LM Funding Signs Letter of Intent to Acquire Global Medical Insurance Product Company, IIU, Inc.
December 20 2018 - 8:00AM
LM Funding America, Inc. (NASDAQ: LMFA) (“LM Funding” or the
“Company”), a technology-based specialty finance company, today
announced that it has signed a Letter of Intent (“LOI”) to acquire
all of the outstanding stock of IIU, Inc. (“IIU”) for a total
purchase price of approximately $6 million. The purchase price is
payable through cancellation of IIU’s $1.5 million promissory note
held by the Company with the balance of the purchase price paid
through issuance of the Company’s Convertible Promissory Note
payable in common stock of LM Funding, at a conversion price of
$2.41 per share, subject to shareholder approval, or cash.
Legal and business due diligence review (including a fairness
opinion) is underway and the acquisition is expected to close
effective January 1, 2019.
Based in the metropolitan Washington DC area,
IIU, through its U.S. subsidiaries, sells global medical insurance
products for international travelers, specializing in policies
covering high-risk destinations and emerging markets. All policies
are fully underwritten with no claim risk remaining with IIU. For
the year ended December 31, 2017, IIU reported an adjusted pre-tax
income of approximately $500,000. Craven House Capital North
America, LLC owns 100% of the outstanding shares of IIU.
“We are very pleased to sign this LOI marking
yet another key step forward in LM Funding’s growth strategy,” said
Bruce Rodgers, LM Funding’s Chief Executive Officer. “As part of
this strategy, we have been actively exploring opportunities to
acquire complementary revenue streams with profitable business
models in the financial services sector such as IIU. The addition
of IIU enables LM Funding to diversify its revenue base while
creating a platform for IIU to scale its niche insurance brokerage
market. Going forward, we intend to identify other synergistic
opportunities in the financial services sector to compliment the
business cycle dependent returns provided by our core business of
providing solutions to condominium and homeowner associations.”
Mark Pajak, Chairman of Craven House North
America, LLC, commented, “We believe this transaction recognizes
the combined value of the platform and allows the combined
companies to leverage future growth opportunities. We look forward
to working with the LM Funding team to identify and exploit further
growth opportunities.”
Under the terms of the LOI, LM Funding will
acquire 100% of the outstanding stock of IIU from Craven for a
total purchase price (“Purchase Price”) of approximately $6
million. The Purchase Price will consist of the cancellation by LM
Funding of all principal and accrued interest of Craven’s
Promissory Note dated November 3, 2018 and issued to the Company
for principal indebtedness of $1.5 million. In addition, LM Funding
will issue to Craven a Convertible Promissory Note (“Convertible
Note”) for the balance of the Purchase Price of approximately $4.5
million, plus the fair market value of IIU’s marketable securities
as of the effective date of the transaction. The Convertible
Note shall bear simple interest at 3% per annum. The
Convertible Note shall be due and payable upon demand at the
earlier of (i) August 31, 2019 or (ii) thirty days after the first
meeting of the shareholders of LMFA to occur in 2019. The note is
payable at Craven’s option in cash or, subject to shareholder
approval, common stock of LM Funding at a conversion price of $2.41
per share.
About LM Funding America:LM
Funding America, Inc., together with its subsidiaries, is a
technology-based specialty finance company that provides funding to
nonprofit community associations (Associations) primarily located
in the state of Florida, as well as in the states of Washington,
Colorado and Illinois. The company offers funding to Associations
by purchasing a certain portion of the associations' rights to
delinquent accounts that are selected by the Associations arising
from unpaid Association assessments. The company is also involved
in the business of purchasing delinquent accounts on various terms
tailored to suit each Association's financial needs, including
under the company’s New Neighbor Guaranty™ program.
Forward-Looking Statements:
This press release may contain forward-looking statements made
pursuant to the Private Securities Litigation Reform Act of 1995.
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. Some of these risks and
uncertainties are identified in the company's most recent Annual
Report on Form 10-K and its other filings with the SEC, which are
available at www.sec.gov. The occurrence of any of these risks and
uncertainties could have a material adverse effect on the company's
business, financial condition, and results of operations.
Company Contact: Bruce Rodgers, Chairman
and CEO LM Funding America, Inc. Tel (813) 222-8996
investors@lmfunding.com |
Investor Contacts:Valter Pinto / Scott
EcksteinKCSA Strategic Communications Tel (212) 896-1254 / (212)
896-1210valter@kcsa.com / seckstein@kcsa.com |
LM Funding America (NASDAQ:LMFA)
Historical Stock Chart
From Aug 2024 to Sep 2024
LM Funding America (NASDAQ:LMFA)
Historical Stock Chart
From Sep 2023 to Sep 2024