SecProbe.io

United States securities and exchange commission logo
February 26, 2024
Fareeha Khan
Chief Financial Officer
DIRTT Environmental Solutions Ltd.
7303 30th Street S.E.
Calgary,Alberta, Canada T2C 1N6
Re:DIRTT Environmental Solutions Ltd.
Schedule TO-I filed February 15, 2024
File No. 005-91166
Dear Fareeha Khan:
            We have reviewed your filing and have the following comments. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
            Please respond to these comments by providing the requested information or advise us as
soon as possible when you will respond. If you do not believe our comments apply to your facts
and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Schedule TO-I filed February 15, 2024
Forward-Looking Statements, page iii
1.We note your reference to Section 21E of the Securities Exchange Act of 1934.  Note that
the safe harbor protections for forward-looking statements contained in U.S. federal
securities laws do not apply to statements made in connection with a tender offer.  See
Section 21E(b)(2)(C) of the Securities Exchange Act of 1934 and telephone interpretation
I.M.2 in the July 2001 Supplement to the Division of Corporation Finance’s Manual of
Publicly Available Telephone Interpretations.  Please delete the reference.
Manner and Time of Acceptance, page 7
2.Disclosure on page 8 indicates that “[i]f the principal amount of all January Debentures
properly deposited by the Expiration Date…exceeds the January Debentures Maximum
Purchase Amount, then the January Debentures to be purchased…will be purchased on a
pro rata basis…(with adjustments to maintain C$1,000 minimum denominations of the
January Debentures) [emphasis added].”  Similar disclosure is provided with respect to

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the December Debentures.  Please revise to explain the referenced “adjustments” and how
they are in compliance with Exchange Act Rule 13e-4(f)(3).
Withdrawal Rights, page 11
3.Disclosure on page 11 indicates that “Debentures deposited pursuant to the Offer may be
withdrawn by or on behalf of the depositing Debentureholder at any time…(iii) if the
Debentures have been taken up but not paid for by the Company within three business
days of being taken up…”  With a view towards improved disclosure, please advise if
Debentureholders will be given notice that their Debentures have been “taken up” so that
they can determine whether the three business day period for payment has expired and
exercise their withdrawal rights accordingly.
4.Disclosure on page 11 also indicates that “Debentures deposited pursuant to the Offer may
be withdrawn by or on behalf of the depositing Debentureholder at any time…(iv) before
the expiration of 10 days from the date that a notice of change or notice of variation (other
than a variation that (A) consists solely of an increase in the consideration offered for the
Debentures under the Offer where the time for deposit is not extended for greater than 10
days, or (B) consists solely of the waiver of a condition of the Offer) has been given in
accordance with the Offer to Purchase…”  Please advise whether a notice of change or
variation could result in an extension of the Offer for greater than 10 days, and if so,
whether Debentureholders will have a right of withdrawal.  Please also advise how clause
(iv) would impact the registrant’s obligations with respect to Exchange Act Rule 13e-
4(f)(1)(ii) and 14e-1(b).
Conditions of the Offer, page 12
5.Refer to conditions (a), (a)(ii) and (b) and the terms “threatened,” “has impaired” and
“contemplated benefits.”  A tender offer may be conditioned on a variety of events and
circumstances provided that they are not within the direct or indirect control of the
offeror.  The conditions also must be drafted with sufficient specificity to allow for
objective verification that the conditions have been satisfied.  Refer to Question 101.01 of
the Tender Offer Rules and Schedules Compliance and Disclosure Interpretations (March
17, 2023).  Please revise these terms so that each of these conditions are objectively
determinable.
6.Refer to condition (c)(i).  Please revise to explain what would be considered a “limitation
on prices for securities on any national securities exchange or in the over-the-counter
market in Canada or the United States” or delete this language.  Similarly, in condition
(c)(iv), please revise to explain what would constitute "any limitation by any
governmental or regulatory or administrative authority or agency or any other event that,
in the reasonable judgment of the Company, might affect the extension of credit by banks
or other lending institutions," or delete.
7.We note that condition (c)(iii) will be triggered by “…the commencement…of a war,
armed hostilities, act of terrorism or other international or national calamity directly or

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indirectly [emphasis added] involving Canada, the United States or any other country or
region in which the Company or its subsidiaries maintain significant business activities…”
 without any materiality qualifier on the gravity of such an event, without requiring any
connection between such an event and the Offer, and without limiting the event to one
directly involving the United States or Canada.  In addition, it is unclear what current
wars, which may trigger the condition upon a “material worsening,” are included in this
condition.  The broad wording of this offer condition gives rise to illusory offer concerns
under Section 14(e) of the Exchange Act and Regulation 14E thereunder, in particular
given ongoing international hostilities.  Please revise to narrow or qualify this condition or
advise.  In addition, please revise to specify those countries other than the United States
and Canada in which the Company or its subsidiaries “maintain significant business
activities.”
8.Similarly, we note that condition (c)(v) broadly refers to "any change [emphasis added] in
the general political, market, economic or financial conditions that in the Company’s
reasonable judgment has or may have [emphasis added] a material adverse effect on the
Company’s business, operations or prospects or the trading in, or value of, any or all of
the Debentures.”  Please revise to narrow or qualify this condition or advise.
9.Refer to conditions (vi) and (vii).  Similar to preceding comments, please revise to allow
for objective verification that the conditions have been satisfied.  While each condition
references a threshold of 10% measured against the close of business on February 14,
2024, use of the phrase “including, without limitation, an amount greater than…”
effectively eliminates such threshold as an objective measure, since any “material decline”
in the relevant indices or “any increase or decrease…by a significant amount” in the
market price of “any or all of the Debentures” can trigger the respective condition.
10.The language in condition (viii) appears to be repetitive of preceding conditions.  For
example, it is unclear what would constitute in condition (viii) “a material worsening” of a
“material worsening” of a war or armed hostilities in condition (iii).  Please advise or
revise.
11.Refer to condition (d).  Please revise to explain the meaning of the term “material adverse
significance” and how it is different than a “material adverse effect.”
12.Refer to condition (g) and the use of the language “not available on acceptable terms to
the Company.”  All offer conditions must be objective and outside the control of the
offeror to avoid an impermissible illusory offer.   Please revise to delete or qualify this
language appropriately.  In addition, please revise to summarize the “necessary
exemptions or approvals under applicable securities legislation” and “the necessary
exemptions from, or waivers, of the appropriate courts or securities regulatory authorities”
referenced in this condition.
13.The last paragraph of this section states that “[t]he foregoing conditions are for the sole
benefit of the Company and may be asserted by the Company in its reasonable discretion
regardless of the circumstances (including any action or inaction by the Company) giving

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rise to any such conditions…”  Offer conditions must be objective and outside the control
of the offeror in order to avoid illusory offer concerns under Regulation 14E.  Please
revise to remove the implication that the conditions may be triggered at the election of the
Company.  See Question 101.02 of the Division of Corporation Finance's “Tender Offer
Rules and Schedules” Compliance and Disclosure Interpretations.
14.The last paragraph also states that “[t]he failure by the Company at any time to exercise its
rights under any of the foregoing conditions shall not be deemed a waiver of any such
right, and the waiver of any such right with respect to particular facts and other
circumstances shall not constitute a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right which may be
asserted at any time or from time to time.”  This language suggests that if a condition is
triggered and the Company fails to assert the condition, it will not lose the right to assert
the condition at a later time.  Please note that when a condition is triggered and a party
decides to proceed with the offer anyway, we believe that this decision is tantamount to a
waiver of the triggered condition(s).  Depending on the materiality of the waived
condition and the number of days remaining in the Offer, the Company may be required to
extend the Offer and recirculate new disclosure to security holders.  In addition, when an
offer condition is triggered by events that occur during the offer period and before the
expiration of the Offer, the Company should inform holders how it intends to proceed
promptly, rather than waiting until the end of the offer period, unless the condition is one
where satisfaction of the condition may be determined only upon expiration.  Please
confirm the Company’s understanding on both points in your response letter.
15.The last sentence of this section also states that “[a]ny determination by the Company
concerning the events described in this Section 5 shall be final and binding on all parties.”
Please revise this statement to include a qualifier indicating that security holders are not
foreclosed from challenging the Company’s determination in a court of competent
jurisdiction.
Taking Up and Payment for the Deposited Debentures, page 15
16.Disclosure indicates that “…subject to and in accordance with applicable securities laws,
the Company will take up and pay for Debentures properly deposited under the Offer in
accordance with the terms thereof as soon as practicable after the Expiration Date and in
any event no later than 10 days after the Expiration Date.”  Please advise why the
Company believes this complies with the prompt payment requirement in Exchange Act
Rules 13e-4(f)(5) and 14e-1(c).
            We remind you that the filing persons are responsible for the accuracy and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please direct any questions to Perry Hindin at 202-551-3444.

 FirstName LastNameFareeha Khan
 Comapany NameDIRTT Environmental Solutions Ltd.
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 FirstName LastName
Fareeha Khan
DIRTT Environmental Solutions Ltd.
February 26, 2024
Page 5
Sincerely,
Division of Corporation Finance
Office of Mergers & Acquisitions
cc:       Robert Kimball