Apteryx Imaging Inc. — M&A Activity 2020

Jun 18, 2020

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MATERIAL CHANGE REPORT

FORM 51-102F3

1. Name and Address of Company:

Apteryx Imaging Inc. (“ Apteryx ” or the “ Company ”) Suite 780 – 580 Hornby Street Vancouver, B.C. V6C 3B6

2. Date of Material Change:

June 14, 2020

3. News Release:

On June 15, 2020, a news release reporting the material change was issued through Accesswire and filed on SEDAR at www.sedar.com.

4. Summary of Material Change:

On June 14, 2020, Apteryx entered into an arrangement agreement (the “ Arrangement Agreement ”) with PDDS Buyer, LLC (“ Planet DDS ”), a portfolio company of Level Equity Management, LLC (“ Level Equity ”), pursuant to which a Planet DDS subsidiary will acquire 100% of the Company's outstanding common and preferred shares (collectively, the “ Shares ”) for CAD$0.65 per Share (the “ Consideration ”) in an all-cash transaction (the “ Transaction ”). The price per Share implies an aggregate equity value for Apteryx of approximately CAD$39.0 million.

5. Full Description of Material Change:

On June 14, 2020, Apteryx entered into the Arrangement Agreement with Planet DDS, a portfolio company of Level Equity, pursuant to which a Planet DDS subsidiary will acquire 100% of the Company's outstanding Shares for CAD$0.65 per Share in an all-cash transaction. The price per Share implies an aggregate equity value for Apteryx of approximately CAD$39.0 million.

Transaction Details

The Transaction will be carried out by means of a court-approved statutory plan of arrangement (the “ Arrangement ”) governed by the Business Corporations Act (British Columbia), pursuant to which a Planet DDS subsidiary will acquire all of the issued and outstanding Shares of Apteryx.

A special committee of independent directors (the “ Special Committee ”) was established by Apteryx's board of directors (the “ Apteryx Board ”) in order to review and consider terms and conditions of the Transaction. The Special Committee and the Apteryx Board obtained a fairness

APTERYX IMAGING INC.

Suite 780 - 580 Hornby Street • Vancouver • British Columbia • Canada • V6C 3B6 • Telephone (604) 434-4614 • Fax (604) 434-4612

opinion from Canaccord Genuity Corp. (the “ Fairness Opinion ”) to the effect that, subject to the assumptions, qualifications and limitations contained therein, as at June 12, 2020, the Consideration to be received by Apteryx common shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Apteryx common shareholders. The Apteryx Board has unanimously determined, based on among other things, the unanimous recommendation of the Special Committee and the Fairness Opinion, that the Arrangement is in the best interests of the Company and is fair to Apteryx securityholders and will unanimously recommend that Apteryx securityholders vote in favor of the Arrangement at a meeting of securityholders (the “ Meeting ”).

The Transaction is subject to the approval of: (i) 66[2/3] % of the votes cast by the holders of Apteryx's common shares present in person or represented by proxy; and (ii) 66[2/3] % of the votes cast by the holders of Apteryx's common shares, preferred shares and other securities present in person or represented by proxy, voting together as a single class. Directors, executive officers and other shareholders of Apteryx holding in aggregate approximately 41.45% of the issued and outstanding Shares of Apteryx have entered into voting and support agreements (the “ Voting Agreements ”) pursuant to which they have agreed to vote their Shares in favor of the Arrangement.

The Transaction is expected to close shortly following the Meeting, subject to receipt of required securityholder, court and other approvals and satisfaction of other closing conditions.

The Arrangement Agreement includes representations, warranties and covenants typical of a transaction of this nature, along with customary non-solicitation covenants and right to match and fiduciary-out provisions. In addition, Apteryx has agreed to pay a termination fee of CAD$2.34 million if the Arrangement Agreement is terminated in certain specific circumstances, including if Apteryx enters into an agreement with respect to a superior proposal or if the Apteryx Board or Special Committee withdraws its recommendation with respect to the Arrangement.

Further information regarding the Transaction will be included in a management information circular (the “ Circular ”), which will be mailed to Apteryx shareholders in advance of the Meeting. Copies of the Arrangement Agreement, form of Voting Agreement and Circular will be filed on Apteryx's SEDAR profile and will be available for viewing at www.sedar.com.

6. Reliance on subsection 7.1(2) of National Instrument 51-102:

Not applicable.

7. Omitted Information:

No significant facts otherwise required to be disclosed in this report have been omitted.

8. Executive Officer:

For further information, please contact:

David Gane, CEO Apteryx Imaging Inc. Phone: (604) 434-4614 Email: david.gane@apteryx.com

9. Date of Report:

June 18, 2020

APTERYX IMAGING INC.

Suite 780 - 580 Hornby Street • Vancouver • British Columbia • Canada • V6C 3B6 • Telephone (604) 434-4614 • Fax (604) 434-4612

Forward-looking statements

This material change report contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation that involve risks and uncertainties. Such forward-looking statements or information may include statements regarding the Company's future plans, objectives, delivery performance, revenues, or the Company's underlying assumptions. The words “may”, “would”, “could”, “will”, “likely”, “expect”, “anticipate”, “intend”, “plan”, “forecast”, “project”, “estimate” and “believe” or other similar words and phrases may identify forward-looking statements or information. Persons reading this material change report are cautioned that such statements or information are only predictions, and that the Company's actual future results or performance may be materially different. Some of the specific forward-looking information referred to in this material change report includes, but is not limited to: the Transaction and the terms thereof; the expected timeline and date of completion of the Transaction; the ability of the parties to receive Apteryx shareholder approval; and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction. There can be no assurance that the Transaction will be completed or that it will be completed on the terms and conditions contemplated in this material change report. The Transaction could be modified or terminated in accordance with its terms.

Forward-looking information is based on a number of key expectations and assumptions made by the Company including, without limitation: the Transaction will be completed on the terms currently contemplated; the Transaction will be completed in accordance with the timing currently expected without any undue or expected delay; all conditions to the completion to the Transaction will be satisfied or waived in due course and the Arrangement Agreement will not be terminated prior to the completion of the Transaction; and other expectations and assumptions concerning the Transaction. Although the forward-looking information contained in this material change report is based on what Apteryx's management believes to be reasonable assumptions, Apteryx cannot assure investors that actual results will be consistent with such information.

Forward-looking information is provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information involves significant risks and uncertainties and should not be read as guarantees of future performance or results as actual results may differ materially from those expressed or implied in such forwardlooking information. Those risks and uncertainties include, among other things: the Transaction may not be completed on the terms, or in accordance with the timing, currently contemplated, or at all; the Company has incurred expenses in connection with the Transaction and will be required to pay for those expenses regardless of whether or not the Transaction is completed; Apteryx and Planet DDS may not be successful in satisfying the conditions to the Transaction, including failing to obtain Apteryx shareholder approval; the possibility that the Apteryx Board could receive and approve a superior acquisition proposal; the possibility of litigation relating to the Transaction; significant Transaction costs or unknown liabilities; the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; the failure to realize the expected benefits of the Transaction; and other risks inherent to the Company's business and/or factors beyond its control which could have a material adverse effect on the Company or the ability to consummate the Transaction.

Additional information about risks and uncertainties are described in the Company's reports filed on SEDAR, including its financial report and annual information form for the year ended December 31, 2019. All forward-looking statements made in this material change report are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise

APTERYX IMAGING INC.

Suite 780 - 580 Hornby Street • Vancouver • British Columbia • Canada • V6C 3B6 • Telephone (604) 434-4614 • Fax (604) 434-4612

forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

APTERYX IMAGING INC.

Suite 780 - 580 Hornby Street • Vancouver • British Columbia • Canada • V6C 3B6 • Telephone (604) 434-4614 • Fax (604) 434-4612