DIRTT Environmental Solutions Ltd. Files 8-K

TL;DR

DIRTT filed an 8-K on Aug 2nd, looks like a big deal with security holder changes.

AI Summary

DIRTT Environmental Solutions Ltd. announced on August 2, 2024, that it has entered into a Material Definitive Agreement. The filing also indicates modifications to the rights of security holders and includes financial statements and exhibits. Specific details of the agreement and its financial implications are not provided in this summary.

Why It Matters

This 8-K filing signals a significant event for DIRTT Environmental Solutions Ltd., potentially impacting its business operations, financial standing, and shareholder rights.

Risk Assessment

Risk Level: medium — An 8-K filing often indicates material events that can significantly impact a company's stock price and future prospects.

Key Players & Entities

• DIRTT ENVIRONMENTAL SOLUTIONS LTD (company) — Registrant
• August 2, 2024 (date) — Date of earliest event reported
• 0000950170-24-089995 (filing_id) — Accession Number
• 001-39061 (company_id) — SEC File Number
• 7303 30th Street S.E. Calgary, Alberta T2C 1N6 (address) — Principal Executive Offices
• (403) 723-5000 (phone_number) — Registrant's Telephone Number

FAQ

Key Financial Figures

• $18,915,000 — e for cancellation an aggregate of (i) C$18,915,000 principal amount of DIRTT's outstanding
• $684.58 — y Debentures ") at a purchase price of C$684.58 per C$1,000 principal amount of January
• $1,000 — ") at a purchase price of C$684.58 per C$1,000 principal amount of January Debentures
• $13,638,000 — amount of January Debentures and (ii) C$13,638,000 principal amount of DIRTT's outstanding
• $665.64 — " Debentures ") at a purchase price of C$665.64 per C$1,000 principal amount of Decembe
• $22,104,591 — es, for an aggregate purchase price of C$22,104,591.45, inclusive of a cash payment for all
• $16,642,000 — ed on August 2, 2024 and, as a result, C$16,642,000 principal amount of the January Debentu
• $15,587,000 — l amount of the January Debentures and C$15,587,000 principal amount of the December Debent
• $0.00001 — n whole, but not in part, at a price of $0.00001 per Right (subject to adjustment) at an

Filing Documents

• drttf-20240802.htm (8-K) — 108KB
• drttf-ex4_1.htm (EX-4.1) — 457KB
• drttf-ex10_1.htm (EX-10.1) — 84KB
• drttf-ex10_2.htm (EX-10.2) — 131KB
• drttf-ex99_1.htm (EX-99.1) — 57KB
• 0000950170-24-089995.txt ( ) — 1066KB
• drttf-20240802.xsd (EX-101.SCH) — 30KB
• drttf-20240802_htm.xml (XML) — 4KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. Convertible Debenture Repurchase Agreement On August 2, 2024, DIRTT Environmental Solutions Ltd. (the " Company " or " DIRTT ") entered into a Convertible Debenture Repurchase Agreement (the " Repurchase Agreement ") with 22NW Fund LP (" 22NW ") to purchase for cancellation an aggregate of (i) C$18,915,000 principal amount of DIRTT's outstanding 6.00% convertible debentures due January 31, 2026 (the " January Debentures ") at a purchase price of C$684.58 per C$1,000 principal amount of January Debentures and (ii) C$13,638,000 principal amount of DIRTT's outstanding 6.25% convertible debentures due December 31, 2026 (the " December Debentures " and together with the January Debentures, the " Debentures ") at a purchase price of C$665.64 per C$1,000 principal amount of December Debentures, for an aggregate purchase price of C$22,104,591.45, inclusive of a cash payment for all accrued and unpaid interest up to, but excluding, the date on which such Debentures are purchased by the Company (the " Debenture Repurchase "). Pursuant to the Repurchase Agreement, the purchase price of each series of Debentures was calculated a 4% discount to the average trading price of the applicable series of Debentures on the Toronto Stock Exchange for the 20 trading days immediately preceding August 2, 2024. 22NW is DIRTT's largest shareholder and Aron English, a director of the Company, is the Portfolio Manager of 22NW. The Debenture Repurchase closed on August 2, 2024 and, as a result, C$16,642,000 principal amount of the January Debentures and C$15,587,000 principal amount of the December Debentures remain outstanding, and 22NW no longer holds any Debentures. DIRTT funded the Debenture Repurchase with cash on hand. The Debenture Repurchase was overseen by a Special Committee of the Board consisting entirely of independent directors, which was established to consider strategic financing alternatives and other matters (the "

03. Material Modification to Rights of Security Holders

Item 3.03. Material Modification to Rights of Security Holders. On March 22, 2024 (the " Effective Date "), the Board approved (with one Board member dissenting) and adopted a Rights Agreement by and between the Company and Computershare Trust Company of Canada, as rights agent (the " Original Rights Agreement "). In connection therewith, one right (a " Right ") was issued and attached to each Common Share outstanding and held of record at the close of business on April 1, 2024 (the " Record Time ") as set forth in the Original Rights Agreement and as confirmed in the Rights Agreement (as defined below). Subsequently, on August 2, 2024, the Board approved and adopted an amended and restated Rights Agreement by and between the Company and Computershare Trust Company of Canada, as rights agent (as amended and restated, the " Rights Agreement "), which amended and restated the Original Rights Agreement and provides for an amended and restated Rights Agreement. The Rights Agreement is consistent with the Rights Agreement that the Company had in place from 2014 to 2020 and the Rights Agreement adopted by the Board on December 7, 2021. The Rights Agreement was adopted to help ensure that all shareholders of the Company are treated fairly and equally in connection with any unsolicited take-over bid or other acquisition of control of the Company (including by way of a "creeping" take-over bid). The Rights Agreement was not adopted in response to any specific proposal to acquire control of the Company, and the Board is not aware of any pending or potential take-over bid for the Company. The Rights Agreement, if approved, amends and restates the Original Rights Agreement to provide that WWT could purchase such number of additional Common Shares to match 22NW's equity ownership in the Company and such acquisition would be an "Exempt Acquisition" pursuant to the terms of the Rights Agreement (the " WWT Exempt Acquisition "). Otherwise, the Rights Agreement, if approved, wou

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On August 2, 2024, the Company issued a press release announcing the entry into the Repurchase Agreement, the entry into the Support Agreement and the adoption of the Rights Agreement, as well as its plans to commence a normal course issuer bid following the release of the Company's second quarter financial results. A copy of that press release is furnished as Exhibit 99.1 to this Current Report and incorporated herein by reference. In accordance with General Instruction B.2 of Form 8-K, the foregoing information, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall such information, including Exhibit 99.1, be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. Important Additional Information Important Additional Information DIRTT intends to file a proxy statement and a proxy card with the U.S. Securities and Exchange Commission (the " SEC ") in connection with the Special Meeting. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MEETING. Shareholders will be able to obtain the definitive proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge on EDGAR at www.sec.gov. Participant Information The Company, its directors and certain of its executive officers (as set forth below) are or may be deemed to be "participants" (as defined in Section 14(a) of the Securities Exchange Act of 1934, as amended) in the solicitation of proxies from the Company's shareholders in connection with the matter

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits: Exhibit No. Description 4.1 Amended and Restated Shareholder Rights Plan Agreement, dated as of August 2, 2024, by and between DIRTT Environmental Solutions Ltd. and Computershare Trust Company of Canada, as rights agent. 10.1 Convertible Debenture Repurchase Agreement, dated as of August 2, 2024, by and between DIRTT Environmental Solutions Ltd. and 22NW Fund, LP 10.2 Support and Standstill Agreement, dated as of April 2, 2024, by and among DIRTT Environmental Solutions Ltd., 22NW Fund, LP and WWT Opportunity #1 LLC. 99.1* Press Release issued by DIRTT Environmental Solutions Ltd. on August 2, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Furnished herewith.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: August 2, 2024 DIRTT Environmental Solutions Ltd. By: /s/ Fareeha Khan Fareeha Khan Chief Financial Officer (Principal Financial Officer) 8

View Full Filing

View this 8-K filing on SEC EDGAR