Item 1.01. Entry into a Material Definitive Agreement
On October 18, 2021, LM Funding America, Inc. (the "Company") entered into an
Underwriting Agreement with Maxim Group LLC on behalf of itself and as
representative of the underwriters named therein (the "Underwriting Agreement"),
pursuant to which the Company issued and sold, in an underwritten public
offering (the "Public Offering"), 6,315,780 units, with each unit consisting of
one share of common stock, $0.001 par value per share ("Common Stock"), and one
warrant to purchase one share of Common Stock (the "Common Warrants"). The units
were sold to the public at the price of $4.75 per unit and were offered by the
Company pursuant to the registration statements on Form S-1 (File No.
333-259423) and S-1MEF (File No. 333-260313), which were declared effective on
October 18, 2021 (the "Registration Statements"). The shares of Common Stock and
the Common Warrants were purchased together as units but were issued separately
and were immediately separable upon issuance, and there is no public trading
market for the Common Warrants.
On October 19, 2021, the Public Offering closed, resulting in gross proceeds to
the Company of approximately $30,000,000, before deducting the underwriting
discounts and commissions and estimated offering expenses. The Company also
granted to the underwriter a 45-day option to purchase up to an additional
947,367 shares of Common Stock ("Option Shares") and/or warrants ("Option
Warrants") to purchase up to 947,367 shares of Common Stock (the "Over-Allotment
Option"). The underwriter partially exercised the Over-Allotment Option, and the
Company thereby issued and sold the additional 947,367 Option Warrants, in a
simultaneous closing with the Public Offering on October 19, 2021. On October
20, 2021, the underwriter exercised the remainder of the Over-Allotment Option,
and the Company thereby issued and sold the additional 947,367 Option Shares
(the "October 20 Over-Allotment Closing").
The Common Warrants issued in the offering are immediately exercisable and
entitle the holder to purchase one share of Common Stock at an exercise price
equal to $5.00 and expire on the fifth anniversary of the issuance date. The
Common Warrants may be exercised on a cashless basis if there is no effective
registration statement available for the resale of the shares of common stock
underlying such warrants.
The Company agreed to an underwriting discount of 8% of the public offering
price of the Units sold in this offering. In addition, the Company issued to
Maxim Group LLC (or its designee) warrants to purchase to purchase an aggregate
of 3% of the number of shares of Common Stock sold in the Public Offering, which
warrants entitle the holder to purchase up to an aggregate of 217,894 shares of
Common Stock after the October 20 Over-Allotment Closing (the "Representative's
Warrants"). The Representative's Warrants have an exercise price equal to $5.94,
which is 110% of the offering price in the Public Offering. The Representative's
Warrants may be exercised on a cashless basis and will be exercisable six months
following the closing date until April 16, 2025.
The Underwriting Agreement contains representations, warranties and covenants
made by the Company that are customary for transactions of this type. Under the
terms of the Underwriting Agreement, the Company has agreed to indemnify the
underwriter against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. In addition, pursuant to the terms of the
Underwriting Agreement, the Company and its officers and directors have entered
into lock-up agreements with the underwriter pursuant to which each of them has
agreed not to, for a period of 180 days, without the prior consent of the
underwriter, offer, sell, transfer or otherwise dispose of the Company's
securities, subject to limited exceptions.
On October 18, 2021, the Company also entered into voting agreements with
certain investors in the Public Offering (the "Voting Agreements"). Pursuant to
the terms of the Voting Agreements, such investors have agreed to vote all
shares of Common Stock they beneficially own on the closing date of the Public
Offering, including the shares purchased in the Public Offering, with respect to
any proposals presented to the stockholders of the Company at the Company's next
stockholders meeting. Such investors' agreement to vote their shares of Common
Stock in accordance with the immediately preceding sentence does not require the
holder to vote its shares for or against any particular proposal or proposals,
whether or not such proposal or proposals are recommended by the Company's board
of directors.
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The Underwriting Agreement, Form of Representative's Warrant, Form of Common
Warrant, and Voting Agreement are filed as Exhibit 1.1, Exhibit 4.1, Exhibit
4.2, and Exhibit 10.1 respectively, to this Current Report on Form 8-K and the
description of such agreements contained herein are qualified in their entirety
by reference to such exhibits.
Item 3.02. Unregistered Sales of Equity Securities.
The issuance of the Representative's Warrants to Maxim Group LLC and the shares
of Common Stock issuable upon exercise of the Representative's Warrants are and
will be exempt from registration under the Securities Act of 1933, as amended
(the "Securities Act"), because the offer and sale of such securities did and
does not involve a "public offering" as defined in Section 4(a)(2) of the
Securities Act, was made without any form of general solicitation to a
sophisticated party, and was made with full access to any information requested
regarding the Company, the Representative's Warrant, and the Common Stock.
Item 7.01. Regulation FD.
On October 18, 2021, the Company issued a press release regarding the pricing of
the Public Offering. A copy of the press release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
On October 19, 2021, the Company closed the Public Offering and issued a press
release regarding the closing of the Offering. A copy of the press release is
attached as Exhibit 99.2 and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, is
being furnished, shall not be deemed "filed" for any purpose, and shall not be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, except as
expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
1.1 Maxim Underwriter Agreement.
4.1 Form of Representative's Warrant
4.2 Form of Common Warrant
10.1 Form of Voting Agreement (incorporated by reference to Exhibit
10.19 to the Registration Statement on Form S-1/A filed October 8,
2021
99.1 Press Release issued October 18, 2021
99.2 Press release issued October 19, 2021
EX-104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
***
Forward-Looking Statements
This Current Report on Form 8-K may contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 that 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
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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, 2020, 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 disclaim 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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LM FUNDING AMERICA, INC. 
