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Callidus Capital Corp. shares tumbled 15 per cent to a new low on Tuesday after the lending company reported a seventh consecutive quarterly loss and announced chief executive officer Newton Glassman is stepping aside to take a medical leave.

Callidus, a lender to distressed companies that Mr. Glassman took public in 2014 at $14 a share, lost $40.8-million in the most recent quarter, up from a loss of $7-million in the first quarter. Shares closed on Tuesday at $2.49 on the Toronto Stock Exchange, down more than 70 per cent over the past 12 months. Callidus also revised elements of its financial reporting in the most recent quarter after scrutiny from the Ontario Securities Commission.

Mr. Glassman’s medical leave, related to a lower-back condition, comes after he missed Callidus’s annual meeting in July for health reasons. In a conference call on Tuesday, Mr. Glassman said his medical problems are expected to require two “significant surgeries” and extensive rehabilitation, and said the rest of the management team will take up his duties.

While on medical leave, Mr. Glassman will keep his positions as executive chairman and director at Callidus, and also remain managing partner of parent private-equity firm Catalyst Capital Group Inc. Mr. Glassman is known for his pugnacious style, which he has displayed through numerous lawsuits against business adversaries. The Toronto-based financier controls both Callidus and Catalyst.

Callidus has been looking for a buyer willing to take the company private for more than year, with Mr. Glassman initially setting a target price for a transaction of more than $18 a share. On Tuesday, the company said it “continues to pursue a privatization and has no material facts or changes to report.”

In July, Callidus eliminated its monthly dividend, which amounted to a total of $1.20 a share annually. In Tuesday’s conference call, Mr. Glassman said the decision to eliminate the dividend was a “prudent approach” for a company that plans to make new loans. In the past six weeks, Callidus made two new loans totalling $163-million.

At the end of Tuesday’s analyst call, the conference operator initially said there were two questions for Callidus management, but before anyone posed a query, the operator came back on the line to say there were no questions and ended the call.

Callidus reported loan losses of $21.3-million in the most recent quarter. The company said on Tuesday it had received indications of an impairment on its loan to Otto Industries North America Inc., a North Carolina-based company that makes plastic litter and recycling bins, prompting an impairment to goodwill of $15.5-million.

Callidus said it stopped reporting a contentious financial assumption known as “unrecognized yield enhancements” in its guidance for investors on potential future gains on its loans, after the Ontario Securities Commission expressed concern. That figure, which is not recognized by the International Financial Reporting Standards organization, totalled $77.9-million at the end of the first quarter.

The OSC will keep Callidus on its “refilings and errors list,” for the next three years, a record of companies required to give the regulator specified-disclosure documents, the company said in a press release. The OSC had previously expressed concern with Callidus’s financial reporting and had been monitoring its financial results.

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