DIRTT Secures Shareholder Truce to Focus on Turnaround

SEATTLE, WA – February 17, 2026 – In a move designed to calm turbulent boardroom waters, activist investor 22NW Fund, LP announced today it has entered into a new support and standstill agreement with DIRTT Environmental Solutions Ltd. and a new major shareholder group, the 726 Entities. The agreement establishes a formal truce, providing the construction technology company with a period of much-needed governance stability as it navigates significant operational challenges and market opportunities.

The deal effectively reshuffles the deck of influential investors at DIRTT, formalizing the roles of its largest shareholders ahead of the company's 2026 annual general meeting. It aims to prevent the kind of proxy battles that can distract management and derail strategic execution, a critical consideration for a company facing headwinds from international tariffs and intense competition.

A Framework for Peace

At the heart of the new pact is a clear set of rules for engagement. The agreement grants both 22NW, a long-time activist shareholder, and the newly prominent 726 Entities the right to each designate one nominee for DIRTT's board of directors. This right is contingent upon each firm maintaining a significant ownership stake—specifically, the lesser of 10% of outstanding shares or just over 19.1 million shares.

In exchange for this board representation, both investment firms have committed to crucial voting and standstill obligations. They have agreed to vote their shares in favor of management's slate of director nominees at the 2026 meeting, a key concession that ensures board continuity. Furthermore, the standstill provisions prohibit both 22NW and the 726 Entities from acquiring any additional DIRTT shares or launching a takeover bid for the duration of the agreement, which terminates 90 days after the 2026 meeting.

This new arrangement amends and partially supersedes an original support agreement from August 2, 2024, which involved 22NW and another investor, WWT Opportunity #1 LLC. The latest deal coincides with the 726 Entities acquiring a block of shares from WWT, marking a changing of the guard among the company's most powerful stakeholders. Public filings indicate that Jeremy Gold, whose appointment as a director became effective February 13, is one of the new board members connected to the agreement.

For 22NW, which, along with its joint actors, controls a formidable 30.06% of DIRTT's outstanding shares, the agreement solidifies its influence while committing it to a collaborative path. It transforms the firm from a potential agitator into a constrained, albeit powerful, partner.

Stability Amidst Economic Headwinds

The timing of this boardroom détente is critical. While DIRTT has shown signs of a successful operational turnaround, its recent financial performance has been battered by external economic forces. The company posted a significant improvement in profitability in 2024, achieving an operating income of $4.2 million compared to a $16.6 million loss in 2023, largely by optimizing costs and consolidating its manufacturing footprint.

However, 2025 brought new challenges. The imposition of a 50% tariff on Canadian aluminum exports to the U.S. dealt a significant blow to the company's margins. In the third quarter of 2025 alone, DIRTT incurred $1.9 million in tariff-related costs, equivalent to over 5% of its revenue for the period. This pressure contributed to a net loss of $3.48 million in the quarter, overshadowing the progress made on cost controls.

With management actively implementing tariff mitigation strategies and guiding for revenue between $194 million and $209 million for the full year 2025, the last thing the company needs is an internal power struggle. The shareholder agreement provides a protected window for leadership to focus squarely on navigating these macroeconomic pressures and executing its strategic plan, which includes a more than 50% increase in capital expenditures to enhance plant efficiency and further develop its proprietary ICE software.

A Clearer Path in a Growing Market

By creating a more stable governance environment, the agreement may better position DIRTT to capitalize on powerful long-term trends in its industry. The company operates at the intersection of two booming sectors: modular construction and sustainable building. The global modular construction market is projected to grow at over 8% annually, reaching nearly $208 billion by 2033, driven by demand for efficiency and cost control. Simultaneously, the sustainable construction market is expanding even faster, with a projected compound annual growth rate of 12.4%.

DIRTT's core value proposition—creating adaptable, prefabricated interior environments that reduce construction waste—aligns perfectly with these trends. The company’s ability to deliver projects with 99% on-time performance and its commitment to sustainability are key differentiators. The newfound stability afforded by the shareholder pact could provide the clear operational runway needed to accelerate innovation and solidify its competitive position.

With the board composition settled for the near future, the focus now shifts to execution. The agreement provides a temporary but invaluable peace, giving DIRTT's leadership the opportunity to prove that a stable boardroom can translate into tangible results in the factory and on the balance sheet. Investors, both aligned and on the sidelines, will be watching closely to see if this truce marks the beginning of a sustained operational and financial recovery.