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TAMPA, FL / ACCESSWIRE / December 21, 2020 / LM Funding America, Inc. (NASDAQ: LMFA) (“LM Funding” or “LMFA”), a specialized technology-based finance company, today announced that it has entered into a Master Loans Receivable Purchase and Divestiture Agreement under which LMFA will purchase, through a wholly owned subsidiary exclusive, up to approximately $ 18 million in aggregate Borqs Technologies, Inc. (BRQS) (“Borqs”) loan receivables from Borqs’ primary lender. As part of the transaction, LMFA has entered into a settlement agreement with Borqs under which Borqs will issue Borqs common shares to LMFA (the “Settlement Shares”), in one or more tranches, in settlement of the acquired loan receivables. . by LMFA (the “Settlement Agreement”). The loan receivables will be purchased by LMFA in installments 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, this discount is resulting in a purchase price of approximately $ 15 million in total.
The Settlement Agreement further provides that the Settlement Shares will be issued at a 30% discount from the volume weighted average price of Borqs common stock over a specified pricing period. The LMFA Settlement Agreement provides that the Settlement Shares will be issued as unrestricted securities in a transaction which is exempt from registration under Section 3 (a) (10) of the Securities Act of 1933, as amended. (the “Securities Act”). LMFA applied to the Eleventh Florida State Court 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 a full settlement and final of the loan receivables acquired in accordance with section 3 (a) (10) of the Securities Act.
In a separate transaction between LMFA and a private investor, the private investor agreed to provide advisory services and to grant a non-recourse loan to LMFA in a principal amount up to the purchase price of the receivables. loan from Borqs purchased by LMFA. LMFA and the private investor will share the net proceeds from the sales of the Settlement Shares, with LMFA receiving one-third of the net proceeds remaining after repayment of the principal amount of the loans and the investor receiving the repayment of the principal plus two-thirds of the net proceeds. If the transactions contemplated in the Master Agreement for the Purchase and Assignment of Receivables and the Settlement Agreement are completed in their entirety, LMFA expects to realize net proceeds of approximately $ 2 million.
“LM Funding has been operating under the We Buy Problems slogan since 2011,” said Bruce M. Rodgers, CEO of LMFA. “Usually we buy or finance debt at a discount and monetize it through legal process. In this case, we have contracted to purchase loan receivables from Borqs’ primary lender and are seeking a state court order authorizing LMFA to receive Borqs common stock in satisfaction of the receivables on the loans. Although larger than our dealings with community associations, the Borqs transaction uses our core competencies to expand our operating activities to another asset class. We hope that the $ 9 million in proceeds from our August stock sale will allow us to continue to consider larger transactions like this in the future. “
About LM Funding America:
LM Funding America, Inc., along with its subsidiaries, is a specialized, technology-based fundraising company that provides funding to nonprofit community associations (Associations) primarily located in the State of Florida, as well as the United States. from Washington, Colorado and Illinois. by financing a certain part of the rights of the associations on overdue accounts which are selected by the associations and resulting from the unpaid contributions of the association.
This press release may contain forward-looking statements made in accordance with the Private Securities Litigation Reform Act of 1995. Words such as “anticipate”, “believe”, “estimate”, “expect”, “intend” “,” Plan “and” “project” and other similar words and expressions are intended to mean forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the company’s most recent annual report on Form 10-K and its other documents filed with the SEC, which are available at www.sec.gov. These risks and uncertainties include , without limitation, the uncertainty created by the COVID-19 pandemic, our ability to acquire new accounts at appropriate prices, the need for capital, our ability to hire and retain new employees. owed, changes in government regulations that affect our ability to collect sufficient amounts on defaulted consumer debts, changes in credit or capital markets, changes in interest rates and the negative press regarding debt. debt collection industry. The occurrence of any of these risks and uncertainties could have a material adverse effect on our business, financial condition and results of operations.
Company details :
Bruce M. Rodgers, President and CEO
LM Financing America, Inc.
Phone (813) 222-8996
THE SOURCE: LM Financing America, Inc.
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