Seattle, Washington--(Newsfile Corp. - January 6, 2022) - 22NW Fund, LP ("22NW") today provided an update on its requisition (the "Requisition") of a shareholders meeting of DIRTT Environmental Solutions Ltd. ("DIRTT"). 22NW is the largest shareholder of DIRTT, holding almost 19% of DIRTT's outstanding shares. On December 9, 2021, 22NW announced that it had submitted to DIRTT a term sheet for a settlement proposal (the "Proposal") related to the Requisition. The Proposal was not accepted by DIRTT's board of directors (the "Board"), which offered no reasons for the rejection of the Proposal nor did the Board offer a counter proposal to 22NW.
Rather than contacting 22NW to discuss its serious concerns regarding DIRTT or attempting to settle with 22NW, the Board and its Special Committee have instead taken the following actions against 22NW:
- DIRTT filed a complaint (the "Complaint") with the Alberta Securities Commission against 22NW. The Complaint alleges breaches of securities laws by 22NW, another major shareholder of DIRTT and potentially other institutional shareholders of DIRTT. 22NW delivered a response to the Complaint to the Alberta Securities Commission on December 16, 2021. In that response, 22NW identified numerous facts refuting the Complaint.
- On December 31, Canadian counsel for 22NW received a copy of further complaints made by DIRTT to the Alberta Securities Commission against 22NW (collectively with the Complaint, the "Complaints"), which include a threat by DIRTT to ask the United States Securities and Exchange Commission to commence enforcement action to address purported filing deficiencies by 22NW.
The Complaints are baseless, were made without appropriate diligence or regard for fairness to 22NW and have needlessly caused material expense to DIRTT.
Despite the actions of the Board and Special Committee to date, 22NW is willing to seek an acceptable resolution that does not require it to continue to pursue the Requisition. Today, 22NW's Canadian counsel advised counsel to the Special Committee that 22NW is prepared to have discussions with the Special Committee regarding a potential settlement, provided that before those discussions occur, the baseless Complaints have been withdrawn in their entirety, and a commitment is made by the Board to not further squander shareholder capital by pursuing frivolous actions against DIRTT's own shareholders.
22NW has proceeded in preparing a proxy statement (the "U.S. Proxy Statement") pursuant to the U.S. Securities Exchange Act of 1934. When the U.S. Proxy Statement is finalized, 22NW will update its Canadian information circular filed on SEDAR on November 22, 2021.
FOR MORE INFORMATION
For further information or to receive a copy of the report filed in connection with this press release, please see DIRTT's profile on the SEDAR website (http://www.sedar.com) or contact Aron English at 206-227-3078 or firstname.lastname@example.org.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
22NW Fund, LP, a Delaware limited partnership ("22NW Fund"), together with the other participants named herein (collectively, "22NW"), has filed a preliminary proxy statement and accompanying WHITE proxy card with the Securities and Exchange Commission ("SEC") to be used to solicit votes for the election of its slate of highly-qualified director nominees at the meeting of shareholders of DIRTT Environmental Solutions Ltd., an Alberta corporation (the "Company") for which it has delivered a requisition to the Board of Directors of the Company pursuant to section 142 of the Business Corporations Act (Alberta).
22NW STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
The participants in the proxy solicitation are anticipated to be 22NW Fund, 22NW, LP, a Delaware limited partnership ("22NW LP"), 22NW Fund GP, LLC, a Delaware limited liability company ("22NW GP"), 22NW GP, Inc., a Delaware S Corporation ("22NW Inc."), Aron R. English, Ryan W. Broderick, Bryson O. Hirai-Hadley, Alexander B. Jones, Cory J. Mitchell, Douglas A. Edwards, Scott L. Robinson, Scott C. Ryan and Kenneth D. Sanders.
As of the date hereof, 22NW Fund directly beneficially owns 15,894,165 Common Shares, without par value, of the Company (the "Shares"). As the investment manager of 22NW Fund, 22NW LP may be deemed to beneficially own the 15,894,165 Shares directly beneficially owned by 22NW Fund. As the general partner of 22NW Fund, 22NW GP may be deemed to beneficially own the 15,894,165 Shares directly beneficially owned by 22NW Fund. As the general partner of 22NW, LP, 22NW Inc. may be deemed to beneficially own the 15,894,165 Shares directly beneficially owned by 22NW Fund. As of the date hereof, Mr. English directly beneficially owns 214,869 Shares. Mr. English, as the Portfolio Manager of 22NW LP, Manager of 22NW GP, and President and sole shareholder of 22NW Inc, may be deemed to beneficially own the 15,894,165 Shares directly beneficially owned by 22NW Fund, which, together with the 214,869 Shares he directly owns, constitutes an aggregate of 16,109,034 Shares beneficially owned by Mr. English. As of the date hereof, Mr. Broderick directly beneficially owns 5,675 Shares. As of the date hereof, Mr. Hirai-Hadley directly beneficially owns 1,250 Shares. As of the date hereof, Mr. Jones directly beneficially owns 1,200 Shares. As of the date hereof, Mr. Mitchell directly beneficially owns 6,890 Shares. As of the date hereof, none of Messrs. Edwards, Robinson, Ryan and Sanders own beneficially or of record any securities of the Company.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/109301