United States securities and exchange commission logo
March 11, 2022
Charles R. Kraus
Senior Vice President, General Counsel and Corporate Secretary
DIRTT Environmental Solutions Ltd.
7303 30th Street SE
Calgary, Alberta
T2C 1N6
Re: DIRTT Environmental
Solutions Ltd.
Revised Preliminary
Proxy Statement on Schedule 14A
Soliciting
Materials filed pursuant to Exchange Act Rule 14a-12
Filed March 7, 2022
File No. 1-39061
Dear Mr. Kraus:
We have reviewed the above filings and have the following
comments. In some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments by providing the requested
information or advise us as
soon as possible when you will respond. If you do not believe our
comments apply to your facts
and circumstances, please tell us why in your response.
After reviewing your
response to these comments, we may have additional comments.
Revised Preliminary Proxy Statement filed March 7, 2022
General
1. Disclosure on page x
describes events that transpired on September 10, 2021 and indicates
that Mr. English
said that he believed 22NW and 726 could block any hostile activity
given their combined
31.9% ownership position. Mr. English also stated that Mr. Noll
would be supportive of
him serving on the Board. It is our understanding that these
statements were never
made and that this particular topic was discussed during Mr.
English s
cross-examination in connection with the ASC proceedings. Please provide
support that such
statements were actually made or revise the disclosure in the proxy
statement accordingly.
Charles R. Kraus
FirstName LastNameCharles R. Kraus
DIRTT Environmental Solutions Ltd.
Comapany
March NameDIRTT Environmental Solutions Ltd.
11, 2022
March2 11, 2022 Page 2
Page
FirstName LastName
Soliciting Materials filed pursuant to Exchange Act Rule 14a-12 on March 7,
2022
General
2. Refer to the following statements contained in the soliciting material
filed by the
Company on March 7, 2022:
The Alberta Securities Commission found that activist Aron
English and his fund
22NW breached securities laws, but elected to not impose
sanctions.
ASC Agrees 22NW Broke the Law.
all costs associated with the Company s efforts to
disclose the truth and protect
the Company and its shareholders rest with Mr. English and 22NW.
It is our understanding that the various allegations made by the
Company against 22NW
were dismissed, other than the allegation that 22NW made a filing 29
days late in summer
2021 after Mr. English and 22NW collectively crossed the 10% ownership
threshold.
With respect to the late filing, it is our understanding that the ASC
described this as an
ordinary course compliance issue and specifically noted that
there was no apparent
prejudice to DIRTT shareholders in connection with such issue.
We also note that the Company s revised preliminary proxy statement
filed on the same
date as this soliciting material states that such issue was in the
nature of compliance
failures and that no remedy against 22NW was warranted
since the disclosure they
were otherwise required to make under the AMR regime had subsequently
been
disclosed.
Furthermore, it is our understanding that in its oral decision
rendered on March 4, 2022,
the ASC specifically provided that:
We express our dismay that this Application was brought at
all.
There was a paucity of circumstantial evidence that fell
well short of establishing on
a balance of probabilities that the respondents were acting
jointly or in concert.
The evidence offered was ambiguous, speculative and would
require us to draw
inferences not supportable.
This was an ill-conceived application and an imprudent use
of DIRTT s resources.
The aforementioned Company statements, lacking appropriate context
given the
mitigating facts noted above, and failing to include material
information necessary to
make the statements therein not misleading, make charges concerning
improper, illegal or
immoral conduct without factual foundation in contravention of
Exchange Act Rule 14a-
9. Please revise the soliciting material in question to include clear
corrective disclosure.
In addition, please do not use these or similar statements in the
proxy statement or other
soliciting materials without providing a proper factual foundation for
the statements. As
to matters for which the filing persons do have a proper factual
foundation, please avoid
Charles R. Kraus
DIRTT Environmental Solutions Ltd.
March 11, 2022
Page 3
making statements about those matters that go beyond the scope of what is
reasonably
supported by the factual foundation. Please note that characterizing a
statement as one s
opinion or belief does not eliminate the need to provide a proper factual
foundation for the
statement; there must be a reasonable basis for each opinion or belief
that the filing
persons express. Please refer to Note (b) to Rule 14a-9.
3. The following statements appear to impugn the character, integrity and
personal
reputation of Mr. English and 22NW without adequate factual foundation:
Aron English s quest for a board seat is about advancing his
career not what is best
for the Company; his vague calls for change and lack of a plan
expose his
commitment to a Stay the Course agenda
The Activist s misleading press release of Friday, March 4,
2022 is silent on Mr.
English s real motivation and objective for initiating a costly and
distracting proxy
fight at our shareholders expense.
Mr. English had communicated directly to members of the Board
that he saw the
Board seat as personally good for his resume
As noted in the preceding comment, please do not use these or similar
statements in the
proxy statement without providing a proper factual foundation for the
statements.
Statements that purport to know the motivation or intent of another
soliciting party may be
difficult to support and should be reconsidered, absent adequate factual
foundation. In
addition, as to matters for which the filing persons do have a proper
factual foundation,
please avoid making statements about those matters that go beyond the
scope of what is
reasonably supported by the factual foundation. Please note that
characterizing a
statement as one s opinion or belief does not eliminate the need to
provide a proper factual
foundation for the statement; there must be a reasonable basis for each
opinion or belief
that the filing persons express. Please refer to Note (b) to Rule 14a-9.
To the extent the
filing persons are unable to provide adequate support, please file
appropriate corrective
disclosure and refrain from including such statements in future
soliciting materials.
Please direct any questions to Perry Hindin at 202-551-3444.
Sincerely,
FirstName LastNameCharles R. Kraus
Division of
Corporation Finance
Comapany NameDIRTT Environmental Solutions Ltd.
Office of Mergers &
Acquisitions
March 11, 2022 Page 3
cc: Robert L. Kimball
FirstName LastName