22NW Fund Amends DIRTT Environmental Solutions Filing

TL;DR

22NW Fund filed another amendment for DIRTT. Still watching.

AI Summary

On August 5, 2024, 22NW Fund, LP filed Amendment No. 13 to its Schedule 13D regarding DIRTT Environmental Solutions Ltd. The filing indicates a change in beneficial ownership, with Aron R. English and Ryan Nebel listed as key individuals associated with 22NW Fund, LP. The filing does not disclose specific shareholdings or dollar amounts in this amendment.

Why It Matters

This amendment signals ongoing activity or changes in the investment strategy of 22NW Fund, LP concerning DIRTT Environmental Solutions Ltd., which could impact the company's stock.

Risk Assessment

Risk Level: medium — Schedule 13D filings often indicate significant investor activity, which can lead to volatility.

Key Players & Entities

• 22NW Fund, LP (company) — Filer of the Schedule 13D amendment
• DIRTT Environmental Solutions Ltd. (company) — Subject company of the filing
• Aron R. English (person) — Associated with 22NW Fund, LP
• Ryan Nebel (person) — Associated with 22NW Fund, LP
• OLSHAN FROME WOLOSKY LLP (company) — Legal counsel for the filer

FAQ

Key Financial Figures

• $44,335,026 — gregate purchase price of approximately $44,335,026, excluding brokerage commissions, (ii)
• $0.40 — reholder approval, at a deemed price of $0.40 per Share as reimbursement for legal fe
• $30.0 million — iption rights under the Issuer’s C$30.0 million rights offering (the “ Rights Off
• $0.35 — ng ”) at a subscription price of C$0.35 per Share. Of the 7,492,943 Shares dir
• $994,199 — gregate purchase price of approximately $994,199, excluding brokerage commissions, and (
• $1,763 — gregate purchase price of approximately $1,763, excluding brokerage commissions, and (
• $2,780 — gregate purchase price of approximately $2,780, excluding brokerage commissions, and (
• $18,915,000 — d for cancellation an aggregate of (i) C$18,915,000 principal amount of the Issuer’s
• $684.58 — ntures ”) 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 the Issuer’s
• $665.64 — ntures ”) 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

Filing Documents

• sc13da1310680012_08052024.htm (SC 13D/A) — 210KB
• 0000921895-24-001688.txt ( ) — 211KB

Source and Amount of Funds or Other Consideration

Item 3. Source and Amount of Funds or Other Consideration .

is hereby amended

Item 3 is hereby amended and restated to read as follows: Of the 49,955,045 Shares beneficially owned by 22NW Fund, (i) 21,981,043 of such Shares were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) and have an aggregate purchase price of approximately $44,335,026, excluding brokerage commissions, (ii) 3,899,745 of such Shares were granted by the Issuer, following shareholder approval, at a deemed price of $0.40 per Share as reimbursement for legal fees and other expenses incurred by 22NW Fund in connection with the contested director election at the Issuer’s 2022 annual and special meeting; and (iii) 24,074,257 1 of such Shares were purchased pursuant to the exercise of 22NW Fund’s subscription rights under the Issuer’s C$30.0 million rights offering (the “ Rights Offering ”) at a subscription price of C$0.35 per Share. Of the 7,492,943 Shares directly owned by Mr. English, (i) 1,777,369 were purchased with personal funds (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) and have an aggregate purchase price of approximately $994,199, excluding brokerage commissions, and (ii) 5,715,574 1 of such Shares were purchased pursuant to the exercise of Mr. English’s subscription rights under the Rights Offering at a subscription price of C$0.35 per Share. Of the 2,272 Shares directly owned by Mr. Hirai-Hadley, (i) 1,250 were purchased with personal funds (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) and have an aggregate purchase price of approximately $1,763, excluding brokerage commissions, and (ii) 1,022 of such Shares were purchased pursuant to the exercise of Mr. Hirai-Hadley’s subscription rights under the Rights Offering at a subscription price of C$0.35 per Share. Of the 2,181 Shares directly owned by

Purpose of Transaction

Item 4. Purpose of Transaction .

is hereby amended

Item 4 is hereby amended to add the following: On August 2, 2024, 22NW Fund entered into a support and standstill agreement (the “ Support Agreement ”) with the Issuer and WWT Opportunity #1 LLC (“ WWT ”). The Support Agreement replaces the previously disclosed support and standstill agreement between the Issuer and 22NW Fund entered into on March 22, 2024. Pursuant to the Support Agreement, the Issuer agreed to nominate Aron R. English (or a replacement director identified by 22NW Fund, the “ Shareholder Director ”) for election as a member of the Issuer’s Board of Directors (the “ Board ”) and to recommend, support and solicit proxies for the election of the Shareholder Director in the same manner as the other DIRTT Nominees (as defined in the Support Agreement) at each of the Issuer’s 2025 annual general meeting of shareholders (the “ 2025 Meeting ”) and 2026 annual general meeting of shareholders (the “ 2026 Meeting ”), subject to 22NW Fund continuing to beneficially own, or exercising control or direction over, at least the lesser of 20% of the then issued and outstanding Shares and 38,592,529 Shares (subject in each case to adjustment for stock splits, reclassifications, combinations and similar adjustments). 1 Inclusive of the internal transfer of 4,117,741 Shares from 22NW Fund to Mr. English, as further described in Item 5 of Amendment No. 11 to the Schedule 13D. 9 CUSIP No. 25490H106 Pursuant to the Support Agreement, 22NW Fund has agreed to vote all of its Shares in favor of recommendations of the Board on director election proposals and certain other proposals, subject to certain exceptions, at the 2025 Meeting and the 2026 Meeting (and any other meeting of the Issuer’s shareholders held prior to the Termination Date (as defined below)). Further under the terms of the Support Agreement, 22NW Fund has also agreed (i) not to initiate an unsolicited take-over bi

Interest in Securities of the Issuer

Item 5. Interest in Securities of the Issuer . Items 5(a) and (c) are hereby amended and restated as follows: (a) The aggregate percentage of Shares reported owned by each person named herein is based upon 191,880,226 Shares outstanding as of April 30, 2024, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2024. 10 CUSIP No. 25490H106 As of the date hereof, 22NW Fund directly beneficially owned 49,955,045 Shares, constituting approximately 26.0% of the Shares outstanding. As of the date hereof, Mr. English directly beneficially owned 7,492,943 Shares, constituting approximately 3.9% of the Shares outstanding. As of the date hereof, Mr. Hirai-Hadley directly beneficially owned 2,272 Shares, constituting less than 1% of the Shares outstanding. As of the date hereof, Mr. Jones directly beneficially owned 2,181 Shares, constituting less than 1% of the Shares outstanding. 22NW, as the investment manager of 22NW Fund, may be deemed to beneficially own the 49,955,045 Shares beneficially owned by 22NW Fund, constituting approximately 26.0% of the Shares outstanding. 22NW GP, as the general partner of 22NW Fund, may be deemed to beneficially own the 49,955,045 Shares beneficially owned by 22NW Fund, constituting approximately 26.0% of the Shares outstanding. 22NW Inc., as the general partner of 22NW, may be deemed to beneficially own the 49,955,045 Shares beneficially owned by 22NW Fund, constituting approximately 26.0% of the Shares outstanding. Mr. English, as the Portfolio Manager of 22NW, Manager of 22NW GP and President and sole shareholder of 22NW Inc., may be deemed to beneficially own the 49,955,045 Shares beneficially owned by 22NW Fund, which, together with the Shares he directly beneficially owns, constitutes an aggregate of 57,447,988 Shares, constituting approximately 29.9% of the Shares outstanding. The filing of this Schedule 1

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer .

is hereby amended

Item 6 is hereby amended to add the following: On August 2, 2024, 22NW Fund, WWT and the Issuer entered into the Support Agreement as defined and described in Item 4 above and attached as Exhibit 99.1 hereto. On August 2, 2024, 22NW Fund and the Issuer entered into the Repurchase Agreement as defined and described in Item 4 above and attached as Exhibit 99.2 hereto.

Material to be Filed as Exhibits

Item 7. Material to be Filed as Exhibits .

is hereby amended

Item 7 is hereby amended to add the following exhibits: 11 CUSIP No. 25490H106 Exhibit No. Description 99.1 Support and Standstill Agreement, dated August 2, 2024 (incorporated by reference to Exhibit 10.2 to the Issuer’s Current Report on Form 8-K filed on August 2, 2024). 99.2 Convertible Debenture Repurchase Agreement, dated August 2, 2024 (incorporated by reference to Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed on August 2, 2024). 12 CUSIP No. 25490H106

SIGNATURES

SIGNATURES After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: August 5, 2024 22NW FUND, LP By: 22NW Fund GP, LLC General Partner By: /s/ Aron R. English Name: Aron R. English Title: Manager 22NW, LP By: 22NW GP, Inc. General Partner By: /s/ Aron R. English Name: Aron R. English Title: President and Sole Shareholder 22NW FUND GP, LLC By: /s/ Aron R. English Name: Aron R. English Title: Manager 22NW GP, INC. By: /s/ Aron R. English Name: Aron R. English Title: President and Sole Shareholder /s/ Aron R. English ARON R. ENGLISH Individually and as attorney-in-fact for Bryson O. Hirai-Hadley and Alexander B. Jones 13

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