DIRTT ENVIRONMENTAL SOLUTIONS LTD

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Risks Relating to Market Conditions

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New and existing trade policies, tariffs or import or export regulations imposed by the U.S., Canada or other foreign governments may adversely affect demand for our products and our ability to source and sell our products profitably, or at all.

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The U.S. has instituted certain changes, and has proposed additional changes, in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., and other government regulations affecting trade between the U.S. and other countries (such as Canada, Mexico, China, and the European Union) where we conduct our business. For example, in February 2025, the U.S. government announced a 25% tariff on product imports from certain countries, including Mexico and Canada, and 10% tariffs on product imports from certain other countries, including China, as well as further tariffs on steel and aluminum. The new tariffs and other changes in U.S. trade policy have triggered retaliatory actions by affected countries, and foreign governments have instituted, or are considering, imposing tariffs or other trade sanctions on U.S. goods. Specifically, the Canadian federal government imposed similar tariffs on U.S. goods imported into Canada in response to the U.S.’s imposition of tariffs. While a certain number of these tariffs have been suspended or temporarily paused, there remains great uncertainty regarding the imposition of tariffs, global trade disruption, significant introductions of trade barriers and bilateral trade frictions, and resulting effects on the general economy.

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DIRTT imports raw materials from, and has manufacturing facilities in, both Canada and the U.S. We also import raw materials from other countries including China. Accordingly, while the extent and duration of any tariffs imposed by the U.S. or Canada, and the resulting impact on our business, are difficult to predict at this time, such tariffs may affect our ability to import raw materials and sell our products profitably. The imposition of trade barriers, including tariffs, quotas, embargoes, safeguards, and customs restrictions between Canada and the U.S., may increase the cost or reduce the supply of materials and products available to us, increase shipping times, affect our customers’ construction needs, timing, or budgets, affect the demand for our products or our product mix or require us to modify our supply chain organization, manufacturing facilities, or other current business practices, any of which could harm our business, financial condition and results of operations.