BLUE RIDGE BANKSHARES INC

Current report

In the second quarter of 2024, the Company completed the Private Placements pursuant to which it has issued approximately (i) 53.9 million shares of the Company’s common stock, (ii) warrants to purchase 23.8 million shares of the Company’s common stock at an exercise price of $2.50 per share and 2.4 million shares of the Company’s common stock at an exercise price of $2.39 per share, (iii) 2,732 shares of Series C Preferred Stock, which are convertible or exchangeable into 10.9 million shares of the Company’s common stock, and (iv) warrants to purchase 1,441 shares of Series C Preferred Stock at an exercise price of $10 thousand per share, which are convertible or exchangeable upon exercise into 5.7 million shares of the Company’s common stock at an exercise price of $2.50 per share.

Current report

Sales of large amounts of the Company’s common stock, or the perception that sales could occur, may depress the Company’s stock price.

Current report

The market price of the Company’s common stock could drop if existing shareholders decide to sell their shares, especially certain of the purchasers in the Private Placements. As of July 19, 2024, Kenneth L. Lehman owned approximately 20.0 million common shares, or about 27.2% of the outstanding shares of the Company’s common stock, and Castle Creek Capital Partners VIII, LP (“Castle Creek”) owned 593,078 common shares and owned all 2,732 outstanding shares of the Series C Preferred Stock, which are convertible or exchangeable into approximately 10.9 million shares of the Company’s common stock in certain circumstances, which, taken together, would constitute about 13.6% of the outstanding shares of the Company’s common stock (taking into account such additional shares of the

Current report

Company’s common stock upon conversion or exchange). The market price could drop significantly if one or more shareholders sold substantial amounts of the Company’s common stock or other investors perceive sales to be imminent. The Company cannot foresee the impact of such potential sales on the market, but it is possible that if a significant percentage of shares were attempted to be sold within a short period of time, the market for the Company’s shares would be adversely affected. Even if a substantial number of sales do not occur within a short period of time, the mere existence of this “market overhang” could have a negative impact on the market for the Company’s common stock.

Current report

Kenneth L. Lehman and Castle Creek are substantial holders of the Company’s securities.

Current report

Following the conversion or exchange of the Series C Preferred Stock, the Company expects that Mr. Lehman will own approximately 20.0 million common shares, or about 23.7% of the outstanding shares of the Company’s common stock, and Castle Creek will own approximately 11.5 million common shares, or about 13.6% of the outstanding shares of the Company’s common stock (in each case, taking into account such additional shares of the Company’s common stock upon conversion or exchange). Pursuant to the terms of the securities purchase agreement with the purchasers in the Private Placements, Mr. Lehman has the right to appoint one representative on the Company’s Board of Directors, and Castle Creek has the right to appoint two representatives on the Company’s Board of Directors. Mr. Lehman and/or Castle Creek may have individual economic interests that are different from the other’s interests and different from the interests of the Company’s other shareholders.

Previous report

On April 3, 2024, the Company completed the Private Placement for gross proceeds of $150.0 million through the issuance and sale of (i) 3.4 million shares (the “Common Shares”) of the Company’s common stock at a purchase price of $2.50 per Common Share, (ii) 11,418 shares (the “Series B Shares”) of the Company’s Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”), at a purchase price of $10 thousand per Series B Share, (iii) 2,732 shares (the “Series C Shares” and together with the Series B Shares, the “Preferred Shares”) of the Company’s Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock” and together with the Series B Preferred Stock, the “Preferred Stock”), at a purchase price of $10 thousand per Series C Share, and (iv) warrants to purchase 5,942 shares of Series B Preferred Stock and 1,441 shares of Series C Preferred Stock at an exercise price of $10 thousand per share (the “Warrants”).

Previous report

The Preferred Stock has certain rights, preferences, and privileges compared to the rights, preferences, and privileges of common stock. For example, holders of shares of Preferred Stock are entitled to receive cumulative dividends at the rate of 15.0% per share per annum, payable semi-annually, commencing October 15, 2024. Such dividends may be paid, at the Company’s option, in cash or in kind through the issuance of additional shares of Preferred Stock. To the extent that such dividends are not paid semi-annually, then such unpaid dividends will accrue and compound until paid. Whenever dividends payable on the Preferred Stock have not been paid for an aggregate of three or more six-month dividend periods, in each case whether or not consecutive, the Company has agreed to increase the authorized number of directors on the Company’s board of directors by two, and the holders of the Preferred Stock shall have the right to elect directors to such newly created directorships until all accrued and unpaid dividends have been declared and paid in full. Prior to the Conversion, no dividend or distribution may be declared or paid upon any shares of the Company’s common stock.

Previous report

The Preferred Stock has conversion rights which could result in greater dilution to holders of the Company's common stock if shareholder approval of the Proposals is not obtained in a timely manner.

Previous report

Pending approval by the holders of the Company's common stock and subject to certain ownership limitations, the shares of Preferred Stock are convertible or exchangeable into shares of the Company’s common stock at the initial conversion rate of 4,000 shares of the Company’s common stock per share of Preferred Stock, which conversion rate is based on an initial conversion price of $2.50 per share of the Company’s common stock (the “Conversion Rate”). The Conversion Rate is subject to certain adjustments, including that the Conversion Rate will be decreased by 10.0% effective as of July 8, 2024, and such adjusted Conversion Rate will be decreased by 10.0% for each successive 95-calendar-day period thereafter, in each case, until the earlier of (i) April 15, 2025 and (ii) the date by which the Proposals have been approved by the Company’s shareholders and the certificate of amendment relating to the Articles Amendment Proposal has been issued by the Virginia State Corporation Commission. The effect of such reduction in the Conversion Rate is that a greater number of shares of common stock will be issued upon conversion, exchange, and exercise of the shares of Preferred Stock and Warrants, resulting in greater dilution to the holders of common stock.