An anonymous director reports

DIRTT ANNOUNCES C$30,000,000 RIGHTS OFFERING AND STANDBY COMMITMENT

DIRTT Environmental Solutions Ltd.'s board of directors has approved a rights offering to its common shareholders for aggregate gross proceeds of $30-million.

Under the rights offering, each holder of the company's common shares of record at the close of business on Dec. 12, 2023, will receive one right for each common share held. Each right will entitle the holder to subscribe for 0.81790023 common share at a subscription price of 35 cents per whole common share, exercisable for whole common shares only, meaning 1.22264301 rights will be needed to purchase one common share. The subscription price represents a discount of 25 per cent to the five-day volume-weighted average trading price of the common shares on the Toronto Stock Exchange (the TSX) prior to the date hereof. The record date is subject to the company receiving applicable regulatory approvals, including that of the U.S. Securities and Exchange Commission (the SEC). The rights are expected to expire at 5 p.m. (Eastern Time) on Jan. 5, 2024.

In accordance with applicable law, the rights offering will include an additional subscription privilege under which eligible holders of rights who fully exercise the rights issued to them under their basic subscription privilege will be entitled to subscribe for additional common shares on a pro rata basis, that are not otherwise subscribed for under the basic subscription privilege, subject to certain limitations that will be set out in the rights offering notice and circular prepared in connection with the rights offering and in the prospectus contained in the company's registration statement on Form S-1 (file No. 333-275172). The company expects to use the proceeds of the rights offering for general corporate purposes, which may include investments in its business, financing potential future cash needs or operating losses, financing working capital or capital expenditure needs, or reductions to its outstanding indebtedness.

The rights offering will be made to all eligible holders of common shares as of the record date who are resident in Canada and in certain states in the United States. Accordingly, and subject to the terms set out in the rights offering documents and in the registration statement, rights will not be delivered to, nor will they be exercisable by, persons resident outside of Canada and the U.S. or in certain U.S. states to be identified in the registration statement. Full details of the rights offering will be set out in the rights offering documents, which are expected to be made available on the company's profile on SEDAR+ as soon as practicable and in the final prospectus contained in the registration statement, which is expected to be made available on EDGAR prior to the record date.

In connection with the rights offering, the company has also entered into a standby purchase agreement with 22NW Fund LP and 726 BC LLC and 726 BF LLC (collectively 726). Subject to the terms and conditions of the standby agreement, each standby purchaser has agreed to exercise its basic subscription privilege in full and to collectively purchase from the company, at the subscription price, all common shares not subscribed for by holders of rights under the basic subscription privilege or additional subscription privilege, up to a maximum of $15-million each, so that the maximum number of common shares that may be issued in connection with the rights offering will be issued and the company will receive aggregate gross proceeds of $30-million. No standby fee will be paid to the standby purchasers in connection with the rights offering; however, DIRTT will reimburse the standby purchasers for their reasonable expenses in connection with the standby agreement up to a maximum of $30,000. The foregoing description of the standby agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the standby agreement, which will be filed on the company's profile on SEDAR+ and on EDGAR as soon as practicable.

The rights are expected to be listed for trading on the TSX under the symbol DRT.RT. Subject to the company receiving applicable regulatory approvals, the rights are expected to begin trading on the TSX one trading day prior to the record date, being Dec. 11, 2023, and cease trading at 12 p.m. (Toronto time) on the expiry date of the rights offering, being Jan. 5, 2024.

Subject to the standby agreement, the company reserves the right to modify any terms of the contemplated rights offering, or to postpone or cancel the rights offering, at any time prior to the listing of the rights on the TSX.

The registration statement relating to the proposed rights offering has been filed with the SEC but has not yet become effective. The securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

About DIRTT Environmental Solutions Ltd.

DIRTT is a leader in industrialized construction. DIRTT's system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, health care, education and public sector markets, DIRTT's system provides total design freedom, and greater certainty in cost, schedule and outcomes. DIRTT's interior construction solutions are designed to be highly flexible and adaptable, enabling organizations to easily reconfigure their spaces as their needs evolve. Headquartered in Calgary, Alta., Canada, DIRTT trades on the Toronto Stock Exchange under the symbol DRT.

We seek Safe Harbor.