UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

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 ☐

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Preliminary Proxy Statement

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

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

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ESSA Pharma Inc.

(Name of Registrant as Specified In Its Charter)

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

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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) and 0-11.

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PRELIMINARY MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT — SUBJECT TO COMPLETION, DATED JULY 30, 2025.

ESSA PHARMA INC.
999 West Broadway Street, Suite 720
Vancouver, BC V5Z 1K5, Canada

INVITATION TO SECURITYHOLDERS

Dear Securityholder,

You are cordially invited to attend a special meeting of the holders of ESSA Pharma Inc. (the “Company”) common shares (“Common Shares”, and the holders of such Common Shares, the “Shareholders”), the holders of stock options of the Company (the “Options”, and the holders of such Options, the “Optionholders”) and the holders of pre-funded Common Share purchase warrants of the Company (the “Warrants”, and the holders of such Warrants, the “Warrantholders” and, together with the Shareholders and the Optionholders, the “Securityholders”) which we will hold at 2:00 p.m. (Pacific Time) on September 10, 2025 (the “Special Meeting”). The Company will conduct the Special Meeting in a virtual-only format via live webcast. You will be able to attend the meeting online at https://meetnow.global/MHPMJ4R. Registration and participation information appears in the enclosed proxy statement and management information circular (“Circular and Proxy Statement”). Formal notice of the Special Meeting, the Circular and Proxy Statement, the letter of transmittal and a proxy card or voting instruction form accompany this letter.

At the Special Meeting, the Securityholders will be asked to consider and, if thought advisable, to pass, with or without variation, (i) a special resolution (the “Arrangement Resolution”), the full text of which is set forth in Annex D to the accompanying Circular and Proxy Statement, to approve an arrangement (the “Arrangement”) under Section 288 of the Business Corporations Act (British Columbia) involving the Company, XenoTherapeutics, Inc. (the “Parent”), Xeno Acquisition Corp. (the “Purchaser”), and XOMA Royalty Corporation (“XRC”) pursuant to a business combination agreement dated July 13, 2025 (the “Agreement”) and the plan of arrangement (“Plan of Arrangement”) appended as Annex E to the Circular and Proxy Statement, (ii) an ordinary resolution to approve, on an advisory and non-binding basis, the compensation to be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Arrangement (the “Compensation Resolution”) and (iii) in the event that the Arrangement Resolution is not approved or the Arrangement is otherwise terminated, (1) a special resolution pursuant to Section 319(1) of the BCBCA to approve the voluntary liquidation (the “Liquidation”) and dissolution of the Company (the “Liquidation Resolution”), and (2) an ordinary resolution pursuant to Section 319(2) of the BCBCA to approve the appointment of PricewaterhouseCoopers LLP (“PwC”) or, in the alternative, another liquidator of nationally recognized experience, as the liquidator of the Company (the “Liquidator”) with authorization for the board of directors of the Company (the “Board”) to set the remuneration of the liquidator (the “Liquidator Resolution”). Pursuant to the Agreement, the Purchaser will, among other things, acquire all of the issued and outstanding Common Shares for (A) cash consideration of approximately US$1.91 per Common Share, provided that such amount shall be reduced by the amount of the Distribution (as defined below), if any (such amount as finally determined in accordance with the Agreement, the “Cash Amount”) and (B) one contingent value right (“CVR”) for each Common Share entitling its holder to a pro rata portion of up to US$2,950,000 less costs and expenses associated with any litigation against the Company and its directors or officers currently active or arising within 18 months following closing of the Arrangement (the “CVR Consideration”, and together with the Cash Amount, the “Consideration”), all as more particularly described in the Circular and Proxy Statement.

In addition, pursuant to the Arrangement, each Option outstanding as of 12:01 a.m. (Vancouver time) (the “Effective Time”) on the date that the Arrangement is completed (the “Effective Date”) (whether vested or unvested) shall be deemed to be unconditionally vested, exercisable and, without any further action by or on behalf of the Optionholder, shall be deemed to be assigned and surrendered by such holder to the Company in exchange for, in respect of each Option for which the Cash Amount exceeds the applicable exercise price in

 

respect of such Option, (i) an amount in cash from the Company equal to the Cash Amount less the applicable exercise price in respect of such Option, and (ii) one CVR, and such Option shall immediately be cancelled. In the event the exercise price of any Option is greater than or equal to the Cash Amount, neither the Company nor the Purchaser shall be obligated to pay the holder of such Option the Consideration or any other amount in respect of such Option, and the Option shall be immediately cancelled without any payment.

Pursuant to the Arrangement, each Warrant outstanding as of the Effective Time shall be deemed to be unconditionally assigned and surrendered by such holder to the Company in exchange for, in respect of each Common Share acquirable upon exercise of the Warrants, (i) an amount in cash from the Company equal to the Cash Amount minus any applicable exercise price in respect of such Warrant, and (ii) one CVR, and each Warrant shall immediately be cancelled.

In connection with the Arrangement, on [   •   ], 2025, the Company received an order from the Supreme Court of British Columbia authorizing a reduction in the capital of the Common Shares and concurrent distribution to Shareholders of an amount equal to the reduction in capital as part of the discontinuance and winding-up of the business of the Company (the “Distribution Order”). On [   •   ], 2025 the board of directors of the Company (the “Board”) approved a reduction in the capital of the Common Shares and concurrent distribution to Shareholders of an amount equal to the reduction in capital as part of the discontinuance and winding-up of the business of the Company in the aggregate amount of US$[   •   ] (the “Distribution”). The Distribution, if any, is scheduled to take place on or about [   •   ], 2025.

The proposed Arrangement and Distribution are expected to result in Shareholders receiving cash sooner than would be the case without the Arrangement and Distribution, while retaining US$4,000,000 of the Company’s Closing Net Cash as a transaction fee as the Company discontinues and winds-up its business (the “Discontinuance”).

Following completion of the Arrangement, the Company will become a private company until ultimate dissolution and all of the Common Shares will be beneficially owned by the Purchaser. In connection with the Arrangement, the Common Shares will be delisted from the Nasdaq Capital Market (the “Nasdaq”) and deregistered under the U.S. Exchange Act, in each case, in accordance with applicable Laws, rules and regulations.

An independent transaction committee (the “Transaction Committee”) of the Board has advised the Board that, after careful consideration, including, among other things, thorough consideration of (i) the process undertaken by the Company, over several months, to explore strategic alternatives to maximize Shareholder value; (ii) the strategic alternatives and options available to the Company, including the prospects of the Company on a standalone basis and the expected return to Securityholders if the Company were to be liquidated and the Company’s conclusion that none of the potential parties contacted during the Company’s process to explore strategic alternatives offered a transaction that the Company considered more advantageous to Securityholders than the Arrangement; (iii) the terms and conditions of the Agreement; (iv) the benefits and risks associated with the Arrangement; (v) the impact of the Arrangement on the Shareholders and other stakeholders of the Company; (vi) advice from management and its legal and financial advisors; and (vii) the opinion of Leerink Partners dated July 13, 2025 that, as of such date and based upon and subject to the various assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the Cash Amount to be received by the Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders, the Transaction Committee unanimously determined that the Consideration to be received by the Securityholders pursuant to the Arrangement is fair, from a financial point of view, to the Securityholders, that the Arrangement is in the best interests of the Company, and unanimously recommended to the Board that it approve the Agreement and recommend that the Securityholders vote in favour of the Arrangement Resolution.

After taking into consideration, among other things, the factors enumerated in the preceding paragraph and the unanimous recommendation of the Transaction Committee, the Board has concluded that the Arrangement is advisable and is in the best interests of the Company and has approved the Arrangement and authorized its submission to the Securityholders. Accordingly, the Board unanimously recommends that Securityholders vote FOR the Arrangement Resolution. It is a condition to the completion of the Arrangement that the Arrangement Resolution be approved by Securityholders at the Special Meeting.

We are seeking approval of the Arrangement Resolution by the affirmative vote of not less than (i) 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, (ii) 662∕3%

 

of the votes cast by Securityholders present in person or represented by proxy at the Special Meeting, voting together as a single class, and (iii) a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, excluding for this purpose the votes required to be excluded by Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions (“MI 61-101”), which excludes Common Shares held by related parties that are receiving a “collateral benefit” ​(as defined in MI 61-101) in connection with the transaction. See “Canadian Securities Law Matters — Multilateral Instrument 61-101” for more information.

We are also seeking approval of (i) the Compensation Resolution by the affirmative vote of a majority of the votes cast by Shareholders present or represented by proxy at the Special Meeting, (ii) the Liquidation Resolution by the affirmative vote of not less than 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, and (iii) the Liquidator Resolution by the affirmative vote of a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting. The Board unanimously recommends that Shareholders vote FOR the Compensation Resolution, FOR the Liquidation Resolution and FOR the Liquidator Resolution.

Whether or not you plan to attend the Special Meeting, it is important that you use this opportunity to take part in the affairs of the Company by voting on the business to come before the Special Meeting. We ask that you submit a proxy or voting instruction form to have your securities voted in advance of the Special Meeting by using one of the methods described in this Circular and Proxy Statement. After reading the enclosed Circular and Proxy Statement, please promptly mark, sign, date and return the enclosed proxy or voting instruction form as instructed to ensure that your Common Shares, Options or Warrants will be represented. Regardless of the number of Common Shares, Options or Warrants you own, your careful consideration of, and vote on, the matters before our Securityholders is important.

The enclosed Circular and Proxy Statement describes the Agreement, the Arrangement and related agreements and provides specific information concerning the Special Meeting. In addition, you may obtain information about us from documents filed with the U.S. Securities and Exchange Commission (the “SEC”). We urge you to read the entire Circular and Proxy Statement, including the annexes, carefully, as it sets forth the details of the Agreement and other important information related to the Arrangement.

We look forward to seeing you at the meeting.

Sincerely yours,

/s/ David R. Parkinson

David R. Parkinson

President, Chief Executive Officer and Director

The date of the Circular and Proxy Statement is [   •   ], 2025 and, together with the enclosed form of proxy card, is first being mailed to Shareholders on or about [   •   ], 2025.

Neither the SEC, nor any state securities commission has approved or disapproved of the transactions described in this Circular and Proxy Statement, including the Arrangement; passed upon the merits or fairness of the transactions described in this Circular and Proxy Statement, including the Arrangement; or determined if the information contained in this Circular and Proxy Statement is accurate or adequate. Any representation to the contrary is a criminal offense.

 

ESSA PHARMA INC.
999 West Broadway Street, Suite 720
Vancouver, BC V5Z 1K5, Canada

NOTICE OF SPECIAL MEETING OF
SECURITYHOLDERS AND INFORMATION CIRCULAR AND PROXY STATEMENT

To the Securityholders of ESSA Pharma Inc.:

Notice is hereby given that a special meeting (“Special Meeting”) of the holders of ESSA Pharma Inc., a company existing under the laws of British Columbia (the “Company”) common shares (the “Common Shares”, and the holders of such Common Shares, the “Shareholders”), holders of stock options of the Company (the “Options”, and the holders of such Options the “Optionholders”) and holders of pre-funded Common Share purchase warrants of the Company (the “Warrants”, and the holders of such Warrants, the “Warrantholders”, and together with the Shareholders and the Optionholders, the “Securityholders”) will be held on September 10, 2025 at 2:00 p.m. (Pacific Time) via live webcast at https://meetnow.global/MHPMJ4R for the following purposes:

(1)

pursuant to an order from the Supreme Court of British Columbia, dated as of [   •   ], 2025 (the “Interim Order”), to consider, and, if thought advisable, to pass, with or without variation, a special resolution (the “Arrangement Resolution”), the full text of which is set forth in Annex D to the accompanying proxy statement and management information circular (the “Circular and Proxy Statement”), approving a plan of arrangement (the “Plan of Arrangement”) under Section 288 of the Business Corporations Act (British Columbia) (the “BCBCA”) involving the Company, XenoTherapeutics, Inc., a company existing under the Laws of Massachusetts (the “Parent” or “XenoTherapeutics”), Xeno Acquisition Corp., a company existing under the laws of Delaware (the “Purchaser”) and XOMA Royalty Corporation, a company existing under the laws of Nevada (“XRC”) pursuant to a business combination agreement dated July 13, 2025 (the “Agreement”), whereby the Purchaser will, among other things, acquire all of the issued and outstanding Common Shares, all as more particularly described in the Circular and Proxy Statement (the “Arrangement”);

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(2)

an ordinary resolution to approve, on an advisory and non-binding basis, the compensation to be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Arrangement (the “Compensation Resolution”);

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(3)

in the event that the Arrangement Resolution is not approved or the Arrangement is otherwise terminated, (A) to consider, and if thought advisable, to pass, with or without variation, a special resolution pursuant to Section 319(1) of the BCBCA to approve the voluntary liquidation (the “Liquidation”) and dissolution of the Company in the event the Arrangement is terminated (the “Liquidation Resolution”); and (B) to consider, and if thought advisable, to pass, with or without variation, an ordinary resolution pursuant to Section 319(2) of the BCBCA to approve the appointment of PricewaterhouseCoopers LLP (“PwC”) or, in the alternative, another liquidator of nationally recognized experience, as the liquidator of the Company (the “Liquidator”) with authorization for the board of directors of the Company (the “Board”) to set the remuneration of the liquidator (the “Liquidator Resolution”); and

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(4)

to transact such further or other business that may properly come before the Special Meeting or any adjournment or postponement thereof.

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Specific details of the matters proposed to be put before the Special Meeting are set forth in the Circular and Proxy Statement that accompanies this Notice of Special Meeting of Securityholders.

During the Special Meeting’s live webcast, Registered Shareholders, Optionholders and Warrantholders and duly appointed proxy holders will be able to participate, vote, and submit questions. Non-registered Shareholders who have not appointed themselves as proxy holders will be able to attend the Special Meeting as guests, but guests will not be able to vote at the Special Meeting. See “Attending and Participating in the Meeting” instructions in the Circular and Proxy Statement. As noted above, the Special Meeting will be a virtual meeting, which will be conducted exclusively on the internet. There will not be a physical meeting location, and Securityholders will not be able to attend the Special Meeting in person. You may attend the Special Meeting via the internet, vote your securities during the Special Meeting and submit questions at the appropriate times during the Special Meeting.

An independent transaction committee (the “Transaction Committee”) of the Board has advised the Board that, after careful consideration, including, among other things, thorough consideration of (i) the process undertaken by the Company, over several months, to explore strategic alternatives to maximize Shareholder value; (ii) the strategic alternatives and options available to the Company, including the prospects of the Company on a standalone basis and the expected return to Securityholders if the Company were to be liquidated and the Company’s conclusion that none of the potential parties contacted during the Company’s process to explore strategic alternatives offered a transaction that the Company considered more advantageous to Securityholders than the Arrangement; (iii) the terms and conditions of the Agreement; (iv) the benefits and risks associated with the Arrangement; (v) the impact of the Arrangement on the Shareholders and other stakeholders of the Company; (vi) advice from management and its legal and financial advisors; and (vii) the opinion of Leerink Partners dated July 13, 2025 that, as of such date and based upon and subject to the various assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the Cash Amount to be received by the Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders, the Transaction Committee unanimously determined that the Consideration to be received by the Securityholders pursuant to the Arrangement is fair, from a financial point of view, to the Securityholders, that the Arrangement is in the best interests of the Company, and unanimously recommended to the Board that it approve the Agreement and recommend that the Securityholders vote in favour of the Arrangement Resolution.

After taking into consideration, among other things, the factors enumerated in the preceding paragraph and the unanimous recommendation of the Transaction Committee, the Board has concluded that the Arrangement is advisable and is in the best interests of the Company and has approved the Arrangement and authorized its submission to the Securityholders. Accordingly, the Board unanimously recommends that Securityholders vote FOR the Arrangement Resolution. It is a condition to the completion of the Arrangement that the Arrangement Resolution be approved by Securityholders at the Special Meeting.

It is a condition to the completion of the Arrangement that the Arrangement Resolution be approved by Securityholders at the Special Meeting. Accordingly, we are seeking approval of the Arrangement Resolution by the affirmative vote of not less than (i) 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, (ii) 662∕3% of the votes cast by Securityholders present in person or represented by proxy at the Special Meeting, voting together as a single class, and (iii) a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, excluding for this purpose the votes required to be excluded by Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions (“MI 61-101”), which excludes Common Shares held by related parties that are receiving a “collateral benefit” ​(as defined in MI 61-101) in connection with the transaction. See “Canadian Securities Law Matters — Multilateral Instrument 61-101” for more information.

We are also seeking approval of (i) the Compensation Resolution by the affirmative vote of a majority of the votes cast by Shareholders present or represented by proxy at the Special Meeting, (ii) the Liquidation Resolution by the affirmative vote of not less than 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, and (iii) the Liquidator Resolution by the affirmative vote of a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting. The Board unanimously recommends that Shareholders vote FOR the Compensation Resolution, FOR the Liquidation Resolution and FOR the Liquidator Resolution.

 

Pursuant to the Interim Order, the record date for determining the Securityholders entitled to receive notice of and to vote at the Special Meeting is the close of business on August 5, 2025 (the “Record Date”). Only Securityholders whose names have been entered in the applicable securities register as of the close of business on the Record Date are entitled to receive notice of and to vote at the Special Meeting.

Your vote is important regardless of the number of Securities you own.   Securityholders are cordially invited to attend the Special Meeting. Whether or not you plan to attend the Special Meeting, it is important that you use this opportunity to take part in the affairs of the Company by voting on the business to come before the Special Meeting. We ask you to submit a proxy or voting instruction form to have your securities voted in advance of the Special Meeting by using one of the methods described in this Circular and Proxy Statement. Securityholders are urged to complete and return the enclosed proxy or voting instruction form promptly. Alternatively, Securityholders can vote online by following the instructions on their proxy or voting instruction form. To be effective, the proxies must be received at the Toronto office of Computershare Investor Services Inc. (“Computershare”), the Company’s registrar and transfer agent, located at 320 Bay Street, 14th Floor, Toronto, ON M5H 4A6, by 2:00 p.m. (Pacific Time) on September 8, 2025, or, in the event that the Special Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before the adjusted time of the Special Meeting. Securityholders whose Common Shares are held by a broker, investment dealer, bank, trust company, nominee or other intermediary (collectively, an “Intermediary”) will receive either a voting instruction form or form of proxy and should follow the instructions provided by such Intermediary. Late proxies may be accepted or rejected by the chair of the Special Meeting in his discretion, and the chair is under no obligation to accept or reject any particular late proxy.

Only Registered Shareholders as of the Record Date have been granted the right to dissent in respect of the Arrangement Resolution. If the Arrangement becomes effective, a Registered Shareholder as of the Record Date who dissents in respect of the Arrangement Resolution (a “Dissenting Holder”) in accordance with the dissent procedures Division 2 of Part 8 of the BCBCA, as modified by the Plan of Arrangement, the Interim Order and the Final Order, is entitled to be paid the fair value of such Dissenting Holder’s Common Shares. If you wish to dissent, you must deliver to the Company c/o Blake, Cassels & Graydon LLP, 1133 Melville Street, Suite 3500, The Stack, Vancouver, BC V6E 4E5 attention: Alexandra Luchenko, or by email to alexandra.luchenko@blakes.com, a written objection to the Arrangement Resolution not later than 5:00 p.m. (Pacific Time) on September 8, 2025, being the Business Day which is two Business Days immediately preceding the Special Meeting (or, if the Special Meeting is postponed or adjourned, by 5:00 p.m. (Pacific Time) on the Business Day which is two Business Days immediately preceding the date of the postponed or adjourned Special Meeting) and otherwise comply strictly with the dissent procedures of Division 2 of Part 8 of the BCBCA, as modified by the Plan of Arrangement, the Interim Order and the Final Order, as described in the Circular and Proxy Statement. This right is described in detail in the Circular and Proxy Statement under the heading “Dissent Rights”. The text of Division 2 of Part 8 of the BCBCA, which will be relevant in any dissent proceeding, is set forth in Annex C to the Circular and Proxy Statement.

Beneficial owners of Common Shares registered in the name of a broker, investment dealer or other intermediary who wish to dissent should be aware that only Registered Shareholders as of the Record Date are entitled to dissent. Beneficial Shareholders who wish to exercise dissent rights must cause each Registered Shareholder holding their Common Shares to deliver the notice of dissent or make arrangements for such Common Shares to be re-registered in their names.

Failure to strictly comply with the dissent procedures described in the Circular and Proxy Statement may result in the loss of any right of dissent. It is strongly suggested that any Shareholder wishing to dissent seek independent legal advice.

All Securityholders are cordially invited to attend the Special Meeting.

The Arrangement is described in the accompanying Circular and Proxy Statement, which we urge you to read carefully. A copy of the Agreement is included as Annex A to the Circular and Proxy Statement. Please review the Circular and Proxy Statement before you cast your vote.

 

By Order of the Board of Directors,

David R. Parkinson
President, Chief Executive Officer and Director

The date of the Circular and Proxy Statement is [   •   ], 2025 and, together with the enclosed form of proxy card, it is first being mailed to Shareholders on or about [   •   ], 2025.

 

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE ARRANGEMENT

The following questions and answers address briefly some questions that Securityholders may have regarding the Special Meeting and the Arrangement. These questions and answers may not address all questions that may be important to you as a Securityholder of the Company. More detailed information will be contained in the Company’s proxy statement and in this Circular and Proxy Statement that the Company will deliver to Securityholders in connection with the Arrangement.

Q:

Why am I receiving these materials?

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A:

The Board is furnishing this Circular and Proxy Statement and form of proxy card to Shareholders in connection with the solicitation of proxies to be voted at the Special Meeting.

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Q:

When and where is the Special Meeting?

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A:

The Company will conduct the Special Meeting in a virtual-only format via live webcast at 2:00 p.m. (Pacific Time) on September 10, 2025. You will be able to attend the meeting online at https://meetnow.global/MHPMJ4R.

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Q:

What matters will be voted on at the Special Meeting?

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A:

You will be asked to vote on the following:

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to consider and, if thought advisable, to pass, with or without variation, the Arrangement Resolution, the full text of which is set forth in Annex D, approving the Arrangement;

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to consider and, if thought advisable, to pass, with or without variation, the Compensation Resolution;

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to consider and, if thought advisable, to pass, with or without variation, (i) the Liquidation Resolution and (ii) Liquidator Resolution; and

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to consider and vote upon proposals to act upon other business that may properly come before the Special Meeting or any adjournment or postponement thereof.

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Q:

Who can attend and vote at the Special Meeting and what is the quorum for the Special Meeting?

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A:

Registered Shareholders, Optionholders, Warrantholders and duly appointed proxy holders can participate in the online Special Meeting and vote and ask questions at the appropriate times during the Special Meeting. A quorum for the transaction of business at the Special Meeting is two Persons who are, or who represent by proxy, Shareholders who, in the aggregate, hold Common Shares to which are attached at least 331∕3% of the votes attached to all of the issued Common Shares of the Company entitled to voting rights at the Special Meeting. Broker non-votes and proxies marked “ABSTAIN” will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Special Meeting.

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Q:

What will Shareholders receive in the Arrangement?

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A:

If the Arrangement is completed, Shareholders will be entitled to receive a cash payment and one contingent value right per Common Share (other than Shareholders who properly exercise their Dissent Rights). The amount of the cash payment will be determined based upon the Company’s cash balance as at the Effective Time on the Effective Date after deducting certain transaction costs, a reserve for liabilities and legal expenses, and a transaction fee to Parent of US$4,000,000 (such amount as finally determined pursuant to the Agreement) divided by the total number of issued and outstanding Common Shares as of the Effective Time (the “Cash Amount”). In addition, each Shareholder will also receive one contingent value right (each, a “CVR”) for each Common Share that will entitle the holder to receive a pro rata portion of up to (i) US$2,800,000 less legal expenses incurred by the Company within 18 months following the closing of the Transaction and (ii) US$150,000 less additional liabilities and expenses of the Company, if any (the “CVR Consideration”, and together with the Cash Amount, the “Consideration”). You will not be entitled to receive shares in the surviving corporation and the CVRs will be non-transferable. Shareholders will also receive a distribution of cash as part of the Distribution, if any.

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11

 

Q:

What will Optionholders receive in the Arrangement?

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A:

Each Option outstanding as of the Effective Time (whether vested or unvested) will be deemed to be unconditionally vested and exercisable and, without any further action by or on behalf of the Optionholder, each in-the-money Option (an Option which has a per-share exercise price that is less than the Cash Amount) will be deemed to be assigned and surrendered to the Company in exchange for (i) an amount in cash from the Company equal to the Cash Amount less the applicable exercise price in respect of such Option, and (ii) one CVR, and such Option will immediately be cancelled. Out-of-the-money Options will be immediately cancelled at the Effective Time without any payment and neither the Company nor the Purchaser will be obligated to pay the holder of out-of-the-money Options the Consideration or any other amount in respect of such Options. Currently, all Options are expected to be out-of-the-money at the Effective Time. Optionholders should consult with their own advisors in determining whether to exercise Options prior to the Effective Time.

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Q:

What will Warrantholders receive in the Arrangement?

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A:

Each Warrant as of the Effective Time will be deemed to be assigned and surrendered by such holder to the Company in exchange for, in respect of each Warrant, (i) an amount in cash from the Company equal to the Cash Amount minus any applicable exercise price, and (ii) one CVR, and each Warrant will immediately thereafter be cancelled.

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Q:

How does the Board recommend that I vote?

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A:

Based in part on the unanimous recommendation of the Transaction Committee and the opinion of the Transaction Committee’s financial advisors, the Board recommends unanimously that our Securityholders vote:

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“FOR” the Arrangement Resolution adopting the Agreement, the Plan of Arrangement and the transactions contemplated thereby.

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“FOR” the Compensation Resolution.

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“FOR” the Liquidation Resolution.

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“FOR” the Liquidator Resolution.

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You should read “Recommendation of the Transaction Committee; Reasons for the Arrangement; and Recommendation of the Board” beginning on page 32 for a discussion of the factors that the Transaction Committee and the Board considered in deciding to recommend and/or approve, as applicable, the Agreement. See also “Interests of the Company’s Directors and Executive Officers in the Arrangement” beginning on page 44.

Q:

What vote is required to approve the Arrangement Resolution?

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A:

Approval of the Arrangement Resolution requires the affirmative vote of not less than (i) 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, (ii) 662∕3% of the votes cast by Securityholders present in person or represented by proxy at the Special Meeting, voting together as a single class, and (iii) a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, excluding for this purpose the votes required to be excluded by MI 61-101, which excludes Common Shares held by related parties that are receiving a “collateral benefit” ​(as defined in MI 61-101) in connection with the transaction. See “Canadian Securities Law Matters — Multilateral Instrument 61-101” for more information. As of August 5, 2025, the record date, there were approximately [44,338,550] Common Shares outstanding.

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Q:

What vote is required to approve the Compensation Resolution, Liquidation Resolution and Liquidator Resolution?

​

A:

Approval of the Compensation Resolution requires the affirmative vote of a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting. Approval of the Liquidation Resolution requires the affirmative vote of not less than 662∕3% of the votes cast by

​

12

 

Shareholders present in person or represented by proxy at the Special Meeting. Approval of the Liquidator Resolution requires the affirmative vote of a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting.

Q:

What effects will the Arrangement have on the Company?

​

A:

Our Common Shares are currently registered under the U.S. Exchange Act and are traded on the Nasdaq under the trading symbol “EPIX”.

​

Following the consummation of the Arrangement, all the Common Shares will be owned by the Purchaser. In connection with the Arrangement, the Common Shares will be delisted from the Nasdaq and deregistered under the U.S. Exchange Act, in each case, in accordance with applicable Laws, rules and regulations, and the Company will no longer have reporting obligations with respect to the Common Shares under the U.S. Exchange Act. Similarly, it is anticipated that the Company will apply to cease to be a reporting issuer (or equivalent) in British Columbia, Alberta and Ontario and that it will cease to have public reporting obligations under Securities Laws following completion of the Arrangement.

Q:

How will I know when the Arrangement will be implemented?

​

A:

Assuming that the Final Order is granted on September 12, 2025, and the other conditions precedent to completion of the Arrangement are satisfied or waived to the extent legally permissible, the Parties expect to close the Arrangement on or about September [18], 2025.

​

The Effective Date could be delayed or not occur at all 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 or failure in satisfying the conditions to the completion of the Arrangement, including obtaining Securityholder approval at the Special Meeting.

Q:

What will happen if the Arrangement is not consummated?

​

A:

If the Arrangement is not consummated for any reason, the Securityholders will not receive any Consideration for their Common Shares, Options or Warrants in connection with the Arrangement. Instead, if the Liquidation Resolution is approved by Shareholders, the Company will proceed with the Liquidation. For more information, you should read “Liquidation Resolution and Liquidator Resolution”.

​

Q:

What do I need to do now?

​

A:

We urge you to read this Circular and Proxy Statement carefully, including its annexes and the documents referred to as incorporated by reference in this Circular and Proxy Statement filed with the SEC, and to consider how the Arrangement affects you.

​

Registered Shareholders, Optionholders and Warrantholders may deposit a proxy that nominates a Person or entity to represent the Securityholder at the Special Meeting.

All proxies or alternative forms of proxy must be completed properly and signed, and deposited at the office of the Company’s registrar and transfer agent (Computershare) indicated on the enclosed envelope for receipt not later than 2:00 p.m. (Pacific Time) on September 8, 2025 or, in the event that the Special Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before the adjusted time of the Special Meeting, or by delivering it to the chair of the Board, prior to the commencement of the Special Meeting on the date of such Special Meeting.

Beneficial Shareholders should carefully follow the instructions set out in the VIF, including those regarding when and where the VIF is to be delivered. Should a Beneficial Shareholder who receives a VIF wish to attend the Special Meeting or have someone else attend on their behalf, the Beneficial Shareholder may request a legal proxy as set forth in the VIF, which will grant the Beneficial Shareholder or their nominee the right to attend and vote at the Special Meeting.

Q:

Should I send in my stock certificates or other evidence of ownership now?

​

A:

We encourage Registered Shareholders, Optionholders and Warrantholders to complete, sign, date and return the enclosed Letter of Transmittal, together with their certificate(s) or DRS advice representing

​

13

 

their Securities (if applicable) in accordance with the instructions set out in the Letter of Transmittal, as soon as possible, as this will assist in arranging for the prompt exchange of their Securities for the Consideration if the Arrangement is completed. If you are a Beneficial Shareholder and your Securities are held in “street name” by your broker, bank or other Intermediary, you may receive instructions from your broker, bank or other Intermediary as to what action, if any, you need to take to effect the surrender of your “street name” shares in exchange for the per share Consideration.

Where Common Shares are evidenced only by a DRS advice, there is no requirement to first obtain a share certificate for those Common Shares. Only a properly completed and duly executed Letter of Transmittal and the applicable certificate(s) or DRS advice(s) are required to be delivered to the Depositary in order to surrender those Common Shares under the Arrangement.

Do not send your Letter of Transmittal and share certificate(s)/DRS advice(s) to the Company. Please follow the instructions set out in the Letter of Transmittal.

Q:

When can I expect to receive the Consideration for my Common Shares, Options or Warrants?

​

A:

Assuming completion of the Arrangement, if you hold your Common Shares through an Intermediary, then you are not required to take any action and the Consideration you are entitled to receive will be delivered to your Intermediary though procedures in place for such purposes between CDS and Cede & Co. (as the case may be) or similar entities and such Intermediaries. You should contact your Intermediary if you have any questions regarding this process.

​

In the case of Registered Shareholders, Optionholders or Warrantholders, as soon as reasonably practical after the Effective Date, which the Parties expect will occur on or about September [18], 2025, assuming due delivery of the required documentation to the Depositary, including the applicable certificates or DRS advices representing the Common Shares and a duly and properly completed Letter of Transmittal, the Depositary will cause the delivery of funds representing a portion of the Consideration to which the Registered Shareholder is entitled by first class mail, at the offices of the Depositary or by wire transfer.

Q:

What is a CVR?

​

A:

Each CVR is a form of contingent consideration entitling the Shareholder to potentially receive a cash payment following the closing of the Transaction for each CVR held. Whether a payment will be made depends on the outcome of certain events that will occur following the closing of the Transaction.

​

For additional information on the CVRs, please see “Risk Factors — Risks Related to CVRs”.

Q:

Are the CVRs transferable?

​

A:

The CVRs are a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement.

​

Q:

How will I receive payment for the CVRs?

​

A:

It is anticipated that a rights agent mutually agreeable to Parent and the Company (the “Rights Agent”) will send each Securityholders at its registered address a check payable for the CVR Consideration amount, (i) with respect to any cash adjustment payment, no later than 30 days following the final determination of such adjustment and (ii) with respect to the Company Litigation, no later than thirty days following the later of (a) the final and non-appealable resolution of any Company Litigation or (b) the date that is eighteen months following the consummation of the Arrangement.

​

Q:

Can I revoke my proxy and voting instructions?

​

A:

Yes. A proxy may be revoked by written notice to the corporate secretary of the Company at any time prior to the voting of the proxy, or by executing a subsequent proxy prior to voting or by attending virtually and voting at the Special Meeting and voting.

​

Please note that if you hold your shares in “street name” and you have instructed a broker, bank or other Intermediary to vote your shares, the above-described options for revoking your voting instructions do

14

 

not apply, and instead you must follow the instructions received from your broker, bank or other Intermediary to revoke your voting instructions.

Q:

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

​

A:

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

​

The Record Date for Securityholders entitled to vote at the Special Meeting is earlier than the date on which the Arrangement will be consummated. So, if you transfer your Common Shares after the Record Date but before the Special Meeting, you will have transferred your right to receive the Consideration in the Arrangement, but retained the right to vote at the Special Meeting.

Q:

Are there risks I should consider in deciding whether to vote for the Arrangement Resolution?

​

A:

Yes. Securityholders should carefully consider the risk factors relating to the Arrangement. Some of these risks include, but are not limited to: (i) there can be no certainty that all conditions precedent to the Arrangement will be satisfied; (ii) the market price of the Common Shares may be materially adversely affected if the Arrangement is not completed; (iii) the Agreement may be terminated in certain circumstances; (iv) the completion of the Arrangement is uncertain and the Company will incur costs even if the Arrangement is not completed, including in certain circumstances, the Termination Payment; (v) directors and officers of the Company have interests in the Arrangement that may be different from those of Securityholders generally; (vi) the Purchaser and the Company may be the targets of legal claims, securities class actions, derivative lawsuits and other claims; (vii) the relative trading price of Common Shares prior to the Effective Date may be volatile; (viii) the Securityholders will no longer have any rights or interest in the Company following the completion of the Arrangement; and (ix) any tax consequences in respect of the Arrangement. See “Risks Related to the Arrangement” in this Circular and Proxy Statement.

​

Q:

What are the U.S. income tax consequences of the Arrangement?

​

A:

For a summary of certain U.S. federal income tax considerations of the Arrangement, see “Certain U.S. Federal Income Tax Considerations of the Arrangement” in this Circular and Proxy Statement. Such summary is not intended to be legal or tax advice to any particular Shareholder. Shareholders should consult their tax and investment advisors with respect to their particular circumstances.

​

Q:

What are the Canadian income tax consequences of the Arrangement?

​

A:

For a summary of certain Canadian federal income tax considerations of the Arrangement, see “Certain Canadian Federal Income Tax Considerations of the Arrangement” in this Circular and Proxy Statement. Such summary is not intended to be legal or tax advice to any particular Shareholder. Shareholders should consult their tax advisors with respect to their particular circumstances.

​

Q:

Am I entitled to Dissent Rights?

​

A:

Only Registered Shareholders as of the Record Date are entitled to dissent from the Arrangement Resolution in the manner provided in Division 2 of Part 8 of the BCBCA as modified by the Plan of Arrangement, the Interim Order, and the Final Order. A Registered Shareholder who wishes to dissent must ensure that: (i) a notice of dissent is received by the Company by mail c/o Blake, Cassels & Graydon LLP, 1133 Melville Street, Suite 3500, The Stack, Vancouver, BC V6E 4E5 attention: Alexandra Luchenko, or by email to alexandra.luchenko@blakes.com by no later than 5:00 p.m. (Pacific Time) on September 8, 2025 (or by 5:00 p.m. (Pacific Time) on the second Business Day immediately preceding the date that any adjourned or postponed Special Meeting is reconvened); and (ii) it otherwise strictly complies with the Dissent Procedures. Failure to do so may result in the loss of any right to dissent. It is strongly suggested that any Registered Shareholder who wishes to dissent seek independent legal advice.

​

Beneficial Shareholders who wish to dissent with respect to their Common Shares should be aware that only Registered Shareholders are entitled to dissent with respect to them. In many cases, Common Shares

15

 

beneficially owned by a holder are registered either (a) in the name of an Intermediary that the Beneficial Shareholder deals with in respect of such Common Shares, such as, among others, banks, trust companies, securities brokers, trustees and other similar entities, or (b) in the name of a depository, such as CDS, of which the Intermediary is a participant. Accordingly, a Beneficial Shareholder will not be entitled to exercise its rights of dissent directly (unless the shares are re-registered in the Beneficial Shareholder’s name). It is strongly suggested that any Beneficial Shareholder who wishes to dissent seek independent legal advice.

Q:

When would a Liquidation be completed?

​

A:

The Company will only proceed with the Liquidation if the Arrangement Resolution is not approved or the Arrangement is otherwise terminated. If the Liquidation is approved at the Special Meeting and the Arrangement is terminated, the Company will, as soon as practicable following the termination of the Arrangement, file a statement of intent to liquidate with the British Columbia Registrar of Companies.

​

Q:

What are the U.S. income tax consequences of the Liquidation?

​

A:

For a summary of certain U.S. federal income tax considerations of the Liquidation, see “Certain U.S. Federal Income Tax Considerations of the Liquidation” in this Circular and Proxy Statement. Such summary is not intended to be legal or tax advice to any particular Shareholder. Shareholders should consult their tax and investment advisors with respect to their particular circumstances.

​

Q:

What are the Canadian income tax consequences of the Liquidation?

​

A:

For a summary of certain Canadian federal income tax considerations of the Liquidation, see “Certain Canadian Federal Income Tax Considerations of the Liquidation” in this Circular and Proxy Statement. Such summary is not intended to be legal or tax advice to any particular Shareholder. Shareholders should consult their tax advisors with respect to their particular circumstances.

​

Q:

How are votes counted?

​

A:

Securityholders may vote “FOR”, “AGAINST” or “ABSTAIN” with respect to the Arrangement Resolution, Shareholders may vote “FOR”, “AGAINST” or “ABSTAIN” with respect to the Compensation Resolution, and Shareholders may vote “FOR”, “AGAINST” or “ABSTAIN” with respect to the Liquidation Resolution and Liquidator Resolution. Abstentions and securities that are not voted will have no effect on the outcome of the vote to approve the Arrangement Resolution, Compensation Resolution, Liquidation Resolution and Liquidator Resolution. If you sign and return your Form of Proxy, but do not mark the boxes showing how you wish to vote on any particular proposal, your Common Shares, Options or Warrants will be voted “FOR” the approval of the Arrangement Resolution, Compensation Resolution, Liquidation Resolution and Liquidator Resolution.

​

Q:

Who will count the votes?

​

A:

A representative of our transfer agent, Computershare, will count the votes and act as scrutineer.

​

Q:

What does the Liquidation entail?

​

A:

The Liquidation provides for the voluntary liquidation, dissolution and winding up of the Company. Pursuant to the Liquidation, the Liquidator would be appointed as the liquidator of the estate and effects of the Company for the purpose of the liquidation of the Company’s business and affairs and distributing its assets to Shareholders, after satisfying all valid creditors’ claims, including any obligations owed to employees, all in accordance with the Liquidation and any order of the Court.

​

Q:

What will happen if the Liquidation Resolution and Liquidator Resolution are not approved by Shareholders?

​

A:

If the Liquidation Resolution and the Liquidator Resolution are not approved and the Arrangement is terminated, the future of the Company will be uncertain, and any realization of value for your Common Shares beyond the consideration received pursuant to the Distribution, if any, will likely be significantly

​

16

 

delayed or you may not realize any value for your Common Shares. If the Liquidation Resolution and the Liquidator Resolution are not approved, the Company may apply to court for an order that a liquidator be appointed and that the company be liquidated, wound up and dissolved.

Q:

Who should I contact if I have further questions?

​

A:

For any further questions in connection with any of the matters set out in this Circular and Proxy Statement, please contact the Chief Financial Officer of the Company 999 West Broadway Street, Suite 720, Vancouver, BC V5Z 1K5, Canada or by phone at 1-778-331-0962.

​

17

 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This Circular and Proxy Statement, and any related oral statements, contains certain information which, as presented, constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian Securities Laws (collectively, “forward-looking statements”). Forward-looking statements include, but are not limited to, statements that relate to future events and often address expected future business and financial performance, containing words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions and include, but are not limited to, statements the regarding the Arrangement; anticipated timing for holding the Special Meeting; the intentions, plans and future actions of the Purchaser and the Company; potential benefits, risks and effects of the Arrangement; our ability to consummate the Arrangement on the terms of the Agreement; the likelihood of the Arrangement being completed; the timing for the completion of the Arrangement; statements made in, and based upon, the opinion of Leerink Partners; receipt of necessary approvals including Court, Securityholder, stock exchange, regulatory and other third-party approvals; de-listing from the Nasdaq and de-registering from the U.S. Exchange Act; the Purchaser’s purposes for the Arrangement; the Purchaser’s position as to fairness of the Arrangement; financial projections and forecasts; funds required to complete the Arrangement; statements relating to the existence and future activities of the Company and the Purchaser following consummation of the Arrangement including the assets, corporate and capital structure, capitalization, operations, and personnel of the Company; the future strategy, structure, and business prospects of the Company; the Company’s ability to conserve cash; and reductions in costs and whether and how long the Company’s existing working capital and cash flows will be sufficient to fund its operations.

In this Circular and Proxy Statement, these forward-looking statements are based on the Company’s current expectations, estimates and projections regarding, among other things, the expected date of closing of the Transaction and the potential benefits thereof, its business and industry, management’s beliefs and certain assumptions made by the Company, all of which are subject to change. Forward-looking statements are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of the Company to control or predict, and which may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied thereby, including the consummation of the Arrangement and the anticipated benefits thereof. Such statements reflect the Company’s current views with respect to future events, are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant medical, scientific, business, economic, competitive, regulatory, political and social uncertainties and contingencies. In making forward-looking statements, the Company may make various material assumptions, including but not limited to (i) the completion of the Arrangement on anticipated terms and timing, including obtaining required shareholder, regulatory and court approvals, and the satisfaction of other conditions to the completion of the Arrangement; (ii) potential litigation relating to the Arrangement that could be instituted by or against the Company, XenoTherapeutics or their respective directors or officers, including the effects of any outcomes related thereto; (iii) the risk that disruptions from the Arrangement will harm the Company’s business, including current plans and operations; (iv) the ability of the Company to retain and hire key personnel; (v) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Arrangement; (vi) continued availability of capital and financing and rating agency actions; (vii) legislative, regulatory and economic developments affecting the Company’s business; (viii) the accuracy of the Company’s financial projections; (ix) general business, market and economic conditions; (x) certain restrictions during the pendency of the Arrangement that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; (xi) unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, pandemics, outbreaks of war or hostilities, as well as the Company’s response to any of the aforementioned factors; (xii) significant transaction costs associated with the Transaction; (xiii) the possibility that the Arrangement may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (xiv) competitive responses to the Arrangement; (xv) the risks and uncertainties pertaining to the Company’s business, including those set forth in the Company’s Annual Report on Form 10-K (“Annual Report”) dated December 17, 2024, under the heading “Risk Factors”, a copy of which is available on the Company’s profile on EDGAR at www.sec.gov and on SEDAR+ at www.sedarplus.ca, and as otherwise disclosed from time to time on the Company’s EDGAR and SEDAR+ profiles; and (xvi) the risk factors

18

 

otherwise described in this Circular and Proxy Statement; and the risks set forth under “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

These risks, as well as other risks associated with the Transaction, are more fully discussed in this Circular and Proxy Statement. While the list of factors presented here is, and the list of factors presented in this Circular and Proxy Statement are, considered representative, no such list should be considered a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material impact on the Company’s financial condition, results of operations, credit rating or liquidity. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as may be required by applicable United States and Canadian securities Laws. Readers are cautioned against attributing undue certainty to forward-looking statements.

PROPOSAL NO. 1 — ARRANGEMENT RESOLUTION

At the Special Meeting, our Securityholders will be asked to consider and, if thought advisable, to pass, with or without variation, the Arrangement Resolution, the full text of which is set forth in Annex D to this Circular and Proxy Statement, approving the Arrangement under Section 288 of the BCBCA involving the Company and the Purchaser, pursuant to which, among other things, the Purchaser will acquire all of the issued and outstanding Common Shares of the Company that it does not already own for (a) cash consideration of approximately US$1.91 per Common Share, provided that such amount shall be reduced by the amount of the Distribution (such amount as finally determined in accordance with the Agreement) and (b) one CVR for each Common Share entitled to a pro rata portion of up to US$2,950,000 less costs and expenses associated with any litigation against the Company and its directors or officers currently active or arising within 18 months following closing of the Arrangement.

Approval of the Arrangement Resolution requires the affirmative vote of not less than (i) 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, (ii) 662∕3% of the votes cast by Securityholders present in person or represented by proxy at the Special Meeting, voting together as a single class, and (iii) a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, excluding for this purpose the votes required to be excluded by MI 61-101, which excludes Common Shares held by related parties that are receiving a “collateral benefit” ​(as defined in MI 61-101) in connection with the transaction.

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

THE ARRANGEMENT

This section of this Circular and Proxy Statement describes the material aspects of the Arrangement. This discussion of the Arrangement is qualified in its entirety by reference to the Arrangement Agreement and the Plan of Arrangement, which are attached to this Circular and Proxy Statement as Annex A and Annex E, respectively, and incorporated into this Circular and Proxy Statement by reference. You should carefully read and consider the entire Agreement and Plan of Arrangement, which are the legal documents that govern the Arrangement, because these documents contain important information about the Arrangement and how it affects you. Additionally, see the section of this Circular and Proxy Statement captioned “The Agreement” for additional and more detailed information regarding the legal documents that govern the Arrangement, including the conditions to completion of the Arrangement and the provisions for terminating or amending the Agreement. In addition, important information about the Company is included in or incorporated by reference into this Circular and Proxy Statement. See the section titled “Where You Can Find More Information.”

The Parties to the Arrangement

ESSA Pharma Inc.

For information about the Company, see “Important Information About the Company — Company Background” beginning on page 96 and “Where You Can Find More Information” beginning on page 124.

19

 

XenoTherapeutics, Inc.

XenoTherapeutics, Inc. is a Massachusetts-based 501(c)(3) research foundation focused on advancing xenotransplantation through scientific research, clinical development, and public education.

Xeno Acquisition Corp.

Xeno Acquisition Corp. is a wholly-owned subsidiary of Parent that has been organized in connection with the Arrangement and has not carried on any activities other than entering into the Agreement and activities in connection therewith.

XOMA Royalty Corporation

XRC is a biotech royalty aggregator. XRC has a sizable portfolio of economic rights to future potential milestone and royalty payments associated with partnered commercial and pre-commercial therapeutic candidates.

Plan of Arrangement

The following summarizes the steps which will occur under the Plan of Arrangement on the Effective Date, if all conditions to the completion of the Arrangement have been satisfied or waived. The following description of steps is qualified in its entirety by reference to the full text of the Plan of Arrangement, attached as Annex E to this Circular and Proxy Statement.

Commencing at the Effective Time, each of the events set out below shall occur and be deemed to occur in the following sequence, without any further Authorization, act or formality, in each case:

(a)

each Warrant outstanding immediately prior to the Effective Time shall, notwithstanding the terms of the warrant certificate, warrant indenture or similar agreement pursuant to which any Warrants were granted or issued, without any further action by or on behalf of the holder thereof, be deemed to be assigned and surrendered by such holder to the Company in exchange for, in respect of each Common Share acquirable upon exercise of the Warrants, (i) an amount in cash from the Company equal to the Cash Amount minus any applicable exercise price, and (ii) one CVR, and such Warrant shall immediately be cancelled;

​

(b)

each Option outstanding immediately prior to the Effective Time (whether vested or unvested) shall, notwithstanding the terms of the Option Plan governing such Option or any award or similar agreement pursuant to which any Options were granted or awarded, as applicable, be deemed to be unconditionally vested exercisable and, without any further action by or on behalf of the holder thereof, shall be deemed to be assigned and surrendered by such holder to the Company in exchange for, in respect of each Option for which the Cash Amount exceeds the applicable exercise price in respect of such Option, (i) an amount in cash from the Company equal to the Cash Amount less the applicable exercise price in respect of such Option, and (ii) one CVR, and such Option shall immediately be cancelled and all of the Company’s obligations with respect to each such Option shall be deemed to be fully satisfied. For greater certainty, where the exercise price of any Option is greater than or equal to the Cash Amount, neither the Company nor the Purchaser shall be obligated to pay the holder of such Option the Consideration or any other amount in respect of such Option, and the Option shall be immediately cancelled without any payment therefor;

​

(c)

(i) each holder of Warrants or Options shall cease to be a holder of such Options or Warrants, (ii) such holder’s name shall be removed from each applicable register, (iii) the Legacy Option Plan and Option Plan and any and all award or similar agreements relating to the Warrants and Options shall be terminated and shall be of no further force and effect, and (iv) such holder shall cease to have any rights as a holder in respect of such Options and Warrants and 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 in the Plan of Arrangement;

​

(d)

each Common Share outstanding immediately prior to the Effective Time held by a Dissenting Holder shall be deemed to have been transferred (free and clear of all Encumbrances), without any

​

20

 

further act or formality by or on behalf of any Dissenting Holder, to the Purchaser, in consideration for a debt claim against the Purchaser for an amount determined under Article 3 of the Plan of Arrangement, and:

i.

such Dissenting Holder shall cease to be the registered holder of such Common Share and to have any rights as a Shareholder other than the right to be paid fair value for such set out in the Plan of Arrangement;

​

ii.

such Dissenting Holder’s name shall be removed as the registered holder of Common Shares from the applicable register of Shareholders maintained by or on behalf of the Company; and

​

iii.

the Purchaser shall be deemed to be the transferee of such Common Shares free and clear of all Encumbrances and shall be entered into the register of the Shareholders maintained by or on behalf of the Company;

​

(e)

each Common Share outstanding immediately prior to the Effective Time (other than a Common Share held by a Dissenting Holder in respect of which Dissent Rights have been validly exercised under the Plan of Arrangement, the Purchaser or any Affiliate of the Purchaser) shall be deemed to be assigned and transferred by the holder thereof to the Purchaser in exchange for the Consideration, and:

​

i.

each registered holder of such Common Shares shall cease to be the registered holder thereof and to have any rights as a Shareholder other than the right to be paid the Consideration pursuant to Section 2.3(e) and in accordance with the Plan of Arrangement;

​

ii.

the name of each such registered holder shall be removed from the register of the Shareholders maintained by or on behalf of the Company; and

​

iii.

the Purchaser shall be deemed to be the transferee of such Common Shares free and clear of all Encumbrances and shall be entered in the register of the Shareholders maintained by or on behalf of the Company.

​

Background of the Arrangement

The following background summarizes the key meetings and events that led to the execution of the Agreement. This background does not purport to catalog every conversation of or among the Transaction Committee, the Board, their representatives or other parties.

The Board, together with its management, regularly evaluated the Company’s strategic direction and ongoing business plans, with a view towards strengthening the Company’s business and enhancing shareholder value. This evaluation took into account several factors, including the financial condition of the Company, the competitive industry in which the Company operates, the development of the Company’s lead product candidate and other considerations. As part of this evaluation, from time to time, the Board and the Company’s management reviewed a variety of potential strategic alternatives, including the continuation of, and potential improvements to, the Company’s current business plans, with the Company remaining an independent entity; capital raising activities; and potential acquisitions, business combinations, partnerships, licenses, collaborations and other financial and strategic transactions, including the potential sale of the Company or certain of its assets. Further, the Company regularly engaged in business development outreach around its lead product candidate, masofaniten (EPI-7386).

ESSA is a clinical stage pharmaceutical company that, prior to the discontinuation of its clinical trials and preclinical and other development programs, had been focused on developing novel and proprietary therapies for the treatment of prostate cancer with an initial focus on patients whose disease was progressing despite treatment with current standard of care therapies, including second-generation antiandrogen drugs such as abiraterone, enzalutamide, apalutamide, and darolutamide. The Company believed its latest series of investigational compounds, including its planned product candidate masofaniten (EPI-7386), had the potential to significantly expand the interval of time in which patients with castration-resistant prostate cancer could benefit from anti-hormone-based therapies. Until October 31, 2024, the Company was running a Phase 2

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clinical trial evaluating in a 2:1 randomization masofaniten (EPI-7386) combined with enzalutamide versus enzalutamide single agent in patients with mCRPC naïve to second-generation antiandrogens (the “Phase 2 Trial”).

On October 18, 2024, the Board held a meeting, also attended by members of management and a representative of Blake, Cassels & Graydon LLP (“Blakes”), the Company’s Canadian counsel. At this meeting, the Board received a preliminary clinical update on the Company’s Phase 2 Trial. Further work was required before the analysis was complete, but the Board discussed the establishment of a transaction committee to review and advise the Board on the strategic alternatives available to the Company, as a contingency, if the final clinical data analysis from the scientific and technical teams did not support the continued development of masofaniten either as a monotherapy or in combination with other agents. Following discussion, the Board resolved to form the Transaction Committee, consisting of directors Franklin Berger, Sandy Zweifach, Richard Glickman and Scott Requadt, each an independent director, to, among other things, review and advise the Board on certain strategic alternatives available to the Company. Franklin Berger and Sandy Zweifach were selected to act as co-chairs of the Transaction Committee. In addition to forming the Transaction Committee, the Board instructed the Company’s management to move as quickly as possible to finalize its analysis of the results of the Company’s Phase 2 Trial.

On October 31, 2024, after completing its analysis of the Phase 2 Trial results, the Board decided to terminate its Phase 2 Trial. This decision, mutually agreed upon by both senior management and the Board, was based on a protocol-specified interim review of the safety, pharmacokinetics and efficacy data, which showed a much higher rate of PSA90 response in patients treated with enzalutamide monotherapy (which is standard of care for this patient population) than was expected based upon historical data. In addition, there was no clear efficacy benefit seen with the combination of masofaniten (EPI-7386) plus enzalutamide compared to enzalutamide single agent. A futility analysis determined a low likelihood of meeting the prespecified primary endpoint of the study.

Later on October 31, 2024, the Board discussed the public company life sciences market generally for masofaniten (EPI-7386). In addition, the Board discussed, among other things, the status and prospects of the Company’s programs, and the Company’s financial prospects in light of the results of the Phase 2 Trial. The Board discussed various potential strategic transactions that may be available to the Company, such as commercial partnerships or, in light of the Company’s cash position and market capitalization, a potential merger or acquisition involving the Company. As part of this discussion, the Board reviewed potential advisors that the Company might engage to assist the Company in identifying potential partners for, and evaluating, such a transaction.

In connection with these events, the Board instructed the Transaction Committee to engage in a comprehensive review of the Company’s strategic options to determine an option that was in the best interests of ESSA while maximizing shareholder value. The strategic options it considered included, but were not limited to, a merger, amalgamation, arrangement, reverse take-over, business combination, asset sale or acquisition, shareholder distribution, wind-down, liquidation and dissolution or other strategic transaction or the continued operation of its business if it elected to seek new product candidates for development. The same day, October 31, 2024, ESSA announced the decision to terminate the Phase 2 Trial and to initiate a strategic process to explore and review a range of strategic options focused on maximizing shareholder value. As part of its efforts to focus its resources, ESSA also announced that the other remaining company-sponsored and investigator-sponsored clinical studies evaluating masofaniten (EPI-7386) either as a monotherapy or in combination with other agents would be terminated. ESSA also decided to withdraw its Investigational New Drug Application (“IND”) and Clinical Trial Agreements (“CTAs”) that have been submitted to date.

The first meeting of the Transaction Committee was held on November 7, 2024, and was also attended by members of management and representatives of Blakes. At this meeting, each of the Transaction Committee members confirmed that they were willing and able to act as members of the Transaction Committee and each accepted their appointment. Additionally, Franklin Berger and Sandy Zweifach each accepted their appointment as co-chairs of the Transaction Committee. The Transaction Committee considered the need for a financial advisor to assist the Transaction Committee in discharging its mandate, and agreed to consider the available options with management and make a decision on which financial advisor to retain at a subsequent Transaction Committee meeting. Following a discussion of the respective relationships of Blakes and Skadden, the Transaction Committee approved the engagement of Blakes and Skadden, Arps, Slate, Meagher &

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Flom LLP (“Skadden”), the Company’s U.S. counsel as the Company’s legal advisors in connection with potential strategic transactions. The Transaction Committee also approved and adopted a mandate for the Transaction Committee and recommended that the mandate be approved and ratified by the Board. At this meeting, the Transaction Committee also considered a letter that had been received from one of the Company’s large Shareholders urging the Company to consider dissolving the Company and returning cash to Shareholders.

Following the formation of the Transaction Committee, in addition to the meetings held by the Transaction Committee as further described below, the Company’s management regularly provided updates to the Transaction Committee regarding potential strategic transactions and the status of the various discussions between the Company and potential counterparties, and the Transaction Committee provided input to the Company’s management.

In addition, the Board was regularly informed as to the status of the Company’s efforts to wind-down clinical programs and cease pre-clinical work in an effort to preserve cash, including workforce and other cost reductions, which initiatives were further described in the Company’s annual and interim public filings on December 17, 2024, February 11, 2025, May 8, 2025[ and August [   •   ], 2025].

On November 10, 2024, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes and Skadden to discuss the filing by Tang Capital Management, LLC (“Tang Capital”) of a Schedule 13D indicating that Tang Capital had acquired 9.7% of the Common Shares of the Company. The Transaction Committee discussed how the Company could assess and respond to any strategic alternatives that may be raised by Shareholders. The Transaction Committee instructed management to enter into discussions with Tang Capital to understand their potential interest in a transaction with the Company.

On November 11 and 12, 2024, management contacted and met with Tang Capital to discuss their potential interest in a transaction.

On November 13, 2024, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes and Skadden. The Transaction Committee received an update on discussions and communications among Tang Capital and management that occurred since the last Transaction Committee meeting. The Transaction Committee also discussed their prior determination that, in order to discharge their mandate, it would be advisable to seek advice from a financial advisor on the strategic alternatives available to the Company. The Transaction Committee discussed the available advisors and the relative merits of each proposed candidate and determined that it was in the best interest of the Company to retain Leerink Partners as financial advisor to the Company. The Transaction Committee instructed management to enter into discussions with Leerink Partners, and to engage Leerink Partners as financial advisor to the Company if reasonable terms could be agreed to.

In connection with its authorization of the negotiation of an engagement letter with Leerink Partners, on November 22, 2024, the Company entered into an engagement letter with Leerink Partners, pursuant to which Leerink Partners agreed to act as the Company’s financial advisor in connection with various possible strategic transactions involving the Company, including the sale of the Company or its assets whether by merger, consolidation or other business combination, stock sale, asset sale, exchange or tender offer, a reorganization, recapitalization, the formation of a joint venture, partnership or similar entity, or otherwise; any so-called “reverse merger” transaction in which the Company effects a business combination with another entity and a result of which, the Company remains a publicly traded entity with the equity holders of the other entity owning a majority of the outstanding equity of the ongoing public entity; or a liquidation or winding down of the Company. The Board selected Leerink Partners to be its financial advisor in this capacity based upon, among other reasons, Leerink Partners’ knowledge of the Company, its reputation, its expertise in advising companies in connection with similar strategic transactions and its familiarity with the industry in which the Company operates.

Later on November 22, 2024, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners where it received an update from management on inbound communications from Shareholders advocating for various strategic alternatives such Shareholders believed the Company should pursue. At the meeting, the Transaction Committee received

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advice from Leerink Partners on market conditions, potential transactions that may be available and the time such transactions may take to complete. The Transaction Committee instructed management and Leerink Partners to prepare a list of potential merger targets across a wide range of areas of focus so the Company could determine what value could be delivered to Shareholders through a transaction. The Transaction Committee also discussed recent acquisitions of its shares in the marketplace and a draft shareholder rights plan (“SRP”) that had been prepared by the Company’s counsel at the request of management and provided to the Transaction Committee prior to the meeting for consideration. The Transaction Committee determined that the question of whether an SRP should be adopted would be considered at a subsequent meeting of the Transaction Committee. Management also provided an update to the Transaction Committee of the current cash position of the Company and its anticipated expenditures.

In connection with its engagement by the Company, between November of 2024 and April of 2025, at the direction of the Transaction Committee, Leerink Partners and the Company conducted a series of outreach campaigns to various private and public companies within the biotechnology and pharmaceutical industries to gauge such parties’ interest in a potential strategic transaction with the Company. As a result of this campaign, during this time, representatives of Leerink Partners and the Company reached out to, or received inbound requests from, a total of 77 parties to explore the possibility of strategic transactions with the Company. In evaluating the inbound requests, the Company received information from Leerink Partners on the various counterparties, weighed the relative merits of each request, and decided to proceed with the proposals that would most likely result in a successful transaction. Of these 77 parties, the Company sent process letters to and entered into confidentiality agreements with 52 parties and received preliminary non-binding indications of interest from 29 parties. Among these 29 parties, 14 parties were invited to present their proposals to the Company. Of the 14 parties that presented, 7 were selected to advance to further diligence and discussions. Each of the 7 selected parties were private companies or were not U.S. publicly listed companies (“private companies”) that expressed interest in exploring a transaction in which the shareholders of the private company would exchange their shares for new shares of the Company, resulting in the shareholders of the private company owning a majority of the Company, and with value being ascribed to the Company’s cash and its public company listing in the respective valuations of the two (2) companies (such a transaction, a “reverse merger transaction”). In addition, three (3) parties, including Party B, expressed preliminary interest in exploring an acquisition of the Company in which no upfront value would be ascribed to the Company’s assets, such as its public company listing, other than its cash (such a transaction, a “financial buyer transaction”).

During this time, members of management and representatives of Blakes, Skadden and Leerink Partners met regularly with the Transaction Committee to receive guidance and direction on the outreach process and with the Board to provide them with periodic updates. Throughout, management kept the Transaction Committee informed of the cash position of the Company.

By March of 2025, the Company and representatives of Leerink Partners had, at the direction of the Transaction Committee, held various meetings and management presentations with certain of the parties that had submitted proposals, or expressed an interest in submitting a proposal, with respect to a transaction. In reviewing proposals for reverse merger transactions, the Transaction Committee, evaluated (and compared as between proposals), among other things, (i) the attributes of the potential counterparty, including the strength of its team and assets and near-term value creation with combined cash, (ii) the relative valuations of the Company and such potential counterparty and (iii) the likelihood of, and anticipated speed to, closing the proposed transaction. The proposals for reverse merger transactions and acquisition transactions received by the Company included valuations for the Company ranging from $101 million to $137 million.

One such party, Party A, a private company (which had, on December 21, 2024, entered into a confidentiality agreement with the Company, which included customary standstill provisions), submitted a non-binding indication of interest on December 5, 2025, with respect to a reverse merger transaction. The non-binding indication of interest from Party A valued the Company at $116 million, consisting of assumed net cash at closing equal to $100 million, plus an additional amount equal to $16 million for the value of the Company’s public listing, personnel and infrastructure and provided for the equity holders of the Company to own approximately 21% of the combined company (before giving effect to a private investment in public equity (“PIPE”) transaction that would further dilute the holdings of both the Shareholders and Party A’s current shareholders).

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Party A submitted a revised proposal to the Company on January 29, 2025 that valued the Company at $125 million and contained an implied ownership split for the equity holders of the Company to own 28% of the combined company after giving effect to a PIPE transaction.

On February 22, 2025, the Company submitted a counterproposal to Party A that valued the Company at $110 million but provided for the equity holders of the Company to own approximately 33% of the combined company after giving effect to a PIPE transaction.

On March 7, 2025, Party A submitted a counterproposal to the Company that provided for the equity holders of the Company to own approximately 31% of the combined company after giving effect to a PIPE transaction.

On March 11, 2025, the Transaction Committee held a meeting that was also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. At this meeting, a representative of Blakes reviewed with the Transaction Committee its fiduciary duties, and the Transaction Committee reviewed and discussed, with the advice of management and its advisors, the Company’s potential strategic alternatives, including the non-binding indications of interest the Company had received from Party A and the other counterparties to date. The Transaction Committee discussed the business terms of the transaction with Leerink Partners and management, and the Transaction Committee was unanimously in favour of recommending to the Board that the Company move forward with exclusively negotiating a transaction with Party A to seek an improvement of the present terms under discussion. The terms of a potential exclusivity agreement, the process for negotiating an agreement and the process for Party A to pursue the PIPE transaction contemplated by its term sheet were discussed by the Transaction Committee with its advisors. The Transaction Committee directed management and Leerink Partners to continue to engage with certain other parties interested in a strategic transaction in order to keep lines of communication open with them should the transaction with Party A not proceed.

On March 14, 2025, the Board met to receive an update on the strategic transaction process from the Transaction Committee. The Transaction Committee reported on the status of the process, the number of potential counterparties the Company had engaged with, the proposals received and the process through which the Transaction Committee had determined that the proposal from Party A represented the most attractive proposal the Company had received and their recommendation to proceed with exclusive negotiations with Party A. After receiving the update, the Board unanimously accepted the recommendation and authorized the Transaction Committee and management, with the assistance and advice of financial and legal advisors, to negotiate definitive agreements for a business combination with Party A substantially on the terms as were presented to the Board. In order to incent Party A to dedicate the resources to proceeding with negotiations, the Transaction Committee recommended that the Company be authorized to enter into a 30-day exclusivity agreement with Party A. The Board accepted the recommendation and authorized the Company to offer a 30-day exclusivity period to Party A.

Between March 14 and March 21, 2025, drafts of an exclusivity agreement were exchanged between counsel for the Company and Party A.

On March 21, 2025, the Transaction Committee held a meeting, also attended by members of management, representatives of Blakes and Skadden and, for part of the meeting, representatives of Leerink Partners. At this meeting, the Transaction Committee was provided an update on the negotiation of the exclusivity agreement. A representative of Leerink Partners confirmed that they had been informed that the board of Party A had approved entering into a 30-day exclusivity agreement. Leerink Partners also presented a calendar setting out the steps needed to complete negotiations with Party A, consummate a PIPE investment, prepare securities filings, undergo SEC review, secure approval by the Shareholders and close the transaction. Leerink Partners discussed how Party A was anticipating approaching the major Shareholders to assess their interest in participating in the PIPE investment and that confidentiality agreements would be required with those parties before such discussions could proceed. Management described a conversation that had occurred since the last meeting with an existing institutional investor in the Company who was seeking information on whether the Company would be distributing cash or otherwise taking action. Management had offered to enter into a confidentiality agreement with this Shareholder, which would include a customary standstill provision so as to permit such a discussion, and this Shareholder was considering the offer.

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On March 25, 2025, the Transaction Committee met and were provided with an update from management and Leerink Partners on the ongoing negotiations with Party A. Party A had requested a carve-out from the exclusivity agreement to permit it to sell a non-core asset during the exclusivity period. The Transaction Committee, after discussion with its advisors, approved the revised exclusivity agreement. The Transaction Committee also discussed with Leerink Partners the plan for the execution of the PIPE transaction and the timing for binding commitments for the PIPE. A successful PIPE transaction was anticipated by the Transaction Committee and Leerink Partners to be a key condition for Party A to proceed with a reverse merger transaction.

Later on March 25, 2025, the Company and Party A entered into an exclusivity agreement providing for a 30-day exclusivity period.

In late March and early April, the Company and Party A and their respective representatives held several discussions regarding the structure of the transaction and various due diligence meetings.

On April 1, 2025, the Transaction Committee met to receive an update from management and Leerink Partners on communications with Shareholders, to discuss planning for the PIPE transaction and to receive an update on negotiations with Party A from Blakes and Skadden.

On April 7, 2025, management of the Company met with the Board to discuss the composition of the board of the combined company following a potential transaction with Party A.

On April 8, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. At the meeting, the Transaction Committee provided management an update on the diligence activities of Party A and the Company. At the meeting, Leerink Partners also provided an update on communications it had received from Shareholders. Three large Shareholders had contacted Leerink Partners in the prior days to indicate a preference to receive a return of capital from the Company as opposed to pursuing a reverse merger transaction. Management was also contacted by another Shareholder that expressed the same sentiment. The Transaction Committee was informed by Leerink Partners that there would be an opportunity to wall-cross each of these Shareholders prior to a definitive agreement being entered into so as to gauge the interest of these Shareholders in participating in the PIPE Investment, once they agreed to a confidentiality agreement.

On April 15, 2025, Soleus Capital Management, L.P. (“Soleus Capital”), one of the Company’s largest Shareholders filed a Schedule 13D filing indicating that, together with its affiliates, Soleus Capital held approximately 5.1% of the Common Shares. That filing also contained a letter that Soleus Capital had sent to the Board. The letter expressed Soleus Capital’s belief that “… it is in shareholders’ best interest for the Company to wind down operations and return remaining cash to shareholders.” The Transaction Committee also discussed a communication received from Party B on April 9 indicating it remained interested in pursuing a potential transaction with the Company.

Also on April 15, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. Management discussed the letter received from Soleus Capital earlier that day, along with further inbound calls from other investors, including some that had been wall-crossed to determine whether they would be willing to participate in the PIPE transaction. Those Shareholders generally expressed a preference for a transaction that would return funds from the Company’s treasury to Shareholders, as opposed to pursuing a reverse merger transaction with a company that would use the treasury to fund its operations, such as the potential transaction with Party A. However, some wall-crossed investors had not completed their diligence on Party A and at this time had not expressed a preference.

On April 17, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. Management and Leerink Partners informed the Transaction Committee that further Shareholder feedback had been received and it was consistent with the feedback provided earlier in the week that those Shareholders strongly preferred a transaction that returned funds from the Company’s treasury to Shareholders as opposed to pursuing a reverse merger transaction with Party A, and indicated they would be unlikely to support any reverse merger transaction. It also had become apparent, in the opinion of the Transaction Committee after discussions with representatives of Blakes, Skadden and Leerink Partners, that, without the support of the Company’s large investors, it was increasingly

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unlikely that either Shareholder approval for a business combination or the PIPE transaction, which was a condition to the transaction with Party A, would be obtained. After discussion with management and its advisors, and considering the best interests of the Company and the interests of its Shareholders and other stakeholders, the Transaction Committee unanimously concluded that without Shareholder support it would not be appropriate or advisable to continue to negotiate a potential transaction with Party A. The Transaction Committee instructed Leerink Partners to approach Party A and request a termination of the exclusivity agreement.

Also at the April 17, 2025 meeting, the Transaction Committee discussed with management the cash position of the Company and the value that could be returned to Shareholders, after the impact on the cash position of paying out all liabilities of the Company. The Transaction Committee discussed with management and its advisers the options available to return funds to Shareholders, including (i) an acquisition by a financial party that will use the treasury, less some amount to be negotiated, to buy back shares from Shareholders and then liquidate the Company, (ii) a dividend or share buyback by the Company followed by a liquidation of the Company, or (iii) a combination of the two. The Transaction Committee discussed the options and determined that no decision on potential options needed to be made at this date, but instructed its financial advisors to, once exclusivity with Party A was terminated, seek offers from potential financial parties that may wish to engage in a transaction with the Company which would have the effect of returning funds to Shareholders and liquidating the Company.

On April 18, 2025, Party A provided written acknowledgment that the Company was no longer willing to pursue a reverse merger transaction and agreed that actions taken to pursue a wind down of its operations and distribution of its remaining capital to its Shareholders would not breach the terms of the March 25, 2025 exclusivity agreement.

In the period from April 18 to April 21, 2025, at the direction of the Board, members of management and representatives of Leerink Partners contacted three parties, including Party B and Party C to gauge interest in acquiring the Company through a cash acquisition, and XOMA Royalty Corporation (“XRC”).

On April 21, 2025, XRC provided a non-binding indication of interest for the acquisition of the Company as part of a liquidation process. The proposal indicated that XRC, or an affiliate, would be willing to acquire the Company for net cash at closing, minus $4,900,000, plus a contingent value right (“CVR”) for 90% of the near-term net proceeds from the sale of the Company’s legacy assets. The proposal assumed that the Company would have cash at closing of $95,000,000, net of all transaction expenses, wind-down expenses and legacy liabilities, representing a 95% / 5% split in favour of the Shareholders. Any net cash at closing greater than $95,000,000, would go to the Shareholders. In addition, any post-merger liabilities that are resolved favorably would be distributed to the Shareholders through the CVR.

On April 22, 2025, the Company and XRC executed a confidentiality agreement in the form previously provided by Leerink Partners to XRC (which included customary standstill provisions) and XRC and certain representatives of XRC’s external counsel, Gibson Dunn & Crutcher LLP (“Gibson Dunn”) and Stikeman Elliott LLP (“Stikeman”) were provided with access to the Company’s virtual data room. Further, representatives of XRC met with senior members of the Company’s management, and Leerink Partners to discuss certain due diligence topics, including the assumptions reflected in, and details with regard to, the Company’s net cash forecast and the wind-down costs related to the Company’s clinical programs. Additional due diligence review of non-public information regarding the Company was performed and discussions of this information with management occurred on an ongoing basis until execution of the Agreement.

Later on April 22, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. The non-binding indication of interest from XRC was discussed, as well as a similar proposal that had been received from Party B. Party B’s proposal indicated that Party B would be willing to acquire the Company for net cash at closing, minus $5,000,000, and assumed that the Company would have cash at closing of $95,000,000, net of transaction expenses and legacy liabilities. XRC’s track record of successfully completing transactions of this type was discussed. Leerink Partners also noted that Party C was conducting diligence and could also make a proposal. The Transaction Committee instructed members of management and representatives of Blakes, Skadden and Leerink Partners to work with all three parties to move the proposals forward so final terms could be received from all potential counterparties and compared. The Transaction Committee also discussed the alternative

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path of a Company-led dividend, distribution or share buyback followed by a liquidation proceeding without involving a third party with representatives of Blakes, Skadden and Leerink Partners. The Transaction Committee discussed the two paths and decided to continue to compare the proposals from potential financial buyers against the base-case of a Company-led process as the proposals moved toward final terms. As part of this discussion, representatives of Blakes reviewed with the Transaction Committee members their fiduciary duties.

On April 24, 2025, BML Capital Management, LLC (“BML”), one of the Company’s largest Shareholders filed a Schedule 13D filing indicating that, together with its affiliates, BML held approximately 9.5% of the Common Shares. That filing also contained a letter that BML had sent to the Board. The letter stated: “BML agrees with recent public suggestions by other large shareholders that a return of the Company’s capital to shareholders via liquidation is a sensible course of action in today’s difficult market conditions. As such, BML would be supportive of such an action, or, in the absence of this, a similar transaction that would quickly return the majority of the Company’s cash to shareholders, such as a sale of the Company or a large special dividend.”

On April 29, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. Leerink Partners and management updated the Transaction Committee on discussions with XRC. Due to the Shareholder litigation against the Company alleging that the Company made material misstatements and/or omissions in the Company’s public statement with respect to its then-ongoing clinical trials of masofaniten, filed on January 24, 2025, XRC was now proposing that a holdback for any potential litigation expense would be added to their proposal and that a revised indication of interest would be provided. The Transaction Committee also discussed with its advisors the two other potential counterparties that had been discussing winding-up transactions with the Company. Management informed the Transaction Committee that Party C had indicated that it would not be submitting a proposal but that it was supportive of the Company proceeding with a liquidation transaction with an alternate party. The Transaction Committee also discussed the revised proposal received from Party B, pursuant to which Party B would acquire the Company for net cash at closing, minus $3,750,000, and assumed that the Company would have cash at closing of $95,000,000, net of transaction expenses and legacy liabilities. Party B’s revised proposal also included a cash CVR that would provide Shareholders with 100% of the cash in excess of the $95,000,000 target cash following closing and an intellectual property CVR that would provide Shareholders with 90% of the net proceeds payable from any disposition of the Company’s programs within one year of closing and received within five years of closing. After discussion with Leerink Partners and management, the Transaction Committee determined that XRC’s proposal was preferable to the Party B proposal from a deal certainty perspective given XRC’s greater experience with this type of liquidation transaction and the similar financial terms. The Transaction Committee instructed Leerink Partners to communicate this determination to Party B.

On May 6, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. Leerink Partners provided a comparison to the Transaction Committee of XRC and Party B proposals. The Transaction Committee set May 8, 2025 as the date by which final proposals from XRC and Party B would be sought and asked Leerink Partners to communicate that date to XRC and Party B.

On May 8, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners and discussed the potential transactions with XRC and Party B. After considering their fiduciary duties and the relative merits of the potential transactions, the Transaction Committee determined to concentrate on negotiating a transaction with XRC, but to continue to engage with Party B and allow them to conduct due diligence on the Company. Representatives of Blakes and Skadden gave the Transaction Committee an update on the status of drafts of the agreements and alternate structures that were under discussion with counsel to XRC. The Transaction Committee instructed Blakes and Skadden to convey to XRC’s counsel the Transaction Committee’s strong preference for a transaction that maximized the speed with which cash would be distributed to the Shareholders.

On May 13, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. Management and Leerink Partners updated the Transaction Committee on ongoing negotiations between the Company and XRC, as well as the due diligence activities of Party B. Representatives of Blakes and Skadden updated the Transaction Committee on the

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structure of the proposed transaction with XRC and that XRC was not willing to conduct the offer by way of take-over bid / tender offer, which may have had some timing advantages, due to Canadian securities law requirements respecting the length of time capital would have to be committed to the transaction unacceptably increasing the cost to XRC. As an alternative, the parties worked on structuring a transaction that would proceed by way of a plan of arrangement under British Columbia corporate law with a distribution of capital occurring as soon as practicable after the transaction was agreed to.

On May 20, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. Blakes and Skadden updated the Transaction Committee on the negotiation of the definitive agreements for a transaction with XRC and the ongoing structuring and tax-planning work related to structuring a distribution of cash to the Shareholders.

On May 23, 2025, a draft of the Agreement was received from counsel to XRC reflecting XRC’s preferred structure for the transaction. The draft definitive agreement did not include a price per share for the Common Shares to be acquired in the transaction, but indicated that the price per share would consist of (i) a fixed cash amount based on the minimum net cash closing condition (which in XRC’s draft was $95 million), minus a $4,250,000 fee to XRC, minus a contingency reserve of $4,000,000, with any excess cash from the contingent reserve to be distributed post-closing through a CVR, plus (ii) one (1) non-tradeable contingent value right. The draft agreement also did not provide the Company credit for certain prepaids, deposits and receivables in the definition of net cash. The draft Agreement contemplated that the Company would be permitted to make an interim distribution to Shareholders between signing and closing so long as Closing Net Cash (as defined therein) of at least $10,000,000 was retained and it proposed that the Company’s termination fee be set at $3,000,000.

On May 27, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners to discuss the draft agreement. The Transaction Committee discussed the terms of the draft Agreement with Skadden and Blakes, and discussed with Leerink Partners the potential market reaction to XRC’s proposal.

On May 29, 2025, a revised draft of the Agreement reflecting the Transaction Committee’s input was provided to counsel for XRC. In that draft, among other changes, the treatment of transaction expenses and the proposed calculation of Closing Net Cash were modified and the proposed termination fee was lowered to $2,375,000.

On May 30, 2025 the Board held a meeting, also attended by the Transaction Committee and members of management and representatives of Blakes, Skadden and Leerink Partners to receive an update on discussions with XRC and to discuss the draft definitive agreements.

On June 3, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners to discuss the status of the draft agreements. Blakes and Skadden indicated that a revised set of definitive agreements, including an initial draft of CVR Agreement was anticipated shortly.

On June 6, 2025, representatives of Blakes and Skadden received a revised draft of the Agreement and an initial draft of the form of the CVR Agreement from representatives of Gibson Dunn. Among other changes to the Agreement, the termination fee was raised to $2,500,000. The draft CVR Agreement provided among other things, that the former Securityholders of the Company would receive up to (i) 90% of the net proceeds received within three (3) years from the closing under the Agreement from dispositions of the Company’s legacy assets pursuant to agreements entered into within 180 days of the closing under the Agreement, (ii) $500,000 less any additional liabilities and expenses that are not deducted from closing net cash at closing under the Arrangement and (iii) $2,750,000 less legal and certain other expenses incurred by the Company following the closing of the transaction. If the Company’s legal expenses exceeded $3,500,000, no amount would be payable to CVR holders in respect of excess litigation cash.

On June 10, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners to discuss the status of the draft agreements and the timeline for finalizing agreements. The Transaction Committee was informed that XRC was considering the structuring of the transaction and may have additional structuring requests which had not yet been received. Leerink Partners updated the Transaction Committee on negotiations of the financial aspects of the

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transaction and indicated that XRC had agreed to a reduction of its retained amount from $4,250,000 to $4,000,000. Later on June 10, 2025, revisions to the Agreement were sent by Blakes and Skadden to Gibson Dunn.

From June 11 to June 16, 2025, due diligence discussions occurred between management, XRC and their respective counsel respecting the Company.

On June 16, the Company provided XRC and its legal counsel an updated disclosure schedule and a revised cash flow forecast.

On June 17, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners to discuss the status of the draft agreements and the timeline for finalizing agreements. Leerink Partners informed the Transaction Committee that XRC had advised that it would provide an update on its due diligence investigations by June 18, 2025.

On June 18, 2025, a representative of Blakes sent to representatives of Gibson Dunn an initial draft of the form of Voting and Support Agreement that XRC expected the Company’s directors and officers to enter into in connection with the signing of the Agreement. This draft Voting and Support Agreement provided that the obligation of the signatories to vote their Securities in favour of the Arrangement would expire in the event that the Company terminated the definitive agreement in accordance with its terms. On June 19, a representative of Stikeman provided comments to the form of Voting and Support Agreement. That draft was subsequently confirmed to be final.

Also on June 19, 2025, representatives of management, Leerink Partners and XRC met to discuss the outstanding diligence requests respecting the Company and the remaining open commercial terms. That day, representatives of Gibson Dunn sent revisions to the Agreement and the form of CVR Agreement to Blakes and Skadden. Among other changes, certain changes were made to reflect treatment of post-closing expenses.

On June 23, 2025, after discussions with representatives of management and Leerink Partners, a revised version of the Agreement and the CVR Agreement were sent to representatives of Gibson Dunn by Blakes and Skadden. Among other changes, the calculation of Closing Transaction Expenses was revised and changes were made related to the treatment of employee benefit plans in the Agreement and the calculation of expenses under the CVR Agreement.

On June 30, 2025, a representative of management was informed by a representative of XRC that XRC wished to make a structural change to the Agreement for tax and reporting purposes, whereby a third party that had an affiliation with XRC’s CEO, Parent and Purchaser, would become the acquiring party in the transaction. The acquisition would remain fully backstopped by XRC and as such the credit and deal risk to the Company was intended to be unaffected by this change. Parent would also pay XRC a $3,000,000 fee in exchange for services rendered in identifying, referring and introducing the Company to Parent following closing of the Arrangement.

On July 3, 2025, a representative of Gibson Dunn provided revised versions of the Agreement and the CVR Agreement to representatives of Blakes and Skadden for review. Among other changes, the drafts were revised so that the Purchaser became the acquiring party under the transaction and added a guarantee by XRC of all of Parent’s and Purchaser’s obligations under the Agreement and the CVR Agreement.

Between July 4, 2025 and July 13, 2025, representatives of Gibson Dunn and representatives of Blakes and Skadden exchanged drafts of the Agreement and the CVR Agreement and, at the direction of the Transaction Committee, representatives of the Company and representatives of XRC agreed on final forms of the definitive documents for the transaction. During this period, the parties agreed to increase the litigation reserve from $2,750,000 to $2,800,000 to account for any expenses that may be incurred by the CVR Committee in discharging its duties under the CVR Agreement. The final Agreement provided that the Shareholders will receive a cash payment per Common Share that will be determined based upon the Company’s cash balance immediately prior to the closing of the transaction after deducting certain transaction costs, a reserve for liabilities and legal expenses, and a transaction fee to Purchaser of $4,000,000. In addition, pursuant to the Agreement, each Shareholder will also receive one non-transferable CVR for each Common Share that will entitle the holder to receive a pro rata portion of up to (i) $150,000 less additional liabilities and expenses of the Company that are not deducted from the Cash Amount at closing of the transaction, if any

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and (ii) $2,800,000 less legal and certain other expenses incurred by the Company following the closing of the transaction. Pursuant to the terms of the Agreement, and following receipt of an interim order from the Supreme Court of British Columbia, the Company was also permitted to make the Distribution to the Shareholders prior to the closing of the transaction. The Distribution, if authorized, and the cash payable upon closing of the transaction was at the time of execution estimated to be approximately $1.91 per Common Share, exclusive of payments received pursuant to the CVR Agreement.

On July 8, 2025, the Transaction Committee held a meeting, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners to discuss the status of the draft agreements and the timeline for finalizing agreements. Representatives of Blakes and Skadden discussed the proposed changes to the structure of the transaction with the Transaction Committee. A commercial point that remained outstanding in the Agreement was the amount of the legacy liability reserve that had been added to the CVR Agreement. The Purchaser and XRC were proposing that the amount be $500,000. The Transaction Committee instructed Leerink Partners to propose to the Purchaser and XRC that the legacy liability reserve be removed. Leerink Partners made that proposal during the meeting by electronic communication to XRC and a counter-proposal of $150,000 was received from XRC and Purchaser. The Transaction Committee instructed Blakes and Skadden to make that change to the CVR Agreement.

On July 13, 2025, the Transaction Committee held a meeting, also attended by the other members of the Board, members of management and representatives of Blakes, Skadden and Leerink Partners. Representatives of Leerink Partners, at the request of the Transaction Committee, reviewed with the Transaction Committee Leerink Partners’ financial analysis of the transaction, and rendered to the Transaction Committee an oral opinion, subsequently confirmed by delivery of a written opinion dated July 13, 2025, to the effect that, as of such date and based upon and subject to the various assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the Cash Amount proposed to be paid to the Shareholders pursuant to the terms of the Arrangement was fair, from a financial point of view, to such holders. For a detailed discussion of the opinion of Leerink Partners, please see Item — under the heading “The Arrangement — Opinion of Leerink Partners” The written opinion of Leerink Partners is attached to this Circular and Proxy Statement as Annex B. Representatives of Blakes then discussed the fiduciary duties of directors in connection with evaluating the Company’s strategic alternatives and discussed the material terms in the Agreement and the CVR Agreement with the members of the Transaction Committee and the other directors of the Company. Following additional discussion and consideration of the Agreement and the CVR Agreement (including the factors described below under the heading “Reasons for the Arrangement”), the Transaction Committee unanimously and after careful consideration, including thorough consideration of (i) the process undertaken by the Company, over several months, to explore strategic alternatives to maximize Shareholder value; (ii) the strategic alternatives and options available to the Company, including the prospects of the Company on a standalone basis and the expected return to Securityholders if the Company were to be liquidated and the Company’s conclusion that none of the potential parties contacted during the Company’s process to explore strategic alternatives offered a transaction that the Company considered more advantageous to Securityholders than the Arrangement; (iii) the terms and conditions of the Agreement; (iv) the benefits and risks associated with the Arrangement; (v) the impact of the Arrangement on the Shareholders and other stakeholders of the Company; (vi) advice from management and its legal and financial advisors; and (vii) the opinion of Leerink Partners dated July 13, 2025 that, as of such date and based upon and subject to the various assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the Cash Amount to be received by the Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders, the Transaction Committee unanimously determined that the Consideration to be received by the Securityholders pursuant to the Arrangement is fair, from a financial point of view, to the Securityholders, that the Arrangement is in the best interests of the Company, and unanimously recommended to the Board that it approve the Agreement and recommend that the Securityholders vote in favour of the Arrangement Resolution.

Immediately after the Transaction Committee meeting on July 13, 2025, the Board held a meeting attended by all members of the Board, also attended by members of management and representatives of Blakes, Skadden and Leerink Partners. David Parkinson declared that he would be receiving a collateral benefit in the Transaction within the meaning of Multilateral Instrument 61-101 and recused himself from the meeting. Following additional discussion and consideration of the transaction and the materials that had

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previously been circulated to the Board (including the factors described below under the heading “Reasons for Arrangement”), all disinterested members of the Board unanimously, after taking into consideration, among other things, the factors enumerated in the preceding paragraph and the unanimous recommendation of the Transaction Committee, concluded that the Arrangement is in the best interests of the Company and approved the Arrangement and authorized its submission to the Securityholders.

Later, on the evening of July 13, 2025, following the Board’s approval of the Agreement (including the form of the CVR Agreement), and the transactions, the Company, Parent and Purchaser executed and delivered the Agreement (which included as an exhibit the form of the CVR Agreement).

On July 14, 2025, XRC and XenoTherapeutics executed a letter agreement (the “Arranger Letter Agreement”) setting forth the commitment of XRC to extend to XenoTherapeutics a short-term senior unsecured term loan facility in the aggregate amount sufficient for XenoTherapeutics to fulfil its obligations under the Agreement and Plan of Arrangement. The Arranger Letter Agreement provides a fee to XRC of $3,000,000 in exchange for services rendered in identifying, referring, or introducing prospective targets culminating in a successful transaction.

Before the opening of trading on the U.S. stock exchanges on July 14, 2025, the Company issued a press release announcing the execution of the Agreement.

Recommendation of the Transaction Committee

The Transaction Committee, with the advice and assistance of its independent legal and financial advisors, evaluated the Arrangement and the terms and conditions of the Agreement. At a meeting held on July 13, 2025, the Transaction Committee unanimously determined that the Consideration to be received by the Securityholders pursuant to the Arrangement is fair, from a financial point of view, to the Securityholders and that the Arrangement is in the best interests of the Company. The Transaction Committee unanimously recommended that the Board (i) approve the Agreement; and (ii) recommend that the Securityholders vote “FOR” the Arrangement Resolution.

Reasons for the Arrangement

In evaluating the Arrangement, the Agreement, and the other transactions and agreements contemplated thereby, the Transaction Committee and the Board consulted with legal and financial advisors, consulted with the Company’s management and considered a number of factors, including, but not limited to, the following material factors (not necessarily in order of relative importance):

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Certainty of Value — The (i) the Distribution and the Cash Amount provide certain and immediate value and liquidity to the Securityholders for their Common Shares and (ii) the CVR may provide additional value and liquidity to the Securityholders for their Common Shares, especially when viewed against the internal and external risks and uncertainties associated with macroeconomic conditions, including the current state of the U.S. and global economies, and the potential impact of such risks and uncertainties on the Company’s projected cash runway the trading price of the Common Shares and the potential for an alternative strategic transaction.

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Accelerating and Maximizing Cash Payment — In furtherance of the Discontinuance, the Arrangement is expected to maximize the amount of cash that will be paid to Securityholders and to provide Securityholders with cash sooner than would be the case without the Arrangement. Pursuant to the terms of the Arrangement, the Company is also permitted to complete the Distributions, which will further expedite the timeframe within which Securityholders will receive cash. Following completion of the Arrangement, the Company will become a private company until ultimate dissolution. Further, the Consideration being offered to the Shareholders is expected to be approximately equal to the cash value per Common Share that will remain in the Company, following completion of the Arrangement, after deducting a reserve for payment of all expected current and future liabilities, less certain transaction costs, the Contingent Reserve and the Purchaser Fee.

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•

Results of a Strategic Review Process — The Arrangement is the result of a reasoned, fully informed process. The Company conducted a fulsome strategic process, with the assistance of its outside legal counsel and the Company’s financial advisor, to explore potential strategic alternatives to maximize

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Shareholder value, including a potential reverse merger transaction. The Company conducted a tailored market search, ultimately focusing on potential financial buyers, because the Company believes that cash acquisition transaction proposals offered greater certainty of closing and value to the Securityholders than reverse merger transaction proposals considering prevailing public market conditions, the ability to secure PIPE financing in the amounts required to fund operations of the combined companies, the timeline on which such reverse merger transactions could be consummated (if at all), the ongoing cash needs of the combined companies post-transaction and other risks with respect to a reverse merger transaction structure. None of those potential parties offered a transaction that the Company considered more advantageous to the Securityholders than the Arrangement. The Company also considered alternatives to a strategic process, including a liquidation of the Company to distribute any available cash to Securityholders.

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Shareholder Preference for Cash Transaction — In connection with its investigation of a potential reverse merger transaction, the Company and its advisors had discussions and communications with certain Shareholders holding a significant number of Common Shares who had been “wall-crossed” with respect to the possibility of providing PIPE financing for such transaction. During these discussions, a significant number of these Shareholders expressed a preference that the Company return all of its cash to Shareholders as opposed to pursuing a reverse merger transaction, and indicated they would be unlikely to support any reverse merger transaction.

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•

No Financing Condition — The Arrangement is not subject to a financing condition and XRC has unconditionally and irrevocably guaranteed the full and timely performance and satisfaction of Purchaser’s obligations under the Agreement.

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•

Potential Additional Consideration — The CVR Consideration provides the Securityholders with an opportunity to receive a pro rata portion of up to (i) US$2,800,000 less certain legal expenses incurred by the Company within 18 months following the close of the Arrangement and (ii) US$150,000 less certain additional liabilities and expenses of the Company that are not deducted from the final Cash Amount at close of the Arrangement, if any, following the final resolution of any Company Litigation.

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Reasonable Holdback and Purchaser Fee — The amount of cash held back at closing, including (i) a transaction fee of $4,000,000 to be retained by the Purchaser, and (ii) a contingent reserve of $3,700,000 for any Company Litigation, are reasonable amounts thereby maximizing the amount of cash to be distributed to Securityholders in connection with the Arrangement.

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Prospects of the Company on a Standalone Basis — The Transaction Committee reviewed and assessed the assets, liabilities and financial condition of the Company if it pursued another business on a standalone basis, which belief was based on and informed by consideration of a number of factors, risks and uncertainties, including:

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the Company’s historical results of operations, including the Company’s termination of its clinical trial of masofaniten (EPI-7386), its primary molecule;

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•

the Company’s short-term and long-term strategic goals;

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•

the uncertain returns to the Securityholders if the Company were to remain independent; and

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•

the Transaction Committee’s belief that the risks and challenges to the Company’s business described above create substantial execution risks compared to the certainty of the Distribution and the Cash Amount for the Securityholders.

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Expected Return to Securityholders if the Company Liquidated — The Company believes that the Consideration to be paid to the Securityholders in the Arrangement is more favorable to such holders than the potential value that might be distributable to the Securityholders if the Company were to effect a statutory liquidation, which conclusion was based on a financial analysis performed by the Company’s management and, among other factors, the following: (i) an orderly liquidation would require that the Company continue to operate until a liquidation process could be completed, which would likely require the Company to continue to incur costs as a publicly listed company that would reduce the cash available for distribution to the Securityholders; (ii) the Company’s directors and officers do not have substantial experience with the liquidation of companies, which would necessitate engaging and compensating experienced consultants to assist with the liquidation effort, as well as

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incentivizing certain existing employees to remain with the Company through the liquidation process; (iii) the Company would need to engage and compensate advisors and consultants to assist with efforts to attempt to monetize the Company’s assets; and (iv) the Company would need to set aside cash for an extended period of time to be available to cover contingent liabilities in connection with a liquidation, during which extended period of time, the Securityholders would not receive any of such withheld cash, and any such contingent liabilities that matured into actual liabilities would reduce the amount available for ultimate distribution to the Securityholders.

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Low Likelihood of Regulatory Impediment; High Likelihood of Closing — The Company believes that the likelihood of completing the Arrangement is high, particularly in light of the lack of any required regulatory filings and the terms of the Agreement, including the conditions to close the Arrangement being specific and limited.

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Required Securityholder Approval — The Arrangement Resolution requires approval of not less than (i) 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, (ii) 662∕3% of the votes cast by Securityholders present in person or represented by proxy at the Special Meeting, voting together as a single class, and (iii) a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, excluding for this purpose the votes required to be excluded by MI 61-101, which excludes Common Shares held by related parties that are receiving a “collateral benefit” ​(as defined in MI 61-101) in connection with the transaction. See “Canadian Securities Law Matters — Multilateral Instrument 61-101” for more information.

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Ability to Respond to Acquisition Proposals Terms of the Arrangement — Under the terms of the Agreement, the Board will remain able to respond to any Acquisition Proposals if it is determined that such Acquisition Proposal could reasonably be expected to lead to a Superior Proposal and to terminate the Agreement if the Company receives a Superior Proposal prior to the approval of the Arrangement Resolution by the Securityholders, subject to payment of the Termination Payment.

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Ability to Change its Recommendation — The Board’s right to make a Change of Recommendation to the Securityholders in the event of a Superior Proposal, subject to the Purchaser’s Right to Match Period and payment of the Termination Payment.

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Opinion of Leerink Partners — The opinion of Leerink Partners dated July 13, 2025 that, as of such date and based upon and subject to the various assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the Cash Amount to be received by the Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders. See “The Arrangement — Opinion of Leerink Partners” in this Circular and Proxy Statement. Securityholders are urged to read the opinion of Leerink Partners in its entirety. The full text of the opinion of Leerink Partners is attached as Annex B to this Circular and Proxy Statement.

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Negotiated Transaction — The Agreement is the result of the Transaction Committee’s extensive strategic review process and negotiations with the Purchaser that were undertaken by the Company and its legal advisor with the oversight and participation of the Transaction Committee and its legal and financial advisors. The Transaction Committee believes the Company obtained an offer that was Purchaser’s best offer and the Agreement includes terms and conditions that are reasonable in the judgment of the Transaction Committee.

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Dissent Rights — Registered Shareholders as of the Record Date who oppose the Arrangement may exercise Dissent Rights in connection with the Arrangement.

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The Transaction Committee and the Board also considered a number of potential issues and risks related to the Arrangement and the Agreement, including, among others:

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the risks to the Company and the Securityholders if the Arrangement is not completed, including the costs to the Company of pursuing the Arrangement;

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•

the fact that if the Agreement is terminated under certain circumstances, the Company must pay the Termination Payment to the Purchaser as set forth in the Agreement; and

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•

the right of the Purchaser to terminate the Agreement under certain circumstances.

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The above discussion of the information and factors considered by the Transaction Committee and the Board is not intended to be exhaustive but is believed by the Transaction Committee and the Board to include the material factors considered by the Transaction Committee and the Board in their assessment of the Arrangement. In view of the wide variety of factors considered by the Transaction Committee and the Board in connection with their assessment of the Arrangement and the complexity of such matters, neither the Transaction Committee nor the Board considered it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the foregoing factors that it considered in reaching its decision. In addition, in considering the factors described above, individual members of the Transaction Committee and/or the Board may have given different weights to various factors and may have applied different analyses to each of the material factors considered by the Transaction Committee and the Board.

The Board’s reasons for recommending the Arrangement include certain assumptions relating to forward-looking information and such information and assumptions are subject to various risks. This information should be read in light of the assumptions described under the section entitled “Cautionary Statement Concerning Forward-Looking Information” and risk factors described under the section entitled “Risk Factors” and under the heading “Risks Related to the Arrangement”.

Process of the Transaction Committee

The Transaction Committee consisted solely of independent directors. The Transaction Committee was provided a clear mandate to retain independent legal and financial advisors and to determine whether to proceed with a transaction with the Purchaser and, if a decision was made to so proceed, to review and negotiate any such transaction. The Transaction Committee met several times to evaluate the proposal, the Arrangement and related matters. During these meetings, the Transaction Committee extensively deliberated and discussed the advantages and disadvantages of the Arrangement. Several meetings were held without management being present. With respect to certain meetings that management did attend, the Transaction Committee excused management prior to the end of such meetings and allowed the Transaction Committee members to raise any concerns they may have had without management present.

Recommendation of the Board

On July 13, 2025, based in part on the unanimous recommendation of the Transaction Committee and the opinion of the Transaction Committee’s financial advisors, as well as on the basis of the other factors described above, the Board:

•

determined unanimously that the Arrangement is advisable and is in the best interests of the Company and is fair, from a financial point of view, to the Securityholders;

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approved unanimously the Arrangement and the Agreement, and the Company’s entrance into the Agreement and performance of the transactions contemplated thereby;

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determined unanimously that the Arrangement Resolution shall be submitted for the consideration of the Securityholders at the Special Meeting; and

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unanimously recommends that the Securityholders vote “FOR” the Arrangement Resolution.

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Opinion of Leerink Partners

Unless the context requires otherwise, capitalized terms used but not defined in this “Opinion of Leerink Partners” section shall have the meaning ascribed to such term in Annex B.

Introduction

The Company retained Leerink Partners as its financial advisor in connection with the transactions contemplated by the Agreement (which are referred to in this Section as the “Transaction”). In connection with this engagement, the Board requested that Leerink Partners evaluate the fairness, from a financial point of view, to the Shareholders (other than holders of Excluded Shares (as defined below)) of the Cash Amount (as defined below) proposed to be paid to such holders pursuant to the Arrangement contemplated by the Agreement. For purposes of this summary of Leerink Partners’ opinion: (a) “Excluded Shares” means Common Shares held by a Dissenting Holder in respect of which Dissent Rights have been validly exercised

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under the Plan of Arrangement, the Purchaser or any affiliate of the Purchaser; and (b) “Cash Amount” means an amount per Common Share equal to (i) the Closing Net Cash as of the Cash Determination Time, divided by (ii) the Company Outstanding Shares.

On July 13, 2025, Leerink Partners rendered to the Transaction Committee its oral opinion, which was subsequently confirmed by delivery of a written opinion dated July 13, 2025, that, as of such date and based upon and subject to the various assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the Cash Amount proposed to be paid to the Shareholders (other than holders of Excluded Shares) pursuant to the terms of the Arrangement was fair, from a financial point of view, to such holders.

The full text of the written opinion of Leerink Partners, dated July 13, 2025, which describes the assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, is attached as Annex B and is incorporated herein by reference. The summary of the written opinion of Leerink Partners set forth below is qualified in its entirety by the full text of the written opinion attached hereto as Annex B. Leerink Partners’ financial advisory services and opinion were provided for the information and assistance of the Transaction Committee and the Board (in their capacity as directors and not in any other capacity) in connection with and for purposes of their consideration of the Transaction and the opinion of Leerink Partners addressed only the fairness, from a financial point of view, as of the date thereof, to the Shareholders (other than holders of Excluded Shares) of the Cash Amount proposed to be paid to such holders pursuant to the Arrangement. The opinion of Leerink Partners did not address any other term or aspect of the Agreement or the Transaction and does not constitute a recommendation to the Shareholders as to whether or how such holder should vote with respect to the Transaction or otherwise act with respect to the Agreement or any other matter.

The full text of the written opinion of Leerink Partners should be read carefully in its entirety for a description of the assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion.

In connection with rendering the opinion described above and performing its related financial analyses, Leerink Partners reviewed, among other things:

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the proposed execution version of the Agreement, as provided to Leerink Partners by the Company on July 13, 2025;

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the proposed execution version of the Plan of Arrangement, as provided to Leerink Partners by the Company on July 13, 2025;

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the proposed final form of the CVR Agreement, as provided to Leerink Partners by the Company on July 13, 2025;

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the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024, as filed by the Company with the SEC;

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the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended December 31, 2024 and March 31, 2025, as filed by the Company with the SEC;

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certain Current Reports on Form 8-K, as filed by the Company with, or furnished by the Company to, the SEC; and

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a dissolution analysis of the Company, as furnished to Leerink Partners by the management of the Company and approved by management for use by Leerink Partners, which is referred to in this summary of Leerink Partners’ opinion as the “Dissolution Analysis”.

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Leerink Partners also conducted discussions with members of the senior management and representatives of the Company regarding such Dissolution Analysis. The Company advised Leerink Partners that it intended to discontinue and wind up the business of the Company and did not have a standalone business plan. In addition, Leerink Partners considered the results of its efforts on behalf of the Company to solicit, at the direction of the Company, indications of interest from third parties with respect to a possible acquisition of or business combination with the Company. Leerink Partners also conducted such other financial studies and analyses and took into account such other information as it deemed appropriate.

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Leerink Partners assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Leerink Partners for purposes of its opinion and, with the Company’s consent, Leerink Partners relied upon such information as being complete and accurate. In that regard, Leerink Partners assumed, at the Company’s direction, that the Dissolution Analysis had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered thereby and Leerink Partners relied, at the Company’s direction, on the Dissolution Analysis for purposes of its analysis and opinion. Leerink Partners expressed no view or opinion as to the Dissolution Analysis or the assumptions on which it was based. In addition, at the Company’s direction, Leerink Partners did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of the Company, nor was Leerink Partners furnished with any such evaluation or appraisal, and Leerink Partners was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of the Company. Furthermore, at the Company’s direction Leerink Partners ascribed no value to the CVR Amount payable pursuant to the CVR Agreement. For purposes of its opinion, Leerink Partners assumed, at the direction of the Board, that the sum of the Cash Amount plus the Distribution would be not less than US$1.91 per Common Share.

Leerink Partners assumed, at the Company’s direction, that the final executed Agreement and CVR Agreement and the final Plan of Arrangement would not differ in any respect material to Leerink Partners’ analysis or its opinion from the last versions of the Agreement, the CVR Agreement and the Plan of Arrangement reviewed by Leerink Partners. Leerink Partners also assumed, at the Company’s direction, that the representations and warranties made by the Company and Parent and the Purchaser in the Agreement were and will continue to be true and correct in all respects material to Leerink Partners’ analysis. Furthermore, Leerink Partners assumed, at the Company’s direction, that the Transaction would be consummated on the terms set forth in the Agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Leerink Partners’ analysis or its opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction, condition or other change would be imposed, the effect of which would be material to Leerink Partners’ analysis or its opinion. Leerink Partners did not evaluate and did not express any opinion as to the solvency or fair value of the Company, or the ability of the Company to pay its obligations when they come due, or as to the impact of the Transaction on such matters, under any national, provincial or other laws relating to bankruptcy, insolvency, or similar matters. Leerink Partners is not a legal, regulatory, tax or accounting advisor, and Leerink Partners expressed no opinion as to any legal, regulatory, tax or accounting matters.

The opinion of Leerink Partners expressed no view as to, and did not address, the Company’s underlying business decision to proceed with or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to the Company or in which the Company might engage. The opinion of Leerink Partners was limited to and addressed only the fairness, from a financial point of view, as of the date of the opinion, to the holders of Common Shares (other than Excluded Shares) of the Cash Amount proposed to be paid to such holders pursuant to the terms of the Arrangement. Leerink Partners was not asked to, and Leerink Partners did not express any view on, and its opinion did not address, any other term or aspect of the Agreement, the CVR Agreement, or the Transaction, including, without limitation, the structure or form of the Transaction, the form or any other terms of the CVR, or any other agreements or arrangements contemplated by the Agreement or entered into in connection with or otherwise contemplated by the Transaction, including, without limitation, the fairness of the Transaction or any other term or aspect of the Transaction to, or any consideration to be received in connection therewith by, or the impact of the Transaction on, the holders of any other class of securities, creditors or other constituencies of the Company or any other party. In addition, Leerink Partners expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of the Company or any other party, or class of such persons in connection with the Transaction, whether relative to the Cash Amount proposed to be paid to the holders of Common Shares pursuant to the terms of the Arrangement or otherwise. The opinion of Leerink Partners’ was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Leerink Partners as of, the date of the opinion, and Leerink Partners does not have any obligation or responsibility to update,

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revise or reaffirm this opinion based on circumstances, developments or events occurring after the date of the opinion. Leerink Partners’ opinion did not constitute a recommendation to the Shareholders as to whether or how such holder should vote with respect to the Transaction or otherwise act with respect to the Agreement or any other matter. Leerink Partners’ financial advisory services and its opinion were provided for the information and assistance of the Transaction Committee and the Board (in their capacity as directors and not in any other capacity) in connection with and for purposes of their consideration of the Transaction. The issuance of the opinion of Leerink Partners was approved by the Leerink Partners LLC Fairness Opinion Review Committee.

Summary of Financial Analyses

The following is a summary of the material financial analyses prepared by Leerink Partners and reviewed with the Transaction Committee in connection with its opinion, which was delivered orally to the Transaction Committee on July 13, 2025, and subsequently confirmed in Leerink Partners’ written opinion, dated July 13, 2025. For purposes of the analyses described below, Leerink Partners was directed to rely upon the Dissolution Analysis prepared by Company management. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinion of Leerink Partners, nor does the order of the analyses described below represent the relative importance or weight given to those analyses by Leerink Partners. The preparation of a fairness opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a fairness opinion is not readily susceptible to summary description. In arriving at its opinion, Leerink Partners did not draw, in isolation, conclusions from or with regard to any factor or analysis that it considered. Accordingly, Leerink Partners believes that its analyses must be considered as a whole and that selecting portions of such analyses and factors without considering all analyses and factors, could create a misleading or incomplete view of the processes underlying Leerink Partners’ financial analyses and its opinion. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. The assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before July 13, 2025, and is not necessarily indicative of current market conditions.

Leerink Partners was not requested to, and did not, recommend or determine the specific consideration payable in the Transaction. The type and amount of consideration payable in the Transaction was determined through negotiations between the Company and Parent and the Company’s decision to enter into the Agreement was solely that of the Board. The opinion of Leerink Partners was only one of many factors considered by the Transaction Committee and the Board in their evaluation of the Transaction and should not be viewed as determinative of the views of the Transaction Committee, the Board or the management of the Company with respect to the Transaction, the Cash Amount, any potential CVR Proceeds or any other aspect of the transactions contemplated by the Agreement.

The following is a summary of the material financial analyses reviewed with the Transaction Committee and performed by Leerink Partners in connection with its opinion, which was rendered orally to the Transaction Committee on July 13, 2025, and subsequently confirmed by delivery of a written opinion dated July 13, 2025. The summary set forth below does not purport to be a complete description of the financial analyses performed by, and underlying the opinion of, Leerink Partners. Future results may be different from those described and such differences may be material.

Dissolution Analysis

The Company advised Leerink Partners that it intended to discontinue and wind up the business of the Company and did not have a standalone business plan. Accordingly, Leerink Partners concluded, in the exercise of its professional judgment, that traditional valuation methodologies typically used for purposes of valuing a business as a going concern were not applicable to the Company. Management furnished to Leerink Partners the Dissolution Analysis prepared by management as described in more detail below under “The Arrangement — ESSA Management Dissolution Analysis” and directed Leerink Partners to rely upon the

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Dissolution Analysis for purposes of its analysis and opinion. The Dissolution Analysis assumed an initial distribution of cash to holders of Common Shares as of August 31, 2025, of approximately $72 million, or $1.53 per Common Share, and a final distribution of cash to holders of Common Shares as of December 31, 2027, of approximately $18 million, or an estimated present value of approximately $0.33 per Common Share (as described below). Together, the initial distribution and the final distribution are referred to in this section as the “Dissolution Payments.”

Leerink Partners compared the assumed value of the Cash Amount plus the Distribution of $1.91 per Common Share to the present value of the Dissolution Payments as of August 31, 2025 (the assumed date of approval by shareholders of the Company of a dissolution of the Company), and, for purposes of comparison with an assumed initial distribution date for the Transaction of August 15, 2025, further discounted the Dissolution Payments to that date. Leerink Partners calculated the August 31, 2025 present value of the Dissolution Payments by discounting the December 31, 2027 final distribution payment to August 31, 2025 using a discount rate equivalent to ICE BofA US High Yield Index Effective Yield of 6.92% as of July 10, 2025, and adding that discounted amount to the amount of the initial distribution payment. Leerink Partners then calculated the present value of the Dissolution Payments as of August 15, 2025 by further discounting the August 31, 2025 present value of Dissolution Payments to August 15, 2025 using the same 6.92% discount rate. Leerink Partners determined this discount rate based upon its professional expertise and judgment.

This analysis resulted in an implied estimated present value as of August 15, 2025 of approximately $88 million, or $1.86 per Common Share, based on the assumed total shares outstanding of the Company of approximately 47.4 million (assuming full exercise of the Warrants) as of August 15, 2025, as provided by the Company.

Leerink Partners then compared the results of the above analysis to the closing price of the Common Shares of $1.71 as of July 11, 2025, and the assumed value of the Cash Amount plus the Distribution of $1.91 per Common Share.

General

Leerink Partners is a full-service securities firm engaged in securities trading and brokerage activities as well as investment banking and financial advisory services. Other than services in connection with the Transaction, in the past two years, Leerink Partners has not provided investment banking services to, or received compensation from, the Company. In the past two years, Leerink Partners has not provided investment banking services to, or received compensation from, Parent or Purchaser. In the ordinary course of business, Leerink Partners may, in the future, provide investment banking services to the Company, Parent, or their respective affiliates and would expect to receive customary fees for the rendering of such services. In the ordinary course of its trading and brokerage activities, Leerink Partners has in the past held and may in the future hold positions, for its own account or the accounts of its customers, in equity, debt or other securities of the Company, Parent or their respective affiliates. Consistent with applicable legal and regulatory requirements, Leerink Partners has adopted policies and procedures to establish and maintain the independence of its research department and personnel. As a result, Leerink Partners’ research analysts may hold views, make statements or investment recommendations and/or publish research reports with respect to the Company, Parent, and the Transaction and other participants in the Transaction that differ from the views of Leerink Partners’ investment banking personnel.

The Company selected Leerink Partners as a financial advisor in connection with the Transaction based on Leerink Partners’ longstanding relationship and familiarity with the Company and its business, as well as its experience and expertise in the pharmaceutical industry. Leerink Partners is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Transaction.

In connection with Leerink Partners’ services as a financial advisor to the Company, the Company has agreed to pay Leerink Partners an aggregate fee of $2.5 million, of which opinion fees of $1.0 million have been paid and the remainder of which is payable contingent upon consummation of the Transaction. In addition, the Company has agreed to reimburse certain of Leerink Partners’ expenses arising, and to indemnify Leerink Partners against certain liabilities, including liabilities under federal securities laws, that may arise, out of Leerink Partners’ engagement. The terms of the fee arrangement between Leerink Partners and the Company, which are customary in transactions of this nature, were negotiated at arm’s length between Leerink

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Partners and the Company, and the Transaction Committee and the Board were aware of the arrangement, including the fact that a significant portion of the fee payable to Leerink Partners is contingent upon the completion of the Transaction.

Distribution

In connection with the Arrangement, on [   •   ], 2025, the Company received the Distribution Order. On [   •   ], 2025 the Board approved the Distribution which is scheduled to take place on or about [   •   ], 2025.

Plans for the Company After the Arrangement

The primary purposes of the Arrangement are to facilitate the Discontinuance and to provide Securityholders with cash sooner than would be the case without the Arrangement, while retaining $4,000,000 of the Company’s Closing Net Cash as a transaction fee (the “Purchaser Fee”). Upon completion of the Arrangement, the Purchaser expects the Company to have sufficient funds to cover anticipated expenses through dissolution of the Company and a reserve for unexpected liabilities. Following the Arrangement, the Common Shares will be delisted from the Nasdaq, in accordance with applicable Laws, rules and regulations, and will apply to cease to be a reporting issuer under applicable Canadian Securities Laws, thereby reducing the administrative and financial burdens (and associated costs) associated with remaining a reporting issuer. The Common Shares will be deregistered under the Exchange Act. Following the completion of the Arrangement and such deregistration, the Company will no longer file period reports with the SEC.

Certain Effects of the Arrangement

Following the consummation of the Arrangement, the registration of the Common Shares under the U.S. Exchange Act will be terminated. Due to this termination, the Company will no longer be required to file annual, quarterly and current reports with the SEC. Moreover, the Company will no longer be subject to the requirement to furnish proxy statements in connection with meetings of Securityholders pursuant to Section 14(a) of the U.S. Exchange Act and the related requirement under the U.S. Exchange Act to furnish an annual report to Securityholders. Similarly, the Company will make an application to cease to be a reporting issuer (or equivalent) in British Columbia, Alberta and Ontario. Following acceptance of such application, the Company will cease to have public reporting obligations under Securities Laws.

The Common Shares are currently registered under the U.S. Exchange Act and are traded on the Nasdaq under the trading symbol “EPIX”. As a result of the Arrangement, the Company will be a privately held corporation and there will be no public market for the Common Shares. After completion of the Arrangement, (i) the Purchaser will hold 100% of the outstanding Common Shares and (ii) the Common Shares will cease to be quoted on the Nasdaq.

Procedure for Exchange of Shares

Letter of Transmittal

The Letter of Transmittal has been sent to Registered Shareholders with this Circular and Proxy Statement. The Letter of Transmittal contains procedural information relating to the Arrangement and should be reviewed carefully. Registered Shareholders (other than the Dissenting Holders and the Purchaser) can obtain additional copies of the Letter of Transmittal by contacting the Depositary, by calling toll-free in North America at 1-800-564-6253 or outside of North America at 1-514-982-7555 or by email to corporateactions@computershare.com.

Each Registered Shareholder must forward a properly completed and signed Letter of Transmittal, with accompanying share certificate(s) or DRS advice(s) in order to receive the Consideration to which such Shareholder is entitled under the Arrangement. It is recommended that Registered Shareholders complete, sign and return the Letter of Transmittal with accompanying share certificate(s) or DRS advice(s) to the Depositary as soon as possible. All deposits of Common Shares made under a Letter of Transmittal are irrevocable. In the event the Arrangement is not consummated, the Depositary will promptly return any share certificate(s) or DRS advice(s) that have been deposited. Any use of the mail to transmit a share certificate

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(if applicable) and a related Letter of Transmittal is at the risk of the Shareholder. If these documents are mailed, it is recommended that registered mail, properly insured, be used.

Whether or not Shareholders forward the share certificate(s) or DRS advice(s), as applicable, upon completion of the Arrangement on the Effective Date, Shareholders will cease to be Shareholders of the Company and will only be entitled to receive the Consideration to which they are entitled under the Arrangement or, in the case of Shareholders who properly exercise Dissent Rights, the right to receive fair value for their Common Shares in accordance with the Dissent Procedures. See “Dissent Rights”.

The instructions for depositing such share certificate(s) or DRS advice(s), as applicable, with the Depositary are set out in the Letter of Transmittal. The Letter of Transmittal provides instructions with regard to lost share certificates. The Letter of Transmittal is available on SEDAR+ at www.sedarplus.ca.

Where Common Shares are evidenced only by a DRS advice, there is no requirement to first obtain a certificate for those Common Shares or deposit with the Depositary any share certificate evidencing the Common Shares. Only a properly completed and duly executed Letter of Transmittal accompanied by the applicable DRS advice(s) are required to be delivered to the Depositary in order to surrender those Common Shares under the Arrangement.

Registered Shareholders will not actually receive their Consideration until the Arrangement is completed and they have returned their properly completed documents, including the Letter of Transmittal and share certificates or DRS advices, if applicable, to the Depositary.

The exchange of Common Shares for the Consideration in respect of Beneficial Shareholders is expected to be made with the Beneficial Shareholder’s Intermediary account through the procedures in place for such purposes between CDS and Cede & Co. (as the case may be) and such Intermediary. Beneficial Shareholders should contact their Intermediary if they have any questions regarding this process and to arrange for their Intermediary to complete the necessary steps to ensure that they receive payment for their Common Shares as soon as possible following completion of the Arrangement.

Exchange Procedure

Prior to the Effective Time, the Purchaser shall deliver or arrange to be delivered to the Depositary sufficient funds to satisfy the aggregate Consideration payable to Shareholders pursuant to the Arrangement, which funds will be held by the Depositary as agent and nominee for Shareholders prior to distribution to such Shareholders under Article 4 of the Plan of Arrangement.

In the case of Registered Shareholders, as soon as reasonably practical after the Effective Date, which the Parties expect will occur on or about September [18], 2025, assuming due delivery of the required documentation, including the applicable share certificate(s) or DRS advice(s) representing such holder’s Common Shares and a duly and properly completed Letter of Transmittal, the Depositary will cause the delivery of the funds representing a portion of the Consideration to which such Registered Shareholder is entitled (pursuant to the Plan of Arrangement) by first class mail, at the offices of the Depositary or by wire transfer.

If you are a Beneficial Shareholder holding your Common Shares through an Intermediary, then you are not required to take any action and the Consideration that you are entitled to receive will be delivered to your Intermediary though procedures in place for such purposes between CDS and Cede & Co. (as the case may be) and such Intermediaries. You should contact your Intermediary if you have any questions regarding this process.

Any exchange or transfer of Common Shares pursuant to the Plan of Arrangement will be free and clear of any Liens or other claims of third parties of any kind.

No Shareholder will be entitled to receive any consideration or entitlement with respect to their Common Shares, other than any consideration or entitlement to which such Shareholder is entitled to receive under Article 2 of the Plan of Arrangement and the other terms of the Plan of Arrangement and, for greater certainty, no such Shareholder will be entitled to receive any interest, dividends, premium or other payment in connection therewith, other than any dividends declared prior to the Effective Date that have not been paid.

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Entitlement to Cash Consideration

In any case where the aggregate Consideration payable to particular Shareholders under the Arrangement would include a fraction of a cent, the cash consideration payable will be rounded down to the next whole cent.

Fractional CVRs

To the extent that any amounts payable to the holder of one or more CVRs include a fraction of a cent, the cash consideration payable shall be rounded down to the nearest whole cent.

Return of Shares

If the Arrangement is not completed, the Letter of Transmittal will be of no effect and the Depositary will return any share certificates or DRS advices representing the deposited Common Shares to the holders thereof as soon as practicable at the address specified in the Letter of Transmittal.

Lost Certificates

In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Common Shares 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, cash deliverable in accordance with such Person’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 cash, give a surety bond satisfactory to the Purchaser and the Depositary (acting reasonably) in such sum as the Purchaser may direct and indemnify the Purchaser, the Depositary and the Company in a manner satisfactory to the Purchaser, the Depositary and the Company, acting reasonably, against any claim that may be made against the Purchaser and the Company with respect to the certificate alleged to have been lost, stolen or destroyed.

Cancellation of Rights

Until surrendered, each share certificate or DRS advice that immediately prior to the Effective Time represented Common Shares will be deemed after the Effective Time to represent only the right to receive upon such surrender the consideration to which the holder is entitled to receive in lieu of such share certificate or DRS advice as contemplated in Section 4.1 of the Plan of Arrangement, less any amounts withheld. Any such share certificate or DRS advice formerly representing Common Shares not duly surrendered on or before the sixth anniversary of the Effective Date will cease to represent a claim or interest of any nature whatsoever and will be deemed to have been surrendered to the Purchaser or any successors and will be cancelled. On such date, any consideration held by the Depositary for such Former Shareholder shall be deemed to have been surrendered by the Former Shareholder to the Purchaser and shall be paid by the Depositary to the Purchaser. None of the Company or Purchaser, or any of their respective successors, will be liable to any person in respect of any Consideration (including any Consideration previously held by the Depositary for any such Former Shareholder) which is forfeited or surrendered to the Company or Purchaser or delivered to any public official pursuant to any applicable abandoned property, escheat or similar Law.

Withholding Rights

Each of the Company, the Parent and the Purchaser, their affiliates, or any other applicable withholding agent shall be entitled to deduct and withhold from any consideration or other amount payable or otherwise deliverable to any person (an “Affected Person”) pursuant to the Plan of Arrangement, the Agreement or the CVR Agreement such amounts as the applicable payor determines, acting reasonably, are required to be deducted and withheld therefrom under any provision of applicable Law in respect of Taxes (a “Withholding Obligation”). To the extent that such amounts are so deducted, withheld and timely remitted to the appropriate Governmental Entity, such amounts shall be treated for all purposes under the Plan of Arrangement, the Agreement or the CVR Agreement as having been paid to the Affected Person.

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ESSA Management Dissolution Analysis

Financial projections in connection with the Dissolution Analysis described under the heading “Opinion of Leerink Partners — Dissolution Analysis” prepared by management were made available to the Board, the Transaction Committee, the committee’s counsel, and Leerink Partners. The Transaction Committee permitted Leerink Partners to use and rely on the financial projections and other financial and business information summarized below for purposes of its financial analyses and opinion summarized under “Opinion of Leerink Partners” and the financial projections and forecasts may not be appropriate for other purposes. The Board permitted Leerink Partners to use and rely on the financial projections and other financial and business information summarized below for purposes of its financial analyses and opinion summarized under “Opinion of Leerink Partners” and the financial projections and forecasts may not be appropriate for other purposes. Summaries of these financial projections and forecasts are being included in this Circular and Proxy Statement not to influence your decision whether to vote “FOR”, “AGAINST” or “ABSTAIN” with respect to the proposal to adopt the Agreement, but because these financial projections and forecasts were made available to the Board, the Transaction Committee, the committee’s counsel, and Leerink Partners.

These financial projections and forecasts are based upon a variety of estimates and numerous assumptions made by the Company’s management with respect to, among other matters, general business, economic, market and financial conditions and other matters, including the factors described under “Cautionary Statement Concerning Forward-Looking Information” beginning on page 18, many of which are difficult to predict, are subject to economic and competitive uncertainties, and are beyond the Company’s control. In addition, since the financial projections and forecasts cover multiple years, such information by its nature becomes less reliable with each successive year. As a result, there can be no assurance that the projected results will be realized or that actual results will not be higher or lower than projected.

The financial projections and forecasts do not take into account any circumstances or events occurring after the date they were prepared, and, except as may be required in order to comply with applicable Securities Laws, the Company does not intend to update, or otherwise revise, the financial projections or forecasts, or the specific portions presented, to reflect circumstances existing after the date when they were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

The financial projections and forecasts were not prepared with a view toward public disclosure, soliciting proxies or complying with United States’ Generally Accepted Accounting Principles (“U.S. GAAP”), the published guidelines of the SEC regarding financial projections and forecasts or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial projections and forecasts. Neither Davidson & Company LLP, the Company’s independent registered public accounting firm, nor any other independent registered public accounting firm has examined, compiled or performed any procedures with respect to the accompanying financial projections and forecasts, and, accordingly, neither Davidson & Company LLP nor any other public accounting firm expresses an opinion or any other form of assurance with respect to such projections and forecasts.

The following table summarizes the financial projections prepared by management:

(1)

See “Opinion of Leerink — Dissolution Analysis” for further information regarding the Dissolution Analysis.

​

Financing

We expect that the professional fees and other expenses required to complete the Arrangement and related transactions will be approximately US$5.63 million. See “Fees and Expenses” for a description of the fees and expenses expected to incur in connection with the transaction. The Purchaser’s obligations under the

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Agreement are not subject to any conditions regarding the Purchaser’s ability to obtain financing for the Consideration to be paid pursuant to the Arrangement.

Interests of the Company’s Directors and Executive Officers in the Arrangement

In considering the recommendation of the Board that you vote in favour of the Arrangement Resolution, you should be aware that aside from their interests as Securityholders of the Company, the Company’s directors and executive officers have interests in the Arrangement that are different from, or in addition to, those of other Securityholders of the Company generally. In particular, certain directors and executive officers are entitled to “collateral benefit” ​(as defined in MI 61-101) in connection with the transaction (see “Canadian Securities Law Maters — Multilateral Instrument 61-101”). Additionally, these interests include indemnification of our directors and executive officers following the completion of the Arrangement. The members of the Transaction Committee were aware of and considered these interests, among other matters, in evaluating and negotiating the Agreement and the Arrangement and in making its recommendations to the Board, which was also aware of and took into account these interests, among other matters, when making its recommendation to the Securityholders to vote for the Arrangement Resolution. See “The Arrangement — Background of the Arrangement” beginning on page 21, “The Arrangement — ; Recommendation of the Transaction Committee; Reasons for the Arrangement; Recommendation of the Board; and Opinion of Leerink Partners” beginning on page 35, and “Interests of the Company’s Directors and Executive Officers in the Arrangement” beginning on page 44.

The Securityholders should take these interests into account in deciding whether to vote “FOR” the Arrangement Resolution.

Indemnification/Insurance

The Company’s Articles provide for indemnification of directors and executive officers against certain liabilities that may arise by reason of their status or service as directors or officers. In addition, pursuant to the Agreement, the Purchaser will, or will cause the Company to, maintain the Company’s “tail” policy of directors and officers’ liability insurance as it exists on the date of the Agreement without any reduction in scope or coverage through July 13, 2031.

Compensation of the Transaction Committee

The Transaction Committee consists of four independent members of the Board: Franklin Berger, Sandford Zweifach, Scott Requadt and Richard Glickman. Franklin Berger and Scott Requadt, the co-chairs of the Transaction Committee, received $8,000 per month since November 1, 2024, for their service on the Transaction Committee. The other members of the Transaction Committee received $6,000 per month since November 1, 2024.

Fees and Expenses

Whether or not the Arrangement is consummated, all fees and expenses incurred in connection with the Arrangement will be paid by the Party incurring those fees and expenses, except that the Company will pay the costs of printing and mailing this Circular and Proxy Statement and all SEC filing fees with respect to the Arrangement. Additionally, if the Agreement is terminated under certain circumstances, the Company must pay the Termination Payment to the Purchaser. Total fees and expenses incurred or to be incurred by the Company in connection with the Arrangement are estimated at this time to be as follows:

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Regulatory Approvals

No material federal, state or provincial regulatory approvals, filings or notices are required under the Agreement in connection with the Arrangement.

Anticipated Accounting Treatment of the Arrangement

The Arrangement will be accounted for in accordance with U.S. GAAP and will constitute a change of control under same.

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RISK FACTORS

In evaluating the Arrangement, Securityholders should carefully consider the following risk factors relating to the Arrangement. The following risk factors are not a definitive list of all risk factors associated with the Arrangement. Additional risks and uncertainties, including those currently unknown or considered immaterial by the Company, may also adversely affect the Company and completion of the Arrangement. The risk factors should be considered in conjunction with the other information included in this Circular and Proxy Statement, including certain sections of documents publicly filed.

Risks Related to the Arrangement

The completion of the Arrangement is subject to conditions precedent.

The completion of the Arrangement is subject to a number of conditions precedent, some of which are outside of the Company’s and the Purchaser’s control, including receipt of the Final Order and the Required Securityholder Approval.

In addition, the completion of the Arrangement is conditional on, among other things, no Material Adverse Change having occurred.

There can be no certainty, nor can the Company or the Purchaser provide any assurance, that all conditions precedent to the Arrangement will be satisfied or waived, or if satisfied or waived, when they will be satisfied or waived; accordingly, the Arrangement may not be completed.

The market price of the Common Shares may be materially adversely affected in certain circumstances.

If, for any reason, the Arrangement is not completed or its completion is materially delayed and/or the Agreement is terminated, the market price of the Common Shares may be materially adversely affected and decline to the extent that the current market price of the Common Shares reflects a market assumption that the Arrangement will be completed. Depending on the reasons for terminating the Agreement, the Company’s financial condition could also be subject to various material adverse consequences, including as a result of paying the Termination Payment under circumstances set forth in the Agreement.

The Agreement may be terminated in certain circumstances.

The Company and the Purchaser each have the right, in certain circumstances, in addition to termination rights relating to the failure to satisfy the conditions of completion of the Arrangement, to terminate the Agreement. Accordingly, there can be no certainty, nor can the Company or Purchaser provide any assurance that the Agreement will not be terminated prior to the completion of the Arrangement. In addition, if the Arrangement is not completed by the Outside Date, the either Party may terminate the Agreement. If the Agreement is terminated in certain circumstances, the Company will be required to pay the Termination Payment to the Purchaser.

If the Agreement is terminated, there is no assurance that the Board will be able to find a party willing to pay an equivalent or greater price than the Consideration to be paid pursuant to the terms of the Agreement.

The completion of the Arrangement is uncertain and the Company will incur costs even if the Arrangement is not completed.

As the Arrangement is dependent upon, among other things, the Final Order, the Required Securityholder Approval and other conditions, its completion is uncertain. If the Arrangement is not completed for any reason, the market price of Common Shares may be adversely affected. Moreover, the dedication of substantial resources of the Company to the completion of the Arrangement could have a negative effect on the Company’s assets, results of operations or prospects.

In addition, certain costs related to the Arrangement, such as legal, accounting and certain financial advisor fees, must be paid by the Company and the Purchaser even if the Arrangement is not completed. The Parties are each liable for their own costs incurred in connection with the Arrangement. If the Arrangement is

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not completed, the Company may be required to pay the Purchaser the Termination Payment. See “The Business Combination Agreement — Termination of the Agreement” in this Circular and Proxy Statement.

Directors and officers of the Company have interests in the Arrangement that may be different from those of Securityholders generally.

In considering the recommendation of the Board with respect to the Arrangement, Securityholders should be aware that certain members of the Company’s management and the Board have certain interests in connection with the Arrangement that may present them with actual or potential conflicts of interest in connection with the Arrangement. In particular, certain directors and executive officers are entitled to “collateral benefit” ​(as defined in MI 61-101) in connection with the transaction. See “The Arrangement — Interests of the Company’s Directors and Executive Officers in the Arrangement” and “Canadian Securities Law Matters — Multilateral Instrument 61-101”.

The Purchaser and the Company may be the targets of legal claims, securities class action, derivative lawsuits and other claims.

The Purchaser and the Company may be the target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Arrangement from being completed. Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into an agreement to acquire a public company or to be acquired. Third parties may also attempt to bring claims against the Purchaser or the Company seeking to restrain the Arrangement or seeking monetary compensation or other redress. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources and may delay or prevent the Arrangement from being completed. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the Arrangement, then that injunction may delay or prevent the Arrangement from being completed.

The relative trading price of the Common Shares prior to the Effective Date may be volatile.

Market assessments of the benefits of the Arrangement and the likelihood that the Arrangement will be consummated may impact the volatility of the market price of the Common Shares prior to the consummation of the Arrangement.

Rights of Securityholders will differ after the completion of the Arrangement.

Following the completion of the Arrangement, Securityholders (other than the Purchaser) will no longer hold Securities and will no longer have an interest in the Company, or its assets. In the event that the value of the Company’s assets, prior, at or after the Effective Date, exceeds the implied value of the Company under the Arrangement, the Securityholders will not be entitled to additional consideration for their Securities.

The Arrangement or the Liquidation may result in a tax payable for Shareholders.

The Arrangement or Liquidation will generally be a taxable transaction for most Shareholders and, as a result, taxes will generally be required to be paid by such Shareholders on any income and gains (if any) that result from receipt of the Consideration under the Arrangement or from any distribution on the Liquidation, winding-up and dissolution of the Company. Shareholders should read “Certain U.S. Federal Income Tax Considerations of the Arrangement”, “Certain Canadian Federal Income Tax Considerations of the Arrangement”, “Certain U.S. Federal Income Tax Considerations of the Liquidation” and “Certain Canadian Federal Income Tax Considerations of the Liquidation”. Shareholders are advised to consult their tax advisors to determine the tax consequences of the Arrangement and the Liquidation.

The Arrangement or the Liquidation may result in adverse tax consequences due to the Company’s expected classification as a passive foreign investment company (“PFIC”).

Shareholders may be subject to adverse U.S. federal income tax consequences due to the Company’s expected classification as a PFIC.

The Company believes it was a PFIC in prior years and expects to be classified as a PFIC in the current year, which would subject U.S. Holders to adverse U.S. federal income tax consequences.

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If the Company were classified as a PFIC for any taxable year during which a U.S. Holder holds Common Shares, such holder may be subject to increased tax liability (generally including an interest charge) as a result of the Distribution and the Arrangement or the Liquidation. In addition, certain elections that generally mitigate these adverse tax results may be unavailable for U.S. Holders. See “Certain U.S. Federal Income Tax Considerations of the Distribution”, “Certain U.S. Federal Income Tax Considerations of the Arrangement” and “Certain U.S. Federal Income Tax Considerations of the Liquidation”.

The Termination Payment provided under the Agreement may discourage other parties from attempting to acquire the Company.

Under the Agreement, the Company would be required to pay the Termination Payment if the Agreement is terminated in certain circumstances. This Termination Payment may discourage other parties from attempting to acquire Common Shares or from making an Acquisition Proposal, even if those parties would otherwise be willing to offer greater value to the Securityholders than that offered by the Purchaser under the Arrangement.

Risks Related to the CVRs

Holders of the CVRs may never receive any proceeds from their CVRs.

Holders of the CVRs will be entitled to a pro rata portion of up to US$2,950,000 less certain costs and expenses, including those associated with any litigation against the Company and its directors or officers currently active or arising within 18 months following closing of the Arrangement. If the Company incurs costs and expenses greater than US$2,950,000 pursuant to the CVR Agreement, there will be no proceeds from the CVR and holders of the CVRs will not realize value on their CVRs.

The CVRs will not be listed on any exchange.

The CVRs are not transferable and will not be listed on any securities exchange. Accordingly, holders of the CVRs may not have an ability to realize the value of the full CVR Payment Amount in accordance with the terms of the CVR Agreement prior to the CVR Payment Date.

The treatment of CVRs for U.S. federal income tax purposes is unclear.

There is no legal authority directly addressing the U.S. federal income tax treatment of CVRs received pursuant to the Arrangement. Accordingly, the amount, timing and character of any gain, income or loss with respect to the CVRs are uncertain. U.S. Holders should consult their tax advisors concerning the recognition of income, gain or loss, if any, resulting from the receipt of a CVR or the receipt of any payment in respect of a CVR, and review the discussion under “Certain U.S. Federal Income Tax Considerations of the Arrangement”.

The treatment of CVRs for Canadian federal income tax purposes is unclear.

The Canadian federal income tax consequences to a Holder of the receipt, holding and disposition of CVRs, including the consequences of a potential reduction in the amount payable under the CVRs, and the reporting of amounts in respect thereof for Canadian federal income tax purposes are not free from doubt. Holders are urged to consult their own tax advisors regarding such consequences and reporting. See “Certain Canadian Federal Income Tax Considerations of the Arrangement”.

Risks Related to the Liquidation

The Company cannot assure Shareholders of the timing or amount of any Liquidation distributions, if any.

The Company cannot predict with certainty the value of any distributions made as part of the Liquidation to its Shareholders and many of the factors influencing the value of any distributions made as part of the Liquidation cannot currently be quantified with certainty and are subject to change. The Company cannot determine at this time when, or potentially whether, it will be able to make any Liquidation distributions to the Shareholders or the value of any such distributions. You may receive substantially less than the value that you

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expect to receive. Accordingly, you will not know the amount of any Liquidation distributions you may receive when you vote on the Liquidation Resolution. These risks will be amplified if the Liquidation is not approved, in which case the Company can make no assurances that any liquidation distributions will be made to the Shareholders.

The Company will continue to incur expenses that will reduce the amount available for distribution, including expenses associated with complying with public company reporting requirements and paying its service providers, among others.

In the event that the Arrangement Resolution is not approved or the Arrangement is otherwise terminated, as the Company winds up, it will continue to incur expenses from operations, including compensation to the limited number of employees implementing the Liquidation, if any, compensation to the Company’s remaining directors, directors’ and officers’ insurance and other insurance premiums, income, payroll and other taxes, legal, accounting, financial, advisory and consulting fees and general and administrative expenses.

The actual amount of such expenses could be much higher than currently anticipated and will reduce the amount of assets available for ultimate distribution to our Shareholders. If the Liquidation Resolution is not approved, the Company expects to continue to incur expenses from operations, including expenses related to the Company’s officers, directors and advisors, while the Company contemplates its other alternatives. Such expenses would likely be in excess of those expected to be incurred in connection with implementing the Liquidation.

The Company will have an obligation to continue to comply with the applicable reporting requirements of the U.S. Exchange Act and applicable Canadian Securities Law, even if compliance with these reporting requirements is economically burdensome. The costs of compliance with such reporting requirements would reduce the amount which otherwise could be distributed to Shareholders.

If the Company fails to retain sufficient funds to pay the liabilities actually owed to the Company’s creditors, including employees of the Company, each Shareholder receiving Liquidation distributions could be liable for payment to the Company’s creditors, including employees, of his, her or its pro rata share of any shortfall, up to the amount actually distributed to each Shareholder in connection with the Liquidation.

The Company will only be able to confirm the amount of its liabilities following completion of the Claims Process as discussed under the heading “Approval of Liquidation Resolution and Liquidator Resolution — Claims Process” in this Proxy Statement. Although the Company will be seeking a Claims Bar Order if the Company proceeds with the Liquidation, which would provide that no claims may be pursued following the Liquidation, there is no absolute certainty that the risk of claims arising after the Liquidation of the Company will be eliminated completely. In the event that the Company fails to retain sufficient funds to pay the expenses and liabilities actually owed to the Company’s creditors, including employees of the Company, each Shareholder could be held liable for the repayment to those creditors, including employees, whose claims are not barred by the Claims Bar Order or otherwise, out of amounts previously received by such Shareholder from the Company (up to the full amount actually received by such Shareholder).

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE DISTRIBUTION

The following is a summary of certain anticipated U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) of Common Shares as a result of the Distribution.

The following summary does not purport to address all U.S. federal income tax consequences that may apply to a U.S. Holder (as defined below) as a result of the Distribution, nor does it take into account the specific circumstances of any particular holder, some of which may be subject to special tax rules (including, but not limited to, brokers, dealers in securities or currencies, traders in securities that elect to use a mark-to-market method of accounting for securities holdings, tax-exempt organizations, insurance companies, banks, thrifts and other financial institutions, persons liable for alternative minimum tax, persons that hold an interest in an entity that holds the Common Shares, persons that will own, or will have owned, directly, indirectly or constructively 10% or more (by vote or value) of our stock, persons that hold the Common Shares as part of a hedging, integration, conversion or constructive sale transaction or a straddle, Shareholders who acquired their Common Shares through the exercise of an employee stock option or otherwise as compensation, former citizens or permanent residents of the United States, or persons whose functional currency is not the U.S. dollar).

This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations, administrative pronouncements and rulings of the United States Internal Revenue Service (the “IRS”), judicial decisions and the Canada-United States Income Tax Convention (1980), as amended, all as in effect on the date hereof, and all of which are subject to change (possibly with retroactive effect) and to differing interpretations. Except as specifically set forth below, this summary does not discuss applicable income tax reporting requirements. This summary does not describe any state, local or non-U.S. tax law considerations, or any aspect of U.S. federal tax law other than income taxation (e.g., estate or gift tax or the Medicare contribution tax). U.S. Holders (as defined below) should consult their tax advisers regarding such matters.

No legal 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 consequences to U.S. Holders (as defined below) of the Distribution. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to different interpretations, the IRS and U.S. courts could disagree with one or more of the positions taken in this summary.

As used in this summary, a “U.S. Holder” is a beneficial owner of the Common Shares who, for U.S. federal income tax purposes, is (i) a citizen or individual resident of the United States, (ii) a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States, any State thereof or the District of Columbia, (iii) an estate whose income is subject to U.S. federal income tax regardless of its source, or (iv) a trust if (A) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (B) the trust has a valid election in effect to be treated as a U.S. person for U.S. federal income tax purposes.

If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax treatment of a partner will depend on the status of the partner and the activities of the partnership. Partnerships holding Common Shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax considerations relating to the Distribution.

For purposes of this summary, a “non-U.S. holder” is a beneficial owner of Common Shares, other than a partnership or other entity taxable as a partnership for U.S. federal income tax purposes, that is not a U.S. Holder. This discussion does not address the U.S. federal income tax consequences of the Distribution applicable to non-U.S. holders of Common Shares. Accordingly, a non-U.S. holder should consult its tax advisor regarding all U.S. federal, state, local and non-U.S. tax considerations relating to the Distribution.

Tax Considerations Relevant to U.S. Holders

For U.S. federal income tax purposes, we and Purchaser intend to treat the Distribution as one in a series of distributions in complete liquidation of the Company. In general, for U.S. federal income tax purposes and

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subject to the discussion below under “Passive Foreign Investment Company Considerations,” a U.S. Holder who receives the Distribution will recognize capital gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received (expressed in U.S. dollars) and (2) the U.S. Holder’s adjusted tax basis (expressed in U.S. dollars) in such shares.

Any such gain or loss will generally be long-term capital gain or loss if the U.S. Holder’s holding period in the Common Shares is greater than one year as of the date of the Distribution. Subject to the discussion below under “Passive Foreign Investment Company Considerations,” long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. If a U.S. Holder acquired different blocks of Common Shares at different times or different prices, such U.S. Holder must determine its adjusted tax basis and holding period separately with respect to each block of Common Shares. In general, each U.S. Holder must allocate liquidating distributions proportionally to each block of shares of the Common Shares and compare the allocated portion of each liquidating distribution with the U.S. Holder’s adjusted tax basis in each block of shares of the Common Shares at the time of such distribution. Any capital gain or loss will generally be treated as U.S.-source gain or loss for U.S. foreign tax credit purposes, which will generally limit the availability of foreign tax credits.

There is no assurance that the IRS will agree with our conclusion, however, that the Distribution be treated as one in a series of liquidating distributions in complete liquidation of the Company. If, contrary to our expectations, the Distribution is treated as an ordinary distribution from the Company to Shareholders, U.S. Holders may be subject to significant adverse tax consequences to the extent that the Company is classified as a PFIC for the taxable year that includes the Distribution or a prior year in which the U.S. Holder held Common Shares in the Company. Such adverse tax consequences could include a U.S. Holder recognizing income with respect to the full amount of the Distribution received (without reference to the U.S. Holder’s adjusted basis in its Common Shares or the current and accumulated earnings and profits of the Company), and any such income being taxed as ordinary income, and an additional interest charge applying with respect to a portion of the tax due thereon (as further described in the Company’s 2024 Form 10-K under the heading Passive Foreign Investment Company Rules).

Passive Foreign Investment Company Considerations

If the Company was classified as a PFIC in any taxable year in which a U.S. Holder held Common Shares of the Company, such U.S. Holder will be subject to special rules with respect to any gain recognized as a result of the Distribution.

A foreign corporation will be considered a PFIC for any taxable year in which (1) 75% or more of its gross income is “passive income” under the PFIC rules or (2) 50% or more of the average quarterly value of its assets produce (or are held for the production of) “passive income.” For this purpose, “passive income” generally includes interest, dividends, certain rents and royalties, and certain gains. Moreover, for purposes of determining if the foreign corporation is a PFIC, if the foreign corporation owns, directly or indirectly, at least 25%, by value, of the shares of another corporation, it will be treated as if it holds directly its proportionate share of the assets and receives directly its proportionate share of the income of such other corporation. If a corporation is treated as a PFIC with respect to a U.S. Holder for any taxable year, the corporation will continue to be treated as a PFIC with respect to that U.S. Holder in all succeeding taxable years, regardless of whether the corporation continues to meet the PFIC requirements in such years, unless certain elections are made.

The determination as to whether a foreign corporation is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and the determination will depend on the composition of the income, expenses and assets of the foreign corporation from time to time and the nature of the activities performed by its officers and employees. The Company believes that it was classified as a PFIC for the taxable year ending September 30, 2024 and in certain prior years, and expects to be classified as a PFIC for the current taxable year. However, the Company’s actual PFIC status for the current taxable year is uncertain and cannot be determined until after the end of the taxable year.

If the Company is classified as a PFIC, a U.S. Holder that does not make any of the elections described below would be required to report any gain recognized in connection with the receipt of the Distribution as

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ordinary income, rather than as capital gain, and to allocate such gain ratably over each day in the U.S. Holder’s holding period (or a portion thereof) for the Common Shares. The amounts allocated to the taxable year during which the gain is realized or distribution is made, and to any taxable years in such U.S. Holder’s holding period that are before the first taxable year in which we are treated as a PFIC with respect to the U.S. Holder, would be included in the U.S. Holder’s gross income as ordinary income for the taxable year of the gain. The amount allocated to each other taxable year would be taxed as ordinary income in the taxable year during which the gain is realized at the highest tax rate in effect for the U.S. Holder in that other taxable year and would be subject to an interest charge as if the income tax liabilities had been due with respect to each such prior year. U.S. Holders would not be able to offset any such gain recognized with losses.

The adverse tax consequences described above may be mitigated if a U.S. Holder makes or has made a timely “qualified electing fund” election (a “QEF election”) with respect to its interest in the PFIC. Consequently, if we are classified as a PFIC, it may be advantageous for a U.S. Holder to elect to treat us as a “qualified electing fund” with respect to such U.S. Holder in the first year in which it holds Common Shares. If a U.S. Holder makes a timely QEF election with respect to the Company, the electing U.S. Holder would be required in each taxable year that we are considered a PFIC to include in gross income (i) as ordinary income, the U.S. Holder’s pro rata share of the ordinary earnings of the Company and (ii) as capital gain, the U.S. Holder’s pro rata share of the net capital gain (if any) of the Company, whether or not the ordinary earnings or net capital gain are distributed. An electing U.S. Holder’s basis in Common Shares will be increased to reflect the amount of any taxed but undistributed income. Distributions of income that had previously been taxed will result in a corresponding reduction of basis in the Common Shares and will not be taxed again as distributions to the U.S. Holder.

If a U.S. Holder has made a valid election to treat the Company as a QEF, in lieu of being subject to the PFIC tax and interest charge rules discussed above, such U.S. Holder will generally recognize gain or loss for U.S. federal income tax purposes in connection with the receipt of the Distribution in an amount equal to the difference between the amount realized pursuant to such transaction and the U.S. Holder’s adjusted tax basis in its Common Shares. The U.S. Holder’s adjusted tax basis in the Common Shares includes any adjustments to such tax basis as a result of any income recognised as a result of the U.S. Holder’s QEF election with respect to the Company. Long-term capital gain of individuals and certain other non-corporate U.S. Holders will generally be eligible for a reduced rate of taxation. The deductibility of a capital loss may be subject to limitations. Any capital gain or loss will generally be treated as U.S.-source gain or loss for U.S. foreign tax credit purposes, which will generally limit the availability of foreign tax credits.

Alternatively, if the Company were to be classified as a PFIC, a U.S. Holder could also avoid certain of the rules described above by making a “mark-to-market election” ​(instead of a QEF election), provided the Common Shares are treated as regularly traded on a qualified exchange or other market within the meaning of the applicable U.S. Treasury Regulations.

U.S. Holders should consult their tax advisers regarding the potential availability and consequences of a mark-to-market election, as well as the advisability of making a QEF election.

During any taxable year in which the Company is treated as a PFIC with respect to a U.S. Holder, that U.S. Holder generally must file IRS Form 8621. U.S. Holders should consult their tax advisers concerning annual filing requirements.

Required Disclosure with Respect to Foreign Financial Assets

Certain U.S. Holders are required to report information relating to an interest in the Common Shares, subject to certain exceptions (including an exception for common shares held in accounts maintained by certain financial institutions), by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest in Common Shares. U.S. Holders should consult their tax advisers regarding information reporting requirements relating to their ownership of the Common Shares.

Information Reporting and Backup Withholding

Payments made to holders in exchange for Common Shares pursuant to the Distribution may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 24%).

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To avoid backup withholding, a U.S. Holder that does not otherwise establish an exemption should complete and return IRS Form W-9, certifying that such U.S. Holder is a U.S. person, the taxpayer identification number (generally, an employer identification number or social security number) provided is correct and such U.S. Holder is not subject to backup withholding. In general, a non-U.S. holder will not be subject to U.S. federal backup withholding and information reporting with respect to cash payments to the non-U.S. holder pursuant to the Distribution if the non-U.S. holder has provided an IRS Form W-8BEN, IRS Form W-8BEN-E, or other applicable version of IRS Form W-8.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will generally be allowed as a refund from the IRS or credited against a holder’s U.S. federal income tax liability, if any, provided that the required information is timely furnished to the IRS.

This summary of certain U.S. federal income tax considerations is for general information only and is not tax advice. Shareholders should consult their tax advisors as to the specific tax considerations applicable to them in connection with the Distribution, including the applicability and effect of the alternative minimum tax and the effect of any federal, state, local, foreign and other tax laws.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE ARRANGEMENT

The following is a summary of certain anticipated U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) and non-U.S. Holders (as defined below) of Common Shares whose Common Shares are exchanged for the Consideration pursuant to the Arrangement. This summary addresses only holders who hold the Common Shares as “capital assets” ​(generally, assets held for investment purposes).

The following summary does not purport to address all U.S. federal income tax consequences that may apply to a U.S. Holder (as defined below) as a result of the Arrangement, nor does it take into account the specific circumstances of any particular holder, some of which may be subject to special tax rules (including, but not limited to, brokers, dealers in securities or currencies, traders in securities that elect to use a mark-to-market method of accounting for securities holdings, tax-exempt organizations, insurance companies, banks, thrifts and other financial institutions, persons liable for alternative minimum tax, persons that hold an interest in an entity that holds the Common Shares, persons that will own, or will have owned, directly, indirectly or constructively 10% or more (by vote or value) of our stock, persons that hold the Common Shares as part of a hedging, integration, conversion or constructive sale transaction or a straddle, Shareholders who acquired their Common Shares through the exercise of an employee stock option or otherwise as compensation, former citizens or permanent residents of the United States, or persons whose functional currency is not the U.S. dollar).

This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations, administrative pronouncements and rulings of the United States Internal Revenue Service (the “IRS”), judicial decisions and the Canada-United States Income Tax Convention (1980), as amended, all as in effect on the date hereof, and all of which are subject to change (possibly with retroactive effect) and to differing interpretations. Except as specifically set forth below, this summary does not discuss applicable income tax reporting requirements. This summary does not describe any state, local or non-U.S. tax law considerations, or any aspect of U.S. federal tax law other than income taxation (e.g., estate or gift tax or the Medicare contribution tax). U.S. Holders (as defined below) should consult their tax advisers regarding such matters.

No legal 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 consequences to U.S. Holders (as defined below) of the Arrangement. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to different interpretations, the IRS and U.S. courts could disagree with one or more of the positions taken in this summary.

As used in this summary, a “U.S. Holder” is a beneficial owner of the Common Shares who, for U.S. federal income tax purposes, is (i) a citizen or individual resident of the United States, (ii) a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) that is created or organized

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in or under the laws of the United States, any State thereof or the District of Columbia, (iii) an estate whose income is subject to U.S. federal income tax regardless of its source, or (iv) a trust if (A) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (B) the trust has a valid election in effect to be treated as a U.S. person for U.S. federal income tax purposes.

If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax treatment of a partner will depend on the status of the partner and the activities of the partnership. Partnerships holding Common Shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax considerations relating to the Arrangement

For purposes of this summary, a “non-U.S. holder” is a beneficial owner of Common Shares, other than a partnership or other entity taxable as a partnership for U.S. federal income tax purposes, that is not a U.S. Holder. This discussion does not address all of the U.S. federal income tax consequences of the Arrangement, applicable to non-U.S. holders of Common Shares. Accordingly, a non-U.S. holder should consult its tax advisor regarding all U.S. federal, state, local and non-U.S. tax considerations relating to the Arrangement, including the potential treatment of a portion of the CVR Payment Amount as interest for U.S. federal income tax purposes.

Tax Considerations Relevant to U.S. Holders

The Arrangement

For U.S. federal income tax purposes, we and Purchaser intend to treat the receipt of the Consideration by U.S. Holders in exchange for their Common Shares pursuant to the Arrangement as consideration received in connection with the sale or exchange of such Common Shares. Accordingly, subject to the discussions below under “Passive Foreign Investment Company Considerations,” and “Treatment of the Receipt of the CVRs,” a U.S. Holder will generally recognize capital gain or loss in an amount equal to the difference, if any, between (i) the sum of the amount of cash received and the fair market value of the CVRs received as Consideration, and (ii) the U.S. Holder’s adjusted tax basis in the Common Shares surrendered, reduced by any amounts received in the Distribution, if any.

If a U.S. Holder’s holding period in the Common Shares surrendered in the Arrangement is greater than one (1) year as of the date of the Arrangement, any gain or loss generally will be long-term capital gain or loss. Subject to the discussion below under “Passive Foreign Investment Company Considerations,” long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. If a U.S. Holder acquired different blocks of Common Shares at different times or different prices, such U.S. Holder must determine its adjusted tax basis and holding period separately with respect to each block of Common Shares. Any capital gain or loss will generally be treated as U.S.-source gain or loss for U.S. foreign tax credit purposes, which will generally limit the availability of foreign tax credits.

Passive Foreign Investment Company Considerations

If the Company was classified as a PFIC in any taxable year in which a U.S. Holder held Common Shares of the Company, such U.S. Holder will be subject to special rules with respect to any gain recognized under the Arrangement.

A foreign corporation will be considered a PFIC for any taxable year in which (1) 75% or more of its gross income is “passive income” under the PFIC rules or (2) 50% or more of the average quarterly value of its assets produce (or are held for the production of) “passive income.” For this purpose, “passive income” generally includes interest, dividends, certain rents and royalties, and certain gains. Moreover, for purposes of determining if the foreign corporation is a PFIC, if the foreign corporation owns, directly or indirectly, at least 25%, by value, of the shares of another corporation, it will be treated as if it holds directly its proportionate share of the assets and receives directly its proportionate share of the income of such other corporation. If a corporation is treated as a PFIC with respect to a U.S. Holder for any taxable year, the corporation will

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continue to be treated as a PFIC with respect to that U.S. Holder in all succeeding taxable years, regardless of whether the corporation continues to meet the PFIC requirements in such years, unless certain elections are made.

The determination as to whether a foreign corporation is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and the determination will depend on the composition of the income, expenses and assets of the foreign corporation from time to time and the nature of the activities performed by its officers and employees. The Company believes that it was classified as a PFIC for the taxable year ending September 30, 2024 and in certain prior years, and expects to be classified as a PFIC for the current taxable year. However, the Company’s actual PFIC status for the current taxable year is uncertain and cannot be determined until after the end of the taxable year.

If the Company is classified as a PFIC, a U.S. Holder that does not make any of the elections described below would be required to report any gain recognized in connection with the receipt of the Consideration in the Arrangement as ordinary income, rather than as capital gain, and to allocate such gain ratably over each day in the U.S. Holder’s holding period (or a portion thereof) for the Common Shares. The amounts allocated to the taxable year during which the gain is realized or distribution is made, and to any taxable years in such U.S. Holder’s holding period that are before the first taxable year in which we are treated as a PFIC with respect to the U.S. Holder, would be included in the U.S. Holder’s gross income as ordinary income for the taxable year of the gain. The amount allocated to each other taxable year would be taxed as ordinary income in the taxable year during which the gain is realized at the highest tax rate in effect for the U.S. Holder in that other taxable year and would be subject to an interest charge as if the income tax liabilities had been due with respect to each such prior year. U.S. Holders would not be able to offset any such gain recognized with losses.

The adverse tax consequences described above may be mitigated if a U.S. Holder makes or has made a timely “qualified electing fund” election (a “QEF election”) with respect to its interest in the PFIC. Consequently, if we are classified as a PFIC, it may be advantageous for a U.S. Holder to elect to treat us as a “qualified electing fund” with respect to such U.S. Holder in the first year in which it holds Common Shares. If a U.S. Holder makes a timely QEF election with respect to the Company, the electing U.S. Holder would be required in each taxable year that we are considered a PFIC to include in gross income (i) as ordinary income, the U.S. Holder’s pro rata share of the ordinary earnings of the Company and (ii) as capital gain, the U.S. Holder’s pro rata share of the net capital gain (if any) of the Company, whether or not the ordinary earnings or net capital gain are distributed. An electing U.S. Holder’s basis in Common Shares will be increased to reflect the amount of any taxed but undistributed income. Distributions of income that had previously been taxed will result in a corresponding reduction of basis in the Common Shares and will not be taxed again as distributions to the U.S. Holder.

If a U.S. Holder has made a valid election to treat the Company as a QEF, in lieu of being subject to the PFIC tax and interest charge rules discussed above, such U.S. Holder will generally recognize gain or loss for U.S. federal income tax purposes in connection with the receipt of the Consideration in the Arrangement in an amount equal to the difference between the amount realized pursuant to such transactions and the U.S. Holder’s adjusted tax basis in its Common Shares. The U.S. Holder’s adjusted tax basis in the Common Shares includes any adjustments to such tax basis as a result of any income recognised as a result of the U.S. Holder’s QEF election with respect to the Company. Long-term capital gain of individuals and certain other non-corporate U.S. Holders will generally be eligible for a reduced rate of taxation. The deductibility of a capital loss may be subject to limitations. Any capital gain or loss will generally be treated as U.S.-source gain or loss for U.S. foreign tax credit purposes, which will generally limit the availability of foreign tax credits.

Alternatively, if the Company were to be classified as a PFIC, a U.S. Holder could also avoid certain of the rules described above by making a “mark-to-market election” ​(instead of a QEF election), provided the Common Shares are treated as regularly traded on a qualified exchange or other market within the meaning of the applicable U.S. Treasury Regulations.

U.S. Holders should consult their tax advisers regarding the potential availability and consequences of a mark-to-market election, as well as the advisability of making a QEF election.

During any taxable year in which the Company is treated as a PFIC with respect to a U.S. Holder, that U.S. Holder generally must file IRS Form 8621. U.S. Holders should consult their tax advisers concerning annual filing requirements.

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Treatment of the Receipt of the CVRs

This section discusses the U.S. federal income tax considerations of the Arrangement if the exchange of Common Shares for cash and CVRs is treated as a closed transaction or, alternatively, as an open transaction. Shareholders are urged to consult their tax advisors with respect to the proper characterization of the receipt of, and payments made with respect to, the CVRs. Under either “closed” or “open” transaction treatment, gain or loss generally will be determined separately for each block of Common Shares exchanged pursuant to the Arrangement.

If the receipt of the CVRs is treated as, or determined to be, part of a closed transaction for U.S. federal income tax purposes, then a U.S. Holder of Common Shares generally would recognize capital gain or loss on an exchange of Common Shares pursuant to the Arrangement as described above under “Tax Considerations Relevant to U.S. Holders.”

A U.S. Holder’s initial tax basis in a CVR received in the Arrangement would equal the fair market value of such CVR as determined for U.S. federal income tax purposes. The holding period for a CVR would begin on the day following the date of the Effective Time.

The Company and Purchaser intend to treat a U.S. Holder’s receipt of a CVR as the receipt of additional consideration paid in the Arrangement for U.S. federal income tax purposes as part of a closed transaction. Purchaser also intends to use commercially reasonable efforts to provide any information reasonably necessary to report the fair market value of a CVR issued in the Arrangement to holders on IRS Form 1099-B or other applicable form. The Company’s and Purchaser’s views as to the U.S. federal income tax treatment of the receipt of a CVR and the fair market value thereof are not dispositive with respect to the tax treatment or fair market value of the CVRs and are not binding on the IRS as to the holder’s tax treatment or the fair market value of the CVRs. U.S. Holders are urged to consult their tax advisors.

There is no authority directly addressing the U.S. federal income tax treatment of receiving payments on the CVRs and, therefore, the amount, timing and character of any gain, income or loss with respect to the CVRs is uncertain. For example, payments with respect to the CVRs could be treated as payments with respect to a sale or exchange of a capital asset or as giving rise to ordinary income. In addition, it is unclear how a U.S. Holder of the CVRs would recover its adjusted tax basis with respect to payments thereon. It is also possible that, were a payment to be treated as being with respect to the sale of a capital asset, a portion of such payment would constitute imputed interest under Section 483 of the Code (as described below).

The Company and Purchaser intend to treat any payment received in respect of the CVRs for all U.S. federal tax purposes (except to the extent any portion of such payment is required to be treated as imputed interest, as described below) as an amount realized on the disposition of the CVR. Assuming that this method of reporting is correct, a U.S. Holder should recognize gain or loss equal to the difference between the amount of such payment (less any portion of such payment required to be treated as imputed interest, as described below) and the U.S. Holder’s adjusted tax basis in the CVR. The gain or loss will generally be long-term capital gain or loss if the U.S. Holder has held the CVR for more than one year at the time of such payment. Additionally, a U.S. Holder may recognize loss, which loss likely would be a capital loss, to the extent of any remaining basis after the expiration of any right to cash payments under such U.S. Holder’s CVR. The deductibility of capital losses is subject to limitations.

If, contrary to the Company’s and Purchaser’s intended reporting position, the transaction is treated as an “open transaction” for U.S. federal income tax purposes, the fair market value of the CVRs would not be treated as additional consideration for the Common Shares at the time the CVRs are received in the Arrangement, and the U.S. Holder would have no tax basis in the CVRs. Instead, subject to the discussion above under “Passive Foreign Investment Company Considerations,” the U.S. Holder would take payments under the CVRs into account when made or deemed made in accordance with the U.S. Holder’s regular method of accounting for U.S. federal income tax purposes. A portion of such payments would be treated as interest income under Section 483 of the Code (as discussed below) and the balance, in general, as additional consideration for the disposition of the Common Shares. Payments of cash pursuant to the Arrangement, plus the portion of payments on the CVRs not treated as imputed interest under Section 483 of the Code, will generally first be applied to reduce a U.S. Holder’s adjusted tax basis in the Common Shares sold or exchanged in the Arrangement. A U.S. Holder will then recognize capital gain to the extent of any cash received pursuant

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to the Arrangement and the portion of payments in respect of the CVRs not treated as imputed interest received that is in excess of the U.S. Holder’s adjusted tax basis in the Common Shares sold or exchanged in the Arrangement. A U.S. Holder will recognize capital loss to the extent of any remaining basis after the basis reduction described above, although it is possible that such holder may not be able to recognize such loss until the resolution of all contingencies under the CVRs or possibly until such holder’s abandonment of the holder’s CVRs. Any such capital gain or loss will generally be long-term capital gain or loss if the Common Shares were held for more than one year prior to such disposition. The deductibility of capital losses is subject to certain limitations.

Regardless of whether the receipt of the CVR Payment Amount is treated as part of a closed transaction or as part of an open transaction for U.S. federal income tax purposes, the CVR Payment Amount may be treated as a payment for the sale or exchange of Common Shares to which Section 483 of the Code applies if at least one payment is due more than one year after the consummation of the Arrangement. Purchaser intends to report imputed interest on the CVRs pursuant to Section 483 of the Code, except as required by applicable law. Accordingly, assuming Section 483 of the Code applies, a portion of any CVR Payment Amount that is due more than six months after the consummation of the Arrangement will be reported as interest and subject to U.S. federal income tax as ordinary income. The portion of any payment made with respect to a CVR treated as imputed interest under Section 483 of the Code will be determined at the time such payment is made and generally should equal the excess of (1) the amount of the payment in respect of the CVRs over (2) the present value of such amount as of the Effective Time, calculated using the applicable federal rate as the discount rate. The applicable federal rate is published monthly by the IRS. The relevant applicable federal rate will be the lower of the lowest applicable federal rate in effect during the three-month period ending with the month that includes the date on which the Plan of Arrangement was signed or the lowest applicable federal rate in effect during the three-month period ending with the month that includes the date of the consummation of the Arrangement. A U.S. Holder must include in its taxable income interest imputed pursuant to Section 483 of the Code using such holder’s regular method of accounting for U.S. federal income tax purposes.

Required Disclosure with Respect to Foreign Financial Assets

Certain U.S. Holders are required to report information relating to an interest in the Common Shares, subject to certain exceptions (including an exception for common shares held in accounts maintained by certain financial institutions), by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest in Common Shares. U.S. Holders should consult their tax advisers regarding information reporting requirements relating to their ownership of the Common Shares.

Tax Considerations Relevant to non-U.S. Holders — the Arrangement

For U.S. federal income tax purposes, we and Purchaser intend to treat the receipt of the Consideration by U.S. Holders in exchange for their Common Shares pursuant to the Arrangement as consideration received in connection with the sale or exchange of such Common Shares. In general, any gain realized by a Non-U.S. Holder on the exchange of shares of our Common Shares for the Consideration generally will not be subject to U.S. federal income tax unless:

•

the gain is effectively connected with the conduct of a trade or business of such non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax on a net basis at the rates generally applicable to U.S. persons, and, if the non-U.S. Holder is a corporation, such gain may also be subject to the branch profits tax at a rate of 30% (or a lower rate under an applicable income tax treaty); or

​

•

such non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year in which the Arrangement is consummated, and certain other specified conditions are met, in which case such gain will be subject to U.S. federal income tax at a rate of 30% (or a lower rate under an applicable income tax treaty), net of applicable U.S.-source capital losses recognized by such non-U.S. Holder.

​

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Generally, if payments are made to a non-U.S. Holder with respect to a CVR, such non-U.S. Holder may be subject to withholding at a rate of 30% (or a lower rate under an applicable income tax treaty) of the portion of any such payments treated as imputed interest (as discussed above), unless such non-U.S. Holder establishes its entitlement to exemption from or a reduced rate of withholding under an applicable tax treaty by providing the appropriate documentation (generally, IRS Form W-8BEN or W-8BEN-E or other applicable IRS Form W-8) to the applicable withholding agents. In addition, a payment to a non-U.S. Holder with respect to a CVR may be subject to U.S. backup withholding and FATCA withholding, each as discussed below.

Non-U.S. Holders are urged to consult their tax advisors to determine the U.S. federal, state, local and other tax considerations that may be relevant to them in light of their particular circumstances and as to any applicable tax treaties that might provide for different rules.

Information Reporting and Backup Withholding

Payments made to holders in exchange for Common Shares pursuant to the Arrangement may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 24%). To avoid backup withholding, a U.S. Holder that does not otherwise establish an exemption should complete and return IRS Form W-9, certifying that such U.S. Holder is a U.S. person, the taxpayer identification number (generally, an employer identification number or social security number) provided is correct and such U.S. Holder is not subject to backup withholding. In general, a non-U.S. holder will not be subject to U.S. federal backup withholding and information reporting with respect to cash payments to the non-U.S. holder pursuant to the Arrangement if the non-U.S. holder has provided an IRS Form W-8BEN, IRS Form W-8BEN-E, or other applicable version of IRS Form W-8.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will generally be allowed as a refund from the IRS or credited against a holder’s U.S. federal income tax liability, if any, provided that the required information is timely furnished to the IRS.

Foreign Account Tax Compliance Act or FATCA

Withholding at a rate of 30% generally will be required in certain circumstances on interest (including payments treated as interest income under Section 483 of the Code) in respect of CVRs held by or through certain non-U.S. financial institutions (including investment funds), unless such institution (i) enters into, and complies with, an agreement with the IRS to report, on an annual basis, information with respect to interests in, and accounts maintained by, the institution that are owned by certain U.S. persons and by certain non-U.S. entities that are wholly or partially owned by U.S. persons and to withhold on certain payments or (ii) if required under an intergovernmental agreement between the U.S. and an applicable foreign country, reports such information to its local tax authority, which will exchange such information with the U.S. authorities. An intergovernmental agreement between the U.S. and an applicable foreign country may modify these requirements. Accordingly, the entity through which the CVR is held will affect the determination of whether such withholding is required. Similarly, in certain circumstances, interest (including payments treated as interest income under Section 483 of the Code) in respect of the CVRs held by a holder that is a non-financial non-U.S. entity that does not qualify under certain exemptions generally will be subject to withholding at a rate of 30%, unless such entity either (i) certifies to the payor that such entity does not have any “substantial United States owners” or (ii) provides certain information regarding the entity’s “substantial United States owners,” which the payor will then in turn be required to provide to the U.S. Department of the Treasury. Holders should consult their tax advisors regarding the possible implications of these rules on their receipt of, and payments with respect to, CVRs.

This summary of certain U.S. federal income tax considerations is for general information only and is not tax advice. Shareholders should consult their tax advisors as to the specific tax considerations applicable to them in connection with the Arrangement, including the applicability and effect of the alternative minimum tax and the effect of any federal, state, local, foreign and other tax laws.

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CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS OF THE DISTRIBUTION

The following is a summary as of the date prior to the date hereof of the principal Canadian federal income tax considerations under the Tax Act generally applicable to Shareholders of the Distribution. This summary is applicable only to a Shareholder who, at all relevant times, for purposes of the Tax Act: (a) deals at arm’s length with the Company; (b) is not affiliated with the Company; and (c) holds Common Shares as capital property (a “Holder”).

Generally, Common Shares will be capital property to a Holder unless the Common Shares are held or were acquired in the course of carrying on a business of buying or selling securities or as part of an adventure or concern in the nature of trade. Certain Resident Holders (as defined below) may be entitled to make an irrevocable election permitted by subsection 39(4) of the Tax Act, the effect of which would be to deem to be capital property any Common Shares (and all other “Canadian securities” ​(as defined in the Tax Act)) owned by such Resident Holder in the taxation year in which the election is made and in all subsequent taxation years. Resident Holders whose Common Shares might not otherwise be considered to be capital property should consult their own tax advisors concerning this election.

This summary does not describe the tax considerations of the Distribution to Optionholders or Warrantholders. Optionholders and Warrantholders should consult their own tax advisors. In addition, this summary is also not applicable to a Shareholder who acquired their Common Shares on the exercise of Options. Such Shareholders should consult their own tax advisors.

This summary is not applicable to a Holder (i) that is a “specified financial institution” ​(as defined in the Tax Act), (ii) an interest in which is a “tax shelter investment” ​(as defined in the Tax Act), (iii) that is a “financial institution” ​(as defined in the Tax Act) for purposes of the “mark-to-market” rules in the Tax Act, (iv) that reports its “Canadian tax results” ​(as defined in the Tax Act) in a currency other than Canadian dollars, (v) that is exempt from tax under Part I of the Tax Act, (vi) that has entered into a “derivative forward agreement” or “synthetic disposition arrangement” ​(each as defined in the Tax Act) in respect of the Common Shares, (vii) that is a “foreign affiliate” ​(as defined in the Tax Act) of a taxpayer resident in Canada, or (viii) that is otherwise of special status or in special circumstances. Such Holders should consult their own tax advisors.

This summary is based on the current provisions of the Tax Act and an understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”) 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. No assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or anticipate any changes in Law or administrative policies or assessing practices 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 be different from those discussed herein.

This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any particular Holder. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, Holders should consult their own tax advisors having regard to their own particular circumstances.

Holders 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, 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.

(i)

Distribution to Resident Holders

​

Generally, where a “public corporation” ​(as defined in the Tax Act) reduces the “paid-up capital” (as defined in the Tax Act) in respect of a class of its shares, the amount distributed to its shareholders on such reduction is deemed to be a dividend. However, where the paid-up capital of the relevant class of shares of the corporation exceeds the amount of the distribution, the amount distributed may be treated as a tax-free return

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of capital to the shareholder (subject to the comments below concerning the reduction of the adjusted cost base of the shares) and not as a deemed dividend where the distribution is made on the winding-up, discontinuance or reorganization of the corporation’s business. Although not free from doubt, the Company is of the view that this exception should apply to the Distribution.

The amount of the Distribution is not expected to exceed the approximate amount of the current paid-up capital of the Common Shares. Accordingly, if the above exception applies at the time of the Distribution, the entire amount of the Distribution should be treated as a tax free return of capital and no portion thereof should be treated as a deemed dividend. To the extent that any portion of the Distribution is treated as a deemed dividend, the amount of the deemed dividend will be included in computing the income of the Resident Holder for purposes of the Tax Act, as generally described below under the heading “Holders Resident in Canada — (ii) Taxation of Dividends”.

The adjusted cost base of each Common Share to a Resident Holder will be reduced by an amount equal to the amount per Common Share received in connection with the Distribution as a return of capital. If the amount per Common Share received on any such Distribution exceeds the adjusted cost base of such share, a Resident Holder will realize a capital gain equal to such excess. The tax consequences to a Resident Holder of any such capital gain are generally as described below under the heading “Holders Resident in Canada — (iii) Taxation of Capital Gains and Losses”.

No third-party determination of the paid-up capital has been sought or obtained, and no advance tax ruling or legal opinion has been sought or obtained with respect to the tax treatment of the Distribution. As such, Resident Holders should consult their own tax advisors in this regard.

(ii)

Taxation of Dividends

​

Dividends (including deemed dividends) received on the Common Shares by a Resident Holder who is an individual (other than certain trusts) will be included in the individual’s income and will be subject to the gross-up and dividend tax credit rules applicable to taxable dividends received by individuals from “taxable Canadian corporations”, as defined in the Tax Act. Dividends received by individuals (other than certain trusts) may give rise to alternative minimum tax under the Tax Act, depending on the individual’s circumstances.

Dividends (including deemed dividends) received on the Common Shares by a Resident Holder that is a corporation will be included in computing the corporation’s income and will generally be deductible in computing its taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received by a Resident Holder that is a corporation as proceeds of disposition or a capital gain. Resident Holders that are corporations are urged to consult their own tax advisors having regard to their particular circumstances.

A Resident Holder that is a “private corporation” or a “subject corporation” ​(each as defined in the Tax Act), may be liable to pay a refundable tax under Part IV of the Tax Act on dividends received (or deemed to be received) on the Common Shares to the extent that such dividends are deductible in computing the Resident Holder’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). Resident Holders to whom these rules may apply should consult their own tax advisors.

A Resident Holder that, throughout the relevant taxation year, is a “Canadian-controlled private corporation” or, at any time in a relevant taxation year, a “substantive CCPC” ​(each as defined in the Tax Act) may be liable for an additional tax (refundable in certain circumstances) on its “aggregate investment income”, which is defined in the Tax Act to include dividends received or deemed to be received in respect of the Common Shares, but not dividends or deemed dividends that are deductible in computing the dividend recipient’s taxable income. Resident Holders to whom these rules may apply should consult their own tax advisors.

(iii)

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 in such taxation year. Subject to and in

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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 by the Resident Holder in such taxation year. Allowable capital losses in excess of taxable capital gains for the year of disposition may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years, in accordance with and subject to the 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 Common Share may be reduced by the amount of any dividends received (or deemed to be received) by it on such Common Share to the extent and under the circumstances prescribed by the Tax Act. Similar rules may apply where a Common Share is owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Such Resident Holders should consult their own tax advisors.

A Resident Holder that, throughout the relevant taxation year, is a “Canadian-controlled private corporation” or, at any time in a relevant taxation year, a “substantive CCPC” ​(each as defined in the Tax Act) may be liable for an additional tax (refundable in certain circumstances) on its “aggregate investment income”, which is defined in the Tax Act to include amounts in respect of taxable capital gains. Resident Holders to whom these rules may apply should consult their own tax advisors.

A capital gain realized by a Resident Holder who is an individual or trust (other than certain trusts) may result in such Resident Holder being liable for alternative minimum tax under the Tax Act.

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, has not been and 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 Common Shares in a business carried on in Canada (a “Non-Resident Holder”). This portion of the summary is not applicable to Non-Resident Holders that are: (i) insurers carrying on an insurance business in Canada and elsewhere; or (ii) “authorized foreign banks” ​(as defined in the Tax Act). Such Non-Resident Holders should consult their own tax advisors.

(i)

Distribution to Non-Resident Holders

​

The consequences to Non-Resident Holders of the Distribution under the Tax Act will be as described above under the heading “Holders Resident in Canada — (i) Distribution to Resident Holders”. However, any deemed dividend would be taxable to a Non-Resident Holder, as generally described below under the heading “Holders Not Resident in Canada — (ii) Taxation of Dividends”. The tax consequences to a Non-Resident Holder of any capital gains are generally as described below under the heading “Holders Not Resident in Canada — (iii) Taxation of Capital Gains”.

(ii)

Taxation of Dividends

​

Any dividend that is, or is deemed to be, paid or credited by the Company to a Non-Resident Holder will be subject to Canadian withholding tax at a rate of 25% or such lower rate as may be provided under the terms of an applicable income tax treaty or convention. Under the Canada-United States Income Tax Convention the rate of withholding tax on dividends paid or credited to a Non-Resident Holder that is fully entitled to the benefits of such treaty is generally reduced to 15% of the gross amount of the dividends (or 5% in the case of a Non-Resident Holder that is a corporation entitled to full benefits under the Canada-United States Income Tax Convention beneficially owning at least 10% of the Company’s voting shares).

(iii)

Taxation of Capital Gains

​

A Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition or deemed disposition of Common Shares (including as a result of the Distribution to the Non-Resident Holder exceeding the adjusted cost base of such Non-Resident Holder’s Common Shares) unless the Common Shares are, or are deemed to be, “taxable Canadian property” ​(as defined in the Tax Act) of the Non-Resident Holder at the time of disposition or deemed disposition and the gain is not exempt from Canadian tax pursuant to the terms of an applicable income tax treaty or convention.

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Generally, a Common Share will not constitute taxable Canadian property of a Non-Resident Holder at the time of disposition provided that the Common Share is listed on a “designated stock exchange” for the purposes of the Tax Act (which currently includes the Nasdaq), unless at any time during the 60 month period immediately preceding the disposition or deemed disposition of the Common Share the following two conditions are met concurrently: (a) the Non-Resident Holder, persons with whom the Non-Resident Holder does not deal at arm’s length, partnerships whose members include, either directly or indirectly through one or more partnerships, the Non-Resident Holder and/or persons with whom the Non-Resident Holder does not deal at arm’s length, or any combination of the foregoing, owned 25% or more of the issued shares of any class or series of shares of the capital stock of the Company; and (b) the Common Share derived more than 50% of its fair market value directly or indirectly from, or from any combination of, real or immovable property situated in Canada, “Canadian resource properties”, “timber resource properties” ​(each as defined in the Tax Act), or options in respect of, interests in, or for civil law rights in, any such property (whether or not such property exists). Notwithstanding the foregoing, a Common Share may be deemed to be taxable Canadian property in certain other circumstances. Non-Resident Holders should consult their own tax advisors in this regard.

In the event that Common Shares constitute taxable Canadian property to a Non-Resident Holder and any capital gain realized by the Non-Resident Holder on the disposition or deemed disposition of the Common Shares (including as a result of the Distribution to the Non-Resident Holder exceeding the adjusted cost base of such Non-Resident Holder’s Common Shares) is not exempt from Canadian tax pursuant to the terms of an applicable income tax treaty or convention, then the tax consequences described above under the heading “Holders Resident in Canada — (iii) Taxation of Capital Gains and Losses” will generally apply.

Non-Resident Holders whose Common Shares may constitute taxable Canadian property should consult their own tax advisors for advice having regard to their particular circumstances.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS OF THE ARRANGEMENT

The following is a summary as of the date prior to the date hereof of the principal Canadian federal income tax considerations under the Income Tax Act (Canada) and the regulations thereunder (collectively, the “Tax Act”) generally applicable to a Shareholder who disposes of Common Shares pursuant to the Arrangement. This summary is applicable only to a Shareholder who, at all relevant times, for purposes of the Tax Act: (a) deals at arm’s length with the Company, the Purchaser, the Parent, and XRC; (b) is not affiliated with the Company, the Purchaser, the Parent, or XRC; and (c) holds Common Shares, and will hold the CVRs received pursuant to the Arrangement, if applicable, as capital property (a “Holder”).

Generally, Common Shares and CVRs will be capital property to a Holder unless such securities are held or were acquired in the course of carrying on a business of buying or selling securities or as part of an adventure or concern in the nature of trade. Certain Resident Holders (as defined below) may be entitled to make an irrevocable election permitted by subsection 39(4) of the Tax Act, the effect of which would be to deem to be capital property any Common Shares (and all other “Canadian securities” ​(as defined in the Tax Act)) owned by such Resident Holder in the taxation year in which the election is made and in all subsequent taxation years. Resident Holders whose Common Shares might not otherwise be considered to be capital property should consult their own tax advisors concerning this election. This election does not apply to CVRs.

This summary does not describe the tax considerations of the Arrangement to Optionholders or Warrantholders. Optionholders and Warrantholders should consult their own tax advisors. In addition, this summary is also not applicable to a Shareholder who acquired their Common Shares on the exercise of Options. Such Shareholders should consult their own tax advisors.

This summary is not applicable to a Holder (i) that is a “specified financial institution” ​(as defined in the Tax Act), (ii) an interest in which is a “tax shelter investment” ​(as defined in the Tax Act), (iii) that is a “financial institution” ​(as defined in the Tax Act) for purposes of the “mark-to-market” rules in the Tax Act, (iv) that reports its “Canadian tax results” ​(as defined in the Tax Act) in a currency other than Canadian dollars, (v) that is exempt from tax under Part I of the Tax Act, (vi) that has entered into a “derivative forward agreement” or “synthetic disposition arrangement” ​(each as defined in the Tax Act) in respect of the Common Shares or the CVRs, (vii) that is a “foreign affiliate” ​(as defined in the Tax Act) of a taxpayer resident in

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Canada, or (viii) that is otherwise of special status or in special circumstances. Such Holders should consult their own tax advisors.

This summary is based on the current provisions of the Tax Act and an understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”) 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. No assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or anticipate any changes in Law or administrative policies or assessing practices 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 be different from those discussed herein.

This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any particular Holder. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, Holders should consult their own tax advisors having regard to their own particular circumstances.

The Canadian federal income tax consequences to a Holder of the receipt, holding and disposition of CVRs, including the consequences of a potential reduction in the amount payable under the CVRs, and the reporting of amounts in respect thereof for Canadian federal income tax purposes are not free from doubt. Holders are urged to consult their own tax advisors regarding such consequences and reporting. This summary is based upon the understanding of counsel that a CVR evidences a contractual right to acquire cash on the satisfaction of certain conditions. No advance tax ruling in respect of the Arrangement has been sought from the CRA and counsel is not aware of any relevant judicial authority relating to this characterization for tax purposes.

Currency Conversion

For purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of the Common Shares and CVRs (including adjusted cost base and proceeds of disposition) must be expressed in Canadian dollars. Any amount denominated in another currency must be converted into Canadian dollars using exchange rates as determined in accordance with the Tax Act.

Holders 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, 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.

(i)

Disposition of Common Shares Pursuant to the Arrangement

​

Generally, a Resident Holder (other than a Resident Dissenting Shareholder) who disposes of Common Shares pursuant to the Arrangement will realize a capital gain (or capital loss) equal to the amount, if any, by which the aggregate proceeds (including the cash consideration and the aggregate of the fair market value of the CVRs received pursuant to the Arrangement at the time of the Arrangement) received for such Common Shares, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the Resident Holder of such Common Shares immediately before the disposition. See “Holders Resident in Canada — (iv) Taxation of Capital Gains and Losses” below for a general discussion of the treatment of capital gains and capital losses under the Tax Act.

(ii)

Receipt, Holding and Disposition of CVRs Received Pursuant to the Arrangement

​

The cost to a Resident Holder of a CVR received pursuant to the Arrangement will be equal to the fair market value of the CVR received at the time of the Arrangement.

A Resident Holder who disposes of a CVR, including pursuant to the termination of the CVR when all of the payment obligations under the CVR have been satisfied, should realize a capital gain (or capital loss) to the extent that the proceeds of disposition received by such Resident Holder, which should include, although not free from doubt, the payments received pursuant to the CVR, if any, exceed (or are less than) the Holder’s

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adjusted cost base of such CVR immediately before the disposition and any reasonable costs of disposition. Where no payment on the CVR is to be made, or, in the event of the termination of a CVR where it is cancelled pursuant to the CVR Agreement, a Resident Holder should be considered to have disposed of its CVR for no proceeds and will realize a capital loss equal to the adjusted cost base of such CVR. See “Holders Resident in Canada — (iv) Taxation of Capital Gains and Losses” below for a general discussion of the treatment of capital gains and capital losses under the Tax Act.

The Canadian federal income tax considerations to a Resident Holder of the receipt, holding and disposition of a CVR, including the tax considerations of the receipt of payment pursuant to the CVR or a potential reduction in the amount payable under the CVR and the reporting of amounts in respect thereof for Canadian federal income tax purposes, are not entirely free from doubt. Resident Holders should consult their own tax advisors to determine the tax considerations and corresponding reporting in relation to the receipt, holding and disposition of a CVR and, in particular, whether the receipt of the CVRs and payments received under the CVRs should be reported in an alternative manner to that described above.

(iii)

Dissenting Shareholders

​

A Resident Holder who duly and validly exercises Dissent Rights (a “Resident Dissenting Shareholder”) who receives a cash payment from or on behalf of the Purchaser in respect of the fair value of the Resident Dissenting Shareholder’s Dissent Shares will be deemed to have disposed of the Dissent Shares to the Purchaser for proceeds of disposition equal to the amount received by the Resident Dissenting Shareholder (excluding the amount of any interest awarded by a court). As a result, such Resident Dissenting Shareholder will generally realize a capital gain (or a capital loss) to the extent that such proceeds of disposition (excluding any interest awarded by a court) exceed (or are less than) the adjusted cost base to the Resident Dissenting Shareholder of such Dissenting Shares immediately before the disposition and any reasonable costs of disposition. See the disclosure below under “Holders Resident in Canada — (iv) Taxation of Capital Gains and Losses” for a description of the tax treatment of capital gains and losses.

Interest awarded by a court to a Resident Dissenting Shareholder will be included in the Resident Dissenting Shareholder’s income for purposes of the Tax Act. A Resident Dissenting Shareholder that, throughout the relevant taxation year, is a “Canadian-controlled private corporation” or, at any time in a relevant taxation year, a “substantive CCPC” ​(each as defined in the Tax Act) may be liable to pay an additional tax (refundable in certain circumstances) on its “aggregate investment income”, which is defined in the Tax Act to include interest income. Resident Holders to whom these rules may apply should consult their own tax advisors.

(iv)

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 in such taxation 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 by the Resident Holder in such taxation year. Allowable capital losses in excess of taxable capital gains for the year of disposition may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years, in accordance with and subject to the 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 Common Share may be reduced by the amount of any dividends received (or deemed to be received) by it on such Common Share to the extent and under the circumstances prescribed by the Tax Act. Similar rules may apply where a Common Share is owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Such Resident Holders should consult their own tax advisors.

A Resident Holder that, throughout the relevant taxation year, is a “Canadian-controlled private corporation” or, at any time in a relevant taxation year, a “substantive CCPC” ​(each as defined in the Tax Act) may be liable for an additional tax (refundable in certain circumstances) on its “aggregate investment income”, which is defined in the Tax Act to include amounts in respect of taxable capital gains. Resident Holders to whom these rules may apply should consult their own tax advisors.

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A capital gain realized by a Resident Holder who is an individual or trust (other than certain trusts) may result in such Resident Holder being liable for alternative minimum tax under the Tax Act.

Eligibility for Investment

The CVRs will not be qualified for investments under the Tax Act for a trust governed by a registered retirement savings plan, a registered retirement income fund, a deferred profit sharing plan, a registered disability savings plan, a registered education savings plan, a tax-free savings account, or a first home savings account. Such trust holding the CVRs or, in certain cases, the annuitant, holder or subscriber thereof may be subject to penalty taxes as a result of the trust holding the CVRs. Other negative tax consequences may also result. Resident Holders are urged to consult their own tax advisors for advice as to any actions to be taken to avoid such adverse tax consequences.

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, has not been and 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 Common Shares or CVRs in a business carried on in Canada (a “Non-Resident Holder”). This portion of the summary is not applicable to Non-Resident Holders that are: (i) insurers carrying on an insurance business in Canada and elsewhere; or (ii) “authorized foreign banks” ​(as defined in the Tax Act). Such Non-Resident Holders should consult their own tax advisors.

(i)

Disposition of Common Shares and Subsequent Dispositions of CVRs

​

A Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition or deemed disposition of Common Shares under the Arrangement unless the Common Shares are, or are deemed to be, “taxable Canadian property” ​(as defined in the Tax Act) of the Non-Resident Holder at the time of disposition or deemed disposition and the gain is not exempt from Canadian tax pursuant to the terms of an applicable income tax treaty or convention.

Similarly, a Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition or deemed disposition of CVRs unless the CVRs are, or are deemed to be, “taxable Canadian property” ​(as defined in the Tax Act) of the Non-Resident Holder at the time of disposition or deemed disposition and the gain is not exempt from Canadian tax pursuant to the terms of an applicable income tax treaty or convention. It is not anticipated that the CVRs will constitute taxable Canadian property of Non-Resident Holders.

Generally, a Common Share will not constitute taxable Canadian property of a Non-Resident Holder at the time of disposition provided that the Common Share is listed on a “designated stock exchange” for the purposes of the Tax Act (which currently includes the Nasdaq), unless at any time during the 60 month period immediately preceding the disposition or deemed disposition of the Common Share the following two conditions are met concurrently: (a) the Non-Resident Holder, persons with whom the Non-Resident Holder does not deal at arm’s length, partnerships whose members include, either directly or indirectly through one or more partnerships, the Non-Resident Holder and/or persons with whom the Non-Resident Holder does not deal at arm’s length, or any combination of the foregoing, owned 25% or more of the issued shares of any class or series of shares of the capital stock of the Company; and (b) the Common Share derived more than 50% of its fair market value directly or indirectly from, or from any combination of, real or immovable property situated in Canada, “Canadian resource properties”, “timber resource properties” ​(each as defined in the Tax Act), or options in respect of, interests in, or for civil law rights in, any such property (whether or not such property exists). Notwithstanding the foregoing, a Common Share may be deemed to be taxable Canadian property in certain other circumstances. Non-Resident Holders should consult their own tax advisors in this regard.

In the event that Common Shares constitute taxable Canadian property to a Non-Resident Holder and any capital gain realized by the Non-Resident Holder on the disposition or deemed disposition of the Common Shares under the Arrangement is not exempt from Canadian tax pursuant to the terms of an applicable income tax treaty or convention, then the tax consequences described above under the heading “Holders Resident in Canada — (iv) Taxation of Capital Gains and Losses” will generally apply.

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Non-Resident Holders whose Common Shares may constitute taxable Canadian property should consult their own tax advisors for advice having regard to their particular circumstances.

(ii)

Dissenting Shareholders

​

A Non-Resident Holder who duly and validly exercises Dissent Rights (a “Non-Resident Dissenting Shareholder”) who receives a cash payment from or on behalf of the Purchaser in respect of the fair value of the Non-Resident Dissenting Shareholder’s Dissent Shares will be deemed to have disposed of the Dissent Shares to the Purchaser for proceeds of disposition equal to the amount received by the Non-Resident Dissenting Shareholder (excluding the amount of any interest awarded by a court). The tax treatment of a Non-Resident Dissenting Shareholder in respect of such a disposition will be similar to that of a Non-Resident Holder who participates in the Arrangement, as described above.

An amount paid in respect of interest to a Non-Resident Dissenting Shareholder will generally not be subject to Canadian withholding tax.

Non-Resident Dissenting Shareholders whose shares are taxable Canadian property should consult their own tax advisors for advice having regard to their particular circumstances.

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NOTICES TO SHAREHOLDERS IN CANADA

This Circular and Proxy Statement is subject to the requirements of Section 14(a) of the U.S. Exchange Act, as well as applicable Canadian corporate and Securities Laws. Accordingly, this Circular and Proxy Statement has been prepared in accordance with disclosure requirements in effect in the United States and in Canada.

Financial Statements and other financial information referred to in this Circular and Proxy Statement have been prepared in accordance with U.S. GAAP. Shareholders who are resident in Canada should be aware that U.S. GAAP is different from International Financial Reporting Standards generally applicable to companies incorporated in Canada.

NOTICES TO SHAREHOLDERS OUTSIDE OF CANADA

The Company is a corporation incorporated under the Laws of British Columbia, Canada. The solicitation of proxies and the transactions contemplated are being carried out in accordance with the Laws of the Province of British Columbia and the federal Laws of Canada applicable therein. The Company has prepared this Circular and Proxy Statement in accordance with the disclosure requirements of Canada and of the United States.

Shareholders who are not residents of Canada should be aware that the disposition of Common Shares pursuant to the Arrangement may have tax consequences both in Canada and in the jurisdiction in which they are resident (including the United States) which may not be described fully herein. The tax treatment of Shareholders pursuant to the Arrangement is dependent on their individual circumstances and the tax jurisdiction applicable to such Shareholders. It is recommended that Shareholders consult their tax advisors in this regard.

THE SPECIAL MEETING

Date, Time and Place

This Circular and Proxy Statement is being furnished to our Securityholders as part of the solicitation of proxies by the Board for use at the Special Meeting to be held at 2:00 p.m. (Pacific Time) on September 10, 2025. The Company will conduct the Special Meeting in a virtual-only format via live webcast. You will be able to attend the meeting online at https://meetnow.global/MHPMJ4R.

Proposals to be Considered at the Special Meeting

At the Special Meeting, our Securityholders will be asked to consider and, if thought advisable, to pass, with or without variation, (i) the Arrangement Resolution, the full text of which is set forth in Annex D to this Circular and Proxy Statement, approving the Arrangement under Section 288 of the BCBCA involving the Company and the Purchaser, pursuant to which, among other things, the Purchaser will acquire all of the issued and outstanding Common Shares of the Company that it does not already own for (a) cash consideration of approximately US$1.91 per Common Share, provided that such amount shall be reduced by the amount of the Distribution (such amount as finally determined in accordance with the Agreement) and (b) one CVR for each Common Share entitled to a pro rata portion of up to US$2,950,000 less costs and expenses associated with any litigation against the Company and its directors or officers currently active or arising within 18 months following closing of the Arrangement; (ii) the Compensation Resolution; and (iii) in the event that the Arrangement Resolution is not approved or the Arrangement is otherwise Terminated, (a) the Liquidation Resolution and (b) the Liquidator Resolution.

Record Date and Voting Information

Only Securityholders who hold Common Shares, Options or Warrants at the close of business on the Record Date will be entitled to receive notice of, and to vote at, the Special Meeting. Each Common Share, Option and Warrant outstanding on the Record Date will be entitled to one vote on the Arrangement Resolution. Each Common Share outstanding on the Record Date will be entitled to one vote on each of the Compensation Resolution, the Liquidation Resolution and the Liquidator Resolution. of the Record Date,

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there were [44,338,550] issued and outstanding Common Shares, [8,749,712] issued and outstanding Options and [2,920,000] issued and outstanding Warrants.

Broker non-votes and proxies marked “ABSTAIN” will be counted only for the purpose of determining whether a quorum is present at the Special Meeting and not as votes cast. Such broker non-votes and proxies marked “ABSTAIN” will have no effect on the outcome of the various matters to be voted upon at the Special Meeting. Abstentions will have no effect on the outcome of the vote to approve the Arrangement Resolution, Compensation Resolution, Liquidation Resolution and Liquidator Resolution.

Quorum

Under the Articles of the Company, a quorum for the transaction of business at the Special Meeting is two Persons who are, or who represent by proxy, Shareholders who, in the aggregate, hold Common Shares to which are attached at least 331∕3% of the votes attached to all of the issued Common Shares of the Company entitled to voting rights at the Special Meeting. Broker non-votes and proxies marked “ABSTAIN” will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Special Meeting. In the event that a quorum is not present at the Special Meeting, it is expected that the Special Meeting will be adjourned or postponed to solicit additional attendance.

Required Vote

Approval of the Arrangement Resolution requires the affirmative vote of not less than (i) 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, (ii) 662∕3% of the votes cast by Securityholders present in person or represented by proxy at the Special Meeting, voting together as a single class, and (iii) a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting, excluding for this purpose the votes required to be excluded by MI 61-101, which excludes Common Shares held by related parties that are receiving a “collateral benefit” ​(as defined in MI 61-101) in connection with the transaction. See “Canadian Securities Law Matters — Multilateral Instrument 61-101” for more information. As of August 5, 2025, the record date, there were approximately [44,338,550] Common Shares outstanding.

Approval of the Compensation Resolution requires the affirmative vote of a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting. Approval of the Liquidation Resolution requires the affirmative vote of not less than 662∕3% of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting. Approval of the Liquidator Resolution requires the affirmative vote of a majority of the votes cast by Shareholders present in person or represented by proxy at the Special Meeting.

Solicitation of Proxies

The Company is providing this Circular and Proxy Statement and a form of proxy in connection with management’s solicitation of proxies for use at the Special Meeting and at any postponement(s) or adjournment(s) thereof. The solicitation of proxies for the Special Meeting will be made primarily by mail, but proxies may also be solicited personally or by telephone, email, internet, facsimile transmission or other electronic or other means of communication by directors, officers, employees, agents or other Representatives. The cost of solicitation by management of the Company will be borne directly by the Company. The Company will reimburse Intermediaries for permitted fees and costs incurred by them in mailing soliciting materials to the Beneficial Shareholders. Invoices for such permitted fees and costs should be directed to the attention of the Chief Financial Officer of the Company at 999 West Broadway Street, Suite 720, Vancouver, BC V5Z 1K5, Canada.

Notice to United States Securityholders

The solicitation of proxies involves securities of an issuer located in Canada and is being effected and disclosed in accordance with the corporate Laws of Canada and Securities Laws of the provinces of Canada as well as in accordance with the U.S. Exchange Act.

The enforcement by Shareholders of civil liabilities under United States federal Securities Laws may be affected adversely because the Company is existing under the BCBCA. Shareholders may not be able to sue a

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foreign company or its officers or directors in a foreign court for violations of United States federal Securities Laws. It may be difficult to compel a foreign company and its officers and directors to subject themselves to a judgment by a United States court.

Advice to Registered Shareholders — Voting and Revocation of Proxies

A Registered Shareholder is a Shareholder that holds Common Shares in its own name. A Registered Shareholder may attend and vote at the Special Meeting. Alternatively, a Registered Shareholder may deposit a proxy that nominates a Person or entity to represent the Shareholder at the Special Meeting. If you are a Registered Shareholder and you intend to participate and vote at the Special Meeting online, you do not need to complete the proxy. See “Attending and Participating in the Meeting” below.

The proxy accompanying this Circular and Proxy Statement nominates officers and/or directors of the Company to represent that Shareholder at the Special Meeting. A Shareholder desiring to appoint a Person or entity, other than those management nominees named in the accompanying form of proxy, to represent such Shareholder at the Special Meeting may do so either by inserting such Person’s or entity’s name in the blank space provided for that purpose in the accompanying proxy or by completing another proper form of proxy. All proxies or alternative forms of proxy must be completed properly and signed, and they must be deposited at the office of the Company’s registrar and transfer agent, Computershare, indicated on the enclosed envelope for receipt not later than 2:00 p.m. (Pacific Time) on September 8, 2025 or, in the event that the Special Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before the adjusted time of the Special Meeting, or by delivering it to the chair of the Board, prior to the commencement of the Special Meeting on the date of such Special Meeting. Late proxies may be accepted or rejected by the chair of the Special Meeting at his discretion, and the chair is under no obligation to accept or reject any particular late proxy.

Advice to Registered Optionholders and Warrantholders — Voting and Revocation of Proxies

An Optionholder or Warrantholder is a holder that holds Options or Warrants, as applicable, in its own name. A registered Optionholder or registered Warrantholder may attend and vote at the Special Meeting. Alternatively, a registered Optionholder or registered Warrantholder may deposit a proxy that nominates a Person or entity to represent the Optionholder or Warrantholder at the Special Meeting. If you are a registered Optionholder or registered Warrantholder and you intend to participate and vote at the Special Meeting online, you do not need to complete the proxy. See “Attending and Participating in the Meeting” below.

The proxy accompanying this Circular and Proxy Statement nominates officers and/or directors of the Company to represent that Shareholder at the Special Meeting. An Optionholder or Warrantholder desiring to appoint a Person or entity, other than those management nominees named in the accompanying form of proxy, to represent such Optionholder or Warrantholder at the Special Meeting may do so either by inserting such Person’s or entity’s name in the blank space provided for that purpose in the accompanying proxy or by completing another proper form of proxy. All proxies or alternative forms of proxy must be completed properly and signed, and they must be deposited at the office of the Company’s registrar and transfer agent, Computershare, indicated on the enclosed envelope for receipt not later than 2:00 p.m. (Pacific Time) on September 8, 2025 or, in the event that the Special Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before the adjusted time of the Special Meeting, or by delivering it to the chair of the Board, prior to the commencement of the Special Meeting on the date of such Special Meeting. Late proxies may be accepted or rejected by the chair of the Special Meeting at his discretion, and the chair is under no obligation to accept or reject any particular late proxy.

Voting of Proxies

The Common Shares, Options and Warrants represented by properly completed and executed proxies that are received in the manner prescribed above will be voted in accordance with the instructions of the Securityholder, including on any ballot votes that may take place at the Special Meeting. If you have not specified how to vote on a particular matter, then your proxy holder can vote your Common Shares as he or she sees fit. Where no choice is specified, the Common Shares, Options and Warrants represented by properly completed and executed proxies in favour of the management proxy nominees named in the printed portion of the enclosed proxy will be voted “FOR” the Arrangement Resolution approving the Arrangement.

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The accompanying proxy also confers discretionary authority upon the proxy nominees named therein to vote (or withhold from voting) in accordance with their best judgment on any amendments or variations to matters identified in the notice of meeting, or other matters as may properly come before the Special Meeting.   At the date of this Circular and Proxy Statement, management of the Company knows of no such amendments, variations or other matters to come before the Special Meeting.

A proxy given by a Securityholder for use at the Special Meeting may be revoked by an instrument in writing that is signed by the Securityholder or by the Securityholder’s attorney, if authorized in writing, or by transmitting, by electronic means, a revocation signed by electronic signature by the Securityholder or by the Securityholder’s attorney, if authorized in writing, to or at the registered office of the Company’s registrar and transfer agent at any time up to and including the last Business Day preceding the day of the Special Meeting, or in the case of any adjournment of the Special Meeting, the last Business Day preceding the day of the adjournment, or by delivering to the chair of the Special Meeting on the day of, and prior to the start of, the Special Meeting or any adjournment thereof. A Shareholder may also revoke a proxy in any other manner permitted by Law.

Advice to Beneficial Shareholders — Voting Information Forms

A Shareholder is a Beneficial Shareholder if it holds Common Shares that are not registered in its own name but are instead registered in the names of entities such as brokerage firms, banks or trust companies through which the Common Shares were purchased on behalf of such Shareholder or to which the Shareholder transferred Common Shares that were formerly registered in the Shareholder’s own name. More particularly, a Person is a Beneficial Shareholder in respect of Common Shares which are held on behalf of that Person but which are registered either: (a) in the name of an Intermediary that the Beneficial Shareholder deals with in respect of the Common Shares; or (b) in the name of a clearing agency (such as the Canadian Depository for Securities Limited) of which the Intermediary is a participant. (Intermediaries include, among others, banks, trust companies, securities dealers or brokers or administrators of self-administered Registered Retirement Savings Plan, Registered Retirement Income Fund, Registered Education Savings Plan, Tax-Free Savings Account, First Home Savings Account, Registered Disability Savings Plan, Deferred Profit Sharing Plan and similar plans).

A Beneficial Shareholder is not entitled to vote directly at the Special Meeting unless it has followed the steps necessary for its Intermediary to name such Beneficial Shareholder as a proxy holder for the Common Shares beneficially held by that Beneficial Shareholder. The process by which Beneficial Shareholders receive the Meeting Materials and by which they may appoint themselves as proxy holders varies depending on whether the Beneficial Shareholder is a non-objecting Beneficial Shareholder (a “NOBO”) or an objecting Beneficial Shareholder (an “OBO”).

Beneficial Shareholders who have not objected to an Intermediary disclosing certain ownership information about them to the Company are referred to as NOBOs. Those Beneficial Shareholders who have objected to an Intermediary disclosing ownership information about them to the Company are referred to as OBOs.

The Company is taking advantage of those provisions of NI 54-101 (as defined below) that permit the Company to deliver proxy-related materials to the Company’s NOBOs who have not waived the right to receive them. As a result, NOBOs can expect to receive the Meeting Materials through their respective broker or other intermediary.

Also, in accordance with the requirements of NI 54-101, the Company has distributed copies of the Meeting Materials to the Intermediaries for onward distribution to OBOs. Intermediaries are required to forward the Meeting Materials to OBOs unless, in the case of certain proxy-related materials, the OBO has waived the right to receive them. Often, Intermediaries will use service companies to forward the Meeting Materials to OBOs.

The Meeting Materials to each NOBO and OBO will also include a VIF which, when properly completed and signed by the NOBO or OBO and returned to the Company (in the case of a NOBO) or the appropriate Intermediary or its service company (in the case of an OBO), will constitute voting instructions that the

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Company or Intermediary must follow. The purpose of this procedure is to permit NOBOs and OBOs to direct the voting of the Common Shares that they beneficially own.

Beneficial Shareholders receiving a VIF cannot use that form to vote their Common Shares directly at the Special Meeting. Beneficial Shareholders should carefully follow the instructions set out in the VIF, including those regarding when and where the VIF is to be delivered. Should a Beneficial Shareholder who receives a VIF wish to vote their Common Shares at the Special Meeting or have someone else attend and vote on its behalf, the Beneficial Shareholder may request a legal proxy as set forth in the VIF, which will grant the Beneficial Shareholder or its nominee the right to attend and vote at the Special Meeting.

Beneficial Shareholders who wish to revoke or amend their VIFs, or revoke their proxies, should refer to the instructions received from Computershare.

Attending and Participating in the Meeting

Registered Shareholders, Optionholders, Warrantholders and duly appointed proxy holders can participate in the online Special Meeting and vote and ask questions at the appropriate times during the Special Meeting. Securityholders will not be able to attend the Special Meeting in person.

To ensure the orderly processing of attendees, we recommend that you log in 30 minutes before the start of the Special Meeting, which is scheduled for 2:00 p.m. (Pacific Time) on September 10, 2025.

To attend the Special Meeting, visit https://meetnow.global/MHPMJ4R. To access the Special Meeting on this site, you must click “I have a control number/meeting access number” and then enter a username and password before the Special Meeting begins.

•

Registered Shareholders: The 15-digit control number located on the Proxy Availability Notice, form of proxy or voting instruction form or in the email notification you received is the Username.

​

•

If you are using a 15-digit control number to login to the Special Meeting and you accept the terms and conditions, you will be revoking any and all previously submitted proxies. However, in such a case, you will be provided the opportunity to vote by ballot on the matters put forth at the Special Meeting. If you DO NOT wish to revoke all previously submitted proxies, do not accept the terms and conditions, in which case you can only enter the Special Meeting as a guest.

​

•

Other Shareholders: Computershare will provide the proxyholder with a Username by email after the voting deadline has passed and the proxyholder has been duly appointed AND registered as described under the heading “Appointment of a Third Party as a Proxy” below.

​

Non-registered Shareholders who have not duly appointed themselves as proxyholder may attend the Special Meeting by clicking “I am a guest” and completing the online form. Such Persons can listen to the Special Meeting but are not able to vote.

If you attend the Special Meeting online, it is important that you remain connected to the internet at all times during the Special Meeting in order to vote when balloting commences. It is your responsibility to ensure connectivity for the duration of the Special Meeting.

If you have any questions or require further information with regard to voting your Common Shares, please contact the Depositary toll-free in North America at 1-800-564-6253 or by email at service@computershare.com.

Appointment of a Third Party as Proxy

The following applies to Shareholders who wish to appoint someone as their proxyholder other than the Persons designated in the enclosed form of proxy or voting instruction form. This includes non-registered Shareholders who wish to appoint themselves as proxyholder to attend, participate or vote at the Special Meeting.

Shareholders who wish to appoint a third party proxyholder to attend and participate at the Special Meeting as their proxy and vote their Common Shares MUST submit their form of proxy or voting instruction form, as applicable, appointing that Person as proxyholder AND register that proxyholder online, as described below.

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Registering your proxyholder is an additional step to be completed AFTER you have submitted your form of proxy or voting instruction form. Failure to register the proxyholder will result in the proxyholder not receiving a Username to participate in the Special Meeting.

Step 1: Submit your form of proxy or voting instruction form:   To appoint someone other than the Persons designated in the form of proxy or voting instruction form as proxyholder, insert that Person’s name in the blank space provided in the form of proxy or voting instruction form (if permitted) and follow the instructions for submitting such form of proxy or voting instruction form. This must be completed before registering such proxyholder, which is an additional step to be completed once you have submitted your form of proxy or voting instruction form.

If you are a non-registered Shareholder and wish to vote at the Special Meeting, you have to insert your own name in the space provided on the voting instruction form sent to you by your intermediary, follow all of the applicable instructions provided by your intermediary AND register yourself as your proxyholder, as described below. By doing so, you are instructing your intermediary to appoint you as proxyholder. It is important that you comply with the signature and return instructions provided by your intermediary. Please also see further instructions above under the heading “Attending and Participating at the Special Meeting”.

If you are a non-registered Shareholder located in the United States and wish to vote at the Special Meeting or, if permitted, appoint a third party as your proxyholder, in addition to the steps described above under “How do I attend and participate at the Special Meeting?”, you must obtain a valid legal proxy from your intermediary. Follow the instructions from your intermediary included with the legal proxy form and the voting information form sent to you, or contact your intermediary to request a legal proxy form or a legal proxy if you have not received one. After obtaining a valid legal proxy from your intermediary, you must then submit such legal proxy to Computershare. Requests for registration from non-registered Shareholders located in the United States that wish to vote at the Special Meeting or, if permitted, appoint a third party as their proxyholder must be sent by email or by courier to: uslegalproxy@computershare.com (if by email), or Computershare, Attention: Proxy Department, 320 Bay Street, 14th Floor, Toronto, ON M5H 4A6 (if by courier), and in both cases, must be labeled “Legal Proxy” and received no later than the voting deadline of 2:00 p.m. (Pacific time) on September 8, 2025.

Step 2: Register your proxyholder:   To register a third-party proxyholder, Shareholders MUST visit www.computershare.com/EssaPharma by 2:00 p.m. (Pacific time) on September 10, 2025 and provide Computershare with the required proxyholder contact information so that Computershare may provide the proxyholder with a Username via email. Without a Username, proxyholders will not be able to vote at the Special Meeting but will be able to participate as a guest.

Notice-And-Access

The Company is not sending this Circular and Proxy Statement to Registered Shareholders or Beneficial Shareholders using “notice-and-access” under NI 54-101.

Other Business

We are not currently aware of any business to be acted upon at the Special Meeting other than the matters discussed in this Circular and Proxy Statement. If other matters do properly come before the Special Meeting, or at any adjournment or postponement of the Special Meeting, the persons named on the enclosed Form of Proxy gives will vote on them in accordance with their best judgment, pursuant to the discretionary authority conferred by the Form of Proxy with respect to such matters.

Adjournments

Pursuant to the articles of the Company, if, within 30 minutes from the time of the Special Meeting, a quorum is not present, the Special Meeting shall be adjourned to the same day in the next week at the same time and place.

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THE AGREEMENT

The Arrangement will be carried out pursuant to the Agreement and the Plan of Arrangement. The following is a summary of the principal terms of the Agreement and Plan of Arrangement. This summary is qualified in its entirety by reference to the Agreement, which has been filed by the Company on its SEDAR+ profile at www.sedarplus.ca and appended hereto as Annex A, and to the Plan of Arrangement, which is appended hereto as Annex E.

Subject to the terms and conditions of the Agreement, the Purchaser will acquire all of the issued and outstanding Common Shares in the capital of the Company that the Purchaser does not already own. Upon completion of the Arrangement, each Securityholder of the Company (other than the Purchaser and Dissenting Holders) will receive, in exchange for each Common Share, the Consideration. The terms of the Agreement are the result of negotiations conducted between the Company and the Purchaser and their respective advisors.

Representations and Warranties

The Agreement contains representations and warranties made by the Company to the Purchaser and representations and warranties made by the Purchaser to the Company. Those representations and warranties were made solely for the purposes of the Agreement and are subject to important qualifications and limitations agreed to by the Parties in connection with negotiating its terms. Moreover, some of the representations and warranties contained in the Agreement are subject to a contractual standard of materiality (including a Material Adverse Change) that is different from that generally applicable to the public disclosure to the Shareholders or those standards used for the purpose of allocating risk between parties to an agreement.

The representations and warranties provided by the Company in favour of the Purchaser relate to, among other things: Board approval; organization; capitalization; authority; no violations; Subsidiaries; corporate records; public filings; financial statements; off-balance sheet financing; independence of auditors; liabilities and indebtedness; brokerage fees; books and records; absence of certain changes or events; derivative transactions; employments and consultant matters; acceleration of benefits; tax matters; Material Contracts; change of control; restrictive documents; related party transactions; absence of insolvency proceedings; no material change; authorizations; internal controls; significant acquisitions; shareholder and similar agreements; transfer agent; Securities Laws matters; no default; litigation; compliance with Laws; anti-corruption and anti money-laundering; sanctions; consents and approvals; fairness opinion; financial advisors; intellectual property matters; data security and privacy requirements; real property; title and sufficiency of corporation assets; and bank accounts and powers of attorney.

The representations and warranties provided by the Purchaser and Parent in favour of the Company relate to, among other things: organization and validity; authority; no violation; residency; litigation; compliance with Laws; sanctions; and sufficient funds available.

The representations and warranties provided by XRC in favour of the Company relate to, among other things: organization; authority; no violation; and residency.

For purposes of the Agreement, a “Material Adverse Change” means , with respect to the Company or the Purchaser, as the case may be, any fact or state of facts, circumstance, change, effect, occurrence or event that: (i) either individually or in the aggregate prevents or materially delays, or individually or in the aggregate would reasonably be expected to prevent or materially delay the consummation of the Contemplated Transaction by the Company or the Purchaser, as the case may be; or (ii) individually or in the aggregate is, or would reasonably be expected to be, material and adverse to the condition (financial or otherwise), business, operations, properties, licenses, affairs, assets, liabilities (contingent or otherwise), capitalization, results of operations or cash flows of either the Company or the Purchaser, as the case may be, and their respective Subsidiaries, taken as a whole, as the case may be, other than any such change, effect, occurrence or event directly or indirectly relating to or resulting from: (a) conditions generally affecting the industries in which such Party and its Subsidiaries operate in jurisdictions in which such Party and its Subsidiaries carry on business; (b) changes to applicable Laws, GAAP or changes in accounting or regulatory requirements generally applicable to the industries in which such Party and its Subsidiaries operate as a whole; (c) general economic, financial, currency exchange, securities or commodity market conditions in Canada or the United States or

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elsewhere; (d) global, national or regional political conditions, including the outbreak of war or acts of terrorism; (e) 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 Agreement; (f) in the case of the Company, relating to a change in the market trading price or trading volume of the Company’s publicly listed securities (it being understood that, unless otherwise excluded by (a) through (f) inclusively, the causes underlying any such change may be considered to determine whether same constitute a Material Adverse Change); (g) the failure of such Party to meet any internal or published projections, forecasts or estimates of revenues, earnings or cash flow (it being understood that, unless otherwise excluded by Sections (a) through (f) inclusively, the causes underlying any such change may be considered to determine whether same constitute a Material Adverse Change); (h) the announcement of the Agreement and the transactions contemplated hereby, including the Contemplated Transactions (provided that this clause (I) shall not apply to any representation or warranty (or any Party’s obligation to consummate the Agreement relating to such representation or warranty) to the extent the purpose of such representation or warranty is to address the consequences resulting from the execution and delivery of the Agreement or the consummation of the Agreement and the other transactions contemplated hereby); or (i) in the case of the Company, any matter expressly consented to in writing by the Purchaser after the date hereof or expressly required by the Agreement (excluding Section 5.1 of the Agreement for such purpose), and in the case of the Purchaser, any matter expressly consented to in writing by the Company after the date hereof or permitted or required by the Agreement provided, however, that where the change or effect referred to in (a) through (e) primarily relates only to (or has the effect of primarily relating only to) the Company or the Purchaser, as the case may be, or disproportionately affects the Company or the Purchaser, as the case may be, and its respective Subsidiaries, taken as a whole, compared to other entities of similar size operating in the same jurisdictions in the industries in which such Party and its Subsidiaries operate, in which case, the relevant exclusion from this definition of Material Adverse Change referred to above shall not be applicable; provided, further, that references in certain sections of the 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 Change has occurred; and provided, further, that in the case of the Company, no fact or state of facts, circumstance, change, effect, occurrence or event related to or arising from the Company’s termination of its Company-sponsored and investigator-sponsored clinical studies as described in its Current Report filed with the SEC on November 1, 2024 shall be taken into account for purposes of determining whether a Material Adverse Change has occurred.

Non-Solicitation Obligations

(a)

On and after the date of the Agreement, except as otherwise provided in the Agreement, the Company agreed it shall not, and shall cause each of its Representatives not to, directly or indirectly:

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(i)

make, solicit, assist, initiate, encourage, promote or otherwise facilitate (including by way of furnishing, providing access to or disclosing information, books and records, facilities or properties of the Company or a Subsidiary of the Company or entering into any form of written or oral agreement, arrangement or understanding) any inquiry, proposal or offer that constitutes or could reasonably be expected to constitute an Acquisition Proposal;

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(ii)

enter into, continue or otherwise participate or engage in or otherwise facilitate any discussions or negotiations with any person (other than the Purchaser and its Affiliates and their respective Representatives), or otherwise cooperate in any way with, or assist or participate in, encourage or otherwise facilitate, any inquiry, proposal or offer that constitutes or could reasonably be expected to constitute an Acquisition Proposal, provided that, for greater certainty, the Company may (A) communicate with any Person making an unsolicited Acquisition Proposal (and such Person’s Representatives) for the purposes of clarifying the terms and conditions of such Acquisition Proposal and assessing the likelihood of its consummation so as to determine whether such Acquisition Proposal constitutes or could reasonably be expected to constitute or lead to a Superior Proposal, (B) advise any person of the restrictions of the Agreement, and (C) advise any person making an unsolicited Acquisition Proposal that such Acquisition Proposal does not constitute a Superior Proposal when the Board has so determined;

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(iii)

make a Change of Recommendation; or

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(iv)

accept, approve, endorse, recommend or enter into, or publicly propose to accept, approve, endorse, recommend or enter into, any letter of intent, agreement in principle, agreement, arrangement or undertaking (other than a confidentiality and standstill agreement permitted under the Agreement) constituting an Acquisition Proposal or requiring, or reasonably expected to cause, the Company to abandon, terminate, delay or fail to consummate, or that would otherwise impede, interfere or be inconsistent with, the Arrangement or any of the other transactions contemplated by the Agreement or requiring, or reasonably expected to cause, the Company to fail to comply with the Agreement or providing for the payment of any break, termination or other fees or expenses to any person in the event that any of the Contemplated Transactions are completed or in the event that it completes any other transaction with the Purchaser or any of its Affiliates that is agreed to prior to any termination of the Agreement.

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(b)

The Company further agreed that it shall, and shall cause each of its Subsidiary and Representatives to, immediately cease and terminate any existing solicitation, assistance, discussion, encouragement, activities, negotiation or process with or involving any person (other than the Purchaser, its Affiliates and their respective Representatives) commenced prior to the date of the Agreement with respect to or which could reasonably be expected to constitute an Acquisition Proposal, whether or not initiated by the Company or any of its Representatives and, in connection therewith, the Company will discontinue access to any other third party to all information, including any data room (virtual or otherwise) and any confidential information, properties, facilities, books and records of the Company or its Subsidiary.

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(c)

The Company represents and warrants that neither it nor its Representatives have waived or released any person from such Person’s obligations respecting the Company, or its Subsidiary, under any confidentiality, standstill or similar agreement or restriction to which the Company or any Subsidiary of the Company is a party, and agreed that the Company shall, and shall cause its Subsidiary to (i) not release any person from, or waive or amend any provision of any confidentiality, standstill or similar agreement or restriction to which the Company or any Subsidiary of the Company is a party, and (ii) take all necessary action to enforce each confidentiality, standstill, or similar agreement or restriction to which the Company or any Subsidiary of the Company is a party (it being acknowledged by the Purchaser that the automatic release from any currently existing standstill restrictions of any such currently existing agreement in accordance with the terms of such agreement as a result of entering into and announcing the Agreement shall not be a violation of the Agreement).

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(d)

The Company further agreed it shall ensure that its Representatives are aware of the provisions of the Agreement, and further agreed it shall be responsible for any breach of the Agreement by its Representatives and any such breach shall be deemed a breach by the Company.

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(e)

From and after the date of the Agreement, the Company agreed it shall promptly (and in any event within 24 hours after it has received or otherwise become aware of any proposal, inquiry, offer, request or expression of interest) notify the Purchaser of any proposal, inquiry, offer, request or expression of interest relating to or that constitutes an Acquisition Proposal or which could reasonably be expected to constitute an Acquisition Proposal or any request for copies of, access to, or disclosure of, non-public information relating to the Company or any Subsidiary of the Company, including but not limited to information, access, or disclosure relating to the properties, facilities, books, records or a list of Securityholders of the Company. Such notice shall include a description of the terms and conditions of, and the identity of the Person making, any proposal, inquiry, offer, request or expression of interest, and shall include copies of any such proposal, inquiry, offer, request or expression of interest. The Company further agreed it shall promptly keep the Purchaser fully informed of any change in the status of developments and negotiations (to the extent such negotiations are permitted pursuant to the Agreement) with respect to such Acquisition Proposal, inquiry, proposal, offer, request or expression of interest, including any changes, modifications or other amendments to any such Acquisition Proposal, inquiry, proposal, offer, request or expression of interest, and shall, promptly upon receipt or delivery thereof, provide the Purchaser (or its outside legal counsel) with copies of all documents and written communications relating to any such Acquisition Proposal, inquiry, proposal, offer, request or expression of interest, including any

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changes, modifications or other amendments to any such Acquisition Proposal, inquiry, proposal, offer, request or expression of interest exchanged between the Company or any of its Representatives, on the one hand, and the Person making the Acquisition Proposal, inquiry, proposal, offer, request or expression of interest, including any changes, modifications or other amendments to any such Acquisition Proposal, inquiry, proposal, offer, request or expression of interest or any of its Representatives, on the other hand. The Company further agreed it shall respond promptly to all inquiries by the Purchaser with respect to such Acquisition Proposal, inquiry, proposal, offer, request or expression of interest. The Company agreed it shall not, and shall cause its Subsidiary not to, enter into any agreement with any person subsequent to the date hereof that prohibits, or which contains any provision that adversely affects the rights of the Company or its Subsidiary upon compliance with any of the provisions of the Agreement.

(f)

The Company further agreed it will promptly (i) advise the Purchaser of any action by a third party of which the Company is aware (whether actual, anticipated, contemplated or threatened) which could reasonably be expected to hinder, prevent, delay or otherwise adversely affect the completion of the Arrangement or any of the Contemplated Transactions; and (ii) notify the Purchaser of any notice or other communication from any Governmental Entity in connection with the Agreement or the Arrangement.

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(g)

The Company further agreed that, notwithstanding any provision of the Agreement, following receipt by the Company of any proposal, inquiry, offer, request or expression of interest (including any changes, modifications or other amendments thereto) that is not an Acquisition Proposal but which the Company reasonably believes could lead to an Acquisition Proposal, the Company may respond to the proponent solely to advise it that, in accordance with the Agreement, the Company can only enter into discussions or negotiations with a Party in accordance with the Agreement, and for no other purpose.

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Responding to an Acquisition Proposal and Right to Match

(a)

If after the date of the Agreement, the Company or any of its Representatives receives from a Person a written Acquisition Proposal that was not solicited after the date thereof, the Company and its Representatives may:

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(i)

if and only if: (A) the Board determines in good faith, after consultation with its outside legal counsel and financial advisors, that such Acquisition Proposal constitutes or would reasonably be expected to constitute or lead to a Superior Proposal; (B) such Person was not restricted from making such Acquisition Proposal pursuant to an existing confidentiality, standstill or similar restriction; (C) the Company has been, and continues to be, in compliance with its obligations relating to non-solicitation; and (D) the Company promptly provides the Purchaser with prior written notice stating the Company’s intention to participate in such discussions or negotiations and to provide such copies, access or disclosure:

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(ii)

furnish information with respect to the Company and its Subsidiary to the Person making such Acquisition Proposal and its Representatives, provided that (A) the Company first enters into a confidentiality and standstill agreement with such Person, the provisions of which are (i) no less favourable to the Company than any confidentiality obligations applicable to Parent, Purchaser or XRC and (ii) and do not restrict the Company from complying in all respects with the terms of the Agreement, and (B) the Company sends a copy of such agreement to the Purchaser promptly following its execution and the Purchaser is promptly provided with all information provided to such Person (to the extent not previously provided); and

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(iii)

engage in discussions and negotiations with respect to the Acquisition Proposal with the Person making such Acquisition Proposal and its Representatives.

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(b)

If after the date of the Agreement the Company receives a Superior Proposal, the Company may terminate the Agreement and accept, approve, recommend or enter into any agreement, understanding or arrangement in respect of such Superior Proposal prior to completion of the Arrangement and recommend or approve such Superior Proposal if and only if:

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(i)

such Superior Proposal did not arise, directly or indirectly, as a result of a violation by the Company of non-solicitation provisions under the Agreement and the Company has been and continues to be in compliance with its obligations under such provisions;

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(ii)

the Person making the Superior Proposal was not restricted from making such Superior Proposal pursuant to an existing confidentiality, standstill or similar restriction;

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(iii)

the Board has determined in good faith, after consultation with its outside legal counsel and financial advisors, that such Acquisition Proposal constitutes a Superior Proposal;

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(iv)

the Company has (A) delivered written notice to the Purchaser of the determination of the Board that the Acquisition Proposal is a Superior Proposal and of the intention of the Board to accept, approve, recommend or enter into an agreement in respect of such Superior Proposal (the “Superior Proposal Notice”) and (B) has provided the Purchaser with a copy of the acquisition or similar agreement relating to such Acquisition Proposal, including all supporting materials, including any financing documents supplied to the Company in connection therewith and a written notice from the Board regarding the value in financial terms that the Board has, in consultation with an independent financial advisor, determined should be ascribed to any non-cash consideration offered under the Superior Proposal;

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(v)

at least five Business Days have elapsed since the later of the date on which the Purchaser received a copy of the Superior Proposal Notice and the date on which the Purchaser received all related specified material (such five Business Day period, the “Right to Match Period”) and, for greater certainty, the Right to Match Period shall expire at 11:59 p.m. (Vancouver time) on the last Business Day of the Right to Match Period;

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(vi)

if the Purchaser and Parent have offered to amend the terms of the Arrangement and the Agreement during the Right to Match Period, the Board has determined, in good faith, after consultation with its outside legal counsel and financial advisors, that such Acquisition Proposal continues to constitute a Superior Proposal when assessed against the Arrangement and the Agreement as it is proposed to be amended as at the termination of the Right to Match Period; and

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(vii)

the Company terminates the Agreement in order to accept, approve, recommend or enter into a binding written agreement with respect to a Superior Proposal and concurrently pays the related Termination Payment.

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(c)

During the Right to Match Period or such longer period as the Company may approve in writing for such purpose, the Purchaser and Parent will have the opportunity, but not the obligation, to offer to amend the terms of the Arrangement and the Agreement. The Company agrees that, if requested by the Purchaser, it will negotiate with the Purchaser in good faith to amend the terms of the Arrangement and the Agreement as would enable them to proceed with the Arrangement and any Contemplated Transactions on such adjusted terms. The Board will review any such offer by the Purchaser and Parent to amend the terms of the Arrangement and the Agreement in order to determine, in good faith in the exercise of its fiduciary duties, whether the Purchaser and Parent’s offer to amend the Arrangement and the Agreement, upon its acceptance, would result in the applicable Acquisition Proposal ceasing to be a Superior Proposal when assessed against the Arrangement and the Agreement as it is proposed to be amended as at the termination of the Right to Match Period. If the Board determines that the applicable Acquisition Proposal would cease to be a Superior Proposal when assessed against the Arrangement and the Agreement as it is proposed to be amended as at the termination of the Right to Match Period, the Purchaser and Parent will amend the terms of the Arrangement and the Agreement and the Company and the Purchaser and Parent shall enter into an amendment to the Agreement reflecting the offer by the Purchaser and Parent to amend the terms of the Arrangement and the Agreement.

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(d)

Each successive amendment, change or modification to any Acquisition Proposal that results in an increase in, or modification of, the consideration to be received by the Shareholders will constitute a new Acquisition Proposal for purposes of the Agreement and the Purchaser shall be afforded a new

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Right to Match 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 material specified in the Agreement with respect to such new Superior Proposal from the Company.

(e)

The Board shall promptly reaffirm the Board Recommendation 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 Agreement or the Plan of Arrangement as contemplated under the Agreement would result in an Acquisition Proposal no longer being a Superior Proposal. The Company 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.

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(f)

If the Special Meeting is to be held during a Right to Match Period, the Company may, and shall at the request of the Purchaser, postpone or adjourn the Special Meeting to a date that is not more than 15 days after the scheduled date of the Special Meeting, but in any event to a date that would not prevent the Effective Date from occurring prior to the Outside Date.

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(g)

Nothing contained in the non-solicitation terms of the Agreement shall limit in any way the obligation of the Company to convene and hold the Special Meeting while the Agreement remains in force.

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(h)

Nothing in the Agreement shall prevent the Board or the Company from responding through a directors’ circular or otherwise as required by applicable Laws to an Acquisition Proposal where such response is not an acceptance, approval, endorsement or recommendation of such Acquisition Proposal and does not otherwise constitute a Change of Recommendation; provided, that the Company shall provide the Purchaser and its outside legal counsel with a reasonable opportunity to review the form and content of such circular or other disclosure and shall make all reasonable amendments to such circular or other disclosure as requested by the Purchaser and its outside legal counsel.

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(i)

Nothing in the non-solicitation obligations under the Agreement or the determination by the Board of Directors of a Superior Proposal shall require the sharing with the Purchaser of any information considered by external legal counsel of each of the Company and the Purchaser to be competitively sensitive information in connection with competition compliance principles, which competitively sensitive information will be provided only to the external legal counsel or external expert of the Purchaser and shall not be shared by such legal counsel or expert with any other person unless it is first anonymized and aggregated such that it is no longer considered by external legal counsel of each of the Company and the Purchaser to be competitively sensitive information in connection with competition compliance principles.

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Covenants

In the Agreement, each of the Company and the Purchaser has agreed to certain covenants, including using commercially reasonable acts to satisfy the conditions precedent to their respective obligations under the Agreement.

Covenants of the Company Regarding the Conduct of Business

During the Interim Period, except: (i) with the prior written consent of the Purchaser (such prior written consent not to be unreasonably withheld or delayed); or (ii) as is otherwise expressly permitted or specifically contemplated by the Agreement or the Plan of Arrangement, the Company agreed it shall, and shall cause its Subsidiary to: (iii) continue the Discontinuance; (iv) continue to pay outstanding accounts payable and other liabilities (including payroll) when due and payable; and (v) keep the Purchaser fully informed as to material decisions or actions made or required to be made with respect to, and material developments relating to, the Discontinuance and consult with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor and provide input with respect to the direction and control of, any such material decisions or actions or developments.

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The Company further agreed that, during the Interim Period, unless (i) the Purchaser shall otherwise agree to in writing (such prior written consent not to be unreasonably withheld or delayed), (ii) expressly permitted or specifically contemplated by the Agreement and the Contemplated Transactions, (iii) expressly required by applicable Law, or (iv) as set forth in the Disclosure Letter, the Company shall, and shall cause its Subsidiary to:

(i)

not split, consolidate or reclassify any of its outstanding shares nor undertake any other capital reorganization, nor reduce capital in respect of its outstanding shares;

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(ii)

not declare, set aside or pay any dividends on or make any other distributions on or in respect of its outstanding shares;

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(iii)

not amend its articles of incorporation, by-laws or other comparable organizational documents or the terms of any of its outstanding securities, including any outstanding indebtedness;

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(iv)

not issue, grant, deliver, sell, exchange, amend, modify, accelerate, pledge or otherwise subject to any Encumbrance (other than Permitted Encumbrances), or authorize any such action in respect of, any securities of the Company (other than the issuance of Common Shares upon the exercise of currently outstanding Options or other Convertible Securities in accordance with their terms);

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(v)

not redeem, offer to purchase, purchase or cause to be purchased any of its outstanding securities;

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(vi)

not authorize, approve, agree to issue, issue or award any Options under the Option Plan or any other Convertible Securities;

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(vii)

not adopt a shareholder rights plan that provides rights to the Shareholders to purchase any securities of the Company as a result of the Arrangement or the Contemplated Transactions, if any;

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(viii)

not enter into, adopt, establish, amend, modify or terminate any Employee Plan (or any arrangement that would be an Employee Plan if in effect as of the date hereof), other than in connection with the Discontinuance;

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(ix)

not increase or decrease any salary, incentives, benefits or other compensation, and not accelerate vesting of any benefits, of any officer, employee, director of the Company or its Subsidiary under any Employee Plan, in each case, other than as contemplated by the Agreement;

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(x)

not acquire or dispose of any securities, except in connection with the Discontinuance;

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(xi)

not reorganize, amalgamate, combine or merge the Company or the Subsidiary with any other person;

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(xii)

not create any Subsidiary;

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(xiii)

not acquire or commit to acquire any assets or group of related assets (through one or more related or unrelated acquisitions);

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(xiv)

not incur, or commit to, capital expenditures; not sell, lease, option, encumber or otherwise dispose of, or commit to sell, lease, option, encumber or otherwise dispose of, or allow any third party to encumber for a period of five Business Days without contesting in good faith, any assets or group of related assets (through one or more related or unrelated transactions), excluding any sale in connection with the Discontinuance or any sale of any obsolete assets, or transfer any interest in any of the Company’s Subsidiaries to a third party unless required under existing banking facilities (provided, however, that to the extent any such sale results in any obligations of or adverse consequences to the Purchaser or its Subsidiaries that could extend beyond the Effective Date, or contemplates that any consideration paid in respect thereof is in anything other than immediately available cash, or otherwise interferes with or delays in any manner the ability of the Purchaser to perform its obligations under the Agreement or

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timely consummate the transaction contemplated hereby, the Company shall procure prior written consent of the Purchaser prior to entering into any sale transaction and any such post-Effective Date obligations shall be treated as a reduction to Closing Net Cash hereunder);

(xv)

not approve the grant of any power of attorney to allow any person to take any action on behalf of the Company or its Subsidiary or the amendment of any power of attorney allowing any person to take any action on behalf of the Company or its Subsidiary;

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(xvi)

not enter into or complete any transaction other than in connection with the Discontinuance or in accordance with plans previously disclosed in the Company Public Documents filed and available on SEDAR+ and EDGAR on or before the date hereof;

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(xvii)

(1) not incur or commit to incur any indebtedness for borrowed money, except for the borrowing of working capital in connection with the Discontinuance or issue any debt securities, (2) not incur or commit to incur, or guarantee, endorse or otherwise become responsible for, any other material liability, obligation or indemnity or the obligation of any person other than the wholly-owned Subsidiaries of the Company, or (3) not make any loans or advances to any person other than the wholly-owned Subsidiaries of the Company;

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(xviii)

not make any material changes to existing accounting methods, principles, practices or policies or internal controls other than as required by applicable Law or by GAAP;

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(xix)

not pay, discharge or satisfy any material claims, liabilities or obligations other than the payment, discharge or satisfaction, in connection with the Discontinuance in accordance with their terms, of liabilities reflected or reserved against in the Company’s financial statements as at and for the period ended March 31, 2025;

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(xx)

not engage in any transaction with any related parties other than with the Company and its Subsidiary in connection with the Discontinuance;

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(xxi)

not commence or settle or assign any rights relating to or any interest in any litigation, proceeding, claim, action, assessment or investigation that is material to the Company and involving the Company or its Subsidiary or material asset of either;

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(xxii)

not waive, release, grant, transfer, exercise, modify or amend in any material respect, other than in connection with the Discontinuance, (1) any existing contractual rights in respect of any joint ventures of the Company, (2) any Authorization, lease, concession, Contract or other document, or (3) any other material legal rights or claims;

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(xxiii)

not propose or enter into any agreement, arrangement, commitment, or offer with respect to a material joint venture or other mutual co-operation or distribution agreement;

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(xxiv)

not enter into any interest rate, currency or equity swaps, hedges, derivatives or other similar financial instruments other than (1) in connection with the Discontinuance, (2) if approved by the Board prior to the date hereof or (3) if required under existing banking facilities;

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(xxv)

not increase any coverage under any directors’ and officers’ insurance policy other than as contemplated in the Agreement;

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(xxvi)

not acquire or agree to acquire (by merger, amalgamation, arrangement, acquisition of stock or assets or otherwise) any person or division of any person or make any investment either by purchase of shares or securities, contributions of capital (other than to the wholly-owned Subsidiaries of the Company), property transfer or purchase of any property or assets of any other person, except for capital expenditures permitted by (xi);

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(xxvii)

not 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 Encumbrance (other than Permitted Encumbrance), any assets Company or its Subsidiary or any interest in any assets of the Company or its Subsidiary, or waive, cancel, release or assign to any person (other than the Company and the Subsidiary) any material right or claim (including

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indebtedness owed to the Company and the Subsidiary), except for (1) any assets Company or its Subsidiary sold, leased, disposed of or otherwise transferred in connection with the Discontinuance and that are not, individually or in the aggregate, material to the Company and the Subsidiary, (2) obsolete, damaged or destroyed assets, (3) returns of leased assets at the end of the lease term, (4) transfers of assets between the Company and the Subsidiary, and (5) as required pursuant to the terms of any Material Contract in effect on the date of the Agreement;

(xxviii)

not adopt a plan of complete or partial liquidation, arrangement, dissolution, amalgamation, merger, consolidation, restructuring, recapitalization, winding-up or other reorganization of the Company or the Subsidiary (other than the Agreement and the Contemplated Transactions), or file a petition in bankruptcy under any applicable Law on behalf of the Company or the Subsidiary, or consent to the filing of any bankruptcy petition against the Company or the Subsidiary under any applicable Law;

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(xxix)

duly and timely file all material forms, reports, press releases, schedules, statements and other documents required to be filed pursuant to any applicable corporate Laws or applicable Securities Laws, provided however that the Company shall in any event consult with the Purchaser prior to making any filing required pursuant to applicable Securities Laws, providing in such cases the Purchaser with a reasonable opportunity to review and comment on any such filing or release, recognizing that whether or not such comments are appropriate will be determined by the Company, acting reasonably;

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(xxx)

not (1) make, change or revoke any material Tax election (other than in connection with the Discontinuance), (2) change any annual Tax accounting period, (3) adopt (other than in connection with the Discontinuance) or make any material change to any material method of Tax accounting, (4) amend any material Tax Return, (5) surrender any claim for a material refund of Taxes, (6) settle or compromise any material claim, assessment or other dispute in respect of Taxes, (7) enter into or make any voluntary disclosure with respect to any material amount of Taxes, (8) enter into any Tax sharing, allocation, indemnification, receivable reimbursement, or similar agreement (whether or not written), (9) fail to pay any material Tax as such Tax became due and payable (including any estimated Tax), (10) prepare and file any Tax Return in a manner materially inconsistent with past practice, or (11) incur any material liability for Taxes outside the Discontinuance;

​

(xxxi)

except as contemplated under certain non-solicitation provisions of the Agreement, not enter into any transaction or perform any act or fail to perform any act that would reasonably be expected to interfere with, delay, or be materially inconsistent with the successful completion of the acquisition of Common Shares by the Purchaser pursuant to the Arrangement;

​

(xxxii)

without limiting the generality of the foregoing, vote or cause to be voted all shares and other securities held by the Company or a Subsidiary of the Company, and use commercially reasonable efforts to cause all nominees of the Company on the Board or any management committee or other committee of a Subsidiary of the Company to vote, in a manner consistent with all of the foregoing sections, including voting against, or causing such Persons to vote against, any resolution to approve any act, agreement or transaction prohibited by any of the foregoing sections;

​

(xxxiii)

(1) not offer, promise, pay, authorize or take up any act in furtherance of any offer, promise, payment or authorization of payment of anything of value, directly or indirectly, to any Government Official or Person of Concern for the purpose of securing discretionary action or inaction or a decision of a Government Official(s), influence over discretionary action or inaction of a Government Official(s), or any improper advantage; or (2) take any action which is otherwise inconsistent with or prohibited by the substantive prohibitions or requirements of Anti-Corruption Laws, AML Laws or similar applicable Laws of any other jurisdiction prohibiting corruption, bribery and money laundering, in connection with any of their business;

​

(xxxiv)

not fail to pay or cause to be paid all accounts when due or invoices promptly upon receipt, consistent with past practice;

​

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(xxxv)

not enter into any new line of business;

​

(xxxvi)

not reduce the stated capital of the securities of the Company or the Subsidiary;

​

(xxxvii)

not disclose any material trade secrets or material confidential information pertaining to the Company or the Subsidiary to any person, other than to Persons who are under a contractual, legal, or ethical obligation to maintain the confidentiality of such information;

​

(xxxviii)

not take any action that would, or would reasonably be expected to, materially delay or impede the consummation of the Arrangement, or the satisfaction of any of the conditions set forth in the Agreement;

​

(xxxix)

enter into or amend any Contract with any broker, finder or investment banker, provided that the foregoing shall not prohibit the Company 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; or

​

(xl)

not announce an intention, enter into any formal or informal agreement, or otherwise make a commitment to do any of the things prohibited by any of the foregoing subsections.

​

The Company agreed that it shall use its commercially reasonable efforts to cause the current material insurance (or re-insurance) policies maintained by the Company or the Subsidiary not to be cancelled or terminated or any of the coverage thereunder to lapse, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect; provided that, subject to terms of the Agreement, neither the Company nor the Subsidiary shall obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months.

Nothing contained in the Agreement shall give the Purchaser, directly or indirectly, the right to direct or control the Discontinuance prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms of the Agreement, control and supervision over the Discontinuance. Nothing in the Agreement, including any of the restrictions set forth herein, shall be interpreted in such a way as to place any Party in violation of applicable Law.

Covenants of the Company Relating to Information Rights

During the Interim Period, upon reasonable notice, the Company agreed it shall, and shall cause its Representatives to, provide the Purchaser and its Representatives with reasonable access (without material disruption to the conduct of the Company’s business and subject to any applicable competition Laws) during normal business hours to all books, records, information, corporate charts, tax documents, filings, memoranda, working papers and files and all other materials in its possession and control, including Material Contracts, and access to the personnel of and legal counsel to the Company and its Subsidiary on an as reasonably requested basis as well as reasonable access to the properties of the Company and its Subsidiary and agrees to assist the Purchaser with any filings or information requests from any Governmental Entity upon request by the Purchaser. The Company further agreed it shall use its commercially reasonable efforts to obtain any necessary consents from any of its auditors and any other advisors to the use of any financial, technical or other expert information required in connection with any filing or information request to or from any Governmental Entity, including any such information required in accordance with U.S. GAAP and applicable Laws (including the US Exchange Act) Nothing in the foregoing shall require the Company to (a) disclose information to the Purchaser which it is prohibited from disclosing pursuant to a written confidentiality agreement or confidentiality provision of an agreement with a third party, (b) provide the Purchaser with access to any property where the Company is contractually or legally prohibited from doing so or (c) disclose information to the Purchaser to the extent such disclosure would jeopardize any attorney-client or other legal privilege. Any such investigation by the Purchaser and its Representatives shall not mitigate, diminish or affect the representations and warranties of the Company contained in the Agreement or any document or certificate given pursuant thereto.

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Covenants of the Company Relating to Shareholder Claims

The Company agreed it shall notify the Purchaser of any demand, claim, proceeding or action brought by (or threatened to be brought by) any present, former or purported holder of any securities of the Company in connection with any of the Contemplated Transactions prior to the Effective Time. The Company shall consult with the Purchaser prior to settling any such claim prior to the Effective Time and shall not settle or compromise, or agree to settle or compromise, any such claim prior to the Effective Time without the prior written consent of the Purchaser, such consent not to be unreasonably withheld or delayed.

Covenants of the Company Relating to the Information Agent

The Company agreed it shall cooperate with any solicitation or information agent retained by the Purchaser, including using commercially reasonable efforts to provide any information requested by the solicitation or information agent, acting reasonably and shall take, or refrain from taking, such action as may be reasonably requested by the Purchaser, in furtherance of such cooperation. The Purchaser shall bear all costs and expenses associated with the retention of any such solicitation or information agent.

Covenants of the Company Relating to the Depositary

The Company agreed to permit the registrar and transfer agent for the Company to act as depositary, and to instruct that transfer agent to furnish to the Company (and such Persons as it may designate) at such times as it may request such information and provide to the Purchaser (and such Persons as it may designate) such other assistance as it may request in connection with the implementation and completion of the Contemplated Transactions.

Covenants of the Company Relating to Consents

The Company agreed it shall use its commercially reasonable efforts to obtain any consent from or to provide notice to any person, in each case in form and substance acceptable to the Purchaser, from which consent is required or that has a right to receive notice in respect of the Agreement or the Contemplated Transactions.

Covenants of the Company Relating to Pre-Funded Warrants

Subject at all times to the holder’s right to exercise the Warrants, the Company agreed it will use commercially reasonable efforts to give effect to an amendment to the Warrants to provide that (a) the holder of the Warrants will be entitled to a payment similar to the Distribution, if any, to the same extent that the holder would have participated therein if the holder held the number of Common Shares acquirable upon exercise of the Warrants prior to the Distribution, if any, and (b) for the treatment set forth in the Plan of Arrangement.

Covenants of the Company Relating to Cooperation

During the Interim Period and for a period of one (1) year following the Effective Date, the Company agreed it shall provide, in a reasonably timely and expeditious manner, in writing to the Purchaser, the Company Information. The Purchaser shall ensure that the Company Information complies in material respects with Law.

Covenants of the Company Relating to the Arrangement

The Company agreed it shall, and shall cause the Subsidiary to, perform all obligations reasonably required to be performed by the Company or the Subsidiary under the Agreement, reasonably cooperate with the Purchaser in connection therewith, and do all such other commercially reasonable acts and things as may be necessary or desirable to consummate and make effective, as soon as reasonably practicable, the transactions contemplated by the Agreement and, without limiting the generality of the foregoing, the Company shall and, where appropriate, shall cause the Subsidiary to:

83

 

(i)

use commercially reasonable efforts to satisfy all conditions precedent in the Agreement and take all steps set forth in the Interim Order and the Final Order applicable to it and comply promptly with all requirements imposed by Law applicable to it or the Subsidiary with respect to the Agreement or the Arrangement;

​

(ii)

mail a disclosure to the Shareholders describing the anticipated U.S. federal income tax consequences and related reporting with respect to the Distribution, if any, at least 10 Business Days prior to the record date for such Distribution;

​

(iii)

apply for and use commercially reasonable efforts to provide, obtain and maintain all Regulatory Approvals, third party notices or other notices and consents, waivers, permits, exemptions, orders, approvals, agreements, amendments or confirmations that are reasonably required or reasonably requested by the Purchaser in connection with the Arrangement, the Agreement or the other transactions contemplated hereby in each case, on terms that are reasonably satisfactory to the Purchaser, and without paying, and without committing itself or the Purchaser to pay, any consideration or incur any liability or obligation without the prior written consent of the Purchaser and, in doing so, keep the Purchaser reasonably informed as to the status of the proceedings related to obtaining such approvals, including providing the Purchaser with copies of all related applications, notices and notifications, in draft form, in order for the Purchaser to provide its reasonable comments thereon, which shall be given due and reasonable consideration;

​

(iv)

use commercially reasonable efforts to effect all necessary registrations, filings and submissions of information required by Governmental Entities from the Company and the Subsidiary relating to the Arrangement;

​

(v)

use commercially reasonable efforts to, upon reasonable consultation with the Purchaser, oppose, lift or rescind any Order seeking to restrain, enjoin or otherwise prohibit or adversely affect the consummation of the Arrangement, and defend, or cause to be defended, any Proceedings to which it is a party or brought against it or its directors or officers challenging the Arrangement, the Agreement or the transactions contemplated hereby, including seeking to have any stay or temporary restraining Order entered by any Governmental Entity vacated or reserved, so as to enable the Effective Date to occur as soon as reasonably practicable (provided, that neither the Company nor the Subsidiary shall consent to the entry of any judgment or settlement with respect to any such Proceeding without the prior written approval of the Purchaser, not to be unreasonably withheld, conditioned or delayed);

​

(vi)

not take any action, or refrain from taking any commercially reasonable action, or permit any action to be taken or not taken, in each case, which is inconsistent with the Agreement or which would reasonably be expected to prevent, materially delay or otherwise impede the consummation of the Arrangement or the transactions contemplated by the Agreement;

​

(vii)

use commercially reasonable efforts to assist the Purchaser in obtaining the resignations and mutual releases (in a form satisfactory to the Purchaser, acting reasonably) of each member of the Board and each member of the board of directors of the Subsidiary (in each case, in their capacity as directors only), and causing them to be replaced by Persons designated or nominated by the Purchaser effective as of the Effective Time; and

​

(viii)

take such action as may be required in order to ensure that the Options and the Warrants are treated in relation to the Arrangement as described in the Agreement.

​

The Company agreed it shall also promptly notify the Purchaser in writing of:

(i)

any Material Adverse Change;

​

(ii)

any material governmental or third-party complaints, investigations or hearings (or communications indicating that the same may be contemplated) provided nothing in the foregoing shall require the Company to disclose information to the Purchaser which it is prohibited from disclosing pursuant to a written confidentiality agreement, confidentiality provision of an agreement with a third party or regulatory restriction;

​

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(iii)

any notice or other communication from any person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person (or another Person) is or may be required in connection with the Arrangement, the Agreement or any of the transactions contemplated thereby;

​

(iv)

unless prohibited by Law, any notice or other communication from any person in connection with the transactions contemplated by the Agreement (and the Company shall contemporaneously provide a copy of any such written notice or communication to the Purchaser);

​

(v)

any breach or default, or any notice of alleged breach or default, by the Company or the Subsidiary of any Material Contract or material Authorization to which it is a party or by which it is bound;

​

(vi)

any written notice or other communication from any Governmental Entity in connection with the Agreement (and the Company shall contemporaneously provide a copy of any such written notice or communication to the Purchaser); and

​

(vii)

any (A) Proceedings commenced or, to the knowledge of the Company, threatened against, relating to or involving or otherwise affecting the Arrangement, the Agreement or any of the transactions contemplated hereby, and (B) material Proceedings commenced or, to the knowledge of the Company, threatened against, relating to or involving or otherwise affecting the Company, the Subsidiary or the assets of the Company.

​

Covenants of the Purchaser Relating to the Arrangement

The Purchaser agreed it shall perform all obligations required or desirable to be performed by the Purchaser under the Agreement, reasonably cooperate with the Company in connection therewith, and do all such other commercially reasonable acts and things as may be necessary or desirable to consummate and make effective, as soon as reasonably practicable, the transactions contemplated by the Agreement and, without limiting the generality of the foregoing, the Purchaser shall:

(i)

use commercially reasonable efforts to satisfy all conditions precedent in the Agreement and take all steps set forth in the Interim Order and the Final Order applicable to it and comply promptly with all requirements imposed by Law applicable to it with respect to the Agreement or the Arrangement, provided, however, that under no circumstances will the Purchaser be required to agree or consent to any increase in the Consideration except as otherwise provided for in the Agreement;

​

(ii)

use commercially reasonable efforts to assist the Company to obtain and maintain all Regulatory Approvals, third party or other consents, waivers, permits, exemptions, Orders, approvals, agreements, amendments or confirmations referred to in the Agreement;

​

(iii)

use commercially reasonable efforts to effect all necessary registrations, filings and submissions of information required by Governmental Entities from it relating to the Arrangement;

​

(iv)

use commercially reasonable efforts to, upon reasonable consultation with the Company, oppose, lift or rescind any Order seeking to restrain, enjoin or otherwise prohibit or adversely affect the consummation of the Arrangement, and defend, or cause to be defended, any Proceedings to which it is a party or brought against it or its directors or officers challenging the Arrangement, the Agreement or the transactions contemplated hereby, including seeking to have any stay or temporary restraining Order entered by any Governmental Entity vacated or reserved, so as to enable the Effective Date to occur as soon as reasonably practicable (provided, that the Purchaser shall not consent to the entry of any judgment or settlement with respect to any such Proceeding without the prior written approval of the Company, not to be unreasonably withheld, conditioned or delayed); and

​

(v)

not take any action which would reasonably be expected to prevent, materially delay or otherwise impede the consummation of the Arrangement or the transactions contemplated by the Agreement.

​

Covenants Relating to Notice Provisions

Each Party agreed it will give prompt written notice to the other of the occurrence, or failure to occur, at any time from the date hereof until the earlier to occur of the termination of the Agreement and the Effective

85

 

Time of any event or state of facts of which it is aware which occurrence or failure would, or would be reasonably likely to result in the failure to satisfy any of the conditions set forth in the Agreement.

Each Party further agreed it will give prompt notice to the other if at any time before the Effective Time it becomes aware that the Circular and Proxy Statement, an application for an Order, any registration, consent, circular or approval, or any other filing under applicable Laws contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in the light of the circumstances in which they are made, or that otherwise requires an amendment or supplement to the Circular and Proxy Statement, such application, registration, consent, circular, approval or filing, and the Purchaser and the Company shall cooperate in the preparation of any amendment or supplement to the Circular and Proxy Statement, application, registration, consent, circular, approval or filing, as required.

Covenants Relating to Additional Agreements, Filings and Government Engagement

Each of the Parties agreed to use its commercially reasonable efforts to take, or cause to be taken, all reasonable actions and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective as promptly as practicable any Contemplated Transactions undertaken by the Purchaser and/or its Affiliates and to cooperate with each other in connection with the foregoing, including using commercially reasonable efforts:

(i)

to obtain all Regulatory Approvals and all other consents, approvals, clearances and authorizations as are necessary to be obtained under applicable Laws;

​

(ii)

to defend all lawsuits or other legal proceedings challenging the Agreement or the consummation of the Contemplated Transactions;

​

(iii)

to cause to be lifted or rescinded any injunction or restraining Order or other Order adversely affecting the ability of the Parties to consummate the Contemplated Transactions;

​

(iv)

to effect all necessary registrations and other filings and submissions of information or responses to information requests as may be requested by Governmental Entities or required under any applicable Securities Laws, or any other Laws;

​

(v)

to execute and deliver such documents as the other Parties may reasonably require;

​

(vi)

to fulfil all conditions within its power and satisfy all provisions of the Agreement and the Arrangement;

​

(vii)

to manage stakeholder communications and engagement and address any questions any Government Official or Governmental Entity may have in connection with the consummation of the Contemplated Transactions; and

​

(viii)

to not take any action which would render, or which may reasonably be expected to render, untrue or inaccurate (without giving effect to, applying or taking into consideration any materiality or Material Adverse Change qualification already contained within such representation or warranty) in any material respect any of such Party’s respective representations and warranties set forth in the Agreement.

​

Covenants Relating to Notice and Cure Provisions

During the period commencing on the date of the Agreement and continuing until the earlier of the Effective Time and the termination of the Agreement in accordance with its terms, each Party agreed it 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:

(i)

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

​

86

 

(ii)

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.

​

Covenants Relating to Nasdaq Delisting

Subject to applicable Law, each of the Company and the Purchaser agreed to use its commercially reasonable efforts and cooperate with the other Party in taking, or causing to be taken, all actions necessary to cause the Common Shares to be delisted from the Nasdaq and deregistered under the U.S. Exchange Act, in each case, as promptly as practicable following the Effective Time.

Covenants Relating to Transaction Litigation

The Company agreed that it shall, as promptly as reasonably practicable, notify the Purchaser in writing of any Transaction Litigation and shall keep the Purchaser informed on a reasonably prompt basis regarding any such Transaction Litigation. The Company shall give the Purchaser the opportunity to (a) participate in the defense of any Transaction Litigation, and (b) consult with outside legal counsel to the Company regarding the defense, settlement or compromise with respect to any such Transaction Litigation.

Covenants Relating to the Voluntary Dissolution

The Parties acknowledged that the business of the Company has been discontinued and as soon as reasonably practicable following the Effective Time and upon the satisfaction of all liabilities of the Company or the Purchaser having made adequate provision for the payment of each of the Company’s liabilities, the Purchaser shall undertake a voluntary dissolution of the Company pursuant to Section 314 of the BCBCA.

Conditions Precedent to the Arrangement

The obligations of the Parties to complete the Arrangement under the Agreement are subject to the satisfaction or waiver of certain conditions described below.

Mutual Conditions

Neither Party is required to complete the Arrangement unless each of the following conditions is satisfied on or 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:

(i)

the Arrangement Resolution shall have been approved and adopted by the Shareholders at the Special Meeting in accordance with the Interim Order;

​

(ii)

the Interim Order and the Final Order shall have each been obtained on terms consistent with the Agreement, and shall have not been set aside or modified in a manner unacceptable to either the Company or the Purchaser, each acting reasonably, on appeal or otherwise;

​

(iii)

each of the Regulatory Approvals shall have been made, given or obtained on terms acceptable to the Purchaser and is in force and has not been rescinded or modified; or

​

(iv)

no Law is in effect that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins the Company or the Purchaser from consummating the Arrangement.

​

Additional Conditions in Favour of the Purchaser

The Purchaser 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 the Purchaser and may only be waived, in whole or in part, by the Purchaser in its sole discretion:

(i)

(1) (A) The representations and warranties of the Company set forth in Paragraphs 2 [Organization], 4 [Authority], 5(a)(i)(A) [No Violation], 3 [Capitalization], 6 [Subsidiaries], and 13 [Brokerage Fees] of Schedule E of the Agreement shall be true and correct in all respects (except for de minimis inaccuracies) as of the date of the Agreement and true and correct in all respects (except for de

​

87

 

minimis inaccuracies and inaccuracies which are the result of transactions, changes, conditions, events or circumstances specifically permitted) as of the Effective Time as if made at and as of such time, (B) the representations and warranties of the Company set forth in Paragraph 5 (other than 5(a)(i)(A)) [No Violation] of Schedule E of the Agreement shall be true and correct in all material respects (disregarding any materiality, “material” or “Material Adverse Change” qualification contained in any such representation or warranty) as of the date of the Agreement and as of the Effective Time as if made at and as of such time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date), and (C) all other representations and warranties of the Company set forth in the Agreement shall be true and correct as of the date of the Agreement and as of the Effective Time as if made at and as of such time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date), except in the case of this clause (C) 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 Change (disregarding any materiality, “material” or “Material Adverse Change” qualification contained in any such representation or warranty), and (2) the Company has delivered a certificate confirming same to the Purchaser, executed by an officer of the Company (without personal liability) addressed to the Purchaser and dated the Effective Date;

(ii)

the Company has fulfilled or complied in all material respects with each of the covenants of the Company contained in the Agreement to be fulfilled or complied with by it on or prior to the Effective Time, and the Company has delivered a certificate confirming same to the Purchaser, executed by a senior officer of the Company (in each case without personal liability) addressed to the Purchaser and dated the Effective Date;

​

(iii)

no Proceeding shall be pending or threatened by any Governmental Entity in any jurisdiction that is reasonably likely to (i) cease trade, enjoin, prohibit, or impose any limitations, damages, or conditions on, the Purchaser’s ability to acquire, hold, or exercise full rights of ownership over, any Common Shares, including the right to vote the Common Shares, or (ii) prohibit or enjoin the Company or the Purchaser from consummating the Arrangement;

​

(iv)

there shall have not occurred a Material Adverse Change and the Company has delivered a certificate confirming same to the Purchaser, executed by two senior officers of the Company (in each case, without personal liability) addressed to the Purchaser and dated the Effective Date;

​

(v)

the Company has received effective resignations and mutual releases (in a form satisfactory to the Purchaser, acting reasonably) of each member of the Board and each member of the board of directors of the Subsidiary, effective as of the Effective Date;

​

(vi)

Dissent Rights have not been exercised with respect to more than 10% of the issued and outstanding Common Shares; and

​

(vii)

the Closing Net Cash shall equal or exceed the Target Closing Net Cash.

​

Additional Conditions in Favour of the Company

The Company is not obligated 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 the Company and may only be waived, in whole or in part, by the Company in its sole discretion:

(i)

the representations and warranties of the Purchaser and Parent set forth in Schedule C of the Agreement shall be true and correct in all material respects (disregarding any materiality or “material” qualification contained in any such representation or warranty) as of the date of the Agreement and as of the Effective Time as if made at and as of such time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such specified date), and the Purchaser has delivered a certificate confirming same to the Company, executed by an officer of the Purchaser (without personal liability) addressed to the Company and dated the Effective Date;

​

88

 

(ii)

the Purchaser has fulfilled or complied in all material respects with the covenants of the Purchaser contained in the Agreement to be fulfilled or complied with by it on or prior to the Effective Time, and has delivered a certificate confirming same to the Company, executed an officer of the Purchaser (without personal liability) addressed to the Company and dated the Effective Date; and

​

(iii)

the Purchaser shall have complied with its obligations under the Agreement to deposit the Consideration with the Depositary.

​

Termination of the Agreement

The Agreement may be terminated at any time prior to the Effective Time, or such other time as may be expressly stipulated in any of the sections below:

(i)

by mutual written agreement of the Company and the Purchaser;

​

(ii)

by the Company, if:

​

a.

in order to accept, approve, recommend or enter into a binding written agreement with respect to a Superior Proposal;

​

b.

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Purchaser under the Agreement occurs that would cause certain conditions precedent to the obligations of the Company relating to representations and warranties of the Purchaser not to be satisfied, and such breach or failure is incapable of being cured or is not cured; provided that the Company is not then in breach of the Agreement so as to directly or indirectly cause certain conditions relating to representations and warranties of the Purchaser not to be satisfied;

​

(iii)

by the Purchaser, if:

​

a.

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company under the Agreement occurs that would cause certain conditions relating to representations and warranties of the Company or performance of covenants by the Company not to be satisfied, and such breach or failure is incapable of being cured or is not cured; provided that the Purchaser is not then in breach of the Agreement so as to directly or indirectly cause conditions related to representations and warranties of the Purchaser and performance of covenants by the Purchaser not to be satisfied;

​

b.

if the Board or the Transaction Committee (1)(I) withholds or withdraws (or amends, modifies or qualifies in a manner adverse to Parent or the Purchaser) the Board Recommendation, or proposes publicly to withhold or withdraw (or amend, modify or qualify in a manner adverse to Parent or the Purchaser) the Board Recommendation or fails to publicly reaffirm the Board Recommendation within five Business Days after having been requested in writing by the Purchaser to do so (or in the event that the Special Meeting is scheduled to occur within such five Business Day period, prior to the third Business Day prior to the date of the Special Meeting), or (II) withholds or withdraws (or amends, modifies or qualifies in a manner adverse to Parent or the Purchaser) or proposes publicly to withhold or withdraw (or amend, modify or qualify in a manner adverse to Parent or the Purchaser) any of the recommendations of the Transaction Committee referred to in Paragraph 1 of Schedule C to the Agreement, respectively, (2) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend an Acquisition Proposal, or (3) takes no position or a neutral position with respect to an Acquisition Proposal for more than five Business Days after the public announcement of such Acquisition Proposal (or beyond the third Business Day prior to the date of the Special Meeting, if sooner); or (4) the Board or any committee of the Board accepts, approves, endorses, recommends or authorizes the Company to enter into a written agreement concerning a Superior Proposal;

​

c.

there has occurred a Material Adverse Change after the date of the Agreement;

​

89

 

d.

the Company breaches any covenant or obligation relating to non-solicitation obligations under the Agreement in any material respect;

​

e.

one or more closing conditions of the Purchaser under the Agreement shall not be met as of the Outside Date;

​

(iv)

by either the Company or the Purchaser if:

​

a.

the Arrangement Resolution is not approved by the Shareholders at the Special Meeting in accordance with the Interim Order, provided that a Party may not terminate the Agreement if the failure to obtain the approval of the Shareholders 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 Agreement;

​

b.

after the date of the Agreement, any Law is enacted, made, enforced or amended, as applicable, that makes the consummation of the Arrangement illegal or otherwise permanently prohibits or enjoins the Company or the Purchaser from consummating the Arrangement, and such Law has, if applicable, become final and non-appealable, provided that a Party may not terminate the Agreement if the enactment, making, enforcement or amendment of such Law 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 Agreement, and provided that the Party seeking to terminate the 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

​

c.

the Effective Time does not occur on or prior to the Outside Date, provided that a Party may not terminate the 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 Agreement.

​

Termination Payment and Expenses

All out-of-pocket expenses incurred in connection with the Agreement, the Arrangement and the other transactions contemplated by the Agreement will be paid by the Party incurring such fees or expenses, whether or not the Arrangement is consummated, with certain exceptions expressly set forth in the Agreement.

Purchaser shall be entitled to a cash termination payment (the “Termination Payment”) in an amount equal to $2,500,000, upon the occurrence of any of the following events (each a “Termination Payment Event”), which shall be paid by the Company within the time specified in respect of each such Termination Payment Event:

(i)

the Agreement is terminated by the Purchaser if (i) the Company breaches any covenant or obligation relating to non-solicitation under the Agreement in any material respect or (ii) if the Board or the Transaction Committee (1)(I) withholds or withdraws (or amends, modifies or qualifies in a manner adverse to Parent or the Purchaser) the Board Recommendation, or proposes publicly to withhold or withdraw (or amend, modify or qualify in a manner adverse to Parent or the Purchaser) the Board Recommendation or fails to publicly reaffirm the Board Recommendation within five Business Days after having been requested in writing by the Purchaser to do so (or in the event that the Special Meeting is scheduled to occur within such five Business Day period, prior to the third Business Day prior to the date of the Special Meeting), or (II) withholds or withdraws (or amends, modifies or qualifies in a manner adverse to Parent or the Purchaser) or proposes publicly to withhold or withdraw (or amend, modify or qualify in a manner adverse to Parent or the Purchaser) any of the recommendations of the Transaction Committee referred to in Paragraph 1 of Schedule C to the Agreement, respectively, (2) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend an Acquisition Proposal, or (3) takes no position or a neutral position with respect to an Acquisition Proposal for more than five Business Days after the public announcement of such Acquisition Proposal (or beyond the third Business Day prior to the date of the Special Meeting, if sooner); or (4) the Board or any committee of the

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Board accepts, approves, endorses, recommends or authorizes the Company to enter into a written agreement concerning a Superior Proposal, in which case the Termination Payment shall be paid to the Purchaser by 4:00 p.m. (Vancouver time) on the first Business Day after the Agreement is so terminated;

(ii)

the Agreement is terminated by the Company at any time when the Agreement was terminable by the Purchaser if (i) the Company breaches any covenant or obligation relating to non-solicitation under the Agreement in any material respect or (ii) if the Board or the Transaction Committee (1)(I) withholds or withdraws (or amends, modifies or qualifies in a manner adverse to Parent or the Purchaser) the Board Recommendation, or proposes publicly to withhold or withdraw (or amend, modify or qualify in a manner adverse to Parent or the Purchaser) the Board Recommendation or fails to publicly reaffirm the Board Recommendation within five Business Days after having been requested in writing by the Purchaser to do so (or in the event that the Special Meeting is scheduled to occur within such five Business Day period, prior to the third Business Day prior to the date of the Special Meeting), or (II) withholds or withdraws (or amends, modifies or qualifies in a manner adverse to Parent or the Purchaser) or proposes publicly to withhold or withdraw (or amend, modify or qualify in a manner adverse to Parent or the Purchaser) any of the recommendations of the Transaction Committee referred to in Paragraph 1 of Schedule C to the Agreement, respectively, (2) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend an Acquisition Proposal, or (3) takes no position or a neutral position with respect to an Acquisition Proposal for more than five Business Days after the public announcement of such Acquisition Proposal (or beyond the third Business Day prior to the date of the Special Meeting, if sooner); or (4) the Board or any committee of the Board accepts, approves, endorses, recommends or authorizes the Company to enter into a written agreement concerning a Superior Proposal, in which case the Termination Payment shall be paid to the Purchaser by 4:00 p.m. (Vancouver time) on the first Business Day after the Agreement is so terminated;

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(iii)

the Agreement is terminated by the Company in order to accept, approve, recommend or enter into a binding written agreement with respect to a Superior Proposal, in which case the Termination Payment shall be paid to the Purchaser prior to or concurrently with such termination;

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(iv)

the Agreement is terminated by the Purchaser if (A) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company under the Agreement occurs that would cause certain conditions not to be satisfied, and such breach or failure is incapable of being cured or is not cured; provided that the Purchaser is not then in breach of the Agreement so as to directly or indirectly cause certain conditions not to be satisfied or (B) the Effective Time does not occur on or prior to the Outside Date and:

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a.

following the date thereof and prior to the date on which the Agreement is terminated, an Acquisition Proposal is publicly announced or made by any person other than the Purchaser or an Affiliate of the Purchaser, or any person, other than the Purchaser or an Affiliate of the Purchaser, has publicly announced an intention to make an Acquisition Proposal; and

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b.

either (x) any Acquisition Proposal is completed within 12 months following the termination of the Agreement; or (y) an agreement in respect of any Acquisition Proposal is entered into directly or indirectly by the Company within 12 months following the termination of the Agreement and that Acquisition Proposal is completed at any time after the termination of the Agreement;

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In which case the Termination Payment shall be paid to the Purchaser concurrently with the completion of that Acquisition Proposal.

(v)

upon written notice to the Company, the Purchaser may assign its right to receive the Termination Payment to any Affiliate of the Purchaser. The Termination Payment shall be paid by the Company to the Purchaser or its assignee, as applicable, by wire transfer in immediately available funds to an account specified by the Purchaser.

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Certain Assurances

XRC has agreed to use its reasonable best efforts to cause Parent or Purchaser, as applicable, and, during the period between July 13, 2025 and the Effective Date, to perform all of its agreements, covenants and obligations under the Agreement. XRC has also unconditionally and irrevocably guaranteed to the Company the full and complete performance by Parent and Purchaser, as applicable, of its respective obligations under the Agreement including the due and punctual payment in full of any obligations of the Parent or Purchaser as and when due and payable pursuant to the Agreement.

Pursuant to a letter agreement dated July 14, 2025 (the “Arranger Letter Agreement”), XRC agreed to extend Parent a short-term senior unsecured term loan facility in the aggregate amount sufficient for Parent to fulfil its obligations under the Agreement and Plan of Arrangement. The Arranger Letter Agreement provides a fee to XRC of $3,000,000 in exchange for services rendered in identifying, referring, or introducing prospective targets culminating in a successful transaction.

Amendments

The Agreement may not be amended except by an instrument signed by each of the Parties.

Timing

The Arrangement will become effective as of the Effective Time and on the Effective Date. If the Special Meeting is held as scheduled and is not adjourned or postponed and the Required Securityholder Approval is obtained, the Company will apply for the Final Order approving the Arrangement. Subject to receipt of the Final Order in form and substance satisfactory to the Company and the Purchaser, and satisfaction or waiver of all other conditions set forth in the Agreement, the Company expects the Effective Date to occur in the second half of 2025. It is not possible, however, to state with certainty when the Effective Date will occur. The Effective Date could be delayed for a number of reasons, including the failure to satisfy the conditions to the completion of the Arrangement in the anticipated time frames.

THE CVR AGREEMENT

At or prior to the Effective Time, XenoTherapeutics and Purchaser will authorize and duly adopt, execute and deliver, and will ensure that the Rights Agent executes and delivers, the Contingent Value Rights Agreement with a committee composed of two former directors of the Company and one representative of XRC (the “CVR Committee”). Each CVR will represent a contractual right for registered holders of each CVR (each a “CVR Holder”) to receive a pro rata portion of the following contingent cash payments:

(a)

if the amount equal to $3,550,000 minus any damages or losses incurred by the CVR Committee or the Company following the closing of the Arrangement related to the litigation against the Company alleging that the Company made material misstatements and/or omissions in the Company’s public statement with respect to its then-ongoing clinical trials of masofaniten filed on January 24, 2025 or any other proceeding against or involving the directors and officers of the Company existing as of July 13, 2025, or arising prior to 18 months following the closing of the Arrangement (the “Company Litigation”), or otherwise paid in satisfaction of the Company’s retention obligations under the D&O Tail Policy, including Shareholder (“Excess Litigation Cash”) is equal to or less than $1,500,000, an amount equal to 50% of Excess Litigation Cash, or (b) if Excess Litigation Cash is greater than $1,500,000, an amount equal to such Excess Litigation Cash less $750,000; and

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(b)

$150,000 less additional liabilities and expenses of the Company that are not deducted from the Cash Amount at closing of the Transaction.

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It is anticipated that the Rights Agent will send each Securityholders at its registered address a check payable for the CVR Consideration amount, (i) with respect to any cash adjustment payment, no later than 30 days following the final determination of such adjustment and (ii) with respect to the Company Litigation, no later than thirty days following the later of (a) the final and non-appealable resolution of any Company Litigation or (b) the date that is eighteen months following the consummation of the Arrangement.

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The CVR Committee shall control the defense of any Company Litigation in its absolute and sole discretion, including full discretion to compromise, discharge and/or settle any Company Litigation with counsel selected by the CVR Committee. Purchaser may (at its own expense) select counsel of its choosing to act as co-counsel (but not lead counsel) on behalf of the Company for purposes of participating in the defense of any Company Litigation. The CVR Committee shall reasonably consult and cooperate with the co-counsel of Purchaser’s choosing and consider in good faith suggestions concerning the decisions and determinations with respect to any Company Litigation. Parent shall indemnify, defend and hold harmless the CVR Committee and all members of the CVR Committee and its members, managers, directors, officers, contractors, agents and employees from and against any and all losses, claims, damages, liabilities, fees, costs, reasonable and documented expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers), judgments, fines, amounts paid in settlement (collectively, the “CVR Committee Expenses”) arising out of or in connection with the acceptance or administration of its duties hereunder.The Company may agree to compensate the directors of the Company that will be members of the CVR Committee. Such CVR Committee Expenses are for the account of the Company and may be recovered promptly from either the Company, Purchaser or the Parent and will increase the Company Litigation Expenses; provided that, any CVR Committee Expenses in excess of $50,000 shall be accrued and paid promptly following the applicable CVR Payment Date. Any such compensation will be paid by the Company prior to the closing of the Arrangement and accounted for in the Closing Net Cash.

The right to the contingent payments contemplated by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement. The CVRs will not be evidenced by a certificate or any other instrument and will not be registered with the SEC. The CVRs will not have any voting or dividend rights and will not represent any equity or ownership interest in XenoTherapeutics, any constituent corporation party to the Agreement or any of their respective affiliates. No interest will accrue on any amounts payable on the CVRs to any CVR Holders.

Canadian Securities Law Matters

Multilateral Instrument 61-101

The Company is a reporting issuer in Ontario, British Columbia and Alberta, and, accordingly, is subject to MI 61-101. MI 61-101 is intended to regulate certain transactions to ensure equality of treatment among security holders, generally requiring enhanced disclosure, approval by a majority of security holders excluding “interested parties” or “related parties” ​(as such terms are defined in MI 61-101) and/or, in certain instances, independent valuations and approval and oversight of the transaction by a transaction committee of independent directors. The protections of MI 61-101 generally apply to “business combinations” ​(as defined in MI 61-101) that terminate the interests of security holders without their consent.

MI 61-101 provides that, in certain circumstances, where a “related party” ​(as defined in MI 61-101) of an issuer is entitled to receive a “collateral benefit” ​(as defined in MI 61-101) in connection with an arrangement transaction (such as the Arrangement), such transaction may be considered a “business combination” for the purposes of MI 61-101 and subject to minority approval requirements.

A “collateral benefit”, as defined in MI 61-101, includes any benefit that a “related party” of the Company (which includes the directors and senior officers of the Company) 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 Company. However, such a benefit will not constitute a “collateral benefit” provided that certain conditions are satisfied. In addition, a related party of an issuer is not considered to be treated differently from other security holders of the issuer in a transaction, or to receive a “collateral benefit”, solely by reason of being a security holder of another party to the transaction.

Under MI 61-101, a benefit received by a “related party” of the Company is not considered to be a “collateral benefit” if the benefit is received solely in connection with the related party’s services as an employee, director or consultant of the Company or an affiliated entity and (i) 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 Arrangement, (ii) the conferring of the benefit is not, by its terms, conditional on the “related party” supporting the Arrangement in any manner, (iii) full particulars of the benefit are

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disclosed in disclosure document for the transaction, and (iv) either (A) at the time the Arrangement was agreed to, the “related party” and its associated entities beneficially owned or exercised control or direction over less than 1% of the outstanding Common Shares, or (B) (x) the “related party” discloses to an independent committee of the Company the amount of consideration that the “related party” expects it will be beneficially entitled to receive, under the terms of the Arrangement, in exchange for the Common Shares beneficially owned by the “related party”, (y) the independent committee, acting in good faith, determines that the value of the benefit, net of any offsetting costs to the “related party”, is less than 5% of the value referred to in (B) (x), and (z) the independent committee’s determination is disclosed in this Circular and Proxy Statement.

If a “related party” receives a “collateral benefit” in connection with the Arrangement, in addition to requiring the approval of at least two-thirds of the votes cast by the Shareholders present virtually or represented by proxy and entitled to vote at the Special Meeting, the Arrangement Resolution will also require “minority approval” in accordance with MI 61-101. If “minority approval” is required, the Arrangement Resolution must also be approved by a majority of the votes cast, excluding those votes beneficially owned, or over which control or direction is exercised, by the “related parties” of the Company who receive a “collateral benefit” in connection with the Arrangement.

Each of Franklin Milan Berger, BVF Partners L.P., Clarus Life Sciences III, L.P., Richard Glickman, Philip Wayne Kantoff, Lauren Merendino, John Alexander Martin, David Parkinson, Scott Requadt, Gary Ralph Sollis, Ann Marella Thorell, Sanford Zweifach and David Wood is a “related party” of the Company (collectively, the “Related Parties”).

Following disclosure by each of the Related Parties of the number of securities of the Company held by them and the total consideration that they expect to receive pursuant to the Arrangement, the only Related Parties who are receiving a benefit in connection with the Arrangement and beneficially own or exercise control or direction over more than one percent (1%) of the Common Shares are Franklin Milan Berger, BVF Partners L.P., Clarus Life Sciences III, L.P., David Parkinson, Ann Marella Thorell and David Wood.

Based on the information set out in the table below the Transaction Committee has determined that the value of any benefits to be received by each of David Parkinson and David Wood, net of any offsetting costs, is more than 5% of the value of consideration that David Parkinson and David Wood, respectively, expect they will be beneficially entitled to receive under the terms of the Arrangement (including in exchange for the equity securities beneficially owned by them).

As a result of the foregoing, (i) the Common Shares that David Parkinson beneficially owns, directly or indirectly, or over which he has control or direction (being 65,765 Common Shares or approximately 0.001% of the issued and outstanding Common Shares as of the Record Date) will be excluded for the purpose of determining if minority approval of the Arrangement is obtained and (ii) the Common Shares that David Wood beneficially owns, directly or indirectly, or over which he has control or direction (being 33,343 Common Shares or approximately 0.0008% of the issued and outstanding Common Shares as of the Record Date) will be excluded for the purpose of determining if minority approval of the Arrangement is obtained.

Other Regulatory Matters

Following the completion of the Arrangement, the Common Shares will be delisted from the Nasdaq and deregistered under the U.S. Exchange Act, in each case, in accordance with applicable Laws, rules and regulations, and the Company’s reporting obligations under the U.S. Exchange Act with respect to the Common Shares will be terminated. Similarly, the Company will make an application to cease to be a reporting issuer (or equivalent) in British Columbia, Alberta and Ontario following the implementation of which, the Company will cease to have public reporting obligations under Securities Laws.

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AGREEMENTS INVOLVING COMMON SHARES

Voting and Support Agreements

In connection with the Agreement, each of the Supporting Company Shareholders, entered into a Voting and Support Agreement dated July 13, 2025. Subject to the terms and conditions of the respective Voting and Support Agreements, each Supporting Company Shareholder agreed, from the date of the Voting and Support Agreement until the date the Agreement is terminated, as follows:

Pursuant to the terms of the Voting and Support Agreements, the Supporting Company Shareholders have agreed to, solely in their capacity as a Securityholder of the Company and not in their capacity as an officer or director of the Company, from the date hereof until the earlier of (i) the Effective Time and (ii) the termination of the Agreement in accordance with its terms: (a) to vote their Subject Securities in favour of the approval of the Arrangement Resolution, the Liquidation Resolution, the Liquidator Resolution and any proposal to adjourn or postpone the Special Meeting if such adjournment or postponement is proposed pursuant to and in compliance with the provisions of the Agreement and against any Acquisition Proposal and any other matter which could reasonably be expected to frustrate, breach, interfere with, prevent or delay the completion of transactions contemplated in the Agreement; (b) no later than ten (10) days prior to the Special Meeting, to deliver or cause to be delivered to the Company duly executed proxies or voting instruction forms voting in favour of the approval of the Arrangement Resolution and the Liquidation Resolution, such proxy or voting instruction forms not to be revoked, amended or withdrawn without the prior written consent of the Purchaser; (c) not to, directly or indirectly (including through any of its Representatives): (i) make, solicit, assist, initiate, encourage, promote or otherwise facilitate any inquiry, proposal or offer that constitutes or could reasonably be expected to constitute an Acquisition Proposal; (ii) enter into continue or otherwise participate or engage in or otherwise facilitate any discussions or negotiations with any person (other than the Purchaser and its affiliates and their respective Representatives), or otherwise cooperate in any way with, or assist or participate in, encourage or otherwise facilitate, any inquiry, proposal or offer that constitutes or could reasonably be expected to constitute an Acquisition Proposal; (iii) accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse or recommend, any Acquisition Proposal; (iv) withdraw support, amend or modify support in a manner adverse to Purchaser, or propose publicly to withdraw support, from the transactions contemplated by the Agreement; (v) enter, or propose publicly to enter, into any agreement related to any Acquisition Proposal; (vi) act jointly or in concert with others with respect to voting securities of the Company for the purpose of opposing or competing with the Purchaser in connection with the Agreement; or (vii) join in the requisition of any meeting of the securityholders of the Company for the purpose of considering any resolution related to any Acquisition Proposal; (d) to, and to each of its affiliates, instruct each of its and their Representatives to, immediately cease and terminate any existing solicitation, knowing encouragement, discussions, negotiations or other activities it is engaged in with any Persons (other than the Purchaser and its affiliates) with respect to any inquiry, proposal or offer that constitutes or would reasonably be expected to constitute or lead to, an Acquisition Proposal; (e) except as contemplated by the Agreement and this letter agreement or as required by Law and/or securities regulation, not to, directly or indirectly transfer any of their Subject Securities (except upon the exercise or settlement of equity awards) or grant or agree to grant any proxy, power of attorney or other right to vote the Subject Securities; (f) to forthwith revoke any and all previous proxies granted or voting instruction forms delivered, or other voting agreements or arrangements that may conflict with or be inconsistent with the matters set forth in this letter agreement; and (g) not to exercise any rights of appraisal or rights of dissent in connection with the Arrangement or the transactions contemplated by the Agreement.

The Voting and Support Agreements signed by the Supporting Company Shareholders shall terminate at any time upon the mutual written agreement of the parties thereto and shall automatically terminate and be of no further force or effect upon the earlier of (i) the Effective Time or (ii) termination of the Agreement in accordance with its terms.

As of the Record Date, the Supporting Company Shareholders held in the aggregate 2.23% of the issued and outstanding Common Shares.

The form of Voting and Support Agreement has been filed by the Company with the SEC and on SEDAR+.

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PROVISIONS FOR UNAFFILIATED SHAREHOLDERS

No provision has been made (i) to grant the Company’s unaffiliated Shareholders access to the corporate files of the Company, any other Party to the Arrangement or any of their respective Affiliates, or (ii) to obtain counsel or appraisal services at the expense of the Company, or any other such Party or Affiliate.

IMPORTANT INFORMATION ABOUT THE COMPANY

Company Background

The Company is a clinical stage pharmaceutical company that, prior to the discontinuation of its clinical trials and preclinical and other development programs, has been focused on developing novel therapies for the treatment of prostate cancer with a primary focus on patients whose disease is still predominantly driven by the androgen axis. The Company’s development of proprietary small molecule inhibitors of the N-terminal domain of the androgen receptor was focused on the treatment of these patients in combination with second-generation antiandrogen drugs such as abiraterone, enzalutamide, apalutamide, and darolutamide.

In October 2024, the Company announced that it decided to terminate its clinical trials evaluating masofaniten (EPI-7386). This decision was mutually agreed upon by both senior management and the Board. The decision was based on the results of a protocol-specified interim review of available safety, PK and efficacy data from the Company’s Phase 2 clinical trial evaluating in a 2:1 randomization masofaniten (EPI 7386) combined with enzalutamide versus enzalutamide single agent in patients with mCRPC naïve to second-generation antiandrogens. This data showed a much higher rate of PSA90 response in patients treated with enzalutamide monotherapy (which is standard of care for this patient population) than were expected based upon historical data. In addition, there was no clear efficacy benefit seen with the combination of masofaniten (EPI-7386) plus enzalutamide compared to enzalutamide single agent. A futility analysis determined a low likelihood of meeting the prespecified primary endpoint of the study.

As part of its efforts to focus its resources, the Company also announced that the other remaining company-sponsored and investigator-sponsored clinical studies evaluating masofaniten (EPI-7386) either as a monotherapy or in combination with other agents will be terminated. The Company also decided to withdraw its IND and CTAs that have been submitted to date.

Additional Financial and Business Information

Additional financial and business information about the Company, including our audited Financial Statements for the fiscal year ended September 30, 2024 and our Interim Financial Statements for the quarter ended March 31, 2025, may be found in our Annual Report for the fiscal year ended September 30, 2024 and in our Quarterly Report for the fiscal quarter ended March 31, 2025 which are incorporated by reference herein and are available on the Company’s profile on EDGAR at www.sec.gov and on SEDAR+ at www.sedarplus.ca. Such Financial Statements should be read together with the notes thereto.

Trading in the Common Shares

Our Common Shares are traded on the Nasdaq under the trading symbol “EPIX”. The high and low sales prices and the volume traded of our Common Shares as reported on all United States platforms for the periods indicated are as follows:

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