LM FUNDING AMERICA INC

If stockholders do not approve this proposal, then the Common Warrants will only be exercisable to the extent that the total number of shares issued in the Private Placement and upon exercise of the Common Warrants do not exceed 19.99% of the shares of our common stock outstanding before the issuance. Failure to obtain such approval may discourage future investors from engaging in future financings with us. If these consequences occur, we may have difficulty finding alternative sources of capital to fund our operations in the future on terms favorable to us or at all. We can provide no assurance that we would be successful in raising funds pursuant to additional equity or debt financings or that such funds could be raised at prices that would not create substantial dilution for our existing stockholders.