SEC Form SC 13D/A filed by Atlanticus Holdings Corporation (Amendment)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Amendment No. 1)

Under the Securities Exchange Act of 1934

ATLANTICUS HOLDINGS CORPORATION

(Name of Issuer)

Common Stock, no par value per share

(Title of Class of Securities)

04914Y102

(CUSIP Number)

Frank J. Hanna, III

c/o Atlanticus Holdings Corporation

Five Concourse Parkway, Suite 300

Atlanta, Georgia 30328

With a copy to:

Paul Davis Fancher

Troutman Pepper Hamilton Sanders LLP

600 Peachtree Street N.E., Suite 3000

Atlanta, Georgia 30308

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

November 14, 2022

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box  ☐

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(a) Includes (i) 263,432 shares of Atlanticus Holdings Corporation’s (the “Issuer”) common stock held by EHP Capital, LLC (“EHP”) and (ii) 4,000,000 shares of the Issuer’s common stock underlying Series A Convertible Preferred Stock held by Dove Ventures, LLC (“Dove”). The governing documents of EHP provide Frank J. Hanna, III with sole voting and dispositive power over the 263,432 shares of common stock held by EHP. Frank J. Hanna, III shares voting and dispositive power over the 4,000,000 shares of the Issuer’s common stock underlying Series A Convertible Preferred Stock held by Dove with his brother David G. Hanna.

(b) Excludes 4,098,072 shares of the Issuer’s common stock that have been pledged to an entity controlled by Frank J. Hanna, III and members of Frank J. Hanna III’s immediate family (the “Pledgee”) to secure a loan to an entity controlled by David G. Hanna and members of David G. Hanna’s immediate family. The pledge agreement, prior to default, does not grant to the Pledgee (i) the power to vote or to direct the vote of the pledged shares or (ii) the power to dispose or direct the disposition of the pledged shares.

(c) Based on 14,445,295 shares of the Issuer’s common stock outstanding as of November 1, 2022, as reported in the Issuer’s Form 10-Q for the quarter ended September 30, 2022, filed with the Securities and Exchange Commission on November 8, 2022. Beneficial ownership is determined in accordance with the rules of the SEC, which deem a person to beneficially own any shares of the Issuer’s common stock the person has or shares voting or dispositive power over and any additional shares of the Issuer’s common stock obtainable within 60 days through the conversion or exercise of preferred stock, options or other purchase rights. Shares of the Issuer’s common stock subject to preferred stock, options or other purchase rights that are currently exercisable or are exercisable within 60 days of November 14, 2022 (including shares subject to restrictions that lapse within 60 days of November 14, 2022) are deemed outstanding for purposes of computing the percentage ownership of the person holding such preferred stock, options or other purchase rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(a)  Includes 4,098,072 shares of the Issuer’s common stock held by FSH.

(b)  Excludes 4,098,072 shares of the Issuer’s common stock that have been pledged to an entity controlled by Frank J. Hanna, III and members of Frank J. Hanna III’s immediate family (the “Pledgee”) to secure a loan to an entity controlled by David G. Hanna and members of David G. Hanna’s immediate family.  The pledge agreement, prior to default, does not grant to the Pledgee (i) the power to vote or to direct the vote of the pledged shares or (ii) the power to dispose or direct the disposition of the pledged shares.

(c)  Based on 14,445,295 shares of the Issuer’s common stock outstanding as of November 1, 2022, as reported in the Issuer’s Form 10-Q for the quarter ended September 30, 2022, filed with the Securities and Exchange Commission on November 8, 2022.  Beneficial ownership is determined in accordance with the rules of the SEC, which deem a person to beneficially own any shares of the Issuer’s common stock the person has or shares voting or dispositive power over and any additional shares of the Issuer’s common stock obtainable within 60 days through the conversion or exercise of preferred stock, options or other purchase rights. Shares of the Issuer’s common stock subject to preferred stock, options or other purchase rights that are currently exercisable or are exercisable within 60 days of November 14, 2022 (including shares subject to restrictions that lapse within 60 days of November 14, 2022) are deemed outstanding for purposes of computing the percentage ownership of the person holding such preferred stock, options or other purchase rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(a) Includes 4,098,072 shares of the Issuer’s common stock held by FSH.

(b) Based on 14,445,295 shares of the Issuer’s common stock outstanding as of November 1, 2022, as reported in the Issuer’s Form 10-Q for the quarter ended September 30, 2022, filed with the Securities and Exchange Commission on November 8, 2022. Beneficial ownership is determined in accordance with the rules of the SEC, which deem a person to beneficially own any shares of the Issuer’s common stock the person has or shares voting or dispositive power over and any additional shares of the Issuer’s common stock obtainable within 60 days through the conversion or exercise of preferred stock, options or other purchase rights. Shares of the Issuer’s common stock subject to preferred stock, options or other purchase rights that are currently exercisable or are exercisable within 60 days of November 14, 2022 (including shares subject to restrictions that lapse within 60 days of November 14, 2022) are deemed outstanding for purposes of computing the percentage ownership of the person holding such preferred stock, options or other purchase rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(a) Includes 4,000,000 shares of the Issuer’s common stock underlying Series A Convertible Preferred Stock held by Dove.

(b) Based on 14,445,295 shares of the Issuer’s common stock outstanding as of November 1, 2022, as reported in the Issuer’s Form 10-Q for the quarter ended September 30, 2022, filed with the Securities and Exchange Commission on November 8, 2022. Beneficial ownership is determined in accordance with the rules of the SEC, which deem a person to beneficially own any shares of the Issuer’s common stock the person has or shares voting or dispositive power over and any additional shares of the Issuer’s common stock obtainable within 60 days through the conversion or exercise of preferred stock, options or other purchase rights. Shares of the Issuer’s common stock subject to preferred stock, options or other purchase rights that are currently exercisable or are exercisable within 60 days of November 14, 2022 (including shares subject to restrictions that lapse within 60 days of November 14, 2022) are deemed outstanding for purposes of computing the percentage ownership of the person holding such preferred stock, options or other purchase rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(a) Includes 263,432 shares of the Issuer’s common stock held by EHP.

(b) Based on 14,445,295 shares of the Issuer’s common stock outstanding as of November 1, 2022, as reported in the Issuer’s Form 10-Q for the quarter ended September 30, 2022, filed with the Securities and Exchange Commission on November 8, 2022. Beneficial ownership is determined in accordance with the rules of the SEC, which deem a person to beneficially own any shares of the Issuer’s common stock the person has or shares voting or dispositive power over and any additional shares of the Issuer’s common stock obtainable within 60 days through the conversion or exercise of preferred stock, options or other purchase rights. Shares of the Issuer’s common stock subject to preferred stock, options or other purchase rights that are currently exercisable or are exercisable within 60 days of November 14, 2022 (including shares subject to restrictions that lapse within 60 days of November 14, 2022) are deemed outstanding for purposes of computing the percentage ownership of the person holding such preferred stock, options or other purchase rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

Explanatory Note:

This Amendment No. 1 to Schedule 13D (this “Amendment”) is being filed by Frank J. Hanna, III, Sally R. Hanna, FSH Capital, LLC (“FSH”), Dove Ventures, LLC (“Dove”) and EHP Capital, LLC (“EHP”). Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” This Amendment is being filed to report the acquisition by EHP of 263,432 shares of Atlanticus Holdings Corporation’s (the “Issuer”) common stock from David G. Hanna, the brother of Frank J. Hanna, III, for estate and tax planning purposes.

Information in this Explanatory Note and in each item of this Amendment shall be deemed incorporated by reference in all other items of this Amendment, as applicable.

This Amendment relates to the common stock, no par value per share of the Issuer. The principal executive office of the Issuer is Five Concourse Parkway, Suite 300, Atlanta, Georgia 30328.

The information set forth in Item 4 hereof is hereby incorporated by reference into this Item 3, as applicable.

As previously disclosed in the Issuer’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on December 30, 2019, the Issuer and Dove entered into a payoff letter (the “Payoff Letter”), pursuant to which the Issuer agreed to issue Dove 400,000 shares of newly-created Series A Cumulative Convertible Preferred Stock, no par value (the “Series A Convertible Preferred Stock”), in exchange for full satisfaction of the $40.0 million that the Issuer owed Dove under the Loan and Security Agreement, dated as of November 26, 2014, as previously amended, among the Issuer, certain subsidiary guarantors of the Issuer and Dove. The Issuer and Dove signed the Payoff Letter and completed the transactions provided for under the Payoff Letter on December 27, 2019.

In connection with the issuance of the Series A Convertible Preferred Stock, on December 27, 2019, the Issuer filed the Articles of Amendment Establishing Cumulative Convertible Preferred Stock, Series A (the “Articles of Amendment”) with the Georgia Secretary of State. The Articles of Amendment, which establishes the rights, preferences, privileges, qualifications, restrictions and limitations relating to the Series A Convertible Preferred Stock, became effective upon filing.

Pursuant to the Articles of Amendment, the Series A Convertible Preferred Stock has the following terms:

The terms of the Series A Convertible Preferred Stock are more fully described in the Articles of Amendment, a copy of which is filed as Exhibit B hereto and is incorporated by reference herein.

Dove is a limited liability company owned by three trusts.  David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of one of the trusts the beneficiaries of which include David G. Hanna.  Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other two trusts the beneficiaries of which include Frank J. Hanna, III.  David G. Hanna and Frank J. Hanna, III are brothers.

Subject to applicable law, each Reporting Person may from time to time purchase additional securities of the Issuer, or rights or options to purchase such securities, through open market or privately negotiated transactions or exercises of derivative securities, or may determine to sell, trade or otherwise dispose of all or some holdings in the Issuer in the public markets, in privately negotiated transactions or otherwise, or take any other lawful action such Reporting Person deems to be in his, her or its best interests, or otherwise, depending upon existing market conditions, the price and availability of such securities and other considerations discussed in this paragraph. Each Reporting Person intends to review on a continuing basis various factors relating to his, her or its investment in the Issuer, including but not limited to the Issuer’s business and prospects, the price and availability of the Issuer’s securities, subsequent developments affecting the Issuer, other investment and business opportunities available to such Reporting Person, such Reporting Person’s general investment and trading practices, market conditions, estate planning considerations or other factors. Each Reporting Person has not yet determined which of the courses of actions specified in this paragraph he, she or it may ultimately take.

Except as set forth herein, none of the Reporting Persons has any present plans or proposals which relate to or would result in any of the following: (a) the acquisition of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) any change in the present Board or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer’s business or corporate structure; (g) changes in the Issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) any action similar to any of those enumerated in the foregoing clauses (a) through (i); provided that any Reporting Person may, at any time and subject to applicable law and the policies of the Issuer, review or reconsider his, her or its position with respect to the Issuer and reserves the right to develop such plans or proposals that would relate to or result in the transactions described above and may hold discussions with or make proposals to management, the Board, other shareholders of the Issuer or other third parties regarding such matters.

The information set forth in Item 4 hereof is hereby incorporated by reference into this Item 6, as applicable.

Stockholders Agreement

On April 28, 1999, the Issuer, David G. Hanna, Frank J. Hanna, III, certain trusts that were affiliates of the Hannas, Richard W. Gilbert and Richard R. House entered into a stockholders agreement (the “Stockholders Agreement”) pursuant to which the parties agreed that (i) if one or more of the shareholders accepts a bona fide offer from a third party to purchase more than 50% of the outstanding common stock, each of the other shareholders that is a party to the agreement may elect to sell his shares to the purchaser on the same terms and conditions, and (ii) if shareholders that are a party to the agreement owning more than 50% of the common stock propose to transfer all of their shares to a third party, then such transferring shareholders may require the other shareholders that are a party to the agreement to sell all of the shares owned by them to the proposed transferee on the same terms and conditions. The foregoing description of the Stockholders Agreement is qualified in its entirety by reference to the full text of the Stockholders Agreement, a copy of which is filed as Exhibit C hereto and is incorporated by reference herein.

Common Stock Pledges

All of the shares of common stock held by FSH have been pledged to secure a loan from an entity controlled by David G. Hanna and members of David G. Hanna’s immediate family. The pledge agreement, prior to default, does not grant to the pledgee (i) the power to vote or to direct the vote of the pledged shares or (ii) the power to dispose or direct the disposition of the pledged shares.

The amounts disclosed in this Amendment exclude 4,098,072 shares of common stock that have been pledged to an entity controlled by Frank J. Hanna, III and members of Frank J. Hanna III’s immediate family to secure a loan to an entity controlled by David G. Hanna and members of David G. Hanna’s immediate family. The pledge agreement, prior to default, does not grant to the pledgee (i) the power to vote or to direct the vote of the pledged shares or (ii) the power to dispose or direct the disposition of the pledged shares.

SIGNATURE

After reasonable inquiry and to the best of the undersigned’s knowledge and belief, the undersigned hereby certifies that the information set forth in this statement is true, complete and correct.

Exhibit A

Joint Filing Agreement

This agreement is made pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended (the “Act”), by and among the parties listed below, each referred to herein as a “Joint Filer.” The Joint Filers agree that a statement of beneficial ownership as required by Section 13(d) of the Act and the rules thereunder may be filed on each of their behalf on Schedule 13D or Schedule 13G, as appropriate, and that said joint filing may thereafter be amended by further joint filings. The Joint Filers state that they each satisfy the requirements for making a joint filing under Rule 13d-1.