22NW’s Failure to Comply with Applicable Regulations
On
- The Preliminary Proxy Statement asserts that, on
November 12, 2021 , the board of directors of the Company (the “Board”) “declined to appoint Mr. English” to the Board. On such date, two members of the Board reiterated toMr. English that the Board would consider his candidacy inFebruary 2022 consistent with its customary review and selection process for director nominees for election at an annual general meeting, and such directors offered to send toMr. English a form of standstill agreement that they believed would be required by the Company in connection with any appointment ofMr. English to the Board. - The Preliminary Proxy Statement asserts that, on
October 11, 2021 ,Mr. English participated in a telephone call with the Board Chair to “reiterate his concerns about the Company’s governance”. 22NW’s statement that the telephone call was to reiterate Mr. English’s “concerns about the Company’s governance” is misleading and fails to disclose that Mr. English’s sole concern on the call was his potential appointment to the Board. - The Preliminary Proxy Statement asserts that, on
March 8, 2021 , representatives of 22NW participated in a “Cost of Ownership” tool demonstration and had been invited with other DIRTT shareholders to also participate in the demonstration. 22NW’s statement that “other DIRTT shareholders” were invited “to also participate in the demonstration” is false. The statement fails to note that 22NW and the Company agreed to invite exactly one other DIRTT shareholder, which is materially different than the statement that “other DIRTT shareholders” were invited to participate. Furthermore, such shareholder is the subject of a complaint submitted by the Company to theAlberta Securities Commission , which complaint alleges that such shareholder is acting jointly or in concert with 22NW.
The Preliminary Proxy Statement also discloses the trading activity in DIRTT stock by the Activist,
These most recent regulatory concerns are in addition to those previously identified, including that the Company shareholders have not been provided with full and fair disclosure concerning relationships amongst the Activist and certain other shareholders, their coordinated trading activities, their joint plans, and the extent of their influence and control.
The Board is raising concerns about the Activist’s activities and disclosures because they raise fundamental issues with respect to the protection of DIRTT’s minority shareholders and the equal treatment of our shareholders, and in order to ensure that shareholders have accurate and complete information to make informed decisions.
Activist’s Boilerplate Reasons for its Requisition Do Not Establish a Case for Change
The Preliminary Proxy Statement discloses some boilerplate reasons for the Requisition commonly stated in most proxy fights, but does not reflect a clear vision or plan for the Company. The Board continues to oversee management in the execution of the strategic plan for the Company, based on three key pillars: commercial execution, manufacturing excellence and innovation with a focus on improving results, and is committed to engaging with all stakeholders as it moves forward with a plan to address these concerns.
Despite the unnecessary distraction that 22NW’s Requisition has caused, the Board remains focused on the business of the Company as its priority.
Commitment to Engaging with Shareholders in an
As previously disclosed, the Company has advised the Activist that it remains committed to negotiations that benefit ALL shareholders, but will only resume such negotiations in good faith and not through press releases. Accordingly, counsel to the Company once again informed counsel to the Activist this morning that the Special Committee is prepared to have discussions with the Activist on a without prejudice basis.
Special Note Regarding Forward-Looking Statements
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the Company’s current expectations regarding future events. In some cases, forward-looking information can be identified by such terms as “plans”, “anticipated”, “believe”, and “will”. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. The Company’s estimates, beliefs and assumptions, may prove to be incorrect. The risks and uncertainties that may affect forward-looking information include, but are not limited to, market conditions, the effect of the COVID-19 pandemic on the Company’s operations, business and financial results, and other factors discussed under “Risks Factors” in the Company’s management’s discussion and analysis in the Company’s Annual Report on Form 10-K for the year ended
Important Additional Information Regarding Proxy Solicitation
DIRTT intends to file a proxy statement (the “DIRTT Proxy Statement”) with the
About DIRTT
DIRTT is a building process powered by technology. The Company uses its proprietary ICE® software to design, manufacture and install fully customized interior environments. The technology drives DIRTT’s advanced manufacturing and provides certainty on cost, schedule, and the final result. Complete interior spaces are constructed faster, cleaner, and more sustainably. DIRTT has manufacturing facilities in
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FOR FURTHER INFORMATION PLEASE CONTACT Media:Hyunjoo Kim Director, Communications,Marketing & Digital Strategy Kingsdale Advisors Direct: 416-867-2357 Cell: 416-899-6463 Email: hkim@kingsdaleadvisors.com Investors:Kim MacEachern Investor Relations, DIRTT 403-618-4539 kmaceachern@dirtt.com
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