0000950170-24-009771 | S-1/A | XBRL Viewer

$ (224,217)

$ (105,556)

$ (105,981)

$ (119,872)

$ (609,192)

^[1]

$ (225,428)

^[1]

$ (401,905)

^[2]

$ (33,077)

^[2]

$ (24,266)

^[2]

$ 121,008

111,851

38,991

41,708

355,481

153,560

266,929

164

125

34,744

204,263

^[1]

80,947

^[1]

145,321

27,023

20,843

(531)

Net cash (used in) provided by operating activities

(918)

(7,664)

(6,195)

(60,912)

(31,533)

(70,764)

(80,635)

2,249

(14)

Net cash provided by (used in) investing activities

(3,015)

7,759

(4,563)

(5,684)

(2,007)

986

Net cash provided by (used in) financing activities

98,728

$ 15,352

99,351

$ 99,735

$ (10,457)

$ 9,610

(27,060)

(77,124)

(91,015)

(118,075)

66,331

23,818

26,535

92,866

21,369

34,475

(857)

Net cash (used in) provided by operating activities

(901)

(7,525)

(60,912)

(70,764)

Net cash provided by (used in) investing activities

(3,015)

(4,563)

Net cash provided by (used in) financing activities

98,728

99,351

(78,496)

(28,857)

(107,353)

$ 45,520

$ 15,173

15,173

60,694

13,375

46,472

326

$ (17)

$ (139)

[1]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.
[2]	Balances include related party transactions. See Note 14, Related Party, for further details.

Quarterly Financial Data (Unaudited) Restatement of Previously Issued Financial Statements - Unaudited Condensed Consolidated Statements of Operations (Details) - USD ($)

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Jun. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

$ 440,000

$ 2,759,000

$ 1,357,000

$ 1,466,000

$ 6,479,000

$ 4,225,000

$ 4,878,000

$ 126,000

$ 255,000

5,748,000

^[1]

3,971,000

12,047,000

498,000

^[1]

17,795,000

^[1]

18,542,000

^[2]

14,500,000

^[2]

13,632,000

^[2]

440,000

8,507,000

5,328,000

13,513,000

6,977,000

22,020,000

23,420,000

14,626,000

13,887,000

574,000

^[3]

1,198,000

^[3]

702,000

709,000

1,972,000

^[3]

1,906,000

^[3]

2,054,000

^[4]

26,000

^[4]

47,000

^[4]

121,008,000

111,851,000

38,991,000

41,708,000

355,481,000

153,560,000

266,929,000

164,000

125,000

2,466,000

5,904,000

3,131,000

5,069,000

15,611,000

10,973,000

18,497,000

8,502,000

2,211,000

137,134,000

133,691,000

72,643,000

84,302,000

424,826,000

217,993,000

354,898,000

21,796,000

17,216,000

(136,694,000)

(125,184,000)

(67,315,000)

(70,789,000)

(417,849,000)

(195,973,000)

(331,478,000)

(7,170,000)

(3,329,000)

(88,279,000)

^[5]

(46,180,000)

^[5]

(24,352,000)

(34,767,000)

(204,287,000)

^[5]

(80,947,000)

^[5]

(121,011,000)

(27,046,000)

(20,886,000)

(224,217,000)

(105,556,000)

(105,981,000)

(119,872,000)

(609,192,000)

(225,428,000)

(401,905,000)

(33,077,000)

(24,266,000)

Less: Net (income) loss attributable to non-controlling members

(224,217,000)

(105,556,000)

(105,981,000)

(119,872,000)

(609,192,000)

^[6]

(225,428,000)

^[6]

(401,905,000)

^[7]

(33,077,000)

^[7]

(24,266,000)

^[7]

204,462,000

103,484,000

104,101,000

117,992,000

576,301,000

221,476,000

394,488,000

(16,000)

18,000

$ (19,755,000)

$ (2,072,000)

$ (1,880,000)

$ (32,891,000)

$ (3,952,000)

$ (7,417,000)

$ (33,093,000)

$ (24,248,000)

12,703,472

2,761,476

544,291

7,097,032

2,125,539

2,473,005

^[8]

12,703,472

2,761,476

544,291

7,097,032

2,125,539

2,473,005

^[8]

$ (1.56)

$ (0.75)

$ (3.45)

$ (4.63)

$ (1.86)

$ (3)

^[8]

Scenario Adjustment [Member] | Class A Common Stock [Member]

$ (1.56)

(0.75)

$ (3.45)

$ (4.63)

(1.86)

$ (3)

^[8]

(0.75)

(1.86)

$ (0.75)

$ (1.86)

As Reported

$ 2,571,000

$ 1,319,000

$ 1,428,000

$ 3,999,000

3,971,000

12,047,000

8,319,000

5,290,000

13,475,000

21,794,000

1,160,000

694,000

701,000

1,861,000

66,331,000

23,818,000

26,535,000

92,866,000

5,875,000

3,118,000

5,056,000

10,931,000

88,104,000

57,449,000

69,108,000

157,212,000

(79,785,000)

(52,159,000)

(55,633,000)

(135,418,000)

(13,083,000)

(10,977,000)

(21,392,000)

(34,475,000)

(27,060,000)

(77,450,000)

(91,341,000)

(118,401,000)

326,000

Less: Net (income) loss attributable to non-controlling members

(27,060,000)

(77,124,000)

(91,015,000)

(118,075,000)

26,597,000

75,836,000

89,727,000

116,324,000

As Reported | Class A Common Stock [Member]

$ (463,000)

$ (1,288,000)

$ (1,751,000)

2,761,476

544,291

2,125,539

2,761,476

544,291

2,125,539

$ (0.17)

$ (2.37)

$ (0.82)

$ (0.17)

$ (2.37)

$ (0.82)

$ 188,000

$ 38,000

$ 226,000

188,000

38,000

226,000

38,000

8,000

45,000

45,520,000

15,173,000

60,694,000

29,000

13,000

42,000

45,587,000

15,194,000

60,781,000

(45,399,000)

(15,156,000)

(60,555,000)

(33,097,000)

(13,375,000)

(46,472,000)

(78,496,000)

(28,531,000)

(107,027,000)

(326,000)

Less: Net (income) loss attributable to non-controlling members

(78,496,000)

(28,857,000)

(107,353,000)

76,887,000

28,265,000

105,152,000

Restatement Adjustments | Class A Common Stock [Member]

$ (1,609,000)

$ (592,000)

$ (2,201,000)

$ (0.58)

$ (1.04)

$ (0.58)

$ (1.04)

[1]	For the three and nine months ended September 30, 2022, claims recovery service income included $0.0 million and $10.6 million, respectively, of claims recovery service income from VRM MSP. There was no claims recovery service income from VRM MSP for the three and nine months ended September 30, 2023. See Note 13, Related Party Transactions, for further details.
[2]	For the years ended December 31, 2022, 2021 and 2020, Claims recovery service income included $10.6 million, $11.5 million, and $13.1 million, respectively, of Claims recovery service income from VRM MSP. See Note 14, Related Party, for further details.
[3]	For both the three and nine months ended September 30, 2023, cost of claim recoveries included $0.3 million of related party expenses. For both the three and nine months ended September 30, 2022, cost of claim recoveries included $0.3 million of related party expenses. This relates to contingent legal expenses earned from claims recovery income pursuant to legal service agreements with the Law Firm. See Note 13, Related Party Transactions, for further details.
[4]	For the year ended December 31, 2022, cost of Claim recoveries included $405 thousand of related party expenses. This relates to contingent legal expenses earned from Claims recovery income pursuant to legal service agreements with the La Ley con John H. Ruiz P.A., d/b/a MSP Recovery Law Firm (the “Law Firm”). See Note 14, Related Party, for further details. For the years ended December 31, 2021 and 2020, the expenses related to contingent legal expenses were de minimis.
[5]	For three and nine months ended September 30, 2023, interest expense included $67.8 million and $159.2 million, respectively, related to interest expense due to VRM. For the three and nine months ended September 30, 2022, interest expense included $33.1 million and $46.5 million, respectively, related to interest expense due to VRM. See Note 13, Related Party Transactions, for further details.
[6]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.
[7]	Balances include related party transactions. See Note 14, Related Party, for further details.
[8]	Earnings per share information has not been presented for periods prior to the Business Combination (as defined in Note 1, Description of Business), as it resulted in values that would not be meaningful to the users of these consolidated financial statements. Refer to Note 16, Net Loss Per Common Share for further information.

Asset Acquisitions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions								9 Months Ended		12 Months Ended
	Jan. 31, 2024	Jan. 01, 2024	Nov. 13, 2023	Sep. 30, 2023	Jul. 28, 2023	Mar. 29, 2023	May 23, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Jul. 24, 2023	Apr. 12, 2023	May 27, 2022
Business Acquisition [Line Items]
Warrants to purchase exercise price per share				$ 0.0025				$ 0.0025		$ 0.0025
Fair value of warrants				$ 0				$ (4,406)	$ 1,619	$ 2,870
Virage Amendment [Member]
Business Acquisition [Line Items]
Operating reserve maintained			$ 47,500								$ 47,500	$ 70,000
Budget percentage			10.00%
Fair value of warrants								$ 43,700
Description of swap agreement amendment					(a) rights to recovery proceeds arising from Claims held by VRM MSP, with dates of service before January 1, 2014, were transferred to MSP Recovery; (b) MSP Recovery contributed to VRM MSP in the form of in-kind ownership interests to certain Series entities holding Claims; and (c) as a result of such capital contributions, MSP Recovery was admitted as a member of VRM MSP.
Virage Amendment [Member] \| Subsequent Event [Member]
Business Acquisition [Line Items]
Description of cash payments made to counter party	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	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
Claims Cost Recovery Agreements [Member]
Business Acquisition [Line Items]
Net gain on sale of claims transactions						$ 4,600
Realized claim recoveries						150,000
Carrying value of claims						40,900
Fair value of claims						285,500
Claims Cost Recovery Agreements [Member] \| Purchase Money Loan [Member]
Business Acquisition [Line Items]
Fair value of claims						$ 250,000
Class A [Member]
Business Acquisition [Line Items]
Warrants to purchase exercise price per share				$ 287.5				$ 287.5		$ 287.5
Fair value of warrants										$ 2,900
Class A [Member] \| Virage Amendment [Member] \| Subsequent Event [Member]
Business Acquisition [Line Items]
Description of warrants issued to counter party	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.	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.
Warrants to purchase exercise price per share	$ 0.0001	$ 0.0001
Warrants expire date		Jan. 01, 2026
Series MRCS LLC [Member] \| Claims Cost Recovery Agreements [Member]
Business Acquisition [Line Items]
Number of Up C units issued in exchange of assets acquired							7.9
Finite life intangible assets acquired useful life							8 years
Series MRCS LLC [Member] \| Class A [Member] \| Claims Cost Recovery Agreements [Member]
Business Acquisition [Line Items]
Percentage of discount on shares lack of marketability							4.50%						4.50%
VRM MSP Recovery Partners LLC [Member] \| Investment in Rights to Claim Recovery Cash Flows [Member]
Business Acquisition [Line Items]
Number of Up C units issued in exchange of assets acquired							14.3
VRM MSP Recovery Partners LLC [Member] \| Claims Cost Recovery Agreements [Member]
Business Acquisition [Line Items]
Number of Up C units issued in exchange of assets acquired							14.3
VRM [Member] \| Reserved Shares [Member]
Business Acquisition [Line Items]
Annual compounded return percentage on contribution							20.00%
Value of full return				$ 900,500				$ 900,500		$ 787,900
Hazel Transactions [Member]
Business Acquisition [Line Items]
Credit facility, agreement date						Mar. 29, 2023
Purchase price						$ 390,000
Purchase money loan						250,000
Realized claim recoveries						150,000
Fair value of claims						$ 45,500
Hazel Transactions [Member] \| Amended and Restated Credit Agreement [Member]
Business Acquisition [Line Items]
Credit facility, agreement date						Mar. 29, 2023		Mar. 29, 2023
Separate Transaction [Member]
Business Acquisition [Line Items]
Purchase price						$ 150,000

Basis of Presentation and Summary of Significant Accounting Policies - Schedule Of Correction Of Previously Reported Interim Condensed Consolidated Statements Of Operations (Details) - USD ($)

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Jun. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

$ 440,000

$ 2,759,000

$ 1,357,000

$ 1,466,000

$ 6,479,000

$ 4,225,000

$ 4,878,000

$ 126,000

$ 255,000

5,748,000

^[1]

3,971,000

12,047,000

498,000

^[1]

17,795,000

^[1]

18,542,000

^[2]

14,500,000

^[2]

13,632,000

^[2]

440,000

8,507,000

5,328,000

13,513,000

6,977,000

22,020,000

23,420,000

14,626,000

13,887,000

574,000

^[3]

1,198,000

^[3]

702,000

709,000

1,972,000

^[3]

1,906,000

^[3]

2,054,000

^[4]

26,000

^[4]

47,000

^[4]

121,008,000

111,851,000

38,991,000

41,708,000

355,481,000

153,560,000

266,929,000

164,000

125,000

2,466,000

5,904,000

3,131,000

5,069,000

15,611,000

10,973,000

18,497,000

8,502,000

2,211,000

137,134,000

133,691,000

72,643,000

84,302,000

424,826,000

217,993,000

354,898,000

21,796,000

17,216,000

(136,694,000)

(125,184,000)

(67,315,000)

(70,789,000)

(417,849,000)

(195,973,000)

(331,478,000)

(7,170,000)

(3,329,000)

(88,279,000)

^[5]

(46,180,000)

^[5]

(24,352,000)

(34,767,000)

(204,287,000)

^[5]

(80,947,000)

^[5]

(121,011,000)

(27,046,000)

(20,886,000)

(224,217,000)

(105,556,000)

(105,981,000)

(119,872,000)

(609,192,000)

(225,428,000)

(401,905,000)

(33,077,000)

(24,266,000)

Less: Net (income) loss attributable to non-controlling members

(224,217,000)

(105,556,000)

(105,981,000)

(119,872,000)

(609,192,000)

^[6]

(225,428,000)

^[6]

(401,905,000)

^[7]

(33,077,000)

^[7]

(24,266,000)

^[7]

204,462,000

103,484,000

104,101,000

117,992,000

576,301,000

221,476,000

394,488,000

(16,000)

18,000

$ (19,755,000)

$ (2,072,000)

$ (1,880,000)

$ (32,891,000)

$ (3,952,000)

$ (7,417,000)

$ (33,093,000)

$ (24,248,000)

12,703,472

2,761,476

544,291

7,097,032

2,125,539

2,473,005

^[8]

12,703,472

2,761,476

544,291

7,097,032

2,125,539

2,473,005

^[8]

$ (1.56)

$ (0.75)

$ (3.45)

$ (4.63)

$ (1.86)

$ (3)

^[8]

$ (1.56)

$ (0.75)

$ (3.45)

$ (4.63)

$ (1.86)

$ (3)

^[8]

As Reported

$ 2,571,000

$ 1,319,000

$ 1,428,000

$ 3,999,000

3,971,000

12,047,000

8,319,000

5,290,000

13,475,000

21,794,000

1,160,000

694,000

701,000

1,861,000

66,331,000

23,818,000

26,535,000

92,866,000

5,875,000

3,118,000

5,056,000

10,931,000

88,104,000

57,449,000

69,108,000

157,212,000

(79,785,000)

(52,159,000)

(55,633,000)

(135,418,000)

(13,083,000)

(10,977,000)

(21,392,000)

(34,475,000)

(27,060,000)

(77,450,000)

(91,341,000)

(118,401,000)

326,000

Less: Net (income) loss attributable to non-controlling members

(27,060,000)

(77,124,000)

(91,015,000)

(118,075,000)

26,597,000

75,836,000

89,727,000

116,324,000

As Reported | Class A Common Stock [Member]

$ (463,000)

$ (1,288,000)

$ (1,751,000)

2,761,476

544,291

2,125,539

2,761,476

544,291

2,125,539

$ (0.17)

$ (2.37)

$ (0.82)

$ (0.17)

$ (2.37)

$ (0.82)

$ 188,000

$ 38,000

$ 226,000

188,000

38,000

226,000

38,000

8,000

45,000

45,520,000

15,173,000

60,694,000

29,000

13,000

42,000

45,587,000

15,194,000

60,781,000

(45,399,000)

(15,156,000)

(60,555,000)

(33,097,000)

(13,375,000)

(46,472,000)

(78,496,000)

(28,531,000)

(107,027,000)

(326,000)

Less: Net (income) loss attributable to non-controlling members

(78,496,000)

(28,857,000)

(107,353,000)

76,887,000

28,265,000

105,152,000

Restatement Adjustments | Class A Common Stock [Member]

$ (1,609,000)

$ (592,000)

$ (2,201,000)

$ (0.58)

$ (1.04)

Related Party Transactions

$ (0.58)

$ (1.04)

[1]	For the three and nine months ended September 30, 2022, claims recovery service income included $0.0 million and $10.6 million, respectively, of claims recovery service income from VRM MSP. There was no claims recovery service income from VRM MSP for the three and nine months ended September 30, 2023. See Note 13, Related Party Transactions, for further details.
[2]	For the years ended December 31, 2022, 2021 and 2020, Claims recovery service income included $10.6 million, $11.5 million, and $13.1 million, respectively, of Claims recovery service income from VRM MSP. See Note 14, Related Party, for further details.
[3]	For both the three and nine months ended September 30, 2023, cost of claim recoveries included $0.3 million of related party expenses. For both the three and nine months ended September 30, 2022, cost of claim recoveries included $0.3 million of related party expenses. This relates to contingent legal expenses earned from claims recovery income pursuant to legal service agreements with the Law Firm. See Note 13, Related Party Transactions, for further details.
[4]	For the year ended December 31, 2022, cost of Claim recoveries included $405 thousand of related party expenses. This relates to contingent legal expenses earned from Claims recovery income pursuant to legal service agreements with the La Ley con John H. Ruiz P.A., d/b/a MSP Recovery Law Firm (the “Law Firm”). See Note 14, Related Party, for further details. For the years ended December 31, 2021 and 2020, the expenses related to contingent legal expenses were de minimis.
[5]	For three and nine months ended September 30, 2023, interest expense included $67.8 million and $159.2 million, respectively, related to interest expense due to VRM. For the three and nine months ended September 30, 2022, interest expense included $33.1 million and $46.5 million, respectively, related to interest expense due to VRM. See Note 13, Related Party Transactions, for further details.
[6]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.
[7]	Balances include related party transactions. See Note 14, Related Party, for further details.
[8]	Earnings per share information has not been presented for periods prior to the Business Combination (as defined in Note 1, Description of Business), as it resulted in values that would not be meaningful to the users of these consolidated financial statements. Refer to Note 16, Net Loss Per Common Share for further information.

Short Term Leases - Schedule Of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]
Remainder of 2023	$ 38
2023 and 2024	153	$ 217
2025	157
2026	107
Total minimum payments required	455	$ 217
Less: implied interest	(87)
Total Lease Liability	$ (368)

Related Party Transactions

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Note 13. RELATED PARTY TRANSACTIONS

Loans from related parties

During the year ended December 31, 2022, the Company issued an unsecured promissory note in an aggregate principal amount of $112.8 million (the “Promissory Note”) to John H. Ruiz and Frank C. Quesada, the Company’s Chief Executive Officer and director and Chief Legal Officer and director, respectively (collectively, the “MSP Principals”), in exchange for the MSP Principals agreeing to provide cash to pay transaction costs related to the Merger, pay down affiliate payable balances, and provide operating cash to the Company. 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. The Promissory Note as well as the amount contributed at the merger date bears interest at an annual rate of 4%, payable in kind, and will mature on the four-year anniversary of the issuance. The Promissory Note is payable by the Company at any time, without prepayment penalties, fees, or other expenses. During the three and nine months ended September 30, 2023, the Company recorded $1.3 million and $3.9 million, respectively, on interest expense related to the Promissory Note.

Under the legal services agreement, 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 nine months ended September 30, 2023, approximately $13.5 million of the $36.5 million advanced by the Company to the Law Firm has been incurred for expenses pursuant to the legal services agreement.

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, 2023 and December 31, 2022 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, 2023, $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 were largely due to the payment of Law Firm expenses per the related party loan as noted above. For the three and nine months ended September 30, 2022, $4.6 million and $24.7 million, respectively was included in Professional fees – legal for expenses related to the Law Firm in the condensed consolidated statements of operations. The amounts were largely due to share base compensation as noted below and the payment of Law Firm expenses per the related party loan as noted above. For the three and nine months ended September 30, 2023 and 2022, no amounts were included for cost of claims recoveries for expenses related to the Law Firm in the condensed consolidated statements of operations.

During the nine months ended September 30, 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 Purchase Money Loan 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.

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, 2023 and December 31, 2022, $0.5 million and $2.1 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, 2023 and December 31, 2022, $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, 2023 $0.0 and $0.2 million 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, 2022, $0.2 million and $0.4 million, was included in General and Administrative expenses related to MSP Aviation 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, 2023 and December 31, 2022, $19.8 million and $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. During the year ended December 31, 2022, the Company also entered into a note payable with Series MRCS as outlined in Note 7, Intangible Assets, Net. As of September 30, 2023 and December 31, 2022, the balance of the note payable was $0.5 million and included in the condensed consolidated balance sheets in Claims financing obligation and notes payable.

As of September 30, 2023 and December 31, 2022, there were additional receivables from other affiliates of $0.2 million and $0.1 million, respectively. These were included in the condensed consolidated balance sheets in Affiliate Receivable.

VRM

Historically, MSP Recovery has received Claims recovery service income for services provided to VRM MSP. The Company concluded that VRM MSP is a related party due to ownership interests in the entity held by Series MRCS LLC. During the three and nine months ended September 30, 2022, $0.0 and $10.6 million, respectively, of claims recovery service income was received from VRM MSP as part of the servicing agreement and was included in the condensed consolidated statements of operations. There was no Claims recovery service income for services provided to VRM MSP for the three and nine months ended September 30, 2023.

For the three and nine months ended September 30, 2023, the Company recorded $67.8 million and $159.2 million, respectively, for interest expense related to the VRM Full Return and Virage MTA Amendment. For the three and nine months ended September 30, 2022, the Company recorded $33.1 million and $46.5 million for interest expense related to the VRM Full Return. Prior the Business Combination, the Company had not guaranteed the VRM Full Return therefore no amount of interest was recorded by prior to Business Combination.

Working Capital Credit Facility Collateral

Pursuant to the Second Amended and Restated First Lien Credit Agreement, and in order to secure those additional advances of Term Loan B beginning in January 2024, the Company approved for Messrs. John Ruiz and Frank Quesada to provide, as additional collateral, the following: (i) a pledge of the equity interests in an Affiliate of Messrs. John Ruiz and Frank Quesada; and (ii) a personal guaranty by Messrs. John Ruiz and Frank Quesada, as primary obligors, guaranteeing those additional advances of Term Loan B beginning in January 2024.

Note 14. RELATED PARTY

Loan from related parties

During the year ended December 31, 2022, the Company issued an unsecured promissory note in an aggregate principal amount of $112.8 million (the “Promissory Note”) to John H. Ruiz and Frank C. Quesada, the Company’s Chief Executive Officer and director and Chief Legal Officer and director, respectively (collectively, the “MSP Principals”), to provide cash to pay transaction costs related to the Merger, pay down affiliate payable balances and provide operating cash to the Company. 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. The Promissory Note as well as the amount contributed at the merger date bears interest at an annual rate of 4%, payable in kind, and will mature on the four-year anniversary of the issuance. The Promissory Note is payable by the Company at any time, without prepayment penalties, fees, or other expenses. During the year ended December 31, 2022, the Company recorded $2.7 million on interest expense related to the Promissory Note.

A portion of the proceeds under the Promissory Note in an amount equal to $36.5 million was advanced to the Law Firm, an affiliate of certain Members, for certain operating expenses as contemplated by the Legal Services Agreement. This amount is reflected in prepaid expenses and other current assets within the consolidated balance sheets and had a balance of $26.9 million as of December 31, 2022. The payments of Law Firm expenses are reflected in Professional fees - legal within the consolidated statement of operations. The payments are expense as incurred as the Company doesn't have recourse to these amounts, but if the Law Firm earns fees under the legal service agreements (the "Existing LSAs") noted below, the Company would not be obligated to pay these costs until the amount of fees earned were in excess of the payments of Law Firm expenses and payments the Company has made to co-counsels. As of as December 31, 2022, the Company has paid Law Firm expenses and co-counsel fees equal to $21.9 million in excess of the fees earned under the Existing LSAs. Therefore, the Company would not be required to pay or incur expenses through cost of Claims recoveries until the amount of fees earned were in excess of the amounts already paid. As of December 31, 2022, this represents prepayments that would cover recoveries of $109.5 million assuming the 40% fees on the half owned by the Company as fees are not incurred on the half owned by the assignors.

Legal Services – MSP Recovery 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 exclusive lead counsel for any litigation relating to such Claims. As of December 31, 2022 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. As of December 31, 2021, $5.5 million was due to the Law Firm and included in the consolidated balance sheets in Affiliate Payable. For the year ended December 31, 2022, $29.7 million was included in Professional fees - legal for expenses related to the Law Firm in the consolidated statements of operations. The amounts were largely due to share base compensation as noted below and the payment of Law Firm expenses per the related party loan as noted above. For the years ended December 31, 2021 and 2020, the amounts were de minimis. For the year ended December 31, 2022, $405 thousand were included in cost of Claims recoveries for expenses related to the Law Firm in the consolidated statements of operations. For the years ended December 31, 2021 and 2020, no amounts were included cost of Claims recoveries for expenses related to the Law Firm in the 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 December 31, 2022 and December 31, 2021, $2.1 million and $3.4 million, respectively, was due from the Law Firm and included in the consolidated balance sheets in Affiliate Receivable. In addition, the Company rents office space from the Law Firm as discussed in Note 8, Leases.

For the year ended December 31, 2022, the Company issued 320,880 Class A common stock shares to the Law Firm employees, which was deemed to be share based compensation. As such $20.1 million of expense was included within Professional fees - Legal for expenses related to the Law Firm in the consolidated statements of operations for the year ended December 31, 2022.

MSP Recovery Aviation, LLC

The Company may make payments related to operational expenses on behalf of its affiliate, MSP Recovery Aviation, LLC (“MSP Aviation”). MSP Aviation was created to provide aircraft rental to third party customers and the Company. The Company has made payments in the periods of the financial statements only related to specifically billed flights and these rates are at or below the market rate for such services. As of both December 31, 2022 and December 31, 2021, $153 thousand was due from MSP Aviation and included in the consolidated balance sheets in Affiliate Receivable. For the year ended December 31, 2022, $400 thousand was included in General and Administrative expenses related to MSP Aviation in the consolidated statements of operations. For the year ended December 31, 2021 and 2020, the amounts were de minimis.

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 December 31, 2022 and December 31, 2021, $19.8 million and $39.7 million was due to affiliates of the Company and included in the 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. During the year ended December 31, 2021, the Company also entered into a note payable with Series MRCS as outlined in Note 7, Intangible Assets, Net. As of December 31, 2022 and December 31, 2021, the balance of the note payable was $0.5 million and included in the consolidated balance sheets in Claims financing obligation and notes payable.

As of December 31, 2022 and December 31, 2021, there were additional receivables from other affiliates of $148 thousand and $92 thousand, respectively. As of December 31, 2021, $0.4 million was due to MSP National, LLC from Series MRCS. These were included in the consolidated balance sheets in Affiliate Receivable.

VRM

Historically, MSP Recovery, LLC has received Claims recovery service income for services provided to VRM MSP. The Company concluded that VRM MSP is a related party due to ownership interests in the entity held by Series MRCS LLC. During the years ended December 31, 2022, 2021 and 2020, $10.6 million, $11.5 million and $13.1 million, respectively, of Claims recovery service income was received from VRM MSP as part of the servicing agreement and was included in the consolidated statements of operations. As of the merger date, the VRM MSP servicing agreement was terminated.

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Class A common stock subject to possible redemption, shares

^[1]

$ 3,253,707

$ 3,363,156

^[2]

45,183

Variable Interest Entities

$ 2,300,000

Class A common stock subject to possible redemption, shares

45,184

Common stock, shares authorized

common stock, par value

$ 0.0001

5,500,000,000

Common stock, shares issued

13,799,230

2,984,212

Common stock, shares outstanding

13,799,230

2,984,212

Class A Common Stock [Member] | As previously reported

Common stock, shares authorized

5,500,000,000

Class V Common Stock [Member]

common stock, par value

$ 0.0001

Common stock, shares authorized

3,250,000,000

Common stock, shares issued

124,264,645

125,919,180

Common stock, shares outstanding

124,264,645

125,919,180

[1]	As of September 30, 2023 and December 31, 2022, intangible assets, net included $2.3 billion and $2.3 billion, respectively, related to a consolidated VIE. See Note 9, Variable Interest Entities, for further details.
[2]	As of December 31, 2022, intangible assets, net included $2.3 billion related to a consolidated VIE. See Note 10, Variable Interest Entities, for further details.

Condensed Consolidated Statements of Operations - USD ($)

3 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

$ 440,000

$ 2,759,000

$ 6,479,000

$ 4,225,000

$ 4,878,000

$ 126,000

$ 255,000

5,748,000

^[1]

498,000

^[1]

17,795,000

^[1]

18,542,000

^[2]

14,500,000

^[2]

13,632,000

^[2]

440,000

8,507,000

6,977,000

22,020,000

23,420,000

14,626,000

13,887,000

574,000

^[3]

1,198,000

^[3]

1,972,000

^[3]

1,906,000

^[3]

2,054,000

^[4]

26,000

^[4]

47,000

^[4]

General and administrative

121,008,000

111,851,000

355,481,000

153,560,000

266,929,000

164,000

125,000

6,130,000

^[5]

6,621,000

^[5]

20,691,000

^[5]

17,049,000

^[5]

23,959,000

^[6]

12,633,000

^[6]

14,130,000

^[6]

Professional fees - legal

2,466,000

5,904,000

15,611,000

10,973,000

18,497,000

8,502,000

2,211,000

6,871,000

^[7]

8,014,000

^[7]

25,889,000

^[7]

34,251,000

^[7]

43,035,000

^[8]

128,000

^[8]

468,000

^[8]

Allowance for credit losses

5,000,000

Depreciation and amortization

85,000

103,000

182,000

254,000

424,000

343,000

235,000

137,134,000

133,691,000

424,826,000

217,993,000

354,898,000

21,796,000

17,216,000

(136,694,000)

(125,184,000)

(417,849,000)

(195,973,000)

(331,478,000)

(7,170,000)

(3,329,000)

Other income (expense), net

(88,279,000)

^[9]

(46,180,000)

^[9]

(204,287,000)

^[9]

(80,947,000)

^[9]

(121,011,000)

(27,046,000)

(20,886,000)

408,000

63,138,000

8,697,000

63,175,000

63,067,000

1,139,000

(51,000)

Change in fair value of warrant and derivative liabilities

348,000

2,670,000

4,247,000

(11,683,000)

(12,483,000)

Provision for income tax expense

(224,217,000)

(105,556,000)

(609,192,000)

(225,428,000)

(401,905,000)

(33,077,000)

(24,266,000)

Less: Net (income) loss attributable to non-controlling members

(224,217,000)

(105,556,000)

(609,192,000)

^[10]

(225,428,000)

^[10]

(401,905,000)

^[11]

(33,077,000)

^[11]

(24,266,000)

^[11]

204,462,000

103,484,000

576,301,000

221,476,000

394,488,000

(16,000)

18,000

$ (19,755,000)

$ (2,072,000)

$ (32,891,000)

$ (3,952,000)

$ (7,417,000)

$ (33,093,000)

$ (24,248,000)

12,703,472

2,761,476

7,097,032

2,125,539

2,473,005

^[12]

12,703,472

2,761,476

7,097,032

2,125,539

2,473,005

^[12]

$ (1.56)

$ (0.75)

$ (4.63)

$ (1.86)

$ (3)

^[12]

Intangible Assets, Net (Excluding Goodwill) [Abstract]

$ (1.56)

$ (0.75)

$ (4.63)

$ (1.86)

$ (3)

^[12]

[1]	For the three and nine months ended September 30, 2022, claims recovery service income included $0.0 million and $10.6 million, respectively, of claims recovery service income from VRM MSP. There was no claims recovery service income from VRM MSP for the three and nine months ended September 30, 2023. See Note 13, Related Party Transactions, for further details.
[2]	For the years ended December 31, 2022, 2021 and 2020, Claims recovery service income included $10.6 million, $11.5 million, and $13.1 million, respectively, of Claims recovery service income from VRM MSP. See Note 14, Related Party, for further details.
[3]	For both the three and nine months ended September 30, 2023, cost of claim recoveries included $0.3 million of related party expenses. For both the three and nine months ended September 30, 2022, cost of claim recoveries included $0.3 million of related party expenses. This relates to contingent legal expenses earned from claims recovery income pursuant to legal service agreements with the Law Firm. See Note 13, Related Party Transactions, for further details.
[4]	For the year ended December 31, 2022, cost of Claim recoveries included $405 thousand of related party expenses. This relates to contingent legal expenses earned from Claims recovery income pursuant to legal service agreements with the La Ley con John H. Ruiz P.A., d/b/a MSP Recovery Law Firm (the “Law Firm”). See Note 14, Related Party, for further details. For the years ended December 31, 2021 and 2020, the expenses related to contingent legal expenses were de minimis.
[5]	For the three and nine months ended September 30, 2022, general and administrative expenses included $0.2 million and $0.4 million of related party expenses. See Note 13, Related Party Transactions, for further details. No such related party expenses were present for the three and nine months ended September 30, 2023.
[6]	For the year ended December 31, 2022, general and administrative expenses included $400 thousand of related party expenses. For the years ended December 31, 2021 and 2020, the amounts were de minimis. See Note 14, Related Party, for further details.
[7]	For the three and nine months ended September 30, 2023 and 2022, Professional Fees—legal included $4.6 million and $13.5 million, and $4.6 million and $5.0 million, respectively, of related party expenses related to the Law Firm. See Note 13, Related Party Transactions, for further details.
[8]	For the year ended December 31, 2022, Professional fees - legal included $29.7 million of related party expenses related to the Law Firm. For the year ended December 31, 2021 and 2020, the amounts were de minimis, respectively, of related party expenses related to the Law Firm. See Note14, Related Party, for further details.
[9]	For three and nine months ended September 30, 2023, interest expense included $67.8 million and $159.2 million, respectively, related to interest expense due to VRM. For the three and nine months ended September 30, 2022, interest expense included $33.1 million and $46.5 million, respectively, related to interest expense due to VRM. See Note 13, Related Party Transactions, for further details.
[10]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.
[11]	Balances include related party transactions. See Note 14, Related Party, for further details.
[12]	Earnings per share information has not been presented for periods prior to the Business Combination (as defined in Note 1, Description of Business), as it resulted in values that would not be meaningful to the users of these consolidated financial statements. Refer to Note 16, Net Loss Per Common Share for further information.

Investments in Equity Securities and Obligations to Deliver Securities - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2022
Investments in Equity Securities and Obligations to Deliver Securities [Line Items]
Number of equity shares acquired to cover the short position	100,000
Purchase of securities to cover short position	$ 1,800,000
Investment in equity securities	0	$ 0
Other Income [Member]
Investments in Equity Securities and Obligations to Deliver Securities [Line Items]
Realized loss on investments to cover short position	$ (193,000)

Intangible Assets, Net

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Intangible Assets, Net

Note 7. INTANGIBLE ASSETS, NET

The Company holds CCRAs held by Series MRCS, which were acquired through the issuance of equity as part of the Business Combination in 2022 and additional acquisitions of additional CCRAs throughout 2022 and 2023. These assets are held at cost and treated as a finite intangible asset with a useful life of eight years.

Intangible assets, net consists of the following:


(in thousands)	September 30, 2023			December 31, 2022
Intangible assets, gross	$	3,872,256		$	3,630,823
Accumulated amortization		(618,549	)		(267,667	)
Net	$	3,253,707		$	3,363,156

During the nine months ended September 30, 2023, the Company purchased $286.9 million of CCRAs included in Intangible Assets, net, of which $285.5 million was through the Hazel transaction (See Note 4, Asset Acquisitions), $0.8 million was through a Class A Common Stock issuance in July 2023 and $0.6 million was paid in cash.

For the three and nine months ended September 30, 2023 and 2022, claims amortization expense was $121.0 million and $355.5 million, respectively, and $111.9 million and $153.6 million, respectively.

Future amortization for CCRAs, for the remainder of 2023 and thereafter is expected to be as follows:


(in thousands)	CCRAs Amortization
2023		121,008
2024		483,959
2025		483,907
2026		483,907
2027		483,907
Thereafter		1,197,019
Total	$	3,253,707

There were no impairment indicators in the nine months ended September 30, 2023 and 2022 related to the intangible assets. 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.

The following table presents the changes in the Company’s intangibles assets for nine months ended September 30, 2023:


(in thousands)	Intangible Assets
Balance as of December 31, 2022	$	3,363,156
Acquisitions of CCRAs		286,929
Amortization expense		(355,481	)
Sale of CCRAs		(40,897	)
Total	$	3,253,707

Note 7. INTANGIBLE ASSETS, NET

During the year ended December 31, 2022, the Company acquired CCRAs held by Series MRCS and consolidated CCRAs held by the Series. The assets were acquired through the issuance of equity as part of the Business Combination. The assets are held at cost and treated as a finite intangible asset with a useful life of 8 years.

Intangible assets, net consists of the following:


(in thousands)	December 31, 2022			December 31, 2021
Intangible assets, gross	$	3,630,823		$	84,955
Accumulated amortization		(267,667	)		(737	)
Net	$	3,363,156		$	84,218

During the year ended December 31, 2022, in addition to the CCRAs acquired as part of the Business Combination the Company purchased $64.8 million of CCRAs included in Intangible assets, net, of which $2.7 million was paid in cash, $11.0 million was paid through Class A Common Stock issuance and $51.2 million is recorded within Other Current Liabilities in the consolidated balance sheet as of December 31, 2022 and will be paid through the issuance of Class A Common Stock. The payment is due in the second quarter of 2023. For the CCRAs acquired through equity issuance, the Company is required to provide additional shares or cash if the value of the shares provided is not equal to $10.0 million or greater within 1 year of issuance. As such, the Company recorded a liability of $8.7 million within Other current liabilities in the consolidate balance sheet for the difference between $10.0 million and the fair value of the shares as of December 31, 2022.

For the years ended December 31, 2022, 2021, and 2020, Claims amortization expense was $266.9 million, $164 thousand, and $125 thousand, respectively.

Future amortization for CCRAs is expected to be as follows:


(in thousands)	CCRAs Amortization
2023	$	453,853
2024		453,853
2025		453,780
2026		453,728
2027		453,728
Thereafter		1,094,214
Total	$	3,363,156

Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Dec. 31, 2021

Cash and cash equivalents

$ 6,659

$ 3,661

$ 1,664

Restricted cash

11,420

Prepaid expenses and other current assets

706

6,195

Affiliate receivable

831

^[1]

2,425

^[1],[2]

4,070

^[2]

14,874

^[1]

27,656

^[1],[2]

13,304

^[2]

Property, plant and equipment, net

23,070

51,357

19,038

4,890

3,432

750

3,253,707

^[3]

3,363,156

^[3],[4]

84,218

^[4]

Right-of-use asset

368

Deferred service fee income

3,282,035

3,417,945

104,006

Current liabilities:

Accounts payable

6,643

8,422

4,609

Affiliate payable

19,822

^[1]

19,822

^[1],[2]

45,252

^[2]

Commission payable

829

545

465

249

Derivative liability

9,613

Warrant liability

662

5,311

Other current liabilities

14,588

72,002

3,489

Total current liabilities

42,544

115,715

54,064

Guaranty obligation

^[1]

900,455

787,945

^[2]

Claims financing obligation & notes payable

513,450

^[1]

198,489

^[1],[2]

$ 106,805

^[2]

Lease liabilities

264

Loan from related parties

^[1]

$ 130,709

$ 125,759

^[2]

Other Liability, Related Party, Type [Extensible Enumeration]

Related Party [Member]

Interest payable

$ 50,951

^[1]

$ 2,765

^[1],[2]

$ 94,545

^[2]

Total liabilities

1,638,373

1,230,673

255,414

Commitments and Contingencies

Class A common stock subject to possible redemption, 45,183 shares at redemption value as of December 31, 2022 (None as of September 30, 2023)

1,807

347,376

137,069

Members' equity

(155,756)

(62,094)

(29,203)

285,295

107,879

(155,756)

1,358,367

2,077,586

4,348

1,643,662

2,185,465

(151,408)

3,282,035

3,417,945

104,006

137,069

$ (151,408)

Class V Common Stock [Member]

Common stock

Class V Common Stock [Member] | As previously reported

Common stock

$ 12

Equity Method Investments and Joint Ventures [Abstract]

Common stock

$ 13

[1]	As of September 30, 2023 and December 31, 2022, the total affiliate receivable, affiliate payable, guaranty obligation and loan from related parties balances are with related parties. In addition, the prepaid expenses and other current assets, claims financing obligation and notes payable, and interest payable includes balances with related parties. See Note 13, Related Party Transactions, for further details.
[2]	As of December 31, 2022 and 2021, the total affiliate receivable, affiliate payable, guaranty obligation and loan from related parties balances are with related parties. In addition, the prepaid expenses and other current assets, Claims financing obligation and notes payable and interest payable includes balances with related parties. See Note 14, Related Party, for further details.
[3]	As of September 30, 2023 and December 31, 2022, intangible assets, net included $2.3 billion and $2.3 billion, respectively, related to a consolidated VIE. See Note 9, Variable Interest Entities, for further details.
[4]	As of December 31, 2022, intangible assets, net included $2.3 billion related to a consolidated VIE. See Note 10, Variable Interest Entities, for further details.

Investment in Equity Method Investees (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Summarized Financial Information of Equity Method Investees

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,
Series PMPI (in thousands)	2023			2022			2023			2022
Revenue	$	8		$	16		$	8		$	16
Amortization		500			500			1,500			1,500
Other expenses		—			8			—			8
Loss		(492	)		(492	)		(1,492	)		(1,492	)


Series PMPI (in thousands)	September 30, 2023		December 31, 2022
Total Assets	$	1,874		3,341
Total Liabilities	$	309		274

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


	For the year ended,
Series PMPI (in thousands)	December 31, 2022			December 31, 2021			December 31, 2020
Revenue		22			1			34
Amortization		2,000			2,000			2,000
Other expenses		8			—			20
Profit (Loss)		(1,986	)		(1,999	)		(1,986	)


Series PMPI (in thousands)	December 31, 2022		December 31, 2021
Total Assets	$	3,341		5,390
Total Liabilities	$	274		266

Leases - Additional Information (Detail)	3 Months Ended		9 Months Ended		12 Months Ended
Leases - Additional Information (Detail)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) Lease	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease description			The Company leases office space under a non-cancellable operating lease which commenced in September 2023 and expires August 2026.
Lease commencement period			September 2023
Lease expiration period			August 2026		November 2023
Operating lease rent expense	$ 300,000	$ 200,000	$ 900,000	$ 600,000	$ 800,000	$ 800,000	$ 1,500,000
Number of long term leases \| Lease					0
New Lease Agreement [Member]
Lessee, Lease, Description [Line Items]
Operating lease rent expense	$ 13,200		$ 13,200

Description of Business

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Note 1. DESCRIPTION OF BUSINESS

On May 23, 2022 (the “Closing Date”), MSP Recovery, Inc. d/b/a LifeWallet, a Delaware corporation (formerly known as Lionheart Acquisition Corporation II (“LCAP”)) consummated the previously announced business combination pursuant to that certain Membership Interest Purchase Agreement, dated as of July 11, 2021, as amended (the “MIPA”), by and among the Company, Lionheart II Holdings, LLC, a wholly owned subsidiary of the Company, MSP Recovery, LLC and combined and consolidated subsidiaries (“Legacy MSP”), the members of Legacy MSP (the “Members”), and John H. Ruiz, in his capacity as the representative of the Members (the “Members’ Representative”). Pursuant to the MIPA, the Members sold and assigned all of their membership interests in Legacy MSP to the Company in exchange for non-economic voting shares of Class V common stock, par value $0.0001, of the Company (“Class V Common Stock”) and non-voting economic Class B Units of Opco (“Class B Units,” and each pair consisting of one share of Class V Common Stock and one Class B Unit, an “Up-C Unit”) (such transaction, the “Business Combination”). The Up-C Units are convertible into Class A Common Stock of the Company at the discretion of the holder of the Up-C Unit. See Note 3, Business Combination, for details. Subsequent to the Closing Date, the Company’s sole asset is its equity interest in MSP Recovery, LLC. The Company is the managing member and therefore consolidates Legacy MSP.

Legacy MSP was organized in 2014 as a Medicaid and Medicare Secondary Payer Act recovery specialist. The Company utilizes its proprietary internal data analytics platform to review health Claims assigned by secondary payers such as health plans, MSOs, providers of medical services, and independent physicians associations. This platform allows the Company to identify Claims cost recovery rights with potential recovery paths where Claims either should not have been paid by the secondary payers or should have been reimbursed by third-party entities.

MSP Recovery is assigned recovery rights to Claims by secondary payers via CCRAs. Prior to executing a CCRA, MSP Recovery utilizes its proprietary internal data analytics platform to review the set of Claims of a prospective assignor to identify Claims with probable recovery paths. MSP Recovery’s assets are these irrevocable broad assignments of health Claims recovery rights that are supported by federal and state laws and regulations. MSP Recovery’s operations are primarily conducted in the U.S. and Puerto Rico.

2023 Reverse Stock Split

Effective at 11:59 PM EDT on October 12, 2023, the Company amended its Second Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware to effect a 1-for-25 reverse stock split of the Company’s common stock (the “Reverse Split”). The Company’s Class A Common Stock began trading post split on October 13, 2023 under the same symbol, LIFW. As a result of the Reverse Split, every 25 shares of the Company’s old common stock were converted into one share of the Company’s new common stock. Fractional shares resulting from the Reverse Split were rounded up to the nearest whole number. The Reverse Split automatically and proportionately adjusted, based on the 1-for-25 split ratio, all issued and outstanding shares of the Company’s common stock, as well as the terms of warrants and other derivative securities outstanding at the time of the effectiveness of the Reverse Split. Proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options and warrants to purchase shares of common stock. Share and per share data (except par value) for the periods presented reflect the effects of the Reverse Split. References to numbers of shares of common stock and per share data in the accompanying financial statements and notes thereto for periods ended prior to October 13, 2023 have been adjusted to reflect the Reverse Split on a retroactive basis. Unless otherwise noted, the share and per share information in this Quarterly Report have been adjusted to give effect to the one-for-twenty-five (1-for-25) Reverse Split. The previously reported number of authorized shares has been revised in this filing to properly reflect the impact of the 2023 Reverse Stock Split.

LifeWallet

As of September 30, 2023, the Company’s investment related to LifeWallet included in the condensed consolidated statement of operations was limited to activity and expenses incurred during the nine months ended September 30, 2023, which amounted to $3.7 million.

Committed Equity Facility

On May 17, 2022, the Company entered into a Company Common Stock Purchase Agreement (the “CF Agreement”) with an affiliate of Cantor Fitzgerald (“CF”). Pursuant to the CF Agreement, after the closing of the Business Combination, the Company will have the right to sell to CF, from time to time at its option, up to $1 billion in Class A Common Stock shares, subject to the terms, conditions and limitations set forth in the CF Agreement.

In connection with the Yorkville Purchase Agreement, the CF Agreement has been terminated.

Subsequent to September 30, 2023, the Company entered into the Standby Equity Purchase Agreement (“Yorkville SEPA”) with Yorkville, which replaced the Yorkville Purchase Agreement described above. Pursuant to the Yorkville SEPA, the Company has the

right to sell to Yorkville up to $250 million of its shares of 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 the shares of 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 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.

Upon the satisfaction of the conditions to Yorkville’s purchase obligation set forth in the Yorkville SEPA, including having a registration statement registering the resale of the shares of common stock issuable under the Yorkville SEPA declared effective by the SEC, the Company will have 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 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 common stock purchased pursuant to an Advance delivered by the Company will be purchased at a price equal to (i) 98% of the VWAP of the shares of 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 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 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 has agreed to advance to the Company in the form of convertible promissory notes (the “Convertible Notes”) an aggregate principal amount of $15.0 million (the “Pre-Paid Advance”). The Pre-Paid Advance was disbursed on November 14, 2023 with respect to $5.0 million and the remaining balance of the Pre-Paid Advance will be disbursed in the amount of (i) $5.0 million on the second trading day after the first amendment to the registration statement registering the resale of the shares of common stock issuable under the Yorkville SEPA being filed and (ii) $5.0 million upon the registration statement registering the resale of the shares of common stock issuable under the Yorkville SEPA being declared effective. The purchase price for the Pre-Paid Advance is 95.0% of the principal amount of the Pre-Paid Advance. If required pursuant to the amended and restated promissory note issued by the Company to Nomura, Yorkville shall pay the aggregate purchase price for the shares of common stock will be offset against an amount outstanding under a promissory note (first towards accrued and unpaid interest, if any, then towards principal equal to 50% of such aggregate purchase price and payment of the remaining 50% of such aggregate purchase price to the Company). Interest shall accrue on the outstanding balance of any Pre-Paid Advance at an annual rate equal to 5.0%, subject to an increase to 18% upon an event of default as described in the Convertible Notes. Yorkville may convert the Convertible Notes into shares of the Company’s common stock at a conversion price equal to the lower of 120% of VWAP the day prior to the date of the closing of each tranche (the “Fixed Price”) or 95% of the lowest daily VWAP during the five consecutive trading days immediately preceding the conversion (the “Conversion Price”), which in no event may the Conversion Price be lower than 20% of the closing price the trading day immediately prior to the signing of the definitive documents (the “Floor Price”). In addition, 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. 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, dated as of the date hereof, by and between Yorkville and the Company (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 $1,500,000 plus an 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 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 common stock issued and outstanding as of the effective date of the Yorkville SEPA (the “Exchange Cap”).

Yorkville, in its sole 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 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 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 common stock to Yorkville, except with respect to Yorkville Advances. Actual sales of shares of 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 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 common stock equal to $250 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 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 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.

Cano Health

On July 7, 2023, the Company issued 7,960,001 unregistered shares of Class A Common Stock (after giving effect to the Reverse Split) to Cano Health, LLC (“Cano”) as payment for $61.7 million in deferred compensation related to the following agreements, which the Company had the option to pay in cash or in stock and has elected to pay in stock, of which (i) 3,225,807 shares of Common Stock were issued as a deferred consideration for the assignment of certain claims pursuant to that certain Purchase Agreement, effective as of September 30, 2022, as amended to date, by and between MSP Recovery and Cano, and (ii) 4,734,194 shares of Common Stock were issued as deferred consideration for the assignment of certain claims pursuant to that certain Amended and Restated Claims Recovery and Assignment Agreement effective as of December 31, 2021, as amended to date, by and between MSP Recovery and Cano. See summary in “Cano Health” in Note 12, Commitments and Contingencies.

Liquidity

As an early-stage growth company, the Company has incurred substantial net losses since inception. As of September 30, 2023, the Company had unrestricted cash and cash equivalents totaling $6.7 million. The Company has incurred recurring losses and negative cash flows since inception and has an accumulated deficit of $62.1 million as of September 30, 2023. For the nine months ended September 30, 2023, the Company used approximately $31.5 million of cash in operations. The Company’s liquidity will depend on the ability to generate substantial Claims recovery income and Claims recovery services income in the near future, the timing of which is uncertain, as well as its ability to secure funding from capital sources. The Company’s principal liquidity needs have been capital expenditures, working capital, debt service and Claims financing obligations.

The Company anticipates sources of liquidity to include the Working Capital Credit Facility as disclosed in Note 10, Claims Financing Obligations and Notes Payable. The Company anticipates having funding through the Working Capital Credit Facility and has taken several actions to address liquidity concerns, including:

On March 29, 2023, the Company’s subsidiary, Subrogation Holdings, LLC, and its parent, MSP Recovery LLP, entered into the Working Capital Credit Facility consisting of commitments to fund up to $48 million in proceeds. See summary in “Hazel Transactions” in Note 10, Claims Financing Obligations and Notes Payable.

On November 13, 2023, the Company entered into the MTA Amendment No. 2 and Amendment to the Amended and Restated Security Agreement (“Second Virage MTA Amendment”), which extended the due date for the payment obligations to Virage to December 31, 2024. See summary in Note 4, Asset Acquisitions. This payment obligation will become a current liability after December 31, 2023, and the Company does not currently have available liquidity to satisfy such obligations.

On November 13, 2023, the Company entered into the Amended and Restated Nomura Promissory Note, which extended the due date to December 31, 2024. See summary in Note 10, Claims Financing Obligations and Notes Payable. Amended and Restated Nomura Promissory Note will become a current liability after December 31, 2023, and the Company does not currently have available liquidity to satisfy said obligation.

On November 14, 2023, the Company entered into the Yorkville SEPA, which included a pre-advancement in the amount of up to $15.0 million in connection with the purchase of the Company’s common stock. See summary above in “Committed Equity Facility” within Note 1, Description of the Business.

Given the uncertainty with regard to the timing and amount of claims recovery income, management implemented a reduction of operating costs in 2023 through the reduction or elimination of certain controllable expenses particularly within the budgeted costs to expand and develop new solutions through LifeWallet platform, advertising expenses and non-contingent legal fees.

The Company has concluded that such actions alleviate the substantial doubt about the Company’s ability to continue as a going concern beyond one year from the date these financial statements are issued.

Notice of Non-Compliance with Nasdaq Listing Requirements

On April 24, 2023, the Company was notified by Nasdaq Listing Qualifications staff (the “Staff”) that the Company was non-compliant with Nasdaq Listing Rule 5250(c)(1) as a result of not having timely filed its 2022 Form 10-K. The Company was also deemed 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 (March 13, 2023 through April 23, 2023). Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company was provided with a compliance cure period of 180 calendar days, or until October 23, 2023, to regain compliance with the Bid Price Requirement. On July 27, 2023, the Company filed its 2022 Form 10-K.

On May 24, 2023, the Company was notified by Nasdaq that it was not in compliance with the requirements of Nasdaq Listing Rule 5250(c) as a result of not having timely filed its Form 10-Q for the period ended March 31, 2023 with the SEC. On August 7, 2023, Nasdaq granted the Company an extension until August 30, 2023 to file its Quarterly Reports on Form 10-Q for the quarters ending March 31, 2023 and June 30, 2023. On August 16, 2023, the Company was notified by Nasdaq that it was not in compliance with the requirement of Nasdaq Listing Rule 5250(c)(1) as a result of not having timely filed its Form 10-Q for the period ended June 30, 2023 with the SEC. On August 17, 2023, the Company filed its Quarterly Report on Form 10-Q for the period ending March 31, 2023. The Company has regained compliance with such rule as a result of the filing of the Quarterly Report on Form 10-Q for the period ended June 30, 2023 on August 30, 2023. On August 31, 2023, the Company was notified by Nasdaq that it regained compliance with Nasdaq Listing Rule 5250(c)(1) after having filed its 2022 Form 10-K, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023.

On September 5, 2023, the Company received a determination from the Staff that the Company’s Class A Common Stock had a closing bid price of $0.10 or less for 10 consecutive trading days during a compliance period and so, pursuant to Listing Rule 5810(3)(A)(iii), the Staff determined to delist the Company’s securities from The Nasdaq Capital Market (the “Delisting Determination”). Pursuant to the procedures set out in the Nasdaq Listing Rules, the Company appealed the Delisting Determination to a hearing panel (the “Hearing”), which suspended the Delisting Determination until the Hearing, which was scheduled for November 2, 2023. The Company effected the Reverse Stock Split on October 13, 2023, which caused the price of its Class A Common Stock to trade at a level sufficient to regain compliance with Listing Rule 5810(3)(A)(iii), and Listing Rule 5450(a)(1). On October 27, 2023, the Company was notified by the Staff that it had regained compliance with all applicable listing standards, the Hearing was canceled, and that the Company’s stock will continue to be listed and traded on the Nasdaq Stock Market.

Note 1. DESCRIPTION OF BUSINESS

On May 23, 2022 (the “Closing Date”), MSP Recovery, Inc. d/b/a LifeWallet, a Delaware corporation (formerly known as Lionheart Acquisition Corporation II (“LCAP”) consummated the previously announced business combination pursuant to that certain Membership Interest Purchase Agreement, dated as of July 11, 2021 (as amended, the “MIPA”), by and among the Company, Lionheart II Holdings, LLC, a wholly owned subsidiary of the Company, MSP Recovery, LLC and combined and consolidated subsidiaries ("Legacy MSP"), the members of Legacy MSP (the “Members”), and John H. Ruiz, in his capacity as the representative of the Members (the “Members’ Representative”). Pursuant to the MIPA, the Members sold and assigned all of their membership interests in Legacy MSP to the Company in exchange for non-economic voting shares of Class V common stock, par value $0.0001, of the Company (“Class V Common Stock”) and non-voting economic Class B Units of the Company (“Class B Units,” and each pair consisting of one share of Class V Common Stock and one Class B Unit, an “Up-C Unit”) (such transaction, the “Business Combination”). The Up-C Units are convertible into Class A Common Stock of the Company at the discretion of holder of the Up-C Unit. See Note 3, Business Combination for details. Subsequent to the Closing Date, the Company's sole asset is its equity interest in MSP Recovery, LLC. The Company is the managing member and therefore consolidates Legacy MSP.

Legacy MSP was organized in 2014 as a Medicaid and Medicare Secondary Pay Act recovery specialist. The Company utilizes its proprietary internal data analytics platform to review health Claims assigned by secondary payers such as Health Plans, Management Service Organizations (“MSO”), providers of medical services and Independent Physicians Associations. This platform allows the Company to identify Claims cost recovery rights with potential recovery paths where Claims either should not have been paid by the secondary payers or should have been reimbursed by third-party entities.

MSP seeks the assignment of recovery rights from secondary payers by acquiring the recovery rights to Claims from secondary payers via Claims Cost Recovery Agreements (“CCRAs”). Prior to executing a CCRA, the Company utilizes its proprietary internal data analytics platform to review the set of Claims and identify Claims with probable recovery paths. MSP’s assets are these irrevocable assignments of health Claims recovery rights that are automatic, all-encompassing and superior to other interests supported by Federal and State laws and regulations. MSP’s operations are primarily conducted in the U.S. and Puerto Rico.

Investment Capacity Agreement

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 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 of 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). While the ICA is still in effect as of the date of this annual report, it is uncertain if or when the Company would transact on the ICA. To date, there have been no transactions in connection with this ICA, and the Company does not anticipate any in the foreseeable future.

LifeWallet

On January 10, 2022, the Company announced the launch of LifeWallet, LLC (“LifeWallet”). As of December 31, 2022, the Company’s investment related to LifeWallet included in the consolidated balance sheets was limited to activity and expenses incurred during the year ended December 31, 2022. Through the date the financial statements were issued, LifeWallet has executed agreements for advertising costs within the next 12 months of approximately $5.5 million. A portion of these contracts are cancellable with a 30-day notice period. For the aforementioned agreements that do not have a 30-day cancellation at will provision, the parties have mutually agreed to terminate said agreements prior to the filing of this Annual Report on Form 10-K.

Committed Equity Facility

On May 17, 2022, the Company entered into a Company Common Stock Purchase Agreement (the “Purchase Agreement”) with an affiliate of Cantor Fitzgerald (“CF”). Pursuant to the Purchase Agreement, after the closing of the Business Combination, the Company will have the right to sell to CF from time to time at its option up to $1 billion in Class A common stock shares, subject to the terms, conditions and limitations set forth in the Purchase Agreement.

On January 6, 2023, the Company entered into a Company Common Stock Purchase Agreement (the “Yorkville Purchase Agreement”) with YA II PN, Ltd., a Cayman Island exempted company (“Yorkville”), which replaced the Purchase Agreement with CF noted above. Pursuant to the Yorkville Purchase Agreement, the Company has the right to sell to Yorkville from time to time at its option up to $1 billion in shares of the Company’s Common Stock, subject to the terms, conditions and limitations set forth in the Yorkville Purchase Agreement. Sales of the shares of the Common Stock to Yorkville under the Yorkville Purchase Agreement, and the timing of any such sales, will be determined by the Company from time to time in its sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading price of the common stock, as well as determinations by the Company about the use of proceeds of such Common Stock sales. The net proceeds from any such sales under the Yorkville Purchase Agreement will depend on the frequency with, and the price at, which the shares of Common Stock are sold to Yorkville. Upon the initial satisfaction of the conditions to Yorkville’s obligation to purchase shares of Common Stock set forth under the Yorkville Purchase Agreement (the “Commencement”), including that a registration statement registering the resale by Yorkville of the shares of Common Stock under the Securities Act, purchased pursuant to the Yorkville Purchase Agreement (the “Resale Registration Statement”) is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC, the Company will have the right, but not the obligation, from time to time, at its sole discretion and on the terms and subject to the limitations contained in the Yorkville Purchase Agreement, until no later than the first day of the month following the 36 month anniversary of the date that the Resale Registration Statement is declared effective, to direct Yorkville to purchase up to a specified maximum amount of Common Stock as set forth in the Yorkville Purchase Agreement by delivering written notice to Yorkville prior to the commencement of trading on any trading day. The purchase price of the common stock that the Company elects to sell to Yorkville pursuant to the Yorkville Purchase Agreement will be 98% of the volume-weighted average price ("VWAP") of the Common Stock during the applicable purchase date on which the Company has timely delivered a written notice to Yorkville, directing it to purchase common stock under the Yorkville Purchase Agreement. The purchase agreement that the Company entered into on May 17, 2022 with CF has been terminated.

Assignment and Sale of Proceeds Agreement

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 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 the Company’s Net Recovery Proceeds, up to an aggregate of $250 million, at a purchase price of 90% of the 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 the Net Recovery Proceeds. Prudent may terminate the Services Agreement upon sixty (60) days prior written notice to the Company.

The Company may utilize the Assignment Agreement as funding if needed. While the Prudent Agreements are still in effect as of the date of these financial statements, it is uncertain if or when the Company would transact on the agreements.

Warrant Agreement with Brickell Key Investments, LP

On October 12, 2022, MSP Recovery, Inc., a Delaware corporation (the “Company”), finalized an Amendment to the Claim Proceeds Investment Agreement (the “Amendment”) and a Warrant Agreement (the “Warrant Agreement”) with Brickell Key Investments LP (the “Holder”), pursuant to which the parties have agreed to amend the original Claims Proceeds Investment Agreement (“CPIA”) and required payment terms. The Amendment and Warrant Agreement were agreed effective September 30, 2022.

Pursuant to the agreements, the Company grants to the Holder the right to purchase Class A common shares in the Company (the “Class A Shares”) in accordance with the terms and conditions of the Agreement. The maximum amount of Class A shares that the holder may purchase from the Company is 2,666,667 (the “Amount”) for a purchase price equal to $6,666.67 ($0.0025 per Class A Share) (the “Exercise Price”) 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 reduced from approximately $143 million to equal $80 million (the “Reduced Obligation”), and no further interest will accrue. The Holder has the right to receive the $80 million owed through (1) proceeds as outlined in the CPIA, (2) cash paid by the Company or (3) 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 (five-day volume weighted average price as of September 30, 2022).

Liquidity

As an early-stage growth company, the Company has incurred substantial net losses since inception. As of December 31, 2022, the Company had unrestricted cash and cash equivalents totaling $3.7 million. The Company has incurred recurring losses and negative cash flows since inception and has an accumulated deficit of $29.2 million as of December 31, 2022. For the year ended December 31, 2022, the Company used approximately $80.6 million of cash in operations. The Company’s liquidity will depend on the ability to generate substantial Claims recovery income and Claims recovery services income in the near future, the timing of which is uncertain, as well as its ability to secure funding from capital sources. The Company’s principal liquidity needs have been capital expenditures, working capital, debt service and Claims financing obligations.

The Company anticipates sources of liquidity to include the Hazel Working Capital Facility as disclosed in Note 19, Subsequent Events. The Company anticipates having funding through this source and has taken several actions to address liquidity concerns, including:

On April 12, 2023, the Company entered into the Virage MTA Amendment, which extended the due date for the payment obligations to Virage to September 30, 2024. See summary in Note 19, Subsequent Events.

On April 12, 2023, the Company entered into an amended and restated promissory note with Nomura, which extended the due date to September 30, 2024. See summary in Note 19, Subsequent Events.

On March 29, 2023, the Company entered into the Working Capital Credit Agreement consisting of commitments to fund up to $48 million in proceeds. See summary in Note 19, Subsequent Events.

Property, Plant and Equipment, Net (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, Net

Property, plant and equipment, net consist of the following:


	September 30,			December 31,
(In thousands)	2023			2022
Office and computer equipment	$	434		$	430
Leasehold improvements		113			113
Internally developed software		5,687			4,050
Other software		67			68
Property, plant and equipment, gross	$	6,301		$	4,661
Less: accumulated depreciation and amortization of software		(1,411	)		(1,229	)
Property, plant and equipment, net	$	4,890		$	3,432

Property, plant and equipment, net consist of the following:


	December 31,			December 31,
(In thousands)	2022			2021
Office and computer equipment	$	430		$	356
Leasehold improvements		113			113
Internally developed software		4,050			1,020
Other software		68			66
Property, plant and equipment, gross	$	4,661		$	1,555
Less: accumulated depreciation and amortization of software		(1,229	)		(805	)
Property, plant and equipment, net	$	3,432		$	750

Intangible Assets, Net (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Finite-Lived Intangible Assets [Line Items]

Summary of Intangible Assets Net


(in thousands)	September 30, 2023			December 31, 2022
Intangible assets, gross	$	3,872,256		$	3,630,823
Accumulated amortization		(618,549	)		(267,667	)
Net	$	3,253,707		$	3,363,156

Intangible assets, net consists of the following:


(in thousands)	December 31, 2022			December 31, 2021
Intangible assets, gross	$	3,630,823		$	84,955
Accumulated amortization		(267,667	)		(737	)
Net	$	3,363,156		$	84,218

Schedule of Expected Future Amortization Expense of Intangible Assets

Future amortization for CCRAs, for the remainder of 2023 and thereafter is expected to be as follows:


(in thousands)	CCRAs Amortization
2023		121,008
2024		483,959
2025		483,907
2026		483,907
2027		483,907
Thereafter		1,197,019
Total	$	3,253,707

Future amortization for CCRAs is expected to be as follows:


(in thousands)	CCRAs Amortization
2023	$	453,853
2024		453,853
2025		453,780
2026		453,728
2027		453,728
Thereafter		1,094,214
Total	$	3,363,156

Claims Cost Recovery Rights [Member]

Finite-Lived Intangible Assets [Line Items]

Summary of Intangible Assets Net

The following table presents the changes in the Company’s intangibles assets for nine months ended September 30, 2023:


(in thousands)	Intangible Assets
Balance as of December 31, 2022	$	3,363,156
Acquisitions of CCRAs		286,929
Amortization expense		(355,481	)
Sale of CCRAs		(40,897	)
Total	$	3,253,707

Business Combination

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Business Combinations [Abstract]

Business Combinations

Note 3. BUSINESS COMBINATION

On May 23, 2022, MSP Recovery, Inc. consummated the Business Combination pursuant to that certain Membership Interest Purchase Agreement, dated as of July 11, 2021, as amended (the “MIPA”), by and among the Company, Lionheart II Holdings, LLC, a wholly owned subsidiary of the Company, MSP Recovery, LLC and combined and consolidated subsidiaries (“Legacy MSP”), the members of Legacy MSP (the “Members”), and John H. Ruiz, in his capacity as the representative of the Members (the “Members’ Representative”). Pursuant to the MIPA, the Members sold and assigned all of their membership interests in Legacy MSP to the Company in exchange for non-economic voting shares of Class V common stock, par value $0.0001, of the Company (“Class V Common

Stock”) and non-voting economic Class B Units of Opco (“Class B Units,” and each pair consisting of one share of Class V Common Stock and one Class B Unit, an “Up-C Unit”) (such transaction, the “Business Combination”). Subsequent to the Closing Date, the Company’s sole asset is its equity interest in MSP Recovery.

As a result of the closing of the Business Combination (the “Closing”), the Company is organized in an “Up-C” structure in which all of the business of Legacy MSP and its subsidiaries is held directly or indirectly by the Company, the Company is the managing member and consolidates Legacy MSP. The Company owns all of the voting economic Class A Units and the Members and their designees own all of the non-voting economic Class B Units in accordance with the terms of the first amended and restated limited liability company agreement of the Company. Each Up-C Unit may be exchanged for either, at the Company’s option, (a) cash or (b) one share of Class A Common Stock, subject to the provisions set forth in the LLC Agreement. The aggregate consideration paid to the Members (or their designees) at the Closing consisted of (i) 130,000,000 Up-C Units and (ii) rights to receive payments under the Tax Receivable Agreement, discussed in detail above. Of the 130,000,000 Up-C Units, 126,178,932 Up-C Units were issued in connection with the Closing and 3,821,069 Units were designated to the Company and Opco for cancellation (“Canceled Units”). Since the Closing, the Company has issued 2,000,880 Up-C Units to certain designated persons and intends to further issue shares of Class A Common Stock in respect of transaction-related bonuses or certain other designated persons, which together with the 2,000,880 Up-C Units, would be equivalent in number to the Canceled Units.

In connection with the Closing, the Company changed its name from “Lionheart Acquisition Corporation II” to “MSP Recovery, Inc.” The Business Combination is accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, the Company is treated as the acquired for financial statement reporting purposes. The reverse recapitalization was treated as the equivalent of Legacy MSP issuing stock for the net assets of LCAP, accompanied by a recapitalization. The net assets of LCAP are stated at historical cost, with no goodwill or other intangible assets recorded.

The Company received net proceeds in the business combination transaction of approximately $23.4 million, which includes the restricted cash received as part of FEF shares as defined in Note 15, Derivative Liability. The Company incurred direct and incremental costs of approximately $79.2 million related to the Business Combination, which consisted primarily of investment banking, legal, accounting, and other professional fees. These transaction-related costs were recorded as a reduction of additional paid-in capital in the condensed consolidated balance sheets. During the nine months ended September 30, 2023, the Company and CF agreed to terminate their OTC Equity Prepaid Forward Transaction. As a result of this termination, the restricted cash received as part of FEF shares amounting to $11.4 million was released and paid to Cantor.

Warrants

As part of the Business Combination transaction, the Company assumed the liability related to the LCAP public warrants (“Public Warrants”) of $12.5 million. Pursuant to the terms of the Existing Warrant Agreement, and after giving effect to the issuance of the New Warrants, as defined below, the exercise price of the Public Warrants decreased to a Reverse Split adjusted $0.0025 per share of Class A Common Stock. During the period from the Closing Date to September 30, 2023, approximately 8.7 million warrants of the original 11.8 million warrants have been exercised and the fair value of the remaining warrants decreased resulting in other income for the three and nine months ended September 30, 2023 and 2022. Following anti-dilution adjustments made in connection with the Business Combination, and adjusted for the Reverse Split, the Public Warrants have an exercise price of $0.0025 per share, which have become exercisable as of 10 days after closing of the Business Combination, on a cashless basis.

Additionally, in connection with the Business Combination, the Company declared the New Warrant dividend comprising approximately 1,028 million New Warrants payable to the holders of record of the Class A Common Stock as of the close of business on the Closing Date, after giving effect to the waiver of the right, title, and interest in, to or under, participation in any such dividend by the Members, on behalf of themselves and any of their designees. The New Warrants will be exercisable 30 days following the Closing Date until their expiration date, which will be the fifth anniversary of the Closing Date or earlier redemption. The record date for the determination of the holders of record of the outstanding shares of Class A Common Stock entitled to receive the New Warrant dividend was the close of business on the Closing Date. Pursuant to the terms of the LLC Agreement, at least twice a month, to the extent any New Warrants have been exercised in accordance with their terms, the Company is required to purchase from the MSP Principals, proportionately, the number of Up-C Units or shares of Class A Common Stock owned by such MSP Principal equal to the aggregate exercise price divided by the warrant exercise price in exchange for the aggregate exercise price. The Company determined that the New Warrants instruments meet the equity scope exception in ASC 815 to be classified in stockholders’ equity, and as the repurchase right noted above has a mirrored value designed to offset the New Warrants, if exercised would be an equity only transaction. The New Warrants are each exercisable for 1/25th of one share of Class A Common Stock at a Reverse Split adjusted exercise price of $287.50 per whole share. The New Warrants must be exercised in lots of 25, as no fractional shares will be issued as a result of their exercise. The New Warrants are subject to certain anti-dilution adjustments.

Public Warrants and New Warrants are currently listed on Nasdaq under the symbols “LIFWZ” and “LIFWW,” respectively.

Tax Receivable Agreement

In connection with the Business Combination, the Company also entered into a Tax Receivable Agreement (the “TRA”). Pursuant to the TRA, the Company is required to pay the sellers 85% of the amount of tax benefits that the Company actually realizes as a result of (i) the Company’s direct and indirect allocable share of existing tax basis acquired in the Business Combination, (ii) increases in the

Company’s allocable share of existing tax basis and tax basis adjustments that will increase the tax basis of the tangible and intangible assets of the Company as a result of the Business Combination and as a result of sales or exchanges of Up-C Units for cash or shares of Class A Common Stock, and (iii) certain other tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. During the three and nine months ended September 30, 2023, 0.0 million and 1.7 million, respectively, of Class V units were exchanged for Class A Common Stock of the Company. The Company receives an increase in its share of the tax basis in the net assets of MSP Recovery, LLC due to the interests being redeemed. The Company has assessed the realizability of the net deferred tax assets and in that analysis has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The Company has recorded a full valuation allowance against the deferred tax assets as of September 30, 2023, which will be maintained until there is sufficient evidence to support the reversal of all or some portion of these allowances. As the tax benefits associated with the TRA have not been recognized, based on estimates of future taxable income, the Company has concluded it is not probable to recognize any tax receivable agreement liability. If the valuation allowance recorded against the deferred tax assets is released in a future period, the TRA liability may be considered probable at that time and recorded within earnings.

Non-Controlling interest

As a result of the Business Combination, the Company reflects non-controlling interests as a result of the Up-C structure. The Company holds all of the voting Class A Units of Opco, whereas the Members (or their designees) hold all of the non-voting economic Class B Units of Opco (these Class B Units represent the non-controlling interest in the Company). The ownership percentage of Class V Common Stock held in the post-combination Company by the Members (or their designees) will be equivalent to the number of Class B Units of Opco, and as such, reflects the non-controlling interest in the Company, which is equivalent to the Class V Common Stock ownership percentage. See Note 11, Noncontrolling Interest, for more information on ownership interests in the Company.

Amended and Restated Nomura Promissory Note

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. On April 12, 2023, the Company amended the promissory note, increasing the principal amount to approximately $26.3 million and extending the maturity date of the promissory note to September 30, 2024. On November 13, 2023, the Company entered into the Amended and Restated Nomura Promissory 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. The Amended and Restated Nomura Promissory 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 November 13, 2023. Upon two days prior written notice to Nomura, the Company may prepay all or any portion of the then outstanding principal amount under the Amended and Restated Nomura Promissory Note together with all accrued and unpaid interest thereon. The balance of the unsecured Amended and Restated Nomura Promissory Note and related interest are included within Claims financing obligations and notes payable in the condensed consolidated balance sheet. Refer to Note 10, Claims Financing Obligations and Notes Payable.

Note 3. BUSINESS COMBINATION

On May 23, 2022, MSP Recovery, Inc. consummated the Business Combination pursuant to the MIPA as noted in Note 1.

As a result of the closing of the Business Combination (the “Closing”), the Company is organized in an “Up-C” structure in which all of the business of Legacy MSP and its subsidiaries is held directly or indirectly by the Company, the Company is the managing member, consolidates Legacy MSP and the Company owns all of the voting economic Class A Units and the Members and their designees own all of the non-voting economic Class B Units in accordance with the terms of the first amended and restated limited liability company agreement of the Company. Each Up-C Unit may be exchanged for either, at the Company’s option, (a) cash or (b) one share of Class A common stock, par value $0.0001, of the Company (“Class A Common Stock”), subject to the provisions set forth in the LLC Agreement. The aggregate consideration paid to the Members (or their designees) at the Closing consisted of (i) 130,000,000 Up-C Units and (ii) rights to receive payments under the Tax Receivable Agreement (“TRA”). Of the 130,000,000 Up-C Units, 126,178,932 Up-C Units were issued in connection with the Closing and 3,821,069 Up-C Units were designated to the Company and Opco for cancellation (“Canceled Units”). Since the Closing, the Company has issued 2,000,880 Up-C Units to certain designated persons and intends to further issue shares of Class A Common Stock in respect of transaction-related bonuses or certain other designated persons, which together with the 2,000,880 Up-C Units would be equivalent in number to the Canceled Units.

In connection with the Closing, the Company changed its name from “Lionheart Acquisition Corporation II” to “MSP Recovery, Inc.” The Business Combination is accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, the Company is treated as the acquirer for financial statement reporting purposes. The reverse recapitalization was treated as the equivalent of Legacy MSP issuing stock for the net assets of LCAP, accompanied by a recapitalization. The net assets of LCAP are stated at historical cost, with no goodwill or other intangible assets recorded.

Warrants

As part of the business combination transaction, the Company assumed the liability related to the LCAP public warrants (“Public Warrants”) of $12.5 million. Pursuant to the terms of the Existing Warrant Agreement, and after giving effect to the issuance of the New Warrants, as defined below, the exercise price of the Public Warrants decreased to $0.0025 per share of Class A Common Stock. During the period from the Closing Date to December 31, 2022, approximately 8.5 million warrants of the original 11.8 million warrants had been exercised. For the year ended December 31, 2022, the fair value of the warrants increased resulting in other expense of $2.9 million. Following anti-dilution adjustments made in connection with the Business Combination, the Public Warrants have an exercise price of $0.0025 per share, which have become exercisable as of 10 days after closing of the Business Combination, on a cashless basis.

Additionally, in connection with the Business Combination, the Company declared the New Warrant Dividend comprising approximately 1,028 million New Warrants payable to the holders of record of the Class A Common Stock as of the close of business on the Closing Date, after giving effect to the waiver of the right, title and interest in, to or under, participation in any such dividend by the Members, on behalf of themselves and any of their designees. The New Warrants will be exercisable 30 days following the Closing Date until their expiration date, which will be the fifth anniversary of the Closing Date or earlier redemption. The record date for the determination of the holders of record of the outstanding shares of Class A Common Stock entitled to receive the New Warrant Dividend was the close of business on the Closing Date. Pursuant to the terms of the LLC Agreement, at least twice a month, to the extent any New Warrants have been exercised in accordance with their terms, the Company is required to purchase from the MSP Principals, proportionately, the number of Up-C Units or shares of Class A Common Stock owned by such MSP Principal equal to the Aggregate Exercise Price divided by the Warrant Exercise Price in exchange for the Aggregate Exercise Price. The Company determined that the New Warrants instruments meet the equity scope exception in ASC 815 to be classified in stockholders’ equity, and as the repurchase right noted above has a mirrored value designed to offset the New Warrants, if exercised would be an equity only transaction. The New Warrants are each exercisable for 1/25th of one share of Class A Common Stock (but only exercisable in lots of 25 to purchase whole shares) at an exercise price of $287.50 per whole share and will be subject to certain anti-dilution adjustments and become exercisable 30 days following the Closing, expiring five years from the date of Closing.

Public Warrants and New Warrants are currently listed on Nasdaq under the symbols “LIFWZ” and “LIFWW,” respectively.

Tax Receivable Agreement

In connection with the Business Combination, the Company also entered into a TRA. Pursuant to the TRA, the Company is required to pay the sellers 85% of the amount of tax benefits that the Company actually realizes as a result of (i) the Company’s direct and indirect allocable share of existing tax basis acquired in the Business Combination, (ii) increases in the Company’s allocable share of existing tax basis and tax basis adjustments that will increase the tax basis of the tangible and intangible assets of the Company as a result of the Business Combination and as a result of sales or exchanges of Up-C Units for cash or shares of Class A Common Stock, and (iii) certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA.

During the year ended December 31, 2022, the Company’s TRA liability associated with the allocable share of existing tax basis acquired in the Business Combination would give rise to a TRA liability of $2.5 million. Furthermore, during the year ended December 31, 2022, 259,752 of Class V units were exchanged for Class A common stock of the Company, which will result in an increase in its share of the tax basis in the net assets of MSP Recovery, LLC; these exchanges will not give rise to a TRA liability due to the Company not receiving a tax basis adjustment that increased the tax basis of the tangible and intangible assets as a result of a limitation on the partnership tax allocations of built-in gains and losses.

The Company has assessed the realizability of the net deferred tax assets and, in that analysis, has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The Company has recorded a full valuation allowance against the deferred tax assets as of December 31, 2022, which will be maintained until there is sufficient evidence to support the reversal of all or some portion of these allowances. As the tax benefits associated with the TRA have not be recognized, based on estimates of future taxable income, the Company has concluded it is not probable to recognize any tax receivable agreement liability. If the valuation allowance recorded against the deferred tax assets is released in a future period, the Tax Receivable Agreement liability may be considered probable at that time and recorded within earnings.

Non-Controlling interest

As a result of the Business Combination, the Company reflects non-controlling interests due to the Up-C structure. The Company holds all of the voting Class A Units of Opco, whereas the Members (or their designees) hold all of the non-voting economic Class B Units of Opco (these Class B Units represent the non-controlling interest in the Company). The ownership percentage of Class V Common Stock held in the Company by the Members (or their designees) will be equivalent to the number of Class B Units held in the Company, and as such, reflects non-controlling interest in the Company, which is equivalent to the Class V Common Stock ownership percentage. See Note 12, Noncontrolling Interest, for more information on ownership interests in the Company.

Nomura Promissory Note

Income Tax - Schedule of Reconciliation Statutory Income Tax Rate to the Company's Effective Tax Rate (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Federal Statutory rate	21.00%	21.00%	21.00%
Noncontrolling interests/effect of pass-through entities	(20.70%)	(21.00%)	(21.00%)
Valuation allowance	(0.40%)	0.00%	0.00%
Other	0.10%	0.00%	0.00%
Effective Income tax rate	0.00%	0.00%	0.00%

Noncontrolling Interest (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Noncontrolling Interest [Abstract]

Summary of Ownership Units

The following table summarizes the stock ownership in the Company as of September 30, 2023:


	Shares of Common Stock		Ownership Percentage
Ownership of Class A Common Stock		13,799,230		9.99	%
Ownership of Class V Common Stock		124,264,645		90.01	%
Balance at end of period		138,063,875		100.00	%

The following table summarizes the ownership of Units in the Company as of December 31, 2022:


	Common Stock		Ownership Percentage
Ownership of Class A Common Stock		2,984,212		2.32	%
Ownership of Class V Common Stock		125,919,180		97.68	%
Balance at end of period		128,903,392		100.00	%

Derivative Liability

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liability

Note 15. DERIVATIVE LIABILITY

The Company and CF had previously entered into an agreement for an OTC Equity Prepaid Forward Transaction, pursuant to which CF agreed to (a) transfer to the Company for cancellation any warrants to purchase shares received as a result of being the stockholder of record of a share as of the close of business on the closing date of the Business Combination, pursuant to the previously announced and declared LCAP dividend and (b) waive any redemption right that would require the redemption of the Subject Shares (as defined below) in exchange for a pro rata amount of the funds held in LCAP’s Trust account.

At the Closing of the Business Combination, the Company transferred from the Trust Account to an escrow account an amount equal to (a) the aggregate number of such Subject Shares (approximately 44,000 shares), multiplied by (b) the per share redemption price for shares out of the Trust Account, as a prepayment to CF of the amount to be paid to CF in settlement of the OTC Equity Prepaid Forward Transaction for the number of shares owned by CF at the closing of the Business Combination (the “FEF Shares”). CF may sell the Subject Shares at its sole discretion in one or more transactions, publicly or privately. Any such sale shall constitute an optional early termination of the OTC Equity Prepaid Forward Transaction upon which (a) CF will receive from the escrow account an amount equal to the positive excess, if any, of (x) the product of the redemption price and the aggregate number of shares over (y) an amount equal to the proceeds received by CF in connection with sales of the shares, and (b) the Company will receive from the escrow account the amount set forth in (y) above.

The Company concluded that the instrument includes an embedded derivative for the change in value of the Company’s Class A Common Stock, and as such, at the end of each period the Company will mark to market the shares through booking a derivative liability/asset. The calculation of the derivative liability/asset would be the difference between the restricted cash and current fair value of the outstanding FEF shares (number of FEF shares multiplied by market price of the Company’s Class A Common Stock as of period end).

On January 6, 2023, the Company and CF entered into an Omnibus Fee Amendment Agreement (“Fee Amendment Agreement”). Pursuant to the terms of the Fee Amendment Agreement, in satisfaction of the deferred underwriting commissions under a previous agreement, the Company and CF agreed to release from escrow the $11.4 million of restricted cash and release the FEF shares previously held as Class A Common Stock subject to possible redemption within temporary equity. Prior to the Fee Amendment Agreement, CF had not sold any FEF shares.

As a result of the Fee Amendment Agreement and termination of the OTC Forward Transaction, as of September 30, 2023, the Company no longer has any restricted cash, Class A Common Stock subject to possible redemption, or derivative liability in the condensed consolidated balance sheets.

Note 17. DERIVATIVE LIABILITY

The Company and CF entered into an agreement for an OTC Equity Prepaid Forward Transaction (the “Transaction”). Pursuant to the terms of the Transaction, CF agreed to (a) transfer to the Company for cancellation any warrants to purchase shares received as a result of being the stockholder of record of a share as of the close of business on the closing date of the Business Combination, pursuant to the previously announced and declared LCAP dividend and (b) waive any redemption right that would require the redemption of the Subject Shares (as defined below) in exchange for a pro rata amount of the funds held in LCAP’s trust account.

At closing of the Business Combination, the Company transferred from the trust account to an escrow account an amount equal to (a) the aggregate number of such Subject Shares (approximately 45.2 thousand shares), multiplied by (b) the per share redemption price for shares out of the trust account, as a prepayment to CF of the amount to be paid to CF in settlement of the Transaction for the number of shares owned by CF at the closing of the Business Combination (the “FEF Shares”). CF may sell the Subject Shares at its sole discretion in one or more transactions, publicly or privately. Any such sale shall constitute an optional early termination of the Transaction upon which (a) CF will receive from the escrow account an amount equal to the positive excess, if any, of (x) the product of the redemption price and the aggregate number of shares over (y) an amount equal to the proceeds received by CF in connection with sales of the shares, and (b) the Company will receive from the escrow account the amount set forth in (y) above.

The Company concluded that the instrument includes an embedded derivative for the change in value of the Company’s Class A common stock and as such, at the end of each period the Company will mark to market the shares through booking a derivative liability/asset. The calculation of the derivative liability/asset would be the difference between the restricted cash and current fair value of the outstanding FEF shares (number of FEF shares multiplied by market price of the Company’s Class A common stock as of period end). As of December 31, 2022, CF had not sold any FEF shares. The aggregate purchase price of $11.4 million is reflected in restricted cash with the fair value of the shares of $1.8 million included as Class A common stock subject to possible redemption within temporary equity and the derivative liability of $9.6 million reflected in current liabilities in the consolidated balance sheets.

Basis of Presentation and Summary of Significant Accounting Policies - Schedule Of Correction Of Previously Reported Interim Condensed Consolidated Statements Of Cash Flows (Details) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Jun. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

$ (224,217)

$ (105,556)

$ (105,981)

$ (119,872)

$ (609,192)

^[1]

$ (225,428)

^[1]

$ (401,905)

^[2]

$ (33,077)

^[2]

$ (24,266)

^[2]

$ 121,008

111,851

38,991

41,708

355,481

153,560

266,929

164

125

34,744

204,263

^[1]

80,947

^[1]

145,321

27,023

20,843

(531)

Net cash (used in) provided by operating activities

(918)

(7,664)

(6,195)

(60,912)

(31,533)

(70,764)

(80,635)

2,249

(14)

Net cash provided by (used in) investing activities

(3,015)

7,759

(4,563)

(5,684)

(2,007)

986

Net cash provided by (used in) financing activities

98,728

$ 15,352

99,351

$ 99,735

$ (10,457)

$ 9,610

(27,060)

(77,124)

(91,015)

(118,075)

66,331

23,818

26,535

92,866

21,369

34,475

(857)

Net cash (used in) provided by operating activities

(901)

(7,525)

(60,912)

(70,764)

Net cash provided by (used in) investing activities

(3,015)

(4,563)

Net cash provided by (used in) financing activities

98,728

99,351

(78,496)

(28,857)

(107,353)

$ 45,520

$ 15,173

15,173

60,694

13,375

46,472

326

Property, Plant and Equipment [Abstract]

$ (17)

$ (139)

[1]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.
[2]	Balances include related party transactions. See Note 14, Related Party, for further details.

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Sep. 30, 2023
Loss Contingencies [Line Items]
Percentage of expected recoveries arise from claims under Medicare Secondary Payer Act	93.00%
Cano Health, LLC [Member]
Loss Contingencies [Line Items]
Aggregate principal amount		$ 5.0

Basis of Presentation and Summary of Significant Accounting Policies - Summary Of Disclosure In Tabular Form Of Useful Lives Of Property Plant And Useful Lives (Detail)	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Estimated Useful Lives	Leasehold Improvements [Member]
Office And Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years

Property, Plant and Equipment, Net

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Property, Plant and Equipment, Net

Note 6. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consist of the following:


	September 30,			December 31,
(In thousands)	2023			2022
Office and computer equipment	$	434		$	430
Leasehold improvements		113			113
Internally developed software		5,687			4,050
Other software		67			68
Property, plant and equipment, gross	$	6,301		$	4,661
Less: accumulated depreciation and amortization of software		(1,411	)		(1,229	)
Property, plant and equipment, net	$	4,890		$	3,432

For the three and nine months ended September 30, 2023 and 2022, depreciation expense and amortization expense was $0.1 million and $0.2 million, respectively, and $0.1 million and $0.3 million, respectively.

Note 6. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consist of the following:


	December 31,			December 31,
(In thousands)	2022			2021
Office and computer equipment	$	430		$	356
Leasehold improvements		113			113
Internally developed software		4,050			1,020
Other software		68			66
Property, plant and equipment, gross	$	4,661		$	1,555
Less: accumulated depreciation and amortization of software		(1,229	)		(805	)
Property, plant and equipment, net	$	3,432		$	750

For the years ended December 31, 2022, 2021, and 2020, depreciation expense and amortization expense was $424 thousand, $343 thousand, and $235 thousand, respectively.

Net Loss Per Common Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Jun. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Numerator - basic and diluted:

Less: Net loss attributable to MSP Recovery, LLC pre Business Combination

$ (224,217)

$ (105,556)

$ (105,981)

$ (119,872)

$ (609,192)

^[1]

$ (225,428)

^[1]

$ (401,905)

^[2]

$ (33,077)

^[2]

$ (24,266)

^[2]

28,640

Less: Net loss attributable to the noncontrolling interest post Business Combination

204,462

103,484

576,301

221,476

365,848

$ (19,755)

$ (2,072)

$ (1,880)

$ (32,891)

$ (3,952)

$ (7,417)

$ (33,093)

$ (24,248)

Weighed-average shares of common stock outstanding - basic

Denominator - basic and diluted:

12,703,472

2,761,476

544,291

7,097,032

2,125,539

2,473,005

^[3]

Weighed-average shares of common stock outstanding - diluted

12,703,472

2,761,476

544,291

7,097,032

2,125,539

2,473,005

^[3]

Earnings per share of common stock - basic

$ (1.56)

$ (0.75)

$ (3.45)

$ (4.63)

$ (1.86)

$ (3)

^[3]

Earnings per share of common stock - diluted

$ (1.56)

$ (0.75)

$ (3.45)

$ (4.63)

$ (1.86)

$ (3)

^[3]

[1]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.
[2]	Balances include related party transactions. See Note 14, Related Party, for further details.
[3]	Earnings per share information has not been presented for periods prior to the Business Combination (as defined in Note 1, Description of Business), as it resulted in values that would not be meaningful to the users of these consolidated financial statements. Refer to Note 16, Net Loss Per Common Share for further information.

Basis of Presentation and Summary of Significant Accounting Policies - Schedule Of Correction Of Previously Reported Interim Condensed Consolidated Statements Of Changes In Equity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Balance at beginning of period	$ 1,803,485	$ 2,463,966	$ (151,408)	$ 2,185,465	$ (151,408)	$ (151,408)	$ (115,847)	$ (100,105)
Contributions prior to recapitalization transaction			15		15	15	227	8,524
Distributions prior to recapitalization transaction			(147)		(147)	(147)	(2,711)
Net loss prior to recapitalization transaction			(28,640)		(28,640)	(28,640)
Opening net assets of Lionheart II Holdings, LLC acquired			(21,786)		(21,786)	(21,786)
Adjustment for value of derivative on temporary equity		1,062	9,003		10,065	9,613
Conversion of Warrants	3	648	1,550	219	2,197	10,092
Class A Issuances	64,391	(4,962)	(23,192)	67,170	(28,153)	24,120
Net loss		(99,345)	(38,301)		(137,645)	(373,265)
Balance at end of period	1,643,662	2,361,369	2,463,966	1,643,662	2,361,369	2,185,465	(151,408)	(115,847)
Recapitalization Transaction [Member]
Balance at beginning of period		2,716,872	2,716,871	2,716,871	2,716,871	2,716,871
Balance at end of period		2,716,871	2,716,872		2,716,871	2,716,871	2,716,871
Additional Paid-in Capital [Member]
Balance at beginning of period	176,643	127,099		137,069
Adjustment for value of derivative on temporary equity		1,062	9,003		10,065	9,613
Conversion of Warrants	2	1,805	13,836	388	15,641	16,703
Class A Issuances	170,731	5,310	62,681	209,919	67,991	69,174
Balance at end of period	347,376	135,276	127,099	347,376	135,276	137,069
Additional Paid-in Capital [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		41,579	41,579	41,579	41,579	41,579
Balance at end of period		41,579	41,579		41,579	41,579	41,579
Accumulated Deficit [Member]
Balance at beginning of period	(42,339)	(23,666)		(29,203)
Opening net assets of Lionheart II Holdings, LLC acquired			(21,786)		(21,786)	(21,786)
Net loss		(2,072)	(1,880)		(3,952)	(7,417)
Balance at end of period	(62,094)	(25,738)	(23,666)	(62,094)	(25,738)	(29,203)
Non- Controlling Interests [Member]
Balance at beginning of period	1,669,169	2,360,520	4,348	2,077,586	4,348	4,348	4,332	4,350
Conversion of Warrants	1	(1,157)	(12,287)	(169)	(13,444)	(6,611)
Class A Issuances	(106,341)	(10,272)	(85,872)	(142,749)	(96,144)	(45,054)
Net loss		(97,273)	(36,420)		(133,693)	(365,848)
Balance at end of period	$ 1,358,367	2,251,818	2,360,520	1,358,367	2,251,818	2,077,586	4,348	$ 4,332
Non- Controlling Interests [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		2,490,751	2,490,751	2,490,751	2,490,751	2,490,751
Balance at end of period		2,490,751	2,490,751		2,490,751	2,490,751	2,490,751
Previously Reported [Member]
Balance at beginning of period		5,416,354	(151,408)		(151,408)	(151,408)
Contributions prior to recapitalization transaction			15		15
Distributions prior to recapitalization transaction			(147)		(147)
Net loss prior to recapitalization transaction			(28,640)		(28,640)
Opening net assets of Lionheart II Holdings, LLC acquired			(21,786)		(21,786)
Adjustment for value of derivative on temporary equity			9,003		10,065
Conversion of Warrants			8,177		9,452
Class A Issuances			23,164		23,785
Net loss			(62,376)		(89,435)
Balance at end of period		5,392,253	5,416,354		5,392,253		(151,408)
Previously Reported [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		5,640,353	5,640,352		5,640,352	5,640,352
Balance at end of period		5,640,352	5,640,353		5,640,352		5,640,352
Previously Reported [Member] \| Additional Paid-in Capital [Member]
Balance at beginning of period		187,578		$ 137,069
Adjustment for value of derivative on temporary equity			9,003		10,065
Conversion of Warrants			20,463		22,896
Class A Issuances			109,037		119,929
Balance at end of period		201,965	187,578		201,965	137,069
Previously Reported [Member] \| Additional Paid-in Capital [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		49,075	49,075		49,075	49,075
Balance at end of period		49,075	49,075		49,075		49,075
Previously Reported [Member] \| Accumulated Deficit [Member]
Balance at beginning of period		(23,074)
Opening net assets of Lionheart II Holdings, LLC acquired			(21,786)		(21,786)
Net loss			(1,288)		(1,751)
Balance at end of period		(23,537)	(23,074)		(23,537)
Previously Reported [Member] \| Non- Controlling Interests [Member]
Balance at beginning of period		5,251,837	4,348		4,348	4,348
Conversion of Warrants			(12,287)		(13,444)
Class A Issuances			(85,872)		(96,144)
Net loss			(61,088)		(87,684)
Balance at end of period		5,213,812	5,251,837		5,213,812		4,348
Previously Reported [Member] \| Non- Controlling Interests [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		5,406,736	5,406,736		5,406,736	5,406,736
Balance at end of period		5,406,736	5,406,736		5,406,736		5,406,736
Revision of Prior Period, Adjustment [Member]
Balance at beginning of period		(2,952,388)
Conversion of Warrants			(6,627)		(7,255)
Class A Issuances			(46,356)		(51,938)
Net loss			24,075		(48,210)
Balance at end of period		(3,030,884)	(2,952,388)		(3,030,884)
Revision of Prior Period, Adjustment [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		(2,923,481)	(2,923,481)		(2,923,481)	(2,923,481)
Balance at end of period		(2,923,481)	(2,923,481)		(2,923,481)		(2,923,481)
Revision of Prior Period, Adjustment [Member] \| Additional Paid-in Capital [Member]
Balance at beginning of period		(60,479)
Conversion of Warrants			(6,627)		(7,255)
Class A Issuances			(46,356)		(51,938)
Balance at end of period		(66,689)	(60,479)		(66,689)
Revision of Prior Period, Adjustment [Member] \| Additional Paid-in Capital [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		(7,496)	(7,496)		(7,496)	(7,496)
Balance at end of period		(7,496)	(7,496)		(7,496)		(7,496)
Revision of Prior Period, Adjustment [Member] \| Accumulated Deficit [Member]
Balance at beginning of period		(592)
Net loss			(592)		(2,201)
Balance at end of period		(2,201)	(592)		(2,201)
Revision of Prior Period, Adjustment [Member] \| Non- Controlling Interests [Member]
Balance at beginning of period		(2,891,317)
Net loss			24,668		(46,009)
Balance at end of period		(2,961,994)	(2,891,317)		(2,961,994)
Revision of Prior Period, Adjustment [Member] \| Non- Controlling Interests [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		(2,915,985)	(2,915,985)		(2,915,985)	$ (2,915,985)
Balance at end of period		$ (2,915,985)	$ (2,915,985)		$ (2,915,985)		$ (2,915,985)

Income Tax - Schedule of Company's Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Components of Deferred Tax Assets and Liabilities [Abstract]
Net operating loss carryforward	$ 423	$ 53
Investment in MSP Recovery, LLC	38,263
Start-up Costs	917	804
Transaction Costs	3,224
Total deferred tax assets	42,827	857
Valuation Allowance	$ (42,827)	$ (857)

Property, Plant and Equipment, Net (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 6,301	$ 4,661	$ 1,555
Less: accumulated depreciation and amortization of software	(1,411)	(1,229)	(805)
Property, plant and equipment, net	4,890	3,432	750
Office and Computer Equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	434	430	356
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	113	113	113
Internally Developed Software
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	5,687	4,050	1,020
Other Software
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 67	$ 68	$ 66

Basis of Presentaton and Summary of Significant Accounting Policies

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of Presentaton and Summary of Significant Accounting Policies

Note 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

Basis of presentation

These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the unaudited condensed consolidated interim financial statements (the “Financial Statements”) reflect all adjustments, which consist only of normal recurring adjustments, necessary to state fairly the results of operations, financial condition and cash flows for the interim periods presented herein. Prior to the Business Combination, the Financial Statements reflect Legacy MSP.

These Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2022 Form 10-K. The year-end condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by GAAP. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

All intercompany transactions and balances are eliminated from the Financial Statements.

Principles of consolidation

The Company consolidates all entities that it controls through a majority voting interest or otherwise and the accompanying Financial Statements include the accounts of the Company’s wholly owned subsidiaries and these entities for which the Company has a controlling interest in. The Company also consolidates all entities that it controls as the primary beneficiary of a variable interest entity (“VIE”). Under the VIE model, management first assesses whether the Company has a variable interest in an entity, which would include an equity interest. If the Company has a variable interest in an entity, management further assesses whether that entity is a VIE, and if so, whether the Company is the primary beneficiary under the VIE model. Generally, entities that are organized similar to a limited partnership, in which a general partner (or managing member) make the most relevant decisions that affect the entity’s economic performance, are considered to be VIEs which would require consolidation, unless the limited partners have substantive kickout or participating rights. Entities that do not qualify as VIEs are assessed for consolidation under the voting interest model.

Under the VIE model, an entity is deemed to be the primary beneficiary of a VIE if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly affect the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. This analysis includes an evaluation of the Company’s control rights, as well as the economic interests that the Company holds in the VIE, including indirectly through related parties. As a result of the Business Combination, the Company consolidates MSP Recovery under the VIE model.

Correction of Previously Reported Interim Condensed Consolidated Quarterly Financial Statement

The interim condensed consolidated financial statements include corrections to the three and nine months ended September 30, 2022, respectively, which were presented in Note 18 to the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2022, in the Company’s fiscal year 2022 Form 10-K filed on July 27, 2023. This restatement corrected errors in the accounting for the indemnification asset, various intangible assets and rights to cash flows, and consolidation of an entity in connection with our business combination.

Description of Restatement of Financial Information

Subsequent to the issuance of the interim financial information as of and for the periods ended June 30, 2022 and September 30, 2022, management identified material errors in such financial information. As disclosed within Note 4, Asset Acquisitions, the Company acquired various intangible assets in connection with the Business Combination. The Company identified an error in the accounting for these acquisitions, in that the Class A market price as of the Closing Date utilized in the valuation included the value of the New Warrants, whereas the Up-C Units provided in the acquisition did not have rights to New Warrants. Therefore, the Class A market price did not equate to the value of the Up-C Units until the opening of the day after the Closing Date when the New Warrants became detached from the Class A shares. This error impacts the intangible assets value that were acquired as of the Closing Date and the resulting amortization of those assets.

In addition, the Company also 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, and therefore should consolidate as of the transaction date. This error impacts the intangible assets and indemnification asset value that was acquired as the balance is now reflected in Intangible Assets, net and is therefore amortized rather than recorded as a financial asset; as a result of this change, the indemnification asset is no longer recorded and the Virage Guaranty is accreted through interest expense. The Company’s financial statements should also include the activity of the Series from the date of acquisition as it is now consolidated.

The table below sets forth the unaudited condensed consolidated balance sheet information, including the balances as reported, adjustments and the balances as restated. Note that only amounts that have changed have been disclosed:


	For the reporting period
	September 30, 2022
	As previously			Restatement
(In thousands except per share amounts)	reported			Adjustments			As Restated
ASSETS
Current assets:
Accounts receivable	$	7,525		$	138		$	7,663
Indemnification asset		752,510			(752,510	)		—
Total current assets		820,157			(752,372	)		67,785
Deferred tax asset		857			(857	)		—
Intangible assets, net		2,077,571			1,395,955			3,473,526
Investment in rights to claim recovery cash flows		3,673,610			(3,673,610	)		—
Total assets	$	6,574,675		$	(3,030,884	)	$	3,543,791

Stockholders’ Equity (Deficit):
Additional paid-in capital	$	201,965		$	(66,689	)	$	135,276
Accumulated deficit		(23,537	)		(2,201	)		(25,738	)
Total Stockholders’ Equity (Deficit)	$	178,441		$	(68,890	)	$	109,551
Non-controlling interest		5,213,812			(2,961,994	)		2,251,818
Total equity	$	5,392,253		$	(3,030,884	)	$	2,361,369
Total liabilities and equity	$	6,574,675		$	(3,030,884	)	$	3,543,791

The table below sets forth the unaudited condensed consolidated statements of operations, including the balances as reported, adjustments and the as restated balances. Note that only amounts that have changed have been disclosed:


	For the three months ended September 30, 2022									For the nine months ended September 30, 2022
(In thousands except per share amounts)	As Reported			Restatement Adjustments			As Restated			As Reported			Restatement Adjustments			As Restated
Claims recovery income	$	2,571			188		$	2,759		$	3,999		$	226		$	4,225
Total Claims Recovery	$	8,319		$	188		$	8,507		$	21,794		$	226		$	22,020
Operating expenses
Cost of claim recoveries		1,160			38			1,198			1,861			45			1,906
Claims amortization expense		66,331			45,520			111,851			92,866			60,694			153,560
Professional fees		5,875			29			5,904			10,931			42			10,973
Total operating expenses		88,104			45,587			133,691			157,212			60,781			217,993
Operating Loss	$	(79,785	)	$	(45,399	)	$	(125,184	)	$	(135,418	)	$	(60,555	)	$	(195,973	)
Interest expense		(13,083	)		(33,097	)		(46,180	)		(34,475	)		(46,472	)		(80,947	)
Net loss before provision for income taxes	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,401	)	$	(107,027	)	$	(225,428	)
Provision for income tax benefit (expense)		-			-			-			326			(326	)		-
Net loss	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,075	)	$	(107,353	)	$	(225,428	)
Less: Net (income) loss attributable to non-controlling members		26,597			76,887			103,484			116,324			105,152			221,476
Net loss attributable to controlling members	$	(463	)	$	(1,609	)	$	(2,072	)	$	(1,751	)	$	(2,201	)	$	(3,952	)

Basic and diluted weighted average shares outstanding, Class A Common Stock		2,761,476		N/A				2,761,476			2,125,539		N/A				2,125,539
Basic and diluted net income per share, Class A Common Stock	$	(0.17	)	N/A			$	(0.75	)	$	(0.82	)	N/A			$	(1.86	)

The table below sets forth the unaudited condensed consolidated statements of cash flows, including balances as reported, adjustments and balances as restated amounts. Note that only amounts that have changed have been disclosed:


	For the nine months ended September 30, 2022
(In thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(118,075	)	$	(107,353	)	$	(225,428	)
Claims amortization expense		92,866			60,694			153,560
Paid in kind interest		34,475			46,472			80,947
Deferred income taxes		(857	)		326			(531	)
Accounts receivable		(7,525	)		(139	)		(7,664	)
Net cash used in operating activities	$	(70,764	)	$	—		$	(70,764	)
Net cash used in investing activities	$	(4,563	)	$	—		$	(4,563	)
Net cash provided by financing activities	$	99,351		$	—		$	99,351

The table below sets forth the unaudited condensed consolidated statements of changes in equity, including balances as reported, adjustments and balances as restated amounts. Note that only amounts that have changed have been disclosed:


	For the reporting period September 30, 2022
	As Previously Reported											Restatement Adjustments												As Restated
(In thousands except shares)	Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital			Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity
Balance at December 31, 2021	$	—	$	—		$	4,348		$	(151,408	)													$	—	$	—		$	4,348		$	(151,408	)
Contributions prior to recapitalization transaction		—		—			—			15															—		—			—			15
Distributions prior to recapitalization transaction		—		—			—			(147	)														—		—			—			(147	)
Net loss prior to recapitalization transaction		—		—			—			(28,640	)														—		—			—			(28,640	)
Cumulative effect of recapitalization transaction		49,075		—			5,406,736			5,640,352			(7,496	)					(2,915,985	)		(2,923,481	)		41,579		—			2,490,751			2,716,871
Opening net assets of Lionheart II Holdings, LLC acquired		—		(21,786	)		—			(21,786	)														—		(21,786	)		—			(21,786	)
Adjustment for value of derivative on temporary equity		10,065		—			—			10,065															10,065		—			—			10,065
Conversion of Warrants		22,896		—			(13,444	)		9,452			(7,255	)								(7,255	)		15,641		—			(13,444	)		2,197
Class A Issuances		119,929		—			(96,144	)		23,785			(51,938	)								(51,938	)		67,991		—			(96,144	)		(28,153	)
Net loss		—		(1,751	)		(87,684	)		(89,435	)					(2,201	)		(46,009	)		(48,210	)		—		(3,952	)		(133,693	)		(137,645	)
Balance at September 30, 2022	$	201,965	$	(23,537	)	$	5,213,812		$	5,392,253		$	(66,689	)	$	(2,201	)	$	(2,961,994	)	$	(3,030,884	)	$	135,276	$	(25,738	)	$	2,251,818		$	2,361,369

Estimates and Assumptions

The preparation of Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from the Company’s estimates.

Estimates are periodically reviewed considering changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Significant estimates and assumptions reflected in these Financial Statements include, but are not limited to, Claims recovery income and Claims recovery service income recognition, recoverability of long-lived assets, and cost of Claims recoveries.

Concentration of credit risk and Off-Balance Sheet Risk

Cash and cash equivalents and affiliate receivable are financial instruments that are potentially subject to concentrations of credit risk. See Note 13, Related Party Transactions, for disclosure of affiliate receivables. The Company’s cash and cash equivalents and restricted cash are deposited in accounts at large financial institutions, which at times may exceed federally insured limits. The Company has not incurred any losses on these accounts. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held. The Company has no other financial instruments with off-balance-sheet risk of loss.

Non-controlling Interests

As part of the Business Combination and described in Note 3, Business Combination, the Company became the managing member of MSP Recovery, which is consolidated as the Company controls the operating decisions of MSP Recovery. The non-controlling interest relates to the Up-C Units that are convertible into Class A Common Stock of the Company at the discretion of the holder of the Up-C Unit. The Up-C Unit holders retained approximately 99.76% of the economic ownership percentage of the Company as of the Closing Date. The non-controlling interest is classified as permanent equity within the condensed consolidated balance sheet of the Company. As of September 30, 2023, based on the Class A Common Stock issuances during the period, the non-controlling interest of Class V Common Stock shareholders was 90.01%.

Changes in the Company’s ownership interest in MSP Recovery, due to Class V Common Stock shareholders converting their shares to Class A Common Stock, are accounted for as equity transactions. Each issuance of the Company’s Class A Common Stock requires a corresponding issuance of MSP Recovery units to the Company. The issuance would result in a change in ownership and would reduce the balance of non-controlling interest and increase the balance of additional paid-in capital.

Claims Recovery Service Income

For the three and nine months ended September 30, 2023 and 2022, the majority of the Company’s Claims recovery service income was related to a servicing agreements with VRM MSP and MSP RH Series 01. As part of the Business Combination, the Company acquired rights to cash flows in the assets, after certain required returns to VRM MSP, that had been part of the servicing agreement. As part of this acquisition, the Company no longer receives service income from this agreement and consolidates the entity in which the Company acquired rights to cash flow in the assets as outlined in Note 4, Asset Acquisitions.

In connection with the Hazel transactions discussed in Note 4, Asset Acquisitions, the Company terminated its service agreement with MSP Recovery RH Series 01, an affiliate of Hazel.

Recent Accounting Pronouncements

New Accounting Pronouncements Recently Adopted

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses. In 2016 and subsequently, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments including subsequent amendments to the initial guidance: ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825. Financial Instruments, ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief, ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. ASU 326, and ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures and related amendments require credit losses on financial instruments measured at amortized cost basis to be presented at the net amount expected to be collected, replacing the current incurred loss approach with an expected loss methodology that is referred to as CECL. This ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company adopted this guidance on January 1, 2023 and it had no material impact on our Financial Statements.

Note 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

Basis of presentation

These statements have been prepared pursuant to the rules and regulations of the SEC and in accordance with GAAP. In the opinion of management, the consolidated financial statements (the “Financial Statements”) reflect all adjustments, which consist only of normal recurring adjustments, necessary to state fairly the results of operations, financial condition and cash flows for the periods presented herein. Prior to the Business Combination, the consolidated interim financial statements reflect Legacy MSP. All intercompany transactions and balances are eliminated from the consolidated financial statements.

Principles of consolidation

The Company consolidates all entities that it controls through a majority voting interest or otherwise and the accompanying consolidated financial statements include the accounts of the Company’s wholly owned subsidiaries and these entities for which the Company has a controlling interest in. The Company also consolidates all entities that it controls as the primary beneficiary of a variable interest entity (“VIE”). Under the VIE model, management first assesses whether the Company has a variable interest in an entity, which would include an equity interest. If the Company has a variable interest in an entity, management further assesses whether that entity is a VIE, and if so, whether the Company is the primary beneficiary under the VIE model. Generally, entities that are organized similar to a limited partnership, in which a general partner (or managing member) make the most relevant decisions that affect the entity’s economic performance, are considered to be VIEs which would require consolidation, unless the limited partners have substantive kickout or participating rights. Entities that do not qualify as VIEs are assessed for consolidation under the voting interest model.

performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. This analysis includes an evaluation of the Company’s control rights, as well as the economic interests that the Company holds in the VIE, including indirectly through related parties. As a result of the Business Combination, the Company consolidates MSP Recovery, LLC under the VIE model.

Estimates and Assumptions

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from the Company’s estimates. Estimates are periodically reviewed considering changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Significant estimates and assumptions reflected in these consolidated financial statements include but are not limited to Claims recovery income and Claims recovery service income recognition, recoverability of long-lived assets and cost of Claims recoveries.

Segments

Operating segments are defined as components of an entity for which separate financial information is available and regularly reviewed by the chief operating decision maker (“CODM”). The Company manages its operations as a single segment for the purposes of assessing performance and making decisions. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. In addition, all of the Company’s revenues and long-lived assets are attributable primarily to operations in the United States and Puerto Rico for all periods presented.

Concentration of credit risk and Off-Balance Sheet Risk

Cash and cash equivalents and affiliate receivable are financial instruments that are potentially subject to concentrations of credit risk. See Note 14, Related Party, for disclosure of affiliate receivables. The Company’s cash and cash equivalents and restricted cash are deposited in accounts at large financial institutions, and amounts may exceed federally insured limits. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held. The Company has no other financial instruments with off-balance-sheet risk of loss.

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Restricted Cash consists of cash held in escrow related to the Prepaid Forward Agreement with CF. See Note 17, Derivative Liability, for more information on the Prepaid Forward Agreement.

Fair Value Measurements

The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, for fair value measurements of financial assets and financial liabilities and for fair value measurements of non-financial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company also applied the provisions of the subtopic to fair value measurements of non-financial assets and non-financial liabilities that are recognized or disclosed at fair value in the financial statements on a non-recurring basis. The subtopic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The subtopic also establishes a framework for measuring fair value and expands disclosures about fair value measurements. The fair value framework requires the Company to categorize certain assets and liabilities into three levels, based upon the assumptions used to price those assets or liabilities. The three levels are defined as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The Company has determined the estimated fair value of its financial instruments based on appropriate valuation methodologies; however, for Level 2 and Level 3 inputs considerable judgment is required to develop these estimates. Accordingly, these estimated fair values are not necessarily indicative of the amounts the Company could realize in a current market exchange. The estimated fair values can be materially affected by using different assumptions or methodologies. The methods and assumptions used in estimating the fair values of financial instruments are based on carrying values and future cash flows. As of December 31, 2022 and December 31, 2021, the Company did not hold any Level 2 or Level 3 assets or liabilities.

Cash and cash equivalents and restricted cash are stated at cost, which approximates their fair value. The carrying amounts reported in the balance sheets for affiliate receivable, accounts payable, affiliate payable and accrued liabilities approximate fair value, due to their short-term maturities.

Outstanding borrowings that qualify as financial instruments are carried at cost, which approximates their fair value as of December 31, 2022 and December 31, 2021.

Equity Method Investments

Equity investments that are not consolidated, but over which the Company exercises significant influence, are accounted for in accordance with ASC 323, “Investments—Equity Method and Joint Ventures” (“ASC 323”). Whether or not the Company exercises significant influence with respect to an investee company depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level. An entity is presumptively assumed to have significant influence in a corporation when it holds 20% or more of the voting stock of the investee company, or at a lower level (e.g., 3% to 5%) for entities that track separate members capital accounts.

Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and statements of operations; however, the Company’s share of the earnings or losses of the investee company is reflected in the caption “Other income” in the consolidated statements of operations. The Company’s carrying value in equity method investee companies is not reflected in the Company’s consolidated balance sheets as of December 31, 2022 or December 31, 2021 as the carrying value is zero. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company has guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.

Property, Plant and Equipment

Property and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, if any. Major expenditures for property and equipment and those that substantially increase useful lives are capitalized. When assets are sold or otherwise disposed of, costs and related accumulated depreciation are removed from the financial statements and any resulting gains or losses are included in general and administrative expenses within our consolidated statements of operations.

The Company provides for depreciation and amortization on property and equipment using the straight-line method to allocate the cost of depreciable assets over their estimated lives as follows:


Office and Computer Equipment	3 years
Furniture and Fixtures	3 years
Leasehold Improvement	Lesser of lease term or estimated life

Internal Use Software

Internal-use software development costs incurred in the preliminary project stage are expensed as incurred; costs incurred in the application and development stage, which meet the capitalization criteria, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset and costs incurred in the post-implementation/operations stage are expensed as incurred. The estimated useful life for development costs capitalized as of December 31, 2022 and 2021 is five years. Further, internal and external costs incurred in connection with upgrades or enhancements are also evaluated for capitalization. If the software upgrade results in an additional functionality, costs are capitalized; if the upgrade only extends the useful life, it is expensed as occurred.

Intangible assets

In certain of its CCRAs, the Company makes upfront payments to acquire Claims recovery rights from secondary payers, such as health plans, managed service organizations, providers or medical services and independent physicians’ associations. The Company recognizes intangible assets for costs incurred up front to acquire Claims recovery rights from various assignors.

The Company amortizes capitalized costs associated with CCRAs over 8 years, based on the typical expected timing to pursue recovery through litigation, including through potential appeals.

As part of the Business Combination, the Company acquired rights to Claims recovery cash flows. As a result of this purchase and the guarantee obligation as noted in Note 10, Variable Interest Entities, the Company consolidated the entity which holds these Claim rights. Upon consolidation, these Claims rights were accounted for under ASC 350 similar to other CCRAs the Company holds. As such these assets are held at cost, net of amortization.

The Company evaluates these assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset group are less than the carrying value, a write-down would be recorded to reduce the related asset group to its estimated fair value. There were no impairment indicators in the years ended December 31, 2022, 2021 and 2020.

Leases

Leases entered into by the Company, in which substantially all the benefits and risk of ownership are transferred to the Company, are recorded as obligations under leases. Leases that meet one of the finance lease criteria are classified as finance leases, while all others are classified as operating leases. The Company determines if an arrangement is a lease at inception and has made an accounting policy election not to recognize right of use assets and lease liabilities that arise from short term lease as defined as leases with initial terms not in excess of 12 months. As of December 31, 2022, the Company did not have any leases in excess of 12 months. See Note 8, Short Term Leases, for more information.

Non-controlling Interests

As part of the Business Combination and described in Note 1, Description of Business, the Company became the managing member of MSP Recovery, LLC, which is consolidated as the Company controls the operating decisions of MSP Recovery, LLC. The non-controlling interest relates to the Up-C Units that are convertible into Class A Common Stock of the Company at the discretion of the holder of the Up-C Unit. The Up-C Unit holders retained approximately 99.76% of the economic ownership percentage of the Company as of the Closing Date. The non-controlling interest is classified as permanent equity within the consolidated balance sheet of the Company. As of December 31, 2022, based on the Class A common stock issuances during the period, the non-controlling interest of Class V shareholders was 97.70%.

Changes in the Company’s ownership interest in MSP Recovery, LLC, due to Class V shareholders converting their shares to Class A, are accounted for as equity transactions. Each issuance of the Company’s Class A Common Stock requires a corresponding issuance of MSP Recovery, LLC units to the Company. The issuance would result in a change in ownership and would reduce the balance of non-controlling interest and increase the balance of additional paid-in capital.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, such as property and equipment, including capitalized software costs, and finite-lived intangibles such as Claims recovery rights, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset group are less than the carrying value, a write-down would be recorded to reduce the related asset group to its estimated fair value. There were no impairment indicators in the year ended December 31, 2022, 2021, and 2020.

Claims Recovery

The Company’s primary income-producing activities are associated with the pursuit and recovery of proceeds related to Claims recovery rights that the Company obtains through CCRAs, in which it becomes the owner of those rights. As a result, such income is not generated from the transfer of control of goods or services to customers, but from the proceeds realized from perfection of Claims recoveries from rights the Company holds outright. The Company also generates revenue by providing Claims recovery services to other entities outside of the Company.

Claims recovery income

The Company recognizes 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, the Company owes 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 the Company is entitled to the full value of recovery proceeds, and makes a payment to the original assignor similar to a royalty arrangement. Such payments to prior owners are recognized as cost of Claims recovery in the same period the Claims recovery income is recognized.

When the Company becomes entitled to recovery proceeds from the settlement of a Claim recovery pursuit or proceeding, it recognizes the amount in accounts receivable.

Claims recovery service income, ASC 606, Revenue from Contracts with Customers

The guidance under ASC 606, Revenue from Contracts with Customers, provides that an entity should apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation.

The Company derives revenues from contracts with customers primarily from Claims recovery services arrangements (“Claims recovery services”). Claims recovery services include services to related parties or third parties to assist those entities with pursuit of Claims recovery rights. The Company has determined it has 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 and are typically based on (1) budgeted expenses for the current month with an adjustment for the variance between budget and actual expenses from the prior month or (2) on a contingent basis dependent on actual settlements or resolved litigation. Amounts estimated and recognized, but not yet fully settled or

resolved as part of litigation are recognized as contract assets. There were no contract assets on December 31, 2022 or December 31, 2021, as amounts associated with unresolved litigation were fully constrained.

Claims recovery services are generally paid in advance on a monthly basis. The Company did not recognize any material revenue for the year ended December 31, 2022 and 2021 for performance obligations that were fully satisfied in previous periods.

For the year ended December 31, 2022 and 2021, the majority of the Company’s Claims recovery service income was related to a servicing agreement with VRM MSP, which was entered into on March 27, 2018. As part of the Business Combination, the Company acquired rights to cash flows in the assets, after certain required returns to VRM MSP, that had been part of the servicing agreement. As part of this acquisition, the Company no longer receives service income from this agreement and consolidates the entity in which the Company acquired rights to cash flow in the assets as outlined in Note 4, Asset Acquisitions. For the year ended December 31, 2022, the Company also recognized $5.0 million of servicing income related to a specific contract where the performance obligations were completed during the year.

The Company does not have material unfulfilled performance obligation balances for contracts with an original length greater than one year in any years presented. Additionally, the Company does not have material costs related to obtaining a Claims recovery service contract with amortization periods greater than one year for any period presented.

The Company applies ASC 606 utilizing the following allowable exemptions or practical expedients:

•

Exemption to not disclose the unfulfilled performance obligation balance for contracts with an original length of one year or less.

•

Practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

•

Election to present revenue net of sales taxes and other similar taxes, if any.

•

Practical expedient not requiring the entity to adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

Transfers of Claims Cost Recovery Rights to Others

In some cases, the Company has entered into arrangements to transfer CCRAs or rights to proceeds from CCRAs to other parties. The Company evaluates whether such transfers are sales of nonfinancial assets, sales of future revenues treated as debt, in-kind contributions to equity method investees, or other types of arrangements.

When they are treated as sales of nonfinancial assets, the Company recognizes a gain on the sale when control transfers to the counterparty based on the difference between the fair value of consideration (including cash) received and the recognized carrying value of the CCRAs. In some cases, 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. The Company estimates and constrains the amounts that will ultimately be realized based on these variable payment terms and includes those amounts in the determination of gain or loss; the gain or loss is subsequently updated based on changes in those estimates.

In other cases, such transfers are considered to be sales of future revenue that are debt-like in nature. These arrangements are recognized as debt based on the proceeds received, and are imputed an interest rate based on the expected timing and amount of payments to achieve contractual hurdles. These are subject to revisions of estimates of that timing and amount based on the contractual provisions and the Company’s assumptions from changes in facts and circumstances. Such changes are reflected through revision of the imputed interest rate on a cumulative catch-up basis.

Cost of Claims Recoveries

Costs of Claims recoveries consist of all directly attributable costs specifically associated with Claims processing activities, including contingent payments to assignors (i.e., settlement expenses).

Claims amortization expense

Claims amortization expense includes amortization of CCRAs acquired as part of the business combination, shown as Intangibles, net in the consolidated balance sheets, and CCRA intangible assets for which the Company made upfront payments for Claims recovery rights. For further details on CCRAs see Note 7, Intangible Assets, Net.

Income Taxes

Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. As a result of the Business Combination, the Company became the sole managing member of MSP Recovery, LLC, which is treated as a partnership for U.S. federal, state, and local income tax purposes. As a partnership, MSP Recovery, LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by MSP Recovery, LLC 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, LLC.

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.

Comprehensive Income (Loss)

The Company has no components of other comprehensive income (loss). As such, net loss equates to comprehensive income (loss) for all periods presented in this report.

Recent Accounting Pronouncements

New Accounting Pronouncements Recently Adopted

In February 2016, the FASB issued ASU 2016-02, Leases, to increase transparency and comparability among organizations by recognizing right of use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, ASU 2018-10, Codification Improvements to ASC 2016-02, Leases, was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Furthermore, in July 2018, the FASB issued ASU 2018-11, Leases: Targeted Improvements, which provides an optional transition method in addition to the existing modified retrospective transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Furthermore, in March 2020, ASU 2020-03, Codification Improvements to Financial Instruments, Leases, was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Additionally, on June 3, 2020, the FASB deferred by one year the effective date of the new leases standard for private companies, private not-for-profits and public not-for-profits that have not yet issued (or made available for issuance) financial statements reflecting the new standard. Furthermore, in June 2020, ASU 2020-05, Revenue from Contracts with Customers and Leases, was issued to defer effective dates of adoption of the new leasing standard for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted this guidance utilizing the cumulative catch-up method with an effective date of January 1, 2022 and it had no material impact on our consolidated financial statements. The Company has made an accounting policy election to not to recognize right of use assets and lease liabilities that arise from short term lease as defined as leases with initial terms not in excess of 12 months. As of December 31, 2022, the Company did not have any leases in excess of 12 months. See Note 8, Short Term Leases, for more information.

ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. The Company adopted this guidance on January 1, 2022 and it had no material impact on our consolidated financial statements.

ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. This standard is effective for all entities as of March 12, 2020 through December 31, 2022. Early adoption is permitted. The Company adopted this guidance on January 1, 2022 and it had no material impact on our consolidated financial statements.

ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815- 40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. On August 5, 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted. The Company adopted this guidance on January 1, 2022 and it had no material impact on our consolidated financial statements.

ASU 2022-03, Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. On June 30, 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendment clarifies that contractual sale restrictions should not be considered when measuring the equity security’s fair value and prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024. Early adoption is permitted. The Company adopted this guidance in June 2022, which resulted in the Company recognizing the assets acquired as part of the Business Combination at values that were not discounted for contractual sale restrictions, which had a material impact on the Company’s consolidated financial statements in relation to the asset acquisitions as noted in Note 4, Asset Acquisitions.

New Accounting Pronouncements Issued but Not Yet Adopted

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses. In 2016 and subsequently, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments including subsequent amendments to the initial guidance: ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825. Financial Instruments, ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief, ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. ASU 326, and ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures and related amendments require credit losses on financial instruments measured at amortized cost basis to be presented at the net amount expected to be collected, replacing the current incurred loss approach with an expected loss methodology that is referred to as CECL. This ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. While the Company does not anticipate the implementation would have a material effect on the Company’s consolidated operating results, cash flows, financial condition and related disclosures, the Company is currently evaluating the effect that implementation of this standard will have.

Investment in Equity Method Investees - Additional Information (Detail)	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) Investment	Dec. 31, 2022 USD ($) Investment	Dec. 31, 2021 USD ($)
Schedule of Equity Method Investments [Line Items]
Number of holding investments \| Investment	3	3
Equity Method Investments		$ 0	$ 0
PMPI [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investments	$ 0	$ 0	0
Percentage of preferred return for the controlling member	20.00%	20.00%
Percentage of recovery claims for the controlling member	50.00%	50.00%
Percentage of costs allocated to non controlling member	100.00%	100.00%
MAO [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investments	$ 0	$ 0	0
Equity method investments ownership percentage	50.00%	50.00%
MSO [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investments	$ 0	$ 0	$ 0
Equity method investments ownership percentage	50.00%	50.00%

Subsequent Events - Additional Information (Details) $ / shares in Units, $ in Thousands														9 Months Ended
	Jan. 31, 2024 $ / shares	Jan. 01, 2024 $ / shares	Nov. 13, 2023 USD ($)	Oct. 13, 2023	Oct. 12, 2023	Sep. 06, 2023 shares	Sep. 05, 2023 $ / shares	Jul. 28, 2023	Jul. 27, 2023 USD ($)	Jul. 07, 2023 USD ($) shares	Apr. 12, 2023 USD ($)	Mar. 29, 2023 USD ($)	Mar. 06, 2023 USD ($)	Sep. 30, 2023 USD ($) $ / shares	Jul. 24, 2023 USD ($)	Dec. 31, 2022 $ / shares
Subsequent Event [Line Items]
Warrants to purchase exercise price per share \| $ / shares														$ 0.0025		$ 0.0025
Cano Health, LLC [Member]
Subsequent Event [Line Items]
Aggregate principal amount														$ 5,000
Class A [Member]
Subsequent Event [Line Items]
Closing bid price of common stock per share as per listing rule for consecutive 30 business days \| $ / shares							$ 0.1							$ 1
Warrants to purchase exercise price per share \| $ / shares														$ 287.5		$ 287.5
Class A [Member] \| Option to Pay in Cash or in Stock and Elected to Pay in Stock [Member] \| Cano Health, LLC [Member]
Subsequent Event [Line Items]
Deferred compensation arrangement shares issued \| shares										7,960,001
Deferred compensation arrangement recorded liability										$ 61,700
Maximum [Member] \| Class A [Member]
Subsequent Event [Line Items]
Reverse stock splits (in shares) \| shares						300
Minimum [Member] \| Class A [Member]
Subsequent Event [Line Items]
Reverse stock splits (in shares) \| shares						3
Amended and Restated Nomura Promissory Note [Member]
Subsequent Event [Line Items]
Aggregate principal amount											$ 26,300
Debt instrument maturity date											Sep. 30, 2024
Interest rate											16.00%
Virage Amendment [Member]
Subsequent Event [Line Items]
Description of swap agreement amendment								(a) rights to recovery proceeds arising from Claims held by VRM MSP, with dates of service before January 1, 2014, were transferred to MSP Recovery; (b) MSP Recovery contributed to VRM MSP in the form of in-kind ownership interests to certain Series entities holding Claims; and (c) as a result of such capital contributions, MSP Recovery was admitted as a member of VRM MSP.
Operating reserve maintained			$ 47,500								$ 70,000				$ 47,500
Purchase Agreement, Effective as of September 30, 2022, as Amended to Date [Member] \| Class A [Member] \| Option to Pay in Cash or in Stock and Elected to Pay in Stock [Member] \| Cano Health, LLC [Member]
Subsequent Event [Line Items]
Deferred compensation arrangement shares issued \| shares										3,225,807
Amended and Restated Claims Recovery and Assignment Agreement Effective as of December 31, 2021, as Amended to Date [Member] \| Class A [Member] \| Option to Pay in Cash or in Stock and Elected to Pay in Stock [Member] \| Cano Health, LLC [Member]
Subsequent Event [Line Items]
Deferred compensation arrangement shares issued \| shares										4,734,194
Scenario Forecast [Member]
Subsequent Event [Line Items]
Reverse stock split conversion description				At the Effective Time, every 25 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock, without any change to the par value per share.
Scenario Forecast [Member] \| Virage Amendment [Member]
Subsequent Event [Line Items]
Description of cash payments made to counter party	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	(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
Scenario Forecast [Member] \| Virage Amendment [Member] \| Class A [Member]
Subsequent Event [Line Items]
Warrants to purchase exercise price per share \| $ / shares	$ 0.0001	$ 0.0001
Description of warrants issued to counter party	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.	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 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.
Warrants expire date		Jan. 01, 2026
Hazel Transactions [Member]
Subsequent Event [Line Items]
Credit facility, agreement date												Mar. 29, 2023
Purchase price												$ 390,000
Purchase money loan												$ 250,000
Purchase Money Loan accrues interest												20.00%
Separate Transaction [Member]
Subsequent Event [Line Items]
Purchase price												$ 150,000
Amended and Restated Credit Agreement [Member] \| Hazel Transactions [Member]
Subsequent Event [Line Items]
Credit facility, agreement date												Mar. 29, 2023		Mar. 29, 2023
Credit Agreement [Member] \| Hazel Transactions [Member]
Subsequent Event [Line Items]
Line of credit facility, Maximum borrowing capacity												$ 80,000
Debt instrument original issue discount												40.00%
Working Capital Credit Facility [Member] \| Hazel Transactions [Member]
Subsequent Event [Line Items]
Interest period, plus an applicable margin												10.00%
Debt instrument maturity date												Mar. 31, 2026
Term Loan A [Member] \| Option to Pay in Cash or in Stock and Elected to Pay in Stock [Member] \| Cano Health, LLC [Member]
Subsequent Event [Line Items]
Deferred compensation arrangement recorded liability										$ 61,677,419,350
Term Loan A [Member] \| Hazel Transactions [Member]
Subsequent Event [Line Items]
Proceeds from loan													$ 10,000
Disbursed loan amount												$ 5,000
Term Loan A [Member] \| Credit Agreement [Member] \| Hazel Transactions [Member]
Subsequent Event [Line Items]
Line of credit facility, Maximum borrowing capacity									$ 5,500			30,000
Terminated funding, value									20,500	$ 20,500
Term Loan B [Member] \| Credit Agreement [Member] \| Hazel Transactions [Member]
Subsequent Event [Line Items]
Line of credit facility, Maximum borrowing capacity									$ 27,500			18,000
Term Loan B [Member] \| Credit Facility [Member] \| Hazel Transactions [Member]
Subsequent Event [Line Items]
Line of credit facility, Maximum borrowing capacity												$ 18,000
Purchase Money Loan [Member] \| Hazel Transactions [Member]
Subsequent Event [Line Items]
Debt instrument maturity date												Mar. 31, 2026
Purchase Money Loan [Member] \| Hazel Transactions [Member] \| Maximum [Member]
Subsequent Event [Line Items]
Debt instrument extended maturity year												1 year
Subsequent Event [Member]
Subsequent Event [Line Items]
Reverse stock split ratio					0.04
Reverse stock split description					Reverse Split, every 25 shares of the Company’s old common stock were converted into one share of the Company’s new common stock.
Subsequent Event [Member] \| Amended and Restated Nomura Promissory Note [Member]
Subsequent Event [Line Items]
Aggregate principal amount			$ 28,900
Debt instrument maturity date			Dec. 31, 2024
Subsequent Event [Member] \| Virage Amendment [Member]
Subsequent Event [Line Items]
Description of cash payments made to counter party	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	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
Subsequent Event [Member] \| Virage Amendment [Member] \| Class A [Member]
Subsequent Event [Line Items]
Warrants to purchase exercise price per share \| $ / shares	$ 0.0001	$ 0.0001
Description of warrants issued to counter party	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.	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.
Warrants expire date		Jan. 01, 2026

Quarterly Financial Data (Unaudited) Restatement of Previously Issued Financial Statements - Unaudited Condensed Consolidated Balance Sheet (Details) - USD ($)
$ in Thousands

Sep. 30, 2023

Jun. 30, 2023

Dec. 31, 2022

Sep. 30, 2022

Jun. 30, 2022

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

$ 706

$ 6,195

$ 7,663

$ 918

23,070

51,357

67,785

76,384

$ 19,038

3,253,707

^[1]

3,363,156

^[1],[2]

3,473,526

3,537,210

84,218

^[2]

3,282,035

3,417,945

3,543,791

3,614,544

104,006

347,376

137,069

135,276

127,099

(62,094)

(29,203)

(25,738)

(23,666)

285,295

107,879

109,551

103,446

(155,756)

1,358,367

2,077,586

2,251,818

2,360,520

4,348

1,643,662

$ 1,803,485

2,185,465

2,361,369

2,463,966

(151,408)

$ (115,847)

$ (100,105)

$ 3,282,035

3,417,945

3,543,791

3,614,544

104,006

7,525

901

752,510

719,413

820,157

795,780

857

2,077,571

2,095,735

3,673,610

6,574,675

6,566,932

$ 137,069

201,965

187,578

(23,537)

(23,074)

178,441

164,517

5,213,812

5,251,837

5,392,253

5,416,354

$ (151,408)

6,574,675

6,566,932

138

(752,510)

(719,413)

(752,372)

(719,396)

(857)

1,395,955

1,441,475

(3,673,610)

(3,030,884)

(2,952,388)

(66,689)

(60,479)

(2,201)

(592)

(68,890)

(61,071)

(2,961,994)

(2,891,317)

(3,030,884)

(2,952,388)

$ (3,030,884)

$ (2,952,388)

[1]	As of September 30, 2023 and December 31, 2022, intangible assets, net included $2.3 billion and $2.3 billion, respectively, related to a consolidated VIE. See Note 9, Variable Interest Entities, for further details.
[2]	As of December 31, 2022, intangible assets, net included $2.3 billion related to a consolidated VIE. See Note 10, Variable Interest Entities, for further details.

Intangible assets, net - Summary of changes in the Company's intangibles assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Sale of CCRAs			$ (30,987)
Claims Cost Recovery Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Balance as of December 31, 2022			3,363,156	$ 84,218	$ 84,218
Acquisitions of CCRAs			286,929
Amortization expense	$ (121,000)	$ (111,900)	(355,481)	$ (153,600)	(266,900)	$ (164)	$ (125)
Sale of CCRAs			(40,897)
Total	$ 3,253,707		$ 3,253,707		$ 3,363,156	$ 84,218

Quarterly Financial Data (Unaudited) Restatement of Previously Issued Financial Statements - Unaudited Condensed Consolidated Statements of Changes in Equity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Balance at beginning of period	$ 1,803,485	$ 2,463,966	$ (151,408)	$ 2,185,465	$ (151,408)	$ (151,408)	$ (115,847)	$ (100,105)
Contributions prior to recapitalization transaction			15		15	15	227	8,524
Distributions prior to recapitalization transaction			(147)		(147)	(147)	(2,711)
Net loss prior to recapitalization transaction			(28,640)		(28,640)	(28,640)
Opening net assets of Lionheart II Holdings, LLC acquired			(21,786)		(21,786)	(21,786)
Adjustment for value of derivative on temporary equity		1,062	9,003		10,065	9,613
Conversion of Warrants	3	648	1,550	219	2,197	10,092
Class A Issuances	64,391	(4,962)	(23,192)	67,170	(28,153)	24,120
Net loss		(99,345)	(38,301)		(137,645)	(373,265)
Balance at end of period	1,643,662	2,361,369	2,463,966	1,643,662	2,361,369	2,185,465	(151,408)	(115,847)
Recapitalization Transaction [Member]
Balance at beginning of period		2,716,872	2,716,871	2,716,871	2,716,871	2,716,871
Balance at end of period		2,716,871	2,716,872		2,716,871	2,716,871	2,716,871
Additional Paid-in Capital [Member]
Balance at beginning of period	176,643	127,099		137,069
Adjustment for value of derivative on temporary equity		1,062	9,003		10,065	9,613
Conversion of Warrants	2	1,805	13,836	388	15,641	16,703
Class A Issuances	170,731	5,310	62,681	209,919	67,991	69,174
Balance at end of period	347,376	135,276	127,099	347,376	135,276	137,069
Additional Paid-in Capital [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		41,579	41,579	41,579	41,579	41,579
Balance at end of period		41,579	41,579		41,579	41,579	41,579
Accumulated Deficit [Member]
Balance at beginning of period	(42,339)	(23,666)		(29,203)
Opening net assets of Lionheart II Holdings, LLC acquired			(21,786)		(21,786)	(21,786)
Net loss		(2,072)	(1,880)		(3,952)	(7,417)
Balance at end of period	(62,094)	(25,738)	(23,666)	(62,094)	(25,738)	(29,203)
Non- Controlling Interests [Member]
Balance at beginning of period	1,669,169	2,360,520	4,348	2,077,586	4,348	4,348	4,332	4,350
Conversion of Warrants	1	(1,157)	(12,287)	(169)	(13,444)	(6,611)
Class A Issuances	(106,341)	(10,272)	(85,872)	(142,749)	(96,144)	(45,054)
Net loss		(97,273)	(36,420)		(133,693)	(365,848)
Balance at end of period	$ 1,358,367	2,251,818	2,360,520	1,358,367	2,251,818	2,077,586	4,348	$ 4,332
Non- Controlling Interests [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		2,490,751	2,490,751	2,490,751	2,490,751	2,490,751
Balance at end of period		2,490,751	2,490,751		2,490,751	2,490,751	2,490,751
As previously reported
Balance at beginning of period		5,416,354	(151,408)		(151,408)	(151,408)
Contributions prior to recapitalization transaction			15		15
Distributions prior to recapitalization transaction			(147)		(147)
Net loss prior to recapitalization transaction			(28,640)		(28,640)
Opening net assets of Lionheart II Holdings, LLC acquired			(21,786)		(21,786)
Adjustment for value of derivative on temporary equity			9,003		10,065
Conversion of Warrants			8,177		9,452
Class A Issuances			23,164		23,785
Net loss			(62,376)		(89,435)
Balance at end of period		5,392,253	5,416,354		5,392,253		(151,408)
As previously reported \| Recapitalization Transaction [Member]
Balance at beginning of period		5,640,353	5,640,352		5,640,352	5,640,352
Balance at end of period		5,640,352	5,640,353		5,640,352		5,640,352
As previously reported \| Additional Paid-in Capital [Member]
Balance at beginning of period		187,578		$ 137,069
Adjustment for value of derivative on temporary equity			9,003		10,065
Conversion of Warrants			20,463		22,896
Class A Issuances			109,037		119,929
Balance at end of period		201,965	187,578		201,965	137,069
As previously reported \| Additional Paid-in Capital [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		49,075	49,075		49,075	49,075
Balance at end of period		49,075	49,075		49,075		49,075
As previously reported \| Accumulated Deficit [Member]
Balance at beginning of period		(23,074)
Opening net assets of Lionheart II Holdings, LLC acquired			(21,786)		(21,786)
Net loss			(1,288)		(1,751)
Balance at end of period		(23,537)	(23,074)		(23,537)
As previously reported \| Non- Controlling Interests [Member]
Balance at beginning of period		5,251,837	4,348		4,348	4,348
Conversion of Warrants			(12,287)		(13,444)
Class A Issuances			(85,872)		(96,144)
Net loss			(61,088)		(87,684)
Balance at end of period		5,213,812	5,251,837		5,213,812		4,348
As previously reported \| Non- Controlling Interests [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		5,406,736	5,406,736		5,406,736	5,406,736
Balance at end of period		5,406,736	5,406,736		5,406,736		5,406,736
Restatement Adjustment
Balance at beginning of period		(2,952,388)
Conversion of Warrants			(6,627)		(7,255)
Class A Issuances			(46,356)		(51,938)
Net loss			24,075		(48,210)
Balance at end of period		(3,030,884)	(2,952,388)		(3,030,884)
Restatement Adjustment \| Recapitalization Transaction [Member]
Balance at beginning of period		(2,923,481)	(2,923,481)		(2,923,481)	(2,923,481)
Balance at end of period		(2,923,481)	(2,923,481)		(2,923,481)		(2,923,481)
Restatement Adjustment \| Additional Paid-in Capital [Member]
Balance at beginning of period		(60,479)
Conversion of Warrants			(6,627)		(7,255)
Class A Issuances			(46,356)		(51,938)
Balance at end of period		(66,689)	(60,479)		(66,689)
Restatement Adjustment \| Additional Paid-in Capital [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		(7,496)	(7,496)		(7,496)	(7,496)
Balance at end of period		(7,496)	(7,496)		(7,496)		(7,496)
Restatement Adjustment \| Accumulated Deficit [Member]
Balance at beginning of period		(592)
Net loss			(592)		(2,201)
Balance at end of period		(2,201)	(592)		(2,201)
Restatement Adjustment \| Non- Controlling Interests [Member]
Balance at beginning of period		(2,891,317)
Net loss			24,668		(46,009)
Balance at end of period		(2,961,994)	(2,891,317)		(2,961,994)
Restatement Adjustment \| Non- Controlling Interests [Member] \| Recapitalization Transaction [Member]
Balance at beginning of period		(2,915,985)	(2,915,985)		(2,915,985)	$ (2,915,985)
Balance at end of period		(2,915,985)	(2,915,985)		(2,915,985)		$ (2,915,985)
As Restated \| Additional Paid-in Capital [Member]
Balance at beginning of period		127,099
Balance at end of period		$ 135,276	$ 127,099		$ 135,276

Basis of Presentation and Summary of Significant Accounting Policies - Schedule Of Correction Of Previously Reported Interim Condensed Consolidated Balance Sheet Information (Details) - USD ($)
$ in Thousands

Sep. 30, 2023

Jun. 30, 2023

Dec. 31, 2022

Sep. 30, 2022

Jun. 30, 2022

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

$ 706

$ 6,195

$ 7,663

$ 918

23,070

51,357

67,785

76,384

$ 19,038

3,253,707

^[1]

3,363,156

^[1],[2]

3,473,526

3,537,210

84,218

^[2]

3,282,035

3,417,945

3,543,791

3,614,544

104,006

347,376

137,069

135,276

127,099

(62,094)

(29,203)

(25,738)

(23,666)

285,295

107,879

109,551

103,446

(155,756)

1,358,367

2,077,586

2,251,818

2,360,520

4,348

1,643,662

$ 1,803,485

2,185,465

2,361,369

2,463,966

(151,408)

$ (115,847)

$ (100,105)

$ 3,282,035

3,417,945

3,543,791

3,614,544

104,006

7,525

901

752,510

719,413

820,157

795,780

857

2,077,571

2,095,735

3,673,610

6,574,675

6,566,932

$ 137,069

201,965

187,578

(23,537)

(23,074)

178,441

164,517

5,213,812

5,251,837

5,392,253

5,416,354

$ (151,408)

6,574,675

6,566,932

138

(752,510)

(719,413)

(752,372)

(719,396)

(857)

1,395,955

1,441,475

(3,673,610)

(3,030,884)

(2,952,388)

(66,689)

(60,479)

(2,201)

(592)

(68,890)

(61,071)

(2,961,994)

(2,891,317)

(3,030,884)

(2,952,388)

Claims Financing Obligations and Notes Payable

$ (3,030,884)

$ (2,952,388)

[1]	As of September 30, 2023 and December 31, 2022, intangible assets, net included $2.3 billion and $2.3 billion, respectively, related to a consolidated VIE. See Note 9, Variable Interest Entities, for further details.
[2]	As of December 31, 2022, intangible assets, net included $2.3 billion related to a consolidated VIE. See Note 10, Variable Interest Entities, for further details.

Noncontrolling Interest

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Noncontrolling Interest [Abstract]

Noncontrolling Interest

Note 11. NONCONTROLLING INTEREST

The non-controlling interest balance primarily represents the Up-C Units of the Company held by the Members. The following table summarizes the stock ownership in the Company as of September 30, 2023:


	Shares of Common Stock		Ownership Percentage
Ownership of Class A Common Stock		13,799,230		9.99	%
Ownership of Class V Common Stock		124,264,645		90.01	%
Balance at end of period		138,063,875		100.00	%

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, 2023, 2.5 million Up-C Units have been exchanged into shares of Class A Common Stock. In addition, 0.5 million new Up-C Units were issued during the nine months ended September 30, 2023.

In addition to the non-controlling interest related to Up-C Units, the Company also has non-controlling interests related to MAO-MSO Recovery LLC Series FHCP (“FHCP”), which is a non-wholly owned subsidiary of MSP Recovery. In accordance with FHCP’s operating agreement, the noncontrolling member is entitled to a preferred return of 20% per annum (the “Preferred Return”). Once the Preferred Return has been met, the noncontrolling 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, 2023 and December 31, 2022, the non-controlling interest also includes $4.3 million representing the entire members’ equity of FHCP.

Note 12. NONCONTROLLING 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 December 31, 2022:


	Common Stock		Ownership Percentage
Ownership of Class A Common Stock		2,984,212		2.32	%
Ownership of Class V Common Stock		125,919,180		97.68	%
Balance at end of period		128,903,392		100.00	%

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 December 31, 2022, 0.3 million Up-C Units have exchanged into Class A shares.

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 10, 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 noncontrolling member is entitled to a preferred return of 20% per annum (the “Preferred Return”). Once the Preferred Return has been met, the noncontrolling 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 December 31, 2022 and December 31, 2021, the non-controlling interest also includes $4.3 million representing the entire members’ equity of FHCP.

Claims Financing Obligations and Notes Payable

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Debt Disclosure [Abstract]

Based on claims financing obligations and notes payable agreements, as of September 30, 2023 and December 31, 2022, the present value of amounts owed under these obligations were $529.2 million and $198.5 million, respectively, including capitalized interest. The

weighted average interest rate is 14.5% based on the current book value of $529.2 million with rates that range from 2% to 20%. The Company is expected to repay these obligations from cash flows from claim recovery income or potentially for the renegotiated debt through class A common stock issuances.

As of September 30, 2023, the minimum required payments on these agreements are $678.1 million. Certain of these agreements have priority of payment regarding any proceeds until full payment of the balance due is satisfied. The maturity of the commitments range from the date sufficient claims recoveries are received to cover the required return or in some cases by 2031.

Brickell Key Investment Amendment

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. 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 50 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, 2023 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, 2023, it was determined to be zero.

Hazel Working Capital Credit Facility and Hazel Purchase Money Loan

On March 29, 2023, the Company’s subsidiary, Subrogation Holdings, LLC, 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. An initial $10 million in proceeds was drawn under the Term Loan A on March 6, 2023. On March 29, 2023, an additional $5 million was disbursed to the Company under the Term Loan A. On May 11, 2023 and June 13, 2023, HPH notified the Company’s subsidiary, Subrogation Holdings, LLC, that it would not disburse additional funds under the Working Capital Credit Facility until the Company satisfied certain funding conditions, including the filing of Annual Report on Form 10-K for the year ending December 31, 2022, which was filed on July 27, 2023.

The parties subsequently agreed that $5.5 million would be funded under Term Loan A in accordance with the terms of the Working Capital Credit Facility subsequent to the filing of the 2022 Form 10-K and receipt of funding notices, deeming funding conditions satisfied or waived. Following such funding, the Term Loan A commitment would be terminated, with total funding of $20.5 million. In addition, 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 will be funded in multiple installments and in accordance with the terms of the Working Capital Credit Facility. Funding will be at a rate of $2.25 million per month until December 2023, and thereafter at $1.75 million per month, subject to potential further reductions in the case of certain agreed cost savings and funds availability. 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.

During both the three and nine months ended September 30, 2023, the Company’s subsidiary, Subrogation Holdings, LLC, received funding from HPH amounting to $5.5 million from Term Loan A and $4.5 million in two installments under Term Loan B. Subsequent to September 30, 2023, the Company’s subsidiary, Subrogation Holdings, LLC, received an additional $4.5 million under Term Loan B.

Pursuant to the Second Amended and Restated First Lien Credit Agreement, and in order to secure those additional advances of Term Loan B beginning in January 2024, the Company agreed to provide, as additional collateral, the following: (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 Ruiz and Frank Quesada; and (iii) a personal guaranty by Messrs. John Ruiz and Frank Quesada, as primary obligors, guaranteeing those additional advances of Term Loan B beginning in January 2024.

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.

Amended and Restated Nomura Promissory Note

On April 12, 2023, the Company amended the promissory note to Nomura originally issued on May 27, 2022, which increased the principal amount to approximately $26.3 million and extended the maturity date of the promissory note to September 30, 2024. Pursuant to the Amended and Restated Promissory Note dated November 13, 2023, the Company amended the promissory note to Nomura 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. The Amended and Restated Promissory Note will become a current liability after December 31, 2023, and the Company does not currently have available liquidity to satisfy said obligation. The Amended and Restated Nomura Promissory 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 November 13, 2023. Upon two days prior written notice to Nomura, the Company may prepay all or any portion of the then outstanding principal amount under the Amended and Restated Nomura Promissory Note together with all accrued and unpaid interest thereon.

Note 11. CLAIMS FINANCING OBLIGATIONS AND NOTES PAYABLE

During the year ended December 31, 2022, the Company finalized an Amendment to Claim Proceeds Investment Agreement and a Warrant Agreement with Brickell Key Investments LP (the “Holder”), pursuant to which the parties have agreed to amend the original Claims Proceeds Investment Agreement (“CPIA”) and required payment terms. The Amendment and Warrant Agreement were executed effective September 30, 2022. Pursuant to the agreements, the Company grants to the Holder the right to purchase Class A common shares in the Company (the “Class A Shares”) in accordance with the terms and conditions of the Agreement. The maximum amount of Class A Shares that the Holder may purchase from the Company is 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 MSP Founders, John H. Ruiz and Frank Quesada (the “Founders”). As part of the agreement, the Founders agreed to pledge 2 million shares to secure payment of the original principal amount of the CPIA. If the Holder were to receive amounts in excess of $80 million, the Founders would receive interest of 10% on 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”). The Pledge Agreement and Side Agreement were executed effective September 30, 2022. As the Company has, at its option, the ability to pay its obligation through cash proceeds or through monetization of the Warrants, the amount owed as of December 31, 2022 was included as Claims financing obligation and notes payable on the consolidated balance sheet. Also, the liability related to the remaining amounts due was recorded as $80 million as of December 31, 2022 as the Company, at its option, has the ability to repurchase the Warrants for $80 million on or before June 30, 2023. The resulting gain on debt extinguishment from the amendment was $63.4 million and was recorded in Other income (expense), net within the consolidated statement of operations for the year ended December 31, 2022.

Based on Claims financing obligations and notes payable agreements, as of December 31, 2022 and December 31, 2021, the present value of amounts owed under these obligations were $201.3 million and $201.4 million, respectively, including unpaid interest to date of $2.8 million and $94.5 million, respectively. The weighted average interest rate is 6.3% based on the current book value of $201.3 million with rates that range from 2% to 11.04%. The Company is expected to repay these obligations from cash flows from Claim recovery income or potentially through class A common stock issuances.

As of December 31, 2022, the minimum required payments on these agreements are $354.9 million. Certain of these agreements have priority of payment regarding any proceeds until full payment of the balance due is satisfied. The maturity of the commitments range from the date sufficient Claims recoveries are received to cover the required return or in some cases by 2031.

Also, during 2020, the Company obtained funds under the Paycheck Protection Program (the “PPP Loan”) in the amount of $1.1 million. Since the amount must be repaid unless forgiven in accordance with the Paycheck Protection Program, the Company accounted for the funds as debt under ASC 470. As of December 31, 2022 and December 31, 2021, the total amount of the PPP Loans have been forgiven.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentaton and Summary of Significant Accounting Policies (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Summary of Disclosure in Tabular Form of Useful Lives of Property Plant and Useful Lives

The Company provides for depreciation and amortization on property and equipment using the straight-line method to allocate the cost of depreciable assets over their estimated lives as follows:


Office and Computer Equipment	3 years
Furniture and Fixtures	3 years
Leasehold Improvement	Lesser of lease term or estimated life

Schedule of Correction of Previously Reported Interim Condensed Consolidated Quarterly Financial Statement


	For the reporting period
	September 30, 2022
	As previously			Restatement
(In thousands except per share amounts)	reported			Adjustments			As Restated
ASSETS
Current assets:
Accounts receivable	$	7,525		$	138		$	7,663
Indemnification asset		752,510			(752,510	)		—
Total current assets		820,157			(752,372	)		67,785
Deferred tax asset		857			(857	)		—
Intangible assets, net		2,077,571			1,395,955			3,473,526
Investment in rights to claim recovery cash flows		3,673,610			(3,673,610	)		—
Total assets	$	6,574,675		$	(3,030,884	)	$	3,543,791

Stockholders’ Equity (Deficit):
Additional paid-in capital	$	201,965		$	(66,689	)	$	135,276
Accumulated deficit		(23,537	)		(2,201	)		(25,738	)
Total Stockholders’ Equity (Deficit)	$	178,441		$	(68,890	)	$	109,551
Non-controlling interest		5,213,812			(2,961,994	)		2,251,818
Total equity	$	5,392,253		$	(3,030,884	)	$	2,361,369
Total liabilities and equity	$	6,574,675		$	(3,030,884	)	$	3,543,791


	For the three months ended September 30, 2022									For the nine months ended September 30, 2022
(In thousands except per share amounts)	As Reported			Restatement Adjustments			As Restated			As Reported			Restatement Adjustments			As Restated
Claims recovery income	$	2,571			188		$	2,759		$	3,999		$	226		$	4,225
Total Claims Recovery	$	8,319		$	188		$	8,507		$	21,794		$	226		$	22,020
Operating expenses
Cost of claim recoveries		1,160			38			1,198			1,861			45			1,906
Claims amortization expense		66,331			45,520			111,851			92,866			60,694			153,560
Professional fees		5,875			29			5,904			10,931			42			10,973
Total operating expenses		88,104			45,587			133,691			157,212			60,781			217,993
Operating Loss	$	(79,785	)	$	(45,399	)	$	(125,184	)	$	(135,418	)	$	(60,555	)	$	(195,973	)
Interest expense		(13,083	)		(33,097	)		(46,180	)		(34,475	)		(46,472	)		(80,947	)
Net loss before provision for income taxes	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,401	)	$	(107,027	)	$	(225,428	)
Provision for income tax benefit (expense)		-			-			-			326			(326	)		-
Net loss	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,075	)	$	(107,353	)	$	(225,428	)
Less: Net (income) loss attributable to non-controlling members		26,597			76,887			103,484			116,324			105,152			221,476
Net loss attributable to controlling members	$	(463	)	$	(1,609	)	$	(2,072	)	$	(1,751	)	$	(2,201	)	$	(3,952	)

Basic and diluted weighted average shares outstanding, Class A Common Stock		2,761,476		N/A				2,761,476			2,125,539		N/A				2,125,539
Basic and diluted net income per share, Class A Common Stock	$	(0.17	)	N/A			$	(0.75	)	$	(0.82	)	N/A			$	(1.86	)


	For the nine months ended September 30, 2022
(In thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(118,075	)	$	(107,353	)	$	(225,428	)
Claims amortization expense		92,866			60,694			153,560
Paid in kind interest		34,475			46,472			80,947
Deferred income taxes		(857	)		326			(531	)
Accounts receivable		(7,525	)		(139	)		(7,664	)
Net cash used in operating activities	$	(70,764	)	$	—		$	(70,764	)
Net cash used in investing activities	$	(4,563	)	$	—		$	(4,563	)
Net cash provided by financing activities	$	99,351		$	—		$	99,351


	For the reporting period September 30, 2022
	As Previously Reported											Restatement Adjustments												As Restated
(In thousands except shares)	Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital			Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity
Balance at December 31, 2021	$	—	$	—		$	4,348		$	(151,408	)													$	—	$	—		$	4,348		$	(151,408	)
Contributions prior to recapitalization transaction		—		—			—			15															—		—			—			15
Distributions prior to recapitalization transaction		—		—			—			(147	)														—		—			—			(147	)
Net loss prior to recapitalization transaction		—		—			—			(28,640	)														—		—			—			(28,640	)
Cumulative effect of recapitalization transaction		49,075		—			5,406,736			5,640,352			(7,496	)					(2,915,985	)		(2,923,481	)		41,579		—			2,490,751			2,716,871
Opening net assets of Lionheart II Holdings, LLC acquired		—		(21,786	)		—			(21,786	)														—		(21,786	)		—			(21,786	)
Adjustment for value of derivative on temporary equity		10,065		—			—			10,065															10,065		—			—			10,065
Conversion of Warrants		22,896		—			(13,444	)		9,452			(7,255	)								(7,255	)		15,641		—			(13,444	)		2,197
Class A Issuances		119,929		—			(96,144	)		23,785			(51,938	)								(51,938	)		67,991		—			(96,144	)		(28,153	)
Net loss		—		(1,751	)		(87,684	)		(89,435	)					(2,201	)		(46,009	)		(48,210	)		—		(3,952	)		(133,693	)		(137,645	)
Balance at September 30, 2022	$	201,965	$	(23,537	)	$	5,213,812		$	5,392,253		$	(66,689	)	$	(2,201	)	$	(2,961,994	)	$	(3,030,884	)	$	135,276	$	(25,738	)	$	2,251,818		$	2,361,369

Income Tax (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Reconciliation Statutory Income Tax Rate to the Company's Effective Tax Rate

A reconciliation of the United States statutory income tax rate to the Company’s effective tax rate for the year ended December 31, 2022, 2021, and 2020 is as follows for the years indicated:


	December 31, 2022			December 31, 2021			December 31, 2020
Federal Statutory rate		21.00	%		21	%		21	%
Noncontrolling interests/effect of pass-through entities		-20.70	%		-21	%		-21	%
Valuation allowance		-0.40	%		0	%		0	%
Other		0.10	%		0	%		0	%
Effective Income tax rate		0.00	%		0	%		0	%

Schedule of Company's Deferred Tax Assets and Liabilities

Details of the Company’s deferred tax assets and liabilities at December 31, 2022 and 2021 are as follows for the years indicated:


	December 31, 2022		December 31, 2021
Deferred tax assets
Net operating loss carryforward	$	423		53
Investment in MSP Recovery, LLC		38,263		—
Start-up Costs		917		804
Transaction Costs		3,224		—
Total deferred tax assets		42,827		857
Valuation Allowance		-42,827		-857
Total Deferred tax assets (liability)	$	—		—

Related Party Transactions - Additional Information (Detail) - USD ($)

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Jun. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

$ 88,279,000

^[1]

$ 46,180,000

^[1]

$ 24,352,000

$ 34,767,000

$ 204,287,000

^[1]

$ 80,947,000

^[1]

$ 121,011,000

$ 27,046,000

$ 20,886,000

Prepaid expenses and other current assets

14,588,000

72,002,000

3,489,000

14,874,000

^[2]

14,874,000

^[2]

27,656,000

^[2],[3]

13,304,000

^[3]

General and Administrative Expenses [Member]

5,748,000

^[4]

$ 3,971,000

$ 12,047,000

498,000

^[4]

17,795,000

^[4]

18,542,000

^[5]

14,500,000

^[5]

13,632,000

^[5]

MSP Principals [Member] | Service fees

400,000

MSP Principals [Member] | Unsecured Promissory Notes [Member]

13,000,000

Interest rate, payable in kind

$ 112,800,000

4.00%

Debt instrument, maturity term

4 years

MSP Recovery Law Firm [Member]

Advance payment incurred for expense

$ 405,000

13,500,000

Payment of law firm expenses and co-counsel fees

21,900,000

MSP Recovery Law Firm [Member] | Professional Fees - Legal [Member]

MSP Recovery Law Firm [Member] | Professional Fees - Legal [Member] | Class A Common Stock [Member]

4,600,000

13,500,000

5,000,000

29,700,000

MSP Recovery Law Firm [Member] | Existing Legal Services Agreements [Member]

$ 20,100,000

Percentage of expected recoveries from fees

40.00%

MSP Recovery Law Firm [Member] | Existing Legal Services Agreements [Member] | Class A Common Stock [Member]

Common stock shares issued

320,880

MSP Recovery Law Firm [Member] | Existing Legal Services Agreements [Member] | Professional Fees - Legal [Member]

MSP Recovery Law Firm [Member] | Existing Legal Services Agreements [Member] | Cost of Claims Recoveries [Member]

4,600,000

13,500,000

24,700,000

$ 29,700,000

MSP Recovery Law Firm [Member] | Existing Legal Services Agreements [Member] | Affiliate Payable [Member]

405,000

MSP Recovery Law Firm [Member] | Existing Legal Services Agreements [Member] | Affiliate Receivable [Member]

5,500,000

Due from related party current

500,000

2,100,000

3,400,000

MSP Recovery Law Firm [Member] | Unsecured Promissory Notes [Member]

Proceeds from promissory notes

36,500,000

Prepaid expenses and other current assets

13,400,000

26,900,000

MSP Recovery Law Firm [Member] | Unsecured Promissory Notes [Member] | Existing Legal Services Agreements [Member]

Debt instrument, maturity term

4,950,000

$ 4,950,000

24 months

MSP Recovery Aviation, LLC [Member] | General and Administrative Expenses [Member]

MSP Recovery Aviation, LLC [Member] | Affiliate Receivable [Member]

200,000

$ 200,000

400,000

Due from related party current

200,000

153,000

Series MRCS LLC [Member] | Claims Financing Obligation and Notes Payable [Member]

Note payable related party

500,000

Other Affiliates [Member] | Additional Receivables From Other Affiliates [Member] | Affiliate Receivable [Member]

Due from related party current

200,000

148,000

92,000

VRM [Member]

MSP National LLC [Member] | Affiliate Receivable [Member]

10,600,000

11,500,000

$ 13,100,000

400,000

109,500,000

19,800,000

$ 39,700,000

Virage Amendment [Member] | VRM [Member]

1,300,000

3,900,000

$ 2,700,000

Schedule of Computation of Basic and Diluted Earnings Per Share

$ 67,800,000

$ 33,100,000

$ 159,200,000

$ 46,500,000

[1]	For three and nine months ended September 30, 2023, interest expense included $67.8 million and $159.2 million, respectively, related to interest expense due to VRM. For the three and nine months ended September 30, 2022, interest expense included $33.1 million and $46.5 million, respectively, related to interest expense due to VRM. See Note 13, Related Party Transactions, for further details.
[2]	As of September 30, 2023 and December 31, 2022, the total affiliate receivable, affiliate payable, guaranty obligation and loan from related parties balances are with related parties. In addition, the prepaid expenses and other current assets, claims financing obligation and notes payable, and interest payable includes balances with related parties. See Note 13, Related Party Transactions, for further details.
[3]	As of December 31, 2022 and 2021, the total affiliate receivable, affiliate payable, guaranty obligation and loan from related parties balances are with related parties. In addition, the prepaid expenses and other current assets, Claims financing obligation and notes payable and interest payable includes balances with related parties. See Note 14, Related Party, for further details.
[4]	For the three and nine months ended September 30, 2022, claims recovery service income included $0.0 million and $10.6 million, respectively, of claims recovery service income from VRM MSP. There was no claims recovery service income from VRM MSP for the three and nine months ended September 30, 2023. See Note 13, Related Party Transactions, for further details.
[5]	For the years ended December 31, 2022, 2021 and 2020, Claims recovery service income included $10.6 million, $11.5 million, and $13.1 million, respectively, of Claims recovery service income from VRM MSP. See Note 14, Related Party, for further details.

Net Loss Per Common Share (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Earnings Per Share [Abstract]

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


(In thousands except shares and per share amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
				(As Restated)						(As Restated)
Numerator – basic and diluted:
Net loss	$	(224,217	)	$	(105,556	)	$	(609,192	)	$	(225,428	)
Less: Net loss attributable to MSP Recovery, LLC pre Business Combination		—			—			—			—
Less: Net loss attributable to the noncontrolling interest post Business Combination		204,462		$	103,484			576,301		$	221,476
Net loss attributable to common shareholders	$	(19,755	)	$	(2,072	)	$	(32,891	)	$	(3,952	)
Denominator – basic and diluted:
Weighted-average shares of Class A common stock outstanding – basic		12,703,472			2,761,476			7,097,032			2,125,539
Effect of dilutive securities:
Weighted-average shares of Class A common stock outstanding – dilutive		12,703,472			2,761,476			7,097,032			2,125,539
Earnings per share of Class A common stock – basic	$	(1.56	)	$	(0.75	)	$	(4.63	)	$	(1.86	)
Earnings per share of Class A common stock – diluted	$	(1.56	)	$	(0.75	)	$	(4.63	)	$	(1.86	)

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


(In thousands except shares and per share amounts)	Year ended December 31, 2022
Numerator - basic and diluted:
Net loss	$	(401,905	)
Less: Net loss attributable to MSP Recovery, LLC pre Business Combination		28,640
Less: Net loss attributable to the noncontrolling interest post Business Combination		365,848
Net loss attributable to common shareholders	$	(7,417	)
Denominator - basic and diluted:
Weighted-average shares of Class A common stock outstanding - basic		2,473,005
Effect of dilutive securities:
Weighted-average shares of Class A common stock outstanding - dilutive		2,473,005
Earnings per share of Class A common stock - basic	$	(3.00	)
Earnings per share of Class A common stock - diluted	$	(3.00	)

Noncontrolling Interest - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Noncontrolling Interest [Line Items]
Non-controlling interest	$ 1,358,367	$ 2,077,586	$ 2,251,818	$ 2,360,520	$ 4,348
MAOMSO Recovery LLC Series FHCP [Member] \| MSP Recovery LLC [Member]
Noncontrolling Interest [Line Items]
Percentage of entitled preferred return by non-controlling member	20.00%	20.00%
Entitled claims recover percentage by non-controlling member	80.00%	80.00%
Percentage of non-controlling member allocated cost	100.00%	100.00%
Non-controlling interest	$ 4,300	$ 4,300			$ 4,300
UP-C Units [Member]
Noncontrolling Interest [Line Items]
Common unit exchange value	2,500	$ 300
New common unit issued	$ 500

Description of Business - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	9 Months Ended
	Sep. 05, 2023	Jul. 07, 2023	Nov. 14, 2023	Sep. 30, 2023	Jan. 06, 2023	Dec. 31, 2022	Oct. 12, 2022	Oct. 11, 2022	May 23, 2022	May 17, 2022
Nature Of Operations [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 0.0025		$ 0.0025
Cano Health, LLC [Member]
Nature Of Operations [Line Items]
Aggregate principal amount				$ 5,000
Standby Equity Purchase Agreement [Member] \| YA II PN, Ltd
Nature Of Operations [Line Items]
Aggregate principal amount			$ 15,000
Common Stock [Member] \| Common Stock Purchase Agreement [Member] \| YA II PN, Ltd
Nature Of Operations [Line Items]
Option to sell maximum shares value under purchase agreement					$ 1,000,000
Common Stock [Member] \| Subsequent Event [Member] \| Standby Equity Purchase Agreement [Member] \| YA II PN, Ltd
Nature Of Operations [Line Items]
Option to sell maximum shares value under purchase agreement			$ 250,000
Mandatory minimum amount			100.00%
Stock purchased price			98.00%
Minimum VWAP of shares			97.00%
Warrants [Member] \| Claims Proceeds Investment Agreement [Member]
Nature Of Operations [Line Items]
Percentage of shares obtained through warrant							15.00%
Warrants and Rights Outstanding							$ 80,000	$ 143,000
Class of Warrant or Right, Exercise Price of Warrants or Rights							$ 30
Class V Common Stock Units [Member] \| Non Economic Voting Shares [Member]
Nature Of Operations [Line Items]
Common stock par or stated value per share									$ 0.0001
Common Class A [Member]
Nature Of Operations [Line Items]
Common stock par or stated value per share				$ 0.0001		0.0001
Closing bid price of common stock per share as per listing rule for consecutive 30 business days	$ 0.1			1
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 287.5		$ 287.5
Maximum amount of common shares to be purchased				5,500,000,000		5,500,000,000
Common Stock, Value, Issued				$ 1
Common Class A [Member] \| Claims Proceeds Investment Agreement [Member]
Nature Of Operations [Line Items]
Common stock par or stated value per share							$ 0.0025
Maximum amount of common shares to be purchased							2,666,667
Common Stock, Value, Issued							$ 6,666,670
Common Class A [Member] \| Option to Pay in Cash or in Stock and Elected to Pay in Stock [Member] \| Cano Health, LLC [Member]
Nature Of Operations [Line Items]
Deferred compensation arrangement shares issued		7,960,001
Deferred compensation arrangement recorded liability		$ 61,700
Common Class A [Member] \| Common Stock Purchase Agreement [Member] \| Cantor Fitzgerald [Member]
Nature Of Operations [Line Items]
Option to sell maximum shares value under purchase agreement										$ 1,000,000
Date of termination					Jan. 06, 2023
Common Class A [Member] \| Common Stock Purchase Agreement [Member] \| YA II PN, Ltd
Nature Of Operations [Line Items]
Option to sell maximum shares value under purchase agreement					$ 1,000,000
Common Class A [Member] \| Purchase Agreement, Effective as of September 30, 2022, as Amended to Date [Member] \| Option to Pay in Cash or in Stock and Elected to Pay in Stock [Member] \| Cano Health, LLC [Member]
Nature Of Operations [Line Items]
Deferred compensation arrangement shares issued		3,225,807
Common Class A [Member] \| Amended and Restated Claims Recovery and Assignment Agreement Effective as of December 31, 2021, as Amended to Date [Member] \| Option to Pay in Cash or in Stock and Elected to Pay in Stock [Member] \| Cano Health, LLC [Member]
Nature Of Operations [Line Items]
Deferred compensation arrangement shares issued		4,734,194

Leases - Schedule of Right-of-Use Assets and Lease Liabilities in Condensed Consolidated Balance Sheet (Detail) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
Right-of-use asset	$ 368
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Right-of-use asset
Operating lease liability, current	$ (104)
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other current liabilities
Operating lease liability, non-current	$ (264)
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Operating lease liability, non-current
Total Lease Liability	$ (368)

Investments in Equity Securities and Obligations to Deliver Securities

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Investments in Equity Securities and Obligations to Deliver Securities

Note 15. INVESTMENTS IN EQUITY SECURITIES AND OBLIGATIONS TO DELIVER SECURITIES

The Company had an outstanding obligation to provide equity securities (a “short position”) as of December 31, 2020. The short position was classified as a liability, marked-to-market, and was evaluated at Level 1 for fair value. During the year ended December 31, 2021, the Company covered its short position by acquiring 100,000 equity shares of a publicly traded U.S. company for $1.8 million, recognizing a realized loss of $193 thousand in Other income, net in the consolidated statements of operations. As of December 31, 2022 and December 31, 2021, the Company had no investments in equity securities.

Condensed Consolidated Statements of Operations (Parenthetical) - USD ($)

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

^[1]

$ 5,748,000

$ 498,000

$ 17,795,000

General and Administrative Expense [Member] | Related Party [Member]

^[2]

$ 88,279,000

46,180,000

204,287,000

80,947,000

200,000

400,000

VRM [Member]

VRM [Member] | Related Party [Member]

10,600,000

MSP Recovery Law Firm [Member] | Related Party [Member]

67,800,000

33,100,000

159,200,000

46,500,000

MSP Recovery Law Firm [Member] | Professional Fees Legal [Member]

300,000

$ 4,600,000

$ 13,500,000

$ 5,000,000

[1]	For the three and nine months ended September 30, 2022, claims recovery service income included $0.0 million and $10.6 million, respectively, of claims recovery service income from VRM MSP. There was no claims recovery service income from VRM MSP for the three and nine months ended September 30, 2023. See Note 13, Related Party Transactions, for further details.
[2]	For three and nine months ended September 30, 2023, interest expense included $67.8 million and $159.2 million, respectively, related to interest expense due to VRM. For the three and nine months ended September 30, 2022, interest expense included $33.1 million and $46.5 million, respectively, related to interest expense due to VRM. See Note 13, Related Party Transactions, for further details.

Schedule of Right-of-Use Assets and Lease Liabilities in Condensed Consolidated Balance Sheet

Amount of the cost of borrowed funds accounted for as interest expense.

+ References + Details

Noncontrolling Interest - Summarizes the ownership of Units (Details) - shares	Sep. 30, 2023	Dec. 31, 2022
UP-C Units [Member]
Noncontrolling Interest [Line Items]
Common stock, shares issued	138,063,875	128,903,392
Ownership percentage	100.00%	100.00%
Class A Common Stock [Member]
Noncontrolling Interest [Line Items]
Common stock, shares issued	13,799,230	2,984,212
Class A Common Stock [Member] \| UP-C Units [Member]
Noncontrolling Interest [Line Items]
Common stock, shares issued	13,799,230	2,984,212
Ownership percentage	9.99%	2.32%
Class V Common Stock [Member]
Noncontrolling Interest [Line Items]
Common stock, shares issued	124,264,645	125,919,180
Class V Common Stock [Member] \| UP-C Units [Member]
Noncontrolling Interest [Line Items]
Common stock, shares issued	124,264,645	125,919,180
Ownership percentage	90.01%	97.68%

Short Term Leases (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Leases [Abstract]

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


		September 30,
(In thousands)	Classification	2023
Assets
Right-of-use asset	Right-of-use assets	$	368
Total Leased Assets		$	368

Liabilities
Current
Operating lease liability	Other current liabilities	$	(104	)
Non-current
Operating lease liability	Lease liabilities	$	(264	)
Total Lease Liability		$	(368	)

Schedule Of Future Minimum Lease Payments Under Non-cancelable Operating Leases

The future minimum lease payments under non-cancellable operating leases as of September 30, 2023 for the next five years and thereafter are as follows:


(in thousands)
Remainder of 2023	$	38
2024		153
2025		157
2026		107
2027		—
Thereafter		—
Total minimum payments required		455
Less: implied interest		(87	)
Present value of lease liabilities	$	368

The future minimum lease payments under non-cancellable operating leases as of December 31, 2022 for the next five years and thereafter are as follows:


(In thousands)	Lease Payments
Year Ending December 31,
2023 (1)	$	217
Total	$	217

(1)

Operating lease expires before or during the year ending December 31, 2023.

Cover Page	9 Months Ended
Cover Page	Sep. 30, 2023
Document Information [Line Items]
Document Type	S-1/A
Amendment Flag	true
Amendment Description	The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
Entity Registrant Name	MSP RECOVERY, INC.
Entity Central Index Key	0001802450
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-4117825
Entity Primary SIC Number	7374
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Address, Address Line One	2701 Le Jeune Road
Entity Address, Address Line Two	Floor 10
Entity Address, City or Town	Coral Gables
Entity Address State Or Province	FL
Entity Address, Postal Zip Code	33134
City Area Code	305
Local Phone Number	614-2222
Business Contact [Member]
Document Information [Line Items]
Contact Personnel Name	Alexandra Plasencia
Entity Address, Address Line One	2701 Le Jeune Road
Entity Address, Address Line Two	Floor 10
Entity Address, City or Town	Coral Gables
Entity Address State Or Province	FL
Entity Address, Postal Zip Code	33134
City Area Code	305
Local Phone Number	614-2222

Derivative Liability - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Jan. 06, 2023
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate purchase price		$ 11,420
Fair value of shares		1,807
Derivative liability		$ 9,613
FEF Shares [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate number of shares transferred to escrow account	44,000	45,200
Aggregate purchase price		$ 11,400	$ 11,400
Derivative liability		9,600
FEF Shares [Member] \| Common Class A [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value of shares		$ 1,800

Carrying amount, attributable to parent, of an entity's issued and outstanding stock which is not included within permanent equity. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. Includes stock with a put option held by an ESOP and stock redeemable by a holder only in the event of a change in control of the issuer.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-03(a)(23)(a)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479440/944-210-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.E.Q2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited) Restatement of Previously Issued Financial Statements (Tables)

12 Months Ended

Dec. 31, 2022

Summary of Quarterly Financial Information

The table below sets forth the unaudited condensed consolidated balance sheet information, including the balances as reported, adjustments and the balances as restated:


	For the reporting period
(In thousands except per share amounts)	June 30, 2022
	As previously			Restatement
	reported			Adjustments			As Restated
ASSETS
Current assets:
Accounts receivable	$	901			17		$	918
Indemnification asset		719,413			(719,413	)		—
Total current assets		795,780			(719,396	)		76,384
Deferred tax asset		857			(857	)		—
Intangible assets, net		2,095,735			1,441,475			3,537,210
Investment in rights to claim recovery cash flows		3,673,610			(3,673,610	)		—
Total assets	$	6,566,932		$	(2,952,388	)	$	3,614,544

Stockholders’ Equity (Deficit):
Additional paid-in capital	$	187,578			(60,479	)	$	127,099
Accumulated deficit		(23,074	)		(592	)		(23,666	)
Total Stockholders’ Equity (Deficit)	$	164,517		$	(61,071	)	$	103,446
Non-controlling interest		5,251,837			(2,891,317	)		2,360,520
Total equity	$	5,416,354		$	(2,952,388	)	$	2,463,966
Total liabilities and equity	$	6,566,932		$	(2,952,388	)	$	3,614,544


	For the reporting period
	September 30, 2022
	As previously			Restatement
(In thousands except per share amounts)	reported			Adjustments			As Restated
ASSETS
Current assets:
Accounts receivable	$	7,525			138		$	7,663
Indemnification asset		752,510			(752,510	)		—
Total current assets		820,157			(752,372	)		67,785
Deferred tax asset		857			(857	)		—
Intangible assets, net		2,077,571			1,395,955			3,473,526
Investment in rights to claim recovery cash flows		3,673,610			(3,673,610	)		—
Total assets	$	6,574,675		$	(3,030,884	)		3,543,791

Stockholders’ Equity (Deficit):
Additional paid-in capital	$	201,965			(66,689	)	$	135,276
Accumulated deficit		(23,537	)		(2,201	)		(25,738	)
Total Stockholders’ Equity (Deficit)	$	178,441		$	(68,890	)		109,551
Non-controlling interest		5,213,812			(2,961,994	)		2,251,818
Total equity	$	5,392,253		$	(3,030,884	)		2,361,369
Total liabilities and equity	$	6,574,675		$	(3,030,884	)		3,543,791

The tables below set forth the unaudited condensed consolidated statements of operations, including the balances as reported, adjustments and the as restated balances:


	For the three months ended June 30, 2022									For the six months ended June 30, 2022
(In thousands except per share amounts)	As Reported			Restatement Adjustments			As Restated			As Reported			Restatement Adjustments			As Restated
Claims recovery income	$	1,319			38		$	1,357		$	1,428			38		$	1,466
Claims recovery service income		3,971			—			3,971			12,047			—			12,047
Total Claims Recovery	$	5,290		$	38		$	5,328		$	13,475		$	38		$	13,513
Operating expenses
Cost of claim recoveries		694			8			702			701			8			709
Claims amortization expense		23,818			15,173			38,991			26,535			15,173			41,708
Professional fees		3,118			13			3,131			5,056			13			5,069
Total operating expenses		57,449			15,194			72,643			69,108			15,194			84,302
Operating Loss	$	(52,159	)	$	(15,156	)	$	(67,315	)	$	(55,633	)	$	(15,156	)	$	(70,789	)
Interest expense		(10,977	)		(13,375	)		(24,352	)		(21,392	)		(13,375	)		(34,767	)
Net loss before provision for income taxes	$	(77,450	)	$	(28,531	)	$	(105,981	)	$	(91,341	)	$	(28,531	)	$	(119,872	)
Provision for income tax benefit (expense)		326			(326	)		—			326			(326	)		—
Net loss	$	(77,124	)	$	(28,857	)	$	(105,981	)	$	(91,015	)	$	(28,857	)	$	(119,872	)
Less: Net (income) loss attributable to non-controlling members		75,836			28,265			104,101			89,727			28,265			117,992
Net loss attributable to controlling members	$	(1,288	)	$	(592	)	$	(1,880	)	$	(1,288	)	$	(592	)	$	(1,880	)

Basic and diluted weighted average shares outstanding, Class A Common Stock		544,291		N/A				544,291			544,291		N/A				544,291
Basic and diluted net income per share, Class A Common Stock	$	(2.37	)	N/A			$	(3.45	)	$	(2.37	)	N/A			$	(3.45	)


	For the three months ended September 30, 2022									For the nine months ended September 30, 2022
(In thousands except per share amounts)	As Reported			Restatement Adjustments			As Restated			As Reported			Restatement Adjustments			As Restated
Claims recovery income	$	2,571			188		$	2,759		$	3,999		$	226		$	4,225
Total Claims Recovery	$	8,319		$	188		$	8,507		$	21,794		$	226		$	22,020
Operating expenses
Cost of claim recoveries		1,160			38			1,198			1,861			45			1,906
Claims amortization expense		66,331			45,520			111,851			92,866			60,694			153,560
Professional fees		5,875			29			5,904			10,931			42			10,973
Total operating expenses		88,104			45,587			133,691			157,212			60,781			217,993
Operating Loss	$	(79,785	)	$	(45,399	)	$	(125,184	)	$	(135,418	)	$	(60,555	)	$	(195,973	)
Interest expense		(13,083	)		(33,097	)		(46,180	)		(34,475	)		(46,472	)		(80,947	)
Net loss before provision for income taxes	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,401	)	$	(107,027	)	$	(225,428	)
Provision for income tax benefit (expense)		—			—			—			326			(326	)		—
Net loss	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,075	)	$	(107,353	)	$	(225,428	)
Less: Net (income) loss attributable to non-controlling members		26,597			76,887			103,484			116,324			105,152			221,476
Net loss attributable to controlling members	$	(463	)	$	(1,609	)	$	(2,072	)	$	(1,751	)	$	(2,201	)	$	(3,952	)

Basic and diluted weighted average shares outstanding, Class A Common Stock		2,761,476			—			2,761,476			2,125,539			—			2,125,539
Basic and diluted net income per share, Class A Common Stock	$	(0.17	)	$	(0.58	)	$	(0.75	)	$	(0.82	)	$	(1.04	)	$	(1.86	)


	For the six months ended June 30, 2022
(In thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(91,015	)	$	(28,857	)	$	(119,872	)
Claims amortization expense		26,535			15,173			41,708
Paid in kind interest		21,369			13,375			34,744
Deferred income taxes		(857	)		326			(531	)
Change in operating assets and liabilities:
Accounts receivable		(901	)		(17	)		(918	)
Net cash used in operating activities		(60,912	)		—			(60,912	)
Net cash used in investing activities		(3,015	)		—			(3,015	)
Net cash provided by (used in) financing activities		98,728			—			98,728


	For the nine months ended September 30, 2022
(In thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(118,075	)	$	(107,353	)	$	(225,428	)
Claims amortization expense		92,866			60,694		$	153,560
Paid in kind interest		34,475			46,472		$	80,947
Deferred income taxes		(857	)		326		$	(531	)
Accounts receivable		(7,525	)		(139	)	$	(7,664	)
Net cash used in operating activities		(70,764	)		—			(70,764	)
Net cash used in investing activities		(4,563	)		—			(4,563	)
Net cash provided by (used in) financing activities		99,351			—			99,351


	For the reporting period June 30, 2022
	As Previously Reported											Restatement Adjustments												As Restated
(In thousands except shares)	Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital			Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity
Balance at December 31, 2021	$	—	$	—		$	4,348		$	(151,408	)													$	—	$	—		$	4,348		$	(151,408	)
Contributions prior to recapitalization transaction		—		—			—			15															—		—			—			15
Distributions prior to recapitalization transaction		—		—			—			(147	)														—		—			—			(147	)
Net loss prior to recapitalization transaction		—		—			—			(28,640	)														—		—			—			(28,640	)
Cumulative effect of recapitalization transaction		49,075		—			5,406,736			5,640,353			(7,496	)					(2,915,985	)		(2,923,481	)		41,579		—			2,490,751			2,716,872
Opening net assets of Lionheart II Holdings, LLC acquired		—		(21,786	)		—			(21,786	)														—		(21,786	)		—			(21,786	)
Adjustment for value of derivative on temporary equity		9,003		—			—			9,003															9,003		—			—			9,003
Conversion of Warrants		20,463		—			(12,287	)		8,177			(6,627	)								(6,627	)		13,836		—			(12,287	)		1,550
Class A Issuances		109,037		—			(85,872	)		23,164			(46,356	)								(46,356	)		62,681		—			(85,872	)		(23,192	)
Net loss		—		(1,288	)		(61,088	)		(62,376	)					(592	)		24,668			24,075			—		(1,880	)		(36,420	)		(38,301	)
Balance at June 30, 2022	$	187,578	$	(23,074	)	$	5,251,837		$	5,416,354		$	(60,479	)	$	(592	)	$	(2,891,317	)	$	(2,952,388	)	$	127,099	$	(23,666	)	$	2,360,520		$	2,463,966


	For the reporting period September 30, 2022
	As Previously Reported											Restatement Adjustments												As Restated
(In thousands except shares)	Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital			Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity
Balance at December 31, 2021	$	—	$	—		$	4,348		$	(151,408	)													$	—	$	—		$	4,348		$	(151,408	)
Contributions prior to recapitalization transaction		—		—			—			15															—		—			—			15
Distributions prior to recapitalization transaction		—		—			—			(147	)														—		—			—			(147	)
Net loss prior to recapitalization transaction		—		—			—			(28,640	)														—		—			—			(28,640	)
Cumulative effect of recapitalization transaction		49,075		—			5,406,736			5,640,352			(7,496	)					(2,915,985	)		(2,923,481	)		41,579		—			2,490,751			2,716,871
Opening net assets of Lionheart II Holdings, LLC acquired		—		(21,786	)		—			(21,786	)														—		(21,786	)		—			(21,786	)
Adjustment for value of derivative on temporary equity		10,065		—			—			10,065															10,065		—			—			10,065
Conversion of Warrants		22,896		—			(13,444	)		9,452			(7,255	)								(7,255	)		15,641		—			(13,444	)		2,197
Class A Issuances		119,929		—			(96,144	)		23,785			(51,938	)								(51,938	)		67,991		—			(96,144	)		(28,153	)
Net loss		—		(1,751	)		(87,684	)		(89,435	)					(2,201	)		(46,009	)		(48,210	)		—		(3,952	)		(133,693	)		(137,645	)
Balance at September 30, 2022	$	201,965	$	(23,537	)	$	5,213,812		$	5,392,253		$	(66,689	)	$	(2,201	)	$	(2,961,994	)	$	(3,030,884	)	$	135,276	$	(25,738	)	$	2,251,818		$	2,361,369

Intangible Assets, Net - Summary of Intangible Assets Net (Detail) - Claims Cost Recovery Rights [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 3,872,256	$ 3,630,823	$ 84,955
Accumulated amortization	(618,549)	(267,667)	(737)
Total	$ 3,253,707	$ 3,363,156	$ 84,218

Business Combination - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands					3 Months Ended	9 Months Ended		12 Months Ended
	Nov. 13, 2023	Sep. 30, 2023	Apr. 12, 2023	May 23, 2022	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	May 27, 2022
Business Acquisition [Line Items]
Increase in TRA liability								$ 2,500
Change in fair value of warrant liability		$ 0				$ (4,406)	$ 1,619	$ 2,870
Warrants or rights exercise price		$ 0.0025			$ 0.0025	$ 0.0025		$ 0.0025
Period of new warrants exercisable closing date						30 days		30 days
Nomura Promissory Note [Member]
Business Acquisition [Line Items]
Principal amount of unsecured promissory note			$ 26,300						$ 24,500
Debt instrument maturity date			Sep. 30, 2024
Interest rate of promissory note			16.00%
Debt description						The Amended and Restated Nomura Promissory 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 November 13, 2023. Upon two days prior written notice to Nomura, the Company may prepay all or any portion of the then outstanding principal amount under the Amended and Restated Nomura Promissory Note together with all accrued and unpaid interest thereon.		The amended 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 April 12, 2023. 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.
Nomura Promissory Note [Member] \| Subsequent Event [Member]
Business Acquisition [Line Items]
Principal amount of unsecured promissory note	$ 28,900
Debt instrument maturity date	Dec. 31, 2024
Interest rate of promissory note	16.00%
Tax Receivable Agreement [Member]
Business Acquisition [Line Items]
Percentage of pay sellers to amount of tax benefit						85.00%		85.00%
Warrants [Member]
Business Acquisition [Line Items]
Class of warrants or rights exercisable period						10 days		10 days
Common Stock [Member]
Business Acquisition [Line Items]
Exchange of stock units to common stock					0	1,700,000		259,752
Cantor Fitzgerald [Member] \| FEF Shares [Member]
Business Acquisition [Line Items]
Restricted cash received		$ 11,400			$ 11,400	$ 11,400
Common Class A [Member]
Business Acquisition [Line Items]
common stock, par value		$ 0.0001			$ 0.0001	$ 0.0001		$ 0.0001
Business combination units issued				130,000,000
Warrant, exercise price, decrease per share				$ 0.0025
Change in fair value of warrant liability								$ 2,900
Warrants exercised		11,800,000			11,800,000	11,800,000		11,800,000
Period of subject to certain ant dilution adjustments exercisable								30 days
Warrants or rights exercise price		$ 287.5			$ 287.5	$ 287.5		$ 287.5
Dividend comprising number of new warrants payable holders						1,028,000,000		1,028,000,000
Subject to certain ant dilution adjustments exercisable term								5 years
Warrants issued		8,700,000			8,700,000	8,700,000		8,500,000
Common Class A [Member] \| Membership Interest Purchase Agreement [Member]
Business Acquisition [Line Items]
Business combination units issued				126,178,932
Business combination, direct and incremental costs				$ 79,200
Common Class A [Member] \| FEF Shares [Member]
Business Acquisition [Line Items]
Net proceeds in business combination				23,400
Common Class A [Member] \| Warrants [Member]
Business Acquisition [Line Items]
Business combination transaction, assumed liability				$ 12,500
Common Class A [Member] \| Canceled Units [Member]
Business Acquisition [Line Items]
Business combination units issued				3,821,069
Common Class A [Member] \| Up-C Units [Member]
Business Acquisition [Line Items]
Business combination units issued				2,000,880
Class V Common Stock Units [Member] \| Non Economic Voting Shares [Member]
Business Acquisition [Line Items]
common stock, par value				$ 0.0001
As previously reported \| Nomura Promissory Note [Member]
Business Acquisition [Line Items]
Principal amount of unsecured promissory note			$ 26,200
As previously reported \| Common Class A [Member]
Business Acquisition [Line Items]
Business combination units issued				130,000,000
As previously reported \| Common Class A [Member] \| Membership Interest Purchase Agreement [Member]
Business Acquisition [Line Items]
Business combination units issued				126,178,932
As previously reported \| Common Class A [Member] \| Canceled Units [Member]
Business Acquisition [Line Items]
Business combination units issued				3,821,069
As previously reported \| Common Class A [Member] \| Up-C Units [Member]
Business Acquisition [Line Items]
Business combination units issued				2,000,880
As previously reported \| Common Class A [Member] \| Non Economic Voting Shares [Member]
Business Acquisition [Line Items]
common stock, par value				$ 0.0001

Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands

6 Months Ended

9 Months Ended

12 Months Ended

Jun. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Adjustments to reconcile net loss to net cash used in operating activities:

Net loss (1)

$ (119,872)

$ (609,192)

^[1]

$ (225,428)

^[1]

$ (401,905)

^[2]

$ (33,077)

^[2]

$ (24,266)

^[2]

Depreciation and amortization

182

254

424

343

235

41,708

355,481

153,560

266,929

164

125

Change in fair value of derivatives

34,744

204,263

^[1]

80,947

^[1]

145,321

27,023

20,843

158

10,065

9,613

Change in fair value of warrant liability

(531)

(4,406)

1,619

2,870

Share based compensation

1,875

20,055

PPP loan forgiveness

(1,043)

(44)

Realized gain on equity securities

(201)

(18)

Unrealized losses on investments - short position

279

Gain on debt extinguishment

(63,367)

Mark to Market Gain on liability payable in stock

(3,937)

Non-cash lease expense

Allowance for credit losses

5,000

Gain on sale of intangibles

(4,599)

Prepaid expenses and other assets

(918)

(7,664)

(6,195)

Affiliate receivable

1,594

^[1]

2,296

^[1]

1,645

^[2]

801

^[2]

(3,346)

^[2]

Affiliate payable

(25,430)

^[1]

(25,430)

^[2]

6,225

^[2]

5,670

^[2]

13,032

^[1]

(32,609)

^[1]

(27,604)

(9)

Commission payable

284

Accounts payable and other current liabilities

8,678

15,394

(2,291)

2,013

268

Deferred service fee income

(249)

249

Net cash (used in) provided by operating activities

(60,912)

(31,533)

(70,764)

(80,635)

2,249

(14)

Cash flows from investing activities:

Additions to property, plant, and equipment

(1,641)

(1,863)

(2,984)

(481)

(330)

Purchases of intangible assets

(600)

(2,700)

(150)

Proceeds from short sale of short positions

1,298

Proceeds from sale of equity securities

4,450

1,273

Purchases of equity securities

(4,056)

(1,255)

Purchase of securities to cover short position

(1,770)

Proceeds from sale of intangible assets

10,000

Net cash provided by (used in) investing activities

(3,015)

7,759

(4,563)

(5,684)

(2,007)

986

Cash flows from financing activities:

Proceeds from debt financing

25,000

1,086

Deferred financing costs

(250)

Debt issuance costs

(683)

Proceeds from related party loan

4,950

^[1]

125,759

^[1]

125,759

^[2]

Release of temporary equity

(11,420)

Repayment of the Claims financing obligation

(2,488)

Proceeds from Business Combination

12,009

Transaction costs incurred for the Business Combination

(49,638)

(7,973)

Issuance of common stock

8,804

9,188

Issuance of temporary equity

2,417

Contribution from members

227

8,524

Distributions to members

(2,711)

Warrant conversions

243

Net cash provided by (used in) financing activities

98,728

15,352

99,351

99,735

(10,457)

9,610

(Decrease) increase in cash and cash equivalents and restricted cash

(8,422)

24,024

13,416

(10,215)

10,582

Cash and cash equivalents and restricted cash at beginning of year

1,664

15,081

1,664

11,879

1,297

Cash and cash equivalents and restricted cash at end of period

6,659

25,688

15,081

1,664

11,879

Cash paid during the period for:

Interest

$ 43

Supplemental disclosure of non-cash investing and financing activities:

Sale of intangible assets

30,987

Purchase of intangible asset financed by note payable

250,000

$ 83,805

Release of temporary equity

1,807

Original issue discount

16,667

Purchase of intangible asset through issuance of Class A common stock

10,000

10,963

Purchase of intangible asset in accrued expenses

48,167

51,167

Payment of professional fees through issuance of Class A common stock

2,049

1,326

1,618

Transaction costs incurred included in accounts payable and accrued liabilities

29,692

29,681

Non-cash lease liabilities arising from obtaining right-of-use assets

426

Payment of Cano Health payment in shares

61,690

Adjustments to reconcile net loss to net cash used in operating activities:

Net loss (1)

(91,015)

(118,075)

26,535

92,866

21,369

34,475

(857)

Net cash (used in) provided by operating activities

(901)

(7,525)

(60,912)

(70,764)

Cash flows from investing activities:

Net cash provided by (used in) investing activities

(3,015)

(4,563)

Cash flows from financing activities:

Net cash provided by (used in) financing activities

$ 98,728

$ 99,351

Cash and cash equivalents and restricted cash at beginning of year

$ 15,080

Cash and cash equivalents and restricted cash at end of period

$ 15,080

[1]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.
[2]	Balances include related party transactions. See Note 14, Related Party, for further details.

Investment in Equity Method Investees - Summarized Financial Information of Equity Method Investees (Detail) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Jun. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Disclosure In Tabular Form Of Summarized Financial Information Of Equity Method Investees [Line Items]

Equity Method Investee [Member]

$ (224,217)

$ (105,556)

$ (105,981)

$ (119,872)

$ (609,192)

^[1]

$ (225,428)

^[1]

$ (401,905)

^[2]

$ (33,077)

^[2]

$ (24,266)

^[2]

Total Assets

3,282,035

3,543,791

$ 3,614,544

3,282,035

3,543,791

3,417,945

104,006

Total Liabilities

1,638,373

1,230,673

255,414

Disclosure In Tabular Form Of Summarized Financial Information Of Equity Method Investees [Line Items]

Revenue

Amortization

500

1,500

2,000

Other expenses

(492)

$ (492)

(1,492)

$ (1,492)

(1,986)

(1,999)

$ (1,986)

Total Assets

1,874

3,341

5,390

Total Liabilities

$ 309

$ 274

$ 266

[1]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.
[2]	Balances include related party transactions. See Note 14, Related Party, for further details.

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

Net Loss Per Common Share

Net Loss Per Common Share

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Earnings Per Share [Abstract]

Note 14. 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 period 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:


(In thousands except shares and per share amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
				(As Restated)						(As Restated)
Numerator – basic and diluted:
Net loss	$	(224,217	)	$	(105,556	)	$	(609,192	)	$	(225,428	)
Less: Net loss attributable to MSP Recovery, LLC pre Business Combination		—			—			—			—
Less: Net loss attributable to the noncontrolling interest post Business Combination		204,462		$	103,484			576,301		$	221,476
Net loss attributable to common shareholders	$	(19,755	)	$	(2,072	)	$	(32,891	)	$	(3,952	)
Denominator – basic and diluted:
Weighted-average shares of Class A common stock outstanding – basic		12,703,472			2,761,476			7,097,032			2,125,539
Effect of dilutive securities:
Weighted-average shares of Class A common stock outstanding – dilutive		12,703,472			2,761,476			7,097,032			2,125,539
Earnings per share of Class A common stock – basic	$	(1.56	)	$	(0.75	)	$	(4.63	)	$	(1.86	)
Earnings per share of Class A common stock – diluted	$	(1.56	)	$	(0.75	)	$	(4.63	)	$	(1.86	)

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, 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 shares issuable upon the exercise of the CPIA Warrant, and 1,028,046,326 of New Warrants outstanding because their effect would have been anti-dilutive. As discussed in Note 1, Description of the Business, the Reverse Split did not affect the number of outstanding warrants; it had effect on the exercise terms of the warrants.

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 period presented is the same as basic loss per share as the inclusion of the potentially issuable shares would be anti-dilutive.

Prior to the Business Combination, the equity structure of MSP Recovery, LLC included units which shared in the profits and losses of MSP Recovery, LLC. In reviewing the calculation of earnings per unit for periods prior to the Business Combination, the Company concluded that it resulted in values that would not be meaningful to the users of the consolidated financial statements. As such, earnings per share information for the year ended December 31, 2021 and 2020 has not been presented. The basic and diluted earnings per share for the year ended December 31, 2022 represent loss from only the period from the Closing Date to December 31, 2022 for the Company.

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


(In thousands except shares and per share amounts)	Year ended December 31, 2022
Numerator - basic and diluted:
Net loss	$	(401,905	)
Less: Net loss attributable to MSP Recovery, LLC pre Business Combination		28,640
Less: Net loss attributable to the noncontrolling interest post Business Combination		365,848
Net loss attributable to common shareholders	$	(7,417	)
Denominator - basic and diluted:
Weighted-average shares of Class A common stock outstanding - basic		2,473,005
Effect of dilutive securities:
Weighted-average shares of Class A common stock outstanding - dilutive		2,473,005
Earnings per share of Class A common stock - basic	$	(3.00	)
Earnings per share of Class A common stock - diluted	$	(3.00	)

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 year ended December 31, 2022, the Company excluded from the calculation of diluted earnings per share 125,919,180 shares of Class V Common Stock, 3,319,304 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.

Condensed Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands

Total

As previously reported

Recapitalization Transaction [Member]

As previously reported

Common Stock [Member]

Class A Common Stock [Member]

Common Stock [Member]

Class A Common Stock [Member]

Recapitalization Transaction [Member]

Common Stock [Member]

Class V Stock [Member]

Common Stock [Member]

Class V Stock [Member]

As previously reported

Common Stock [Member]

Class V Stock [Member]

Recapitalization Transaction [Member]

Additional Paid-in Capital [Member]

As previously reported

Additional Paid-in Capital [Member]

Recapitalization Transaction [Member]

Additional Paid-in Capital [Member]

Recapitalization Transaction [Member]

As previously reported

Member's Deficit [Member]

Recapitalization Transaction [Member]

Accumulated Deficit [Member]

As previously reported

Non- Controlling Interests [Member]

As previously reported

Non- Controlling Interests [Member]

Recapitalization Transaction [Member]

Non- Controlling Interests [Member]

Recapitalization Transaction [Member]

As previously reported

Balance at beginning of period at Dec. 31, 2019

$ (100,105)

$ (104,455)

$ 4,350

Contributions prior to recapitalization transaction

8,524

Balance at end of period at Dec. 31, 2020

(24,266)

^[1]

(24,248)

(18)

(115,847)

(120,179)

4,332

Contributions prior to recapitalization transaction

227

Distributions prior to recapitalization transaction

(2,711)

Balance at end of period, shares at Dec. 31, 2021

(33,077)

^[1]

(33,093)

303,307

126,178,932

Balance at end of period at Dec. 31, 2021

(151,408)

$ (151,408)

$ 2,716,871

$ 5,640,352

$ 13

$ 41,579

$ 49,075

(155,756)

$ 184,528

4,348

$ 4,348

$ 2,490,751

$ 5,406,736

Contributions prior to recapitalization transaction

Distributions prior to recapitalization transaction

(147)

Net loss prior to recapitalization transaction

(28,640)

Opening net assets of Lionheart II Holdings, LLC acquired

(21,786)

$ (21,786)

Adjustment for value of derivative on temporary equity

9,003

$ 9,003

1,550

8,177

13,836

20,463

(12,287)

(23,192)

23,164

62,681

109,037

(85,872)

(119,872)

(91,015)

Balance at end of period, shares at Jun. 30, 2022

(38,301)

(62,376)

(1,880)

(1,288)

(36,420)

(61,088)

2,642,042

126,178,932

Balance at end of period at Jun. 30, 2022

2,463,966

5,416,354

2,716,872

5,640,353

$ 13

127,099

187,578

41,579

49,075

(23,666)

(23,074)

2,360,520

5,251,837

2,490,751

5,406,736

Balance at beginning of period at Dec. 31, 2021

(151,408)

2,716,871

5,640,352

$ 13

41,579

49,075

(155,756)

184,528

4,348

2,490,751

5,406,736

Balance at beginning of period, shares at Dec. 31, 2021

303,307

126,178,932

Contributions prior to recapitalization transaction

Distributions prior to recapitalization transaction

(147)

Net loss prior to recapitalization transaction

(28,640)

Opening net assets of Lionheart II Holdings, LLC acquired

(21,786)

Adjustment for value of derivative on temporary equity

10,065

2,197

9,452

15,641

22,896

(13,444)

316,328

(28,153)

23,785

67,991

119,929

(96,144)

2,296,750

(230,123)

(225,428)

^[2]

(118,075)

Balance at end of period, shares at Sep. 30, 2022

(137,645)

(89,435)

(3,952)

(1,751)

(133,693)

(87,684)

2,916,385

125,948,809

Balance at end of period at Sep. 30, 2022

2,361,369

5,392,253

2,716,871

5,640,352

$ 13

135,276

201,965

41,579

49,075

(25,738)

(23,537)

2,251,818

5,213,812

2,490,751

5,406,736

Balance at beginning of period at Dec. 31, 2021

(151,408)

2,716,871

5,640,352

$ 13

41,579

49,075

(155,756)

184,528

4,348

2,490,751

5,406,736

Balance at beginning of period, shares at Dec. 31, 2021

303,307

126,178,932

Contributions prior to recapitalization transaction

Distributions prior to recapitalization transaction

(147)

Net loss prior to recapitalization transaction

(28,640)

$ (28,640)

Opening net assets of Lionheart II Holdings, LLC acquired

(21,786)

Adjustment for value of derivative on temporary equity

9,613

10,092

16,703

(6,611)

340,222

24,120

69,174

(45,054)

2,340,683

(259,752)

^[1]

(401,905)

Balance at end of period, shares at Dec. 31, 2022

(373,265)

(7,417)

(365,848)

2,984,212

303,307

125,919,180

126,178,932

Balance at end of period at Dec. 31, 2022

2,185,465

2,716,871

$ 13

137,069

41,579

184,528

(29,203)

2,077,586

2,490,751

Balance at beginning of period at Jun. 30, 2022

2,463,966

5,416,354

2,716,872

5,640,353

$ 13

127,099

187,578

41,579

49,075

(23,666)

(23,074)

2,360,520

5,251,837

2,490,751

5,406,736

Balance at beginning of period, shares at Jun. 30, 2022

2,642,042

126,178,932

Adjustment for value of derivative on temporary equity

1,062

648

1,805

(1,157)

28,247

(4,962)

5,310

(10,272)

246,096

(230,123)

(105,556)

(27,060)

Balance at end of period, shares at Sep. 30, 2022

(99,345)

(2,072)

(97,273)

2,916,385

125,948,809

Balance at end of period at Sep. 30, 2022

2,361,369

$ 5,392,253

2,716,871

$ 5,640,352

$ 13

135,276

201,965

41,579

$ 49,075

(25,738)

$ (23,537)

2,251,818

$ 5,213,812

2,490,751

$ 5,406,736

Balance at beginning of period at Dec. 31, 2022

2,185,465

$ 2,716,871

$ 13

137,069

$ 137,069

$ 41,579

$ 184,528

(29,203)

2,077,586

$ 2,490,751

Balance at beginning of period, shares at Dec. 31, 2022

2,984,212

303,307

125,919,180

126,178,932

219

388

(169)

9,523

67,170

$ 1

$ (1)

209,919

(142,749)

10,805,495

(1,654,535)

Balance at end of period, shares at Sep. 30, 2023

(609,192)

^[2]

(32,891)

(576,301)

13,799,230

124,264,645

Balance at end of period at Sep. 30, 2023

1,643,662

$ 1

$ 12

347,376

(62,094)

1,358,367

Balance at beginning of period at Jun. 30, 2023

1,803,485

$ 12

176,643

(42,339)

1,669,169

Balance at beginning of period, shares at Jun. 30, 2023

5,289,434

124,264,645

125

64,391

$ 1

170,731

(106,341)

8,509,671

Balance at end of period, shares at Sep. 30, 2023

(224,217)

(19,755)

(204,462)

13,799,230

124,264,645

Balance at end of period at Sep. 30, 2023

$ 1,643,662

$ 1

$ 12

$ 347,376

$ (62,094)

$ 1,358,367

[1]	Balances include related party transactions. See Note 14, Related Party, for further details.
[2]	Balances include related party transactions. See Note 13, Related Party Transactions, for further details.

Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail)

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2022

USD ($)

^[1]

Jun. 30, 2022

USD ($)

Jun. 30, 2022

USD ($)

Sep. 30, 2023

USD ($)

Sep. 30, 2022

USD ($)

Dec. 31, 2022

USD ($)

Segment

Dec. 31, 2021

USD ($)

Dec. 31, 2020

USD ($)

Impairment of long lived assets

$ 0

Equity Method Investments

$ 5,748,000

$ 3,971,000

$ 12,047,000

$ 498,000

^[1]

$ 17,795,000

^[1]

18,542,000

^[2]

14,500,000

^[2]

$ 13,632,000

^[2]

$ 0

Development costs capitalized useul life

5 years

Finite lived intangible assets useful lives

8 years

Number of operating segments | Segment

Specific Contract

$ 5,000,000

Maximum [Member]

Equity method ownership percentage for entities that track separate capital accounts

5.00%

Minimum [Member]

Equity method ownership percentage for entities that track separate capital accounts

3.00%

Minimum [Member] | Equity Method Investment Investee

Equity method investments ownership percentage

20.00%

Fair Value Inputs Level 2

Liabilities at fair value

Assets at fair value

$ 0

$ 0

ASU 2016-13 [Member]

Change in accounting principle, accounting standards update, adopted [true false]

true

Change in accounting principle, accounting standards update, adoption date

Jan. 01, 2023

Change in accounting principle, accounting standards update, immaterial effect [true false]

true

ASU 2016 -02 [Member]

Change in accounting principle, accounting standards update, adopted [true false]

true

Change in accounting principle, accounting standards update, immaterial effect [true false]

true

ASU 2019-12 [Member]

Change in accounting principle, accounting standards update, adopted [true false]

true

Change in accounting principle, accounting standards update, adoption date

Jan. 01, 2022

Change in accounting principle, accounting standards update, immaterial effect [true false]

true

ASU 2020-04 [Member]

Change in accounting principle, accounting standards update, adopted [true false]

true

Change in accounting principle, accounting standards update, adoption date

Jan. 01, 2022

Change in accounting principle, accounting standards update, immaterial effect [true false]

true

ASU 2020-06 [Member]

Change in accounting principle, accounting standards update, adopted [true false]

true

Change in accounting principle, accounting standards update, adoption date

Jan. 01, 2022

Change in accounting principle, accounting standards update, immaterial effect [true false]

true

ASU 2022-03 [Member]

Change in accounting principle, accounting standards update, adopted [true false]

true

Change in accounting principle, accounting standards update, adoption date

Jun. 30, 2022

Change in accounting principle, accounting standards update, immaterial effect [true false]

false

Change in accounting principle, accounting standards update, early adoption [true false]

true

Up-C Unit Holders [Member] | Class A Common Stock [Member]

Non-controlling interests ownership percentage

99.76%

Class V Shareholders [Member] | Class A Common Stock [Member]

Non-controlling interests ownership percentage

90.01%

97.70%

[1]	For the three and nine months ended September 30, 2022, claims recovery service income included $0.0 million and $10.6 million, respectively, of claims recovery service income from VRM MSP. There was no claims recovery service income from VRM MSP for the three and nine months ended September 30, 2023. See Note 13, Related Party Transactions, for further details.
[2]	For the years ended December 31, 2022, 2021 and 2020, Claims recovery service income included $10.6 million, $11.5 million, and $13.1 million, respectively, of Claims recovery service income from VRM MSP. See Note 14, Related Party, for further details.

Property, Plant and Equipment, Net (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	$ 85	$ 103	$ 182	$ 254	$ 424	$ 343	$ 235

Income Tax

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Tax

Note 9. INCOME TAX

The Company holds an economic interest in MSP Recovery, LLC and consolidates its financial position and results. The remaining ownership of MSP Recovery, LLC not held by the Company is considered a noncontrolling interest. MSP Recovery, LLC is treated as a partnership for income tax reporting and its members, including the Company, are liable for federal, state, and local income taxes based on their share of the LLC’s taxable income.

There was no provision for income tax for the years ended December 31, 2022, 2021, and 2020.

A reconciliation of the United States statutory income tax rate to the Company’s effective tax rate for the year ended December 31, 2022, 2021, and 2020 is as follows for the years indicated:


	December 31, 2022			December 31, 2021			December 31, 2020
Federal Statutory rate		21.00	%		21	%		21	%
Noncontrolling interests/effect of pass-through entities		-20.70	%		-21	%		-21	%
Valuation allowance		-0.40	%		0	%		0	%
Other		0.10	%		0	%		0	%
Effective Income tax rate		0.00	%		0	%		0	%

Details of the Company’s deferred tax assets and liabilities at December 31, 2022 and 2021 are as follows for the years indicated:


	December 31, 2022		December 31, 2021
Deferred tax assets
Net operating loss carryforward	$	423		53
Investment in MSP Recovery, LLC		38,263		—
Start-up Costs		917		804
Transaction Costs		3,224		—
Total deferred tax assets		42,827		857
Valuation Allowance		-42,827		-857
Total Deferred tax assets (liability)	$	—		—

The Company has a deferred tax asset for the difference between the financial reporting and the tax basis of its investment in MSP Recovery, LLC. The deferred tax asset above does not consider the iterative impact of the TRA liability as the entire liability has not been recorded as of December 31, 2022.

As of December 31, 2022 and 2021, the Company had $3,854,829 and $446,481 of U.S. gross federal and state net operating loss carryovers available to offset future taxable income, respectively.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.

As of December 31, 2022 and 2021, the Company has not recorded any unrecognized tax benefits. The Company files income tax returns in the U.S. federal jurisdiction and Florida which remain open and subject to examination by the various taxing authorities. As of December 31, 2022, the Company’s federal and state and local income tax years 2019 through 2022 remain open and are subject to examination.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Publisher FASB
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-Name Accounting Standards Codification
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Principles of Consolidation

Intangible Assets, Net - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Jul. 31, 2023
Intangible Assets, Net [Line Items]
Impairment of long lived assets			$ 0	$ 0	$ 0	$ 0	$ 0
Claims Cost Recovery Rights [Member]
Intangible Assets, Net [Line Items]
Purchase of Intangible assets			286,929,000
Intangible Assets, net	$ 3,253,707,000		3,253,707,000		3,363,156,000	84,218,000
Amortization expense	121,000,000	$ 111,900,000	$ 355,481,000	$ 153,600,000	$ 266,900,000	$ 164,000	$ 125,000
Claims Cost Recovery Rights [Member] \| Series MRCS LLC [Member]
Intangible Assets, Net [Line Items]
Finite life intangible assets acquired useful life			8 years		8 years
Additional purchase of intangible assets			$ 286,900,000		$ 64,800,000
Payment of cash for assets purchase			600,000		2,700,000
Minimum required Issuance value within one year to avoid additional cash or equity payments					10,000,000
Difference between fair value and issuance value of shares					8,700,000
Issuance value of shares					10,000,000
Claims Cost Recovery Rights [Member] \| Series MRCS LLC [Member] \| Class A Common Stock [Member]
Intangible Assets, Net [Line Items]
Issuance of stock value for purchase of assets					11,000,000			$ 800,000
Business Combination, Other Current Liabilities					$ 51,200,000
Claims Cost Recovery Rights [Member] \| Hazel Transactions [Member]
Intangible Assets, Net [Line Items]
Intangible Assets, net	$ 285,500,000		$ 285,500,000

Basis of Presentaton and Summary of Significant Accounting Policies (Policies)

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of presentation

All intercompany transactions and balances are eliminated from the Financial Statements.

Basis of presentation

Principles of consolidation

Correction of Previously Reported Interim Condensed Consolidated Quarterly Financial Statement

Description of Restatement of Financial Information


	For the reporting period
	September 30, 2022
	As previously			Restatement
(In thousands except per share amounts)	reported			Adjustments			As Restated
ASSETS
Current assets:
Accounts receivable	$	7,525		$	138		$	7,663
Indemnification asset		752,510			(752,510	)		—
Total current assets		820,157			(752,372	)		67,785
Deferred tax asset		857			(857	)		—
Intangible assets, net		2,077,571			1,395,955			3,473,526
Investment in rights to claim recovery cash flows		3,673,610			(3,673,610	)		—
Total assets	$	6,574,675		$	(3,030,884	)	$	3,543,791

Stockholders’ Equity (Deficit):
Additional paid-in capital	$	201,965		$	(66,689	)	$	135,276
Accumulated deficit		(23,537	)		(2,201	)		(25,738	)
Total Stockholders’ Equity (Deficit)	$	178,441		$	(68,890	)	$	109,551
Non-controlling interest		5,213,812			(2,961,994	)		2,251,818
Total equity	$	5,392,253		$	(3,030,884	)	$	2,361,369
Total liabilities and equity	$	6,574,675		$	(3,030,884	)	$	3,543,791


	For the three months ended September 30, 2022									For the nine months ended September 30, 2022
(In thousands except per share amounts)	As Reported			Restatement Adjustments			As Restated			As Reported			Restatement Adjustments			As Restated
Claims recovery income	$	2,571			188		$	2,759		$	3,999		$	226		$	4,225
Total Claims Recovery	$	8,319		$	188		$	8,507		$	21,794		$	226		$	22,020
Operating expenses
Cost of claim recoveries		1,160			38			1,198			1,861			45			1,906
Claims amortization expense		66,331			45,520			111,851			92,866			60,694			153,560
Professional fees		5,875			29			5,904			10,931			42			10,973
Total operating expenses		88,104			45,587			133,691			157,212			60,781			217,993
Operating Loss	$	(79,785	)	$	(45,399	)	$	(125,184	)	$	(135,418	)	$	(60,555	)	$	(195,973	)
Interest expense		(13,083	)		(33,097	)		(46,180	)		(34,475	)		(46,472	)		(80,947	)
Net loss before provision for income taxes	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,401	)	$	(107,027	)	$	(225,428	)
Provision for income tax benefit (expense)		-			-			-			326			(326	)		-
Net loss	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,075	)	$	(107,353	)	$	(225,428	)
Less: Net (income) loss attributable to non-controlling members		26,597			76,887			103,484			116,324			105,152			221,476
Net loss attributable to controlling members	$	(463	)	$	(1,609	)	$	(2,072	)	$	(1,751	)	$	(2,201	)	$	(3,952	)

Basic and diluted weighted average shares outstanding, Class A Common Stock		2,761,476		N/A				2,761,476			2,125,539		N/A				2,125,539
Basic and diluted net income per share, Class A Common Stock	$	(0.17	)	N/A			$	(0.75	)	$	(0.82	)	N/A			$	(1.86	)


	For the nine months ended September 30, 2022
(In thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(118,075	)	$	(107,353	)	$	(225,428	)
Claims amortization expense		92,866			60,694			153,560
Paid in kind interest		34,475			46,472			80,947
Deferred income taxes		(857	)		326			(531	)
Accounts receivable		(7,525	)		(139	)		(7,664	)
Net cash used in operating activities	$	(70,764	)	$	—		$	(70,764	)
Net cash used in investing activities	$	(4,563	)	$	—		$	(4,563	)
Net cash provided by financing activities	$	99,351		$	—		$	99,351


	For the reporting period September 30, 2022
	As Previously Reported											Restatement Adjustments												As Restated
(In thousands except shares)	Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital			Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity
Balance at December 31, 2021	$	—	$	—		$	4,348		$	(151,408	)													$	—	$	—		$	4,348		$	(151,408	)
Contributions prior to recapitalization transaction		—		—			—			15															—		—			—			15
Distributions prior to recapitalization transaction		—		—			—			(147	)														—		—			—			(147	)
Net loss prior to recapitalization transaction		—		—			—			(28,640	)														—		—			—			(28,640	)
Cumulative effect of recapitalization transaction		49,075		—			5,406,736			5,640,352			(7,496	)					(2,915,985	)		(2,923,481	)		41,579		—			2,490,751			2,716,871
Opening net assets of Lionheart II Holdings, LLC acquired		—		(21,786	)		—			(21,786	)														—		(21,786	)		—			(21,786	)
Adjustment for value of derivative on temporary equity		10,065		—			—			10,065															10,065		—			—			10,065
Conversion of Warrants		22,896		—			(13,444	)		9,452			(7,255	)								(7,255	)		15,641		—			(13,444	)		2,197
Class A Issuances		119,929		—			(96,144	)		23,785			(51,938	)								(51,938	)		67,991		—			(96,144	)		(28,153	)
Net loss		—		(1,751	)		(87,684	)		(89,435	)					(2,201	)		(46,009	)		(48,210	)		—		(3,952	)		(133,693	)		(137,645	)
Balance at September 30, 2022	$	201,965	$	(23,537	)	$	5,213,812		$	5,392,253		$	(66,689	)	$	(2,201	)	$	(2,961,994	)	$	(3,030,884	)	$	135,276	$	(25,738	)	$	2,251,818		$	2,361,369

Estimates and Assumptions

Segments

Concentration of credit risk and Off-Balance Sheet Risk

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Restricted Cash consists of cash held in escrow related to the Prepaid Forward Agreement with CF. See Note 17, Derivative Liability, for more information on the Prepaid Forward Agreement.

Fair Value Measurements

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Outstanding borrowings that qualify as financial instruments are carried at cost, which approximates their fair value as of December 31, 2022 and December 31, 2021.

Equity Method Investments

Property, Plant and Equipment

The Company provides for depreciation and amortization on property and equipment using the straight-line method to allocate the cost of depreciable assets over their estimated lives as follows:


Office and Computer Equipment	3 years
Furniture and Fixtures	3 years
Leasehold Improvement	Lesser of lease term or estimated life

Internal Use Software

Intangible assets

The Company amortizes capitalized costs associated with CCRAs over 8 years, based on the typical expected timing to pursue recovery through litigation, including through potential appeals.

Leases

Non-controlling Interests

Impairment of Long-Lived Assets

Claims Recovery Service Income

In connection with the Hazel transactions discussed in Note 4, Asset Acquisitions, the Company terminated its service agreement with MSP Recovery RH Series 01, an affiliate of Hazel.

Claims Recovery

Claims recovery income

When the Company becomes entitled to recovery proceeds from the settlement of a Claim recovery pursuit or proceeding, it recognizes the amount in accounts receivable.

Claims recovery service income, ASC 606, Revenue from Contracts with Customers

The Company applies ASC 606 utilizing the following allowable exemptions or practical expedients:

•

Exemption to not disclose the unfulfilled performance obligation balance for contracts with an original length of one year or less.

•

Election to present revenue net of sales taxes and other similar taxes, if any.

•

Transfers of Claims Cost Recovery Rights to Others

Cost of Claims Recoveries

Comprehensive Income (Loss)

Income Taxes

The Company has no components of other comprehensive income (loss). As such, net loss equates to comprehensive income (loss) for all periods presented in this report.

Recent Accounting Pronouncements

New Accounting Pronouncements Recently Adopted

Recent Accounting Pronouncements

New Accounting Pronouncements Recently Adopted

New Accounting Pronouncements Issued but Not Yet Adopted

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses. In 2016 and subsequently, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments including subsequent amendments to the initial guidance: ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825. Financial Instruments, ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief, ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. ASU 326, and ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures and related amendments require credit losses on financial instruments measured at amortized cost basis to be presented at the net amount expected to be collected, replacing the current incurred loss approach with an expected loss methodology that is referred to as CECL. This ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. While the Company does not anticipate the implementation would have a material effect on the Company’s consolidated operating results, cash flows, financial condition and related disclosures, the Company is currently evaluating the effect that implementation of this standard will have.

Description of Business - Additional Information (Detail1)			1 Months Ended	6 Months Ended	9 Months Ended		12 Months Ended
	Oct. 12, 2023	Jun. 30, 2022 USD ($)	Nov. 14, 2023 USD ($)	Jun. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) $ / shares	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 29, 2023 USD ($)	Oct. 12, 2022 $ / shares	May 17, 2022	Sep. 27, 2021 USD ($)
Nature Of Operations [Line Items]
Warrants to purchase exercise price per share \| $ / shares					$ 0.0025		$ 0.0025
Unrestricted cash and cash equivalents					$ 6,659,000		$ 3,661,000	$ 1,664,000
Accumulated deficit		$ (23,666,000)		$ (23,666,000)	(62,094,000)	$ (25,738,000)	(29,203,000)
Anticipated savings in operating expenses over next twelve months							21,500,000
Cash in operations				(60,912,000)	(31,533,000)	$ (70,764,000)	(80,635,000)	$ 2,249,000	$ (14,000)
Life Wallet LLC [Member]
Nature Of Operations [Line Items]
Activity and expenses incurred on investments					3,700,000
Working Capital Credit Agreement [Member]
Nature Of Operations [Line Items]
Line of credit facility, maximum borrowing capacity										$ 48,000,000
Cano Health, LLC [Member]
Nature Of Operations [Line Items]
Aggregate principal amount					$ 5,000,000
Investment Capacity Agreement [Member] \| Virage Capital Management LP [Member]
Nature Of Operations [Line Items]
Maximum amount of paid amount purchasable pursuant to Agreement													$ 3,000,000
Percentage of recoveries payable to assignor													50.00%
Percentage of recoveries from the assignor													50.00%
Common Stock Purchase Agreement [Member] \| Cantor Fitzgerald [Member]
Nature Of Operations [Line Items]
Percentage of volume of weighted average price of common stock to sell under purchase agreement												98.00%
Standby Equity Purchase Agreement [Member] \| YA II PN, Ltd
Nature Of Operations [Line Items]
Aggregate principal amount			$ 15,000,000
Standby Equity Purchase Agreement [Member] \| YA II PN, Ltd \| Convertible Debt [Member]
Nature Of Operations [Line Items]
Payment of advance for shares of common stock in event of termination			250,000,000
Aggregate principal amount			$ 15,000,000
Interest rate			5.00%
Standby Equity Purchase Agreement [Member] \| YA II PN, Ltd \| Tranche One [Member] \| Convertible Debt [Member]
Nature Of Operations [Line Items]
Aggregate principal amount			$ 5,000,000
Standby Equity Purchase Agreement [Member] \| YA II PN, Ltd \| Tranche Two [Member] \| Convertible Debt [Member]
Nature Of Operations [Line Items]
Aggregate principal amount			5,000,000
Standby Equity Purchase Agreement [Member] \| YA II PN, Ltd \| Tranche Three [Member] \| Convertible Debt [Member]
Nature Of Operations [Line Items]
Aggregate principal amount			$ 5,000,000
Advertising Costs Commitment [Member] \| Life Wallet LLC [Member]
Nature Of Operations [Line Items]
Contractual agreements within next 12 months							$ 5,500,000
Agreements [Member] \| Prudent Group [Member]
Nature Of Operations [Line Items]
Maximum monetize amount of net recovery interest in claim demand		$ 250,000,000		$ 250,000,000
Percentage of amount paid on claim		90.00%
Subsequent Event [Member]
Nature Of Operations [Line Items]
Reverse stock split ratio	0.04
Reverse stock split description	Reverse Split, every 25 shares of the Company’s old common stock were converted into one share of the Company’s new common stock.
Subsequent Event [Member] \| Standby Equity Purchase Agreement [Member] \| YA II PN, Ltd \| Convertible Debt [Member]
Nature Of Operations [Line Items]
Percentage of purchase price for the Pre-Paid Advance			95.00%
Percentage of aggregate purchase price of shares			50.00%
Percentage of payment of aggregate purchase price of shares			50.00%
Increase Decrease interest percentage			18.00%
Percentage of VWAP of shares during Prior Date			120.00%
VWAP five consecutive trading days			95.00%
Closing price the trading day			20.00%
Outstanding shares of the common stock			9.99%
Seventh trading day after the Trigger			$ 1,500,000
Premium and accrued and unpaid interest			5.00%
Aggregate number of shares of common stock issued and outstanding as of the effective date			19.99%
Exchange Cap or the amount of shares of common stock			9.99%
Warrants [Member] \| Claims Proceeds Investment Agreement [Member]
Nature Of Operations [Line Items]
Warrants to purchase exercise price per share \| $ / shares											$ 30
Common Class A [Member]
Nature Of Operations [Line Items]
Warrants to purchase exercise price per share \| $ / shares					$ 287.5		$ 287.5

Quarterly Financial Data (Unaudited) Restatement of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2022

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited) Restatement of Previously Issued Financial Statements

Note 18. QUARTERLY FINANCIAL DATA (UNAUDITED) RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Description of Restatement of Financial Information

Subsequent to the issuance of the interim financial information as of and for the periods ended June 30, 2022 and September 30, 2022, management identified material errors in such financial information. As disclosed within Note 4, Asset Acquisitions, the Company acquired various intangible assets in connection with the Business Combination. The Company identified an error in the accounting for these acquisitions, in that the Class A market price as of the Closing Date utilized in the valuation included the value of the New Warrants, whereas the Up-C Units provided in the acquisition did not have rights to New Warrants. Therefore, the Class A market price didn’t equate to the value of the Up-C Units until the opening of the day after the Closing Date when the New Warrants became detached from the Class A shares. This error impacts the intangible assets value that was acquired as of the Closing Date and the resulting amortization of those assets.

As a result of these errors, the Company determined that the valuation of the asset acquisitions and impacts of consolidating the Series were misstated in the Company’s financial statements for the periods ending June 30 and September 30, 2022. In the following tables, the Company has presented a reconciliation of its unaudited condensed consolidated financial information as originally reported, to the as restated amounts as of and for the three and six months ended June 30, 2022, and the three and nine months ended September 30, 2022. The restatements will be reflected in the comparative financial statements included in our future filings of our 2023 unaudited condensed consolidated financial statements within our Quarterly Reports on Form 10-Q.

The table below sets forth the unaudited condensed consolidated balance sheet information, including the balances as reported, adjustments and the balances as restated:


	For the reporting period
(In thousands except per share amounts)	June 30, 2022
	As previously			Restatement
	reported			Adjustments			As Restated
ASSETS
Current assets:
Accounts receivable	$	901			17		$	918
Indemnification asset		719,413			(719,413	)		—
Total current assets		795,780			(719,396	)		76,384
Deferred tax asset		857			(857	)		—
Intangible assets, net		2,095,735			1,441,475			3,537,210
Investment in rights to claim recovery cash flows		3,673,610			(3,673,610	)		—
Total assets	$	6,566,932		$	(2,952,388	)	$	3,614,544

Stockholders’ Equity (Deficit):
Additional paid-in capital	$	187,578			(60,479	)	$	127,099
Accumulated deficit		(23,074	)		(592	)		(23,666	)
Total Stockholders’ Equity (Deficit)	$	164,517		$	(61,071	)	$	103,446
Non-controlling interest		5,251,837			(2,891,317	)		2,360,520
Total equity	$	5,416,354		$	(2,952,388	)	$	2,463,966
Total liabilities and equity	$	6,566,932		$	(2,952,388	)	$	3,614,544


	For the reporting period
	September 30, 2022
	As previously			Restatement
(In thousands except per share amounts)	reported			Adjustments			As Restated
ASSETS
Current assets:
Accounts receivable	$	7,525			138		$	7,663
Indemnification asset		752,510			(752,510	)		—
Total current assets		820,157			(752,372	)		67,785
Deferred tax asset		857			(857	)		—
Intangible assets, net		2,077,571			1,395,955			3,473,526
Investment in rights to claim recovery cash flows		3,673,610			(3,673,610	)		—
Total assets	$	6,574,675		$	(3,030,884	)		3,543,791

Stockholders’ Equity (Deficit):
Additional paid-in capital	$	201,965			(66,689	)	$	135,276
Accumulated deficit		(23,537	)		(2,201	)		(25,738	)
Total Stockholders’ Equity (Deficit)	$	178,441		$	(68,890	)		109,551
Non-controlling interest		5,213,812			(2,961,994	)		2,251,818
Total equity	$	5,392,253		$	(3,030,884	)		2,361,369
Total liabilities and equity	$	6,574,675		$	(3,030,884	)		3,543,791

The tables below set forth the unaudited condensed consolidated statements of operations, including the balances as reported, adjustments and the as restated balances:


	For the three months ended June 30, 2022									For the six months ended June 30, 2022
(In thousands except per share amounts)	As Reported			Restatement Adjustments			As Restated			As Reported			Restatement Adjustments			As Restated
Claims recovery income	$	1,319			38		$	1,357		$	1,428			38		$	1,466
Claims recovery service income		3,971			—			3,971			12,047			—			12,047
Total Claims Recovery	$	5,290		$	38		$	5,328		$	13,475		$	38		$	13,513
Operating expenses
Cost of claim recoveries		694			8			702			701			8			709
Claims amortization expense		23,818			15,173			38,991			26,535			15,173			41,708
Professional fees		3,118			13			3,131			5,056			13			5,069
Total operating expenses		57,449			15,194			72,643			69,108			15,194			84,302
Operating Loss	$	(52,159	)	$	(15,156	)	$	(67,315	)	$	(55,633	)	$	(15,156	)	$	(70,789	)
Interest expense		(10,977	)		(13,375	)		(24,352	)		(21,392	)		(13,375	)		(34,767	)
Net loss before provision for income taxes	$	(77,450	)	$	(28,531	)	$	(105,981	)	$	(91,341	)	$	(28,531	)	$	(119,872	)
Provision for income tax benefit (expense)		326			(326	)		—			326			(326	)		—
Net loss	$	(77,124	)	$	(28,857	)	$	(105,981	)	$	(91,015	)	$	(28,857	)	$	(119,872	)
Less: Net (income) loss attributable to non-controlling members		75,836			28,265			104,101			89,727			28,265			117,992
Net loss attributable to controlling members	$	(1,288	)	$	(592	)	$	(1,880	)	$	(1,288	)	$	(592	)	$	(1,880	)

Basic and diluted weighted average shares outstanding, Class A Common Stock		544,291		N/A				544,291			544,291		N/A				544,291
Basic and diluted net income per share, Class A Common Stock	$	(2.37	)	N/A			$	(3.45	)	$	(2.37	)	N/A			$	(3.45	)


	For the three months ended September 30, 2022									For the nine months ended September 30, 2022
(In thousands except per share amounts)	As Reported			Restatement Adjustments			As Restated			As Reported			Restatement Adjustments			As Restated
Claims recovery income	$	2,571			188		$	2,759		$	3,999		$	226		$	4,225
Total Claims Recovery	$	8,319		$	188		$	8,507		$	21,794		$	226		$	22,020
Operating expenses
Cost of claim recoveries		1,160			38			1,198			1,861			45			1,906
Claims amortization expense		66,331			45,520			111,851			92,866			60,694			153,560
Professional fees		5,875			29			5,904			10,931			42			10,973
Total operating expenses		88,104			45,587			133,691			157,212			60,781			217,993
Operating Loss	$	(79,785	)	$	(45,399	)	$	(125,184	)	$	(135,418	)	$	(60,555	)	$	(195,973	)
Interest expense		(13,083	)		(33,097	)		(46,180	)		(34,475	)		(46,472	)		(80,947	)
Net loss before provision for income taxes	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,401	)	$	(107,027	)	$	(225,428	)
Provision for income tax benefit (expense)		—			—			—			326			(326	)		—
Net loss	$	(27,060	)	$	(78,496	)	$	(105,556	)	$	(118,075	)	$	(107,353	)	$	(225,428	)
Less: Net (income) loss attributable to non-controlling members		26,597			76,887			103,484			116,324			105,152			221,476
Net loss attributable to controlling members	$	(463	)	$	(1,609	)	$	(2,072	)	$	(1,751	)	$	(2,201	)	$	(3,952	)

Basic and diluted weighted average shares outstanding, Class A Common Stock		2,761,476			—			2,761,476			2,125,539			—			2,125,539
Basic and diluted net income per share, Class A Common Stock	$	(0.17	)	$	(0.58	)	$	(0.75	)	$	(0.82	)	$	(1.04	)	$	(1.86	)


	For the six months ended June 30, 2022
(In thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(91,015	)	$	(28,857	)	$	(119,872	)
Claims amortization expense		26,535			15,173			41,708
Paid in kind interest		21,369			13,375			34,744
Deferred income taxes		(857	)		326			(531	)
Change in operating assets and liabilities:
Accounts receivable		(901	)		(17	)		(918	)
Net cash used in operating activities		(60,912	)		—			(60,912	)
Net cash used in investing activities		(3,015	)		—			(3,015	)
Net cash provided by (used in) financing activities		98,728			—			98,728


	For the nine months ended September 30, 2022
(In thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(118,075	)	$	(107,353	)	$	(225,428	)
Claims amortization expense		92,866			60,694		$	153,560
Paid in kind interest		34,475			46,472		$	80,947
Deferred income taxes		(857	)		326		$	(531	)
Accounts receivable		(7,525	)		(139	)	$	(7,664	)
Net cash used in operating activities		(70,764	)		—			(70,764	)
Net cash used in investing activities		(4,563	)		—			(4,563	)
Net cash provided by (used in) financing activities		99,351			—			99,351


	For the reporting period June 30, 2022
	As Previously Reported											Restatement Adjustments												As Restated
(In thousands except shares)	Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital			Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity
Balance at December 31, 2021	$	—	$	—		$	4,348		$	(151,408	)													$	—	$	—		$	4,348		$	(151,408	)
Contributions prior to recapitalization transaction		—		—			—			15															—		—			—			15
Distributions prior to recapitalization transaction		—		—			—			(147	)														—		—			—			(147	)
Net loss prior to recapitalization transaction		—		—			—			(28,640	)														—		—			—			(28,640	)
Cumulative effect of recapitalization transaction		49,075		—			5,406,736			5,640,353			(7,496	)					(2,915,985	)		(2,923,481	)		41,579		—			2,490,751			2,716,872
Opening net assets of Lionheart II Holdings, LLC acquired		—		(21,786	)		—			(21,786	)														—		(21,786	)		—			(21,786	)
Adjustment for value of derivative on temporary equity		9,003		—			—			9,003															9,003		—			—			9,003
Conversion of Warrants		20,463		—			(12,287	)		8,177			(6,627	)								(6,627	)		13,836		—			(12,287	)		1,550
Class A Issuances		109,037		—			(85,872	)		23,164			(46,356	)								(46,356	)		62,681		—			(85,872	)		(23,192	)
Net loss		—		(1,288	)		(61,088	)		(62,376	)					(592	)		24,668			24,075			—		(1,880	)		(36,420	)		(38,301	)
Balance at June 30, 2022	$	187,578	$	(23,074	)	$	5,251,837		$	5,416,354		$	(60,479	)	$	(592	)	$	(2,891,317	)	$	(2,952,388	)	$	127,099	$	(23,666	)	$	2,360,520		$	2,463,966


	For the reporting period September 30, 2022
	As Previously Reported											Restatement Adjustments												As Restated
(In thousands except shares)	Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital			Accumulated Deficit			Non- Controlling Interests			Total Equity			Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interests			Total Equity
Balance at December 31, 2021	$	—	$	—		$	4,348		$	(151,408	)													$	—	$	—		$	4,348		$	(151,408	)
Contributions prior to recapitalization transaction		—		—			—			15															—		—			—			15
Distributions prior to recapitalization transaction		—		—			—			(147	)														—		—			—			(147	)
Net loss prior to recapitalization transaction		—		—			—			(28,640	)														—		—			—			(28,640	)
Cumulative effect of recapitalization transaction		49,075		—			5,406,736			5,640,352			(7,496	)					(2,915,985	)		(2,923,481	)		41,579		—			2,490,751			2,716,871
Opening net assets of Lionheart II Holdings, LLC acquired		—		(21,786	)		—			(21,786	)														—		(21,786	)		—			(21,786	)
Adjustment for value of derivative on temporary equity		10,065		—			—			10,065															10,065		—			—			10,065
Conversion of Warrants		22,896		—			(13,444	)		9,452			(7,255	)								(7,255	)		15,641		—			(13,444	)		2,197
Class A Issuances		119,929		—			(96,144	)		23,785			(51,938	)								(51,938	)		67,991		—			(96,144	)		(28,153	)
Net loss		—		(1,751	)		(87,684	)		(89,435	)					(2,201	)		(46,009	)		(48,210	)		—		(3,952	)		(133,693	)		(137,645	)
Balance at September 30, 2022	$	201,965	$	(23,537	)	$	5,213,812		$	5,392,253		$	(66,689	)	$	(2,201	)	$	(2,961,994	)	$	(3,030,884	)	$	135,276	$	(25,738	)	$	2,251,818		$	2,361,369

Income Tax - Additional Information (Details) - USD ($)	12 Months Ended
Income Tax - Additional Information (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating Loss Carryforwards [Line Items]
Provision for income tax benefit (expense)	$ 0	$ 0	$ 0
Unrecognized tax benefits	$ 0	0
Income tax examination, description	As of December 31, 2022, the Company’s federal and state and local income tax years 2019 through 2022 remain open and are subject to examination.
Federal [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryovers	$ 3,854,829	3,854,829
Open tax year	2019
State [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryovers	$ 446,481	$ 446,481
Open tax year	2022

Claims Financing Obligations and Notes Payable [Line Items]

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Claims Financing Obligations and Notes Payable - Additional Information (Detail)

9 Months Ended

12 Months Ended

Jan. 01, 2024

USD ($)

Nov. 13, 2023

USD ($)

Sep. 30, 2023

USD ($)

$ / shares

Jul. 27, 2023

USD ($)

Jul. 07, 2023

USD ($)

Apr. 12, 2023

USD ($)

Mar. 29, 2023

USD ($)

Mar. 06, 2023

USD ($)

Sep. 30, 2023

USD ($)

Installment

$ / shares

Sep. 30, 2022

USD ($)

$ / shares

Dec. 31, 2022

USD ($)

$ / shares

Dec. 31, 2021

USD ($)

Dec. 31, 2020

USD ($)

Dec. 31, 2015

USD ($)

$ / shares

Claims financing obligation and notes payable

$ 0.0025

Fair value of warrants

$ 0

$ (4,406,000)

$ 1,619,000

$ 2,870,000

$ 513,450,000

^[1]

$ 513,450,000

^[1]

198,489,000

^[1],[2]

$ 106,805,000

^[2]

Gain on debt extinguishment

$ 63,367,000

Number of installments | Installment

Amended and Restated Nomura Promissory Note [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Interest rate

16.00%

Debt description

The Amended and Restated Nomura Promissory 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 November 13, 2023. Upon two days prior written notice to Nomura, the Company may prepay all or any portion of the then outstanding principal amount under the Amended and Restated Nomura Promissory Note together with all accrued and unpaid interest thereon.

$ 26,300,000

Hazel Transactions [Member]

Sep. 30, 2024

Claims Financing Obligations and Notes Payable [Line Items]

Purchase money loan

$ 250,000,000

Credit facility, agreement date

Mar. 29, 2023

Purchase Money Loan accrues interest

20.00%

Hazel Transactions [Member] | Term Loan A [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Proceeds from loan

$ 10,000,000

Disbursed loan amount

$ 5,000,000

Hazel Transactions [Member] | Purchase Money Loan [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Amended and Restated Credit Agreement [Member] | Hazel Transactions [Member]

Mar. 31, 2026

Claims Financing Obligations and Notes Payable [Line Items]

Credit facility, agreement date

Mar. 29, 2023

Credit Agreement [Member] | Hazel Transactions [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Line of credit facility, Maximum borrowing capacity

$ 80,000,000

Debt instrument, frequency of periodic payment

$ 2,250,000

Debt instrument, frequency of periodic payment

per month

Debt instrument original issue discount

40.00%

Credit Agreement [Member] | Hazel Transactions [Member] | Term Loan A [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Line of credit facility, Maximum borrowing capacity

$ 5,500,000

$ 30,000,000

Proceeds from credit facility

$ 5,500,000

Terminated funding, value

20,500,000

$ 20,500,000

Credit Agreement [Member] | Hazel Transactions [Member] | Term Loan B [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Line of credit facility, Maximum borrowing capacity

$ 27,500,000

$ 18,000,000

Proceeds from credit facility

$ 4,500,000

Credit Agreement [Member] | Hazel Transactions [Member] | Scenario Forecast [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Debt instrument, frequency of periodic payment

$ 1,750,000

Working Capital Credit Facility [Member] | Hazel Transactions [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Interest period, plus an applicable margin

10.00%

Subsequent Event [Member] | Amended and Restated Nomura Promissory Note [Member]

Mar. 31, 2026

Claims Financing Obligations and Notes Payable [Line Items]

$ 28,900,000

Subsequent Event [Member] | Credit Agreement [Member] | Hazel Transactions [Member] | Term Loan B [Member]

Dec. 31, 2024

Claims Financing Obligations and Notes Payable [Line Items]

Proceeds from credit facility

$ 4,500,000

Common Class A [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Maximum amount of common shares to be purchased | shares

5,500,000,000

Common stock issued

$ 1,000

Common stock par or stated value per share | $ / shares

$ 0.0001

Claims Financing Obligations and Notes Payable [Line Items]

287.5

$ 287.5

Fair value of warrants

$ 2,900,000

Warrant [Member]

Price of common stock | $ / shares

$ 30

80,000,000

Option to repurchase of warrants

80,000,000

Maximum [Member] | Hazel Transactions [Member] | Purchase Money Loan [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Debt instrument extended maturity year

1 year

Maximum [Member] | Subsequent Event [Member] | Second Amended and Restated First Lien Credit Agreement [Member] | Term Loan B [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Debt Instrument, Collateral Amount

$ 14,000,000

PPP Loan [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Claims Financing Obligation and Notes Payable [Member] | Warrant [Member]

$ 1,100,000

Claims Financing Obligations and Notes Payable [Line Items]

Warrant and rights outstanding

$ 80,000,000

Financing Obligations and Notes Payable Agreements [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Line of credit facility, Maximum borrowing capacity

$ 529,200,000

198,500,000

Weighted average interest rate

14.50%

Line of credit facility, Current borrowing capacity

$ 529,200,000

Financing Obligations and Notes Payable Agreements [Member] | Minimum [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Line of credit facility, Interest rate during period

2.00%

Financing Obligations and Notes Payable Agreements [Member] | Maximum [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Line of credit facility, Interest rate during period

20.00%

Minimum Required Payment [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Repayments of lines of credit

$ 678,100,000

354,900,000

Claims Proceeds Investment Agreement [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Shares pledged under agreement | shares

2,000,000

Line of credit facility, Maximum borrowing capacity

201,300,000

201,400,000

Interest expense, Debt

$ 2,800,000

$ 94,500,000

Weighted average interest rate

6.30%

Line of credit facility, Current borrowing capacity

$ 201,300,000

Claims Proceeds Investment Agreement [Member] | Common Class A [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Maximum amount of common shares to be purchased | shares

2,666,667

Common stock issued

$ 6,666.67

Common stock par or stated value per share | $ / shares

$ 0.0025

Claims Proceeds Investment Agreement [Member] | Warrant [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Percentage of shares obtained through warrant

$ 30

15.00%

Warrant and rights outstanding

$ 80,000,000

Interest on principal amount of agreement

10.00%

Claims Proceeds Investment Agreement [Member] | Minimum [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Line of credit facility, Interest rate during period

2.00%

Claims Proceeds Investment Agreement [Member] | Maximum [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Line of credit facility, Interest rate during period

11.04%

Brickell Key Investment Amendment [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Shares pledged under agreement | shares

50,000,000

Brickell Key Investment Amendment [Member] | Common Class A [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Maximum amount of common shares to be purchased | shares

2,666,667

Common stock issued

$ 6,666.67

Common stock par or stated value per share | $ / shares

$ 0.0025

Brickell Key Investment Amendment [Member] | Warrant [Member]

Claims Financing Obligations and Notes Payable [Line Items]

Warrant and rights outstanding

$ 30

$ 80,000,000

[1]

As of September 30, 2023 and December 31, 2022, the total affiliate receivable, affiliate payable, guaranty obligation and loan from related parties balances are with related parties. In addition, the prepaid expenses and other current assets, claims financing obligation and notes payable, and interest payable includes balances with related parties. See Note 13, Related Party Transactions, for further details.

[2]

As of December 31, 2022 and 2021, the total affiliate receivable, affiliate payable, guaranty obligation and loan from related parties balances are with related parties. In addition, the prepaid expenses and other current assets, Claims financing obligation and notes payable and interest payable includes balances with related parties. See Note 14, Related Party, for further details.

Commitments and Contingencies

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 12. COMMITMENTS AND CONTINGENCIES

The Company is subject to certain legal proceedings, claims, investigations, and administrative proceedings in the ordinary course of its business. The Company records a provision for a liability when it is both probable that the liability has been incurred and the amount of the liability can be reasonably estimated. These provisions, if any, are reviewed and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Depending on the nature and timing of any such proceedings that may arise, an unfavorable resolution of a matter could materially affect the Company’s future results of operations, cash flows or financial position in a particular period.

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 Annual Report on Form 10-K for the year ended December 31, 2022.

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 Form 8-K, 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 and related matters. 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 requesting documents in connection with the Company’s financial statements for the periods ended June 30, 2022 and September 30, 2022 that required restatements as disclosed in the Company’s Form 8-K filed with the SEC 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, as well as various statements and disclosures by the Company in connection with and following the Business Combination. 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 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. 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. In connection with its review of the matters related to the preparation and filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, a special committee of the Company’s board of directors, along with external advisors retained thereby, also reviewed the subject matter of information requests related to the foregoing subpoenas. Based on this review, the Company believes that these investigations will be resolved without any material developments; however, there can be no assurance as to the outcome or future direction thereof.

Cano Health

On August 10, 2023, the Company 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 Services 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. While it is inherently difficult to predict the eventual outcomes of pending actions, the Company denies all liability alleged by Cano and intends to defend the litigation vigorously.

The Company has outstanding a $5.0 million receivable from Cano; however, due to Cano’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, which included a substantial doubt about its ability to continue as a going concern, the Company established a reserve for the balance due under such receivable during the nine months ended September 30, 2023.

Note 13. COMMITMENTS AND CONTINGENCIES

The Company is subject to certain legal proceedings, Claims, investigations, and administrative proceedings in the ordinary course of its business. The Company records a provision for a liability when it is both probable that the liability has been incurred and the amount of the liability can be reasonably estimated. These provisions, if any, are reviewed and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Depending on the nature and timing of any such proceedings that may arise, an unfavorable resolution of a matter could materially affect the

Company’s future consolidated results of operations, cash flows or financial position in a particular period. As of December 31, 2022, there was no material pending or threatened litigation against us.

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.

Approximately 93% of the Company’s expected recoveries arise from Claims being brought under the Medicare Secondary Payer Act private cause of action (Section 1862(b)(3)(A) of the Social Security Act (42 U.S.C. § 1395y(b)(3)(A)). 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, Senators Tim Scott (R-SC) and Maggie Hassan (D-NH) and Representatives Brad Schneider (D-IL) and Gus Bilirakis (R-FL) introduced the Repair Abuses of MSP Payments Act (S.1607/H.R.3388) (the “RAMP Act”) 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” (as defined in paragraph 42 U.S.C. § 1395y(b)(1)(A)(v)).

The Medicare Secondary Payer Act’s private cause of action—a fundamental component of how the Company is able to calculate damages—incentivizes private parties, such as MSP Recovery, to pursue reimbursement of conditional payments by rewarding them with double damages. If the Medicare Secondary Payer Act is changed, or if the RAMP Act were enacted to apply retroactively, it could significantly reduce the Company’s potential recoveries and have a material adverse effect on its business, financial condition, and results of operations.

Subsequent Events

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

Note 16. SUBSEQUENT EVENTS

Notice of Compliance with Nasdaq Listing Requirements

On October 27, 2023, the Company received a letter from the Staff at Nasdaq that the bid price deficiency has been cured, that the Company is in compliance with all applicable listing standards, and that the Company’s stock will continue to be listed and traded on the Nasdaq Stock Market.

Note 19. SUBSEQUENT EVENTS

Hazel Transactions

On March 29, 2023 (and amended on July 17, 2023), the Company entered into a membership interest purchase agreement with Hazel, whereby in exchange for a stated purchase price of $390 million, the Company acquired from Hazel interests in certain Claims recovery and reimbursement rights (the “Claims Purchase”). The purchase price for the Claims Purchase was funded by (i) the proceeds from the Claims Sale (as defined below), and (ii) a purchase money loan between Hazel, as lender, and the Company, as borrower, in the amount of $250 million (the “Purchase Money Loan”).

On March 29, 2023, the Company entered into a membership interest purchase agreement with Hazel, whereby in exchange for a purchase price of $150 million, Hazel acquired from the Company the membership interests in entities that own certain other Claims recovery and reimbursement rights, provided that the Company and Hazel will share in the recovery proceeds therefrom in accordance with an agreed waterfall (the “Claims Sale,” and together with the Claims Purchase, the “Claims Transactions”).

In addition, on March 29, 2023, the Company entered into an Amended and Restated Credit Agreement (the “Working Capital Credit Facility”) with affiliates 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 multiple installments) in proceeds, and a Term Loan B Commitment to fund up to $18 million (in multiple installments) in proceeds, the funding of each conditioned on certain milestones. An initial $10 million in proceeds was drawn under the Term Loan A on March 6, 2023. On March 29, 2023, an additional $5 million was disbursed to the Company under the Term Loan A. On May 11, 2023 and June 13, 2023, Hazel notified us that it would not disburse additional funds under the Working Capital Credit Facility until the Company satisfies certain funding conditions, including the filing of our 2022 Form 10-K. The parties subsequently agreed that $5.5 million will be funded under Term Loan A in accordance with the terms of the Working Capital Credit Facility subsequent to the filing of our 2022 Form 10-K and receipt of funding notices, deeming funding conditions satisfied or waived. Following such funding, the Term Loan A commitment would be terminated, with total funding of $20.5 million. In addition, the parties agreed to increase the Term Loan B commitment from $18 million to $27.5 million, which will be funded in multiple installments and in accordance with the terms of the Working Capital Credit Facility.

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 Hazel 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 Loans will be permitted after the prepayment or repayment of loans under the Working Capital Loans, and such prepayment of the Purchase Money Loans may be subject to prepayment penalty, as applicable.

The Purchase Money Loan and the Working Capital Credit Agreement contains 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.

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 Hazel, which sets forth certain arrangements between the Company and Hazel in relation to the management of the litigation of certain Claims owned by the Company, the proceeds of which were pledged to Hazel to secure the Purchase Money Loan and the Working Capital Credit Facility.

Yorkville Facility

Refer to Note 1, Description of the Business of this Form S-1.

Virage Amendment

On April 12, 2023, we entered into an amendment (the “Virage MTA Amendment”) to the Virage MTA and Virage Guaranty pursuant to which the payment date was extended from May 23, 2023 until September 30, 2024, subject to acceleration upon certain triggering events. The guaranty obligation will become current at September 30, 2023, and the Company does not currently have available liquidity to satisfy such obligations. Under the Virage MTA Amendment, Virage will receive 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 in excess of the amount of revenues necessary to establish and maintain an operating reserve of $70 million for overhead expenses and applicable taxes.

On January 1, 2024, if the Virage Guaranty is not paid, the Company will be 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 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. If paid in warrants, such warrants will expire on January 1, 2026.

Further, for each calendar month beginning with January 31, 2024 until the obligations to Virage are paid in full, the Company has agreed to pay to Virage an amount monthly, 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. If paid in warrants, such warrants will expire two years from the date of issuance.

The warrants will contain customary provisions for a transaction of this type, including that each warrant will be exercisable in whole or in part at any time prior to the expiration date, be freely transferable, subject only to applicable securities laws, and be subject to customary anti-dilution protection regarding the exercise price and number of shares of Class A Common Stock to be issued upon the exercise of each warrant.

Amended and Restated Nomura Promissory Note

On April 12, 2023, the Company amended the promissory note to Nomura originally issued on May 27, 2022, which amendment increased the principal amount to approximately $26.3 million and extended the maturity date of the promissory note to September 30, 2024. The note will become current at September 30, 2023, and the Company does not currently have available liquidity to satisfy said obligation. The amended 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 April 12, 2023. 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.

Cano Health Share Issuance

On July 7, 2023, the Company issued 7,960,001 shares of Class A common stock to Cano Health, LLC (“Cano”) as payment for $61,677,419.35 million dollars in deferred compensation related to the following agreements, which the Company had the option to pay in cash or in stock and has elected to pay in stock, of which (i) 3,225,807 shares of Common Stock were issued as a deferred consideration for the assignment of certain claims pursuant to that certain Purchase Agreement, effective as of September 30, 2022, as amended to date, by and between the Company and Cano, and (ii) 4,734,194 shares of Common Stock were issued as deferred consideration for the assignment of certain claims pursuant to that certain Amended and Restated Claims Recovery and Assignment Agreement effective as of December 31, 2021, as amended to date, by and between the Company and Cano.

2023 Reverse Stock Split

On September 6, 2023, the Company filed a “Notice of Action To Be Held Without a Meeting” in which it notified the stockholders that, on September 5, 2023, the stockholders holding at least a majority of our outstanding voting capital stock (the “Majority Stockholders”) approved by written consent resolutions authorizing the effect a reverse stock split of the Company’s Class A and Class V common stock at a reverse stock split ratio ranging from 1:3 to 1:300, with the exact ratio to be set at a whole number within such range by the Company’s board of directors (the “Reverse Stock Split”).

The Reverse Stock Split became effective on October 13, 2023 upon the opening of trading on the Nasdaq Capital Market (the “Effective Time”) and the trading of the Company’s common stock on a post-split adjusted basis. At the Effective Time, every 25 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock, without any change to the par value per share. Fractional shares resulting from the Reverse Split were rounded up to the nearest whole number. In addition, proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options and warrants to purchase shares of common stock. These consolidated financial statements are retrospectively adjusted for this Reverse Stock Split. The previously reported number of authorized shares has been revised in this filing to properly reflect the impact of the 2023 Reverse Stock Split.

Asset Acquisitions

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Asset Acquisitions

Note 4. ASSET ACQUISITIONS

VRM

On May 23, 2022 as part of the Closing of the Business Combination, the Company acquired assets through the issuance of Up-C Units. In exchange for approximately 7.9 million Up-C Units (after giving effect to the Reverse Split), the Company acquired Claims previously held by Series MRCS, an affiliate of the Company. The Claims are included as Intangible Assets, net in the condensed consolidated balance sheet.

The Claims are held at cost, which was determined using the opening market price of the Company’s Class A Common Stock as of the day subsequent to the Closing Date discounted by 4.5% or lack of marketability due to timing before shares are sellable. The Company determined the appropriate measurement date was the opening of the first trading day of the Class A Common Stock after the Closing Date as this reflects the equivalent value of the Up-C Units provided to the sellers. The Up-C Units provided to the sellers did not include New Warrants, and as such, the Class A Common Stock value excluding the New Warrants was reflected at the Close of the first trading day after the Closing Date. The Claims are treated as finite life intangible assets similar to other Claims that the Company has acquired and have a useful life of eight years. For further details on this Claims acquisition, see Note 7, Intangible Assets, Net.

On May 23, 2022 as part of the Closing of the Business Combination, the Company acquired assets through the issuance of Up-C Units. In exchange for approximately 14.3 million Up-C Units (after giving effect to the Reverse Split), the Company acquired the rights to receive the distributable net proceeds (the “Proceeds”) of a portfolio of Claims owned by VRM MSP, a Delaware limited liability company and joint investment vehicle of VRM and Series MRCS. Under this asset acquisition structure, the Company determined that the arrangements to acquire the rights to proceeds from certain Claims recovery rights along with the guarantee of the VRM Full Return (noted and defined below) result in the Company consolidating the Series. Upon consolidation, the Company included the value of the Up-C Units provided and the value of the guarantee as Intangible Assets, net in the condensed consolidated balance sheet. These are

held at cost and treated as finite life intangible assets similar to other CCRAs that the Company has acquired, and have a useful life of eight years.

As the Company incurred debt related to the VRM Full Return as included in the guarantee 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. Subsequent to September 30, 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 Ruiz and Frank 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 Ruiz and Frank 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.

As a part of the Virage MTA Amendment, on January 1, 2024, the Company will be 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. If paid in warrants, such warrants will expire on January 1, 2026.

The Virage warrant, if issued will be recorded at fair value on or after January 1, 2024. The Company recorded interest expense related to Virage MTA Amendment as of September 30, 2023 of $43.7 million. The accrued interest expense related to the Virage MTA Amendment is reflected in Interest Payable on the condensed consolidated Balance Sheet as of September 30, 2023.

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) requires Virage and the Company negotiate and agree on a form of initial warrant and monthly warrant by no later than December 1, 2023. The payment obligations will become a current liability after December 31, 2023, and the Company does not currently have available liquidity to satisfy said obligation.

VRM Swap

On July 28, 2023, VRM exercised its option to exchange Claims with service dates prior to January 1, 2014 for more recent Claims. To do so, the VRM MSP agreement was amended to reflect that: (a) rights to recovery proceeds arising from Claims held by VRM MSP, with dates of service before January 1, 2014, were transferred to MSP Recovery; (b) MSP Recovery contributed to VRM MSP in the form of in-kind ownership interests to certain Series entities holding Claims; and (c) as a result of such capital contributions, MSP Recovery was admitted as a member of VRM MSP.

The contribution of certain Series (holding certain CCRAs) by MSP Recovery into VRM MSP is considered a common control transaction, given that the Company consolidates Series before and after such transfers. In addition, the Company analyzed being admitted as a member of VRM MSP and concluded to apply Investments in Equity Method guidance under ASC 323. The Company initially measured and recorded its equity method investment in VRM MSP using a cost accumulation model; however, in consolidation, the investment in VRM MSP is eliminated, with the CCRA intangible assets remaining on the balance sheet under the “Intangible assets” line item. The investment in VRM MSP will reflect a zero balance. In addition, given VRM MSP’s primary assets are the CCRAs, VRM MSP’s ability to generate any earnings (not already reported via MSP Recovery consolidation of Series), is negligible; therefore, MSP Recovery does not expect any significant earnings from VRM MSP.

Hazel Transactions

Claims Transactions and Purchase Money Loan

On March 29, 2023, the Company acquired a controlling interest in nine legal entities, whose sole assets are CCRAs, from Hazel Holdings I LLC (together with its affiliates, “Hazel”). This is referred to as the “Claims Purchase.” The purchase price for the Claims Purchase was funded by (i) a purchase money loan between Hazel, as a lender, and the Company, as a borrower, in the amount of $250 million (the “Purchase Money Loan”) and (ii) proceeds from the sale of certain, separate CCRAs in the Claims Sale (as defined below).

Also, on March 29, 2023, the Company sold a controlling interest in three legal entities whose sole assets are CCRAs to Hazel. The agreement provided that the Company and Hazel would share in the recovery proceeds therefrom, in accordance with an agreed waterfall after Hazel had realized the first $150 million in claims recoveries. This transaction is referred to as the “Claims Sale,” and together with the Claims Purchase, the “Claims Transactions.”

As the Claims Transactions were negotiated together in contemplation of one another, they have been combined for accounting purposes. The Company analyzed the Claims Sale and determined that this transaction would be treated as the sale of in-substance nonfinancial assets, in exchange for noncash consideration in the form of the CCRAs from the Claims Purchase measured at fair value. The variable consideration related to future recoveries is fully constrained, because, at this time, it is not probable that any amounts will be owed above the $150 million recovery threshold that would trigger additional payments. The Company analyzed the Claims Purchase and determined it results in the initial consolidation of variable interest entities that are not businesses. The acquired CCRAs held by those entities are recognized at fair value.

The fair value of the assets sold in the Claims Sale was determined to be $45.5 million. The Company’s carrying value of those CCRAs surrendered was $40.9 million. Because there are no other observable prices for such transactions, the Company determined the fair value by reference to the purchase price for those CCRAs in a recent transaction. The fair value of the acquired CCRAs was determined to be $285.5 million, and the Company recognized the Purchase Money Loan recognized at $250 million, as any implicit discount or premium to current market rates at the time of issuance were insignificant.

This resulted in a gain on the Claims Transactions of $4.6 million, which largely corresponds to the previously recognized amortization of the CCRAs that were sold in the Claims Sale.

Amounts borrowed and obligations under the Purchase Money Loan and the Working Capital Credit Facility (See Note 10, Claims Financing Obligation and Note Payable) are secured by a pledge of proceeds from specific 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 Hazel, which sets forth certain arrangements between the Company and Hazel in relation to Claims owned by the Company, the proceeds of which are due to the Company were pledged to Hazel to secure the Purchase Money Loan and the Working Capital Credit Facility.

Note 4. ASSET ACQUISITIONS

On May 23, 2022 as part of the closing of the Business Combination, the Company acquired assets through the issuance of Up-C units. In exchange for approximately 7.9 million Up-C units, the Company acquired CCRAs previously held by Series MRCS, an affiliate of MSP. The CCRAs are included as Intangible Assets, net in the consolidated balance sheet.

The CCRAs are held at cost, which was determined using the opening market price of the Company’s Class A shares as of the day subsequent to the Closing Date discounted by 4.5% for lack of marketability due to timing before shares are sellable. The Company determined the appropriate measurement date was the opening of the first trading day of the Class A shares after the Closing Date as this reflects the equivalent value of the Up-C units provided to the sellers. The Up-C units provided to the sellers did not include New Warrants and as such the Class A shares value excluding the New Warrants was reflected at the Close of the first trading day after the Closing Date. The CCRAs are treated as finite life intangible assets similar to other CCRAs that the Company has acquired and have a useful life of 8 years. For further details on this CCRA acquisition, see Note 7, Intangible Assets, Net.

On May 23, 2022 as part of the closing of the Business Combination, the Company acquired assets through the issuance of Up-C units. In exchange for approximately 14.3 million Up-C units, the Company acquired the rights to receive the distributable net proceeds (the “Proceeds”) of a portfolio of Claims owned by VRM MSP, a Delaware limited liability company and joint investment vehicle of VRM and Series MRCS. Under this asset acquisition structure, the Company determined that the arrangements to acquire the rights to proceeds from certain Claims recovery rights along with the guarantee of the VRM Full Return (noted and defined below) result in the Company consolidating the Series. Upon consolidation, the Company included the value of the Up-C units provided and the value of the guarantee as Intangible Assets, net in the consolidated balance sheet. These are held at cost and treated as finite life intangible assets similar to other CCRAs that the Company has acquired and have a useful life of 8 years.

In connection with such transaction 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 is payable exclusively by any of the following means (or any combination thereof): (a) the Proceeds, (b) a sale of certain reserved shares of Messrs. John H. Ruiz and Frank Quesada, and the delivery of the resulting net cash 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 $787.9 million as of December 31, 2022. Upon payment of the VRM Full Return, VRM and Series MRCS would assign and transfer to the Company their respective rights to receive all Proceeds. As the Company incurred debt related to the VRM Full Return as included in the guarantee obligation within the consolidated balance sheet, this value was included in the purchase price and is included in Intangible Assets, net, in the 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 consolidated statement of operations. Separately, the VRM Full Return was guaranteed by Messrs. John H. Ruiz and Frank Quesada for any remaining required payment of the VRM Full Return as of May 23, 2023.

On April 12, 2023, the Company entered into an amendment (the “Virage MTA Amendment”) to the agreement with Virage 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. See Note 19, Subsequent Events.

Variable Interest Entities - Additional Information (Detail) - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Sep. 30, 2022

Jun. 30, 2022

Dec. 31, 2021

Variable Interest Entity [Line Items]

Assets

$ 3,282,035

$ 3,417,945

$ 3,543,791

$ 3,614,544

$ 104,006

Liabilities

1,638,373

1,230,673

255,414

Variable Interest Entity, Primary Beneficiary [Member]

3,253,707

^[1]

3,363,156

^[1],[2]

$ 3,473,526

$ 3,537,210

84,218

^[2]

Variable Interest Entity [Line Items]

Assets

2,300,000

9,700

Liabilities

400

122,700