MSP Recovery, Inc. reported a significant decline in its financial performance for the first quarter of 2025, with total revenues dropping to $837,000, an 86% decrease from $6 million in the same period last year. The company's claims recovery income fell to $830,000, down from $6 million, primarily due to fewer settlements during the quarter. Operating expenses also decreased slightly to $127.8 million from $136.2 million, driven by lower costs associated with claims recovery and professional fees. However, the company still recorded a net loss of $236 million, a 34% increase compared to the previous year's loss of $176.6 million.
In terms of operational metrics, MSP Recovery's total assets decreased to $1.8 billion as of March 31, 2025, down from $1.9 billion at the end of 2024. The company's accumulated deficit has grown to $567.7 million, reflecting ongoing challenges in achieving profitability. The number of shares outstanding increased to approximately 4.9 million Class A shares and 3.3 million Class V shares, indicating a shift in equity structure as the company navigates its financial obligations.
Strategically, MSP Recovery has been focusing on restructuring its debt and enhancing its operational efficiency. The company entered into a term sheet with key stakeholders, including Virage and Hazel Partners, to reduce costs and convert certain debts into equity. This restructuring plan aims to provide up to $25 million in working capital for a new subsidiary, New Servicer, which will focus on claims recovery efforts. The company has also secured bridge loan funding of up to $9.85 million to support its operations.
Looking ahead, MSP Recovery faces substantial liquidity challenges, with a current cash balance of $9.1 million and ongoing negative cash flows. The company has indicated that its ability to continue as a going concern is in doubt unless it can secure additional funding and generate significant claims recovery income. The management is actively pursuing new Assignors and exploring various financing options to stabilize its financial position and enhance its recovery capabilities.