An anonymous director reports

DYE & DURHAM PROVIDES BI-WEEKLY MCTO STATUS REPORT

Dye & Durham Ltd. is providing this biweekly default status report in accordance with National Policy 12-203 (Management Cease Trade Orders), together with an update on certain related matters.

Issue-oriented review

The company announced today that, on Nov. 24, 2025, the Ontario Securities Commission confirmed that it had completed the previously disclosed issue-oriented review.

Senior credit agreement waiver update

On Sept. 26, 2025, the company announced that it obtained a waiver under its senior credit agreement to provide the company until Dec. 1, 2025, to file the annual filings (as defined below) without triggering a default under its senior credit agreement. The initial waiver did not waive the requirement under the company's senior credit agreement to file the first quarter filings (as defined below) on or before Nov. 14, 2025, which non-filing triggered a 30-day cure period that expires on Dec. 18, 2025.

The company is working with its advisers and the administrative agent under the company's senior credit agreement to obtain a waiver from lenders to provide it with additional time to file both the annual filings and Q1 filings. In the event the company is not able to file the annual filings and Q1 filings on or before Dec. 18, 2025, obtaining a waiver would ensure that its current default under the senior credit agreement does not become an event of default on Dec. 18, 2025. Until a default becomes an event of default, the company's senior lenders are not permitted to take action under the senior credit agreement.

MCTO status update and extension

On Oct. 1, 2025, the company announced that, at the request of the company, the OSC issued a temporary and voluntary management cease trade order against the company under NP 12-203 in connection with the company's delayed filing of its: (i) audited consolidated financial statements for fiscal 2025; (ii) management's discussion and analysis relating to the annual financial statements; and (iii) chief executive officer and chief financial officer certificates relating to the annual financial statements. The company has also been delayed in filing its: (i) unaudited consolidated financial statements for the first quarter of FY 2026; (ii) management's discussion and analysis relating to the Q1 financial statements; and (iii) CEO and CFO certificates relating to the Q1 financial statements. The annual filings were required to be filed by Sept. 29, 2025, and the Q1 filings were required to be filed by Nov. 14, 2025.

To provide the company with additional time to complete and file the required filings, the company previously applied to the OSC to extend the MCTO. The company announced today that the OSC has reviewed the application and granted the extension of the MCTO until Dec. 13, 2025. If the company is not able to file the required filings on or before Dec. 13, 2025, the company may be subject to a failure-to-file cease trade order.

The MCTO prohibits the company's chief executive officer and chief financial officer from trading in and acquiring, whether directly or indirectly, securities of the company until two full business days following receipt by the OSC of the required filings. The MCTO does not restrict or affect the ability of other shareholders or investors to trade in the company's securities.

Pursuant to NP 12-203, Dye & Durham must file biweekly default status reports by way of news releases during the period of the MCTO. The company previously filed a biweekly default status report by way of a news release on Nov. 12, 2025. Other than as disclosed herein, the company confirms that, since Nov. 12, 2025: (i) there has been no material change to the information contained in the press release issued by the company announcing the issuance of the MCTO; (ii) there has been no failure to fulfill its stated intentions with respect to satisfying the provisions of the alternative information guidelines set out in NP 12-203; (iii) there has not been any other specified default subsequent by the company under NP 12-203; and (iv) there is no other material information concerning the affairs of the company that has not been generally disclosed.

Until the filing of the required filings and during the period of the MCTO, the company will follow the provisions of the alternative information guidelines as required by NP 12-203.

Update on required filings

Set out below are the items that remain outstanding to allow the company's auditor to complete the audit of the annual financial statements, along with the target date that the company anticipates delivering those items to its auditor so that the company may file the annual financial statements during the week of Dec. 15, 2025.

The company is concurrently advancing the Q1 financial statements, such that it anticipates filing all of the required filings on the same date.

As the company currently expects to file the required filings during the week of Dec. 15, 2025, it is possible that the filings occur after the issuance of a failure-to-file cease trade order, if one is issued.

Updated outlook

On Nov. 12, 2025, the company disclosed that one of the first initiatives of its chief executive officer following his appointment was to launch a transformation program to drive cost savings across the business and create reinvestment capacity. As disclosed, the program, which is under way and being executed over the next two years through initiatives focused on improving operational efficiency, implementing automation, optimizing workflows and aligning resources to support sustainable growth, is expected to deliver annualized run rate savings of approximately $15-million to $20-million by the end of FY 2027, with about 60 per cent anticipated in FY 2026 and the rest in FY 2027.

In calculating the expected annualized run rate savings, the company undertook a detailed cost assessment and developed a plan to execute cost reductions in both FY 2026 and FY 2027. The plan has identified $11-million of run rate cost savings to be executed in FY 2026 going into FY 2027, and an additional $6-million to $8-million to be executed in FY 2027 going into FY 2028. The categories of run rate savings in FY 2026 are primarily based on offshoring and automation, vendor management and office cost reduction, and reduction in sales and marketing expenses. The rest of the expected savings are primarily based on steps to be taken in FY 2027, which include additional office cost optimization and automation.

The company has considered in detail individually and collectively the nature and timing of these cost cuts, and has determined they are achievable. However, given the risk of timing delays and the potential for certain of these costs reductions to require an initial upfront investment, the company has provided a range for the annualized run rate savings and estimated the timing of execution to be approximately 60 per cent in FY 2026 (based on the midpoint of the range) and the rest in FY 2027.

In calculating the expected annualized run rate savings, the company assumed that it could implement the plan, that the savings realized would be in line with expected savings, that the cost of replacement services (such as automation) would not materially increase from the date hereof until the date such replacement services are engaged, and that the needs of the company would not change such that it would become impractical to implement some or all of the initiatives noted above. If any of these assumptions are incorrect or prove to be different, the company may not be able to implement some or all of the parts of the plan that have yet to be implemented and/or may not realize the savings that are expected to be derived from the plan.

About Dye & Durham Ltd.

Dye & Durham provides premier practice management solutions empowering legal professionals every day, delivers vital data insights to support critical corporate transactions, and enables the essential payments infrastructure trusted by government and financial institutions. The company has operations in Canada, the United Kingdom, Ireland, Australia and South Africa.

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