| FORM 4 |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940 |
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| Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). | |||||||||||||||||
1. Name and Address of Reporting Person*
(Street)
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2. Issuer Name and Ticker or Trading Symbol
Velocity Financial, Inc. [ VEL ] |
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
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3. Date of Earliest Transaction
(Month/Day/Year) 04/05/2020 | ||||||||||||||||||||||||||
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4. If Amendment, Date of Original Filed
(Month/Day/Year) |
6. Individual or Joint/Group Filing (Check Applicable Line)
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| Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned | ||||||||||
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| 1. Title of Security (Instr. 3) | 2. Transaction Date (Month/Day/Year) | 2A. Deemed Execution Date, if any (Month/Day/Year) | 3. Transaction Code (Instr. 8) | 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) | 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) | 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) | 7. Nature of Indirect Beneficial Ownership (Instr. 4) | |||
| Code | V | Amount | (A) or (D) | Price | ||||||
| Common Stock | 4,470,300 | D(1) | ||||||||
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities) | |||||||||||||||
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| 1. Title of Derivative Security (Instr. 3) | 2. Conversion or Exercise Price of Derivative Security | 3. Transaction Date (Month/Day/Year) | 3A. Deemed Execution Date, if any (Month/Day/Year) | 4. Transaction Code (Instr. 8) | 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) | 6. Date Exercisable and Expiration Date (Month/Day/Year) | 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) | 8. Price of Derivative Security (Instr. 5) | 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) | 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) | 11. Nature of Indirect Beneficial Ownership (Instr. 4) | ||||
| Code | V | (A) | (D) | Date Exercisable | Expiration Date | Title | Amount or Number of Shares | ||||||||
| Series A Convertible Preferred Stock | $3.85(3)(4) | 04/05/2020 | A | 25,000 | (3) | (4) | Common Stock | 6,493,506(3)(4) | (2) | 25,000 | D(1) | ||||
| Warrant (right to buy) | (5) | 04/05/2020 | A | 1,673,958 | (5) | (5) | Common Stock | 1,673,958(5) | (2) | 1,673,958 | D(1) | ||||
1. Name and Address of Reporting Person*
(Street)
Relationship of Reporting Person(s) to Issuer
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1. Name and Address of Reporting Person*
(Street)
Relationship of Reporting Person(s) to Issuer
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1. Name and Address of Reporting Person*
(Street)
Relationship of Reporting Person(s) to Issuer
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| Explanation of Responses: |
| 1. TOBI III SPE I LLC, a Delaware limited liability company ("TOBI"), is the direct holder of the Issuer's securities. TOBI was formed solely for the purpose of investing in the Issuer. LVS III Holding LP, a Delaware limited partnership ("LVS"), is the sole member of TOBI and operates as a pooled investment fund and invests (among other things) in operating companies. PIMCO GP XVII, LLC, a Delaware limited liability company ("PIMCO GP"), is the sole general partner of LVS. Pacific Investment Management Company LLC is the sole managing member of PIMCO GP, retains a pecuniary interest therein, and has the power to make voting and investment decisions regarding the securities of the Issuer held by TOBI. The signatory below executes this Form 4 on behalf of each Reporting Person as an Executive Vice President of PIMCO. |
| 2. On April 5, 2020, the Issuer and TOBI entered in to a securities purchase agreement (the "Securities Purchase Agreement") pursuant to which TOBI acquired from the Issuer in a private placement: (i) 25,000 shares of the Issuer's Series A Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"); and (ii) warrants to purchase an aggregate of 1,673,958 shares of the Issuer's Common Stock (the "Warrants"). The aggregate subscription amount paid by TOBI for the Series A Convertible Preferred Stock and Warrants acquired by it pursuant to the Securities Purchase Agreement was $25,000,000. |
| 3. The Series A Preferred Stock is not convertible and the Warrants are not exercisable until the Issuer obtains stockholder approval as required by applicable NYSE rules ("Stockholder Approval"). After the Issuer obtains Stockholder Approval, the Series A Preferred Stock is convertible into, with respect to each share of Series A Preferred Stock so converted, the number of shares of Common Stock equal to then applicable conversion rate (plus cash in lieu of fractional shares, if any) at any time, in whole or in part, at the option of TOBI (or a permitted transferee) at an initial conversion price of $3.85 per share of Common Stock. The initial conversion rate for the Series A Preferred Stock is 259.74, and is subject to customary antidilution adjustments. |
| 4. (Continued from Footnote 3) In addition, the Series A Preferred Stock is subject to conversion at the option of the Issuer after October 7, 2021 in accordance with the terms thereof. The Series A Preferred Stock is also subject to repurchase, at the option of TOBI (or a permitted transferee), in accordance with the terms thereof. The Series A Preferred Stock has no expiration date. |
| 5. After the Issuer obtains Stockholder Approval, the Warrants are exercisable at the warrantholder's option at any time, in whole or in part, through April 7, 2025, at an exercise price of $2.96 per share of Common Stock, with respect to two-thirds of the Warrants (or the right to purchase 1,115,972 shares of Common Stock), and at an exercise price of $4.94 per share of Common Stock, with respect to the other one-third of the Warrants (or the right to purchase 557,986 shares of Common Stock). The exercise price and the number of shares of Common Stock issuable upon exercise of the Warrants are subject to customary antidilution adjustments. The Issuer is not required to effect an exercise of Warrants, if after giving effect to the issuance of Common Stock upon exercise of such Warrants, such warrantholder together with its affiliates would beneficially own 49% or more of the Issuer's outstanding Common Stock. |
| Remarks: |
| /s/ Harin de Silva, Executive Vice President, Pacific Investment Management Company LLC | 04/07/2020 | |
| /s/ Harin de Silva, Executive Vice President, on behalf of TOBI III SPE I LLC; By: LVS III Holding LP, its sole member; By: PIMCO GP XVII, LLC, its general partner; By: Pacific Investment Management Company LLC, its managing member | 04/07/2020 | |
| /s/ Harin de Silva, Executive Vice President, on behalf of LVS III Holding LP; By: PIMCO GP XVII, LLC, its general partner; By: Pacific Investment Management Company LLC, its managing member | 04/07/2020 | |
| ** Signature of Reporting Person | Date | |
| Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. | ||
| * If the form is filed by more than one reporting person, see Instruction 4 (b)(v). | ||
| ** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). | ||
| Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure. | ||
| Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number. | ||