Item 1.01 Entry into a Material Definitive Agreement.
On January 28, 2021, LMF Acquisition Opportunities, Inc. ("LMF Acquisition"), a
special purpose acquisition company organized by LM Funding America, Inc. (the
"Company"), announced the closing of an initial public offering of units
("Units"). In the initial public offering, LMF Acquisition sold an aggregate of
10,350,000 Units at a price of $10.00 per unit, resulting in total gross
proceeds of $103,500,000. Each Unit consisted of one share of Class A common
stock and one redeemable warrant, with each warrant entitling the holder thereof
to purchase one share of Class A common stock of LMF Acquisition at a price of
$11.50 per share. LMFAO Sponsor, LLC ("Sponsor"), a subsidiary in which the
Company owns approximately 70% of the equity and for which the Company is the
sole manager, served as the sponsor for LMF Acquisition's initial public
offering. Sponsor was organized by, and its initial capital contribution was
contributed by, the Company and the Company's executive officers. The Company's
executive officers and LMF Acquisition's directors collectively own an
approximately 30% nonvoting equity interest in Sponsor, and LMF Acquisition will
be managed by the Company's management team.
In connection with the initial public offering of LMF Acquisition, Sponsor
entered into a Private Placement Warrants Purchase Agreement with LMF
Acquisition on January 25, 2021 (the "Warrants Purchase Agreement"). Pursuant to
the Warrants Purchase Agreement, Sponsor purchased from LMF Acquisition,
simultaneous with the closing of the initial public offering, an aggregate of
5,738,000 warrants at a price of $1.00 per warrant ($5,738,000 in the aggregate)
in a private placement (the "Private Placement Warrants"). Each Private
Placement Warrant is exercisable to purchase one share of LMF Acquisition's
Class A common stock at $11.50 per share. The purchase price for the Private
Placement Warrants was funded by an intercompany loan by the Company to
Sponsor. A copy of the Warrants Purchase Agreement is attached as Exhibit 10.4
to this Form 8-K and incorporated herein by this reference. The terms of the
Private Placement Warrants are set forth in a Warrant Agreement, dated January
25, 2021 (the "Warrant Agreement"), a copy of which is attached as Exhibit 10.1
to this Form 8-K and incorporated herein by this reference.
In addition to the foregoing, Sponsor holds 2,587,500 shares of LMF
Acquisition's Class B common stock that it acquired for a purchase price of
$25,000. The shares of Class B common stock will automatically convert into
shares of Class A common stock at the time, if any, when LMF Acquisition
completes an initial business combination, on a one-for-one basis, subject to
certain adjustments. The Class B common stock represented approximately 20% of
the outstanding common stock of LMF Acquisition immediately following the
completion of LMF Acquisition's initial public offering. In connection with such
initial public offering, the Sponsor, LMF Acquisition, and Maxim Partners LLC
entered into a Registration Rights Agreement, dated January 25, 2021 (the
"Registration Rights Agreement"), pursuant to which Sponsor has certain rights
to require LMF Acquisition to register the shares of Class A common stock into
which the Class B common stock is convertible and for which the Private
Placement Warrants are exercisable. A copy of the Registration Rights Agreement
is attached as Exhibit 10.3 to this Form 8-K and incorporated herein by this
reference.
Also in connection with LMF Acquisition's initial public offering, Sponsor
entered into a letter agreement, dated January 25, 2021, with LMF Acquisition
and its officers and directors (the "Letter Agreement"). Pursuant to the Letter
Agreement, Sponsor has agreed to, among other things, waive its redemption
rights with respect to its shares of LMF Acquisition, vote its shares in favor
of LMF Acquisition's initial business combination, and comply with certain share
lock-up and transfer restrictions. A copy of the Letter Agreement is attached as
Exhibit 10.2 to this Form 8-K and incorporated herein by this reference.
The foregoing descriptions of the Warrants Purchase Agreement, Warrant
Agreement, Registration Rights Agreement, and Letter Agreement are summary in
nature and are qualified by reference to the full text of such agreements
attached as exhibits to this Form 8-K.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective January 25, 2021, Martin A. Traber resigned as a member of the board
of directors of the Company (the "Board") and became a director of LMF
Acquisition. Mr. Traber's resignation was not the result of any disagreement
with the Company on any matter relating to its operations, policies, or
practices.
On January 29, 2021, the Board appointed Frank Silcox, effective immediately, to
serve as a director to fill the vacancy resulting from Mr. Traber's
resignation. Mr. Silcox was appointed as a "Class III" director for a term that
ends at the 2022
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annual meeting of stockholders. Mr. Silcox was also appointed to serve on the
Compensation Committee and Nominating and Governance Committee of the Board.
Mr. Silcox, age 57, was the original founder of the Company in January 2008 and
thereafter ceased to be an equity holder and management member in 2014. Since
March 2015, Mr. Silcox has been a partner with Osprey Capital, a private
commercial real estate lender and equity investor, and since March 2015, Mr.
Silcox has been Managing Director of Osprey Capital. Mr. Silcox has over 30
years of experience in the commercial mortgage banking business with particular
expertise in the development of, and investment in, multi-family housing and
condominium projects throughout Florida and the Southeast. Also since 2014, Mr.
Silcox has made investments through FS Ventures, LLC, his personal investment
firm which owns a diversified investment portfolio of investments primarily in
real estate. As a principal investor, Mr. Silcox has held ownership interests
in over ten (10) real estate projects with individual costs exceeding
$15,000,000 and total costs exceeding $300,000,000. Mr. Silcox is a 1985
graduate of the University of Tampa.
Item 7.01 Regulation FD Disclosure.
On January 29, 2021, the Company issued a press release announcing, among other
things, the appointment of Frank Silcox as a director of the Company, a copy of
which is attached as Exhibit 99.1 to this Form 8-K.
The information in this Item 7.01 of this Current Report on Form 8-K shall not
be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act
of 1934, or incorporated by reference in any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except as shall be expressly set
forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
10.1 Warrant
Agreement,
dated January
25, 2021,
between the
Company and
Continental
Stock Transfer
& Trust
Company .
10. 2 Letter
Agreement,
dated January
25, 2021,
among LMF
Acquisition
Opportunities,
Inc., its
officers, its
directors and
LMFAO
Sponsor, LLC.
10.3 Registration
Rights
Agreement,
dated January
25, 2021,
among LMF
Acquisition
Opportunities,
Inc., LMFAO
Sponsor, LLC,
and Maxim
Partners
LLC.
10.4 Private
Placement
Warrants
Purchase
Agreement,
dated January
25, 2021,
between LMF
Acquisition
Opportunities,
Inc. and LMFAO
Sponsor,
LLC.
99. 1 Press
Release, dated
January 29,
2021, issued
by LM Funding
America,
Inc..
***
Forward-Looking Statements
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This Current Report on Form 8-K may contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainty. Words such as "anticipate,"
"estimate," "expect," "intend," "plan," and "project" and other similar words
and expressions are intended to signify forward-looking statements.
Forward-looking statements are not guarantees of future results and conditions
but rather are subject to various risks and uncertainties. Such statements are
based on the Company's current expectations and are subject to a number of risks
and uncertainties that could cause actual results to differ materially from
those described in the forward-looking statements. Investors are cautioned that
there can be no assurance actual results or business conditions will not differ
materially from those projected or suggested in such forward-looking statements
as a result of various risks and uncertainties. Investors should refer to the
risks detailed from time to time in the reports the Company files with the SEC,
including the Company's Annual Report on Form 10-K for the year ended December
31, 2019, as well as other filings on Form 10-Q and periodic filings on Form
8-K, for additional factors that could cause actual results to differ materially
from those stated or implied by such forward-looking statements. The Company
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise,
unless required by law.
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