DIRTT Reiterates commitment to engaging with shareholders in an appropriate forum

Rhea-AI Summary

DIRTT Environmental Solutions Ltd. announced its commitment to engage in discussions with activist investor 22NW Fund regarding its proxy fight. The independent directors' Special Committee has been in negotiations with the activist since August 2021. A recent proposal from the activist followed DIRTT's complaint against 22NW for alleged breaches of securities laws. DIRTT intends to file a Proxy Statement for its upcoming shareholder meeting on April 26, 2022. The Company emphasizes its dedication to benefiting all shareholders while conducting negotiations in good faith.

Positive

• Commitment to engaging with shareholders and addressing activist proposals.
• Proprietary ICE® software enhances operational efficiency.

Negative

• Ongoing proxy fight could distract from core business operations.
• Recent complaint against the activist investor raises potential legal issues.

DIRTT responds to Activist’s December 9, 2021 “proposal”

CALGARY, Alberta, Dec. 10, 2021 (GLOBE NEWSWIRE) -- DIRTT Environmental Solutions Ltd. (“DIRTT”, the “Company”, “we” or “us”) (Nasdaq: DRTT, TSX: DRT), an interior construction company that uses proprietary software to design, manufacture and install fully customizable environments, announced today that the committee of its independent directors (the “Special Committee”) tasked with reviewing and considering the requisition made by an activist investor, 22NW Fund, LP, (the “Activist”) has reiterated its commitment to being prepared to engage in discussions with the Activist to settle this unnecessary proxy fight.

Since August 5, 2021, representatives of the Company have been in negotiations with Mr. Aron English (the principal of the Activist) regarding him joining the board of directors of the Company, and without prior notice, on November 17, 2021, Mr. English issued his requisition. It is noteworthy that the December 9, 2021 “proposal” was made less than 24 hours after the Company filed a complaint against the Activist with the Alberta Securities Commission alleging serious breaches of securities laws based on an extensive review of documents and interviews by the Special Committee in the course of its work. In any event, and consistent with the Special Committee’s approach throughout this process, it has advised the Activist that it remains committed to negotiating a settlement that benefits all shareholders, but will only resume such negotiations in good faith and not through press releases.

Special Note Regarding Forward-Looking Statements

This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the Company’s current expectations regarding future events. In some cases, forward-looking information can be identified by such terms as “plans”, “anticipated”, “believe”, and “will”. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. The Company’s estimates, beliefs and assumptions, may prove to be incorrect. The risks and uncertainties that may affect forward-looking information include, but are not limited to, market conditions, the effect of the COVID-19 pandemic on the Company’s operations, business and financial results, and other factors discussed under “Risks Factors” in the Company’s management’s discussion and analysis in the Company’s Annual Report on Form 10-K dated February 24, 2021, which is available on SEDAR (www.sedar.com) and on the SEC’s website (www.sec.gov). The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.

Important Additional Information Regarding Proxy Solicitation

DIRTT intends to file a proxy statement (the “Proxy Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies for its annual and special meeting of shareholders scheduled for April 26, 2022 (the “Meeting”). DIRTT, its directors and certain of its executive officers will be participants in the solicitation of proxies from shareholders in respect of the Meeting. Information regarding the names of DIRTT’s directors and executive officers and their respective interests in DIRTT by security holdings or otherwise is set forth in DIRTT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 24, 2021, and DIRTT’s proxy statement for the 2021 annual meeting of shareholders, filed with the SEC on March 26, 2021. To the extent holdings of such participants in DIRTT’s securities are not reported, or have changed since the amounts described, in the 2021 proxy statement, such changes have been reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Details concerning the nominees of DIRTT’s board of directors for election at the Meeting will be included in the Proxy Statement. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SHAREHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE COMPANY’S DEFINITIVE PROXY STATEMENT AND ANY SUPPLEMENTS THERETO WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and shareholders will be able to obtain a copy of the definitive Proxy Statement and other relevant documents filed by DIRTT free of charge from the SEC’s website, www.sec.gov. DIRTT’s shareholders will also be able to obtain, without charge, a copy of the definitive Proxy Statement and other relevant filed documents by directing a request by mail to DIRTT Environmental Solutions Ltd., 7303 30th Street S.E., Calgary, Alberta, Canada T2C 1N6 or at ir@dirtt.com or from the investor relations section of DIRTT’s website, www.dirtt.com/investors.

About DIRTT

DIRTT is a building process powered by technology. The Company uses its proprietary ICE® software to design, manufacture and install fully customized interior environments. The technology drives DIRTT’s advanced manufacturing and provides certainty on cost, schedule, and the final result. Complete interior spaces are constructed faster, cleaner, and more sustainably. DIRTT has manufacturing facilities in Phoenix, AZ, Savannah, GA, Rock Hill, SC, and Calgary, AB. The Company works with distribution partners throughout North America. DIRTT trades on Nasdaq under the symbol “DRTT” and on the Toronto Stock Exchange under the symbol “DRT”.

FAQ

What is DIRTT's response to the activist investor's proposal dated December 9, 2021?

DIRTT reiterated its commitment to engage in negotiations with the activist investor, aiming for a beneficial settlement.

What actions has DIRTT taken regarding the activist investor 22NW Fund?

DIRTT has been in negotiations since August 2021 and recently filed a complaint against 22NW for alleged securities law breaches.

When is DIRTT's annual meeting of shareholders scheduled?

DIRTT's annual meeting of shareholders is scheduled for April 26, 2022.

What is DIRTT's strategy for the upcoming proxy solicitation?

DIRTT plans to file a proxy statement with the SEC to solicit proxies for the shareholder meeting.