the daily VWAP is less than the Floor Price for ten consecutive trading days (“Floor Price Trigger”), (ii) the Company has issued substantially all of the shares available under the Exchange Cap (as defined below) (“Exchange Cap Trigger”), or (iii) the Parent is in material breach of the Registration Rights Agreement, and such breach remains uncured for a period of twenty trading days, or the occurrence of an “Event” (as defined in the Registration Rights Agreement) (“Registration Event Trigger” and collectively with the Floor Price Trigger and the Exchange Cap Trigger, the “Trigger”), then the Company shall make monthly payments to Yorkville beginning on the seventh trading day after the Trigger and continuing monthly in the amount of $1.5 million plus a 5.0% premium and accrued and unpaid interest. The Exchange Cap Trigger will not apply in the event the Company has obtained the approval from its stockholders in accordance with the rules of Nasdaq Stock Market for the issuance of shares of Class A Common Stock pursuant to the transactions contemplated in the Convertible Note and the Yorkville SEPA in excess of 19.99% of the aggregate number of shares of Class A Common Stock issued and outstanding as of the effective date of the Yorkville SEPA (the “Exchange Cap”).

Yorkville, at its discretion and providing that there is a balance remaining outstanding under the Convertible Notes, may deliver a notice under the Yorkville SEPA requiring the issuance and sale of shares of Class A Common Stock to Yorkville at the Conversion Price in consideration of an offset of the Convertible Notes (“Yorkville Advance”). Yorkville, in its sole discretion, may select the amount of any Yorkville Advance, provided that the number of shares issued does not cause Yorkville to exceed the 9.99% ownership limitation, does not exceed the Exchange Cap or the amount of shares of Class A Common Stock that are registered. As a result of a Yorkville Advance, the amounts payable under the Convertible Notes will be offset by such amount subject to each Yorkville Advance.

The Company will control the timing and amount of any sales of shares of Class A Common Stock to Yorkville, except with respect to the conversion of the Convertible Notes. Actual sales of shares of Class A Common Stock to Yorkville as an Advance under the Yorkville SEPA will depend on a variety of factors to be determined by the Company from time to time, which may include, among other things, market conditions, the trading price of the Company’s Class A Common Stock and determinations by the Company as to the appropriate sources of funding for our business and operations.

The Yorkville SEPA will automatically terminate on the earliest to occur of: (i) the first day of the month following the 36-month anniversary of the date of the Yorkville SEPA, or (ii) the date on which Yorkville shall have made payment of Advances pursuant to the Yorkville SEPA for shares of Class A Common Stock equal to $250.0 million. The Company has the right to terminate the Yorkville SEPA at no cost or penalty upon five (5) trading days’ prior written notice to Yorkville, provided that there are no outstanding Advance

Notices for which shares of Class A Common Stock need to be issued and the Company has paid all amounts owed to Yorkville pursuant to the Convertible Notes. The Company and Yorkville may also agree to terminate the Yorkville SEPA by mutual written consent. Neither the Company nor Yorkville may assign or transfer the Company’s respective rights and obligations under the Yorkville SEPA, and no provision of the Yorkville SEPA may be modified or waived by the Company or Yorkville other than by an instrument in writing signed by both parties.

The Yorkville SEPA contains customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

The net proceeds under the Yorkville SEPA to the Company will depend on the frequency and prices at which the Company sells its shares of Class A Common Stock to Yorkville. The Company expects that any proceeds received from such sales to Yorkville will be used for working capital and general corporate purposes.

On April 8, 2024, the Company and Yorkville entered into the Yorkville Letter Agreement to: (1) reduce the Floor Price from $1.28 to $1.00; (2) waive the first monthly payment due to the Floor Price Trigger, thereby curing the Floor Price Trigger; and (3) extend the maturity date of the Convertible Notes to September 30, 2025. On April 12, 2024, Yorkville further agreed that, to the extent that it holds Class A Common Stock in such quantities that would prevent the Company from utilizing the SEPA solely due to the Ownership Limitation, Yorkville commits to fund an additional advance in the principal amount of $13.0 million on the same terms and conditions as the previous advances pursuant to the Yorkville SEPA. On May 2, 2024, the Company and Yorkville reached an agreement to: (i) reduce the Floor Price under the Yorkville SEPA from $1.00 to $0.50. On July 11, 2024, the daily VWAP for our Class A Common Stock had been below the Floor Price for ten consecutive trading days, resulting in a Floor Price Trigger. On July 12, 2024, Yorkville agreed to extend the due date for the first Monthly Payment, due as a result of a Floor Price Trigger, to September 11, 2024. On August 13, 2024, the Company and Yorkville reached an agreement to reduce the Floor Price under the Yorkville SEPA from $0.50 to $0.15, thereby curing the Floor Price Trigger pursuant to the terms of the Yorkville SEPA. At the close of trading on October 18, 2024, the daily VWAP for the Company’s Class A Common Stock was below the Floor Price for ten consecutive trading days, resulting in a Floor Price Trigger, as defined in the Convertible Notes. Pursuant to a letter agreement dated November 7, 2024, Yorkville has agreed that the first Monthly Payment, as defined in the Convertible Notes, would be due from the Company no sooner than December 18, 2024. The Convertible Notes became current on September 30, 2024, and the Company does not currently have available liquidity to satisfy said obligations.

During the three and nine months ended September 30, 2024, the Company sold 10,049,967 and 11,859,069 shares to Yorkville, respectively, pursuant to investor notices delivered under the Yorkville SEPA at prices between $0.15 and $0.84 per share, and the proceeds were used to: (i) reduce amounts owed under Yorkville Note #1 by $1.3 million and $53.6 thousand of principal and interest, respectively, for the three months ended September 30, 2024, and $1.8 million and $0.2 million of principal and interest, respectively, for the nine months ended September 30, 2024, and (ii) $1.4 million and $2.0 million of payment to reduce amounts owed under the Amended and Restated Nomura Promissory Note for the three and nine months ended September 30, 2024.

On June 30, 2022, the Company entered into an Assignment and Sale of Proceeds Agreement (the “Assignment Agreement”) and a Recovery Services Agreement (the “Services Agreement” and collectively, the “Agreements”) with the Prudent Group (“Prudent”) in order to monetize up to $250.0 million of the value of the Company’s net recovery interest in Claim demand letters that the Company has commenced sending to insurers who admitted they had primary payer responsibility for the underlying accidents to the federal government (“Net Recovery Proceeds”). Pursuant to the Agreements, at the Company’s sole and absolute discretion, the Company has the right to direct Prudent to acquire, on a non-recourse basis, a percentage of Net Recovery Proceeds, up to an aggregate of $250.0 million, at a purchase price of 90% of Net Recovery Proceeds of such Claim.

Under the Services Agreement, the Company will service and recover on the demand letters and will retain any revenues generated in excess of the amount received from Prudent, plus up to an 18% annual return on the amount Prudent paid for Net Recovery Proceeds. Prudent may terminate the Services Agreement upon sixty (60) days prior written notice to the Company. The Company plans to utilize the Assignment Agreement as funding is needed. To date, the Company has not exercised its rights pursuant to the Services Agreement and does not anticipate doing so in the foreseeable future.

Actual results, including sources and uses of cash, may differ from our current estimates due to the inherent uncertainty involved in making those estimates and any such differences may impact the Company’s ability to continue as a going concern in the future. The expenditures associated with the development and launch of our additional recovery services and the anticipated increase in Claims recovery capacity are subject to significant risks and uncertainties, many of which are beyond our control, which may affect the timing and magnitude of these anticipated expenditures. These risks and uncertainties are described in more detail in the “Risk Factors” section in the 2023 Form 10-K.

The Agreements that the Company entered into on June 30, 2022 with Prudent have been terminated effective August 13, 2024.

On September 27, 2021, the Company entered into an Investment Capacity Agreement (the “ICA”) providing for potential future transactions regarding select healthcare Claims recovery interests with its investment partner, Virage, which transactions may include the sale of Claims by MSP. The ICA provides that the maximum value of such Claims will be $3.0 billion.

When the Company takes an assignment, the Company takes an assignment of the entire recovery but often has a contractual obligation to pay the Assignor 50% of any recoveries. This 50% interest typically is retained by the Assignor (the “Retained Interest”), although in some cases, the Company has acquired all of the recoveries, and the applicable Assignor has not kept any Retained Interest. The Retained Interest is not an asset of the Company, but an obligation to pay these Assignors, with the Company keeping the other 50% interest on any recoveries. Virage’s funding in connection with future transactions generally will be used to purchase Retained Interests from existing Assignors or new MSP Assignors, although its funds can also be used to buy 50% of the recoveries from the Company, in the event the applicable Assignor did not retain any Retained Interest. In connection with transactions consummated under the ICA, the Company may receive certain fees, including a finder’s fee for identifying the recoveries and a servicing fee for servicing the Claims.

Pursuant to the ICA, the Company will assist Virage in acquiring these Retained Interests for a cash price. Virage will be paid the recovery generated from the purchased Retained Interests when received through litigation or settlements. The ICA is separate and distinct from the equity investment in the Company by VRM MSP (an affiliate of Virage).

在2023年3月29日，公司收購了九家法律實體中的控制權，這些實體的唯一資產是CCRAs，收購行爲被稱爲「索賠購買」。索賠購買的購買價格由以下方式融資:(i)一筆購買款項貸款，貸款人爲Hazel，借款人爲公司，金額爲$25000萬(「購買款項貸款」)；(ii)來自索賠銷售中特定獨立CCRAs出售所得。詳見附註4。資產收購.

2015年2月20日，公司的一家子公司與第三方投資者簽訂了《索賠款項投資協議》（「CPIA」），直接和間接投資於索賠、爭議和訴訟以及仲裁索賠。針對此類投資，公司將未來某些索賠款項的一部分分配給投資者，儘管公司仍然是索賠的唯一所有人和受讓人，因爲投資者只是在獲取索賠款項的一部分收益權。投資者的回報基於其投資額（在原始和修訂協議之間爲2300萬美元）和從交割日起計算的30%的內部回報率。

2022年12月31日結束時，公司與第三方就修訂CPIA和認股權協議達成一致，各方同意修改原始CPIA和支付條款。見 “Brickell Key Investments”在附註10中，索賠融資義務和應付票據，了解已經修訂的索賠融資義務的描述。

根據TRA的條款，我們通常需要支付給成員以及在TRA下成爲「TRA當事方」的其他人員85%的稅款節省，如果有的話，我們會在一定情況下被認定爲實現的稅款節省，這是由於業務合併後存在的某些稅務屬性，以及此後產生的稅收，包括在TRA下的支付所致。TRA的期限將持續直到利用或到期所有這類稅收優惠，除非我們行使終止TRA的權利，以終止TRA，金額代表預期未來稅收優惠的現值或發生某些其他加速事件。我們在TRA下支付的任何款項通常將減少本應可用於我們的整體現金流的金額，並且，如果由於任何原因我們無法支付TRA下的款項，未支付款項通常將被推遲，並將計算利息，直至我們支付。

截至2024年9月30日的九個月內，經營活動淨現金使用量比2023年同期的3150萬美元減少了1370萬美元，降至1790萬美元。在截至2024年9月30日的九個月期間，經營活動淨現金使用量主要受到我們的淨虧損、36300萬美元的索賠攤銷費用、20340萬美元的實物利息、12170萬美元的認股權證負債公允價值變化以及11530萬美元的營運資金變化增加的影響。我們在經營活動中使用的現金流主要與薪資和專業服務相關，期間之間沒有顯著變化。

截至2024年9月30日止九個月的投資活動使用的淨現金相比於2023年9月30日止九個月提供的淨現金從1010萬美元變動至240萬美元。在2024年9月30日止九個月期間，我們用於投資活動的現金涉及收購額外CCRA的金額爲220萬美元，以及購買房地產、廠房和設備的金額爲20萬美元。

截至2024年9月30日的九個月，融資活動提供的淨現金減少至1330萬美元，而截至2023年9月30日的九個月融資活動提供的淨現金爲1540萬美元。這主要是由於債務融資的收入爲1650萬美元和普通股發行的收入爲200萬美元，而這被償還的索賠融資義務480萬美元和相關方貸款償還40萬美元所抵消。

根據索賠融資義務和應付票據協議，截至2024年9月30日，這些義務下欠款的現值爲63830萬美元，包括當日已資本化的利息。另外，截至2024年9月30日和2023年12月31日，公司分別從約克維爾獲得1320萬美元和1000萬美元的預付款。根據目前63830萬美元的賬面價值和0.0%至20.0%的區間利率，加權平均利率爲14.9%。預計公司將通過索賠收入的現金流還款這些義務。

截至2024年9月30日，這些協議的最低要求付款爲78780萬美元。其中某些協議在完全清償剩餘款項之前具有付款優先權。承諾的到期時間爲從收到足夠索賠賠償以支付所需回報的日期，或在某些情況下爲2031年。

截至2024年9月30日，公司有107710萬的擔保義務。2023年4月12日，我們簽署了Virage MTA修正案，根據該修正案，付款日期從2023年5月23日延長至2024年9月30日，視特定觸發事件而加快。2023年11月13日，到期日期延長至2024年12月31日。根據Virage MTA修正案，Virage將獲得公司所有未另有負擔的營業收入優先留置權，超過Virage MTA修正案日期當日用於設立和維持用於一週開支和適用稅款的7000萬美元進行運作儲備的收入金額的部分。2023年7月24日，運作儲備調整到4750萬美元，並根據第二次Virage MTA修正案，運作儲備從4750萬美元調整到公司預算（加上適用稅款）加10%。2024年4月1日，公司簽署了第三個Virage MTA修正案，其中：（i）將VRm全額歸還款項截止日期延長至2025年9月30日，根據特定觸發事件而加快；（ii）公司同意，在可轉換票據得到完全清償後，將來自Yorkville SEPA淨收益的公司所佔份額的25%用於支付VRm全額歸還；（iii）啓動對John H. Ruiz和Frank C. Quesada先生的部分儲備股份的出售，並將其產生的淨現金收益交付給VRm。

我們在本季度報告的表格10-Q中包含的簡化的合併財務報表及相關附註是按照GAAP準則準備的。我們準備簡化的合併財務報表時需要對金額和相關披露進行估計和假設，這些估計和假設會影響我們財務報表和附註中的報告金額。我們的估計基於歷史經驗和我們認爲在該情況下是合理的各種因素，並且結果構成了對於資產和負債的賬面價值進行判斷的基礎，這些賬面價值不能從其他來源中輕易獲取。由於在進行這些估計時涉及固有的不確定性，實際結果可能會因在不同假設或條件下的這些估計與實際結果的不同而產生差異，而且這些差異可能是重大的。

我們的關鍵會計政策和估計在“管理層對財務狀況和經營結果的討論與分析 - 關鍵會計政策”中披露於我們的2023年10-K表格中，並且在截止到2024年9月30日的三個月和九個月期間沒有發生重大變化。

我們是根據交易所法規120億.2規定而被定義爲較小的報告公司，並且不需要根據該項要求提供其他信息。

我們維護披露控制和程序（根據交易所法第13a-15(e)條款的定義），旨在確保我們在根據交易所法提交的報告中所需披露的信息被記錄、處理、彙總和報告，符合證監會的規則和表格要求，且我們在根據交易所法提交的報告中所需披露的信息能夠被彙總並傳達給我們的管理層，包括我們的首席執行官和致富金融(臨時代碼)首席財務官，以便及時做出關於所需披露的決策。

管理層在我們首席執行官和首席財務官的參與下，對截至2024年9月30日的披露控制和程序的有效性進行了評估。根據該評估，我們的管理層，包括首席執行官和首席財務官，得出結論認爲截至2024年9月30日，我們的財務報告內部控件並不有效，因爲2023年10-K表格中識別的人力資源流程存在的重大缺陷尚未整改完畢，包括用戶訪問控制的設計和控件操作、系統實施的變更管理以及工資條目的批准，同時在合同終止的會計覈算方面也存在重大缺陷，包括對供應商服務合同終止的會計覈算。上述重大缺陷的整改工作正在進行中。

管理層認爲上述的重大弱點並未對我們的財務結果產生影響。

在最近的財政季度內，我們的內部財務報告控制未發生任何變化，這些變化對我們的內部財務報告控制的重大影響，或者可能對我們的內部財務報告控制產生重大影響。

我們可能會不時捲入法律訴訟，或在我們業務的正常過程中受到索賠。無論結果如何，這些訴訟或索賠都可能對我們產生不利影響，因爲涉及軍工股和和解費用、資源分散以及其他因素，而且不能保證會取得有利的結果。

調查儘管本協議中的任何內容相反，但本協議並不妨礙您向政府機構提供可能違法行爲的信息，或者在可能涉及違法行爲的任何政府機構的調查或訴訟中作證或參與, 爲了明確起見，您無權根據《證券交易所法》第21F條向證券交易委員會自願提供信息。

根據先前披露，2022年8月11日，證券交易委員會（「SEC」）啓動了對公司的調查，並要求有關業務合併交易以及獅心收購公司II於2022年5月23日完成的文件，某些歷史和預測的財務結果，投資者協議以及數據分析平台和算法。公司收到了SEC於2023年3月1日關於前述主題的傳票，並隨後在2023年5月10日收到了有關調查的進一步傳票，其中包括公司的預測、某些資產的會計和估值，這些資產是公司決定其截至2022年6月30日和2022年9月30日的季度財務報表需要重述並且不應再依賴的依據，如公司於2023年4月14日在8-K表中披露的。於2023年8月16日，公司收到了SEC關於業務合併之前公司的某些資金來源，公司在業務合併前後關於業務合併的各種聲明和披露，某些歷史和預測的財務結果以及用於確定潛在收入的數據分析平台和算法的進一步傳票。公司打算全力配合SEC回應這些傳票。

此外，2023年3月10日，公司收到了美國律師辦公室（"USAO"）的傳票，此次傳票與佛羅里達州南區聯邦法院的一個大陪審團調查有關，要求提供有關公司的某些信息，該傳票請求與公司專有算法及其他用於識別潛在可回收索賠的軟件有關的文件，涉及公司的普通股在與業務合併後價格下跌的情況，以及出示給潛在投資者的某些市場材料和投資協議。2024年7月18日，公司收到了來自USAO的另一份傳票，要求提供與公司新聞稿相關的文件。根據公司的最佳了解，司法部沒有因該調查向與公司相關的任何人發出目標信函（美國檢察官手冊中指出，"目標"指的是檢察官或大陪審團有實質證據將其與犯罪行爲聯繫起來的人，並且在檢察官的判斷中，他或她是擬被告）。

公司已經並將繼續全力配合這些調查。關於2022年10-K表格的準備和提交事項的審查，特別委員會及其聘請的外部顧問也審查了與2023年6月之前收到的前述傳票相關的信息請求。根據該審查，以及後續傳票中請求的文件性質，公司認爲調查將會沒有任何重大進展而得到解決；然而，無法保證其結果或未來的發展方向。

2023年7月7日，公司向Cano Health, LLC（「Cano」）發行了796萬股A類普通股，作爲6170萬美元的遞延薪酬的支付。該遞延薪酬與以下協議有關，公司可以選擇用現金或股票支付，並選擇用股票支付，其中（i）322萬5807股A類普通股作爲根據公司與Cano簽訂的那份於2022年9月30日生效並至今一直在生效的、經修訂的《Cano購買協議》中的某些索賠的遞延考慮而發行，（ii）473萬4194股A類普通股作爲根據公司與Cano簽訂的那份於2021年12月31日生效並至今一直在生效的、經修訂的《Cano索賠回收和轉讓協議》中的某些索賠的遞延考慮而發行。

2023年8月10日，公司在佛羅里達州邁阿密戴德縣第十一司法區巡迴法院對Cano進行起訴，請求宣告權利和對Cano協議（包括Cano CCRA、Cano購買協議和服務協議）的預期違約。同一天，Cano在同一法庭起訴公司，聲稱誘導欺詐、合同違約、侵權干涉和不正當得利，涉及Cano協議。公司有來自Cano的500萬美元應收賬款尚未結清；然而，由於Cano在2023年6月30日和9月30日結束的季度報告中，對Cano繼續作爲經營實體的能力存在重大疑慮，以及Cano在2024年2月4日根據美國破產法第11章自願申請申請救濟，公司在2023年爲該應收賬款餘額建立了準備金。這些事項因Cano的破產申請而自動暫停。截至2024年7月，債務人計劃已獲確認並生效。訴訟的自動暫停已被解除，各方預計持續訴訟將在根據新的排程命令重新開始。

2024年1月4日，Cano對Simply Healthcare Plans, Inc.（「Simply」）以及公司和相關實體提起訴訟，尋求判決聲明以判斷Cano購買協議是否應被撤銷，以及Cano或公司是否有權就根據Cano購買協議指派給公司的索賠向Simply索賠。Cano還要求賠償損失。

就簡而言之，涉及公司在卡諾購買協議下指定索賠。公司打算在所有與卡諾相關的訴訟中積極維護其立場。

我們認爲與我們業務、經營成果和財務控件相關的重要風險，並未有實質性變化，這些風險因素在截至2023年12月31日的年度報告10-K中已有披露（「2023年10-K表格」）。我們鼓勵潛在投資者考慮在我們2023年10-K表格中描述的風險，以及在本季度報告10-Q和我們2023年10-K表格中包含的管理層討論及財務狀況和經營成果分析，以及在我們向證券交易委員會提交的文件中公開披露的其他信息，在購買我們的證券之前。

在截至2024年9月30日的季度期間，公司發行了warrants，允許Virage購買91,033,992股A類普通股。2024年10月23日，公司還發行了一份2024年10月的warrant，允許Virage購買66,322,033股A類普通股。

截至2024年9月30日的季度期間，公司向palantir發行了1,533,757股未註冊的A類普通股。2024年10月29日，公司向palantir發行了另外2,761,904股未註冊的A類普通股。

在2024年9月30日結束的季度期間，公司根據約克維爾(SEPA)提供的投資者通知出售了10,049,967股股票，價格在每股$0.15和$0.50之間，所得款項用於：(i) 減少根據約克維爾票據#1所欠金額，分別爲$130萬和$5.36萬的本金和利息；以及(ii) 支付$140萬以減少根據修訂後的野村期票據所欠金額。

ǂ 先前已提交。根據S-K條規第601(b)(2)項的規定，如果公開披露可能對公司造成競爭損害，則協議中某些不重要的條款已被刪減或省略。

根據1934年的證券交易法的要求，註冊人已經指定代表簽署本報告。


特拉華州	84-4117825
（國家或其他管轄區的公司成立或組織）	（IRS僱主唯一識別號碼）
3150 SW 38th Avenue, 1100套房邁阿密, 佛羅里達	33146
(主要行政辦公室地址)	(郵政編碼)
2701勒瓊路, 10層, 科勒蓋布爾斯, 佛羅里達 33134
（前名稱、地址及財政年度，如果自上次報告以來有更改）


每一類的名稱	交易符號:	在其上註冊的交易所的名稱
A類普通股，每股面值0.0001美元	LIFW	納斯達克全球貨幣市場
可贖回的warrants，每批25個warrants可轉爲一股A類普通股，行使價格爲每股287.50美元	LIFWW	納斯達克全球貨幣市場
可贖回的warrants，每批25個warrants可按每股0.0025美元的行使價格行使購買一股A類普通股。	2024年6月7日，MSP Recovery, Inc.（「公司」、「我們」或「我們的」）收到納斯達克證券交易所（「納斯達克」）上市資格部的通知，稱我們的普通股收盤買價在前30個連續的營業日內不足1美元/股，因此不符合維持納斯達克協議中規定的最低買盤價要求。該通知顯示我們將有180個日曆日或至2024年12月4日之前的時間來恢復符合此要求。在180天的符合期限內，如果我們的普通股收盤買價連續10個營業日至少爲1美元/股，我們就可以恢復符合1美元的最低掛牌要求。納斯達克的通知對我們的普通股在納斯達克的掛牌或交易沒有立即影響。	納斯達克全球貨幣市場


		頁面
第I部分	財務信息	5
條款1。	基本報表(未經審計)	5
	截至2024年9月30日和2023年12月31日的精簡合併資產負債表	5
	2024年9月30日和2023年的三個月和九個月的營運基本報表	6
	2024年和2023年9月30日終了的精簡綜合權益變動表及九個月變動表	7
	2024年9月30日止九個月的精簡合併現金流量表和2023年	8
	簡明聯合財務報表附註(未經審計)	9
項目2。	分銷計劃	34
項目 3。	有關市場風險的定量和定性披露	51
項目 4。	控制和程序	52
第二部分	其他信息	53
項目 1。	法律訴訟	53
項目1A。	風險因素	54
項目 2。	未註冊的股票股權銷售和籌款用途	54
項目3。	對優先證券的違約	54
項目4。	礦山安全披露	54
項目5。	其他信息	54
項目6。	展示資料	55
簽名		56


	2023年9月30日			2024年12月31日，
(單位：千，除了股份和每股數據)	2024			2023
資產
流動資產：
現金	$	4,746		$	11,633
應收賬款		3,100			217
關聯應收賬款 (1)		1,222			1,188
預付費用和其他流動資產 (1)		1,692			8,908
總流動資產		10,760			21,946
物業和設備，淨值		4,866			4,911
無形資產，淨額 (2)		2,771,969			3,132,796
使用權資產		257			342
總資產	$	2,787,852		$	3,159,995

負債和股東權益
流動負債:
應付賬款	$	10,767		$	6,244
關聯方應付款 (1)		20,637			19,822
應付佣金		1,222			821
衍生品負債		110			37
權證負債 (1)		27,012			268
擔保義務 (1)		1,077,070			—
索賠融資義務和應付款 (1)		43,267			—
應付利息(1)		11,096			—
其他流動負債 (1)		14,813			19,314
總流動負債		1,205,994			46,506
擔保義務 (1)		—			941,301
索賠融資義務和應付票據 (1)		588,513			548,276
租賃負債		138			235
關聯方貸款 (1)		130,328			130,709
應付利息 (1)		12,655			73,839
其他長期負債		3,236			—
總負債	$	1,940,864		$	1,740,866

承諾和 contingencies （注13）

股東權益：
A類普通股，$0.0005股，截至2024年4月30日和2024年1月31日，授權股票0.0005股；0.0001面值； 5,500,000,000授權股份； 30,975,324和 14,659,794截至2024年9月30日和2023年12月31日，已發行和流通	$	3		$	1
V類普通股，$0.0001面值； 3,250,000,000授權股份； 124,067,498和 124,132,398截至2024年9月30日和2023年12月31日，已發行和流通		12			12
其他資本公積		459,748			357,928
累積赤字		(159,416	)		(85,551	)
股東權益總額	$	300,347		$	272,390
非控股權益		546,641			1,146,739
總股本	$	846,988		$	1,419,129
總負債和權益	$	2,787,852		$	3,159,995


	截至9月30日的三個月						截至9月30日的九個月
(單位：千，除了股份和每股數據)	2024			2023			2024			2023
索賠收入	$	3,577		$	440		$	9,879		$	6,479
索賠回收服務收入		—			—			—			498
其他		91			—			127			—
總收入	$	3,668		$	440		$	10,006		$	6,977

運營費用
營業成本 (1)		1,671			574			3,453			1,972
索賠攤銷費用		121,007			121,008			363,027			355,481
營業費用及管理費（2）		5,329			6,130			17,145			20,691
專業費用		3,248			2,466			12,030			15,611
專業費用 - 法律（3）		2,213			6,871			9,146			25,889
信貸損失準備金		—			—			—			5,000
折舊與攤銷		71			85			206			182
總營業費用		133,539			137,134			405,007			424,826
營業損失	$	(129,871	)	$	(136,694	)	$	(395,001	)	$	(417,849	)

利息支出 (4)		(106,653	)		(88,279	)		(306,596	)		(204,287	)
其他收入（費用），淨額		799			408			1,140			8,697
權證和衍生負債公允價值變動		45,341			348			121,625			4,247
稅前淨虧損	$	(190,384	)	$	(224,217	)	$	(578,832	)	$	(609,192	)

所得稅費用的撥備		—			—			—			—
淨損失	$	(190,384	)	$	(224,217	)	$	(578,832	)	$	(609,192	)

淨損失歸屬於非控制權益人		160,537			204,462			504,967			576,301
歸因於MSP Recovery, Inc.的淨虧損。	$	(29,847	)	$	(19,755	)	$	(73,865	)	$	(32,891	)

基本和稀釋加權平均流通股份，A類普通股		23,764,079			12,703,472			18,586,357			7,097,032
基本和稀釋後每股A類普通股的淨虧損。	$	(1.26	)	$	(1.56	)	$	(3.97	)	$	(4.63	)


☒	根據1934年證券交易法第13或15(d)節的季度報告


☐	根據1934年證券交易法第13或15(d)節的轉型報告書


大型加速文件管理器	☐	加速過濾器	☐

非加速過濾器	☒	規模較小的申報公司	☒

新興成長型公司	☒


	A類普通股				V類股票
(除股份外，以千爲單位)	股票		金額		股份		金額		其他資本公積		累計虧損			3			總股本
2024年6月30日餘額		18,630,980	$	2		124,067,498	$	12	$	390,756	$	(129,569	)	$	772,804		$	1,034,005
A類發行		12,344,344		1		—		—		68,992		—			(65,626	)		3,367
淨損失		—		—		—		—		—		(29,847	)		(160,537	)		(190,384	)
截至2024年9月30日的餘額		30,975,324	$	3		124,067,498	$	12	$	459,748	$	(159,416	)	$	546,641		$	846,988


	A類普通股				五類股票
(單位：千股)	股票		金額		股數		金額		其他資本公積		累計虧損			非控制權益利息			總股本
2023年6月30日的餘額		5,289,434	$	—		124,264,645	$	12	$	176,643	$	(42,339	)	$	1,669,169		$	1,803,485
權證轉換		125		—		—		—		2		—			1			3
A類股票發行		8,509,671		1		—		—		170,731		—			(106,341	)		64,391
淨損失		—		—		—		—		—		(19,755	)		(204,462	)		(224,217	)
2023年9月30日的餘額		13,799,230	$	1		124,264,645	$	12	$	347,376	$	(62,094	)	$	1,358,367		$	1,643,662


	A類普通股				五級股票
(以千爲單位，除股數外)	股票		金額		股數			金額		其他資本公積		累計虧損			非控制權益利息			總股本
2023年12月31日的餘額		14,659,794	$	1		124,132,398		$	12	$	357,928	$	(85,551	)	$	1,146,739		$	1,419,129
A類發行		16,315,530		2		(64,900	)		—		101,820		—			(95,131	)		6,691
淨損失		—		—		—			—		—		(73,865	)		(504,967	)		(578,832	)
截至2024年9月30日的餘額		30,975,324	$	3		124,067,498		$	12	$	459,748	$	(159,416	)	$	546,641		$	846,988


	A 類普通股				V 類股票
（以千計，股票除外）	股票		金額		股票			金額			額外實收資本		累計赤字			非控制性興趣愛好			總股權
截至2022年12月31日的餘額		2,984,212	$	—		125,919,180		$	13		$	137,069	$	(29,203	)	$	2,077,586		$	2,185,465
認股權證的轉換		9,523		—		—			—			388		—			(169	)		219
A 類發行		10,805,495		1		(1,654,535	)		(1	)		209,919		—			(142,749	)		67,170
淨虧損		—		—		—			—			—		(32,891	)		(576,301	)		(609,192	)
2023 年 9 月 30 日的餘額		13,799,230	$	1		124,264,645		$	12		$	347,376	$	(62,094	)	$	1,358,367		$	1,643,662


	截至9月30日的九個月
(以千爲單位)	2024			2023
經營活動現金流量：
淨虧損（1）	$	(578,832	)	$	(609,192	)
調整爲淨損失到經營活動現金流量淨使用：
折舊與攤銷		206			182
索賠攤銷費用		363,027			355,481
實物支付利息（1）		203,420			204,263
債務清償利得		(450	)		—
信貸損失準備金		—			5,000
權證責任公允價值變動		(121,685	)		(4,406	)
無形資產出售收益		—			(4,599	)
基於股份的報酬		94			—
應付股票標的賬面價值盈利		(523	)		(3,937	)
以股份支付的專業費用		1,484			1,875
衍生品公允價值變動		60			158
非現金租賃費用		5			1
經營性資產和負債的變化：
應收賬款		(2,883	)		53
預付款和其他資產		7,216			13,032
關聯應收賬款 (1)		(34	)		1,594
關聯方應付款 (1)		814			—
應付賬款、佣金應付款和應計負債		7,100			8,962
應付利息		103,130			—
遞延收入		—			—
用於經營活動的淨現金		(17,851	)		(31,533	)

投資活動現金流量：
購買物業和設備		(161	)		(1,641	)
購買無形資產		(2,200	)		(600	)
出售無形資產的收益		—			10,000
投資活動的淨現金流量(使用)/提供的淨現金流量		(2,361	)		7,759

籌集資金的現金流量：
貸款融資收入		16,500			25,000
遞延融資成本		—			(250	)
債務發行成本		—			(683	)
(付款)與關聯方貸款的款項(1)		(382	)		4,950
暫時性股權釋放		—			(11,420	)
償還索賠融資義務		(4,793	)		(2,488	)
普通股發行收益		2,000			—
認股權轉換		—			243
融資活動提供的淨現金		13,325			15,352

現金淨減少額		(6,887	)		(8,422	)
年初現金餘額		11,633			15,081
期末現金餘額	$	4,746		$	6,659

非現金投資和籌資活動的補充披露:
無形資產的出售	$	—		$	30,987
以應付票據融資購買無形資產	$	—		$	250,000
暫時權益的釋放	$	—		$	1,807
原始發行貼現。	$	8,083		$	16,667
以股份發行結算債務	$	2,000		$	—
通過發行A類普通股支付專業費用	$	1,484		$	2,049
因取得使用權資產而產生的非現金租賃負債	$	—		$	426
以股份支付Cano Health的付款	$	—		$	61,690

期間支付的現金用於：
利息	$	4,495		$	—


(in thousands)	Intangible Assets
Balance as of December 31, 2023	$	3,132,796
Acquisitions of CCRAs		2,200
Amortization expense		(363,027	)
Balance as of September 30, 2024	$	2,771,969


$ in billions	Nine Months Ended September 30, 2024			Year Ended December 31, 2023			Year Ended December 31, 2022
Paid Amount	$	380.5		$	369.8		$	374.8
Paid Value of Potentially Recoverable Claims(2)		87.8			88.9			89.6
Billed Value of Potentially Recoverable Claims		375.3			373.5			377.8
Recovery Multiple	N/A(1)			N/A			N/A
Penetration Status of Portfolio		86.8	%		86.8	%		85.8	%


	MSP Recovery, Inc.（MSP拯救，公司，我們）

日期：2024年11月14日	作者：	Francisco Rivas-Vásquez
		弗朗西斯科·裏瓦斯-巴斯克斯
		首席財務官
		（信安金融財務負責人和財務會計負責人）


	Three Months Ended September 30,
(In thousands, except for percentages)		2024			2023		$ Change			% Change
Claims recovery income	$	3,577		$	440		$	3,137			713		%
Other		91			—			91			100		%
Total Revenue	$	3,668		$	440		$	3,228			734		%
Operating expenses
Cost of revenue		1,671			574			1,097			191		%
Claims amortization expense		121,007			121,008			(1	)		(0	)	%
General and administrative		5,329			6,130			(801	)		(13	)	%
Professional fees		3,248			2,466			782			32		%
Professional fees - legal		2,213			6,871			(4,658	)		(68	)	%
Depreciation and amortization		71			85			(14	)		(16	)	%
Total operating expenses		133,539			137,134			(3,595	)		(3	)	%
Operating Loss	$	(129,871	)	$	(136,694	)	$	6,823			(5	)	%
Interest expense		(106,653	)		(88,279	)		(18,374	)		21		%
Other income (expense), net		799			408			391			96		%
Change in fair value of warrant and derivative liabilities		45,341			348			44,993			12,929		%
Net loss before provision for income taxes	$	(190,384	)	$	(224,217	)	$	33,833			(15	)	%
Provision for income tax expense		—			—			—			—		%
Net loss	$	(190,384	)	$	(224,217	)	$	33,833			(15	)	%
Less: Net (income) loss attributable to non-controlling interests		160,537			204,462			(43,925	)		(21	)	%
Net loss attributable to MSP Recovery, Inc.	$	(29,847	)	$	(19,755	)	$	(10,092	)		51		%


	截至9月30日的九個月
（以千計）	2024			2023
用於經營活動的淨現金	$	(17,851	)	$	(31,533	)
投資活動提供的（用於）淨現金		(2,361	)		7,759
融資活動提供的淨現金		13,325			15,352
現金淨減少		(6,887	)		(8,422	)
年初現金		11,633			15,081
期末現金	$	4,746		$	6,659


		參照而成
展覽數字	描述	形式	文件編號	展覽	備案日期
4.1+	2024年7月1日的VRm月度權證	10-Q	001-39445	10.14	2024年8月14日
4.2+	2024年8月1日的VRm月度權證	10-Q	001-39445	10.15	2024年8月14日
4.3+	由代位索賠控股有限公司與海澤爾合夥人控股有限公司於2024年8月2日簽署的協議	8-K	001-39445	4.1	2024年8月8日
10.1+	於2024年7月12日簽署的約克維爾SEPA補充協議	8-K	001-39445	10.1	2024年7月18日
10.2+	可交換本票的形式	8-K	001-39445	10.2	2024年7月18日
10.3ǂ	Subrogation Holdings，LLC；MSP Recovery，LLC；JRFQ Holdings，LLC；4601 Coral Gables Property，LLC；MSP Recovery Claims，Series LLC - Series 15-09-321；和Hazel Partners Holdings，LLC之間於2024年8月2日簽署的函件協議。	8-K	001-39445	10.1	2024年8月8日
10.4+	約克維爾SEPA附函於2024年8月13日簽署	10-Q	001-39445	10.13	2024年8月14日
10.5+	Virage Recovery Master LP和Virage Capital Management LP於2024年9月6日簽署的信函協議	8-K	001-39445	10.01	2024年9月10日
10.6ǂ	2024年10月2日第二次修訂和重訂的信用協議第3修正案	8-K	001-39445	10.1	2024年10月2日
10.7*	Yorkville SEPA Side Letter executed November 7, 2024
31.1*	根據《證券交易法》第13a-14(a)和15d-14(a)條的規定，信安金融首席財務官的認證書，該規定根據2002年《薩班斯-奧克斯利法》第302條的規定採納。
31.2*	根據《證券交易法》第13a-14(a)條和第15d-14(a)條規定文件，信安金融主要財務負責人的認證，根據《薩班斯-奧克斯利法案》第302條通過。
32.1#	根據2002年薩班斯 - 豪利法案第906條，主要執行官的認證（根據18 U.S.C. Section 1350進行），豪利奧克斯利應用第32.1(a)項（第906條）的採納。
32.2#	帶有嵌入式鏈接庫的內聯XBRL分類擴展模式文件。
Inline XBRL實例文檔	Inline XBRL Instance文檔——由於其XBRL標記嵌入到Inline XBRL文檔中，因此此實例文檔不會出現在互動數據文件中。
Inline XBRL擴展架構文檔	內聯XBRL補充架構，帶有嵌入式鏈接基礎文檔。
104*	封面交互數據文件（嵌入在Inline XBRL文檔中）。