Fission/Alpha -- summary under Shares for Shares and Nominal Cash

Overview

Alpha and Fission (both TSXV-listed, and ABCA and CBCA corporations, respectively) will be transferring various (mostly uranium) exploration assets to Alpha Spinco and Fission Spinco and spinning-them off (per the s. 86 rules) under ABCA and CBCA Plans of Arrangement (the Alpha Arrangement and Fission Arrangement), with each Alpha share then being transferred to Fission under the Alpha Arrangement for 5.725 Fission common shares and nominal cash (so that no rollover treatment obtains unless a s. 85 election is filed).

Post-merger picture

The Spincos are expected to be listed on the TSXV. Alpha shareholders will hold approximately 50.7% of the new Fission common shares (or 49.3% after giving effect to the private placement referred to in 10 below). The merger will consolidate ownership of the Patterson Lake South uranium property in Saskatchewan, a core asset for both companies.

Alpha Pre-Spinout Reorganization

1. Alpha will transfer various Canadian exploration properties to Alpha Spinco in consideration for the issuance of common shares; and Alpha Spinco will assume liabilities in respect of the transferred properties in consideration for a cash payment from Alpha with Alpha also subscribing $3M for Alpha Spinco common shares.

Alpha Arrangement

1. Each Alpha common share of a dissenter will be transferred to Fission.
2. Each of the other Alpha common shares will be exchanged for one Alpha Class A share and ½ of an Alpha Spinco common share, with the stated capital of the Alpha Class A shares being equal to the paid-up capital of the exchanged Alpha common shares minus the fair market value of the Alpha Spinco common shares.
3. Each Alpha common share will be transferred to Fission for 5.725 "new" Fission common shares (see 3 of section below) and cash of $0.0001
4. Each employee stock option to acquire an Alpha common share will be exchanged for an option to acquire 5.725 new Fission common shares, with the exercise price reduced by the fair market value of ½ an Alpha Spinco common share; and similarly re Alpha warrants.

Fission Arrangement

1. Fission will transfer various exploration properties in Alberta, Saskatchewan and Peru to Fission Spinco on essentially the same terms as 1 above.
2. Each Fission common share of a dissenter will be transferred to Fission.
3. Each of the other Fission common shares will be redesignated as Fission Class A shares (essentially the same as before but with two votes per share) and each such Fission Class A share will be exchanged for one new Fission common shares and one Fission Spinco common share, with the stated capital of the new Fission common shares being equal to the paid-up capital of the exchanged Fission Class A shares minus the fair market value of the Alpha Spinco common shares.
4. Each employee stock option to acquire a Fission common share will be exchanged for an option to a new Fission common shares, with the exercise price reduced by the fair market value of a Fission common share.

Flow-through offering

1. Subscription proceeds from an offering of flow-through new Fission common shares will be released from escrow immediately following the closing of the two Arrangements.

Canadian tax consequences

Alpha s. 86 reorg. Description of s. 86 rules. The determination as to whether a deemed dividend will arise, which depends on the fair market value of the Alpha Spinco common shares cannot currently be made. Alpha will subsequently advise on its website.

Fission s. 86 reorg

Similar to Alpha Circular disclosure.

Exchange of Alpha Class A shares

Eligible Shareholders (non-exempt Canadian residents, non-residents whose Alpha Class A shares are taxable Canadian property and who are not treaty-exempt and partnerships with such members) who use Fission's web-based system to complete a s. 85 election and who provide the election to Fission within 90 days of the Arrangement effective date will have those election forms completed and returned by Fission. Those who do not make and timely-file a valid election will be considered to have disposed of their shares on a non-rollover basis.

Qualified investments

If the Alpha or Fission Spinco shares are not listed before the due date for the Spinco's first income tax return, they will not be qualified investments.

Non-residents

Standard taxable Canadian property disclosure.

U.S. tax consequences

Alpha Arrangement. It is not intended to be a tax-free transaction.

Fission reorg

The exchange of Fission shares for new Fission shares and Fission Spinco shares is not expected to qualify as a nonrecognition transaction. Accordingly, subject to the PFIC rules, a U.S. holder will be required to include in income as a distribution the fair market value of the of the Fission Spinco common shares received.

PFIC rules

Fission, its non-U.S. subsidiaries and Fission Spinco may be classified as PFICs for their current and future taxable years.