# EDGAR Filing Document

**Accession Number:** 0001340476
**File Stem:** 0001193125-25-267458
**Filing Date:** 2025-11
**Character Count:** 271416
**Document Hash:** de3d4f6d437872d1c9cdcdb0da948b49
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-25-267458.hdr.sgml**: 20251106

**ACCESSION NUMBER**: 0001193125-25-267458

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 90

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251106

**DATE AS OF CHANGE**: 20251105

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** DIRTT ENVIRONMENTAL SOLUTIONS LTD
- **CENTRAL INDEX KEY:** 0001340476
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A0
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56646
- **FILM NUMBER:** 251455510

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 7303 30 ST S E
- **CITY:** CALGARY ALBERTA T2C 1N6 CAN
- **PROVINCE COUNTRY:** A1
- **BUSINESS PHONE:** 403-723-5000

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 7303 30 ST S E
- **CITY:** CALGARY ALBERTA T2C 1N6 CAN
- **PROVINCE COUNTRY:** A1

?xml version='1.0' encoding='ASCII'? 10-Q

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM** 10-Q

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☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the quarterly period ended** **September 30,** 2025

**or**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from to** 

**Commission file number** 001-39061

DIRTT ENVIRONMENTAL SOLUTIONS LTD**.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| Alberta, Canada<br>(State or other jurisdiction<br>of incorporation or organization) | N/A<br>(IRS Employer <br>Identification No.) |
| 7303 30th Street S.E.<br>Calgary, Alberta, Canada<br>(Address of principal executive offices) | T2C 1N6<br>(Zip code) |

---

(Registrant's telephone number, including area code): (403) 723-5000

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**Securities registered pursuant to Section 12(b) of the Exchange Act: None**

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
|  |  | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The registrant had 191,832,029 common shares outstanding as of October 30, 2025.

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**DIRTT ENVIRONMENTAL SOLUTIONS LTD.**

**FORM 10-Q**

**FOR THE QUARTER ENDED September 30, 2025**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [<u>Cautionary Statement Regarding Forward-Looking Statements</u>](#cautionary_statement_regarding_forwardlo) | ii |
| [<u>PART I – FINANCIAL INFORMATION</u>](#part_i_financial_information) | 4 |
| [<u>Item 1. Financial Statements (Unaudited)</u>](#item_1_financial_statements_unaudited) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Interim Condensed Consolidated Balance Sheet</u>](#interim_condensed_consolidated_balance_s) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Interim Condensed Consolidated Statement of Operations and Comprehensive (Loss) Income</u>](#interim_condensed_consolidated_statement) | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Interim Condensed Consolidated Statement of Changes in Shareholders' Equity</u>](#equity) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Interim Condensed Consolidated Statement of Cash Flows</u>](#cash_flow) | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Notes to the Unaudited Interim Condensed Consolidated Financial Statements</u>](#notes_to_unaudited_interim_condensed_con) | 9 |
| [<u>Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item_2_managements_discussion_analysis_f) | 26 |
| [<u>Item 3. Quantitative and Qualitative Disclosures About Market Risk</u>](#item_3_quantitative_and_qualitative) | 46 |
| [<u>Item 4. Controls and Procedures</u>](#item_4_controls_procedures) | 46 |
| [<u>PART II – OTHER INFORMATION</u>](#part_ii_or_information) | 47 |
| [<u>Item 1. Legal Proceedings</u>](#item_1_legal_proceedings) | 47 |
| [<u>Item 1A. Risk Factors</u>](#item_1a_risk_factors) | 47 |
| [<u>Item 2. Unregistered Sales of Equity Securities and Use of Proceeds</u>](#item_2_unregistered_sales_equity_securit) | 47 |
| [<u>Item 3. Defaults Upon Senior Securities</u>](#item_3_defaults_upon_senior_securities) | 47 |
| [<u>Item 4. Mine Safety Disclosures</u>](#item_4_mine_safety_disclosures) | 47 |
| [<u>Item 5. Other Information</u>](#item_5_or_information) | 48 |
| [<u>Item 6. Exhibits</u>](#item_6_exhibits) | 49 |

---

i

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# Cautionary Statement Regardin g Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (this "Quarterly Report") are "forward-looking statements" within the meaning of "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and "forward-looking information" within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words "anticipate," "believe," "expect," "estimate," "intend," "plan," "project," "outlook," "may," "will," "should," "would," "could," "can," "continue," the negatives thereof, variations thereon and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on certain estimates, beliefs, expectations and assumptions made in light of management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that may be appropriate.

Forward-looking statements necessarily involve unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from those contained in, or expressed or implied by such statements. Due to the risks, uncertainties and assumptions inherent in forward-looking information, you should not place undue reliance on forward-looking statements. Factors that could have a material adverse effect on our business, financial condition, results of operations and growth prospects can be found in the section titled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (the "SEC") and applicable securities commissions or similar regulatory authorities in Canada on February 26, 2025 (the "Annual Report on Form 10-K"), and in this Quarterly Report under "Part II, Item 1A. Risk Factors." These factors include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the effects of tariffs or other trade barriers on exports or imports to and from Canada and the U.S., retaliatory measures in response thereto, including potential increases in the cost of our raw materials, our finished goods, and our ability to mitigate such effects and timing thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•general economic and business conditions in the jurisdictions in which we operate, including potential recession risks in North America;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to successfully implement the Company's strategic transformation plan to grow DIRTT's revenue and pipeline and manage profitability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to develop our Construction Services team (previously referred to as Integrated Solutions) and the effects thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•inflation and material fluctuations of commodity prices, including raw materials, and our ability to set prices for our products that satisfactorily adjust for inflation, tariffs, and fluctuations in commodity prices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•shortages of supplies of certain key components and materials or disruption in supplies due to global events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•volatility of our share price and potentially limited liquidity for U.S. investors due to our common shares being quoted on the "OTCQX";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the availability of capital or financing on acceptable terms, or at all, which may impact our liquidity and impair our ability to make investments in the business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•refinancing or repaying our indebtedness on maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•turnover of our key executives and difficulties in recruiting or retaining key employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to generate sufficient revenue to achieve and sustain profitability and positive cash flows;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to attract, train and retain qualified hourly labor on a timely basis to increase overall productive capacity in our manufacturing facilities to enable us to capture any rising demand in the construction industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to achieve and manage growth effectively;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•competition in the interior construction industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the voting influence our two largest shareholders are able to exercise over the Company due to their ownership of our common shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•competitive behaviors by our co-founders and former executives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the condition and changing trends of the overall construction industry;

ii

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our reliance on our network of Construction Partners (as defined herein) for sales, marketing and installation of our solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to introduce new designs, solutions and technology and gain client and market acceptance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•defects in our designing and manufacturing software and warranty and product liability claims brought against us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the effectiveness of our manufacturing processes and our success in implementing improvements to those processes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the effectiveness of certain elements of our administrative systems and the need for investment in those systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•global economic, political and social conditions affecting financial markets, such as the war in Ukraine and the conflict in the Middle East;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our exposure to currency exchange rates, tax rates, interest rates and other fluctuations, including those resulting from changes in laws or administrative practice, or changes in monetary policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•legal and regulatory proceedings brought against us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•infringement on our patents and other intellectual property and our ability to protect and enforce our intellectual property rights, including certain intellectual property rights that are jointly owned with a third party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•cyber-attacks and other security breaches of our information and technology systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•damage to our information technology and software systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our requirements to comply with applicable environmental, health, safety and other similar laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the impact of environmental, social and governance ("ESG") matters on our business, including potentially incurring additional expenses implementing Canadian, U.S. and other regulations requiring additional disclosures regarding greenhouse gas emissions and/or broader ESG related-factors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•periodic fluctuations in our results of operations and financial conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the effect of being governed by the corporate laws of a foreign country, including the difficulty of enforcing civil liabilities against directors and officers residing in a foreign country;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the availability and treatment of government subsidies (including any current or future requirements to repay or return such subsidies); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•future mergers, acquisitions, agreements, consolidations or other corporate transactions we may engage in.

These risks are not exhaustive. Because of these risks and other uncertainties, our actual results, performance or achievement, or industry results, may be materially different from the anticipated or estimated results discussed in the forward-looking statements in this Quarterly Report. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the effects of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or expressed or implied by, any forward-looking statements. Our past results of operations are not necessarily indicative of our future results. You should not place undue reliance on any forward-looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. We undertake no obligation to update these forward-looking statements, even though circumstances may change in the future, except as required under applicable securities laws. We qualify all of our forward-looking statements by these cautionary statements.

iii

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# PART I – FINANC IAL INFORMATION
**Item 1. Financial Statements (Unaudited)**

**DIRTT Environmental Solutions Ltd.** 

**Interim Condensed Consolidated Balance Sheet**

**(Unaudited – Stated in thousands of U.S. dollars)** 

---

| | | |
|:---|:---|:---|
|  | **As at September 30,** | **As at December 31,** |
|  | **2025** | **2024** |
| **ASSETS** |  |  |
| **Current Assets** |  |  |
| Cash and cash equivalents | 26132 | 29288 |
| Restricted cash | 243 | 243 |
| Trade and accrued receivables, net of expected credit losses of <br> $0.1 million at September 30, 2025 and December 31, 2024 | 14994 | 19494 |
| Other receivables | 838 | 416 |
| Inventory | 15974 | 15109 |
| Prepaids and other current assets | 3249 | 2609 |
| **Total Current Assets** | **61430** | **67159** |
| Property, plant and equipment, net | 17977 | 20199 |
| Capitalized software, net | 3145 | 2548 |
| Operating lease right-of-use assets, net | 23898 | 25369 |
| Other assets | 2760 | 2945 |
| **Total Assets** | **109210** | **118220** |
| **LIABILITIES** |  |  |
| **Current Liabilities** |  |  |
| Accounts payable and accrued liabilities | 17447 | 16352 |
| Other liabilities | 3126 | 3217 |
| Customer deposits and deferred revenue | 5771 | 4028 |
| Current portion of long-term debt and accrued interest | 12206 | 359 |
| Current portion of lease liabilities | 5503 | 5619 |
| **Total Current Liabilities** | **44053** | **29575** |
| Long-term debt | 10805 | 21993 |
| Long-term lease liabilities | 22865 | 24062 |
| **Total Liabilities** | **77723** | **75630** |
| **SHAREHOLDERS' EQUITY** |  |  |
| Common shares, unlimited authorized without par value, 191,840,863 issued and outstanding at September 30, 2025 and 193,605,237 issued and outstanding at December 31, 2024 | 215052 | 219023 |
| Additional paid-in capital | 10571 | 8206 |
| Accumulated other comprehensive loss | (17275) | (18541) |
| Accumulated deficit | (176861) | (166098) |
| **Total Shareholders' Equity** | **31487** | **42590** |
| **Total Liabilities and Shareholders' Equity** | **109210** | **118220** |

---

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

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**DIRTT Environmental Solutions Ltd.** 

**Interim Condensed Consolidated Statement of Operations** 

**(Unaudited - Stated in thousands of U.S. dollars)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Product revenue | 36677 | 42475 | 114764 | 121690 |
| Service revenue | 1039 | 900 | 3169 | 3733 |
| **Total revenue** | **37716** | **43375** | **117933** | **125423** |
| Product cost of sales | 25794 | 26208 | 79512 | 76589 |
| Service cost of sales | 455 | 354 | 1594 | 1998 |
| **Total cost of sales** | **26249** | **26562** | **81106** | **78587** |
| **Gross profit** | **11467** | **16813** | **36827** | **46836** |
| **Expenses** |  |  |  |  |
| Sales and marketing | 4795 | 5183 | 15265 | 17165 |
| General and administrative | 4429 | 5834 | 15652 | 14791 |
| Operations support | 1801 | 1915 | 5703 | 5531 |
| Technology and development | 805 | 1294 | 3513 | 3981 |
| Stock-based compensation | 742 | 803 | 2075 | 1905 |
| Reorganization | 2593 | 604 | 2977 | 944 |
| Impairment charge on Rock Hill Facility (as defined in Note 4) | - | - | - | 530 |
| **Total operating expenses** | **15165** | **15633** | **45185** | **44847** |
| **Operating (loss) income** | **(3698)** | **1180** | **(8358)** | **1989** |
| Gain on extinguishment of convertible debentures | 8 | 7478 | 22 | 10409 |
| Foreign exchange gain (loss) | 602 | (360) | (1422) | 917 |
| Interest income | 226 | 341 | 720 | 1312 |
| Interest expense | (465) | (1525) | (1401) | (3524) |
|  | **371** | **5934** | **(2081)** | **9114** |
| **Net (loss) income before tax** | **(3327)** | **7114** | **(10439)** | **11103** |
| **Income taxes** |  |  |  |  |
| Current and deferred income tax expense | 157 | 23 | 308 | 371 |
| **Net (loss) income after tax** | **(3484)** | **7091** | **(10747)** | **10732** |
| **Net (loss) income per share** |  |  |  |  |
| Net (loss) income per share - basic | (0.02) | 0.04 | (0.06) | 0.06 |
| Net (loss) income per share - diluted | (0.02) | 0.03 | (0.06) | 0.05 |
| **Weighted average number of shares outstanding** (in thousands) |  |  |  |  |
| Basic | 190981 | 193020 | 190693 | 189585 |
| Diluted | 190981 | 241272 | 190693 | 239301 |

---

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**Interim Condensed Consolidated Statement of Comprehensive (Loss) Income**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net (loss) income after tax for the period | (3484) | 7091 | (10747) | 10732 |
| Exchange differences on translation of foreign operations | (540) | 386 | 1266 | (221) |
| **Comprehensive (loss) income for the period** | **(4024)** | **7477** | **(9481)** | **10511** |

---

Interest expense for the three and nine months ended September 30, 2025 includes $nil earned by a related party ($0.3 million and $1.0 million for the three and nine months ended September 30, 2024). Refer to Note 17.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

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**DIRTT Environmental Solutions Ltd.**

**Interim Condensed Consolidated Statement of Changes in Shareholders' Equity** 

**(Unaudited – Stated in thousands of U.S. dollars, except for share data)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | **Accumulated** |  |  |
|  | **Number of** |  | **Additional** | **other** |  | **Total** |
|  | **Common** | **Common** | **paid-in** | **comprehensive** | **Accumulated** | **shareholders'** |
|  | **shares** | **shares** | **capital** | **loss** | **deficit** | **equity** |
| **As at December 31, 2023** | **105377667** | **196128** | **7954** | **(16125)** | **(180856)** | **7101** |
| Stock-based compensation | - | - | 248 | - | - | 248 |
| Issued on vesting of RSUs (as defined in Note 9) | 521253 | 771 | (771) | - | - | - |
| Issued on Rights Offering (as defined in Note 15) | 85714285 | 21273 | - | - | - | 21273 |
| Issued for employee share purchase plan | 267021 | 122 | - | - | - | 122 |
| RSUs withheld to settle employee tax obligations | - | - | (76) | - | - | (76) |
| Foreign currency translation adjustment | - | - | - | (297) | - | (297) |
| Net income for the period | - | - | - | - | 3045 | 3045 |
| **As at March 31, 2024** | **191880226** | **218294** | **7355** | **(16422)** | **(177811)** | **31416** |
| Stock-based compensation | - | - | 194 | - | - | 194 |
| Issued on vesting of RSUs | 702918 | 300 | (300) | - | - | - |
| Issued for employee share purchase plan | 384499 | 135 | - | - | - | 135 |
| RSUs and Share Awards withheld to settle employee tax obligations | - | - | (131) | - | - | (131) |
| Foreign currency translation adjustment | - | - | - | (310) | - | (310) |
| Net income for the period | - | - | - | - | 596 | 596 |
| **As at June 30, 2024** | **192967643** | **218729** | **7118** | **(16732)** | **(177215)** | **31900** |
| Stock-based compensation | - | - | 542 | - | - | 542 |
| Issued on vesting of RSUs | 125205 | 49 | (49) | - | - | - |
| Issued for employee share purchase plan | 300036 | 137 | - | - | - | 137 |
| RSUs and Share Awards withheld to settle employee tax obligations | - | - | (46) | - | (5) | (51) |
| Foreign currency translation adjustment | - | - | - | 386 | - | 386 |
| Net income for the period | - | - | - | - | 7091 | 7091 |
| **As at September 30, 2024** | **193392884** | **218915** | **7565** | **(16346)** | **(170129)** | **40005** |
| **As at December 31, 2024** | **193605237** | **219023** | **8206** | **(18541)** | **(166098)** | **42590** |
| Stock-based compensation | - | - | 566 | - | - | 566 |
| Issued on vesting of RSUs | 343455 | 366 | (366) | - | - | - |
| RSUs withheld to settle employee tax obligations | - | - | (1) | - | - | (1) |
| Issued for employee share purchase plan | 236834 | 152 | - | - | - | 152 |
| Cancelled from Shares NCIB and Share Repurchase (each as defined in Note 10) | (4439107) | (4880) | 1368 | - | - | (3512) |
| Foreign currency translation adjustment | - | - | - | 67 | - | 67 |
| Net loss for the period | - | - | - | - | (661) | (661) |
| **As at March 31, 2025** | **189746419** | **214661** | **9773** | **(18474)** | **(166759)** | **39201** |
| Stock-based compensation | - | - | 561 | - | - | 561 |
| Issued on vesting of RSUs | 1130876 | 524 | (524) | - | - | - |
| RSUs withheld to settle employee tax obligations | - | - | (60) | - | (16) | (76) |
| Issued for employee share purchase plan | 298039 | 152 | - | - | - | 152 |
| Cancelled from Shares NCIB | (730148) | (852) | 365 | - | - | (487) |
| Foreign currency translation adjustment | - | - | - | 1739 | - | 1739 |
| Net loss for the period | - | - | - | - | (6602) | (6602) |
| **As at June 30, 2025** | **190445186** | **214485** | **10115** | **(16735)** | **(173377)** | **34488** |
| Stock-based compensation | - | - | 604 | - | - | 604 |
| Issued on vesting of RSUs | 235807 | 231 | (231) | - | - | - |
| Settlement of DSU liability (as defined in Note 9) | 1234487 | 592 | - | - | - | 592 |
| RSUs withheld to settle employee tax obligations | - | - | (92) | - | - | (92) |
| Issued for employee share purchase plan | 267012 | 130 | - | - | - | 130 |
| Cancelled from Shares NCIB | (341629) | (386) | 175 | - | - | (211) |
| Foreign currency translation adjustment | - | - | - | (540) | - | (540) |
| Net loss for the period | - | - | - | - | (3484) | (3484) |
| **As at September 30, 2025** | **191840863** | **215052** | **10571** | **(17275)** | **(176861)** | **31487** |

---

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

------

**DIRTT Environmental Solutions Ltd.** 

**Interim Condensed Consolidated Statement of Cash Flows** 

**(Unaudited – Stated in thousands of U.S. dollars)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |  |  |
| Net (loss) income for the period | (3484) | 7091 | (10747) | 10732 |
| **Adjustments:** |  |  |  |  |
| Depreciation and amortization | 1534 | 1487 | 4561 | 4542 |
| Impairment charge on Rock Hill Facility | - | - | - | 530 |
| Stock-based compensation | 742 | 803 | 2075 | 1905 |
| Foreign exchange loss (gain) | (492) | 1051 | 1573 | (420) |
| Gain on extinguishment of convertible debt | (8) | (7478) | (22) | (10409) |
| Accretion of convertible debentures | 80 | 1013 | 255 | 1398 |
| Loss on disposal | - | 132 | 115 | 422 |
| Changes in operating assets and liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade and accrued receivables | 1977 | (2609) | 4638 | (4598) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivables | 242 | 106 | (425) | (43) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | (422) | 327 | (498) | 1558 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other assets, current and long term | 118 | 9 | (447) | 335 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | 1773 | (781) | 1342 | (3366) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (110) | (34) | (110) | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp;Customer deposits and deferred revenue | 2387 | 609 | 1730 | (1761) |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt and accrued interest | (11) | (352) | (14) | (445) |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | 64 | 148 | 126 | 776 |
| **Net cash flows provided by operating activities** | **4390** | **1522** | **4152** | **1122** |
| **Cash flows from investing activities:** |  |  |  |  |
| Purchase of property, plant and equipment, net of accounts <br>&nbsp;&nbsp;&nbsp;&nbsp;payable changes | (283) | (310) | (1084) | (973) |
| Capitalized software development expenditures | (490) | (409) | (1420) | (1333) |
| Other asset expenditures | (58) | 29 | (149) | (103) |
| Recovery of software development expenditures | 51 | 94 | 165 | 215 |
| Proceeds on sale of property, plant, and equipment | - | - | - | 10 |
| Proceeds on sale of assets held for sale | - | - | - | 1025 |
| **Net cash flows (used in) investing activities** | **(780)** | **(596)** | **(2488)** | **(1159)** |
| **Cash flows from financing activities:** |  |  |  |  |
| Common share repurchases | (211) | - | (4204) | - |
| Repayment of long-term debt | (122) | (16230) | (312) | (21323) |
| Net proceeds received from Rights Offering | - | - | - | 21273 |
| Employee tax payments on vesting of RSUs | (89) | (32) | (149) | (239) |
| **Net cash flows (used in) financing activities** | **(422)** | **(16262)** | **(4665)** | **(289)** |
| Effect of foreign exchange on cash, cash equivalents and <br>&nbsp;&nbsp;&nbsp;&nbsp;restricted cash | (156) | (567) | (155) | (906) |
| **Net increase (decrease) in cash, cash equivalents and <br>&nbsp;&nbsp;&nbsp;&nbsp;restricted cash** | **3032** | **(15903)** | **(3156)** | **(1232)** |
| Cash, cash equivalents and restricted cash, beginning of period | 23343 | 39770 | 29531 | 25099 |
| **Cash, cash equivalents and restricted cash, end of period** | **26375** | **23867** | **26375** | **23867** |
| **Supplemental disclosure of cash flow information:** |  |  |  |  |
| Interest paid | (367) | (853) | (1076) | (2531) |
| Income taxes paid | (1) | (133) | (5) | (544) |
| The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within |
| the consolidated balance sheet. |  |  | **As at September 30,** | **As at September 30,** |
|  |  |  | **2025** | **2024** |
| Cash and cash equivalents |  |  | 26132 | 23626 |
| Restricted cash |  |  | 243 | 241 |
| **Total cash, cash equivalents and restricted cash** |  |  | **26375** | **23867** |

---

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

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**DIRTT Environmental Solutions Ltd.**

**Notes to the Unaudited Interim Condensed Consolidated Financial Statements** 

**(Amounts in thousands of U.S. dollars unless otherwise stated)**

**1. GENERAL INFORMATION** 

DIRTT Environmental Solutions Ltd. and its subsidiary ("DIRTT", the "Company", "we" or "our") is a leader in industrialized construction. DIRTT's system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education, and public sector markets, DIRTT's system provides total design freedom, and greater certainty in cost, schedule, and outcomes.

DIRTT's proprietary design integration software, ICE® ("ICE" or "ICE software"), translates the vision of architects and designers into a 3D model that also acts as manufacturing information. ICE is also licensed to unrelated companies and construction partners of the Company ("Construction Partners"), including Armstrong World Industries, Inc. ("AWI"), which owns a 50% interest in the rights, title and interests in certain intellectual property rights in a portion of the ICE software that is used by AWI.

DIRTT is incorporated under the laws of the province of Alberta, Canada. Its headquarters is located at 7303 – 30th Street S.E., Calgary, AB, Canada T2C 1N6 and its registered office is located at 4500, 855 – 2nd Street S.W., Calgary, AB, Canada T2P 4K7. DIRTT's common shares trade on the Toronto Stock Exchange under the symbol "DRT". On June 12, 2025, the Company began trading on the OTCQX® Best Market ("OTCQX") under the symbol "DRTTF." The Company previously traded on, and upgraded to OTCQX from, the OTC Pink® Market.

**2. BASIS OF PRESENTATION** 

The accompanying unaudited interim condensed consolidated financial statements (the "Financial Statements") have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, the Financial Statements do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of the Company, the Financial Statements contain all adjustments necessary, consisting of only normal recurring adjustments, for a fair statement of its financial position as of September 30, 2025, and its results of operations and cash flows for the three and nine months ended September 30, 2025 and 2024. The condensed balance sheet at December 31, 2024, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. These Financial Statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2024 and 2023 and for each of the three years in the period ended December 31, 2024 included in the Annual Report on Form 10-K of the Company as filed with the SEC and applicable securities commission or similar regulatory authorities in Canada.

In these Financial Statements, unless otherwise indicated, all dollar amounts are expressed in United States ("U.S.") dollars. DIRTT's financial results are consolidated in Canadian dollars, the Company's functional currency, and the Company has adopted the U.S. dollar as its reporting currency. All references to US$ or $ are to U.S. dollars and references to C$ are to Canadian dollars.

***Principles of consolidation*** 

The Financial Statements include the accounts of DIRTT Environmental Solutions Ltd. and its subsidiary. All intercompany balances, income and expenses, unrealized gains and losses and dividends resulting from intercompany transactions have been eliminated on consolidation.

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***Basis of measurement*** 

These Financial Statements have been prepared on the historical cost convention except for certain financial instruments, assets held for sale and certain components of stock-based compensation that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The Company's quarterly tax provision is based upon an estimated annual effective tax rate.

***Seasonality*** 

Sales of the Company's products are driven by consumer and industrial demand for interior construction solutions. The timing of customers' construction projects can be influenced by a number of factors including the prevailing economic climate and weather.

**3. ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS**

On December 14, 2023, the FASB issued Accounting Standards Update No. 2023-09, "Improvements to Income Tax Disclosures" ("ASU-2023-09") further disaggregated information on an entity's tax rate reconciliation and income taxes paid. The amendments in ASU-2023-09 are effective for fiscal years beginning after December 15, 2024, on a prospective basis with an option of retrospective application. The Company is evaluating the impact of the adoption of this standard and expects the impact to be limited to disclosures.

On November 5, 2024, the FASB issued Accounting Standards Update No. 2024-03, "Disaggregation of Income Statement Expenses" ("ASU-2024-03") which requires further disaggregated information on an entity's types of expenses presented to better understand the components of an entity's expense captions. The amendments within ASU-2024-03 are effective for annual reporting periods starting December 15, 2026, and interim periods beginning after December 15, 2027, on a prospective basis with an option of retrospective application. The Company is evaluating the impact of the adoption of this standard and expects the impact to be limited to disclosures.

On November 27, 2024, the FASB issued Accounting Standards Update No. 2024-04, "Induced Conversions of Convertible Debt Instruments" ("ASU-2024-04") which requires discussing an entity's assessment of induced conversion and debt extinguishment of convertible debt instruments. The amendments in ASU-2024-04 are effective for fiscal years beginning after December 15, 2025, on a prospective basis with an option of retrospective application. The Company is evaluating the impact of the adoption of this standard.

On September 18, 2025, the FASB issued Accounting Standards Update No. 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software" ("ASU-2025-06") which targets improvements to the accounting for internal-use software. The amendments in ASU-2025-06 are effective for fiscal years beginning after December 15, 2027, on a prospective basis with an option of retrospective application. The Company is evaluating the impact of the adoption of this standard.

Although there are several other new accounting standards issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its Financial Statements.

**4. REORGANIZATION**

***Temporary Suspension of Operations and Subsequent Closure at Rock Hill, South Carolina Facility (the "Rock Hill Facility")***

On September 27, 2023, the Company decided to permanently close the Rock Hill Facility. Certain assets, including manufacturing equipment, which met held for sale criteria at that time were reclassified from property, plant and equipment. During the three months ended March 31, 2024, $1.0 million of the assets held for sale were sold. At March 31, 2024, the assets held for sale balance was reduced from $0.5 million to $nil, resulting in a $0.5 million impairment charge for the first quarter as we were not able to determine the likelihood of a sale based on the market interest at that time.

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---

| | | |
|:---|:---|:---|
|  | **As at September 30,** | **As at September 30,** |
|  | **2025** | **2024** |
| **Assets held for sale, opening** |  | **1555** |
| Proceeds from sale of assets held for sale |  | (1025) |
| Impairment charge on reassessment |  | (530) |
| **Assets held for sale, ending** |  | **-** |

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***Transformation Office***

In 2024, DIRTT's leadership team set up a new team, the Construction Services team (previously referred to as Integrated Solutions), to support our Construction Partner network in increasing market share and accessing markets to which we previously did not have access. In early 2025, a transformation office was set up, to accelerate the strategic transformation of our business by streamlining the Company's processes and procedures, supporting the Construction Services team and improving productivity across the Company (the "Transformation Office"). We are incurring one-time consultant costs to assist in, advise, and implement our transformation actions, as well as one-time termination benefits as a result of elimination of positions. The program is planned to be completed in 2026. At present, the Transformation Office is led by a special committee of the Board of Directors and has one dedicated staff member.

For the three months and nine months ended September 30, 2025 and 2024, the following reorganization costs incurred relate to the above mentioned initiatives:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Termination benefits | 1879 | - | 1879 | - |
| Transformation Office costs | 689 | - | 689 | - |
| Rock Hill Facility temporary suspension and closure of operations | - | 604 | - | 932 |
| Other costs | 25 | - | 409 | 12 |
| **Total reorganization costs** | **2593** | **604** | **2977** | **944** |

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| | |
|:---|:---|
| Reorganization costs in accounts payable and accrued liabilities at January 1, 2025 | 117 |
| Reorganization expense | 2977 |
| Reorganization costs paid | (1794) |
| **Reorganization costs in accounts payable and accrued liabilities at September 30, 2025** | **1300** |

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Of the $1.3 million of reorganization costs in accounts payable and accrued liabilities as at September 30, 2025 (December 31, 2024 – $0.1 million), $1.1 million relates to termination benefits (December 31, 2024 – $0.07 million) and $0.2 million relates to other reorganization costs (December 31, 2024 – $0.03 million).

**5**. GAIN ON EXTINGUISHMENT OF CONVERTIBLE DEBENTURES

On February 15, 2024, the Company commenced a substantial issuer bid and tender offer (the "Issuer Bid") pursuant to which the Company offered to repurchase for cancellation: (i) up to C$6.0 million principal amount of its issued and outstanding January Debentures (as defined in Note 8) at a purchase price of C$720 per C$1,000 principal amount of January Debentures, and (ii) up to C$9.0 million principal amount of its issued and outstanding December Debentures (as defined in Note 8 and together with the January Debentures, the "Debentures"), at a purchase price of C$600 per C$1,000 principal amount of December Debentures.

C$4.7 million ($3.5 million) aggregate principal amount of the January Debentures and C$5.8 million ($4.3 million) aggregate principal amount of December Debentures were validly deposited and not withdrawn at the expiration of the Issuer Bid on March 22, 2024, representing approximately 11.66% of the January Debentures and 16.50% of the December Debentures issued and outstanding at that time. The Company took up all the Debentures tendered pursuant to the Issuer Bid for aggregate consideration of C$7.0 million ($5.2 million) (comprised of C$6.9 million ($5.1 million) repayment on principal and interest of C$0.1 million ($0.1 million)).

------

On August 2, 2024, the Company entered into a Convertible Debenture Repurchase Agreement (the "Repurchase Agreement") with 22NW Fund, LP ("22NW"), pursuant to which the Company purchased for cancellation an aggregate of C$18,915,000 principal amount of the January Debentures at a purchase price of C$684.58 per C$1,000 principal amount of January Debentures and C$13,638,000 principal amount of the December Debentures at a purchase price of C$665.64 per C$1,000 principal amount of December Debentures, for an aggregate purchase price of C$22,104,591.45, inclusive of a cash payment for all accrued and unpaid interest up to, but excluding, the date on which such Debentures were purchased by the Company (the "Debenture Repurchase"). The Debenture Repurchase closed on August 2, 2024. The purchase price of each series of Debentures (excluding the cash payment for accrued and unpaid interest) represented a discount of approximately 4% to the average trading price of the applicable series of Debentures on the Toronto Stock Exchange (the "TSX") for the 20 trading days preceding August 2, 2024. Following the Debenture Repurchase, C$16,642,000 principal amount of the January Debentures and C$15,587,000 principal amount of the December Debentures remained outstanding and 22NW no longer held any Debentures.

On August 28, 2024, the Company commenced a normal course issuer bid (the "Debentures NCIB") for the Debentures which expired on August 27, 2025. On August 26, 2025, the Company announced the renewal of the Debentures NCIB which commenced on August 28, 2025 upon expiry of the Debentures NCIB (the "Renewed Debentures NCIB"). The Renewed Debentures NCIB is expected to terminate on August 27, 2026 with respect to the December Debentures and is expected to terminate on January 31, 2026 with respect to the January Debentures, concurrent with the maturity date of the January Debentures. Under the Debentures NCIB, DIRTT was permitted to acquire up to C$1,664,200 principal amount of the January Debentures and C$1,558,700 principal amount of the December Debentures. For the three and nine months ended September 30, 2025, C$0.1 million ($0.1 million) and C$0.3 million ($0.2 million) principal amounts of the December Debentures (respectively) and C$0.01 million ($0.01 million) and C$0.06 million (C$0.04 million) principal amounts of the January Debentures (respectively) had been acquired in aggregate through the Debentures NCIB. Under the Renewed Debentures NCIB, DIRTT is permitted to acquire up to C$1,656,900 principal amount of the January Debentures and C$1,493,500 principal amount of the December Debentures. For the three months ended September 30, 2025, C$0.01 million ($0.01 million) principal amounts of the December Debentures and $nil principal amounts of the January Debentures had been acquired through the Renewed Debentures NCIB.

For the three months and nine months ended September 30, 2025 and 2024, the gain on extinguishment of convertible debentures relate to the above mentioned initiatives:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| Extinguishment of convertible debentures | 109 | 23685 | 274 | 31671 |
| Less: |  |  |  |  |
| Principal repayment through the Debentures NCIB and Renewed Debentures NCIB | (101) | (73) | (252) | (73) |
| Principal repayment through the Repurchase Agreement | - | (16134) | - | (16134) |
| Principal repayment through the Issuer Bid | - | - | - | (5055) |
| **Gain on extinguishment of convertible debentures** | **8** | **7478** | **22** | **10409** |

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In accordance with GAAP, it was determined that the C$0.1 million ($0.1 million) repayment on convertible debt through the Debentures NCIB and the Renewed Debentures NCIB, in aggregate, in the three months ended September 30, 2025 (C$22.2 million ($16.2 million) repayment of convertible debt through the Repurchase Agreement and the Debentures NCIB for the three months ended September 30, 2024), triggered an extinguishment of C$0.1 million ($0.1 million) (C$32.6 million and $23.9 million for the three months ended September 30, 2024) of principal amount of debt. The gain on extinguishment of C$0.01 million ($0.01 million) for the three months ended September 30, 2025 (C$10.2 million and $7.5 million for the three months ended September 30, 2024), was calculated as the difference between the repayment and the net carrying value of the extinguished principal less unamortized issuance costs.

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In accordance with GAAP, it was determined that the C$0.4 million ($0.3 million) repayment on convertible debt through the Debentures NCIB and the Renewed Debentures NCIB, in aggregate, in the nine months ended September 30, 2025 (C$29.0 million ($21.3 million) repayment of convertible debt through the Issuer Bid, the Debenture Repurchase, and the Debentures NCIB in the nine months ended September 30, 2024), triggered an extinguishment of C$0.4 million ($0.3 million) (C$43.1 million ($31.7 million) for the nine months ended September 30, 2024) of principal amount of debt. The gain on extinguishment of C$0.03 million ($0.02 million) for the nine months ended September 30, 2025 (C$14.2 million ($10.4 million) for the nine months ended September 30, 2024), was calculated as the difference between the repayment and the net carrying value of the extinguished principal less unamortized issuance costs.

**6**. TRADE AND ACCRUED RECEIVABLES

Accounts receivable are recorded at the invoiced amount, do not require collateral and typically do not bear interest. The Company estimates an allowance for credit losses using the lifetime expected credit loss at each measurement date, taking into account historical credit loss experience as well as forward-looking information, in order to establish rates for each class of financial receivable with similar risk characteristics. Adjustments to this estimate are recognized in the consolidated statement of operations.

In order to manage and assess our risk, management maintains credit policies that include regular review of credit limits of individual receivables and systematic monitoring of aging of trade receivables and the financial well-being of our customers. At September 30, 2025, approximately 67% of our trade accounts receivable are trade credit insured, relating to accounts receivable from counterparties deemed creditworthy by the insurer and excluding accounts receivable from government entities.

Our trade balances are spread over a broad Construction Partner base, which is geographically dispersed. For the three and nine months ended September 30, 2025, no single Construction Partner accounted for greater than 10% of revenue (no single Construction Partner for the three and nine months ended September 30, 2024). In addition, and where possible, we collect a 50% deposit on sales, excluding the government and certain other clients.

The Company's aged receivables were as follows**:** 

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| | | |
|:---|:---|:---|
|  | **As at** | **As at** |
|  | **September 30, 2025** | **December 31, 2024** |
| Current | 11596 | 16677 |
| Overdue | 3474 | 2916 |
|  | **15070** | **19593** |
| Less: expected credit losses | (76) | (99) |
| **Trade and accrued receivables, net of expected credit losses** | **14994** | **19494** |

---

No adjustment to our expected credit losses of $0.1 million was required for the three and nine months ended September 30, 2025. Receivables are generally considered to be past due when over 60 days old, unless there is a separate payment arrangement in place for the collection of the receivable.

**7. OTHER LIABILITIES**

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| | | |
|:---|:---|:---|
|  | **As at** | **As at** |
|  | **September 30, 2025** | **December 31, 2024** |
| Warranty provisions <sup>(1)</sup> | 858 | 849 |
| DSU liability | 1652 | 2028 |
| Income taxes payable | 283 | - |
| Sublease deposits | 206 | 206 |
| Other provisions and other liabilities | 127 | 134 |
| **Other liabilities** | **3126** | **3217** |

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(1)The following table presents a reconciliation of the warranty provision balance:

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| | | |
|:---|:---|:---|
|  | **As at** | **As at** |
|  | **September 30, 2025** | **December 31, 2024** |
| **As at January 1,** | 849 | 873 |
| Additions to warranty provision | 486 | 640 |
| Payments related to warranties | (477) | (664) |
|  | **858** | **849** |

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**8. LONG-TERM DEBT**

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| | | | |
|:---|:---|:---|:---|
|  | **Leasing <br>Facilities** | **Convertible <br>Debentures** | **Total Debt** |
| **Balance at January 1, 2024** | **484** | **55624** | **56108** |
| Accretion of issue costs | - | 1491 | 1491 |
| Accrued interest | 35 | 2402 | 2437 |
| Interest payments | (35) | (2839) | (2874) |
| Principal repayments | (78) | (21408) | (21486) |
| Gain on extinguishment | - | (10426) | (10426) |
| Exchange differences | (33) | (2865) | (2898) |
| **Balance at December 31, 2024** | **373** | **21979** | **22352** |
| Current portion of long-term debt and accrued interest | 78 | 281 | 359 |
| Long-term debt | 295 | 21698 | 21993 |
| **Balance at January 1, 2025** | **373** | **21979** | **22352** |
| Accretion of issue costs | - | 255 | 255 |
| Accrued interest | 22 | 1040 | 1062 |
| Interest payments | (22) | (1054) | (1076) |
| Principal repayments | (60) | (252) | (312) |
| Gain on extinguishment | - | (22) | (22) |
| Exchange differences | 12 | 740 | 752 |
| **Balance at September 30, 2025** | **325** | **22686** | **23011** |
| Current portion of long-term debt and accrued interest | 86 | 12120 | 12206 |
| Long-term debt | 239 | 10566 | 10805 |

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*Revolving Credit Facility* 

On February 12, 2021, the Company entered into a loan agreement governing a C$25.0 million senior secured revolving credit facility with the Royal Bank of Canada ("RBC"), as lender (the "RBC Facility"). Under the RBC Facility, the Company was able to borrow up to a maximum of 90% of investment grade or insured accounts receivable plus 85% of eligible accounts receivable plus the lesser of (i) 75% of the book value of eligible inventory and (ii) 85% of the net orderly liquidation value of eligible inventory less any reserves for potential prior ranking claims (the "Borrowing Base"). Interest was calculated at the Canadian or U.S. prime rate plus 30 basis points or at the Canadian Dollar Offered Rate or LIBOR plus 155 basis points. Under the RBC Facility, if the "Aggregate Excess Availability" (defined as the Borrowing Base less any loan advances or letters of credit or guarantee and if undrawn including unrestricted cash), was less than C$5.0 million, the Company is subject to a fixed charge coverage ratio ("FCCR") covenant of 1.10:1 on a trailing twelve-month basis. Additionally, if the FCCR had been below 1.10:1 for the three immediately preceding months, the Company was required to maintain a reserve account equal to the aggregate of one year of payments on outstanding loans on the Canada Leasing Facility (as defined below) and a leasing facility in the United States that is no longer available (together, the "Leasing Facilities"). Should an event of default have occurred or the Aggregate Excess Availability been less than C$6.25 million for five consecutive business days, the Company would have entered a cash dominion period whereby the Company's bank accounts would have been blocked by RBC and daily balances would have offset any borrowings and any remaining amounts made available to the Company.

On February 9, 2023, the Company extended the RBC Facility (the "Extended RBC Facility"). The Extended RBC Facility had a borrowing base of C$15.0 million and a one-year term. Interest was calculated as at the Canadian

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or U.S. prime rate plus 75 basis points or the Canadian Dollar Offered Rate or Term Secured Overnight Financing Rate ("Term SOFR") plus 200 basis points plus the Term SOFR Adjustment (as defined in the amended loan agreement governing the Extended RBC Facility). Under the Extended RBC Facility, if the trailing twelve-month FCCR was not above 1.25 for three consecutive months, a cash balance equivalent to one-year's worth of Leasing Facilities payments was required to be maintained. Effective October 2023, inventory was scoped out of the Borrowing Base.

On February 9, 2024, the Company extended the Extended RBC Facility (the "Second Extended RBC Facility"). The Second Extended RBC Facility is subject to the borrowing base calculation to a maximum of C$15.0 million and a one-year term. Interest is calculated at the Canadian or U.S. prime rate plus 75 basis points or at the Canadian Dollar Offered Rate or Adjusted Term CORRA or Term SOFR plus the Term SOFR Adjustment, in each case plus 200 basis points. The Second Extended RBC Facility removed the three-month FCCR covenant, which resulted in the release of $0.1 million of restricted cash during the first quarter of 2024. On February 11, 2025, the Company extended the Second Extended RBC Facility (the "Third Extended RBC Facility") for a period of two weeks up to February 25, 2025 whilst the Company and RBC completed negotiations.

On February 20, 2025, the Company extended the Third Extended RBC Facility (the "Fourth Extended RBC Facility"). The Fourth Extended RBC Facility is subject to the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million and matures on November 30, 2025. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points. At September 30, 2025, available borrowings are C$8.7 million ($6.2 million) (December 31, 2024 – C$14.4 million ($10.0 million) of available borrowings), calculated in the same manner as the RBC Facility described above, of which no amounts have been drawn. Under the RBC Facility, if the "Aggregate Excess Availability" (defined as the Borrowing Base less any loan advances or letters of credit or guarantee and if undrawn including unrestricted cash), was less than C$3.0 million for at least thirty consecutive calendar days, the Company is subject to a FCCR covenant of 1.10:1 on a trailing twelve-month basis. As at September 30, 2025, the Company is in compliance with its financial covenants. The Fourth Extended RBC Facility also includes a new letter of credit facility guaranteed by the Export Development of Canada of C$5.0 million. The Company has also entered into a bonding facility with Great Midwest Insurance Company, and any other company that is part of or added to Skyward Specialty Insurance Group, Inc. ("Skyward"), which allows access to a $15.0 million bonding facility subject to an individual maximum of $5.0 million. Under the terms of the facility with Skyward, any bonds issued will be secured through letters of credit issued pursuant to the Fourth Extended RBC Facility. At September 30, 2025, no bonds have been issued through such bonding facility.

On November 4, 2025, the Company extended the Fourth Extended RBC Facility (the "Fifth Extended RBC Facility"). The Fifth Extended RBC Facility matures on November 30, 2026 and is subject to the same borrowing base terms as the previous facility; with the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points. The Company will be in default under the Fifth Extended RBC Facility if the January Debentures are not paid in full or refinanced on terms and conditions satisfactory to RBC by January 31, 2026.

*Leasing Facilities*

The Company has a C$5.0 million equipment leasing facility in Canada (the "Canada Leasing Facility") of which C$4.4 million ($3.2 million) has been drawn and C$4.0 million ($2.9 million) has been repaid. The Canada Leasing Facility has a seven-year term and bears interest at 4.25%.

The Company did not make any draws on the Canada Leasing Facility during the three and nine months ended September 30, 2025 (2024 – $nil). The associated financial liabilities are shown on the consolidated balance sheet in the current portion of long-term debt and accrued interest and long-term debt.

*Convertible Debentures*

On January 25, 2021, the Company completed a C$35.0 million ($27.5 million) bought-deal financing of convertible unsecured subordinated debentures (the "January Debentures") with a syndicate of underwriters. On

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January 29, 2021, the Company issued a further C$5.25 million ($4.1 million) of the January Debentures under the terms of an overallotment option granted to the underwriters. The January Debentures will mature and be repayable on January 31, 2026 (the "January Debentures Maturity Date") and accrue interest at the rate of 6.00% per annum payable semi-annually in arrears on the last day of January and July of each year commencing on July 31, 2021 until the January Debentures Maturity Date. Interest and principal are payable in cash or shares at the option of the Company. The January Debentures will be convertible into common shares of DIRTT, at the option of the holder, at any time prior to the close of business on the business day prior to the earlier of the January Debentures Maturity Date and the date specified by the Company for redemption of the January Debentures. Costs of the transaction were approximately C$2.7 million, including the underwriters' commission. As a result of the Rights Offering (refer to Note 15), the conversion price of the January Debentures was adjusted to C$4.03 per common share representing a conversion rate of 248.1390 common shares per C$1,000 principal amount. On March 22, 2024, the Company completed the Issuer Bid in which the Company repurchased for cancellation C$4.7 million ($3.5 million) of the principal balance of the January Debentures, and paid C$0.04 million ($0.03 million) of the interest payable on such January Debentures (refer to Note 5). On August 2, 2024, the Company completed the Debenture Repurchase. On August 28, 2024, the Company commenced the Debentures NCIB which expired on August 27, 2025. On August 26, 2025, the Company announced the Renewed Debentures NCIB which commenced on August 28, 2025 upon expiry of the Debentures NCIB. The Renewed Debentures NCIB is expected to terminate on January 31, 2026, with respect to the January Debentures, concurrent with the maturity date of the January Debentures. During the three and nine months ended September 30, 2025, the Company repurchased for cancellation C$0.01 million ($0.01 million) and C$0.06 million ($0.04 million) principal amount of January Debentures, in aggregate, as part of the Debentures NCIB and Renewed Debenture NCIB (C$0.01 million ($0.01 million) for the three and nine months ended September 30, 2024). As at September 30, 2025, C$16.6 million ($11.9 million) principal amount of the January Debentures was outstanding.

On December 1, 2021, the Company completed a C$35.0 million ($27.4 million) bought-deal financing of convertible unsecured subordinated debentures (the "December Debentures") with a syndicate of underwriters. The December Debentures will mature and be repayable on December 31, 2026 (the "December Debentures Maturity Date") and accrue interest at the rate of 6.25% per annum payable semi-annually in arrears on the last day of June and December of each year commencing on June 30, 2022 until the December Debentures Maturity Date. Interest and principal are payable in cash or shares at the option of the Company. The December Debentures will be convertible into common shares of DIRTT, at the option of the holder, at any time prior to the close of business on the business day prior to the earlier of the December Debentures Maturity Date and the date specified by the Company for redemption of the December Debentures. Costs of the transaction were approximately C$2.3 million, including the underwriters' commission. As a result of the Rights Offering (refer to Note 15), the conversion price of the December Debentures was adjusted to C$3.64 per common share representing a conversion rate of 274.7253 common shares per C$1,000 principal amount. On March 22, 2024, the Company completed the Issuer Bid in which the Company repurchased for cancellation C$5.8 million ($4.3 million) of the principal balance of the December Debentures and paid C$0.08 million ($0.06 million) of the interest payable on such December Debentures (refer to Note 5). On August 2, 2024, the Company repurchased for cancellation C$13.6 million ($10.1 million) principal amount of December Debentures held by 22NW. On August 28, 2024, the Company commenced the Debentures NCIB which expired on August 27, 2025. On August 26, 2025, the Company announced the Renewed Debentures NCIB which commenced on August 28, 2025 upon expiry of the Debentures NCIB. The Debentures NCIB is expected to terminate on August 27, 2026 with respect to the December Debentures. During the three and nine months ended September 30, 2025, the Company repurchased for cancellation C$0.1 million ($0.1 million) and C$0.3 million ($0.2 million) principal amount of the December Debentures, in aggregate, as part of the Debentures NCIB and Renewed Debentures NCIB (C$0.1 million ($0.1 million) for the three and nine months ended September 30, 2024). As at September 30, 2025, C$14.9 million ($10.7 million) principal amount of the December Debentures was outstanding.

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**9**. STOCK-BASED COMPENSATION

In May 2020, shareholders approved the DIRTT Environmental Solutions Ltd. Long Term Incentive Plan, which was subsequently amended and restated in each of 2023, 2024 and 2025 and is currently called the DIRTT Environmental Solutions Ltd. Third Amended and Restated Long-Term Incentive Plan (as amended and restated, the "LTIP"). Each amendment and restatement was approved by our shareholders. The LTIP replaced the predecessor incentive plans, being the Performance Share Unit Plan ("PSU Plan") and the Amended and Restated Stock Option Plan ("Stock Option Plan"). No further awards have been or will be granted under either the Stock Option Plan or the PSU Plan following initial approval of the LTIP in May of 2020, but both plans remain in place to govern the terms of any awards that were granted pursuant to such plans.

The LTIP gives the Company the ability to award options, share appreciation rights, restricted share units, deferred share units, restricted shares, dividend equivalent rights, and other share-based awards and cash awards to eligible employees, officers, consultants and directors of the Company and its affiliates. In accordance with the LTIP, the sum of (i) 30,350,000 common shares plus (ii) the number of common shares subject to stock options previously granted under the Stock Option Plan that, following May 22, 2020, expire or are cancelled or terminated without having been exercised in full, have been reserved for issuance under the LTIP. Upon vesting of certain LTIP awards, the Company may withhold shares as a means of meeting DIRTT's tax withholding requirements in respect of the withholding tax remittances required in respect of award holders. To the extent the fair value of the withheld shares upon vesting exceeds the grant date fair value of the instrument, the excess amount is credited to retained earnings or deficit.

Prior to May of 2023, deferred share units ("DSUs") were granted to non-employee directors under the Deferred Share Unit Plan for Non-Employee Directors (as amended and restated, the "DSU Plan") and settleable only in cash. As of May 30, 2023, the LTIP provides the Company the ability to settle DSUs in either cash or common shares, while consolidating future share-based awards under a single plan. The terms of the DSU Plan are otherwise materially unchanged as incorporated into the LTIP. Effective May 30, 2023, no new awards have been or will be made under the DSU Plan, but awards previously granted under the DSU Plan will continue to be governed by the DSU Plan. DSUs are settled following cessation of services with the Company.

*Stock-based compensation expense* 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Equity-settled awards | 741 | 627 | 2219 | 1641 |
| Cash-settled awards | 1 | 176 | (144) | 264 |
|  | **742** | **803** | **2075** | **1905** |

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The following summarizes RSUs, PRSUs, PSUs (each as defined herein) and DSUs activity during the periods:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **RSU Time-** | **RSU Performance-** |  |  |
|  | **Based** | **Based** | **PSU** | **DSU** |
|  | **Number of** | **Number of** | **Number of** | **Number of** |
|  | **units** | **units** | **units** | **units** |
| **Outstanding at December 31, 2023** | **3530564** | **64029** | **1845608** | **3086172** |
| Granted | 8456663 | - | - | 1409962 |
| Vested or settled | (1336802) | (12574) | - | (741306) |
| Withheld to settle employee tax obligations | (351672) | - | - | - |
| Forfeited or expired | (159663) | (6278) | - | - |
| **Outstanding at September 30, 2024** | **10139090** | **45177** | **1845608** | **3754828** |
| **Outstanding at December 31, 2024** | **10260791** | **45177** | **1845608** | **4033894** |
| Granted | 25000 | - | - | 780025 |
| Vested or settled | (1710138) | - | - | (1234487) |
| Withheld to settle employee tax obligations | (335975) | - | - | - |
| Forfeited or expired | (439119) | (45177) | - | (347628) |
| **Outstanding at September 30, 2025** | **7800559** | **-** | **1845608** | **3231804** |

---

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*Restricted share units (time-based vesting)*

Except as noted below, outstanding restricted share units ("RSUs") that vest based on time have an aggregate time-based vesting period of three years and generally one-third of the RSUs vest every year over a three-year period from the date of grant. The RSUs will be settled following vesting by way of the provision of cash or shares to employees (or a combination thereof), at the discretion of the Company. The weighted average fair value of the RSUs granted in the nine months ended September 30, 2025 and September 30, 2024 was C$0.82 and C$0.63, respectively, which was determined using the closing price of the Company's common shares on their respective grant dates. During the third quarter of 2024, certain of the Company's executives were granted (i) 5 million RSUs which will cliff vest on August 14, 2026 and (ii) 975,000 RSUs, one-third of which will vest every year over a three-year period from the date of grant, at a weighted average fair value of C$0.75 which was determined using the closing price of the Company's common shares on their respective grant dates.

*Restricted share units (performance-based vesting)*

During 2022 and 2021, RSUs were granted to executives with service and performance-based conditions for vesting based on the Company's share price performance (the "PRSUs"). Based on share price performance since the date of grant, 66.7% of the 2021 PRSUs vested on March 1, 2024, but none of the 2022 PRSUs vested upon completion of the three-year service period. As at September 30, 2024, the Company had 45,177 PRSUs outstanding. All PRSUs were expired as of September 30, 2025.

*Performance share units*

During the second quarter of 2023, certain executives were issued a strategic equity grant through performance share units ("PSUs"). The performance period of the PSUs is from January 1, 2023 to December 31, 2026 with a cliff vesting term for December 31, 2026. 2,584,161 PSUs were granted and depending on the level of performance, the PSUs will vest 100%, 160% or 190% up to a maximum of 4,909,907 PSUs. Settlement will be made in the form of shares issued from treasury. The performance measures are a combination of Revenue and Earnings Before Interest, Taxes, Depreciation and Amortization and both targets have to be achieved. As of September 30, 2025, the fair value of these PSUs have been deemed to be $nil based on the likelihood of achieving the targets compared to current results. During the third quarter of 2023, 738,553 PSUs with a $nil value were forfeited as a result of an executive departure and 1,845,608 PSUs with a $nil value are outstanding at September 30, 2025.

*Deferred share units* 

**Granted under the DSU Plan**

The fair value of the DSU liability and the corresponding expense is charged to profit or loss at the grant date. Subsequently, at each reporting date between the grant date and settlement date, the fair value of the liability is remeasured with any changes in fair value recognized in profit or loss for the period. In the three months ended September 30, 2025, the Company settled 0.3 million DSUs (nil in the three months ended September 30, 2024) to departed directors with a fair value of $0.2 million ($nil in the three months ended September 30, 2024). DSUs outstanding at September 30, 2025 had a fair value of $0.4 million which is included in other liabilities on the balance sheet (December 31, 2024 – $0.7 million).

**Granted under the LTIP**

DSUs granted after May 30, 2023 (the "New DSUs") will be settled by way of the provision of cash or shares (or a combination thereof) to the directors, at the discretion of the Company. The Company intends to settle these DSUs through issuances of common shares. The weighted average fair value of the DSUs granted in the first nine months of 2025 and 2024 was C$0.89 ($0.63) and C$0.64 ($0.47), respectively, which was determined using the closing price of the Company's common shares on the grant date. In the three months ended September 30, 2025, the Company settled 1.2 million New DSUs (nil in the three months ended September 30, 2024) to departed directors with a fair value of $0.6 million ($nil in the three months ended September 30, 2024). New DSUs outstanding at September 30, 2025 had a fair value of $1.3 million which is included in other liabilities on the balance sheet (December 31, 2024 – $1.3 million).

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*Dilutive Instruments*

For the three and nine months ended September 30, 2025, 0.3 million and 5.3 million RSUs, respectively, 2.5 million and 2.3 million New DSUs, 1.8 million PSUs, and 39.9 million common shares which would have been issued if the principal amount of the Debentures was settled in common shares at the quarter-end price were excluded from the diluted weighted average number of common shares, as their effect would have been anti-dilutive to the net loss per share.

For the three and nine months ended September 30, 2024, 0.1 million and 2.0 million RSUs, respectively, 2.3 million and 1.8 million New DSUs, respectively, and 45.9 million shares which would have been issued if the principal amount of the Debentures was settled in common shares at the quarter-end price were included in the diluted net income per share calculation. 0.04 million PRSUs, 1.8 million PSUs and 6.1 million and 8.1 million RSUs in the three and nine months ended September 30, 2024, respectively, were excluded from the diluted weighted average number of common shares, as their effect would have been anti-dilutive to the net income per share. See Note 11 for the dilutive impact on net income per share.

**10**. SHARE REPURCHASES

On December 18, 2024, the Company announced a normal course issuer bid for common shares (the "Shares NCIB"), which commenced on December 20, 2024 and terminates on December 19, 2025, and which permits DIRTT to acquire up to 7,515,233 common shares. All repurchases under the Shares NCIB will be made on the open market through the facilities of the TSX at the market price of common shares at the time of acquisition. Any common shares acquired through the Shares NCIB will be immediately cancelled.

On February 13, 2025, the Company entered into a share repurchase agreement (the "NGEN Repurchase Agreement") with NGEN III, LP ("NGEN"), pursuant to which the Company purchased for cancellation 3,920,844 common shares held by NGEN at a purchase price of $0.80 per share (the "Share Repurchase"). Pursuant to the terms of the NGEN Repurchase Agreement, the purchase price of $0.80 per share was a 1% discount to the closing price of the common shares on the TSX on January 27, 2025 (converted into U.S. Dollars using the February 13, 2025 closing exchange rate published by the Bank of Canada). Upon completion of the Share Repurchase on February 14, 2025, there were 189,643,903 common shares outstanding. The common shares repurchased under the Share Repurchase count against the maximum number of shares that may be repurchased pursuant to the Shares NCIB, being 7,515,233 shares.

In addition to the Share Repurchase, DIRTT acquired and cancelled 341,629 and 1,590,040 common shares during the three and nine months ended September 30, 2025, respectively, under the Shares NCIB (58,478 common shares for the year ended December 31, 2024).

The following table summarizes the common shares repurchased and cancelled during the period:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total number of shares purchased** | **Average price paid per share** | **Total number of shares purchased as part of publicly announced programs** | **Maximum number of shares that may yet be purchased under the program** |
| January 1, 2025 - January 31, 2025 | 109556 | $0.77 | 109556 | 7347199 |
| February 1, 2025 - February 28, 2025<sup>(1)</sup> | 4074200 | $0.80 | 153356 | 3272999 |
| March 1, 2025 - March 31, 2025 | 255351 | $0.69 | 255351 | 3017648 |
| April 1, 2025 - April 30, 2025 | 266546 | $0.73 | 266546 | 2751102 |
| May 1, 2025 - May 31, 2025 | 197129 | $0.66 | 197129 | 2553973 |
| June 1, 2025 - June 30, 2025 | 266473 | $0.61 | 266473 | 2287500 |
| July 1, 2025 - July 31, 2025 | 255173 | $0.65 | 255173 | 2032327 |
| August 1, 2025 - August 31, 2025 | 1500 | $0.59 | 1500 | 2030827 |
| September 1, 2025 - September 30, 2025 | 84956 | $0.52 | 84956 | 1945871 |
| **Total** | 5510884 |  | 1590040 | 1945871 |

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(1) Includes 3,920,844 common shares that were repurchased from NGEN under the Share Repurchase at a purchase price of $0.80 per share. The Share Repurchase was completed on February 14, 2025. The Share Repurchase was a privately negotiated transaction and was not made pursuant to the Shares NCIB or any other publicly announced share repurchase programs, although it was counted against the Shares NCIB limit.

**11. EARNINGS (LOSS) PER SHARE**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Net (loss) income per share – basic** |  |  |  |  |
| Net (loss) income (thousands of U.S. dollars) | $(3484) | $7091 | $(10747) | $10732 |
| Weighted average number of shares outstanding (thousands of shares) | 190981 | 193020 | 190693 | 189585 |
| **Net (loss) income per share (U.S. dollars) - basic** | $**(0.02)** | $**0.04** | $**(0.06)** | $**0.06** |
| **Net (loss) income per share - diluted** |  |  |  |  |
| Net (loss) income (thousands of U.S. dollars) | $(3484) | $7091 | $(10747) | $10732 |
| Interest on convertible debentures | NA | 486 | NA | 2053 |
|  | $(3484) | $7577 | $(10747) | $12785 |
| Weighted average number of shares outstanding (thousands of shares) | 190981 | 193020 | 190693 | 189585 |
| Dilutive debentures on convertible debt (thousands of shares) <sup>(1)</sup> | - | 45861 | - | 45861 |
| Dilutive RSUs and PRSUs (thousands of shares) <sup>(2)</sup> | - | 117 | - | 2043 |
| Dilutive New DSUs (thousands of shares) <sup>(2)</sup> | - | 2274 | - | 1812 |
| Weighted average number of shares outstanding (thousands of shares) | 190981 | 241272 | 190693 | 239301 |
| **Net (loss) income per share (U.S .dollars) - diluted** | $**(0.02)** | $**0.03** | $**(0.06)** | $**0.05** |

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(1) For the three and nine months ended September 30, 2024, the Net income per share - diluted includes the effect of 45.9 million shares that would be issued if the principal amount of the Debentures was settled in our common shares at the quarter end price as they would have the potential to dilute basic income per share. Refer to Note 9 for the anti-dilutive impact on the three and nine months ended September 30, 2025.

(2) For the three and nine months ended September 30, 2024, the Net income per share - diluted includes the effect of 0.1 million and 2.0 million RSUs and PRSUs, and 2.3 million and 1.8 million New DSUs, as they would have the potential to dilute basic income per share. Refer to Note 9 for the anti-dilutive impact on the three and nine months ended September 30, 2025 and 2024.

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**12. REVENUE**

In the following table, revenue is disaggregated by performance obligation and timing of revenue recognition. All revenue comes from contracts with customers. See Note 13 for the disaggregation of revenue by geographic region.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Product | 32431 | 38510 | 102130 | 109527 |
| Transportation | 4066 | 3788 | 12095 | 11602 |
| License fees from Construction Partners | 180 | 177 | 539 | 561 |
| **Total product revenue** | **36677** | **42475** | **114764** | **121690** |
| Installation and other services | 1039 | 900 | 3169 | 3733 |
|  | **37716** | **43375** | **117933** | **125423** |

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DIRTT sells its products and services pursuant to fixed-price contracts which generally have a term of one year or less. The transaction price used in determining the amount of revenue to recognize from fixed-price contracts is based upon agreed contractual terms with each customer and is not subject to variability.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| At a point in time | 36497 | 42298 | 114225 | 121129 |
| Over time | 1219 | 1077 | 3708 | 4294 |
|  | **37716** | **43375** | **117933** | **125423** |

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Revenue recognized at a point in time represents the majority of the Company's sales. Revenue is recognized when a customer obtains legal title to the product, which is when ownership of the product is transferred to, or services are delivered to, the customer. Revenue recognized over time includes pre-construction services, license fees, installation and ongoing maintenance contracts with customers and is recorded as performance obligations which are satisfied over the term of the contract.

***Contract Liabilities*** 

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As at** | **As at** | **As at** | **As at** | **As at** | **As at** |
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** |
| Customer deposits |  | 5,591 |  | 4,028 |  | 5,290 |
| Deferred revenue |  | 180 |  | - |  | - |
| Contract liabilities |  | **5,771** |  | **4,028** |  | **5,290** |

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Contract liabilities primarily relate to deposits received from customers and maintenance revenue from license subscriptions. The balance of contract liabilities was higher as at September 30, 2025 compared to December 31, 2024 mainly due to the timing of orders and payments. Contract liabilities as at December 31, 2024 and 2023 totaling $4.0 million and $5.3 million, respectively, were recognized as revenue in the nine months ended September 30, 2025 and 2024, respectively.

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***Sales by Industry*** 

The Company periodically reviews the growth of product and transportation revenue by vertical market to evaluate the success of industry-specific sales initiatives. The nature of products sold to the various industries is consistent and therefore review is focused on sales performance.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Commercial | 21675 | 27815 | 70581 | 86012 |
| Healthcare | 8645 | 6975 | 25014 | 14824 |
| Government | 2057 | 3768 | 7713 | 12335 |
| Education | 4120 | 3740 | 10917 | 7958 |
| License fees from Construction Partners | 180 | 177 | 539 | 561 |
| **Total product and transportation revenue** | **36677** | **42475** | **114764** | **121690** |
| Installation and other services | 1039 | 900 | 3169 | 3733 |
|  | **37716** | **43375** | **117933** | **125423** |

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**13. SEGMENT REPORTING** 

The Company has one reportable and operating segment and operates in two principal geographic locations – Canada and the United States. Revenue continues to be derived almost exclusively from projects in North America and predominantly from the United States. The Company's revenue from operations from external customers, based on location of operations, and information about its non-current assets, is detailed below.

***Revenue from external customers*** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Canada | 3298 | 7879 | 14220 | 15607 |
| U.S. | 34418 | 35496 | 103713 | 109816 |
|  | **37716** | **43375** | **117933** | **125423** |

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***Non-current assets***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **As at September 30,** | **As at September 30,** | **As at December 31,** | **As at December 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
| Canada |  | 24,286 |  | 25,924 |
| U.S. |  | 23,494 |  | 25,137 |
|  |  | **47,780** |  | **51,061** |

---

DIRTT has one reportable segment: solutions. The DIRTT solutions segment derives revenues from customers by providing physical products and digital tools through our ICE software to create interior spaces for our customers across the commercial, healthcare, education and government industries. The solutions segment provides digital tools (access to ICE software) and physical products to create modular interior construction spaces for our customers.

DIRTT's chief operating decision maker is the executive leadership team that includes the president and chief operating officer, chief financial officer, and the chief executive officer. The chief operating decision maker assesses performance for the solutions segment and decides how to allocate resources based on gross profit and net income (loss) that also is reported on the Consolidated Statement of Operations and Comprehensive (Loss) Income as consolidated gross profit and net income (loss). The measure of segment assets is reported on the balance sheet as total consolidated assets. The chief operating decision maker uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the solutions segment or into other parts of the entity, such as to repay long-term debt.

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Net income (loss) are used to monitor budget versus actual results. The chief operating decision maker also uses net income (loss) in competitive analysis by benchmarking to DIRTT's competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management's compensation.

DIRTT derives revenue primarily in North America and manages the business activities on a consolidated basis. The technology used in the customer arrangements is based on a single software platform that is deployed to, and implemented by, customers in a similar manner.

***Segment profit and loss reconciliation to Net (loss) income after tax***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| Revenue | 37716 | 43375 | 117933 | 125423 |
| Cost of sales | 26249 | 26562 | 81106 | 78587 |
| Operating expenses <sup>(1)</sup> | 15165 | 15633 | 45185 | 44847 |
| **Operating (loss) income** | **(3698)** | **1180** | **(8358)** | **1989** |
| Other (expenses)/income and (losses)/gains <sup>(2)</sup> | 214 | 5911 | (2389) | 8743 |
| **Net (loss) income after tax** | **(3484)** | **7091** | **(10747)** | **10732** |
| *Reconciliation of profit or loss* |  |  |  |  |
| Adjustments and reconciling items | - | - | - | - |
| **Net (loss) income after tax** | **(3484)** | **7091** | **(10747)** | **10732** |

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(1) Includes Sales and marketing, General and administrative, Operations support, Technology and development, Stock-based compensation, Reorganization costs and Impairment charges.

(2) Includes Tax expenses, non-recurring gains and losses, foreign exchange gains (losses), interest income and interest expenses.

**14. INCOME TAXES**

As at September 30, 2025, the Company had a valuation allowance of $29.8 million against deferred tax assets as the Company has experienced cumulative losses in recent years (December 31, 2024 – $30.0 million).

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**15. RIGHTS OFFERING**

On November 21, 2023, the Company announced that the Board of Directors had approved a rights offering (the "Rights Offering") to its common shareholders for aggregate gross proceeds of C$30.0 million ($22.4 million).

In connection with the Rights Offering, the Company entered into a standby purchase agreement, dated November 20, 2023 (the "Standby Purchase Agreement") with 22NW and 726 BC LLC and 726 BF LLC (together, "726"), or their permitted assigns (collectively and including WWT Opportunity #1 LLC, to which 726 transferred all of their common shares to on December 1, 2023, the "Standby Purchasers"). Subject to the terms and conditions of the Standby Purchase Agreement, each Standby Purchaser agreed to exercise its Basic Subscription Privilege (as defined below) in full and to collectively purchase from the Company, at the subscription price, all common shares not subscribed for by holders of Rights (as defined below) under the Basic Subscription Privilege or Additional Subscription Privilege (as defined below), up to a maximum of C$15.0 million each, so that the maximum number of common shares that could be issued in connection with the Rights Offering would be issued and the Company would receive aggregate gross proceeds of C$30.0 million ($22.4 million). As described below, no standby fee was paid to the Standby Purchasers in connection with the Rights Offering; however, DIRTT reimbursed the Standby Purchasers for their reasonable expenses in the amount of $0.03 million each.

On January 9, 2024, the Company announced the completion of the Rights Offering to its common shareholders and the issuance of 85,714,285 common shares at a price of C$0.35 ($0.26) per whole common share for aggregate gross proceeds of C$30.0 million ($22.4 million) and aggregate net proceeds of $21.3 million ($1.1 million of costs associated with the Rights Offering). Each right distributed under the Rights Offering (each, a "Right") entitled eligible holders to subscribe for 0.81790023 common shares, exercisable for whole common shares only, meaning 1.22264301 Rights were required to purchase one common share (the "Basic Subscription Privilege"). In accordance with applicable law, the Rights Offering included an additional subscription privilege (the "Additional Subscription Privilege") under which eligible holders of Rights who fully exercised the Rights issued to them under their Basic Subscription Privilege, were entitled to subscribe for additional common shares, on a pro rata basis, that were not otherwise subscribed for under the Basic Subscription Privilege.

DIRTT issued an aggregate of 67,379,471 common shares pursuant to the Basic Subscription Privilege and 18,334,814 common shares pursuant to the Additional Subscription Privilege. As a result of the common shares issued under the Basic Subscription Privilege and Additional Subscription Privilege, no common shares were available for issuance pursuant to the Standby Purchase Agreement.

**16. COMMITMENTS AND CONTINGENCIES**

As at September 30, 2025, the Company had outstanding purchase obligations of approximately $3.3 million related to service commitments, inventory, and property, plant and equipment purchases (December 31, 2024 – $4.2 million). As at September 30, 2025, the Company had undiscounted operating lease liabilities of $37.1 million (December 31, 2024 – $39.5 million), which includes undiscounted rent obligations of $1.4 million relating to a five-year lease agreement for a new DIRTT Experience Center ("DXC") in Houston, Texas that was signed by the Company in the second quarter of 2025.

DIRTT Environmental Solutions Inc. received a subpoena for records in relation to an ongoing inquiry by the U.S. Department of Justice into certain projects and services provided by a third party and DIRTT. The Company is complying with the subpoena and cooperating with the Department of Justice. At this time, there are no asserted claims against the Company. Therefore the extent of any loss, if any, to the Company cannot be reasonably estimable.

**17. RELATED PARTY TRANSACTIONS**

As at September 30, 2025 and September 30, 2024 there were no Debentures held by a related party. Interest earned on Debentures held by a related party is $nil for the three and nine months ended September 30, 2025 ($0.3 million and $1.0 million for three and nine months ended September 30, 2024). Interest was earned on terms applicable to all Debenture holders.

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**18. SUBSEQUENT EVENTS**

On October 28, 2025, we entered into a non-binding term sheet with the Business Development Bank of Canada ("BDC") for proposed financing of up to C$15.0 million, the net proceeds of which are expected to be used to further strengthen our balance sheet and partially repay the January Debentures. The remaining January Debentures (C$1.6 million) are expected to be repaid using cash on hand. DIRTT continues to consider, evaluate, and negotiate a definitive agreement with respect to the proposed financing with BDC. Any advancement of funds is subject to, among other things, BDC's due diligence and the negotiation and execution of binding definitive documentation. There can be no assurance that a definitive agreement will be reached or that the proposed financing will be completed on the terms in the non-binding term sheet or at all, and the Company may ultimately determine not to proceed with the financing or use any net proceeds of such financing for the repayment of the January Debentures.

On November 4, 2025, the Company entered into the Fifth Extended RBC Facility. For more information, refer to Note 8.

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited interim condensed consolidated financial statements and related notes and other financial information appearing in this Quarterly Report. This discussion contains forward-looking statements reflecting our current expectations and estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" appearing elsewhere in this Quarterly Report.* 

**Summary of Financial Results**

DIRTT Environmental Solutions Ltd. and its subsidiary ("DIRTT", the "Company", "we" or "our") is a leader in industrialized construction for interior spaces. DIRTT's system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education, and public sector markets, DIRTT's system provides total design freedom, and greater certainty in cost, schedule, and outcomes.

DIRTT's proprietary design integration software, ICE® ("ICE" or "ICE software"), translates the vision of architects and designers into a 3D model that also acts as manufacturing information. ICE is also licensed to our Construction Partners and certain third parties, including Armstrong World Industries, Inc. ("AWI") which owns a 50% interest in the rights, title and interests in certain intellectual property rights in a portion of the ICE software that is used by AWI.

***Key Third Quarter Highlights and Other Recent Developments***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Revenue for the quarter ended September 30, 2025 was $37.7 million, a decrease of $5.7 million or 13%, from $43.4 million for the same period of 2024. We entered the third quarter of 2025 with twelve-month forward pipeline 18% higher as compared to July 1, 2024. We experienced higher than normal order delays due to job sites not being ready, which contributed to lower revenue this quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Gross profit and gross profit margin for the quarter ended September 30, 2025 were $11.5 million or 30.4% of revenue compared to $16.8 million or 38.8% of revenue for the quarter ended September 30, 2024. Sequentially, gross profit margin increased from 27.8% in the second quarter of 2025 as tariff mitigation actions began to take effect. Adjusted Gross Profit (see "– Non-GAAP Financial Measures") for the three months ended September 30, 2025 was $12.5 million, a decrease from $17.6 million Adjusted Gross Profit for the third quarter of 2024. Adjusted Gross Profit Margin (see "– Non-GAAP Financial Measures") was 33.1% in the third quarter of 2025, a decrease from 40.7% in the comparative period of 2024. Gross profit and Adjusted Gross Profit for the quarter ended September 30, 2025 were negatively impacted due to the decline in revenues as well as tariff-related costs that commenced in March 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•During the first nine months of 2025, various tariffs were levied by the U.S. and Canadian governments. We incurred $1.9 million (5.1% of total revenue) and $4.5 million (3.8% of total revenue) in tariffs and costs related to tariff mitigation actions for the three and nine months ended September 30, 2025, respectively. DIRTT is most impacted by the 25% tariff levied on Canadian aluminum exports to the United States which increased to 50% in June 2025. We believe that going into the fourth quarter of 2025, costs relating to existing tariffs will be substantially mitigated through price and other actions taken earlier in the year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•During the nine months ended September 30, 2025, the Company undertook activities associated with the deployment of its Transformation Office (as defined herein). $2.6 million of associated costs were recognized as reorganization expenses in the three months ended September 30, 2025.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Net loss after tax and net loss margin for the third quarter of 2025 was $3.5 million and 9.2% of revenue, respectively, compared to $7.1 million net income after tax and net income margin of 16.3% for the same period of 2024. The decrease in net income is primarily the result of a $5.3 million decrease in gross profit, a $2.0 million increase in reorganization expenses, a $7.5 million decrease in gain on extinguishment of convertible debentures, offset by a $2.5 million decrease in other operating expenses, a $1.1 million decrease in interest expense, and a $1.0 million increase in foreign exchange gain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Adjusted EBITDA (see "– Non-GAAP Financial Measures") for the third quarter of 2025 was $1.2 million, or 3.1% of revenue, a decrease of $2.9 million from $4.1 million, or 9.4% of revenue, for the third quarter of 2024. Lower Adjusted EBITDA was mainly driven by a $5.2 million decrease in Adjusted Gross Profit, offset by the decrease in operating expenses discussed above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Cash on hand increased by $3.0 million in the third quarter of 2025 to $26.1 million, compared to a $15.9 million decrease in cash in the third quarter of 2024. The increase in cash in the third quarter of 2025 was driven by $4.4 million of net cash flows provided by operating activities, offset by $0.8 million in capital expenditures, an aggregate of $0.2 million in common share repurchases from the Shares NCIB (as defined herein) and repurchase of convertible debt through the Debentures NCIB (as defined herein) and the Renewed Debentures NCIB (as defined herein), $0.1 million in employee tax payments on vesting of RSUs, and $0.1 million in repayment of long-term debt. The decrease in cash for the third quarter of 2024 was mainly due to $16.2 million repayment of long-term debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•On August 26, 2025, the Company announced the renewal of the Debentures NCIB (the "Renewed Debentures NCIB"), which commenced on August 28, 2025 and permits DIRTT to acquire up to C$1,656,900 principal amount of the January Debentures and C$1,493,500 principal amount of the December Debentures. As at September 30, 2025, C$0.01 million and C$nil principal amounts of the December Debentures and January Debentures were acquired through the Renewed Debentures NCIB, respectively. For the three and nine months ended September 30, 2025, C$0.1 million and C$0.3 million principal amount of the December Debentures, respectively, and C$0.01 million and C$0.06 million principal amount of the January Debentures, respectively, had been acquired through the Debentures NCIB and Renewed Debentures NCIB, collectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•On October 28, 2025, we entered into a non-binding term sheet with the Business Development Bank of Canada ("BDC") for proposed financing of up to C$15.0 million. We expect to use the proceeds to partially settle the January Debentures. The remaining January Debentures (C$1.6 million) will be settled through our cash balances. Advancement of funds remains subject to, among other things, completion of due diligence by BDC (see "– Liquidity and Capital Resources").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•On November 4, 2025, the Company entered into the Fifth Extended RBC Facility (as defined herein), which matures on November 30, 2026.

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**Pipeline**

The table below presents our qualified leads and twelve-month forward pipeline as at October 1, 2025, January 1, 2025 and October 1, 2024. We define qualified leads as the quantity of projects being pursued as of the date presented, and define our pipeline as the estimated potential revenue from qualified leads where a client has engaged DIRTT and is assessing DIRTT as a potential provider of prefabricated interior solutions. We believe these metrics are helpful to estimate near-term performance, particularly given the macroeconomic factors that affect our operating environment, including labor availability, interest rate changes, delayed contracts and slowed construction schedules driven by changing tariff policies and potential recessionary impacts on construction projects.

As of October 1, 2025, our twelve-month forward pipeline increased by 31% year-over-year and by 20% from January 1, 2025, illustrated in the table below.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As at** | **As at** | **As at** | **As at** | **As at** |
|  | **October 1, 2025** | **January 1, 2025** | **% Change** | **October 1, 2024** | **% Change** |
| **Twelve-Month Forward Pipeline ($000s)** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 183011 | 147609 | 24 | 145827 | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;Healthcare | 67140 | 51214 | 31 | 48931 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Government | 51877 | 55203 | (6) | 34829 | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;Education | 31431 | 24292 | 29 | 25383 | 24 |
|  | **333459** | **278318** | **20** | **254970** | **31** |
| **Leads (#)** | **1464** | **1012** | **45** | **940** | **56** |

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**Price Increases and Impact of Tariffs**

On February 11, 2025, we announced a price increase of 5% on all orders placed after March 18, 2025, and price adjustments on certain products in response to market feedback and to mitigate the impact of rising raw material costs.

Commencing in February 2025, the U.S. government proposed and enacted various tariffs. Refer to "Outlook" and "Risk Factors" for further discussion on these tariffs. As of the date of this report, the following tariffs are currently in effect that materially affect DIRTT:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•On March 12, 2025, a 25% tariff was levied on steel and aluminum imports from Canada into the U.S. As disclosed in our Annual Report on Form 10-K, DIRTT manufactures aluminum components, which are machined and processed in Calgary, Alberta as well as Savannah, Georgia. Aluminum costs represent approximately 9% of our total product revenue. This tariff impacts aluminum exports from our Calgary plants to our U.S. customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•On March 13, 2025, Canada responded to the U.S. tariffs by announcing reciprocal tariffs. As disclosed in our Annual Report on Form 10-K, approximately 92% of DIRTT's raw materials are sourced in North America and certain products are imported from the U.S. to Canada. We incurred costs on these reciprocal tariffs but note that the Canadian government has put a six month pause on these tariffs, effective April 15, 2025, which was extended an additional two months on October 17, 2025. If these tariffs are maintained, we will look into seeking exemptions or alternative suppliers to mitigate this tariff impact.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•On April 9, 2025, tariffs of 145% were levied on imports from China into the U.S., which were subsequently reduced on May 12, 2025, to 30% for 90 days. On June 11, 2025, China and the U.S. agreed to reduce overall tariffs by 115%. The Company imports certain raw materials from China (approximately 7% of total raw material spend, representing 2% of total product revenue). In response, we increased the price of certain hardware by 10%, effective June 5, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•On June 3, 2025, the U.S. government announced a tariff increase, raising duties on all steel and aluminum imports from 25% to 50%. In response, we added a surcharge of 3.5% on all orders placed after June 20, 2025.

If further tariff changes are announced, we will consider the impact of such changes to our business. The most significant tariff impacting DIRTT at present is the 50% aluminum and steel tariff. Going into the fourth quarter, we expect the impact of prevailing tariffs to be substantially mitigated through our price increases, surcharges and various other internal tariff mitigation strategies.

**Outlook**

Business is returning to normal and we returned to positive Adjusted EBITDA in the third quarter of 2025 as the effects of tariffs on gross profit have been substantially mitigated through price and other tariff mitigation actions taken by the Company earlier in the year. For the fourth quarter of 2025, we expect to report revenues between $48.0 to $52.0 million and Adjusted EBITDA of $5.0 to $7.0 million.

Our twelve-month forward pipeline has grown 7.2% to $333 million from July 1, 2025 to October 1, 2025. Our revenue growth is attributable to our Construction Partners as well as our new Construction Services team (formerly known as Integrated Solutions). As our revenue outlook improves, we are looking to transform our business. In early 2025, DIRTT's leadership team established a transformation office to accelerate the strategic transformation of our business by streamlining the Company's processes and procedures, supporting the Construction Services team and improving productivity across the Company (the "Transformation Office"). We are restructuring certain aspects of the business as disclosed in Note 4 of our interim condensed consolidated financial statements and will continue to look for cost improvements to grow Adjusted EBITDA. The program is expected to be completed in 2026.

Construction Services opportunities are growing and we have almost doubled the number of persons on that team since the beginning of the year. Our manufacturing capacity is approximately $400 million and we will benefit from fixed cost leverage as our revenue grows.

Our 8-week trial against Falkbuilt Ltd., Messrs. Smed and Loberg and several other former DIRTT employees

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alleging breaches of restrictive covenants, fiduciary duties, employment duties and confidentiality is due to start on February 2, 2026 (the "Falkbuilt Litigation"). DIRTT is pursuing damages and losses it suffered in Canada, the United States, and abroad in the Court of King's Bench of Alberta.

Our balance sheet is strong, including $32.3 million of liquidity (comprising of unrestricted cash and available borrowings). Despite lower revenue in the third quarter, cash flow increased by $3.0 million this quarter due to improved margins, cost containment and limited Shares NCIB activity. There is C$16.6 million ($11.9 million) principal due under the January Debentures (as defined herein), which mature on January 31, 2026. We are pleased to announce we recently entered a preliminary non-binding term sheet with BDC for financing of up to C$15.0 million. We expect to use the proceeds to partially settle the January Debentures. The remaining January Debentures (C$1.6 million) will be settled through our cash balances. Advancement of funds remains subject to, among other things, completion of due diligence by BDC (see "– Liquidity and Capital Resources").

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**Non-GAAP Financial Measures** 

***Note Regarding Use of Non-GAAP Financial Measures*** 

Our interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These GAAP financial statements include non-cash charges and other charges and benefits that we believe are unusual or infrequent in nature or that we believe may make comparisons to our prior or future performance difficult.

As a result, we also provide financial information in this Quarterly Report that is not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. Management uses these non-GAAP financial measures in its review and evaluation of the financial performance of the Company. We believe that these non-GAAP financial measures also provide additional insight to investors and securities analysts as supplemental information to our GAAP results and as a basis to compare our financial performance period-over-period and to compare our financial performance with that of other companies. We believe that these non-GAAP financial measures facilitate comparisons of our core operating results from period to period and to other companies by removing the effects of our capital structure (net interest income on cash deposits, interest expense on outstanding debt and debt facilities, or foreign exchange movements), asset base (depreciation and amortization), tax consequences, reorganization expense, unusual or infrequent charges or gains (such as gain on extinguishment of debt, and impairment charges), stock-based compensation, and government subsidies. We remove the impact of foreign exchange gain (loss) from Adjusted EBITDA. Foreign exchange gains and losses can vary significantly period-to-period due to the impact of changes in the U.S. and Canadian dollar exchange rates on foreign currency denominated monetary items on the balance sheet and are not reflective of the underlying operations of the Company. In addition, management bases certain forward-looking estimates and budgets on non-GAAP financial measures, primarily Adjusted EBITDA. We have not reconciled forward-looking non-GAAP measures, including Adjusted EBITDA guidance, to its corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to non-operating income and expenditures, which are difficult to predict and subject to change.

Depreciation and amortization, stock-based compensation expense, reorganization expense, foreign exchange gains and losses, gain on extinguishment of debt, impairment charges, net interest income on cash deposits, interest expense on outstanding debt and debt facilities, and tax expense are excluded from our non-GAAP financial measures because management considers them to be outside of the Company's core operating results, even though some of those receipts and expenses may recur, and because management believes that each of these items can distort the trends associated with the Company's ongoing performance. We believe that excluding these receipts and expenses provides investors and management with greater visibility to the underlying performance of the business operations, enhances consistency and comparativeness with results in prior periods that do not, or future periods that may not, include such items, and facilitates comparison with the results of other companies in our industry.

The following non-GAAP financial measures are presented in this Quarterly Report, and a description of the calculation for each measure is included.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Adjusted Gross Profit** | Gross profit before deductions for depreciation and amortization |
| **Adjusted Gross Profit Margin** | Adjusted Gross Profit divided by revenue |
| **EBITDA** | Net income before interest, taxes, depreciation, and amortization |
| **Adjusted EBITDA** | EBITDA adjusted to remove foreign exchange gains or losses; impairment charges; reorganization expenses; stock-based compensation expense; unusual or infrequent charges (such as gain on extinguishment of debt); and any other non-core gains or losses |
| **Adjusted EBITDA Margin** | Adjusted EBITDA divided by revenue |

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You should carefully evaluate these non-GAAP financial measures, the adjustments included in them, and the reasons we consider them appropriate for analysis supplemental to our GAAP information. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider any of these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. You should also be aware that we may recognize income or incur expenses in the future that are the same as, or similar to, some of the adjustments in these non-GAAP financial measures. Because these non-GAAP financial measures may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

**Results of Operations** 

***Three and Nine Months Ended September 30, 2025, Compared to the Three and Nine Months Ended September 30, 2024*** 

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **% Change** | **2025** | **2024** | **% Change** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| Revenue | 37716 | 43375 | (13) | 117933 | 125423 | (6) |
| Gross Profit | 11467 | 16813 | (32) | 36827 | 46836 | (21) |
| Gross Profit Margin | 30.4% | 38.8% |  | 31.2% | 37.3% |  |
| Operating expenses |  |  |  |  |  |  |
| &nbsp;&nbsp;Sales and marketing | 4795 | 5183 | (7) | 15265 | 17165 | (11) |
| &nbsp;&nbsp;General and administrative | 4429 | 5834 | (24) | 15652 | 14791 | 6 |
| &nbsp;&nbsp;Operations support | 1801 | 1915 | (6) | 5703 | 5531 | 3 |
| &nbsp;&nbsp;Technology and development | 805 | 1294 | (38) | 3513 | 3981 | (12) |
| &nbsp;&nbsp;Stock-based compensation | 742 | 803 | (8) | 2075 | 1905 | 9 |
| &nbsp;&nbsp;Reorganization | 2593 | 604 | 329 | 2977 | 944 | 215 |
| &nbsp;&nbsp;Impairment charge on Rock Hill Facility | - | - | NA | - | 530 | (100) |
| **Total operating expenses** | **15165** | **15633** | **(3)** | **45185** | **44847** | **1** |
| **Operating (loss) income** | **(3698)** | **1180** | **(413)** | **(8358)** | **1989** | **520** |
| **Operating margin** | **(9.8)%** | **2.7%** |  | **(7.1)%** | **1.6%** |  |
| &nbsp;&nbsp;Gain on extinguishment of convertible debentures | 8 | 7478 | (100) | 22 | 10409 | (100) |
| &nbsp;&nbsp;Foreign exchange (loss) gain | 602 | (360) | 267 | (1422) | 917 | (255) |
| &nbsp;&nbsp;Interest income | 226 | 341 | (34) | 720 | 1312 | (45) |
| &nbsp;&nbsp;Interest expense | (465) | (1525) | (70) | (1401) | (3524) | (60) |
|  | **371** | **5934** | **(94)** | **(2081)** | **9114** | **(123)** |
| **Net (loss) income before tax** | **(3327)** | **7114** | **(147)** | **(10439)** | **11103** | **(194)** |
| &nbsp;&nbsp;Current and deferred income tax expense | 157 | 23 | 583 | 308 | 371 | (17) |
| **Net (loss) income after tax** | **(3484)** | **7091** | **(149)** | **(10747)** | **10732** | **(200)** |

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*Revenue* 

Revenue mainly reflects sales to our construction partners ("Construction Partners") for resale to their clients and, in limited circumstances, our direct sales to clients. We are investing in our Construction Services team to grow revenue and increase direct sales to clients where such opportunities are not available to our Construction Partners. Our revenue is generally affected by the timing of when orders are executed, particularly large orders, which can add variability to our financial results and shift revenue between quarters.

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The following table sets forth the contribution to revenue of our DIRTT product and service offerings:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **% Change** | **2025** | **2024** | **% Change** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| Product | 32431 | 38510 | (16) | 102130 | 109527 | (7) |
| Transportation | 4066 | 3788 | 7 | 12095 | 11602 | 4 |
| License fees from Construction Partners | 180 | 177 | 2 | 539 | 561 | (4) |
| **Total product revenue** | **36677** | **42475** | **(14)** | **114764** | **121690** | **(6)** |
| Installation and other services | 1039 | 900 | 15 | 3169 | 3733 | (15) |
|  | **37716** | **43375** | **(13)** | **117933** | **125423** | **(6)** |

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Revenue for the three months ended September 30, 2025 was $37.7 million, a decrease of $5.7 million compared to $43.4 million in the comparative period of 2024. Similar to the second quarter of 2025, revenue was adversely impacted by delays in project start dates. In the previous quarters, we believe that the delays were largely related to broader market uncertainties whereas in the third quarter of 2025, they were specific to job site readiness. When project delays occur, is typically deferred 1-12 months from the original planned start date. Revenue for the nine months ended September 30, 2025 was $117.9 million, a decrease from $125.4 million in the comparative period of 2024 for the same reasons explained above. For the quarter ended September 30, 2025, we recorded $0.8 million in revenue related to the 3.5% surcharge on orders placed on or after June 20, 2025. The 5% price increase on orders placed on or after March 18, 2025, has begun to be reflected in revenue. See "Price Increases and Impact of Tariffs."

Installation and other services revenue was $1.0 million for the quarter ended September 30, 2025 compared to $0.9 million in the quarter ended September 30, 2024, and $3.2 million for the nine months ended September 30, 2025 compared to $3.7 million in the same period of 2024. This revenue primarily reflects services performed by our ICE teams for third parties. Except in limited circumstances, historically our Construction Partners, rather than the Company, perform installation services. As our Construction Services team grows, we expect to see a modest increase in installation services.

Our success is partly dependent on our ability to profitably develop our Construction Partner network to expand our market penetration and ensure best practices are shared across local markets. At September 30, 2025, we had 69 Construction Partners (September 30, 2024: 74; December 31, 2024: 71) servicing multiple locations. We also continue to work on developing our Construction Services team and partnering with our Construction Partner network to drive revenue for DIRTT.

The following tables present our product and transportation revenue by vertical market:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **% Change** | **2025** | **2024** | **% Change** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| Commercial | 21675 | 27815 | (22) | 70581 | 86012 | (18) |
| Healthcare | 8645 | 6975 | 24 | 25014 | 14824 | 69 |
| Government | 2057 | 3768 | (45) | 7713 | 12335 | (37) |
| Education | 4120 | 3740 | 10 | 10917 | 7958 | 37 |
| License fees from Construction Partners | 180 | 177 | 2 | 539 | 561 | (4) |
| **Total product revenue** | **36677** | **42475** | **(14)** | **114764** | **121690** | **(6)** |
| Service revenue | 1039 | 900 | 15 | 3169 | 3733 | (15) |
|  | **37716** | **43375** | **(13)** | **117933** | **125423** | **(6)** |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **(in %)** | **(in %)** | **(in %)** | **(in %)** |
| Commercial | 60 | 66 | 63 | 71 |
| Healthcare | 24 | 16 | 22 | 12 |
| Government | 6 | 9 | 7 | 10 |
| Education | 11 | 9 | 10 | 7 |
| **Total Product Revenue**<sup>(1)</sup> | **100** | **100** | **100** | **100** |

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<sup>(1)</sup> Excludes license fees from Construction Partners.

Commercial sales decreased by 22% for the third quarter of 2025 from the third quarter of 2024. The quarter ended September 30, 2025 had fewer large commercial projects compared to the quarter ended September 30, 2024. Healthcare revenues increased by 24% in the third quarter of 2025 from the same period of 2024, primarily due to the third quarter of 2025 having a larger volume of high value projects than those in the same period of 2024. Sales in the healthcare sector tend to be larger individual projects and are subject to timing due to a typically longer sales cycle, resulting in variability in sales levels. We have made several investments in new product solutions (such as COVE™ and Applied Headwalls) and additions to the business development team to increase product placement in future healthcare and life science construction projects. Government sales in the third quarter of 2025 decreased by 45% from the third quarter of 2024 primarily due to one key project shipping in the third quarter of 2024 and the projects in 2025 having smaller value than those in the same period of 2024. Education sales in the third quarter of 2025 increased by 10% from the same period of 2024 due to a larger volume of high value projects in 2025 compared to the same period of 2024.

Revenue continues to be derived almost exclusively from projects in North America and predominantly from the United States. The following table presents our revenue dispersion by geography:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **% Change** | **2025** | **2024** | **% Change** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| Canada | 3298 | 7879 | (58) | 14220 | 15607 | (9) |
| U.S. | 34418 | 35496 | (3) | 103713 | 109816 | (6) |
|  | **37716** | **43375** | **(13)** | **117933** | **125423** | **(6)** |

---

For the three months ended September 30, 2025, 9% of revenue was from Canada, as compared to 18% for the three months ended September 30, 2024. Historically, approximately 10-15% and 85-90% of revenues are derived from sales to Canada and the United States, respectively. We expect the historical split to continue.

*Sales and marketing expenses* 

Sales and marketing expenses decreased by $0.4 million to $4.8 million for the three months ended September 30, 2025 from $5.2 million for the three months ended September 30, 2024. The decrease was driven by a $0.3 million decrease in commissions as a result of lower revenues, a $0.1 million decrease in marketing and tradeshow costs, a $0.1 million decrease in depreciation and amortization expenses, and a $0.1 million decrease in travel, meals and entertainment costs. The decrease was partially offset by a $0.3 million increase in salaries and benefits costs.

Sales and marketing expenses decreased by $1.9 million to $15.3 million for the nine months ended September 30, 2025 from $17.2 million for the nine months ended September 30, 2024. The decrease was primarily driven by a $0.8 million decrease in termination benefits, a $0.6 million decrease in commissions as a result of lower revenues, a $0.2 million decrease in pass through charges, a $0.2 million decrease in professional services costs, a $0.2 million decrease in depreciation and amortization expenses, and a $0.1 million decrease in other costs. The decrease was partially offset by a $0.2 million increase in salaries and benefits costs.

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*General and administrative expenses* 

General and administrative expenses decreased by $1.4 million to $4.4 million for the three months ended September 30, 2025, from $5.8 million for the three months ended September 30, 2024. The decrease was primarily related to a $1.2 million decrease in professional services costs largely due to insurance recoveries, lower litigation costs, and costs related to the Debenture Repurchase and the support and standstill agreement with 22NW Fund, LP ("22NW") and WWT Opportunity #1 LLC that occurred in the third quarter of 2024 which were not repeated in 2025, a $0.2 million decrease in building and infrastructure costs, a $0.1 million decrease in public company costs, and a $0.1 million decrease in depreciation and amortization expenses. The decrease was offset by a $0.1 million increase in board fees, and a $0.1 million increase in communication costs.

General and administrative expenses increased by $0.9 million to $15.7 million for the nine months ended September 30, 2025, from $14.8 million for the nine months ended September 30, 2024. The increase was primarily related to a $0.7 million increase in salaries and benefits costs, a $0.5 million increase in professional services costs as a result of litigation costs related to the Falkbuilt Litigation, and a $0.4 million increase in board fees. The increase was partially offset by a $0.6 million decrease in building and infrastructure costs and a $0.1 million decrease in other costs.

*Operations support expenses* 

Operations support is comprised primarily of project managers, order entry and other professionals that facilitate the integration of our Construction Partner project execution, our manufacturing operations, and support staff for the Construction Services team. Operations support expenses decreased by $0.1 million for the three months ended September 30, 2025 to $1.8 million compared to $1.9 million for the comparative period of 2024. The decrease was related to a $0.2 million decrease in salaries and benefits costs, offset by a $0.1 million increase in research and development costs.

Operations support expenses increased by $0.2 million for the nine months ended September 30, 2025 to $5.7 million, from $5.5 million for the comparative period of 2024. The increase was primarily related to a $0.2 million increase in research and development costs, a $0.1 million increase in marketing and tradeshow costs, and a $0.1 million increase in other costs. The increase was offset by a $0.1 million decrease in travel, meals and entertainment costs, and a $0.1 million loss on disposal in the third quarter of 2024 not repeated in 2025.

*Technology and development expenses* 

Technology and development expenses relate to non-capitalizable costs associated with our product and software development teams, and are primarily comprised of salaries and benefits of technical staff. Technology and development expenses decreased $0.5 million to $0.8 million for the three months ended September 30, 2025 compared to $1.3 million for the three months ended September 30, 2024. The decrease is primarily related to a $0.5 million decrease in salaries and benefits costs.

Technology and development expenses decreased by $0.5 million to $3.5 million for the three months ended September 30, 2025 from $4.0 million for the comparative period of 2024. The decrease was primarily related to a $0.5 million decrease in salaries and benefits costs, and a $0.3 million loss on disposal of a software development project in 2024 not repeated in 2025. The decrease was partially offset by a $0.4 million increase in professional services costs.

*Stock-based compensation* 

Stock-based compensation expense is dependent on share price in a period for fair value adjustments made on cash-settled deferred share units ("DSUs") awards and grants, exercises, expirations or forfeitures made on other awards.

Stock-based compensation expense for the three months ended September 30, 2025 was $0.7 million compared to $0.8 million in the same period of 2024. The decrease in expense was largely due to a decrease in DSU expense as a result of a lower number of DSUs granted in the third quarter of 2025 compared to the third quarter of 2024, slightly offset by higher restricted share units ("RSUs") expense due to a full quarter of expense on an August 31, 2024 grant in the third quarter of 2025 compared to one month of the expense in the third quarter of 2024.

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Stock-based compensation expense for the nine months ended September 30, 2025 was $2.1 million, compared to $1.9 million in the same periods of 2024. The increase in expense was largely due to an increase in RSU expense as a result of a full quarter of expense on an August 31, 2024 grant in the third quarter of 2025 compared to one month of the expense on the same August 31, 2024 grant in the third quarter of 2024, offset by a decrease in DSU expense caused by a recovery on cash-settled DSU expense from a lower share price as at September 30, 2025 compared to December 31, 2024.

*Reorganization* 

Reorganization expenses for the three and nine months ended September 30, 2025 were $2.6 million and $3.0 million, respectively, compared to $0.6 million and $0.9 million in the three and nine months ended September 30, 2024, respectively. Reorganization expenses for the three and nine months ended September 30, 2025, primarily relate to one-time termination and consultant costs associated with the establishment of the Transformation Office, as described in Note 4 of our interim condensed consolidated financial statements, while the reorganization costs for the three and nine months ended September 30, 2024 were largely made up of movement of inventory and equipment from the facility at Rock Hill, South Carolina (the "Rock Hill Facility") for use at the Calgary facility.

*Impairment charge on Rock Hill Facility*

On September 27, 2023, the Company decided to permanently close the Rock Hill Facility. Certain assets, including manufacturing equipment, which met held-for-sale criteria at that time were reclassified from property, plant and equipment. At March 31, 2024, we determined that the assets held for sale balance of $0.5 million was to be reduced to $nil resulting in a $0.5 million impairment charge for such quarter.

The Company had $nil impairment charges in the three and nine months ended September 30, 2025.

*Gain on extinguishment of convertible debentures*

During the three and nine months ended September 30, 2025 C$0.1 million ($0.1 million) and C$0.4 million ($0.3 million), respectively, principal amount of Debentures was repurchased for cancellation through the Debentures NCIB and Renewed Debentures NCIB which triggered an extinguishment of debt. The gain on extinguishment of debentures of $0.01 million and $0.02 million for the three and nine months ended September 30, 2025, respectively, was calculated as the difference between the repayment and the net carrying value of the extinguished principal less unamortized issuance costs (refer to Note 5 of our interim condensed consolidated financial statements for additional information).

During the first nine months of 2024, C$43.1 million ($31.7 million) in principal amount of Debentures was repurchased for cancellation through the Issuer Bid, a private repurchase, and the Debentures NCIB, which triggered an extinguishment of debt. The gain on extinguishment of $7.5 million and $10.4 million for the three and nine months ended September 30, 2024, respectively, was calculated as the difference between the repayment and the net carrying value of the extinguished principal less unamortized issuance costs. (refer to Note 8 of our interim condensed consolidated financial statements for additional information).

*Foreign exchange (loss) gain*

Foreign exchange loss or gain increased from a loss of $0.4 million for the three months ended September 30, 2024 to a gain of $0.6 million for the same period of 2025. The increase is primarily related to the weakening of the Canadian dollar over the three months ended September 30, 2025.

Foreign exchange loss or gain decreased from a gain of $0.9 million for the nine months ended September 30, 2024 to a loss of $1.4 million for the same period of 2025. The decrease is primarily related to the strengthening of the Canadian dollar relative to the U.S. dollar over the twelve months ended September 30, 2025. The majority of our revenue is collected in U.S. dollars (approximately 90%), and approximately 70% of the costs incurred in the three and nine months ended September 30, 2025, were denominated in Canadian dollars.

*Interest income*

Interest income for the three and nine months ended September 30, 2025 was $0.2 million and $0.7 million compared to $0.3 million and $1.3 million for the comparative periods of 2024. The decreased interest income is due

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to declining prime rates that determine interest yields on the Company's lower cash equivalents during the three and nine months ended September 30, 2025 compared to the same periods of 2024.

*Interest expense*

Interest expense decreased by $1.1 million from $1.5 million in the quarter ended September 30, 2024 to $0.5 million for the three months ended September 30, 2025, and by $2.1 million from $3.5 million for the nine months ended September 30, 2024, to $1.4 million for the nine months ended September 30, 2025. This decrease is largely due to repayment of debt throughout the year ended December 31, 2024 and during the first nine months of 2025, reducing the interest payable on current and long-term debt.

*Income tax* 

Income tax expense for the three months ended September 30, 2025 increased to $0.2 million from $0.02 million in the three months ended September 30, 2024. Income tax expense for the nine months ended September 30, 2025 decreased to $0.3 million from $0.4 million in the nine months ended September 30, 2024. The current tax expense represents the income tax provision after the utilization of non-capital loss carry forwards against current period taxable income. The provision for income taxes comprises U.S. and Canadian federal, state and provincial taxes based on pre-tax income. Despite positive indications of future profitability, including the strength of our pipeline, the Company has determined that it is unlikely that a deferred tax asset will be recognized. Given the history of losses, the Company plans to maintain a valuation allowance against the deferred tax asset. As at September 30, 2025, the Company had a valuation allowance of $29.8 million (December 31, 2024: $30.0 million) against deferred tax assets. The Company plans to continue to evaluate indicators on whether a valuation allowance continues to be needed. For the quarter ended September 30, 2025, the Company utilized a balance of its non-capital loss carry-forwards in Canada and the United States. As at September 30, 2025, we had C$108.7 million of non-capital loss carry-forwards in Canada and $46.2 million of non-capital loss carry-forwards in the United States. These loss carry-forwards will begin to expire in 2037.

*Net (loss) income after tax*

Net loss after tax was $3.5 million or $0.02 net loss per share, basic and diluted, in the three months ended September 30, 2025, a decrease of $10.6 million from net income after tax of $7.1 million or $0.04 and $0.03 net income per share, basic and diluted, respectively, for the three months ended September 30, 2024. The decrease in net income is primarily the result of a $7.5 million gain on extinguishment of debt resulting from the Debenture Repurchase in the quarter ended September 30, 2024 not repeated in the same period of 2025, a $5.3 million decrease in gross profit, a $2.0 million increase in reorganization expenses, a $0.1 million increase in income taxes, and a $0.1 million decrease in interest income. The decrease was partially offset by a $2.5 million decrease in other operating expenses, a $1.1 million decrease in interest expense, and a $1.0 million increase in foreign exchange gain.

Net loss after tax was $10.7 million or $0.06 net loss per share, basic and diluted, for the nine months ended September 30, 2025, a decrease of $21.5 million from net income after tax of $10.7 million or $0.06 and $0.05 net income per share, basic and diluted, respectively, for the nine months ended September 30, 2024. The decrease in net income is primarily the result of a $10.4 million gain on extinguishment of debt resulting from the Debenture Repurchase in the nine months ended September 30, 2024 not repeated in the same period of 2025, a $10.0 million decrease in gross profit, a $2.3 million decrease in foreign exchange gain, a $2.0 million increase in reorganization expenses, a $0.6 million decrease in interest income, and a $0.1 million increase in income taxes. The decrease was partially offset by a $2.1 million decrease in interest expense, a $1.7 million decrease in other operating expenses, and a $0.1 million decrease in income tax expense.

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***Adjusted Gross Profit and Adjusted Gross Profit Margin for the Three and Nine months ended September 30, 2025 and 2024*** 

The following table presents a reconciliation for the three and nine months ended September 30, 2025 and 2024 of Adjusted Gross Profit to our gross profit and Adjusted Gross Profit Margin to gross profit margin, which are the most directly comparable GAAP measures for the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| **Gross profit** | **11467** | **16813** | **36827** | **46836** |
| **Gross profit margin** | **30.4%** | **38.8%** | **31.2%** | **37.3%** |
| Add: Depreciation and amortization expense | 1013 | 823 | 2977 | 2512 |
| **Adjusted Gross Profit** | **12480** | **17636** | **39804** | **49348** |
| **Adjusted Gross Profit Margin** | **33.1%** | **40.7%** | **33.8%** | **39.3%** |

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For the quarter ended September 30, 2025, gross profit margin decreased to 30.4% compared to 38.8% for the same period of 2024. Adjusted Gross Profit Margin was 33.1% for the third quarter of 2025, down from 40.7% in the comparative period of 2024. The decrease in Adjusted Gross Profit Margin was primarily attributable to the $5.7 million reduction in revenue. Tariff-related costs for the third quarter of 2025 were $1.9 million and were substantially mitigated through price and other actions taken earlier in the year.

For the nine months ended September 30, 2025, gross profit margin decreased to 31.2%, compared to 37.3% in the prior year period. Adjusted Gross Profit Margin was 33.8%, compared to 39.3% in the same period of 2024. The year-to-date margin decline reflects the same underlying factors observed in the third quarter, including a $7.5 million reduction in revenue. Tariff-related costs for the nine months ended September 30, 2025 were $4.5 million. We began to realize the benefits of our tariff mitigation efforts in the third quarter of 2025, as explained above.

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***EBITDA and Adjusted EBITDA for the Three and Nine months ended September 30, 2025 and 2024***

The following table presents a reconciliation for the results for the three and nine months ended September 30, 2025 and 2024 of EBITDA and Adjusted EBITDA to our net (loss) income after tax, and of Adjusted EBITDA Margin to net (loss) income margin, which are the most directly comparable GAAP measures for the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| **Net (loss) income after tax for the period** | **(3484)** | **7091** | **(10747)** | **10732** |
| Add back (deduct): |  |  |  |  |
| Interest expense | 465 | 1525 | 1401 | 3524 |
| Interest income | (226) | (341) | (720) | (1312) |
| Income tax expense | 157 | 23 | 308 | 371 |
| Depreciation and amortization | 1534 | 1487 | 4561 | 4542 |
| **EBITDA** | **(1554)** | **9785** | **(5197)** | **17857** |
| Foreign exchange (gain) loss | (602) | 360 | 1422 | (917) |
| Stock-based compensation | 742 | 803 | 2075 | 1905 |
| Reorganization expense<sup>(2)</sup> | 2593 | 604 | 2977 | 944 |
| Gain on extinguishment of convertible debentures<sup>(2)</sup> | (8) | (7478) | (22) | (10409) |
| Impairment charge on Rock Hill Facility <sup>(2)</sup> | - | - | - | 530 |
| **Adjusted EBITDA** | **1171** | **4074** | **1255** | **9910** |
| **Net (Loss) Income Margin**<sup>(1)</sup> | **(9.2)%** | **16.3%** | **(9.1)%** | **8.6%** |
| **Adjusted EBITDA Margin** | **3.1%** | **9.4%** | **1.1%** | **7.9%** |

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*(1) Net (loss) income after tax divided by revenue.*

*(2) Reorganization expenses, the gain on extinguishment of convertible debentures and the impairment charge on the Rock Hill Facility (refer to Note 4 and Note 5 of the interim condensed consolidated financial statements) are not core to our business and are therefore excluded from the Adjusted EBITDA calculation.*

For the three months ended September 30, 2025, Adjusted EBITDA decreased by $2.9 million to $1.2 million from $4.1 million and Adjusted EBITDA Margin decreased to 3.1% from 9.4% for the same period of 2024. This decrease is attributed to the $5.2 million decrease in Adjusted Gross Profit (explained above) offset by a decrease in operating expenses (excluding reorganization expense and stock-based compensation) of $2.4 million.

For the nine months ended September 30, 2025, Adjusted EBITDA decreased by $8.7 million to $1.3 million from $9.9 million and Adjusted EBITDA Margin decreased to 1.1% from 7.9%, for the same period of 2024. This reflects a $9.5 million decrease in Adjusted Gross Profit, a $0.7 million increase in professional services costs largely associated with higher litigation costs related to the Falkbuilt Litigation, a $0.5 million increase in public company costs and board fees, and a $0.2 million increase in marketing and tradeshow expenses, partially offset by a $0.6 million decrease in commissions from lower revenue, a $0.6 million decrease in building and infrastructure costs, a decrease of $0.4 million in salaries and benefits costs, a decrease of $0.2 million in travel, meals, and entertainment costs, and a $0.4 million decrease in other costs.

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**Liquidity and Capital Resources** 

As at September 30, 2025, the Company had $26.1 million of cash on hand and C$8.7 million ($6.2 million) of available borrowings, compared to $29.3 million of cash on hand and C$14.4 million ($10.0 million) of available borrowings as at December 31, 2024. Through the first nine months of 2025, the Company used $3.2 million of cash primarily due to the payment of $4.2 million to repurchase common shares under the Shares NCIB and Share Repurchase and $2.7 million for capital expenditures, offset by $4.1 million of net cash flows provided by operating activities.

We have assessed the Company's liquidity as at September 30, 2025, taking into account our sales outlook for the next twelve months, our budget, forecast and expected cash outflows and our existing cash balances and available credit facilities. Based upon this analysis, we believe the Company has sufficient liquidity to remain a going concern for at least the next twelve months. We note that the January Debentures amounting to C$16.6 million ($11.9 million) as of September 30, 2025 are due on January 31, 2026 and have therefore been classified as current on our balance sheet. Another C$14.9 million ($10.7 million) of principal is due under the December Debentures (as defined herein), which mature on December 31, 2026 (and therefore not yet classified as current). We are evaluating whether we will settle or refinance this debt.

On October 28, 2025, we entered into a non-binding term sheet with the BDC for proposed financing of up to C$15.0 million, the net proceeds of which are expected to be used to further strengthen our balance sheet and partially repay the January Debentures. The remaining January Debentures (C$1.6 million) are expected to be repaid using cash on hand. DIRTT continues to consider, evaluate, and negotiate a definitive agreement with respect to the proposed financing with BDC. Any advancement of funds is subject to, among other things, BDC's due diligence and the negotiation and execution of binding definitive documentation. There can be no assurance that a definitive agreement will be reached or that the proposed financing will be completed on the terms in the non-binding term sheet or at all, and the Company may ultimately determine not to proceed with the financing or use any net proceeds of such financing for the repayment of the January Debentures.

On November 4, 2025, the Company entered into the Fifth Extended RBC Facility (as defined herein), which matures on November 30, 2026. The Fifth Extended RBC Facility is subject to the same borrowing base terms as the previous facility; with the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points. The Company will be in default under the Fifth Extended RBC Facility if the January Debentures are not paid in full or refinanced on terms and conditions satisfactory to RBC by January 31, 2026.

To the extent that existing cash and cash equivalents and available facilities are not sufficient to fund future activities, we may seek to raise additional funds through equity or debt financings. If additional funds are raised through the incurrence of indebtedness, such indebtedness may have rights that are senior to holders of our Debentures and our equity securities or contain instruments that may be dilutive to our existing shareholders. Any additional equity or debt financing may be dilutive to our existing shareholders. While we believe we can access capital markets when needed or under acceptable terms, there can be no assurance that we will be able to do so, particularly in light of recent market conditions.

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We note that as of the date of this report, the imposition of trade barriers, including tariffs, quotas, embargoes, safeguards, and customs restrictions between Canada and the U.S., may increase the cost or reduce the supply of materials and products available to us, increase shipping times, affect our customers' construction needs or budgets, affect the demand for our products or our product mix or require us to modify our supply chain organization, manufacturing facilities, or other current business practices, any of which could harm our business, financial condition, and results of operations.

**Equity and Debt Issuances and Buyback Programs**

During the past two years, we have executed various debt and share buyback programs. The Issuer Bid, Debenture Repurchase, Debentures NCIB, Renewed Debentures NCIB, Shares NCIB and the Share Repurchase (each as defined herein) were initiated after careful consideration of cash flow, and the Company continues to evaluate uses of cash on hand. As discussed in the "Part II, Item 1A. Risk Factors" section and elsewhere of this Quarterly Report, proposed and implemented tariffs on Canadian exports into the United States, and vice versa, may have a material impact on future cash flows and liquidity, which the Company will continue to monitor.

In January 2021, we issued C$40.3 million of convertible unsecured subordinated debentures (the "January Debentures") for net proceeds after costs of C$37.6 million ($29.5 million). The January Debentures accrue interest at a rate of 6.00% per annum and are convertible into common shares of DIRTT at an exercise price of C$4.65 per common share, or if not converted will mature and be repayable on January 31, 2026. Interest and principal are payable in cash or shares at the option of the Company.

On December 1, 2021, we issued C$35.0 million of convertible unsecured subordinated debentures (the "December Debentures", and collectively with the January Debentures, the "Debentures") for net proceeds after costs of C$32.7 million ($25.6 million). The December Debentures accrue interest at a rate of 6.25% per annum and are convertible into common shares of DIRTT at an exercise price of C$4.20 per common share, or if not converted, will mature and be repayable on December 31, 2026. Interest and principal are payable in cash or shares at the option of the Company.

On November 21, 2023, the Company announced a rights offering, which closed on January 9, 2024, for aggregate gross proceeds of C$30.0 million (net proceeds of $21.3 million) (the "Rights Offering"). As a result of the Rights Offering, the conversion price was adjusted to C$4.03 per common share for the January Debentures, and C$3.64 per common share for the December Debentures.

On February 15, 2024, the Company announced a substantial issuer bid and tender offer (the "Issuer Bid"), under which the Company offered to repurchase for cancellation: (i) up to C$6,000,000 principal amount of the January Debentures at a purchase price of C$720 per C$1,000 principal amount of January Debentures; and (ii) up to C$9,000,000 principal amount of the December Debentures at a purchase price of C$600 per C$1,000 principal amount of December Debentures. Holders of Debentures who validly tendered and did not withdraw their Debentures received the applicable purchase price, plus a cash payment for all accrued and unpaid interest up to, but excluding, the date on which such Debentures were taken up by the Company. The applicable purchase price was denominated in Canadian dollars and payments of amounts owed to holders of deposited Debentures, including for interest, were made in Canadian dollars. The Issuer Bid expired on March 22, 2024 and DIRTT purchased C$4.7 million ($3.5 million) aggregate principal amount of the January Debentures and C$5.8 million ($4.3 million) aggregate principal amount of the December Debentures, representing approximately 11.66% of the January Debentures and 16.50% of the December Debentures issued and outstanding at that time. The Company took up all the Debentures tendered pursuant to the Issuer Bid for aggregate consideration of C$7.0 million ($5.2 million) (comprised of C$6.9 million ($5.1 million) repayment on principal and interest of C$0.1 million ($0.1 million)).

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On August 2, 2024, the Company entered into an agreement with 22NW Fund LP ("22NW"), to purchase for cancellation an aggregate of C$18,915,000 principal amount of the January Debentures at a purchase price of C$684.58 per C$1,000 principal amount of January Debentures and C$13,638,000 principal amount of the December Debentures at a purchase price of C$665.64 per C$1,000 principal amount of December Debentures, for an aggregate purchase price of C$22,104,591.45, inclusive of a cash payment for all accrued and unpaid interest up to, but excluding, the date on which such Debentures were purchased by the Company (the "Debenture Repurchase"). The purchase price of each series of Debentures (excluding the cash payment for accrued and unpaid interest) represented a discount of approximately 4% to the average trading price of the applicable series of Debentures on the TSX for the 20 trading days preceding August 2, 2024. As a result of the Debenture Repurchase, 22NW no longer holds any Debentures.

On August 28, 2024, the Company commenced the Debentures normal course issuer bid (the "Debentures NCIB") which expired on August 27, 2025. Under the Debentures NCIB, DIRTT was permitted to acquire up to C$1,664,200 principal amount of the January Debentures and C$1,558,700 principal amount of the December Debentures. For the three and nine months ended September 30, 2025, C$0.1 million ($0.1 million) and C$0.3 million ($0.2 million) principal amounts of the December Debentures (respectively) and C$0.01 million ($0.01 million) and C$0.06 million (C$0.04 million) principal amounts of the January Debentures (respectively) had been acquired through the Debentures NCIB. On August 26, 2025, the Company announced the Renewed Debentures NCIB which commenced August 28, 2025 and is expected to terminate on August 27, 2026 for the December Debentures and on January 31, 2026 for the January Debentures, concurrent with the maturity date of the January Debentures. Under the Renewed Debentures NCIB, DIRTT is permitted to acquire up to C$1,656,900 principal amount of the January Debentures and C$1,493,500 principal amount of the December Debentures. For the three months ended September 30, 2025, C$0.01 million ($0.01 million) principal amounts of the December Debentures and $nil principal amounts of the January Debentures had been acquired through the Renewed Debentures NCIB. As at September 30, 2025, C$16.6 million ($11.9 million) principal amount of the January Debentures and C$14.9 million ($10.7 million) principal amount of the December Debentures were outstanding.

On December 20, 2024, the Company commenced a normal course issuer bid for common shares (the "Shares NCIB") which will terminate no later than December 19, 2025. Under the Shares NCIB, DIRTT is permitted to acquire up to 7,515,233 common shares. All purchases will be made on the open market at the market price of common shares at the time of acquisition. Any common shares acquired through the Shares NCIB will be immediately cancelled.

On February 13, 2025, the Company entered a share repurchase agreement with NGEN III, LP ("NGEN") to purchase for cancellation 3,920,844 common shares held by NGEN (the "NGEN Shares") at a purchase price of $0.80 per NGEN Share (the "Share Repurchase"). Following the Share Repurchase, there were 189,643,903 common shares outstanding. The NGEN Shares repurchased under the Share Repurchase were counted against the maximum number of shares that may be repurchased pursuant to the Shares NCIB being 7,515,233 shares. As at September 30, 2025, 5,510,884 common shares had been repurchased and cancelled for proceeds of C$6.0 million ($4.2 million) through the Shares NCIB and the Share Repurchase.

As explained above, initiating the debt and share buybacks was done after careful consideration of cash flow and with consideration to the risk of proposed and implemented tariffs.

------

**Facilities**

On February 12, 2021, the Company entered into a loan agreement governing a C$25.0 million senior secured revolving credit facility with the Royal Bank of Canada ("RBC"), as lender (the "RBC Facility"). Under the RBC Facility, the Borrowing Base is up to a maximum of 90% of investment grade or insured accounts receivable plus 85% of eligible accounts receivable plus the lesser of 75% of the book value of eligible inventory and 85% of the net orderly liquidation value of eligible inventory less any reserves for potential prior ranking claims. Interest is calculated at the Canadian or U.S. prime rate plus 30 basis points or at the Canadian Dollar Offered Rate or LIBOR plus 155 basis points. Under the RBC Facility, if the "Aggregate Excess Availability", defined as the Borrowing Base less any loan advances or letters of credit or guarantee and if undrawn including unrestricted cash is less than C$5.0 million, the Company is subject to a fixed charge coverage ratio ("FCCR") covenant of 1.10:1 on a trailing twelve-month basis. Additionally, if the FCCR has been below 1.10:1 for the three immediately preceding months, the Company is required to maintain a reserve account equal to the aggregate of one year of payments on outstanding loans on the Canada Leasing Facility and a leasing facility in the United States that is no longer available (together, the "Leasing Facilities"). Should an event of default occur or the Aggregate Excess Availability be less than C$6.25 million for five consecutive business days, the Company would enter a cash dominion period whereby the Company's bank accounts would be blocked by RBC and daily balances will set-off any borrowings and any remaining amounts made available to the Company.

On February 9, 2023, the Company extended the RBC Facility (the "Extended RBC Facility"). The Extended RBC Facility has a maximum borrowing base of C$15.0 million and a one-year term. Interest is calculated as at the Canadian or U.S. prime rate plus 75 basis points or at the Canadian Dollar Offered Rate or LIBOR plus 200 basis points. Under the Extended RBC Facility, until such time that the trailing twelve-month FCCR is above 1.25 for three consecutive months, a cash balance equivalent to one-year's worth of Leasing Facilities payments must be maintained.

On February 9, 2024, the Company extended the Extended RBC Facility (the "Second Extended RBC Facility"). The maximum availability under the Second Extended RBC Facility is subject to the borrowing base calculation to a maximum of C$15.0 million and a one-year term. Interest is calculated as at the Canadian or U.S. prime rate plus 75 basis points or at the Canadian Dollar Offered Rate or Adjusted Term CORRA or Term SOFR plus the Term SOFR Adjustment, in each case, plus 200 basis points. The Second Extended RBC Facility removed the three-month FCCR covenant, which resulted in the release of $0.1 million of restricted cash during the first quarter of 2024 (the Company had $0.4 million restricted cash as at December 31, 2023). On February 11, 2025, the Company extended the Second Extended RBC Facility (the "Third Extended RBC Facility") for a period of two weeks up to February 25, 2025 whilst the Company and RBC completed negotiations.

On February 20, 2025, the Company extended the Third Extended RBC Facility (the "Fourth Extended RBC Facility"). The Fourth Extended RBC Facility is subject to the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million and matures on November 30, 2025. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points. At September 30, 2025, available borrowings were C$8.7 million ($6.2 million) (December 31, 2024 – C$14.4 million ($10.0 million) of available borrowings), calculated in the same manner as the RBC Facility described above, of which no amounts have been drawn. The Fourth Extended RBC Facility also includes a new letter of credit facility guaranteed by the Export Development of Canada of C$5 million. The Company has also entered into a bonding facility with Great Midwest Insurance Company, and any other company that is part of or added to Skyward Specialty Insurance Group, Inc. ("Skyward"), which allows access to a $15.0 million bonding facility subject to an individual maximum of $5 million. Under the terms of the facility with Skyward, any bonds issued will be secured through letters of credit issued pursuant to the Fourth Extended RBC Facility.

On November 4, 2025, the Company entered into the Fifth Extended RBC Facility (the "Fifth Extended RBC Facility"). The Fifth Extended RBC Facility expires November 30, 2026 and is subject to the same borrowing base terms as the previous facility; with the borrowing base calculation based on accounts receivable balances to a maximum of C$25.0 million. Interest is calculated as the Canadian or U.S. prime rate plus 50 basis points or at the Term CORRA Rate as adjusted by the Term CORRA Adjustment or Term SOFR plus the Term SOFR Adjustment, in each case plus 175 basis points. The Company will be in default under the Fifth Extended RBC Facility if the January Debentures are not paid in full or refinanced on terms and conditions satisfactory to RBC by January 31, 2026.

------

The Company has a C$5.0 million equipment leasing facility in Canada (the "Canada Leasing Facility") of which, as of September 30, 2025, C$4.4 million ($3.2 million) has been drawn and C$4.0 million ($2.9 million) has been repaid. The Canada Leasing Facility has a seven-year term and bears interest at 4.25%. The Company did not make any draws on the Canada Leasing Facility during the years ended September 30, 2025 and 2024.

We are restricted from paying dividends unless Payment Conditions (as defined in the Fourth Extended RBC Facility) are met, including having a net borrowing availability of at least C$5.0 million over the proceeding 30-day period, and having a trailing twelve-month fixed charge coverage ratio above 1.10:1 and certain other conditions. The Fourth Extended RBC Facility is currently secured by substantially all of our real and personal property located in Canada and the United States.

------

***Analysis of Cash Flow Changes During the Three and Nine Months Ended September 30, 2025 and 2024***

The following table summarizes our consolidated cash flows for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** | **($ in thousands)** |
| Net cash flows provided by operating activities | 4390 | 1522 | 4152 | 1122 |
| Net cash flows (used in) investing activities | (780) | (596) | (2488) | (1159) |
| Net cash flows (used in) financing activities | (422) | (16262) | (4665) | (289) |
| Effect of foreign exchange on cash, cash equivalents and restricted cash | (156) | (567) | (155) | (906) |
| **Net increase (decrease) in cash, cash equivalents and restricted cash** | **3032** | **(15903)** | **(3156)** | **(1232)** |
| Cash, cash equivalents and restricted cash, beginning of period | 23343 | 39770 | 29531 | 25099 |
| **Cash, cash equivalents and restricted cash, end of period** | **26375** | **23867** | **26375** | **23867** |

---

*Operating Activities* 

For the three months ended September 30, 2025, net cash flows provided by operating activities were $4.4 million compared to $1.5 million in the same period of 2024. The increase in cash flows provided by operations in the third quarter of 2025 is largely due to a $5.9 million increase in working capital compared to a $2.6 million decrease in working capital in the third quarter of 2024, and partially offset by a $2.9 million decrease in Adjusted EBITDA.

For the nine months ended September 30, 2025, net cash flows provided by operating activities were $4.2 million compared to $1.1 million in the same period of 2024. The increase in cash flows provided by operations was largely driven by a $6.2 million increase in working capital in the nine months ended September 30, 2025 compared to a $7.6 million decrease in working capital in the nine months ended September 30, 2024, partially offset by an $8.7 million decrease in Adjusted EBITDA.

*Investing Activities* 

We invested $0.8 million and $2.7 million in capital expenditures for the three and nine months ended September 30, 2025, compared to $0.7 million and $2.4 million for the three and nine months ended September 30, 2024, respectively. The capital expenditures in the three and nine months ended September 30, 2025 primarily consisted of $0.5 million and $1.4 million on capitalized software, $0.1 million and $0.4 million on manufacturing upgrades, $0.1 million and $0.3 million on marketing, $0.03 million and $0.2 million on leasehold improvements, and $0.3 million and $0.5 million on other asset spend.

*Financing Activities*

We used $0.4 million of cash in financing activities for the three months ended September 30, 2025 and $4.7 million in the nine months ended September 30, 2025, compared to $16.3 million used in the three months ended September 30, 2024 and $0.3 million used in the nine months ended September 30, 2024. The decrease in net cash flows used in financing activities from the third quarter of 2024 compared to the third quarter of 2025 is driven by a $0.2 million increase in common share repurchases under the Shares NCIB that was not available for the three months ended September 30, 2024, and a $0.1 million increase in employee tax payments on vesting RSUs and a $0.1 million increase in repayment of convertible debt under the Debentures NCIB. These increases were offset by a one time transaction in the three months ended September 30, 2024, where the Company used $16.1 million to settle debentures under the Debentures Repurchase.

Cash used in the nine months ended September 30, 2025 was mainly driven by the $4.2 million spent in repurchases of common shares through the Shares NCIB and the Share Repurchase, and $0.3 million repayment on convertible debt through the Debentures NCIB. The cash provided by financing activities in the nine months ended September 30, 2024 was driven by $21.3 million of net proceeds received from the Rights Offering, partially offset

------

by $21.3 million used for the repurchase for cancellation of C$10.5 million principal amount of Debentures as a result of the Issuer Bid.

**Contractual Obligations** 

There have been no material changes in our contractual obligations during the nine months ended September 30, 2025, as compared to those disclosed in the "Management's Discussion and Analysis of Financial Condition and results of Operations - Contractual Obligations" in our Annual Report on Form 10-K, as updated in our Form 10-Q for the quarter ended June 30, 2025.

**Significant Accounting Policies and Estimates** 

There have been no material changes in our significant accounting policies during the nine months ended September 30, 2025, as compared to those disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations – Significant Accounting Policies and Estimates" in our Annual Report on Form 10-K. For information regarding significant accounting policies and estimates, please refer to Item 7 and Item 8 in our Annual Report on Form 10-K. As disclosed in Note 3, "Adoption of New and Revised Accounting Standards" to our interim condensed consolidated financial statements appearing in this Quarterly Report, we are evaluating the impact of Accounting Standards Update No. 2023-09, "Improvements to Income Tax Disclosures" ("ASU-2023-09") which further disaggregated information on an entity's tax rate reconciliation and income taxes paid. The amendments in ASU-2023-09 are effective for fiscal years beginning after December 15, 2024, on a prospective basis with an option of retrospective application. The Company expects the impact to be limited to disclosures.

**Recent Accounting Pronouncements** 

For information regarding recent accounting pronouncements, please refer to Note 3, "Adoption of New and Revised Accounting Standards," to our condensed consolidated interim financial statements and "–Significant Accounting Policies and Estimates" appearing in this Quarterly Report.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

There have been no material changes to our market risk exposures since our disclosures in our Annual Report on Form 10-K. For information regarding our exposure to certain market risks, please refer to Item 7A. "Quantitative and Qualitative Disclosures about Market Risk" in our Annual Report on Form 10-K. The Company's cash and cash equivalents are predominantly all with one AA rated financial institution.

**Item 4. Controls and Procedures**

***Disclosure Controls and Procedures*** 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company's reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officers and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our principal executive officers and principal financial officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based upon their evaluation, our principal executive officers and principal financial officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

***Changes in Internal Control Over Financial Reporting***

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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# PART II – OTHER INFOR MATION
**Item 1. Legal Proceedings**

There have been no material developments in the legal proceedings previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"), as updated in our Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025.

**Item 1A. Risk Factors**

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors and other cautionary statements described under the heading "Risk Factors" included in our 2024 Form 10-K, as updated in our Form 10-Q for the quarter ended March 31, 2025, which could materially affect our businesses, financial condition, or results of operations. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and results of operations.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

The following table summarizes the common shares repurchased and cancelled during the period:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total number of shares purchased** | **Average price paid per share** | **Total number of shares purchased as part of publicly announced programs**<sup>(1)(2)(3)</sup> | **Maximum number of shares that may yet be purchased under the program**<sup>(1)(2)(3)</sup> |
| January 1, 2025 - January 31, 2025 | 109556 | $0.77 | 109556 | 7347199 |
| February 1, 2025 - February 28, 2025<sup>(4)</sup> | 4074200 | $0.80 | 153356 | 3272999 |
| March 1, 2025 - March 31, 2025 | 255351 | $0.69 | 255351 | 3017648 |
| April 1, 2025 - April 30, 2025 | 266546 | $0.73 | 266546 | 2751102 |
| May 1, 2025 - May 31, 2025 | 197129 | $0.66 | 197129 | 2553973 |
| June 1, 2025 - June 30, 2025 | 266473 | $0.61 | 266473 | 2287500 |
| July 1, 2025 - July 31, 2025 | 255173 | $0.65 | 255173 | 2032327 |
| August 1, 2025 - August 31, 2025 | 1500 | $0.59 | 1500 | 2030827 |
| September 1, 2025 - September 30, 2025 | 84956 | $0.52 | 84956 | 1945871 |
| **Total** | 5510884 |  | 1590040 | 1945871 |

---

(1) The normal course issuer bid for common shares was announced on December 18, 2024 and commenced on December 20, 2024;

(2) The maximum number of common shares approved to be purchased under the Shares NCIB is 7,515,233 common shares;

(3) The expiration date of the Shares NCIB is December 19, 2025. As of October 1, 2025, the number of shares available to be purchased under the Shares NCIB is 1,945,871; and

(4) Includes 3,920,844 common shares that were repurchased from NGEN under the Share Repurchase at a purchase price of $0.80 per share. The Share Repurchase was completed on February 14, 2025. The Share Repurchase was a privately negotiated transaction and was not made pursuant to the Shares NCIB or any other publicly announced share repurchase programs, although it was counted against the Shares NCIB limit.

**Item 3. Defaults Upon Senior Securities**

None.

**Item 4. Mine Safety Disclosures**

Not Applicable.

------

**Item 5. Other Information**

**<u>Insider Trading Arrangements</u>**

None.

------

**Item 6. Exhibits** 

**EXHIBIT INDEX** 

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | [<u>Restated Articles of Amalgamation of DIRTT Environmental Solutions Ltd. (incorporated by reference to Exhibit 3.1 to the Registrant's Registration Statement on Form 10, File No. 001-39061, filed on September 20, 2019).</u>](https://www.sec.gov/Archives/edgar/data/1340476/000119312519250806/d664052dex31.htm) |
| 3.2 | [<u>Amended and Restated Bylaw No. 1 of DIRTT Environmental Solutions Ltd. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, File No. 001-39061, filed on May 22, 2020).</u>](https://www.sec.gov/Archives/edgar/data/1340476/000119312520150255/d860040dex31.htm) |
| 4.1 | [<u>Base Indenture, dated January 25, 2021, by and among DIRTT Environmental Solutions Ltd., Computershare Trust Company of Canada and Computershare Trust Company, National Association as Trustees (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, File No. 001-39061, filed on January 29, 2021).</u>](https://www.sec.gov/Archives/edgar/data/1340476/000119312521022736/d114837dex41.htm) |
| 4.2 | [<u>Supplemental Indenture, dated January 25, 2021, by and among the Company, Computershare Trust Company of Canada and Computershare Trust Company, National Association as Trustees (incorporated by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, File No. 001-39061, filed on January 29, 2021).</u>](https://www.sec.gov/Archives/edgar/data/1340476/000119312521022736/d114837dex42.htm) |
| 4.3 | [<u>Second Supplemental Indenture, dated December 1, 2021, by and among the Company, Computershare Trust Company of Canada and Computershare Trust Company, National Association as Trustees (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, File No. 001-39061, filed on December 1, 2021).</u>](https://www.sec.gov/Archives/edgar/data/0001340476/000119312521345525/d126415dex41.htm) |
| 10.1\* | [<u>Indemnity Agreement, dated July 30, 2025, between DIRTT Environmental Solutions Ltd and Adrian Zarate.</u>](drttf-ex10_1.htm) |
| 10.2\* | [<u>Sixth Amendment to Loan Agreement, dated November 4, 2025, by and among DIRTT Environmental Solutions Ltd., DIRTT Environmental Solutions, Inc. and Royal Bank of Canada.</u>](drttf-ex10_2.htm) |
| 31.1\* | [<u>Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</u>](drttf-ex31_1.htm) |
| 31.2\* | [<u>Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</u>](drttf-ex31_2.htm) |
| 32.1\*\* | [<u>Certification of the Principal Executive Officer required by 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</u>](drttf-ex32_1.htm) |
| 32.2\*\* | [<u>Certification of the Principal Financial Officer required by 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](drttf-ex32_2.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| \* | Filed herewith |
| \*\* | Furnished herewith |
| + | Compensatory plan or agreement |

---

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **DIRTT ENVIRONMENTAL SOLUTIONS LTD.** | **DIRTT ENVIRONMENTAL SOLUTIONS LTD.** |
|  | By: | /s/ Fareeha Khan |
|  |  | Fareeha Khan |
|  |  | Chief Financial Officer<br>(*Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)* |
| Date: November 5, 2025 |  |  |

---

------

## Exhibit 10.1

**Exhibit 10.1**

# INDEMNITY AGREEMENT
**THIS INDEMNITY AGREEMENT** is made as of this 30th day of July 2025

# BETWEEN:
**DIRTT ENVIRONMENTAL SOLUTIONS LTD.**, a corporation

governed by the laws of the Province of Alberta (the "**Corporation**")

-and-

Adrian Zarate, an individual residing in Florida (the "**Indemnified Party**")

# RECITALS:
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.The Indemnified Party serves as a director and/or officer of the Corporation or the Indemnified Party is a former director or officer of the Corporation or acts or has acted at the Corporation's request as a director, officer or similar capacity of any subsidiary or affiliate of the Corporation or any entity of which the Corporation is or was a shareholder, partner, member or creditor (each an "**Entity**");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.The Corporation considers it desirable and in the best interests of the Corporation to enter into this Agreement to set out the circumstances and manner in which the Indemnified Party may be indemnified in respect of certain liabilities and expenses which the Indemnified Party may incur as a result of acting or having acted as a director or officer of the Corporation or, at the Corporation's request, as a director, officer or similar capacity of an Entity; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.The by-laws of the Corporation contemplate that the Indemnified Party may be indemnified in certain circumstances.

**NOW THEREFORE, IN CONSIDERATION OF** the promises and mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and the Indemnified Party acting as a director or officer of the Corporation or, at the Corporation's request, as a director, officer or similar capacity of an Entity, the Corporation and the Indemnified Party do hereby covenant and agree as follows:

# ARTICLE 1
**DEFINITIONS AND PRINCIPLES OF INTERPRETATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.1** **Definitions**

Whenever used in this Agreement, the following words and terms shall have the meanings set out below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"**Act**" means the *Business Corporations Act* (Alberta) as of the date hereof, provided that if the Act is amended after the date hereof in a manner which permits the Corporation to provide broader rights of indemnification than are permitted on the date hereof, this Agreement shall be construed so as to give effect to such broader rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)"**Agreement**" means this indemnity agreement and all amendments or restatements as permitted under this Agreement, and references to "**Article**" or "**Section**" mean the specified Article or Section of this Agreement, and "**paragraph**" means the specified paragraph of this Agreement;

------

**Exhibit 10.1**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"**Claims**" means any claim, demand, suit, action, cause of action, proceeding, inquiry, arbitration, mediation, alternative dispute resolution mechanism, hearing, discovery or investigation of whatever nature, whether anticipated, threatened, pending, commenced, continuing or completed of whatever kind including any civil, criminal, administrative, arbitrative, regulatory, investigative (formal or informal) or other claim of any nature whatsoever; any appeal in or related to any such claim, demand, suit, action, cause of action, proceeding, inquiry, arbitration, mediation, alternative dispute resolution mechanism, hearing, discovery or investigation; and any inquiry or investigation (including discovery) whether conducted by or in the right of the Corporation or any other person that the Indemnified Party in good faith believes could lead to any such claim, demand, suit, action, cause of action, proceeding, inquiry, arbitration, mediation, alternative dispute resolution mechanism, hearing, discovery or investigation or appeal thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)"**Court**" means the Court of Queen's Bench of Alberta (Judicial District of Calgary), including any appeal courts arising therefrom;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"**ERISA**" means the United States Employee Retirement Income Security Act of 1974, as amended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)"**Exchange Act**" means the United States Securities Exchange Act of 1934, as amended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)"**Expenses**" means all legal fees and disbursements, retainers, accountant's fees and disbursements, private investigator fees and disbursements, other professionals' fees and disbursements, court costs, transcript costs, fees and expenses of experts, witness fees and expenses, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, penalties, and all other disbursements, costs or expenses of the types customarily incurred in connection with prosecuting, defending (including affirmative defences and counterclaims), preparing to prosecute or defend, investigating, being or preparing to be a witness in, or participating in or preparing to participate in a Claim and all interest or finance charges attributable to any thereof. Without limiting the foregoing, "Expenses" also shall include Expenses incurred in connection with any appeal resulting from any Claim, including the principal, premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. Should any payments by the Corporation under this Agreement be determined to be subject to any national, provincial, federal, state or local income or excise tax, "Expenses" shall also include such amounts as are necessary to place the Indemnified Party in the same after-tax position (after giving effect to all applicable taxes) as the Indemnified Party would have been in had no such tax been determined to apply to such payments. Also, in this Agreement "witness" includes responding (or objecting) to a discovery or similar request, whether in writing or in an oral deposition, in any Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)"**Losses**" means any and all amounts related to all costs, charges and Expenses reasonably incurred by the Indemnified Party, which shall include all losses, damages (including

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**Exhibit 10.1**

incidental and consequential damages), fees (including any legal, professional or advisory fees, retainers, charges or disbursements and including costs of services of any experts), claims, awards, statutory obligations, amounts paid to settle or dispose of any Claim or satisfy any judgment, fines, penalties or liabilities (including all interest, assessments and other charges paid or payable in connection with or in respect of such losses, damages, fees, claims, awards, statutory obligations, amounts paid to settle or dispose of any Claim or satisfy any judgment, fines, penalties or liabilities), without limitation, and whether incurred alone or jointly with others, including any amounts which the Indemnified Party may reasonably suffer, sustain, incur or be required to pay in respect of the investigation, defence, settlement or appeal of or preparation for any Claim or with any action to establish a right to indemnification under this Agreement, and for greater certainty, includes all Taxes, interest, penalties and related outlays of the Indemnified Party arising from any indemnification of the Indemnified Party by the Corporation pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)"**Parties**" means the Corporation and the Indemnified Party collectively and "**Party**"

means any one of them;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)"**Policy**" means the directors' and officers' errors and omissions insurance policy of the Corporation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)"**Taxes**" includes any assessment, reassessment, claim or other amount for taxes, charges, duties, levies, imposts, ERISA excise taxes or penalties, or similar amounts, including any interest and penalties in respect thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.2** **Certain Rules of Interpretation**

In this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Governing Law** – This Agreement is a contract made under and shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable in the Province of Alberta. The Parties hereby irrevocably submit and attorn to the exclusive jurisdiction of the Court with respect to all matters arising out of or relating to this Agreement and all matters, agreements or documents contemplated by this Agreement. The Parties hereby waive any objections they may have to the venue being in such Court, including any claim that any such venue is in an inconvenient forum. For greater certainty, all references to "applicable law" in this Agreement shall refer to the laws of the Province of Alberta and the federal laws of Canada applicable in the Province of Alberta.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Headings** – Headings of Articles and Sections are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Number and Inclusion** – Unless the context otherwise requires, words importing the singular include the plural and vice versa. Whenever the words "include," "includes" or "including" are used in this Agreement, they are deemed to be followed by the words "without limitation."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**Severability –** If, in any jurisdiction, any provision of this Agreement or its application to any Party or circumstance is restricted, prohibited or unenforceable, such provision shall,

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**Exhibit 10.1**

as to such jurisdiction, be ineffective only to the extent of such restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement and without affecting the validity or enforceability of such provision in any other jurisdiction or without affecting its application to other Parties or circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)**Entire Agreement** – This Agreement constitutes the entire agreement between the Parties and sets out all the covenants, promises, warranties, representations, conditions, understandings and agreements between the Parties pertaining to the subject matter ofthis Agreement and supersedes all prior agreements, understandings, negotiations and discussions, oral or written. There are no covenants, promises, warranties, representations, conditions, understandings or other agreements, oral or written, between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement, including Section 2.8.

# ARTICLE 2 OBLIGATIONS
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1** **Obligations of the Corporation**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**General Indemnity** – The Corporation will, to the fullest extent permitted by law on the date hereof and to such greater extent as applicable law may hereafter from time to time permit, including to the extent permitted under the Act, exonerate, indemnify and hold the Indemnified Party and the Indemnified Party's respective heirs, executors, administrators and other legal representatives of the Indemnified Party (each of which is included in any reference hereinafter made to the Indemnified Party) harmless from and against, and will pay to the Indemnified Party, any and all Losses which the Indemnified Party may suffer, sustain, incur or be required to pay in respect of any Claim to which a director or officer is made a party by reason of being a director or officer of the Corporation or director, officer or in similar capacity of an Entity at the Corporation's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Conditions** – The indemnity provided for in Section 2.1(a) will only be available if the Indemnified Party:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)acted honestly and in good faith with a view to the best interest of the Corporation or as the case may be, to the best interest of an Entity for which the Indemnified Party acted as a director, officer or in a similar capacity at the Corporation's request; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing the Indemnified Party's conduct was lawful.

The Indemnified Party shall be presumed to have fulfilled the foregoing conditions unless it is determined by the Court that the Indemnified Party has not (and the burden of proof shall be on the Corporation to rebut such presumption).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Derivative Claims** – The Corporation shall to the fullest extent permitted by law on the date hereof and to such greater extent as applicable law may hereafter from time to time permit, provided the Indemnified Party fulfills the conditions in Section 2.1(b), with the approval of the Court if such approval is required exonerate, indemnify and hold the

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**Exhibit 10.1**

Indemnified Party harmless, and advance moneys under Section 2.1(k) to the Indemnified Party, in respect of a Claim by or on behalf of the Corporation or other entity to procure a judgment in the Corporation's favour to which the Indemnified Party is made a party by reason of being or having been a director or officer of the Corporation or director, officer or in similar capacity of an Entity at the Corporation's request. The Corporation will advance or reimburse, as applicable, all Losses incurred by the Indemnified Party in connection with the Indemnified Party's participation in such Claim as provided in this Section 2.1(c). The Corporation shall pay to the Indemnified Party, if applicable, a reasonable *per diem* amount for time spent in connection with a Claim under this Section 2.1(c) as provided in Section 2.1(l).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**Indemnity as of Right** – Notwithstanding anything in this Agreement, provided the Indemnified Party fulfills the conditions in Section 2.1(b), the Corporation shall be required to indemnify the Indemnified Party in respect of all Losses incurred by the Indemnified Party in respect of any Claim to which the Indemnified Party is made a party by reason of being or having been a director or officer of the Corporation or director, officer or in similar capacity of an Entity at the Corporation's request, if after the final disposition of such Claim, the Indemnified Party has not been reimbursed for those Losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)**Incidental and Additional Expenses** – The Corporation shall to the fullest extent permitted by law on the date hereof and to such greater extent as applicable law may hereafter from time to time permit pay or reimburse the Indemnified Party for (i) the Indemnified Party's reasonable and necessary travel, lodging or accommodation costs, charges or expenses paid or incurred by or on behalf of the Indemnified Party in connection with a Claim where such Claim is subject to indemnification hereunder; (ii) the Indemnified Party's reasonable fees and Expenses incurred in connection with efforts to recover under any directors and officers liability insurance policies maintained by the Corporation; and (iii) the Indemnified Party's reasonable fees and Expenses incurred in connection with enforcement of, or claims for breaches of, any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)**Witness Expenses** – The Corporation shall to the fullest extent permitted by law on the date hereof and to such greater extent as applicable law may hereafter from time to time permit pay or reimburse the Indemnified Party for the reasonable and necessary Expenses incurred by Indemnified Party, including a reasonable *per diem* amount as provided in Section 2.1(l), in connection with time spent in the investigation or as a witness for the Corporation or an Entity with respect to any Claim, by reason of the Indemnified Party being a director or officer of the Corporation or director, officer or in similar capacity of an Entity at the Corporation's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)**Specific Indemnity for Statutory Obligations** – Without limiting the generality of the preceding Sections 2.1(a) through 2.1(f) of this Agreement, the Corporation agrees, to the fullest extent permitted by law on the date hereof and to such greater extent as applicable law may hereafter from time to time permit, to exonerate, indemnify and hold the Indemnified Party harmless from and against any and all Losses arising by operation of statute and incurred by or imposed upon the Indemnified Party in relation to the affairs of the Corporation in the Indemnified Party's capacity as a director or officer thereof, including all statutory obligations to creditors, employees, suppliers, contractors, subcontractors, and any government or any agency or division of any government,

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**Exhibit 10.1**

whether federal, provincial, state, regional or municipal, or which in any way involve the business or affairs of the Corporation or an Entity for which the Indemnified Party acted as a director, officer or similar capacity at the Corporation's request, provided that the indemnity provided for in this Section 2.1(g) will be available unless it is determined by the Court that the Indemnified Party has not fulfilled the conditions in Section 2.1(b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)**Change of Law** – In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of an Alberta corporation to indemnify a director or officer, it is the intent of the parties hereto that the Indemnified Party shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change after that date of this Agreement in any applicable law, statute or rule which narrows the rights of an Alberta corporation to indemnify a director or officer, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties' right and obligations hereunder except as set forth in Section 2.9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)**Partial Indemnification** – If the Indemnified Party is determined by the Court to be entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of the Losses incurred in respect of any Claim but not for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnified Party for the portion thereof to which the Indemnified Party is determined by the Court to be so entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)**Indemnification for Losses of an Indemnified Party Who Is Wholly or Partly Successful** – To the extent the Indemnified Party is a party to (or a participant in) a Claim and is successful, on the merits or otherwise, in the defence of any Claim or any issue or matter therein, the Corporation shall, to the fullest extent permitted by applicable law, exonerate, indemnify, and hold the Indemnified Party harmless against all Losses incurred by the Indemnified Party therewith. If the Indemnified Party is not wholly successful in such Claim but is successful, on the merits or otherwise, as to one or more but less than all the issues or matters in such Claim, the Corporation shall, to the fullest extent permitted by applicable law, exonerate, indemnify, and hold the Indemnified Party harmless against all Losses incurred by the Indemnified Party in connection with each successfully resolved issue or matter. For purposes of this Section 2.1(j), without limitation, the termination of any issue or matter in a Claim by dismissal, with or without prejudice, shall be deemed to be a successful result as to such issue or matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)**Advance of Expenses** – The Corporation shall, at the request of the Indemnified Party, to the maximum extent permitted under the Act or otherwise by law on the date hereof and to such greater extent as applicable law may hereafter from time to time permit, promptly: (i) reimburse the Indemnified Party for all Losses incurred by the Indemnified Party in relation to a Claim claimed by the Indemnified Party to be subject to indemnification hereunder; and (ii) pay reasonable and customary advance payments and costs and expenses to service providers of the Indemnified Party; in each case, prior to any settlement or resolution of such Claim to enable the Indemnified Party to properly investigate, defend or appeal such Claim. The Corporation shall pay such advances within ten (10) days after the receipt by the Corporation of a written request from the Indemnified Party requesting such payment or payments from time to time, whether prior to or after final disposition of a Claim. If it is ultimately determined in a final judgment

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**Exhibit 10.1**

of a court of competent jurisdiction or final arbitration award of an applicable arbitration proceeding that has become non-appealable that the Indemnified Party did not fulfill the conditions in Section 2.1(b) or that the Indemnified Party was not entitled to be fully so indemnified, such advance, or the appropriate portion thereof, upon written notice of such determination being given by the Corporation to the Indemnified Party detailing the basis for such determination, shall be repayable on demand without interest. The Indemnified Party shall not be required to provide collateral or otherwise secure the Indemnified Party's agreement to repay described in the prior sentence. If and to the extent the Indemnified Party makes any such repayment to the Corporation, the obligation of the Corporation to indemnify the Indemnified Party will continue in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)**Per Diem Charge** – In addition to any other amount payable to the Indemnified Party under this Agreement, the Indemnified Party shall be entitled to receive from the Corporation a *per diem* payment (the "**Per Diem Charge**") for time spent with respect to any Claim for which the Indemnified Party is otherwise entitled to indemnification pursuant to any one of the foregoing provisions of Section 2.1 of this Agreement. For directors, the Per Diem Charge shall be an amount equal to US$350 per hour. For officers, the Per Diem Charge shall be zero if the Indemnified Party is still employed on a full time basis by the Corporation at the time the Per Diem Charge is payable or has been terminated for cause by the Corporation, and the Per Diem Charge shall be in an amount equal to US$350 per hour if the Indemnified Party is not employed on a full time basis by the Corporation at the time the Per Diem Charge is payable other than as a result of termination for cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)**Taxes** – For greater certainty, a Claim subject to indemnification pursuant to Article 2 of this Agreement shall include any Taxes which the Indemnified Party may be subject to or suffer or incur as a result of, in respect of, arising out of or referable to any indemnification of the Indemnified Party by the Corporation pursuant to this Agreement; *provided, however*, that any amount required to be paid with respect to such Taxes shall be payable by the Corporation only upon the Indemnified Party remitting or being required to remit any amount payable on account of such Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)**Right to Access –** The Indemnified Party (and its legal representatives) is entitled to have access to and inspect the Corporation's records and documents which are under its control and which may be reasonably necessary in order to defend the Indemnified Party against a Claim which has been or which the Indemnified Party reasonably anticipates may be made against the Indemnified Party, provided that the Indemnified Party (and its legal representatives) maintains all such information in the strictest confidence except to the extent necessary for the defence of the Indemnified Party. The Corporation shall provide the Indemnified Party (and its legal representatives) with access to the relevant documents and records during the regular business hours of the Corporation as soon as practicable following a request for such access by or on behalf of the Indemnified Party. The Indemnified Party (and its legal representatives) shall be entitled to make and receive copies (including electronic copies) of any of such records and documents of the Corporation at the cost of the Corporation and such copies shall be provided as soon as practicable following a request therefor by or on behalf of the Indemnified Party. If the Indemnified Party is the subject of or is implicated in any way during the proceeding of any Claim, the Corporation will share with the Indemnified Party (and its legal

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**Exhibit 10.1**

representatives) any information that it has turned over to any third parties in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)**Enforcement –** The Indemnified Party's right to indemnification and other rights under this Agreement shall be specifically enforceable by the Indemnified Party in a "court" (as defined in the Act) and shall be enforceable notwithstanding any adverse determination by or on behalf of the Corporation's board of directors and no such determination shall create a presumption that the Indemnified Party is not entitled to be indemnified hereunder. In any such action, the Corporation shall have the burden of proving that indemnification is not required or permitted under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)**Court Approvals –** If the payment of an indemnity under any provision of this Agreement requires any court or other approvals, the Corporation shall make the application or seek such other required approvals and use reasonable best efforts to obtain such order or other required approvals, including paying the costs of such application or seeking such other required approvals and paying the expenses of the Indemnified Party, to the extent permitted by applicable law, in connection with any such order or approval process. If the Corporation fails to do so, the Indemnified Party may apply to the Court or other applicable court, agency or body for an order or seek such other required approvals approving the indemnity of the Indemnified Party pursuant to this Agreement, and the Corporation shall pay the expenses of the Indemnified Party, to the extent permitted by applicable law, in connection with any such order or approval process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2** **Notice of Proceedings**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Indemnified Party shall give notice in writing to the Corporation as soon as practicable upon being served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation order or other document commencing, threatening or continuing any Claim which may result in a claim for indemnification under this Agreement, and the Corporation agrees to give the Indemnified Party notice in writing as soon as practicable upon it being served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation order or other document commencing, threatening or continuing any Claim which may result in a claim for indemnification under this Agreement. Such notice shall include a description of the Claim or threatened Claim, a summary of the facts giving rise to the Claim or threatened Claim and, if possible, an estimate of any potential liability arising under the Claim or threatened Claim. Failure by either party to so notify the other of any Claim shall not relieve the Corporation from liability under this Agreement except to the extent that the failure materially prejudices the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If, at the time the Corporation gives the Indemnified Party notice in connection with Section 2.2(a), a Policy is in effect with respect to the Indemnified Party, the Corporation shall give prompt notice of the applicable Claim to its insurers in accordance with the procedures set forth in such Policy. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay all amounts payable as a result of such Claim in accordance with the terms of such Policy.

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**Exhibit 10.1**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3** **Subrogation**

Promptly after receiving written notice from the Indemnified Party of any Claim or threatened Claim (other than a Claim by or on behalf of the Corporation to procure a judgment in its favour against the Indemnified Party), the Corporation may by notice in writing to the Indemnified Party, and upon the written request of the Indemnified Party the Corporation shall, in a timely manner assume conduct of the defence thereof and retain counsel on behalf of the Indemnified Party who is reasonably satisfactory to the Indemnified Party, to represent the Indemnified Party in respect of the Claim. On delivery of such notice by the Corporation, other than pursuant to Section 2.4, the Corporation shall not be liable to the Indemnified Party under this Agreement for any fees and disbursements of counsel the Indemnified Party may subsequently incur with respect to the same matter. If the Corporation assumes conduct of the defence on behalf of the Indemnified Party, the Indemnified Party hereby consents to the conduct thereof and of any action taken by the Corporation, in good faith, in connection therewith, and the Indemnified Party shall fully cooperate in such defence including the provision of documents, attending examinations for discovery, making affidavits, meeting with counsel, testifying and divulging to the Corporation all information reasonably required to defend or prosecute the Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4** **Separate Counsel**

In connection with any Claim or other matter for which the Indemnified Party may be entitled to indemnity under this Agreement, the Indemnified Party shall have the right to employ separate counsel and consultants of the Indemnified Party's choosing and to participate in and approve any settlement by the Corporation of any Claim involving or affecting in any manner whatsoever the Indemnified Party, and provided that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the employment of such counsel and consultants of the Indemnified Party's choosing have been previously approved by the Corporation, acting reasonably; or (b) the Indemnified Party has reasonably concluded that there may be a conflict of interest between the Corporation and the Indemnified Party in defending such Claim; then all fees, expenses and disbursements of such counsel and consultants shall be at the Corporation's expense and shall be paid within ten (10) days of invoices being submitted to the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5** **Presumption of Indemnification**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In making a determination with respect to entitlement to indemnification hereunder, the Corporation shall, to the fullest extent not prohibited by law, presume that the Indemnified Party is entitled to indemnification under this Agreement, and the Corporation shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by the Court of any determination contrary to that presumption. Neither the failure of the Corporation to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because the Indemnified Party has met the applicable standard of conduct, nor an actual determination by the Corporation that the Indemnified Party has not met such applicable standard of conduct, shall be a defence to the action or create a presumption that the Indemnified Party has not met the applicable standard of conduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If the Corporation shall not have made a determination with respect to entitlement to indemnification within sixty (60) days after receipt by the Corporation of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and the Indemnified Party

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**Exhibit 10.1**

shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The knowledge or actions, or failure to act, of any director, officer, agent or employee of the Entity shall not be imputed to the Indemnified Party for purposes of determining the right to indemnification under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6** **Presumption of Good Faith**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)For the purposes of any determination of good faith under this Agreement, the Indemnified Party shall be deemed to have acted in good faith if the Indemnified Party's action is based on the records or books of account of the Corporation or an Entity, including applicable financial statements, or on information supplied to the Indemnified Party by officers of the Corporation or an Entity (other than the Indemnified Party) in the course of their duties, or on the advice of legal counsel of the Corporation, an Entity, their respective board of directors, counsel selected by any committee of their respective board of directors or on information or records given or reports made to the Corporation or an Entity by an independent certified public accountant or by an appraiser, investment banker, compensation consultant or other expert selected with reasonable care by the Corporation, an Entity, their respective board of directors or any committee of their respective board of directors or by any other person as to matters the Indemnified Party reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation. The provisions of this Section 2.6 shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnified Party may be deemed to have fulfilled the conditions in Section 2.1(b) or met any other applicable standard of conduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Unless the Court or a court of competent jurisdiction otherwise has held or decided that the Indemnified Party is not entitled to be fully or partially indemnified under this Agreement, the termination of any civil, criminal or administrative action or proceedings by judgement, order, settlement, conviction or similar or other result or upon a plea of "no contest" or the equivalent will not, of itself: (i) create a presumption for the purposes of this Agreement that the Indemnified Party did not act honestly and in good faith with a view to the best interests of the Corporation or Entity; (ii) in the case of a criminal or administrative action or proceeding that is enforced by monetary penalty, that the Indemnified Party did not have reasonable grounds for believing that the Indemnified Party's conduct was lawful; or (iii) that the Indemnified Party is not entitled to indemnity under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.7** **Settlement of a Claim**

For greater certainty, no admission of liability and no settlement of any Claim in a manner adverse to the Indemnified Party shall be made without the consent of the Indemnified Party, acting reasonably. No admission of liability shall be made by the Indemnified Party without the consent of the Corporation and the Corporation shall not be liable for any settlement of any Claim made without its consent, acting reasonably.

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**Exhibit 10.1**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8** **Other Rights and Remedies Unaffected**

The indemnification and advance payment provided in this Agreement shall not derogate from or exclude any other rights to which the Indemnified Party may be entitled under any provision of the Act or otherwise at law, the articles or by-laws of the Corporation, any applicable policy of insurance, guarantee or third-party indemnity, any vote of shareholders of the Corporation, or otherwise, both as to matters arising out of the Indemnified Party's capacity as a director or officer of the Corporation or as to matters arising out of any other capacity in which the Indemnified Party may act for or on behalf of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9** **Exceptions**

Any other provision herein to the contrary notwithstanding, the Corporation shall not be obligated pursuant to the terms of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Claims Initiated by the Indemnified Party** – To indemnify or advance expenses to the Indemnified Party with respect to any proceeding or Claim initiated or brought voluntarily by the Indemnified Party and not by way of defence, except with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or any statute, the articles or by-laws of the Corporation or otherwise but such indemnification or advancement of expenses may be provided by the Corporation in specific cases if the Corporation's board of directors has approved the initiation or bringing of such suit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Frivolous Proceedings** – To indemnify the Indemnified Party for any expenses incurred by the Indemnified Party with respect to any proceeding instituted by the Indemnified Party to enforce or interpret this Agreement, if the Court or a court of competent jurisdiction determines that each of the material assertions made by the Indemnified Party in such proceedings were frivolous.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Insured Claims** – To make any payment in connection with any Claim made against the Indemnified Party to the extent the Indemnified Party has otherwise received payment (under any insurance policy, the articles or by-laws of the Corporation, contract or otherwise) of the amounts otherwise indemnifiable hereunder. If the Corporation makes any indemnification payment to the Indemnified Party in connection with any particular expense indemnified hereunder and the Indemnified Party has already received or thereafter receives, and is entitled to retain, duplicate payments in reimbursement of the same particular expense, then the Indemnified Party shall reimburse the Corporation in an amount equal to the lesser of: (i) the amount of such duplicate payment; and (ii) the full amount of such indemnification payment made by the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**Claims for Unlawful Profits** – To indemnify the Indemnified Party for the disgorgement of profits arising from the purchase and sale by the Indemnified Party of securities in violation of Section 16(b) of the Exchange Act (or any successor statute) or any other applicable securities law or Losses incurred by the Indemnified Party for Claims in connection with such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)**Other Indemnification** – To indemnify the Indemnified Party for expenses for which the Indemnified Party is indemnified by the Corporation otherwise than pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)**Not Lawful** – To indemnify the Indemnified Party if (and to the extent that) a final decision by the Court, a court of competent jurisdiction, or an arbitration body having jurisdiction in the matter shall determine that such indemnification is not lawful.

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**Exhibit 10.1**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.10** **Articles and By-Laws**

The Corporation agrees that the articles and by-laws of the Corporation in effect on the date hereof shall not be amended to reduce, limit, hinder or delay: (a) the rights of the Indemnified Party granted hereunder; or (b) the ability of the Corporation to indemnify the Indemnified Party as required hereunder. The Corporation further agrees that it shall exercise the powers granted to it under the articles and by- laws of the Corporation and applicable law to indemnify the Indemnified Party to the fullest extent possible as required by this Agreement.

# ARTICLE 3 INSURANCE
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1** **The Policy**

The Corporation shall purchase and maintain, or cause to be purchased and maintained, while the Indemnified Party remains a director or officer of the Corporation or director, officer or a similar capacity of an Entity at the Corporation's request, and in accordance with Section 3.6, for a period of six (6) years after the Indemnified Party ceases to be a director or officer of the Corporation, a Policy including Side "A" difference in conditions coverage, for the benefit of the Indemnified Party containing such customary terms and conditions and in such amounts as are available to the Corporation on reasonable commercial terms, having regard to the nature and size of the business and operations of the Corporation and its subsidiaries from time to time. In all such Policies, the Indemnified Party, by reference to the Indemnified Party's position or otherwise, shall be named as an insured. The Corporation shall thereafter take all necessary or desirable action to cause its insurer to pay, on behalf of the Indemnified Party, all amounts payable as a result of such Claims in accordance with the terms of such policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2** **Variation of Policy**

So long as the Indemnified Party is a director or officer of the Corporation or director, officer or similar capacity of an Entity at the Corporation's request, and, in accordance with Section 3.6, for a period of six

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) years thereafter, the Corporation shall not seek to amend or discontinue the Policy or allow the Policy to lapse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3** **Run-Off Coverage**

If the Policy is discontinued for any reason, the Corporation shall purchase, maintain and administer, or cause to be purchased, maintained and administered for a period of six (6) years after such discontinuance, insurance for the benefit of the Indemnified Party (the "**Run-Off Coverage**"), on such terms as the Corporation then maintains in existence for its directors and officers, to the extent permitted by law and provided such Run-Off Coverage is available on commercially acceptable terms and premiums (as determined by the Corporation's board of directors acting reasonably). The Run-Off Coverage shall provide coverage only in respect of events occurring prior to the discontinuance of the Policy.

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**Exhibit 10.1**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4** **Insurable Events**

If an insurable event occurs, the Corporation shall indemnify the Indemnified Party as agreed hereto regardless of whether the Corporation receives the insurance proceeds. The Indemnified Party is entitled to full indemnification as agreed hereto notwithstanding any deductible amounts or policy limits contained in any such insurance policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5** **Exclusion of Indemnity**

Notwithstanding any other provision in this Agreement to the contrary, the Corporation shall not be obligated to indemnify the Indemnified Party under this Agreement for any Losses which have been paid to, by or on behalf of, the Indemnified Party under the Policy or any other applicable policy of insurance maintained by the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.6** **Post Office Directors and Officers Insurance**

Following the Indemnified Party ceasing to be a director or officer of the Corporation or director, officer or similar capacity of an Entity at the Corporation's request, for any reason whatsoever, the Corporation shall continue to purchase and maintain directors' and officers' liability insurance, for the benefit of the Indemnified Party for a minimum of six (6) years, such that the Indemnified Party's insurance coverage is, during that time, the same as any insurance coverage the Corporation purchases and maintains for the benefit of its then current directors and officers, from time to time. Notwithstanding the foregoing, if: (a) liability insurance coverage for former directors and officers is no longer available; or (b) it is no longer industry practice among responsible companies to procure liability insurance for former directors and officers and the cost to the Corporation to do so would be commercially unreasonable (as determined by the board of directors acting reasonably), the Corporation shall be relieved of its obligation to procure liability insurance coverage for former directors and officers; provided that the Corporation procures such level of insurance coverage, if any, as is available for former directors and officers at a commercially reasonable rate and adopts comparable measures to protect its former directors and officers in the circumstances as are adopted by other responsible companies. The onus is on the Corporation to establish that the circumstances described in the previous sentence exist.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.7** **Deductible under Directors and Officers Insurance**

If for any reason whatsoever, any directors' and officers' liability insurer asserts that the Indemnified Party is subject to a deductible under any existing or future Policy purchased and maintained by the Corporation for the benefit of the Indemnified Party, the Corporation shall pay the deductible for and on behalf of the Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.8** **Notice**

The Corporation agrees to provide notice of any material changes in the insurance coverage referred to in Article 3 during the period in which the Indemnified Party serves as director or officer of the Corporation or a director, officer or similar capacity of an Entity at the Corporation's request and for a period of six (6) years thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.9** **Most Favoured Nation**

The Corporation agrees that if the Corporation enters into any indemnity agreement or similar arrangement with any person who is, or becomes, a director or officer of the Corporation or a director, officer or

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**Exhibit 10.1**

similar capacity of an Entity at the Corporation's request, and such agreement or arrangement contains any provision which is more favourable to the other party to such agreement than the provisions of this Agreement are to the Indemnified Party then, and in each such case, the Corporation shall provide written notice of such provision to the Indemnified Party (which shall include a copy of such provision). Upon such notice, unless the Indemnified Party elects otherwise within five (5) days of receipt of such notice, this Agreement shall be deemed to be amended to conform the provisions of this Agreement to such more favourable provision.

# ARTICLE 4 MISCELLANEOUS
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1** **Corporation and Indemnified Party to Cooperate**

The Corporation and the Indemnified Party shall, from time to time, provide such information and cooperate with the other, as the other may reasonably request, in respect of all matters under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2** **Effective Time**

This Agreement shall be deemed to have effect as and from the first date that the Indemnified Party became a director or officer of the Corporation or a director, officer or similar capacity of an Entity at the Corporation's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3** **Insolvency**

The liability of the Corporation under this Agreement shall not be affected, discharged, impaired, mitigated or released by reason of the discharge or release of the Indemnified Party in any bankruptcy, insolvency, receivership or other similar proceeding of creditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4** **Multiple Proceedings**

No action or proceeding brought or instituted under this Agreement and no recovery pursuant thereto shall be a bar or defence to any further action or proceeding which may be brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5** **Termination**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Nothing in this Agreement will prevent the Indemnified Party from resigning as a director or officer of the Corporation or a director, officer or similar capacity of an Entity at the Corporation's request at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The obligations of the Corporation will not terminate or be released upon the Indemnified Party resigning or ceasing to act as a director or officer of the Corporation or a director, officer or similar capacity of an Entity at the Corporation's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.6** **Limitation of Actions and Release of Claims**

To the extent permitted by applicable law, no legal action shall be brought and no course of action shall be asserted by or on behalf of the Corporation against the Indemnified Party after the expiration of two years from the date of the Indemnified Party's ceasing to act as a director or officer of the Corporation or a director, officer or similar capacity of an Entity at the Corporation's request and the Corporation agrees that any claim or cause of action of the Corporation shall be extinguished and the Indemnified Party be

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**Exhibit 10.1**

deemed released therefrom absolutely unless asserted by the commencement of legal action in a court of

competent jurisdiction within such two year period.

# ARTICLE 5 CONTRIBUTION
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1.** **Contribution Payment**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)To the fullest extent permitted by law, whether or not the indemnification provided in Article 2 is available, in respect of any threatened, pending or completed Claim in which the Corporation is jointly liable with the Indemnified Party (or would be if joined in such Claim), the Corporation shall pay, in the first instance, the entire amount of any judgment or settlement of such Claim without requiring the Indemnified Party to contribute to such payment, and the Corporation hereby waives and relinquishes any right of contribution it may have against the Indemnified Party. The Corporation shall not enter into any settlement of any Claim in which the Corporation is jointly liable with the Indemnified Party (or would be if joined in such Claim) unless such settlement provides for a full and final release of all claims asserted against the Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Without diminishing or impairing the obligations of the Corporation set forth in the preceding paragraph, if, for any reason, the Indemnified Party shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed Claim in which the Corporation is jointly liable with the Indemnified Party (or would be if joined in such Claim), the Corporation shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by the Indemnified Party in proportion to the relative benefits received by the Corporation and all officers, directors or employees of the Corporation, other than the Indemnified Party, who are jointly liable with the Indemnified Party (or would be if joined in such Claim), on the one hand, and the Indemnified Party, on the other hand, from the transaction or events from which such Claim arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Corporation and all officers, directors or employees of the Corporation other than the Indemnified Party who are jointly liable with the Indemnified Party (or would be if joined in such Claim), on the one hand, and the Indemnified Party, on the other hand, in connection with the transaction or events that resulted in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Corporation hereby agrees, to the fullest extent permitted by applicable law, to fully indemnify and hold the Indemnified Party harmless from any claims of contribution which may be brought by officers, directors or employees of the Corporation, other than the Indemnified Party, who may be jointly liable with the Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)To the fullest extent permissible under applicable law and without diminishing or impairing the obligations of the Corporation set forth in the preceding paragraphs of this Section 5.1, if the indemnification provided for in this Agreement is unavailable to the Indemnified Party for any reason whatsoever, the Corporation, in lieu of indemnifying the Indemnified Party, shall contribute to the amount incurred by the Indemnified Party, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in

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**Exhibit 10.1**

settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Claim in order to reflect (i) the relative benefits received by the Corporation and the Indemnified Party as a result of the event(s) and/or transaction(s) giving cause to such Claim; and/or (ii) the relative fault of the Corporation (and its directors, officers, employees and agents) and the Indemnified Party in connection with such event(s) and/or transaction(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 Relative Fault

The relative fault of the Indemnified Party, on the one hand, and of the Corporation and any and all other parties (including officers and directors of the Corporation other than the Indemnified Party) who may be at fault with respect to such matter shall be determined (i) by reference to the relative fault of the Indemnified Party as determined by the court or other governmental agency assessing the contribution amounts or (ii) to the extent such court or other governmental agency does not apportion relative fault, by independent counsel agreed to by both the Corporation and the Indemnified Party after giving effect to, among other things, the degree of which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, the degree to which their conduct is active or passive, the degree of the knowledge, access to information, and opportunity to prevent or correct the subject matter of the Claim and other relevant equitable considerations of each party. The Corporation and the Indemnified Party agree that it would not be just and equitable if contribution pursuant to this Section 5.2 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 5.2.

# ARTICLE 6 GENERAL
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1.** **Term**

This Agreement shall continue after the Indemnified Party ceases to serve as a director or officer of the Corporation or a director, officer or similar capacity of an Entity at the Corporation's request and shall survive indefinitely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2.** **Deeming Provision**

The Indemnified Party shall be deemed to have acted or be acting at the specific request of the Corporation upon the Indemnified Party's being appointed or elected as a director or officer of the Corporation or a director, officer or similar capacity of an Entity at the Corporation's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3.** **Assignment**

Neither Party may assign this Agreement or any rights or obligations under this Agreement without the prior written consent of the other Party. This Agreement shall enure to the benefit of and be binding upon the Parties and the heirs, executors and administrators and other legal representatives of the Indemnified Party and the successors and permitted assigns of the Corporation (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Corporation).

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**Exhibit 10.1**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.4.** **Amendments and Waivers**

No supplement, modification, amendment or waiver or termination of this Agreement and, unless otherwise specified, no consent or approval by any Party, shall be binding unless executed in writing by the Party to be bound thereby. For greater certainty, the rights of the Indemnified Party under this Agreement shall not be prejudiced or impaired by permitting or consenting to any assignment in bankruptcy, receivership, insolvency or any other creditor's proceedings of or against the Corporation or by the winding-up or dissolution of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.5.** **Notices**

Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section referred to as a "**Notice**") shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile or e-mail:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)in the case of a Notice to the Indemnified Party at:

Attn: Adrian Zarate

\*\*\*

\*\*\*

\*\*\*

e-mail: \*\*\*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)in the case of a Notice to the Corporation at: DIRTT Environmental Solutions Ltd.

Attn: CFO

7303 30th Street S.E. Calgary, Alberta T2C 1N6

e-mail: \*\*\*

Any Notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a business day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if the Notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a business day then the Notice shall be deemed to have been given and received on the next business day.

Any Party may, from time to time, change its address for Notice set out in this Section 6.5 by giving Notice to the other Party in accordance with the provisions of this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.6.** **Further Assurances**

The Corporation and the Indemnified Party shall, with reasonable diligence, do all such further acts, deeds or things and execute and deliver all such further documents as may be necessary or advisable for the purpose of assuring and conferring on the Indemnified Party the rights hereby created or intended, and of giving effect to and carrying out the intention or facilitating the performance of the terms of this Agreement or to evidence any advance made pursuant to Section 2.1(k).

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**Exhibit 10.1**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.7.** **Independent Legal Advice**

The Indemnified Party acknowledges that the Indemnified Party has been advised to obtain independent legal advice with respect to entering into this Agreement, that it has obtained such independent legal advice or has expressly determined not to seek such advice, and that the Indemnified Party is entering into this Agreement with full knowledge of the contents hereof, of the Indemnified Party's own free will and with full capacity and authority to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.8.** **Execution and Delivery**

This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile or other form of electronic transmission, and all such counterparts and facsimiles or forms of electronic transmission together shall be deemed to be an original and shall constitute one and the same agreement.

*[Signature Page Follows]*

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**Exhibit 10.1**

**IN WITNESS OF WHICH** the Parties have duly executed this Agreement.

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;**DIRTT ENVIRONMENTAL SOLUTIONS LTD.** |
| &nbsp;&nbsp;&nbsp; <br>Per: <u>/s/ Fareeha Khan</u>  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Fareeha Khan |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Chief Financial Officer |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;SIGNED, SEALED AND DELIVERED<br>In the presence of:<br>/s/ Mark Wilson /s/ Adrian Zarate | &nbsp;&nbsp;SIGNED, SEALED AND DELIVERED<br>In the presence of:<br>/s/ Mark Wilson /s/ Adrian Zarate |
| &nbsp;&nbsp;Witness – Mark Wilson | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adrian Zarate |

---

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## Exhibit 10.2

**Exhibit 10.2**

***Execution Version***

**<u>SIXTH AMENDMENT TO LOAN AGREEMENT</u>**

**DATED** as of November 4, 2025

**AMONG: DIRTT ENVIRONMENTAL SOLUTIONS LTD.**, and **DIRTT ENVIRONMENTAL SOLUTIONS, INC.**, as Borrowers

**AND: ROYAL BANK OF CANADA**, as Lender

**PREAMBLE**

**WHEREAS** the Borrowers and the Lender entered into that certain Loan Agreement dated as of February 12, 2021 (as amended pursuant to a First Amendment and Consent dated November 15, 2021, the Second Amendment to Loan Agreement dated February 9, 2023, the Third Amendment and Consent to Loan Agreement dated February 9, 2024, the Fourth Amendment to Loan Agreement dated February 12, 2025, the Fifth Amendment to Loan Agreement dated February 20, 2025, and as may be further amended, restated, supplemented, revised, replaced or otherwise modified from time to time, the "**Existing Loan Agreement**");

**AND WHEREAS** the Borrowers and the Lender have agreed to extend the Stated Expiry Date of the Loan Agreement by one year to November 30, 2026 and to amend certain other provisions of the Loan Agreement, but, in each case, only to the extent and subject to the limitations set forth in this Amendment (this "**Amendment**" and, together with the Existing Loan Agreement, the "**Loan Agreement**") and without prejudice to the Lender's other rights;

**NOW THEREFORE** for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereby agree as follows:

**ARTICLE I –** **INTERPRETATION**

1.1All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

**ARTICLE II –** **AMENDMENTS TO THE Loan AGREEMENT**

2.1The Transaction Summary following the index page of the Loan Agreement is hereby amended by deleting the reference to "November 30, 2025" and replacing it with "November 30, 2026".

2.2Schedule A of the Loan Agreement (*Definitions*) is hereby amended by deleting the defined term "Stated Expiry Date" in its entirety and replacing it with the following:

""**Stated Expiry Date**" shall mean, unless extended to a later date in the sole, unfettered discretion of Lender following a written request by Borrower (and subject to an extension fee), November 30, 2026."

2.3Section 7.1 is hereby amended by deleting the word "or" at the end of Section 7.1(l), replacing the period at the end of Section 7.1(m) with "; or", and adding the following Section 7.1(n):

"(n) as of January 31, 2026, the convertible unsecured subordinated debentures of the Canadian Borrower in a principal amount of $40,250,000 issued pursuant to a first supplemental indenture dated as of January 25, 2021 have not been (i) paid in full, or (ii) refinanced on terms and conditions satisfactory to the Lender in its sole discretion."

------

2.4As of the Effective Date, Schedules 3.7, 3.12, 3.13, 3.16 and 6.1 are hereby amended and restated in their entirety in the form attached hereto.

**ARTICLE III –** **CONDITIONS TO EFFECTIVENESS** 

3.1This Amendment shall become effective upon the Borrowers delivering to the Lender each of the following (such date being referred to herein as the "**Effective Date**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)an executed copy of this Amendment by PDF copy transmitted via e-mail or telecopier;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)copies of PPSA, UCC, and as applicable, Register of Personal and Movable Real Rights of Quebec, Bank Act, insolvency, executions, litigation, or other jurisdictional searches, as applicable, or other evidence satisfactory to Lender, listing all effective registrations, financing statements and recordations which name the Credit Parties (under present name, any previous name or any trade or doing business name) as debtor and together with copies of such other recordings, registrations and financing statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)acknowledgment copies of proper financing change statements and notices of recording under the PPSA, the applicable UCC and Civil Code of Quebec, as applicable, duly filed in all jurisdictions as may be necessary or, in the opinion of Lender, desirable to perfect Lender's Lien on the Collateral in which a security interest may be perfected by filing a financing statement or a notice of recording, as applicable, pursuant to the PPSA, the UCC or the Civil Code of Quebec, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)certified copies of all the constating documents, by-laws and resolutions of the directors (or partners, members or shareholders as required by Lender) authorizing the Loan Documents, and certificates of incumbency, for Borrowers and each other Credit Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)certificate of good standing (or other similar instruments) in respect of each of the Credit Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)opinions of counsel to each of the Credit Parties (including opinions relating to enforceability, the Lender's security in each relevant jurisdiction and such other matters as the Lender reasonably considers necessary in its discretion) with respect to this Amendment and each Loan Document in form and substance satisfactory to Lender; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)the Borrowers paying to the Lender an amendment fee equal to $15,000; which fee shall be non-refundable and fully earned and paid upon the execution of this Agreement and which fee may be charged as a Revolving Credit Advance and be added to and form part of a Loan.

**ARTICLE IV –** **representations and warranties**

4.1Each Borrower represents and warrants to the Lender that the following statements are true, correct and complete:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Authorization, Validity, and Enforceability of this Amendment.</u> Each Borrower has the corporate power and authority to execute and deliver this Amendment. Each Borrower has taken all necessary corporate action (including, without limitation, obtaining approval of its shareholders if necessary) to authorize the execution and delivery of this Amendment. This Amendment has been duly executed and delivered by the Borrowers and this Amendment constitutes the legal, valid and binding obligations of the Borrowers, enforceable against them in accordance with their respective terms without defence, compensation, setoff or counterclaim. Each Credit Party's execution and delivery of this Amendment does not and will not conflict with, or constitute a violation or breach of, or constitute a default under, or

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result in the creation or imposition of any lien upon the property of the Borrowers by reason of the terms of (a) any contract, mortgage, hypothec, lien, lease, agreement, indenture, or instrument to which any of the Borrowers is a party or which is binding on any of them, (b) any requirement of law applicable to the Borrowers, or (c) the certificate or articles of incorporation or amalgamation or bylaws of the Borrowers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Governmental Authorization.</u> No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any governmental authority or other person is necessary or required in connection with the execution, delivery or performance by, or enforcement against the Borrowers or any Subsidiaries of this Amendment except for such as have been obtained or made and filings required in order to perfect and render enforceable the Lender's security interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Incorporation of Representations and Warranties From Loan Agreement.</u> The representations and warranties contained in the Loan Agreement are and will be true, correct and complete in all material respects on and as of the Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Absence of Default.</u> No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Amendment that would constitute an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Security.</u> All security delivered to or for the benefit of the Lender pursuant to the Loan Agreement and the other Loan Documents remains in full force and effect and secures all Obligations of the Borrowers under the Loan Agreement and the other Loan Documents to which they are a party.

**ARTICLE V –** **miscellaneous**

5.1Each Borrower (i) reaffirms its Obligations under the Loan Agreement and the other Loan Documents to which it is a party, and (ii) agrees that the Loan Agreement and the other Loan Documents to which it is a party remain in full force and effect, except as amended hereby, and are hereby ratified and confirmed.

5.2The execution, delivery and performance of this Amendment shall not, except as expressly provided for herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Lender under the Loan Agreement or any other document.

5.3Each Borrower acknowledges and agrees that it has read and is fully informed and satisfied with all the terms and conditions of this Amendment and has had the opportunity to obtain independent legal advice in connection therewith.

5.4This Amendment shall be governed by, and construed in accordance with, the internal laws of the Province of Alberta and the federal laws of Canada applicable therein without regard to the principles of conflict of laws.

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5.5This Amendment and each other Loan Document may be executed in one or more counterparts (and by different parties hereto in different counterparts), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by fax or other electronic transmission of an executed counterpart of a signature page to this Amendment and each other Loan Document shall be effective as delivery of an original executed counterpart of this Amendment and such other Loan Document. The words "execution," "execute", "signed," "signature," and words of like import in or related to any document to be signed in connection with this Amendment or any other Loan Document shall be deemed to include electronic signatures, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, as in provided Parts 2 and 3 of the *Personal Information Protection and Electronic Documents Act* (Canada), the *Electronic Commerce Act*, 2000 (Ontario), the *Electronic Transaction Acts* (British Columbia), the *Electronic Transactions Act* (Alberta), or any other similar laws based on the Uniform Electronic Commerce Act of the Uniform Law Conference of Canada. The Lender may, in its discretion, require that any such documents and signatures executed electronically or delivered by fax or other electronic transmission be confirmed by a manually-signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature executed electronically or delivered by fax or other electronic transmission.

**[The next pages are the signature pages]**

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**DATED** as of the date first stated above.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Lender: | &nbsp;&nbsp;**ROYAL BANK OF CANADA,** <br>by its attorneys, | &nbsp;&nbsp;**ROYAL BANK OF CANADA,** <br>by its attorneys, |
|  | &nbsp;&nbsp;Per: | &nbsp;&nbsp;/s/ Vanja Tubin |
|  |  | &nbsp;&nbsp;Name: Vanja Tubin |
|  |  | &nbsp;&nbsp;Title: Vice President, Corporate Client Group - Asset Based Lending |
|  | &nbsp;&nbsp;Per: | &nbsp;&nbsp;/s/ Jordan Falkenberg |
|  |  | &nbsp;&nbsp;Name: Jordan Falkenberg |
|  |  | &nbsp;&nbsp;Title: Vice-President, Corporate Client Group - Finance |

---

*Signature Page to Sixth Amendment* 

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---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Borrower: | &nbsp;&nbsp;**DIRTT ENVIRONMENTAL SOLUTIONS LTD.** | &nbsp;&nbsp;**DIRTT ENVIRONMENTAL SOLUTIONS LTD.** |
|  | &nbsp;&nbsp;Per: | &nbsp;&nbsp;/s/ Fareeha Khan |
|  |  | &nbsp;&nbsp;Name: Fareeha Khan |
|  |  | &nbsp;&nbsp;Title: Chief Financial Officer |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Borrower: | &nbsp;&nbsp;**DIRTT ENVIRONMENTAL SOLUTIONS, INC.** | &nbsp;&nbsp;**DIRTT ENVIRONMENTAL SOLUTIONS, INC.** |
|  | &nbsp;&nbsp;Per: | &nbsp;&nbsp;/s/ Fareeha Khan |
|  |  | &nbsp;&nbsp;Name: Fareeha Khan |
|  |  | &nbsp;&nbsp;Title: Chief Financial Officer |

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*Signature Page to Sixth Amendment* 

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## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

**PURSUANT TO EXCHANGE ACT RULE 13A-14(a) OR RULE 15D-14(a)**

**AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Benjamin Urban, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of DIRTT Environmental Solutions Ltd. (the "registrant") for the quarter ended September 30, 2025;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Dated: November 5, 2025 | By: | /s/ Benjamin Urban |
|  |  | Benjamin Urban |
|  |  | Chief Executive Officer |
|  |  | *(Principal Executive Officer)* |

---

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

**PURSUANT TO EXCHANGE ACT RULE 13A-14(a) OR RULE 15D-14(a)**

**AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Fareeha Khan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of DIRTT Environmental Solutions Ltd. (the "registrant") for the quarter ended September 30, 2025;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: November 5, 2025 | By: | /s/ Fareeha Khan |
|  |  | Fareeha Khan |
|  |  | Chief Financial Officer  |
|  |  | *(Principal Financial Officer)* |

---

------

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of DIRTT Environmental Solutions Ltd. (the "Company") for the quarter ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Benjamin Urban, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Dated: November 5, 2025 | By: | /s/ Benjamin Urban |
|  |  | Benjamin Urban |
|  |  | Chief Executive Officer |
|  |  | *(Principal Executive Officer)* |

---

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## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of DIRTT Environmental Solutions Ltd. (the "Company") for the quarter ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Fareeha Khan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| Dated: November 5, 2025 | By: | /s/ Fareeha Khan |
|  |  | Fareeha Khan |
|  |  | Chief Financial Officer |
|  |  | *(Principal Financial Officer)* |

---

------