LMFAW LM Funding America Inc

Item 1.01    Entry into Material Definitive Agreement.

On December 1, 2021, LM Funding America, Inc. (the “Company”) entered into a Secured Promissory Note and Loan Agreement (the “Note”) with Symbiont.io, Inc., a Delaware corporation (“Symbiont”). Pursuant to the terms of the Note, the Company agreed to make loans to Symbiont in an aggregate principal amount of up to $3,000,000.00 (the “Loans”) to be used by Symbiont for working capital purposes. The Company funded the first loan to Symbiont in the amount of $2,000,000.00 simultaneously with the execution of the Note and, upon the occurrence of certain triggering events, may loan to Symbiont up to an additional $1,000,000.00. The outstanding principal amount of the Loans will bear interest at a rate of 16% per annum. The outstanding principal, plus any accrued and unpaid interest, becomes due and payable on December 1, 2022. The Note is secured by a first priority perfected security interest in the assets of Symbiont.

Concurrently with the execution of the Note, the Company and Symbiont entered into a First Refusal and Purchase Option Agreement, dated December 1, 2021 (the “ROFR Agreement”), to provide the Company with certain rights relating to the potential purchase of the capital stock or assets of Symbiont. Pursuant to the terms of the ROFR Agreement, in the event that Symbiont expects to accept a third-party offer that would result in a sale of Symbiont, then the Company will have the first right and option to purchase, upon the same terms and conditions as the third-party offer, the assets or capital stock of Symbiont, subject to certain terms and exclusions as described in the ROFR Agreement.  The Company’s rights under the ROFR Agreement are assignable to third parties. The ROFR Agreement will expire on December 1, 2022.

Also on December 1, 2021, Symbiont issued to the Company a Common Stock Warrant (the “Warrant”) in connection with the Note. The Warrant entitles the Company to purchase from Symbiont up to 700,000 fully paid and nonassessable shares of Common Stock, par value $0.0001 per share, of Symbiont (the “Common Stock”). The Warrant is immediately exercisable at a purchase price of $3.0642 per share of Common Stock, subject to adjustment in certain circumstances, and will expire on 4:00 p.m. Eastern Time on December 1, 2026. The Warrant includes anti-dilution protection upon the issuance of any Common Stock, securities convertible into Common Stock, or certain other issuances at a price below the then-existing exercise price of the Warrant, with certain exceptions.

The foregoing descriptions of the Note, the ROFR Agreement, and the Warrant, which are each effective as of December 1, 2021, are summary in nature and are each qualified by reference to the full text of each respective agreement, copies of which are attached as Exhibits 10.1, 10.2, and 10.3 to this Current Report on Form 8-K.