Opening the filing
8-K
Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Subscription Agreements and Certificate of Designations for Series B Convertible Preferred Stock On September 14, 2026 , Dream Finders Homes, Inc., a Texas corporation (the “Company”), entered into Subscription Agreements (the “Subscription Agreements”) with certain institutional investors (collectively, the “Purchasers”). Pursuant to the Subscription Agreements, the Company sold to the Purchasers 225,000 shares of newly-created Series B Convertible Preferred Stock at a first closing, which occurred on September 14, 2026 (the “First Closing”) with an initial liquidation preference of $1,000 per share and a par value of $0.01 per share (the “Series B Convertible Preferred Stock”), for an aggregate purchase price of $225.0 million (the “Purchase Price”). At the First Closing, the Purchasers received an original issue discount equal to 2.50% of the Purchase Price, which was netted from the amount funded by each Purchaser to the Company on the First Closing. The Subscription Agreements contain customary representations, warranties and covenants of the Company and the Purchasers.
The Company used the proceeds from the sale of the Series B Convertible Preferred Stock from the First Closing to redeem the Company’s existing Series A Convertible Preferred Stock, with the remainder to be used for general corporate purposes.
Pursuant to the Subscription Agreements, subject to certain exceptions set forth therein, no Purchaser may transfer any Series B Convertible Preferred Stock, or any Class A common stock issued upon conversion thereof, until the earlier of (i) the 18-month anniversary following the First Closing and (ii) the announcement of a Fundamental Change, in each case without the prior written consent of the Company. Each Purchaser is also generally prohibited from transferring any Series B Convertible Preferred Stock or Class A common stock to any competitor of the Company or other disqualified holder.
As previously disclosed in the Company’s Current Report on Form 8-K filed on August 7, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Bulldogs Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, and Beazer Homes USA, Inc. (“Beazer”). Pursuant to the Subscription Agreements, subject to and contingent upon satisfaction of the conditions to the consummation of the transactions contemplated by the Merger Agreement (the “Merger”) by the Company, the Company agreed to sell, and the Purchasers agreed to purchase, an aggregate of 450,000 additional shares of Series B Convertible Preferred Stock (the “Additional Shares”) at a second closing (the “Second Closing”) at the same purchase price per share and original issue discount. The Second Closing will occur on or before the third business day following the Company’s notice to the Purchasers that all conditions to the consummation of the transactions contemplated by the Merger Agreement have been satisfied or waived. The Company will use the proceeds from any sale of Additional Shares to fund a portion of the consideration payable in connection with the closing of the transactions contemplated by the Merger Agreement, with the remainder of such proceeds to be used for general corporate purposes.
In connection with the First Closing, the Company filed a Certificate of Designations with respect to the Series B Convertible Preferred Stock, which is included as Exhibit 3.1 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01 (the “Certificate of Designations”). Pursuant to the Certificate of Designations, the Series B Convertible Preferred Stock will rank senior to the Company’s Class A and Class B common stock with respect to dividends and distributions on liquidation, winding-up and dissolution. Upon a liquidation, dissolution or winding up of the Company, each share of Series B Convertible Preferred Stock will be entitled to receive the greater of (i) the sum of the initial liquidation preference of $1,000 per share, plus all accumulated and unpaid dividends thereon (including any outstanding deferred dividend amounts), and (ii) after the Non-Convertible Period (as defined herein), the as-converted value of such share calculated pursuant to the calculation of an Optional Conversion or Fundamental Change Conversion (each as defined within the Certificate of Designations). In addition, the Series B Convertible Preferred Stock will have the following terms:
• Cumulative Dividends . The Series B Convertible Preferred Stock will accumulate cumulative dividends at a rate per annum equal to 12.00%, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, beginning on December 31, 2026. The dividend rate will increase by 0.50% on the date after the sixth anniversary of the First Closing date, and by an additional 0.50% every six months thereafter, subject to a maximum rate of 15.00%. The Company may, in its sole discretion, defer payment of all or part of any dividend. During any deferral period, the Company may not declare or pay dividends on, or redeem, purchase or otherwise acquire for consideration, any junior equity securities (including common stock) or any equity securities on parity with the Series B Convertible Preferred Stock with respect to the payment of dividends, subject to customary exceptions.
• Duration and Conversion Rights . The Series B Convertible Preferred Stock will be perpetual with redemption and conversion rights. The Series B Convertible Preferred Stock will not be convertible by the Purchasers prior to the sixth anniversary of the First Closing date (the “Non-Convertible Period”), except in connection with a Fundamental Change (as defined in the Certificate of Designations) or upon the occurrence of an uncured breach by the Company of the protective covenants discussed below. Following the Non-Convertible Period, the Series B Convertible Preferred Stock will be convertible into shares of Class A common stock at a conversion price equal to the average of the closing price of the Class A common stock over the 90 trading days immediately preceding, but not including, the date of the conversion notice, less a 20.0% discount (the “Conversion Discount”), and subject to a floor conversion price of $4.19. If conversion is triggered by an uncured breach of the protective covenants, the Conversion Discount will be 25.0%.
• Company Redemption Right . Following the third anniversary of the First Closing date, the Company will have the option to redeem all or any portion of the Series B Convertible Preferred Stock for an amount, in cash, equal to (i) 102.0% of the liquidation preference, if redeemed after the third anniversary and on or before the fourth anniversary, (ii) 101.0% of the liquidation preference, if redeemed after the fourth anniversary and on or before the fifth anniversary, and (iii) 100.0% of the liquidation preference, if redeemed after the fifth anniversary, and in each case, plus accumulated and unpaid dividends.
• Protective Covenants . For so long as any Series B Convertible Preferred Stock is outstanding, the Company will comply with all covenants set forth in (i) the Company’s Amended and Restated Credit Agreement with Bank of America, N.A., as administrative agent, and the lenders party thereto (the “Credit Agreement”) (including, without limitation, affirmative, negative, and financial covenants); and (ii) any agreement between the Company and any Purchaser or its affiliates. Any amendment, restatement, modification, waiver, replacement in any manner (whether upon or after termination or otherwise) or refinancing in whole or in part of the Credit Agreement that would adversely and materially affect the rights of the holders of Series B Convertible Preferred Stock will require the written consent of the holders of at least 85.0% of the outstanding Series B Convertible Preferred Stock (which holders must include certain of the Purchasers for so long as such Purchasers hold at least 25.0% of the outstanding Series B Convertible Preferred Stock). Non-compliance beyond any applicable cure period with the protective covenants (in the case of the protective covenants related to the Credit Agreement), if uncured for more than 90 days beyond the applicable cure period, will accelerate the conversion right with a 25.0% Conversion Discount.
• Minority Protective Provisions. For so long as any Series B Convertible Preferred Stock is outstanding, the consent of the holders of at least 85.0% of the outstanding Series B Convertible Preferred Stock (which holders must include certain of the Purchasers for so long as such Purchasers hold at least 25.0% of the outstanding Series B Convertible Preferred Stock) shall be required to (i) amend, modify, or waive the Certificate of Designations or the Company’s Certificate of Formation or Bylaws in a manner that adversely alters the rights, powers, preferences, or privileges of the holders of the Series B Convertible Preferred Stock, (ii) effect any amendment, restatement, modification, or waiver of the Credit Agreement that would adversely and materially affect the rights of holders of the Series B Convertible Preferred Stock, (iii) create any new class or series of shares having rights, preferences, or privileges senior to or on parity with the Series B Convertible Preferred Stock, or increase or decrease the authorized number of shares of Series B Convertible Preferred Stock, or issue any additional shares of Series B Convertible Preferred Stock (other than pursuant to the Subscription Agreements) or (iv) consummate a binding share exchange or reclassification involving the Series B Convertible Preferred Stock, or a merger or consolidation of the Company with another entity, unless the Series B Convertible Preferred Stock remains outstanding without adverse modification or equivalent securities are issued by the surviving entity.
• Information Rights. For so long as any Purchaser holds any of the Series B Convertible Preferred Stock, the Purchasers will receive certain information rights, including the right to receive the same financial, business, and other information that is provided to the administrative agent and lenders under the Credit Agreement, at the same time as it is provided to such lenders.
Pursuant to the terms of the Certificate of Designations, unless and until approval of a majority of the Company’s shareholders is obtained as contemplated by New York Stock Exchange listing rules (the “Requisite Shareholder Approval”), no shares of Class A common stock will be issued or delivered upon conversion of any Series B Convertible Preferred Stock to the extent that such issuance would exceed 19.99% of the outstanding shares of Class A common stock as of the date of execution of the Subscription Agreements in the aggregate. In addition, the Series B Convertible Preferred Stock includes a beneficial ownership limitation prohibiting conversions that would cause any Purchaser to beneficially own more than 4.99% of the Class A common stock outstanding after giving effect to any conversion (which limitation may be increased to 19.99% upon 60 days prior notice to the Company). The Company has agreed to seek shareholder approval for the issuance of shares of Class A common stock upon conversion of the Series B Convertible Preferred Stock at the first annual meeting of shareholders to occur after the First Closing.
Investor Rights Agreement In connection with the First Closing, the Company entered into separate investor rights agreements with each Purchaser, a form of which is included as Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01 (each, an “Investor Rights Agreement” and collectively, the “Investor Rights Agreements”). The Investor Rights Agreements provide as follows:
• Board Observer Rights. For so long as each Purchaser continues to beneficially own any shares of Series B Convertible Preferred Stock, such Purchaser, shall have the right to designate one individual each to be present in a non-voting, non-fiduciary observer capacity (each, a “Board Observer”) at all meetings of the Company’s Board of Directors (the “Board of Directors”), including any telephonic or electronic meetings. If following designation as a Board Observer, the Board Observer resigns, is removed, or is otherwise unable to serve for any reason, the applicable Purchaser shall be entitled to designate a replacement Board Observer.
The foregoing descriptions of the transactions contemplated by the Subscription Agreements, Investor Rights Agreements, Registration Rights Agreement, the Voting Agreement and the terms of the Series B Convertible Preferred Stock pursuant to the Certificate of Designations do not purport to be complete and are subject to, and qualified in their entirety by, the full text of such agreements or forms of such agreements, as applicable, which are included as Exhibits 10.1, 10.2, 10.3, 10.4 and 3.1, respectively, to this Current Report on Form 8-K and incorporated by reference into this Item 1.01.
Item 3.02. Unregistered Sales of Equity Securities.
As described in Item 1.01 above, pursuant to the Subscription Agreements, on September 14, 2026 , the Company sold 225,000 shares of Series B Convertible Preferred Stock to the Purchasers at the First Closing and agreed to sell 450,000 additional shares of Series B Convertible Preferred Stock in connection with the consummation of the Merger at the Second Closing. The offer and sale of the shares of Series B Convertible Preferred Stock through the Subscription Agreements are being made in reliance on an exemption from registration under the Securities Act, pursuant to Section 4(a)(2) thereof. The information in Item 1.01 of this Current Report on Form 8-K under the heading “Subscription Agreements and Certificate of Designations for Series B Convertible Preferred Stock” is incorporated by reference into this Item 3.02.
Item 3.03. Material Modification to Rights of Security Holders.
As previously reported on a Current Report on Form 8-K filed by the Company on August 14, 2026, the Company indicated that it would use the net proceeds from the sale of the Series B Convertible Preferred Stock from the First Closing to redeem the Company’s existing Series A Convertible Preferred Stock. In connection with the First Closing, the Company redeemed all outstanding shares of the Company’s Series A Convertible Preferred Stock at a redemption price of $1,028.50 per share, which amounted to a cumulative redemption amount of approximately $154.3 million.
The disclosure set forth above in Item 1.01 under the heading “Subscription Agreements and Certificate of Designations for Series B Convertible Preferred Stock” is incorporated by reference into this Item 3.03.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.