SCHEDULE: Hexstone Capital Exits LM Funding America Stake

Hexstone Capital LLC and Brendan O'Neil have filed an exit Schedule 13G, reporting their beneficial ownership in LM Funding America, Inc. has fallen below the 5% threshold.

Summary

• Hexstone Capital LLC and Brendan O'Neil have filed an Amendment No. 1 to their Schedule 13G for LM Funding America, Inc.
• This filing constitutes an "exit filing" as their aggregate beneficial ownership has decreased below the 5% reporting threshold.
• The reporting persons collectively beneficially own 726,464 shares of Common Stock, representing 4.9% of the class.
• This ownership calculation is based on 14,031,948 shares of Common Stock outstanding as of December 19, 2025, following the issuer's recent offering.
• Beneficial ownership includes 200,000 shares of Common Stock directly held by Hexstone Capital LLC and 526,464 shares issuable upon exercise of common stock purchase warrants.
• Further exercises of these warrants are subject to a 4.99% beneficial ownership limitation provision, preventing the holder from exceeding this threshold.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral event. While an investor reducing their stake can sometimes be seen negatively, this is a routine regulatory disclosure for falling below a threshold, not necessarily an active divestment or a statement on the issuer's performance.

Positives

• The reporting persons are no longer required to file Schedule 13G amendments, reducing their administrative burden.
• The 4.99% beneficial ownership limitation (Blocker) on warrant exercises helps prevent excessive concentration of ownership by a single entity, potentially promoting a broader shareholder base.

Negatives

• The reduction in beneficial ownership by Hexstone Capital LLC and Brendan O'Neil could be interpreted as a decrease in conviction or a strategic divestment, although the filing does not explicitly state the reason for the reduction.

Risks

• NA

Future Outlook

NA

Industry Context

StockSavvy.ai notes that a reduction in a significant investor's stake below the 5% threshold, while a routine disclosure, can sometimes signal a shift in investment strategy or a re-evaluation of the company's prospects by that particular investor. However, without further context from Hexstone Capital LLC, it is difficult to ascertain the specific drivers behind this exit filing. Such filings are common as institutional investors rebalance portfolios or realize gains/losses.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• NA

Related Party Transactions

• NA

Stakeholder Impact

• Shareholders: The reduction in a significant investor's stake might lead to questions about the company's future prospects or the investor's confidence, potentially influencing sentiment.
• Management: No direct impact mentioned, but management might need to address investor inquiries regarding the ownership change.

Next Steps

• NA

Key Dates

Recommendation

The filing is a routine regulatory disclosure of an investor's stake falling below the 5% threshold. It does not provide new information about LM Funding America, Inc.'s operational performance, strategic direction, or financial health that would warrant a change in investment thesis. Therefore, a 'hold' recommendation is appropriate, pending further fundamental analysis of the company's business.

Keywords

LM Funding America, Hexstone Capital, Brendan O'Neil, Schedule 13G, Beneficial Ownership, Exit Filing, Common Stock, Warrants, SEC Filing, Investment