The massive share overhang (22.9M shares vs. a pre-conversion float likely under 5M shares) creates extreme selling pressure risk. With the stock trading at $7.38 vs. the $3.50 effective conversion price, selling shareholders have a strong incentive to monetize. The company's fundamentals are also deteriorating — dividends suspended, a $38.4M asset resolution plan, a restatement, and discontinued SBA 7(a) lending. Expect significant downward pressure on BAFN as this registration becomes effective and selling begins. Monitor for selling activity from Kenneth R. Lehman (42.38% holder) and other large holders.
Executive Summary
BayFirst Financial Corp. filed Amendment #2 to its S-1 registration statement to register up to 22,856,000 shares of common stock for resale by selling shareholders who acquired the shares through the conversion of Series D and Series E preferred stock issued in an $80M private placement. The company will not receive any proceeds from this resale registration, but the massive share overhang (22.9M shares vs. a pre-conversion float likely under 5M shares) creates significant potential selling pressure, especially as the stock trades at $7.38, well above the $3.50 effective conversion price. The filing also discloses a $38.4M asset resolution plan adjustment, a $1.5M impairment, and a $1.6M write-down, alongside the redemption of $9.7M of Series A and B preferred stock on August 10, 2026, and the suspension of common dividends since July 2025.
Key Facts
- Up to 22,856,000 shares registered for resale by selling shareholders — zero proceeds to the company.
- Shares were issued via conversion of Series D and E preferred stock from an $80M private placement that closed April 28, 2026, at an effective $3.50/share.
- Kenneth R. Lehman owns 11,428,000 shares (42.38% of outstanding) and plans to sell all of them.
- The company disclosed a $38.4M asset resolution plan adjustment, a $1.5M impairment, and a $1.6M write-down.
- Dividends to common shareholders have been suspended since July 2025.
- On August 10, 2026, the company redeemed $9,704,434 of Series A and B preferred stock.
- The auditor's report includes an explanatory paragraph regarding a restatement of the 2025 and 2024 financial statements.
- Stock closed at $7.38 on August 20, 2026 — more than double the $3.50 conversion price, creating a strong incentive for selling shareholders to monetize.
Financial Impact
Up to 22.9M shares registered for resale at a current market price of $7.38, representing potential selling pressure of ~$169M at market value. The company will receive zero proceeds.
Risk Factors
- Massive share overhang of 22.9M shares could flood the market and crush the stock price.
- Kenneth R. Lehman's 42.38% stake being sold entirely creates concentrated selling risk.
- Deteriorating fundamentals: $38.4M asset resolution plan, $1.5M impairment, $1.6M write-down, restated financials, suspended dividends.
- The company is an emerging growth company with reduced disclosure requirements, increasing information risk.
- No proceeds to the company — this is purely a resale registration with no capital infusion.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| S-1/A Filing (Primary) | 0001649739-26-000082 |
| Exhibit: exfilingfees.htm | 0001649739-26-000082 |
| Exhibit: exhibit51opinions-1aresale.htm | 0001649739-26-000082 |
| Document: a231forvisconsents-1aresal.htm | 0001649739-26-000082 |
| Document: 0001649739-26-000082-index-headers.html | 0001649739-26-000082 |
| Document: 0001649739-26-000082-index.html | 0001649739-26-000082 |
| Document: 0001649739-26-000082.txt | 0001649739-26-000082 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 19, 2026 7d ago | SC 13D/A | $6.44 | awaiting T+60 | — | $6.57 (+2.02%) |
Oct 13, 2026 13d ago | SC 13D/A | $5.25 | awaiting T+60 | — | $6.57 (+25.14%) |
Sep 30, 2026 26d ago | 8-K | $6.81 | awaiting T+60 | — | $6.57 (−3.52%) |
Sep 29, 2026 27d ago | 8-K | $7.21 | awaiting T+60 | — | $6.57 (−8.88%) |
Sep 24, 2026 4w ago | 3 | $7.12 | awaiting T+60 | — | $6.57 (−7.72%) |
Sep 24, 2026 4w ago | Press Release | $7.12 | awaiting T+60 | — | $6.57 (−7.72%) |
Sep 1, 2026 7w ago | 8-K | $7.15 | awaiting T+60 | — | $6.57 (+8.11%) |
Aug 27, 2026 8w ago | 8-K | $6.61 | awaiting T+60 | — | $6.57 (−0.61%) |
Aug 25, 2026 9w ago | EFFECT | $7.37 | awaiting T+60 | — | $6.57 (+10.85%) |
Aug 21, 2026 9w ago | S-1/A | $7.31 | awaiting T+60 | — | $6.57 (+10.12%) |
US Market Status
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