DIRTT ENVIRONMENTAL SOLUTIONS LTD

Previous wording

Key Second Quarter Highlights and Other Recent Developments

Current wording

Key Third Quarter Highlights and Other Recent Developments

Previous wording

Gross profit and gross profit margin for the quarter ended June 30, 2026 were $14.0 million or 34.7% of revenue compared to $10.8 million or 27.8% of revenue for the quarter ended June 30, 2025. Adjusted Gross Profit (see “– Non-GAAP Financial Measures”) for the three months ended June 30, 2026 was $14.9 million, an increase from $11.8 million Adjusted Gross Profit for the second quarter of 2025. Adjusted Gross Profit Margin (see “– Non-GAAP Financial Measures”) was 37.0% in the second quarter of 2026, an increase from 30.4% in the comparative period of 2025. Gross profit and Adjusted Gross Profit for the quarter ended June 30, 2026 improved from prior periods primarily due to lower tariff and tariff mitigation costs, which was partially offset by lower margins on installation projects. A 1% aluminum price surcharge was put in place on orders placed after March 18, 2026 to help mitigate the impact of rising aluminum prices. We incurred $0.3 million of tariff and tariff mitigation costs in the second quarter of 2026 compared to $2.0 million tariff and tariff mitigation costs in the second quarter of 2025.

Current wording

Gross profit and gross profit margin for the quarter ended September 30, 2026 were $15.7 million or 35.1% of revenue compared to $11.5 million or 30.4% of revenue for the quarter ended September 30, 2025. Adjusted Gross Profit (see “– Non-GAAP Financial Measures”) for the three months ended September 30, 2026 was $16.6 million, an increase from $12.5 million Adjusted Gross Profit for the third quarter of 2025. Adjusted Gross Profit Margin (see “– Non-GAAP Financial Measures”) was 37.1% in the third quarter of 2026, an increase from 33.1% in the comparative period of 2025. Gross profit and Adjusted Gross Profit for the quarter ended September 30, 2026 improved from prior year periods primarily due to lower tariff and tariff mitigation costs and higher volumes offsetting material costs. A 1% aluminum price surcharge was put in place on orders placed after March 18, 2026 to help mitigate the impact of rising aluminum prices. We incurred $0.3 million of tariff and tariff mitigation costs in the third quarter of 2026 compared to $1.9 million tariff and tariff mitigation costs in the third quarter of 2025.

Previous wording

During the first six months of 2025, various tariffs were levied by the U.S. and Canadian governments. The Company was most significantly impacted by the 50% tariff levied on Canadian aluminum exports to the U.S. which increased from 25% in June 2025. Following tariff revisions announced by the U.S. Government on April 6, 2026 and June 8, 2026, the Company believes that the import of DIRTT product into the U.S. is no longer subject to certain tariffs under Section 232 of the Trade Expansion Act of 1962 (“Section 232 tariffs”) on steel and aluminum. We incurred $0.3 million (0.7% of total revenue) in tariffs and costs related to tariff mitigation actions for the three months ended June 30, 2026 compared to $2.0 million tariff and tariff mitigation costs incurred in the three months ended June 30, 2025.

Current wording

During the first nine months of 2025, various tariffs were levied by the U.S. and Canadian governments. The Company was most significantly impacted by the 50% tariff levied on Canadian aluminum exports to the U.S. which increased from 25% in June 2025. Following tariff revisions announced by the U.S. Government on April 6, 2026 and June 8, 2026, the Company believes that the import of DIRTT product into the U.S. is no longer subject to certain tariffs under Section 232 of the Trade Expansion Act of 1962 (“Section 232 tariffs”) on steel and aluminum. We incurred $0.3 million (0.7% of total revenue) in tariffs and costs related to tariff mitigation actions for the three months ended September 30, 2026 compared to $1.9 million tariff and tariff mitigation costs incurred in the three months ended September 30, 2025.

Previous wording

Reorganization expenses related to the deployment of the Transformation Office (as defined herein) for the three months ended June 30, 2026 included $1.1 million primarily related to termination benefits.

Current wording

Reorganization expenses for the three months ended September 30, 2026 included $0.3 million primarily related to termination benefits.

Previous wording

Net income after tax and net income margin for the second quarter of 2026 was $1.1 million and 2.6% of revenue, respectively, compared to $6.6 million net loss after tax and net loss margin of 17.0% for the same period of 2025. The increase in net income is primarily the result of a $3.2 million increase in gross profit, a $2.0 million increase in foreign exchange gain, a $1.2 million decrease in general and administrative expenses, $1.1 million decrease in sales and marketing expense, a $0.6 million decrease in operations support expenses, a $0.6 million decrease in technology and development expenses, offset by a $0.9 million increase in reorganization expenses.

Current wording

Net income after tax and net income margin for the third quarter of 2026 was $17.1 million and 38.3% of revenue, respectively, compared to $3.5 million net loss after tax and net loss margin of 9.2% for the same period of 2025. The increase in net income is primarily the result of a $4.2 million increase in gross profit, $0.7 million decrease in sales and marketing expense, and a $0.6 million decrease in operations support expenses and a $2.3 million decrease in reorganization expenses, offset by a $0.7 million increase in foreign exchange loss.

Previous wording

Adjusted EBITDA (see “– Non-GAAP Financial Measures”) for the second quarter of 2026 was $4.7 million, or 11.8% of revenue, an increase of $6.8 million from $(2.0) million, or (5.2%) of revenue, for the second quarter of 2025. Higher Adjusted EBITDA was mainly driven by a $3.1 million increase in Adjusted Gross Profit, offset by the decrease in other operating expenses discussed above.

Current wording

Adjusted EBITDA (see “– Non-GAAP Financial Measures”) for the third quarter of 2026 was $6.5 million, or 14.6% of revenue, an increase of $5.4 million from $1.2 million, or 3.1% of revenue, for the third quarter of 2025. Higher Adjusted EBITDA was mainly driven by a $4.1 million increase in Adjusted Gross Profit and the decrease in other operating expenses discussed above.

Previous wording

Cash on hand decreased by $0.2 million in the second quarter of 2026 to $14.8 million, compared to a $5.3 million decrease in cash in the second quarter of 2025. The decrease in cash in the second quarter of 2026 was driven by $0.9 million of net cash flows provided by operating activities, offset by $0.5 million in investment activities, and $0.3 million in repayment of long term debt.

Current wording

Cash on hand increased by $4.4 million in the third quarter of 2026 to $19.3 million, compared to a $3.0 million increase in cash in the third quarter of 2025. The increase in cash in the third quarter of 2026 was driven by $3.1 million of net cash flows provided by operating activities and the $2.1 million provided by financing activities, offset by $0.7 million in investment activities. During the third quarter of 2026, the Company received the third disbursement of net proceeds of $3.7 million from Business Development Bank of Canada (“BDC”) to further strengthen our balance sheet.

Previous wording

On February 2, 2026, the Company’s 10-week trial against Falkbuilt Ltd. (“Falkbuilt”), Messrs. Smed and Loberg and several other former DIRTT employees alleging breaches of restrictive covenants, fiduciary duties, employment duties and confidentiality (the “Falkbuilt Litigation”) commenced. DIRTT is pursuing damages and losses it suffered in Canada, the U.S., and abroad in the Court of King’s Bench of Alberta. An additional three weeks of trial began July 20, 2026.

Current wording

On August 7, 2026, evidentiary hearings concluded for DIRTT’s action against Falkbuilt, Messrs. Smed and Loberg and several other former DIRTT employees alleging breaches of restrictive covenants, fiduciary duties, employment duties and confidentiality. Final argument is scheduled for November 18, 2026 to November 20, 2026.

Previous wording

As of July 1, 2026, our twelve-month forward pipeline remained consistent year-over-year and decreased by 7% from January 1, 2026, illustrated in the table below.

Current wording

As of October 1, 2026, our twelve-month forward pipeline decreased year-over-year and from January 1, 2026, 13% illustrated in the table below.

Previous wording

Conflict in the Middle East, including Iran, has resulted in rising oil and aluminum prices which are compressing our gross margin. In response, we implemented an 8% freight and 1% aluminum price surcharge earlier in 2026.

Current wording

Conflict in the Middle East, including Iran, has resulted in rising oil and aluminum prices which have been compressing our gross margin. In response, we implemented an 8% freight price increase and a 1% aluminum price surcharge earlier in 2026. Subsequent to the quarter, freight prices have been increased by a further 2%.

Previous wording

As of the date of this report, tariff revisions were announced effective April 6, 2026 and subsequently updated effective June 8, 2026, specific to steel and aluminum tariffs. Based on our review of the proclamations, we believe that the import of DIRTT products into the U.S. is no longer subject to Section 232 tariffs on steel and aluminum.

Current wording

As of the date of this report, tariff revisions were announced effective April 6, 2026 and subsequently updated effective June 8, 2026, specific to steel and aluminum tariffs. Based on our review of the proclamations, we believe that the import of DIRTT products into the U.S. is no longer subject to Section 232 tariffs on steel and aluminum. In June 2026, certain tariffs under Section 338 of the Tariff Act of 1930 (“Section 338 tariffs”) were imposed by the U.S. on certain Canadian goods. We believe these tariffs have an immaterial impact on the Company. In response to the Section 338 tariffs, Canada imposed retaliatory tariffs ranging from 15% to 50% on similar American goods effective September 8, 2026. We believe these retaliatory tariffs have an immaterial impact on the Company.

Previous wording

Further, the Canada-United States-Mexico Agreement (“ CUSMA”), the free trade agreement among Canada, the U.S., and Mexico, is undergoing a joint review in 2026. If the U.S. were to withdraw from or materially modify the CUSMA or impose significant tariffs or taxes on goods imported into the U.S., the cost of our products could significantly increase or no longer be priced competitively for U.S. customers, and our business, financial condition, and results of operations could be materially and adversely affected. We continue to evaluate these developments.

Current wording

Further, on July 1, 2026, the Free Trade Commission held its mandatory six-year joint review of the Canada-United States-Mexico Agreement (“ CUSMA”), the free trade agreement among Canada, the U.S., and Mexico. Both Canada and Mexico expressed support for a 16-year extension of CUSMA but the U.S. declined to renew CUSMA in its current form, triggering annual joint reviews. CUSMA remains fully in force through July 1, 2036. If the U.S. were to withdraw from or materially modify the CUSMA or impose significant tariffs or taxes on goods imported into the U.S., the cost of our products could significantly increase or no longer be priced competitively for U.S. customers, and our business, financial condition, and results of operations could be materially and adversely affected. We continue to evaluate these developments.

Previous wording

We continue to monitor and mitigate the impact of tariffs and raw material costs through pricing actions, surcharges, and other operational strategies. Although aluminum is our most significant raw material, we are seeing double digit price increases in some of our other raw materials due to rising oil prices. Based on the above developments, we continue to maintain our 3.5% tariff surcharge and the additional 1% aluminum price surcharge announced earlier in the year. Through our business transformation, we are aiming to absorb other raw material price increases by finding business efficiencies through DIRTT’s new operating model.

Current wording

We are monitoring and mitigating the impact of tariffs and raw material costs through pricing actions, surcharges, and other operational strategies. Although aluminum is our most significant raw material, we are seeing double digit price increases in some of our other raw materials due to rising oil prices. We are maintaining our 3.5% tariff surcharge and the additional 1% aluminum price surcharge announced earlier in the year. Through our business transformation, we are aiming to absorb other raw material price increases by finding business efficiencies through DIRTT’s new operating model.

Previous wording

On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act. As a result of this ruling, we may be eligible for a refund of certain tariffs previously paid on imported goods. As of June 30, 2026, the U.S. Customs and Borders Protection has confirmed that we are eligible to a refund of $0.3 million under Phase 1 of the program including $0.02 million of interest. These amounts have been recorded in our financial statements. We may be eligible for additional refunds in the future under Phase 2 and Phase 3. However, no adjustments have been recorded in the accompanying interim condensed consolidated financial statements for these two phases as the recoverability and timing of any such refund remains uncertain and we cannot reasonably predict or estimate the financial impact.

Current wording

On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act. As a result of this ruling, we may be eligible for a refund of certain tariffs previously paid on imported goods. As of September 30, 2026, the U.S. Customs and Borders Protection has confirmed that we are eligible to a refund of $0.8 million under Phase 1 and Phase 2 of the program including $0.04 million of interest. These amounts have been recorded in our financial statements. We may be eligible for additional refunds in the future under Phase 3. However, no adjustments have been recorded in the accompanying interim condensed consolidated financial statements for this phase as the recoverability and timing of any such refund remains uncertain and we cannot reasonably predict or estimate the financial impact.

Previous wording

As we progress through the back-half of 2026, DIRTT continues to build on the operational and commercial improvements achieved over the past eighteen months. While customer decision-making timelines remain measured in certain markets, we are seeing increased consistency in project qualification, stronger alignment between commercial activity and forecasted revenue opportunities, and improved visibility into the timing of potential project awards. We believe these trends reflect the progress achieved through our transformation initiatives and provide a stronger foundation for disciplined execution.

Current wording

As we progress through the latter part of 2026, DIRTT continues to build on the operational and commercial improvements achieved over the past eighteen months. Third-quarter revenue was $44.7 million, an increase of 19% over the prior-year period, while year-to-date revenue increased 8% to $127.5 million. Although customer decision-making timelines remain measured in certain markets, we are seeing increased consistency in project qualification, stronger alignment between commercial activity and forecasted revenue opportunities, and improved visibility into the timing of potential project awards.

Previous wording

We continue to execute our transformation initiatives, including process standardization, cost optimization, partner enablement, and enhancements to our commercial organization. Targeted investments in leadership, organizational capability, and go-to-market effectiveness are strengthening commercial execution and supporting more efficient conversion of opportunities into revenue. Collectively, these efforts are enhancing organizational effectiveness and positioning the Company to drive sustainable, profitable growth.

Current wording

On a year-to-date basis, adjusted gross profit increased 14% to $45.5 million, while Adjusted EBITDA increased to $12.7 million from $1.3 million in the comparable period of 2025. Targeted investments in leadership, organizational capability, and go-to-market effectiveness are intended to strengthen commercial execution and support more efficient conversion of opportunities into revenue. Collectively, these efforts are enhancing organizational effectiveness and positioning the Company to drive sustainable revenue growth and profitability.

Previous wording

With a strong liquidity position, improving commercial discipline, and a streamlined operating model, DIRTT remains focused on disciplined execution and long-term value creation for shareholders, partners, and employees.

Current wording

With $19.3 million of cash at September 30, 2026, improving commercial discipline, and a streamlined operating model, DIRTT remains focused on disciplined execution and building a larger, stronger, and more profitable business for shareholders, partners, and employees.

Previous wording

As a result, we also provide financial information in this Quarterly Report that is not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. Management uses these non-GAAP financial measures in its review and evaluation of the financial performance of the Company. We believe that these non-GAAP financial measures also provide additional insight to investors and securities analysts as supplemental information to our GAAP results and as a basis to compare our financial performance period-over-period and to compare our financial performance with that of other companies. We believe that these non-GAAP financial measures facilitate comparisons of our core operating results from period to period and to other companies by removing the effects of our capital structure (net interest income on cash deposits, interest expense on outstanding debt and debt facilities, or foreign exchange movements), asset base (depreciation and amortization), tax consequences, reorganization expense, unusual or infrequent charges or gains (such as gain on extinguishment of debt), and stock-based compensation. We remove the impact of foreign exchange gain (loss) from Adjusted EBITDA. Foreign exchange gains and losses can vary significantly period-to-period due to the impact of changes in the U.S. and Canadian dollar exchange rates on foreign currency denominated monetary items on the balance sheet and are not reflective of the underlying operations of the Company. In addition, management bases certain forward-looking estimates and budgets on non-GAAP financial measures, primarily Adjusted EBITDA. We have not reconciled forward-looking non-GAAP measures to its corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to non-operating income and expenditures, which are difficult to predict and subject to change.

Current wording

As a result, we also provide financial information in this Quarterly Report that is not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. Management uses these non-GAAP financial measures in its review and evaluation of the financial performance of the Company. We believe that these non-GAAP financial measures also provide additional insight to investors and securities analysts as supplemental information to our GAAP results and as a basis to compare our financial performance period-over-period and to compare our financial performance with that of other companies. We believe that these non-GAAP financial measures facilitate comparisons of our core operating results from period to period and to other companies by removing the effects of our capital structure (net interest income on cash deposits, interest expense on outstanding debt and debt facilities, or foreign exchange movements), asset base (depreciation and amortization), tax consequences, reorganization expense, unusual or infrequent charges or gains (such as gain on extinguishment of debt), and stock-based compensation. We remove the impact of foreign exchange (loss) gain from Adjusted EBITDA. Foreign exchange gains and losses can vary significantly period-to-period due to the impact of changes in the U.S. and Canadian dollar exchange rates on foreign currency denominated monetary items on the balance sheet and are not reflective of the underlying operations of the Company. In addition, management bases certain forward-looking estimates and budgets on non-GAAP financial measures, primarily Adjusted EBITDA. We have not reconciled forward-looking non-GAAP measures to its corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to non-operating income and expenditures, which are difficult to predict and subject to change.

Previous wording

Depreciation and amortization, stock-based compensation expense, reorganization expense, foreign exchange gains and losses, gain on extinguishment of debt, legal provisions, net interest income on cash deposits, interest expense on outstanding debt and debt facilities, and tax expense are excluded from our non-GAAP financial measures because management considers them to be outside of the Company’s core operating results, even though some of those receipts and expenses may recur, and because management believes that each of these items can distort the trends associated with the Company’s ongoing performance. We believe that excluding these receipts and expenses provides investors and management with greater visibility to the underlying performance of the business operations, enhances consistency and comparativeness with results in prior periods that do not, or future periods that may not, include such items, and facilitates comparison with the results of other companies in our industry.

Current wording

Depreciation and amortization, stock-based compensation expense, reorganization expense, foreign exchange gains and losses, gain on extinguishment of debt, legal provisions, net interest income on cash deposits, interest expense on outstanding debt and debt facilities, and tax expense (recovery) are excluded from our non-GAAP financial measures because management considers them to be outside of the Company’s core operating results, even though some of those receipts and expenses may recur, and because management believes that each of these items can distort the trends associated with the Company’s ongoing performance. We believe that excluding these receipts and expenses provides investors and management with greater visibility to the underlying performance of the business operations, enhances consistency and comparativeness with results in prior periods that do not, or future periods that may not, include such items, and facilitates comparison with the results of other companies in our industry.

Previous wording

Revenue for the three months ended June 30, 2026 was $40.3 million, an increase of $1.4 million compared to $38.9 million in the comparative period of 2025. The second quarter was relatively flat compared to the second quarter of 2025. Revenue for the six months ended June 30, 2026 was $82.7 million, an increase of $2.5 million from $80.2 million in the comparative period of 2025 due to pricing increases issued in response to tariffs. See “Price Increases and Impact of Tariffs.”

Current wording

Revenue for the three months ended September 30, 2026 was $44.7 million, an increase of $7.0 million compared to $37.7 million in the comparative period of 2025. Revenue for the nine months ended September 30, 2026 was $127.5 million, an increase of $9.5 million from $117.9 million in the comparative period of 2025 due to higher volume as well as pricing increases implemented in response to tariffs. See “Price Increases and Impact of Tariffs.”

Previous wording

Installation and other services revenue was $1.4 million for the quarter ended June 30, 2026 compared to $1.2 million in the quarter ended June 30, 2025 and $3.0 million for the six months ended June 30, 2026 compared to $2.1 million for the same period of 2025. Historically, this revenue primarily reflects services performed by our ICE teams for third parties. Except in limited circumstances, historically our Construction Partners, rather than the Company, perform installation services. For the three and six months ended June 30, 2026, our Construction Services channel was involved in a higher number of installation projects resulting in a 20% and a 42% growth in that revenue stream, respectively.

Current wording

Installation and other services revenue was $3.2 million for the quarter ended September 30, 2026 compared to $1.0 million in the quarter ended September 30, 2025 and $6.2 million for the nine months ended September 30, 2026 compared to $3.2 million for the same period of 2025. Historically, this revenue primarily reflects services performed by our Design Editor teams for third parties. Except in limited circumstances, historically our Construction Partners, rather than the Company, perform installation services. For the three and nine months ended September 30, 2026, our Construction Services channel was involved in a higher number of installation projects resulting in a 207% and a 96% growth in that revenue stream, respectively. The increase relates to two large healthcare projects and one large technology project that were in progress during the nine months ended September 30, 2026.

Previous wording

Our success is partly dependent on our ability to profitably develop our Construction Partner network to expand our market penetration and ensure best practices are shared across local markets. At June 30, 2026, we had 59 Construction Partners (June 30, 2025: 70; December 31, 2025: 66) servicing multiple locations. We continue to both develop our Construction Services team and partner with our Construction Partner network to drive increased revenue for DIRTT.

Current wording

Our success is partly dependent on our ability to profitably develop our Construction Partner network to expand our market penetration and ensure best practices are shared across local markets. At September 30, 2026, we had 59 Construction Partners (September 30, 2025: 69; December 31, 2025: 66) servicing multiple locations. We continue to both develop our Construction Services team and partner with our Construction Partner network to drive increased revenue for DIRTT.

Previous wording

We experienced a modest increase in revenue year-over-year. We continue to pursue opportunities across all market sectors, including healthcare, where projects typically exhibit longer sales cycles and implementation timelines.

Current wording

We continue to pursue opportunities across all market sectors, especially healthcare, where projects typically exhibit longer sales cycles and implementation timelines.

Previous wording

For the three months ended June 30, 2026, 13% of revenue was from Canada, as compared to 10% for the three months ended June 30, 2025. Historically, approximately 10-15% and 85-90% of revenues are derived from sales to Canada and the United States, respectively. We expect the historical split to continue.

Current wording

For the three months ended September 30, 2026, 18% of revenue was from Canada, as compared to 9% for the three months ended September 30, 2025. Historically, approximately 10-15% and 85-90% of revenues are derived from sales to Canada and the United States, respectively. We expect the historical split to continue.

Previous wording

Sales and marketing expenses decreased by $1.1 million to $4.2 million for the three months ended June 30, 2026, compared to $5.3 million for the three months ended June 30, 2025. The decrease is primarily due to a $0.7 million decrease in salaries and benefits costs and a $0.2 million decrease in commissions.

Current wording

Sales and marketing expenses decreased by $0.7 million to $4.0 million for the three months ended September 30, 2026, compared to $4.8 million for the three months ended September 30, 2025. The decrease is primarily due to a $0.6 million decrease in salaries and benefits costs and a $0.2 million decrease in commissions expense.

Previous wording

Sales and marketing expenses decreased by $1.2 million to $9.2 million for the six months ended June 30, 2026, compared to $10.5 million for the six months ended June 30, 2025. The decrease is primarily due to a $0.6 million decrease in salaries and benefits costs and a $0.3 million decrease in commissions.

Current wording

Sales and marketing expenses decreased by $2.0 million to $13.3 million for the nine months ended September 30, 2026, compared to $15.3 million for the nine months ended September 30, 2025. The decrease is primarily due to a $1.2 million decrease in salaries and benefits costs, a $0.5 million decrease in commissions and a $0.3 million decrease in travel and marketing costs.

Previous wording

General and administrative expenses decreased by $1.2 million to $10.0 million for the six months ended June 30, 2026, compared to $11.2 million for the six months ended June 30, 2025. The decrease is primarily related to a $0.6 million decrease in professional services costs and a $0.4 million decrease in salaries and benefits costs.

Current wording

General and administrative expenses decreased by $1.1 million to $14.5 million for the nine months ended September 30, 2026, compared to $15.7 million for the nine months ended September 30, 2025. The decrease is primarily related to a $0.4 million decrease in professional services costs, a $0.4 million decrease in salaries and benefits costs and a $0.2 million decrease in public company costs.

Previous wording

Operations support is comprised primarily of project managers, order entry, and other professionals that facilitate the integration of our Construction Partner project execution, our manufacturing operations, and support staff for the operational processes team. Operations support expenses decreased by $0.6 million for the three months ended June 30, 2026 to $1.2 million from $1.9 million for the comparative period of 2025 primarily due to a $0.7 million decrease in salaries and benefits costs.

Current wording

Operations support is comprised primarily of project managers, order entry, and other professionals that facilitate the integration of our Construction Partner project execution, our manufacturing operations, and support staff for the operational processes team. Operations support expenses decreased by $0.6 million for the three months ended

Previous wording

Operations support expenses decreased by $1.1 million to $2.9 million for the six months ended June 30, 2026, compared to $3.9 million for the six months ended June 30, 2025 primarily due to a $0.9 million decrease in salaries and benefits costs.

Current wording

Operations support expenses decreased by $1.7 million to $4.0 million for the nine months ended September 30, 2026, compared to $5.7 million for the nine months ended September 30, 2025 primarily due to a $1.4 million decrease in salaries and benefits costs.

Previous wording

Technology and development expenses relate to non-capitalizable costs associated with our product and software development teams, and are primarily comprised of salaries and benefits of technical staff. Technology and development expenses decreased $0.6 million to $0.9 million for the three months ended June 30, 2026 compared to $1.5 million for the three months ended June 30, 2025. The decrease is primarily related to a $0.3 million decrease in salaries and benefits costs.

Current wording

Technology and development expenses relate to non-capitalizable costs associated with our product and software development teams, and are primarily comprised of salaries and benefits of technical staff. Technology and development expenses decreased by $0.1 million to $0.7 million for the three months ended September 30, 2026 compared to $0.8 million for the three months ended September 30, 2025. The decrease is primarily related to a $0.1 million decrease in professional service costs.

Previous wording

Technology and development expenses decreased by $0.9 million to $1.8 million for the six months ended June 30, 2026 compared to $2.7 million for the six months ended June 30, 2025. The decrease is primarily related to a $0.5 million decrease in salaries and benefits costs, and a $0.3 million decrease in professional services costs.

Current wording

Technology and development expenses decreased by $1.0 million to $2.6 million for the nine months ended September 30, 2026 compared to $3.5 million for the nine months ended September 30, 2025. The decrease is primarily related to a $0.5 million decrease in professional services costs and a $0.4 million decrease in salaries and benefits expenses.

Previous wording

Stock-based compensation expense for the three months ended June 30, 2026 was $0.7 million compared to $0.6 million in the same period of 2025. The increase in expense was largely due to an increase in performance share units (“PSUs”) expense and an increase in DSU expense in the second quarter of 2026, compared to the second quarter of 2025. The increase was slightly offset by a decrease in restricted share units (“RSUs”) expense as a result of a lower amount of RSUs outstanding for the quarter ended June 30, 2026 compared to the same period of 2025.

Current wording

Stock-based compensation expense for the three months ended September 30, 2026 was $0.5 million compared to $0.7 million in the same period of 2025. The decrease in expense was largely due to a decrease in restricted share units (“RSUs”) outstanding for the quarter ended September 30, 2026 compared to the same period of 2025, offset by an increase related to grants of performance share units (“PSUs”) and DSUs in the third quarter of 2026, compared to the third quarter of 2025.

Previous wording

Reorganization expenses for the three and six months ended June 30, 2026 were $1.1 million and $3.4 million, respectively, compared to $0.2 million and $0.4 million, respectively, in the three and six months ended June 30, 2025. Reorganization expenses for the three and six months ended June 30, 2026, primarily relate to termination benefit costs and consultant costs associated with our Transformation Office, as described in Note 4 of our interim condensed consolidated financial statements, while the reorganization costs for the three and six months ended June 30, 2025 were largely made up of movement of inventory and equipment from the facility at Rock Hill, South Carolina (the “Rock Hill Facility”) for use at the Calgary facility.

Current wording

Reorganization expenses for the three and nine months ended September 30, 2026 were $0.3 million and $3.7 million, respectively, compared to $2.6 million and $3.0 million, respectively, in the three and nine months ended September 30, 2025. Reorganization expenses for the three and nine months ended September 30, 2026 and 2025, primarily relate to termination benefit costs, as described in Note 4 of our interim condensed consolidated financial statements.

Previous wording

Interest income for the three and six months ended June 30, 2026 was $0.1 million and $0.2 million, respectively, compared to $0.2 million and $0.5 million for the comparative periods of 2025. The decreased interest income is due to declining prime rates on the Company’s lower cash equivalents during the six months ended June 30, 2026 compared to the same period of 2025.

Current wording

Interest income for the three and nine months ended September 30, 2026 was $0.1 million and $0.3 million, respectively, compared to $0.2 million and $0.7 million for the comparative periods of 2025. The decreased interest income is due to declining prime rates on the Company’s lower cash equivalents during the nine months ended September 30, 2026 compared to the same period of 2025.

Previous wording

Foreign exchange gain (loss) increased from losses of $1.9 million and $2.0 million for the three and six months ended June 30, 2025 to gains of $0.05 million and $0.4 million for the same periods of 2026. The increase is primarily related to the weakening of the Canadian dollar over the three and six months ended June 30, 2026.

Current wording

Foreign exchange gain (loss) decreased from a gain of $0.6 million for the three months ended September 30, 2025 to a loss of $0.05 million for the three months ended September 30, 2026 and increased from a loss of $1.4 million for the nine months ended September 30, 2025 to a gain of $0.3 million for the same periods of 2026. The increase is primarily due to the weakening of the Canadian dollar for the nine months ended September 30, 2026.

Previous wording

Interest expense decreased by $0.1 million and $0.2 million from $0.5 million and $0.9 million in the three and six months ended June 30, 2025, respectively, to $0.4 million and $0.7 million for the three and six months ended June 30, 2026, respectively. This decrease is largely due to repayment of the 6.00% convertible unsecured subordinated debentures on January 31, 2026 (the “January Debentures”). The Business Development Bank of Canada (“BDC”) loan of C$10 million was advanced during February and March 2026 and bears an interest rate of 5.8% .

Current wording

Interest expense decreased by $0.1 million and $0.3 million from $0.5 million and $1.4 million in the three and nine months ended September 30, 2025, respectively, to $0.4 million and $1.1 million for the three and nine months ended September 30, 2026, respectively. This decrease is largely due to repayment of the 6.00% convertible unsecured subordinated debentures on January 31, 2026 (the “January Debentures”). Offsetting the decreases from the January Debentures repayment, interest on the C$15 million loan from the Business Development Bank of Canada (“BDC”) advanced during February, March and September 2026 bears an interest rate of 5.8% .

Previous wording

Income tax expense for the three and six months ended June 30, 2026 decreased to $0.04 million and $0.1 million from $0.1 million and $0.2 million in the three and six months ended June 30, 2025. The current tax expense represents the income tax provision after the utilization of non-capital loss carry forwards against current period taxable income. The provision for income taxes comprises U.S. and Canadian federal, state and provincial taxes based on pre-tax income. Despite positive indications of future profitability, including the strength of our pipeline, the Company has determined that it is unlikely that a deferred tax asset will be recognized. Given the history of losses, the Company plans to maintain a valuation allowance against the deferred tax asset. As at June 30, 2026, the Company had a valuation allowance of $30.5 million (December 31, 2025: $30.9 million) against deferred tax assets. The Company plans to continue to evaluate indicators on whether a valuation allowance continues to be needed. As at June 30, 2026, we had C$112.4 million of non-capital loss carry-forwards in Canada and $41.2 million of non-capital loss carry-forwards in the United States. These loss carry-forwards will begin to expire in 2037.

Current wording

Current and deferred income tax (recovery) for the three and nine months ended September 30, 2026 was $13.0 million compared to $0.2 million and $0.3 million in the same period of 2025. The current period recovery represents the income tax provision after the utilization of non-capital loss carry forwards against current period taxable income and the recording of the deferred tax asset for $13.1 million. The provision for income taxes comprises U.S. and Canadian federal, state and provincial taxes based on pre-tax income. Given positive indications of future profitability, including the strength of our pipeline, and a history of income the Company has determined that it is likely that a deferred tax asset will be utilized. As at September 30, 2026 the Company plans to maintain a valuation allowance of $17.2 million (December 31, 2025: $30.9 million) against deferred tax assets. The Company plans to continue to evaluate indicators on whether a valuation allowance continues to be needed. As at September 30, 2026, we had C$113.4 million of non-capital loss carry-forwards in Canada and $40.9 million of non-capital loss carry-forwards in the United States. These loss carry-forwards will begin to expire in 2037.

Previous wording

Net loss after tax was $2.2 million or $0.01 net loss per common share, basic and diluted, in the six months ended June 30, 2026, a decrease of $5.0 million from net loss after tax of $7.3 million or $0.04 net loss per common share, basic and diluted, for the six months ended June 30, 2025. The decrease in net loss is primarily the result of a $4.4 million decrease in operating expenses (excluding stock-based compensation and reorganization expenses), a $2.4 million increase in foreign exchange gain, and a $1.6 million increase in gross profit, offset by a $3.0 million increase in reorganization expenses.

Current wording

Net income after tax was $17.1 million or $0.09 net income per common share, basic and diluted, in the three months ended September 30, 2026, an increase of $20.6 million from net loss after tax of $3.5 million or $0.02 net loss per common share, basic and diluted, for the three months ended September 30, 2025. The increase in net income is primarily the result of a $13.0 million deferred tax recovery, a $3.8 million decrease in operating expenses and a $4.2 million increase in gross profit, offset by a $0.7 million decrease in foreign exchange gains.

Previous wording

Net income after tax was $1.1 million or $0.01 net income per common share, basic and diluted, in the three months ended June 30, 2026, an increase of $7.7 million from net loss after tax of $6.6 million or $0.03 net loss per common share, basic and diluted, for the three months ended June 30, 2025. The increase in net income is primarily the result of a $3.5 million decrease in operating expenses (excluding stock-based compensation and reorganization expenses), a $3.2 million increase in gross profit, and a $2.0 million increase in foreign exchange gain, offset by a $0.9 million increase in reorganization expenses.

Current wording

Net income after tax was $14.9 million or $0.08 net income per common share, basic and diluted, for the nine months ended September 30, 2026, an improvement of $25.7 million from net loss after tax of $10.7 million or $0.06 net loss per common share, basic and diluted, for the nine months ended September 30, 2025. The increase in net income is primarily the result of a $5.7 million decrease in operating expenses (excluding stock-based compensation and reorganization expenses), a $ 13.0 million deferred tax recovery and a $5.9 million increase in gross profit, offset by a $0.7 million increase in reorganization expenses.

Previous wording

The following table presents a reconciliation for the three and six months ended June 30, 2026 and 2025 of Adjusted Gross Profit to our gross profit and Adjusted Gross Profit Margin to gross profit margin, which are the most directly comparable GAAP measures for the periods presented:

Current wording

The following table presents a reconciliation for the three and nine months ended September 30, 2026 and 2025 of Adjusted Gross Profit to our gross profit and Adjusted Gross Profit Margin to gross profit margin, which are the most directly comparable GAAP measures for the periods presented: