Form 4: DIRTT Officer Zarate Boosts Stake with DSU Grant

Adrian Zarate, DIRTT's Chief Transformation Officer and Director, acquired 31,379 Deferred Share Units as part of the company's long-term incentive plan.

Summary

• Adrian Zarate, a Director and Chief Transformation Officer of DIRTT Environmental Solutions Ltd., acquired 31,379 Deferred Share Units (DSUs).
• The DSUs were granted on December 31, 2025, under the company's Third Amended and Restated Long Term Incentive Plan.
• Each DSU is the economic equivalent of one common share of DIRTT Environmental Solutions Ltd.
• The price used for calculation was C$0.90 per common share, based on the Toronto Stock Exchange closing price on December 30, 2025.
• This translates to approximately US$0.66 per DSU, using a Bank of Canada exchange rate of C$1.3693 = US$1.00.
• Following this transaction, Zarate beneficially owns a total of 57,254 DSUs.
• DSUs settle upon cessation of service/employment, either in common shares or the cash equivalent.

Sentiment

Score: 7

Explanation: The grant of DSUs to a key executive and director is generally a positive sign of management's continued alignment with the company's long-term performance and shareholder interests. It's a routine compensation event rather than a major strategic announcement.

Positives

• An executive and director, Adrian Zarate, increased his beneficial ownership in the company through a grant of 31,379 Deferred Share Units (DSUs).
• The grant aligns management's interests with shareholders through a long-term incentive plan.

Future Outlook

The Deferred Share Units (DSUs) granted to Adrian Zarate are designed to settle upon cessation of service, aligning future compensation with the company's long-term performance and executive retention.

Management Comments

• "Each deferred share unit ('DSU') was granted pursuant to the DIRTT Environmental Solutions Ltd. Third Amended and Restated Long Term Incentive Plan and is the economic equivalent of one common share."
• "All DSUs settle following the cessation of service and employment with the Issuer (the 'Termination Date')."

Industry Context

This is a standard insider transaction report, common in publicly traded companies, reflecting executive compensation and alignment with shareholder interests through equity-based incentives. It does not provide direct insights into broader industry trends.

Comparison to Industry Standards

• The use of Deferred Share Units (DSUs) as a long-term incentive is a common practice in corporate compensation structures across various industries, including construction and environmental solutions, to retain key executives and align their interests with long-term shareholder value.
• The settlement upon cessation of service is a typical feature of such plans, ensuring executives remain invested in the company's performance throughout their tenure.

Corporate Governance

Stakeholder Impact

• Shareholders: Increased alignment of executive interests with long-term shareholder value through equity-based compensation.
• Employees: Standard executive compensation practice, potentially signaling stability in leadership.

Next Steps

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

Key Dates

Recommendation

This Form 4 filing reports a standard grant of Deferred Share Units (DSUs) to a key executive and director as part of a long-term incentive plan. While it indicates management's continued alignment with the company's performance, it does not present new material information regarding the company's financial health, strategic direction, or operational performance that would warrant a change in investment recommendation. Therefore, a 'hold' recommendation is appropriate as it reflects a routine corporate governance event without significant immediate market impact.

Keywords

DIRTT Environmental Solutions, DRTTF, Adrian Zarate, Deferred Share Units, DSU, Insider Transaction, Executive Compensation, Long Term Incentive Plan, Corporate Governance