MSP Recovery, Inc. Announces Completion of Business Combination Between Lionheart Acquisition Corporation II and MSP Recovery, LLC.
MSP Recovery, Inc. ("MSPR"), formerly known as Lionheart Acquisition Corporation II, a Delaware corporation (Nasdaq: LCAPU, LCAP, LCAPW, "Lionheart" or "LCAP"), today announced that it has closed the previously announced business combination (the "transaction") with MSP Recovery, LLC. ("MSP"), a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery leader. The business combination was approved by a majority of LCAP's stockholders in an extraordinary meeting on May 18, 2022.
As previously announced, following the closing, LCAP's Class A Common Stock will cease trading on the Nasdaq Capital Market ("Nasdaq CM") under the symbol "LCAP" (CUSIP 53625R104), and will begin trading tomorrow -- May 24, 2022 -- on Nasdaq Global Market ("Nasdaq GM") under the symbol "MSPR" (CUSIP 553745100) and LCAP's warrants, each to purchase one share of Class A Common Stock of MSPR at $11.50 per share, will cease trading on the Nasdaq CM under the symbol "LCAPW" and begin trading on Nasdaq GM under the symbol "MSPRZ".
"Today's news is the latest milestone showing that MSP Recovery has entered into an exciting new stage as one of the nation's most sophisticated and successful payer reimbursement recovery companies that continues to pave the way in discovering and recovering improperly paid claims as well as the development of cutting edge technology to fix the fragmented healthcare systems, to not only save tax payer dollars but also save lives," said MSP Recovery Founder and CEO, John H. Ruiz. "The closing of this business combination is proof of the confidence in the strength of our business strategy and effectiveness of our innovative approach. Since the announcement of the business combination agreement we have seen a substantial amount of new business over and above what we originally projected," said Mr. Ruiz.
The business combination with LCAP announced on July 12, 2021 was based on an enterprise value of the combined company of approximately $32.6 billion. The $32.6 billion valuation was based on projected MSPR Recovery Proceeds. Since July 2021, however, MSPR has been developing additional revenue streams.
As of December 31, 2021, MSPR's portfolio included more than $1.5 trillion in billed amount (reflecting the full amount billed by a provider to a health plan or insurer), up more than 530% from $242 billion in 2020. MSPR's portfolio included $364.4 billion in paid amount as of the same date (reflecting amounts actually paid to a provider from a health plan), up more than 520% from $58.4 billion in 2020.
And since announcing the Business Combination in July 2021, MSPR has seen a significant increase in interest from various entities in the healthcare industry. During that time period alone, MSPR has: vetted 91 prospects; made proposals to 48 entities; conducted data diligence on 46 entities; generated a data evaluation report for 21 entities; and negotiated initial agreements with 20 entities. MSPR already has over 150 assignors, and continues to grow its number of assignors.
"I am thrilled to see this business combination successfully executed and look forward to working with John and the MSP Recovery team as they continue to innovate on behalf of a growing list of healthcare providers and payers," said Ophir Sternberg, Chairman and CEO of Lionheart. "MSP Recovery is well-positioned to continue to expand its footprint in this promising market."
Keefe, Bruyette & Woods, a Stifel Company, served as financial advisor to MSP Recovery. Nomura Securities International, Inc. served as financial and capital markets advisor to Lionheart Acquisition Corp II. Weil, Gotshal & Manges LLP served as legal counsel to MSP Recovery. DLA Piper LLP served as legal counsel to Lionheart Acquisition Corp II. ICR, LLC served as communications advisor to MSP Recovery.
About MSP Recovery
Founded in 2014, MSP Recovery has become a Medicare, Medicaid, commercial, and secondary paer reimbursement recovery leader, disrupting the antiquated healthcare reimbursement system with data-driven solutions to secure recoveries against responsible parties. MSP Recovery provides the healthcare industry with comprehensive compliance solutions, while innovating technologies to help save lives. For more information, visit: www.msprecovery.com
About Lionheart Acquisition Corporation II
Lionheart Acquisition Corporation II was a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. For more information, visit: www.LCAP2.com.
Cautionary Note Regarding Forward Looking Statements
This communication includes forward looking statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act") and Section 27A of the Securities Act, which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. 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There is no guarantee that prospects or results or the timing of events included or referred to in this communication, including the continued utilization of LifeWallet, or that it will save lives, will be achieved or that MSP will be able to implement successfully its investment strategy or achieve its investment objectives or return targets. Accordingly, we caution you against relying on forward-looking statements. Forward looking statements also are subject to a number of significant risks and uncertainties that could cause the actual results to differ materially, and potentially adversely, from those express or implied in the forward-looking statements. These statements are based on various assumptions, whether or not identified in this communication, and on the current expectations of management and are not predictions of actual performance. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions, and such differences may be material. Many actual events and circumstances are inherently subject to significant business, economic and competitive uncertainties and contingencies, and are beyond the control of MSP and are difficult to predict. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Factors that may cause such differences include, but are not limited to, operating costs and future business, investment, holding and sale decisions and costs; the risks that the anticipated benefits of the launch and adoption of LifeWallet are not realized or are delayed; the risks associated with MSP's business, including, among others, MSP's ability to capitalize on its assignment agreements and recover monies that were paid by the assignors; litigation results; the validity of the assignments of claims to MSP; a determination that MSP's claims are not reasonable, related or necessary; the failure of MSP's clients to renew their agreements with MSP (or terminate those agreements early); MSP's claims being within applicable statutes of limitations; the inability to successfully expand the scope of MSP's claims or obtain new data and claims from MSP's existing assignor base or otherwise; the limited number of MSP's assignors and the associated concentration of MSP's current and future potential revenue; internal improvements to claims and retail billing processes by MSP's clients that reduce the need for and revenue generated by MSP's products and services; healthcare spending fluctuations; programmatic changes to the scope of benefits and limitations to payment integrity initiatives that reduce the need for MSP's services; delays in implementing MSP's services to its claims; system interruptions or failures; cyber-security breaches and other disruptions that could compromise MSP's data; MSP's failure to maintain or upgrade its operational platforms; MSP's failure to innovate and develop new solutions, or the failure of those solutions to be adopted by MSP's existing and potential assignors; MSP's failure to comply with applicable privacy, security and data laws, regulations and standards, including with respect to third party providers; changes in legislation related to healthcare programs and policies; changes in the healthcare market; negative publicity concerning healthcare data analytics and payment accuracy; competition; successfully protecting MSP's intellectual property rights; the risk that third parties may allege infringement of their intellectual property; changes in the healthcare regulatory environment and the failure to comply with applicable laws and regulations or the increased costs associated with any such compliance; failure to manage MSP's growth; the inability to attract and retain key personnel; MSP's reliance on its senior management team and key employees and the loss it could sustain if any of those employees separated from the business; the failure of vendors and providers to deliver or perform as expected, or the loss of such vendors or providers; MSP's geographic concentration; MSP's relatively limited operating history, which makes it difficult to evaluate its current or future business prospects; the impact of the ongoing COVID-19 pandemic; and the risk that MSP may not be able to develop and maintain effective internal controls. The foregoing list of factors is not exhaustive. If any of these risks materialize or MSP's assumptions prove incorrect, actual results may differ materiality from the results implied by these forward-looking statements. There may be additional risks that we do not presently know or currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. The foregoing list of factors is not exclusive. This communication speaks only as of the date indicated, and the statements, expressions, information and data included therein may change and may become stale, out-of-date or no longer applicable. 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