In a private transaction exempt from registration, Blue Ridge Bankshares, Inc. (NYSE American: BRBS) has issued a significant number of common shares and a warrant to Castle Creek Capital Partners (WA:CPAP) VIII, LP. This strategic financial move took place on Thursday, November 7, 2024, as disclosed in a recent 8-K filing with the Securities and Exchange Commission.
The transaction involved the exchange of 2,732 shares of Blue Ridge Bankshares' Series C Preferred Stock and a warrant for 1,441 shares of the same stock, held by Castle Creek, for 10,928,000 shares of the company’s common stock and a new warrant exercisable into 5,764,000 common shares. The new warrant has an exercise price of $2.50 per share and will remain valid until April 3, 2029.
This exchange aligns with the terms set forth in an Exchange Agreement between the two entities, originally entered into on April 3, 2024. The agreement facilitated the conversion of preferred stock and associated warrants into common stock and warrants, streamlining Blue Ridge Bankshares' capital structure.
The issuance of the common stock and warrant to Castle Creek is exempt from registration under Section 3(a)(9) of the Securities Act of 1933, as the transaction did not involve any commission or remuneration for solicitation. This means that the securities cannot be offered or sold without registration or unless they qualify for an exemption from registration according to the Securities Act.
Investors should note that the securities involved in this transaction are subject to resale restrictions under the Securities Act and are not currently registered for public trading. Blue Ridge Bankshares has made it clear that this filing should not be construed as an offer to sell or a solicitation of an offer to buy any securities.
This transaction is part of Blue Ridge Bankshares' broader strategy to manage its financial instruments and investor relations effectively. The information provided in this article is based on statements from a press release.
In other recent news, Blue Ridge Bankshares, Inc. held its annual shareholder meeting, resulting in several significant decisions. The shareholders elected seven directors and approved the Amended and Restated 2023 Stock Incentive Plan.
As part of the company's recent developments, C. Douglass Riddle, the Executive Vice President and Commercial Banking Executive, departed from the company in accordance with his employment contract.
Additionally, Blue Ridge Bankshares, Inc. underwent substantial stock changes, with the automatic conversion of its Series B Preferred Stock into common stock.
This followed shareholder approval to increase the number of authorized shares of common stock to at least 150 million. It is expected that the outstanding shares of Series C Preferred Stock will be exchanged for shares of Common Stock later this year.
The company also expanded its authorized shares of common stock from 50 million to 150 million, as approved by shareholders. Moreover, the company confirmed the approval of Proposal 1, permitting the issuance of shares representing more than 20% of the outstanding common stock upon conversion or exchange of the recently issued Series B and Series C preferred stock and related warrants.
InvestingPro Insights
Blue Ridge Bankshares' recent strategic transaction with Castle Creek Capital Partners VIII, LP reflects the company's efforts to restructure its capital. This move comes at a time when the bank is facing some financial challenges, as revealed by recent InvestingPro data.
According to InvestingPro, Blue Ridge Bankshares has a market capitalization of $236.07 million. The company's revenue for the last twelve months as of Q3 2024 stood at $97.61 million, with a concerning revenue growth of -0.74% over the same period. This negative growth aligns with an InvestingPro Tip indicating that the company is not profitable over the last twelve months.
On a more positive note, Blue Ridge Bankshares has shown strong recent performance in the stock market. InvestingPro data shows a 12.64% price return over the past week and a 25.3% return over the last three months. These figures correspond with InvestingPro Tips highlighting significant returns over the last week and strong returns over the last three months.
The exchange of preferred stock for common stock and warrants may be part of Blue Ridge Bankshares' strategy to simplify its capital structure and potentially improve its financial position. Investors considering this stock should be aware that InvestingPro offers 8 additional tips that could provide further insights into the company's financial health and prospects.
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