Supply Chain Council of European Union |

DATA Communications Management Corp. Announces Rights Offering and Stand-by Commitment to Raise Gross Proceeds of up to $4.95 Million


BRAMPTON, Ontario — DATA Communications Management Corp. (TSX: DCM) (“DCM” or the “Company”), a leading provider of marketing and business communication solutions to companies across North America, announced that it will conduct an offering (the “Rights Offering”) of rights (the “Rights”) to acquire common shares of the Company (“Common Shares”) to raise gross proceeds of up to $4.95 million.

Details of the Rights Offering

Pursuant to the rights offering notice (the “Notice of Rights Offering”) and the rights offering circular (the “Rights Offering Circular”) filed by DCM with Canadian securities regulatory authorities, each eligible registered shareholder of the Company resident in Canada holding Common Shares as at 5:00 p.m. (Toronto time) on December 2, 2019 (the “Record Date”) will be entitled to participate in the Rights Offering. Eligible holders of Common Shares will receive one Right for each Common Share held. No fractional Rights will be issued. Each Right will entitle the holder to subscribe for one Common Share at the subscription price of $0.23 per Common Share (the “Basic Subscription Privilege”). Shareholders who fully exercise their Rights under the Basic Subscription Privilege will also be entitled to subscribe for additional Common Shares, on a pro rata basis, if available, as a result of unexercised Rights prior to the Expiry Time (the “Additional Subscription Privilege”), subject to certain limitations as set out in the Company’s Rights Offering Circular.

DCM currently has 21,523,515 Common Shares issued and outstanding. If all Rights are exercised, an additional 21,523,515 Common Shares would be issued and the gross proceeds of the Rights Offering would be approximately $4.95 million. The completion of the Rights Offering is not conditional upon the Company receiving any minimum amount of subscriptions for Common Shares.

A Notice of Rights Offering will be mailed to each registered shareholder of the Company resident in Canada as at the Record Date. Registered shareholders who wish to exercise their rights must forward the completed rights certificate, together with applicable funds, to the rights agent, Computershare Investor Services Inc., on or before the Expiry Time. Shareholders who own their Common Shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

The Rights will be transferable. The Rights will be listed on the TSX under the symbol “DCM.RT” and will be posted for trading on the TSX until 12:00 p.m. (Toronto time) on December 27, 2019, at which time they will be halted from trading. The Rights will expire at 5:00 p.m. (Toronto time) (the “Expiry Time”) on December 27, 2019. Rights not exercised before the Expiry Time will be void and of no value. If a holder does not exercise its Rights and the Rights Offering is completed, such holder’s percentage interest in the Company will be diluted upon the exercise of Rights by other holders. Holders of Rights who wish to exercise their Rights must do so in the manner set forth in the Rights Offering Circular.

Insider Participation and Stand-by Commitment Agreement

Directors and officers of the Company who currently beneficially own, directly or indirectly, or who have control or direction over 5,016,302 Common Shares (representing approximately 23.3% of the Company’s issued and outstanding Common Shares), have indicated that they intend to exercise their subscription privileges to acquire Common Shares representing total subscription proceeds of approximately $1.2 million, which would represent approximately 23.3% of the Rights Offering assuming it is fully subscribed.

In addition, the Company has entered into a stand-by purchase agreement (the “Stand‑by Purchase Agreement”) with Gregory Cochrane, Michael Sifton, Merv Simpson, J.R. Kingsley Ward, Christopher Lund and Michael Coté (or, in each case, entities controlled by such individual) (collectively, the “Stand-by Purchaser”). Each of such individuals, other than Mr. Simpson, is a director and, or, officer of the Company. Pursuant to the Stand‑by Purchase Agreement, the Stand‑by Purchaser has agreed to purchase, subject to certain terms, conditions and limitations set forth in the Stand‑by Purchase Agreement, and the Company has agreed to issue, on the Closing Date (as defined herein), such number of Common Shares (the “Stand‑by Shares”), as is necessary to ensure that the aggregate gross proceeds of the Rights Offering are at least $4.6 million (the “Stand-by Commitment”), at a price of $0.23 per Common Share.

The commitment pursuant to the Stand-by Purchase Agreement will be completed, subject to the satisfaction of the conditions thereunder, including there being no material adverse effect upon the business of the Company, including the failure of the Company to enter into amendments to its existing credit agreements (the “Credit Facilities Amendments”) with its senior lenders which are satisfactory to the Stand-by Purchaser, including, without limitation, amendments to the respective financial covenants of the Company in such agreements, prior to the expiry date of the Rights. The Company is seeking to reach agreement with its senior lenders on the terms of the Credit Facilities Amendments by no later than December 15, 2019. In that regard, the Company’s senior lenders have agreed to waive certain financial covenants for the period of September 1, 2019 to December 15, 2019. There can be no assurance that the Company will negotiate and implement the Credit Facilities Amendments on terms satisfactory to the Company prior to December 15, 2019 or the Expiry Time, or at all.

The Stand‑by Purchaser will not receive a fee for providing the Stand‑by Commitment.

Use of Proceeds

The Company will use the net proceeds from the Rights Offering to reduce its outstanding indebtedness, by repaying amounts drawn on its revolving credit facility (the “Revolving Credit Facility”) and repaying up to $1.5 million of outstanding promissory notes, including up to $1 million of promissory notes entered into by DCM in July 2019 with certain parties, including related parties of DCM (the “Related Party Notes”), and up to $0.5 million of promissory notes entered into with the vendor of Perennial Inc. in May 2017 (the “Perennial Note”), subject to the Stand-by Purchaser carrying out its Stand-by Commitment, and subject to receipt of the consent of DCM’s lenders under the Company’s senior credit facilities. Repayments of borrowings made under the Revolving Credit Facility increase the borrowing base available to the Company under that credit facility, thereby enhancing the Company’s available liquidity. Messrs. Cochrane, Coté, Simpson and Ward (or, in each case, companies controlled by such individual) are holders of Related Party Promissory Notes and a relative of Mr. Lund holds the Perennial Note.

DCM intends to spend the net proceeds from the Rights Offering as stated above. However, there may be circumstances where a reallocation of those proceeds may be necessary. The Company will reallocate funds only for sound business reasons and in furtherance of its business.

More Information

DCM has retained Kingsdale Advisors as the information agent in connection with the Rights Offering. Questions and requests for assistance relating to the Rights Offering may be directed to Kingsdale at [email protected] or 1-866-851-2484.

The Rights Offering Notice and Rights Offering Circular containing details of the Rights Offering will be filed on SEDAR at and on the Company’s website at

No Offering in the United States

Neither the Rights nor the Common Shares issuable upon exercise of the Rights have been, or will be, registered under the United States Securities Act of 1933, as amended, (the “1933 Act”) and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Rights or Common Shares in the United States or to, or for, the account or benefit of, U.S. persons.

About DATA Communications Management Corp.

DCM is a communication solutions partner that adds value for major companies across North America by creating more meaningful connections with their customers. DCM pairs customer insights and thought leadership with cutting-edge products, modular enabling technology and services to power its clients’ go-to market strategies. DCM helps its clients manage how their brands come to life, determine which channels are right for them, manage multimedia campaigns, deploy location-specific and 1:1 marketing, execute custom loyalty programs, and fulfill their commercial printing needs all in one place.

DCM’s extensive experience has positioned it as an expert at providing communication solutions across many verticals, including the financial, retail, healthcare, consumer health, energy, and not-for-profit sectors. As a result of its locations throughout Canada and in the United States (Chicago, Illinois and New York, New York), it is able to meet its clients’ varying needs with scale, speed, and efficiency – no matter how large or complex the ask. DCM is able to deliver advanced data security, regulatory compliance, and bilingual communications, both in print and/or digital formats.

Additional information relating to DATA Communications Management Corp. is available on, and in the disclosure documents filed by DATA Communications Management Corp. on the System for Electronic Document Analysis and Retrieval (SEDAR) at


Certain statements in this press release constitute “forward-looking” statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of DCM, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. When used in this press release, words such as “may”, “would”, “could”, “will”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan”, and other similar expressions are intended to identify forward-looking statements. These statements reflect DCM’s current views regarding future events and operating performance, are based on information currently available to DCM, and speak only as of the date of this press release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Many factors could cause the actual results, performance, objectives or achievements of DCM to be materially different from any future results, performance, objectives or achievements that may be expressed or implied by such forward-looking statements. The principal factors, assumptions and risks that DCM made or took into account in the preparation of these forward-looking statements include: DCM’s new enterprise resource planning (“ERP”) system has failed to perform as planned and interrupted operational transactions during and following the implementation, which has, and may continue to, materially and adversely affect DCM’s financial liquidity and operations and results of operations; there are material uncertainties associated with the resolution of the liquidity challenges currently facing the Company, as described in the Company’s condensed interim financial statements for the three months ended September 30, 2019, that may cast significant doubt as to the ability of the Company to meet its obligations as they come due; there is no assurance that management’s initiatives for dealing with these events and conditions will be successful and there are risks in the expected timing of resolution thereof and the possible effects of these issues if they are not resolved; the Company’s ability to continue as a going concern is dependent upon its ability to return the Company to profitability, generate positive cash flows from operations, obtain additional financing and resetting the financial covenants associated with its credit facilities as discussed in those interim financial statements; risks relating to DCM’s ability to access sufficient capital, including, without limitation, under its existing revolving credit facility, on favourable terms to fund its liquidity and business plans from internal and external sources; the risk that DCM will not be successful in implementing amendments to the terms of its existing credit facilities including, without limitation, the financial covenants of DCM under these facilities; the limited growth in the traditional printing industry and the potential for further declines in sales of DCM’s printed business documents relative to historical sales levels for those products; the risk that changes in the mix of products and services sold by DCM will adversely affect DCM’s financial results; the risk that DCM may not be successful in reducing the size of its legacy print business, realizing the benefits expected from restructuring and business reorganization initiatives, reducing costs, reducing and repaying its long term debt, and growing its digital and marketing communications businesses; the risk that DCM may not be successful in managing its organic growth; DCM’s ability to invest in, develop and successfully market new digital and other products and services; competition from competitors supplying similar products and services, some of whom have greater economic resources than DCM and are well established suppliers; DCM’s ability to grow its sales or even maintain historical levels of its sales of printed business documents; the impact of economic conditions on DCM’s businesses; risks associated with acquisitions and/or investments in joint ventures by DCM; the failure to realize the expected benefits from the acquisitions of Thistle Printing, Eclipse Colour & Imaging, BOLDER Graphics and Perennial Group of Companies and risks associated with the integration and growth of such businesses; increases in the costs of paper and other raw materials used by DCM; and DCM’s ability to maintain relationships with its customers.

Additional factors are discussed elsewhere in this press release and under the headings “Liquidity and capital resources” and “Risks and Uncertainties” in DCM’s management’s discussion and analysis and in DCM’s other publicly available disclosure documents, as filed by DCM on SEDAR ( Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, DCM does not intend and does not assume any obligation to update these forward-looking statements.



Mr. Gregory J. Cochrane
Chief Executive Officer
DATA Communications Management Corp.
Tel: (905) 791-3151

Mr. James E. Lorimer
Chief Financial Officer
DATA Communications Management Corp.
Tel: (905) 791-3151
[email protected]

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