Analysis of LM Funding America's Warrant Exercise Price Adjustment in Form 8-K Filed on January 6, 2026

Pursuant to the Form 8-K filed by LM Funding America Inc on

[0], the company disclosed a significant (Item 8.01 - Other Events) [1].

Item	Details
Disclosure Date	January 6, 2026
Reported Item	Item 8.01 - Other Events
Total Warrants Involved	16,670,623 shares
Original Exercise Price	$0.97 per share
Adjusted Exercise Price	$0.48 per share
Triggering Reason	Price Protection Provisions were triggered

This exercise price adjustment stems from a registered direct offering financing event disclosed by the company in a Form 8-K on

[2]. According to the announcement dated December 19, 2025, the company entered into a securities purchase agreement with institutional investors, selling 1,822,535 shares of common stock and 7,332,395 pre-funded warrants, as well as warrants exercisable for an aggregate of 9,154,930 shares of common stock, at a combined effective offering price of $0.71 per share [3].

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The reduction of the warrant exercise price to $0.48 will have the following impacts on the company’s ownership structure:

• If all 16,670,623 warrants are exercised at $0.48, the company will receive approximately
  $8 million
  in new capital
• Compared to the current stock price ($0.54), the exercise price represents a discount of approximately
  11%
  , which is highly attractive to existing shareholders
• However, the further issuance of new shares will lead to additional dilution of earnings per share (EPS)

Financial Indicator	Value	Industry Comparison
Current Ratio	0.03	Significantly Below Average
Net Profit Margin	-83.38%	Substantial Losses
Return on Equity (ROE)	-18.72%	Negative Value
Accumulated Losses Continue to Expand	-	Increased Operational Pressure

Notably, the company actively accumulated Bitcoin assets in Q4 2025 [4]:

• Raised approximately
  $21.3 million
  through financing in Q3 for Bitcoin purchases
• Held approximately
  304.5 Bitcoins
  as of the end of September 2025, valued at nearly
  $35 million
• Completed a private repurchase of approximately 3.3 million shares and 7.3 million warrants in October 2025

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In terms of stock performance, LMFA has experienced a significant decline during the disclosure period [0]:

Time Period	LMFA Performance	S&P 500	NASDAQ
5-Day	+18.12%	+1.95%	+1.62%
1-Month	-41.91%	Relatively Stable	Relatively Stable
3-Month	-61.59%	+1.95%	+1.62%
1-Year	-77.24%	Up	Up

1. Dilution Concerns
   : A reduction in warrant exercise price is typically viewed as dilution of existing shareholders’ equity, which may trigger a negative market reaction
2. Triggering of Price Protection Provisions
   : This usually indicates that the company’s stock price performance is below expectations at the time of the planned financing
3. Increased Volatility
   : The stock’s 30-day volatility reaches
   8.62%
   , which is significantly higher than the market average [3]

1. New Capital Injection
   : If the warrants are exercised, the company will receive approximately $8 million in new funds
2. Bitcoin Value Support
   : The value of the company’s Bitcoin holdings far exceeds its current market capitalization (market cap of $6.58 million vs. Bitcoin holdings valued at approximately $16-$35 million)
3. Analysts Maintain Buy Ratings
   : H.C. Wainwright has set a target price of $5 [3]

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Risk Type	Details
Going Concern Risk	The company faces extreme liquidity pressure (current ratio of only 0.03) with limited cash reserves
Cryptocurrency Risk	Fluctuations in Bitcoin prices directly impact the company’s asset value
High Dilution Risk	Frequent financings and warrant exercises lead to continuous equity dilution
Limited Operational History	The Bitcoin mining business only launched in September 2022, with limited operational experience

Opportunity Type	Details
Upside Potential of Bitcoin	If Bitcoin prices rise, the company’s holdings will appreciate significantly
Capacity Expansion	The company is expanding its mining facilities in Oklahoma and Mississippi
Capital Structure Optimization	Reducing the number of warrants and shares may improve per-share metrics

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The Form 8-K disclosed by LM Funding America on January 6, 2026 shows that, due to the triggering of price protection provisions related to its December 2025 financing, the company reduced the exercise price of 16,670,623 warrants from $0.97 to $0.48. This event reflects the company’s capital operation model within its aggressive expansion strategy in the cryptocurrency mining sector, while also highlighting the liquidity pressure and equity dilution risks it faces.

From a financial perspective, the company’s current price-to-book ratio is only 0.05x, and its market capitalization is far lower than the value of its Bitcoin holdings, indicating market concerns about the company’s going-concern ability. Investors should closely monitor the company’s next-quarter Bitcoin production, cash burn rate, and subsequent financing plans.

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[0] Gilin AI API Data - LM Funding America Real-Time Quotes and Company Profile
[1] SEC EDGAR - LM Funding America Form 8-K (January 6, 2026) (https://www.sec.gov/Archives/edgar/data/1640384/000119312526004587/0001193125-26-004587-index.htm)
[2] GlobeNewswire - LM Funding America Announces Pricing of Registered Direct Offering (https://www.globenewswire.com/en/news-release/2025/12/19/3207635/0/en/LM-Funding-America-Adds-35-PH-s-with-Energization-of-First-Oklahoma-Immersion-Unit.html)
[3] NewsHeater - LM Funding America Inc (LMFA) Stock Price and Analyst Predictions (https://newsheater.com/2025/12/23/lm-funding-america-inc-lmfa-stock-price-and-analyst-predictions/)
[4] LM Funding America Q3 2025 Earnings Call Transcript (https://www.insidermonkey.com/blog/lm-funding-america-inc-nasdaqlmfa-q3-2025-earnings-call-transcript-1646054/)