This Amendment No. 3 (“Amendment No. 3”) to Schedule 13D amends the initial Statement on Schedule 13D filed on August 23, 2018, as amended by Amendment No. 1 to Schedule 13D filed on May 29, 2020, as amended by Amendment No. 2 to Schedule 13D on June 16, 2020 (as so amended, the “Schedule 13D”), relating to the Common Shares of Beneficial Interest, $0.01 par value per share (the “Common Shares”), of Ellington Residential Mortgage REIT, a Maryland corporation (the “Issuer”). Capitalized terms used but not defined in this Amendment No. 3 shall have the same meanings ascribed to them in the Schedule 13D.
Item 2. Identity and Background.
Item 2 of the Schedule 13D is hereby amended by incorporating herein by reference the information set forth on the updated Schedule I attached hereto.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended and supplemented as follows:
On June 14, 2021, the Issuer and EARN Holdings entered into an underwriting agreement (the “Underwriting Agreement”) with the underwriters named therein (the “Underwriters”). Pursuant to the Underwriting Agreement, EARN Holdings agreed to sell 2,675,000 Common Shares. The shares were sold at the $13.20 public offering price per Common Share, less the underwriting discount of $0.40 per share. The sale of the Common Shares pursuant to the Underwriting Agreement closed on June 17, 2021.
In connection with the offering described herein, the Issuer, the Issuer’s executive officers and directors, EARN Holdings and other persons identified therein have agreed with the Underwriters, subject to specified exceptions, not to offer, pledge or sell or otherwise transfer any of the Common Shares or securities convertible into or exchangeable for Common Shares, for a period of 30 days after June 14, 2021 except with the prior written consent of Morgan Stanley & Co. LLC.
References to and descriptions of the lock-up agreement set forth above in this Item 4 do not purport to be complete and are qualified in their entirety by reference to the full text of such agreement, the form of which has been filed as an exhibit hereto and incorporated by reference herein.
Following the consummation of the offering described herein, the Shareholders Agreement automatically terminated with respect to the rights of EARN Holdings. As a result, EARN Holdings ceased to have any rights under the Shareholders Agreement, including the right to designate one nominee to the Issuer’s board of trustees.
Item 5. Interest in Securities of the Issuer.
Items 5(a)-(c) of the Schedule 13D are hereby amended and restated as follows:
(a) – (b) Calculations of the percentage of Common Shares beneficially owned assumes that there were 12,918,542 Common Shares outstanding as of June 17, 2021, upon the completion of the Offering described herein, based on the prospectus supplement filed pursuant to Rule 424(b)(5) by the Issuer on June 15, 2021.
The aggregate number and percentage of the Common Shares beneficially owned by each Reporting Person and, for each Reporting Person, the number of shares as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition are set forth on rows 7 through 11 and row 13 of the cover pages of this Schedule 13D and are incorporated herein by reference.
As of June 21, 2021, EARN Holdings directly held 628,578 Common Shares.
BTO EARN Manager L.L.C. is the managing member of EARN Holdings. BTOA L.L.C. is the sole member of BTO EARN Manager L.L.C. Blackstone Holdings III L.P. is the managing member of BTOA L.L.C. Blackstone Holdings III GP L.P. is the general partner of Blackstone Holdings III L.P. Blackstone Holdings III GP Management L.L.C. is the general partner of Blackstone Holdings III GP L.P. Blackstone is the sole member of Blackstone Holdings III GP Management L.L.C. Blackstone Group Management L.L.C. is the sole holder of the Series II preferred stock of Blackstone. Blackstone Group Management L.L.C. is wholly owned by its senior managing directors and controlled by its founder, Stephen A. Schwarzman.
