22 slides from Dirtt Environmental Solutions's proxy contest presentation, Apr 8, 2022
Slide 1: Exposing DIRTT's Misrepresentations and Omissions
22NW EXPOSING DIRTT’S MISREPRESENTATIONS A ND OMISSIONS APRIL 2022
Slide 2: Recap: Case for Change at DIRTT & 22NW's Proposed Solution
22NW RECAP: CASE FOR CHANGE AT DIRTT & 22NW’S PROPOSED SOLUTION
Slide 3: DIRTT Has Significantly Underperformed Under the Current Board
3 22NW DIRTT HAS SIGNIFICANTLY UNDERPERFORMED UNDER THE CURRENT BOARD Source : Company filings, Bloomberg (share price depreciation reflects share price and performance up until December 22 , 2021 , which is the day before 22 NW filed its preliminary proxy statement) . DIRTT’s share price has fallen
Slide 4: The Incumbent Board Has Failed Shareholders and Cannot Be Trusted
4 22NW IN OUR VIEW, THE INCUMBENT BOARD HAS FAILED SHAREHOLDERS AND CANNOT BE TRUSTED TO INITIATE A TURNAROUND • Lack of Succession Planning : The Company has overseen significant turnover in the C - suite with four CEOs in four years . In December 2021 , DIRTT suddenly announced the departure of CE
Slide 5: Our Highly Qualified Nominees Have a Vision to Fix DIRTT
5 22NW OUR HIGHLY QUALIFIED NOMINEES HAVE A VISION TO FIX DIRTT Ken Sanders x Extensive C - suite and board experience in the architecture, engineering and planning sectors x Deep knowledge of technology, including hands - on experience using DIRTT’s product in the field x Experience leading global
Slide 6: We Believe Shareholders Stand with 22NW, Not the Incumbents
6 22NW • 22 NW previously received executed non - binding indications of support from approximately 50 . 4 % of DIRTT’s shareholders for the election of our nominees to the Board at the Meeting . • Instead of listening to shareholders’ opinions and perspectives, the Board sought a hearing before the
Slide 7: Setting the Record Straight on DIRTT's April 5th Presentation
7 22NW In the following slides, we set the record straight regarding the many misleading components of DIRTT’s April 5 th presentation. We believe the Board’s attempts to shirk responsibility for DIRTT’s underperformance and rewrite history only reinforce the need for meaningful change atop the Comp
Slide 8: Rebuttal: Exposing DIRTT's Distortions and Misrepresentations
22NW REBUTTAL: EXPOSING DIRTT'S DISTORTIONS AND MISREPRESENTATIONS
Slide 9: The Reality: Responses to DIRTT's Claims
9 22NW x THE REALITY : We are seeking to remove and replace seven members of the Board, thus disrupting the dismal status quo . x THE REALITY : We believe continuing with the current Board would be a serious risk given its history of shareholder - unfriendly actions and utter mismanagement of the Co
Slide 10: Board Claims Mr. Lillibridge Is Critical Despite Poor Performance
10 22NW • Mr . Lillibridge has overseen strategic and operational missteps across DIRTT, specifically in healthcare . • Since Mr . Lillibridge joined the Board in 2017 , DIRTT’s total revenue and healthcare revenue have declined by ~ 39 % and ~ 70 % , respectively . • Despite touting Mr . Lillibridg
Slide 11: Board Is Unwilling to Take Responsibility for Underperformance
11 22NW THE BOARD IS UNWILLING TO TAKE RESPONSIBILITY FOR ITS MISSTEPS AND UNDERPERFORMANCE Source : Company presentation . The Facts: • DIRTT has consistently made excuses that shift blame for execution and leadership failures away from the Board . • DIRTT’s revenue problem existed long before COVI
Slide 12: DIRTT Says It Has Momentum Despite Sustained Tailspin
12 22NW DIRTT SAYS IT HAS “MOMENTUM” DESPITE ITS SUSTAINED TAILSPIN UNDER THE INCUMBENT BOARD Source : S&P Capital IQ . The Board cannot run from the fact that DIRTT has delivered negative performance for years and plummeted ~40% following Chairman Lillibridge’s appointment as interim CEO. -45% -40%
Slide 13: Board Wasted Resources on Meritless ASC Application
13 22NW WE BELIEVE THE BOARD WASTED COMPANY RESOURCES BY BRINGING A MERITLESS APPLICATION BEFORE THE ASC AGAINST ITS OWN SHAREHOLDERS Source : Company presentation . The Facts: • The ASC dismissed all of the Company’s requested relief against 22 NW . • Despite this ruling, the Board continued its re
Slide 14: Board Has Failed to Engage in Good Faith with 22NW
14 22NW WE BELIEVE THE BOARD HAS FAILED TO ENGAGE IN GOOD FAITH WITH 22NW Source : Company presentation . Company filings . The Board claimed it “proactively offered to negotiate with 22NW,” but the truth is the Company has never directly offered 22NW a settlement proposal. Dec. 9, 2021 Dec. 10, 202
Slide 15: Board Claims It Is Committed to Best Interests of All Stakeholders
15 22NW THE BOARD CLAIMS IT IS COMMITTED TO THE BEST INTERESTS OF ALL STAKEHOLDERS Source : Company presentation . The Board collectively owns roughly 1 % of the Company’s stock, demonstrating a lack of alignment with shareholders . The Board has overseen a ~ 10 % year - over - year increase in tota
Slide 16: DIRTT Touts a Self-Directed Refresh That Has Objectively Failed
16 22NW The Facts: • DIRTT’s TSR has continued to decline, falling ~ 60 % , ~ 82 % and ~ 76 % over the past one - , three - and five - year horizons . • The Board has kept shareholders in the dark and failed to disclose key business metrics . • The Board has undertaken several shareholder - unfriend
Slide 17: DIRTT Ignores Reality Proclaiming Its Strategy and Rebrand Are Working
17 22NW DIRTT APPEARS TO IGNORE REALITY BY PROCLAIMING THAT ITS STRATEGY, REBRAND AND REPOSITIONING ARE WORKING The Facts: • Despite the Company’s “new” marketing initiatives, we believe it is doubling down on its same losing strategy . • In our view, this highlights the Board’s lack of understandin
Slide 18: Our Slate Has the Right Skills, Perspectives and Experience
18 22NW UNLIKE THE CURRENT BOARD, OUR SLATE HAS THE RIGHT SKILLS, PERSPECTIVES AND EXPERIENCE TO TURN AROUND DIRTT AND CREATE MEANINGFUL VALUE Source : Company presentation, Company filings . Our highly qualified nominees possess the necessary skillsets and experience to ameliorate DIRTT’s weak oper
Slide 19: 22NW's Slate Has a Real Plan for Enhancing Shareholder Value
19 22NW DESPITE THE BOARD’S MISLEADING CLAIMS, 22NW’S SLATE HAS A REAL PLAN FOR ENHANCING SHAREHOLDER VALUE PRIORITY #1 Immediate Strategic Revenue Opportunities PRIORITY #2 Improve Stakeholder Engagement PRIORITY #3 Enhance DIRTT’s ESG Practices x Engage with potential revenue - generating partners
Slide 20: Vote on the WHITE Proxy Card for 22NW's Slate
20 22NW VOTE ON THE WHITE PROXY CARD FOR 22NW’S SLATE THE 22NW NOMINEES ARE COMMITTED TO BUILDING A BETTER DIRTT CONTACT INFO@SARATOGAPROXY.COM WITH QUESTIONS ON HOW TO VOTE
Slide 21: Disclaimer – Important Information
21 22NW Disclaimer – Important Information The materials contained herein (the “Materials”) represent the opinions of 22 NW Fund, LP and the other participants named in its proxy solicitation (collectively, “ 22 NW”) and are based on publicly available information with respect to DIRTT Environmental
Slide 22: Disclaimer – Continued
22 22NW Disclaimer – Continued The Materials contain forward - looking statements . All statements contained herein that are not clearly historical in nature or that necessarily depend on future events are forward - looking, and the words “anticipate,” “believe,” “expect,” “potential,” “opportunity,