Dye & Durham Ltd. DND-T has less than a month to file its delayed audited financial statements for its most recent quarter or it will be in default under its senior credit agreement, the beleaguered real estate software company said Tuesday.
Toronto-based D&D last week reported preliminary unaudited results for its fiscal year ended June 30 and its first quarter ended Sept. 30 that were weaker than expected, prompting a third crash in its stock price in a month.
In September, D&D said it had obtained a waiver under its senior credit agreement giving it until Dec. 1 to file its annual results without triggering a default. That agreement didn’t waive the company’s requirement to file first-quarter results by Nov. 14.
The company is also seeking a second extension from the Ontario Securities Commission in connection with the delayed annual filings – originally due by Sept. 29 – and subject to a cease trade order from the regulator.
On Tuesday, D&D said in a release said that after failing to deliver its audited first quarter results on time, it is now in a 30-day “cure” period under its senior credit agreement that gives it until Dec. 17 to fix the problem.
If it can’t, “an event of default will occur,” the company said, entitling lenders, acting by majority decision, “to exercise certain rights defined in the senior credit agreement.”
D&D is seeking a waiver from lenders to give it more time to provide its updated filings to avoid triggering a default but hasn’t yet obtained one.
Meanwhile, an ad hoc group of its majority term lenders have organized and hired legal firm Milbank to consider the waiver request, debt industry news site Octus reported last week, citing unnamed sources. The Globe and Mail has not independently confirmed the information.
A company spokeswoman declined to comment.
Last week, D&D said it would file its year-end statements before its annual meeting, which is typically held in the week before Christmas, but has been delayed to Dec. 31. The company provided no further details Tuesday as to when those filings might be ready.
D&D said that based on its unaudited results, it expects to remain compliant with financial covenants under its senior credit agreements. The company has also launched a cost-saving program and committed to a strategic review that could result in the sale of some or all of D&D.
The stock crashed twice in one week in October, after former chief executive officer Matt Proud withdrew his offer to buy D&D for $10.25 a share, then when the company disclosed CIBC Capital Markets had backed out of leading the strategic review. The stock has plumbed all-time lows in recent days and some analysts have slashed their stock price forecasts.
D&D has had a brutal 2025 in the wake of Mr. Proud’s exit and the election of a new board last December after a successful activist campaign led by hedge fund Engine Capital LP.
The new board’s efforts to hire a CEO dragged on as D&D’s results disappointed, and it rehired and then quickly fired a former chief financial officer.
Last month, S&P Global Ratings and Moody’s Ratings cut their credit ratings on the company, flagging concerns about its leadership and governance issues.
Mr. Proud led his own activist campaign against his former company earlier this year, agreeing to back off in July when D&D reached a standstill agreement with him and appointed one of his nominees to the board.
But the agreement has been tested since then: The company sued to enforce its co-operation agreement, and Mr. Proud and his investment company Plantro Ltd. have told the company they will consent to the temporary injunction D&D had sought.
D&D’s continuing turmoil follows years of concerns by large shareholders about the acquisitive company’s rising debt, its management and governance under Mr. Proud’s leadership, which culminated in their support for Engine’s campaign last year. Engine founder Arnaud Ajdler is chair of D&D.