Form 4: DIRTT Director Acquires 28,527 Deferred Share Units

DIRTT Environmental Solutions Director Shalima K. Pannikode acquired 28,527 Deferred Share Units under a pre-arranged plan.

Summary

• Shalima K. Pannikode, a Director of DIRTT Environmental Solutions Ltd., acquired 28,527 Deferred Share Units (DSUs).
• The transaction occurred on December 31, 2025, and was made pursuant to a Rule 10b5-1(c) plan.
• Each DSU is the economic equivalent of one common share of DIRTT Environmental Solutions Ltd. and was granted under the company's Third Amended and Restated Long Term Incentive Plan.
• The price used to calculate the number of DSUs was C$0.90, based on the closing price on the Toronto Stock Exchange on December 30, 2025.
• This price converts to approximately US$0.66 per DSU, using the Bank of Canada exchange rate of C$1.3693 = US$1.00 for December 30, 2025.
• Following this transaction, Ms. Pannikode beneficially owns a total of 282,845 derivative securities (DSUs).
• DSUs will settle following the cessation of service and employment with the Issuer, with US Directors' DSUs settling no later than 40 days after termination, either in common shares or the cash equivalent.

Sentiment

Score: 6

Explanation: Neutral to slightly positive. The acquisition of DSUs by a director is a routine compensation event but also indicates alignment of interests with shareholders. No significant positive or negative operational news is present.

Positives

• Director Pannikode's acquisition of DSUs aligns her interests with shareholders, indicating confidence in the company's long-term performance.
• The transaction was made pursuant to a Rule 10b5-1(c) plan, suggesting a pre-planned, non-discretionary acquisition.

Risks

• The value of the DSUs is tied to the future performance of DIRTT Environmental Solutions Ltd. common shares, exposing the holder to market fluctuations.
• Settlement of DSUs is contingent on cessation of service, which introduces a timing element for realization of value.

Future Outlook

The Deferred Share Units (DSUs) will settle following the cessation of service and employment with the Issuer (the "Termination Date"). For directors subject to taxation in the United States, the DSUs will settle no later than forty days following the Termination Date. Each DSU will be settled in one Common Share or in the cash equivalent of such Common Shares, calculated based on the closing price of the Common Shares on the day prior to the 30th day following separation from service for US Directors.

Industry Context

This is an insider transaction filing (Form 4), which primarily reports changes in beneficial ownership for company insiders. Such filings are common for directors receiving equity-based compensation as part of their long-term incentive plans, reflecting standard corporate governance practices.

Comparison to Industry Standards

• The grant of Deferred Share Units (DSUs) as part of a long-term incentive plan is a common practice among publicly traded companies to align the interests of directors and executives with those of shareholders.
• The use of a Rule 10b5-1(c) plan for such transactions is also standard practice, providing an affirmative defense against insider trading allegations by demonstrating a pre-arranged, non-discretionary plan.

Corporate Governance

Stakeholder Impact

• Shareholders: Director's increased beneficial ownership through DSUs aligns her interests with long-term shareholder value creation.
• Employees: The filing pertains to a director's compensation and does not directly impact general employees.

Next Steps

• DSUs will settle following the cessation of service and employment with the Issuer.
• For US Directors, DSUs will settle no later than forty days following the Termination Date.

Key Dates

Recommendation

This Form 4 filing reports a routine grant of deferred share units to a director as part of their compensation package. While it indicates alignment of interests, it does not provide new operational or financial information that would warrant a change in investment recommendation. Therefore, a "hold" recommendation is appropriate, maintaining existing positions based on broader company fundamentals rather than this specific insider transaction.

Keywords

DIRTT Environmental Solutions, DRTTF, SEC Form 4, Insider Trading, Deferred Share Units, DSU, Executive Compensation, Director Stock Ownership, Long Term Incentive Plan, Rule 10b5-1