SCHEDULE: Black Rock Coffee Insiders Detail Significant Holdings & Margin Loan

Key insiders of Black Rock Coffee Bar, Inc., including co-founders and entities, have disclosed substantial beneficial ownership of 39.9% to 53.1% of Class A Common Stock, alongside a new $62.85 million margin loan secured by their equity.

Summary

• Viking Cake BR, LLC and its wholly-owned subsidiary, Viking Cake Fuel, LLC, beneficially own 11,618,781 LLC Units of Black Rock Coffee Holdings, LLC (Black Rock OpCo) and an equal number of Class C Common Stock of Black Rock Coffee Bar, Inc. (the Issuer).
• This ownership represents 39.9% of the Issuer's Class A Common Stock, assuming conversion of all LLC Units into Class A Common Stock, resulting in a total of 29,097,233 Class A shares outstanding (17,478,452 existing + 11,618,781 convertible).
• Daniel Brand, as investment advisor for several trusts (Hernandez, Spellmeyer, Pereboom Trusts) and through Viking Cake Fuel, LLC, is deemed to beneficially own 19,766,207 LLC Units and Class C shares, representing 53.1% of Class A Common Stock, assuming conversion into 37,055,645 total Class A shares.
• Jeffrey Hernandez, Bryan Pereboom, and Jacob Spellmeyer, as managers of Viking Cake BR, LLC, are also deemed to beneficially own 11,618,781 LLC Units and Class C shares, representing 39.9% of Class A Common Stock.
• The Reporting Persons acquired their securities for long-term investment purposes and intend to continuously review their investment.
• Viking Cake Fuel, LLC entered into a margin loan agreement with JPMorgan Chase Bank, N.A. on September 11, 2025, with aggregate commitments of $62,850,130.09.
• Proceeds from this margin loan were used to purchase 3,118,938 newly issued LLC Units from Black Rock OpCo on September 15, 2025, concurrent with the Issuer's initial public offering.
• A total of 11,618,781 LLC Units and an equal number of Class C shares held by Viking Cake Fuel, LLC, and 2,023,931 LLC Units and Class C shares held by a subsidiary of the Jeffrey R. Hernandez 2021 Trust, are pledged as collateral for the margin loan.

Sentiment

Score: 5

Explanation: The filing is a standard regulatory disclosure of beneficial ownership and a financing arrangement. It indicates significant insider commitment through substantial holdings and a margin loan, which can be viewed positively. However, the leverage introduced by the margin loan and the various triggers for collateral calls or mandatory prepayments also introduce potential risks. The overall sentiment is neutral as it's an informational update rather than a performance report.

Positives

• The Reporting Persons, including co-founders, state their acquisition of securities is for long-term investment purposes, indicating continued commitment to the company.
• Co-founders serve on the Issuer's Board of Directors, suggesting active involvement and potential influence over corporate activities.
• The margin loan provided $62,850,130.09 in capital, which was used to purchase additional LLC Units, potentially signaling confidence in the Issuer's future.

Negatives

• A significant portion of insider holdings (11,618,781 LLC Units from Viking Cake Fuel, LLC and 2,023,931 LLC Units from Jeffrey R. Hernandez 2021 Trust) are pledged as collateral for the margin loan, introducing leverage and potential for forced sales if collateral calls are triggered.
• The margin loan includes various events that could trigger mandatory prepayment or collateral calls, such as a Change of Control, Issuer Event (e.g., delisting, low market price, low trading volume), or Regulatory Event, which could lead to market instability for the stock.
• The specific financial terms of the margin loan, such as the 'Spread' and various LTV ratios (Margin Call, Release, Reset, Initial), are redacted, limiting full transparency into the loan's risk profile.

Risks

• **Collateral Calls**: If the Loan-to-Value (LTV) Ratio exceeds the LTV Margin Call Level (redacted), the Borrower must post additional cash collateral, potentially leading to forced sales of pledged shares if cash is unavailable.
• **Mandatory Prepayment Events**: The loan can be mandatorily accelerated upon a Change of Control, an Issuer Event (e.g., delisting, market price below redacted minimum, ADTV below redacted minimum, trading suspension, tender offer/merger), or a Regulatory Event (e.g., investigation for law violation, anti-fraud/fiduciary breach, indictment of principal officer).
• **Transfer Restrictions**: The pledged shares are subject to existing transfer restrictions, including those related to Rule 144, lock-up agreements, and the OpCo LLCA, which could limit liquidity or the ability to manage collateral.
• **Market Price Volatility**: A decline in the Issuer's Class A Common Stock market price below the redacted Minimum Market Price or a decrease in Average Daily Trading Volume (ADTV) below the redacted Minimum ADTV Level could trigger an Issuer Event and mandatory prepayment.
• **Free Float Reduction**: If the Free Float falls below a redacted monetary threshold, it constitutes an Issuer Event, potentially leading to mandatory prepayment.
• **Regulatory Scrutiny**: Investigations or indictments related to the Loan Parties, OpCo, its manager, or co-founders for fraud or securities law violations could trigger a Regulatory Event and mandatory prepayment.
• **Changes to OpCo LLCA/Units**: Amendments that do not maintain economic parity between Class A Shares and OpCo Units, or restrict the Redemption Right, could trigger an Issuer Event or Potential Adjustment Event, potentially leading to mandatory prepayment.
• **Tax Implications**: The Tax Receivable Agreement obligates the Issuer to make cash payments equal to 85% of certain tax benefits, which could impact the Issuer's cash flow.

Future Outlook

The Reporting Persons acquired their securities for investment purposes and intend to continuously review their investment in the Issuer. They may, in the future, acquire additional securities or dispose of existing ones. As co-founders and Board members, they may influence the Issuer's corporate activities. No present plans or proposals are in place that would result in major corporate transactions like mergers, liquidations, or significant changes to the board or capital structure.

Management Comments

• Daniel Brand, Jeffrey Hernandez, Bryan Pereboom, and Jacob Spellmeyer are co-founders and members of the Board of Directors of Black Rock Coffee Bar, Inc.
• As Board members and holders of equity securities, the co-founders may have influence over the corporate activities of the Issuer.

Industry Context

NA

Corporate Governance

Related Party Transactions

• The co-founders (Daniel Brand, Jeffrey Hernandez, Bryan Pereboom, Jacob Spellmeyer) are managers of Viking Cake BR, LLC and members of the Issuer's Board of Directors.
• The Margin Loan Agreement involves Viking Cake Fuel, LLC (a wholly-owned subsidiary of Viking Cake BR, LLC) as Borrower and Viking Cake Fuel II, LLC (owned by Jeffrey R. Hernandez 2021 Trust) as Pledgor, with JPMorgan Chase Bank, N.A. as the lender.
• The Tax Receivable Agreement, Registration Rights Agreement, and Voting Agreement are between the Issuer and the co-founders and certain of their affiliates.

Stakeholder Impact

• **Shareholders**: The significant insider ownership and long-term investment intent may signal confidence. However, the margin loan introduces leverage and potential for forced sales, which could impact share price stability. The registration rights agreement could lead to future dilution or increased supply of shares.
• **Creditors (JPMorgan Chase Bank, N.A.)**: The margin loan provides a secured interest in a substantial portion of the Issuer's equity, mitigating risk for the lender.
• **Management**: The co-founders' continued presence on the Board and their voting agreement provide a stable leadership structure for the near term.

Next Steps

• The Reporting Persons intend to continuously review their investment in the Issuer.
• They may, in the future, determine to acquire additional securities or dispose of existing securities.
• The Issuer is required to make cash payments to TRA Parties under the Tax Receivable Agreement.
• The co-founders and certain affiliates have demand registration rights for their shares.

Key Dates

Recommendation

The filing provides a detailed look into the significant insider ownership and a substantial margin loan taken by key stakeholders of Black Rock Coffee Bar, Inc. While the long-term investment intent and continued board involvement by co-founders are positive indicators of commitment, the leverage introduced by the $62.85 million margin loan, secured by a large block of shares, presents a notable risk. The potential for collateral calls and mandatory prepayments under various market or regulatory conditions could lead to forced selling, creating downward pressure on the stock. Given this balance of insider confidence and financial leverage risk, a 'hold' recommendation is appropriate, awaiting further clarity on operational performance and market stability.

Keywords

Black Rock Coffee Bar, Schedule 13D, beneficial ownership, margin loan, insider holdings, Class A Common Stock, LLC Units, corporate governance, JPMorgan Chase Bank, Viking Cake BR, Viking Cake Fuel, co-founders