Sonder Holdings Inc. Announces Results of Special Meeting of Shareholders

Rhea-AI Summary

Sonder Holdings Inc. (NASDAQ: SOND) announced that 57% of shareholders approved all proposals at a Special Meeting held on September 30, 2024. This follows the August 19, 2024 announcement of a $43 million convertible preferred equity purchase commitment from investors. $14.7 million was already purchased on August 13, 2024, with the remainder expected to close in the coming weeks after filing Q1 and Q2 2024 reports.

CEO Francis Davidson stated that this approval is a important milestone for strengthening Sonder's balance sheet and positioning for long-term growth. He also mentioned early progress on integration plans with Marriott following their strategic licensing agreement. The additional liquidity will support ongoing integration efforts. Final vote results will be disclosed in an SEC Form 8-K filing.

Positive

• Shareholders approved all proposals with a 57% majority vote
• $43 million convertible preferred equity purchase commitment secured
• $14.7 million of preferred equity already purchased
• Strategic licensing agreement with Marriott in place
• Early progress made on Marriott integration plans

Negative

• Delayed filing of Q1 and Q2 2024 financial reports
• Remaining preferred equity purchase contingent on filing delayed reports

Insights

Financial Analyst

The approval of proposals at Sonder's Special Meeting of Shareholders marks a significant development for the company. The $43 million Preferred Equity transaction, with $14.7 million already purchased, provides important liquidity to strengthen Sonder's balance sheet. This financial injection is timely, especially considering the company's relatively small market cap of about $50 million.

The strategic licensing agreement with Marriott, coupled with this additional funding, positions Sonder for potential growth. However, investors should note that the company still needs to file its quarterly reports for Q1 and Q2 2024, which is unusual and may indicate underlying issues. The 57% shareholder approval, while a majority, isn't overwhelmingly strong, possibly reflecting some investor hesitation.

Overall, this news provides a lifeline for Sonder, but the company's ability to leverage this opportunity and achieve profitability remains to be seen. Investors should closely monitor upcoming financial reports and integration progress with Marriott for a clearer picture of Sonder's future prospects.

Market Research Analyst

Sonder's strategic moves, including the Preferred Equity transaction and the Marriott partnership, indicate a shift in its business model. The company is positioning itself in the premium, design-forward accommodation segment, which could differentiate it in the competitive travel market. However, the success of this strategy depends on effective execution and market reception.

The delay in filing quarterly reports is concerning and could impact investor confidence. It's important for Sonder to address this promptly to maintain transparency. The additional liquidity from the Preferred Equity deal should help with integration efforts, but investors should watch for concrete results from the Marriott partnership.

Given Sonder's small market cap, these developments could significantly impact its valuation. While the news is positive for the company's immediate future, long-term success will depend on Sonder's ability to capitalize on these opportunities and achieve sustainable growth in the evolving travel industry landscape.

SAN FRANCISCO, Oct. 01, 2024 (GLOBE NEWSWIRE) -- Sonder Holdings Inc. (NASDAQ: SOND or the “Company”), a leading global brand of premium, design-forward apartments and intimate boutique hotels serving the modern traveler, today announced that holders of approximately 57% of Sonder’s outstanding shares of common stock voted to approve all proposals at a Special Meeting of Shareholders held on September 30, 2024.

As previously announced on August 19, 2024, a consortium of investors committed to purchase approximately $43 million of a newly designated series of convertible preferred equity (the “Preferred Equity”) of Sonder. $14.7 million of the $43 million Preferred Equity was purchased on or about August 13, 2024. The remainder of the Preferred Equity transaction is expected to close in the coming weeks following the filing of Sonder’s quarterly reports on Form 10-Q for the fiscal quarters ended March 31, 2024 and June 30, 2024.

“Approval of these proposals represents an important milestone as we strengthen our balance sheet and position Sonder for long-term growth,” said Francis Davidson, Co-Founder and CEO of Sonder. “Since announcing our strategic licensing agreement with Marriott, we have made tangible early progress on our integration plans and this additional liquidity will continue to support the integration efforts underway to realize the full value of our partnership.”

Sonder will disclose the final vote results, as certified by the independent inspector of elections, on a Current Report on Form 8-K with the U.S. Securities and Exchange Commission.

About Sonder

Sonder (NASDAQ: SOND) is a leading global brand of premium, design-forward apartments and intimate boutique hotels serving the modern traveler. Launched in 2014, Sonder offers inspiring, thoughtfully designed accommodations and innovative, tech-enabled service combined into one seamless experience. Sonder properties are found in prime locations in over 40 markets, spanning ten countries and three continents. The Sonder app gives guests full control over their stay. Complete with self-service features, simple check-in and 24/7 on-the-ground support, amenities and services at Sonder are just a tap away, making a world of better stays open to all.

To learn more, visit http://www.sonder.com or follow Sonder on Instagram, LinkedIn or X.

Download the Sonder app on Apple or Google Play.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based upon current expectations or beliefs, as well as assumptions about future events. Forward-looking statements include statements that are not historical facts and can generally be identified by terms such as “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” or “will” or similar expressions and the negatives of those terms. These statements include, but are not limited to, statements relating to: the timing of the filing of the Company’s Form 10-Qs for the fiscal quarters ended March 31, 2024 and June 30, 2024 and the closing of the Preferred Equity transaction; improving the Company’s balance sheet and long-term growth; and the Company’s progress on its integration plans related to its strategic licensing agreement with Marriott. Actual results could differ materially from those expressed in or implied by the forward-looking statements due to a number of risks and uncertainties. The forward-looking statements contained herein speak only as of the date of this press release. Except as required by law, the Company does not undertake any obligation to update or revise its forward-looking statements to reflect events or circumstances after the date of this press release.

Contacts:

Investor:
ir@sonder.com

Media:
press@sonder.com

Dan Moore / Tali Epstein
Collected Strategies
Sonder-CS@collectedstrategies.com

FAQ

What was the outcome of Sonder Holdings Inc.'s (SOND) Special Meeting of Shareholders?

Approximately 57% of Sonder's outstanding shares voted to approve all proposals at the Special Meeting held on September 30, 2024.

How much convertible preferred equity did investors commit to purchase from Sonder (SOND)?

Investors committed to purchase approximately $43 million of a newly designated series of convertible preferred equity from Sonder.

When is the remainder of Sonder's (SOND) preferred equity transaction expected to close?

The remainder of the preferred equity transaction is expected to close in the coming weeks after Sonder files its Q1 and Q2 2024 quarterly reports.

What recent strategic partnership did Sonder (SOND) announce?

Sonder recently announced a strategic licensing agreement with Marriott and reported making early progress on integration plans.