UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

SCHEDULE 14A

 

 

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant         ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box: 

 

☒

Preliminary Proxy Statement

 

☐

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

☐

Definitive Proxy Statement

 

☐

Definitive Additional Materials

 

☐

Soliciting Material Pursuant to §240.14a-12

Aptose Biosciences Inc.

(Name of Registrant as Specified in Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

 

☐

No fee required

 

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Fee paid previously with preliminary materials

 

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1)

NOTICE OF SPECIAL MEETING

AND

NOTICE OF APPLICATION TO THE COURT OF KING’S BENCH OF ALBERTA

AND

PROXY STATEMENT

FOR THE

SPECIAL MEETING OF SHAREHOLDERS OF APTOSE BIOSCIENCES INC.

TO BE HELD ON JANUARY 16, 2026

WITH RESPECT TO A PROPOSED PLAN OF ARRANGEMENT INVOLVING

APTOSE BIOSCIENCES INC.,

HS NORTH AMERICA LTD., AND

HANMI PHARMACEUTICAL CO. LTD.

December [●], 2025

December [●], 2025

Dear Shareholder:

You are cordially invited to attend a special meeting (the “Meeting”) of the holders of common shares (the “Shares”) of Aptose Biosciences Inc. (“Aptose”), a corporation formed under the Canada Business Corporations Act (“CBCA”), which we will hold virtually on January 16, 2026 at 11:00 a.m. (Eastern time).

On November 18, 2025, Aptose entered into an Arrangement Agreement with Hanmi Pharmaceutical Co. Ltd (“Parent”) and HS North America Ltd. (“Purchaser”), a wholly-owned subsidiary of Parent, which provides for the acquisition of Aptose by Purchaser (the “Arrangement Agreement”). Under the terms of the Arrangement Agreement, Purchaser will acquire all of our issued and outstanding Shares (other than the Shares owned or beneficially controlled by Parent or any of its affiliates) for C$2.41 per Share in cash pursuant and subject to the terms and conditions of the Arrangement Agreement. The acquisition will be completed by way of a statutory plan of arrangement (the “Arrangement”) under the Business Corporations Act (Alberta) (the “ABCA”).

At the Meeting, shareholders will be asked to consider and vote on (i) a special resolution to approve a continuance (the “Continuance”) of Aptose from the CBCA to the ABCA (the “Continuance Resolution”), and (ii) a special resolution approving the Arrangement (the “Arrangement Resolution”).

Board Recommendation

A special committee of independent directors, appointed by the board of directors of Aptose (the “Transaction Committee”), has carefully considered all aspects of the Continuance and the Arrangement. As part of its review, the Transaction Committee engaged Locust Walk Securities, LLC as its financial advisor. Locust Walk delivered an opinion (the “Fairness Opinion”) concluding that, as of the date of the Fairness Opinion and subject to the assumptions, limitations and qualifications to be set forth therein, the consideration to be received by Shareholders, other than those shares held by Parent or any of its affiliates pursuant to the Arrangement Agreement is fair, from a financial point of view, to such Shareholders. Based on the Transaction Committee’s analysis, the Transaction Committee unanimously recommended that the board of directors of Aptose (the “Board”) approve the Arrangement.

The Board, on recommendation of the Transaction Committee, consideration of the Fairness Opinion, and based upon its own investigations, has unanimously approved the Arrangement and the terms of the Arrangement Agreement and has determined that the Arrangement is in the best interests of Aptose and the Shareholders (excluding Shares held by the Parent and its affiliates). Accordingly, the Board unanimously recommends that you vote FOR the Continuance Resolution and the Arrangement Resolution at the Meeting.

The recommendation of the Transaction Committee and the Board is based on various factors described more fully in the accompanying proxy statement (the “Proxy Statement”). We recommend that you review in detail the full reasons for the recommendation, which are set out in the accompanying Proxy Statement under the headings “The Arrangement – Recommendation of the Board and Transaction Committee and Reasons for the Arrangement”.

The Board of Directors unanimously recommends that shareholders vote “FOR” these proposals

The enclosed Proxy Statement describes the Continuance and the Arrangement. It also provides detailed information about the Arrangement Agreement and the Meeting. We encourage you to read the Proxy Statement carefully, including the appendices, as it sets forth important information regarding these matters.

Your vote is very important. The Arrangement cannot be completed unless (i) the Continuance Resolution is approved by the affirmative vote of at least two-thirds (66 ²⁄₃%) of the votes cast by shareholders, virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share, and (ii) the Arrangement Resolution is approved by (1) the affirmative vote of at least two-thirds (66 ²⁄₃%) of the votes cast by shareholders, virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share, and (2) the affirmative vote of a majority of the votes cast by the shareholders in person or represented by proxy at the Meeting, each being entitled to one vote per Share after excluding the votes of those persons whose votes are required to be excluded under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators.

Your vote is very important, regardless of the number of Shares you own. Whether or not you expect to attend the Meeting, please vote your Shares by proxy in advance of the Meeting to ensure your representation and the presence of a quorum at the Meeting. To ensure that your vote is recorded promptly, please vote as soon as possible, even if you plan to attend the Meeting.

If you have any questions about the Special Meeting or require more information with respect to the procedures for voting, please contact our strategic shareholder advisor and proxy solicitation agent, Morrow Sodali (Canada) Ltd. (“Sodali & Co”) at 1-833-711-4830 toll free in North America or 1-289-695-3075 collect outside North America or by email at assistance@investor.sodali.com.

Thank you for your continuing support of Aptose.

Very truly yours,

William G. Rice, Ph.D.

Chairman, President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state, provincial or territorial securities regulatory agency has approved or disapproved the Arrangement, passed upon the merits or fairness of the Arrangement or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

The Proxy Statement is dated December [●], 2025 and is first being mailed to shareholders on or about December 19, 2025.

Aptose Biosciences Inc.

Notice of Special Meeting of Shareholders

NOTICE IS HEREBY GIVEN, in accordance with an interim order (the “Interim Order”) of the Court of King’s Bench of Alberta (the “Court”) dated December 12, 2025, that a special meeting (the “Meeting”) of holders (the “Shareholders”) of common shares (“Shares”) of Aptose Biosciences Inc. (the “Corporation”) will be held on January 16, 2026 at 11:00 a.m. (Eastern time). The Meeting will be conducted as an online only meeting. There will be no physical location for shareholders and duly appointed proxyholders to attend. Shareholders and duly appointed proxyholders are invited to attend by live webcast accessible directly online at https://meetings.lumiconnect.com/400-581-122-608 , where they will be able to listen, vote, and submit questions during the Meeting.

What the Meeting is About

The following items of business will be covered at the Meeting:

 

1.

Proposal No. 1 – to consider, and if deemed advisable, to pass, with or without variation, a special resolution to approve a continuance of the Corporation from the Canada Business Corporations Act (“CBCA”) to the Business Corporations Act (Alberta) (the “Continuance Resolution”), the full text of which is set forth in Appendix A to the accompanying proxy statement of the Corporation (the “Proxy Statement”), all as more particularly described in the Proxy Statement;

 

2.

Proposal No. 2 - to consider, pursuant to the Interim Order, and, if deemed advisable, to pass, with or without variation, a resolution (the “Arrangement Resolution”), the full text of which is set forth in Appendix D to the Proxy Statement, approving a statutory arrangement (the “Arrangement”) pursuant to Section 193 of the ABCA, all as more particularly described in the Proxy Statement; and

 

3.	transacting such other business as may be properly brought before the Meeting.

The Shareholders may also consider other business that properly comes before the Meeting or any adjournment of the Meeting. The Proxy Statement provides additional information relating to the matters to be dealt with at the Meeting and forms part of this notice.

You are entitled to receive notice of and vote at the Meeting, or any adjournment, if you are a registered holder of Shares (a “Registered Shareholder”) at the close of business on December 12, 2025 (the “Record Date”).

You have the right to vote your Shares on items 1 and 2 listed above and any other items that may properly come before the Meeting or any adjournment.

The Notice of Meeting, Proxy Statement and the form of proxy will be mailed to you on or around December 19, 2025. Detailed instructions regarding Shareholders’ voting process are also available on our website at https://www.aptose.com/investors/news-events/ir-calendar.

Your vote is important.

If you are not able to attend the Meeting, please exercise your right to vote by signing and returning the enclosed form of proxy to Computershare Investor Services Inc., 320 Bay Street, 14^th Floor, Toronto, Ontario, Canada, M5H 4A6, so as to arrive not later than 11:00 a.m. (Eastern time) on January 14, 2026 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting. The time limit for the deposit of proxies may be waived or extended by the Chair of the Meeting at his discretion without notice.

This Notice of Special Meeting of Shareholders is accompanied by the Proxy Statement, a form of proxy or voting instruction form, as applicable, and a form of letter of transmittal (the “Letter of Transmittal”).

A summary of the arrangement agreement among Hanmi Pharmaceutical Co. Ltd. (“Parent”), HS North America Ltd. (the “Purchaser”) and Aptose dated November 18, 2025 (the “Arrangement Agreement”) and the plan of arrangement (the “Plan of Arrangement”) is included in the Proxy Statement, and the full text thereof is attached as Appendix B and Appendix C, respectively, to the Proxy Statement and is also available under Aptose’s profile on the System for Electronic Data Analysis and Retrieval + (“SEDAR+”) at www.sedarplus.ca and on the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) at www.sec.gov/edgar. The full text of the Interim Order is attached as Appendix F to the Proxy Statement. Shareholders should carefully review and consider all of the information in the Proxy Statement.

Registered Shareholders have the right to dissent with respect to the Continuance Resolution or, pursuant to the Interim Order, with respect to the Arrangement Resolution and to be paid an amount equal to the fair value of their Shares. These dissent rights and the dissent procedures are described in the Proxy Statement. The dissent procedures require that a Registered Shareholder who wishes to exercise dissent rights send Aptose a written notice to inform Aptose of his, her or its intention to exercise dissent rights, which notice must be received by Aptose at its registered office located at 66 Wellington Street West, Suite 5300, TD Bank Tower Box 48, Toronto ON M5K 1E6, Attention: Charles-Antoine Soulière, not later than 5:00 p.m. (Eastern time) on the day that is two Business Days immediately preceding the date of the Meeting (as it may be adjourned or postponed from time to time). Failure to strictly comply with the dissent procedures will result in loss of the right to dissent. Non-registered Shareholders must be aware that only Registered Shareholders are entitled to dissent. Accordingly, a beneficial owner of Shares must make arrangements for the Shares beneficially owned by such Shareholder to be registered in the Shareholder’s name prior to the time the written objection to the Continuance Resolution or the Arrangement Resolution, as applicable, is required to be received by the Corporation, or alternatively, make arrangements for the registered holder of such Shares to dissent on the Shareholder’s behalf. It is strongly suggested that any Shareholder wishing to dissent seek independent legal advice, as the failure to comply strictly with the provisions of the CBCA or the ABCA, as modified by the Interim Order and the Plan of Arrangement, as applicable, may result in the forfeiture of such Shareholder’s right to dissent.

Your vote is very important, regardless of the number of Shares you own. Whether or not you expect to attend the Meeting, please vote your Shares by proxy in advance of the Meeting to ensure your representation and the presence of a quorum at the Meeting. To ensure that your vote is recorded promptly, please vote as soon as possible, even if you plan to attend the Meeting.

If you are a non-registered Shareholder and have received these materials through your broker, custodian, nominee or other intermediary, please complete and return the form of proxy or voting instruction form provided to you by your broker, custodian, nominee or other intermediary in accordance with the instructions provided therein.

If you have any questions about the Special Meeting or require more information with respect to the procedures for voting, please contact our strategic shareholder advisor and proxy solicitation agent, Sodali & Co at 1-833-711-4830 toll free in North America or 1-289-695-3075 collect outside North America or by email at assistance@investor.sodali.com.

BY ORDER OF THE BOARD OF DIRECTORS

William G. Rice, Ph.D.

Chairman, President and Chief Executive Officer

December [●], 2025

IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY

MATERIALS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE

HELD ON JANUARY 16, 2026.

Our Notice of the Special Meeting of Shareholders, Proxy Statement to Shareholders is available on the Corporation’s website at https://www.aptose.com/investors/news-events/ir-calendar.

Copies are also available upon written request to the Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary (i) at our principal executive and registered office located at 66 Wellington Street West, Suite 5300, TD Bank Tower Box 48, Toronto ON M5K 1E6; or (ii) at our executive headquarters located at Suite 120, 12770 High Bluff Drive, San Diego, California, 92130 and from Sodali & Co at 1-833-711-4830 toll free in North America or 1-289-695-3075 collect outside North America or by email at assistance@investor.sodali.com.

TABLE OF CONTENTS

 

PERSONS MAKING THE SOLICITATION			i
SUMMARY			1
The Companies			1
The Continuance			1
The Arrangement			2
Arrangement Consideration			2
The Meeting			2
Quorum and Record Date			3
Background to the Arrangement			3
Recommendation of the Board and Transaction Committee and Reasons for the Arrangement			3
Formal Valuation and Fairness Opinion of Locust Walk Securities, LLC			3
Regulatory Approvals			4
The Arrangement Agreement			4
Restrictions on Solicitations of Other Offers			4
Conditions to the Arrangement			5
Termination			7
Expense Fee			9
Interests of the Corporation’s Directors and Officers in the Arrangement			9
Failure to Complete the Arrangement			9
Support and Voting Agreements			9
Certain Canadian Federal Income Tax Considerations			10
Certain U.S. Federal Income Tax Considerations			10
Risks Relating to the Arrangement			10
Dissent Rights			10
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			12
QUESTIONS ABOUT THE ARRANGEMENT			13
QUESTIONS ABOUT THE SPECIAL MEETING AND VOTING YOUR SHARES			17
Registered Shareholders			19
Non-Registered (or Beneficial) Shareholders			19
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES			26
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND DIRECTORS			26

 

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THE CONTINUANCE			28
General			28
Effect of the Continuance			28
Certain Corporate Differences Between the CBCA and the ABCA			28
THE ARRANGEMENT			31
Summary of the Arrangement			31
Arrangement Consideration			31
Arrangement Steps			32
Background to the Arrangement			33
Recommendation of the Board and Transaction Committee and Reasons for the Arrangement			37
Formal Valuation and Fairness Opinion of Locust Walk Securities, LLC			41
Interest of the Corporation’s Directors and Officers in the Arrangement			42
Regulatory Approvals			44
Failure to Complete the Arrangement			44
Procedure for the Arrangement Becoming Effective			44
Shareholder Approval			45
Court Approval of the Arrangement			45
Support and Voting Agreements			46
Timing			46
Delisting and Deregistration			46
THE ARRANGEMENT AGREEMENT			46
Effective Date of the Arrangement			47
Covenants			47
Regulatory Approvals			53
Access to Information; Confidentiality			54
Notice and Cure Provisions			55
Insurance and Indemnification			56
TSX Delisting			56
CrystalGenomics Release			57
Restrictions on Solicitations of Other Offers			57
Employees			61
Representations and Warranties			61
Alternative CCAA Proceedings			63

 

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Conditions to the Arrangement			64
Termination			67
Expense Fee			69
Governing Law			69
Support and Voting Agreements			69
PRINCIPAL LEGAL MATTERS			70
Court Approval and Completion of the Arrangement			70
Canadian Securities Law Matters			70
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS			73
Holders Resident in Canada			73
Holders Not Resident in Canada			73
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS			73
U.S. Holders			74
U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed			74
Treatment of the Arrangement			75
Passive Foreign Investment Company Rules			75
Controlled Foreign Corporation Rules			77
Foreign Tax Credits and Limitations			77
Foreign Currency			77
Dissenting Shareholders			78
Specified Foreign Financial Assets Reporting			78
Backup Withholding and Information Reporting			78
RISK FACTORS			79
PROCEDURES FOR SURRENDER OF SHARES AND RECEIPT OF CONSIDERATION			81
Cancellation of Rights			83
Payment of Consideration by Purchaser			83
Depositary Services			83
DISSENT RIGHTS			84
Dissent Rights of Shareholders to the Continuance			84
Dissent Rights of Shareholders to the Arrangement			86
PROPOSAL NO. 1 – CONTINUANCE RESOLUTION			88
Vote Required			88
Board Recommendation			88
PROPOSAL NO. 2 – ARRANGEMENT RESOLUTION			88

 

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Vote Required			88
Board Recommendation			89
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON			90
DELINQUENT SECTION 16(A) REPORTS			90
HOUSEHOLDING OF PROXY MATERIALS			90
DIRECTORS AND OFFICERS’ LIABILITY			90
ADDITIONAL INFORMATION			90
GLOSSARY OF TERMS			92
DIRECTORS’ APPROVAL			106
APPENDIX A – CONTINUANCE RESOLUTION			A-1
APPENDIX B – ARRANGEMENT AGREEMENT			B-1
APPENDIX C – PLAN OF ARRANGEMENT			C-1
APPENDIX D – ARRANGEMENT RESOLUTION			D-1
APPENDIX  E – FORMAL VALUATION AND OPINION OF LOCUST WALK SECURITIES, LLC			E-1
APPENDIX F – INTERIM ORDER			F-1
APPENDIX G – NOTICE OF APPLICATION FOR THE FINAL ORDER			G-1
APPENDIX H – DISSENT PROVISIONS OF THE CBCA			H-1
APPENDIX I – DISSENT PROVISIONS OF THE ABCA			I-1

 

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PERSONS MAKING THE SOLICITATION

The information contained in this proxy statement (the “Proxy Statement”) is furnished in connection with the solicitation of proxies by Aptose Biosciences Inc. (the “Corporation”, “Aptose”, “we” or “our”) to be used at the special meeting (the “Meeting”) of holders (the “Shareholders”) of common shares (the “Shares”) of the Corporation to be held on January 16, 2026 at 11:00 a.m. (Eastern time) and at all adjournments thereof, for the purposes set forth in the accompanying notice of meeting (the “Notice of Meeting”). The Meeting will be held online at https://meetings.lumiconnect.com/400-581-122-608. There will be no physical location for Shareholders and duly appointed proxyholders to attend.

The information contained in this Proxy Statement is given as at December [●], 2025 except where otherwise noted. All references to “dollar” or the use of the symbol “$” are to United States dollars and use of the symbol “C$” refers to Canadian dollars, unless otherwise indicated.

On February 26, 2025, the Corporation effected a reverse stock split on a thirty (30) to one (1) Share basis. All Share and per Share amounts have been adjusted retroactively to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented.

This Proxy Statement does not constitute the solicitation of an offer to purchase, or the making of an offer to sell, any securities or the solicitation of a proxy by any person in any jurisdiction in which such solicitation or offer is not authorized or in which the person making such solicitation or offer is not qualified to do so or to any person to whom it is unlawful to make such solicitation or offer.

Information contained in this Proxy Statement should not be construed as legal, tax or financial advice and Shareholders are urged to consult their own professional advisors in connection therewith.

Descriptions in this Proxy Statement of the terms of the Arrangement Agreement, the Plan of Arrangement and the Support and Voting Agreements are summaries of the terms of those documents and are qualified in their entirety by such terms. Shareholders should refer to the full text of each of the Arrangement Agreement, the Plan of Arrangement and the Support and Voting Agreements for complete details of those documents.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Proxy Statement contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities law, which we collectively refer to as “forward-looking statements”. Such forward-looking statements reflect our current beliefs and are based on information currently available to us. In some cases, forward-looking statements can be identified by terminology such as “may”, “would”, “could”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, “hope”, “foresee” or the negative of these terms or other similar expressions concerning matters that are not historical facts.

Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others:

 

•

the occurrence of any event, change or other circumstance that could give rise to the termination of the Arrangement Agreement, including in circumstances that would require payment by Aptose of an Expense Fee or the commencement of proceedings under the CCAA;

 

•

the failure to obtain the required vote of Shareholders to approve the Continuance Resolution or the Arrangement Resolution;

 

•

the inability of the parties to satisfy the other conditions to, and to complete, the Continuance and the Arrangement;

 

•

risks related to disruption of management’s attention from Aptose’s ongoing business operations due to the pendency of the Arrangement;

 

•

the effect of the announcement of the Arrangement on the Corporation’s operating results and business generally and the Corporation’s relationships with employees, customers, suppliers, partners and regulators;

 

•

the outcome of any legal proceedings that may be instituted against Aptose and others relating to the Arrangement Agreement;

 

•

the inherent uncertainty with financial or other forecasts or projections;

 

•

the impact of the Arrangement not being completed on the Corporation and its business and shareholders;

 

•

the failure to obtain the Regulatory Approvals;

 

•

uncertainties related to general economic, financial, regulatory and political conditions, as well as potential changes in law and regulatory interpretations and the competitive environment in which the Corporation operates; and

 

•

other risks and uncertainties pertaining to the Corporation, including the risks and uncertainties discussed in Aptose’s filings with the Canadian Securities Administrators and

 

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the SEC, including the “Risk Factors” sections of Aptose’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other continuous disclosure documents filed with the Canadian Securities Administrators and the SEC, copies of which are available at www.sedarplus.ca and at www.sec.gov.

Except as required under applicable securities legislation, we undertake no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

QUESTIONS ABOUT THE ARRANGEMENT

The following questions and answers are intended to briefly address some commonly asked questions regarding the Arrangement Agreement and the Arrangement. These questions and answers do not address all questions that may be important to you as a Shareholder. Please refer to the section entitled “Summary” and the more detailed information contained elsewhere in this Proxy Statement, the appendices to this Proxy Statement, and the documents referred to in this Proxy Statement, which you should read carefully.

What is the Arrangement?

The Arrangement is the transaction contemplated under the Arrangement Agreement entered into by the Corporation, Purchaser and Parent under which, among other things, the Purchaser will acquire all of the issued and outstanding Shares (other than the Shares beneficially owned or controlled by Parent or any of its affiliates) by way of a statutory plan of arrangement under section 193 of the ABCA.

On closing of the Arrangement, the Corporation will become a wholly-owned indirect subsidiary of Parent and will apply to cease to be a reporting issuer under applicable Canadian securities laws and to deregister its securities under the Exchange Act as soon as practicable following the completion of the Arrangement, and the Shares will be delisted from the TSX and the OTC Markets. The Arrangement will be carried out pursuant to the terms of the Arrangement Agreement and the Plan of Arrangement. For information regarding the treatment of Warrants, Restricted Stock Units and Options in the Arrangement, see the section entitled “The Arrangement – Arrangement Steps”.

What will I receive in the Arrangement?

If the Arrangement is completed, you will be entitled to receive the Consideration in respect of each Share, which is equal to C$2.41 in cash per Share, subject to applicable withholdings and other source deductions. If you are a registered Shareholder, you must complete and follow the instructions in the Letter of Transmittal to receive the Consideration. If you are a Beneficial Shareholder, you should contact your Intermediary to arrange for your Intermediary to complete the necessary transmittal documents (including the Letter of Transmittal) and make such other arrangements with your Intermediary as are necessary to receive the Consideration.

What does the Board Recommend?

The Board, after careful review and consideration and consultation with its financial and legal advisors, and upon the unanimous recommendation of the Transaction Committee, unanimously (1) determined that the Arrangement is fair to the Shareholders (other than Parent and its affiliates); (2) determined that the Arrangement is in the best interests of the Corporation; and (3) recommends that the Shareholders vote “FOR” the Arrangement Resolution.

 

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For more information, you should also review the sections entitled “The Arrangement – Recommendation of the Board and Transaction Committee and Reasons for the Arrangement”.

How do the directors and executive officers of the Corporation intend to vote?

The directors and executive officers of the Corporation have each entered into a Support and Voting Agreement with Parent pursuant to which each has agreed to vote or cause to be voted all Shares owned or controlled by them in favour of the Arrangement Resolution and the Continuance Resolution. As of November 18, 2025, the date of the Arrangement Agreement, the Shares held by all Supporting Shareholders represent in the aggregate approximately 0.26% of the outstanding Shares entitled to vote at the Meeting.

For more information see the section entitled “The Arrangement – Support and Voting Agreements”.

Why is the Board proposing the Arrangement?

The Board is proposing the Arrangement because, after consultation with its financial and legal advisors and careful consideration of various factors, and upon the unanimous recommendation of the Transaction Committee, the Board has unanimously determined that the Arrangement is fair to the Shareholders (other than Parent and its affiliates) and that the Arrangement is in the best interests of the Corporation.

In reaching these determinations, the Transaction Committee and the Board each considered numerous factors, including, among other things, the potential benefits and risks of the Arrangement a.

For details regarding the process followed by, and reasons for the recommendation of, the Board, see the sections entitled “The Arrangement – Background to the Arrangement”, “The Arrangement – Recommendation of the Board and Transaction Committee and Reasons for the Arrangement”.

When does the Corporation expect the Arrangement to be effective?

The completion of the Arrangement is conditional upon, among other things, receipt of the Required Shareholder Approval, the granting of the Final Order, receipt of the Regulatory Approvals, and such other conditions to completion as set forth in the Arrangement Agreement.

Accordingly, the exact timing of completion of the Arrangement cannot be predicted. As required by the terms of the Arrangement Agreement, the Corporation is holding the Meeting as soon as reasonably practicable in order to obtain the Required Shareholder Approval of the Arrangement Resolution.

For more information, see the sections entitled “The Arrangement Agreement – Conditions to the Arrangement” and “The Arrangement Agreement – Covenants – Regulatory Approvals”.

Has the Corporation received a fairness opinion in connection with the Arrangement?

The Corporation retained Locust Walk as the Board’s financial advisor in connection with the Arrangement and the other transactions contemplated by the Arrangement Agreement. In connection with this engagement, the Board requested that Locust Walk evaluate the fairness, from a financial point of view, to the holders of Shares (other than Excluded Shares) of the Consideration proposed to be paid to such holders pursuant to the Arrangement Agreement. On November 18, 2025, Locust Walk rendered to the Board its oral opinion, which was subsequently confirmed by delivery of a written opinion dated

 

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November 18, 2025 that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Locust Walk in preparing its opinion, the Consideration proposed to be paid to the holders of Shares (other than Excluded Shares) pursuant to the Arrangement Agreement was fair, from a financial point of view, to such holders.

For more information, see the section entitled “The Arrangement – Formal Valuation and Fairness Opinion of Locust Walk”. The full text of Locust Walk’s written opinion, dated November 18, 2025, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Locust Walk in preparing its opinion, is attached as Appendix E and is incorporated herein by reference.

How will the Arrangement affect my ownership and voting rights as a Shareholder?

Following the completion of the Arrangement, Shareholders will not have any interest in the Corporation or its securities, assets, future revenues or profits. On completion of the Arrangement, it is intended that the Shares will be delisted from the TSX and the OTC Markets and the Corporation will apply to cease to be a reporting issuer under Canadian securities laws and to deregister its securities under the Exchange Act as soon as practicable following the completion of the Arrangement.

What happens if the Arrangement is not completed?

If the Arrangement is not completed, Shareholders will retain their Shares and will not receive the Consideration. If the Arrangement is not completed, the Shares will continue to be listed for trading on the TSX. Failure to complete the Arrangement may have a material negative effect on the trading price of the Shares.

Pursuant to the terms of the Arrangement Agreement, in certain circumstances where the Corporation fails to complete the Arrangement, the Corporation will be required to commence without delay the Alternative CCAA Proceedings. See “The Arrangement Agreement – Alternative CCAA Proceedings” for more information.

Shareholders will continue to be subject to the same or similar risks and uncertainties currently facing the Corporation and disclosed in the Corporation Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC and available on EDGAR and SEDAR+, as updated by the Corporation’s continuous disclosure filings, copies of which are available at www.sec.gov and at www.sedarplus.ca.

For more information, see the section entitled “Risk Factors”.

Are there risks I should consider in connection with the Arrangement?

Yes. Particulars of the Arrangement are described in this Proxy Statement and a copy of the Arrangement Agreement is attached as Appendix B. A number of the risk factors that you should consider in connection with the Arrangement are described in the section entitled “Risk Factors”.

 

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What will I receive for my Options, RSUs or Warrants under the Arrangement?

Upon completion of the Arrangement:

 

•

each Option held by an Option holder will cease to represent an option or other right to acquire Shares and shall be surrendered to the Corporation and exchanged for an amount in cash, payable by the Corporation, equal to the Consideration less the applicable exercise price in respect of such Option, less any applicable withholdings;

 

•

each RSU held by a RSU holder will cease to represent a share unit of the Corporation and shall be surrendered to the Corporation and exchanged for an amount in cash, payable by the Corporation, equal to the Consideration, less any applicable withholdings;

 

•

each Warrant held by a Warrant holder other than Warrants held by Armistice Capital Master Fund Ltd. (the “Armistice Warrants”) will cease to represent a common share purchase warrant of the Corporation and shall be surrendered to the Corporation and exchanged for an amount in cash, payable by the Corporation, equal to the Consideration, less the exercise price per Share of such Warrant, less any applicable withholdings; and

 

•

each Armistice Warrant will cease to represent a common share purchase warrant of the Corporation, and shall be deemed to be surrendered and exchanged for an amount in cash, payable by the Corporation, equal to the Black Scholes Amount, less any applicable withholdings.

What happens if I sell my Shares before completion of the Arrangement?

If you transfer your Shares, you will have transferred your right to receive the applicable Consideration for your Shares in the Arrangement. In order to receive the applicable Consideration, you must hold your Shares through completion of the Arrangement.

The Record Date for Shareholders entitled to vote at the Meeting is earlier than the closing of the Arrangement. If you transfer your Shares after the Record Date but before the closing of the Arrangement, you will have transferred your right to receive the applicable Consideration in the Arrangement, but retained the right to vote at the Meeting.

Am I entitled to Dissent Rights?

Only registered Shareholders are entitled to exercise Dissent Rights with respect to the Arrangement Resolution and the Continuance Resolution.

A Beneficial Shareholder desiring to exercise its Dissent Rights must make arrangements for the Shares beneficially owned by such Beneficial Shareholder to be registered in the Beneficial Shareholder’s name prior to the time the written objection to the Arrangement Resolution or the Continuance Resolution, as applicable, is required to be received by the Corporation or, alternatively, make arrangements for the registered holder of such Shares to dissent on the Beneficial Shareholder’s behalf. A registered Shareholder wishing to exercise Dissent Rights may only dissent with respect to all of the Shares held on behalf of any one Beneficial Shareholder and registered in the name of such Shareholder.

For more information, see the section entitled “Dissent Rights”.

 

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QUESTIONS ABOUT THE SPECIAL MEETING AND VOTING YOUR SHARES

What are the date, time and place of the Meeting?

The Meeting will be held on January 16, 2026 at 11:00 a.m. (Eastern time). The Meeting will be held online at https://meetings.lumiconnect.com/400-581-122-608 . There will be no physical location for Shareholders and duly registered proxyholders to attend. The online Meeting will be accessible 15 minutes before the start time.

How can I access the Meeting virtually?

To participate in the Meeting virtually, visit https://meetings.lumiconnect.com/400-581-122-608. Registered Shareholders and duly appointed and registered proxyholders will be able to listen, vote and ask questions via the virtual meeting platform. It is to be noted, however, that questions cannot be submitted prior to the Meeting. Non-registered Shareholders who have not appointed themselves as proxyholders will only be able to attend the online Meeting as “Guests” and will not be able to vote or ask questions at the Meeting. To access the Meeting virtually, registered Shareholders and duly appointed proxyholders will need an Internet connection and an Internet-connected device (such as a desktop, laptop, tablet or cell phone) running the most updated version of applicable software and plugins. The virtual meeting platform is fully supported across browsers (Microsoft Edge, Chrome, Firefox and Safari). Participants in the online Meeting must be connected to Internet at all times during the Meeting in order to vote when balloting commences. A summary of the information Shareholders will need to attend the Meeting virtually is provided below:

 

1.	Registered Shareholders and duly appointed proxyholders can participate in the Meeting virtually by clicking “I have a login” and entering a Username and Password before the start of the Meeting.

 

(a)

Registered Shareholders – The 15-digit control number located on the form of proxy or in the email notification you received is the Username and the Password is “aptose2026”.

 

(b)

Duly appointed proxyholders – Following the registration of the proxyholder with Computershare Investor Services Inc. (“Computershare”), Computershare will provide the proxyholder with a Username after the voting deadline has passed. The Password to the online Meeting is “aptose2026”.

 

2.

Voting at the Meeting will only be available for registered Shareholders and duly appointed and registered proxyholders. Non-registered Shareholders who have not appointed themselves may attend the Meeting virtually by clicking “I am a guest” and completing the online form. This will allow them to listen to the online Meeting; however, they will not be able to vote or submit questions.

 

3.

Registered Shareholders who use a 15-digit control number to login to the online Meeting and who accept the terms and conditions will be revoking any and all previously submitted proxies. However, in such a case, registered Shareholders will be provided the opportunity to vote by ballot on the matters put forth at the Meeting. If registered Shareholders do not wish to revoke all previously submitted proxies, they should not accept the terms and conditions, in which case they can only enter the online Meeting as a guest.

 

- 17 -

If you attend the Meeting virtually, it is important that you remain connected to the internet at all times during the online Meeting in order to vote when balloting commences. It is your responsibility to ensure connectivity for the duration of the Meeting. You will be able to access the online Meeting 15 minutes before the start time and should allow ample time for online check-in, which will begin at 11:00 a.m. (Eastern time) on January 16, 2026.

Why is the Meeting held virtually?

By conducting our Meeting online, the Board aims to provide Shareholders a convenient opportunity to participate in the Meeting without incurring significant travel costs or being restricted by time constraints.

The format of the Meeting has been designed to ensure that Shareholders who attend the Meeting online will be afforded the same rights and opportunities to participate as they have in previous special shareholders’ meetings. Directors will also attend the Meeting via the virtual platform.

Can I submit questions prior or at the Meeting?

Registered Shareholders and duly appointed and registered proxyholders can ask questions during the online Meeting via the virtual meeting platform. It is to be noted, however, that questions cannot be submitted prior to the Meeting. Questions pertinent to the Meeting matters will be answered at a designated time during the Meeting, subject to time constraints. The chair of the Meeting reserves the right to edit or reject questions it deems irrelevant to meeting matters, profane or inappropriate.

The chair of the Meeting has broad authority to conduct the Meeting in an orderly manner. To ensure the Meeting is conducted in a manner that is fair to all Shareholders, the chair of the Meeting may exercise its discretion in recognizing Shareholders who wish to participate, in determining the order in which questions are answered, and the amount of time devoted to each question. However, consistent with prior special shareholders’ meetings, questions submitted in accordance with the rules of conduct generally will be addressed in the order received during the allotted time for questions.

Who can vote at the Meeting?

Only Shareholders as of the close of business on the Record Date, being December 12, 2025, are entitled to receive notice of and vote on matters to be presented at the Meeting, or any adjournment or postponement thereof, in the manner and subject to the procedures described in this Proxy Statement and the accompanying form of proxy.

As at the date hereof, 2,552,429 Shares were issued and outstanding.

Each Shareholder is entitled to one vote per Share held on all matters to come before the Meeting. Shares of Aptose are the only securities of Aptose which will have voting rights at the Meeting.

What is the quorum for the Meeting?

The presence at the opening of the Meeting of two persons who are entitled to vote either as Shareholders or as proxyholders and holding or representing not less than 33¹⁄₃% of the outstanding Shares entitled to vote at the Meeting as of the Record Date will constitute a quorum for the transaction of business at the Meeting. In general, Shares represented by a properly signed and returned form of proxy, or properly voted by Internet or telephone, or voted by your broker will be counted as Shares present and entitled to

 

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vote at the Meeting for purposes of determining a quorum. “Broker non-votes” are also counted in determining whether a quorum is present.

What does it mean to vote by proxy?

Voting by proxy means that you are giving the person or people named on your form of proxy (the “proxyholder”) the authority to vote your Shares for you at the Meeting or any adjournment. A form of proxy is included with this Proxy Statement.

The management representatives named on the form of proxy will vote your Shares for you, unless you appoint someone else to be your proxyholder. You have the right to appoint a person to represent you at the Meeting other than the persons named on the form of proxy. If you appoint someone else, he or she must be present at the Meeting to vote your Shares. If you want to appoint someone else, you can insert that person’s name in the blank space provided in the form of proxy. That other person does not need to be a Shareholder of the Corporation.

If you are voting your Shares by proxy, our transfer agent, Computershare, must receive your completed form of proxy by 11:00 a.m. (Eastern time) on January 14, 2026 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting.

What’s the difference between registered and non-registered (beneficial) Shareholders?

The voting process is different depending on whether you are a registered or non-registered (beneficial) Shareholder:

Registered Shareholders

You are a registered Shareholder if your name appears on your Share certificate or in the registers of the Corporation maintained by Computershare. Your form of proxy tells you whether you are a registered Shareholder. We mail copies of the Notice of Meeting, this Proxy Statement and the form of proxy (collectively, the “proxy materials”) directly to registered Shareholders. We have previously mailed our annual report to all registered Shareholders.

Non-Registered (or Beneficial) Shareholders

You are a non-registered (or beneficial) Shareholder if your bank, trust company, securities broker or other financial institution holds your Shares for you (as your nominee). For most of you, your voting instruction form or proxy tells you whether you are a non-registered (or beneficial) Shareholder.

In accordance with Canadian securities law and SEC rules, we have distributed copies of the proxy materials and the annual report to CDS Clearing and Depository Services Inc. and intermediaries (such as securities brokers or financial institutions) for onward distribution to those non-registered or beneficial Shareholders to whom we have not sent the proxy materials and the annual report directly.

The intermediaries are required to forward proxy materials and the annual report to non-registered or beneficial Shareholders unless a non-registered or beneficial Shareholder has waived the right to receive them. Very often, intermediaries will use a service company such as Broadridge Investor Communication Solutions to forward the proxy materials to non-registered or beneficial Shareholders.

 

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How do I vote?

Most non-registered or beneficial Shareholders who have not waived the right to receive proxy materials will receive a voting instruction form (“VIF”). Registered Shareholders will, and some non-registered (beneficial) Shareholders may receive a form of proxy. Shareholders should follow the additional procedures set out below, depending on what type of form they receive. Detailed instructions regarding Shareholders’ voting process are also available on the Investors page of our website at https://www.aptose.com/investors/news-events/ir-calendar.

 

1.

Voting Instruction Form. If the non-registered Shareholder does not wish to attend and vote at the Meeting (or have another person attend and vote on the non-registered Shareholder’s behalf), the voting instruction form must be completed, signed and returned in accordance with the directions on the form, so that the intermediary may vote on the non-registered Shareholder’s behalf.

If a non-registered Shareholder wishes to attend and vote at the Meeting (or have another person attend and vote on the non-registered Shareholder’s behalf), the non-registered Shareholder must complete, sign and return the VIF in accordance with the directions provided. If the non-registered Shareholder wishes to attend and vote at the Meeting, they must appoint themselves as proxyholder. Otherwise, the non-registered Shareholder will only be able to attend the Meeting as a “Guest”, and will not be able to vote or ask questions at the Meeting. Non-registered Shareholders should visit our website at https://www.aptose.com/investors/news-events/ir-calendar to obtain additional instructions on how to vote online during the Meeting.

Non-registered Shareholders who wish to appoint themselves as a proxy holder in order to attend the Meeting virtually or who wish to appoint a proxyholder other than a management representative to represent them at the online Meeting must submit their VIF prior to registering themselves or their proxyholder, as applicable. Registering themselves or the proxyholder, as applicable, is an additional step once a non-registered Shareholder has submitted their VIF. Failure to register themselves or another person other than a management representative as duly appointed proxyholder will result in the non-registered Shareholder or the proxyholder not receiving a Username to participate in the Meeting. To register a proxyholder (be it themselves or another person other than a management representative), non-registered Shareholders must visit https://www.computershare.com/aptose by 11:00 a.m. (Eastern time) on January 14, 2026 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting, and provide Computershare with their information or their proxyholder’s contact information, as applicable, so that Computershare may provide them or the proxyholder, as applicable, with a Username via email. Without a Username, non-registered Shareholders who appointed themselves as proxyholders and proxyholders will only be able to attend the Meeting as “Guests” and will not be able to vote or ask questions at the Meeting.

Or

 

2.

Form of Proxy. A registered Shareholder will receive a form of proxy to be completed, signed and returned in accordance with the directions on the form, if the registered Shareholder does not wish to attend and vote at the Meeting virtually (or have another person attend and vote on the registered Shareholder’s behalf).

Registered Shareholders who wish to appoint a proxyholder other than a management representative to represent them at the online Meeting must submit their form of proxy prior to registering their proxyholder. Registering the proxyholder is an additional step once a registered Shareholder has submitted their proxy. Failure to register a duly appointed proxyholder will result

 

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in the proxyholder not receiving a Username to participate in the Meeting. To register a proxyholder, registered Shareholders must visit https://www.computershare.com/aptose by 11:00 a.m. (Eastern time) on January 14, 2026 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting, and provide Computershare with their proxyholder’s contact information, so that Computershare may provide the proxyholder with a Username via email. Without a Username, proxyholders will only be able to attend the Meeting as “Guests” and will not be able to vote or ask questions at the Meeting.

Registered Shareholders may also attend and vote at the Meeting. Registered Shareholders wishing to attend the Meeting virtually should visit our website at https://www.aptose.com/investors/news-events/ir-calendar to obtain additional instructions on how to vote online during the Meeting. The 15-digit control number provided on the registered Shareholder’s form of proxy will be required.

Less frequently, a non-registered Shareholder will receive, as part of the proxy materials, a form of proxy that has already been signed by the intermediary (typically by a facsimile or stamped signature), which is restricted as to the number of Shares beneficially owned by the non-registered Shareholder, but which is otherwise uncompleted. If the non-registered Shareholder does not wish to attend and vote at the Meeting (or have another person attend and vote on the non-registered Shareholder’s behalf), the non-registered Shareholder must complete the form of proxy and deposit it with Computershare, 320 Bay Street, 14^th Floor, Toronto, Ontario, Canada, M5H 4A6 as described above.

If a non-registered Shareholder wishes to attend and vote at the Meeting (or have another person attend and vote on the non-registered Shareholder’s behalf), the non-registered Shareholder must strike out the names of the persons named in the proxy and if they intend to participate in the Meeting virtually, insert the non-registered Shareholder’s (or such other person’s) name in the blank space provided. The non-registered Shareholder must then register themselves or the other person, as applicable, as proxyholder. Registering themselves or the other person, as applicable, is an additional step once a non-registered Shareholder has submitted their completed form of proxy. Failure to register themselves or the other person, as applicable, as duly appointed proxyholder will result in the non-registered Shareholder or the proxyholder, as applicable, not receiving a Username to participate in the online Meeting. To register a proxyholder (be it themselves or another person), non-registered Shareholders must visit https://www.computershare.com/aptose by 11:00 a.m. (Eastern time) on January 14, 2026 or, if the Meeting is adjourned, 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment of the Meeting, and provide Computershare with their information or their proxyholder’s contact information, as applicable, so that Computershare may provide them or the proxyholder, as applicable, with a Username via email. Without a Username, non-registered Shareholders who appointed themselves as proxyholders and proxyholders will only be able to attend the Meeting as “Guests” and will not be able to vote or ask questions at the Meeting.

 

3.

United States non-registered (beneficial) Shareholders. If a non-registered Shareholder in the United States wishes to attend and vote at the online Meeting, they must first obtain a valid legal proxy from their broker, bank or other agent and then register in advance to attend the Meeting. The U.S. non-registered Shareholder should follow the instructions from their broker or bank included with these proxy materials, or contact their broker or bank to request a legal form of proxy. After first obtaining a valid legal proxy from their broker, bank or other agent, the U.S. non-

 

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registered Shareholder must then register to attend the online Meeting by submitting a copy of their legal proxy to Computershare. Requests for registration should be directed to:

Computershare

320 Bay Street

14^th Floor

Toronto, Ontario

M5H 4A6

OR

Email at: uslegalproxy@computershare.com

Requests for registration must be labelled as “Legal Proxy” and be received no later than by 11:00 a.m. (Eastern time) on January 14, 2026. U.S. non-registered Shareholders will receive a confirmation of their registration by email receipt of their registration materials by Computershare. U.S. non-registered Shareholders will then be able to attend the Meeting and vote and ask questions at https://meetings.lumiconnect.com/400-581-122-608. U.S. non-registered Shareholders are required to register their appointment at www.computershare.com/appointee. If U.S. non-registered Shareholders do not follow the procedures set out above, they will only be able to attend the Meeting virtually as “Guests” and will not be able to vote or ask questions at the online Meeting.

Shareholders should follow the instructions on the forms they receive, and non-registered Shareholders should contact their intermediaries promptly if they need assistance.

How do I request a copy of proxy materials?

To request a printed copy of the proxy materials, please contact your broker, if you are a non-registered Shareholder, or if you are a registered Shareholder, contact our Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary at Aptose Biosciences Inc., Suite 120, 12770 High Bluff Drive, San Diego, California, telephone: 858-926-2730.

The proxy materials are being sent or made available to both registered and non-registered owners of Shares. The Corporation is sending proxy materials indirectly to non-objecting beneficial owners (as defined in National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”)). The Corporation intends to pay for intermediaries to forward to objecting beneficial owners (as defined in NI 54-101) the proxy materials.

What am I voting on at the Meeting?

The following items of business will be covered at the Meeting:

 

1.

Proposal No. 1 – to consider, and if deemed advisable, to pass, with or without variation, a special resolution to approve a continuance of the Corporation from the Canada Business Corporations Act (“CBCA”) to the Business Corporations Act (Alberta) (the “Continuance Resolution”), the full text of which is set forth in Appendix A to the Proxy Statement;

 

2.

Proposal No. 2 - to consider, pursuant to the Interim Order, and, if deemed advisable, to pass, with or without variation, a resolution (the “Arrangement Resolution”), the full text of which is set forth in Appendix D to the Proxy Statement, approving a statutory arrangement (the “Arrangement”) pursuant to Section 193 of the ABCA; and

 

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3.	Transacting such other business as may be properly brought before the Meeting.

As of the date of this Proxy Statement, the Board is not aware of any such other business.

How does the Board recommend that I vote?

The Board recommends that each Shareholder vote “FOR” Proposals No. 1 and 2.

What votes may I cast with regard to each Proposal?

You can choose to vote “For” or “Against” each of Proposals No. 1 and 2. The Shares represented by the form of proxy will be voted in accordance with the instructions of the Shareholder on any ballot that may be called for and, if the Shareholder specifies a choice with respect to any matter to be acted upon, the Shares will be voted accordingly.

If you return your form of proxy and do not tell us how you want to vote your Shares, your Shares will be voted in accordance with Board recommendations for each proposal by the management representatives named in the form of proxy.

The enclosed form of proxy confers discretionary authority upon the management representatives designated in the form of proxy with respect to amendments to or variations of matters identified in the Notice of Meeting and with respect to other matters that may properly come before the Meeting. At the date of this Proxy Statement, management of the Corporation knows of no such amendments, variations or other matters.

What vote is required in order to approve each Proposal?

 

•

Proposal No. 1: The Continuance Resolution will require the affirmative vote of at least two-thirds (662⁄3%) of the votes cast by the Shareholders virtually present or represented by proxy and entitled to vote at the Meeting, voting as a single class. Broker non-votes will not be included in the total votes cast and will not affect the results.

 

•

Proposal No. 2: Pursuant to the Interim Order and Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), the Arrangement Resolution will require the affirmative vote of: (i) at least two-thirds (662⁄3%) of the votes cast by the Shareholders virtually present or represented by proxy and entitled to vote at the Meeting, voting as a single class; and (ii) a simple majority (50%+1) of the votes cast by the Shareholders virtually present or represented by proxy and entitled to vote at the Meeting, voting as a single class, excluding the votes of Shareholders whose votes are required to be excluded for the purpose of such vote under MI 61-101 (the “Minority Shareholders”). Broker non-votes will not be included in the total votes cast and will not affect the results.

 

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What is the effect if I do not cast my vote?

If, as a registered Shareholder, you do not cast your vote at the Meeting or by proxy, no votes will be cast on your behalf on any of the Proposals.

If you are a U.S. beneficial Shareholder with an intermediary, you must instruct your U.S. intermediary how to vote your shares. If, as a U.S. non-registered or beneficial Shareholder, you do not instruct your intermediary on how to vote on any of the Proposals at the Meeting, the intermediary does not have discretionary authority to vote your shares on Proposals No. 1 and 2 or any unusual item, so a “broker non-vote” will be recorded with respect to such item. Broker non-votes will be treated as not entitled to vote on any such matter and will not be counted as having been voted in respect of any such matter. Shares represented by such broker “non-votes” will, however, be counted in determining whether there is a quorum for the Meeting.

How do I change my vote?

A registered Shareholder who has given a proxy may revoke that proxy and change a vote by:

 

(a)

completing and signing a proxy bearing a later date and depositing it with Computershare as described above;

 

(b)

depositing an instrument in writing executed by the Shareholder or by the Shareholder’s attorney authorized in writing at our registered office located at 66 Wellington Street West, Suite 5300, TD Bank Tower Box 48, Toronto ON M5K 1E6, Canada at any time before 11:00 a.m. (Eastern time) on January 15, 2026, or on the last business day before any adjournment of the Meeting at which the proxy is to be used;

 

(c)

using your 15-digit control number and voting online at the Meeting; or

 

(d)

in any other manner permitted by law.

A non-registered or beneficial Shareholder may revoke a voting instruction form or a waiver of the right to receive proxy materials and to vote given to an intermediary or to the Corporation, as the case may be, at any time by written notice to the intermediary or the Corporation, except that neither an intermediary nor the Corporation is required to act on a revocation of a voting instruction form or on a waiver of the right to receive materials and to vote that is not received by such intermediary or the Corporation, at least seven days prior to the Meeting.

What does it mean if I receive more than one set of proxy materials?

This means that you own Shares that are registered under different accounts. For example, you may own some Shares directly as a registered Shareholder and other Shares as a non-registered beneficial Shareholder through an intermediary, or you may own Shares through more than one such organization. In

 

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these situations, you will receive multiple sets of proxy materials. It is necessary for you to complete and return all forms of proxy and VIFs in order to vote all of the Shares you own. Please make sure you return each form of proxy or VIF in the accompanying return envelope. You may also vote by Internet, telephone, facsimile or email, as applicable, by following the instructions on your proxy materials.

Who is soliciting the proxies, how will proxies be solicited and who will pay the cost of the proxy solicitation?

Aptose is soliciting proxies to be used at the Meeting. The solicitation of proxies will be primarily by mail, but Aptose’s directors, officers and regular employees may also solicit proxies personally or by telephone. Aptose will bear all costs of the solicitation, including the printing, handling and mailing of the Meeting materials. Aptose has arranged for intermediaries to forward the Meeting materials to non-registered or beneficial Shareholders of record, and Aptose may reimburse the intermediaries for their reasonable fees and disbursements in that regard.

Aptose has retained Sodali & Co as their strategic shareholder advisor and proxy solicitation agent and will pay fees of up to $115,000 to Sodali & Co for proxy solicitation services in addition to out-of-pocket expenses.

Additionally, Aptose may use the Broadridge QuickVote^™ service, which involves non-objecting beneficial shareholders being contacted by Sodali & Co to obtain voting instructions over the telephone, and relaying them to Broadridge (on behalf of the Shareholders’ intermediary). The QuickVote^™ system is intended to assist Shareholders in placing their votes, however, Shareholders are not obligated to vote using the QuickVote^™ system, a Shareholder may vote (or change or revoke their votes) at any other time and in any other applicable manner described in this Proxy Statement. Any voting instructions provided by a Shareholder will be recorded and such Shareholder will receive a letter from Broadridge (on behalf of the Shareholder’s intermediary) as confirmation that their voting instructions have been accepted.

What if amendments are made to the Proposals or if other matters are brought before the Meeting?

With respect to any amendments or variations in any of the Proposals, or any other matters which may properly come before the Meeting, the Shares will be voted by the appointed proxyholder as he or she in their sole discretion sees fit.

As of the date of this Proxy Statement, the Board is not aware of any such amendments, variations or other matters to come before the Meeting. However, if any such changes that are not currently known to the Board should properly come before the Meeting, the Shares represented by your proxyholders will be voted in accordance with the best judgment of the proxyholders.

Who will tabulate the votes?

We currently expect that Computershare will tabulate the votes, and the secretary of the Meeting will be our inspector of elections for the Meeting.

When will voting results be disclosed?

Preliminary voting results will be announced at the Meeting. Final voting results will be filed with the Canadian provincial securities regulatory authorities on SEDAR+ at www.sedarplus.ca promptly following the Meeting, and will also be published in a Current Report on Form 8-K filed with the SEC on EDGAR at www.sec.gov within four business days of the Meeting.

Whom do I contact if I have questions regarding the Meeting?

If you have any questions about the Special Meeting or require more information with respect to the procedures for voting, please contact our strategic shareholder advisor and proxy solicitation agent, Sodali & Co at 1-833-711-4830 toll free in North America or 1-289-695-3075 collect outside North America or by email at assistance@investor.sodali.com.

 

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VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

As of December [●], 2025, 2,552,429 Shares are issued and outstanding. Each holder of Shares of record at the close of business on December 12, 2025, will be entitled to one vote for each Share held on all matters proposed to come before the Meeting, except to the extent that the Shareholder has transferred any Shares after the Record Date and the transferee of such Shares establishes ownership of them and makes a written demand, not later than 10 days prior to the Meeting, to be included in the list of Shareholders entitled to vote at the Meeting, in which case the transferee will be entitled to vote such Shares.

SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,

MANAGEMENT AND DIRECTORS

The table below sets forth information known to us regarding the beneficial ownership of our Shares as of December [●], 2025 for:

 

•

each person the Corporation believes beneficially holds more than 5% of our outstanding Shares based solely on our review of SEC filings;

 

•

each of our directors;

 

•

each of our executive officers; and

 

•

all of our directors and executive officers as a group.

The number of Shares beneficially owned by a person includes shares subject to options held by that person that are currently exercisable or that become exercisable within 60 days of December [●], 2025. Percentage calculations assume, for each person and group, that all Shares that may be acquired by such person or group pursuant to options currently exercisable or that become exercisable within 60 days of December [●], 2025 are outstanding for the purpose of computing the percentage of Shares owned by such person or group. However, such unissued Shares described above are not deemed to be outstanding for calculating the percentage of Shares owned by any other person.

Except as otherwise indicated, the persons in the table below have sole voting and investment power with respect to all Shares shown as beneficially owned by them, subject to community property laws where applicable and subject to the information contained in the notes to the table.

 

Name of Beneficial Owner

Amount and Nature of Beneficial  Ownership(1)

Percent of  Class

Named Executive Officers and Directors

Dr. Rafael Bejar

5,106

*

Dr. Denis Burger

1,234

*

Fletcher Payne

3,308

*

Dr. Erich Platzer

2,252

*

Dr. William G. Rice

17,308

*

Dr. Bernd R. Seizinger

898

*

 

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Mark D. Vincent

1,186

*

Warren Whitehead

1,108

*

All Executive Officers and Directors as a Group (8 persons)

32,400

1.3%

Beneficial Owners of More Than 5%

Hanmi Pharmaceutical Co., Ltd. (“Parent”)(2)(3)

508,710

19.9%

*Does not exceed one percent of Shares outstanding

(1)   Includes for the persons listed below the following Shares subject to options or warrants held by such persons that are currently exercisable or become exercisable within 60 days of December [●], 2025:

Dr. Rafael Bejar: 4,862 options; Dr. Denis Burger: 1,186 options; Mr. Fletcher Payne: 3,064 options; Dr. Erich Platzer: 1,130 options; Dr. William G. Rice: 11,168 options and 1,667 warrants; Dr. Bernd R. Seizinger: 332 options; Dr. Mark Vincent: 1,172 options; and Mr. Warren Whitehead: 1,075 options.

(2)   Based on information contained in a schedule 13D filed with the SEC on March 20, 2025 by Parent. Parent also owns common share purchase warrants which, when exercised, will increase the number of Shares beneficially owned by Parent.

(3)   Parent’s ownership gives effect to the 19.99% ownership blocker (the “Blocker”) restriction contained in certain of its securities. Parent currently holds warrants that would bring Parent’s interest in the Corporation to 23.0%, if exercised without giving effect to the Blocker.

 

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THE CONTINUANCE

General

In order to complete the Arrangement, the Corporation must first continue its corporate existence under the ABCA, as provided in the Arrangement Agreement. The Corporation intends to apply to continue Aptose out of the federal jurisdiction of Canada under the CBCA to the provincial jurisdiction of Alberta under the ABCA. A corporation subject to the CBCA may apply under the ABCA for a certificate of continuance under the ABCA (“Certificate of Continuance”): if: (a) the continuance to the ABCA is authorized by special resolution of the shareholders of the corporation; and (b) the corporation establishes to the Director under the CBCA that its proposed continuance to the ABCA will not adversely affect the creditors or shareholders of the corporation.

Shareholders will be asked to consider, and if deemed advisable, to pass the Continuance Resolution authorizing the Board, in its sole discretion, to file a continuance application with the Registrar under the ABCA as required in connection with the Continuance and a form of Articles of Continuance which comply with the provisions of the ABCA. The Continuance will affect certain of the rights of Shareholders as they currently exist under the CBCA, and Shareholders should consult with their legal advisors regarding the implications of the Continuance which may be of particular importance to them. The Board believes that the passing of the Continuance Resolution is in the best interest of and unanimously recommends that Shareholders vote FOR of the Continuance Resolution.

On the date shown on the Certificate of Continuance, Aptose will become a corporation under the laws of the Province of Alberta as if it had been incorporated under the ABCA. The Continuance will not result in any change in the business of Aptose or its assets, liabilities or net worth, or in the individuals who constitute the Board and management. The Continuance is not a reorganization, amalgamation or merger.

If: (a) the Continuance Resolution is passed by the Shareholders at the Meeting; (b) the Arrangement Resolution is passed by the Shareholders at the Meeting; and (c) all other conditions to the completion of the Arrangement have been satisfied or waived, then the Board shall, prior to the Effective Time, proceed with the Continuance.

Effect of the Continuance

Upon the effective date of the Continuance, the CBCA will cease to apply to Aptose and Aptose will thereupon become subject to the ABCA, as if it had been originally incorporated as a corporation under the provincial laws of Alberta. The Continuance will not create a new legal entity, affect the continuity of Aptose or result in a change in its business. The persons appointed as directors pursuant to the Recapitalization will continue to constitute the Board upon the Continuance becoming effective.

As of the effective date of the Continuance, Aptose’s current Constating Documents under the CBCA, will be replaced with the Articles of Continuance and new by-laws under the ABCA. See Schedules “A” and “B” to Appendix A.

Each previously outstanding Share will continue to be a share of the Corporation as a corporation governed by the ABCA.

Certain Corporate Differences Between the CBCA and the ABCA

If the Continuance Resolution is approved by the Shareholders and the Continuance is completed, Aptose will be governed by the ABCA instead of the CBCA. While the rights of shareholders under the

 

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ABCA are broadly similar to those under the CBCA, there are a number of variations in the rights afforded to shareholders under the two pieces of legislation.

The following is a summary of certain similarities and differences between the CBCA and the ABCA on matters pertaining to shareholder rights. This summary is not exhaustive and is of a general nature only and is not intended to be, and should not be construed to be, legal advice to Shareholders. Accordingly, Shareholders should consult their own legal advisors with respect to the corporate law consequences of the Continuance.

Board of Directors

Under the ABCA, there are no minimum number of directors that must be resident Canadian. Under the CBCA, at least one-quarter of a corporation’s directors must be resident Canadian; however, there is no similar requirements for committees of directors.

Place of Meetings

The CBCA provides that a meeting of shareholders may be held outside Canada if the place is specified in the articles or where all the shareholders entitled to vote at such a meeting so agree. No such provision applies under the ABCA.

Telephonic or Electronic Meetings

Under the CBCA, if the directors or the shareholders of a corporation call a meeting of shareholders, those directors or shareholders, as the case may be, may determine that the meeting shall be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the by-laws so provide. Under the ABCA, subject to any limitations or requirements set out in the regulations, if any, and unless the corporation’s bylaws, articles or other governing documents expressly provide otherwise, a meeting of shareholders may be held entirely by electronic means.

Shareholder Proposals

Both the ABCA and the CBCA provide for shareholder proposals.

Under the CBCA, a registered or beneficial owner of shares entitled to be voted at an annual meeting may submit a proposal. To be eligible, the registered or beneficial shareholder must either: (a) have owned for six months not less than 1% of the total number of voting shares or voting shares with a fair market value of a least C$2,000; or (b) have the support of persons who have owned for six months not less than 1% of the total number of voting shares or voting shares with a fair market value of at least C$2,000.

Under the ABCA, a registered holder of shares entitled to vote at an annual meeting of shareholders, or a beneficial owner of shares, may submit a proposal. To be eligible to make a proposal a person must: (a) be a registered holder or beneficial owner of at least one percent (1%) of all issued voting shares of the corporation for at least six months with a fair market value of a least C$2,000; (b) have the support of other registered holders or beneficial owners of shares of at least five percent (5%) of the issued voting shares of the corporation; (c) provide to the corporation his or her name and address and the names and addresses of those registered holders or beneficial owners of shares who support the proposal; and (d) continue to hold or own the prescribed number of shares up to and including the day of the meeting at which the proposal is to be made.

 

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Record Date for Voting

The ABCA permits a transferee of common shares after the record date for a shareholder meeting, not later than 10 days before the shareholder meeting, to establish a right to vote at the meeting by providing evidence of ownership of common shares and demanding that the transferee’s name be placed on the voting list in place of the transferor. The CBCA does not have an equivalent provision.

Rights of Dissent

Under both the ABCA and the CBCA, shareholders have substantially the same rights of dissent if a corporation resolves to effect certain fundamental changes. Under the CBCA, the corporation must, within 10 days of the resolution to which the shareholder dissents being adopted, send notice to the dissenting shareholder. The dissenting shareholder, within 20 days of receiving notice from the corporation or, if such notice was not received, within 20 days after learning that the resolution has been adopted, shall send the corporation notice of his demand for payment of the fair value of his shares, the number and class of shares in respect of which the shareholder dissents and his relevant personal information. Within 30 days of this notice, the dissenting shareholder must send the corporation, or its transfer agent, his share certificates. No more than seven days after the later of the day on which the resolution is effective and the day the corporation receives notice from the dissenting shareholder, the corporation must send to the dissenting shareholder an offer to pay. The corporation or the dissenting shareholder may apply to the court to fix a fair value for the shares of the dissenting shareholder.

Under the ABCA, a dissenting shareholder may send a corporation a written objection to a resolution affecting a fundamental change at or before any meeting of shareholders at which the resolution is to be voted on. Once the resolution is adopted the dissenting shareholder may make application to the court to fix the fair value of his shares. If an application is made to the court, unless the court otherwise orders, the corporation must send an offer to pay to each dissenting shareholder an amount considered by the directors to be the fair value of the shares. Unless the court otherwise orders, the dissenting shareholder may accept the offer to pay from the corporation or wait for an order from the court fixing the fair value of the shares. The dissent rights under the CBCA apply to the Continuance Resolution.

Registered Office

Under the CBCA, the registered office must be in the Canadian province specified in the articles and may be relocated within that province by directors’ approval. Under the ABCA, a registered office must be in Alberta and the directors of the corporation may at any time change the address of the registered office within Alberta by sending a notice of that change to the Registrar within 15 days after the change.

Amendments to the Articles of the Corporation

Under both the ABCA and the CBCA, certain fundamental changes to the articles of a corporation, such as an alteration of any restrictions on the business carried on by the corporation, changes in the name of the corporation, increases or decreases in the authorized capital, the creation of any new classes of shares and changes in the jurisdiction of incorporation, must be approved by a special resolution passed by a majority of not less than two-thirds of the votes cast by shareholders voting in person or by proxy at a meeting of the shareholders of the corporation.

Oppression Remedies

Under the ABCA and the CBCA, a registered or beneficial shareholder, former registered or beneficial shareholder, director, former director, officer or former officer of a corporation or any of its

 

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affiliates, or any other person who, in the discretion of a court, is a proper person to seek an oppression remedy, may apply to a court to rectify the matters complained of where in respect of a corporation or any of its affiliates: (a) any act or omission of a corporation or its affiliates effects a result; (b) the business or affairs of a corporation or any of its affiliates are or have been carried on or conducted in a manner; or (c) the powers of a corporation or any of its affiliates are or have been exercised in a manner, that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, any securityholder, creditor, director or officer.

Notice of a Derivative Action

Under the CBCA, a condition precedent to a complainant bringing a derivative action is that the complainant has given at least 14 days’ notice to the directors of a corporation of the complainant’s intention to make an application to the court to bring such a derivative action. Under the ABCA, the Court must be satisfied that the complainant has given reasonable notice to the directors of the corporation or its subsidiary of the complainant’s intention to apply to the Court, the complainant is acting in good faith, and it appears to be in the interest of the corporation or its subsidiary that the action be brought, prosecuted, defended, or discontinued.

THE ARRANGEMENT

Summary of the Arrangement

The Corporation entered into the Arrangement Agreement with Parent and Purchaser on November 18, 2025. A copy of the Arrangement Agreement is attached as Appendix B to this Proxy Statement. The Arrangement Agreement provides for the implementation of the Plan of Arrangement pursuant to which, among other things, Shareholders (other than Dissenting Shareholders) will receive the Consideration for each Share (other than Excluded Shares) held immediately prior to the Effective Time in accordance with the Plan of Arrangement.

The Arrangement will be implemented by way of a court approved Plan of Arrangement under Section 193 of the ABCA pursuant to the terms of the Arrangement Agreement. Upon completion of the Arrangement, Aptose will become an indirect, wholly-owned subsidiary of Parent.

The principal features of the Arrangement are summarized under the section entitled “Arrangement Steps” below.

The completion of the Arrangement contemplated by the Arrangement Agreement is subject to certain conditions, including, but not limited to, the receipt of the Required Shareholder Approval, the granting of the Final Order, receipt of Regulatory Approvals, and such other conditions to completion as set forth in the Arrangement Agreement.

The Plan of Arrangement is attached to this Proxy Statement as Appendix C. We encourage you to read each of the Arrangement Agreement and the Plan of Arrangement in its entirety.

Arrangement Consideration

If the Arrangement is completed, Shareholders will be entitled to receive the Consideration in respect of each Share, which is equal to C$2.41 in cash per Share, subject to applicable withholdings and other source deductions.

 

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Arrangement Steps

The following summarizes the steps that will occur under the Plan of Arrangement immediately after the Effective Time, if all conditions to the completion of the Arrangement have been satisfied or waived. The following description is qualified in its entirety by reference to the full text of the Plan of Arrangement attached as Appendix C to this Proxy Statement.

Pursuant to the Arrangement, each of the following events shall occur and shall be deemed to occur sequentially as set out below without any further authorization, act or formality, in each case, unless stated otherwise, effective at one-minute intervals starting at the Effective Time:

(1)    In accordance with and subject to the Plan of Arrangement and notwithstanding anything contrary in the Incentive Compensation Plans, Warrant certificate or any applicable grant letter, employment Contract or any resolution or determination of the Board (or any committee thereof), at the Effective Time, the Incentive Securities and Warrants identified below shall be treated as follows:

 

(a)

each Option held by an Option holder will cease to represent an option or other right to acquire Shares and shall be surrendered to the Corporation and exchanged for an amount in cash, payable by the Corporation, equal to the Consideration less the applicable exercise price in respect of such Option (for greater certainty, where such amount is zero or negative, neither the Corporation nor the Purchaser shall be obligated to pay the holder of such Option any amount in respect of such Option), less any applicable withholdings;

 

(b)

each RSU held by a RSU holder will cease to represent a share unit of the Corporation and shall be surrendered to the Corporation and exchanged for an amount in cash, payable by the Corporation, equal to the Consideration, less any applicable withholdings;

 

(c)

each Warrant held by a Warrant holder other than Armistice, will cease to represent a common share purchase warrant of the Corporation and shall be surrendered to the Corporation and exchanged for an amount in cash, payable by the Corporation, equal to the Consideration, less the exercise price per Share of such Warrant (for greater certainty, where such amount is zero or negative, neither the Corporation nor the Purchaser shall be obligated to pay the holder of such Warrant any amount in respect of such Warrant), less any applicable withholdings; and

 

(d)

each Armistice Warrant will cease to represent a common share purchase warrant of the Corporation, and shall be deemed to be surrendered and exchanged for an amount in cash, payable by the Corporation, equal to the Black Scholes Amount, less any applicable withholdings;

(2)    each outstanding Share held by a Dissenting Holder in respect of which Dissent Rights have been validly exercised shall be deemed to have been transferred without any further action by or on behalf of the holder thereof to the Purchaser, and:

 

(a)

such Dissenting Holder shall cease to be the holder of such Share and to have any rights as a Shareholder, other than the right to be paid the fair value of its Shares by the Purchaser, less any applicable withholdings;

 

(b)

such Dissenting Holder’s name shall be removed from the register of holders of Shares maintained by or on behalf of the Corporation; and

 

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(c)

the Purchaser shall be recorded in the register of holders of Shares maintained by or on behalf of the Corporation as the holder of the Shares so transferred, and shall be deemed to be the legal and beneficial owner thereof;

(3)    concurrently with section (2) above, each outstanding Share (other than (i) Shares held by any Dissenting Holder who has validly exercised such holder’s Dissent Rights and (ii) Shares owned or beneficially controlled by the Purchaser or any of its affiliates) shall be transferred without any further action by or on behalf of the holder thereof, to the Purchaser in exchange for the Consideration, less any applicable withholdings, and:

 

(a)

the holder of each such Share shall cease to be the holder thereof and to have any rights as a Shareholder other than the right to receive the Consideration in accordance with the Plan of Arrangement;

 

(b)

a portion of the amount held by the Depositary as agent for and on behalf of the Purchaser, equal to the aggregate Consideration payable in respect of such outstanding Shares, shall thereupon be held by the Depositary as agent for and on behalf of the former holders of such Shares, to be paid to such holders following the completion of the Plan of Arrangement;

 

(c)

such holder’s name shall be removed from the register of holders of Shares maintained by or on behalf of the Corporation; and

 

(d)

the Purchaser shall be recorded in the register of holders of Shares maintained by or on behalf of the Corporation as the holder of the Shares so transferred, and shall be deemed to be the legal and beneficial owner thereof,

following the payments or actions described above, all Incentive Securities and Warrants, whether vested or unvested, outstanding on the Effective Date shall be deemed cancelled, surrendered and cancelled and (i) each holder of Options, RSUs or Warrants shall cease to be a holder of such Options, RSUs or Warrants, (ii) such holder’s name shall be removed from each applicable register, (iii) the Incentive Compensation Plans and all agreements relating to the Options, RSUs and Warrants shall be terminated and shall be of no further force and effect, and (iv) such holder shall thereafter have only the right to receive the consideration to which they are entitled pursuant to the Plan of Arrangement at the time and in the manner specified therein.

Background to the Arrangement

The provisions of the Arrangement Agreement, together with the Support and Voting Agreements executed concurrently therewith, are the result of arm’s length negotiations conducted among representatives of the Parent, the Transaction Committee and the Corporation, with the assistance of their respective legal and financial advisors. The following is a summary of the main events leading up to the negotiation and execution of the Arrangement Agreement and other transaction documents, as well as meetings, negotiations, discussions and actions between the Parties that preceded the execution of the Arrangement Agreement and the public announcement of the Arrangement.

On September 2, 2024, the Corporation and the Parent signed a letter of understanding in which the parties committed to negotiating a co-development collaboration to be executed in the fourth quarter of 2024, but no later than February 28, 2025. Later in 2024, it was determined that the future collaboration agreement could not be completed until early 2025; however, both parties wished to continue the clinical trial and accrue patients.

 

- 33 -

On March 4, 2025, management updated the Board on negotiations with the Parent relating to the proposed co-development agreement, the Corporation’s financial position and financing strategy, including potential conversion features under the Parent’s existing convertible loan facility. The Corporation continued to pursue an array of potential financing options, however there was no investor support.

During March 2025, the Corporation had been discussing potential terms of an equity offering with a placement agent. On April 1, 2025, the Corporation was notified that the Shares were going to be delisted from the Nasdaq Stock Market effective April 2, 2025. As a result of the delisting, the Corporation was forced to abandon the equity financing efforts then underway and seek alternative sources of funding. The Corporation evaluated the cost and timing of completing an equity offering in Canada; however, given the prolonged timeline for completing a potential equity offering and the limited cash runway of the Corporation, the Corporation was ultimately required to pursue debt financing options which included a loan arrangement with the Parent.

In early May 2025, the Board reviewed the Corporation’s financing needs and potential strategic paths involving the Parent. The Board discussed the ongoing discussions between management and the Parent whereby the Parent was contemplating a potential offer to acquire the Corporation at a value of approximately C$5.58 million. The Board affirmed the strategic importance of continuing the tuspetinib clinical program and avoiding insolvency.

On May 11, 2025, management prepared and delivered a letter to the Parent outlining the positive clinical findings and the resulting interest from industry partners. The letter also included a timeline showing how long the Corporation could continue to fund the triplet study, as well as the potential consequences for the Corporation and the clinical trial if additional financing could not be secured. The letter presented the only two available options: additional funding from the Parent or the Corporation proceeding toward insolvency.

On May 17–18, 2025, the Board considered a range of alternatives with the Parent, including a loan, loan-plus-partnership, an M&A transaction, and, alternatively, termination of the Corporation’s activities, and was informed that the Parent had no desire to terminate the Corporation’s activities and that a formal response was forthcoming. During this period, the Board also evaluated insolvency considerations in parallel with continued pursuit of funding and the clinical trials, while noting the Corporation’s cash runway to approximately May 30, 2025 absent additional financing.

On May 24–30, 2025, management emphasized the urgency of bridge financing to avoid clinical work stoppage and to stabilize operations while exploring strategic transactions, including the Parent’s interest in acquiring the Corporation. The Board authorized management to negotiate with the Parent regarding short-term funding and bridge financing, and was advised that the Parent was preparing bridge financing documents. The Board was also apprised that the Parent considered the then-current loan agreement draft non-negotiable; the Board nevertheless authorized continued negotiations for a bridge facility and related security.

On June 2, 2025, the Board met to review and discuss the Parent’s non-binding letter of intent from the Parent. In view of the fact that the Parent is a “related party” of the Corporation within the meaning of MI 61-101, the Board determined that it would be in the best interests of the Corporation to establish the Transaction Committee consisting of independent directors to oversee the review and consideration of the offer, as required by MI 61-101 and discussed the need for independent financial advice, including a formal valuation and fairness opinion. During this meeting, the Board approved the formation and appointment of the Transaction Committee with responsibility for, among other things: (i) examining, reviewing and evaluating the offer from the Parent, including whether such transaction

 

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would be in the best interests of the Corporation, (ii) identifying and evaluating the alternatives to the offer from the Parent (including the status quo) and other potential financing, partnering or insolvency scenarios that were reasonably available to the Corporation, (iii) conducting or supervising the conduct of negotiations of the offer from the Parent or any alternatives, and (iv) reporting and making recommendations to the Board with respect to the offer from the Parent or any alternatives. The Transaction Committee also had the authority under its mandate to, among other things, retain an independent valuator or financial advisor required to prepare a “formal valuation” pursuant to MI 61-101 and to provide an opinion on the fairness, from a financial point of view, of the consideration to be received by the Minority Shareholders. The following directors were appointed to the Transaction Committee, each of whom is independent for purposes of MI 61-101: Mr. Warren Whitehead (chair), Mr. Denis Burger and Mr. Erich Platzer.

Between June 2, 2025, and June 5, 2025, the Transaction Committee engaged with two prospective financial advisors. After conducting interviews and reviewing relevant materials and credentials produced by the prospective financial advisors, the Transaction Committee determined that it would retain Locust Walk as an independent financial advisor to the Transaction Committee, given its independence, mergers and acquisitions experience and industry expertise, subject to the negotiation of satisfactory fee arrangements and engagement terms.

On June 5, 2025, McCarthy Tetrault LLP engaged in correspondence with Stikeman Elliott LLP, legal counsel to the Parent, to review and discuss certain initial matters regarding the Parent’s offer.

Throughout June 2025, management provided updates on the proposed loan facility, including the Parent’s requirement for a 13-week cash flow statement, and finalization of the facility agreement, while the Board weighed insolvency proceedings versus continued engagement with the Parent and prioritized pursuit of the clinical trial in the interests of patients. To bridge near-term obligations pending external financing, William G. Rice, Chairman, President and Chief Executive Officer of the Corporation, offered a short-term, unsecured, non-interest-bearing advance to cover payroll and similar expenses, which the Board authorized alongside continued negotiations with the Parent for bridge financing. On June 17, 2025, the Board determined not to initiate insolvency proceedings at that time and to continue the process with the Parent in light of the imperative to support the clinical program.

On June 20, 2025, the Corporation announced that it had entered into a loan facility agreement with the Parent which provided for an uncommitted facility for up to US$8.5 million, administered through multiple advances for the continued clinical development of tuspetinib.

On June 30, 2025, the Corporation entered into an interest deferral agreement with the Parent, whereby the Parent agreed to further defer the interest payment under the loan facility agreement between the Corporation and the parent dated August 27, 2024 for the period commencing December 21, 2024 and ending March 31, 2025 from June 27, 2025 to December 31, 2025 and to defer the interest for the period commencing March 31, 2025 from June 30, 2025 to December 31, 2025.

In July 2025, the Board received updates indicating the Parent’s reiterated intent to acquire the Corporation to serve as the Parent’s U.S. beachhead for tuspetinib and other agents, and discussed timeline, cash runway, and the potential need for the Parent’s support if timing milestones were not met. The Board considered exclusivity, timeline impacts on their ability to respond to superior proposals, and the process following execution of a letter of intent, including agreement execution and requisite approvals. The Board was briefed on Locust Walk’s preliminary view as to the range of value of the Shares, negotiation dynamics, market context, and financing constraints given the Corporation’s existing debt. Management also reported that, considering ongoing negotiations with the Parent, the company administering the clinical program had confirmed that it would not institute a work stoppage.

 

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On August 6, 2025, the Board considered negotiation guidance, including a counteroffer reflecting a 30% premium over the 30-day VWAP (approximately C$2.35–C$2.50 per share) and the addition of contingent value rights (“CVRs”) for shareholders tied to percentages of net proceeds from specified subsequent transactions over defined time horizons. The Board discussed the counterproposal, received updates that additional funding from the Parent would be required to continue operations pending consummation, and resolved to authorize negotiations with the Parent for: a C$2.50 per share price; a shareholder CVR structure; a C$250,000 break fee; and an extension of the bridge loan to fund operational and clinical costs until closing. Management also reported the Parent’s interest in adding patients to the triplet trial, which was viewed as a positive indicator for stabilizing the Corporation’s financial position.

For the remainder of August 2025, the Corporation continued to negotiate the terms of the proposed offer with the Parent, including the exceptions to the exclusivity provisions which would continue to allow the Corporation to pursue alternative financing and transaction opportunities with potential industry partners currently under discussion with the Corporation.

After reviewing the alternatives available to the Corporation, considering the Corporation’s current business, operations and financial position, and the advice of, among others, McCarthy Tétrault LLP and Locust Walk, concerning the options reasonably available to the Corporation in the circumstances, on September 9, 2025, the Transaction Committee determined that it was in the best interests of the Corporation to execute the latest non-binding letter of intent presented to the Transaction Committee and to finalize and enter into an amended and restated facility loan agreement with the Parent.

On September 22, 2025, the Corporation and the Parent announced that they had entered into a US$11.9 million loan amended facility agreement pursuant to which the Parent would provide an uncommitted facility administered through multiple advances until December 31, 2025.

On November 7, 2025, the Transaction Committee held a meeting to review the various transaction alternatives the Corporation has been pursuing, including the timing, stage of due diligence and nature of transactions that may be available to the Corporation, against the backdrop of the current financial constraints of the Corporation and limited cash runway. During the Transaction Committee’s deliberations, the Transaction Committee duly considered (i) the best interests of the Corporation and its stakeholders, and (ii) various factors and risks associated with the transaction and the related announcement, including (A) the lack of alternatives available to the Corporation that offered superior value or comparable certainty and the related risk of insolvency, (B) the fact that any definitive agreement entered into with the Purchaser and the Parent would allow the Board to respond to superior alternative transaction proposals and change its recommendation to Shareholders upon the receipt of any such superior proposal, (C) the fact that any definitive agreement entered into with Purchaser and the Parent would not provide for the payment of any fee by the Corporation in the event the Transaction is not approved by the Corporation’s shareholders, (D) the premium represented by the Consideration, (E) the de minimis market price of the Shares, (F) the form of the proposed consideration (all cash with no financing condition), (G) the mandatory CCAA Proceedings if the Arrangement Agreement were terminated in certain circumstances and (H) the Parent’s commitment to support the Corporation’s ongoing clinical activities. The Transaction Committee concluded that, on the basis of the foregoing and the advice of its legal and financial advisors, continuing negotiations to finalize the Arrangement Agreement and proceeding with the related announcement were in the best interests of the Corporation and its stakeholders.

Between November 7 and November 18, 2025, McCarthy Tetrault LLP, Stikeman Elliott LLP, and the Corporation finalized the terms of the Arrangement Agreement and press release.

On the evening of November 18, 2025, the Transaction Committee met with its independent financial and legal advisors to decide what recommendation to make to the Board with respect to the Arrangement. During the meeting, the Transaction Committee received legal advice from McCarthy regarding the terms of the Arrangement contemplated under the draft Arrangement Agreement and the

 

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duties and responsibilities of the Transaction Committee in making a recommendation to the Board regarding the Arrangement.

During such meeting, Locust Walk orally delivered the substance of the Formal Valuation to the Transaction Committee concluding that, as of November 18, 2025, and based upon and subject to the assumptions, limitation and qualifications set forth in the Formal Valuation and Fairness Opinion attached hereto as Appendix E, the fair market value of the Shares was in the range of C$1.00 to C$5.23 per Share.

Locust Walk orally delivered the substance of the Fairness Opinion to the Transaction Committee that, as of November 18, 2025, and subject to the assumptions, limitations and qualifications set forth in the Formal Valuation and Fairness Opinion attached hereto as Appendix E, the Consideration to be received by the Minority Shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Minority Shareholders.

The Transaction Committee, with the assistance of its independent financial and legal advisors, discussed and analyzed all of the benefits and risks associated with completion of the Arrangement, including the factors set out below and under the heading “Recommendation of the Board and Transaction Committee and Reasons for the Arrangement,” determined that the Arrangement is in the best interests of the Corporation and the Consideration to be received by the Minority Shareholders is fair, from a financial point of view, to the Minority Shareholders, and unanimously recommended that the Board approve the Arrangement and the entering into by the Corporation of the Arrangement Agreement and recommend to the Minority Shareholders that they vote their Shares in favour of the Arrangement.

On the evening of November 18, 2025, the Board met to receive the recommendation of the Transaction Committee regarding the Arrangement and to consider whether to approve the Arrangement. All members of the Board (including the members of the Transaction Committee) then unanimously approved the Arrangement Agreement, unanimously determined that the Arrangement is in the best interests of the Corporation (considering the interests of all stakeholders) and unanimously resolved to recommend that the Minority Shareholders vote in favour of the Arrangement Resolution (the “Board Recommendation”). The Purchaser, the Parent and the Corporation executed and delivered the Arrangement Agreement and the Corporation publicly announced the execution of the Arrangement Agreement.

Recommendation of the Board and Transaction Committee and Reasons for the Arrangement

The Board, after careful review and consideration and consultation with its financial and legal advisors, and upon the unanimous recommendation of the Transaction Committee, unanimously (1) determined that the Arrangement is fair to the Shareholders (other than the Parent and its affiliates); (2) determined that the Arrangement is in the best interests of the Corporation; and (3) recommends that the Shareholders vote “FOR” the Arrangement Resolution.

With the assistance of its independent financial and legal advisors, the Transaction Committee carefully considered a number of factors relating to the Arrangement, including those listed below. The Transaction Committee’s recommendation is based upon the totality of the information presented to and considered by it. In light of the variety of factors considered in connection with the Transaction Committee’s evaluation of the Arrangement, the Transaction Committee did not find it practicable to, and did not attempt to, quantify or otherwise assign any relative weight to the various factors that it considered in making its recommendation. The following includes forward-looking information, and readers are cautioned that actual results may vary. See “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.”

 

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In making its recommendation to the Board, the Transaction Committee considered and relied upon a number of substantive and procedural factors, including, among others, the following:

 

•

Cash Consideration is a Premium to Shareholders. The Cash Consideration offered to Shareholders under the Arrangement represents a premium of approximately 28% to the 30-day volume weighted average price per Share on the TSX of C$1.88.

 

•

Form of Consideration. The Cash Consideration to be received by the Shareholders under the terms of the Arrangement Agreement is all cash, with no financing condition, which provides the Shareholders with certainty, immediate value and liquidity and enables them to realize value for their interest in the Corporation without having to assume long-term business, clinical, regulatory and execution risk.

 

•

Value Supported by the Formal Valuation and Fairness Opinion. On November 18, 2025, Locust Walk orally delivered to the Transaction Committee the substance of the Formal Valuation prepared in accordance with MI 61-101, concluding that, as of November 18, 2025, and based upon and subject to the assumptions, limitations and qualifications set forth in the Formal Valuation, the fair market value of the Shares was in the range of C$1.00 to C$5.23 per Share. In addition, on November 18, 2025, Locust Walk also orally delivered to the Transaction Committee the substance of the Fairness Opinion that, as of November 18, 2025, and subject to the assumptions, limitations and qualifications set forth in the Fairness Opinion, the Consideration to be received by the Shareholders (other than the Parent and its affiliates) pursuant to the Arrangement Agreement is fair, from a financial point of view, to such Shareholders.

 

•

Compelling Value Relative to Limited Alternatives. The Transaction Committee, with the assistance of its financial and legal advisors, and based upon their collective knowledge of the business, operations, financial conditions, prospects of the Corporation, the environment in which the Corporation operates, as well as the current shareholdings of Parent and the amount of debt owed to the Parent, assessed the relative benefits and risks of the limited alternatives to the Arrangement (including the status quo). In this regard, efforts by the Corporation to solicit alternative proposals from potential counterparties did not result in any proposal that would provide immediate liquidity and superior value to the Minority Shareholders compared to that provided for under the Arrangement or otherwise provide a viable alternative to insolvency which the Corporation faces without the Arrangement. In making that determination, the Transaction Committee evaluated the Arrangement in the context of current industry and economic conditions and trends, in addition to Management’s and the Transaction Committee’s knowledge of the industry and the costs associated with continued operations and concluded that the Arrangement offers the most favourable, executable outcome.

 

•

Ongoing Clinical Trial. The Transaction Committee considered the detriment to patients if the clinical trial were forced to stop due to the Corporation’s inability to fund the clinical trial.

 

•

Capital Constraints. The Transaction Committee assessed the significant liquidity and capital constraints faced by Aptose due to its outstanding indebtedness and limited operating cash flow, including the financial risk associated with Aptose continuing as a going concern without the Arrangement being approved and the significant likelihood of insolvency in the absence of the Arrangement.

 

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•

Historical Market Price. The Transaction Committee considered the historical market prices and trading information of the Shares, including the historical volatility of the price of Shares and the underlying financial results notwithstanding the announcement of strong clinical data.

 

•

Arm’s Length Negotiations. The Arrangement Agreement is the result of robust arm’s-length negotiations between the Transaction Committee, with input from and consultation with its independent financial and legal advisors, on the one hand, and the Parent, on the other hand.

 

•

Limited Conditions to Closing. The Purchaser’s obligation to complete the Arrangement is subject to a limited number of conditions and the completion of the Arrangement is not subject to a due diligence or financing condition.

 

•

Transaction Committee Oversight. The Transaction Committee, which is comprised entirely of independent directors and was advised by experienced and qualified independent financial and legal advisors, oversaw, reviewed and considered, and directly participated in the negotiation of, the Arrangement Agreement.

 

•

Court and Shareholder Approval Required. Completion of the Arrangement is subject to the following Shareholder and Court approvals:

 

○

the approval of the Continuance Resolution by an affirmative vote of not less than 662⁄3% of the votes cast on the Arrangement Resolution by the Shareholders, virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share;

 

○

the approval of the Arrangement Resolution by:

 

◾

an affirmative vote of not less than 662⁄3% of the votes cast on the Arrangement Resolution by the Shareholders, virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share, and

 

◾

an affirmative vote of a majority of the votes cast by the Minority Shareholders; and

 

○

a determination of the Court that the Arrangement is fair and reasonable, both procedurally and substantively, to Shareholders and other affected persons.

 

•

Dissent Rights. Registered Shareholders are granted the right to dissent in respect of the Arrangement, which provides them with the right to demand payment of the fair value of their Shares, as determined by the Court.

 

•

Employees. Pursuant to the Arrangement Agreement, the Purchaser shall cause the Corporation to honour and comply in all material respects with the obligations of the Corporation under employment agreements with current Employees.

 

•

Other Stakeholders. The Transaction Committee also took into account the treatment of Options, RSUs and Warrants under the Arrangement, ensuring that equity-based securityholders are treated in a fair and orderly manner consistent with the overall transaction framework.

 

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•

Purchaser’s Plans. The Transaction Committee considered the Purchaser’s plans with respect to the Corporation, which the Transaction Committee understands to be supportive of the uninterrupted expanded development of TUS in the TUSCANY clinical study, creating value for the patients currently enrolled in such study, and viewed that commitment as aligned with the Corporation’s mission and in the interests of stakeholders.

 

•

Support of Independent Directors and Management. Certain executive officers of the Corporation and all of the independent directors of the Board, holding or controlling, in the aggregate, approximately 0.26% of the outstanding Shares, have entered into Support and Voting Agreements to vote their Shares in favour of the Arrangement, subject to certain customary exceptions evidencing aligned support from the Corporation’s leadership for the transaction.

In making its recommendation with respect to the Arrangement, the Transaction Committee also considered a number of potential risks, which the Transaction Committee concluded were outweighed by the positive substantive and procedural factors described above, including, among others, the following:

 

•

Risks of Non-Completion. The Transaction Committee considered the risks to the Corporation if the Arrangement is not completed in a timely manner or at all, including the high likelihood of insolvency proceedings and in certain circumstances, the Corporation will be required to implement the Alternative CCAA Proceedings if the Arrangement Agreement is terminated, the costs incurred in pursuing the Arrangement, the potential requirement to pay the Expense Fee to the Purchaser in certain circumstances, the diversion of management resources away from the conduct of the Corporation’s business and the resulting uncertainty which might result in the Corporation’s Employees, partners or other counterparties delaying or deferring decisions concerning, or terminating their relationships with, the Corporation.

 

•

Conditions to Closing. Although limited, there are conditions to the obligation of the Purchaser to complete the Arrangement, and certain of the conditions to Closing are outside the control of the Corporation.

 

•

Limitations on Solicitation and Corporation Expense Fee. The limitations contained in the Arrangement Agreement on the Corporation’s ability to solicit additional interest from third parties, required parameters for a Superior Proposal, the Purchaser’s right to match a Superior Proposal and the requirement to pay the Expense Fee, may discourage other parties from offering to acquire the Shares.

 

•

No Reverse Break Fee/ No Guarantee. The Arrangement Agreement does not provide for a reverse break fee in the event the Arrangement Agreement is terminated as the result of the Purchaser failing to deposit the Consideration at the relevant time.

 

•

Termination Rights. The Purchaser has the right to terminate the Arrangement Agreement under certain limited circumstances, including if the holders of more than 5% of the issued and outstanding Shares exercise Dissent Rights.

 

•

No Continuing Interest of Shareholders. Following the Arrangement, the Corporation will no longer exist as a public company, the Shares will be de-listed from the TSX and the

 

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OTC Markets, the Minority Shareholders will forgo any future increase in value that might result from future growth and the potential achievement of the Corporation’s long-term plans.

 

•

Restrictions on Business Conduct. There are restrictions imposed pursuant to the Arrangement Agreement on the conduct of the Corporation’s business and operations during the period between the execution of the Arrangement Agreement and the consummation of the Arrangement.

 

•

Taxable Transaction. The Arrangement will generally be a taxable transaction and, as a result, the holders of Shares (other than Excluded Shares) will generally be required to pay taxes on any taxable gains that result from the receipt of the Consideration pursuant to the Arrangement.

Formal Valuation and Fairness Opinion of Locust Walk Securities, LLC

Locust Walk was retained by the Transaction Committee to provide financial advice and prepare the Formal Valuation. Locust Walk delivered a valuation that, as of November 18, 2025, and based on Locust Walk’s analysis and subject to the assumptions, limitations and qualifications to be set forth in the Formal Valuation, using multiple analyses, including DCF modeling, the fair market value of the Shares is in the range of C$1.00 to C$5.23 per Share. Locust Walk has also delivered an oral opinion to the Transaction Committee that, as of November 18, 2025, and subject to the assumptions, limitations and qualifications to be set forth in Locust Walk’s written fairness opinion, the consideration to be received by the holders of Shares (other than the Excluded Shares) pursuant to the Arrangement Agreement is fair, from a financial point of view, to such holders of Shares.

Pursuant to the terms of the engagement letter with Locust Walk, as amended, Aptose has agreed to pay a work fee for the delivery of the Fairness Opinion (regardless of its conclusion) and a fixed fee for the delivery of the Formal Valuation, in each case, that is not contingent upon the completion of the Arrangement or any alternative transaction. Aptose has also agreed to reimburse Locust Walk for reasonable expenses and to indemnify Locust Walk against certain liabilities that might arise out of its engagement.

The full text of Locust Walk’s written opinion and formal valuation, dated November 18, 2025, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Locust Walk in preparing its opinion and formal valuation, is attached as Appendix E.

The summary of the written opinion and formal valuation of Locust Walk set forth below is qualified in its entirety by the full text of Locust Walk’s written opinion and formal valuation attached as Appendix E.

Locust Walk’ financial advisory services, opinion and formal valuation were provided for the information and assistance of the Board (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Arrangement and Locust Walk’s opinion only addressed the fairness, from a financial point of view, as of the date thereof, to the holders of Shares (other than Excluded Shares) of the Consideration to be paid to such holders pursuant to the Arrangement Agreement. Locust Walk’s opinion did not address any other term or aspect of the Arrangement Agreement or the Arrangement and does not constitute a recommendation to any Shareholder or any other person as to how such Shareholder or other person should vote with respect to the Arrangement or otherwise act with respect to the Arrangement or any other matter.

 

- 41 -

The full text of Locust Walk’s written opinion and formal valuation should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Locust Walk in preparing its opinion.

Interest of the Corporation’s Directors and Officers in the Arrangement

Existing Arrangements with the Corporation’s Executive Officers

The Corporation has existing employment agreements with each of its senior officers, which provide termination payments in certain circumstances as summarized below.

The employment agreements of Dr. Rice, Mr. Payne and Dr. Bejar provide that, in the event their employment with the Corporation is terminated within three months immediately preceding or 12 months immediately following the consummation of a “change of control” (defined as the consummation of any of the following: (a) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions to which the Corporation is a party, (b) a sale, lease or other conveyance of all or substantially all of the assets of the Corporation, or (c) liquidation, dissolution or winding up of the Corporation, whether voluntary of involuntary), each of Dr. Rice, Mr. Payne and Dr. Bejar would be eligible, subject to certain conditions, to receive a payment equivalent to 18 months of their annual base salaries at the time of termination (Dr. Rice’s December 31, 2025 annual base salary represented $676,865, Mr. Payne’s annual base salary represented $500,056 and Dr. Bejar’s base salary represented $531,513), plus an amount equal to 150% of the average bonus remuneration received from the Corporation during the last three years of employment completed prior to the termination date, prorated based on the number of days the executive worked during the year of the termination, as well taxable cash payments equal to applicable COBRA as continuation coverage premium of the payments related to group health benefits for a period of up to 12 months following the termination following a change of control.

The employment agreements of Dr. Rice, Mr. Payne and Dr. Bejar provide that in the event of their termination, other than for cause, the vesting and exercisability of all then outstanding unvested share options, restricted stock units or other equity awards then held by such executive officer become immediately vested and exercisable and shall remain exercisable as set forth in the applicable award documents.

The estimated payments that would be provided to each of Dr. Rice, Mr. Payne and Dr. Bejar assuming termination of employment takes place on January 16, 2026 following completion of the Arrangement are quantified in the table provided under “Golden Parachute Compensation”.

Deferred Bonus

Due to the limited financial resources of the Corporation, the Board resolved that bonus payments for 2024 for all employees, including certain executive officers would become payable upon the earlier of (i) the successful complete of one or more financings of the Corporation that ensure sufficient capital for the Corporation to operate its business for six months or more, and (ii) a change of control of the Corporation. As such, upon closing of the Arrangement, certain executive officers will be entitled to receive their 2024 deferred bonus.

 

 

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The 2024 deferred bonus payments for each of Dr. Rice, Mr. Payne and Dr. Bejar are quantified in the table provided under “Golden Parachute Compensation”.

Retention Bonus Agreements

The Corporation has existing retention bonus agreements in place with each of its executive officers and vice-presidents, which provide for bonus payments in certain circumstances described below.

The retention bonus agreements provide that conditional on the completion of a change of control (as such term is defined in the retention bonus agreement), which for greater certainty includes completion of the Arrangement, the Corporation will pay the executive officer and vice-president party to a retention bonus agreement, a cash bonus award in recognition of such individual’s continued employment with the Corporation.

The retention bonus payments for each of Dr. Rice, Mr. Payne and Dr. Bejar are quantified in the table provided under “Golden Parachute Compensation”.

Indemnification and Insurance

Pursuant to the terms of the Arrangement Agreement, Aptose’s directors and officers will be entitled to certain ongoing indemnification and coverage under directors’ and officers’ liability insurance policies. See the section entitled “The Arrangement Agreement — Insurance and Indemnification” for a description of such ongoing indemnification and insurance coverage obligations.

Golden Parachute Compensation

The table below sets forth the information required by Item 402(t) of Regulation S-K regarding certain compensation that is based on or that otherwise related to the Arrangement to which Aptose’s named executive officers are entitled under existing agreements.

The table below assumes that:

 

•

the Arrangement is completed on January 16, 2026 (which is the assumed date solely for purposes of this golden parachute compensation disclosure); and

 

•

the employment of each of Aptose’s named executive officer is involuntarily terminated immediately following the completion of the Arrangement.

Golden Parachute Compensation

 

Name		Cash (US$)(2)				Retention Bonus (US$)				2024 Deferred Bonus (US$)				Potential 2025 Bonus (US$)(3)				Accelerated Equity (US$)				Benefits (US$)(4)				Total (US$)(1)(5)
Dr. William G. Rice		1,038,802				331,496				356,928				372,276				Nil				45,792				2,145,294
Dr. Rafael Bejar		810,693				199,947				203,840				212,605				Nil				47,074				1,474,159
Fletcher Payne		762,713				167,059				191,776				200,022				Nil				37,405				1,358,975

 

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(1)   There are no pensions/non-qualified defined contribution, perquisites/benefits, tax reimbursements, or other payments (other than the COBRA continuation coverage subsidy, tax reimbursements, or other payments (other than those described in the chart) to the named executive officers that need to be disclosed pursuant to Item 402(t) of Regulation S-K.

(2)   Pursuant to the employment agreements of Dr. Rice, Mr. Payne and Dr. Bejar, these amounts represent termination payments equal to: (a) 18 months of the 2025 annual base salaries, plus (b) an amount equal to 150% of the average bonus remuneration received from the Corporation during the last three years of employment completed prior to the termination date (in each case, assuming maximum bonus rates in 2025 of 55%, 40% and 40% of their respective 2025 salaries), prorated based on the number of days the executive worked during the year of the termination.

(3)   Reflects the potential bonus payable to Dr. Rice, Dr. Bejar and Mr. Payne for 2025, assuming maximum bonus rates of 55%, 40% and 40% of the named executives’ 2025 salaries, respectively.

(4)   Includes the continuation of the payments related to health benefits for a period of 12 months following a change of control.

(5)   Golden parachute compensation may be reduced such that the named executive officers receive the greater of (a) the largest portion of golden parachute compensation such that no portion of the payment would be subject to excise tax under Code Section 4999 or (b) the golden parachute compensation less all applicable taxes, including the excise tax under Code Section 4999.

 

Regulatory Approvals

Other than the Final Order and the Korea’s Foreign Exchange Transactions Act Filing, the Corporation is not aware of any material Regulatory Approvals to complete the Arrangement. In the event that any additional Regulatory Approvals are determined to be required, such Regulatory Approvals will be sought. Any such additional Regulatory Approvals could delay the Effective Date or prevent the completion of the Arrangement. The Korea’s Foreign Exchange Transactions Act Filing will be completed shortly before the closing of the Arrangement. While there can be no assurance that the Final Order or any other Regulatory Approvals that are determined to be required will be obtained, the Corporation currently anticipates that the Final Order and any other Regulatory Approvals that are determined to be required will have been obtained or otherwise resolved by the Effective Date.

Failure to Complete the Arrangement

Failure to complete the Arrangement could have a Material negative effect on the market price of the Shares and the Corporation will continue to face the risks that it currently faces with respect to its affairs, business and operations and future prospects.

Pursuant to the terms of the Arrangement Agreement, in certain circumstances where the Corporation fails to complete the Arrangement, the Corporation will be required to commence without delay the Alternative CCAA Proceedings.

See “The Arrangement Agreement – Alternative CCAA Proceedings” for more information.

Procedure for the Arrangement Becoming Effective

The Arrangement will be implemented by way of a court approved arrangement under Section 193 of the ABCA pursuant to the terms of the Arrangement Agreement. Upon completion of the Arrangement, Aptose will become an indirect, wholly-owned subsidiary of Parent. The following procedural steps must be taken for the Arrangement to become effective:

 

•

the Arrangement Resolution must be approved by the Shareholders at the Meeting;

 

•

the Court must grant the Final Order approving the Arrangement; and

 

 

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•

all other conditions precedent to the Arrangement, as set forth in the Arrangement Agreement, must be satisfied or waived in accordance with the terms thereof.

Shareholder Approval

At the Meeting, pursuant to the Interim Order, the Shareholders will be asked to, if deemed advisable, approve the Arrangement Resolution and the Continuance Resolution. Each Shareholder as of the close of business on the Record Date shall be entitled to vote on the Arrangement Resolution and the Continuance Resolution.

The Continuance Resolution must be approved at the Meeting by an affirmative vote of not less than 66²⁄₃% of the votes cast on the Continuance Resolution by the Shareholders, virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share.

As a condition to the completion of the Arrangement and in accordance with the Interim Order and the ABCA (as modified by the Interim Order), the Arrangement Resolution must be approved at the Meeting by: (1) an affirmative vote of not less than 66²⁄₃% of the votes cast on the Arrangement Resolution by the Shareholders, virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share and (2) an affirmative vote of a majority of the votes cast by the Shareholders virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share, after excluding the votes of those Persons whose votes are required to be excluded under MI 61-101. The Arrangement Resolution and the Continuance Resolution must receive the Required Shareholder Approval in order for the Corporation to seek the Final Order and implement the Arrangement on the Effective Date in accordance with the terms of the Final Order and the Arrangement Agreement.

Court Approval of the Arrangement

The Arrangement requires approval by the Court under Section 193 of the ABCA. Prior to the mailing of this Proxy Statement, the Corporation obtained the Interim Order providing for the calling and holding of the Meeting, the Dissent Rights and other procedural matters. A copy of the Interim Order is attached hereto as Appendix F of this Proxy Statement. A copy of the Notice of Application in respect of the hearing of the Corporation’s application for the Final Order is attached hereto as Appendix G.

Subject to obtaining the Required Shareholder Approval at the Meeting and the terms of the Interim Order, the hearing of the Corporation’s application for the Final Order is expected to be held virtually on January 16, 2026 at https://albertacourts.webex.com/meet/virtual.courtroom60, or at any other date and time and by any method as the Court may direct and the parties agree. Any Shareholders wishing to appear virtually or to be represented by counsel at the hearing of the application for the Final Order may do so but must comply with certain procedural requirements described in the Notice of Application, including filing a notice of appearance with the Court and serving same upon the Corporation and Parent via their respective counsel as soon as reasonably practicable and, in any event, no less than five Business Days before the date of the hearing of the application for the Final Order (as it may be rescheduled from time to time). The Court has broad discretion under the ABCA when making orders with respect to arrangements.

The Court, when hearing the application for the Final Order, will consider, among other things, whether the Arrangement is fair and reasonable. The Court may approve the Arrangement in any manner it may direct and determine appropriate. If any such amendments are made, depending on the nature of the amendments, the parties to the Arrangement Agreement may not be obligated to complete the transactions contemplated in the Arrangement Agreement. For more information, see the section entitled “The Arrangement – Termination”.

 

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Support and Voting Agreements

On November 18, 2025, in connection with the execution of the Arrangement Agreement, the Supporting Shareholders entered into Support and Voting Agreements with the Purchaser. Under the terms of the Support and Voting Agreements, the Supporting Shareholders have agreed, among other things, to vote their Shares in favour of the approval and authorization of the Arrangement Resolution and the Continuance Resolution at the Meeting and, subject to certain exceptions, not to transfer any of their Shares. As of November 18, 2025, the date of the Arrangement Agreement, the Supporting Shareholders beneficially owned an aggregate of approximately 0.26% of the outstanding Shares, collectively, entitled to vote at the Meeting. The Support and Voting Agreements will terminate upon termination of the Arrangement Agreement and certain other specified events.

Timing

Assuming that the Final Order is granted, and the other conditions precedent to closing are satisfied or waived to the extent legally permissible, the Arrangement will become effective as promptly as practicable and in any event within five Business Days following the satisfaction or waiver of all conditions to completion of the Arrangement set forth in the Arrangement Agreement.

Although the objectives of each of the Corporation, Parent and the Purchaser is to have the Effective Date occur as soon as possible after the Meeting, the Effective Date could be delayed for a number of reasons, including, but not limited to, an objection before the Court at the hearing of the application for the Final Order or any delay in satisfying the other conditions to the completion of the Arrangement, including obtaining applicable regulatory approvals.

Delisting and Deregistration

It is expected that the Shares will be delisted from TSX and the OTC Markets following the completion of the Arrangement. It is also expected that the Corporation will make an application to terminate its status as a reporting issuer under applicable Canadian securities laws and to deregister its securities under the Exchange Act as soon as practicable following the completion of the Arrangement.

THE ARRANGEMENT AGREEMENT

The following is a summary of the material terms of the Arrangement Agreement and is qualified in its entirety by the full text of the Arrangement Agreement, including the Plan of Arrangement. A copy of the Arrangement Agreement is attached as Appendix B to this Proxy Statement, and a copy of the Plan of Arrangement is attached as Appendix C to this Proxy Statement. We urge you to read the full text of the Arrangement Agreement and Plan of Arrangement because they are the legal documents that govern the Arrangement.

The Arrangement Agreement has been included to provide Shareholders with information regarding its terms and is not intended to provide any other factual information about the Corporation, Parent, Purchaser or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Arrangement Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties to such agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Shareholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of

 

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the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Arrangement Agreement, and unless required by applicable law, the Corporation does not undertake any obligation to update such information.

Effective Date of the Arrangement

The Arrangement will become effective no later than five Business Days following the satisfaction or waiver of all conditions to completion of the Arrangement set forth in the Arrangement Agreement. See the section entitled “The Arrangement Agreement – Conditions to the Arrangement”.

Although the objective of each of the Corporation, Parent and the Purchaser is to have the Effective Date occur as soon as possible after the Meeting, the Effective Date could be delayed for a number of reasons, including, but not limited to, an objection before the Court at the hearing of the application for the Final Order or any delay in satisfying the other conditions to the completion of the Arrangement, including obtaining applicable regulatory approvals.

For more information on the Arrangement, including Court processes, Consideration and treatment of any outstanding equity, see the section entitled “The Arrangement”.

Covenants

Conduct of Business of the Corporation

Until the earlier to occur of the Effective Time and the valid termination of the Arrangement Agreement in accordance with its terms, except (1) with the express written consent of the Purchaser (such consent not to be unreasonably withheld or delayed), (2) as required by the Arrangement Agreement, (3) as required by applicable law, a Governmental Entity or any Material Contract in effect as of the date of the Arrangement Agreement or (4) as set forth in the Corporation’s confidential disclosure letter to the Arrangement Agreement, the Corporation will, and will cause its subsidiaries to:

 

•

conduct its business in the ordinary course;

 

•

use commercially reasonable efforts to maintain and preserve in all material respects its and its subsidiaries’ respective business organization, operations, assets, properties, authorizations, intellectual property, pharmaceutical product, goodwill and business relationships with customers, suppliers, distributors, licensors, partners and other persons with which the Corporation or any of its subsidiaries has material business relations; and

 

•

perform and comply with all of its obligations under its material contracts.

In addition, until the earlier to occur of the Effective Time and the valid termination of the Arrangement Agreement in accordance with its terms, except (1) with the express written consent of the Purchaser (such consent not to be unreasonably withheld or delayed), (2) as required by the Arrangement Agreement, (3) as required by applicable law, a Governmental Entity or any Material Contract in effect as of the date of the Arrangement Agreement or (4) as set forth in the Corporation’s confidential disclosure letter to the Arrangement Agreement, the Corporation will not, and will cause its subsidiaries not to, directly or indirectly:

 

•

amend, restate, rescind, alter, enact or adopt all or any portion of any of the Constating Documents of the Corporation or any of its Subsidiaries;

 

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•

adjust, split, combine, reclassify or amend the terms of any securities of the Corporation or any of its Subsidiaries or reorganize, amalgamate or merge the Corporation or any Subsidiary of the Corporation, other than in respect of the Continuance;

 

•

reduce the stated capital of the securities of the Corporation or any of its Subsidiaries;

 

•

purchase, redeem, repurchase or otherwise acquire or offer to purchase, redeem, repurchase or otherwise acquire any class of its securities, whether pursuant to any existing or future contract, arrangement, purchase plan, normal course issuer bid or otherwise;

 

•

adopt a plan of complete or partial liquidation, arrangement, dissolution, amalgamation, merger, consolidation, restructuring, recapitalization, winding-up or other reorganization of the Corporation or any of its Subsidiaries (other than the Arrangement Agreement and the transactions contemplated by the Arrangement Agreement), or file a petition in bankruptcy under any applicable Law on behalf of the Corporation or any of its Subsidiaries, or consent to the filing of any bankruptcy petition against the Corporation or any of its subsidiaries under any applicable Law;

 

•

create any subsidiary except in the Ordinary Course;

 

•

enter into any new line of business or discontinue any existing line of business, or enter into any agreement or arrangement that would limit or restrict in any material respect the Corporation and any of its Subsidiaries from competing or carrying on any business in any manner;

 

•

materially change the business carried on by the Corporation and its Subsidiaries, as a whole;

 

•

issue, grant, deliver, sell, exchange, amend, modify, accelerate, pledge or otherwise subject to any Lien (other than Permitted Liens), or authorize any such action in respect of, (i) any securities of the Corporation or any of its Subsidiaries, (ii) options, warrants, equity or equity-based awards or other rights exercisable or exchangeable for, or convertible into, or otherwise evidencing a right to acquire any securities of the Corporation or any of its subsidiaries (including any Incentive Securities or Warrants), or (iii) any rights that are linked in any way to the price of any shares of, or to the value of or of any part of, or to any dividends or distributions paid on any shares of, the Corporation or any of its Subsidiaries (including any Incentive Securities or Warrants), in each case other than (A) the issuance of Shares issuable upon the settlement of Incentive Securities or Warrants outstanding as of the date of the Arrangement Agreement in accordance with their existing terms in effect on the date of the Arrangement Agreement, or (B) the issuance of securities of the Corporation in the Ordinary Course under the Employee Plans as required pursuant to obligations existing prior to the date of the Arrangement Agreement under the Employee Plans;

 

•

invest in or acquire (by amalgamation, merger, consolidation, exchange, purchase of securities, contributions to capital or purchase, lease or license of assets or otherwise) any Person, land or any real property;

 

•

enter into, or resolve to enter into, any agreement that has the effect of creating a joint venture, partnership, shareholders’ agreement or similar relationship between the Corporation or any of its Subsidiaries and another Person;

 

- 48 -

•

make any capital expenditures or commitments in excess of $50,000 in the aggregate, except for any capital expenditures agreed to by the Purchaser prior to the date of the Arrangement Agreement, provided that in the case of capital expenditures expended to address emergencies or other urgent matters involving the potential material loss or material damage to property or personal safety, the Purchaser’s consent shall not be required where it cannot be received in a reasonably expedient manner;

 

•

sell, sell and lease back, pledge, license, lease, sublease, alienate, dispose, swap, transfer or voluntarily lose the right to use, in whole or in part, or otherwise dispose of, or subject to any lien (other than Permitted Liens), any Corporation Assets or any interest in any Corporation Assets, or waive, cancel, release or assign to any person (other than the Corporation and its wholly-owned subsidiaries) any material right or claim (including indebtedness owed to the Corporation and its Subsidiaries), except for (i) Corporation Assets sold, leased or otherwise transferred in the ordinary course and that are not, individually or in the aggregate, material to the Corporation and its Subsidiaries, (ii) obsolete, damaged or destroyed assets in the Ordinary Course, (iii) returns of leased assets at the end of the lease term, (iv) transfers of assets between one or more of the Corporation and its wholly-owned subsidiaries, (v) as required pursuant to the terms of any material contract in effect on the date of the Arrangement Agreement, and (vi) sales or other dispositions of Corporation Assets in the Ordinary Course not in excess of $50,000 in the aggregate;

 

•

make any loan or similar advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any person, employee, officer, director, in excess of $50,000, other than any loan, advance, capital contribution or investment by one wholly-owned Subsidiary of the Corporation to the Corporation or another wholly-owned Subsidiary of the Corporation of from the Corporation to another wholly-owned Subsidiary of the Corporation in the Ordinary Course;

 

•

prepay any long-term indebtedness before its scheduled maturity, or increase, create, incur, assume or otherwise become liable for, in one transaction or in a series of related transactions, any indebtedness or guarantees thereof other than (i) indebtedness incurred in the Ordinary Course not in excess of $50,000 in the aggregate (provided that any indebtedness created, incurred, assumed or for which the Corporation or any Subsidiary becomes liable in accordance with the foregoing is prepayable at the Effective Time without premium, penalty or other incremental costs (including breakage costs)) (ii) in connection with the refinancing of any indebtedness outstanding on the date of the Arrangement Agreement and effected at the direction of the Purchaser, acting reasonably pursuant to the transactions contemplated by the Arrangement Agreement or (iii) in connection with advances under the New Facility Agreement;

 

•

except as may be required by the terms of any written employment Contract, Employee Plan or Collective Agreement existing on the date of the Arrangement Agreement, the Retention Bonus Program or as otherwise provided for in the Arrangement: (i) other than increases in the Ordinary Course that are not material individually or in the aggregate, as required by law or pursuant to the terms of existing written employment contract or Employee Plan, grant any increase in the rates of wages, salaries, benefits, bonuses or other remuneration of any employees, (ii) grant or increase any indemnification, retention, severance, change of control, transaction-based award, bonus or termination or similar compensation or benefits payable to any employee, officer, director, consultant, agent or independent contractor of the Corporation or any of its subsidiaries, (iii) hire or engage any employee, officer, director, consultant, agent or

 

- 49 -

independent contractor or promote any of the foregoing who has a total compensation level greater than $100,000, (iv) terminate any employee whose total annual compensation exceeds $100,000 without cause, (v) establish, adopt, enter into, materially amend or terminate any Employee Plan (or any plan, contract, program, practice, policy, trust, fund or other arrangement that would be an Employee Plan if it were in existence as of the date of the Arrangement Agreement), or increase or accelerate the timing of any funding obligation, funding contribution or payment of any compensation or benefits under any Employee Plan, other than commercially reasonable amendments to targets under any Incentive Compensation Plan in the ordinary course, after reasonable consultation with the Purchaser, (vi) accelerate the vesting of, or otherwise deviate from the terms provided in the applicable award agreement with respect to the vesting, payment, settlement or exercisability of, any Incentive Securities or other equity-based awards or other compensation, (vii) pay, grant or award, or commit to pay, grant or award, any bonuses or incentive compensation (equity- or cash-based), other than the scheduled payment in the ordinary course of any award, bonus or incentive compensation agreed upon prior to the date of the Arrangement Agreement, or (viii) reduce the Corporation’s or any of its subsidiaries’ work force in a material way or so as to trigger any collective dismissal provisions under applicable laws;

 

•

knowingly take any action or fail to take any action that would reasonably be expected to result in a breach or violation of the obligations of the Corporation or any of its subsidiaries under any Collective Agreement;

 

•

enter into, modify or terminate or cancel any Collective Agreement, or enter into any Contract that would be a Collective Agreement if in effect on the date of the Arrangement Agreement or grant recognition to any labour union or similar labour organization for purposes of collective bargaining;

 

•

disclose any material trade secrets or material confidential information pertaining to the Corporation or any of its Subsidiaries to any Person, other than in the Ordinary Course or to Persons who are under a contractual, legal, or ethical obligation to maintain the confidentiality of such information;

 

•

(i) sublicense, sell, transfer, assign or dispose of any right in any Corporation Intellectual Property, or any Intellectual Property, in each case, material to any Pharmaceutical Product, (ii) other than non-exclusive licenses granted to third Persons in the Ordinary Course that are terminable by the Corporation without any consent, material penalty or material payment, lease or grant a license of any right in any Corporation Intellectual Property, or any Intellectual Property material to any Pharmaceutical Product or (iii) assign or grant a license of any material right in any other Owned Intellectual Property;

 

•

(i) waive, amend or voluntarily terminate any inbound license in favour of the Corporation with respect to any Corporation Intellectual Property, or any other Intellectual Property material to any Pharmaceutical Product, (ii) amend any Contract with respect to the use of any intellectual property material to any Pharmaceutical Product, or (iii) amend or waive any rights under any Material Contract, enter into any Contract that would be a Material Contract if in effect on the date of the Arrangement Agreement, or enter into any in-license of Intellectual Property, in each case, with respect to any Pharmaceutical Product;

 

- 50 -

•

(i) except as required by applicable Law or Governmental Entity, or is deemed necessary by an existing Institutional Review Board process, commence (other than planning) or terminate (alone or with any third party) any research or development program, phase I, phase II, phase III or phase IV human clinical trial, including initiation of a new Institutional Review Board process, involving any Pharmaceutical Product, or (ii) make any material changes to, or to discontinue, terminate or suspend any ongoing research and development program relating to a Pharmaceutical Product; including in relation to any Pharmaceutical Product;

 

•

except as contemplated in Section 4.9 of the Arrangement Agreement, amend, modify or terminate, cancel or let lapse, any material insurance (or re-insurance) policy of the Corporation or any of its Subsidiaries, unless, simultaneously with any termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the terminated, cancelled or lapsed policies for substantially similar premiums (other than increases reflecting changing market rates) are in full force and effect, and provided that no such termination, cancellation or lapse causes the Corporation or such Subsidiary to be in default of any Material Contract or material Authorization to which it is a party or by which it is bound;

 

•

amend, other than in the Ordinary Course, any existing material Authorization of the Corporation or any of its Subsidiaries, or abandon or fail to diligently pursue any application for or renewal of any required material Authorization, or take or omit to take any action that would reasonably be expected to lead to the termination of, or imposition of conditions on, any such material Authorization of the Corporation or any of its Subsidiaries;

 

•

commence, waive, release, assign, settle or compromise any Proceeding or threatened Proceeding, in each case other than settlements or compromises in the Ordinary Course that involve only: (i) the payment of monetary damages (net of any payments or proceeds received through insurance) not in excess of $1,000 individually or $5,000 in the aggregate, or (ii) the payment of immaterial non-monetary compensation, in each case without any admission of wrongdoing by the Corporation or any of its Subsidiaries, or the imposition of any material restrictions (including through the granting of equitable relief) on the business and operations of the Corporation or any of its Subsidiaries;

 

•

amend or modify (other than immaterial amendments or modifications in the Ordinary Course) or terminate or waive or fail to exercise any right under any Material Contract, or enter into any Contract that would be a Material Contract if in effect on the date of the Arrangement Agreement;

 

•

engage in any transaction with any member of senior management, vice-president, director or any of their immediate family members (including spouses) or any related party (within the meaning of MI 61-101), other than (i) expense reimbursements and advances in the Ordinary Course, (ii) employment Contracts with Employees hired in accordance with Section 4.1(2)(p) of the Arrangement Agreement, or (iii) transactions between the Corporation and any of its wholly-owned Subsidiaries or between two or more wholly-owned Subsidiaries;

 

- 51 -

•

make any material change in the Corporation’s methods of Tax of financial accounting policies, practices, principles, methods or procedures, except as required by applicable Law or as required by U.S. GAAP;

 

•

except as required by applicable Law or other than in the Ordinary Course: (i) make, change or rescind any material Tax election, information schedule, return or designation inconsistent with past practice, (ii) settle or compromise (or offer to settle or compromise) any material Tax claim, assessment, reassessment, liability, proceeding or controversy, (iii) file any amendment to a material Tax Return, (iv) enter into any material agreement with a Governmental Entity with respect to Taxes, (v) enter into or change any material Tax sharing, Tax advance pricing agreement, Tax allocation or Tax indemnification agreement that is binding on the Corporation or its subsidiaries, (vi) surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refund, (vii) consent to the extension or waiver of the limitation period applicable to any material Tax matter, (viii) make a request for a material Tax ruling or decision to any Governmental Entity, or (ix) materially amend or change any of its methods for reporting income, deductions or accounting for income Tax purposes;

 

•

grant or commit to grant a license or otherwise transfer any Intellectual Property owned by or licensed to the Corporation or its Subsidiaries or rights in or in respect thereto that is material to the Corporation and its Subsidiaries taken as a whole, other than to (i) wholly-owned Subsidiaries and (ii) non-exclusive licenses granted to third parties in the Ordinary Course;

 

•

enter into or amend any Contract with any broker, finder or investment banker, provided that the foregoing shall not prohibit the Corporation from entering into an agreement on commercially reasonable terms with any dealer and proxy solicitation services firm for purposes of soliciting proxies in connection with the Arrangement;

 

•

enter into any interest rate, currency, equity or commodity swaps, hedges, derivatives, forward sales contracts or similar financial instruments; or

 

•

authorize, agree, offer, resolve or otherwise commit, whether or not in writing, to do any of the foregoing.

In addition, until the earlier to occur of the Effective Time and the valid termination of the Arrangement Agreement in accordance with its terms, the Corporation shall, and shall cause its subsidiaries to, in each case to the extent reasonably practicable and permitted under applicable law:

 

•

consult with the Purchaser in connection with any proposed meeting with any Drug Regulatory Agency relating to services provided by, or proposed to be provided by, the Corporation or in respect of any Pharmaceutical Product;

 

•

inform the Purchaser within two Business Days following receipt of any material communication (written or oral) with or from any Drug Regulatory Agency relating to services provided by, or proposed to be provided by, the Corporation;

 

•

promptly inform the Purchaser of, and provide the Purchaser with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of the Corporation or any of its Subsidiaries, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted, to any Drug Regulatory Agency by or

 

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on behalf of the Corporation or any of its Subsidiaries, in each case relating to services provided by, or proposed to be provided by, the Corporation or in respect of any Pharmaceutical Product; and

 

•

promptly inform the Purchaser and provide the Purchaser with a reasonable opportunity to comment, in each case, prior to making any material change to any study, protocol, trial, manufacturing plan or development timeline relating to services provided by, or proposed to be provided by, the Corporation or in respect of any pharmaceutical product, except where such change must be made in less than three Business Days when (i) required by law or a Governmental Entity; or (ii) deemed necessary or advisable by an ethics board,

provided that, for the purposes of Section 4.1(3) of the Arrangement Agreement, it shall not be reasonably practicable to consult with or provide the Purchaser with a reasonable opportunity to review or comment in respect of the foregoing, as the case may be, if the period within which the Corporation is required to meet or file with, or submit or transmit to, any Drug Regulatory Agency or to make any material change to any study, protocol, trial, manufacturing plan or development timeline is less than 48 hours.

Regulatory Approvals

Each Party to the Arrangement Agreement shall, as promptly as possible, use its commercially reasonable efforts to obtain, or cause to be obtained, all consents and Authorizations, including the Regulatory Approvals, from all Governmental Entities that may be or become necessary for its execution and delivery of the Arrangement Agreement and the performance of its obligations under the Arrangement Agreement. Each Party shall co-operate fully with the other Party and its affiliates in promptly seeking to obtain all such consents or Authorizations from such Governmental Entities.

In connection with filing the Arrangement Agreement under the Korea Foreign Exchange Transactions Act Filing, as promptly as practicable, and in any event prior to the closing of the Arrangement, the Purchaser shall prepare and file its notification and report forms under the Foreign Exchange Transactions Act (Korea).

The Parties shall cooperate and coordinate with one another in connection with obtaining the Regulatory Approvals, including by providing or submitting as promptly as practicable all documentation and information that is required, or in the opinion of the Purchaser, acting reasonably, advisable, in connection with obtaining the Regulatory Approvals.

The Parties shall cooperate with and keep one another fully informed as to the status of and the processes and proceedings relating to obtaining the Regulatory Approvals, and shall promptly notify each other of any communication from any Governmental Entity in respect of the transactions contemplated by the Arrangement Agreement. The Parties shall exchange advance drafts of all submissions, correspondence (including emails), filings, presentations, and, if necessary, applications, undertakings, consent agreements or other material documents made or submitted to or filed with any Governmental Entity in respect of the transactions contemplated by the Arrangement Agreement, will consider in good faith any suggestions made by the other Party and its counsel thereon, and will provide the other Party and its counsel with final copies thereof on a timely basis. The Parties will each keep each other and their counsel fully apprised of all written (including email) and oral communications and all meetings with any Governmental Entity, and their staff, in respect of the transactions contemplated by the Arrangement Agreement. Neither Party will participate in any communications or meetings (in person, by telephone or otherwise) with any Governmental Entity regarding the transactions contemplated by the Arrangement Agreement without giving the other Party and their counsel the opportunity to participate therein, except to the extent that competitively sensitive information may be discussed, in which case the Parties will allow external legal

 

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counsel for the other Party to participate. To the extent that any information required to be provided by one Party to another Party pursuant to this subsection is subject to privilege or is competitively sensitive, such information may be provided only to the legal counsel and external experts of the other Party on an “outside advisors only” basis.

The Purchaser shall not, and shall not allow any of its Subsidiaries to, take any action or enter into any transaction, including any merger, acquisition, business combination, joint venture, disposition, lease or contract, that would reasonably be expected to prevent, materially delay or materially impede the obtaining of, or materially increase the risk of not obtaining, the Regulatory Approvals, or otherwise prevent, materially delay or materially impede the consummation of the transactions contemplated by the Arrangement Agreement.

Access to Information; Confidentiality

Until the earlier to occur of the Effective Time and the valid termination of the Arrangement Agreement in accordance with its terms, subject to applicable Law, the Corporation shall, and shall cause its Subsidiaries and shall use commercially reasonable efforts to cause their respective directors, officers, Employees, independent auditors, advisers, consultants and agents to, upon reasonable prior notice: (a) give the Parent and the Purchaser, and their respective Representatives reasonable access (during normal business hours), as the Parent or the Purchaser may reasonably require for the purpose of consummating the Arrangement or for post-closing integration purposes, to its and its Subsidiaries’ offices, premises, properties, assets, senior personnel, Contracts and books and records (including continuing access to the Data Room), and (b) furnish to the Parent or the Purchaser and its Representatives such financial and operating data and Corporation Data or other information with respect to the assets or business of the Corporation as the Parent or the Purchaser may reasonably request for the purpose of consummating the Arrangement or for post-closing integration purposes; provided that the Corporation’s compliance with any request under the Arrangement Agreement shall not unduly interfere with the conduct of the business of the Corporation and its Subsidiaries.

Section 4.5(1) of the Arrangement Agreement shall not require the Corporation or its Subsidiaries to permit any access, or to disclose any information that in the reasonable good faith judgment of the Corporation, after consultation with outside legal counsel, would result in the breach of any Contract, any violation of any Law or cause any privilege (including attorney-client privilege) that the Corporation or its Subsidiaries would be entitled to assert to be undermined with respect to such information; provided that, the Parties thereto shall cooperate in seeking to find a way to allow disclosure of such information to the extent doing so could reasonably (in the good faith belief of the Corporation, after consultation with counsel) be managed through the use of customary “clean-room” or other similar arrangements.

Investigations made by or on behalf of the Purchaser, whether under Section 4.5 of the Arrangement Agreement or otherwise, will not waive, diminish the scope of, or otherwise affect any representation or warranty made by the Corporation in the Arrangement Agreement.

Public Communications

The Corporation and the Purchaser, each acting reasonably, shall agree on the text of press releases by which the Corporation, the Purchaser or the Parent will announce the execution of the Arrangement Agreement, and the completion of the Arrangement.

Except as required by applicable Law, neither Party shall issue any press release or make any other public statement or disclosure with respect to the Arrangement Agreement or the transactions contemplated by the Arrangement Agreement without the prior written consent of the other Party (which consent shall

 

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not be unreasonably withheld); provided that, subject to Article 5 of the Arrangement Agreement, any Party that, in the opinion of outside legal counsel, is required to make disclosure by applicable Law (other than disclosures to Governmental Entities in connection with the Regulatory Approvals, which shall be addressed as contemplated by Section 4.4 of the Arrangement Agreement) shall use its reasonable best efforts to give the other Party prior oral or written notice and a reasonable opportunity to review or comment on such disclosure (other than with respect to confidential information contained in such disclosure) and if such prior notice is not permitted by applicable Law, shall give such notice immediately following the making of such disclosure. The Party making such disclosure shall give reasonable consideration to any comments made by the other Party or its counsel. For the avoidance of doubt, none of the foregoing shall prevent the Corporation or the Purchaser from making (a) internal announcements to Employees and having discussions with shareholders, financial analysts and other stakeholders, or (b) public announcements in the Ordinary Course that do not relate specifically to the Arrangement Agreement or the Arrangement, in each case so long as such announcements and discussions are consistent in all material respects with the most recent press releases, public disclosures or public statements made by such Person. The Parties acknowledge that the Corporation will file the Arrangement Agreement (excluding, for greater certainty, the Corporation Disclosure Letter) and a material change report relating thereto on SEDAR+ and with the SEC (each of which shall be available on EDGAR).

Notice and Cure Provisions

During the period commencing on the date of the Arrangement Agreement and continuing until the earlier of the Effective Time and the termination of the Arrangement Agreement in accordance with its terms, each Party shall promptly notify the other Party of the occurrence, or failure to occur, of any event or state of facts which occurrence or failure would, or would be reasonably likely to:

 

(a)

cause any of the representations or warranties of such Party contained in the Arrangement Agreement to be untrue or inaccurate in any material respect at any time from the date of the Arrangement Agreement to the Effective Time; or

 

(b)

result in the failure, in any material respect, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such Party under the Arrangement Agreement.

Notification provided under Section 4.8 of the Arrangement Agreement will not affect the representations, warranties, covenants, agreements or obligations of the Parties (or remedies with respect thereto) or the conditions to the obligations of the Parties under the Arrangement Agreement.

The Corporation may not elect to exercise its right to terminate the Arrangement Agreement pursuant to Section 7.2(1)(c)(i) of the Arrangement Agreement [Breach of Representations and Warranties or Covenants by the Purchaser or the Parent] and the Purchaser may not elect to exercise its right to terminate the Arrangement Agreement pursuant to Section 7.2(1)(d)(i) [Breach of Representations and Warranties or Covenants by the Corporation], unless the Party seeking to terminate the Arrangement Agreement (the “Terminating Party”) has delivered a written notice (“Termination Notice”) to the other Party (the “Breaching Party”) specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Terminating Party asserts as the basis for termination. After delivering a Termination Notice, provided the Breaching Party is proceeding diligently to cure such matter and such matter is capable of being cured prior to the Outside Date, the Terminating Party may not exercise such termination right until the earlier of (i) the Outside Date, and (ii) the date that is 10 Business Days following receipt of such Termination Notice by the Breaching Party, if such matter has not been cured by such date, provided that, for greater certainty, if any matter is not capable of being cured by the Outside Date or if at any time following receipt of a Termination Notice the Breaching Party fails to diligently proceed to cure

 

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any matter, the Terminating Party may immediately exercise the applicable termination right, and provided further that a Willful Breach shall be deemed to be incapable of being cured, and the Terminating Party may immediately exercise the applicable termination right in accordance with the terms of Section 7.2(1)(c)(i) of the Arrangement Agreement [Breach of Representations and Warranties or Covenants by the Purchaser or the Parent] or Section 7.2(1)(d)(i) [Breach of Representations and Warranties or Covenants by the Corporation] of the Arrangement Agreement, as applicable, without first providing a Termination Notice.

If the Terminating Party delivers a Termination Notice prior to the date of the Meeting, unless the Parties agree otherwise, the Corporation shall postpone or adjourn the Meeting to the earlier of (i) five Business Days prior to the Outside Date and (ii) the date that is 10 Business Days following receipt of such Termination Notice by the Breaching Party.

Insurance and Indemnification

Prior to the Effective Time, the Corporation shall, in consultation with the Purchaser, and if the Corporation is unable after using commercially reasonable efforts, the Purchaser shall cause the Corporation to, as of the Effective Time, purchase customary fully pre-paid and non-cancelable “tail” policies of directors’ and officers’ liability insurance from an insurance company of nationally recognized standing providing protection no less favourable in the aggregate to the protection provided by the policies maintained by the Corporation and its wholly-owned Subsidiaries which are in effect immediately prior to the Effective Time and providing protection in respect of claims arising from facts or events which occurred on or prior to the Effective Time and the Purchaser shall, or shall cause the Corporation and its wholly-owned Subsidiaries to maintain such tail policies in effect without any reduction in scope or coverage for six (6) years after the Effective Date; provided that the Purchaser shall not be required to pay any amounts in respect of such coverage prior to the Effective Time and provided further that the cost of such policies shall not exceed 200% of the Corporation’s and its wholly-owned Subsidiaries’ current annual aggregate premium for directors’ and officers’ liability insurance policies currently maintained by the Corporation or its wholly-owned Subsidiaries.

From and after the Effective Time, the Purchaser shall cause the Corporation or the applicable Subsidiary of the Corporation to honour all rights to indemnification or exculpation existing as of the date of the Arrangement Agreement in favour of present and former Employees, officers and directors of the Corporation and its Subsidiaries pursuant to applicable Law and to indemnification agreements (to the extent such indemnification agreements are disclosed in Section 4.9(2) of the Corporation Disclosure Letter) and acknowledges that such rights shall survive the completion of the Plan of Arrangement and shall continue in full force and effect in accordance with their terms for a period of not less than six (6) years after the Effective Date.

If the Corporation or any of its Subsidiaries or any of their respective successors or assigns (a) consolidates or amalgamates with, or merges or liquidates into, any other Person and is not a continuing or surviving corporation or entity of such consolidation, amalgamation, merger, amalgamation or liquidation, or (b) transfers all or substantially all of its properties and assets to any Person, the Purchaser shall ensure that any such successor or assign (including, as applicable, any acquirer of substantially all of the properties and assets of the Corporation or its Subsidiaries) assumes all of the obligations set forth in Section 4.9 of the Arrangement Agreement.

TSX Delisting

Each of the Corporation and the Purchaser agree to cooperate with the other Party in taking, or causing to be taken, all actions necessary to enable the delisting of the Shares from the TSX (including, if

 

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requested by the Purchaser, such items as may be necessary to delist the Shares on the Effective Date) the Corporation to cease being a reporting issuer under applicable Canadian Securities Laws and the deregistration of the Corporation with the SEC, in each case, as promptly as practicable following the Effective Time.

CrystalGenomics Release

The Corporation shall use reasonable best efforts to obtain from CG, an agreement (i) confirming the termination of the license granted from CG to the Corporation in respect of the compound referred to as CG-806 (luxeptinib), (ii) confirming the non-existence of any cause of action against the Corporation in connection with such license and its termination and (iii) providing for a customary mutual release of any and all claims each against the other in respect of or in relation to such license.

Restrictions on Solicitations of Other Offers

Aptose has agreed, subject to certain limited exceptions, not to, and to cause its subsidiaries and its and their respective representatives not to, directly or indirectly:

 

(a)

solicit, assist, initiate, knowingly encourage or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information, properties, facilities, books or records of the Corporation or any Subsidiary or entering into any form of Contract, agreement, arrangement or understanding) any inquiry, proposal or offer (whether public or otherwise) that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

 

(b)

enter into, engage in, continue or otherwise participate in any discussions or negotiations with any Person (other than the Parent, the Purchaser and their affiliates) regarding any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

 

(c)

make a Change in Recommendation;

 

(d)

enter into any Contract or agreement in principle requiring the Corporation to abandon, terminate or fail to consummate the Arrangement or any other transactions contemplated by the Arrangement Agreement or fail to consummate the Arrangement or any other transactions contemplated by the Arrangement Agreement or to breach its obligations hereunder, or propose or agree to do any of the foregoing; or

 

(e)

accept or enter into, or publicly propose to accept or enter into, any Contract, letter of intent, term sheet, understanding or arrangement (in each case, whether or not legally binding) or similar document with any Person in respect of an Acquisition Proposal (other than a confidentiality and standstill agreement permitted by and in accordance with Section 5.3 of the Arrangement Agreement).

In addition, Aptose agreed to, and to cause its subsidiaries and their respective representatives to, immediately cease and terminate, and cause to be terminated, any solicitation, encouragement, discussion, negotiations or other activities commenced prior to the date of the Arrangement Agreement with any Person (other than the Parent, the Purchaser and their respective affiliates) with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal, and in connection with such termination shall:

 

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(a)

immediately discontinue access to, and disclosure of, all information regarding the Corporation and its Subsidiaries, including any data room and any confidential information, properties, facilities and books and records of the Corporation or any of its Subsidiaries; and

 

(b)

promptly, and in any event within two (2) Business Days of the date of the Arrangement Agreement, request, and exercise all rights it has to require (i) the prompt return or destruction of all copies of any confidential information regarding the Corporation or any of its Subsidiaries provided to any Person other than the Purchaser, its affiliates and their respective Representatives, and (ii) the destruction of all material including or incorporating or otherwise reflecting such confidential information regarding the Corporation or any of its Subsidiaries, in each case, to the extent that such information has not previously been returned or destroyed and using its reasonable commercial reasonable efforts to ensure that such requests are fully complied with in accordance with the terms of such rights or entitlements..

Since January 1, 2025, Aptose has not waived any confidentiality, standstill, non-disclosure, non-solicitation or similar agreement, restriction or covenant to which the Corporation or any Subsidiary is a Party. The Corporation also covenants, agrees and confirms that (a) the Corporation shall use commercially reasonable efforts to enforce each confidentiality, standstill, non-disclosure, non-solicitation or similar agreement, restriction or covenant to which the Corporation or any Subsidiary is a Party or may after the date of the Arrangement Agreement become a party in accordance with Section 5.3 of the Arrangement Agreement, and (b) neither the Corporation, nor any Subsidiary nor any of their respective Representatives have released or will, without the prior written consent of the Purchaser (which may be withheld or delayed in the Purchaser’s sole and absolute discretion), release any Person from, or waive, amend, suspend or otherwise modify, such Person’s obligations respecting the Corporation or any of its Subsidiaries under any confidentiality, standstill, non-disclosure, non-solicitation or similar agreement, restriction or covenant to which the Corporation or any Subsidiary is a party (it being acknowledged by the Purchaser that the automatic termination or release of any such agreement, restriction or covenant as a result of entering into the Arrangement Agreement shall not be a violation of Section 5.1(3) of the Arrangement Agreement).

If Aptose or any of its subsidiaries or any of their respective representatives receives or otherwise becomes aware of any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute an Acquisition Proposal, or any request for copies of, access to, or disclosure of, confidential information relating to the Corporation or any of its Subsidiaries, including information, access or disclosure relating to the properties, facilities, books and records of the Corporation or any of its Subsidiaries, or any discussions or negotiations are sought to be initiated or continued with, the Corporation, its Subsidiaries or any of their respective Representatives, the Corporation shall

 

(a)

immediately notify the Purchaser, at first orally and then in writing and in any event within 24 hours of such Acquisition Proposal, inquiry, proposal, offer or request, including a description of its material terms and conditions, the identity of all Persons making the Acquisition Proposal, inquiry, proposal, offer or request, and copies of all written documents, material correspondence or other material received in respect of, from or on behalf of any such Person; and

 

(b)

keep the Purchaser fully informed, on a prompt basis, of the status of all developments and, to the extent permitted by Section 5.3 of the Arrangement Agreement, discussions and negotiations with respect to such Acquisition Proposal, inquiry, proposal, offer or request, including any changes, modifications or other amendments to any such Acquisition Proposal, inquiry, proposal, offer or request and shall promptly provide to the Purchaser

 

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copies of all material correspondence if in writing or electronic form, and if not in writing or electronic form, a description of the material or substantive terms of such correspondence communicated to the Corporation by or on behalf of any Person making such Acquisition Proposal, inquiry, proposal, offer or request.

If at any time prior to obtaining the Required Shareholder Approval, the Corporation receives a bona fide unsolicited written Acquisition Proposal, the Corporation may (a) contact the Person making such Acquisition Proposal and its Representatives solely for the purpose of clarifying the terms and conditions of such Acquisition Proposal so as to determine whether such Acquisition Proposal constitutes or would reasonably be expected to constitute a Superior Proposal, and (b) engage in or participate in discussions or negotiations with such Person regarding such Acquisition Proposal, and may provide copies of, access to or disclosure of confidential information, properties, facilities, or books and records of the Corporation or any of its Subsidiaries, if and only if:

 

(a)

the Board first determines (based upon, amongst other things, the recommendation of the Transaction Committee) in good faith, after consultation with its financial advisers and its outside legal counsel, that such Acquisition Proposal constitutes or would reasonably be expected to constitute a Superior Proposal;

 

(b)

such Person making the Acquisition Proposal was not restricted from making such Acquisition Proposal pursuant to an existing confidentiality, standstill, non-disclosure, non-solicitation or similar agreement, restriction or covenant contained in any Contract entered into with the Corporation or any of its Subsidiaries;

 

(c)

the Corporation has been, and continues to be, in compliance with its obligations under Article 5 of the Arrangement Agreement;

 

(d)

prior to providing any such copies, access or disclosure, the Corporation enters into a confidentiality and standstill agreement with such Person that contains a customary standstill provision for not less than 12 months and any such copies, access or disclosure provided to such Person shall have already been (or promptly be) provided to the Purchaser (by posting such information to the Data Room or otherwise); and

 

(e)

prior to providing any such copies, access or disclosure, the Corporation promptly provides the Purchaser with a true, complete and final executed copy of the confidentiality and standstill agreement referred to in Section 5.3(1)(d) of the Arrangement Agreement.

Nothing contained in Article 5 of the Arrangement Agreement shall prohibit the Board from making disclosure to Securityholders as required by applicable Law, including complying with Section 2.17 of Multilateral Instrument 62-104 – Takeover Bids and Issuer Bids and similar provisions under Securities Laws relating to the provision of a directors’ circular in respect of an Acquisition Proposal.

The Arrangement Agreement provides that if at any time prior to obtaining the Required Shareholder Approval at the Meeting, Aptose receives an Acquisition Proposal that constitutes a Superior Proposal, the Board may (based upon, amongst other things, the recommendation of the Transaction Committee), enter into a definitive agreement with respect to a Superior Proposal, if and only if:

 

(a)

the Person making the Superior Proposal was not restricted from making such Superior Proposal pursuant to an existing confidentiality, standstill, non-disclosure, non-solicitation or similar agreement, restriction or covenant contained in any Contract entered into with the Corporation or any of its Subsidiaries;

 

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(b)

the Corporation has been, and continues to be, in compliance with its obligations under Article 5 of the Arrangement Agreement;

 

(c)

the Corporation has delivered to the Purchaser a written notice of the determination of the Board that such Acquisition Proposal constitutes a Superior Proposal and of the intention of the Board to enter into such definitive agreement with respect to such Superior Proposal (including a notice as to the value in financial terms that the Board has, in consultation with its financial advisors, determined should be ascribed to any non-cash consideration offered under the Superior Proposal) (the “Superior Proposal Notice”);

 

(d)

the Corporation has provided the Purchaser a copy of the proposed definitive agreement for the Superior Proposal (including any financing documents or other documents containing material terms and conditions of such Superior Proposal supplied to the Corporation in connection therewith);

 

(e)

at least five (5) full Business Days (the “Matching Period”) have elapsed from the date that is the later of the date on which the Purchaser received the Superior Proposal Notice and the date on which the Purchaser received all of the materials referred to in Section 5.4(1)(d) of the Arrangement Agreement;

 

(f)

during any Matching Period, the Purchaser has had the opportunity (but not the obligation), in accordance with Section 5.4(2) of the Arrangement Agreement, to offer to amend the Arrangement Agreement and the Arrangement in order for such Acquisition Proposal to cease to be a Superior Proposal;

 

(g)

after the Matching Period, the Board has determined in good faith, after consultation with the Corporation’s outside legal counsel and financial advisers, that such Acquisition Proposal continues to constitute a Superior Proposal (if applicable, compared to the terms of the Arrangement as proposed to be amended by the Purchaser under Section 5.4(2)of the Arrangement Agreement); and

 

(h)

prior to or concurrently with entering into such definitive agreement the Corporation terminates the Arrangement Agreement pursuant to Section 7.2(1)(c)(i) of the Arrangement Agreement and pays the Corporation Expense Fee pursuant to Section 8.2(2) of the Arrangement Agreement.

During the Matching Period, or such longer period as the Corporation may approve in writing for such purpose: (a) the Purchaser shall have the opportunity (but not the obligation) to offer to amend the Arrangement, the Arrangement Agreement or the Plan of Arrangement in order for such Acquisition Proposal to cease to be a Superior Proposal and the Board shall, in consultation with the Corporation’s outside legal counsel and financial advisers, review any offer made by the Purchaser to amend the terms of the Arrangement Agreement and the Arrangement in good faith in order to determine whether such proposal would, upon acceptance, result in the Acquisition Proposal previously constituting a Superior Proposal ceasing to be a Superior Proposal, and (b) the Corporation shall, and shall cause its Representatives to, negotiate in good faith with the Purchaser to make such amendments to the terms of the Arrangement Agreement and the Plan of Arrangement as would enable the Purchaser to proceed with the transactions contemplated by the Arrangement Agreement on such amended terms. If the Board determines (based upon, inter alia, the recommendation of the Transaction Committee) that such Acquisition Proposal would cease to be a Superior Proposal, the Corporation shall promptly so advise the Purchaser and the Corporation and the Purchaser shall amend the Arrangement Agreement to reflect such offer made by the Purchaser, and shall take and cause to be taken all such actions as are necessary to give effect to the foregoing.

 

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Each successive amendment or modification to any Acquisition Proposal that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the Shareholders or other material terms or conditions thereof shall constitute a new Acquisition Proposal, and the Purchaser shall be afforded a new full five (5) Business Day Matching Period from the later of the date on which the Purchaser received the Superior Proposal Notice and the date on which the Purchaser received all of the materials referred to in Section 5.4(1)(d) of the Arrangement Agreement with respect to each new Superior Proposal from the Corporation.

The Board shall promptly reaffirm the Board Recommendation (based upon, inter alia, the recommendation of the Transaction Committee) by press release after any Acquisition Proposal which is not determined to be a Superior Proposal is publicly announced or publicly disclosed or the Board determines that a proposed amendment to the terms of the Arrangement Agreement or the Plan of Arrangement as contemplated under Section 5.4(2) of the Arrangement Agreement would result in an Acquisition Proposal no longer being a Superior Proposal. The Corporation shall provide the Purchaser and its outside legal counsel with a reasonable opportunity to review the form and content of any such press release and shall make all reasonable amendments to such press release as requested by the Purchaser and its outside legal counsel.

If the Meeting is to be held during a Matching Period, the Corporation may, and shall at the request of the Purchaser, postpone or adjourn the Meeting to a date that is not more than 10 Business Days after the scheduled date of the Meeting, but in any event to a date that would not prevent the Effective Date from occurring prior to the Outside Date.

Employees

The Purchaser has covenanted that, from and after the Effective Time, the Purchaser shall cause the Corporation to honour and comply in all material respects with all of the obligations of the Corporation under employment agreements with Employees and for a period of 12 months following the Effective Time and shall cause the Corporation to provide the Employees with total compensation that is, in the aggregate, at least substantially similar (excluding grants and compensation under Incentive Compensation Plans) to the compensation provided to such Employees immediately prior to the Effective Time; (ii) notice of termination, pay in lieu of notice and severance benefits to each Employee that are no less favourable than those that would have been provided to such Employee under the applicable employee plans or contracts as in effect immediately prior to the Effective Time, and if no such employee plan or contracts were then in effect, such Employee will be provided with notice or payment in lieu of notice and severance as required by Law, and (iii) employee benefits that are comparable in the aggregate to those that such Employee was entitled to receive under the employee plans (excluding any employee plan providing for defined benefits, equity or equity-based, or retiree or post-termination health and welfare benefits) immediately prior to the Effective Date provided that the foregoing shall not (a) give any Employees any right to continued employment, (b) affect or otherwise increase the severance, post-termination benefits or other termination entitlements of Employees under their current employment contracts, employee plans or applicable Law, (c) impair in any way the right of the Corporation to terminate the employment of any Employee or amend or terminate any of the employee plans at any time, or (d) apply to any Employee who is or becomes covered by a collective agreement whose terms and conditions of employment of each such Employee following the Effective Time shall be governed by the terms of the applicable collective agreement.

Representations and Warranties

The Arrangement Agreement contains customary representations and warranties made by each of Aptose, Parent and the Purchaser. The assertions embodied in those representations and warranties are

 

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solely for the purposes of the Arrangement Agreement. Many of the parties’ representations and warranties are qualified by knowledge, materiality and/or a “Material Adverse Effect” standard.

The Arrangement Agreement contains customary representations and warranties of Aptose relating to, among other things: organization and qualification; corporate authorization; execution and binding obligation of the Arrangement Agreement; governmental authorization; no conflict/non-contravention; capitalization; shareholders’ and similar agreements; subsidiaries; securities laws matters; financial statements; disclosure controls and internal controls over financial reporting; minute books; auditors; no undisclosed liabilities; transactions with directors, officers, employees, etc.; absence of certain changes or events; long-term and derivatives transactions; compliance with laws; whistleblower reporting; authorization and licenses; fairness opinion; formal valuation; brokers; Board and Transaction Committee approval; material contracts; no guarantees; real property; title and sufficiency of Corporation assets; restrictions on conduct of business; government incentives; intellectual property; business systems; litigation; healthcare laws; healthcare regulatory compliance; solvency; environmental matters; employees; collective agreements; employee plans; insurance; tax matters; non-arm’s length transactions; anti-terrorism laws; corrupt practices legislation; CFIUS; money laundering; data protection laws; anti-spam; funds available; confidentiality agreements; disclosure and transaction costs.

In addition, the Arrangement Agreement contains customary representations and warranties of Parent and the Purchaser, including with respect to, among other things; organization and qualification; corporate authorization; execution and binding obligation of the Arrangement Agreement; governmental authorization; no conflict/non-contravention; litigation; security ownership; sufficiency of funds and brokers.

Many of Aptose’s representations and warranties are qualified by a “Material Adverse Effect” standard. For purposes of the Arrangement Agreement, “Material Adverse Effect” means any fact, change, event, occurrence, effect, state of facts and/or circumstance that, individually or in the aggregate, is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, condition (financial or otherwise) or liabilities (contingent or otherwise) of the Corporation and its Subsidiaries, taken as a whole, except any such fact, change, event, occurrence, effect, state of facts or circumstance resulting from or arising in connection with:

 

(a)

any change or development generally affecting the pharmaceutical industries in which the Corporation and/or its Subsidiaries operate;

 

(b)

any changes, events or occurrences in general economic, business, regulatory, political, financial or currency exchange conditions in Canada or the United States, including changes in (i) financial markets, credit markets or capital markets, (ii) interest rates and credit ratings, (iii) inflation and (iv) currency exchange rates;

 

(c)

any hurricane, flood, tornado, earthquake or other natural disaster, epidemic, pandemic or disease outbreak or any material worsening of such conditions existing as of the date of the Arrangement Agreement;

 

(d)

any act of sabotage, espionage, including any commencement or escalation of a war (whether or not declared), armed hostilities or acts of crime or terrorism;

 

(e)

any change in Law, generally acceptable accounting principles, including U.S. GAAP, or changes in regulatory accounting or tax requirements, or in the interpretation, application or non-application of the foregoing by any Governmental Entity;

 

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(f)

any action taken (or omitted to be taken) by the Corporation or any of its Subsidiaries that is required to be taken (or prohibited to be taken) pursuant to the Arrangement Agreement or with the express prior written consent or at the written direction of the Purchaser;

 

(g)

any change in the market price or trading volume of the Shares (it being understood that the causes underlying such change in market price or trading volume may, to the extent not otherwise excluded from the definition of Material Adverse Effect, be taken into account in determining whether a Material Adverse Effect has occurred);

 

(h)

any Proceeding or threatened Proceeding relating to the Arrangement Agreement or the Arrangement (it being understood that the causes underlying such Proceeding may, to the extent not otherwise excluded from the definition of Material Adverse Effect, be taken into account in determining whether a Material Adverse Effect has occurred);

 

(i)

the announcement of the Arrangement Agreement or the Arrangement or the pendency or consummation of the Arrangement or the transactions contemplated hereby; or

 

(j)

the payment of accounts payable and accrued liabilities in the amounts funded by the Parent pursuant to the Facility Agreements,

but, in the case of clauses (a) through to and including (e), only to the extent that such matter does not have a materially disproportionate effect on the Corporation and its Subsidiaries, taken as a whole, relative to other companies and entities operating in the pharmaceutical industry in which the Corporation and/or its Subsidiaries operate, and references in certain sections of the Arrangement Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretative for purposes of determining whether a Material Adverse Effect has occurred.

Alternative CCAA Proceedings

In the event that the Arrangement Agreement is terminated for any reason other than (1) the breach of representations or warranties or failure to perform covenants by the Purchaser or (2) the Purchaser failing to deposit the Consideration at the Effective time or the Corporation entering into a definitive agreement with respect to a Superior Proposal, the Corporation is required to immediately commence the Alternative CCAA Proceedings in accordance with the following terms and timeline:

 

(a)

the Corporation will apply to the Court for approval of a SISP Process Order (the “SISP Order”) with the Parent or the Purchaser as stalking horse bidder with the ability to acquire, directly or indirectly, the assets and business of the Corporation (whether by way of an asset purchase, the purchase of newly issued shares or another form of transaction) by way of credit bid of a portion of the aggregate indebtedness owing from the Corporation to the Parent or the Purchaser equivalent to the aggregate Consideration, regardless of its allocation among stakeholders as determined by the Court (the “CCAA Sale Transaction”);

 

(b)

the CCAA Order shall include, among other things: a provision staying proceedings against the Corporation; and an Order for interim financing from the Parent or the Purchaser, on terms to be negotiated with the Corporation and approved by the Court (the “DIP Order”) and such other ancillary relief as the Parent or the Purchaser may approve, including the SISP Order;

 

(c)

the process contemplated under the SISP Order shall be completed and a Vesting Order granted with respect to the transfer of business of the Corporation to the Parent or the

 

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Purchaser, provided that the Parent or the Purchaser is the successful bidder of the SISP (the “Vesting Order”) within 45 Business Days after the commencement of the Alternative CCAA Proceedings, or as the Court may allow;

 

(d)

to the extent that the Corporation fails to commence a CCAA Proceeding within 10 Business Days of the deadlines set forth above (provided that the Parent and the Purchaser, as applicable, has, in a timely manner, cooperated with the Corporation in the negotiation and completion of the agreements to which the Parent and/or the Purchaser, as applicable, will be a party and the other related materials in order to enable the Corporation to comply with the timeline set out in this paragraph and if there is delay caused by the Parent and/or the Purchaser or more time is required through no fault of the Corporation, the foregoing 10 Business Day timeline shall be extended accordingly), the Parent and/or the Purchaser shall be entitled to make an application and seek the entry of the CCAA Orders, or take such other steps to enforce its security interests, and the Corporation and its Subsidiaries or affiliates shall not contest the granting of such relief and shall waive any applicable notice periods under Section 244 of the Bankruptcy and Insolvency Act (Canada) once notice is received from the Parent or the Purchaser; and

 

(e)

the Alternative CCAA Proceedings will be terminated after closing of the CCAA Sale Transaction and no later than March 15, 2026 or such later date as determined by the Purchaser, in its sole discretion.

Conditions to the Arrangement

Mutual Conditions Precedent

The parties to the Arrangement Agreement are not required to complete the Arrangement unless each of the following conditions is satisfied prior to the Effective Time, which conditions may only be waived, in whole or in part, by the mutual consent of each of the parties to the Arrangement Agreement:

 

•

The Arrangement Resolution being approved and adopted by the Shareholders at the Meeting in accordance with the Interim Order.

 

•

The Continuance Resolution being approved and adopted by the Shareholders at the Meeting.

 

•

The Interim Order and the Final Order each being obtained on terms consistent with the Arrangement Agreement, and not having been set aside or modified in a manner unacceptable to either the Corporation or the Purchaser, each acting reasonably, on appeal or otherwise.

 

•

Each of the Regulatory Approvals being obtained on terms acceptable to the Corporation, the Parent and the Purchaser (each acting reasonably).

 

•

No Law (other than a Regulatory Approval) being in effect that makes the consummation of the Arrangement illegal or otherwise prevents, prohibits or enjoins the Corporation, the Parent or the Purchaser from consummating the Arrangement.

 

•

The Articles of Arrangement to be filed with the Registrar under the ABCA in accordance with the Arrangement Agreement being in a form and content satisfactory to the Corporation and the Purchaser, each acting reasonably.

 

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•

The Articles of Continuance to be filed with the Registrar in accordance with the Arrangement Agreement being in a form and content satisfactory to the Corporation and the Purchaser, each acting reasonably, and the Articles of Continuance being filed with the Registrar and the Continuance being completed.

 

•

There being no action or proceeding (whether, for greater certainty, by a Governmental Entity or any other Person) commenced in any jurisdiction that is reasonably likely to:

 

○

cease trade, enjoin or prohibit or impose any limitations, damages or conditions on, the Parent’s or the Purchaser’s ability to acquire, hold, or exercise full rights of ownership over, any Shares, including the right to vote the Shares;

 

○

prohibit the Arrangement, or the ownership or operation by the Parent or the Purchaser of any material portion of the business or assets of the Corporation and its Subsidiaries (taken as a whole) or, except as a consequence of Section 4.4 of the Arrangement Agreement (for greater certainty, without derogating from the rights of the Parent or the Purchaser under Section 6.1(3) of the Arrangement Agreement), compel the Parent or the Purchaser to dispose of or hold separate any material portion of the business or assets of the Corporation and its Subsidiaries (taken as a whole) as a result of the Arrangement or

 

○

materially delay the consummation of the Arrangement, or if the Arrangement is consummated, have a Material Adverse Effect.

Conditions Precedent to the Obligations of Purchaser

Purchaser is not required to consummate and complete the Arrangement unless each of the following conditions is satisfied, which conditions are for the exclusive benefit of Purchaser and may only be waived, in whole or in part, by Purchaser in its sole discretion:

 

•

The representations and warranties of the Corporation set forth in Paragraphs (1) [Organization and Qualification], (2) [Corporation Authorization], (3) [Execution and Binding Obligation], (6) [Capitalization] and (22) [Brokers] of Schedule C of the Arrangement Agreement shall be true and correct in all respects as of the date of the Arrangement Agreement and true and correct in all respects (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date) as of the Effective Time as if made at and as of such time, and (ii) all other representations and warranties of the Corporation set forth in the Arrangement Agreement shall be true and correct as of the date of the Arrangement Agreement and as of the Effective Time as if made at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of the Arrangement Agreement or another date shall be true and correct in all respects as of such date), except in the case of this clause (ii) where the failure to be so true and correct in all respects, individually or in the aggregate, has not had or would not reasonably be expected to have a Material Adverse Effect (disregarding for purposes of Section 6.2(1)(a)(ii) of the Arrangement Agreement any materiality, “material” or “Material Adverse Effect” qualification contained in any such representation or warranty).

 

•

The Corporation has fulfilled or complied in all material respects with the covenants of the Corporation contained in the Arrangement Agreement to be fulfilled or complied with by it on or prior to the Effective Time.

 

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•

Dissent Rights not having been exercised (or, if exercised, remaining outstanding) with respect to more than 5% of the issued and outstanding Shares in respect of either of the Continuance Resolution or the Arrangement Resolution.

 

•

Purchaser shall be given the opportunity to review all Incentive Securities and Warrants within a reasonable period of time prior to the Closing and shall be satisfied, acting reasonably, that all Incentive Securities and Warrants have been exercised or surrendered in accordance with their terms or Purchaser shall be otherwise satisfied, acting reasonably, that the Incentive Securities and Warrants will no longer represent any right to acquire Shares after giving effect to the Arrangement, and there are no other outstanding claims or rights or securities which could become claims or rights to Shares.

 

•

Since the date of the Arrangement Agreement, no Material Adverse Effect having occurred and been continuing.

 

•

Since the date of the Arrangement agreement, no Event of Default under the Facility Agreements of any breach by Aptose of the Debt Conversion and Interest Payment Agreement having occurred and been continuing.

 

•

The Purchaser shall be satisfied, in its sole discretion, with the implementation of actions taken or to be taken by the Corporation in connection with the matters set forth in Section 6.2(7) of the Corporation Disclosure Letter relating to certain Employee Plan of the Corporation.

 

•

The delivery by Aptose of certain other customary closing deliverables and certificates.

Conditions Precedent to the Obligations of Aptose

Aptose is not required to complete the Arrangement unless each of the following conditions is satisfied, on or before the Effective Time, which conditions are for the exclusive benefit of Aptose and may only be waived, in whole or in part, by Aptose in its sole discretion:

 

•

The representations and warranties of the Parent and the Purchaser set forth in Paragraphs (1) [Organization and Qualification], (2) [Corporation Authorization], (3) [Execution and Binding Obligation] of Schedule D to the Arrangement Agreement shall be true and correct in all respects as of the date of the Arrangement Agreement and true and correct in all respects (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date) as of the Effective Time as if made at and as of such time, and (ii) all other representations and warranties of the Parent and Purchaser set forth in the Arrangement Agreement shall be true and correct as of the date of the Arrangement Agreement and as of the Effective Time as if made at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of the Arrangement Agreement or another date shall be true and correct in all respects as of such date), except in the case of this clause (ii) where the failure to be so true and correct in all respects, individually or in the aggregate, (disregarding for purposes of Section 6.3(1) of the Arrangement Agreement any materiality or “material” or “Material Adverse Effect” qualification contained in any such representation or warranty) has not had or would not reasonably be expected to materially impede or delay the consummation of the Arrangement.

 

•

The Parent and the Purchaser have fulfilled or complied in all material respects with the covenants of the Parent and the Purchaser, respectively, contained in the Arrangement Agreement to be fulfilled or complied with by it on or prior to the Effective Time.

 

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•

Subject to obtaining the Final Order and the satisfaction or waiver of the other conditions precedent contained herein in its favour (other than conditions which, by their nature, are only capable of being satisfied as of the Effective Time), the Purchaser has deposited or caused to be deposited in escrow with the Depositary in accordance with Section 2.10 of the Arrangement Agreement the funds required to effect payment in full of the aggregate Consideration to be paid pursuant to the Arrangement.

Termination

The Arrangement Agreement may be terminated and the Arrangement abandoned at any time prior to the Effective Time by:

 

•

the mutual written agreement of the parties;

 

•

either Aptose, the Parent or the Purchaser if:

 

○

the Arrangement Resolution is not approved by the Shareholders at the Meeting in accordance with the Interim Order or the Continuance Resolution is not approved by the Shareholders at the Meeting, provided that a Party may not terminate the Arrangement Agreement if the failure to obtain the approval of the Shareholders of the Arrangement Resolution or the Continuance Resolution, as applicable, has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such to perform any of its covenants or agreements under the Arrangement Agreement;

 

○

after the date of the Arrangement Agreement, any Law (including with respect to the Regulatory Approvals) is enacted, made, enforced or amended, as applicable, that makes the consummation of the Arrangement illegal or otherwise permanently prohibits or enjoins the Corporation, the Parent or the Purchaser from consummating the Arrangement, and such Law has, if applicable, become final and non-appealable, provided that the Party seeking to terminate the Arrangement Agreement has used its commercially reasonable efforts, to, as applicable, prevent, appeal or overturn such Law or otherwise have it lifted or rendered non-applicable in respect of the Arrangement; or

 

○

The Effective Time does not occur on or prior to the Outside Date, provided that a Party may not terminate the Arrangement Agreement if the failure of the Effective Time to so occur has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under the Arrangement Agreement.

 

•

Aptose if:

 

○

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Parent or the Purchaser under the Arrangement Agreement occurs that would cause any condition in Section 6.3(1) [Representations and Warranties of the Parent and the Purchaser] or Section 6.3(2) [Performance of Covenants by the Parent and the Purchaser] of the Arrangement Agreement not to be satisfied, and such breach or failure is incapable of being cured or is not cured in accordance with the terms of Section 4.8(3) of the Arrangement Agreement provided that any Willful Breach shall be deemed to be incapable of being cured and the

 

- 67 -

Corporation is not then in breach of the Arrangement Agreement so as to directly or indirectly cause any condition in Section 6.2(1) [Representations and Warranties of the Corporation] or Section 6.2(2) [Performance of Covenants by the Corporation] not to be satisfied;

 

○

all of the conditions in Section 6.1 [Mutual Conditions Precedent] and Section 6.2 [Additional Conditions Precedent to the Obligations of the Purchaser] of the Arrangement Agreement are and continue to be satisfied or waived by the applicable Party or Parties at the time the Closing is required to occur pursuant to Section 2.9, the Corporation has irrevocably confirmed to the Purchaser in writing that it is ready, willing and able to consummate the Closing, and the Purchaser does not provide, or cause to be provided, the Depositary with sufficient funds to complete the transactions contemplated by the Arrangement Agreement as required by Section 2.10 within five (5) Business Days after the first date upon which Closing should have occurred pursuant to Section 2.9; or

 

○

prior to the approval by the Shareholders of the Arrangement Resolution, the Board authorizes the Corporation to enter into a written agreement (other than a confidentiality agreement permitted by and in accordance with Section 5.3 of the Arrangement Agreement) with respect to a Superior Proposal in accordance with Section 5.4 of the Arrangement Agreement, provided the Corporation is then in compliance with Article 5 of the Arrangement Agreement and that prior to or concurrent with such termination the Corporation pays the Corporation Expense Fee in accordance with Section 8.2 of the Arrangement Agreement;

 

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Parent or the Purchaser if:

 

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a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Corporation under the Arrangement Agreement occurs that would cause any condition in Section 6.2(1) [Representations and Warranties of the Corporation] or Section 6.2(2) [Performance of Covenants by the Corporation] of the Arrangement Agreement not to be satisfied, and such breach or failure is incapable of being cured or is not cured in accordance with the terms of Section 4.8(3) of the Arrangement Agreement; provided that any Willful Breach shall be deemed to be incapable of being cured and each of the Parent and the Purchaser is not then in breach of the Arrangement Agreement so as to directly or indirectly cause any condition in Section 6.3(1) [Representations and Warranties of the Purchaser] or Section 6.3(2) [Performance of Covenants by the Purchaser] of the Arrangement Agreement not to be satisfied;

 

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Prior to the approval by the Shareholders of the Arrangement Resolution, (A) the Board or the Transaction Committee fails to unanimously recommend or withdraws, amends, modifies or qualifies (in the case of an amendment, modification or qualification, in a manner adverse to the Purchaser), the Board Recommendation or publicly proposes or states its intention to do any of the foregoing, (B) the Board or the Transaction Committee accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend an Acquisition Proposal or takes no position or remains neutral with respect to a publicly announced, or otherwise publicly disclosed, Acquisition Proposal for more than five (5) Business Days (or beyond the third (3rd) Business Day prior to the date of the Meeting, if sooner), (C) the Board or the Transaction Committee fails to publicly reaffirm the Board Recommendation within

 

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five (5) Business Days after having been requested in writing by the Purchaser to do so (or in the event that the Meeting is scheduled to occur within such five (5) Business Day period, prior to the third (3rd) Business Day prior to the date of the Meeting) (in each of the cases set forth in clause (A), (B) or (C), a “Change in Recommendation”), or (D) the Corporation accepts or enters into, or publicly proposes to accept or enter into, any Contract, letter of intent, term sheet, understanding or arrangement (in each case, whether or not legally binding) or similar document with any Person in respect of an Acquisition Proposal (other than a confidentiality and standstill agreement permitted by and in accordance with Section 5.3 of the Arrangement Agreement) or the Corporation breaches Article 5 of the Arrangement Agreement in any material respect;

 

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The condition set forth in Section 6.2(3) is not capable of being satisfied by the Outside Date;

 

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There has occurred a Material Adverse Effect which is incapable of being cured on or prior to the Outside Date;

 

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The condition set forth in Section 6.2(7) is not capable of being satisfied by the Outside Date.

Expense Fee

In the event (i) a Change in Recommendation, (ii) a Superior Proposal or (iii) the Purchaser not being satisfied, in its sole discretion, with the implementation of actions taken or to be taken by the Corporation in connection with the matters set forth in Section 6.2(7) of the Corporation Disclosure Letter relating to certain Employee Plan of the Corporation, results in the termination of the Arrangement Agreement, Aptose shall be required to pay an Expense Fee of $300,000.

Fees and Expenses

Except as otherwise specifically provided for in the Arrangement Agreement, all out-of-pocket third party expenses incurred in connection with the Arrangement, the Arrangement Agreement or the transactions contemplated thereby, including all costs, expenses and fees of the Corporation incurred prior to or after the Effective Time in connection with, or incidental to, the Plan of Arrangement, shall be paid by the Party incurring such expenses, whether or not the Arrangement is consummated.

Governing Law

The Arrangement Agreement is governed by and will be interpreted and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Support and Voting Agreements

On November 18, 2025, in connection with the execution of the Arrangement Agreement, the Supporting Shareholders entered into Support and Voting Agreements with the Purchaser. Under the terms of the Support and Voting Agreements, the Supporting Shareholders have agreed, among other things, to vote their Shares in favour of the approval and authorization of the Arrangement Resolution and the Continuance Resolution at the Meeting and, subject to certain exceptions, not to transfer any of their Shares. As of November 18, 2025, the date of the Arrangement Agreement, the Supporting Shareholders beneficially owned an aggregate of approximately 0.26% of the outstanding Shares entitled to vote at the Meeting. The

 

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Support and Voting Agreements will terminate upon termination of the Arrangement Agreement and certain other specified events.

PRINCIPAL LEGAL MATTERS

Court Approval and Completion of the Arrangement

An arrangement under the ABCA requires sanction by the Court. On December [●], 2025, the Corporation obtained the Interim Order providing for the calling and holding of the Meeting and other procedural matters. A copy of the Interim Order and the Notice of Application for the Final Order are attached to this Proxy Statement as Appendix F and Appendix G, respectively.

If the Arrangement Resolution is approved by Shareholders at the Meeting in the manner required by the Interim Order, the Corporation will apply to the Court to obtain the Final Order. The hearing in respect of the Final Order is scheduled to be held virtually at https://albertacourts.webex.com/meet/virtual.courtroom60 on January 16, 2026, at 3:00 p.m. (Mountain Time), or as soon after such time as counsel may be heard. Any Shareholders wishing to appear in person or to be represented by counsel at the hearing of the application for the Final Order may do so but must comply with certain procedural requirements described in the Notice of Application for the Final Order, including filing a notice of appearance with the Court and serving same upon the Corporation and Purchaser via their respective counsel as soon as reasonably practicable and, in any event, no less than five Business Days before the hearing of the application for the Final Order (as it may be rescheduled from time to time).

The Court has broad discretion under the ABCA when making orders with respect to arrangements. The Court, when hearing the application for the Final Order, will consider, among other things, the fairness of the Arrangement to Shareholders. The Court may approve the Arrangement in any manner it may direct and determine appropriate.

Once the Final Order is granted on terms consistent with the Arrangement Agreement, and the other conditions contained in the Arrangement Agreement are satisfied or waived to the extent legally permissible, the Articles of Arrangement will be filed with the Registrar under the ABCA for issuance of the Certificate of Arrangement giving effect to the Arrangement.

Canadian Securities Law Matters

The Corporation is a reporting issuer in all provinces of Canada, and, accordingly, is subject to applicable Securities Laws in all such provinces, including MI 61-101.

MI 61-101 is intended to regulate certain transactions to ensure equality of treatment among security holders in transactions which raise the potential for conflicts of interest, generally requiring enhanced disclosure, approval by a majority of security holders (excluding interested or related parties and their joint actors), and, in certain instances, independent valuations and approval and oversight of the transaction by a Transaction Committee of independent directors. The protections afforded by MI 61-101 apply to a reporting issuer proposing to carry out, among other transactions, a “business combination” (as defined in MI 61-101).

A transaction is a “business combination” for purposes of MI 61-101 if the interests of holders of equity securities of an issuer may be terminated without their consent and, among other things, a “related party” (as defined in MI 61-101) at the time the transaction is agreed to (i) would, as a consequence of such transaction, directly or indirectly acquire the issuer or the business of the issuer, or combine with the issuer

 

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(through an amalgamation, arrangement or otherwise), whether alone or with joint actors, (ii) is entitled to receive, directly or indirectly, as a consequence of the transaction, consideration per equity security that is not identical in amount and form to the entitlement of the general body of holders in Canada of securities of the same class, or (iii) is entitled to receive, directly or indirectly, as a consequence of the transaction, a “collateral benefit” (as defined in MI 61-101).

As of the date of the Arrangement Agreement, to the knowledge of the Corporation, Parent beneficially owned, directly or indirectly, or exercised control or direction over, 508,710 Shares in the aggregate, which represented approximately 19.93% of the issued and outstanding Shares and of the total votes attached to all classes of the Corporation’s voting shares, on an undiluted basis as of such date. The Purchaser is controlled by Parent. As a result, each of Parent and the Purchaser is a “related party” of the Corporation for the purposes of MI 61-101.

The Arrangement is a “business combination” for the purposes of MI 61-101 because, among other things, under the terms of the Arrangement, (i) the interests of holders of equity securities of the Corporation may be terminated without their consent, and (ii) each of the Purchaser and Parent is a “related party” of the Corporation and as a consequence of the Arrangement, the Purchaser and Parent will, directly or indirectly, own all of the issued and outstanding Shares following completion of the Arrangement.

Collateral Benefit

A “collateral benefit,” as defined under MI 61-101, includes any benefit that a “related party” of the Corporation, which includes the directors and “senior officers” (as defined under MI 61-101) of the Corporation, is entitled to receive, directly or indirectly, as a consequence of the Arrangement, including, without limitation, an increase in salary, a lump sum payment, a payment for surrendering securities, or other enhancement in benefits related to past or future services as an employee, director or consultant of the Corporation. MI 61-101 excludes from the meaning of “collateral benefit” certain benefits to a “related party” received solely in connection with the related party’s services as an employee, director or consultant of an issuer where, among other things, (a) the benefit is not conferred for the purpose, in whole or in part, of increasing the value of the consideration paid to the related party for securities relinquished under the transaction, (b) the conferring of the benefit is not, by its terms, conditional on the related party supporting the transaction in any manner, (c) full particulars of the benefit are disclosed in the disclosure document for the transaction, and (d)(i) at the time the transaction was agreed to, the related party and its associated entities beneficially own or exercise control or direction, over less than 1% of the outstanding shares of the issuer (the “1% Exemption”), or (ii) an independent committee, acting in good faith, determines that the value of the collateral benefit, net of any offsetting costs to the related party, is less than 5% of the value of the consideration the related party expects to receive under the terms of the transaction.

The Board has reviewed the benefits that its directors and senior officers may receive in connection with the Transaction. The Board has determined that no benefits were conferred to increase the consideration paid to any of its directors or senior officers nor as a condition of any such director or senior officer supporting the Transaction and that the Corporation’s non-executive directors are not otherwise entitled to receive any “collateral benefit” for the purposes of MI 61-101. The Board has determined that the senior officers of the Corporation each have existing employment agreements that provide for certain entitlements where the senior officer is terminated by the Corporation without cause or resigns for “good reason” within 3 months prior to or 12 months following a “change of control”. Subject to the terms of the retention bonus agreements, retention awards will be payable to certain of the Corporation’s senior officers in connection with the Transaction. As well, certain senior officers are also entitled to receive deferred 2024 bonus payments which will be payable in connection with the Transaction. To Corporation’s knowledge, no senior

 

 

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officer of the Corporation beneficially owned or exercised control or direction over 1% or more of the Shares at the time Transaction was agreed to and, accordingly, the benefits noted above do not constitute a “collateral benefit” for the purposes of MI 61-101 for any such senior officer as they each satisfy the requirements of the 1% Exemption. See “Interest of the Corporation’s Directors and Officers in the Arrangement” for further detail

Minority Approval Requirements

MI 61-101 requires that, in addition to any other required security holder approval, a “business combination” must be subject to “minority approval” (as defined in MI 61-101) of every class of “affected securities” (as defined in MI 61-101) of the issuer, in each case voting separately as a class.

Consequently, the approval of the Arrangement Resolution will require the affirmative vote of a simple majority of the votes cast by all Shareholders virtually present or represented by proxy at the Meeting other than: (i) an “interested party” (as defined in MI 61-101); (ii) any “related party” (as defined in MI 61-101) of an “interested party,” unless the “related party” meets that description solely in its capacity as a director or senior officer of one or more persons that are neither an “interested party” nor “issuer insiders” of the Corporation; and (iii) any person that is a “joint actor” (as defined in MI 61-101) with any of the foregoing, voting separately as a class (collectively, the “Minority Shareholders”).

To the knowledge of the Corporation, the only holders of Shares that qualifies as an “interested party” or “related party” of an “interested party” is Parent. Accordingly, any Shares held, directly or indirectly, by Parent will be excluded from the vote of the Minority Shareholders. As of the Record Date, to the knowledge of the Corporation, Parent beneficially own or exercise control or direction over, directly or indirectly, an aggregate of 508,710 Shares, representing in the aggregate approximately 19.93% of the outstanding Shares, on an undiluted basis. For clarity, given the analysis set out above under “Collateral Benefits,” none of the Shares held by the directors or senior officers of the Corporation will be excluded in determining whether Minority Shareholder approval for the Arrangement is obtained. As such, to the knowledge of the Corporation, after reasonable inquiry, of the 2,552,429 Shares issued and outstanding as of the Record Date, 2,043,719 Shares can be voted in respect of the Minority Approval Vote.

Formal Valuation

MI 61-101 provides that, unless an exemption is available, a reporting issuer proposing to carry out a business combination is required to obtain a formal valuation of the “affected securities” (as defined in MI 61-101) from a qualified independent valuator and to provide the holders of such affected securities with a summary of such valuation. For the purposes of the Arrangement, the Shares are considered “affected securities” within the meaning of MI 61-101.

The Transaction Committee determined that Locust Walk was a qualified and independent valuator for purposes of MI 61-101. As a result, the Transaction Committee retained Locust Walk to provide it with a formal valuation of the Consideration in accordance with the requirements of MI 61-101. A copy of the Formal Valuation and Fairness Opinion prepared by Locust Walk is attached to this Proxy Statement as Appendix E.

Prior Valuations and Prior Offers

To the knowledge of the Corporation and its directors and officers, after reasonable enquiry, there have been no “prior valuations” (as defined in MI 61-101) prepared in respect of the Corporation within the 24 months prior to the date of this Proxy Statement. The Corporation has not received any bona fide

 

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prior offer during the 24 months before the date of the Arrangement Agreement that relates to the subject matter or is otherwise relevant to the Arrangement.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The following is, at the date hereof, a summary of the principal Canadian federal income tax considerations under the Tax Act generally applicable to a beneficial owner of Shares who, for the purposes of the Tax Act, and at all relevant times, (i) holds Shares as capital property, (ii) deals at arm’s length with, and is not affiliated with, the Corporation, the Purchaser or any of their respective affiliates, and (iii) disposes of Shares under the Arrangement or in connection with the Continuance (a “Holder”).

Shares will generally be considered to be capital property to a Holder for purposes of the Tax Act provided the Holder does not hold the Shares in the course of carrying on a business and has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade.

This summary is based on the provisions of the Tax Act in force as of the date hereof and counsel’s understanding of the current administrative policies of the Canada Revenue Agency published in writing prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. Other than the Proposed Amendments, this summary does not take into account or anticipate any changes in law or administrative policy whether by legislative, regulatory, administrative or judicial action or decision nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction, which may differ significantly from those discussed herein.

This summary is not applicable to a Holder: (i) that is a “financial institution” (as defined in the Tax Act, including for the purpose of the mark-to-market rules); (ii) that is a “specified financial institution,” (as defined in the Tax Act); (iii) an interest in which would be a “tax shelter investment” (as defined in the Tax Act); (iv) that has elected or elects under the functional currency rules in the Tax Act to report its “Canadian tax results” (as defined in the Tax Act) in a currency other than Canadian currency; (v) that is exempt from tax under Part I of the Tax Act; (vi) that has entered or enters into a “derivative forward agreement” or a “synthetic disposition arrangement” (each as defined in the Tax Act) with respect to the Shares; (vii) that is a “foreign affiliate” (as defined in the Tax Act) of a taxpayer resident in Canada; or (viii) that is a partnership. Such Holders should consult their own tax advisors having regard to their own particular circumstances.

This summary does not address the tax consequences to holders of Options, RSUs or Warrants (including for greater certainty the Armistice Warrants) nor to any holders who have acquired Shares on the exercise or settlement of any of the foregoing or through another equity-based employment compensation arrangement, or otherwise in the course of their employment. Such holders or other securityholders should consult their own tax advisors having regard to their own particular circumstances.

This summary is not exhaustive of all Canadian federal income tax considerations. It is of a general nature only and is neither intended to be, nor should it be construed to be, legal, business or tax advice or representations to any particular Holder. Accordingly, Holders should consult their own legal and tax advisors with respect to their particular circumstances, and any other consequences to them of such transactions under Canadian federal, provincial, territorial, local and foreign tax laws.

Holders Resident in Canada

This portion of the summary is applicable to a Holder who, at all relevant times, for purposes of the Tax Act and any applicable income tax treaty or convention, is or is deemed to be resident in Canada (a “Resident Holder”). Holders should confirm with their own tax advisors whether they are a Resident Holder. Certain Resident Holders who might not otherwise be considered to hold their Shares as capital property may, in certain circumstances, be entitled to make an irrevocable election in accordance with subsection 39(4) of the Tax Act to have such Shares, and every other “Canadian security” (as defined in the Tax Act) owned by such Holder in the taxation year of the election and all subsequent taxation years, to be capital property. Holders should consult with their own tax advisors regarding this election.

Disposition of Shares

Generally, a Resident Holder (other than a Continuance Dissenting Resident Holder or an Arrangement Dissenting Resident Holder, as these terms are defined below) who disposes of Shares under the Arrangement will realize a capital gain (or capital loss) equal to the amount by which the Consideration received by the Resident Holder under the Arrangement exceeds (or is less than) the aggregate of the Resident Holder’s adjusted cost base in its Shares immediately before the disposition and any reasonable costs of disposition. See the disclosure below under “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Taxation of Capital Gains and Losses” for a description of the tax treatment of capital gains and losses.

Taxation of Capital Gains and Losses

Generally, a Resident Holder is required to include in computing its income for a taxation year one-half of the amount of any capital gain (a “Taxable Capital Gain”) realized by the Resident Holder in the year. Subject to and in accordance with the provisions of the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an “Allowable Capital Loss”) realized in a taxation year from Taxable Capital Gains realized in the year by such Resident Holder. Allowable Capital Losses in excess of Taxable Capital Gains realized in a taxation year may be carried back and deducted in any of the three preceding years or carried forward and deducted in any subsequent year against net Taxable Capital Gains realized by the Resident Holder in such years, subject to and in accordance with the detailed rules contained in the Tax Act.

The amount of any capital loss realized by a Resident Holder that is a corporation on the disposition of a Share (and, in certain circumstances, a share exchanged for such share) may be reduced by the amount of any dividends received (or deemed to be received) by it on such Share to the extent and under the circumstances described in the Tax Act. Similar rules may apply where a corporation is a member of a partnership or a beneficiary of a trust that owns a Share directly or indirectly through a partnership or trust. Resident Holders to whom these rules may apply should consult their own tax advisors.

Resident Holders dissenting to the Continuance

A Resident Holder who validly exercises Dissent Rights with respect to the Continuance (a “Continuance Dissenting Resident Holder”) and who disposes of his, her or its Shares in respect of which the Continuance Dissenting Resident Holder dissents in consideration for an entitlement to receive a payment from the Corporation of an amount equal to the fair value of his, her or its Shares will be deemed to have received a taxable dividend from the Corporation equal to the amount by which the amount received from the Corporation for the Shares (other than any portion of the payment that is interest awarded by a court) exceeds the paid-up capital of the Continuance Dissenting Resident Holder’s Shares (calculated in accordance with the Tax Act). A Continuance Dissenting Resident Holder will be considered to have disposed of such Continuance Dissenting Resident Holder’s Shares for proceeds of disposition equal to the amount received by the Continuance Dissenting Resident Holder (other than any portion of the payment that is interest awarded by a court) less the amount of any deemed dividend described above. Generally, a Continuance Dissenting Resident Holder will realize a capital gain (or capital loss) to the extent that such proceeds of disposition exceeds (or is less than) the aggregate of the Continuance Dissenting Resident Holder’s adjusted cost base in its Shares and any reasonable costs of disposition. See the disclosure above under “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Taxation of Capital Gains and Losses” for a description of the tax treatment of capital gains and losses.

A Continuance Dissenting Resident Holder who is an individual (including certain trusts) will be required to include in income any dividend deemed to be received on the Continuance Dissenting Resident Holder’s Shares and will be subject to the gross-up and dividend tax credit rules applicable to taxable dividends received from taxable Canadian corporations, including the enhanced gross-up and dividend tax credit rules applicable to any dividends designated by the Corporation as “eligible dividends” (as defined in the Tax Act). There may be limitations on the ability of the Corporation to designate dividends as eligible dividends.

A Continuance Dissenting Resident Holder that is a corporation will be required to include in income any dividend deemed to be received on the Continuance Dissenting Resident Holder’s Shares, but generally will be entitled to deduct an equivalent amount in computing taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received or deemed to have been received by a Resident Holder that is a corporation as proceeds of a disposition or a capital gain and not as a dividend. Accordingly, Continuance Dissenting Resident Holders that are corporations should consult their own tax advisors for specific advice with respect to the potential application of this provision.

A “private corporation” or a “subject corporation” (each as defined in the Tax Act) may be liable under Part IV of the Tax Act to pay a refundable tax on any dividend that it is deemed to receive on the Shares to the extent that the dividend is deducible in computing the corporation’s taxable income. A “subject corporation” is generally a corporation (other than a private corporation) resident in Canada and controlled directly or indirectly by or for the benefit of an individual (other than a trust) or a related group of individuals (other than trusts). Continuance Dissenting Resident Holders that are corporations should consult their own tax advisors having regard to their own particular circumstances.

A Continuance Dissenting Resident Holder will be required to include in computing his, her or its income under the Tax Act any interest awarded by a court in connection with the exercise of his, her or its Dissent Rights in respect of the Continuance.

Resident Holders dissenting to the Arrangement

A Resident Holder who validly exercises Dissent Rights with respect to the Arrangement (an “Arrangement Dissenting Resident Holder”) will be deemed to have disposed of his, her or its Shares in respect of which the Arrangement Dissenting Resident Holder dissents to the Purchaser and will be entitled to receive a payment from the Purchaser of an amount equal to the fair value of his, her or its Shares. Generally, an Arrangement Dissenting Resident Holder will realize a capital gain (or capital loss) to the extent that such payment (other than any portion thereof that is interest awarded by a court) exceeds (or is less than) the aggregate of the Arrangement Dissenting Resident Holder’s adjusted cost base in his, her or its Shares and any reasonable costs of disposition. See the disclosure above under “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Taxation of Capital Gains and Losses” for a description of the tax treatment of capital gains and losses.

An Arrangement Dissenting Resident Holder will be required to include in computing his, her or its income under the Tax Act any interest awarded by a court in connection with the exercise of his, her or its Dissent Rights in respect of the Arrangement.

Alternative Minimum Tax

The realization of a capital gain by an individual (including certain trusts) may give rise to a liability for alternative minimum tax as calculated under the detailed rules set out in the Tax Act. Such Resident Holders should consult their own tax advisors having regard to their own particular circumstances.

Additional Refundable Tax

A Resident Holder that is throughout the relevant taxation year a “Canadian-controlled private corporation” (as defined in the Tax Act), or that is or is deemed to be a “substantive CCPC” (as defined in the Tax Act) at any time in the relevant taxation year, may be liable to pay an additional tax on its “aggregate investment income” (as defined in the Tax Act), which includes interest, taxable capital gains and dividends (including deemed dividends). Such additional tax may be refundable in certain circumstances. Resident Holders should consult their own tax advisors having regard to their own particular circumstances.

Holders Not Resident in Canada

This portion of the summary is generally applicable to a Holder who, at all relevant times, for purposes of the Tax Act and any applicable income tax treaty or convention, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the Shares in, or in the course of, a business carried on in Canada (a “Non-Resident Holder”). Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere or that is an “authorized foreign bank” (as defined in the Tax Act). Such Non-Resident Holders should consult their own tax advisors having regard to their own particular circumstances.

Disposition of Shares

A Non-Resident Holder who disposes of Shares under the Arrangement will generally realize a capital gain or a capital loss computed in the manner described above under “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Taxation of Capital Gains and Losses”.

Taxation of Capital Gains and Losses

A Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain or entitled to deduct any capital loss realized on the disposition of Shares pursuant to the Arrangement, unless the Shares constitute “taxable Canadian property” of the Non-Resident Holder for purposes of the Tax Act at the time of their disposition and the Non-Resident Holder is not entitled to relief under an applicable income tax treaty or convention between Canada and the country in which the Non-Resident Holder is resident.

Generally, the Shares will not constitute taxable Canadian property of a Non-Resident Holder at the time of their disposition provided that (i) the Shares were listed on a “designated stock exchange” (as defined in the Tax Act), which currently includes the TSX, at that time, and (ii) at no time during the 60 month period immediately preceding the disposition, the following two conditions were met concurrently: (A) one or any combination of (a) the Non-Resident Holder, (b) persons with whom the Non-Resident Holder does not deal at arm’s length, and (c) partnerships in which the Non-Resident Holder or a person described in (b) holds an interest directly or indirectly through one or more partnerships, owned 25% or more of the issued shares of any class or series of the Corporation, and (B) more than 50% of the fair market value of the Shares was derived, directly or indirectly, from one or any combination of (a) real or immovable property situated in Canada, (b) Canadian resource properties (as defined in the Tax Act), (c) timber resource properties (as defined in the Tax Act), and (d) options in respect of, or interests in, or for civil law, rights in, any of the foregoing property, whether or not such property exists. Notwithstanding the foregoing, Shares may be deemed to be taxable Canadian property in certain circumstances specified in the Tax Act.

Non-Resident Holders whose Shares might constitute taxable Canadian property should consult with their own tax advisors having regard to their own particular circumstances.

Even if the Shares were to be considered to be taxable Canadian property to a Non-Resident Holder as described above, any taxable capital gain resulting from the disposition of the Shares will not be included in computing the Non-Resident Holder’s taxable income earned in Canada for purposes of the Tax Act if, at the time of their disposition, the Shares constitute “treaty-protected property” of the Non-Resident Holder for purposes of the Tax Act. Shares will generally be considered “treaty-protected property” of a Non-Resident Holder for purposes of the Tax Act at the time of their disposition if any gain realized would, because of an applicable income tax treaty or convention between Canada and the country in which the Non-Resident Holder is resident for purposes of such treaty or convention and in respect of which the Non-Resident Holder is entitled to receive benefits thereunder, be exempt from tax under the Tax Act. Non-Resident Holders whose Shares constitute taxable Canadian property should consult their own tax advisors with respect to the availability of relief under the terms of any applicable income tax treaty or convention.

Non-Resident Shareholders dissenting to the Continuance

A Non-Resident Holder who validly exercises Dissent Rights with respect to the Continuance (a “Continuance Dissenting Non-Resident Holder”) and who dispose of his, her or its Shares in respect of which the Continuance Dissenting Non-Resident Holder dissents in consideration for an entitlement to receive a payment from the Corporation of an amount equal to the fair value of his, her or its Shares will be deemed to have received a taxable dividend from the Corporation equal to the amount by which the amount received from the Corporation for the Shares (other than any portion of the payment that is interest awarded by a court) exceeds the paid-up capital of the Continuance Dissenting Non-Resident Holder’s Shares (calculated in accordance with the Tax Act).

Any dividend deemed to be received by a Continuance Dissenting Non-Resident Holder will be subject to withholding tax under the Tax Act at a rate of 25% of the gross amount of the dividend, unless the rate is reduced under the provisions of an applicable income tax treaty or convention. In the case of a beneficial owner of dividends who is a resident of the United States for purposes of the Canada-US Tax Convention (1980) (as amended) and who is fully entitled to the benefits of that treaty, the rate of withholding will generally be reduced to 15% (or 5% in the case of a company beneficially owning at least 10% of the voting stock of the Corporation). The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting of which Canada is a signatory, affects many of Canada’s income tax treaties (but not the Canada-US Tax Convention (1980)), including the ability to claim benefits thereunder. Continuance Dissenting Non-Resident Holders should consult their own tax advisors having regard to their own particular circumstances.

A Continuance Dissenting Non-Resident Holder will be considered to have disposed of such Continuance Dissenting Non-Resident Holder’s Shares for proceeds of disposition equal to the amount received by the Continuance Dissenting Non-Resident Holder (other than any portion of the payment that is interest awarded by a court) less the amount of any deemed dividend described above. In general, a Continuance Dissenting Non-Resident Holder will realize a capital gain (or capital loss) to the extent that such proceeds of disposition, exceeds (or is less than) the aggregate of the Continuance Dissenting Non-Resident Holder’s adjusted cost base in its Shares and any reasonable costs of disposition. The income tax treatment of capital gains and capital losses of a Continuance Dissenting Non-Resident Shareholder is discussed above. See “Certain Canadian Federal Income Tax Considerations –Holders Not Resident in Canada– Taxation of Capital Gains and Losses” above.

The amount of any interest awarded by a court to a Continuance Dissenting Non-Resident Holder will not be subject to Canadian withholding tax provided that such interest is not “participating debt interest” (as defined in the Tax Act). Continuance Dissenting Non-Resident Holder who intend to dissent with respect to the Continuance should consult their own tax advisors for advice having regard to their own particular circumstances.

Non-Resident Shareholders dissenting to the Arrangement

A Non-Resident Holder who validly exercises Dissent Rights under the Arrangement (an “Arrangement Dissenting Non-Resident Holder”) will realize a capital gain (or capital loss) in the same manner as an Arrangement Dissenting Resident Holder. See “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada –Resident Holders dissenting to the Arrangement”.

The income tax treatment of capital gains and capital losses of an Arrangement Dissenting Non-Resident Shareholder is discussed above. See “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Taxation of Capital Gains and Losses” above.

The amount of any interest awarded by a court to an Arrangement Dissenting Non-Resident Holder will not be subject to Canadian withholding tax provided that such interest is not “participating debt interest” (as defined in the Tax Act). Arrangement Dissenting Non-Resident Holder who intend to dissent from the Arrangement should consult their own tax advisors for advice having regard to their own particular circumstances.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a general discussion of certain U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) of Shares arising from and relating to the Arrangement.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the Arrangement. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax considerations relevant to such U.S. Holder, including, without limitation, specific tax consequences to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or tax advice with respect to any particular U.S. Holder. This summary does not address the U.S. federal net investment income tax, U.S. federal alternative minimum tax, U.S. federal estate and gift tax, U.S. state and local tax, or non-U.S. tax considerations applicable to U.S. Holders arising from and relating to the Arrangement. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. state and local, and non-U.S. tax considerations arising from and relating to the Arrangement. This summary also does not address tax consequences to holders of Warrants, Restricted Stock Units or Options. A holder of such securities should consult its own tax advisor regarding the tax considerations arising from and relating to the Arrangement applicable to such securities.

No opinion from U.S. legal counsel or ruling from the IRS has been requested, or will be obtained, regarding the U.S. federal income tax considerations arising from and relating to the Arrangement. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, or contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the conclusions described in this summary.

THE FOLLOWING SUMMARY IS FOR GENERAL INFORMATION ONLY AND IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY HOLDER OF SHARES AND NO OPINION OR REPRESENTATION WITH RESPECT TO THE U.S. FEDERAL INCOME TAX CONSIDERATIONS APPLICABLE TO ANY SUCH HOLDER IS MADE. HOLDERS OF SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR CONSIDERATIONS APPLICABLE TO THEM UNDER U.S. FEDERAL, STATE AND LOCAL, AS WELL AS ANY APPLICABLE NON-U.S., TAX LAWS ARISING FROM AND RELATING TO THE ARRANGEMENT.

This summary is based on the Code, Treasury Regulations (whether final, temporary, or proposed) promulgated thereunder, published rulings of the IRS, published administrative positions of the IRS, the current provisions of the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Treaty”), and U.S. court decisions that are applicable, and, in each case, as in effect and available, as of the date of this document.

 

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Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied retroactively. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.

U.S. Holders

For purposes of this summary, the term “U.S. Holder” means a beneficial owner of Shares participating in the Arrangement or exercising Dissent Rights pursuant to the Arrangement that is, for U.S. federal income tax purposes:

 

•

an individual who is a citizen or resident of the United States;

 

•

a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

 

•

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

 

•

a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions, or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) are banks, financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) are brokers or dealers in securities or currencies or that are traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a “functional currency” other than the U.S. dollar; (e) own Shares as part of a straddle, hedge, conversion transaction, constructive sale, or other integrated transaction; (f) acquired Shares in connection with the exercise or cancellation of employee stock options or otherwise as compensation for services; (g) hold Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) are partnerships and other pass-through entities (and partners or investors in such partnerships and entities) or are S corporations (and shareholders thereof); (i) are subject to special tax accounting rules in respect of Shares; (j) own or have owned (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of the Corporation’s outstanding shares; (k) are U.S. expatriates or former long term residents of the United States; (l) hold Shares in connection with a trade or business, permanent establishment or fixed base outside the United States; or (m) are subject to the alternative minimum tax. U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S. federal, U.S. state and local, and non U.S. tax considerations arising from and relating to the Arrangement.

If an entity or arrangement that is classified as a partnership (or other “pass through” entity) for U.S. federal income tax purposes holds Shares, the U.S. federal income tax consequences to such entity or

 

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arrangement and the owners of such entity or arrangement generally will depend on the activities of such entity or arrangement and the status of such partners (or other owners). This summary does not address the tax consequences to any such entity or arrangement or any partner or other owner thereof. Partners (or other owners) of entities or arrangements that are classified as partnerships for U.S. federal income tax purposes should consult their own tax advisor regarding the U.S. federal income tax considerations arising from and relating to the Arrangement.

Treatment of the Arrangement

A U.S. Holder will recognize gain or loss on the exchange of Shares for the Consideration in an amount equal to the difference, if any, between (i) the U.S. dollar value of the Canadian dollars received or, if a U.S. Holder exercises the right to elect in its Letter of Transmittal to receive the Consideration in U.S. dollars, the U.S. dollars received and (ii) such U.S. Holder’s adjusted tax basis in the Shares surrendered in exchange therefor. Subject to the PFIC (as defined below) rules discussed below, such gain or loss generally will be capital gain or loss, which will be long-term capital gain or loss, if, at the time of the exchange, such Shares are held for longer than one year.

Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gains of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

Subject to the PFIC rules discussed below, a U.S. Holder’s adjusted tax basis in a Share generally will equal its cost to the U.S. Holder. In the case of a Share purchased with non-U.S. currency, the cost of the Share to a U.S. Holder will be the U.S. dollar value of the non-U.S. currency purchase price on the date of purchase. In the case of a Share that is traded on an established securities market, a cash basis U.S. Holder (and, if it so elects, an accrual basis U.S. Holder) determines the U.S. dollar value of the cost of such Share by translating the amount paid at the spot rate of exchange on the settlement date of the purchase.

Passive Foreign Investment Company Rules

If the Corporation were to constitute a “passive foreign investment company” within the meaning of Section 1297 of the Code (a “PFIC”) at any time during a U.S. Holder’s holding period, then certain potentially adverse rules would affect the U.S. federal income tax consequences to a U.S. Holders resulting from the Arrangement.

The Corporation generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Corporation for such tax year is passive income (the “PFIC income test”) or (b) 50% or more of the value of the assets of the Corporation either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the “PFIC asset test”). “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

Under certain attribution rules, if the Corporation is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of any of the Corporation’s subsidiaries which is also a PFIC (a “Subsidiary PFIC”), and will generally be subject to U.S. federal income tax under the default PFIC rules under Section 1291 of the Code discussed below on their proportionate share of any gain realized on a disposition or deemed disposition of shares of a Subsidiary PFIC, as if such U.S. Holders directly held the shares of such

 

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Subsidiary PFIC. Accordingly, U.S. Holders should be aware that they could be subject to tax under the PFIC rules on any indirect gain realized on the stock of a Subsidiary PFIC on the disposition of Shares pursuant to the Arrangement.

The Corporation believes that it was classified as a PFIC for its most recently completed tax year, and based on the nature of the Corporation’s business, the projected composition of its gross income and the projected composition and estimated fair market value of its assets, the Corporation expects to be a PFIC for its current tax year. No opinion of legal counsel or ruling from the IRS concerning the status of the Corporation as a PFIC has been obtained or is currently planned to be requested. PFIC classification is fundamentally factual in nature, generally cannot be determined until the close of the tax year in question and is determined annually. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, the Corporation’s PFIC status for the current year cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS will not challenge any PFIC determination made by the Corporation. Each U.S. Holder should consult its own tax advisor regarding the Corporation’s status as a PFIC.

If the Corporation were to be treated as a PFIC for any tax year during a U.S. Holder’s holding period, and if a U.S. Holder disposes of Shares pursuant to the Arrangement that were held by such U.S. Holder directly or indirectly during any time that Corporation was a PFIC (such Shares held by a U.S. Holder directly or indirectly during any time that the Corporation was a PFIC are sometimes referred to herein as “PFIC Shares”), regardless of whether the Corporation was a PFIC in the year in which the Effective Date occurs, such U.S. Holder could be subject to certain adverse U.S. federal income tax consequences with respect to gain realized on the disposition of such PFIC Shares pursuant to the Arrangement. In general, if a U.S. Holder who disposes of PFIC Shares has not made either a timely and effective election to treat the Corporation as a “qualified electing fund” under Section 1295 of the Code (a “QEF Election”) with respect to each taxable year during the U.S. Holder’s holding period during which the Corporation was a PFIC or a timely and effective election under Section 1296 of the Code to mark such PFIC Shares to market (a “Mark-to-Market Election”), the gain the U.S. Holder recognizes as a result of the Arrangement with respect to such PFIC Shares will be treated as earned pro rata over such U.S. Holder’s holding period. With respect to gain allocated to any period preceding the first year in such U.S. Holder’s holding period when the Corporation was a PFIC (if any) and gain allocated to the year of disposition, such gain will be treated as gain arising in the year of disposition and taxed at ordinary U.S. federal income tax rates for the year of disposition. With respect to gain allocated to each of the other years, such gain will be taxed at the highest ordinary U.S. federal income tax rate in effect for each of those years and will be subject to punitive interest charges. A U.S. Holder that is not a corporation must treat such interest as non-deductible personal interest.

In the event the Corporation is classified as a PFIC for any tax year, the Corporation does not intend to provide U.S. Holders with a PFIC Annual Information Statement for such tax year. As a result, U.S. Holders are not expected to be able to make a QEF Election in respect of the Corporation or any Subsidiary PFIC. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a QEF Election.

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules (including the availability and advisability of making a QEF Election or Mark-to-Market

 

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Election) and how the PFIC rules may affect the U.S. federal income tax considerations arising from and relating to the disposition of Shares pursuant to the Arrangement.

Controlled Foreign Corporation Rules

The Corporation believes that it was not a controlled foreign corporation (a “CFC”) for its tax year ending on December 31, 2024, and does not expect to be a CFC prior to the consummation of the Arrangement. The determination of whether any corporation was, or will be, a CFC for a tax year depends, in part, on the actual and constructive ownership of such corporation by U.S. persons, with constructive ownership based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. No opinion of legal counsel or ruling from the IRS concerning the status of the Corporation as a CFC has been obtained or is currently planned to be requested. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Corporation concerning its CFC status. Each U.S. Holder should consult its own tax advisors regarding the CFC status of the Corporation and the tax consequences to such U.S. Holder if the Corporation is a CFC.

Foreign Tax Credits and Limitations

Any gain or loss recognized by a U.S. Holder on the sale or other disposition of Shares generally will be U.S.-source gain or loss. Certain U.S. Holders that are eligible for the benefits of the Treaty may elect to treat such gain or loss as Canadian-source gain or loss for U.S. foreign tax credit purposes. The Code applies various complex limitations on the amount of non-U.S. taxes that may be claimed as a credit by U.S. taxpayers. In addition, Treasury Regulations that apply to taxes paid or accrued (the “Foreign Tax Credit Regulations”) impose additional requirements for Canadian withholding taxes to be eligible for a foreign tax credit, and there can be no assurance that those requirements will be satisfied in respect of any applicable Canadian income or withholding taxes. The Treasury Department has released guidance temporarily pausing the application of certain of the Foreign Tax Credit Regulations.

Subject to the PFIC rules and the Foreign Tax Credit Regulations, each as discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax in connection with a sale or other taxable disposition of Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income or withholding tax. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all non-U.S. taxes paid (whether directly or through withholding) by a U.S. Holder during a year. The foreign tax credit rules are complex and involve the application of rules that depend on a U.S. Holder’s particular circumstances. Accordingly, each U.S. Holder should consult its own U.S. tax advisor regarding the foreign tax credit rules.

Foreign Currency

The amount of any Consideration paid to a U.S. Holder in non-U.S. currency pursuant to the sale, exchange or other taxable disposition of Shares generally will be equal to the U.S. dollar value of such non-U.S. currency based on the exchange rate applicable on the date of receipt or, if applicable, the date of settlement if the Shares are traded on an established securities market (regardless of whether such non-U.S. currency is converted into U.S. dollars at that time). A U.S. Holder will have a tax basis in the non-U.S. currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the non-U.S. currency after the date of receipt may have a non-U.S. currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S.-source income or loss for

 

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foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method of tax accounting. Each U.S. Holder should consult its own U.S. tax advisors regarding the U.S. federal income tax consequences of receiving, owning, and disposing of non-U.S. currency. The foregoing rules should not apply to the receipt of the Consideration by a U.S. Holder which exercises the right to elect in its Letter of Transmittal to receive the Consideration in U.S. dollars.

Dissenting Shareholders

A U.S. Holder that is a Dissenting Shareholder in the Arrangement and is paid cash in exchange for all of such U.S. Holder’s Shares generally will recognize taxable gain or loss in an amount equal to the difference, if any, between: (i) the U.S. dollar value of the Canadian dollars received by such U.S. Holder in exchange for its Shares or, if a U.S. Holder receives payment in respect of such U.S. Holder’s Shares in U.S. dollars, the U.S. dollars received and (ii) the U.S. Holder’s adjusted tax basis in the Shares. Such gain or loss will generally be subject to the rules discussed above under the heading “Certain U.S. Federal Income Tax Considerations – Treatment of the Arrangement” and the PFIC rules described above under “Certain U.S. Federal Income Tax Considerations – Passive Foreign Investment Company Rules”.

Specified Foreign Financial Assets Reporting

Certain U.S. Holders that hold “specified foreign financial assets” are generally required to attach to their annual returns a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with respect to such assets (and can be subject to substantial penalties for failure to file). The definition of specified foreign financial asset includes not only financial accounts maintained in foreign financial institutions, but also, if held for investment and not held in an account maintained by a financial institution, securities of non-U.S. issuers (subject to certain exceptions, including an exception for securities of non-U.S. issuers held in accounts maintained by domestic financial institutions). U.S. Holders should consult their own tax advisors regarding the possible reporting requirements with respect to their investments in Shares and the penalties for non-compliance.

Backup Withholding and Information Reporting

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of proceeds arising from the sale or other taxable disposition of the Shares generally may be subject to information reporting and backup withholding tax (currently at the rate of 24%) if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on IRS Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons, such as U.S. Holders that are corporations, generally are excluded from these information reporting and backup withholding tax rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules generally will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.

The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE

 

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DISPOSITION OF THE SHARES PURSUANT TO THE ARRANGEMENT OR PURSUANT TO THE EXERCISE OF DISSENT RIGHTS. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.

RISK FACTORS

In evaluating whether to approve the Arrangement Resolution, Shareholders should carefully consider the following risk factors. Additional risks and uncertainties, including those currently unknown to or considered immaterial by the Corporation may also adversely affect the Arrangement. The following risk factors are not a definitive list of all risk factors associated with the Arrangement.

Risks Related to Aptose

If the Arrangement is not completed, the Corporation will continue to face the risks that it currently faces with respect to its affairs, business and operations and future prospects. Such risks include those set forth and described in the “Risk Factors” sections of the Corporation’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Qs, and other documents filed with the SEC and the Canadian Securities Administrators, copies of which can be found under the Corporation’s profile on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.

Risks Related to the Arrangement

Completion of the Arrangement is subject to a number of conditions that must be satisfied or waived.

The completion of the Arrangement is subject to a number of conditions precedent, some of which are outside of the control of the Corporation, Parent or Purchaser, including, without limitation, approval of the Shareholders, receipt of the required Regulatory Approvals, and the granting of the Final Order.

In addition, the completion of the Arrangement by Parent and Purchaser is conditional on, among other things, no Material Adverse Effect having occurred and continuing since the date of the Arrangement Agreement. There can be no certainty, nor can the Corporation, Parent or Purchaser provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied. Moreover, a substantial delay in obtaining the required approvals (including the Regulatory Approvals) could result in the Arrangement not being completed. If the Arrangement is not completed for any reason, there are risks that the announcement of the Arrangement and the dedication of substantial resources of the Corporation to the completion of the Arrangement could have a negative impact on the Corporation’s current business relationships and could have a material adverse effect on the Corporation’s current and future operations, financial condition and prospects. In addition, failure to complete the Arrangement for any reason could negatively impact the trading price of the Shares.

The Arrangement Agreement may be terminated in certain circumstances, in which case an alternative transaction may not be available.

Each of the Corporation and Parent has the right to terminate the Arrangement Agreement in certain circumstances. Accordingly, there is no certainty that the Arrangement Agreement will not be terminated by the Corporation or Parent before the completion of the Arrangement. Failure to complete the Arrangement could materially negatively impact the trading price of the Shares. If the Arrangement Agreement is terminated and the Board decides to seek an alternative transaction, there is no guarantee that it will be able to find a party willing to pay consideration for the Shares that is equivalent to, or more attractive than, the Consideration payable pursuant to the Arrangement.

If the Arrangement Agreement is terminated in certain circumstances, the Corporation will be required to immediately implement the Alternative CCAA Proceedings. In the event that the Corporation commences Alternative CCAA Proceedings, Shareholders may not be entitled to receive any consideration on their Shares.

The Corporation will incur costs and may have to pay an Expense Fee.

Certain costs relating to the Arrangement, such as certain legal, accounting and financial advisor fees, must be paid by the Corporation even if the Arrangement is not completed. If the Arrangement is not completed for certain reasons, the Corporation may also be required to pay an Expense Fee of $300,000 to

 

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Parent. See “The Arrangement Agreement – Expense Fee”. If the Corporation is required to pay this Expense Fee under the Arrangement Agreement, the financial condition and ability of the Corporation to fund current operations could be materially adversely affected.

CCAA Plan in the Event Arrangement is not Completed

If the Arrangement Agreement is terminated in certain circumstances, the Corporation will be required to immediately implement the Alternative CCAA Proceedings. In the event that the Corporation commences Alternative CCAA Proceedings, Shareholders may not be entitled to receive any consideration on their Shares.

The Expense Fee may discourage other parties from proposing a significant business transaction with the Corporation.

The Corporation is required to pay an Expense Fee in the event that the Arrangement Agreement is terminated in circumstances related to a possible alternative transaction to the Arrangement. The Expense Fee may discourage other parties from attempting to propose a business transaction, even if such a transaction could provide better value to Shareholders than the Arrangement.

Shareholders will no longer hold an interest in the Corporation following the Arrangement.

Following the Arrangement, Shareholders will no longer hold any of the Shares and Shareholders will forego any future increase in value that might result from future growth and the potential achievement of the Corporation’s long-term plans.

The Corporation’s business relationships may be subject to disruption due to uncertainty associated with the Arrangement.

Parties with which the Corporation currently does business or may do business in the future may experience uncertainty associated with the Arrangement, including with respect to current or future business relationships with the Corporation, Parent or Purchaser. Such uncertainty could be materially adverse to the business, financial condition, results of operations or prospects of the Corporation.

While the Arrangement is pending, the Corporation is restricted from taking certain actions.

The Arrangement Agreement restricts the Corporation from taking specified actions without the consent of Parent until the Arrangement is completed. These restrictions may prevent the Corporation from pursuing attractive business opportunities that may arise prior to the completion of the Arrangement. Such restrictions include those items detailed in the section entitled “The Arrangement Agreement – Covenants – Conduct of Business of the Corporation” and “The Arrangement Agreement – Covenants – Restrictions on Solicitations of Other Offers”.

Certain directors and executive officers of the Corporation may have interests in the Arrangement that may be different from, or in addition to, the interests of Shareholders generally.

Certain directors and officers of the Corporation may have interests in the Arrangement that may be different from, or in addition to, the interests of Shareholders generally, including those interests discussed under the heading “The Arrangement – Interest of the Corporation’s Directors and Officers in the Arrangement”. In considering the recommendation of the Board to vote in favour of the Arrangement Resolution, Shareholders should consider these interests.

 

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Completion of the Arrangement is subject to the Required Shareholder Approval.

There can be no certainty, nor can the Corporation provide assurance, that the Required Shareholder Approval will be obtained. If such approval is not obtained and the Arrangement is not completed, the market price of the Shares may decline to the extent that the current market price reflects a market assumption that the Arrangement will be completed. If the Arrangement is not completed and the Board decides to seek another arrangement or alternative transaction, there can be no assurance that it will be able to find a party willing to pay an equivalent or greater price for the Shares than the Consideration to be paid pursuant to the Arrangement.

Applicable tax authorities may not agree with the discussion regarding tax matters included in this Proxy Statement.

There can be no assurance that the Canada Revenue Agency, the U.S. tax authorities or other applicable taxing authorities will agree with the disclosure regarding Canadian federal income tax and the U.S. tax consequences of the Arrangement, as applicable, as set forth in this Proxy Statement.

The Corporation expects to be a “passive foreign investment company” or “PFIC”, which may result in adverse U.S. federal income tax consequences for U.S. Shareholders.

The Corporation believes that it was classified as a PFIC during its most recently completed tax year and based on the nature of the Corporation’s business, the projected composition of its gross income and the projected composition and estimated fair market value of its assets, the Corporation expects to be a PFIC for its current tax year. If the Corporation is or was a PFIC for any year during a U.S. Holder’s (as defined above) holding period of Shares, then such U.S. Holder generally will be required to treat any gain realized upon a disposition of the Shares as ordinary income, and to pay an interest charge on a portion of such gain. In certain circumstances, the sum of the tax and the interest charge may exceed the total amount of proceeds realized on the disposition by the U.S. taxpayer. Subject to certain limitations, these tax consequences may be mitigated if a U.S. taxpayer has in place a timely and effective QEF Election (as defined above) or a Mark-to-Market Election (as defined above). This paragraph is qualified in its entirety by the discussion above under the heading “Certain U.S. Federal Income Tax Considerations - Passive Foreign Investment Company Rules”. Each Shareholder who is a U.S. Holder should consult its own tax advisor regarding the tax consequences of the PFIC rules and the Arrangement.

The Corporation will continue to face a number of risks regarding its business and prospects if the Arrangement is not completed.

If the Arrangement is not completed, the Corporation will continue to face the risks that it currently faces with respect to its affairs, business and operations and future prospects. Such risks include those set forth and described in the “Risk Factors” sections of the Corporation’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Qs, and other documents filed with the SEC and the Canadian Securities Administrators, copies of which can be found under the Corporation’s profile on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.

PROCEDURES FOR SURRENDER OF SHARES AND RECEIPT OF CONSIDERATION

If the Arrangement is completed, Shareholders will be entitled to receive the Consideration in respect of each Share, which is equal to C$2.41 in cash per Share, subject to applicable withholdings and other source deductions.

 

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From and after the Effective Time, all certificates, DRS statements or book-entry holdings that represented the Shares immediately prior to the Effective Time will cease to represent any rights with respect to such Shares, and will only represent the right to receive the Consideration or, in the case of the Dissenting Shareholders, the right to receive fair value for their Shares.

Enclosed with this Proxy Statement is a form of Letter of Transmittal which, when properly completed and duly executed and returned together with any certificate(s) or DRS statement(s) representing Shares and all other required documents, will enable each registered Shareholder (other than Dissenting Shareholders) to obtain the Consideration that such registered Shareholder is entitled to receive under the Arrangement.

The form of Letter of Transmittal contains complete instructions on how to exchange the certificate(s) or DRS statement(s) representing the Shares for the Consideration under the Arrangement. A registered Shareholder will not receive Consideration under the Arrangement until after the Arrangement is completed and the registered Shareholder has returned their properly completed documents, including the Letter of Transmittal and any certificate(s) or DRS statement(s) representing the Shares to the Depositary.

Only registered Shareholders are required to submit a Letter of Transmittal. A Beneficial Shareholder holding Shares through an Intermediary should contact that Intermediary for instructions and assistance in depositing their Shares and carefully follow any instructions provided by such Intermediary.

Upon the surrender by a registered Shareholder to the Depositary for cancellation of a certificate or DRS statement which immediately prior to the Effective Time represented outstanding Shares together with a duly completed and executed Letter of Transmittal and such additional documents and instruments as the Depositary may reasonably require, the Depositary shall deliver to such registered Shareholder a cheque, wire or other form of immediately available funds representing the Consideration which such registered Shareholder has the right to receive under the Plan of Arrangement for such Shares less any amounts withheld pursuant to the Plan of Arrangement, and any certificate or DRS statement so surrendered shall forthwith be cancelled. Upon receipt of a customary “agent’s message” by the Depositary with respect to book-entry Shares, and such additional documents and instruments as the Depositary may reasonably require, the Depositary shall deliver to the holder of such book-entry Shares, a cheque, wire or other form of immediately available funds representing the Consideration that such holder has the right to receive under the Arrangement for such book-entry Shares, less any amounts withheld pursuant to the Plan of Arrangement, and any book-entry Shares so surrendered shall forthwith be cancelled.

No registered Shareholder shall be entitled to receive any consideration with respect to such Shares other than any cash payment to which such holder is entitled to receive in accordance with the Plan of Arrangement and no such registered Shareholder will be entitled to receive any interest, dividends, premium or other payment in connection therewith.

The method of delivery of certificates or DRS statements representing Shares and all other required documents is at the option and risk of the registered Shareholder depositing their Shares. Any use of mail to transmit certificate(s) or DRS statement(s) representing Shares and the Letter of Transmittal is at each registered Shareholder’s risk and documents so mailed shall be deemed to have been received by Aptose upon actual receipt by the Depositary. Aptose recommends that such certificate(s), DRS statement(s), and other documents be delivered by hand to the Depositary and a receipt therefor be obtained or that registered mail be used (with proper acknowledgment) and appropriate insurance be obtained.

 

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In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Shares that were transferred pursuant to the Plan of Arrangement shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, a cheque, wire or other form of immediately available funds for the Consideration that such Shareholder has the right to receive in accordance with the Plan of Arrangement and such Shareholder’s Letter of Transmittal. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the person to whom such cash is to be delivered shall as a condition precedent to the delivery of such payment, give a bond satisfactory to Purchaser and the Depositary (each acting reasonably) in such sum as Purchaser may direct, and shall indemnify Purchaser, Aptose and the Depositary in a manner satisfactory to Purchaser, Aptose and the Depositary (each acting reasonably) against any claim that may be made against Purchaser, Aptose and the Depositary with respect to the certificate alleged to have been lost, stolen or destroyed.

Cancellation of Rights

Until surrendered to the Depositary in accordance with the Plan of Arrangement, each certificate and DRS statement that immediately prior to the Effective Time represented Shares shall be deemed after the Effective Time to represent only the right to receive upon such surrender the Consideration which the holder is entitled to receive in lieu of such certificate or DRS statement, less any amounts withheld in accordance with the Plan of Arrangement. Any such certificate or DRS statement formerly representing Shares not duly surrendered on or before the sixth anniversary of the Effective Date shall cease to represent a claim by or interest of any former holder of Shares of any kind or nature against or in Aptose. On such date, the Consideration to which such former holder was entitled shall be deemed to have been surrendered to Purchaser or Aptose, as applicable, and shall be paid over by the Depositary to Purchaser or as directed by Purchaser.

Any payment made by way of cheque by the Depositary (or Aptose, if applicable) pursuant to the Plan of Arrangement that has not been deposited or has been returned to the Depositary (or Aptose) or that otherwise remains unclaimed, in each case, on the sixth anniversary of the Effective Time, and any right or claim to payment hereunder that remains outstanding on the sixth anniversary of the Effective Time shall cease to represent a right or claim of any kind or nature and the right of the holder to receive the applicable consideration for the Shares pursuant to the Plan of Arrangement shall terminate and be deemed to be surrendered and forfeited to Purchaser or Aptose, as applicable, for no consideration.

Payment of Consideration by Purchaser

Purchaser and Parent will, prior to the Effective Time, provide or cause to be provided to the Depositary with sufficient cash (to be held in escrow until the Effective Time (the terms and conditions of such escrow to be satisfactory to Aptose and Parent, each acting reasonably)) to satisfy the aggregate Consideration payable pursuant to the Plan of Arrangement and, pursuant to a depositary agreement with the Depositary, by wire transfer to be initiated prior to the Effective Time.

Depositary Services

The Depositary will formally be appointed to act as depositary for the Arrangement for the receipt of certificates representing Shares and the Letter of Transmittal and for the purposes of delivering the Consideration payable to Shareholders. The terms and conditions of such appointment will be set out in an agreement to be entered into prior to the Effective Date. The Depositary will receive reasonable and customary compensation for its services in connection with the Arrangement, will be reimbursed for certain out-of-pocket expenses and will be indemnified by the Corporation, Parent and Purchaser against certain liabilities and expenses in connection therewith.

 

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DISSENT RIGHTS

The following description of the rights of Shareholders wishing to exercise Dissent Rights is not a comprehensive statement of the procedures to be followed by a Dissenting Shareholder who seeks payment of the fair value of its Shares and is qualified in its entirety by the reference to the full text of Section 190 of the CBCA, which is set forth in Appendix H of this Proxy Statement, and Section 191 of the ABCA, which is set forth in Appendix I of this Proxy Statement, as modified by the Interim Order, a copy of which is attached to this Proxy Statement as Appendix F and the Plan of Arrangement, a copy of which is attached as Appendix C to this Proxy Statement. The statutory procedures dealing with the right of dissent are technical and complex. A Shareholder who intends to exercise Dissent Rights should carefully consider and comply with the provisions of Section 190 of the CBCA or Section 191 of the ABCA, as modified by the Interim Order and the Plan of Arrangement, as applicable and seek legal advice. Failure to comply with the provisions of the CBCA or the ABCA, as so modified by the Interim Order and the Plan of Arrangement, as applicable, and to adhere to the procedures established therein may result in the loss of all rights thereunder.

Dissent Rights of Shareholders to the Continuance

Under the CBCA, a registered Shareholder is entitled, in addition to any other right such holder may have, to dissent to the Continuance Resolution and, upon strict compliance with the CBCA, to be paid the fair value of the Shares held by such Dissenting Shareholder in respect of which such Shareholder dissents, determined as of the close of business on the last Business Day before the day on which the Continuance Resolution is adopted.

Only registered Shareholders may dissent with respect to the Continuance. Persons who are Beneficial Shareholders of Shares registered in the name of an Intermediary who wish to dissent should be aware that they may only do so through the registered owner of such Shares. A registered Shareholder, such as a broker, who holds Shares as nominee for Beneficial Shareholders, some of whom wish to dissent, must exercise Dissent Rights on behalf of a Beneficial Shareholder with respect to all of the Shares held for such Beneficial Shareholder. In such case, the demand for dissent should set forth the number of Shares covered by such objection.

The dissent procedures require that a registered Shareholder who wishes to exercise dissent rights send Aptose a written notice to inform Aptose of his, her or its intention to exercise dissent rights, which notice must be received by Aptose at its executive headquarters located at Suite 120, 12770 High Bluff Drive, San Diego, California, 92130, United States, Attention: Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary, with a copy to Aptose’s Canadian legal counsel, McCarthy Tétrault LLP, 66 Wellington Street West, Suite 5300, TD Bank Tower Box 48, Toronto ON M5K 1E6, Attention: Charles-Antoine Soulière, not later than 5:00 p.m. (Eastern time) on the day that is two Business Days immediately preceding the date of the Meeting (as it may be adjourned or postponed from time to time). Failure to strictly comply with the provisions of Section 190 of the CBCA may result in loss of the Dissent Right.

Pursuant to the CBCA, Aptose shall, within 10 days after the Shareholders approve the Continuance Resolution, send to each Dissenting Shareholder that has complied with the requirement of the CBCA, notice that the Continuance Resolution has been approved. Within 20 days of receiving such notice, a Dissenting Shareholder shall send to a written notice (the “Continuance Dissent Notice”) containing (a) the Shareholder’s name and address, (b) the number and class of Shares in respect of which the Shareholder dissents, and (c) a demand for payment of the fair value of such Shares. Within 30 days after sending the Continuance Dissent Notice, the Shareholder shall send Aptose or its transfer agent certificates or DRS statements representing the Shares in respect of which the Shareholder dissents.

 

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A Dissenting Shareholder who fails to send its certificates or DRS statement(s) has no right to make a claim for payment.

Not later than seven days after the later of the day on which the Continuance becomes effective or the day receives the Continuance Dissent Notice, Aptose shall send to each Dissenting Shareholder who has sent a Continuance Dissent Notice a written offer to pay for the Shares in an amount considered by the directors to be the fair value of the Shares, accompanied by a statement showing how the fair value of the Shares was determined.

On the Dissenting Shareholder sending a Continuance Dissent Notice, the Dissenting Shareholder will cease to have any rights as a Shareholder, other than the right to be paid the fair value of such holder’s Shares. Until such time as Aptose makes an offer as set out above, the Dissenting Shareholder may withdraw the Dissenting Shareholder’s Continuance Dissent Notice, or if the Continuance has not yet become effective, Aptose may abandon the Continuance, and in either event the dissent and appraisal proceedings in respect of that Dissenting Shareholder will be discontinued.

If Aptose fails to make an offer, or if the offer is rejected by a Dissenting Shareholder, Aptose may, within 50 days after the Continuance becomes effective, apply to a court of competent jurisdiction to fix a fair value for the Shares of any Dissenting Shareholder. If Aptose fails to make a court application, a Dissenting Shareholder may apply to a court for the same purpose within a further period of 20 days.

A Dissenting Shareholder is not required to give security for costs in respect of an application and, except in special circumstances, will not be required to pay the costs of the application or appraisal. On the application, all Dissenting Shareholders whose Shares have not been purchased by Aptose shall be joined as parties and are bound by the decision of the court. Aptose must notify each affected Dissenting Shareholder of the date, place and consequences of the application and of their right to appear. The court of competent jurisdiction will make an order fixing the fair value of the Shares of all Dissenting Shareholders, giving judgment in that amount against Aptose, and in favour of each Dissenting Shareholder. The court of competent jurisdiction may in its discretion allow a reasonable rate of interest on the amount payable to each Dissenting Shareholder calculated from the date on which the Continuance becomes effective, until the date of payment.

Aptose will not make a payment to a Dissenting Shareholder under Section 190 of the CBCA if there are reasonable grounds for believing that Aptose would after the payment be unable to pay its liabilities as they become due, or that the realizable value of the assets of Aptose would thereby be less than the aggregate of its liabilities. In such event, Aptose shall (a) within seven after the later of the day on which the Continuance becomes effective or the day Aptose received the Continuance Dissent Notice, (b) within 10 days of the pronouncement of an order of the court fixing the fair value of the Shares of all Dissenting Shareholders, or (c) within 10 days of the acceptance by a Dissenting Shareholder of an offer made by Aptose, as applicable, notify each Dissenting Shareholder that it is unable to lawfully pay its Dissenting Shareholders for their Shares. In such an event, a Dissenting Shareholder may, within 30 days after receipt of such notice, withdraw such Dissenting Shareholder’s written objection, in which case Aptose shall be deemed to consent to the withdrawal and such Dissenting Shareholder shall be reinstated with full rights as a Shareholder, failing which such Dissenting Shareholder retains status as a claimant against Aptose, to be paid as soon as Aptose is lawfully entitled to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of Aptose, but in priority to the Shareholders.

Unless otherwise waived, it is a condition to the completion of the Arrangement that holders of not more than 5.0% of the issued and outstanding Shares shall have exercised their Dissent Rights that have not been withdrawn as of the Effective Date with respect to the Continuance Resolution.

 

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Dissent Rights of Shareholders to the Arrangement

Pursuant to the Plan of Arrangement and the Interim Order, registered Shareholders who comply with the procedures set out in Section 191 of the ABCA, as modified by the Plan of Arrangement and the Interim Order, are entitled to dissent in respect of the Arrangement Resolution. Set out below is a summary of the provisions of Section 191 of the ABCA, as modified by the Plan of Arrangement and the Interim Order, relating to a Shareholder’s Dissent Rights.

A Court hearing the application for the Final Order has the discretion to alter the Dissent Rights described herein based on the evidence presented at such hearing. Subject to certain tests as described below, pursuant to the Interim Order, Dissenting Shareholders are entitled, in addition to any other right such Dissenting Shareholder may have, to dissent and to be paid by Purchaser the fair value of the Shares held by such Dissenting Shareholder in respect of which such Dissenting Shareholder dissents, determined as of the close of business on the last Business Day before the day on which the Arrangement Resolution was adopted. A Dissenting Shareholder may dissent only with respect to all of the Shares held by such Dissenting Shareholder or on behalf of any one Beneficial Shareholder and registered in the Dissenting Shareholder’s name. Only registered Shareholders may dissent. Persons who are Beneficial Shareholders of Shares registered in the name of an Intermediary who wish to dissent should be aware that they may only do so through the registered owner of such Shares. A registered Shareholder, such as a broker, who holds Shares as nominee for Beneficial Shareholders, some of whom wish to dissent, must exercise their Dissent Right on behalf of a Beneficial Shareholder with respect to all of the Shares held for such Beneficial Shareholder. In such case, the demand for dissent should set forth the number of Shares covered by it.

Dissenting Shareholders must provide a written objection to the Arrangement Resolution to Aptose at its executive headquarters located at Suite 120, 12770 High Bluff Drive, San Diego, California, 92130, United States, Attention: Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary, with a copy to Aptose’s Canadian legal counsel, McCarthy Tétrault LLP, 66 Wellington Street West, Suite 5300, TD Bank Tower Box 48, Toronto ON M5K 1E6, Attention: Charles-Antoine Soulière, not later than 5:00 p.m. (Eastern time) on the day that is two Business Days immediately preceding the date of the Meeting (as it may be adjourned or postponed from time to time). No Shareholder who has voted in favour of the Arrangement Resolution shall be entitled to dissent with respect to the Arrangement.

The Purchaser or a Dissenting Shareholder may apply to the Court, by way of an origination application, after the approval of the Arrangement Resolution, to fix the fair value of the Dissenting Shareholder’s Shares. If such an application is made to the Court by either the Purchaser or a Dissenting Shareholder, the Purchaser must, unless the Court orders otherwise, send to each Dissenting Shareholder a written offer to pay the Dissenting Shareholder an amount, considered by the Purchaser, to be the fair value of the Shares held by such Dissenting Shareholders. The offer, unless the Court orders otherwise, must be sent to each Dissenting Shareholder at least ten days before the date on which the application is returnable, if the Purchaser is the applicant, or within ten days after the Purchaser is served a copy of the origination application, if a Dissenting Shareholder is the applicant. Every offer will be made on the same terms to each Dissenting Shareholder of Shares and contain or be accompanied with a statement showing how the fair value was determined.

A Dissenting Shareholder may make an agreement with the Purchaser for the purchase of such holder’s Shares in the amount of the offer made by the Purchaser, or otherwise, at any time before the Court pronounces an order fixing the fair value of the Shares.

A Dissenting Shareholder will not be required to give security for costs in respect of an application and, except in special circumstances, will not be required to pay the costs of the application or appraisal.

 

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On the application, the Court will make an order fixing the fair value of the Shares of all Dissenting Shareholders who are parties to the application, giving judgment in that amount against the Purchaser and in favour of each of those Dissenting Shareholders, and fixing the time within which the Purchaser must pay the amount payable to each Dissenting Shareholder calculated from the date on which the Dissenting Shareholder ceases to have any rights as a Shareholder, until the date of payment.

On the Arrangement becoming effective, or upon the making of an agreement between the Purchaser and the Dissenting Shareholder as to the payment to be made to the Dissenting Shareholder, or upon the pronouncement of a Court order, whichever first occurs, the Dissenting Shareholder will cease to have any rights as a Shareholder other than the right to be paid the fair value of such holder’s Shares in the amount agreed to or in the amount of the judgment, as the case may be. Until one of these events occurs, the Dissenting Shareholder may withdraw the Dissenting Shareholder’s dissent, or if the Arrangement has not yet become effective, the Corporation may rescind the Arrangement Resolution, and in either event, the dissent and appraisal proceedings in respect of that Dissenting Shareholder will be discontinued.

The Purchaser shall not make a payment to a Dissenting Shareholder under Section 191 of the ABCA if there are reasonable grounds for believing that it is or would after the payment be unable to pay its liabilities as they become due, or that the realizable value of its assets would thereby be less than the aggregate of its liabilities. In such event, it shall notify each Dissenting Shareholder that it is unable lawfully to pay Dissenting Shareholders for their Shares, in which case the Dissenting Shareholder may, by written notice to the Corporation within 30 days after receipt of such notice, withdraw such holder’s written objection, in which case the holder shall be deemed to have participated in the Arrangement as a Shareholder. If the Dissenting Shareholder does not withdraw such holder’s written objection, such Dissenting Shareholder retains status as a claimant against the Purchaser to be paid as soon as the Purchaser is lawfully entitled to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of the Purchaser but in priority to its shareholders.

All Shares held by Dissenting Shareholders who exercise their Dissent Rights will, if the holders do not otherwise withdraw such holder’s written objection, be deemed to be transferred to the Purchaser under the Arrangement, and cancelled in exchange for the fair value thereof or will, if such Dissenting Shareholders ultimately are not so entitled to be paid the fair value thereof, be treated as if the holder had participated in the Arrangement on the same basis as a non dissenting holder of Shares and such Shareholder’s Shares will be deemed to be exchanged for the Consideration on the same basis as all other Shareholders.

The above summary does not purport to provide a comprehensive statement of the procedures to be followed by Dissenting Shareholders who seek payment of the fair value of their Shares. Section 191 of the ABCA, other than as amended by the Plan of Arrangement and the Interim Order, requires adherence to the procedures established therein and failure to do so may result in the loss of all rights thereunder. Accordingly, Dissenting Shareholders who might desire to exercise the right to dissent and appraisal should carefully consider and comply with the provisions of Section 191 of the ABCA, Appendix I, as modified by the Interim Order, a copy of which is attached to this Proxy Statement as Appendix F and the Plan of Arrangement, a copy of which is attached as Appendix C to this Proxy Statement, respectively, and consult their own legal advisor.

Unless otherwise waived, it is a condition to the completion of the Arrangement that holders of not more than 5.0% of the issued and outstanding Shares shall have exercised their Dissent Rights that have not been withdrawn as of the Effective Date with respect to the Arrangement Resolution.

 

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PROPOSAL NO. 1 – CONTINUANCE RESOLUTION

The Corporation is asking its Shareholders to approve the Continuance Resolution, a copy of which is attached as Appendix A to this Proxy Statement.

Vote Required

Pursuant to the CBCA, in order for the Continuance Resolution to become effective, the Continuance Resolution must be passed by an affirmative vote of not less than 66²⁄₃% of the votes cast on the Continuance Resolution by the Shareholders, virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share.

The failure to vote and broker non-votes, if any, will have no effect on the outcome of this proposal. Broker non-votes are shares held by a broker or other nominee that are virtually present or represented at a meeting, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal and the broker does not have discretionary voting power on such proposal.

If you sign and return a proxy and do not indicate how you wish to vote on the Continuance Resolution, your Shares will be voted in favour of the proposal.

Unless you have specified in the enclosed form of proxy that the votes attaching to the Shares represented by the proxy are to be voted against the Continuance Resolution on any ballot that may be called for, the management representatives designated in the enclosed form of proxy intend to vote the Shares in respect of which they are appointed proxy FOR the Continuance Resolution.

Board Recommendation

The Board unanimously recommends a vote “FOR” the Continuance Resolution.

PROPOSAL NO. 2 – ARRANGEMENT RESOLUTION

The Corporation is asking its Shareholders to approve the Arrangement Resolution, a copy of which is attached as Appendix D to this Proxy Statement. For a summary and detailed information regarding this proposal, see the information about the Arrangement Agreement and the Arrangement throughout this Proxy Statement, including the information in the sections entitled “The Arrangement” and “The Arrangement Agreement”. Copies of the Arrangement Agreement and the Plan of Arrangement are attached as Appendix 0 and Appendix C, respectively, to this Proxy Statement. We urge you to read the full text of the Arrangement Agreement and Plan of Arrangement.

Vote Required

Pursuant to the ABCA and the Interim Order, in order for the Arrangement Resolution to become effective, the Arrangement Resolution must be passed by (1) an affirmative vote of not less than 66²⁄₃% of the votes cast on the Arrangement Resolution by the Shareholders, virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share and (2) an affirmative vote of a majority of the votes cast by the Shareholders virtually present or represented by proxy at the Meeting, each being entitled to one vote per Share, after excluding the votes of those Persons whose votes are required to be excluded under MI 61-101.

 

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Pursuant to the terms of the Arrangement Agreement, in certain circumstances where the Corporation fails to complete the Arrangement, the Corporation will be required to commence without delay the Alternative CCAA Proceedings.

The failure to vote and broker non-votes, if any, will have no effect on the outcome of this proposal. Broker non-votes are shares held by a broker or other nominee that are virtually present or represented at a meeting, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal and the broker does not have discretionary voting power on such proposal.

If you sign and return a proxy and do not indicate how you wish to vote on the Arrangement Resolution, your Shares will be voted in favour of the proposal.

Unless you have specified in the enclosed form of proxy that the votes attaching to the Shares represented by the proxy are to be voted against The Arrangement Resolution on any ballot that may be called for, the management representatives designated in the enclosed form of proxy intend to vote the Shares in respect of which they are appointed proxy FOR the Arrangement Resolution.

Board Recommendation

The Board unanimously recommends a vote “FOR” the Arrangement Resolution.

 

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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Other than as disclosed in this Proxy Statement, none of the directors or executive officers of the Corporation, none of the persons who have been directors or executive officers of the Corporation at any time since January 1, 2024, and none of the associates or affiliates of any of the foregoing has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter scheduled to be acted upon at the Meeting.

DELINQUENT SECTION 16(A) REPORTS

Section 16(a) of the Exchange Act requires our directors and executive officers and all persons who beneficially own more than 10 percent of our outstanding Shares to file with the SEC initial reports of changes in ownership of our Shares. To our knowledge, based on a review of the copies of such reports and amendments to such reports furnished to us with respect to the year ended December 31, 2024, and based on written representations by our directors and executive officers, all required Section 16(a) reports under the Exchange Act for our directors, executive officers, and beneficial owners of greater than 10 percent of our Shares were filed on a timely basis during the year ended December 31, 2024.

HOUSEHOLDING OF PROXY MATERIALS

Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our Notice of Internet Availability of Proxy Materials, proxy materials or annual report to Shareholders may have been sent to multiple Shareholders in each household unless otherwise instructed by such Shareholders. We will deliver promptly a separate copy of these documents to any Shareholder upon written or oral request to our Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary at Aptose Biosciences Inc., Suite 120, 12770 High Bluff Drive, San Diego, California, telephone: 858-926-2730. Any Shareholder who wants to receive separate copies of our Notice of Internet Availability of Proxy Materials, proxy materials or annual report to Shareholders in the future, or any Shareholders who is receiving multiple copies and would like to receive only one copy per household, should contact the Shareholder’s bank, broker, or other nominee record holder, or the Shareholder may contact us at the above address and phone number.

DIRECTORS AND OFFICERS’ LIABILITY

We purchase and maintain liability insurance for the benefit of directors and officers to cover liability incurred by such person in such capacities. The policy provides for coverage in the amount of $15,000,000. The annual premium payable by the Corporation for directors’ and officers’ liability insurance for the year ended December 31, 2024 was approximately $581,150.

ADDITIONAL INFORMATION

Additional information relating to us, including our most current Annual Report on Form 10-K (together with documents incorporated therein by reference), our consolidated financial

 

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statements for the year ended December 31, 2024, the report of the independent registered public accounting firm thereon, and management’s discussion and analysis of our financial condition and results of operations for the year ended December 31, 2024 can be found by accessing the SEC’s EDGAR filing database at www.sec.gov and on SEDAR+ at www.sedarplus.ca Copies of those documents are available upon written request to the Senior Vice President, Chief Financial Officer, Chief Business Officer and Corporate Secretary at Aptose Biosciences Inc., Suite 120, 12770 High Bluff Drive, San Diego, California, free of charge to our securityholders. Our financial information is provided in our consolidated financial statements for the year ended December 31, 2024 and management’s discussion and analysis of our financial condition and results of operations for the year ended December 31, 2024.

 

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GLOSSARY OF TERMS

Capitalized terms used but not specifically defined in this “Glossary of Terms” are defined in the Proxy Statement.

“1% Exemption” has the meaning specified under “Principal Legal Matters - Collateral Benefit”.

“ABCA” means the Business Corporations Act (Alberta).

“ASC” means the Alberta Securities Commission.

“Acquisition Proposal” means, other than the transactions contemplated by the Arrangement Agreement and other than any transaction between the Corporation, on the one hand, and one or more of its wholly-owned Subsidiaries, on the other hand, any offer, proposal, indication of interest or inquiry (written or oral) from any Person or group of Persons other than the Parent or the Purchaser (or any affiliate of the Parent or the Purchaser) after the date of the Arrangement Agreement relating to (a) any direct or indirect sale, disposition, alliance or joint venture (or any lease, license, long-term supply agreement or other arrangement having the same economic effect as a sale), in a single transaction or a series of transactions, of, or relating to, assets (including voting or equity securities of, or securities convertible into or exercisable or exchangeable for voting or equity securities of, Subsidiaries of the Corporation) representing a material portion of the Corporation Assets (based on the consolidated financial statements of the Corporation most recently filed on SEDAR+ prior to such inquiry, proposal, offer or indication of interest) or 20% or more of the voting or equity securities of the Corporation (including securities convertible into or exercisable or exchangeable for voting or equity securities), (b) any direct or indirect take-over bid, tender offer, exchange offer, treasury issuance, acquisition, exchange, transfer or other transaction, in a single transaction or a series of transactions, that, if consummated, would result in such Person or group of Persons beneficially owning, or exercising control or direction over, 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for such voting or equity securities) of the Corporation then outstanding (assuming, if applicable, the conversion, exchange or exercise of such securities convertible into or exchangeable or exercisable for such voting or equity securities), or (c) any arrangement, merger, amalgamation, consolidation, security exchange, business combination, reorganization, recapitalization, liquidation, dissolution, winding up or exclusive license, in a single transaction or series of transactions involving the Corporation or any of its Subsidiaries, or (d) other similar transaction or series of transactions involving the Corporation or any of its Subsidiaries pursuant to which any Person or group of Persons would acquire beneficial ownership of 20% or more of any class of voting or equity securities of the Corporation or of the surviving entity or the resulting direct or indirect parent of the Corporation or the surviving entity (assuming, if applicable, the conversion, exchange or exercise of such securities convertible into or exchangeable or exercisable for such voting or equity securities).

“affiliate” has the meaning specified in NI 45-106 as in effect on the date of the Arrangement Agreement.

“Allowable Capital Loss” has the meaning specified under “Certain Canadian Federal Income Tax Considerations - Holders Resident in Canada - Taxation of Capital Gains and Losses”.

“Alternative CCAA Proceedings” means an application for the CCAA Order under the CCAA, as provided under the Arrangement Agreement.

 

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“Arrangement Agreement” means the arrangement agreement among the Parent, the Purchaser and the Corporation (including the Schedules thereto) as it may be amended, modified or supplemented from time to time in accordance with its terms.

“Armistice Warrants” has the meaning specified under “The Arrangement – Arrangement Steps”.

“Arrangement” means an arrangement under Section 193 of the ABCA in accordance with the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of the Arrangement Agreement or made at the direction of the Court in the Final Order with the prior written consent of the Corporation and the Purchaser, each acting reasonably.

“Arrangement Dissenting Non-Resident Holder” has the meaning specified under “Certain Canadian Federal Income Tax Considerations – Holders Not Resident in Canada – Non-Resident Shareholders dissenting to the Arrangement”.

“Arrangement Dissenting Resident Holder” has the meaning specified under “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Resident Holders dissenting to the Arrangement”.

“Arrangement Resolution” means the special resolution approving the Plan of Arrangement to be considered at the Meeting, substantially in the form of Appendix D to the accompanying Proxy Statement

“Articles of Arrangement” means the articles of arrangement of the Corporation in respect of the Arrangement, required by the ABCA to be filed with the Registrar after the Final Order is made, which shall include the Plan of Arrangement and otherwise be in a form and content satisfactory to the Corporation and the Purchaser, each acting reasonably.

“Articles of Continuance” means the articles of continuance of the Corporation giving effect to the Continuance to be filed pursuant to the Arrangement Agreement.

“associate” has the meaning specified in the Securities Act (Ontario) as in effect on the date of the Arrangement Agreement.

“Authorization” means with respect to any Person, any certificate, consent, order, permit, approval, waiver, license, qualification, registration or similar authorization of any Governmental Entity having jurisdiction over such Person.

“Black Scholes Amount” means in respect of each Armistice Warrant, the value of such warrant as of the Effective Date using the “Black Scholes” valuation model calculated in accordance with the terms of the applicable Armistice Warrant.

“Board” means the board of directors of the Corporation as constituted from time to time.

“Board Recommendation” has the meaning specified under “The Arrangement – Background to the Arrangement”.

“Breaching Party” has the meaning specified under “The Arrangement Agreement - Notice and Cure Provisions.”

“Business Day” means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Toronto, Ontario.

“Business System” means all of the information technology assets, systems and services that are used by the Corporation or any of its Subsidiaries in the operation of the business of the Corporation or any of its Subsidiaries, including all computers, devices, computer hardware, operating system, firmware, middleware, server, workstation, router, hub, switch, data communications line, hosting infrastructure, subscribed data service, peripheral equipment or all other information technology equipment or element, software, database engine or processed data, technology infrastructure or other computer system or associated documentation.

“CBCA” means the Canada Business Corporations Act.

 

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“CCAA” means the Companies’ Creditors Arrangement Act, R.S.C. 1985, c C-36, as amended, including the regulations promulgated thereunder.

“CCAA Order” means an initial order and an amended and restated initial order under the CCAA.

“CCAA Sale Transaction” has the meaning specified under “The Arrangement Agreement - Alternative CCAA Proceedings”.

“Certificate of Arrangement” means the certificate of arrangement to be issued by the Registrar pursuant to Subsection 193(11) of the ABCA in respect of the Articles of Arrangement.

“CFC” has the meaning specified under “Certain U.S. Federal Income Tax Considerations - Controlled Foreign Corporation Rules”.

“Change in Recommendation” has the meaning specified under “The Arrangement Agreement – Termination”.

“change of control” has the meaning specified under “The Arrangement – Interest of the Corporation’s Directors and Officers in the Arrangement - Existing Arrangements with the Corporation’s Executive Officers”.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Collective Agreement” means any collective agreement, collective bargaining agreement or related document that is binding on the Corporation or any of its Subsidiaries, including any arbitration decision, letter or memorandum of understanding or agreement, letter of intent or other written communication with bargaining agents which covers or would pertain to the employment of any Employee and imposes any obligations upon the Corporation and/or any of its Subsidiaries.

“Consideration” means CAD$2.41 in cash per Share, without interest.

“Continuance” means the continuance of the Corporation from a corporation incorporated under the CBCA to a corporation continued under the ABCA pursuant to Section 187 of the CBCA and Section 188 of the ABCA, such continuance to be effective on the filing of the Articles of Continuance by the Corporation and the issuance of a certificate of continuance by the Registrar.

“Continuance Dissent Notice” has the meaning specified under “Dissent Rights - Dissent Rights of Shareholders to the Continuance”.

“Continuance Dissenting Non-Resident Holder” has the meaning specified under “Certain Canadian Federal Income Tax Considerations - Holders Not Resident in Canada - Non-Resident Shareholders dissenting to the Continuance”.

“Continuance Dissenting Resident Holder” has the meaning specified under “Certain Canadian Federal Income Tax Considerations - Holders Resident in Canada - Resident Holders dissenting to the Continuance”.

“Continuance Resolution” means the special resolution of the Shareholders approving the Continuance to be considered at the Meeting.

“Contract” means any written or oral agreement, commitment, engagement, contract, franchise, license, lease, sublease, obligation, note, bond, mortgage, indenture, deferred or conditioned sale agreement, general sales agent agreement, undertaking or joint venture, in each case, together with any amendment, modification or supplement thereto, to which the Corporation or any of its Subsidiaries is a party or by which the Corporation or any of its Subsidiaries is bound or affected or to which any of their respective properties or assets is subject.

“Corporation” means Aptose Biosciences Inc., a corporation existing under the CBCA.

“Corporation Assets” means all of the assets (tangible, corporeal, intangible and incorporeal), properties (real, immovable, personal or movable), rights, interests, Contracts or Authorizations (whether contractual or otherwise) owned, leased, licensed or otherwise used or held for use by the Corporation or any of its Subsidiaries, including the Leased Real Properties, equipment, fixtures, furniture, furnishings, office equipment, Corporation Intellectual Property, Business Systems and Corporation Data, supplies, materials and other assets.

“Corporation Data” means any and all information and data, including any Personal Information, collected, processed or otherwise controlled or held by, or in the possession of, the Corporation or any of its Subsidiaries regarding the Corporation or its Subsidiaries’ current, former or prospective partners,

 

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customers, suppliers, processors, service providers, vendors, Employees, consultants, agents, independent contractors, temporary workers or any other Person.

“Corporation Intellectual Property” means, collectively, the Owned Intellectual Property and the Licensed Intellectual Property.

“Court” means the Court of King’s Bench of Alberta, or other court as applicable.

“CVRs” means contingent value rights.

“Depositary” means Computershare Investor Services Inc., in its capacity as depositary for the Arrangement, or such other Person as the Corporation and the Purchaser mutually agree to engage as depositary for the Arrangement.

“Debt Conversion and Interest Payment Agreement” means the debt conversion and interest payment agreement between the Corporation and the Parent dated August 27, 2024.

“DIP Order” has the meaning specified under “The Arrangement Agreement - Alternative CCAA Proceedings”.

“Director” means the Director appointed pursuant to Section 260 of the CBCA.

“Dissent Rights” means the rights of dissent exercisable by Shareholders in respect of: (i) the Continuance Resolution, as provided by section 191 of the CBCA, and (ii) the Arrangement Resolution, as provided by the Plan of Arrangement.

“DRS” means the direct registration system maintained by the Corporation’s transfer agent.

“Drug Regulatory Agencies” means the FDA, the European Medicines Agency, the United Kingdom Medicines and Healthcare products Regulatory Agency and Health Canada and any corresponding drug, biologic, natural health product, controlled drug substance, narcotic, and medical device regulatory agencies within the world having jurisdiction over the Corporation and its business, including those that govern or implement health products and related activities (including personal health information), including development, regulatory and commercial activities.

“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval system maintained for purposes of filings made under the Securities Act of 1933 (United States), as amended, the U.S. Exchange Act and other statutes.

“Effective Date” means the date shown on the Certificate of Arrangement.

“Effective Time” has the meaning specified in the Plan of Arrangement.

“Employee Plan” means any plan, arrangement, agreement, program, policy, practice or undertaking, whether written or oral, funded or unfunded, insured, self-insured or uninsured, registered or unregistered, that provides any employee benefit, fringe benefit, pension, retirement, deferred compensation, savings, profit-sharing, stock option, stock purchase, equity, bonus, incentive, commission, change of control, retention, termination, vacation pay, severance pay, supplemental unemployment benefit, health, welfare, medical, dental, disability, life insurance, employee assistance, and any similar plans, arrangements, Contracts, programs, policies, practices or undertakings, whether or not subject to Employee Retirement Income Security Act of 1974, as amended (ERISA), in each case: (a) for the benefit of present or former Employees, officers, directors, consultants, service providers or independent contractors of the Corporation or any of its Subsidiaries (or, in each case, any of their respective spouses, dependents, survivors or beneficiaries); (b) that is maintained, sponsored, contributed to or funded by or on

 

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behalf of the Corporation or any of its Subsidiaries; or (c) under which the Corporation or any of its Subsidiaries have, or could reasonably be expected to have, any liability or contingent liability.

“Employees” means all employees of the Corporation and its Subsidiaries, as the case may be, including part time and full-time employees, in each case, whether active or inactive, unionized or non-unionized.

“ESPP” means the 2021 employee stock purchase plan of the Corporation.

“Excluded Shares” means the Shares owned or beneficially controlled by the Parent, the Purchaser or any of their respective affiliates and associates.

“Expense Fee” has the meaning specified under “Expense Fee”.

“Facility Agreements” means, collectively, the (i) loan agreement between the Corporation and the Parent dated August 27, 2024 and (ii) New Facility Agreement.

“Fairness Opinion” means the opinion of Locust Walk Securities, LLC to the effect that, as of the date of such opinion, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Consideration to be received by the Shareholders (other than the holders of the Excluded Shares as well as the Shares owned or beneficially controlled by any other Person required to be excluded pursuant to the requirements of MI 61-101 for the purpose of the Required Shareholder Approval under Part 8 of MI 61-101) under the Arrangement is fair, from a financial point of view, to such holders.

“FDA” means the United States Food and Drug Administration, or any successor entity.

“Final Order” means the final order of the Court in a form acceptable to the Corporation and the Purchaser, each acting reasonably, approving the Arrangement, as such order may be amended by the Court (with the consent of both the Corporation and the Purchaser, each acting reasonably) at any time prior to the Effective Time or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Corporation and the Purchaser, each acting reasonably) on appeal.

“Foreign Tax Credit Regulations” has the meaning specified under “Certain U.S. Federal Income Tax Considerations - Foreign Tax Credits and Limitations”.

“Formal Valuation” means the formal valuation of the Shares prepared by Locust Walk Securities,

“Governmental Entity” means any: (i) international, multinational, federal, provincial, state, territorial, municipal, local or other governmental or public department, regulatory authority, central bank, court, commission, commissioner, board, bureau, ministry, agency or instrumentality, domestic or foreign, and includes the Securities Authorities, (ii) any subdivision or authority of any of the foregoing, (iii) any quasi-governmental, self-regulatory organization or private body exercising any regulatory, expropriation or taxing authority under or for the account of its members or any of the above, including the TSX, SEC, the Canadian Investment Regulatory Organization (CIRO) and any other regulatory body, or (iv) any arbitrator exercising jurisdiction over the affairs of the applicable person, asset, obligation or other matter.

“GST” means the goods and services tax and/or harmonized sales tax levied under the Excise Tax Act (Canada) and any similar tax imposed by any province of Canada.

“Holder” has the meaning specified under “Certain Canadian Federal Income Tax Considerations”.

“Incentive Compensation Plans” means the Legacy Option Plan, the Stock Incentive Plan and the ESPP.

“Incentive Securities” means, collectively, the Options and the RSUs.

 

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“Institutional Review Board” means the entity defined in 21 C.F.R. § 50.3(i), or any other substantially equivalent entity in Canada.

“Intellectual Property” means all intellectual property, in any jurisdiction throughout the world, whether or not registrable, including all: (a) patents, applications for patents and reissues, divisionals, continuations, renewals, re-examinations, extensions and continuations-in-part of patents or patent applications, (b) proprietary and non public business information, including inventions (whether patentable or not), invention disclosures, improvements, discoveries, trade secrets, confidential information, know-how, methods, models, formulas, algorithms, processes, designs, technology, technical data, schematics, formulae and customer lists, and documentation relating to any of the foregoing, (c) copyrights, copyright registrations and applications for copyright registration, (d) integrated circuit, topographies, integrated circuit topography registrations and applications, mask works, mask work registrations and applications, (e) designs, design registrations, design registration applications, industrial designs, industrial design registrations and industrial design applications, (f) trade names, business names, corporate names, domain names, social media accounts and user names, social media identifiers and identities, website names and world wide web addresses, common law trade-marks, trade-mark registrations, trade mark applications, trade dress and logos, and the goodwill associated with any of the foregoing, (g) all intellectual property rights in and to software and technology, and (h) any other intellectual property and industrial property rights throughout the world, however denominated, together with all licenses of and to any of the foregoing.

“Interim Order” means the interim order of the Court in a form acceptable to the Corporation and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Meeting, as such order may be amended by the Court with the consent of the Corporation and the Purchaser, each acting reasonably.

“IRS” means the United States Internal Revenue Service.

“Korea’s Foreign Exchange Transactions Act Filing” means the successful filing of the Arrangement Agreement under the Foreign Exchange Transactions Act (Korea).

“Laws” means, with respect to any Person, any and all applicable laws, including all statutes, codes, ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions or rulings of (or issued by) any Governmental Entity that is binding on or affecting such Person, and to the extent they have the force of law, all policies or guidelines of any Governmental Entity.

“Legacy Option Plan” means the Corporation’s share option plan.

“Licensed Intellectual Property” means all Intellectual Property (a) which is not Owned Intellectual Property, and (b) in which the Corporation or a Subsidiary has a right, interest, benefit, license or permission to access, use, practice or otherwise enjoy or exploit, including pursuant to a Contract, covenant not to sue, custom or practice, Order or applicable Law.

“Lien” means any mortgage, charge, pledge, hypothec, security interest, international interest, prior claim, encroachments, option, right of first refusal or first offer, occupancy right, covenant, assignment, lien (statutory or otherwise), defect of title, or restriction or adverse right or claim, or other third-party interest or encumbrance of any kind, in each case, whether contingent or absolute.

“Mark-to-Market Election” has the meaning specified under “Certain U.S. Federal Income Tax Considerations - Passive Foreign Investment Company Rules”.

“Matching Period” has the meaning specified under “The Arrangement Agreement - Restrictions on Solicitations of Other Offers”.

 

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“Material Adverse Effect” means any fact, change, event, occurrence, effect, state of facts and/or circumstance that, individually or in the aggregate, is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, condition (financial or otherwise) or liabilities (contingent or otherwise) of the Corporation and its Subsidiaries, taken as a whole, except any such fact, change, event, occurrence, effect, state of facts or circumstance resulting from or arising in connection with:

 

(a)

any change or development generally affecting the pharmaceutical industries in which the Corporation and/or its Subsidiaries operate;

 

(b)

any changes, events or occurrences in general economic, business, regulatory, political, financial or currency exchange conditions in Canada or the United States, including changes in (i) financial markets, credit markets or capital markets, (ii) interest rates and credit ratings, (iii) inflation and (iv) currency exchange rates;

 

(c)

any hurricane, flood, tornado, earthquake or other natural disaster, epidemic, pandemic or disease outbreak or any material worsening of such conditions existing as of the date of the Arrangement Agreement;

 

(d)

any act of sabotage, espionage, including any commencement or escalation of a war (whether or not declared), armed hostilities or acts of crime or terrorism;

 

(e)

any change in Law, generally acceptable accounting principles, including U.S. GAAP, or changes in regulatory accounting or tax requirements, or in the interpretation, application or non-application of the foregoing by any Governmental Entity;

 

(f)

any action taken (or omitted to be taken) by the Corporation or any of its Subsidiaries that is required to be taken (or prohibited to be taken) pursuant to the Arrangement Agreement or with the express prior written consent or at the written direction of the Purchaser;

 

(g)

any change in the market price or trading volume of the Shares (it being understood that the causes underlying such change in market price or trading volume may, to the extent not otherwise excluded from the definition of Material Adverse Effect, be taken into account in determining whether a Material Adverse Effect has occurred);

 

(h)

any Proceeding or threatened Proceeding relating to the Arrangement Agreement or the Arrangement (it being understood that the causes underlying such Proceeding may, to the extent not otherwise excluded from the definition of Material Adverse Effect, be taken into account in determining whether a Material Adverse Effect has occurred);

 

(i)

the announcement of the Arrangement Agreement or the Arrangement or the pendency or consummation of the Arrangement or the transactions contemplated hereby; or

 

(j)

the payment of accounts payable and accrued liabilities in the amounts funded by the Parent pursuant to the Facility Agreements,

 

(k)

but, in the case of clauses (a) through to and including (e) above, only to the extent that such matter does not have a materially disproportionate effect on the Corporation and its Subsidiaries, taken as a whole, relative to other companies and entities operating in the pharmaceutical industry in which the Corporation and/or its Subsidiaries operate, and references in certain sections of the Arrangement Agreement to dollar amounts are not

 

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intended to be, and shall not be deemed to be, illustrative or interpretative for purposes of determining whether a Material Adverse Effect has occurred.

“Material Contract” means any Contract:

 

(a)

under which the Corporation or its Subsidiaries have made payments in excess of $500,000 during the fiscal year ended December 31, 2024, or is obligated to make payment in excess of $100,000 in any 12-month period;

 

(b)

pursuant to which the Corporation or any of its Subsidiaries receives sales, advertising, agency, franchise, partner channel, reseller or representative services in excess of $100,000 in any 12-month period;

 

(c)

providing for the purchase, sale or exchange of, or option to purchase, sell or exchange (including any put, call or similar right), any property or asset where the purchase or sale price or agreed value of such property or asset exceeds $100,000;

 

(d)

relating to (i) any indebtedness for borrowed money in excess of a principal amount of $100,000 in any 12-month period or over the life of the Contract (currently outstanding or which may become outstanding) of the Corporation or any of its Subsidiaries or (ii) the guarantee of any liabilities or obligations of a Person other than the Corporation or any of its Subsidiaries, in each case excluding guarantees or intercompany liabilities or obligations between two or more Persons each of whom is a Subsidiary of the Corporation or between the Corporation and one or more Persons each of whom is a Subsidiary of the Corporation;

 

(e)

restricting in any material respect the incurrence of indebtedness by the Corporation or any of its Subsidiaries (including by requiring the granting of an equal and rateable Lien) or the incurrence of any Liens on any properties or assets of the Corporation or any of its Subsidiaries, or restricting the payment of dividends by the Corporation;

 

(f)

that limits or restricts in any material respect (i) the manner or the location in which the Corporation or any of its Subsidiaries may engage in any line of business, (ii) any business practice of the Corporation or any of its Subsidiaries; (iii) any acquisition or disposition of any products or assets, or the delivery of any services by the Corporation or any of its Subsidiaries, or (iv) the scope of Persons to whom the Corporation or any of its Subsidiaries may sell products or deliver services;

 

(g)

that contains any “most favored nation”, “exclusivity”, “minimum purchase” or similar provisions, or grants a third party a right of first offer or refusal in respect of material assets of the Corporation or any of its Subsidiaries;

 

(h)

with a Governmental Entity;

 

(i)

relating to the development, sale, purchase or license of (or otherwise relating to transfer of) any material Intellectual Property or exclusive right in respect thereto;

 

(j)

involving the settlement of any lawsuit (i) with respect to which there is any unpaid amount in excess of $10,000; (ii) with respect to which there are conditions precedent to the settlement thereof have not been satisfied, or (iii) that imposes material ongoing obligations

 

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after the date of the Arrangement Agreement on the Corporation and its Subsidiaries, taken as a whole;

 

(k)

that obligates the Corporation or any of its Subsidiaries to make any capital expenditure in excess of $50,000;

 

(l)

providing for any termination, severance, or change in control payments, or any retention payments in excess of $50,000;

 

(m)

with Employees or consultants, agents or contractors providing for annual base compensation in excess of $100,000;

 

(n)

that is a shareholders agreement or a similar type of Contract or that is otherwise relating to any joint venture, partnership or alliance;

 

(o)

that is a Collective Agreement;

 

(p)

that is still in force and which has been filed by the Corporation with the Securities Authorities;

 

(q)

that if terminated or modified in a prejudicial manner or if it ceased to be in effect, would reasonably be expected to have a Material Adverse Effect; or

 

(r)

that is otherwise material to the Corporation and its Subsidiaries, taken as a whole;

and includes each of the Contracts listed in Section (25)(a) of the Corporation Disclosure Letter, provided that, in each of the foregoing cases, if a Contract has been amended, modified, supplemented or renewed, any reference to the Contract shall refer to the Contract as so amended, modified, supplemented or renewed.

“Meeting” means the special meeting of the Shareholders, including any adjournment or postponement of such special meeting in accordance with the terms of the Arrangement Agreement, to be called and held in accordance with the Interim Order to consider the Arrangement Resolution and the Continuance Resolution and for any other purpose as may be set out in the Proxy Statement and agreed to in writing by the Purchaser.

“MI 61-101” means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

“Minority Shareholders” means Shareholders whose votes are required to be excluded from voting on the Arrangement Resolution for the purpose of MI 61-101.

“New Facility Agreement” means the facility agreement among the Corporation, Aptose Biosciences U.S. Inc., NuChem Pharmaceuticals Inc. and the Parent dated June 18, 2025.

“NI 45-106” means National Instrument 45-106 – Prospectus Exemptions.

“Non-Resident Holder” has the meaning specified under “Certain Canadian Federal Income Tax Considerations – Holders Not Resident in Canada”.

“officer” has the meaning specified in the Securities Act (Ontario).

“Options” means the stock options of the Corporation granted pursuant to (i) the Stock Incentive Plan and (ii) the Legacy Option Plan.

 

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“Ordinary Course” means, with respect to an action (or omission to take any action) taken by a Party or any of its Subsidiaries, that such action or omission is consistent in nature and in scope with the past practices of such Party or Subsidiary and taken in the ordinary course of the normal day-to-day operations of the business of such Party or such Subsidiary and, in the case of the Corporation, as determined only with reference to the period following April 2025.

“Outside Date” means March 15, 2026.

“Owned Intellectual Property” means all Intellectual Property owned or purported to be owned, in whole or in part, by the Corporation or a Subsidiary. For purposes of the foregoing, “owned” includes ownership of a beneficial right pursuant to which an employee or other third party is obligated (whether under contract, fiduciary obligations, statute or otherwise) to assign Intellectual Property to the Corporation or a Subsidiary.

“Parent” means Hanmi Pharmaceutical Co. Ltd., a corporation governed by the laws of the Republic of Korea.

“Parties” means the Corporation, the Parent and the Purchaser and “Party” means any one of them.

“Permitted Liens” means, in respect of the Corporation or any of its Subsidiaries, any one or more of the following:

 

(a)

Liens for Taxes, assessments and other governmental charges or levies not yet due or for which instalments have been paid based on reasonable estimates pending final assessments, or if due, the validity of which is being contested diligently and in good faith by appropriate proceedings by that Person and in respect of which reasonable reserves under U.S. GAAP are maintained;

 

(b)

undetermined or inchoate liens, rights of distress and charges incidental to current operations which have not at such time been filed or exercised, or which relate to obligations not yet due and payable, or the validity of which is being contested diligently and in good faith by appropriate proceedings by that Person;

 

(c)

zoning, land use and building restrictions, by-laws, regulations and ordinances of Governmental Entities, licenses, easements, rights-of-way and rights in the nature of easements (including, without limiting the generality of the foregoing, license, restrictions, easements, servitudes, rights-of-way and rights in the nature of easements for railways, sidewalks, public ways, sewers, drains, gas, steam and water mains or electric light and power, or telephone and telegraph conduits, poles, wires and cables) which do not materially impair the use of the affected land for the purpose for which it is used by that Person;

 

(d)

title defects, encroachments or irregularities or other matters relating to title which are of a minor nature and which in the aggregate do not materially impair the use of the affected property for the purpose for which it is used by that Person;

 

(e)

the right reserved to or vested in any Governmental Entity by the terms of any lease, license, franchise, grant or permit acquired by that Person or by any statutory provision to

 

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