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Dolphin Seeks Qumu Strategic Sale—Immediate Break-Even Cash Flow Non-Executive Board Chairman Resignation

Vote WITHHOLD ALL On the Directors (Proposal #1)
Vote AGAINST ALL Compensation and Incentive Plans and Auditor (Proposal #s 2–4)
Vote FOR Dolphin’s Strategic Sale (Proposal # 5)

GREENWICH, Conn., May 10, 2022 (GLOBE NEWSWIRE) — Dolphin Limited Partnership III, L.P.(“Dolphin”) and another entity, combined holding ~670,000 Qumu Corporation QUMU shares or ~3.7% of the outstanding common stock, today announced that, on December 6, 2021, Dolphin submitted a non-binding Proposal #5 for inclusion in Qumu’s proxy statement for its delayed June 2, 2022 annual shareholder’s meeting.

Dolphin seeks a majority vote for its Strategic Sale Proposal #5. As of the April 25, 2022 record date, Qumu’s proxy states insiders held ~12.5% (including 9.7% held by Harbert Discovery Fund L.P. (“Harbert”)) of the ~17.9 million shares outstanding. Broker non-votes and abstentions will not count towards achieving a majority for a Strategic Sale. All unaffiliated shareholders are urged to: VOTE “FOR” Proposal #5, a Strategic Sale; VOTE “WITHHOLD ALL” Proposal #1, the directors; and VOTE “AGAINST” Proposal’s #2–4, Compensation and Incentive Plans and the Auditor.

Dolphin believes this will send a strong signal of immediate required change.

For months, the Board wasted valuable funds making extensive effort to exclude Dolphin’s non-binding Proposal #5 and Supporting Statement (including a request to the staff of the United States Securities and Exchange Commission seeking no action relief, which was denied) to hire a recognized investment bank to conduct a Strategic Sale.

In 2021, Qumu held its annual shareholders meeting May 6th and announced Q1 2021 earnings May 2nd. Qumu announced the issuance of its Q1 2022 earrings for May 12th.

While the Board has now failed to recommend Dolphin’s Strategic Sale Proposal #5 to unaffiliated shareholders, it obstructed Dolphin’s Proposal, dissipated ~$17 million of its January 29, 2021 net equity capital raise, and presided over approximately nine (9) years of flat revenues and sizable annual EBITDA loses in its core business. Accordingly, the Company must immediately disclose either achievable operating and financial guidance reflecting a demonstrable turnaround or support a Strategic Sale—Dolphin’s Proposal #5.

Books and Records Demand Under Minnesota Law

On March 16, 2022, Dolphin submitted a revised Demand to obtain Company documents relating to Qumu’s January 29, 2021 $23.1 million ($6.75 per share) net equity capital raise and guidance changes surrounding this offering, informing of a share price above $10 in 2021 and as of yesterday’s close, $1.13. Dolphin is seeking full disclosure under the Demand and is discussing with the Company.

Recent Developments

On January 25, 2021, Qumu announced preliminary FY 2020 results (revenue of $29.1 million) and FY 2021 guidance of “at least 20% revenue growth.” The share price closed at $8.10. On January 29, 2021, Qumu closed an equity offering at $6.75 per share, generating an additional approximately $23.1 million (for pro forma net cash of approximately $32 million). The share price closed above $10 in February 2021. On March 4, 2021, Qumu disclosed FY 2020 results: revenue of $29.1 million, an EBITDA loss of ($2.3) million, and FY 2021 revenue guidance of $35.0 million, a 20% increase. On April 29, 2021, Qumu reiterated this guidance.

Sixty-one days later, on June 29, 2021, Qumu announced Q2 results, strikingly lowered its outlook, withdrew its April 29, 2021 guidance, and “pushed” growth to 2022. Qumu closed at $3.85. On August 30, 2021, Qumu announced its CFO was “stepping down.” On March 17, 2022, Qumu announced FY 2021 operating results: $24.0 million of revenue (-$5.1 million YOY decline and below $25.4 million FY 2019 revenue) and net cash declining to approximating $15.0 million—accordingly, in 11-months, Qumu had expended ~$17.0 million of its net cash balance after its January 29, 2021 net equity capital raise. In addition to the August 30, 2021 announcement of its former CFO stepping down, on April 18, 2022, the Company’s much-touted CEO resigned after being appointed 21-months earlier (July 2020).

The Board is doing it again—In Qumu’s 2021 Form 10-K (filed April 12, 2022) the Board now indicates improvement in Q2 2022. Dolphin requests the Board immediately achieve cash flow break-even, no additional onerous dilutive financings, and the resignation of Neil E. Cox, Non-Executive Chairman of the Board. Mr. Cox was elected to the Board on December 19, 2017 pursuant to a Standstill Agreement between various Harbert affiliates and the Company.

Given Qumu’s most recent 14-month operating, financial and share price collapse since its January 29, 2021 net equity capital raise ($6.75 per share), burning ~$17 million of net cash, yesterday’s closing share price of $1.13 and “going concern” language in the 2021 Form 10-K, Dolphin recently spoke with Qumu’s Non-Executive Chairman of the Board, Mr. Neil E. Cox. During this call, Dolphin requested achieving immediate break-even cash flow and stated that it does not want to see a Rule 13e-3 going private transaction, an onerous financing or anything that would impinge the equity.


In March 2013, Dolphin disclosed holding approximately 6.5% of Qumu and the addition of a Dolphin sponsored Director and observer to the Board. Qumu owned its current business, acquired in 2011 for $52 million and Dolphin calculated over $80 million of cash and assets convertible to cash (then approximately $9.25 per share). On March 31, 2014, Qumu closed above $16 per share. By July 2015, Qumu had burned approximately $50 million relating to its current business including a related acquisition. After a negative amended guidance, by August 2015 the share price was near $4. In July 2015, a Dolphin Director was added to the Board with objectives of eliminating $25 million of costs and cash flow break-even, both accomplished. In February 2020, Qumu was merging with another public company; this was terminated in June 2020.

With the Q1 2022 report, if operating and financial results have not improved in accordance with guidance of June 29, 2021, the Board should immediately implement cash flow break-even measures and obtain the resignation of Mr. Cox, Non-Executive Chairman of the Board since 2020.

Given the Company’s continuous adverse operating and financial performance, and yesterday’s closing share price of $1.13, Dolphin urges all stockholders to VOTE as follows:

Proposals for the June 2, 2022 Annual Stockholder’s Meeting:

  1. Seven (7) directors—WITHHOLD ALL;
  2. Non-binding advisory vote on named executive officer compensation—AGAINST
  3. Increase stock incentive plan by 1.2 million shares—AGAINST;
  4. Ratify KPMG Auditor appointment—AGAINST; and
  5. Approve Dolphin Strategic Sale—FOR.

Dolphin urges all shareholders support its non-binding Strategic Sale Proposal #5 to end approximately nine (9) years of failed operating and financial performance, massive cash burn, a rollercoaster share price, (yesterday’s closing share price of $1.13) and repeatedly missed guidance.

Please DO NOT send us your proxy card as it will not be accepted.

Additional Information

Dolphin does not intend to file a proxy statement or proxy card with the United States Securities and Exchange Commission in connection with the 2022 Annual Meeting of Shareholders of QUMU. Shareholders are advised to read the definitive proxy statement of QUMU filed and mailed on May 2, 2022. THIS IS NOT A SOLICIATION OF AUTHORITY TO VOTE YOUR PROXY. Please DO NOT send us your proxy card as it will not be accepted.

Cautionary Statement Regarding Forward-Looking Statements

The information herein contains “forward-looking statements.” Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “targets,” “forecasts,” “seeks,” “could” or the negative of such terms or other variations on such terms or comparable terminology. Many of the facts contained herein are from QUMU’s and other public documents; Dolphin makes its statements herein relying on such public documents that it believes to be accurate, but makes no representation. Shareholders are urged to consult with their own financial advisor. Forward-looking statements are based on current intent, belief, expectations, estimates and projections regarding QUMU and projections regarding the industry in which it operates. These statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to differ materially. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.


Scott R. Wilson, Esq., (410) 385-3515

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