13G Filing: EJF Capital and Hcsb Financial Corp (HCFB)

(1)

In addition to the 35,968,163 shares of common stock, par value $0.01 per share (“Common Stock”) beneficially owned by EJF Capital LLC, it also beneficially owns 80,318.37 shares of a series of convertible perpetual preferred stock, par value $0.01 per share (“Series A Preferred Stock”) of the Issuer.  Subject to certain conditions, each share of Series A Preferred Stock may be converted into 100 shares of Common Stock at any time, provided that upon such conversion, the holder and its affiliates will not own more than 9.9% of the Common Stock.  Because the 35,968,163 shares of Common Stock that are beneficially owned by EJF Capital LLC represent 9.9% of the outstanding shares of Common Stock, EJF Capital LLC may not currently convert any shares of Series A Preferred Stock into shares of Common Stock.

(2)

Based upon beneficial ownership of 35,968,163 shares of Common Stock and 363,314,783 shares of Common Stock outstanding, as reported in the stock purchase agreement dated March 2, 2016 by and among the Issuer and the purchasers identified therein (the “Purchase Agreement”), and as reflected on the Issuer’s amended Form 8K filed with the Securities and Exchange Commission on March 9, 2016.