Form 4: Potbelly Director Sells Shares in RaceTrac Merger

Potbelly Corp. Director Vann A. Avedisian reported the disposition of all his common stock and warrants following the company's merger with RaceTrac, Inc. at $17.12 per share.

Summary

• Vann A. Avedisian, a Director and 10% Owner of Potbelly Corp. (PBPB), reported changes in beneficial ownership following the merger of Potbelly with Hero Sub Inc., a subsidiary of RaceTrac, Inc.
• The merger, effective October 23, 2025, resulted in Potbelly becoming a wholly-owned subsidiary of RaceTrac, Inc.
• Each share of Potbelly common stock was automatically cancelled and converted into the right to receive $17.12 per share in cash.
• Avedisian disposed of 96,930 shares of Common Stock held directly, 513,163 shares held indirectly by the Vann A. Avedisian Trust, and 101,585 shares held indirectly by Intrinsic Investment Holdings, LLC, all at $17.12 per share.
• Outstanding warrants to purchase Common Stock were also cancelled and converted into a cash payment based on the excess of the $17.12 Per Share Price over the warrant's exercise price.
• Avedisian disposed of 40,710 warrants held indirectly by Intrinsic Investment Holdings, LLC, at $17.12 per share equivalent.
• Unvested restricted stock units (RSUs) were cancelled and substituted into contingent cash awards, subject to the same vesting terms but with 'double-trigger' accelerated vesting upon certain terminations.
• Corrections were noted for previously reported amounts on Form 3: 513,163 shares of Common Stock (corrected from 513,263) and 40,710 Warrants (corrected from 40,634).

Sentiment

Score: 7

Explanation: The sentiment is positive for the reporting person as they successfully monetized their holdings at a pre-determined price, and unvested RSUs were converted into cash awards with favorable vesting terms. For the company, it marks a transition to private ownership, which can be seen as positive for strategic flexibility but removes public investment opportunity.

Positives

• The reporting person received cash for all common stock and warrants at a fixed price of $17.12 per share, providing liquidity and a defined return.
• Unvested restricted stock units were converted into Substituted RSU Cash Awards with 'double-trigger' accelerated vesting, offering potential for earlier payout under specific conditions.

Negatives

• The company's common stock is no longer publicly traded, removing future upside potential for public shareholders.
• The reporting person no longer holds equity in the company, eliminating direct participation in future growth.

Future Outlook

Potbelly Corp. is now a wholly-owned subsidiary of RaceTrac, Inc., and its common stock is no longer publicly traded. The future outlook for the former public entity is now integrated within RaceTrac's private operations.

Industry Context

This transaction represents a take-private merger, where a publicly traded company (Potbelly) is acquired by a private entity (RaceTrac, Inc.). Such mergers typically occur when a private buyer sees strategic value or believes the public market undervalues the target, allowing for greater operational flexibility away from public scrutiny.

Stakeholder Impact

• Shareholders: Public shareholders received $17.12 per share in cash, ending their equity ownership in Potbelly Corp.
• Employees with RSUs: Employees holding unvested RSUs received Substituted RSU Cash Awards with 'double-trigger' accelerated vesting, providing continued incentive and potential for accelerated payout.

Next Steps

• For the reporting person, the disposition of securities is complete.
• For Potbelly Corp., operations will continue as a wholly-owned subsidiary of RaceTrac, Inc.

Key Dates

Keywords

Potbelly, PBPB, RaceTrac, Merger, Acquisition, Form 4, Insider Transaction, Vann Avedisian, Common Stock, Warrants, Restricted Stock Units, Corporate Action