DIRTT Environmental Solutions Ltd. (“DIRTT” or the “Company”)
(TSX:DRT, NASDAQ:DRTT), an interior construction company that uses
proprietary software to design, manufacture and install fully
customizable environments, is pleased to announce that it has
entered into a C$35 million bought-deal financing (the "Offering")
of 6.25% convertible unsecured subordinated debentures (the
"Debentures") with a syndicate of underwriters (the "Underwriters")
led by National Bank Financial Inc. The Company has also granted
the Underwriters an over-allotment option to purchase up to an
additional C$5.25 million aggregate principal amount of Debentures
on the same terms, exercisable in whole or in part at any time up
to the 30th day following the closing of the Offering.
The Company intends to use a portion of the net
proceeds of the Offering, together with cash reserves on hand, to
fund its anticipated 2022 capital expenditure program of
approximately US$7.0 million, comprised of approximately US$2.5
million related to refreshes of DIRTT Experience Centers, continued
enhancement of the Company’s customer relationship management
system and website redesign, approximately US$2.5 million on
software development and approximately US$2.0 million on
manufacturing and other capital upgrades. The remaining net
proceeds of the Offering are expected to be used, initially, to
support the continued funding of the Company’s manufacturing and
commercial activities as the COVID-19 pandemic recovery occurs, and
to provide incremental liquidity to support the Company’s
operations and growth objectives.
The Debentures will mature and be repayable on
December 31, 2026 (the "Maturity Date") and will accrue interest at
the rate of 6.25% per annum payable semi-annually in arrears on the
last day of June and December of each year commencing on June 30,
2022 until the Maturity Date of the
Debentures.
The Debentures will be convertible into common
shares of DIRTT (“Common Shares”), at the option of the holder, at
any time prior to the close of business on the earlier of the
Maturity Date and the business day immediately preceding the date
specified by the Company for redemption of the Debentures at a
conversion price of C$4.20 per Common Share (the “Conversion
Price”), being a ratio of approximately 238.0952 Common Shares per
C$1,000 principal amount of Debentures. The Conversion Price
represents a conversion premium of approximately 35% to the closing
price of the Common Shares on November 15, 2021, on the Toronto
Stock Exchange ("TSX") subject to adjustment in accordance with a
second supplemental indenture to the base indenture dated January
25, 2021 to be entered into on or before closing of the Offering
that will govern the Debentures. Holders converting their
Debentures will receive accrued and unpaid interest thereon to but
excluding the date of conversion.
The Debentures will not be redeemable before
December 31, 2024. On or after December 31, 2024 and prior to
December 31, 2025, the Company may at its option redeem Debentures,
in whole or in part from time to time, at par plus accrued and
unpaid interest, if any, to but excluding the date of redemption,
provided that the volume weighted average trading price of the
Common Shares on the TSX for the 20 consecutive trading days ending
five trading days preceding the date on which notice of redemption
is given is not less than 125% of the Conversion Price. On or after
December 31, 2025, the Company may at its option redeem the
Debentures, in whole or in part from time to time, at par plus
accrued and unpaid interest, if any, to but excluding the date of
redemption. The Company shall provide not more than 60 nor less
than 30 days’ prior notice of redemption.
The Company has the option to satisfy its
obligation to repay the principal amount of the Debentures, in
whole or in part, plus accrued and unpaid interest, due upon
redemption or on the maturity date, upon at least 30 days' and not
more than 60 days' prior notice, by delivering a number of freely
tradable Common Shares obtained by a formula relating to the
then-current market price of the Common Shares.
The Debentures will be direct unsecured
obligations of the Company ranking subordinate to all liabilities,
except liabilities which by their terms rank in right of payment
equally with or subordinate to the Debentures. The Debentures will
rank pari passu with all subordinate debentures issued by the
Company.
The Debentures will be offered in Canada
(excluding Quebec) pursuant to a short form prospectus under
Canadian law and in the United States pursuant to a shelf
registration statement on Form S-3 (File No. 333-251660) previously
filed with the U.S. Securities and Exchange Commission (the “SEC”),
and in certain other jurisdictions as may be agreed by the
Underwriters and the Company. The Offering is expected to close on
or about December 1, 2021, and is subject to certain conditions
including, but not limited to, the receipt of all necessary
approvals and consents, including the approval of the TSX. Offers,
solicitations and sales of the Debentures or Common Shares is made
only by means of the prospectus supplement to the shelf
registration statement on Form S-3 in the United States and the
short form prospectus in Canada (excluding Quebec). The preliminary
U.S. prospectus supplement and preliminary Canadian short form
prospectus relating to, and describing the terms of, the Offering
will be filed with and available on the SEC’s website at
www.sec.gov and SEDAR at sedar.com, as applicable. Electronic
copies of the preliminary U.S. prospectus supplement and
preliminary Canadian short form prospectus, may also be obtained,
when available, by contacting National Bank Financial Inc. at 130
King Street West, Suite 3200, Toronto, ON M5X 1J9, by telephone at
(416)-869-6534 or e-mail at ECM-Origination@nbc.ca.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy, nor shall there be
any sale of these securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
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 Phoenix, AZ,
Savannah, GA, Rock Hill, SC and Calgary, AB. The Company works with
distribution partners throughout North America. DIRTT trades on the
Nasdaq under the symbol “DRTT” and on the Toronto Stock Exchange
under the symbol “DRT.” For more information, visit
dirtt.com/investors.
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, including statements about the Offering
and the proposed use of proceeds. In some cases forward-looking
information can be identified by such terms as "will" and
"expected". 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, which may prove to be
incorrect, including those relating to the Company's ability to
complete the Offering or its use of proceeds from the Offering. The
risks and uncertainties that may affect forward-looking information
include, but are not limited to, market conditions, the effect of
COVID-19 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 for the three and
nine months ended September 30, 2021 and in the Company's Annual
Report on Form 10-K for the year ended December 31, 2020, both of
which are available on SEDAR (www.sedar.com) and on the SEC’s
website (www.sec.gov). The Company does not undertake any
obligation to update such forward-looking information, whether as a
result of new information, future events or otherwise, except as
expressly required by applicable law. This forward-looking
information speaks only as of the date of this news release.
FOR MORE INFORMATION, PLEASE
CONTACT
Kim
MacEachern Investor
Relations,
DIRTT 403.618.4539kmaceachern@dirtt.com
DIRTT Environmental Solu... (TSX:DRT.DB)
Historical Stock Chart
From Jun 2024 to Jul 2024
DIRTT Environmental Solu... (TSX:DRT.DB)
Historical Stock Chart
From Jul 2023 to Jul 2024