Insider filing report for Changes in Beneficial Ownership
- Schedule 13G & 13D forms are used to report a party's ownership of stock which exceeds 5% of a company's total stock issue.
- Schedule 13G is a shorter version of Schedule 13D with fewer reporting requirements.
"Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise"
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- Peter Lynch
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
Blue Ridge Bankshares, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
095825105
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(CUSIP Number)
Ken Lehman, 122 N Gordon Rd, Fort Lauderdale, FL 33301 (703) 975-7967
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(Name, address and telephone number of person authorized
to receive notices and communications)
April 3, 2024
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [ ].
The information required in the remainder of this cover page shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934 ("Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
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1. Names of Reporting Persons................................ Kenneth R. Lehman
I.R.S. Identification Nos. of Above Persons.............................. NA
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2. Check the appropriate box if a Member of a Group (See instructions)
(a) [ ]
(b) [ ]
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3. SEC use only
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4. Source of Funds.......................................................... PF
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5. Check if Disclosure of Legal Proceedings
Is Required Pursuant to Item 2(d) of 2(e)............................... [ ]
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6. Citizenship............................................................. USA
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Number of (7) Sole Voting Power................................. 1,186,257
Shares
Beneficially (8) Shared Voting Power....................................... 0
Owned by
Each Reporting (9) Sole Dispositive Power............................ 1,186,257
Person
With (10) Shared Dispositive Power................................. 0
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11. Aggregate Amount Beneficially Owned by Each Reporting Person..... 1,186,257
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12. Check if the Aggregate Amount in Row 11 Excludes Certain Shares........ [ ]
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13. Percent of Class Represented by Amount in Row 11...................... 5.2%
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14. Type of Reporting Person (See Instructions)............................. IN
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Item 1. Security and Issuer
This statement relates to Blue Ridge Bankshares, Inc. (the "Issuer") common
stock, no par value (the "Common Stock"). The Issuer's principal executive
offices are located at 1807 Seminole Trail, Charlottesville, Virginia 22901.
Item 2. Identity and Background
(a) This statement is filed by Kenneth R. Lehman (the "Reporting Person").
(b) The address of the Reporting Person is 122 North Gordon Road, Fort
Lauderdale, Florida 33301.
(c) The Reporting Person is a private investor.
(d) The Reporting Person has not, during the last five years, been convicted
in a criminal proceeding.
(e) The Reporting Person has not, during the last five years, been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and, as a result of such proceeding, was, or is subject to, a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) The Reporting Person is a United States citizen.
Item 3. Source and Amount of Funds and Other Consideration
On April 3, 2024, the Reporting Person purchased the securities described in
response to Item 4 below for an aggregate purchase price of $49,995,393. The
Reporting Person funded the purchase with approximately $15 million of cash on
hand as of December 31, 2023, $10 million from the sale of marketable
securities from December 31, 2023, through April 3, 2024, and $25 million of
additional cash borrowed from lines of credit previously issued by community
banks in the ordinary course of business. Between December 31, 2023, and April
3, 2024, on a temporary basis, the Reporting Person used cash on hand as of
December 31, 2023, and cash from the sale of such marketable securities to
temporarily pay-down other lines of credit issued by community banks in the
ordinary course of business that were outstanding as of December 31, 2023, and
then redrew upon such lines of credit on April 3, 2024, to fund the
acquisition. The securities acquired in the transaction do not currently
collateralize any borrowings, although in the future all or part of securities
may from time to time be pledged with one or more banking institutions or
brokerage firms as collateral for loans or lines of credit made by any such
bank or brokerage firm to the Reporting Person.
Item 4. Purpose of the Transaction
The Reporting Person acquired all securities described herein for investment.
Other than as described herein, the Reporting Person does not have any plans or
proposals that relate to or would result in: (a) the acquisition by any person
of additional securities of the Issuer, or the disposition of securities of the
Issuer; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or any of
its subsidiaries; (d) any change in the present board of directors or
management of the Issuer, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board; (e) any
material change in the present capitalization or dividend policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;(g) changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person; (h) causing a class of securities of the
Issuer to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (i) a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to section 12(g)(4)
of the Securities Exchange Act; or (j) any action similar to any of those
enumerated in (a) through (i) above.
The Reporting Person is deemed under banking regulations to control the Issuer,
and the Reporting Person may from time to time to review or reconsider his
intention in holding and/or acquiring shares of Common Stock, and at such time
may formulate a plan or proposal that relates to or would result in one or more
of the matters referred to above in (b) through (j).
Item 5. Interest in Securities of the Issuer
(a) The Reporting Person owns 1,186,257 shares of Common Stock, or an
estimated 5.2%, of the outstanding shares (based on 19,198,379 shares of
Common Stock outstanding as of March 7, 2024 per the Issuer's Annual Report on
Form 10-K for the year ended December 31, 2023 filed with the Commission on
March 15, 2024, plus 3,400,000 shares of Common Stock issued on April 3, 2024).
(b) The Reporting Person has sole power to vote, direct the vote of, dispose
of, or direct the disposition of all reported shares of Common Stock.
(c) The Reporting Person purchased 1,186,157 shares of Common Stock on April
3, 2024, and has not purchased any other securities of the Issuer within the
last 60 days.
(d) No other person has the power to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of the shares of
Common Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
On April 3, 2024, the Reporting Person and other investors entered into an
Amended and Restated Securities Purchase Agreement (the "Securities Purchase
Agreement") with the Issuer, which amends and restates a previous securities
purchase agreement dated December 21, 2023. Pursuant to the Securities Purchase
Agreement, the Issuer issued and sold the following securities in a private
placement (the "Private Placement"), for gross proceeds of $150,000,000: (i)
3,400,000 shares of Common Stock; (ii) 11,418 shares (the "Series B Shares") of
the Issuer's Mandatorily Convertible Cumulative Perpetual Preferred Stock,
Series B, par value $50.00 per share, each Series B Share representing the
economic equivalent of 4,000 shares of Common Stock based on an initial
conversion price of $2.50 per share of Common Stock; (iii) 2,732 shares (the
"Series C Shares" and together with the Series B Shares, the "Preferred
Shares") of the Issuer's Mandatorily Convertible Cumulative Perpetual Preferred
Stock, Series C, par value $50.00 per share, each Series C Share representing
the economic equivalent of 4,000 shares of Common Stock based on an initial
conversion price of $2.50 per share of Common Stock, and (iv) warrants to
purchase 5,942 Series B Shares and 1,441 Series C Shares at an exercise price
of $10,000.00 per share (the "Warrants"), representing the economic equivalent
of warrants to purchase a total of 29,532,000 shares of Common Stock for a
strike price of $2.50 per share of Common Stock.
The Reporting Person paid $49,995,393 for 1,186,157 shares of Common Stock,
4,703 Series B Shares, and Warrants to purchase 2,500 Series B Shares.
The Reporting Person's acquisition represents a purchase price of $49,995,393
for the economic equivalent of 19,998,157 shares of Common Stock and warrants
to purchase 10,000,000 shares of Common Stock for a strike price of $2.50 per
share. The Reporting Person is voluntarily reporting his ownership of the
Series B Shares and Warrants, although he believes that it is not required to
be reported on this schedule unless and until approved by stockholders.
Upon the receipt of requisite stockholder approvals (described below) and
mandatory conversion of all outstanding Series B Shares into Common Stock, the
Reporting Person would own 19,998,257 shares of Common Stock, or 29.3% of the
outstanding shares.
Upon the receipt of requisite stockholder approvals (described below) and
mandatory conversion of all outstanding Series B Shares into Common Stock and
Warrants into warrants to purchase Common Stock, and assuming the Reporting
Person (and no one else) exercised such warrants, the Reporting Person would
own 29,998,257 shares of Common Stock, or 38.3% of the shares outstanding.
Upon the receipt of requisite stockholder approval (described below) and
mandatory conversion of all outstanding Series B Shares into Common Stock, and
accounting for the common-equivalent value of the Series C Shares, the
Reporting Person would own 19,998,257 shares of Common Stock, or 25.3% of the
common-equivalent shares outstanding.
Additional Terms of the Securities Purchase Agreement
Pursuant to the terms of the Securities Purchase Agreement, subject to required
regulatory approvals, the Reporting Person may designate an individual to be
appointed to the boards of directors of the Issuer and the Issuer's wholly
owned subsidiary, Blue Ridge Bank, National Association (the "Bank") for as
long as he owns, generally, at least 4.9% of the outstanding Common Stock
and/or common-equivalent stock. Castle Creek Capital Partners VIII, LP ("Castle
Creek") also has board designation rights and, in the event Castle Creek's
ownership falls below, generally, 4.9% of the outstanding Common Stock and
common-equivalent stock, its right to designate a board representative to the
boards of the Issuer and the Bank automatically will be assigned to the
Reporting Person, provided that he then holds the required ownership levels.
In connection with the Issuer's next annual meeting of shareholders, the Issuer
will take appropriate actions to reduce the size of the Issuer's and the Bank's
boards of directors to 12 and 13 members, respectively, including two Castle
Creek representatives, or 13 and 14 members, respectively, if the Reporting
Person also exercises his right to designate a board member.
The Issuer and the Reporting Person, with non-binding input from Castle Creek,
will work together to identify specific work-out assets and develop and adopt a
mutually agreeable asset resolution plan pursuant to which the Issuer will
accelerate its work-out strategy with respect to those identified assets.
The Reporting Person and other purchasers who own at least, generally, 9.9% of
the issued and outstanding Common Stock and common-equivalent stock have gross-
up rights to acquire from the Issuer any equity or equity-linked securities
(with certain exceptions) offered by the Issuer in order to enable such person
to maintain its proportionate ownership interest in the Issuer as immediately
prior to such issuance.
The Issuer will use its reasonable best efforts to hold a shareholder meeting
no later than June 17, 2024 to obtain shareholder approval of (i) an amendment
to the Issuer's articles of incorporation to increase the number of authorized
shares of Common Stock to at least 150,000,000 shares (the "Articles Amendment
Approval") and (ii) the issuance of the Common Stock underlying the Series B
Shares and Warrants pursuant to applicable listing standards of the NYSE
American (the "Issuance Approval" and together with the Articles Amendment
Approval, the "Stockholder Approvals"). If any of the Stockholder Approvals are
not obtained at the initial shareholder meeting called by the Issuer, then the
Issuer will include proposals to approve such Stockholder Approvals at a
meeting of its shareholders no less than once in each subsequent three-month
period beginning on the date of such previous shareholder meeting until such
approval is obtained. The Issuer may, with the approval of the Reporting Person
and with input from Castle Creek, determine to first convene a meeting of the
Issuer's shareholders for the purpose of obtaining the Issuance Approval, and
then convene a separate meeting of the Issuer's shareholders for the purpose of
obtaining the Articles Amendment Approval. After receiving each required
Stockholder Approval, the Issuer will use its commercially reasonable efforts
to cause all of the Common Stock underlying the Series B Shares and Warrants to
be approved for listing on the NYSE American as promptly as possible. In the
event that the Issuer has obtained the Issuance Approval but the Issuer's
shareholders have not approved the Articles Amendment Approval, the Issuer will
effect a "Partial Conversion" of the Series B Preferred Stock, whereby
outstanding shares of Series B Preferred Stock wil
l automatically convert into
shares of Common Stock, but only to the extent of the total number of shares of
Common Stock available for issuance by the Issuer pursuant to its then
effective articles of incorporation (taking into consideration any shares
previously reserved for issuance), allocated pro rata among the holders of the
Series B Shares and the Series C Shares.
Subject to certain limitations, the Issuer will indemnify the Reporting Person
and other purchasers against losses in connection with breaches of the
Securities Purchase Agreement and the other documents contemplated therein by
the Issuer or in connection with the transactions contemplated by the
Securities Purchase Agreement. Subject to certain limitations, the Reporting
Person and each other purchaser will indemnify the Issuer and its affiliates
and certain related persons against losses in connection with breaches of the
Securities Purchase Agreement and the other documents contemplated therein by
such purchaser.
The Warrants
Warrants are exercisable at any time after issuance, and from time to time, in
whole or in part into Series B Shares or Series C Shares (depending on whether
such Purchaser purchased Series B Shares or Series C Shares pursuant to the
Securities Purchase Agreement) until April 3, 2029. In the event that all (but
not less than all) outstanding Series B Shares are converted into shares of
Common Stock pursuant to the provisions of the Issuer's Articles of
Incorporation as then in effect, then from and after the date on which such
outstanding Series B Shares have been so converted, the Warrant shall be
exercisable for such number of shares of Common Stock into which the shares of
Preferred Stock subject to the Warrant would have been converted had the shares
of Preferred Stock subject to the Warrant been outstanding on the date of such
conversion as provided in the Issuer's Articles of Incorporation as then in
effect. After such conversion, the exercise price per share of Common Stock
subject to the Warrant shall equal the exercise price in effect as of
immediately prior to such conversion divided by the number of shares of Common
Stock into which one share of Preferred Stock previously subject to the Warrant
would have been converted on such date. Holders may exercise their Warrants by
paying the exercise price in immediately available funds to the Issuer or, in
certain circumstances, through a "cashless exercise" whereby the holder of the
Warrant forfeits shares subject to the Warrant in lieu of paying the exercise
price. The Warrants contain certain anti-dilution price protection.
The Registration Rights Agreement
On April 3, 2024, the Issuer and the Reporting Person and other purchasers
entered into a Registration Rights Agreement (the "Registration Rights
Agreement"). Pursuant to the Registration Rights Agreement, the Issuer will
register for resale the Common Stock sold in the Private Placement and the
Common Stock underlying the Series B Stock and Warrants (collectively, the
"Registrable Securities"). The Issuer has agreed to file a registration
statement registering the Registrable Securities for resale by the Purchasers
by the earliest of (i) 30 days after the Stockholder Approvals, (ii) thirty
days after the Partial Conversion and (iii) October 15, 2025. The Issuer shall
use its commercially reasonable efforts to cause such registration statement to
be declared effective by the Securities and Exchange Commission and to keep
such registration statement effective until the earlier of (i) such time as all
of the Registrable Securities covered by such registration statement have been
publicly sold by the holders thereof and (ii) the date on which all Common
Shares, Warrant Shares and Underlying Preferred Shares cease to be Registrable
Securities.
Other than in connection with the agreements described herein, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
between the Reporting Person and any person with respect to any securities of
the Issuer, including but not limited to transfer or voting of any other
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, divisions of profits or loss, or the giving or
withholding of proxies.
Item 7. Materials to be Filed as Exhibits
Exhibit 1: Articles of Amendment to the Articles of Incorporation of Blue
Ridge Bankshares, Inc. creating the Mandatorily Convertible Cumulative
Perpetual Preferred Stock, Series B (incorporated by reference to Exhibit 3.1
of the Issuer's Form 8-K filed on April 5, 2024).
Exhibit 2: Specimen Mandatorily Convertible Cumulative Perpetual Preferred
Stock, Series B, Certificate of Blue Ridge Bankshares, Inc. (incorporated by
reference to Exhibit 4.1 of the Issuer's Form 8-K filed on April 5, 2024).
Exhibit 3: Form of Warrant, dated April 3, 2024, to Purchase Shares of
Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series B, of Blue
Ridge Bankshares, Inc. (incorporated by reference to Exhibit 4.3 of the
Issuer's Form 8-K filed on April 5, 2024).
Exhibit 4: Amended and Restated Securities Purchase Agreement, dated April 3,
2024, by and among Blue Ridge Bankshares, Inc. and the other parties thereto
(incorporated by reference to Exhibit 10.1 of the Issuer's Form 8-K filed on
April 5, 2024).
Exhibit 5: Form of Registration Rights Agreement, dated April 3, 2024, by and
among Blue Ridge Bankshares, Inc. and the other parties thereto (incorporated
by reference to Exhibit 10.2 of the Issuer's Form 8-K filed on April 5, 2024).
Signature
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
DATED: April 10, 2024
/s/ Kenneth R. Lehman
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Kenneth R. Lehman