Dye & Durham Ltd. DND-T said Wednesday it expects to file its delayed annual and first-quarter financial statements the week of Dec. 15, but if that doesn’t happen by Dec. 18, it could be in default under its senior credit agreement.
The embattled legal software company laid out a detailed timeline in a news release for when it expects to complete the outstanding items it needs to deliver to its auditor for its year ended June 30 and subsequent first quarter. It shows all items are expected to be ready next week. The annual filings were originally due by Sept. 29.
Meanwhile, Toronto-based D&D has until Dec. 18 to file its overdue statements under its credit agreement. They were supposed to be submitted earlier this month, before a 30-day “cure period” kicked in, which gives it breathing room to fix the matter. D&D said it’s working with advisers and the administrative agent under the credit agreement to obtain another waiver from its lenders to give it an extra day to file the outstanding statements by the end of that week.
D&D stock closed at $3.18, up 3.6 per cent.
D&D also said it had received an extension from the Ontario Securities Commission of a voluntary management cease-trade order related to the filing delay, to Dec. 13. The order prohibits chief executive officer George Tsivin and interim chief financial officer Sandra Bell from trading in its securities until two business days after the OSC receives its filings.
The update comes during a period of immense uncertainty for D&D. Ex-CEO Matt Proud last week sent his third bid to buy D&D to the board since his departure last year. His private company, Plantro Ltd., offered $5.72 a share in cash and senior unsecured notes. His first bid in February valued the company at $20 a share and his second this fall was for $10.25 a share. The board rebuffed the first two bids, and the stock fell to all-time lows below $3 a share last week before rallying on news of the bid.
Mr. Proud also tried to privatize D&D in 2021, months after it went public at $7.50 a share, but the board rejected the $50.50-a-share management buyout bid. Instead, it gave him a rich pay package that incensed shareholders, led to the eventual exit of two directors and sparked discontent among investors about D&D’s debt-fueled acquisition binge. Activist Engine Capital LP tapped into that when it launched an ultimately successful effort last year to overhaul the board.
Meanwhile, Mr. Proud’s brother Tyler, D&D’s former chairman, one of the unhappy shareholders that supported Engine’s campaign, subsequently lost confidence in the new board. Last week, he revealed his own proposed dissident slate for next month’s annual meeting. He is one of five nominees that his private company, OneMove Capital, has proposed for D&D’s seven-member board.
News of the brothers’ rival efforts to set a new course for the company surfaced late last week as three directors resigned, including Engine founder and D&D chairman Arnaud Ajdler, former interim CEO Sid Singh and Eric Shahinian, Tyler Proud’s nominee under a shareholder rights agreement. Bay Street veteran Alan Hibben joined the board as chairman, as did Mr. Tsivin.
Former D&D chief operating officer Martha Vallance also plans to run for a board seat.
The latest developments add to what has been a tumultuous year for D&D. This month D&D reported disappointing preliminary unaudited results for last year and the first quarter.
Last month, S&P Global Ratings and Moody’s Ratings cut their credit ratings on the company. The Engine board faced criticism earlier this year after the process to hire a new CEO dragged on and it rehired, then quickly fired, a former chief financial officer.
The stock has also crashed several times in recent weeks, including after CIBC Capital Markets backed out of leading a strategic review that could lead to the company’s sale. That process is supposed to kick off by year-end under a standstill agreement D&D reached with Matt Proud in July, after he launched his own activist campaign to shake up the board.