Dream Finders is paying 12% a year to buy a bigger homebuilder

Dream Finders Homes builds and sells houses. On August 6, 2026 it agreed to buy Beazer Homes, another American homebuilder. It is paying $33.50 in cash for each Beazer share. [C7][C7] Notice of Special Meeting and letter to stockholdersa proposal to adopt the Agreement and Plan of Merger, dated as of August 6, 2026 ... by and among the Company, Dream Finders Homes, Inc., a Texas corporation ("DFH"), and Bulldogs Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of DFH ... If the Merger is completed, you will be entitled to receive an amount in cash equal to $33.50, without interest and subject to deduction for any applicable withholding taxes, for each share of the Company's common stockBeazer Homes USA, Inc. definitive merger proxy statement, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/915840/000110465926107656/tm2622398-15_defm14a.htm Beazer had 26,679,623 shares on the record date for the vote. [C8][C8] The Special Meeting — Record Date and QuorumOn the Record Date, there were 26,679,623 shares of Company Common Stock outstanding and entitled to vote.Beazer Homes USA, Inc. definitive merger proxy statement, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/915840/000110465926107656/tm2622398-15_defm14a.htm

Beazer's board backed the deal with no vote against. It told its shareholders to accept. Dream Finders already owns about 3.5% of Beazer. It has signed a deal to vote those shares for it. [C9][C9] Letter to stockholdersThe Company's Board of Directors (the "Board") has unanimously (i) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger ... DFH, which held approximately 3.5% of the Company Common Stock outstanding as of the close of business on the record date for the Special Meeting, has entered into a voting and support agreement to, among other things, vote in favor of the Merger Agreement Proposal.Beazer Homes USA, Inc. definitive merger proxy statement, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/915840/000110465926107656/tm2622398-15_defm14a.htm If Beazer walks away for a better offer, it owes Dream Finders $31.3 million. [C10][C10] Summary — Company Termination FeeIf the Merger Agreement is terminated under certain circumstances, such as if the Company terminates the Merger Agreement prior to the adoption of the Merger Agreement by Company Stockholders for the purpose of entering into an Alternative Acquisition Agreement providing for a Superior Proposal, the Company must pay DFH the Company Termination Fee of $31,300,000.Beazer Homes USA, Inc. definitive merger proxy statement, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/915840/000110465926107656/tm2622398-15_defm14a.htm

Beazer said no three times first. Dream Finders offered $28.50 a share in February. [C11][C11] Item 1.01 — use of proceedsThe 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm It raised that to $29.00 in March. [C12][C12] Item 1.01 — Cumulative DividendsDuring 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm Then in May it cut the offer to $25.75. Beazer's stock had just fallen after a weak quarter. The board turned all three down. [C13][C13] Item 1.01 — Protective CovenantsFor 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") ... Any amendment, restatement, modification, waiver, replacement in any manner ... 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 ... 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

On September 14, 2026 Dream Finders sold 225,000 shares of a new preferred stock. Each one cost $1,000, for $225.0 million in all. The filing names the buyers only as big investors. They took 2.5% off the top before they paid. The firm used the money first to buy out an older preferred stock. It kept the rest for general use. [C1][C1] Item 1.01 — Subscription Agreements and Certificate of Designations for Series B Convertible Preferred StockPursuant 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm [C11][C11] Item 1.01 — use of proceedsThe 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

The stock pays 12% a year, every three months, starting December 31, 2026. Dream Finders can choose not to pay. Unpaid dividends pile up. While it is skipping them it cannot pay a dividend on its common shares. It cannot buy any of them back either. Six years in, the rate starts climbing half a point at a time, up to 15%. [C2][C2] Item 1.01 — Cumulative DividendsCumulative 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm [C12][C12] Item 1.01 — Cumulative DividendsDuring 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

Dream Finders cannot get out early. It can only buy the stock back after three years. It pays 102 cents on the dollar in year four. It pays 101 in year five. It pays full price after that, plus every dividend it skipped. [C4][C4] Item 1.01 — Company Redemption RightCompany 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

The swap is where common shareholders feel it. After six years the holders can turn their preferred into common shares. The price is the average of the last 90 trading days, less 20%. If Dream Finders breaks its lender promises and does not fix it, the discount becomes 25%. The lowest that price can go is $4.19. [C5][C5] Item 1.01 — Duration and Conversion RightsThe 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm [C13][C13] Item 1.01 — Protective CovenantsFor 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") ... Any amendment, restatement, modification, waiver, replacement in any manner ... 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 ... 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

The buyers also got a say over the bank. Dream Finders must keep to the promises in its bank loan for as long as any of this stock is out. It cannot change that loan in a way that hurts the holders unless 85% of them agree. One more trigger is personal. Founder and chief executive Patrick Zalupski must keep at least half the votes and half the value of the firm. If he drops below that, holders can swap early or demand cash back. That cash would include dividends they would have earned through September 14, 2029. [C13][C13] Item 1.01 — Protective CovenantsFor 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") ... Any amendment, restatement, modification, waiver, replacement in any manner ... 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 ... 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm [C14][C14] Item 1.01 — Fundamental ChangeUpon the occurrence of a Fundamental Change (as defined in the Certificate of Designations, which includes, among other events, a change of control, sale of substantially all assets, or Patrick Zalupski, the Company's President and Chief Executive Officer, ceasing to beneficially own at least 50.0% of both the voting power and economic interest of the Company), each holder of Series B Convertible Preferred Stock will have the right to (i) convert all or any portion of such holder's Series B Convertible Preferred Stock into Class A common stock ... and/or (ii) require the Company to redeem all or any portion of such holder's Series B Convertible Preferred Stock for an amount in cash equal to the greater of the as-converted value and the liquidation preference, plus (a) accumulated and unpaid dividends and (b) if and only if the Fundamental Change Redemption Date ... occurs on or prior to September 14, 2029, an amount equal to the regular dividends that would have accumulated on such share of Series B Convertible Preferred Stock from and after the date of the Fundamental Change and through September 14, 2029.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

All of that is for $225 million. Close the Beazer deal and the same terms apply to another $450 million. [C3][C3] Item 1.01 — the Second ClosingPursuant 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

The buyers are not named. The filing calls them big investors. It says nothing about who they are or how the $225 million was split. [C1][C1] Item 1.01 — Subscription Agreements and Certificate of Designations for Series B Convertible Preferred StockPursuant 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

Beazer shareholders have not voted. A majority of every share has to say yes. A share that is not voted counts the same as a no. [C15][C15] The Special Meeting — Required Voterequires the affirmative vote of Company Stockholders holding a majority of the outstanding shares of Company Common Stock entitled to vote thereon as of the close of business on the Record Date (the"Company Stockholder Approval"). Because the required vote for the Merger Agreement Proposal is based on the number of shares of Company Common Stock outstanding, if you (1) are a record holder and fail to vote or authorize a proxy to vote on your behalf or (2) are a beneficial holder and fail to instruct your broker on how to vote, in each case, such failure will have the same effect as a vote cast"AGAINST"the Merger Agreement Proposal.Beazer Homes USA, Inc. definitive merger proxy statement, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/915840/000110465926107656/tm2622398-15_defm14a.htm

This filing does not say how the rest of the price is paid. $675 million of preferred does not cover $33.50 a share for every Beazer share. [C3][C3] Item 1.01 — the Second ClosingPursuant 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm [C7][C7] Notice of Special Meeting and letter to stockholdersa proposal to adopt the Agreement and Plan of Merger, dated as of August 6, 2026 ... by and among the Company, Dream Finders Homes, Inc., a Texas corporation ("DFH"), and Bulldogs Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of DFH ... If the Merger is completed, you will be entitled to receive an amount in cash equal to $33.50, without interest and subject to deduction for any applicable withholding taxes, for each share of the Company's common stockBeazer Homes USA, Inc. definitive merger proxy statement, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/915840/000110465926107656/tm2622398-15_defm14a.htm

Nobody can know today what the swap price will be. It is set six years out. It runs off the share price at the time, and it cannot go below $4.19. [C5][C5] Item 1.01 — Duration and Conversion RightsThe 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm

Whether Dream Finders ever skips a dividend is its own choice. The filing gives no sign either way. [C2][C2] Item 1.01 — Cumulative DividendsCumulative 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.Dream Finders Homes, Inc. current report on Form 8-K, filed September 15, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1825088/000162828026061981/dream-20260914.htm