Business
LM Funding Announces Purchase of Loan Receivables
TAMPA, FL / ACCESSWIRE / December 21, 2020 / LM Funding America, Inc. (NASDAQ:LMFA) ("LM Funding" or "LMFA"), a technology-based specialty finance company,
About this update from Lm Funding America, Inc.
[{"type":"text","content":"TAMPA, FL / ACCESSWIRE / December 21, 2020 / LM Funding America, Inc. (NASDAQ:LMFA) (\"LM Funding\" or \"LMFA\"), a technology-based specialty finance company, today announced that it has entered into a Master Loan Receivable Purchase and Assignment Agreement under which LMFA will purchase, through a wholly owned subsidiary, up to approximately $18 million in the aggregate of loan receivables of Borqs Technologies, Inc. (BRQS) (\"Borqs\") from Borqs' senior lender. As a part of the transaction, LMFA has entered into a Settlement Agreement with Borqs pursuant to which Borqs will issue shares of Borqs common stock to LMFA (the \"Settlement Shares\"), in one or more tranches, in settlement of the loan receivables acquired by LMFA (the \"Settlement Agreement\"). The loan receivables will be purchased by LMFA in tranches over a period of up to 22 months at a price equal to a discount of 2.5% to 22.5% of the face value of the loan receivable, with such discount to result in an acquisition price of approximately $15 million in the aggregate.The Settlement Agreement further provides that the Settlement Shares shall be issued at a 30% discount to the volume-weighted average price of Borqs common stock over a specified pricing period. The LMFA Settlement Agreement contemplates that the Settlement Shares will be issued as unrestricted securities in a transaction that is exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended (the \"Securities Act\"). LMFA has petitioned the Eleventh Circuit Court of the State of Florida for a court order (the \"LMFA Order\") approving, among other things, the fairness of the terms and conditions of the issuance of the Settlement Shares as the full and final settlement of the acquired loan receivables pursuant to Section 3(a)(10) of the Securities Act.In a separate transaction between LMFA and a private investor, the private investor has agreed to provide consulting services and make a non-recourse loan to LMFA in a principal amount of up to the purchase price of the Borqs loan receivables purchased by LMFA. LMFA and the private investor will split the net proceeds from sales of the Settlement Shares with LMFA receiving one-third of the net proceeds remaining after a return of the principal amount of the loans and the investor receiving return of principal plus two-thirds o...