DIRTT Environmental Solutions (DRTTF) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Jul 29, 2026
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1Our two three largest shareholders, 22NW and 22NW, WWT, and the 726 Entities, are able to exercise voting influence over matters which may require shareholder approval due to their ownership of our common shares, and their interests may conflict with or differ from the interests of our other shareholders. In addition, the Amended and Restated SRP and the Support Agreement limit limits the concentration of ownership of our common shares by shareholders other than 22NW and WWT, 22NW, which may make it more difficult for a shareholder to acquire the Company.
As of February 13, 2026, 22NW Fund, L.P. ("22NW") and Aron English (collectively, the "22NW Group"), WWT Opportunity #1 LLC ("WWT") and Shaun Noll (collectively, the "WWT Group") and 726 BF LLC and 726 BC LLC (collectively, the "726 Entities") owned 30%, 13% and 15% of our outstanding common shares, respectively, together beneficially owning approximately 58% of our outstanding common shares. So long as such shareholders and their respective affiliates continue to directly or indirectly own a significant amount of our common shares, they will, in certain circumstances, have voting influence over matters requiring shareholder approval, including amendments to our amended and restated articles of amalgamation, and approval of significant corporate transactions (barring any requirement for such shareholder to recuse itself from any such vote pursuant to applicable securities law, corporate law or the rules and regulations of any applicable stock exchanges). This could have the effect of delaying or preventing a change of control of the Company, and would make the approval of certain transactions difficult or impossible without the support of these shareholders. In addition, the Amended and Restated Shareholder Rights Plan, effective August 2, 2024 (the "Amended and Restated SRP"), which was ratified by shareholders at a special meeting held on September 20, 2024, was adopted by the Board in order to help ensure that all shareholders of the Company are treated fairly and equally in connection with any unsolicited take-over bid or other acquisition of control of the Company. The Amended and Restated SRP may discourage, delay, or prevent a change of control or acquisition of the Company, even if such action may be considered beneficial by some shareholders, and could limit the price that investors would be willing to pay in the future for the Company's common shares.
- Share Price & Shareholder Rights - Risk 2Our common shares are quoted on the OTC's Pink Tier, OTCQX, and there may be a limited trading market in the Company's common shares in the United States. As a result of the limited trading market, investors may experience limited liquidity, and may experience limited ability to sell shares in the open market.
Our common shares are quoted on the OTCQX under the symbol "DRTTF." There may be a limited trading market in the Company's common shares in the United States. As a result of the limited trading market of our common shares, investors in our common shares may experience limited demand for their common shares, which may limit their ability to sell their shares in the open market.
- Debt & Financing - Risk 3The repurchase and cancellation of our Debentures in 2024 could adversely affect the price or liquidity of the Debentures.
On August 26, 2024, the Company announced a normal course issuer bid for its outstanding 6.00% convertible unsecured subordinated debentures due January 31, 2026 ("the January Debentures") and the December Debentures (the "Debentures NCIB") 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"). Under the Debentures NCIB and the Renewed Debentures NCIB. C$0.4 million and C$0.07 million principal amounts of the December Debentures and January Debentures, respectively, were acquired and cancelled. The January Debentures were repaid on maturity on January 31, 2026. The Debentures NCIB and the Renewed Debentures NCIB have decreased, and may further decrease, the number of outstanding December Debentures, which could decrease liquidity in the market of the Debentures and increase the volatility of the prices at which they trade. Repurchases of the December Debentures may also cause the prices of the December Debentures to differ from what they would be in the absence of such repurchase. There can be no assurance any such repurchases will ultimately enhance shareholder value. As at February 17, 2025, an aggregate principal amount of C$14.8 million ($10.8 million) of the December Debentures remain outstanding.
- Corporate Activity and Growth - Risk 4The management team Company is working on undergoing a strategic transformation plan, we process, across the Commercial, Operational and Manufacturing departments. We may not be able to achieve some or all of the anticipated benefits of this transformation plan.
In response to performance challenges we have faced in recent years, the Board of Directors and management team is working on a transformation plan to advance the business and grow revenue and manage profitability. In early 2025, we established a transformation office to accelerate the strategic transformation of our business by streamlining the Company's processes and procedures, supporting Construction Services and improving productivity across the Company (the "Transformation Office"). Implementation of this transformation plan will require robust and reliable systems and processes across the organization. There is also no assurance that successful implementation will lead to sustainable, profitable growth, and may itself be disruptive to the Company. Failure to implement our transformation plan could materially and adversely affect our near-term sales, commercial activities, and ability to develop and sustain profitable growth. In addition, the success and timing of our implementation may be dependent upon external factors outside of our control. Our transformation plan also depends in part on our ability to maintain and manage growth effectively. Growth in our headcount and operations may place significant demands on our management and operational and financial resources. Additionally, managing growth of our operations and personnel requires continuous improvement of our internal controls and reporting systems and procedures. Failure to effectively manage growth could result in difficulty providing current DIRTT Solutions and introducing future solutions, difficulty in securing clients and Construction Partners, declines in quality or client satisfaction, increases in costs or other operational difficulties. Any of these difficulties could lead to a loss of investor confidence and adversely affect our business performance, financial condition and results of operations.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 33
- Share Price & Shareholder Rights - Risk 1Because we are a corporation incorporated in Alberta and some of our directors and officers are residents of Canada, it may be difficult for investors in the United States to enforce civil liabilities against us or our directors and officers based solely upon the federal securities laws of the United States. Similarly, it may be difficult for Canadian investors to enforce civil liabilities against our directors and officers residing outside of Canada.
We are a corporation amalgamated and existing under the laws of Alberta with our principal place of business in Calgary, Alberta, Canada. Some of our officers are residents of Canada and a substantial portion of our assets and those of such persons are located outside the United States. Consequently, it may be difficult for U.S. investors to effect service of process within the United States upon us or our officers who are not residents of the United States, or to realize in the United States upon judgments of courts of the United States predicated upon civil liabilities under the Securities Act of 1933. Investors should not assume that Canadian courts: (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or blue sky laws of any state within the United States or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or any such state securities or blue sky laws. Similarly, some of our directors and officers are residents of countries other than Canada and all or a substantial portion of the assets of such persons are located outside Canada. As a result, it may be difficult for Canadian investors to initiate a lawsuit within Canada against these non-Canadian residents. In addition, it may not be possible for Canadian investors to collect from these non-Canadian residents judgments obtained in courts in Canada predicated on the civil liability provisions of securities legislation of certain of the provinces and territories of Canada. It may also be difficult for Canadian investors to succeed in a lawsuit in the United States, based solely on violations of federal, provincial or territorial securities laws.
- Share Price & Shareholder Rights - Risk 2Our three largest shareholders, 22NW, WWT, and the 726 Entities, are able to exercise voting influence over matters which may require shareholder approval due to their ownership of our common shares, and their interests may conflict with or differ from the interests of our other shareholders. In addition, the Amended and Restated SRP limits the concentration of ownership of our common shares by shareholders other than 22NW, which may make it more difficult for a shareholder to acquire the Company.
As of February 13, 2026, 22NW Fund, L.P. ("22NW") and Aron English (collectively, the "22NW Group"), WWT Opportunity #1 LLC ("WWT") and Shaun Noll (collectively, the "WWT Group") and 726 BF LLC and 726 BC LLC (collectively, the "726 Entities") owned 30%, 13% and 15% of our outstanding common shares, respectively, together beneficially owning approximately 58% of our outstanding common shares. So long as such shareholders and their respective affiliates continue to directly or indirectly own a significant amount of our common shares, they will, in certain circumstances, have voting influence over matters requiring shareholder approval, including amendments to our amended and restated articles of amalgamation, and approval of significant corporate transactions (barring any requirement for such shareholder to recuse itself from any such vote pursuant to applicable securities law, corporate law or the rules and regulations of any applicable stock exchanges). This could have the effect of delaying or preventing a change of control of the Company, and would make the approval of certain transactions difficult or impossible without the support of these shareholders. In addition, the Amended and Restated Shareholder Rights Plan, effective August 2, 2024 (the "Amended and Restated SRP"), which was ratified by shareholders at a special meeting held on September 20, 2024, was adopted by the Board in order to help ensure that all shareholders of the Company are treated fairly and equally in connection with any unsolicited take-over bid or other acquisition of control of the Company. The Amended and Restated SRP may discourage, delay, or prevent a change of control or acquisition of the Company, even if such action may be considered beneficial by some shareholders, and could limit the price that investors would be willing to pay in the future for the Company's common shares.
- Share Price & Shareholder Rights - Risk 3We are governed by the corporate laws of Alberta, Canada, which in some cases have a different effect on shareholders than the corporate laws of the United States.
We are governed by the ABCA and other relevant laws, which may affect the rights of shareholders differently than those of a company governed by the laws of a U.S. jurisdiction, and may, together with our charter documents, have the effect of delaying, deterring or discouraging another party from acquiring control of our company by means of a tender offer, a proxy contest or otherwise, or may affect the price an acquiring party would be willing to offer in such an instance. The material differences between the ABCA and Delaware General Corporation Law ("DGCL"), that may have the greatest such effect include, but are not limited to, the following: (i)for certain extraordinary corporate transactions (such as amalgamations or amendments to our articles), the ABCA generally requires the voting threshold to be a special resolution passed by not less than two-thirds of the votes cast by the shareholders who voted in respect of the resolution, whereas DGCL generally only requires a majority vote; and (ii) under the ABCA, registered holders or beneficial owners (as defined in the ABCA) of not less than 5% of our common shares in aggregate can requisition our directors to call a special meeting of shareholders, whereas such right does not exist under the DGCL. We cannot predict whether investors will find our company and our common shares less attractive because we are governed by the corporate laws of Alberta, Canada.
- Share Price & Shareholder Rights - Risk 4Our common shares are quoted on the OTCQX, and there may be a limited trading market in the Company's common shares in the United States. As a result of the limited trading market, investors may experience limited liquidity, and may experience limited ability to sell shares in the open market.
Our common shares are quoted on the OTCQX under the symbol "DRTTF." There may be a limited trading market in the Company's common shares in the United States. As a result of the limited trading market of our common shares, investors in our common shares may experience limited demand for their common shares, which may limit their ability to sell their shares in the open market.
- Share Price & Shareholder Rights - Risk 5Our share price has been and may continue to be volatile, which could cause the value of your investment to decline.
Our common shares are listed on the TSX under the symbol "DRT" and are quoted on the OTCQX under the symbol "DRTTF." The price of our common shares has in the past fluctuated significantly, and may fluctuate significantly in the future, depending upon a number of factors, many of which are beyond our control and may adversely affect the market price of our common shares. These factors include: (i) variations in quarterly results of operations; (ii) deviations in our earnings from publicly disclosed forward-looking guidance; (iii) changes in earnings estimates by analysts; (iv) our announcements or our competitors' announcements of significant contracts, acquisitions, strategic partnerships or joint ventures; (v) general conditions in the offsite construction and manufacturing industries; (vi) sales of our common shares by our significant shareholders; (vii) fluctuations in stock market price and volume; and (viii) other general economic conditions. Additionally, the Shares NCIB and the Share Repurchase from NGEN (each as defined herein) and any other common share repurchase we may complete in the future, may further decrease the number of outstanding common shares, which could decrease liquidity in the market of the common shares and increase the volatility of its trading price. In the past, following periods of volatility in the trading price of a company's securities, securities class action litigation has been brought against that company. If our share price is volatile, we may become the target of securities litigation in both the United States and Canada. Securities litigation could result in substantial costs and divert management's attention and resources from our business and could have an adverse effect on our business, financial condition and results of operations.
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