4/A: Patriot National Bancorp Insider Converts Preferred Stock

Patriot National Bancorp's President and Director, Steven Sugarman, converted Series A Preferred Stock into 2 million shares of non-voting common stock via a family trust.

Summary

• Steven Sugarman, a Director, President, and 10% owner of Patriot National Bancorp, Inc. (PNBK), reported changes in his beneficial ownership through an amended filing.
• On July 3, 2025, all Series A Preferred Stock held by the Steven and Ainslie Sugarman Living Trust automatically converted into Non-Voting Common Stock of the Issuer.
• The Trust acquired a total of 2,000,000 shares of Non-Voting Common Stock as a result of this conversion.
• This total includes 1,533,333 shares from the conversion of 19,167 Series A Preferred Stock shares originally purchased in a private placement on March 20, 2025.
• Additionally, 466,667 shares were acquired from the conversion of 5,833 Series A Preferred Stock shares issued to the Trust as reimbursement for the reporting person's legal fees and expenses related to the private placement.
• Each share of Non-Voting Common Stock is convertible into one share of Voting Common Stock, subject to a limitation that no holder can become the beneficial owner of more than 9.99% of the issued and outstanding voting securities.

Sentiment

Score: 6

Explanation: The filing reports a routine, pre-planned conversion of preferred stock to non-voting common stock by an insider. While not directly indicative of company performance, it reflects a structured capital event and insider's continued significant stake. The conversion itself is neutral, but the underlying private placement was a positive capital infusion.

Positives

• The conversion of preferred stock to common stock simplifies the capital structure for the insider's holdings.
• The transaction stems from a private placement, indicating a prior capital infusion into the company.

Negatives

• The common stock received is non-voting, limiting direct voting influence for the converted shares.
• A 9.99% beneficial ownership limitation restricts the insider's ability to convert all non-voting shares into voting shares if it exceeds the threshold.

Risks

• Beneficial Ownership Limitation: No investor in the private placement, nor any holder of Non-Voting Common Stock, has the right to become the beneficial owner of more than 9.99% of the issued and outstanding voting securities of the Issuer, as determined under Rule 13d-3 of the Securities Exchange Act of 1934, as amended. This limits the voting power of the converted shares.

Future Outlook

The filing indicates that each share of Non-Voting Common Stock is convertible into one share of Voting Common Stock, subject to a 9.99% beneficial ownership limitation, suggesting a future potential for these shares to gain voting rights if the limitation allows.

Management Comments

• The Steven and Ainslie Sugarman Living Trust is a revocable living trust for the benefit of the Reporting Person and his spouse, with both serving as trustees.

Industry Context

NA

Corporate Governance

Related Party Transactions

• The Steven and Ainslie Sugarman Living Trust, for which Steven Sugarman (the reporting person) and his spouse are trustees, was issued 5,833 shares of Series A Preferred Stock as reimbursement for the reporting person's legal fees and expenses relating to the Private Placement.

Stakeholder Impact

• Shareholders: The conversion of preferred stock to non-voting common stock by a significant insider could slightly increase the float of non-voting shares. The 9.99% beneficial ownership limitation ensures no single investor gains excessive voting control through this mechanism.

Next Steps

• Conversion of Non-Voting Common Stock into Voting Common Stock is possible in the future, subject to the 9.99% beneficial ownership limitation.

Key Dates

Recommendation

This Form 4/A reports a routine, pre-planned conversion of preferred stock to non-voting common stock by a key insider. It does not provide new information regarding the company's operational performance or strategic direction that would warrant a change in investment stance. The underlying private placement was a past capital event. Investors should hold and await further operational updates or financial results.

Keywords

Patriot National Bancorp, PNBK, Steven Sugarman, SEC Form 4/A, Insider Trading, Stock Conversion, Preferred Stock, Common Stock, Non-Voting Common Stock, Private Placement, Beneficial Ownership