| Item 1.01. |
Entry into a Material Definitive Agreement. |
Preferred Stock Conversion and Warrant Extension Agreement and Amendment to Warrant Agreement
On March 11, 2026, in order to induce the immediate full conversion of all of the outstanding shares of the Series A Convertible Preferred Stock, par value $0.01 per share (“Series A Convertible Preferred Stock”), of Sonida Senior Living, Inc., a Delaware corporation (the “Company”), the Company entered into a Preferred Stock Conversion and Warrant Extension Agreement (the “Conversion and Extension Agreement”) with Conversant Dallas Parkway (A) LP, a Delaware limited partnership (“Conversant A”), and Conversant Dallas Parkway (B) LP, a Delaware limited partnership (and, together with Conversant A, the “Investors”) that held all of the 41,250 outstanding shares of Series A Convertible Preferred Stock and all of the 1,031,250 warrants to purchase Company common stock, par value $0.01 per share (“Common Stock”), for $40.00 per share (the “Warrants”) issued and outstanding under that certain Warrant Agreement, dated as of November 3, 2021 (the “Warrant Agreement”), by and among the Company, Computershare Inc. (“Computershare”) and Computershare Trust Company, N.A. (collectively with Computershare, the “Warrant Agent”).
Pursuant to the Conversion and Extension Agreement, among other things and subject to the terms thereof, (i) the Company and the Investors agreed to reduce the conversion price of the Series A Convertible Preferred Stock from $40.00 per share of Common Stock to $32.00 per share of Common Stock (the “Conversion Price”), (ii) the Company entered into an amendment to the Warrant Agreement (the “Warrant Agreement Amendment”) with the Warrant Agent to extend the expiration date of the Warrants from November 3, 2026 to November 3, 2027, (iii) the Company made a onetime payment to the Investors of approximately $5.8 million in the aggregate, which included approximately $1.1 million of accrued but unpaid dividends for the period of January 1, 2026 through March 11, 2026, and (iv) the Investors agreed to immediately convert all of the outstanding shares of Series A Convertible Preferred Stock into shares of Common Stock at the Conversion Price. Accordingly, on March 11, 2026, all of the outstanding shares of Series A Preferred Stock were converted into 1,601,505 shares of common stock.
The foregoing descriptions of the Conversion and Extension Agreement and the Warrant Agreement Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of the Conversion and Extension Agreement and Warrant Agreement Amendment, copies of which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Special Committee Recommendation
The Board established a special committee (the “Special Committee”) comprised solely of independent and disinterested directors for the purpose of reviewing, evaluating, negotiating and approving any agreement with Conversant Capital LLC or any of its affiliates (collectively, “Conversant”) regarding any modification of the terms of the Series A Convertible Preferred Stock and the Warrants and all other matters relating to or arising in connection therewith that present actual or potential conflicts of interest between the Company and Conversant but no actual or potential conflicts of interest between the Company and Silk Partners, LP. The Special Committee determined that the Conversion and Extension Agreement and the transactions contemplated thereby are advisable and in the best interests of the Company and its stockholders and that the terms of the transactions contemplated by the Conversion and Extension Agreement are no less favorable to the Company than those that could have been obtained from third parties. The Special Committee authorized and approved, and recommended that the Audit Committee of the Board and the Board each authorize and approve, the Company’s entry into the Conversion and Extension Agreement and the performance by the Company of the transactions contemplated thereby.
| Item 3.03. |
Material Modification to Rights of Security Holders. |
Pursuant to the terms of the Conversion and Extension Agreement, the Company filed a Certificate of Amendment to Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock Par Value $0.01 per share (the “Certificate of Designation” and such amendment, the “Certificate of Designation Amendment”) on March 11, 2026 with the Secretary of State of the State of Delaware, pursuant to which the Certificate of Designation was amended to reduce the Conversion Price of the Series A Convertible Preferred Stock from $40.00 per share of Common Stock to $32.00 per share of Common Stock. The Certificate of Designation Amendment was approved by each of the Investors.
