Dolphin Seeks Strategic Sale of Qumu – Non-Executive Chairman of the Board to Immediate Breakeven Cash Flow… | Your money


Vote WITHHOLD on Directors (Proposal #1) Vote AGAINST ALL Compensation and Incentive Plans and Auditor (Proposals #2-4) Vote FOR the Strategic Sale of Dolphin (Proposal #5)

GREENWICH, Conn., May 10, 2022 (GLOBE NEWSWIRE) — Dolphin Limited Partnership III, LP (“Dolphin”) and another entity, together owning ~670,000 shares of Qumu Corporation (Nasdaq: QUMU) or ~3.7% of outstanding common stock, today announced that, on December 6, 2021, Dolphin submitted non-binding proposal No. 5 for inclusion in Qumu’s proxy statement for its postponed annual meeting of shareholders from June 2, 2022 .

Dolphin is seeking a majority vote for its Strategic Selling Proposition #5. As of the record date of April 25, 2022, Qumu’s proxy indicates that insiders held approximately 12.5% ​​(including 9.7% held by Harbert Discovery Fund LP (“Harbert”)) of the approximately 17.9 million outstanding shares. Non-votes and broker abstentions will not count towards obtaining a majority for a strategic sale. All Unaffiliated Shareholders are urged to: VOTE “FOR” Proposal #5, a Strategic Sale; VOTE “ABTAIN ALL” Proposal #1, the directors; and VOTE “AGAINST” Proposals 2-4, Compensation and Incentive Plans and the Auditor.

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

For months, the Board of Directors has wasted valuable funds going to great lengths to exclude Dolphin’s non-binding Proposal No. 5 and supporting statement (including a request to Securities and Exchange Commission staff of the United States requesting no relief, which was denied) to hire a reputable investment bank to conduct a Strategic Sale.

In 2021, Qumu held its annual shareholders’ meeting on May 6 and announced its first quarter 2021 results on May 2. Qumu announced the release of their Q1 2022 earrings for May 12.

Although the Board of Directors no longer recommended Dolphin’s Strategic Sale Proposal No. 5 to unaffiliated shareholders, it obstructed Dolphin’s proposal, dissipated approximately $17 million of its net equity raise as of January 29, 2021 and has presided over approximately nine (9) years of stable revenue and significant annual EBITDA losses in its core business. Accordingly, the Company should immediately disclose either achievable operational and financial guidance reflecting a demonstrable turnaround or support a strategic sale – Dolphin Proposal #5.

Requesting books and documents under Minnesota law

On March 16, 2022, Dolphin submitted a revised request for company documents relating to Qumu’s $23.1 million ($6.75 per share) net capital increase on January 29, 2021 and changes guidance surrounding this offering, advising of a stock price above $10 in 2021 and at yesterday’s close $1.13. Dolphin requests full disclosure as part of the application and discusses with the company.


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

Sixty-one days later, on June 29, 2021, Qumu announced second quarter results, significantly 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 that its CFO was “resigning”. On March 17, 2022, Qumu announced its operating results for fiscal 2021: $24.0 million in revenue (down -$5.1 million year-over-year and less than $25.4 million in revenues for fiscal year 2019) and net cash down to approximately $15.0 million – as a result, in 11 months, Qumu had spent ~$17.0 million of its net cash balance after its net capital increase as of January 29, 2021. In addition to the August 30, 2021 announcement of the resignation of its former CFO, on April 18, 2022 the company’s vaunted CEO stepped down after being appointed 21 months earlier (July 2020) .

Board Does It Again – In Qumu’s 2021 Form 10-K (filed April 12, 2022), the board now shows improvement in the second quarter of 2022. Dolphin calls on the board to immediately break even , no additional onerous dilutive financing, 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 latest 14-month slump in operating prices, financials and share price since its January 29, 2021 net capital raise ($6.75 per share), burning around $17 million of net cash, yesterday’s closing stock price of $1.13, and the “going concern” language in the 2021 Form 10-K, Dolphin recently spoke with the non-executive chairman of the board of Directors of Qumu, Mr. Neil E. Cox. During that call, Dolphin asked to reach an immediate cash threshold and said he did not want to see a 13e-3 rule become a private transaction, expensive financing or anything that would affect equity. .


In March 2013, Dolphin disclosed ownership of approximately 6.5% of Qumu and the addition of a Dolphin-sponsored director and observer to the board. Qumu owned his current business, acquired in 2011 for $52 million, and Dolphin calculated over $80 million in cash and cash-convertible assets (then about $9.25 per share). On March 31, 2014, Qumu closed above $16 per share. By July 2015, Qumu had burned around $50 million related to its current business, including a related acquisition. After a modified negative stance, in August 2015 the stock price was close to $4. In July 2015, a Dolphin director was added to the board with goals of eliminating $25 million in costs and balancing cash flow, both of which were achieved. In February 2020, Qumu merged with another state-owned company; this ended in June 2020.

With the first quarter 2022 report, if operating and financial results do not improve in line with the June 29, 2021 guidance, the board should immediately implement cash flow balance measures and obtain the resignation of Mr. Cox, non-executive chairman of the board. Board since 2020.

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

Proposals for the General Meeting of June 2, 2022:

Seven (7) directors—ABTAIN ALL; Non-binding advisory vote on named executive officer compensation — AGAINST Increase stock incentive plan by 1.2 million shares — AGAINST; Ratify the appointment of auditor KPMG — AGAINST; and approve the strategic sale of Dolphin—FOR.

Dolphin urges all shareholders to support its non-binding Strategic Sell Proposal #5 to end approximately nine (9) years of failed operational and financial performance, massive cash burn, share price roller coaster (yesterday’s closing stock price of $1.13) and repeatedly missed advice.

THIS IS NOT A SOLICITATION FOR AUTHORITY TO VOTE YOUR PROXY Please DO NOT send us your proxy card as it will not be accepted.

Further information

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

Caution Regarding Forward-Looking Statements

The information contained in this document contains “forward-looking statements”. Specific forward-looking statements can be identified by the fact that they do not strictly relate to historical or current facts and include, without limitation, words such as “may”, “will”, “expect ‘, ‘believes’, ‘anticipates’, ‘plans’, ‘estimates’, ‘projects’, ‘goals’, ‘forecasts’, ‘seeks’, ‘could’ or the negative of these terms or other variations of these terms or comparable terminology. Many of the facts in this document come from QUMU and other public documents; Dolphin makes its statements here based on public records it believes to be accurate, but makes no representations. Shareholders are urged to consult their own financial advisor. Forward-looking statements are based on current intention, 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 could cause actual results to differ materially. Accordingly, you should not rely on any forward-looking statements because a prediction of actual results and actual results may vary materially from what is expressed or indicated by the forward-looking statements.

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


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