Document:

EX-4.3

 Exhibit 4.3 

ABSOLUTE SOFTWARE CORPORATION (TSX: ABT) 
 Fiscal 2020 Management’s
Discussion and Analysis 
 For the three months and year ended June 30, 2020 

Dated: August 10, 2020 
 Introduction

 The following Management’s Discussion and Analysis (this “MD&A”) has been prepared in accordance with Form 51-102F1 and should be read in conjunction with the Company’s Fiscal 2020 (“F2020”) Consolidated Financial Statements and accompanying notes. These documents, along with additional information about
Absolute, including the Annual Information Form (the “AIF”) for the year ended June 30, 2020, are available at www.absolute.com and under Absolute’s profile at www.sedar.com. 

The words “we”, “our”, “us”, “Company” and “Absolute” refer to Absolute Software Corporation
together with its subsidiaries and/or the management and employees of the Company (as the context may require). 
 The Company’s fiscal
year ends on June 30 of each year. All dollar figures are stated in U.S. dollars unless otherwise indicated. 
 Forward-Looking
Statements 
 This MD&A contains certain forward-looking statements and forward-looking information (collectively,
“forward-looking statements”) which relate to future events or Absolute’s future business, operations, and financial performance and condition. Forward-looking statements normally contain words like “will”,
“intend”, “anticipate”, “could”, “should”, “may”, “might”, “expect”, “estimate”, “forecast”, “plan”, “potential”, “project”,
“assume”, “contemplate”, “believe”, “shall”, “scheduled”, and similar terms and, within this MD&A, include, without limitation, any statements (express or implied) respecting: Absolute’s
future plans, strategies, and objectives, including plans, strategies, and objectives arising out of the COVID-19 pandemic; the impacts of the COVID-19 pandemic on
Absolute’s business, operations, prospects, and financial results, including, without limitation, greater/continued remote working and/or distance learning and the effects of governmental lockdowns, restrictions, and new regulations on our
operations and processes, business, and financial results; projected revenues, expenses, margins, and profitability; future trends, opportunities, challenges, and growth in Absolute’s industry, including as a result of COVID-19; Absolute’s ability to grow revenue by selling to new customers and increasing subscriptions with existing customers; Absolute’s ability to renew customers’ subscriptions more efficiently and
cost effectively; Absolute’s ability to maintain and enhance its competitive advantages within its industry and in certain markets; Absolute’s ability to remain compatible with existing and new operating systems; the maintenance and
development of Absolute’s PC OEM and other partner networks; existing and new product functionality and suitability; Absolute’s product and research and development strategies and plans; Absolute’s privacy and data security controls;
the seasonality of future revenues and expenses; the future availability of working capital and any required additional financing; future share buybacks; future dividend issuances or increases; future fluctuations in applicable tax rates, foreign
exchange rates, and/or interest rates; the future availability of tax credits; the addition and retention of key personnel; increases to brand awareness and market penetration; future corporate, asset, or technology acquisitions; strategies
respecting intellectual property protection and licensing; potential future litigation or product liability; Absolute’s foreign operations; changes and planned changes to accounting policies and standards and their respective impact on our
financial reporting; economic and market uncertainty; and the continued effectiveness of our accounting policies and internal controls over financial reporting. Forward-looking statements are provided for the purpose of presenting information about
management’s current expectations and plans relating to the future and allowing investors and others to get a better understanding of our anticipated financial position, results of operations, and operating environment. Readers are cautioned
that such information may not be appropriate for other purposes. 
 Forward-looking statements are not guarantees of future performance,
actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. The material expectations, assumptions, and other

  
 1 

 
factors used in developing the forward-looking statements set out herein include or relate to the following, without limitation: Absolute will be able to successfully execute its plans,
strategies, and objectives; Absolute will be able to successfully manage the impacts of COVID-19 on its business, operations, and financial results; Absolute will be able to successfully manage cash flow,
operating expenses, interest expenses, capital expenditures, and working capital and credit, liquidity, and market risks; Absolute will be able to leverage its past, current, and planned investments to support growth and increase profitability;
there will continue to be a trend toward greater/continued remote working and/or distance learning, in the short, medium, and/or long-term, and a resulting market shift in the demand for endpoint security and Absolute’s solutions; Absolute will
be able to grow revenue by selling to new customers and increasing subscriptions with existing customers at or above the rates currently anticipated; Absolute will be able to renew customers’ subscriptions more efficiently and cost effectively,
including through its ServiceSource partnership; Absolute will maintain and enhance its competitive advantages within its industry and certain markets; Absolute will keep pace with or outpace the growth, direction, and technological advancement in
its industry; industry data and projections are accurate and reliable; Absolute will be able to adapt its technology to be compatible with changes to existing, and new, operating systems such as Microsoft Windows; Absolute will be able to maintain
and develop its PC OEM and other partner networks; Absolute’s current and future (if any) PC OEM partners will continue to provide embedded firmware and distribution and resale support; Absolute will be able to maintain or grow its sales to
education customers; Absolute’s existing and new products will function as intended and will be suitable for the intended end users; Absolute will be able to design, develop, and release new products, features, and services and enhance its
existing products and services; Absolute will be able to protect against the improper disclosure of data it may process, store, and/or manage; Absolute’s revenues will not become subject to increased seasonality; future financing will be
available to Absolute on favourable terms if and when required; Absolute will be in a financial position to buy back some of its shares and/or issue dividends in the future; fluctuations in applicable tax rates, foreign exchange rates, and interest
rates will not have a material impact on Absolute; certain tax credits will remain or become available to Absolute; Absolute will be able to attract and retain key personnel; Absolute will be successful in its brand awareness and other marketing
initiatives; Absolute will be able to successfully integrate businesses, intellectual property, products, personnel, and/or technologies that it may acquire (if any); Absolute will be able to maintain and enhance its intellectual property portfolio;
Absolute’s protection of its intellectual property will be sufficient and its technology does not and will not materially infringe third party intellectual property rights; Absolute will be able to obtain any necessary third party licenses on
favourable terms; Absolute will not become involved in material litigation; Absolute will not face any material unexpected costs related to product liability or warranties; foreign jurisdictions will not impose unexpected risks; economic and market
conditions (including, without limitation, as affected by the COVID-19 pandemic) will not impose unexpected risks or challenges; Absolute will maintain or enhance its accounting policies and standards and
internal controls over financial reporting; and Absolute will be able to recruit and hire a suitably-qualified new Chief Financial Officer on the timeline currently intended. 

Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the
risks and uncertainties associated with and inherent to Absolute’s business, including the following risks (as more particularly described in the “Risk and Uncertainties” section of this MD&A): risks related to the COVID-19 pandemic and its impact on Absolute; that Absolute may not be able to accurately predict its rate of growth and profitability; Absolute’s dependence on PC OEMs and distribution channels; risks related
to economic and political uncertainty; that Absolute may not be able to attract new customers or maintain its existing consumer base or grow or upgrade the services provided to these customers; that Absolute may be unable to adapt its technology to
be compatible with new operating systems; that changing buying patterns in the education vertical may adversely impact Absolute’s business; risks relating to the evolving nature of the market for Absolute’s products; that Absolute’s
software services may contain errors, vulnerabilities or defects; that Absolute could suffer security breaches impacting the data that Absolute processes and the other risks associated with data security and hacking; risks associated with potential
violations of applicable privacy laws; risks associated with any continued sales growth; that Absolute’s focus on larger enterprise customers could result in greater costs, less favourable commercial terms, and other adverse impacts to
Absolute; risks associated with any failure by Absolute to successfully promote and protect its brands; risks associated with cyclical business impacts on Absolute; risks associated with the competition Absolute faces within its industry; that
Absolute’s research and 

  
 2 

 
development efforts may not be successful; risks resulting from interruptions or delays from third-party hosting facilities; that Absolute’s business may suffer if it cannot continue to
protect its intellectual property rights; that Absolute may be unable to obtain patent or other proprietary or statutory protection for new or improved technologies or products; risks related to fluctuating foreign exchange rates; that the price of
Absolute’s common chares may be subject to wide fluctuations; that Absolute is reliant on its key personnel; that Absolute may be subject to litigation or dispute resolution from
time-to-time; risks related to Absolute’s foreign operations; that Absolute may be unable to successfully manage and/or integrate acquisitions; risks related to
Absolute’s amortization of revenue over the term of its customer subscriptions; risks related to Absolute’s reliance on its reseller and other partners for billings; income tax related risks; Absolute may become subject to product
liability claims; and risks related to Absolute’s reliance on copyrights, trademarks, trade secrets, confidentiality procedures and similar contractual provisions. Additional material risks and uncertainties applicable to the forward-looking
statements herein include, without limitation, unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. Many of these factors are beyond the
control of Absolute. 
 All forward-looking statements included in this MD&A are expressly qualified in their entirety by these cautionary
statements. The forward-looking statements contained in this MD&A are made as at the date hereof and Absolute undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new
information, future events, or otherwise, except as may be required by applicable securities laws. 
 Industry and Market Data

 Information contained in this MD&A concerning the industry and the markets in which Absolute operates, including Absolute’s
perceived trends, market position, market opportunity, market share, and competitive advantages within the markets in which it operates, is based on information from independent industry analysts and third party sources (including industry
publications, surveys, and forecasts), Absolute’s internal research, and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and other third party sources, as well
as data from Absolute’s internal research, and are based on assumptions made by Absolute based on such data and its knowledge of its industry and markets, which management believes to be reasonable. Certain of the sources utilized in this
MD&A have not consented to the inclusion of any data from their reports, nor has Absolute sought their consent. Absolute’s internal research has not been verified by any independent source and Absolute has not independently verified any
third-party information. While Absolute believes the market opportunity and market share information included in this MD&A is generally reliable, such information is inherently imprecise and may be rendered inaccurate by a variety of factors,
including recent events and emerging economic trends. In addition, projections, assumptions, and estimates of Absolute’s future performance and the future performance of the industry and the markets in which Absolute operates constitute
forward-looking statements which are subject to a high degree of uncertainty and risk due to a variety of factors, including those referred to under the heading “Forward-Looking Statements” above and in the “Risks and
Uncertainties” and other sections of this MD&A. As of the date of this MD&A, the impacts of the COVID-19 pandemic continue to unfold. It is not possible for Absolute to reliably estimate the
length and severity of these impacts and, as a result, many of our estimates and assumptions contained herein required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional
information becomes available, our estimates may change materially in future periods. Readers should carefully review these estimates and assumptions, along with the risk factors contained in “Risks and Uncertainties”, in light of evolving
economic, political, and social conditions. 
 Trademarks 

ABSOLUTE, the ABSOLUTE logo, PERSISTENCE, APPLICATION PERSISTENCE, ABSOLUTE RESILIENCE, ENDPOINT RESILIENCE, ABSOLUTE REACH, SELF-HEALING ENDPOINT,
and DARK ENDPOINT are trademarks of Absolute in Canada, the United States, and/or other jurisdictions. Other product names or logos mentioned herein may be the trademarks of Absolute or their respective owners.

  
 3 

 
The absence of the symbols TM and ® in proximity to each trademark, or at all,
herein is not a disclaimer of ownership of the related trademark. 
 Selected Quarterly Information 

 

																									
	USD Millions, except per share data	  	Q4	 	  	  	 	 	YTD	 	  	  	 
	  	  
	  
	 	  				 	  
	  
	 	  			 
	  	F2020	 	  	F2019	 	  	Change	 	 	F2020	 	  	F2019	 	  	Change	 
	  
	 
	 Revenue
	  				  				  				 				  				  			 
	 Commercial recurring(1)
	  	$	25.9	 	  	$	24.1	 	  	 	8%	 	 	$	100.5	 	  	$	94.6	 	  	 	6%	 
	 Professional Services and Other
	  	 	1.3	 	  	$	1.2	 	  	 	6%	 	 	 	4.2	 	  	$	4.3	 	  	 	(3%	) 
	 Total
	  	$	27.2	 	  	$	25.3	 	  	 	7%	 	 	$	104.7	 	  	$	98.9	 	  	 	6%	 
	 						 
	 Adjusted EBITDA(2)
	  	$	 8.0	 	  				  				 				  	$	 	 	  	 	-*27.4	 
	 As a percentage of revenue
	  	 	29%	 	  				  				 	 	26%	 	  				  			 
	 						 
	 Adjusted EBITDA – pre IFRS 16(2)(3)
	  	$	7.5	 	  	$	4.9	 	  	 	53%	 	 	$	25.4	 	  	$	19.3	 	  	 	32%	 
	 As a percentage of revenue
	  	 	28%	 	  	 	19%	 	  				 	 	24%	 	  	 	20%	 	  			 
	 						 
	 Net Income
	  	$	2.2	 	  	$	2.0	 	  	 	9%	 	 	$	10.6	 	  	$	7.6	 	  	 	40%	 
	 Per share (basic)
	  	$	0.05	 	  	$	0.05	 	  				 	$	0.25	 	  	$	0.19	 	  			 
	 Per share (diluted)
	  	$	0.05	 	  	$	0.05	 	  				 	$	0.24	 	  	$	0.18	 	  			 
	 						 
	 Cash from operating activities
	  	$	 11.6	 	  				  				 	$	25.0	 	  				  			 
	 						 
	 Cash from operating activities –
pre IFRS 16(3)
	  	$	11.1	 	  	$	3.5	 	  	 	220%	 	 	$	23.2	 	  	$	10.3	 	  	 	126%	 
	 						 
	 Dividends paid
	  	$	2.5	 	  	$	2.5	 	  	 	(0%	) 	 	$	10.0	 	  	$	9.9	 	  	 	2%	 
	 Per share (CAD)
	  	$	0.08	 	  	$	0.08	 	  	 	—  	 	 	$	0.32	 	  	$	0.32	 	  	 	—  	 
	 						 
	 Cash, cash equivalents, and short-term investments
	  	$	47.1	 	  	$	35.8	 	  	 	32%	 	 				  				  			 
	 						 
	 Total assets
	  	$	130.2	 	  	$	103.3	 	  	 	26%	 	 				  				  			 
	 						 
	 Lease liabilities –
long-term
	  	$	8.4	 	  	$	—  	 	  	 	100%	 	 				  				  			 
	 						 
	 Deferred revenue
	  	$	142.6	 	  	$	134.4	 	  	 	6%	 	 				  				  			 
	 						 
	 Common shares
outstanding
	  	 	42.5	 	  	 	41.6	 	  	 	2%	 	 	 	 	 	  	 	 	 	  	 	 	 

 Notes: 
  

	(1)	 Commercial recurring revenue represents revenue derived from Cloud Services (as defined below) and recurring managed
professional services, both of which are included as part of Total ARR. Other revenue represents revenue derived from non-recurring professional services and ancillary product lines, including consumer
products. 

  

	(2)	 Throughout this document, “Adjusted EBITDA” (as defined below) is used as a profitability measure. Please
refer to the “Non-IFRS Measures” section of this MD&A for further discussion on this and other non-IFRS measures. 

 

	(3)	 The Company adopted IFRS 16, “Leases” (“IFRS 16”), effective July 1, 2019 using
the modified retrospective approach (please refer to the “New Accounting Pronouncements” section of this MD&A and to Note 2(e) in the notes to the F2020 Consolidated Financial Statements). Accordingly, financial information
presented for fiscal 2019 has not been adjusted for the impact of the adoption of IFRS 16. Figures presented that include the title “pre-IFRS 16” represent operating results had IFRS 16 not been
adopted, and provide a meaningful comparative to similar operating results for fiscal 2019. 

  
 4 

 Selected Annual Information 

 

													
	 	 	 	 
	 USD Millions, except per share data
	  	 	F2020 (7)	 	  	 	F2019	 	  	 	F2018	 
	  
	 
	 Revenue
	  				  				  			 
	 Commercial recurring(1)
	  	$	100.5	 	  	$	94.6	 	  	$	88.9	 
	 Other(1)
	  	 	4.2	 	  	$	4.3	 	  	$	4.7	 
	 Total
	  	$	104.7	 	  	$	98.9	 	  	$	93.6	 
	 			 
	 Adjusted EBITDA(2)
	  	$	27.4	 	  				  			 
	 As a percentage of revenue
	  	 	26%	 	  				  			 
	 			 
	 Adjusted EBITDA – pre IFRS 16(2)(3)(4)
	  	$	25.4	 	  	$	19.3	 	  	$	9.2	 
	 As a percentage of revenue
	  	 	24%	 	  	 	20%	 	  	 	10%	 
	 			 
	 Net Income(5)
	  	$	10.6	 	  	$	7.6	 	  	$	3.1	 
	 Per share (basic)
	  	$	0.25	 	  	$	0.19	 	  	$	0.08	 
	 Per share (diluted)
	  	$	0.24	 	  	$	0.18	 	  	$	0.08	 
	 			 
	 Cash from operating activities
	  	$	25.0	 	  				  			 
	 			 
	 Cash from operating activities – pre IFRS
16(3)
	  	$	23.2	 	  	$	10.3	 	  	$	12.5	 
	 			 
	 Dividends paid
	  	$	10.0	 	  	$	9.9	 	  	$	10.1	 
	 Per share (CAD)
	  	$	0.32	 	  	$	0.32	 	  	$	0.32	 
	 			 
	 Cash, cash equivalents, and
investments
	  	$	47.1	 	  	$	35.8	 	  	$	34.3	 
	 			 
	 Total assets
	  	$	130.2	 	  	$	103.3	 	  	$	97.0	 
	 			 
	 Lease liabilities – long-term(6)
	  	$	8.4	 	  	$	—  	 	  	$	—  	 
	 			 
	 Deferred revenue
	  	$	142.6	 	  	$	134.4	 	  	$	139.2	 
	 			 
	 Common shares
outstanding
	  	 	42.5	 	  	 	41.6	 	  	 	40.2	 

 Notes: 
  

	(1)	 Commercial recurring revenue represents revenue derived from Cloud Services (as defined below) and recurring managed
professional services, both of which are included as part of Total ARR. Other revenue represents revenue derived from non-recurring professional services and ancillary product lines, including consumer
products. 

  

	(2)	 Throughout this MD&A, “Adjusted EBITDA” is used as a profitability measure. Please refer to the “Non-IFRS Measures” section of this MD&A for further discussion on this measure. 

  

	(3)	 The Company adopted IFRS 16, “Leases”, effective July 1, 2019 using the modified retrospective
approach (please refer to the “New Accounting Pronouncements” section of this MD&A and to Note 2(e) in the notes to the F2020 Consolidated Financial Statements). Accordingly, financial information presented for fiscal 2019 has
not been adjusted for the impact of the adoption of IFRS 16. Figures presented that include the title “pre-IFRS 16” represent operating results had IFRS 16 not been adopted, and provide a meaningful
comparative to similar operating results for fiscal 2019 and 2018. 

  

	(4)	 The improvement in Adjusted EBITDA – pre IFRS 16 between F2018 and F2019 reflects the impact of an increase in
revenue of $5.3 million and a decrease of $4.8 million in Adjusted Operating Expenses. 

  

	(5)	 The improvement in net income between F2018 and F2019 was impacted by an increase in operating income of
$8.0 million and increased income tax expense of $3.8 million. 

  

	(6)	 Lease liabilities – long-term increased from F2018 and F2019 to F2020 as a result of the adoption of IFRS 16
(please refer to the “New Accounting Pronouncements” section of this MD&A and to Note 2(e) in the notes to the F2020 Consolidated Financial Statements). 

 

	(7)	 All significant variances from F2019 to F2020 are described below under the “Financial Performance Review and
Analysis” section of this MD&A. 

  
 5 

 Fourth Quarter Fiscal 2020 (“Q4-F2020”)
Overview 
 Key Financial Metrics 
  

	 	•	 	 Total revenue in Q4-F2020 was $27.2 million, representing a year-over-year
increase of 7%. Annual revenue in F2020 was $104.7 million, representing an increase of 6% over F2019. 

  

	 	•	 	 Total Annual Recurring Revenue (“ARR”)(1) (refer to the “Non-IFRS
Measures” section of this MD&A for further discussion of this measure) at June 30, 2020 was $108.3 million, representing an increase of 11% over the prior year balance and a sequential increase of 7% as compared to March 31,
2020. 

  

	 	•	 	 The Enterprise & Government portions of Total ARR(1), combined, increased by 14% annually and by 5% as compared
to the prior quarter-end. Enterprise & Government sector customers represented 68% of Total ARR at June 30, 2020. 

 

	 	•	 	 The Education sector portion of Total ARR(1) increased by 4% annually and 11% as compared to the prior quarter-end. Education sector customers represented 32% of Total ARR at June 30, 2020. 

  

	 	•	 	 Incremental ARR from New Customers(1) (refer to the “Non-IFRS
Measures” section of this MD&A for further discussion of this measure) was $3.5 million in Q4-F2020, compared to $2.1 million in Q4-F2019.

  

	 	•	 	 Net ARR Retention(1) (refer to the “Non-IFRS Measures” section of this
MD&A for further discussion of this measure) from existing customers was 103% in Q4-F2020, compared with 101% in Q4-F2019. 

 

	 	•	 	 Adjusted EBITDA in Q4-F2020 was $8.0 million, or 29% of revenue. Adjusted
EBITDA – pre-IFRS 16 in Q4-F2020 was $7.5 million, or 28% of revenue, compared to $4.9 million, or 19% of revenue, in
Q4-F2019. Annual Adjusted EBITDA was $27.4 million in F2020, or 26% of revenue. Annual Adjusted EBITDA – pre-IFRS 16 was $25.4 million in F2020, or 24% of
revenue, compared with $19.3 million, or 20% of revenue, in F2019. 

  

	 	•	 	 Cash generated from operating activities in Q4-F2020 was $11.6 million.
Cash from operating activities – pre-IFRS 16 in Q4-F2020 was $11.1 million, compared to $3.5 million in Q4-F2019.
Annual cash from operating activities was $25.0 million. Annual cash from operating activities – pre-IFRS 16 was $23.2 million, compared with $10.3 million in F2019. 

 

	 	•	 	 Absolute paid a quarterly dividend of CAD$0.08 per common share during Q4-F2020.

  

	(1)	 Beginning in Q4-F2020, we have changed the nomenclature of the aggregate annual
recurring revenue of our subscriptions under contract and generating revenue from “ACV Base” to “ARR”. Similarly, the nomenclature of “ACV from New Customers” and “Net ACV Retention” have changed to “ARR
from New Customers” and “Net ARR Retention”, respectively. There has been no change in the methods by which these measures are calculated. Please refer to the “Non-IFRS
Measures” section of this MD&A for further discussion of these measures. 

 Q4 Fiscal 2020 Business Highlights 

During Q4-F2020, Absolute announced additional products, tools, and insights: 

 

	 	•	 	 Absolute continued expanding its Global Resilience Ecosystem, now totalling approximately 40 independent endpoint
security and productivity tool applications, to help customers ensure their mission-critical security controls remain healthy and undeletable. 

  

	 	•	 	 Absolute delivered increased capabilities to its Endpoint
ResilienceTM platform, to help protect devices and sensitive data for remote endpoints. 

  
 6 

	 	•	 	 Absolute announced general availability of its “Web Usage” tool, which aims to provide K-12 school administrators and educators with insights to support distance learning programs. 

During Q4-F2020, Absolute continued leveraging its intelligence capabilities and published two pieces of
research: 
  

	 	•	 	 The Absolute “Remote Work & Distance Learning Insights Center” that is updated weekly and is designed
to share insights across the Company’s install base, providing customers with a benchmark for how empowered and secure their environment is relative to the industry. 

 

	 	•	 	 The second edition of the “2020 State of Endpoint Resilience Report” that
re-emphasizing the vulnerability of enterprise devices and critical endpoint controls and presented opportunities to optimize security investments. 

Partner and other highlights in Q4-F2020 included: 

 

	 	•	 	 Lenovo included Absolute in a four-year Lenovo ThinkShield bundle. 

 

	 	•	 	 CDW promoted our COVID-19 offers. 

 

	 	•	 	 HP featured Absolute in a consumer laptop promotion on QVC. 

 

	 	•	 	 Absolute was only company to be selected as a finalist in two categories for the BC Tech Association 2020
“Technology Impact Awards” (TIAs): Company of the Year – Anchor Success and Tech Culture of the Year. 

 Fiscal 2020 Business
Highlights 
 In F2020 Absolute continued delivering innovative and resilient capabilities and research to support our customers, including: 

 

	 	•	 	 Multiple user interface (UI) enhancements, designed to provide IT and security teams with richer experiences: a new
visually-rich Absolute console with flexible customizable widgets, reports and alerts; the ability to detect under-utilized devices, quickly spot vulnerabilities, and take immediate action to neutralize risks; simplifying security policy deployments
and remote management of device fleets; easier and simplified license expiration visibility; and historical event capabilities, providing IT and security administrators with greater visibility and audit historical information on device events.

  

	 	•	 	 A new “Missing Devices” feature, intended to make it easier for customers to manage their deployments,
including the ability to locate, track and manage missing devices. 

  

	 	•	 	 “Absolute Secure Channel”, which provided secure and remote access to the firmware layer across endpoint
devices to help strengthen the foundation of firmware-level protections. 

  

	 	•	 	 The addition of multiple new mission-critical applications to Absolute’s growing Global Resilience Ecosystem, to
help customers ensure those applications remain healthy and deliver their intended value. 

  

	 	•	 	 Activated Absolute’s first public cloud data center in Europe. 

 

	 	•	 	 Provided capabilities to support existing customers in the face of the COVID-19
outbreak: 

  
 7 

	 	○	 	 Absolute provided certain customers with premium features to ‘persist,’ or proactively repair and reinstall,
their existing virtual private network (“VPN”) applications, helping ensure uninterrupted remote access to corporate and school networks, business and education applications, and data for remote workers. 

 

	 	○	 	 Absolute provided certain customers with free access to a comprehensive library of automated, custom workflows,
accelerating their ability to proactively pinpoint vulnerabilities and quickly take remedial action, whether a device is on or off the corporate network. 

  

	 	•	 	 Absolute introduced its first Education research: “Cybersecurity and Education: The State of the Digital District
in 2020”, focused on the state of IT security, staff and student safety, and endpoint device health in K-12 organizations. 

Absolute continued building its leadership team in F2020 reflected by the appointments of: Dianne Lapierre as Chief Information Officer; William Morris
as Executive Vice President, Product Development; Ameer Karim as Executive Vice President, Product Management; and Lynn Atchison to our Board of Directors. 

F2020 partner and other highlights included: 
  

	 	•	 	 Absolute shipped and on-boarded its first Resilience-as-a-Service licensee customer (employing our Application PersistenceTM technology).

  

	 	•	 	 Absolute was again included as a key component in Dell’s F2021 global security portfolio. 

 

	 	•	 	 Absolute was featured in Lenovo’s “Partner Stimulus Package”. 

 

	 	•	 	 Panasonic included Absolute in its Toughbook bundle, reaching critical first responders, police, and fire agencies.

  

	 	•	 	 ServiceNow certified the Absolute ITSM Connector for ServiceNow, enabling joint customers to view Absolute’s single
source of truth asset intelligence for Windows and Mac devices. 

  

	 	•	 	 Forbes Magazine recognized Absolute as a Top 10 Cybersecurity Company to Watch in 2020, for the second year in a row.

  
 8 

 Company Overview 

Absolute delivers a cloud-based service that supports the management and security of computing devices, applications, and data for a variety of
organizations globally. Our differentiated technology is rooted in our patented Persistence® technology, which is embedded in the firmware of laptop, desktop, and tablet devices (collectively,
“endpoint devices”) by the majority of the world’s largest global computer manufacturers (“PC OEMs”). Enabling a permanent digital tether between the endpoint and the organization that distributed it, Absolute provides IT
and security personnel with connectivity, visibility, and control, whether a device is on or off the corporate network, and empowers them with Self-Healing Endpoint® security to ensure
mission-critical applications remain healthy and deliver intended value. Our technology is embedded in over a half-billion devices and we currently serve more than 13,000 commercial customers with over 9 million activated licenses globally.

 We have offices in Vancouver, Canada; Austin, U.S.A.; San Jose, U.S.A.; Iowa, U.S.A.; Colorado, USA; Ho Chi Minh City, Vietnam; and Reading,
England. We also service additional territories in most regions of the world through our remote sales force and through our partner network. Our products and customer support services are currently available in 10 languages. We have distribution
agreements with PC OEMs and a number of distributors, resellers, and other partners located in North America, Europe, Africa, the Asia-Pacific region, and Latin America. 

Our company website is www.absolute.com. 

Impacts of COVID-19 

When the global COVID-19 pandemic broke out in March 2020, Absolute responded quickly to ensure the health of
the Company’s employees and to support our customers and business partners. We mobilized resources and established protocols that allowed us to adapt to the shifting environment, including: 

 

	 	•	 	 putting in place measures to safeguard our employees by enabling work-from-home policies, systems, and tools, which we
believe we were able to adapt to and implement quickly, partly as a result of our history of distributed operations; 

  

	 	•	 	 focusing on the operational integrity of our business, by identifying operational efficiencies and actively managing
short and long-term expenses; and 

  

	 	•	 	 mobilizing to help our customers manage and measure the health and security of new work-from-home and learn-from-home
environments, by accelerating the development of new product features that we believed customers would find especially useful in the shifting environment and, for a period of time, making available additional capabilities at no charge to existing
customers who had not previously licensed them. 

 We are actively managing our preparedness plans and response activities to align
with recommendations of the health and government authorities in the locations in which we operate. The COVID-19 pandemic is an unprecedented global challenge and it has placed every company and business in
uncharted territory. While Absolute is not immune to these challenging times, we believe that we can continue to serve our customers around the world with valuable and necessary support and tools in these challenging times. 

As of the date of this MD&A, we believe the underlying fundamentals of our business remain sound, notwithstanding the challenges presented by the
current economic, political, and social environment: 
  

	 	•	 	 With the rapid shifts in where and how people work and learn, we believe the relevance of solutions and technology like
ours, which protect distributed devices and data, have gained importance. 

  

	 	•	 	 We have long-term relationships with our customers, in the form of recurring software-as-a-service (“SaaS”) contracts. Approximately 95% of our annual revenue is in recurring SaaS business. 

  
 9 

	 	•	 	 We expect that our ARR, which results from customer term subscriptions to our software service, to continue to provide
stability in our revenue and also in profitability and cash flow, as we manage through these challenging times. 

  

	 	•	 	 At June 30, 2020, we believe we have a strong balance sheet and sufficient liquidity to support our business
objectives in the coming fiscal year. 

 Looking ahead, the full impacts of COVID-19 on our
customers (potentially including cash conservation measures) and consequently on our business, are unknown and highly unpredictable. Our past results may not be indicative of our future performance and historical trends in our financial performance
may differ materially from future performance. Notwithstanding the continually evolving impacts of the COVID-19 pandemic, particularly the medium and long-term economic effects, we believe that this
environment has only reinforced the need for organizations of various sizes and industries to modernize their businesses and workforces for the new world. We expect our cloud-based solutions, that help empower and secure distributed organizations,
position us well to continue to help our customers through these unprecedented times. 
 Please refer to specific risk factor entitled “COVID-19 Impacts” below under “Risk and Uncertainties”. 

  
 10 

 Market Opportunity 

We believe that the market opportunity for Absolute centers around two key themes: (1) the acceleration of attack vectors and data breaches that
are impacting organizations of all types, sizes, industries, and geographies; and (2) the shift to remote work and distance learning and the growing information security challenges associated with managing and measuring the health and security
of these programs. Even prior to the outbreak of COVID-19, organizations around the world were becoming more distributed as they increased workforce mobility, grew their number of connected devices, and added
more workloads to these devices. 
 We believe that there will be a structural shift to increased remote work and distance learning which, in turn, we
believe will expand and accelerate our market opportunity as organizations in various sectors increasingly focus on the need to establish and maintain an undeletable connection to their endpoints. Absolute is positioned to deliver the Endpoint
Resilience security solutions which we believe enterprise, government, and educational organizations will require. By establishing an unbreakable tether to every device, Absolute can deliver services required to support other security controls and
productivity tools from bad actors, decay, and vulnerabilities, which enables organizations to keep data, devices, and applications secure and users productive. In addition, our real-time intelligence services amplify our customers’ ability to
understand the health, compliance, and state of decay of endpoint security controls and productivity tools. 
 Cyber security spending has exploded in
the last decade and, according to Gartner®, is expected to top $190 billion by 2023, of which $56 billion is expected to be dedicated to endpoint security technology1. As companies have invested more deeply in cyber security, the complexity has also grown. In our second annual “2020 State of Endpoint Resilience Report” released in June 2020, we re-emphasized our view that complexity and technology combinations are driving endpoint vulnerabilities, including: the increasing number of agents piling up on devices; device operating system migrations resulting
in fragmentation and stagnant patching practices; and fragile security controls with varying rates of decay and collision. We believe that the risk and complexity of remotely managing endpoints is at an
all-time high and will require administrators to have an unbreakable connection to the endpoint. 

Solutions and Technology 
 Our
solutions are delivered in a SaaS model, where customers access our service through the cloud-based Absolute service. Absolute’s solutions are offered in specific versions for the (i) enterprise and government, and (ii) education
verticals. All versions are available in three editions: Visibility, Control, and Resilience, each of which provides a different subset of product features and functionality. We also offer a Home and Office edition of our service, which is targeted
to consumers and home office professionals. 
 Absolute Platform 

Absolute’s cloud-based platform helps ensure the connectivity, visibility, and control of data and devices independent of the operating system,
empowering devices to recover automatically to a secure operational state without user intervention. We believe our Endpoint Resilience solutions are essential to support various other security controls and productivity tools from decay and
vulnerabilities, and to help enable organizations to keep data, devices, and applications secure and their users productive. 
 Absolute’s
platform also powers our Application Persistence technology, which enables measurement of the health, compliance, and state of decay of endpoint security controls and productivity tools (e.g. encryption, client management, anti-malware,
collaboration, and VPN) and their ability to react to attack, collision, and damage. Our Global Resilience Ecosystem now includes approximately 40 independent applications. We believe organizations need tools that monitor when applications are in
decay, disabled, out of compliance, misconfigured, or breached and that then automatically self-heal (i.e. reinstall and repair 
  

1 Gartner: Forecast: Information Security and Risk Management, Worldwide, 2017-2023, 4Q19 Update
(December 2019). 

  
 11 

 
as needed) these mission-critical applications. In addition, IT and security teams can leverage our Application Persistence technology to combine security control applications that work best
together for maximum capabilities, performance, and ROI on security investments. 
 Technology Deployment Model 

The foundation of our Endpoint Resilience solutions is the undeletable tether built into device firmware. Our patented Persistence technology is
embedded into the firmware of endpoint devices at the point of manufacture by most of the world’s largest PC OEMs. Once activated, this technology provides a reliable, highly tamper-resistant, and constant connection between the device and
our cloud-based monitoring center, even when the device is off the corporate network and beyond the reach of traditional IT management and security tools. We believe that our ability to establish this root of trust is a key differentiator as it
enables a high degree of resilience for our software agent, as well as for other critical third-party software agents that leverage the self-healing capabilities of our Application Persistence technology. If the software agent is removed or
disabled, an automatic reinstallation will occur, even if the firmware is overwritten or flashed, the device is reimaged, the hard drive is replaced, or if the device is restored to its factory settings. 

We also license our Application Persistence technology within our partner ecosystem via custom integrations. Under this model, which we refer to as Resilience-as-a-Service (“RaaS”), partners, such as PC OEMs and independent software vendors (“ISVs”), license our
technology in order to improve the resilience of their own endpoint agents. 

  
 12 

 Business and Growth Strategy 

We believe that the recent shift to increased remote work and distance learning will help fortify the demand for the security and management of
computing devices, applications, and data. With a distributed workforce, organizations can no longer be solely reliant on network-based security – rather, they need to increase their focus on securing the actual endpoint devices. As a result,
we see opportunity for further growth across North America and in other global regions in each of the enterprise, government, and education verticals. 

We plan to continue releasing new capabilities and product offerings leveraging our distinctive technology and rich data platform. Our focus will be in
high growth areas such as our global strategic accounts, growth in developing regions for our sales such as Europe, and our channel and partner programs. Our growth strategies and programs in the coming months may be tempered by the continued
economic uncertainty resulting from the COVID-19 pandemic. 
 Our business and growth strategy is organized
around four fundamental pillars: 
  

	 	•	 	 Persistence – Absolute’s solution is an undeletable digital tether, based on our patented Persistence
technology that is embedded into the firmware of endpoint devices. This technology can re-establish communication and control of a device, even when the device is off the corporate network and beyond the reach
of traditional IT management and security tools. 

  

	 	•	 	 Resilience – Our Absolute Resilience® solutions
provide the toolkit to automatically remedy and harden the endpoint against common fragility and decay in an increasingly complex and distributed environment. We are continuing to strengthen the capabilities of our Absolute Resilience solutions to
solve the Dark EndpointTM challenge (enterprise computing devices that are not connected to the corporate network or are missing critical IT management applications). 

 

	 	•	 	 Intelligence – Due to our distinctive endpoint position and the significant volume of anonymous data points
we gather from activated devices, we are able to deploy machine learning to analyze these data sets in order to deliver real-time insights to our customers around the health, performance, and compliance of their devices and software. We believe that
we are well organized to accelerate the enhancement of our capabilities in this area that we believe will enable our customers to optimize the security and efficiency of their endpoint devices. 

 

	 	•	 	 Education – Historically the education sector has had unique technology requirements. The recent rapid shift
to learn-from-home environments has led to certain increases in technology funding and many schools procuring and mobilizing systems for students, teachers, and administrators – in essence, moving to more of an enterprise model. As a result, we
see a growing role for Absolute in this sector, which includes helping ensure the student has access to a secure device capable of accessing online curriculum, allowing administrators to understand where devices are and if they are being used for
their intended purposes, and helping manage the reissuance of devices. Further, we believe the ongoing enhancements in our enterprise software products can support those education organizations as their requirements shift to more closely mirror
those of a typical enterprise customer. 

  
 13 

 Routes to Market 

We have several routes to market which are grounded in our “land and expand” strategy, where we seek to grow our presence within a
customer’s IT and security environments over time. 
 PC OEMs 

During the selling process, we typically co-engage with our PC OEM partners, often also in conjunction with
value-added resellers (“VARs”) and distribution partners (see “Partner Ecosystem” below). Commonly, a customer’s purchase of our solutions will be made in conjunction with the purchase of new endpoint devices from the PC
OEM. Orders are often placed from our end user customers to our partners, who then place orders directly with Absolute. To drive demand, we operate a channel support team with responsibility for cultivating go-to-market initiatives with our channel partners and driving new customer acquisition campaigns. We currently generate approximately 75-80% of our total revenues in
conjunction with our PC OEM partners. 
 Direct 
 Our
direct sales force is responsible for solution-selling, targeting new customers, upselling and expanding within existing accounts, and relationship management with our end customers. Commonly, a customer’s initial purchase of our solutions will
be made in conjunction with the purchase of new endpoint devices and will represent a small portion of the overall license opportunity within that customer’s environment. Many customer deployments expand over time, either as a result of
customer purchases of incremental licenses on new device purchases or, alternatively, through the purchase of an enterprise or site license covering a majority or all devices in their environment. See “Subscription Billings” below. 

Channel/Managed Service Providers 
 In addition to our
strategic partnerships with PC OEMs, Absolute is engaged with and sells through a variety of other indirect channel partners, including resellers, distributors, and managed service providers around the world. These partners typically have direct
relationships with existing and potential customers, offering opportunities for Absolute to acquire new customers. 

  
 14 

 Partner Ecosystem 

Our partner ecosystem is an essential component of our business strategy. Our key partners are PC OEMs who are both key collaborative technology
partners and key distribution and reseller partners. We also have a robust and growing network of other partners such as distributors, resellers, managed IT service providers (“MSPs”), and ISVs. 

Our strong relationships with PC OEMs are foundational to our robust ecosystem. We are continually enhancing and expanding our PC OEM relationships from
both the technology and go-to-market perspectives in order to drive value for them. Our PC OEM partners have adopted our Persistence technology as a standard and have
embedded it in the firmware of their laptop, desktop, and/or tablet devices. This is an important collaboration for us, as the embedded support enhances the persistence (the ability to survive unauthorized or unintentional removal attempts) of our
software, which is a key differentiator for us. Our Persistence technology is normally shipped in a dormant state with the device and is activated after the customer purchases our service and installs the Absolute software agent. 

The following table lists PC OEMs who currently provide embedded support for our Persistence technology: 

 

			
	 Aava Mobile (since 2015)

Acer (since 2009)
 ASUS (since 2009)

Daten (since 2014)
 Dell (since 2005)

Dynabook (since 2006)
 Fujitsu (since 2006)

Fujitsu Client Computing Ltd. (since 2019) Getac (since 2008)

HP (since 2005)
 Inforlandia LDA (since 2013)

Intel (Classmate Computer) (since 2009) Lenovo (since 2005)
	  	 Microsoft
(since 2014)
 MPS Mayorista (since 2015) Mustek Systems (since 2015)

NCS Technologies, Inc. (since 2007) Panasonic (since 2006)

PC Smart SA (since 2013) Pinnacle Africa (since 2015)

Positivo Informatica SA (since 2014) Prestigio (since 2015)

Samsung (since 2011)
 VAIO (since 2017)

Zebra (since 2015)

 Patent Portfolio 

At June 30, 2020, we have a global portfolio of 140 issued patents and 29 patent applications in process. 

  
 15 

 Subscription Business Model 

We sell our solutions to end customers most often under a term license model in which customers acquire subscriptions to our cloud-based software
services for a specified term, typically ranging from one to five years. The majority of these subscriptions are fully invoiced up-front for the entire licensed term and are
non-refundable. We refer to our total invoiced sales in a period as our total “Billings”. During F2020, the prepaid term of our Billings averaged approximately 19 months (based on the ratio of the
total amount invoiced over the annualized contract value of the associated Billings). 
 We also offer enterprise license (“EL”) and site
license (“SL”) models, which provide customers with the option to license our software for multiple years on either a fully pre-paid basis or with an annual payment at the start of each contract
year. The EL and SL models match the buying preferences of some of our customers and generally result in a positive impact to ARR compared to prepaid multi-year licenses. 

From a financial reporting perspective, the amount we invoice is recorded at the time of sale in deferred revenue on the statement of financial position
and is recognized as revenue ratably over the contract term. Due to the fact that a significant portion of our Billings are for terms longer than one year, in general, only 20-30% of total Billings reported
for any given fiscal year are also recognized as revenue in the same fiscal year. 
 Seasonality 

Given the annual budget approval process of many of our customers, we see seasonal patterns in our business. Our cash from operating activities is
affected by the timing of our customer Billings, with cash collections in a particular quarter having a high correlation to Billings in the previous quarter. Historically, a higher concentration of Billings have occurred in the fourth quarter of
each fiscal year. This has been primarily due to higher activity in the North American education sector during this quarter. The strength of this seasonal pattern in the future will be impacted by the shifting relative proportions of our sales into
the enterprise, government, and education sectors. 
 Competition 

The markets we serve are increasingly competitive and are characterized by continuous and rapid changes in technology, customer needs, and industry
standards. However, we have historically experienced few direct competitors for our offerings, which we believe are unique in the IT and security markets. On occasion, we encounter companies that offer capabilities that overlap with certain subsets
of our product portfolio, such as endpoint hardware and software inventory management, compliance reporting, and data discovery. However, our product offerings often complement these other companies’ offerings, by providing status reporting on
their presence and activity on the endpoint and the ability to self-heal and repair many applications. 
 We believe our competitive position in the
market is built upon our patented Persistence technology that is embedded into the firmware of leading PC OEMs’ devices, the off-network capabilities of our solutions, broad device coverage, extensive PC
OEM go-to-market relationships, and strong patent portfolio. 

  
 16 

 Non-IFRS Measures 

Throughout this MD&A we refer to a number of measures which we believe are meaningful in the assessment of the Company’s performance. Many of
these metrics are non-standard measures under International Financial Reporting Standards (“IFRS”), do not have any standardized meaning under IFRS, and are unlikely to be comparable to similarly
titled measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS. 

The purpose of these non-IFRS measures is to provide supplemental information that may prove useful to readers
who wish to consider the impact of certain non-cash or uncontrollable items on the Company’s operating performance. Share-based compensation and non-cash
amortization of acquired intangible assets are being excluded from the Company’s operating expenses because the decisions which gave rise to these expenses were not made to increase sales in a particular period, but were made for the
Company’s long-term benefit over multiple periods. While strategic decisions, such as those to issue share-based awards or to acquire intangible assets, are made to further the Company’s long-term strategic objectives and do impact the
Company’s earnings under IFRS, these items affect multiple periods and management is not able to change or affect these items within any particular period. As such, supplementing IFRS disclosure with
non-IFRS disclosure using the non-IFRS measures outlined below provides management with an additional view of operational performance by excluding expenses that are not
directly related to performance in any particular period. Management uses both IFRS and non-IFRS measures when planning, monitoring and evaluating the Company’s performance. 

These measures, as well as their method of calculation or reconciliation to IFRS measures, are as follows: 

 

	a)	 Total ARR, Net ARR Retention, and ARR from New Customers 

As the majority of our customer contracts are sold under prepaid multi-year term licenses, there is typically a significant lag between the timing of
the invoice and the associated revenue recognition. As a result, we focus on the aggregate annual recurring revenue of our subscriptions under contract and generating revenue, measured by Annual Recurring Revenue (“ARR”), as an indicator
of our future recurring revenues. 
 Note that prior to Q4-F2020, we referred to ARR as Annual Contract Value
(“ACV”); however, we have changed the nomenclature of this measure as we believe ARR is more aligned with industry norms. There has been no change in the method by which this measure (and related measures below) is calculated. 

Total ARR (previously “ACV Base”) measures the amount of annual recurring revenue we will receive from our commercial customers under
contract at a point in time, and therefore is an indicator of our future revenue streams. Total ARR will change over a period through the retention, attrition and expansion of existing customers and the acquisition of new customers. As Total ARR is
measured at a point in time, there is no similar measure under IFRS against which it can be reconciled. 
 Net ARR Retention (previously
“Net ACV Retention”) measures the percentage increase or decrease in Total ARR at the end of a period for customers that comprised Total ARR at the beginning of the same period. This metric provides insight into the effectiveness of our
activities to retain and expand the ARR of our existing customers. 
 ARR from New Customers (previously “ACV from New Customers”)
measures the addition to Total ARR from sales to new commercial customers during a period. 
 We believe that increases in the amount of ARR from New
Customers, and improvement in our Net ARR Retention, will accelerate the growth of Total ARR and, in turn, our future revenues. 

  
 17 

	b)	 Adjusted Operating Expenses 

A number of significant non-cash expenses are reported in our Cost of Revenue and Operating Expenses. In
addition, restructuring and reorganization charges and post-retirement benefits are also reported in Operating Expenses. Management defines “Adjusted Operating Expenses” as IFRS Cost of Revenue and Operating Expenses adjusted for these
items, as we believe that analyzing these expenses exclusive of these items provides a useful measure of the cash invested in operating the ongoing business. The non-cash items include share-based
compensation, amortization of intangible assets, and amortization of property and equipment and right of use assets. 
 Specifically, management
adjusts for the following items in computing its Adjusted Operating Expenses: 
  

	 	1)	 Share-based compensation: Our compensation strategy includes the use of share-based awards to attract and
retain key employees, executives and directors. It is principally aimed at aligning their interests with those of our shareholders and at long-term employee retention, rather than to motivate or reward operational performance for any particular
period. Thus, share-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period. 

 

	 	2)	 Amortization of Intangible Assets: We believe that amortization of intangible assets is not necessarily
reflective of current period operational activities. In particular, the amortization of acquired technologies and customer relationships relates to items arising from pre-acquisition activities. These are
costs that are determined at the time of an acquisition or when other intangible assets are acquired. While it is continually reviewed for potential impairment, amortization of the cost is a static expense, one that is typically not affected by
operations during any particular period. 

  

	 	3)	 Amortization of Property and Equipment and Right of Use Assets: We believe that amortization of property and
equipment and right of use assets is not necessarily reflective of current period operational activities. In particular, the costs associated with these assets relate to operational decisions made in prior periods. Amortization of these costs is a
static expense, one that is typically not affected by operations during any particular period. 

  

	 	4)	 Restructuring or Reorganization Charges and Post-Retirement Benefits: We believe that costs incurred in
restructuring or reorganization, and certain significant post-retirement benefits afforded to executives upon departure from the Company, are not necessarily reflective of current period operational activities. In particular, these items relate to
decisions which will impact future operating periods. The magnitude of these expenses is typically determined by contractual law, common law, or by statute, and is unaffected by operations and performance in any particular period.

  

	c)	 Adjusted Operating Expenses – pre-IFRS 16 and Cash from Operating
Activities – pre-IFRS 16 

 We adopted IFRS 16, “Leases”,
effective July 1, 2019 using the modified retrospective approach (please refer to the “New Accounting Pronouncements” section of this MD&A and to note 2(e) in the F2020 Consolidated Financial Statements). Accordingly,
financial information for fiscal 2019 has not been adjusted as a result of the adoption of IFRS 16. 
 Management believes that presenting F2020
Adjusted Operating Expenses and Cash from Operating Activities on a pre-IFRS 16 basis will provide meaningful comparatives to similar F2019 operating results. 

  
 18 

 Please see the following for a reconciliation of Cost of Revenue and Operating Expenses to Adjusted
Operating Expenses and to Adjusted – pre-IFRS 16 Operating Expenses. 
  

																																	
	 	  	Three months ended June 30,	 
		  	  
	  
	 
	 	  	2020	 	  	2019	 
		  	  
	  
	 
	(in millions)	  	Per
consolidated
financial
statements	 	  	Adjustments	 	 	Adjusted	 	  	IFRS 16
Adjustments(1)	 	  	Adjusted
Operating
Expenses –
pre-IFRS 16(1)	 	  	Per
consolidated
financial
statements	 	  	Adjustments	 	 	Adjusted	 
		  	  
	  
	 
	 Cost of Revenue (“COR”)
	  	$	3.0	 	  	$	(0.1	)(2) 	 	$	2.9	 	  	$	0.2	 	  	$	3.1	 	  	$	3.6	 	  	$	-  	 	 	$	3.6	 
		  	  
	  
	 
	 Operating Expenses
	  				  				 				  				  				  				  				 			
	 Sales and Marketing
	  	$	9.1	 	  	$	(0.2	)(2) 	 	$	8.9	 	  	$	0.1	 	  	$	9.0	 	  	$	9.3	 	  	$	-  	 	 	$	9.3	 
	 Research and Development
	  	 	5.5	 	  	 	(0.1	)(2) 	 	 	5.4	 	  	 	0.1	 	  	 	5.5	 	  	 	5.0	 	  	 	-  	 	 	 	5.0	 
	 General and Administration
	  	 	3.0	 	  	 	(1.0	)(2)(3) 	 	 	2.0	 	  	 	0.1	 	  	 	2.1	 	  	 	3.3	 	  	 	(0.8	)(3) 	 	 	2.5	 
	 Share-based compensation
	  	 	3.1	 	  	 	(3.1	)(4) 	 	 	-  	 	  	 	-  	 	  	 	-  	 	  	 	1.1	 	  	 	(1.1	)(4) 	 	 	-  	 
		  	  
	  
	 
	 Adjusted Operating Expenses
	  	$	23.7	 	  	$	(4.5	) 	 	$	19.2	 	  	$	0.5	 	  	$	19.7	 	  	$	22.3	 	  	 	($1.9	) 	 	 	20.4	 
		  	  
	  
	 
		
	 	  	Year ended June 30,	 
		  	  
	  
	 
	 	  	2020	 	  	2019	 
		  	  
	  
	 
	(in millions)	  	Per
consolidated
financial
statements	 	  	Adjustments	 	 	Adjusted	 	  	IFRS 16
Adjustments(1)	 	  	Adjusted
Operating
Expenses –
pre-IFRS 16(1)	 	  	Per
consolidated
financial
statements	 	  	Adjustments	 	 	Adjusted	 
		  	  
	  
	 
	 Cost of Revenue (“COR”)
	  	$	12.7	 	  	$	(0.5	)(2) 	 	$	12.2	 	  	$	0.6	 	  	$	12.8	 	  	$	13.0	 	  	$	-  	 	 	$	13.0	 
		  	  
	  
	 
	 Operating Expenses
	  				  				 				  				  				  				  				 			
	 Sales and Marketing
	  	$	38.0	 	  	$	(0.7	)(2) 	 	$	37.3	 	  	$	0.4	 	  	$	37.7	 	  	$	37.4	 	  	$	-  	 	 	$	37.4	 
	 Research and Development
	  	 	18.3	 	  	 	(0.6	)(2) 	 	 	17.7	 	  	 	0.7	 	  	 	18.4	 	  	 	19.2	 	  	 	-  	 	 	 	19.2	 
	 General and Administration
	  	 	13.7	 	  	 	(3.6	)(2)(3) 	 	 	10.1	 	  	 	0.3	 	  	 	10.4	 	  	 	13.4	 	  	 	(3.4	)(3) 	 	 	10.0	 
	 Share-based compensation
	  	 	6.7	 	  	 	(6.7	)(4) 	 	 	-  	 	  	 	-  	 	  	 	-  	 	  	 	5.0	 	  	 	(5.0	)(4) 	 	 	-  	 
		  	  
	  
	 
	 Adjusted Operating Expenses
	  	$	89.4	 	  	$	(12.1	) 	 	$	77.3	 	  	$	2.0	 	  	$	79.3	 	  	$	88.0	 	  	 	($8.4	) 	 	 	79.6	 
		  	  
	  
	 

 Notes: 
  

	(1)	 The Company adopted IFRS 16, “Leases”, effective July 1, 2019 using the modified retrospective approach
(please refer to the “New Accounting Pronouncements” section of this MD&A and to Note 2(e) in the notes to the F2020 Consolidated Financial Statements). Accordingly, financial information presented for fiscal 2019 has not been adjusted
for the impact of the adoption of IFRS 16. “IFRS 16 Adjustments” and “Adjusted Operating Expenses – pre-IFRS 16” represent the impact on the Company’s financial results had IFRS
16 not been adopted. 

  

	(2)	 Amortization of right of use assets per the Statement of Cash Flows. 

 

	(3)	 Amortization of property and equipment per the Statement of Cash Flows. 

 

	(4)	 Share-based compensation per the Statement of Operations. 

 

	d)	 Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA” and
“Adjusted EBITDA - pre-IFRS 16”) 

 Management believes that analyzing
operating results exclusive of the significant non-cash items noted above provides a useful measure of the Company’s performance, as it helps illustrate underlying trends in our business that could
otherwise be masked by the effect of the income or expenses that are not indicative of the core operating performance of our business that are excluded from adjusted EBITDA. The term Adjusted EBITDA refers to earnings before deducting interest
income or expense, income taxes, amortization of intangible assets and property and equipment, foreign exchange gains or losses, share-based compensation, restructuring or reorganization charges and
post-retirement benefits. The items excluded in the determination of Adjusted EBITDA include share-based compensation, amortization of 

  
 19 

 
intangible assets, amortization of property and equipment and restructuring or reorganization charges and post-retirement benefits. In addition, the impact of IFRS 16 is excluded in the
determination of Adjusted – pre-IFRS 16 EBITDA. See points (b) and (c) above for a discussion of these items. 

Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other IFRS
financial measures. Some of the limitations of Adjusted EBITDA are that it excludes recurring expenses for interest payments, does not reflect the dilution that results from stock-based compensation, and does not reflect the cost to replace
amortized property and equipment. It may be calculated differently by other companies in our industry, limiting its usefulness as a comparative measure. 

Management believes that presenting F2020 Adjusted EBITDA on a pre-IFRS 16 basis will provide a meaningful
comparative to F2019 Adjusted EBITDA. 
 The following table provides a reconciliation of our Operating Income to Adjusted EBITDA and to Adjusted
– pre-IFRS 16 EBITDA: 
  

																																	
	 	  	Three months ended June 30,	 
		  	  
	  
	 
	 	  	2020	 	  	2019	 
		  	  
	  
	 
	(in millions)	  	Per
consolidated
financial
statements	 	  	Adjustments	 	 	 Adjusted

EBITDA
	 	  	IFRS 16
Adjustments(1)	 	 	
Adjusted
EBITDA –
pre-IFRS 16

(1)
	 	  	Per
consolidated
financial
statements	 	  	Adjustments	 	 	Adjusted	 
		  	  
	  
	 
	 Operating Income
	  	$	3.5	 	  	$	4.5	(2) 	 	$	8.0	 	  	$	(0.5	) 	 	 	7.5	 	  	$	3.0	 	  	 	$1.9	(1) 	 	$	4.9	 
		  	  
	  
	 
		
	 	  	Year ended June 30,	 
		  	  
	  
	 
	 	  	2020	 	  	2019	 
		  	  
	  
	 
	(in millions)	  	Per
consolidated
financial
statements	 	  	Adjustments	 	 	 Adjusted

EBITDA
	 	  	IFRS 16
Adjustments(1)	 	 	
Adjusted
EBITDA –
pre-IFRS 16

(1)
	 	  	Per
consolidated
financial
statements	 	  	Adjustments	 	 	Adjusted	 
		  	  
	  
	 
	 Operating Income
	  	$	15.3	 	  	$	12.1	(2) 	 	$	27.4	 	  	$	(2.0	) 	 	 	25.4	 	  	$	10.9	 	  	 	$8.4	(1) 	 	$	19.3	 
		  	  
	  
	 

 Notes: 
  

	(1)	 The Company adopted IFRS 16, “Leases”, effective July 1, 2019 using the modified retrospective approach
(please refer to the “New Accounting Pronouncements” section of this MD&A and to Note 2(e) in the notes to the F2020 Consolidated Financial Statements). Accordingly, financial information presented for fiscal 2019 has not been
adjusted for the impact of the adoption of IFRS 16. “IFRS 16 Adjustments” and “Adjusted EBITDA – pre-IFRS 16” represent the impact on the Company’s financial results had IFRS 16
not been adopted. 

  

	(2)	 Amortization of property and equipment and right of use assets per the Statement of Cash Flows, and share-based
compensation per the Statement of Operations. 

  

	e)	 Billings 

See the “Subscription Billings” and “Seasonality” sections of this MD&A for a detailed discussion of Billings.
Billings are a component of deferred revenue (see Note 12 of the notes to the F2020 Consolidated Financial Statements) and result from invoiced sales of our solutions. Most of our Billings relate to prepaid term license subscriptions. We view Cash
from Operating Activities as a meaningful performance metric, and the total amount of our Billings in a period will have a material impact on our operating cash flows. 

  
 20 

 Financial Performance Review and Analysis 

Total Annual Recurring Revenue 
 Total ARR measures the
annualized value of recurring revenue we have under contract with our commercial customers and is generating revenue at a point in time, and is therefore a direct indicator of our future recurring revenue streams. The increase or decrease in Total
ARR during a given period measures our success in impacting the amount of future annual revenue that will be earned by the Company. Total ARR will increase (or decrease) in a period through the retention (or attrition) and expansion (or contraction)
of service subscriptions from existing commercial customers, and through the acquisition of new commercial customers. 
 The following table shows the
components of Total ARR broken out by industry vertical and geography. In addition, it shows the percentage increase (decrease) in Total ARR over the trailing four quarters (“T4Q”), as well as compared to the prior sequential quarter
(“QoQ”). 
  

																					
	(in millions)	  	
Q4-F2020
	 	  	Q3-F2020	 	 	Q2-F2020	 	 	Q1-F2020	 	 	Q4-F2019	 
						
	 Total ARR
	  	$	108.3	 	  	$	101.4	 	 	$	100.3	 	 	$	99.1	 	 	$	98.0	 
		  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Enterprise
	  	 	60.5	 	  	 	58.2	 	 	 	57.6	 	 	 	55.1	 	 	 	53.6	 
	 Government
	  	 	13.5	 	  	 	12.4	 	 	 	12.0	 	 	 	11.9	 	 	 	11.6	 
	 Education
	  	 	34.3	 	  	 	30.8	 	 	 	30.7	 	 	 	32.1	 	 	 	32.8	 
						
	 North America
	  	 	93.5	 	  	 	87.8	 	 	 	87.4	 	 	 	86.7	 	 	 	85.7	 
	 International
	  	 	14.8	 	  	 	13.6	 	 	 	12.9	 	 	 	12.4	 	 	 	12.3	 
						
	 T4Q Growth – Total
	  	 	11%	 	  	 	7%	 	 	 	5%	 	 	 	7%	 	 	 	7%	 
		  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Enterprise
	  	 	13%	 	  	 	14%	 	 	 	13%	 	 	 	11%	 	 	 	11%	 
	 Government
	  	 	17%	 	  	 	11%	 	 	 	9%	 	 	 	13%	 	 	 	15%	 
	 Education
	  	 	4%	 	  	 	(7%	) 	 	 	(8%	) 	 	 	(2%	) 	 	 	(1%	) 
						
	 North America
	  	 	9%	 	  	 	4%	 	 	 	3%	 	 	 	4%	 	 	 	5%	 
	 International
	  	 	20%	 	  	 	24%	 	 	 	23%	 	 	 	24%	 	 	 	26%	 
						
	 Sequential QoQ Growth – Total
	  	 	7%	 	  	 	1%	 	 	 	1%	 	 	 	1%	 	 	 	3%	 
		  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Enterprise
	  	 	4%	 	  	 	1%	 	 	 	5%	 	 	 	3%	 	 	 	5%	 
	 Government
	  	 	9%	 	  	 	4%	 	 	 	0%	 	 	 	3%	 	 	 	3%	 
	 Education
	  	 	11%	 	  	 	0%	 	 	 	(4%	) 	 	 	(2%	) 	 	 	(0%	) 
						
	 North America
	  	 	7%	 	  	 	1%	 	 	 	1%	 	 	 	1%	 	 	 	2%	 
	 International
	  	 	8%	 	  	 	6%	 	 	 	4%	 	 	 	1%	 	 	 	12%	 

 Our success with respect to the retention and expansion of service subscriptions from existing commercial customers
during a period is represented by our Net ARR Retention rate, and our success with respect to acquiring new commercial customers during a period is measured by the amount of incremental ARR from new commercial customers (“ARR from New
Customers”). We believe that our ability to renew our customers more efficiently, and cost effectively, through inside sales and/or partnerships, will create more of selling capacity within our direct sales organization. In Q3-F2020 we commenced a partnership with ServiceSource, a third party outsourced sales renewal organization, and expect this initiative to help 

  
 21 

 
improve our renewal efficiency over time. Combined, we believe these factors will improve our Net ARR Retention rate and drive increased ARR from New Customers. 

In Q4-F2020, Net ARR Retention from existing commercial customers was 103%, up from 100% in Q3-F2020 and 101% in Q4-F2019. ARR from New Customers was $3.5 million in Q4-F2020, up from $1.0 million in Q3-F2020 and from $2.1 million in Q4-F2019. 
 We believe that our
market growth opportunity continues to be strong in the Enterprise and Government verticals, and therefore we continue to direct a substantial portion of our sales and marketing and product development investment to target these markets. We believe
these focused initiatives have helped drive the 14% T4Q growth we have experienced in these markets combined, and we believe that our investment in these verticals will continue to drive growth in the future. The shift to work from home environments
resulting from the COVID-19 pandemic appears to have resulted in IT and security teams requiring services provided by Absolute in order to effectively manage and secure devices off corporate networks. We
believe that this dynamic helped drive record ARR from New Customers of $2.4 million within the Enterprise and Government sectors in Q4-F2020, compared to $2.0 million in Q4-F2019. No single Enterprise or Government customer represented more than $0.5 million of the total in Q4-F2020, while Q4-F2019
included a single transaction that exceeded that amount. 
 As discussed previously under “Growth Strategy”, while we had been experiencing
headwinds in the Education vertical over the past few fiscal years, Q4-F2020 saw rapid changes for Educational organizations as a result of a shift to learn from home environments. This shift resulted in IT
teams having to mobilize not just students, but also teachers and administrators, as they were required to work, teach, and learn remotely. This shift positively impacted business in the Education vertical, where
Q4-F2020 saw record ARR from New Customers of $1.1 million, compared to $0.2 million in Q4-F2019. In Q4-F2020, ARR from
New Customers included one customer greater than $0.5 million. 
 At June 30, 2020, Total ARR was represented 56% by Enterprise vertical
customers, 12% by Government vertical customers, and 32% by Education vertical customers. From a geographic perspective, June 30, 2020 Total ARR was represented 86% by North American customers and 14% by international customers. As a result of
its smaller ARR, we expect international results to fluctuate with a higher degree of variability. 

  
 22 

 Revenue 

Total revenue in Q4-F2020 increased 7% to $27.2 million from $25.3 million in Q4-F2019. This was represented by an 8% increase in commercial recurring revenue and a 6% increase in non-recurring professional services and other revenue. In the annual
period of F2020, total revenue increased 6% to $104.7 million from $98.9 million in F2019. This increase was primarily a result of an increase in a 6% increase in commercial recurring revenue. The increases in commercial recurring revenue
are a result of historical increases in Total ARR, as Total ARR is an indicator of future revenue growth. 
 In general, we believe our future
commercial recurring revenue performance will be closely aligned with the net growth in Total ARR. 
 The table below provides details of our revenue,
and the associated year-over-year increase (decrease), over the trailing five quarters: 
  

																					
	(in millions)	  	Q4-F2020	 	  	Q3-F2020	 	  	Q2-F2020	 	 	Q1-F2020	 	 	Q4-F2019	 
						
	 Commercial Recurring Revenue
	  	$	25.9	 	  	$	25.1	 	  	 	24.9	 	 	 	24.6	 	 	 	24.1	 
	 Professional Services and Other
	  	 	1.3	 	  	 	1.0	 	  	 	0.9	 	 	 	1.1	 	 	 	1.2	 
		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 
	 Total Revenue
	  	$	27.2	 	  	$	26.1	 	  	$	25.8	 	 	$	25.7	 	 	$	25.3	 
		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 
						
	 Year-over-year increase (decrease)
	  				  				  				 				 			
	 Commercial Recurring Revenue
	  	 	8%	 	  	 	5%	 	  	 	6%	 	 	 	6%	 	 	 	5%	 
	 Professional Services and Other
	  	 	6%	 	  	 	1%	 	  	 	(11%	) 	 	 	(6%	) 	 	 	1%	 
		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 
	 Total Revenue
	  	 	7%	 	  	 	5%	 	  	 	6%	 	 	 	6%	 	 	 	5%	 
		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 

 The table below provides a comparison of our Q4 and annual revenue: 

 

																									
	 (in millions)
	  	 
	Q4
F2020	 
 	  	 
	Q4
F2019	 
 	  	 
	Increase
(decrease)	 
 	 	 
	YTD
F2020	 
 	  	 
	YTD
F2019	 
 	  	 
	Increase
(decrease)	 
 
		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 
	 Revenue recognized from:
	  				  				  				 				  				  			
	 Term licensing(1)
	  	$	24.8	 	  	$	23.1	 	  	 	7%	 	 	$	96.3	 	  	$	91.0	 	  	 	6%	 
	 Managed services(1)
	  	 	1.1	 	  	 	1.0	 	  	 	15%	 	 	 	4.2	 	  	 	3.6	 	  	 	15%	 
		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 
							
	 Commercial Recurring Revenue
	  	 	25.9	 	  	 	24.1	 	  	 	8%	 	 	 	100.5	 	  	 	94.6	 	  	 	6%	 
	 Professional services
	  	 	0.1	 	  	 	0.2	 	  	 	(25%	) 	 	 	0.4	 	  	 	0.7	 	  	 	(39%	) 
	 Other(2)
	  	 	1.2	 	  	 	1.0	 	  	 	11%	 	 	 	3.8	 	  	 	3.6	 	  	 	4%	 
		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 
	 Total Revenue
	  	$	27.2	 	  	$	25.3	 	  	 	7%	 	 	$	104.7	 	  	$	98.9	 	  	 	6%	 
		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 

  

	(1)	 Cloud services and recurring managed professional service revenues are included as part of Total ARR (please refer to
the “Critical Accounting Policies and Estimates” section of this MD&A). 

  

	(2)	 Other revenue represents revenue derived from ancillary product lines, including consumer products.

 Our annual F2020 revenue of $104.7 million was within the range of our previously disclosed outlook for revenue for the
year, of $103 million to $107 million. 

  
 23 

 Adjusted Operating Expenses(1) 

 

																					
		 				 				 				 	 	Increase (decrease)	 
	(in millions)	 	Q4-F2020	 	 	
Q4-F2020(2)

(pre-IFRS 16)
	 	 	Q4-F2019	 	 	Q4-F2020	 	 	 Q4-F2020

(pre-IFRS 16)
	 
	 Cost of revenue (“COR”)(1)
	 	$	2.9	 	 	$	3.1	 	 	$	3.6	 	 	 	(20	%) 	 	 	(15	%) 
	 Sales and marketing
(“S&M”)(1)
	 	 	8.9	 	 	 	9.0	 	 	 	9.3	 	 	 	(4	%) 	 	 	(3	%) 
	 Research and development
(“R&D”)(1)
	 	 	5.4	 	 	 	5.5	 	 	 	5.0	 	 	 	6	% 	 	 	10	% 
	 General and administration
(“G&A”)(1)
	 	 	2.0	 	 	 	2.1	 	 	 	2.5	 	 	 	(19	%) 	 	 	(16	%) 
		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Adjusted Operating Expenses(1)
	 	$	19.2	 	 	$	19.7	 	 	$	20.4	 	 	 	(6	%) 	 	 	(4	%) 
		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Number of employees at June 30
	 	 	499	 	 	 	499	 	 	 	477	 	 	 	5	% 	 	 	5	% 
		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
					
		 				 				 				 	 	Increase (decrease)	 
	(in millions)	 	YTD-F2020	 	 	
YTD-F2020(2)

(pre-IFRS 16)
	 	 	YTD-F2019	 	 	YTD-F2020	 	 	 YTD-F2020

(pre-IFRS 16)
	 
	 Cost of revenue (“COR”)(1)
	 	$	12.2	 	 	$	12.8	 	 	$	13.0	 	 	 	(6	%) 	 	 	(2	%) 
	 Sales and marketing
(“S&M”)(1)
	 	 	37.3	 	 	 	37.7	 	 	 	37.4	 	 	 	(0	%) 	 	 	1	% 
	 Research and development
(“R&D”)(1)
	 	 	17.7	 	 	 	18.4	 	 	 	19.2	 	 	 	(7	%) 	 	 	(4	%) 
	 General and administration
(“G&A”)(1)
	 	 	10.1	 	 	 	10.4	 	 	 	10.0	 	 	 	0	% 	 	 	3	% 
		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Adjusted Operating Expenses(1)
	 	$	77.3	 	 	$	79.3	 	 	$	79.6	 	 	 	(3	%) 	 	 	(0	%) 
		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Number of employees at June 30
	 	 	499	 	 	 	499	 	 	 	477	 	 	 	5	% 	 	 	5	% 
		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 ADJUSTMENTS: 
  

	(1)	 Please refer to the “Non-IFRS Measures” section of this MD&A for
a reconciliation of these adjusted expenses to those in the Consolidated Financial Statements. 

  

	(2)	 The Company has adopted IFRS 16, “Leases”, effective July 1, 2019 using the modified retrospective
approach (please refer to the “New Accounting Pronouncements” section of this MD&A and to note 2(e) in the F2020 Consolidated Financial Statements). Accordingly, the information presented for fiscal 2019 has not been adjusted
retrospectively. The figures presented under the column titled “pre-IFRS 16” present the Company’s financial information if IFRS 16 had not been adopted. 

  
 24 

 Adjusted Operating Expenses and EBITDA as a Percentage of
Revenue(1) 
  

													
	 (percentage of Revenue)
	 	Q4-F2020	 	Q4-F2020(2)

(pre-IFRS 16)
	 	Q4-F2019	 	YTD-F2020	 	YTD-F2020(2)

(pre-IFRS 16)
	 	YTD-F2019
		 	 	 	 	 	 	 	 	 	 	 	 
	 Cost of revenue (“COR”)(1)
	 	11%	 	11%	 	14%	 	11%	 	12%	 	13%
	 Sales and marketing
(“S&M”)(1)
	 	33%	 	33%	 	37%	 	36%	 	36%	 	38%
	 Research and development
(“R&D”)(1)
	 	19%	 	20%	 	20%	 	17%	 	18%	 	19%
	 General and administration
(“G&A”)(1)
	 	8%	 	8%	 	10%	 	10%	 	10%	 	10%
	
Adjusted Operating Expenses(1)
	 	71%	 	72%	 	81%	 	74%	 	76%	 	80%
	 Adjusted EBITDA(1)
	 	29%	 	28%	 	19%	 	26%	 	24%	 	20%

 ADJUSTMENTS: 
  

	(1)	 Please refer to the “Non-IFRS Measures” section of this
MD&A for a reconciliation of Adjusted Operating Expenses and EBITDA to those in the Consolidated Financial Statements. 

  

	(2)	 The Company has adopted IFRS 16, “Leases”, effective July 1, 2019 using the modified retrospective
approach (please refer to the “New Accounting Pronouncements” section of this MD&A and to note 2(e) in the F2020 Consolidated Financial Statements). Accordingly, the information presented for fiscal 2019 has not been adjusted
retrospectively. The figures presented under the column titled “pre-IFRS 16” present the Company’s financial information if IFRS 16 had not been adopted. 

Adjusted Operating Expenses in Q4-F2020 were $19.2 million, and were $77.3 million in the annual
period of F2020. Adjusted Operating Expenses pre-IFRS 16 were $19.7 million in Q4-F2020, which is down 4% from $20.4 million in
Q4-F2019, and were $79.3 million in the annual period, down marginally from $79.6 million in F2019. 

The year-over-year decrease in Q4-F2020 was primarily attributable to lower service guarantee expenses and lower
travel and entertainment expenses, partially offset by increased headcount related expenses, including amortized commissions and corporate bonus accruals, as compared to Q4-F2019. 

Additionally, in the annual period of F2020, we experienced higher levels of personnel related expenses resulting from increased headcount levels, as
well as increased consulting costs and professional fees on general corporate matters within G&A. However, these increases were significantly offset by lower R&D expenses resulting from increased levels of Canadian government Scientific
Research and Experimental Development investment tax credits (“SRED ITCs”) upon the successful assessment, and filing, of historical claims. 

Adjusted EBITDA was 29% of revenue in Q4-F2020, and Adjusted EBITDA
pre-IFRS 16 was 28% of revenue, up from 19% from Q4-F2019. In the annual period of F2020, Adjusted EBITDA was 26% of revenue, and Adjusted EBITDA pre-IFRS 16 was 24% of revenue, up from 20% in F2019. The increase in Adjusted EBITDA in the annual period of F2020 was attributable to an increase in revenues, with a lower increase in Adjusted Operating Expenses,
described above. 

  
 25 

 Cost of Revenue (“COR”) and Gross Margin 

Cost of revenue includes the costs of operating our SaaS-hosted infrastructure, customer experience and support, professional and investigative
services, as well as service guarantee costs and allocated overhead. 
 On an overall basis, COR was $3.0 million in Q4-F2020, down 17% from $3.6 million in Q4-F2019, and in the annual period of F2020, COR was $12.6 million, down 3% from $13.0 million in F2019. As a result,
gross margin was 89% and 88% in Q4 and the annual period of F2020, respectively, compared to 86% and 87% in the comparable periods of F2019. 

Adjusted COR was $2.9 million in Q4-F2020, and pre-IFRS 16 Adjusted
COR was $3.1 million, down 15% from Q4-F2019. Adjusted COR was $12.2 million in the annual period of F2020, while pre-IFRS 16 Adjusted COR was
$12.8 million, down 2% from $13.0 million in F2019. The decreases in Q4 and the annual periods of F2020 are primarily attributable to lower service guarantee (related to certain of our device theft investigation and recovery services) and
geolocation license service expenses, partially offset by increased personnel related expenses, including corporate bonus accruals, as compared to the prior year. 

We exited Q4-F2020 with a headcount of 78 in this area as compared to 82 at March 31, 2020 and 72 at
June 30, 2019. 
 Sales and Marketing (“S&M”) 

Sales and marketing expenses consist of salaries and related expenses for sales, marketing, partner support and business development personnel,
amortization of deferred commission expenses, marketing automation, program and event expenditures, travel and entertainment expenses, and allocated overhead. We undertake a number of general marketing initiatives including: participation in
tradeshows and partner events; marketing automation; market development programs with partners; public and industry analyst relations; webinars; and advertising expenditures. These expenditures are incurred to increase awareness with partners and
customers, drive coverage with industry analysts and help to establish Absolute as the recognized leader in the Endpoint Resilience market. 
 In Q4-F2020, S&M expense decreased 2% to $9.1 million from $9.2 million in Q4-F2019. Adjusted S&M expense was $8.9 million and Adjusted pre-IFRS 16 S&M expense was $9.0 million, down 3% from $9.3 million in Q4-F2019. As a percentage of revenue, Adjusted
pre-IFRS 16 S&M expenses were 33% in Q4-F2020, down from 37% in the comparative period of F2019. 

S&M expense was $38.0 million in the annual period of F2020, up 2% from $37.4 million in F2019. In the annual period of F2020, Adjusted
S&M expense was $37.3 million, and Adjusted pre-IFRS 16 S&M expense was $37.7 million, up 1% from $37.4 million in F2019. As a percentage of revenue, Adjusted pre-IFRS 16 S&M expenses were 36% in F2020, down from 38% in F2019. 
 Our
Q4-F2020 S&M expense was primarily impacted by lower travel and entertainment expenses, offset by increased personnel related expenses, including amortized commissions, as compared to Q4-F2019. On an annual basis, our F2020 S&M expense was impacted by the same factors, however, as compared to F2019, the increased headcount related expenses were greater than the decreased travel and
entertainment expenses, in addition to higher partner and direct marketing program spending. We exited Q4-F2020 with a headcount of 145 in S&M, as compared to 150 at March 31, 2020 and 142 at
June 30, 2019. 
 Research and Development (“R&D”) 

Research and development expenses consist primarily of salaries and related expenses for our research and development staff, contractor and outsourcing
costs, and allocated overhead. These expenses are partially offset by SRED ITCs. 

  
 26 

 R&D expense was $5.4 million in Q4-F2020, up 8% from
$5.0 million in Q4-F2019. Adjusted R&D expense was $5.4 million, and Adjusted pre-IFRS 16 R&D expense was $5.5 million, up 10% from Q4-F2019. Total SRED ITCs recorded were $0.4 million in Q4-F2020, consistent with $0.4 million in Q4-F2019. When measured as
a percentage of revenues, Adjusted pre-IFRS 16 R&D expenses were 20% in Q4-F2020, consistent with 20% in Q4-F2019. 

In the annual period of F2020, R&D expense decreased 5% to $18.3 million from $19.2 million in F2019. Adjusted R&D expense was
$17.7 million and Adjusted pre-IFRS 16 R&D expense was $18.4 million, down 4% from $19.2 million in F2019. On an annual basis, we recorded SRED ITCs of $3.1 million, compared to
$1.9 million in F2019. During F2020, we recorded $1.1 million in positive adjustments to SRED ITCs recorded within R&D expense as a result of the successful assessment by Canadian tax authorities of certain historical claims. As a
percentage of revenue, Adjusted pre-IFRS 16 R&D expenses were 17% in F2020, compared to 18% in F2019. 

The increase in our Q4-F2020 Adjusted R&D expense primarily reflects the impact of increased personnel
related expenses resulting from filling open positions earlier in the fiscal year, and corporate bonus accruals. The decrease in Adjusted R&D expense in the annual period of F2020 reflects the impact of the increased SRED ITCs recorded earlier
in the fiscal year, partially offset by higher personnel related expenses. 
 We exited Q4-F2020 with a
headcount of 218 in R&D, compared to 210 at March 31, 2020 and 212 at June 30, 2019. 
 General and Administration (“G&A”) 

G&A expenses consist of salaries and related expenses for finance and accounting, human resources, legal, administration, bad debt provisions,
professional fees other corporate expenses and allocated overhead. 
 G&A expenses were $3.0 million in
Q4-F2020, down 11% from $3.3 million in Q4-F2019. Adjusted G&A expenses were $2.0 million in Q4-F2020, while
Adjusted pre-IFRS 16 G&A expenses were $2.1 million in Q4-F2020, down 16% from $2.5 million in Q4-F2019. When
measured as a percentage of revenue, Adjusted pre-IFRS 16 G&A expenses were 8% in Q4-F2020, down from 10% in Q4-F2019. 

In the annual period of F2020, G&A expenses were $13.7 million, up 2% from $13.5 million in F2019. Adjusted G&A expenses were
$10.1 million, and Adjusted pre-IFRS 16 G&A expenses were $10.4 million in the annual period of F2020, up 3% from $10.0 million in F2019. Annual Adjusted
pre-IFRS 16 G&A expenses were 10% of revenue in each of F2020 and F2019. 
 The decrease in Adjusted
G&A expenses in Q4-F2020 compared to Q4-F2019 was primarily the result of decreased personnel related expenses, including travel and entertainment, and decreased IT
infrastructure expenses, partially offset by increased professional fees incurred on general corporate matters. In the annual period of F2020, we experienced the same factors as mentioned above, however, professional fees were slightly higher than
the decreased personnel related expenses as compared to F2019. We exited Q4-F2020 with a headcount of 58 in G&A, compared to 59 at March 31, 2020 and 51 at June 30, 2019. 

Share-based compensation 
 Share-based compensation expenses
are related to fair-value based measures related to our various share-based compensation arrangements. 
 Share-based compensation was
$3.1 million in Q4-F2020, up from $1.1 million in Q4-F2019, and was $6.7 million in the annual period of F2020, up from $5.0 million in F2019. The
increase in share-based compensation in the Q4 and annual periods of F2020 is primarily related to increased expenses related to deferred share units, which are marked to market each reporting period. Accordingly, we will experience higher
share-based compensation expense in periods during which our share price increases. 

  
 27 

 Operating Income and Adjusted EBITDA 

We recorded IFRS operating income of $3.5 million in Q4-F2020, up from $3.0 million in Q4-F2019. In the annual period of F2020, we recorded IFRS operating income of $15.3 million, up from $10.9 million in F2019. 

Adjusted EBITDA was $8.0 million in Q4-F2020, while Adjusted
pre-IFRS 16 EBITDA of $7.5 million was up 53% from $4.9 million Q4-F2019. As a percentage of revenue, Adjusted pre-IFRS
16 EBITDA was 28% in Q4-F2020, compared to 19% in Q4-F2019. In the annual period of F2020, Adjusted EBITDA was $27.4 million, while Adjusted EBITDA pre-IFRS 16 increased 32% to $25.4 million from $19.3 million in F2019, and improved to 24% of revenue from 20% in F2019. 

The increase in Adjusted EBITDA is related to increased revenues (as outlined above under “Revenue”) and decreased Adjusted Operating Expenses
(as outlined above under “Adjusted Operating Expenses”). 
 Our annual F2020 Adjusted EBITDA of $27.4 million, or 26% of revenue, was
above the range of our previously disclosed outlook for Adjusted EBITDA for the year, of 21% to 25% of revenue. 
 Other Income and Expenses 

Absolute earns finance income on its cash and investment resources beyond immediate operating requirements. We recorded finance income of $43,000 in Q4-F2020 compared to $75,000 in Q4-F2019, and 
 $395,000 in the annual
period of F2020, up from $274,000 in F2019. The increase in finance income reflects moderately increased interest rates in addition to a higher level of short-term investments as compared to F2019. 

Other income and expenses also include interest expense on lease liabilities, and foreign exchange gains and losses incurred primarily on the
translation of Canadian dollar and U.K. pound cash, investment and liability balances. 
 In Q4 and the annual periods of F2020, we recorded $135,000
and $619,000, respectively, in interest expense on lease liabilities, compared to $nil in the comparative periods of F2019. In addition, we experienced a foreign exchange loss of $18,000 in Q4-F2020 as
compared to $30,000 in Q4-F2019, while in the annual period of F2020, we recorded a foreign exchange gain of $199,000 as compared to a loss of $65,000 in F2019. In both F2020 and F2019, the losses were the
result of intra-quarter fluctuations between the U.S. and Canadian dollar. In the annual period of F2020, the gain resulted primarily from the revaluation of the Company’s lease liabilities, a significant portion of which are denominated in
Canadian dollars. 
 Income Taxes 
 Our overall effective
tax rate is significantly impacted by the source of income or losses amongst our subsidiaries as a result of varying tax rates in different jurisdictions. In addition, our overall effective tax rate is impacted by share-based compensation, which is
generally not deductible for income tax purposes. We are also subject to foreign exchange fluctuations on deferred tax balances originating in foreign jurisdictions, the impact of non-recognition of deferred
tax assets in some jurisdictions, and the impact of changes in statutory tax rates. 
 In Q4-F2020, we
recorded current tax expense of $370,000 and a deferred tax expense of $837,000, as compared to a current tax recovery of $317,000 and a deferred tax expense of $1.3 million in Q4-F2019. In the annual
period of F2020, we recorded a current tax expense of $1.5 million and a deferred tax expense of $3.1 million, as compared to current tax expense of $1.6 million and deferred tax expense of $1.9 million in F2019. 

  
 28 

 The difference between our effective tax rate in F2020 of 30.2% (F2019 – 31.8%) and our statutory
tax rate of 27.0% (F2019 – 27.0%) is primarily due to the interaction of the factors mentioned above. In the annual periods of F2020 and F2019, our effective tax rate was impacted by non-deductible
expenses in our Canadian operations. In F2020 and F2019, our current tax position in Canada is net of SRED ITCs to be claimed, which are presented as a reduction of research and development expenses. 

Net Income and Comprehensive Income 
 The Company recorded
net income in Q4-F2020 of $2.2 million, up 9% from $2.0 million in Q4-F2019. In the annual period of F2020, we recorded net income of $10.6 million,
compared to $7.6 million in F2019. Net income in the current year reflects the impact of IFRS operating income and income tax expense, as described above. In Q4-F2020, we recorded total comprehensive
income of $2.5 million, reflecting net income and the impact of the reclassification of previously unrealized foreign exchange forward losses recorded in Other Comprehensive Income within shareholders’ deficiency at March 31, 2020.

 Cash from Operating Activities 
 Our quarterly cash from
operating activities is significantly impacted by the timing of our Billings, with cash collections in one quarter having a high correlation to Billings in the previous quarter. 

Our Billings in a period represent amounts related to expiring contract renewals, existing customer expansions and product upgrades, and new customer
purchases. As our average prepaid contract term over the past four quarters has averaged 19 months, our Billings in a period are heavily influenced by the expiration of contracts sold in the same period several years prior. As a result, a comparison
of current period Billings to prior year Billings may be misleading, as a year-over-year increase/decrease in Billings may infer an expansion/contraction of Total ARR when no such expansion/contraction exists. For this reason, we believe that the
change in Total ARR is a more accurate measure of our revenue generating activities. 
 The table below provides details of our Billings over the
trailing six quarters: 
  

																									
	(in millions)	  	Q4-F2020	 	  	Q3-F2020	 	  	Q2-F2020	 	  	Q1-F2020	 	  	Q4-F2019	 	  	Q4-F2019	 
		  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 
	 Billings
	  	$	42.2	 	  	$	24.9	 	  	$	23.8	 	  	$	22.0	 	  	$	31.4	 	  	$	21.5	 
		  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 

 Our average prepaid contract term has generally trended lower in recent quarters, which is a result of our deliberate
focus on our sales incentives geared toward maximizing the ARR of our Billings. Due to an increase in ARR in the Education vertical, where contract terms tend to trend longer, the average prepaid contract term in
Q4-F2020 was 21 months. The average contract term of our customer Billings will fluctuate depending on customer buying patterns, which will impact our operating cash flows. 

In Q4-F2020, we generated cash from operating activities of $11.6 million, up from $3.5 million in Q4-F2019. In the annual period of F2020, we generated cash from operating activities of $25.0 million, up from $10.3 million in F2019 period. Our F2020 cash from operations was positively impacted
primarily by improved Adjusted EBITDA (as outlined above under “Operating Income and Adjusted EBITDA”) in addition to working capital changes, including higher Billings, as compared to F2019. 

Our annual F2020 cash from operating activities of $25.0 million, or 24% of revenue, was above the range of our previously disclosed outlook for
cash from operating activities for the year, of 16 % to 22% of revenue. 
 Liquidity and Capital Resources 

We believe Absolute is in a strong financial position, with no debt and the financial resources necessary to fund its operating and capital requirements
and to support its business objectives. At June 30, 2020, our cash, cash equivalents and short-term investments were $47.1 million, compared to $35.8 million at June 

  
 29 

 
30, 2019. The Company’s cash and investment position was impacted in F2020 by cash from operations, an amount of $3.9 million in capital expenditures, and outlays of $10.0 million
for dividends and $1.7 million lease liability repayments. These amounts were offset by the receipt of $2.1 million on stock option exercises and receipts pursuant to the Company’s other employee share-based plans. 

Based on current sales and investment plans, management believes that the Company has sufficient capital resources to support its business objectives
for the coming year. 
 Accounts receivable 
 Accounts
receivable balances increased to $29.0 million at June 30, 2020 (69% of Q4-F2020 Billings) from $22.2 million at June 30, 2019 (72% of Q4-F2019
Billings). The increase is primarily due to increased Billings volumes in Q4-F2020 as compared to Q4-F2019. 

At June 30, 2020, 1% of the Company’s accounts receivable balance was over 90 days past due, consistent with June 30, 2019. At
June 30, 2020, accounts receivable included three PC OEM and distributor partners that represented more than 10% of receivables, at 55%, 16%, and 16%, respectively. At June 30, 2019, these three partners comprised 40%, 27%, and 8%,
respectively, of our total accounts receivable, with a fourth partner representing 15%. 
 Deferred revenue 

Deferred revenue was $142.6 million at June 30, 2020, compared to $134.4 million at June 30, 2019. Deferred revenue is comprised of
the unamortized portion of deferred revenue from our Billings, which is amortized ratably to revenue over time. 
 The scheduled recognition of
deferred revenue is as follows: 
  

																									
	(in millions)	  	F2021	 	  	F2022	 	  	F2023	 	  	F2024	 	  	F2025	 	  	Total	 
		  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 
	 Revenue to be recognized
	  	$	80.8	 	  	$	35.2	 	  	$	19.6	 	  	$	6.0	 	  	$	1.0	 	  	$	142.6	 

 Current taxes and deferred income tax assets 

At June 30, 2020, we had current taxes receivable of $112,000 and current taxes payable of $382,000, compared to current taxes receivable of
$708,000 and current taxes payable of $14,000 at June 30, 2019. In F2020 and F2019, our current tax position in Canada is net of SRED ITCs to be claimed, which are presented as a reduction of research and development expenses. Our current tax
receivable primarily relates to payments of tax instalments, and our current taxes payable relates to current taxes in jurisdictions in which we have taxable income. 

At June 30, 2020, we had total deferred income tax assets of $22.3 million, compared to $22.4 million at June 30, 2019. These
deferred tax assets are primarily attributable to the future benefit of deferred revenue balances, operating tax loss carry forwards in our U.K. operations, and to amounts relating to SRED ITCs in our Canadian operations. Management believes these
deferred income tax assets are more likely than not to be realized. 
 The Company operates in various tax jurisdictions and, accordingly, the
Company’s income is subject to varying rates of tax. Losses incurred in one jurisdiction cannot be used to offset income taxes payable in another. The Company’s ability to use income tax losses and future income tax deductions is dependent
upon the profitable operations of the Company in the tax jurisdictions in which such losses or deductions arise. 
 In assessing the recognition of
deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation
of future taxable income during the years 

  
 30 

 
in which the temporary differences are deductible. To the extent that management believes that the realization of the deferred income tax assets does not meet the more likely than not realization
criteria, deferred tax assets are not recognized. 
 Shareholders’ Deficiency and Outstanding Share Data 

At June 30, 2020, Absolute had a shareholders’ deficiency of $43.1 million. In evaluating shareholders’ deficiency, management
believes it is important to consider the $142.6 million of deferred revenue carried on the statement of financial position. Deferred revenue represents prepaid (or due to be paid in full on payment terms) and
non-refundable revenue, on which we expect to generate high margins when recognized in income, as much of the associated contract acquisition costs are already included in the operating deficit. In addition,
any common shares repurchased as part of our fiscal 2016 Substantial Issuer Bid or Normal Course Issuer Bids are recorded at an historical per share average value, and the difference between these amounts and the amount paid is recorded as part of
deficit. 
 The Company’s common shares (the “Common Shares”) trade on the Toronto Stock Exchange (the “TSX”) (TSX: ABT). At
June 30, 2020, the Company had 42,535,495 (August 10, 2020 – 42,566,003) issued and outstanding Common Shares. The following rights to receive Common Shares are issued and outstanding at June 30, 2020: 

 

	 	•	 	 Stock Option Plan: 791,171 (August 10, 2020 – 791,171) stock options granted and outstanding. The stock options
have a weighted average exercise price of CAD$7.87 per share and a weighted average term to expiry of 4.2 years. There were no stock options granted in F2020. 

 

	 	•	 	 Performance and Restricted Share Unit (“PRSU”) Plan: 617,373 (August 10, 2020 – 617,373) Performance
Share Units (“PSUs”) granted and outstanding. The PSUs have a weighted average term to expiry of 4.5 years. There were 444,033 PSUs granted in F2020. 

 

	 	•	 	 PRSU Plan: 1,811,963 (August 10, 2020 – 1,811,963) Restricted Share Units (“RSUs”) granted and
outstanding. The RSUs have a weighted average term to expiry of 1.6 years. There were 1,288,092 RSUs granted in F2020. 

  

	 	•	 	 Employee Share Ownership Plan: During F2020, the Company issued 72,023 Common Shares at a weighted average price of
CAD$6.68 per Common Share pursuant to the Company’s 2005 Employee Share Purchase Plan (the “Prior ESOP”). The Company adopted a new Employee Share Ownership Plan effective January 1, 2020 (the “New ESOP”) to replace the
Prior ESOP. Commencing July 1, 2020, Common Share issuances under this employee incentive program will be pursuant to the New ESOP. Under each of the Prior ESOP and the New ESOP, employees may purchase Common Shares issued from treasury during
two discrete offering periods each year. The issuance price of Common Shares is 85% of the lower of the closing Common Share price on the first and last day of the relevant offering period, and therefore can result in an issuance price that is below
the market price of the Common Shares on the date of issuance. 

 On October 1, 2019, the Company commenced a TSX-approved Normal Course Issuer Bid (the “2020 NCIB”) that enables the Company to purchase up to 2,663,275 of its Common Shares for cancellation or return to treasury until September 30, 2020. The
2020 NCIB allows for the purchase of up to 27,956 Common Shares on a daily basis, except where purchases are made in accordance with “block purchase” exemptions under applicable TSX policies. Prior to October 1, 2019, the Company
purchased and cancelled shares under previously TSX-approved Normal Course Issuer Bids. 
 During F2020, the
Company repurchased and cancelled 8,700 Common Shares for a total cost of $48,828 (2019 – $nil) under the 2020 NCIB. On cancellation of the Common Shares, the difference between the purchase price and the average book value of the Common Shares
were recorded as a deficit, which amounted to $32,919 (2019 – $nil). 

  
 31 

 As a measure of prudence while we monitored developing market conditions, we temporarily suspended
purchases of our Common Shares under the 2020 NCIB through June 30, 2020. Any shareholder may obtain, without charge, a copy of the notice of intention with respect to the 2020 NCIB by contacting the Company. 

Contractual Commitments 
 The Company’s minimum payments
required under other contractual commitments for business service agreements are as follows as at June 30, 2020: 
  

					
	 2021
	  	$	689,550	 
	 2022
	  	 	399,714	 
	 2023
	  	 	112,434	 
		  	  
	  
	 
		  	$	  1,201,698	 
		  	  
	  
	 

 The Company’s maturities of lease liabilities are as follows as at June 30, 2020: 

 

					
	 2021
	  	$	2,356,346	 
	 2022
	  	 	2,194,448	 
	 2023
	  	 	1,766,341	 
	 2024
	  	 	1,676,881	 
	 2025
	  	 	1,719,557	 
	 2026
	  	 	1,634,144	 
	 2027
	  	 	554,544	 
		  	  
	  
	 
		  	$	  11,902,261	 
		  	  
	  
	 

 At June 30, 2020, the weighted average remaining lease term is 6 years and the weighted average discount rate is
4.9%. 
 Off Balance Sheet Arrangements 
 We have not
entered into any off balance sheet arrangements. 
 Corporate Developments 

None. 
 Related Party Transactions 

Key management personnel compensation 
  

									
		  	 	F2020	 	  	 	F2019	 
		  	 	 	 	  	 	 	 
	 Salaries, bonus, and short-term employment benefits
	  	$	  3,921,179	 	  	$	  4,288,039	 
	 Share-based compensation
	  	 	2,761,740	 	  	 	2,998,792	 
		  				  	 	 	 
		  	$	  6,682,919	 	  	$	  7,286,831	 
		  	 	 	 	  	 	 	 

 In F2020, 15 individuals, inclusive of our Board of Directors, were included in key management personnel, as compared to
18 individuals in F2019. 

  
 32 

 Subsequent Events 

Quarterly dividend 
 On July 20, 2020, the Company
declared a quarterly dividend of CAD$0.08 per share on the Common Shares, payable in cash on August 31, 2020 to shareholders of record at the close of business on August 12, 2020. 

Employee share ownership plan 
 On July 21, 2020, 30,508
Common Shares were issued pursuant to the New ESOP. 
 Derivative financial instruments 

Through August 10, 2020, the Company entered into foreign exchange forward contracts with a notional value of $18,400,000 to hedge Canadian dollar
denominated operating expenses. 

  
 33 

 Financial Instruments 

Overview 
 The Company is exposed to risks of varying degrees
of significance which could affect its ability to achieve its strategic objectives for growth. The main objectives of the Company’s risk management process are to ensure that risks are properly identified and that the capital base is adequate
in relation to those risks. The principal financial risks to which the Company is exposed have not changed from the year ended June 30, 2019. During the year ended June 30, 2020, the Company entered into foreign exchange forward contracts
to minimize its exposure to foreign exchange rate risks. 
 Market risk 

Market risk is the risk that changes in market prices, such as fluctuations in the market prices of the Company’s publicly traded investments,
foreign exchange rates, and interest rates, will affect the Company’s income or the value of its financial instruments. The Company does not engage in risk management practices related to its investments or interest rate risks, such short
selling with respect to its investments. 
 The Company operates internationally, primarily in the United States, giving rise to exposure to market
risks from foreign exchange rates. The Company’s functional currency is the U.S. dollar. However, the Company maintains Canadian dollar net asset positions, and therefore records gains in periods of rising Canadian dollar exchange rates and
losses in periods of declining rates. Canadian dollar operating costs are converted at current exchange rates, while revenue is recorded at historic rates from when the sales contracts were recorded into deferred revenue, and as a result the
Company’s operating income decreases in periods when the Canadian dollar appreciates. 
 The Company engages in risk management practices related
to its foreign currency denominated operating expenses by hedging using derivative instruments such as foreign exchange forward contracts. 
 Foreign Currency
Sensitivity Analysis 
 Volatility in the Canadian dollar relative to the U.S. dollar could impact the Company’s current operating margins as
a significant amount of operating costs are denominated in Canadian dollars. Appreciation in the Canadian dollar would negatively impact the Company’s current operating margins, while depreciation in the Canadian dollar would positively impact
current operating margins. The Company is also exposed to fluctuations in the U.K. pound, through U.K. pound working capital balances and operating expenses. 

If unhedged, the Company’s sensitivity to a 1% strengthening of the Canadian dollar against the U.S. dollar is an approximate decrease of $273,000
in annual operating income and a $343,000 decrease in net income. This sensitivity decreases commensurate with the amount of Canadian dollar denominated operating expenses that are hedged. 

The Company’s sensitivity to a 1% strengthening of the U.K. pound against the U.S. dollar is an approximate decrease of $24,000 in annual operating
income and a $22,000 decrease in net income. For a 1% weakening of the Canadian dollar or U.K. pound against the U.S. dollar, there would be an equal and opposite impact on operating income and net income. 

The Company enters into foreign exchange forward contracts to minimize its exposure to foreign exchange rate risks. These contracts are designated as
cash flow hedges. 

  
 34 

 Liquidity Risk 

Liquidity risk is the risk that the Company is not able to meet its financial obligations as they fall due or can do so only at excessive cost. The
Company mitigates liquidity risk by holding sufficient cash and cash equivalents to meet its financial obligations. The Company’s growth is financed through cash on hand and cash flows from operations. The majority of the Company’s
financial liabilities recorded in trade and other payables are due within 60 days. 
 Given the Company’s available liquid resources as compared
to the timing of the payments of liabilities, management assesses the Company’s liquidity risk to be low. 
 Credit Risk 

Credit risk represents the financial loss that the Company would experience if a counterparty to a financial instrument, in which the Company has an
amount owing from the counterparty, failed to meet its obligations in accordance with the terms and conditions of its contracts with the Company. The carrying amount of the Company’s financial assets represents the Company’s maximum credit
exposure. 
 The Company manages credit risk related to accounts receivable by carrying out credit investigations for new customers and partners, and
by maintaining reserves for potential credit losses. The majority of the accounts receivable balance is due from well-capitalized computer manufacturers who have a history of paying on a timely basis. Accounts receivable are net of allowance for
doubtful accounts of $315,096 (June 30, 2019 - $287,954). 
 At June 30, 2020, 1% of the Company’s accounts receivable balance is over 90
days past due (June 30, 2019 – 1%). As at June 30, 2020, 55%, 16%, and 16% (June 30, 2019 - 40%, 27%, and 8%) of the receivable balances are owing from three PC OEM and distributor partners. At June 30, 2019, a fourth partner
represented 15%. 
 The Company manages credit risk related to cash, cash equivalents, and short-term investments by maintaining bank and investment
accounts with high credit quality financial institutions, including Schedule 1 banks. 
 The Company’s exposure to credit loss and market risk
will vary over time as a function of currency exchange rates. The Company measures its counterparty credit exposure as a percentage of the total fair value of the applicable derivative instruments. Where the net fair value of derivative instruments
with any counterparty is negative, the Company deems the credit exposure to that counterparty to be $nil. As at June 30, 2020, the Company had no outstanding or unsettled foreign exchange derivative instruments. 

Fair Values of Financial Instruments 
 The carrying value of
cash and cash equivalents, accounts receivable, trade and other payables and accrued warranty approximate their fair values due to the immediate or short-term nature of these instruments. Short-term investments are carried at market value using
Level 1 valuation inputs. 
 Foreign exchange 
 The
Company enters into foreign exchange forward contracts to minimize its exposure to foreign exchange rate risks, principally related to its Canadian dollar denominated operating expenses. At June 30, the Company had no outstanding foreign
exchange forward contracts. Through August 10, 2020, the Company entered into foreign exchange forward contracts with a notional value of $18,400,000, with maturity dates ranging from August 2020 to June 2021. These contracts are designated as
cash flow hedges. 
 During the year ended June 30, 2020, $244,769 (2019 - $nil) in hedging losses were recognized in operating expenses. 

 

  
 35 

 Quarterly Operating Data 
  

																	
		 	 	 	 	 	 	 	 
	 (in USD millions except share and per share data)
	  	Q4-20	  	Q3-20	  	Q2-20	  	Q1-20	  	Q4-19	  	Q3-19	  	Q2-19	  	Q1-19
		 	 	 	 	 	 	 	 
	 Revenue(1)
	  	27.2	  	26.1	  	25.8	  	25.7	  	25.3	  	24.9	  	24.4	  	24.3
		 	 	 	 	 	 	 	 
	 Adjusted EBITDA(2)
	  	8.0	  	6.1	  	6.2	  	7.1	  	4.9	  	5.8	  	4.5	  	4.1
		 	 	 	 	 	 	 	 
	 Adjusted EBITDA – pre IFRS 16(2)
	  	7.5	  	5.5	  	5.7	  	6.6	  	4.9	  	5.8	  	4.5	  	4.1
		 	 	 	 	 	 	 	 
	 Net income(3)
	  	2.2	  	2.3	  	2.7	  	3.5	  	2.0	  	2.5	  	1.8	  	1.3
		 	 	 	 	 	 	 	 
	 Basic income per share
	  	0.05	  	0.05	  	0.06	  	0.08	  	0.05	  	0.06	  	0.04	  	0.03
		 	 	 	 	 	 	 	 
	 Diluted income per share
	  	0.05	  	0.05	  	0.06	  	0.08	  	0.05	  	0.06	  	0.04	  	0.03
		 	 	 	 	 	 	 	 
	 Cash from Operating Activities(4)
	  	11.6	  	3.7	  	2.2	  	7.5	  	3.5	  	0.9	  	1.9	  	4.0
		 	 	 	 	 	 	 	 
	 Dividends paid
	  	2.5	  	2.5	  	2.5	  	2.5	  	2.5	  	2.5	  	2.4	  	2.5
		 	 	 	 	 	 	 	 
	 Repurchases of Common Shares
	  	0.0	  	0.0	  	0.0	  	0.0	  	0.0	  	0.0	  	0.0	  	0.0
		 	 	 	 	 	 	 	 
	 Number of Common Shares outstanding
	  	42.5	  	42.5	  	42.3	  	41.8	  	41.6	  	41.6	  	40.6	  	40.4

  

	(1)	 Our revenues have increased on a quarterly basis as a result of historical increases in Total ARR, which we believe is
a leading indicator for future revenue growth. Total ARR has increased as a result of Net ARR Retention and incremental ARR from New Customers. 

  

	(2)	 Please refer to the “Non-IFRS Measures” section of this MD&A for
a description of Adjusted EBITDA and Adjusted EBITDA – pre-IFRS 16. Adjusted EBITDA and Adjusted EBITDA – pre IFRS 16 have improved over the periods presented as a result of improved revenues and
stable, or decreased, Adjusted Operating Expenses. 

  

	(3)	 Net income has remained stable throughout the periods presented, and results from improved revenue, increased operating
income, and reflecting the impact of changes in income tax expense. 

  

	(4)	 Cash from Operating Activities has increased throughout F2020 as compared to F2019 primarily as a result of increased
Billings and stable Adjusted Operating Expenses. 

 Critical Accounting Policies and Estimates 

Management considers the Company’s accounting for revenue, contract acquisition assets, and deferred income taxes to be critical accounting
policies. An understanding of the accounting policies for these items is important for meaningful analysis of Absolute’s business. 
 As of the
date of this MD&A, the impacts of the COVID-19 pandemic continue to unfold. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and
volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. See “Risks and Uncertainties” below. 

Revenue 
 We operate a cloud-based service, which leverages
patented embedded self-healing Persistence technology residing on a customer’s endpoint computing devices. The service allows a client to maintain visibility and control over its endpoints, and includes features such as reporting and analytics,
geotechnology, risk assessment, risk response, and endpoint investigation and recovery. We provide access to the service to our clients on a subscription basis. 
  

We principally derive our revenues from two sources: subscription revenues, which are comprised of subscription fees from customers accessing the
Company’s enterprise cloud computing services 

  
 36 

 
(collectively, “Cloud Services”); and related professional services such as project implementation and other short-term consulting services, in addition to longer-term services such as
device lifecycle and technical account management services. Cloud Services revenue subscriptions are typically for terms ranging between one and five years. Other revenue consists primarily of ancillary business lines such as our consumer and
digital subscriber management products. 
 Revenue is recognized upon transfer of control of promised products and services to customers in an amount
that reflects the consideration we expect to receive in exchange for those products or services. If the consideration promised in a contract includes a variable amount, for example, contingent fees or service level penalties, we include an estimate
of the amount we expect to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur. 

The Company determines the amount of revenue to be recognized through application of the following steps: 

 

	 	•	 	 Identification of the contract, or contracts with a customer; 

 

	 	•	 	 Identification of the performance obligations in the contract; 

 

	 	•	 	 Determination of the transaction price; 

 

	 	•	 	 Allocation of the transaction price to the performance obligations in the contract; and 

 

	 	•	 	 Recognition of revenue when or as the Company satisfies the performance obligations. 

We obtain the majority of our customer arrangements through our PC OEM and reseller partners, most of which are based in North America. All revenues are
recorded at the net amount received from the reseller, provided that all significant contractual obligations have been satisfied. For direct sales, revenues are recorded at the amount received from the end customer. 

Our subscription service arrangements are non-cancelable and do not contain refund-type provisions. 

 

	(a)	 Subscription and Support Revenues 

Subscription and support revenues are comprised of fees that provide customers with access to Cloud Services, software licenses and related support and
updates during the term of the arrangement. 
 Cloud Services arrangements allow customers to use our hosted software without taking possession of the
software. Revenue is generally recognized ratably over the contract term. 
 We typically invoice our reseller partners upon execution of the contract
and fulfillment of services to the end customer. We typically execute a new contract for subsequent renewals or follow on orders. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue. 

 

	(b)	 Professional Services and Other Revenues 

Our professional services contracts are generally on either a fixed fee or subscription basis. These revenues are recognized on a proportional
performance basis for fixed price contracts, and ratably over the contract term for subscription managed professional services contracts. 
 Revenues
for our consumer products are generally recognized on a subscription fee basis as described above under “Subscription and Support Revenues”. Revenues for our digital subscriber management products are typically recognized in arrears
pursuant to the terms of those arrangements. 

  
 37 

 Significant Judgments - Contracts with Multiple Performance Obligations 

We enter into contracts with our customers that may include promises to transfer multiple Cloud Services and professional services. A performance
obligation is a commitment in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one
unit of accounting may require significant judgment. 
 Cloud Services are distinct as such services are often sold separately. In determining whether
professional services are distinct, we consider the following factors for each type of professional services agreement: the availability of the services from other vendors; the nature of the professional services; the timing of when the professional
services contract was signed in comparison to the start date of any related Cloud Services; and the contractual dependence of the professional services on the Cloud Services. 

We allocate the transaction price to each distinct performance obligation on a relative standalone selling price (“SSP”) basis. The SSP is the
price at which we would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. 

We determine SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the
Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where services are sold, price lists, its
go-to-market strategy, historical sales and contract prices. As our go-to-market
strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. 
 In certain cases, we are able
to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company generally uses a range of SSP when it has observable prices. 

If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range
using information that may include market conditions or other observable inputs. The Company may have more than one SSP for individual products and services due to the stratification of those products and services by customer size, geography, and
the other factors noted above. 
 Contract Acquisition Assets 

Incremental costs of obtaining sales contracts are capitalized and amortized. These costs are presented as separate current and non-current assets in the consolidated statement of financial position. Costs incurred to acquire new customer contracts are amortized over the estimated period of benefit, including renewal periods, unless
additional costs are anticipated to be incurred to obtain renewal contracts and those costs are commensurate with the costs incurred to obtain the contract originally. 

The capitalized amounts consist primarily of sales commissions paid to the Company’s direct and indirect sales force. Capitalized amounts also
include: amounts paid to employees other than the sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired; the associated payroll taxes associated with the payments to the
Company’s employees; and to a lesser extent, costs incurred under a branding agreement with a third party, and success fees paid to partners in emerging markets where the Company has a limited presence. 

As noted above, contract acquisition assets are amortized on a straight-line basis commensurate with the average term of the contracts acquired related
to the payments made. The capitalized amounts are recoverable through future revenue streams under all non-cancelable customer contracts. The Company periodically evaluates whether there have been any changes
in its business, the market conditions in which it operates, or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. 

  
 38 

 Amortization of contract acquisition assets is included in sales and marketing expense in the
consolidated statement of operations. 
 Deferred Income Taxes 

The Company has recognized deferred tax assets on its Statement of Financial Position. Each reporting period, management assesses the likelihood of
realizing deferred tax assets. Where management considers that it is more likely than not that some portion or all of the future tax assets will be realized, the estimated realizable value of the future tax asset is recognized on the statement of
financial position. The net income or loss after income taxes can vary widely in periods where tax assets are recognized and such variances could result from a material write-down or increase in the estimated value of the Company’s deferred tax
assets. 
 Derivative financial instruments and hedge accounting 

The Company enters into derivative financial instruments such as foreign exchange forward contracts to manage its exposure to foreign exchange rate
risks. The Company does not use derivative financial instruments for speculative purposes. 
 Derivatives are recognized initially at fair value at
the date a derivative contract is entered into and are subsequently measured to their fair value at each reporting date. The Company records all derivative instruments at fair value on the consolidated statements of financial position. The fair
value of these instruments is calculated based on notional and exercise values, transaction rates, market quoted currency spot rates and forward rates and therefore fall into Level II of the fair value hierarchy. 

The Company designates foreign exchange forward contracts as hedging instruments. Hedges of foreign exchange risk are accounted for as cash flow hedges.

 For derivative instruments designated as cash flow hedges, the entire change in the value of the hedging instrument included in the assessment of
hedge effectiveness is initially reported as a component of other comprehensive income (“OCI”), net of tax, and subsequently reclassified into income in the same period or periods in which the hedged item affects income. 

At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its
risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is effective in offsetting changes in
fair value or cash flows of the hedged item attributable to the hedged risk. This documentation includes: identification of the specific foreign currency asset, liability or forecasted transaction being hedged; the nature of the risk being hedged;
the hedge objective; and the method of assessing hedge effectiveness. If an anticipated transaction is deemed no longer likely to occur, the corresponding derivative instrument is de-designated as a hedge and
any associated unrealized gains and losses in OCI are recognized in income at that time. 
 The Company designates the full change in the fair value
of a foreign exchange forward contract (i.e. including the forward elements) as the hedging instrument for all of its hedging relationships involving forward contracts. 

For any derivative instruments that do not meet the requirements for hedge accounting, or for which hedge accounting is not elected, the changes in fair
value of the instruments are recognized in income in the current period and will generally offset the changes in the U.S. dollar value of the associated asset, liability or forecasted transaction. 

  
 39 

 New Accounting Pronouncements 

Standards Adopted in F2020 
 IFRS 16 –
“Leases” (“IFRS 16”) 
 In January 2016, the IAB issued IFRS 16, which outlines the accounting for lease arrangements. Generally,
IFRS 16 eliminates a lessees’ classification of leases and introduces a single lessee accounting model. The most significant effect of the new standard is the lessee’s recognition of the initial present value of unavoidable future lease
payments as right of use assets and lease liabilities on the statement of financial position. Leases with durations of 12 months or less, and leases for low-value assets, are both exempted from the standard.

 The total expense recognized over the term of a lease will be unaffected by IFRS 16. However, it results in the recognition of amortization of the
right of use asset and of interest expense, as opposed to operating lease expense previously being recognized as a period cost in the statement of operations. As a result, the timing of lease expense recognition is accelerated for leases which were
previously accounted for as operating leases. 
 Effective July 1, 2019, the Company adopted IFRS 16 using the modified retrospective method,
with the cumulative effect of initially applying the new standard recognized in retained earnings on that date. Comparative figures were not adjusted. 

Upon adoption of IFRS 16, the Company recognized lease liabilities in relation to leases which had previously been classified as operating leases under
the principles of International Accounting Standard (“IAS”) 17, “Leases”. These liabilities are measured at the present value of the remaining fixed lease payments, discounted using the Company’s incremental borrowing
rate as at July 1, 2019. The weighted average incremental borrowing rate applied to lease liabilities recognized in the consolidated balance sheet on July 1, 2019 was 5.48%. 

The associated right of use assets were primarily measured as if the standard had been applied since the commencement date of the lease, but discounted
using the Company’s incremental borrowing rate at the date of initial application. Certain right of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any tenant incentives and direct costs incurred
relating to the lease recognized in the balance sheet as at July 1, 2019. 
 In applying IFRS 16 for the first time, the Company has used the
following practical expedients permitted by the standard: 
  

	 	•	 	 the Company has not reassessed contracts that were identified as leases under the previous accounting standard (IAS 17
and International Financial Reporting Interpretations Committee (“IFRIC”) Interpretation 4, “Determining Whether an Arrangement Contains a Lease”; 

 

	 	•	 	 the Company has applied a single discount rate to a portfolio of leases with reasonably similar underlying
characteristics; 

  

	 	•	 	 the Company has excluded initial direct costs in the measurement of the right-of-use asset on transition; 

  

	 	•	 	 the Company accounted for real estate operating leases with a remaining lease term of less than 12 months as at
July 1, 2019 as short-term leases; and 

  

	 	•	 	 the Company has used hindsight in determining the lease term where the lease contracts contain options to extend or
terminate the lease. 

  
 40 

 The following table summarizes the adjustments to opening balances resulting from the initial adoption
of IFRS 16: 
  

													
		  	 

	As previously
reported –
June 30, 2019	 
 
 	  	 

	IFRS 16
transition
adjustments	 
 
 	 	 
	Balance –
July 1, 2019	
 
		  	 	 	 	  	 	 	 	 	 	 	 
	 Assets
	  				  				 			
	 Right of use assets
	  	 	-	 	  	$	8,917,373	 	 	$	8,917,373	 
				
	 Liabilities
	  				  				 			
	 Trade and other payables
	  	$	19,034,996	 	  	 	(782,278	) 	 	 	18,252,718	 
	 Lease liabilities - current
	  	 	-	 	  	 	1,601,223	 	 	 	1,601,223	 
	 Lease liabilities
	  	 	-	 	  	 	8,098,428	 	 	 	8,098,428	 

 The following table reconciles the change in lease liabilities upon transition at July 1, 2019: 

 

					
	 Operating lease commitments, June 30, 2019
	  	$	5,988,145	 
	 Adjustments as a result of the inclusion of renewal option(s)
	  	 	9,685,221	 
	 Effect of discounting using the Company’s incremental borrowing rate
	  	 	(5,973,715	) 
		  	  
	  
	 
	 Balance, July 1, 2019
	  	 	9,699,651	 
	 Less: current portion
	  	 	(1,601,223	) 
		  	  
	  
	 
		  	$	8,098,428	 
		  	  
	  
	 

 Evaluation of Disclosure Controls and Internal Controls over Financial Reporting 

Disclosure controls and procedures 
 The Company has
disclosure controls and procedures in place that are designed to provide reasonable assurance that material information relating to Absolute is disclosed on a timely basis. Management has reviewed the Company’s disclosure controls and concluded
that they were effective during the reporting period. 
 The Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) have evaluated the
effectiveness of the Company’s disclosure controls and procedures related to the preparation of Management’s Discussion and Analysis and the consolidated financial statements. They have concluded that the Company’s disclosure controls
and procedures were effective, at a reasonable assurance level, to ensure that material information relating to the Company and its consolidated subsidiaries would be made known to them by others within those entities, particularly during the period
in which the Management’s discussion and analysis and the consolidated financial statements contained in this report were being prepared. 
 Internal control
over financial reporting 
 The Company has also designed internal controls over financial reporting to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Absolute’s CEO and CFO have assessed the effectiveness of the Company’s internal control over financial reporting
as at June 30, 2020 in accordance with Internal Control – Integrated Framework 2013, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, Absolute’s CEO and CFO have
determined that the Company’s internal control over financial reporting is effective as at June 30, 2020 and expect to certify Absolute’s annual filings with the Canadian securities regulatory authorities. 

  
 41 

 Changes in internal control over financial reporting 

There were no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting. 
 Risks and Uncertainties 

This section describes the principal risks that could have a material and adverse effect on the Company’s business, products, reputation, financial
condition, stock price, operating results, and/or prospects. In addition to the risks outlined in this MD&A, there may be other risks and uncertainties that are not known to the Company or that the Company currently believes are not material,
but which may also have a material adverse effect on the Company’s business, products, reputation, financial condition, stock price, operating results, and/or prospects. In addition to the other information set forth elsewhere in this MD&A,
in the AIF, and in the Company’s other public disclosure filings, current and prospective investors should carefully review the risk factors set forth below. Our discussion in this section is qualified in its entirety by the cautions regarding
forward-looking statements at the beginning of this MD&A. 
 COVID-19 Impacts – The continuing
global health, social, political, and economic implications of the COVID-19 pandemic are highly unpredictable and could have significant impacts on our business, operations, future financial performance, and
the market price of the Common Shares. As a result of the scale of the pandemic and the speed at which the global community has been impacted, our current and future financial performance, including our quarterly and annual revenue growth rates and
expenses as a percentage of our revenues, may differ significantly from our historical performance, and our future operating results may fall below expectations. The impacts of the pandemic on our business, operations, and future financial
performance could include, but are not limited to: 
  

	 	•	 	 A significant decline in revenue as customer spending slows due to an economic downturn and/or as customer demand
otherwise decreases. This decline in revenue could persist through and beyond a recessionary period. 

  

	 	•	 	 Adverse impacts to our growth rates, cash flows, and margins -particularly if expenses do not decrease across our
business at the same pace as revenue declines. Many of our expenses are less variable in nature and may not correlate to changes in revenues, such as depreciation and other costs associated with our hosting operations and office facilities, customer
support, and other infrastructure maintenance costs. As such, we may not be able to decrease them significantly in the short-term, or we may choose not to significantly reduce them in an effort to remain focused on our long-term outlook and
opportunities. 

  

	 	•	 	 Major disruptions to the respective businesses of the Company’s principal PC OEM and other partners which could
have a material impact on the Company’s business, operations, prospects, and revenues, and accordingly the Company’s financial position. 

  

	 	•	 	 Significant supply chain constraints such that we cannot procure the servers and other technology infrastructure needed
to deliver our services to our customers. Supply chain constraints could also affect our ability to sell via our PC OEM and other partners in conjunction with their hardware sales. Increased pricing of these components could also affect
infrastructure costs to deliver our services. 

  

	 	•	 	 The COVID-19 pandemic has caused organizations globally to rapidly and broadly
shift to remote working, which has resulted in certain inherent productivity, connectivity, and oversight challenges. Continued and/or new governmental lockdowns, restrictions, or regulations arising from the
COVID-19 pandemic (and any subsequent waves of the pandemic) which restrict the movement of people in the jurisdictions in which we operate could significantly impact the ability of our employees, partners,
customers, and vendors to work productively. Governmental restrictions have been globally inconsistent and it is not clear if and when return to worksite locations or travel will be permitted, for how long, or what restrictions will be in place in
these jurisdictions at any given 

  
 42 

	 	 
time. The extent and/or duration of ongoing workforce restrictions and limitations could impact our ability to enhance, develop, and support existing products and services, hold sales, marketing,
and employee events, and generate new sales leads, among others. In addition, the changed environment under which we are operating could have an impact on our internal controls over financial reporting as well as our ability to meet a number of our
compliance requirements in a timely manner. 

  

	 	•	 	 Ongoing significant foreign exchange volatility which could materially impact our revenues that are denominated in
foreign currencies and our ability to hedge our foreign exchange exposure. Additionally, volatility in debt and equity markets could affect the values of our debt and equity holdings and the realized gains or losses on the disposition of those
holdings. 

 Ability to Predict Rate of Growth and Profitability – Absolute focuses on four key performance metrics:
Revenue, Adjusted EBITDA, the change in Total ARR (resulting from Net ARR Retention and ARR from New Customers), and Cash from Operating Activities. Due to, among other things, the evolving SaaS business model and the unpredictability of our
emerging and competitive category of information security products, Absolute may not be able to accurately forecast the rate of adoption of its services and hence its revenue growth and profitability. Absolute bases its current and future expense
levels and its investment plans on estimates of future revenue growth. Absolute may not be able to adjust its spending quickly enough if the rate of new or renewed subscriptions falls short of its expectations. In addition, the significant
competition we face in the sales of our products and services and general economic and business conditions (including foreign exchange rates) can put pressure on us to change our prices. If our competitors offer deep discounts on certain products or
services or develop products that the marketplace considers more valuable, we may need to lower our prices or offer other favorable terms in order to compete successfully. Any such changes may reduce margins and could adversely affect operating
results. Also, Absolute’s operating results may fluctuate significantly on a quarterly basis. In addition, we expect that COVID-19 and its effects on the global economy and on our current and prospective
customers could impact our revenue growth rate. Accordingly, period-to-period comparisons of our operating results may not necessarily be a meaningful indicator of
future performance. 
 Dependence on PC OEMs and Distribution Channels – Absolute’s Persistence technology and product and sales
strategies are heavily dependent on its ability to maintain its embedded BIOS/UEFI firmware positions with its PC OEM partners. In addition, Absolute generates a substantial portion of its revenue through PC OEM channels and other distribution
partners. Our solutions (including our Persistence technology) may compete with other solutions developed and/or marketed by a PC OEM or other distribution partner or otherwise lose favour with these partners. Our PC OEM and other distribution
partners may also cease or reduce marketing our solutions with limited or no notice and with little or no penalty. New PC OEM and distribution partners require extensive training and may take several months or more to achieve productivity. If any of
our PC OEM partners elect to not embed, or reduce the prevalence of, our Persistence technology or favour competing products, Absolute may have to change its product strategies, which could have a material adverse effect on Absolute’s business,
operating results and financial condition. In addition, if any of our PC OEM or other distribution partners cease or reduce marketing our solutions and/or experience reductions in sales of our solutions and/or we fail to manage these important sales
and distribution channels effectively, Absolute may have to change its sales strategies, which could have a material adverse effect on Absolute’s business, operating results and financial condition. 

Economic and Political Uncertainty – Current and future global economic, political, and social conditions remain volatile and uncertain,
especially due to the COVID-19 pandemic. As a result, it is difficult to estimate the level of growth or contraction for the global economy as a whole. It is even more difficult to estimate economic growth or
contraction in various sectors and regions, including the markets in which the Company operates. Because all components of the Company’s budgeting and forecasting are dependent upon estimates of growth or contraction in the markets it serves
and the demand for its products and services, the prevailing economic uncertainties render estimates of future income and expenditures very difficult to make. Adverse changes may occur as a result of the impacts of the
COVID-19 pandemic or the continued prevalence of public health crises, wavering consumer confidence, unemployment, declines in stock 

  
 43 

 
markets, contraction of credit availability, declines in real estate values, stagnant economic conditions, increasing nationalism and protectionism, trade tensions and tariff uncertainty,
political deadlock, social unrest, or other factors affecting economic conditions generally. These changes may negatively affect the sales of our services and, therefore, may impact our ability to meet our targets for Total ARR, Revenue, Adjusted
EBITDA, and Cash from Operating Activities. 
 Ability to Attract New Customers – To expand our customer base, we need to convince
potential customers to allocate a portion of their discretionary budgets to purchase our solutions. Our sales efforts often involve educating our prospective customers about the uses and benefits of our solutions. Enterprises and governments that
use other forms of network and/or endpoint security products for their IT security may be hesitant to purchase our solutions if they believe that these products are more cost effective, provide substantially the same functionality as our solutions,
or provide a level of IT security that is sufficient to meet their needs. We may have difficulty convincing prospective customers of the value of adopting our solution. Even if we are successful in convincing prospective customers that a persistent
solution like ours is critical to protect against cyberattacks, they may not decide to purchase our solutions for a variety of reasons some of which are out of our control. For example, any deterioration in general economic conditions, including a
downturn due to COVID-19, may cause our customers to cut their overall security and IT operations spending, and such cuts may fall disproportionately on cloud-base security solutions like ours. Economic
weakness, customer financial difficulties, and constrained spending on security and IT operations may result in decreased revenue, reduced sales, lengthened sales cycles, increased churn, lower demand for our products, and adversely affect our
results of operations and financial conditions. If organizations do not continue to adopt our solutions, our sales will not grow as quickly as anticipated, or at all, and our business, results of operations, and financial condition would be harmed.

 Ability to Renew and Grow Existing Customers – In order for us to maintain or improve our financial and operational results, it is
important that our existing customers renew their subscriptions for our solutions when existing contract terms expire, and that we expand our commercial relationships with our existing customers by selling and deploying to more endpoints in their
environments, selling additional types of services, and/or moving these customers to higher tiers of our solutions. Our customers typically have no obligation to renew their subscription for our solutions after the expiration of their contractual
subscription period, and in the normal course of business, some customers have elected not to renew. In addition, our customers may seek to renew for shorter contract subscription lengths, reduce the number of endpoints deployed in their
environment, or downgrade to lower tiers of our solutions. Our customer retention and expansion may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our services, our pricing, customer security
and networking issues and requirements, our customers’ spending levels, decreases in the number of endpoints to which our customers deploy our solutions, mergers and acquisitions involving our customers, industry developments, competition and
general economic conditions. We are focused on maintaining or increasing our customer renewal and growth rates efficiently and cost effectively, including via our recent partnership with ServiceSource, a third party outsourced sales renewal
organization. However, if our efforts to maintain and expand our relationships with our existing customers are not successful, our business, results of operations, and financial condition may materially suffer. 

Operating Systems – Absolute has designed the majority of its services to operate on certain generations of Microsoft Windows and other
operating systems. The development by Microsoft of new versions of Windows and/or upgrades or updates to Windows or other operating systems and/or the market adoption of these or other operating systems developed by other vendors may have an adverse
effect on Absolute’s business if the Company is not able to adapt its technology to be compatible with these new operating systems. In addition, end users may want to deploy our products and services in computing environments with operating
systems, software and/or hardware different than those in which we test our products and services before release or where our products are not compatible. The costs incurred in analyzing, correcting or eliminating any material defects or errors in
our software may be substantial. Furthermore, we may not be able to correct any defects or errors or promptly address any vulnerabilities or compatibility issues with our products which could have a material adverse effect on Absolute’s
business, operating results and financial condition. 

  
 44 

 Changing Buying Patterns in the Education Vertical – Absolute has historically generated a
significant portion of its revenue from the Education vertical, specifically K-12 customers. In certain recent past quarters, we have seen volatility and declines in the Total ARR in the Education vertical,
which we believe reflect a secular trend specific to this sector. While customers in the enterprise and government sectors generally associate the value of our solutions with the protection of information, many of our customers within the Education
sector have historically associated the value of our solutions with the protection and recovery of devices. We continue to experience a shifting trend in the mix of devices that customers in the Education vertical are purchasing, away from higher
cost devices to lower cost, cloud-based devices. We have yet to see this shifting trend stabilize and, as a result, we have experienced pressure on our average selling prices and our Net ARR Retention in the Education sector. 

In Q4-F2020 the COVID-19 pandemic caused an increasing number of schools
to rapidly procure and seek to secure mobile computing systems for students, teachers, and administrators, in order to stand up and secure distance learning programs. This led to increased demand for our solutions and increased revenues from our
Education vertical. However, there is no assurance that this vertical trend will continue into coming quarters or permanently, or that we will continue to see increased demand and increased revenue from the Education vertical as a result of COVID-19 impacts. 
 Further, we believe that our current and intended future investments in our Intelligence
initiative will result in product enhancements that will assist educators in gaining valuable insights into the value of their technology investments as well as assist them in managing their diverse technology landscapes. However, these enhancements
are still being developed and gradually introduced to the market, and therefore their continuing impact on our education business remains to be proven. As a result, we expect results in the Education vertical to continue to fluctuate in the near
term. A continued decline of sales in our Education vertical could materially affect our business and financial condition, especially if such revenue loss is not adequately offset by revenue growth in our other verticals. 

Emerging Products and Technology – The market for Absolute’s products continues to evolve and continued growth and demand for, and
acceptance of, these products remains uncertain. In addition, other emerging technology and products may impact the viability of the market for Absolute’s products. Absolute’s continued success will depend upon its ability to keep pace
with technological and marketplace change and to introduce, on a timely and cost-effective basis, new and enhanced products that satisfy changing customer requirements and achieve market acceptance. There can be no assurance that Absolute will be
able to respond effectively to changes in technology or customer demands. Moreover, there can be no assurance that Absolute’s competitors or current partners (including PC OEMs) will not develop competitive products or that any such products
will not have an adverse effect upon Absolute’s business, financial condition or results of operations. 
 Absolute’s products and
technologies are not available for all existing and emerging mobile computers and other mobile devices that are or will be available in the marketplace, and some features of Absolute’s products are offered for only some devices. For example,
Absolute’s Persistence technology is not currently embedded in Apple devices or on Google Chromebooks. Absolute targets its product development efforts towards those devices and operating systems that Absolute believes have the best strategic
value to the Company. Absolute may not be successful in identifying future trends in the marketplace for these devices on a timely basis, or in creating or adapting Absolute’s products and features for enough of the devices that are available.
If the present decline in PC and tablet sales continues, or if Absolute’s customers replace their existing mobile computers and mobile devices with other devices for which Absolute has not developed products, our revenue may decline and our
results from operations may be adversely impacted. 
 Product Errors, Defects, or Vulnerabilities – The software technology enabling
Absolute’s software services is complex and the related application software may contain errors, vulnerabilities or defects, especially when upgrades or new versions are released. Any errors or vulnerabilities that are discovered after
commercial release could result in loss of revenues or delay in market acceptance, diversion of development resources, damage to Absolute’s reputation, increased service and warranty costs, liability claims and our end-customers’ unwillingness to buy products from us. In addition, it is possible that the Company’s product may become the subject of a third party attack or disruption, whether malicious or

  
 45 

 
otherwise. This could detrimentally affect the persistence of the Company’s technology, which could have a material adverse effect on its business. 

Breach of Security Measures and Unauthorized Access – The Company’s service involves the storage, processing and transmission of
significant amounts of data which may include certain personally identifiable information (PII) and protected health data (PHI), depending on applicable legal definitions and parameters in different jurisdictions. Internal or external security
incidents or breaches could expose the Company to a risk of loss of this information, litigation, and possible liability. If our data security measures are inadequate or interfered with or breached as a result of third-party action, employee error,
malfeasance or otherwise, during the transfer of data to additional data centers or at any time, and, as a result, someone obtains unauthorized access to our data or our customers’, partners’, or employees’ data, our reputation could
be damaged, our business may suffer, and we could incur significant liability. Absolute remains potentially vulnerable to additional known or unknown threats that elude our detection, investigation, and prevention efforts, and the Company may be
unable to anticipate new attack techniques or may not have time to implement adequate preventative measures, including recommended upgrades, patches or improvements for individuals or entities utilizing unlicensed or outdated versions of our product
or agent. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and Absolute could lose sales, channel partners, and existing and potential customers. In
addition, our customers may authorize third-party service providers to access their customer data. Because the control of these third-party service providers is undertaken by our customers, Absolute cannot ensure the complete integrity or security
of such transmissions or processing. 
 Data Security and Hacking – Increasingly, organizations are subject to a wide variety of attacks
on their networks. In addition to traditional computer “hackers,” malicious code (such as viruses and worms), employee theft or misuse, denial of service attacks, ransomware, malware and sophisticated government and government-supported
actors now engage in incidents and attacks (including advanced persistent threat intrusions), and add to the risks to our internal networks and the information they store, manage and process. It is virtually impossible for Absolute to entirely
mitigate these risks (especially as it relates to unlicensed or outdated versions of our product or agent). Any such security incident or breach could compromise our networks, creating system disruptions or slowdowns and exploiting security
vulnerabilities of our products, and the information stored on our networks could be accessed, publicly disclosed, lost, or stolen, which could subject us to liability and cause us financial harm. These breaches, or any perceived breach, may also
result in damage to our reputation, negative publicity (through research reports or otherwise), loss of partners, end-customers and sales, increased costs to remedy any problem, and costly litigation and may
result in the Company’s business, operating results and financial condition being materially adversely affected. 
 Privacy Laws –
Absolute’s customers use our service to transmit, receive and store certain identifying information regarding their computing devices in various jurisdictions, including, in some instances, location information. Our Absolute products and
monitoring system are developed to ensure that forensic components or tools that enable personal information to be obtained from host computers are not resident in the products during normal use, and are only implemented and used by Absolute’s
trained and authorized experts in the case of emergency or with our customer’s explicit consent. Certain of this information may be considered to be personally identifiable information. For example, location information may be obtained as part
of normal use, and we instruct and rely on our customers to obtain the required notices and consents for such geolocation tracking. If a customer fails to give the required notice or obtain the consent required by law, we may not be aware of the
breach and could be in violation of applicable privacy laws. Federal, provincial, state and certain foreign governmental bodies and agencies are experiencing heightened sensitivity to privacy issues and have adopted or are considering adopting laws
and regulations regarding the collection, use and disclosure of personal information obtained from consumers and individuals. The costs of compliance with, and other burdens imposed by, such evolving laws and regulations that are applicable to the
businesses of our customers may limit the use and adoption of our service and reduce overall demand for it. Even the perception of privacy concerns, whether or not valid, may inhibit market adoption of our service in certain industries or
jurisdictions. 

  
 46 

 Management of Growth – Absolute has remained focused on sales growth. This has resulted,
at times, in increasing headcount and operational costs to generate and support this growing customer base, which has placed, and will continue to place, to the extent that Absolute is able to sustain such growth, significant strain on
Absolute’s management, administrative, operational and financial infrastructure. Absolute anticipates that further growth will be required to address increases in the customer base, further development of our products, and expansion into new
geographic areas, amongst other areas of our business and operations. Further growth will require Absolute to continue to hire, train and manage new employees as needed. If new hires perform poorly, or if we are unsuccessful in hiring, training,
managing and integrating new employees, or if Absolute is not successful in retaining existing employees, our business may be harmed. In addition, we may look to expand our engineering and sales teams in an attempt to increase sales growth. Such
sales growth may not match or exceed the increase in operating costs associated with hiring, training, managing and integrating of such employees. 

Efforts to Sell to Larger Enterprise Customers – As Absolute continues to direct more sales efforts at larger enterprise customers, the
Company could face greater costs, less favourable commercial and contract terms and conditions, greater due diligence and technical scrutiny, longer sales cycles, less predictability in completing some sales and greater fluctuation in sales and cash
flow in quarters where these large deals conclude. In this market segment, the customer’s decision to use Absolute’s service or products may be an enterprise-wide decision and, if so, these types of sales may require Absolute to provide
increased product discounts, additional global support and professional services, increased service level availability, greater levels of education and training regarding the use and benefits of the service, as well as education regarding privacy
and data protection laws and regulations to prospective customers with international operations. As a result of these factors, these sales opportunities may require Absolute to devote greater sales support and professional services resources to
individual customers, driving up costs and time required to complete sales and diverting sales and professional services resources to a smaller number of larger transactions. 

Development of Brand – Absolute believes that developing and maintaining awareness of its proprietary corporate and product brands in a
cost-effective manner is critical to achieving widespread acceptance of its existing and future services and is an important element in attracting new customers. Further, Absolute believes in the increased importance of brand recognition as
competition in our market intensifies. Successful promotion of our brands will depend largely on the effectiveness of our marketing and communications efforts and on our ability to provide reliable secure and useful services at competitive prices.
If Absolute fails to successfully promote, maintain, and protect its brands, or incurs substantial expenses in an unsuccessful attempt to promote and maintain its brands, Absolute may fail to attract enough new customers or retain existing customers
to the extent necessary to realize a sufficient return on brand-building efforts. 
 Cyclical Nature of our Business – Our business may be
impacted from time to time by the general cyclical and seasonal nature of PC and other device purchases by corporate, education and governmental entities. For instance, in the education sector, greater technology purchases tend to occur in our
fiscal Q4, in line with school-year-end purchasing cycles. Other factors which may create cyclical fluctuations include the development and adoption of new operating system software, the expiry of leases on
devices or the introduction of newer or more advanced devices, legal and regulatory requirements, and the timing of contract renewals between our partners and their own customers. Since some of our revenue from particular products and services are
tied to the volume of shipments being processed, adverse fluctuations in the volume of global shipments may adversely affect our revenues. There can be no assurance that declines in shipment volumes in the United States or internationally will not
have a material adverse effect on our business. 
 Competition – It is possible that new competitors will enter the markets we operate in.
Several potential competitors (including PC OEMs) are marketing or have announced the development of products and related patents that could be in direct competition with Absolute. In addition, as Absolute develops new products and services, we may
begin competing against companies with whom it did not previously compete. Many of these competitors have greater financial, technical, marketing, sales, and other resources, greater name recognition, longer operating histories, and a larger base of
customers than we 

  
 47 

 
do. They may be able to devote greater resources to the development, promotion, and sale of services than we can, and they may offer lower pricing than we do. Further, they may have greater
resources for research and development of new technologies, the provision of customer support, and the pursuit of acquisitions, or they may have other financial, technical, or other resource advantages. Our larger competitors may have substantially
broader and more diverse product and services offerings as well as routes to market, which allows them to leverage their relationships based on other products or incorporate functionality into existing products to gain business in a manner that
discourages users from purchasing our solutions. Conditions in our market could change rapidly and significantly as a result of technological advancements, partnering or acquisitions by our competitors or continuing market consolidation..
Accordingly, competition could have a material adverse effect on Absolute’s business, financial condition and results of operations. 

Research and Development – We believe that we must continue to dedicate a significant amount of resources to our research and development
efforts to maintain and develop our solutions and maintain and enhance our competitive position. We recognize the costs associated with these research and development investments earlier than the anticipated benefits, and the return on these
investments may be lower, or may develop more slowly, than we expect. If we spend significant resources on research and development and are unable to generate an adequate return on our investment, our business, financial condition and results of
operations may be materially and adversely affected. 
 Interruptions or Delays in Service from our Third-Party Hosting Facilities –
Absolute currently serves its customers from facilities that include third-party hosting facilities located on the west coast of both Canada and the United States and certain cloud service providers. Damage to, or failure of, our and our
vendors’ systems generally could result in interruptions in our service. Interruptions in our service may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their subscriptions and adversely affect our
renewal rates and our ability to attract new customers. Our business will also be harmed if our customers and potential customers believe our service is unreliable. In addition, pandemics or other public health crises, acts of terrorism, and other
political and economic unrest could cause disruptions in our and our vendors’ service reliability and in the economy as a whole. 
 As part of
our current disaster recovery arrangements, redundant hardware is deployed where possible in all production customer environments. Production data is backed up onto encrypted media and taken off-site. The
recovery procedures and encryption keys are held remotely by Absolute employees, so that the systems can be restored in the event of a site-wide disaster. Other than contractual assurances and agreed-to
controls, Absolute does not control the operation of any of these facilities and they are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, pandemics or other public health crises, telecommunications failures and
other events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct. The occurrence of a natural disaster or an act of terrorism, a decision to close the
facilities without adequate notice or other unanticipated problems at these facilities could result in lengthy interruptions in the delivery of our products and our services. 

Intellectual Property Protection – Absolute’s revenue, cost of revenue, and expenses may suffer if we cannot continue to protect our
intellectual property rights, or if third parties assert that Absolute violates their intellectual property rights. The Company relies upon patent, copyright, trademark and trade secret laws in the United States and Canada and similar laws in other
countries, and agreements with employees, customers, suppliers and other parties, to establish and maintain intellectual property rights in, amongst other items, its Persistence technology platform. The industry in which the Company competes may
include new or existing entrants that own, or claim to own, intellectual property and the Company has received, and may receive in the future, assertions and claims from third parties that the Company’s products infringe on their patents or
other intellectual property rights (see “Patent Portfolio” above). Litigation has been and in the future may continue to be necessary to determine the scope, enforceability and validity of third-party proprietary rights or to
establish the Company’s proprietary rights. Any of the Company’s direct or indirect intellectual property rights could be challenged, invalidated or circumvented, or such intellectual property rights may not be sufficient to permit
Absolute to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly or delayed product redesign efforts, discontinuance of certain product offerings or other competitive harm. Further, the
laws of certain countries do not protect proprietary rights to the same extent as the laws of Canada or the United States. Therefore, 

  
 48 

 
in certain jurisdictions Absolute may be unable to protect its proprietary technology adequately against unauthorized third-party copying or use, which could adversely affect its competitive
position. Third parties also may claim that Absolute or customers or partners indemnified by Absolute are infringing upon their intellectual property rights. Even if management believes that the claims are without merit, the claims can be
time-consuming and costly to defend and divert management’s attention and resources away from the business. Claims of intellectual property infringement also might require Absolute to redesign affected products, enter into costly settlement or
license agreements (if such licenses can be obtained on commercially reasonable terms, or at all) or pay costly damage awards, or face a temporary or permanent injunction prohibiting the marketing or selling certain of our products, which could
result in the Company’s business, operating results and financial condition being materially adversely affected. 
 Additional Patent
Applications – The Company’s research and development activities and commercial success depend in part upon its ability to develop new or improved technologies and products and to successfully obtain patent or other proprietary or
statutory protection for these technologies and products in Canada, the United States and other countries. The Company seeks to patent concepts, components, protocols and other inventions that are considered to have commercial value or that will
likely yield a technological advantage. The Company owns rights to patented and patent pending technologies in the United States, Canada and other countries. The Company may not be able to develop new technology that is patentable, new patents may
not be issued in connection with the Company’s pending applications, allowed claims may not be sufficient to protect the Company’s new technology, and patents may not be obtained by the Company in every jurisdiction where the
Company’s products are sold. Furthermore, any patents issued could be challenged, invalidated or circumvented and may not provide proprietary protection or a competitive advantage. New entrants to the field may have been issued patents, and may
have filed patent applications or may obtain additional patents and proprietary rights, for technologies similar to those that the Company has made or may make in the future. Since patent applications filed before November 29, 2000 in the
United States are maintained in secrecy until issued as patents, and since publication or public awareness of new technologies often lags behind actual discoveries, the Company cannot be absolutely certain that it was the first to develop the
technology covered by its pending patent applications or that it was the first to file patent applications for the technology. In addition, the disclosure in the Company’s new patent applications, particularly in respect of the utility of its
claimed inventions, may not be sufficient to meet the statutory requirements for patentability in all cases. As a result, there can be no assurance that the Company’s new patent applications will result in enforceable patents, nor can the
breadth of allowed claims in the Company’s patents, and their enforceability, be predicted. Even if the Company’s patents are held to be enforceable, others may be able to design around these patents or develop products similar to the
Company’s products that are not within the scope of these patents. 
 Foreign Exchange – The Company’s reporting and functional
currency is the United States dollar. However, a significant portion of operating expenses is denominated in Canadian dollars. As a result, the Company is exposed to fluctuations in the Canadian dollar exchange rate for which it has not entered into
foreign exchange hedges. Currency markets by their nature are volatile and have seen increased volatility recently due to the COVID-19 pandemic. A significant appreciation of the Canadian dollar relative to
the U.S. dollar could materially impact the profitability of the Company. In addition, the Company will be exposed to greater foreign exchange risk from other countries as our operations, and our operating expenses, expand in foreign
jurisdictions. 
 Volatility in our Share Price – The trading price of our Common Shares has in the past been subject to wide
fluctuations and may also be subject to fluctuation in the future. The COVID-19 pandemic has resulted in significant volatility in global equity markets, including to Absolute’s stock price, in recent
months. This may make it more difficult for investors to resell the Common Shares when they want at prices that they find attractive. Increases in our Common Share price may also increase our compensation expense pursuant to our existing director,
officer and employee compensation arrangements. Fluctuations in our Common Share price may be caused by events unrelated to our operating performance and beyond our control. Factors that may contribute to fluctuations include, but are not limited
to: 
  

	 	•	 	 revenue or results of operations in any quarter failing to meet the expectations, published or otherwise, of the
investment community; 

  
 49 

	 	•	 	 changes in recommendations or financial estimates by industry or investment analysts; 

 

	 	•	 	 changes in our executive management team or the composition of our Board of Directors; 

 

	 	•	 	 fluctuations in the share prices of other companies in the technology and emerging growth sectors;

  

	 	•	 	 general market conditions, for instance, as recently affected by COVID-19;

  

	 	•	 	 foreign exchange rates; and 

  

	 	•	 	 other risk factors as set out in this MD&A. 

If the market price of our Common Shares drops significantly, shareholders could institute securities class action lawsuits against us, regardless of
the merits of such claims. Such a lawsuit could cause us to incur substantial costs and could divert the time and attention of our management and other resources from our business. 

Reliance on Key Personnel – Absolute’s future performance depends in part upon attracting and retaining key technical, sales and management
personnel. There can be no assurance that Absolute can retain these personnel and continue to recruit required talent quickly enough and with the skills required to enable Absolute to execute on its business plans. Effective and thorough succession
planning is also important to our long-term success. Failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution. The loss of any key employee, or the inability
of a key employee to work for a prolonged period of time (for example, as a result of the illness of a key employee or the inability of a key employee to work due to government restrictions), could result in significant disruptions to our
operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of company initiatives and our results of operations. 

Competition for people with the specific skills that we require is significant in the industry in which we operate and in the Vancouver, B.C., Austin,
Texas, the Silicon Valley in California, the Denver and Boulder areas in Colorado, and Ho Chi Minh City, Vietnam areas where we have a substantial presence and require highly skilled personnel and, as a result, we may face difficulties in
attracting, retaining and motivating employees. In addition, periodic changes to the organizational structure, geographic focus and concentration and compensation plans for our sales organization may be disruptive and may impact our sales cycle or
alter the average cost of revenue. The inability to obtain key employees or the loss of the services of Absolute’s key employees and related severance or termination payments could have a material adverse effect on Absolute’s business,
operating results and financial condition. 
 In addition, we believe that our corporate culture fosters innovation, creativity, and teamwork. As our
organization grows and evolves, we may need to implement more complex organizational management structures or adapt our corporate culture and work environments to ever-changing circumstances, such as during times of a natural disaster or pandemic
(including COVID-19), and these changes could impact our ability to compete effectively or have an adverse impact on our corporate culture. 

Litigation and Dispute Resolution – From time to time, we may be subject to litigation or dispute resolution relating to various types of
claims, including claims (for damages or otherwise) related to undetected errors or malfunctions of our services and products, data breaches, intellectual property violation, commercial or contract disputes, employment matters, or under applicable
securities laws. A product liability or securities class action claim, in particular, could seriously harm our business because of the costs of defending the lawsuit, diversion of employees’ time and attention and potential damage to our
reputation. Further, our services and products are complex and often implemented by our customers to interact with third-party technology. Claims may be made against us for damages properly attributable to those third-party technologies, regardless
of our lack of responsibility for any failure resulting in a loss. As a result, we could be required to pay substantial amounts of damages in settlement or upon the determination of any of these types of claims and incur damage to the reputation of
Absolute and our 

  
 50 

 
products. The likelihood of such claims and the amount of damages we may be required to pay may increase as our customers increasingly use our services and products. Our insurance may not cover
potential claims, or may not be adequate to cover all costs incurred in defense of potential claims or to indemnify us for all liability that may be imposed. 

Foreign Operations – We intend to continue to pursue and commit resources to growth opportunities beyond North America which could result in
international sales accounting for an increasing portion of the Company’s consolidated revenues. Outside of North America, the Company maintains foreign offices in Vietnam and the United Kingdom and personnel in these and other countries. The
Company may not be aware of all the factors that may affect its business in foreign jurisdictions. The Company will be subject to a number of risks associated with international business activities that may increase liability or costs, lengthen
sales and/or product development cycles, or require significant management attention. International operations carry certain risks and associated costs, such as: the complexities and expense of administering a business abroad; complications in
compliance with, and unexpected changes in legal and regulatory restrictions or requirements; foreign laws, international import and export legislation; trading and investment policies; economic and political instability; foreign currency
fluctuations; exchange controls; increased nationalism and protectionism; tariffs and other trade barriers; difficulties in collecting accounts receivable; potential adverse tax consequences; uncertainties of laws and enforcement relating to
intellectual property and privacy rights; unauthorized copying of software; difficulty in managing a geographically dispersed workforce in compliance with diverse local laws and customs; potential governmental expropriation (especially in countries
with undemocratic/authoritarian ruling parties); and other factors depending upon the country involved. There can be no assurance that the Company will not experience these risks in the future. If foreign operations expand to the point where they
account for a significant portion of the Company’s consolidated revenues, the presence of such risks could have a material adverse effect on the Company’s business, operating results and financial condition. 

Ability to Successfully Manage and Integrate Acquisitions and/or Dispositions – We expect to continue to evaluate possible acquisitions of,
or strategic investments in, businesses, products or technologies that could be complementary to our business. Any integration process will require significant time and resources and we may not be able to manage the process successfully. If our
customers are uncertain about our ability to operate on a combined basis, they could delay or cancel orders for our products. We may not successfully evaluate or utilize the acquired technology and accurately forecast the financial impact of an
acquisition transaction, including accounting charges. The areas where we may face risks include: 
  

	 	•	 	 difficulties in integrating the operations, technologies, products and/or personnel of any companies we acquire into our
operations; 

  

	 	•	 	 potential disruption of our ongoing business and diversion of management’s attention from normal daily operations
of the business; 

  

	 	•	 	 insufficient revenues to offset increased expenses associated with acquisitions; 

 

	 	•	 	 potential for third party IP infringement claims against any companies we acquire; 

 

	 	•	 	 failure to successfully further develop acquired technology, resulting in the impairment of amounts capitalized as
intangible assets; 

  

	 	•	 	 impairment of relationships with customers and partners of any companies we acquire or in which we invest, or with our
customers and partners, as a result of the integration of acquired operations; 

  

	 	•	 	 impairment of relationships with employees of any acquired companies or our existing employees as a result of
integration of new management personnel; 

  

	 	•	 	 impact of known potential, or unknown, liabilities associated with any companies we acquire; 

  
 51 

	 	•	 	 failure to adequately understand and mitigate the risks of new product lines and services; and 

 

	 	•	 	 in the case of foreign acquisitions, uncertainty regarding foreign laws and regulations and difficulty integrating
operations and systems as a result of cultural, systems and operational differences. 

 Our failure to be successful in addressing
these risks or other problems encountered in connection with our past or future acquisitions could cause us to fail to realize the anticipated benefits of such acquisitions, incur unanticipated liabilities and adversely affect our business,
operating results or financial condition, or result in significant or material control weaknesses. 
 Future acquisitions or dispositions could also
result in dilutive issuances of our Common Shares, a decrease in our cash and cash equivalents and short-term investments, the incurrence of additional expense related to compliance, contingent liabilities or amortization of expenses, or write-offs
of goodwill, any of which could harm our financial condition and negatively impact our operating results. 
 The Effect of Amortization of Revenue
Over the Term of the Subscription – Absolute generally recognizes revenue from customer subscriptions to our Cloud Services ratably over the terms of the Billings. As a result, most of the revenue the Company reports in each quarter results
from the recognition of deferred revenue relating to Billings entered into during previous periods. Consequently, a decline in new or renewal subscriptions in any one quarter will not necessarily be fully reflected in the revenue in that quarter but
will negatively affect revenue in future quarters. In addition, we may be unable to adjust our cost structure to reflect the changes in Billings. Accordingly, the effect of significant downturns in sales and market acceptance of our services or
products may not be fully reflected in Absolute’s results of operations until future periods. 
 Billings – Most Billings are
conducted via channel partners who purchase from Absolute in order to resell to their customers. While Absolute’s services are provided directly to the end user customer, the orders, which include ship dates, customer name, product, pricing and
volume, come in various forms from the reseller partner (sales reports, purchase orders, shipping reports, royalty reports, etc.). Absolute ships the software, commences the subscription term and invoices the reseller (and receives payment from the
reseller) based on receipt of, or ship dates contained in, these forms of evidence of the end customer purchase, and reports this as a Billing for the applicable period. Accordingly, Absolute relies upon the reseller partner to have sufficiently
concluded the sales process with the end user customer to ensure that the order is valid and the risk of returns is kept to a minimum. It is possible that a reseller may order from us and subsequently return the product in accordance with generally
accepted industry practices. In such cases, if a sale had been reported in a prior period, it would have to be subsequently reversed, impacting future Billings and revenue performance. 

Income Taxes – Significant judgment is required in determining our provision for income taxes. Various internal and external factors may
have favourable or unfavourable effects on our future provision for income taxes, income taxes payable and/or effective income tax rate. These factors include, but are not limited to: changes in tax laws, regulations and/or rates; results of audits
by tax authorities; changing interpretations of existing tax laws or regulations; changes in estimates of prior years’ items; future levels of R&D spending; changes in the overall mix of income among the different jurisdictions in which we
operate; and changes in overall levels of income before taxes. To the extent that the taxation authorities do not agree with our tax positions, we may not be able to realize all or a portion of the tax benefits recognized. Furthermore, new
accounting pronouncements or new interpretations of existing accounting pronouncements (such as those described in “Recent Accounting Pronouncements” in this MD&A) can have a material impact on our effective income tax rate. 

The Company and its subsidiaries file income tax returns and pay income taxes in jurisdictions where we believe we are subject to tax. In jurisdictions
in which the Company and its subsidiaries do not believe we are subject to tax and therefore do not file income tax returns, we can provide no certainty that tax authorities in those jurisdictions will not subject one or more tax years (since
inception of the Company or its subsidiaries) to examination. Tax examinations are often complex as tax authorities may disagree with 

  
 52 

 
the treatment of items reported by the Company, the result of which could have a material adverse effect on our financial condition and results of operations. 

In addition, in response to significant market volatility and disruptions to business operations resulting from
COVID-19, legislatures and taxing authorities in many jurisdictions in which we operate may propose changes to their tax rules. These changes could include modifications that have temporary effect, and more
permanent changes. The impact of these potential new rules on us, our long-term tax planning, and our tax effective tax rate could be material. 

Consumer Product Liability – The Company may be subject to claims related to product liability and consumer protection legislation,
particularly in the United States. The limitation of liability provisions in the standard terms and conditions in our license agreements may not fully or effectively protect us from claims as a result of applicable laws or unfavourable judicial
decisions in the United States or other countries. The sale and support of our products also entails the risk of product liability claims. Although we may be indemnified by our third-party manufacturers for product liability claims arising out of
manufacturing defects or inadvertent activation by manufacturers of our Absolute agent on endpoint devices, because we control the design of our products, we may not be indemnified for product liability claims arising out of design defects. We
maintain insurance to protect against, amongst other matters, certain claims associated with the use of our products, but our insurance coverage may not adequately cover any claim asserted against us. In addition, even claims that ultimately are
unsuccessful could result in our expenditure of funds in litigation, divert management’s time and other resources, and harm our reputation. 
 Other
Proprietary Rights 
 In addition to patents, the Company relies on, among other things, copyrights, trademarks, trade secrets, confidentiality
procedures and contractual provisions to protect its proprietary rights in Canada, the United States and other countries. As a result, it is possible that the following may occur: some or all of the confidentiality agreements entered into by
Absolute with its employee, consultants, business partners, customers, potential customers and other third parties will not be honoured; third parties will independently develop equivalent technology or misappropriate the Company’s technology
and/or designs; disputes will arise with the Company’s strategic partners, customers or others concerning the ownership of intellectual property; there may occur an unauthorized disclosure of source code,
know-how or trade secrets; or contractual provisions may not be enforced in foreign jurisdictions. There can be no assurance that the Company will be successful in protecting its proprietary rights in Canada,
the United States and other countries. 

  
 53EX-4.4

 Exhibit 4.4 
  

 
 

 
 ABSOLUTE SOFTWARE CORPORATION 

Notice of Annual General Meeting 
 and
Management Information Circular 
 2019 
  

			
	 Meeting Date:
	  	 Wednesday, December 11, 2019, 2:00 p.m. (PST)

		
	 Location:
	  	 Blake, Cassels & Graydon LLP, Suite 2600, 595 Burrard Street, Vancouver, British Columbia, Canada

  
 Suite 1400 

Four Bentall Centre, 1055 Dunsmuir Street 
 PO Box 49211

 Vancouver, British Columbia, Canada V7X 1K8 
 604-730-9851 
 www.absolute.com 

This document is important and requires your immediate attention. It requires holders of common shares of Absolute Software Corporation to make
important decisions. If you are in doubt as to how to make such decisions, please contact your financial, legal, tax, or other professional advisors. 

  -
 2
 - 
  

 TABLE OF CONTENTS 
  

			
	  	 	      Page     
 
	 Notice of Annual General Meeting
	 	3
	 Management Information Circular
	 	4
	 Introduction
	 	4
	 Cautionary Note on Forward Looking Statements
	 	4
	 General Proxy Information
	 	5
	 Who Can Vote
	 	5
	 How You Can Vote
	 	5
	 Principal Holders of Common Shares
	 	5
	 Normal Course Issuer Bid
	 	5
	 Advice to Beneficial Holders of Shares
	 	6
	 Solicitation of Proxies
	 	7
	 Appointment and Revocation of Proxies
	 	7
	 Exercise of Discretion
	 	7
	 Election of Directors
	 	8
	 Advance Notice Policy
	 	8
	 Majority Voting Policy
	 	8
	 Director Nominees
	 	9
	 Prior Year’s Voting Results
	 	12
	 Absence of Cease Trade Orders, Bankruptcies, Penalties and
Sanctions
	 	12
	 Board Committees
	 	13
	 Strategic Planning
	 	14
	 Risk Oversight
	 	14
	 Appointment of Auditor
	 	14
	 Approval of New Employee Share Ownership Plan
	 	15
	 New Employee Share Ownership Plan
	 	15
	 New Employee Share Ownership Plan Approval
Resolutions
	 	16
	 Other Business
	 	17
	 Disclosure of Corporate Governance Practices
	 	17
	 Securities Authorized for Issuance under Equity
Compensation Plans
	 	17
	 Share Option Plan
	 	17
	 Performance and Restricted Share Unit Plan
	 	20
	 Current Employee Share Ownership Plan
	 	24
	 New Employee Share Ownership Plan
	 	25
	 Deferred Share Unit Plan
	 	26
	 Equity Compensation Plan Information as at June 30,
2019
	 	26
	 Statement of Executive Compensation
	 	27
	 Named Executive Officers
	 	27
	 Compensation Discussion and Analysis
	 	28
	 Performance Chart
	 	35
	 Summary Compensation Table
	 	36
	 Incentive Plan Awards
	 	37
	 Pension Plan Benefits
	 	39
	 Termination and Change of Control Benefits
	 	39
	 Director Compensation
	 	41
	 Executive Officer and Director Share Ownership
Policy
	 	44
	 Indebtedness of Directors and Executive Officers
	 	44
	 Interest of Certain Persons or Companies in Matters to be
Acted Upon
	 	44
	 Interest of Informed Persons in Material
Transactions
	 	44
	 Management Contracts
	 	44
	 Additional Information
	 	44
	 Schedule “A” – Statement of
Corporate Governance Practices
	 	45
	 Schedule “B” – New Employee Share
Ownership Plan
	 	50
	 Schedule “C” – Blackline of New
Employee Share Ownership Plan to Current Employee Share Ownership Plan
	 	78

  -
 3
 - 
  

 ABSOLUTE SOFTWARE CORPORATION 

Suite 1400, Four Bentall Centre 
 1055 Dunsmuir Street

 Vancouver, British Columbia, V7X 1K8 
 NOTICE
OF ANNUAL GENERAL MEETING 
 TO OUR SHAREHOLDERS: 

Our Annual General Meeting (the “Meeting”) will be held at the offices of Blake, Cassels & Graydon LLP, at Suite 2600, 595
Burrard Street, Vancouver, British Columbia, on Wednesday, December 11, 2019 at 2:00 p.m. (PST) for the following purposes: 
  

	 	(1)	 to receive the report of our Directors; 

 

	 	(2)	 to receive our audited financial statements for the financial year ended June 30, 2019, and the accompanying
report of the auditors; 

  

	 	(3)	 to set the number of our Directors at six for the ensuing year; 

 

	 	(4)	 to elect our Directors for the ensuing year; 

 

	 	(5)	 to appoint our auditor for the ensuing year and to authorize the Directors to fix the auditor’s remuneration;

  

	 	(6)	 to approve the adoption of a new Employee Share Ownership Plan and reserve 350,000 common shares for issuance
thereunder; 

  

	 	(7)	 to consider any amendment to or variation of a matter identified in this Notice; and 

 

	 	(8)	 to transact such other business as may properly come before the Meeting or any adjournment thereof.

 Our Information Circular, which includes a detailed description of the matters to be dealt with at the Meeting, accompanies this
Notice. Our financial statements for the year ended June 30, 2019 and the report of the auditors thereon can be requested separately. 
 If
you are unable to attend the Meeting in person and wish to ensure that your Absolute shares will be voted at the Meeting, you must complete, date, and execute the enclosed form of proxy, or another suitable form of proxy, and deliver it by hand or
by mail in accordance with the instructions set out in the form of proxy and in the Information Circular. If you are an unregistered shareholder and want to attend the Meeting, you must follow the instructions set out in the Information Circular to
ensure that your Absolute shares will be voted at the Meeting. 
 DATED at Vancouver, British Columbia as of November 12, 2019. 

 

	
	 ABSOLUTE SOFTWARE CORPORATION

	
	 “Daniel P. Ryan”

	 Chairman of the Board

  -
 4
 - 
  

 ABSOLUTE SOFTWARE CORPORATION 

Suite 1400, Four Bentall Centre 
 1055 Dunsmuir Street

 Vancouver, British Columbia, V7X 1K8 

INFORMATION CIRCULAR 
 as at November 12,
2019 
 INTRODUCTION 
 The Board of
Directors of Absolute Software Corporation (the “Board”) is delivering this information circular (this “Information Circular”) to you in connection with the solicitation of your proxy for use at the annual general
meeting of shareholders to be held on December 11, 2019 (the “Meeting”). 
 In this Information Circular, unless the context
otherwise requires, all references to “Absolute”, the “Company”, “we”, “us”, and “our” refer to Absolute Software Corporation. The Company’s fiscal year ends
on June 30 of each year. In this Information Circular, the fiscal year ended June 30, 2019 is referred to as “Fiscal 2019”, the fiscal year ended June 30, 2018 is referred to as “Fiscal 2018”, and the
fiscal year ended June 30, 2017 is referred to as “Fiscal 2017”. All dollar figures are stated in U.S. dollars unless otherwise indicated. 

Cautionary Note on Forward Looking Statements 
 Certain
statements contained in the Notice of Meeting and this Information Circular (together, the “Meeting Materials”) may contain and constitute forward-looking statements and forward-looking information (collectively,
“forward-looking statements”) which relate to future events or Absolute’s future business, operations, and financial performance and condition. Forward-looking statements normally contain words like “will”,
“intend”, “anticipate”, “could”, “should”, “may”, “might”, “expect”, “estimate”, “forecast”, “plan”, “potential”, “project”,
“assume”, “contemplate”, “believe”, “shall”, “scheduled”, and similar terms and, within the Meeting Materials, include, without limitation, any statements (express or implied) respecting: the
administration of the Option Plan (as defined herein); the administration of the PRSU Plan (as defined herein); the administration of the Current ESOP (as defined herein); the Company’s plans with respect to the Current ESOP; the enactment and
approval of the New ESOP (as defined herein); the administration of the New ESOP; the administration of the DSU Plan (as defined herein); the Company’s compensation plans, philosophies, and practices; and the ability of the Company’s
compensation practices to attract, retain, motivate, and reward qualified executive officers who will be able to accomplish the Company’s business objectives. 

Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions, and other
factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. The material expectations, assumptions, and other factors used in developing the forward-looking statements set out in the Meeting Materials
include or relate to the following, without limitation: the Company will be able to successfully execute its plans, strategies, and objectives; market and industry data obtained from external sources is accurate and reliable; the Company’s
compensation practices are competitive with comparable organizations for similar positions; the Company will be able to attract and retain qualified personnel; the New ESOP will be approved by shareholders, the TSX (as defined herein), and the
Administrator (as defined herein) and will accomplish its intended purpose; and the 350,000 Common Shares (as defined herein) proposed to be reserved for issuance pursuant to the New ESOP will be sufficient for purchases under the New ESOP in the
two following calendar years. 
 Although management believes that the forward-looking statements herein are reasonable, actual results could be
substantially different due to the risks and uncertainties associated with and inherent to Absolute’s business, as more particularly described in the “Risk and Uncertainties” section of Absolute’s most recently filed
Management’s Discussion and Analysis, which is available under Absolute’s profile on www.sedar.com. Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation: the New ESOP
will not be approved by shareholders, the TSX, and/or the Administrator on the respective timelines currently anticipated or at all; the 350,000 Common Shares proposed to be reserved for issuance pursuant to the New ESOP will not be sufficient for
purchases under 

  -
 5
 - 
  

 
the New ESOP in the two following calendar years; the Company’s compensation strategies and programs will be unsuccessful at attracting, retaining, motivating, and rewarding qualified
executive officers and the Company may change its strategies and programs if they are unsuccessful; and other unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being
inaccurate or irrelevant. Many of these factors are beyond the control of Absolute. 
 All forward-looking statements included in the Meeting
Materials are expressly qualified in their entirety by this cautionary note. The forward-looking statements contained in the Meeting Materials are made as at the date of this Information Circular and Absolute undertakes no obligation to update
publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws. 

GENERAL PROXY INFORMATION 
 Who Can Vote 

November 6, 2019 is the record date for the determination of shareholders entitled to notice of and to vote at the Meeting and at any adjournment
thereof. As of November 6, 2019, Absolute had outstanding 41,817,499 common shares in the capital of Absolute (“Common Shares”). Persons who on November 6, 2019 are recorded on our share register as holders of Common
Shares can vote at the Meeting. Each Common Share has the right to one vote. 
 Under our Articles, the quorum for the transaction of business at the
Meeting is two persons present in person, each being a shareholder entitled to vote at the Meeting or a duly appointed proxyholder or representative for such shareholder so entitled, representing at least 25% of the issued and outstanding Common
Shares. 
 How You Can Vote 
 If you are a registered
shareholder (your Common Shares are held in your name) you may vote your Common Shares either by attending the Meeting in person or, if you do not plan to attend the Meeting, by completing the proxy and following the delivery instructions contained
in the form of proxy and this Information Circular. 
 Principal Holders of Common Shares 

To the knowledge of the Company, as of November 6, 2019, Lynrock Lake LP held 6,247,066 Common Shares, or approximately 14.9% of the outstanding
Common Shares, and Trigran Investments, Inc. held 6,246,800 Common Shares, or approximately 14.9% of the outstanding Common Shares. To the knowledge of the Company, no other person or corporation beneficially owns, directly or indirectly, or
exercises control or direction over, Common Shares carrying more than 10% of the voting rights attached to all outstanding Common Shares. 
 Normal Course Issuer
Bid 
 On October 1, 2019, the Company commenced a normal course issuer bid (the “NCIB”) to purchase and cancel up to
2,663,275 Common Shares until September 30, 2020. The NCIB allows for the purchase of up to 27,956 Common Shares on a daily basis, except where purchases are made in accordance with “block purchase” exemptions under applicable Toronto
Stock Exchange (“TSX”) policies. To date, the Company has not purchased any shares under the NCIB. 
 The Company commenced the NCIB
because it believes that, from time to time, the market price of the Common Shares may not fully reflect the underlying value of the Company’s business and its future business prospects. Any purchases of Common Shares by the Company are
expected to benefit all remaining shareholders. 
 The Company’s prior normal course issuer bid ran for the period September 28, 2018 to
September 27, 2019. Under this prior normal course issuer bid, the Company sought to purchase up to 1,933,375 Common Shares, but ultimately purchased 

  -
 6
 - 
  

 
no Common Shares. The Company’s normal course issuer bids for periods prior to the current NCIB are described in the Company’s prior Information Circulars which are available under
Absolute’s profile on www.sedar.com. 
 The Company’s Notice of Intention to Make a Normal Course Issuer Bid (TSX Form 12) for the NCIB is
available free of charge from Absolute in person at Suite 1400, Four Bentall Centre, 1055 Dunsmuir Street, Vancouver British Columbia, or by telephone at (604) 730-9851 (ext. 117). 

Advice to Beneficial Holders of Shares 
 The information set
forth in this section is of significant importance to many shareholders of Absolute, as a substantial number of our shareholders do not hold their Common Shares in their own name. Shareholders who do not hold their Common Shares in their own name
(referred to in this Information Circular as “Beneficial Shareholders”) should note that only proxies deposited by shareholders whose names appear on the records of the Company as the registered holders of Common Shares can be
recognized and acted upon at the Meeting. If your Common Shares are listed in an account statement provided to you by a broker, then in almost all cases those Common Shares will not be registered in your name on the records of Absolute. Such Common
Shares will more likely be registered under the name of your broker or an agent of that broker. In Canada, the vast majority of such Common Shares are registered under the name of CDS & Co. (the registration name for The Canadian Depository
for Securities Limited, which acts as nominee for many Canadian brokerage firms), and in the United States, under the name of Cede & Co. as nominee for The Depositary Trust Company (which acts as depositary for many U.S. brokerage firms and
custodian banks). If you are a Beneficial Shareholder, you should ensure that instructions respecting the voting of your Common Shares are communicated to the appropriate person. 

Applicable regulatory policy requires intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of shareholders’
meetings. Every intermediary/broker has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by Beneficial Shareholders in order to ensure that their Common Shares are voted at the
Meeting. The form of proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is similar to the form of proxy provided to registered shareholders by Absolute. However, its purpose is limited to instructing the registered
shareholder (the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Investor Communication Solutions
(“Broadridge”) in Canada and in the United States. Broadridge will either mail a form of proxy or a voting instruction form in lieu of a form of proxy provided by Absolute. The voting instruction form will name the same persons as
the proxy to represent you as a Beneficial Shareholder at the Meeting. As a Beneficial Shareholder you have the right to appoint a person (who need not be a Beneficial Shareholder) other than the persons designated in the voting instruction form, to
represent you at the Meeting. To exercise this right, you should insert the name of the desired representative in the blank space provided in the voting instruction form. The completed voting instruction form must then be returned to Broadridge by
mail or facsimile. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of Common Shares to be represented at the Meeting. If you receive a voting instruction form from
Broadridge, you cannot use it to vote your Common Shares directly at the Meeting as the voting instruction form must be returned to Broadridge well in advance of the Meeting in order to have your Common Shares voted. 

Although as a Beneficial Shareholder you may not be recognized directly at the Meeting for the purposes of voting your Common Shares registered in the
name of your broker (or agent of the broker), you may attend at the Meeting as proxyholder for the registered shareholder and vote the Common Shares in that capacity. If you wish to attend at the Meeting and indirectly vote your Common Shares as
proxyholder for the registered shareholder, you should enter your own name in the blank space on the instrument of proxy provided to them and return the same to your broker (or the broker’s agent) in accordance with the instructions provided by
such broker (or agent), well in advance of the Meeting. 
 Alternatively, as a Beneficial Shareholder you may request in writing that your broker send
to you a legal proxy which would enable you to attend at the Meeting and vote your Common Shares. 

  -
 7
 - 
  

 Solicitation of Proxies 

We are soliciting proxies primarily by mail, but our Directors, officers, and employees may solicit proxies personally, by telephone, by email, or by
other means of electronic communication. We are paying all proxy solicitation costs. We are not sending proxy-related materials directly to non-objecting beneficial owners. We intend to pay for
intermediaries to deliver proxy-related materials to objecting beneficial owners. 
 Appointment and Revocation of Proxies 

The persons named in the accompanying form of proxy are the Company’s Chief Executive Officer and Chief Financial Officer. You may also
appoint some other person or company (who need not be a shareholder of Absolute) to represent you at the Meeting either by inserting such other person’s name or company’s name in the blank space provided in the form of proxy or by
completing another suitable form of proxy. A proxy will not be valid unless the completed form of proxy is delivered to the office of AST Trust Company (Canada) (“AST”) or the Company’s agents by mail or by fax no later
than 48 hours (excluding Saturdays, Sundays, and holidays) prior to the time of the Meeting, or an adjournment thereof, or may be accepted by the Chair of the Meeting prior to the commencement of the Meeting. The Company or the Chair of the Meeting
may waive or extend the proxy cut-off without notice. 
 AST’s mailing address is AST Trust Company
(Canada), Attention: Proxy Department, P.O. Box 721, Agincourt, Ontario, M1S 0A1. AST’s fax numbers are 1-866-781-3111 (toll
free) or 1-416-368-2502. You may also scan and email your proxy to proxyvote@astfinancial.com. 

You can revoke your proxy by: 
  

	 	◾	 	 providing a written notice of revocation to AST before the end of business on December 9, 2019;

  

	 	◾	 	 providing a written notice of revocation to Absolute at its registered office, which is located at the offices of Blake,
Cassels & Graydon LLP, Suite 2600, 595 Burrard Street, P.O. Box 49314, Vancouver, British Columbia, V7X 1L3, before the end of business on December 9, 2019; 

 

	 	◾	 	 advising the Chair of the Meeting that you are voting in person at the Meeting; or 

 

	 	◾	 	 any other manner provided by law. 

Your revocation of a proxy will not affect a matter on which a vote has already been taken. 

Exercise of Discretion 
 The nominees named in the
accompanying form of proxy will vote or withhold from voting the Common Shares represented by the proxy in accordance with your instructions. The proxy grants the nominees the discretion to vote on: 

 

	 	◾	 	 each matter or group of matters identified in the proxy where you do not specify how you want to vote;

  

	 	◾	 	 any amendment to or variation of any matter identified in the proxy; and 

 

	 	◾	 	 any other matter that properly comes before the Meeting. 

If on a particular matter to be voted on you do not specify in your proxy the manner in which you want to vote, your Common Shares will be voted for the
approval of such matter. 
 As of the date of this Information Circular, the Company’s management knows of no amendment, variation, or other
matter that may come before the Meeting; but if any amendment, variation, or other matter properly comes before the Meeting, each nominee named in the proxy intends to vote in accordance with the nominee’s best judgment. 

  -
 8
 - 
  

 Late proxies may be accepted or rejected by the Chair of the Meeting at his or her discretion. The
Chair of the Meeting is under no obligation to accept or reject any particular late proxy. The Company or the Chair of the Meeting may waive or extend the proxy cut-off without notice. 

If no choice is indicated in the proxy, management’s nominees intend to vote FOR: 

 

	 	◾	 	 establishing the number of Directors at six; 

 

	 	◾	 	 electing management’s nominees for Director; 

 

	 	◾	 	 appointing Deloitte LLP as the auditor of the Company, at remuneration to by fixed by the Board; and

  

	 	◾	 	 approving the New ESOP and reserving 350,000 Common Shares for issuance thereunder. 

ELECTION OF DIRECTORS 
 The Board currently
has seven members. At the Meeting, shareholders will be asked to pass an ordinary resolution to set the number of Directors for the ensuing year at six, subject to such increases as may be permitted by our Articles and the Business Corporations
Act (British Columbia). The number of Directors will be approved if the affirmative vote of the majority of Common Shares present, or represented by proxy at the Meeting, and entitled to vote is voted in favour to set the number of Directors at
six. The term of office of each of the current Directors will end at the conclusion of the Meeting. Each Director elected at the Meeting will hold office until the end of our next annual meeting, or if no Director is then elected, until a successor
is elected, or until the Director resigns or is removed. 
 Advance Notice Policy 

On October 25, 2014, the Board adopted an Advance Notice Policy for Director nominations. The Advance Notice Policy was ratified, confirmed, and
approved at the Annual General and Special Meeting of our shareholders held on December 8, 2014. Shareholders who wish to nominate candidates for election as Directors must provide timely notice in writing to the Secretary of the Company at
Suite 1400, Four Bentall Centre, 1055 Dunsmuir Street, Vancouver, British Columbia, V7X 1K8, and include the information set forth in the Advance Notice Policy. The notice must be given not less than 30 days and not more than 65 days prior to the
date of the Meeting. A copy of the Advance Notice Policy is available on the Company’s website and under its profile on www.sedar.com. 
 Majority Voting
Policy 
 The Board believes that each of the Directors should carry the confidence and support of its shareholders. To this end, the Board has
adopted a Majority Voting Policy for the election of Directors. The policy provides that if a nominee for election as Director receives a greater number of “withheld” votes than “for” votes, that nominee will tender a resignation
to the Chair of the Board following the meeting of shareholders at which the nominee was put forth for election. The Board will consider the offer of resignation and announce its decision on whether to accept it in a press release within 90 days
following the meeting of shareholders. 
 In these deliberations, the Board will consider all factors it deems relevant, including any reasons stated
for why shareholders “withheld” votes from the election of that nominee and, as applicable, the length of service and the qualifications of the nominee, the nominee’s contributions to the Company, the effect such resignation may have
on the Company’s ability to comply with any applicable governance rules and policies and the dynamics of the Board, and whether the resignation would be in the best interests of the Company. The Board will be expected to accept the resignation,
except in situations where extenuating circumstances would warrant the Director to continue to serve. 
 This policy only applies in circumstances
involving an uncontested election of Directors, being those where the number of Director nominees is the same as the number of Directors to be elected to the Board. A copy of the Majority Voting Policy is available on the Company’s website and
under its profile on www.sedar.com. 

  -
 9
 - 
  

 Director Nominees 

Each of the proposed nominees for election has been nominated by management of Absolute. Each nominee is currently a Director of Absolute. The following
table sets out certain information regarding the nominees(1). 
  

			
	 Daniel Ryan
	  	
		
	 Age:
	  	 60

		
	 Director Since:
	  	 June 2011

		
	 Principal Occupation:
	  	 Chief Executive Officer of CiBO Technologies

		
	 Areas of Expertise:
	  	 Executive leadership; Industry knowledge; Technology and research & development; Information security
knowledge

		
	 Common Shares(2):
	  	 115,101

		
	 Residence:
	  	 Minnesota, U.S.A.

	 	  	 
		
	 Lynn Atchison
	  	
		
	 Age:
	  	 59

		
	 Director Since:
	  	 August 2019

		
	 Principal Occupation:
	  	 Corporate director

		
	 Areas of Expertise:
	  	 Financial expertise; Mergers and acquisitions; Public and private capital markets; Executive leadership

		
	 Common Shares(2):
	  	 0

		
	 Residence:
	  	 Texas, U.S.A.

	 	  	 
		
	 Gregory Monahan
	  	
		
	 Age:
	  	 46

		
	 Director Since:
	  	 December 2012

		
	 Principal Occupation:
	  	 Senior Managing Director of Crescendo Partners, L.P. and Portfolio Manager of Jamarant Capital, L.P.

		
	 Areas of Expertise:
	  	 Corporate governance; Financial expertise; Public company directorships, Public and private capital markets

		
	 Common Shares(2)(3):
	  	 78,795

		
	 Residence:
	  	 Connecticut, U.S.A.

	 	  	 

  -
 10
 - 
  

			
	 Salvatore Visca
	  	
		
	 Age:
	  	 53

		
	 Director Since:
	  	 February 2014

		
	 Principal Occupation:
	  	 Chief Technology Officer of Elastic Path Software

		
	 Areas of Expertise:
	  	 Executive leadership; Industry knowledge; Technology and research & development; Information security
knowledge

		
	 Common Shares(2):
	  	 12,000

		
	 Residence:
	  	 British Columbia, Canada

	 	  	 
		
	 Gerhard Watzinger
	  	
		
	 Age:
	  	 59

		
	 Director Since:
	  	 December 2014

		
	 Principal Occupation:
	  	 Corporate director

		
	 Areas of Expertise:
	  	 Executive leadership; Industry knowledge; CEO background; Information security knowledge

		
	 Common Shares(2):
	  	 0

		
	 Residence:
	  	 Florida, U.S.A.

	 	  	 
		
	 Christy Wyatt
	  	
		
	 Age:
	  	 47

		
	 Director Since:
	  	 December 2018

		
	 Principal Occupation:
	  	 Chief Executive Officer of Absolute

		
	 Areas of Expertise:
	  	 Executive leadership; Industry knowledge; Product development; Technology and Information security knowledge; Mergers &
acquisitions

		
	 Common Shares(2):
	  	 0

		
	 Residence:
	  	 California, U.S.A.

	 	  	 

 Notes: 
  

	 	1)	 Other than with respect to Ms. Wyatt, the information as to principal occupation, age, place of residence, and the
number Common Shares owned, controlled, or directed is not within the knowledge of management of the Company and has been provided by the respective nominees. 

 

	 	2)	 Includes Common Shares beneficially owned, or controlled or directed, directly or indirectly, by each nominee.

  

	 	3)	 These include Common Shares held by Jamarant Capital, L.P. 

  -
 11
 - 
  

 Daniel P. Ryan 

Mr. Ryan joined Absolute as a Director in June 2011, has been Chairman of the Board since December 2013, and is currently a member of the Audit
Committee and the Governance and Nominating Committee. Mr. Ryan, a resident of Greenwood, Minnesota, is a software and technology executive with over 30 years of experience and a background in product and market strategy, business development,
and mergers and acquisitions. Mr. Ryan is currently the CEO and a director of CiBO Technologies, a science-driven software company that models and simulates agricultural ecosystems. From 2011 to 2018 (until its acquisition by Marlin Equity
Partners), Mr. Ryan was the President and CEO of RedBrick Health, which grew into an acknowledged industry leader in SaaS-powered employee well-being and health engagement. Before RedBrick, Mr. Ryan was President and CEO at Secure
Computing, a $250 million leader in enterprise security solutions, prior to it being acquired by McAfee, where he served as EVP and General Manager of their $500 million Network Security Business Unit. Prior to Secure Computing,
Mr. Ryan served as President and Chief Operating Officer at Stellent, a leading enterprise content management software company that grew revenue from $2 million to $130 million during his tenure before being acquired by Oracle, where
he became Senior Vice President of Enterprise Content Management Products. Mr. Ryan joined Stellent from Foglight Software, an innovator in e-commerce and application performance management that was
acquired by Quest Software, where he headed marketing, product management, and business development. Mr. Ryan is also currently a director of LogicStream Health, a clinical process improvement company, and was previously a director of Secure
Computing. Mr. Ryan holds a Bachelor of Science in Math and Economics from the University of Minnesota. 
 Lynn Atchison 

Ms. Atchison joined Absolute as a Director on August 7, 2019 and is currently a member of the Audit Committee. Ms. Atchison is a resident
of Austin, Texas and currently serves on the boards of Q2 Software, Convey, and RealMassive. Ms. Atchison is also a member of original steering committee for Women@Austin and an Advisory Board Member of Philanthropitch. Most recently,
Ms. Atchison was the CFO of Spredfast, a provider of enterprise social media management software. Prior to that, she served as the CFO of the online vacation rental marketplace HomeAway from August 2006 until March 2016. During her tenure at
HomeAway, the business grew from $10 million to over $500 million in revenue and Ms. Atchison oversaw over 20 acquisitions, expansion into Europe, South America, and Australia, and an IPO on the NASDAQ in June 2011. Ms. Atchison
was also instrumental in the sale of HomeAway to Expedia in December 2015 for $3.9 billion. 
 Gregory Monahan 

Mr. Monahan joined Absolute as a Director in December 2012 and is currently the Chair of the Governance and Nominating Committee and a member of the
Audit Committee. Mr. Monahan is a resident of Darien, Connecticut. Mr. Monahan is a Senior Managing Director of Crescendo Partners, L.P. and he is the Portfolio Manager of Jamarant Capital, L.P., a New York-based investment firm.
Mr. Monahan previously co-founded Bind Network Solutions, a consulting firm focused on network infrastructure and security. Mr. Monahan also serves as a director of Cott Corporation, a leading North
American and European water, coffee and coffee extracts, tea, and filtration solutions service company. He was formerly a director of: BSM Technologies, a commercial fleet telematics provider; COM DEV International, a designer and manufacturer of
space hardware; ENTREC Corporation, a crane and heavy haul transportation company; SAExploration Holdings, a geophysical services company offering seismic data acquisition services to the oil and gas industry; O’Charley’s Inc., a
multi-concept restaurant company; and Bridgewater Systems, a telecommunications software provider. Mr. Monahan holds a Bachelor of Science in Mechanical Engineering from Union College and an MBA from Columbia Business School. 

Salvatore (Sal) Visca 
 Mr. Visca joined Absolute
as a Director in March 2014 and is currently a member of the Compensation Committee and the Governance and Nominating Committee. Mr. Visca is a resident of Vancouver, British Columbia and his principal occupation is as Chief Technology Officer
of Elastic Path Software, a privately held e-commerce software company. Prior to Mr. Visca’s time with Elastic Path, he was the Chief Technology Officer from 2005 to 2008 at Business Objects, an
enterprise software company specializing in business intelligence. When Business Objects was acquired by SAP in 2007, Mr. Visca transitioned to Chief Technology Officer for the SAP Technology Development Group until 2010. Prior to Business
Objects, he held a number of technology leadership positions at Infowave Software and IBM. Mr. Visca served as the Chairman of the Advisory Board of Infowave Software Inc. from 2004 to 2006. Mr. Visca also served as a director of DDS
Wireless International Inc. from November 2006 to July 2014, as the independent director of Terminal City Capital Inc. from May 2008 to August 2010, and as an advisor of INETCO Systems Limited. Mr. Visca graduated with Honours from the
University of Western Ontario with a Bachelor of Science in Computer Science. 

  -
 12
 - 
  

 Gerhard Watzinger 

Mr. Watzinger joined Absolute as a Director in December 2014 and is currently the Chair of the Compensation Committee and a member of the Governance
and Nominating Committee. Mr. Watzinger, a resident of Naples, Florida, is the Chairman of CrowdStrike, a cloud-based security and endpoint protection company, and is also a director of each of Mastech Digital, a leading provider of digital
transformation IT services, and KnowBe4, a privately-held provider of security awareness training platforms. Mr. Watzinger previously served as the chief strategy officer and an executive vice president at McAfee, where he was responsible for
guiding McAfee’s global business strategy and development. Mr. Watzinger helped accelerate the international expansion of McAfee and directed the company through numerous successful mergers and acquisitions. Mr. Watzinger was also the
architect of McAfee’s acquisition by Intel, a $7.7 billion transaction which is one of the largest transactions in the information security industry. Mr. Watzinger holds a Bachelor’s degree in Computer Science from the University
of Applied Sciences in Munich, Germany. 
 Christy Wyatt 

Ms. Wyatt is Absolute’s Chief Executive Officer. Ms. Wyatt, a resident of San Jose, California, joined Absolute as CEO in November 2018
and became a Director in December 2018. Previously, Ms. Wyatt served as CEO of Dtex Systems, a leader in enterprise user intelligence and insider threat detection. Ms. Wyatt has held a variety of executive leadership roles at
globally-recognized business and technology brands including Good Technology (now Blackberry), Citigroup, Motorola, Apple, and Sun Microsystems. Ms. Wyatt currently serves as a member of the boards of directors of Silicon Labs and Quotient
Technology. She has been named one of Inc. Magazine’s Top 50 Women Entrepreneurs of America, Information Security’s CEO of the Year, one of the Fierce Wireless ‘Most Influential Women in Wireless’, and most recently as one of the
Top 50 Women Leaders in SaaS. 
 Prior Year’s Voting Results 

Except Ms. Atchison, each of the nominees for election as Director was nominated and elected as a Director at the last annual meeting of
shareholders. The voting results for the election of Directors at the Company’s Annual General Meeting held on December 13, 2018 are as follows: 
  

					
	  

Name
  
	 	Votes For	 	Percentage For
	  
 Daniel
Ryan
  
	 	19,679,801	 	73.35%
	  
 Gregory
Monahan
  
	 	18,412,022	 	68.63%
	  
 Eric
Rosenfeld
  
	 	17,496,572	 	65.21%
	  
 Salvatore
Visca
  
	 	20,456,855	 	76.25%
	  
 Gerhard
Watzinger
  
	 	20,465,443	 	76.28%
	  
 Christy
Wyatt
  
	 	26,800,810	 	99.89%

 Eric Rosenfeld will not stand for re-election at the Meeting. Management
appreciates and thanks Mr. Rosenfeld for his contributions to the Company over the past seven years. 
 Absence of Cease Trade Orders, Bankruptcies, Penalties
and Sanctions 
 None of our proposed Directors or executive officers has, within the 10 years prior to the date of this Information Circular,
been a director, chief executive officer, or chief financial officer of any company (including Absolute) that, while such person was acting in that capacity (or after such person ceased to act in that capacity but resulting from an event that
occurred while that person was acting in such capacity), was the subject of a cease trade order, an order similar to a cease trade order, or an order that denied the company access to any exemption under securities legislation, in each case for a
period of more than 30 consecutive days. 

  -
 13
 - 
  

 None of our proposed Directors or executive officers or, to the knowledge of the Company, shareholders
holding a sufficient number of securities to materially affect control of Absolute has within the 10 years prior to the date of this Information Circular: (i) become bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency or was subject to or instituted any proceedings, arrangement or comprise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (ii) been a director or executive officer of any company, that,
while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any
proceedings, arrangement or comprise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets. 
 None of our
proposed Directors or executive officers or, to the knowledge of the Company, shareholders holding a sufficient number of securities to materially affect control of Absolute has: (i) been subject to any penalties or sanctions imposed by a court
relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) been subject to any other penalties or sanctions imposed by a court or
regulatory body that would likely be considered important to a reasonable investor making an investment decision.  
 Board Committees 

The Board currently has an Audit Committee, a Compensation Committee, and a Governance and Nominating Committee. The membership of these committees is
reviewed annually. The Board intends to review and reconstitute the membership of each of these committees following the Meeting. 
 Audit Committee

 The Audit Committee is currently comprised of: 

Eric Rosenfeld (Chair) 

Lynn Atchison 

Gregory Monahan 

Daniel Ryan 
 The primary functions
of the Audit Committee are to: (a) meet with the CFO and other senior finance staff of Absolute and its independent auditors to review matters affecting financial reporting, the system of internal accounting and financial controls and
procedures and the audit procedures and audit plans; (b) appoint the auditors, subject to shareholder approval; and (c) review and recommend to the Board for approval Absolute’s financial statements and certain other documents
required by regulatory authorities. 
 During Fiscal 2019, all members of the Audit Committee listed above were independent and financially literate
and none of the members was an officer or employee of the Company or any of its subsidiaries. 
 Audit Committee disclosure required under National
Instrument 52-110 – Audit Committees (“NI 52-110”) is contained in the Company’s Annual Information Form dated August 13, 2019 (the
“AIF”), which is available under the Company’s profile on www.sedar.com. 
 Compensation Committee 

The Compensation Committee is currently comprised of: 

Gerhard Watzinger (Chair) 

Eric Rosenfeld 

Salvatore Visca 

  -
 14
 - 
  

 The primary functions of the Compensation Committee are to: (a) consider the terms of employment
of the Chief Executive Officer and certain other executive officers; (b) oversee the Company’s general compensation policies; and (c) approve the grant of awards under Absolute’s equity compensation plans. 

During Fiscal 2019, all members of the Compensation Committee listed above were independent and none of the members was an officer or employee of the
Company or any of its subsidiaries. 
 Governance and Nominating Committee 

The Governance and Nominating Committee is currently comprised of: 

Gregory Monahan (Chair) 

Daniel Ryan 

Salvatore Visca 

Gerhard Watzinger 
 The primary
functions of the Governance and Nominating Committee are to: (a) provide a focus on governance that will enhance the Company’s performance; (b) assess and make recommendations regarding the effectiveness of the Board; and
(c) establish and lead the process for identifying, recruiting, appointing, and providing ongoing development for the Directors. 
 During Fiscal
2019, all members of the Governance and Nominating Committee listed above were independent and none of the members was an officer or employee of the Company or any of its subsidiaries. 

Strategic Planning 
 The Board oversees the Company’s
strategic planning. At least annually, the Board reviews the strategic business plans and strategies proposed by management and approves such plans and strategies with such changes as the Board deems appropriate. The strategic plans and discussions
– which take into account, among other things, the opportunities and risks of the business, strategic objectives of the Company, and budgetary considerations – are presented by management to the Board for its approval. 

Risk Oversight 
 The Board oversees the identification of the
principal risks of the Company’s business and the implementation of appropriate systems to manage these risks. A Risk Committee, consisting of senior executive officers, maintains a dashboard of the evolving strategic, operational, product,
cyber, financial, legal, compliance, and other risks facing the Company, which includes an explanation of the risk, measurement of the likelihood of occurrence and resulting impact of the risk, and mitigation efforts being undertaken by the Company.
This dashboard is presented at least quarterly by management to the Audit Committee and the Board for review and discussion. 
 APPOINTMENT OF
AUDITOR 
 Deloitte LLP, Chartered Professional Accountants, of 939 Granville Street, Vancouver, British Columbia, will be nominated at the
Meeting for reappointment as Absolute’s auditor, at the remuneration to be fixed by the Board. Deloitte LLP was first appointed as Absolute’s auditor by the Company’s shareholders on November 12, 2003. 

The remuneration for the auditors is determined by the Board, and the fees paid to the auditors during the last two fiscal years has been disclosed in
the “Audit Committee Disclosure” section of the AIF. 

  -
 15
 - 
  

 APPROVAL OF NEW EMPLOYEE SHARE OWNERSHIP PLAN 

New Employee Share Ownership Plan 
 At the Meeting,
shareholders will be asked to approve a new Employee Share Ownership Plan (the “New ESOP”), which the Company intends will replace the Current ESOP (as discussed below) effective January 1, 2020 if approved by
shareholders, the TSX, and the designated administrator under the Employee Investment Act (British Columbia) (the “Administrator”). If the New ESOP receives necessary shareholder, TSX, and Administrator approvals, the Company
will terminate the Current ESOP following the conclusion of the current offering period ending December 31, 2019. 
 The Company is seeking to
reserve for issuance 350,000 Common Shares under the New ESOP, being that number of Common Shares that management believes will be sufficient to satisfy employee purchases under the New ESOP for the following two calendar years, at which point the
Company intends to re-evaluate the place of the New ESOP in the Company’s compensation scheme in conjunction with the need for the Company, pursuant to the policies of the TSX, to seek the re-approval of the unallocated entitlements under the Option Plan and PRSU Plan from shareholders in 2021 if the Company wishes to grant further awards under these plans thereafter. The Common Shares proposed to be
reserved for issuance under the New ESOP fall within the 12% limit contained in the Option Plan and PRSU Plan, and as such will reduce the number of awards that may be granted under those plans. 

The terms of the New ESOP are substantially similar to the terms of the Current ESOP; however, the Company has made certain amendments to the terms,
including: 
  

	 	◾	 	 only an employee’s base salary will be eligible for deduction pursuant to the New ESOP; 

 

	 	◾	 	 the New ESOP simplifies the definition of “Eligible Employee” to mean any employee employed by the Company (or
an affiliate) on a continuing basis for at least 20 hours a week, excluding non-employee service providers, non-employee members of the Board, and highly compensated
employees within the meaning of Section 414(q) of the Internal Revenue Code of 1986 (United States); 

  

	 	◾	 	 the New ESOP will be overseen by the Compensation Committee; 

 

	 	◾	 	 the New ESOP removes the 60 day notice period for amendments and may be amended, subject to the approval of the
Administrator, the TSX, and a majority of employee shareholders in all instances, except that any of the following amendments will require approval by the Company’s shareholders: 

 

	 	○	 	 increasing the number of Common Shares reserved for issuance under the New ESOP or the maximum amount of Common Shares
available for issuance pursuant to the New ESOP; 

  

	 	○	 	 amending the definition of “Eligible Employee”, “Purchase Price”, or “Shares”;

  

	 	○	 	 to remove, exceed, or increase the limits on insider participation in the New ESOP; 

 

	 	○	 	 to introduce Company matching of employee contributions under the New ESOP; 

 

	 	○	 	 amending the restrictions on the transferability of participating employees’ rights under the New ESOP; and

  

	 	○	 	 amendments to the amendment provisions of the New ESOP; 

 

	 	◾	 	 the New ESOP allows persons who become employees during an offering period to participate in the New ESOP on a pro-rated basis during that offering period; 

  

	 	◾	 	 all contributions pursuant to the New ESOP will be denominated in Canadian dollars to ensure the consistent application
of the limits in the New ESOP to the Company’s employees in different jurisdictions; 

  

	 	◾	 	 the period and annual contribution limits under the New ESOP for all participating employees will generally be $7,500
and $15,000, respectively; 

  

	 	◾	 	 the New ESOP prohibits purchases under the New ESOP by those persons who, after giving effect to such purchases, would
hold more than 5% of the total issued and outstanding Common Shares on that date; and 

  -
 16
 - 
  

	 	◾	 	 the New ESOP will continue to be available to participating employees during sick leave or other bona fide leave of
absence, for up to 3 months, or for so long as the participating employee’s right to re-employment is guaranteed either by statute or contract, if longer than 3 months. 

The full text of the New ESOP is appended to this Information Circular as Schedule “B” and a blackline to the Current ESOP is appended
as Schedule “C”. The terms of the New ESOP are described in further detail below under the heading “Securities Authorized for Issuance under Equity Compensation Plans – New Employee Share Ownership Plan”. 

New Employee Share Ownership Plan Approval Resolutions 
 At
the Meeting, shareholders will be asked to consider and, if deemed appropriate, to pass with or without variation, the following ordinary resolutions (the “New ESOP Resolutions”): 

RESOLVED THAT: 
  

	 	1)	 The new Employee Share Ownership Plan (the “New ESOP”) of the Company, in substantially the form
described in and appended as Schedule “B” to the Company’s management information circular dated November 12, 2019, be and is hereby authorized and approved. 

 

	 	2)	 The maximum number of common shares in the capital of the Company (the “Common Shares”) authorized
and reserved for issuance under the New ESOP shall be 350,000 Common Shares. 

  

	 	3)	 Any Director or officer of the Company be and is hereby authorized and directed to take all such action and execute
and deliver all such documents as any such Director or officer may, in his or her sole discretion, determine are necessary, desirable, or useful to implement the foregoing resolutions. 

 

	 	4)	 The Board of Directors of the Company, in its sole and complete discretion, may act upon these resolutions to effect
the adoption of the New ESOP and, subject to the limits set forth herein, fix the number of Common Shares reserved for issuance thereunder, or if deemed appropriate and without any further approval from the shareholders of the Company, may choose
not to act upon this resolutions, notwithstanding shareholder approval of the New ESOP and are authorized to revoke this resolution in their sole discretion. 

An ordinary resolution is a resolution passed by a simple majority of the votes cast in person or by proxy. Unless otherwise indicated, the persons
designated as proxyholders in the accompanying proxy intend to vote the Common Shares represented by each properly executed proxy FOR the New ESOP Resolutions. 

The Board recommends that shareholders vote FOR the New ESOP Resolutions. Unless otherwise instructed, Common Shares represented by proxies in favour
of management will be voted FOR the New ESOP Resolutions. 
 If the shareholders do not approve the New ESOP, the Current ESOP will remain as the
employee share ownership plan of the Company. The Company expects the remaining Common Shares issuable pursuant to the Current ESOP to be issued during the current offering period ending on December 31, 2019, and that no further Common Shares
will be issued pursuant to the Current ESOP thereafter. In the event the New ESOP is approved, the Company expects that employees will be able to acquire Common Shares under the New ESOP subject to and governed by the terms of the New ESOP effective
January 1, 2020, subject to the approval of the New ESOP by the TSX and the Administrator. If the New ESOP is approved by shareholders, the TSX, and the Administrator, the Company will terminate the Current ESOP following the end of the current
offering period concluding December 31, 2019. 

  -
 17
 - 
  

 OTHER BUSINESS 

Management has no knowledge, as at the date hereof, of any business other than that mentioned in the Notice of Meeting, to be presented for action at
the Meeting. However, the proxy solicited hereunder confers upon the proxyholder the discretionary right to exercise the powers conferred thereunder upon any other matters and proposals that may properly come before the Meeting. 

DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES 

National Instrument 58-101 – Disclosure of Corporate Governance Practices requires reporting issuers
to disclose their corporate governance practices. The corporate governance practices of the Company are set out in the attached Schedule “A” – Statement of Corporate Governance Practices. 

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS 

Share Option Plan 
 Overview 

The Company’s 2000 Share Option Plan, as amended (the “Option Plan”) has been established to provide incentives to eligible
persons to increase their ownership interest in the Company and thereby encourage their continuing association with the Company. The Option Plan was last approved by the Company’s shareholders on December 13, 2018. The Option Plan is
administered by the Board. The Option Plan provides that options (“Options”) exercisable for Common Shares may be issued to officers, employees, and consultants of the Company or a subsidiary of the Company. All Options expire on a
date not later than 7 years after the date of grant of such Option. 
 Number of Common Shares Available for Issuance 

The maximum number of Common Shares that may be reserved for issuance under the Option Plan, in combination with all other security-based compensation
arrangements of the Company, is 12% of the Company’s issued and outstanding Common Shares. Based on the 41,817,499 Common Shares issued and outstanding as at November 6, 2019, the Company may reserve up to 5,018,100 Common Shares for
issuance pursuant to the Option Plan and all other security based compensation arrangements. As at November 6, 2019, the Company had outstanding Options to purchase 1,138,375 Common shares (representing approximately 2.7% of the issued and
outstanding Common Shares as at November 6, 2019). Taking into account the 56,136 Common Shares reserved for issuance pursuant to the Current ESOP and the 2,363,720 Common Shares reserved for issuance pursuant to Share Units (as defined below)
granted under the PRSU Plan, 1,459,869 Common Shares, or approximately 3.5% of the Company’s total issued and outstanding Common Shares as at November 6, 2019, are available for issuance pursuant to the Option Plan and all other
security-based compensation arrangements of the Company. 
 As at June 30, 2019, the Company had outstanding Options to purchase 1,151,213 Common
Shares (representing approximately 2.8% of the issued and outstanding Common Shares as at June 30, 2019). Taking into account the 92,099 Common Shares reserved for issuance pursuant to the Current ESOP and the 1,580,257 Common Shares reserved
for issuance pursuant to the PRSU Plan, in each case as at June 30, 2019, 2,173,897 Common Shares, or approximately 5.2% of the Company’s issued and outstanding Common Shares as at June 30, 2019, were available for issuance pursuant
to the Option Plan and all other security-based compensation arrangements of the Company as at June 30, 2019. 
 Common Shares purchased and
cancelled under the NCIB will reduce the number of Common Shares outstanding and therefore the maximum number of Options the Company can issue. 
 The
number of Common Shares reserved for issue to any person under the Option Plan may not exceed 5% of the issued and outstanding Common Shares (2,090,875 Common Shares, based on the number of issued and outstanding Common Shares as at November 6,
2019). In addition, the number of Common Shares (i) that may be issuable under the Option Plan 

  -
 18
 - 
  

 
and any other security-based compensation arrangement of the Company at any time, or (ii) issued under the Option Plan and any other security-based compensation arrangement of the Company
within any one year period to insiders of the Company may not exceed 10% of the issued and outstanding Common Shares at that time. 
 Burn Rate 

The Company’s annual burn rate under the Option Plan, as described in Section 613(d) of the TSX Company Manual, was 0.4% in Fiscal 2017, 2.3%
in Fiscal 2018, and 0.9% in Fiscal 2019. The burn rate is calculated by dividing the number of securities granted under the security-based compensation arrangement during the relevant fiscal year by the weighted average number of securities
outstanding for the applicable fiscal year (the “Burn Rate”). The weighted average number of securities outstanding during the period is the number of securities outstanding at the beginning of the period, adjusted by the number of
securities bought back or issued during the period, multiplied by a time-weighting factor. The time-weighting factor is the number of days that the securities are outstanding as a proportion of the total number of days in the period (a weighted
average is adequate in many circumstances). The weighted average number of securities outstanding is to be calculated in accordance with the CPA Canada Handbook, as such may be amended or superseded from time to time. 

Vesting, Exercise, and Expiry Provisions 
 The exercise price
for each Option is equal to the closing price per share for the Common Shares on the TSX on the last trading day before the date of the grant of the Option. Except for alternate vesting schedules for certain optionees that may be fixed by the Board
on a case by case basis, and except for accelerated vesting in certain instances, Options vest after the first, second, third, or fourth year of the term of the Options as to a total number of Common Shares not exceeding 25% of the Common Shares
that are the subject of the Options in each such year. For Options issued on or before December 31, 2012, accelerated vesting in respect of a change of control is defined broadly to include, among other things, the launch of a take-over bid
which would result in the acquisition of control over 75% of the votes to elect a Director, whether or not the bid is ultimately successful, the beneficial acquisition of sufficient securities to cast 75% of the votes to elect a Director, on a fully
diluted basis, a disposition of substantially all of the assets of the Company or an amalgamation, merger, arrangement or other business combination resulting in securityholders of the other party’s shares being entitled to cast 75% of the
votes to elect Directors of the continuing entity. For Options issued on or after January 1, 2013, accelerated vesting in respect of a change of control is defined to include, among other things, an accelerated vesting event identified in an
employment agreement, the passage of a resolution by the Board determining that an accelerated vesting event has or is deemed to have occurred together with the occurrence of (a) a special resolution of shareholders pursuant to the Business
Corporations Act (British Columbia) in the event of a take-over bid, (b) the acquisition or continuing ownership by any person or persons acting jointly or in concert of at least 50% of the Common Shares of the Company, or (c) the
sale, lease exchange or other disposition of all or substantially all of the Company’s assets or a business combination involving the Company that results in securityholders other than current securityholders of the Company owning shares of the
continuing entity entitling them to cast over 50% of the votes attaching to all shares of the continuing entity. For Options issued on or after December 13, 2018, accelerated vesting would occur for an optionee upon the occurrence of:
(A) (i) the sale of all or substantially all of the assets of the Company other than to an entity which was an affiliate of the Company prior to the sale; (ii) a reorganization, amalgamation, merger or plan of arrangement with respect to
which all or substantially all of the persons who were the beneficial owners of the Common Shares immediately prior to such reorganization, amalgamation, merger or plan of arrangement beneficially own, directly or indirectly, less than 50% of the
resulting voting shares on a fully-diluted basis; (iii) a formal bid or tender offer for Common Shares being made as a result of which the offeror and its affiliates would, if successful, beneficially own, directly or indirectly, 50% or more of
the Common Shares then outstanding; (iv) during any period of two consecutive years, individuals who at the beginning of the period constituted the Board (together with any new directors whose nomination for election was approved by a vote of a
majority of the directors of the Company, then still in the office, who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of
the Board, then still in office; (v) any transaction determined by the Board to be substantially similar to the above transactions; (vi) any proposed change of control determined by the Board to be a change of control; or (vii) any
change of control event identified in an optionees employment agreement and (B) the employment of an optionee being terminated by the Company without cause or the optionee resigning in circumstances constituting constructive termination, in
each case within twelve months following any of the events listed above. 

  -
 19
 - 
  

 If an Option would otherwise expire during or within 5 business days after the expiration of a black-out period applicable to the optionholder, then such Option expires 10 business days following the expiration of the applicable black-out period. 

Termination, Retirement and Other Cessation of Employment 

Options terminate upon the happening of certain events. For optionholders who are Directors, their Options terminate upon their ceasing to be a
Director. For officers and employees, their Options terminate on the last day such officer or employee worked for the Company, except in limited circumstances. The exceptions to these termination events include, (a) the cases of death,
retirement or total disability of the optionholder, in which cases an additional one year, 3 years or 3 years, respectively, are allowed for the exercise of the Options in question, and (b) in the event the optionholder is terminated other than
for cause, the optionholder may exercise the Options in question for up to 30 days following termination. Notwithstanding the foregoing, for all Options granted following the December 13, 2018 amendment of the Option Plan, upon the death or
disability of an optionee, all Options will vest immediately prior to the optionee’s death or disability and become exercisable by the personal representatives of the optionee for 6 months following such death or disability. 

Except for cases involving assignment to a personal representative in the case of death, an Option may be exercised only by the optionholder to whom it
is granted and is not assignable. 
 Amendment Provisions 

Shareholder approval is required for any amendment or modification to the Option Plan that does any of the following: 

 

	 	◾	 	 increases the aggregate number of Common Shares reserved under the Option Plan; 

 

	 	◾	 	 extends the option period of Options granted to insiders pursuant to the Option Plan; 

 

	 	◾	 	 reduces the exercise price of Options granted to insiders pursuant to the Option Plan; 

 

	 	◾	 	 removes or exceeds the insider participation limit set out in the Option Plan; 

 

	 	◾	 	 removes the non-transferability limits set out in the Option Plan, or permits
the transfer or assignment of Options other than by will or the laws of descent and distribution; 

  

	 	◾	 	 amends the amending provisions set out in the Option Plan; 

 

	 	◾	 	 extends the option period of Options granted to any participant in the Option Plan; 

 

	 	◾	 	 reduces the exercise price of Options granted to any participant in the Option Plan; 

 

	 	◾	 	 cancels and reissues any Option; or 

 

	 	◾	 	 expands the categories of eligible optionees to broaden or increase insider participation. 

Except for the above noted matters, the Board retains the power without further shareholder approval to approve all other changes to the Option Plan.
Such amendments may include the following: 
  

	 	◾	 	 changes to the terms and conditions of the Option Plan necessary to ensure that the Option Plan complies with the
applicable regulatory requirements, including, without limitation, the rules of the TSX or any national securities exchange or system on which the stock is then listed or reported, or by any regulatory body having jurisdiction with respect thereto;

  

	 	◾	 	 the addition of a cashless exercise feature, payable in cash or securities, whether or not such feature provides for a
full deduction of the number of underlying securities from the Option Plan reserve; 

  

	 	◾	 	 a change to the termination provisions of a security or the Option Plan which does not entail an extension beyond the
original expiry date; 

  

	 	◾	 	 changes to the provisions of the Option Plan respecting the administration of the Option Plan and eligibility for
participation under the Option Plan; 

  -
 20
 - 
  

	 	◾	 changes to the provisions of the Option Plan respecting the terms and conditions on which Options may be granted,
including the provisions relating to the subscription price, the option period, and the vesting schedule; 

  

	 	◾	 the addition of any form of financial assistance to participants for the acquisition of Common Shares, and the
subsequent amendment of any such provision which is more favourable to participants; 

  

	 	◾	 changes of a “housekeeping nature”; 

 

	 	◾	 any amendments necessary to suspend or terminate the Option Plan; and 

 

	 	◾	 any other amendment, whether fundamental or otherwise, not requiring shareholder approval under applicable law
(including the policies of the TSX). 

 Performance and Restricted Share Unit Plan 

Overview 
 The Performance and Restricted Share Unit Plan, as
amended (the “PRSU Plan”) was last approved by the Company’s shareholders on December 13, 2018. Pursuant to the PRSU Plan, the Board may, from time to time, determine those eligible employees and officers of the Company
who will receive a grant of Restricted Share Units (“RSUs”) and/or Performance Share Units (“PSUs”, and together with RSUs, “Share Units”). The purposes of the PRSU Plan are to: (i) support the
achievement of the Company’s performance objectives; (ii) ensure that interests of key persons are aligned with the success of the Company; (iii) provide compensation opportunities to attract, retain and motivate key employees and
officers critical to the long-term success of the Company; and (iv) provide compensation incentives that do not promote excessive risk-taking by the Company’s key employees. 

Subject to the Compensation Committee of the Board reporting to the Board on all matters relating to the PRSU Plan and obtaining approval of the Board
for those matters required by the Compensation Committee’s mandate, the PRSU Plan is administered by the Compensation Committee, which has the sole and absolute discretion to recommend to the Board the employees and officers of the Company to
whom grants of Share Units should be made and the number of Share Units to be granted; to interpret and administer the PRSU Plan; to establish conditions to the vesting of Share Units; to set, waive, and amend performance targets; and to make any
other determinations that the Compensation Committee deems necessary or desirable for the administration of the PRSU Plan. Any decision of the Compensation Committee with respect to the administration and interpretation of the PRSU Plan will be
conclusive and binding on the participants. 
 Awards 
 The
Compensation Committee may award Share Units to any employee or officer (a “Participant”), subject to Board approval, and a Participant may elect to defer compensation to be received under the Company’s annual incentive program
by electing to receive such compensation in the form of RSUs by delivering to the Company an election notice not later than December 31 of the year preceding the first date of any period of services over which any compensation to be received
under the annual incentive program would be earned. A Participant who makes such an election will be awarded the number of RSUs determined by dividing the dollar amount of incentive compensation to be deferred by the “FMV” (as defined
below) as at the award date. 
 Each Share Unit granted to a Participant under the PRSU Plan will be credited to the Participant’s Share Unit
account. From time to time, a Participant’s Share Unit account will be credited with dividend Share Units in the form of additional RSUs (“Dividend RSUs”) or additional PSUs (“Dividend PSUs”, together with
Dividend RSUs, “Dividend Share Units”), as applicable, in respect of outstanding RSUs or PSUs, as applicable, on each dividend payment date in respect of which normal cash dividends are paid on Common Shares. Such Dividend Share
Units will be computed as the amount of the dividend declared and paid per Common Share multiplied by the number of Share Units recorded in the Participant’s Share Unit account on the date for the payment of such dividend, divided by the FMV as
at the dividend payment date. Dividend Share Units are not paid out until the underlying vested Share Unit is paid out. 

  -
 21
 - 
  

 “FMV” for these purposes means the volume weighted average trading price of the Common
Shares on the principal stock exchange on which the Common Shares are traded for the 5 trading days immediately preceding the applicable day (calculated as the total value of Common Shares traded over the 5 day period divided by the total number of
Common Shares traded over the 5 day period on that exchange). 
 Participants may elect at any time to redeem vested Share Units on any date or dates
after the date the Share Units become vested and on or before the expiry date. A Participant who does not elect an early redemption date as specified under the PRSU Plan will have vested Share Units redeemed on their expiry date. The expiry date for
Share Units will be determined by the Compensation Committee for each applicable grant. 
 The Company will redeem each Share Unit elected to be
redeemed by a Participant on the applicable redemption date by: 
  

	 	◾	 	 issuing to the Participant the number of Common Shares equal to one Common Share for each whole vested Share Unit
elected to be redeemed and delivering (A) such number of Common Shares; less (B) the number of Common Shares with a FMV equal to the amount of all income taxes and statutory amounts required to be withheld (“Applicable
Withholdings”); or 

  

	 	◾	 	 at the election of the Participant and subject to the consent of the Company, paying the Participant an amount in cash
equal to: (A) the number of vested Share Units elected to be redeemed multiplied by (B) the FMV minus (C) Applicable Withholdings; or 

  

	 	◾	 	 at the election of the Participant, a combination of Common Shares and, subject to the consent of the Company, cash,
less Applicable Withholdings. 

 Rights respecting Share Units and Dividend Share Units are not transferable or assignable other
than by will or the laws of descent and distribution. No financial assistance will be provided by the Company to any Participant in connection with any award of Share Units. 

Vesting Provisions 
 Each RSU will vest on the date or dates
designated in the applicable grant agreement or such earlier date as is provided for in the PRSU Plan or is determined by the Compensation Committee, conditional on the satisfaction of any additional vesting conditions established by the
Compensation Committee. 
 Each PSU will vest on the date or dates designated in the applicable grant agreement or such earlier date as is provided in
the PRSU Plan or is determined by the Compensation Committee, conditional on the satisfaction of any additional vesting conditions established by the Compensation Committee. The number of PSUs which will vest on a vesting date will be the number of
PSUs and Dividend PSUs scheduled to vest on such vesting date multiplied by the applicable adjustment factor set out and defined in the relevant grant agreement. The adjustment factor will be determined based on the Company’s financial or
market performance, as described in the applicable grant agreement. For PSUs granted after December 13, 2018, the adjustment factor of any such PSU is capped at 200% (or a multiple of 2). 

Number of Common Shares Available for Issuance 
 The
aggregate number of Common Shares that may be reserved for issuance under the PRSU Plan, in combination with all other security-based compensation arrangements of the Company is 12% of the Company’s issued and outstanding Common Shares. Based
on the 41,817,499 Common Shares issued and outstanding as at November 6, 2019, the Company may reserve up to 5,018,100 Common Shares for issuance pursuant to the PRSU Plan and all other security-based compensation arrangements. As at
November 6, 2019, the Company had outstanding Share Units to purchase 2,363,720 Common Shares (representing approximately 5.7% of the issued and outstanding Common Shares as at November 6, 2019). Taking into account the 56,136 Common
Shares reserved for issuance pursuant to the Current ESOP and the 1,138,375 Common Shares reserved for issuance pursuant to the Option Plan, 1,459,869 Common Shares, or approximately 3.5% of the issued and outstanding Common Shares as at
November 6, 2019, are available for issuance pursuant to the PRSU Plan 

  -
 22
 - 
  

 
and all other security-based compensation arrangements of the Company. The Company’s annual Burn Rate under the PRSU Plan was 1.3% in Fiscal 2017, 2.2% in Fiscal 2018, and 3.4% in Fiscal
2019. 
 As at June 30, 2019, the Company had outstanding Share Units to purchase 1,580,257 Common Shares (representing approximately 3.8% of the
issued and outstanding Common Shares as at June 30, 2019). Taking into account the 92,099 Common Shares that were reserved for issuance pursuant to the Current ESOP and the 1,151,213 Common Shares that were reserved for issuance pursuant to the
Option Plan, in each case as at June 30, 2019, 2,173,897 Common Shares, or approximately 5.2% of the Company’s issued and outstanding Common Shares as at June 30, 2019, were available to be reserved for issuance pursuant to the PRSU
Plan and all other security-based compensation arrangements as at June 30, 2019. 
 Under the PRSU Plan, Common Shares reserved for issuance
pursuant to Share Units that are surrendered, terminated, or are cancelled without having been redeemed will again be available for issuance under the PRSU Plan and Common Shares underlying Share Units that are redeemed for cash, Common Shares, or a
combination of cash and Common Shares will again be available for issuance under the PRSU Plan. 
 Pursuant to the terms of the PRSU Plan:
(i) the number of Common Shares reserved for issuance pursuant to the PRSU Plan and any other security-based compensation arrangement of the Company to any one person will not exceed 5% of the issued and outstanding Common Shares; (ii) the
aggregate number of Common Shares issued to insiders of the Company under the PRSU Plan and under any other security-based compensation arrangement of the Company will not exceed 10% of the issued and outstanding Common Shares within a 12-month period; and (iii) the aggregate number of Common Shares issued to insiders of the Company, or issuable to insiders of the Company at any time, under the PRSU Plan and any other security-based
compensation arrangement of the Company, may not exceed 10% of the total number of issued and outstanding Common Shares. 
 Termination, Retirement and Other
Cessation of Employment 
 In the event that a Participant’s employment is terminated due to resignation by the Participant or by the Company
for just cause, the Participant will forfeit all rights, title and interest with respect to Share Units and the related Dividend Share Units which are not vested at the Participant’s termination date. All vested Share Units will be redeemed as
at the Participant’s termination date. Notwithstanding the foregoing, for all Share Units granted following the December 13, 2018 amendment of the PRSU Plan, in the case of termination by the Company for cause, all Share Units, whether
vested or unvested, and the related Dividend Share Units, will be cancelled as at the Participant’s termination date. 
 For all PSUs granted
prior to the December 13, 2018 amendment of the PRSU Plan, in the event a Participant’s employment is terminated by the Company without cause, a pro-rata portion of the Participant’s unvested
PSUs and related Dividend PSUs will vest immediately prior to the Participant’s termination date, based on the number of complete months from the first day of the performance period to the applicable termination date divided by the number of
months in the performance period and using an Adjustment Factor of one. Similarly, for all RSUs granted prior to the December 13, 2018 amendment of the PRSU Plan, if the Participant’s employment is terminated by the Company without cause,
a pro-rata portion of the Participant’s unvested RSUs and related Dividend RSUs will vest immediately prior to the Participant’s termination date, based on the number of months from the first day of
the grant term to the termination date divided by the number of months in the grant term. For all Share Units granted following the December 13, 2018 amendment of the PRSU Plan, in the case of a termination of a Participant without cause, all
of the Participant’s unvested Share Units and related Dividend Share Units will be cancelled as at the Participant’s termination date. For all Share Units, in the event a Participant’s employment is terminated by the Company without
cause, all vested Share Units will be redeemed as at the Participant’s termination date. 
 In the event a Participant’s employment is
terminated by the death or disability of the Participant or the Participant ceases to be employed due to retirement, all of the Participant’s PSUs and RSUs and related Dividend PSUs and Dividend RSUs, as applicable, will vest immediately prior
to the date of such event, and for purposes of PSUs using an Adjustment Factor of one, and will be redeemed as at that date, and all vested Share Units will be redeemed as at the Participant’s termination date. Notwithstanding the foregoing,
for all Share Units granted following the December 13, 2018 amendment of the PRSU 

  -
 23
 - 
  

 
Plan, in the case of the retirement of a Participant, the Participant will forfeit all rights, title, and interest with respect to unvested Share Units, and the related Dividend Share Units. 

In the event that employment of a Participant is terminated by the Company without just cause or if the Participant resigns in circumstances
constituting constructive termination, in each case, within 12 months following a Change of Control (as such term is defined under the PRSU Plan) which includes, among other things the acquisition of 50% or more of the Common Shares, sale of all or
substantially all of the assets of the Company, or a significant change in the Directors of the Company, all of the Participant’s Share Units and related Dividend Share Units as applicable will vest immediately prior to the Participant’s
termination date (for purposes of PSUs, using an Adjustment Factor of one) and will be redeemed as at that date. 
 Amendment, Suspension or Termination 

The Board may amend, suspend or terminate the PRSU Plan, or any portion thereof, at any time, subject to those provisions of applicable law (including,
without limitation, the rules, regulations and policies of the TSX), if any, that require the approval of shareholders or any governmental or regulatory body. The Board may make any amendments to the PRSU Plan without seeking shareholder approval
and the Compensation Committee may correct any defect or supply any omission or reconcile any inconsistency in the PRSU Plan and to the extent the Compensation Committee deems, in its sole and absolute discretion, necessary or desirable. However,
shareholder approval (by a majority of votes cast) will be required for: 
  

	 	◾	 	 amendments to the percentage of Common Shares issuable under the PRSU Plan, including an increase to the fixed maximum
percentage of Common Shares or a change from a fixed maximum percentage of Common Shares to a fixed maximum number; 

  

	 	◾	 	 amendments expanding the categories of Participants which would have the potential of broadening or increasing insider
participation; 

  

	 	◾	 	 amendments extending the term of a Share Unit or any rights pursuant thereto held by an insider beyond its original
expiry date; 

  

	 	◾	 	 amendments that add any other provision which results in participants receiving Common Shares while no cash
consideration is received by the Company; 

  

	 	◾	 	 amendments which would permit the rights respecting Share Units or Dividend Share Units to be transferred or assigned
other than by will or the laws of descent and distribution; 

  

	 	◾	 	 amendments to the amending provisions of the PRSU Plan; and 

 

	 	◾	 	 amendments required to be approved by shareholders under applicable law (including, without limitation, the rules,
regulations and policies of the TSX). 

 The Board may, from time to time, in its absolute discretion and without the approval of
shareholders, make the following amendments to the PRSU Plan or any Share Unit: 
  

	 	◾	 	 any amendment to the vesting provisions applicable to a Share Unit, including to accelerate, conditionally or otherwise,
on such terms as it sees fit, the vesting date of a Share Unit, provided that with respect to any Participant who is a United States citizen or United States resident alien, the acceleration will not accelerate the redemption date applicable to the
Share Unit; 

  

	 	◾	 	 any amendment to the PRSU Plan or a Share Unit, as necessary, to comply with applicable law or the requirements of the
applicable stock exchange or any other regulatory body having authority over the Company, the PRSU Plan or the shareholders; 

  

	 	◾	 	 any amendment to permit the conditional redemption of any Share Unit; 

 

	 	◾	 	 any amendment of a “housekeeping” nature, including, without limitation, to clarify the meaning of an existing
provision of the PRSU Plan, correct or supplement any provision of the PRSU Plan that is inconsistent with any 

  -
 24
 - 
  

	 	 
other provisions of the PRSU Plan, correct any grammatical or typographical errors or amend the definitions in the PRSU Plan regarding administration of the PRSU Plan; 

 

	 	◾	 	 any amendment respecting the administration of the PRSU Plan; or 

 

	 	◾	 	 any other amendment that does not require the approval of the shareholders, including, for greater certainty, an
amendment in connection with a change of control of the Company to assist the Participants to tender the underlying Common Shares to, or participate in, the actual or potential event or to obtain the advantage of holding the underlying Common Shares
during such event, and to terminate, following the successful completion of such event, on such terms as it sees fit, the Share Units not redeemed prior to the successful completion of the event. 

The Board may amend or modify any outstanding Share Unit in any manner to the extent that the Board would have had the authority to initially grant the
award as so modified or amended, provided that, where such amendment or modification is adverse to the holder, the consent of the holder is required to effect such amendment or modification. No new awards of Share Units may be made under the PRSU
Plan after December 16, 2025, being the tenth anniversary of the PRSU Plan’s effective date. 
 Current Employee Share Ownership Plan 

The current employee share ownership plan (the “Current ESOP”), adopted in 2005, was established to provide incentive to qualified
individuals to increase their proprietary interest in the Company and thereby encourage their continuing association with the Company. The Current ESOP is administered by the Directors of the Company. The Current ESOP provides for the issuance of
Common Shares to employees of the Company or a subsidiary of the Company pursuant to its terms. The shareholders have approved the issuance of a maximum of 2,000,000 Common Shares under the Current ESOP, which represents approximately 4.8% of the
Company’s issued and outstanding shares as at November 6, 2019. As at November 6, 2019, 1,943,864 and 56,136 Common Shares have been issued and remain available for issue, respectively, under the Current ESOP, constituting
approximately 4.6% and 0.1%, respectively, of the issued and outstanding Common Shares as at that date. As at June 30, 2019, 1,907,901 and 92,099 Common Shares had been issued and were available for issue, respectively, under the Current ESOP,
constituting approximately 4.6% and 0.2%, respectively, of the issued and outstanding Common Shares as at June 30, 2019. The Company’s annual Burn Rate under the Current ESOP was 0.2% in Fiscal 2017, 0.3% in Fiscal 2018, and 0.2% in Fiscal
2019. 
 The number of Common Shares that may be issued under the Current ESOP and any other security-based compensation arrangement to insiders of
the Company may not exceed 10% of the issued and outstanding Common Shares at that time. With respect to insiders (or their associates), within a one year period, the number of Common Shares that may be issued under the Current ESOP and any other
security-based compensation arrangement to such insiders may not exceed 10% of the issued and outstanding Common Shares at that time. The purchase price of Common Shares under the Current ESOP is 85% of the lower of the closing Common Share price on
the first and last day of the offering period, and therefore could result in a purchase price that is below the market price of the Common Shares. The Current ESOP has annual Common Share purchase limits of $10,500 for
US-based employees and CAD$10,500 for Canadian employees. 
 Upon termination of employment with the Company
(including retirement or death), under the terms of the Current ESOP, an employee will be deemed to have withdrawn from participation in the purchase of Common Shares under the Current ESOP, effective the date of termination. 

An employee’s rights under the Current ESOP may not be pledged, assigned, encumbered or otherwise transferred for any reason other than by will or
the laws of descent and distribution. 
 The Board may amend any terms under the Current ESOP upon 60 days written notice, subject to the receipt of
any required regulatory approval, and approval from the Administrator and a majority of employee shareholders. 
 As described above under the heading
“Approval of New Employee Share Ownership Plan”, the Company intends for the New ESOP to replace the Current ESOP effective January 1, 2020. If shareholders do not approve the New ESOP, the Current

  -
 25
 - 
  

 
ESOP will remain as the employee share ownership plan of the Company. The Company expects the remaining Common Shares issuable pursuant to the Current ESOP to be issued during the current
offering period ending on December 31, 2019, and that no further Common Shares will be issued pursuant to the Current ESOP thereafter. In the event the New ESOP is approved, the Company expects that employees will be able to acquire Common
Shares under the New ESOP subject to and governed by the terms of the New ESOP effective January 1, 2020, subject to the approval of the New ESOP by the TSX and the Administrator. If the New ESOP is approved by shareholders, the TSX and the
Administrator, the Company will terminate the Current ESOP following the end of the current offering period concluding December 31, 2019. 
 New Employee
Share Ownership Plan 
 At the Meeting, shareholders will be asked to approve, with or without variation, the New ESOP Resolutions to adopt the
New ESOP and reserve a fixed limit of 350,000 Common Shares issuable under the New ESOP. The New ESOP is intended to provide incentive to qualified individuals to increase their proprietary interest in the Company and encourage their continuing
association with the Company. The New ESOP will be overseen by the Compensation Committee. The New ESOP provides for the issuance of Common Shares to employees of the Company or a subsidiary of the Company pursuant to its terms. The shareholders
will be asked to approve the issuance of a maximum of 350,000 Common Shares under the New ESOP, which represents approximately 0.8% of the issued and outstanding Common Shares as at November 6, 2019 and approximately 0.8% of the issued and
outstanding Common Shares as at June 30, 2019. 
 Similar to the Current ESOP, the purchase price of Common Shares under the New ESOP will be 85%
of the lower of the closing Common Share price on the first and last day of the offering period, and therefore could result in a purchase price that is below the market price of the Common Shares. The New ESOP will have annual purchase limits of
CAD$15,000 per employee. 
 Common Shares will not be purchased under the New ESOP if, together with any other security based compensation arrangement
of the Company, such purchase could result in the number of Common Shares issuable to insiders, at any time, exceeding 10% of the outstanding issue, or the number of Common Shares issued to insiders, within any
one-year period, exceeding 10% of the outstanding issue. The number of Common Shares that may be purchased by any person under the New ESOP may not, after giving effect to such purchase, exceed 5% of the
issued and outstanding Common Shares on the date of such purchase. 
 An employee may withdraw from the New ESOP by delivering written notice to the
Company on or before the 10th business day prior to the end of the offering period. Upon termination of employment with the Company for any reason (including involuntary with or without cause,
resignation, retirement or death), under the terms of the New ESOP, an employee will be deemed to have withdrawn from participation in the purchase of Common Shares under the New ESOP, effective as of the last date of their employment. Upon receipt
of a notice of withdrawal or termination, as described above, the Company will, within 10 business days, return all of the employee’s contributions which are being held at such time by the Company. 

If an employee’s payroll deductions are interrupted by any garnishment or other legal process, the employee will be deemed to have elected to
withdraw from the New ESOP. An employee’s participation in the New ESOP will continue during a sick leave or other bona fide leave of absence for up to three months or for so long as the employee’s right to
re-employment is guaranteed, either by statute or contract, if longer than three months, unless the employee elects to withdraw from participation in the New ESOP. 

An employee’s rights under the New ESOP may not be pledged, assigned, encumbered or otherwise transferred for any reason other than by will or the
laws of descent and distribution. 
 The Compensation Committee may, insofar as permitted by law and subject to any required approval of any stock
exchange on which the Common Shares are then listed or quoted, the Administrator and a majority of employee shareholders, amend, modify, revise or otherwise change the terms of the New ESOP, in whole or in part, provided that no amendment or
revision may use or divert any employee contributions for purposes other than for the purchase of Common Shares pursuant to the New ESOP. Such amendments may include: 

  -
 26
 - 
  

	 	◾	 	 amendments of a “housekeeping” nature, including any amendment for the purpose of curing any ambiguity, error
or omission or to correct or supplement any provision of the New ESOP that is inconsistent with any other provision; 

  

	 	◾	 	 amendments necessary to comply with the provisions of applicable law; 

 

	 	◾	 	 amendments respecting the administration of the New ESOP, including changing the process by which an employee may
participate in the New ESOP; and 

  

	 	◾	 	 amendments to introduce vesting or retention periods in respect of Common Shares purchased pursuant to the New ESOP.

 However, shareholder approval will be required for: 
  

	 	◾	 	 any amendment to increase the number of Common Shares reserved for issuance under the New ESOP or the maximum amount of
Common Shares available for issuance pursuant to the New ESOP; 

  

	 	◾	 	 any amendment to the definition of “Eligible Employee”, “Purchase Price”, and “Shares;

  

	 	◾	 	 any amendment to remove, exceed or increase the limits on insider participation in the New ESOP; 

 

	 	◾	 	 any amendment to introduce Company matching of employee contributions; 

 

	 	◾	 	 any amendment to the restrictions on the transferability of participating employee’s rights under the New ESOP; and

  

	 	◾	 	 any amendments to the amendment provisions under the New ESOP. 

Deferred Share Unit Plan 
 The Company adopted a deferred
share unit plan (the “DSU Plan”) effective January 1, 2016. Pursuant to the DSU Plan, non-employee Directors are entitled to elect to receive deferred share units
(“DSUs”) in full or partial satisfaction of their annual retainers, with each DSU having a value equal to the market price of the Common Shares, which under the DSU Plan is equal to the weighted-average closing price of the Common
Shares in the period of 5 trading days preceding the date of grant. Although DSUs will typically vest in the calendar year of grant, they are not payable by the Company until the non-employee Director ceases
to be a member of the Board. After a Director leaves the Board, their DSUs will be redeemed for cash during a prescribed period at a value equal to the market price of the Common Shares at the date of redemption. No Common Shares are issuable
pursuant to the DSU Plan. The Company may amend the DSU Plan as it deems necessary or appropriate, but no such amendment may adversely affect the rights of an eligible Director in DSUs granted prior to the date of amendment without the consent of
the Director. 

  -
 27
 - 
  

 Equity Compensation Plan Information as at June 30, 2019 

The following table sets forth details of the Company’s compensation plans under which equity securities of the Company were authorized for
issuance as at the end of Fiscal 2019. 
  

							
	  
  

Plan Category
	  	
Number of securities to be
issued under equity
compensation
plans(1)
  

(a)
	  	 Weighted-average exercise
price of outstanding options
  

(b)
	  	  

Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected
in column (a))
  
 (c)

 

	  

Equity compensation plans approved by securityholders

 

	  

Option Plan
  
	  	1,151,213	  	CAD$7.82	  	2,173,897
	  

PRSU Plan
  
	  	1,580,257	  	N/A	  	2,173,897
	  

Current ESOP
  
	  	N/A	  	N/A	  	92,099
	  

Total
  
	  	2,731,470	  	CAD$7.82	  	2,173,897(2)

 Notes: 
  

	 	 1)	 Except as set out herein, Absolute does not have any Common Share purchase arrangements or other rights to purchase
Common Shares outstanding. 

  

	 	 2)	 This figure is based on the 12% limit for all equity-based compensation plans of the Company. 

STATEMENT OF EXECUTIVE COMPENSATION 
 Named Executive
Officers 
 In this Information Circular, Named Executive Officer (“NEO”) means each of the following individuals: 

 

	 	a)	 the Company’s Chief Executive Officer (“CEO”); 

 

	 	b)	 the Company’s Chief Financial Officer (“CFO”); 

 

	 	c)	 each of the Company’s three most highly compensated executive officers, or the three most highly compensated
individuals acting in a similar capacity, other than the CEO and CFO, at the end of Fiscal 2019 whose total compensation was, individually, more than CAD$150,000 for Fiscal 2019; and 

 

	 	d)	 each individual who would be an NEO under (c) above, but for the fact that he or she was neither an executive
officer of the Company, nor serving in a similar capacity, at the end of Fiscal 2019. 

 Based on the foregoing, the Company’s
NEOs for Fiscal 2019 were: 
  

	 	◾	 	 Christy Wyatt (CEO as of November 26, 2018); 

 

	 	◾	 	 Steve Munford (Interim CEO until November 26, 2018); 

 

	 	◾	 	 Errol Olsen (CFO); 

  

	 	◾	 	 Sean Maxwell (Chief Commercial Officer); 

 

	 	◾	 	 Dr. Nicholas (Nicko) van Someren (Chief Technology Officer); 

 

	 	◾	 	 Todd Wakerley (Executive Vice President, Product Development until November 1, 2019); and 

 

	 	◾	 	 Dean Coza (Executive Vice President, Products until April 30, 2019). 

  -
 28
 - 
  

 Compensation Discussion and Analysis 

Compensation Committee 
 The Compensation Committee is
currently composed of Gerhard Watzinger, Eric Rosenfeld, and Salvatore Visca, all of whom are independent Directors and have prior management experience determining compensation plans and levels in other organizations. See “Election of
Directors” above for a description of their relevant experience. The Compensation Committee has adopted a Charter which outlines the roles, responsibilities, and purposes of the Compensation Committee. The purposes and responsibilities of the
Compensation Committee with respect to compensation matters are to determine the Company’s compensation philosophy, oversee the development and implementation of executive and Director compensation programs, and review and recommend to the
Board any required modifications to the program. 
 The Objectives 

Compensation of the Company’s executives has three primary objectives: (i) attract and retain executives with the management skills required
to execute on the Company’s objectives; (ii) reward executive team members for their contribution to the overall success of the Company and for achievement of planned business objectives in their own area of responsibility; and
(iii) align the longer term interests of the Company’s executives with the investment objectives of the Company’s shareholders through share-ownership programs. In order to meet these objectives, the Compensation Committee considers
many factors which influence the overall level of executive compensation. 
 Elements of Compensation 

The Company’s executive compensation program is comprised primarily of the following elements: 

 

	 	◾	 	 base salary; 

  

	 	◾	 	 participation in the Option Plan (described above under “Securities Authorized Under Equity Compensation Plans
– Share Option Plan”); 

  

	 	◾	 	 participation in the PRSU Plan (described above under “Securities Authorized Under Equity Compensation Plans –
Performance and Restricted Share Unit Plan”); 

  

	 	◾	 	 compensation under the Company’s short-term incentive plans, which include an annual variable pay plan and/or sales
commissions, depending on the nature of the particular executive officer’s position; 

  

	 	◾	 	 participation in the Current ESOP (described above under “Securities Authorized Under Equity Compensation Plans
– Current Share Ownership Plan” and “Securities Authorized Under Equity Compensation Plans – New Employee Share Ownership Plan”); and 

 

	 	◾	 	 other perquisites and benefits. 

Each element of the Company’s compensation program is chosen to satisfy one or more of the stated compensation objectives. The Compensation
Committee regularly reviews the various elements of the Company’s compensation program to ensure that each element is aligned with both the goals of the Company and the relevant executive officer. The compensation program, as designed, achieves
the Company’s compensation objectives through: 
  

	 	◾	 	 Benchmarking: The Compensation Committee periodically benchmarks the Company’s executive compensation with a
broad peer group of companies with particular emphasis on the security software and Software-as-a-Service sectors. This
comparison ensures that the Company’s executive compensation and benefits package is competitive with those found in the survey. To ensure that the survey includes the most appropriate companies, the Compensation Committee considers companies
of a similar revenue size and market capitalization that have a global focus and that compete with the Company for executives of similar talent and experience. In the most recent benchmarking study, the total compensation package was compared to
approximately the 35th percentile of the comparator group, taking into account the specific skillset and performance of the executives. In Fiscal 2019,

  -
 29
 - 
  

	 	 
the Compensation Committee considered the benchmarking study performed in Fiscal 2018 as well as a number of other factors, including information gathered from a third party compensation survey,
when determining compensation changes for Fiscal 2019. 

  

	 	◾	 	 Providing Fixed and Variable Compensation: The Company provides a mix of fixed and variable compensation designed
to attract, retain, and motivate top performing executives, and the Company also appropriately links compensation levels with the achievement of relevant financial and strategic goals. The Company’s fixed compensation includes salary and
certain perquisites and benefits. The Company’s variable compensation includes participation in the Option Plan, the PRSU Plan, the Current ESOP, and compensation under short-term incentive plans. 

 

	 	◾	 	 Providing a Mix of Equity and Cash Incentives: The Company provides a mix of equity compensation, through
participation in the Option Plan, the PRSU Plan, and the Current ESOP, and variable pay cash incentives designed to motivate executive officers to focus on achieving performance results that lead to sustainable long-term shareholder returns.

 Independent Compensation Consultant 

Under its Charter, the Compensation Committee has the authority to select and set the compensation for external compensation consultants or advisors. In
Fiscal 2019, the Compensation Committee engaged an independent compensation consultant, Meridian Compensation Partners (“Meridian”). 

In July 2019, Willis Towers Watson was retained as an independent compensation consultant to assist the Compensation Committee in determining executive
compensation for the 2020 fiscal year. Full details of these services will be disclosed in the Company’s 2020 Statement of Executive Compensation. 

In Fiscal 2019, the services provided by Meridian were limited to assistance with annual incentive and long-term incentive compensation design,
including assistance with determining performance measures related to vesting PSUs. Meridian was originally retained prior to this engagement in the 2016 fiscal year and again in Fiscal 2017 and in Fiscal 2018 and has not provided any other services
to the Company or to its affiliates, or to any of the Directors or members of management, other than the compensation services that it has been retained to provide to the Compensation Committee. 

In completion of their mandate in Fiscal 2018, Meridian compiled lists of peer group companies in the software industry, with particular emphasis on
those with a similar size (based on revenue) in the security software and Software-as-a-Service industries. This list comprised a
total of 17 peer group companies, of which 6 were Canadian-based and 11 were U.S.-based. Total compensation for each selected executive officer was compared to the 35th percentile of the
appropriate range, based on the compiled list of Canadian and U.S. based companies, and recommendations were then made for consideration of the Compensation Committee. 

The peer companies studied in Fiscal 2018 were: 
  

			
	 ◾  Amber Road
Inc.
	  	 ◾  Rapid7,
Inc.

		
	 ◾  Brightcove,
Inc.
	  	 ◾  Redknee Solutions
Inc.

		
	 ◾  Descartes Systems
Group Inc.
	  	 ◾  Solium Capital
Inc.

		
	 ◾  Everbridge,
Inc.
	  	 ◾  Tucows,
Inc.

		
	 ◾  Guidance Software,
Inc.
	  	 ◾  Upland Software,
Inc.

		
	 ◾  Halogen Software
Inc.
	  	 ◾  Vasco Data Security
Intl., Inc.

		
	 ◾  Kinaxis
Inc.
	  	 ◾  Xactly
Corp.

		
	 ◾  MobileIron,
Inc.
	  	 ◾  Zix
Corporation

		
	 ◾  Qualys, Inc.
	  	

  -
 30
 - 
  

 Executive Compensation Related Fees 

The aggregate fees billed by Meridian, or any of its affiliates, for services related to determining compensation for any of the Company’s
Directors and executive officers were CAD$32,407 in Fiscal 2018 and CAD$24,460 in Fiscal 2019. 
 All Other Fees 

The aggregate fees billed by Meridian, or any of its affiliates, for all other services provided were CAD$24,987 in Fiscal 2018 and CAD$0 in Fiscal
2019. The nature of the other services in Fiscal 2018 included: development of equity compensation plans; assistance with development of equity compensation policies; and general advisory services on design of overall compensation plans for the
executive officers. 
 Recommendations of the Compensation Committee and Management 

In general, the Compensation Committee uses information gathered from an independent consultant (if engaged), third-party compensation surveys, and its
own assessment of performance to develop pay strategies and recommendations for the executive officers. In Fiscal 2019, the Compensation Committee considered the benchmarking study performed in Fiscal 2018 as well as a number of other factors,
including information gathered from a third party compensation survey, when determining compensation changes for Fiscal 2019. 
 After this analysis,
the Compensation Committee prepares its recommendation for the Board to review and discuss. The independent (non-executive) members of the Board have the sole authority to approve compensation decisions made
with respect to the NEOs. This applies to all elements of the relevant executive officers’ compensation, including salary, short-term incentive plan opportunity, sales commissions, and long-term incentive plan participation. The CEO and other
NEOs determine the compensation for the other executive officers which report directly to them. 
 The Determination of Each Element 

When determining compensation policies and individual compensation levels for the executive officers, the Compensation Committee takes into
consideration a variety of factors. These factors include: (i) the Company’s overall financial and operating performance; (ii) the Compensation Committee’s and the Board’s overall assessment of each relevant executive’s
individual performance and contribution towards meeting corporate objectives, levels of responsibility, and length of service; (iii) industry comparables, as noted above under “Independent Compensation Consultant”; and
(iv) information from relevant third party compensation surveys. 
 The amount for each element of compensation is determined as follows: 

 

	 	◾	 	 Salary: Base salary for a NEO is determined based on his or her responsibilities, individual performance factors,
overall corporate performance, benchmark data, and the assessment of such individual as determined by the Compensation Committee. The base salaries for executive officers are reviewed annually. Base salary is considered as a part of the overall
compensation package, which is intended to provide the executive officer with a compensation level comparable to the total compensation package within the applicable peer group of companies from the most recent compensation study completed.

  

	 	◾	 	 Share Ownership: NEOs benefit from long-term improved performance by the Company almost entirely through their
participation in the Option Plan, the PSRU Plan, and the Current ESOP. The Compensation Committee may from time to time recommend the grant of Options, PSUs, and/or RSUs to the Company’s executive officers. All grants of Options, PSUs, and RSUs
are reviewed and approved by the Compensation Committee and the Board. Grants of Options, PSUs, and RSUs are intended to emphasize the executive officers’ commitment to the Company’s growth and the enhancement of share value and to reward
executive officers for the Company’s performance through appreciation in equity values. The grant of Options, PSUs, and RSUs is a key component of the executive compensation package and contributes to the Company’s ability to attract and
retain qualified 

  -
 31
 - 
  

	 	 
executives. The Compensation Committee recommends to the Board grants to newly hired executive officers following the commencement of their employment and reviews Option, PSU, and RSU balances
annually. The amount of Options, PSUs, and RSUs granted to the executive officers on an annual basis is determined based on their position level, respective responsibilities, individual performance factors, overall corporate performance, benchmark
data, and the assessment of such individual as determined by the Compensation Committee. In addition, the amount and terms of outstanding Options, PSUs, and RSUs held by the executive officer are taken into account when determining whether and how
new grants should be made to such person. Generally, Options, PSUs, and/or RSUs are granted on initial hire, upon promotion, and via an annual grant to certain employees, including executive officers. The adjustment factor for PSUs granted in Fiscal
2019 was related to a mix of (i) market-based performance condition, and (ii) a Company-specific performance condition. 

  

	 	◾	 	 Short-term Incentive Plan: The executive officers also benefit from the improved performance of the Company from
time to time by the receipt of variable pay, awarded based on Company performance set in conjunction with the annual financial plan, and subject to personal performance. The annual executive officer variable pay plan and the related performance
targets are reviewed and approved by the Compensation Committee. The performance targets are aligned with those which the Compensation Committee believes will enhance future shareholder value and, in Fiscal 2019, were based on the achievement of
annual contract value base growth and profitability, in addition to the achievement of certain individual objectives (MBOs). Generally, the amounts available under the variable pay plan will be paid if the Company meets annual targets and strategic
imperatives as set out in the annual operating plan. In addition, the standard opportunities are also payable at a variety of decreased or increased levels depending on performance (such as at a level of 50% for achievement of approximately 87-95% of the standard performance targets, depending on the target, or at a level of 200% for overachievement of approximately 104-120% of the standard performance targets,
depending on the target). From time to time, the Compensation Committee may change the variable pay plan performance targets in order to provide continued incentive to the executive officers throughout the year, if it becomes clear that the targets
as originally outlined are unachievable. 

  

	 	◾	 	 Commissions: The Chief Commercial Officer, in his sales leadership role, benefits from variable compensation in
the form of sales commissions. Sales quotas are set based on senior management recommendations, taking into account current market trends and the overall annual budget approved by the Board, and are subject to approval by the CEO. In Fiscal 2019,
sales quotas were set semi-annually, with quarterly benchmarks. Due to their nature, sales commissions are generally earned on a pro-rata basis, based on performance. Any sales commission opportunity
for a NEO is approved by the Compensation Committee. 

  

	 	◾	 	 Perquisites and Benefits: The Compensation Committee also determines industry standard perquisites for each NEO.
The Company’s perquisites are intended to provide the executive officers with a package competitive within its industry, so as to attract and retain talented executives. Executive officers also participate in the Company’s employee health
insurance benefit plans. There are minimal perquisites provided to the executive officers which are not afforded to all employees. 

The Company believes that the disclosure of the specific targets referred to under “Share Ownership”, “Short-term Incentive Plan”
and “Commissions” above would be seriously prejudicial to its interests, as disclosure of these targets would reveal details that could undermine the chosen target criteria and the rationale for choosing such criteria. The Company believes
these targets are sufficiently and appropriately challenging to reach, while still being achievable. The achievement of targeted objectives, which are established in consideration of the Company’s projections for each fiscal year, is based on,
among other things, the Company’s financial performance. Thus, various economic factors beyond the Company’s control, including the Company’s market outlook and the global economic environment, may influence the achievement of the
Company’s results. 

  -
 32
 - 
  

 Compensation Risk 

Both the Compensation Committee and the Board considered the risks associated with the Company’s compensation policies and practices. The role of
the Board includes assessing and reviewing the principal risks of all aspects of the Company’s business, and ensuring proper structures are in place to manage those risks. The role of the Compensation Committee includes developing appropriate
terms of employment for certain executive officers and general compensation policy to appropriately balance risks and incentives. 
 The Company
monitors industry standards for compensation practices to identify emerging areas of potential risk or inappropriate incentives. When setting compensation levels, the Company seeks an appropriate balance of base pay, variable pay opportunities, and
share ownership vehicles to balance the short-term and long-term interests of the Company by tying compensation to the achievement of the business objectives of the Company, while also ensuring that the senior management of the Company has
sufficient equity exposure to align their interests with the interests of the Company’s shareholders. The Company believes that the compensation policies it has established reflect an appropriate mixture of guaranteed compensation, variable pay
opportunities, and risk mitigation. The Company believes that senior management collectively owns a sufficient number of Common Shares to discourage the taking of inappropriate risks by senior management. 

The Directors and executive officers are prohibited from purchasing financial instruments designed to hedge or offset a decrease in the market value of
the Common Shares or other equity securities of the Company that were granted to him or her by the Company as compensation, or that are otherwise held (directly or indirectly) by him or her. 

NEO Compensation Paid in Fiscal 2019 – Base Salaries 

Base salaries for the NEOs are typically reviewed by the Compensation Committee annually and at the outset of employment. The following changes were
made to the base salaries of the NEOs in Fiscal 2019: 
  

	 	◾	 	 Ms. Wyatt was appointed as CEO effective November 26, 2018. Ms. Wyatt’s annual base salary was set
at $420,000. 

  

	 	◾	 	 Effective May 1, 2019, Mr. Olsen’s annual base salary was increased to CAD$400,000.

  

	 	◾	 	 Effective April 1, 2019, Mr. Maxwell’s annual base salary was increased to $400,000.

  

	 	◾	 	 Dr. van Someren was hired as Chief Technology Officer effective April 1, 2019. Dr. van Someren’s
annual base salary was set at $330,000. 

  -
 33
 - 
  

 NEO Compensation Paid in Fiscal 2019 – Variable Pay Opportunity 

The variable pay opportunity for each of the NEOs in Fiscal 2019 is set out below. The variable pay opportunity for Mr. Maxwell was primarily based
on the achievement of certain sales targets (as discussed above), with a small portion being based on achievement of corporate objectives. See below under “Summary Compensation Table” for the actual amounts paid to the NEOs. 

 

			
	  

Name and Position
  
	 	    Variable Pay Opportunity  
  
	  

Christy Wyatt
  

Current Chief Executive Officer
  
	 	$248,548(1) 
	  

Errol Olsen
  

Chief Financial Officer
  
	 	CAD$171,821(2) 
	  

Sean Maxwell
  

Chief Commercial Officer
  
	 	$280,405(3) 
	  

Nicko van Someren
  

Chief Technology Officer
  
	 	$40,685(4) 
	  

Todd Wakerley
  

Executive Vice President, Product Development
  
	 	$145,000
	  

Steve Munford
  

Former Interim Chief Executive Officer
  
	 	$162,192(5) 
	  

Dean Coza
  

Former Executive Vice President, Products
  
	 	$126,596(6) 

 Notes: 
  

	 	1)	 This variable pay opportunity is based on a full year at $420,000, pro-rated to
a start date of November 28, 2018. 

  

	 	2)	 Effective May 1, 2019, this variable pay opportunity was increased to CAD$200,000 from CAD$167,375.

  

	 	3)	 Effective April 1, 2019, this variable pay opportunity was increased to $300,000 from $276,000.

  

	 	4)	 This variable pay opportunity is based on a full year at $165,000, pro-rated to
a start date of April 1, 2019. 

  

	 	5)	 This variable pay opportunity is based on a full year at $400,000, pro-rated to
an end date of November 26, 2018. This amount was guaranteed to be paid out at 100% pursuant to the terms of Mr. Munford’s employment agreement. 

 

	 	6)	 This variable pay opportunity is based on a full year at $152,500, pro-rated to
an end date of April 30, 2019. 

 The NEOs’ opportunities under the Company’s variable pay plans are typically
reviewed by the Compensation Committee annually and at the outset of employment. The following changes were made to the variable pay opportunities of the NEOs in fiscal 2019: 
  

	 	◾	 	 Ms. Wyatt was appointed as CEO effective November 26, 2018. Ms. Wyatt’s standard annual variable pay
opportunity, based on corporate performance, was set at $420,000. 

  

	 	◾	 	 Effective May 1, 2019, Mr. Olsen’s standard annual variable pay opportunity, based on corporate
performance, was increased to CAD$200,000. 

  

	 	◾	 	 Effective April 1, 2019, Mr. Maxwell’s total standard variable pay opportunity was increased to $300,000.
Of this amount, $264,000 was structured as sales commissions and $36,000 was based on corporate performance. 

  

	 	◾	 	 Dr. van Someren was hired as Chief Technology Officer effective April 1, 2019. Dr. van Someren’s
standard annual variable pay opportunity, based on corporate performance, was set at $165,000. 

 The NEOs’ payment pursuant to
the annual executive variable pay plan for Fiscal 2019 was based upon the achievement of the Company’s two annual performance targets (the first target being annual contract value base growth and the second target being profitability) and a
third target being the achievement of certain individual objectives (MBOs). The first and second performance targets were each weighted at 40% and the third target was weighted at 20%. The Company achieved

  -
 34
 - 
  

 
97% of the first performance target and 126% of the second performance target. As a result of various executive changes that occurred during Fiscal 2019, the Compensation Committee determined it
was not possible to properly assess the achievement of the individual objectives for the third performance target. While the target threshold for the first performance target was not met, the 97% achievement of the target resulted in a 68%
attainment factor for that target. The achievement of the second performance target applied a 200% attainment factor to that amount. As a result of the difficulty in assessing the achievement of the individual objectives for the third performance
target, the Compensation Committee applied the 68% achievement of the first performance target as a proxy for the third performance target. As a result, the relevant executive officers achieved an overall attainment of 121% of their variable pay
opportunity for Fiscal 2019, which was paid early in the fiscal 2020 year. This excludes sales commissions payable to Mr. Maxwell. 
 Actual
amounts paid, and their percentage of total compensation for each NEO, are outlined in the Summary Compensation Table below. 
 NEO Compensation Paid in Fiscal
2019 – Incentive Plan Awards 
 Ms. Wyatt and Dr. van Someren received respective grants of Options, PSUs, and RSUs following the
commencement of their employment. Messrs. Olsen, Maxwell, Wakerley, and Coza received grants of PSUs and RSUs in September 2018 in recognition of their performance in Fiscal 2018 and as a retention tool. Mr. Maxwell also received a grant of
RSUs in March 2019 as a retention tool. NEOs were also eligible to participate in the Current ESOP. 
 See below under “Incentive Plan Awards
– Value Vested or Earned During the Year” for details of the incentive plan amounts granted to the NEOs in Fiscal 2019. 
 Compensation Plan Changes for
Fiscal 2020 
 The variable pay plan for Ms. Wyatt and Messrs. Olsen, van Someren and Wakerley was determined by the Compensation Committee
for the 2020 fiscal year to align with current internal targets, budgets, and forecasts. For the 2020 fiscal year, the three performance targets for the NEOs variable pay opportunity are: (i) the amount of new Annual Contract Value
(“ACV”) in excess of expirations in our ACV Base; (ii) the percentage renewal of subscription expiries in our ACV Base; and (iii) adjusted earnings before interest, taxes, depreciation, and amortization
(“EBITDA”), each weighted at 33.3%. For Mr. Maxwell, approximately 88% of his variable pay opportunity is based on the achievement of sales targets and is paid as commissions on a
pro-rata basis, with the remaining 12% based on the corporate variable pay plan as described above. See the section entitled “Non-IFRS Measures” in the
Company’s most recent management’s analysis and discussion filed on www.sedar.com for a discussion of the Company’s methods for calculating ACV Base and EBITDA. 

The standard variable pay opportunities described above are available if the Company meets its performance targets. In addition, the standard
opportunities described above are also payable at a variety of decreased or increased levels depending on performance (such as at a level of 50% for achievement of approximately 89-93% of the standard
performance targets, depending on the target, or at a level of 200% for overachievement of approximately 109-122% of the standard performance targets, depending on the target). 

In general, the achievement of annual performance targets by the Company triggers the creation of the pool of funds available for variable pay to
employees who are not executive officers or commissioned employees; however, specific amounts are paid based on assessed personal performance levels. 

  -
 35
 - 
  

 Performance Chart 

The following chart shows the shareholder return on the Common Shares for the 5-year period from June 30,
2014 to June 30, 2019, together with the cumulative return for the S&P/TSX Total Return Index for the same period, based on the closing price on the last trading day of each year and including dividends paid on the Common Shares. The chart
assumes an initial investment of CAD$100. 
 

 
  

													
	  	  	  

  June 30,    

  2014    
  
	  	  June 30,    
  2015   
 	  	  June 30,    
  2016   
 	  	  June 30,    
  2017   
 	  	  June 30,    
  2018   
 	  	
  June 30,    

  2019    

	  

Absolute
  
	  	  CAD$100.00    	  	  CAD$134.20    	  	  CAD$108.55    	  	  CAD$124.35    	  	  CAD$118.12	  	  CAD$137.97    
	  

S&P/TSX Total Return Index
  
	  	  CAD$100.00    	  	  CAD$96.09    	  	  CAD$92.86    	  	  CAD$100.24    	  	  CAD$107.47	  	  CAD$108.16    

 The trend in the above graph shows that the performance of the Common Shares has outpaced the performance of the
S&P/TSX Total Return Index over the past five years. 
 Overall compensation for the NEOs has been relatively constant over this 5 year period,
with the general exception of higher amounts in the first year of a NEO’s employment as a result of inception equity grants. The short term variable pay opportunity for NEOs is based on Company performance in meeting profitability and
revenue growth targets, with annual improvement in these metrics likely to contribute to stock price performance. The long term incentive compensation for NEOs is equity based; however, ongoing grants are measured primarily by the value of
equity instruments at the time of grant. As a result, changes in the Company’s public market valuation do not directly influence NEO compensation; however, the post-grant value of these awards will increase if the Company’s stock
performance improves. 

  -
 36
 - 
  

 Summary Compensation Table 

The compensation paid to the NEOs during Fiscal 2019 is as set out below: 

 

															
	
Name and Position
  
	  	
Fiscal  
 Year  

 
	  	 Salary(1)   
  
	  	 Share-based  
awards(2)(3)   
  

 
	  	 Option-based  
awards(4)   
  

 
	  	 Non-equity 
 incentive plan 
compensation 
	  	 All
other  
compensation(6)  
  
	  	
  Total    

  compensation    
  

	  	  

Annual  
incentive  
plans(1)(5)   

 

	  

Christy Wyatt(7) 
  

Current Chief Executive Officer
  
	  	2019  	  	$253,182  	  	$1,664,651  	  	$260,617  	  	$302,039  	  	$404,200  	  	  $2,884,689    
	 Errol Olsen

 
 Chief Financial Officer
	  	  
 2019  

 
 2018  

 
 2017  

 
	  	 $271,894  

 
 $260,683  

 
 $252,352  
	  	 $270,309  

 
 $328,476  

 
 $103,968  
	  	 Nil  

 
 $42,475  

 
 $19,538  
	  	 $157,932  

 
 $68,652  

 
 $56,087  
	  	 $15,765  

 
 $9,098  

 
 $10,125  
	  	
  $715,900    
  

  $709,386    
  

  $442,070    

	 Sean Maxwell

 
 Chief Commercial Officer
	  	  
 2019  

 
 2018  

 
 2017  

 
	  	 $383,754  

 
 $354,939  

 
 $300,000  
	  	 $656,391  

 
 $298,522  

 
 Nil  
	  	 Nil  

 
 $42,475  

 
 Nil  
	  	 $288,423  

 
 $248,302  

 
 $275,504  
	  	 $969  

 
 $1,952  

 
 Nil  
	  	
  $1,329,537    
  

  $946,190    
  

  $575,504    

	  

Nicko van Someren(8) 
  

Chief Technology Officer
  
	  	2019  	  	$82,569  	  	$515,984  	  	$136,509  	  	$49,760  	  	$100,000  	  	  $884,822    
	 Todd Wakerley

 
 Executive Vice President, Product Development
	  	  
 2019  

 
 2018  

 
 2017  

 
	  	 $290,180  

 
 $290,000  

 
 $270,833  
	  	 $151,780  

 
 $141,313  

 
 $180,413  
	  	 Nil  

 
 $14,128  

 
 $7,098  
	  	 $175,394  

 
 $85,550  

 
 $145,000  
	  	 $8,250  

 
 $8,700  

 
 $8,125  
	  	
  $625,604    
  

  $539,693    
  

  $611,469    

	 Steve Munford(9) 
  
 Former Interim Chief Executive
Officer
	  	  
 2019  

 
 2018  

 
	  	 $151,382  

 
 $141,949  
	  	 Nil  

 
 $544,624  
	  	 Nil  

 
 $325,555  
	  	 $228,165  

 
 $121,469  
	  	 $93,677(10)   

 
 Nil  
	  	
  $473,223    
  

  $1,133,607    

	  

Dean Coza(11) 
  

Former Executive Vice President, Products
  
	  	  
 2019  

 
 2018  

 
	  	 $263,408  

 
 $226,599  
	  	 $159,825  

 
 $466,185  
	  	 Nil  

 
 $72,072  
	  	 Nil  

 
 $66,740  
	  	 $254,564  

 
 Nil  
	  	
  $677,797    
  

  $831,596    

 Notes: 
  

	 	1)	 The salary and annual incentive plan payments for Messrs. Olsen and Munford were paid in Canadian dollars. These
amounts are translated into US dollars at the average monthly foreign exchange rate in effect when the payment is made. 

  

	 	2)	 Share-based awards include RSUs and PSUs and, in the case of Messrs. Olsen, Maxwell, and Wakerley, Phantom Share Unit
awards. The Phantom Share Unit Plan lapsed on December 7, 2017. The grant-date fair value of the Phantom Share Unit and RSU awards is the fair value of the Common Shares on the date of grant. 

 

	 	3)	 The grant-date fair value of PSU awards is determined on the grant date using a Monte Carlo simulation model, taking
into account the fair value of the Common Shares on the date of grant, potential future dividends accruing to the unitholder’s benefit, and encompassing a wide range of possible future market conditions and Company performance conditions.

  

	 	4)	 The grant-date fair value of the Option awards is determined in accordance with IFRS 2, “Share Based
Payment” using a Black- Scholes option pricing model. The Company has chosen this methodology as there are no future performance criteria for the vesting of these Options, other than the passage of time. 

 

	 	5)	 The annual incentive plan compensation (the specific targets for which have not been disclosed) as a percentage of
total annual compensation for the year ended June 30, 2019 was 10% for Ms. Wyatt, 22% for Mr. Olsen, 22% for Mr. Maxwell, 

  -
 37
 - 
  

	 	 
6% for Dr. van Someren, 28% for Mr. Wakerley, 48% for Mr. Munford, and 0% for Mr. Coza. 

 

	 	6)	 Other compensation includes inception bonuses, Company contribution to a personal savings plan like a registered
retirement savings plan or a 401(k) Plan, and amounts related to participation in the Current ESOP. The amount related to the Current ESOP is calculated as the difference between the price expected to be paid for the number of shares purchased and
the fair market value of the shares at the beginning of each Current ESOP period. 

  

	 	7)	 Ms. Wyatt was appointed CEO effective November 27, 2018. No additional compensation was paid to
Ms. Wyatt specifically for serving on the Board. 

  

	 	8)	 Dr. van Someren was hired as Chief Technology Officer effective April 1, 2019. 

 

	 	9)	 Mr. Munford’s employment ended on November 26, 2018. 

 

	 	10)	 Mr. Munford received a payment of CAD$124,000 in connection with his departure from the Company.

  

	 	11)	 Mr. Coza’s employment ended on April 30, 2019. 

Incentive Plan Awards 
 Outstanding Option-Based Awards 

The following table sets out all Options outstanding as at June 30, 2019 for each NEO: 

 

									
	  	  	  

Option-based Awards
  

	 Name and Position 

 
	  	  

Number of

securities
underlying
unexercised
options (#)

 
	  	
Option
exercise
price(1) 

 
	  	
Option expiration date
  
	  	
Value of
unexercised in-
the-money
options(1) 
  

	  

Christy Wyatt
  

Current Chief Executive Officer
  
	  	250,000	  	CAD$8.74	  	February 7, 2026	  	Nil
	 Errol Olsen

 
 Chief Financial Officer
	  	  

12,500
  
	  	CAD$6.90	  	February 20, 2020	  	CAD$13,500
	  	  

17,500
  
	  	CAD$7.10	  	August 22, 2020	  	CAD$15,400
	  	  

26,600
  
	  	CAD$7.11	  	March 15, 2023	  	CAD$23,142
	  	  

22,500
  
	  	CAD$7.23	  	September 9, 2023	  	CAD$16,875
	  	  

47,348
  
	  	CAD$7.46	  	August 25, 2024	  	CAD$24,621
	  

Sean Maxwell
  

Chief Commercial Officer
  
	  	  

200,000
  
	  	CAD$6.03	  	February 8, 2023	  	CAD$390,000
	  	  

47,348
  
	  	CAD$7.46	  	August 25, 2024	  	CAD$24,621
	  

Nicko van Someren
  

Chief Technology Officer
  
	  	135,000	  	CAD$9.16	  	May 9, 2026	  	Nil
	 Todd Wakerley

 
 Executive Vice President, Product Development

 
	  	  

4,000
  
	  	CAD$7.40	  	August 23, 2023	  	CAD$2,320
	  	  

11,812
  
	  	CAD$7.46	  	August 25, 2024	  	CAD$6,142
	  	  

7,500
  
	  	CAD$8.09	  	November 13, 2021	  	Nil
	  

Steve Munford
  

Former Interim Chief Executive Officer(2) 

 
  
	  	5,000	  	CAD$8.09	  	November 13, 2021	  	Nil

 Notes: 
  

	 	1)	 All Options have exercise prices denominated in Canadian dollars. 

 

	 	2)	 The Options remaining outstanding for Mr. Munford were granted prior to his appointment as Interim CEO and relate
to his prior advisory relationship with the Company. As a result, these Options did not expire as a result of his tenure as Interim CEO ending. 

  -
 38
 - 
  

 Outstanding Share-Based Awards – NEOs 

The following table sets out all share-based awards (PSUs and RSUs) outstanding as at June 30, 2019 for each NEO: 

 

							
	 Name and Position

 
	  	
 
 Share-based Awards

 

	  	  

Number of securities
underlying unvested
share-based awards
(#)

 
	  	
Value of unvested
share-based awards

 
	  	
Value of vested share-
based awards not paid
out or distributed

 

	  

Christy Wyatt
  

Current Chief Executive Officer
  
	  	305,550	  	CAD$2,438,288	  	Nil
	  

Errol Olsen
  

Chief Financial Officer
  
	  	100,565	  	CAD$802,508	  	CAD$273,138
	  

Sean Maxwell
  

Chief Commercial Officer
  
	  	136,863	  	CAD$1,092,165	  	CAD$818,857
	  

Nicko van Someren
  

Chief Technology Officer
  
	  	90,000	  	CAD$718,200	  	Nil
	  

Todd Wakerley
  

Executive Vice President, Product Development
  
	  	49,720	  	CAD$396,764	  	CAD$163,292

 Incentive Plan Awards – Value Vested or Earned During the Year 

The following table sets out the value vested or earned under incentive plans during the year ended June 30, 2019 for each NEO: 

 

							
	 Name and Position

 
	  	 Option-based awards –
Value vested during the
year(1) 

 
	  	 Share-based
awards – Value
vested during the
year(2) 

 
	  	  

Non-equity
incentive plan
compensation –

Value earned
during the year
  

	  

Christy Wyatt
  

Current Chief Executive Officer
  
	  	Nil	  	Nil	  	$702,039
	  

Errol Olsen
  

Chief Financial Officer
  
	  	CAD$34,945	  	CAD$361,016	  	$209,055
	  

Sean Maxwell
  

Chief Commercial Officer
  
	  	CAD$137,735	  	CAD$688,521	  	$288,423
	  

Nicko van Someren
  

Chief Technology Officer
  
	  	Nil	  	Nil	  	$149,760
	  

Todd Wakerley
  

Executive Vice President, Product Development
  
	  	CAD$5,075	  	CAD$307,545	  	$175,394
	  

Steve Munford
  

Former Interim Chief Executive Officer
  
	  	CAD$49,800	  	CAD$919,362	  	$302,023

 Notes: 
  

	 	1)	 Amount is calculated as the number of Common Shares vested multiplied by the difference between the Common Share

  -
 39
 - 
  

	 	 
price and the exercise price on the date of vesting. 

  

	 	2)	 Amount is calculated as the number of Common Shares vested multiplied by the Common Share price on the date of vesting.

 Pension Plan Benefits 
 The Company
does not have any pension plans that provide for payments or benefits at, following, or in connection with retirement (defined benefit plans or defined contribution plans). 

Termination and Change of Control Benefits 
 The Company has
written employment agreements with each of its NEOs. Under these agreements, an amount equal to 18 months’ salary, in the case of Ms. Wyatt and Mr. Olsen, and 12 months’ salary in the case of Messrs. Maxwell, van Someren, and
Wakerley, is payable in the event of a termination without cause or a resignation with cause within 12 months following a change of control (as defined below). If the employment of an NEO is terminated by the Company without cause, or if the NEO
resigns in circumstances constituting constructive termination, in each case within 12 months from the date of the change of control, all of the NEO’s unvested Options, RSUs, and PSUs (with an adjustment factor of x1 in the case of PSUs) will
vest immediately. If the employment of a NEO is terminated with cause: (i) unvested Options, RSUs, and PSUs are immediately cancelled; (ii) vested Options are cancelled at 5pm (PST) on the termination date; (iii) vested RSUs and PSUs
granted prior to December 13, 2018 are redeemed on the termination date; and (iv) vested RSUs and PSUs granted after December 13, 2018 are cancelled immediately. 

Under these NEO employment agreements, a change of control is generally defined to have occurred upon: (a) the acquisition or ownership by a person
of a stated percentage of Common Shares (ranging between 30% and 51%); (b) the election over any period of two consecutive years of a stated percentage (ranging between 51% and 75%) of Directors who were not incumbent Directors; (c) the sale,
lease, exchange, or other disposition of all or substantially all of the assets of the Company; (d) an amalgamation, merger, arrangement or other business combination that results in persons other than the shareholders of the Company owning
Common Shares of the continuing entity that entitle the holders thereof to cast a majority of the votes on the election of Directors; or (e) the Board otherwise determining that a change of control has occurred. 

  -
 40
 - 
  

 The estimated incremental payments from the Company to each of the NEOs following (a) termination
without cause, or (b) termination without cause or resignation with cause within 12 months following a change of control, assuming the triggering event occurred on June 30, 2019, are as follows: 

 

							
	  

Name and Position
  
	 	  

Termination Without Cause
  
	 	  

Change of Control
  

	  

Christy Wyatt
  

Current Chief Executive Officer
	 	  

Salary
  
	 	$420,000	 	$630,000
	 	  

Variable Pay
  
	 	$420,000(1) 	 	$420,000
	 	  

Options
  
	 	Nil	 	Nil
	 	  

RSUs & PSUs
  
	 	CAD$478,753	 	CAD$2,438,288
	  

Errol Olsen
  

Chief Financial Officer
	 	  

Salary
  
	 	CAD$600,000	 	CAD$600,000
	 	  

Variable Pay
  
	 	Nil	 	Nil
	 	  

Options
  
	 	CAD$60,849	 	CAD$93,538
	 	  

RSUs & PSUs
  
	 	CAD$273,138	 	CAD$1,075,646
	  

Sean Maxwell
  

Chief Commercial Officer
	 	  

Salary
  
	 	$400,000	 	$400,000
	 	  

Variable Pay
  
	 	Nil	 	Nil
	 	  

Options
  
	 	CAD$298,655	 	CAD$414,621
	 	  

RSUs & PSUs
  
	 	CAD$818,856	 	CAD$1,911,021
	  

Nicko van Someren
  

Chief Technology Officer
	 	  

Salary
  
	 	$330,000	 	$330,000
	 	  

Variable Pay
  
	 	Nil	 	Nil
	 	  

Options
  
	 	Nil	 	Nil
	 	  

RSUs & PSUs
  
	 	Nil	 	CAD$718,200
	  

Todd Wakerley
  

Executive Vice President, Product Development
	 	  

Salary
  
	 	$290,000	 	$290,000
	 	  

Variable Pay
  
	 	Nil	 	Nil
	 	  

Options
  
	 	$8,462	 	$8,462
	 	  

RSUs & PSUs
  
	 	CAD$163,292	 	CAD$560,056

 Note: 
  

	 	1)	 The terms of Ms. Wyatt’s employment agreement stipulate that in the event of termination without cause, she
is entitled to receive an annual bonus payment calculated at the percentage set for corporate achievement in the prior year. The Company’s short-term incentive plan allows for attainment from 0% to 200%. The amount presented here represents
100% attainment. 

  -
 41
 - 
  

 Director Compensation 

The Company compensates its independent Directors for serving on the Board. In making recommendations to the Board relating to Director compensation,
the Compensation Committee considered Directors’ compensation offered by similar companies, its Directors’ time commitments, and the risks and responsibilities that the Directors assume. The compensation provided to the Directors in Fiscal
2019, Fiscal 2018, and Fiscal 2017 is set out below: 
  

									
	 	 	 	 	 
	Name(1)
 	 	Fiscal Year	 	Fees Earned(2)	 	Share-based Awards(3)	 	Total Compensation
	 	 	 	 	 
	
Daniel Ryan
	 	 2019

 
 2018

 
 2017
	 	 $90,000(4)
  
 $90,000(4)
  
 $90,000(4)
	 	 $95,340

 
 $81,060

 
 $80,730
	 	 $185,340

 
 $171,060

 
 $170,730

	 	 	 	 	 
	
Gregory Monahan
	 	 2019

 
 2018

 
 2017
	 	 $63,750(5)
  
 $60,000

 
 $60,000
	 	 $95,340

 
 $81,060

 
 $80,730
	 	 $159,090

 
 $141,060

 
 $140,730

	 	 	 	 	 
	
Eric Rosenfeld
	 	 2019

 
 2018

 
 2017
	 	 $69,375(5)
  
 $63,750(6)
  
 $63,750(7)
	 	 $95,340

 
 $81,060

 
 $80,730
	 	 $164,715

 
 $144,810

 
 $144,480

	 	 	 	 	 
	
Salvatore Visca
	 	 2019

 
 2018

 
 2017
	 	 $60,000

 
 $60,000

 
 $45,233
	 	 $95,340

 
 $97,087

 
 $80,730
	 	 $155,340

 
 $157,087

 
 $125,963

	 	 	 	 	 
	
Gerhard Watzinger
	 	 2019

 
 2018

 
 2017
	 	 $66,875(5)
  
 $63,750(6)
  
 $63,750(7)
	 	 $95,340

 
 $81,060

 
 $80,730
	 	 $162,215

 
 $154,810

 
 $144,480

	 	 	 	 	 
	
J. Ian Giffen(8) 
	 	 2019

 
 2018

 
 2017
	 	 $33,750(5)
  
 $67,500(6)
  
 $56,541(7)
	 	 Nil

 
 $100,972

 
 $80,730
	 	 $33,750

 
 $168,472

 
 $137,271

	 	 	 	 	 
	
Arthur Mesher(9) 
	 	 2019

 
 2018

 
 2017
	 	 $35,000(5)
  
 $70,000(6)
  
 $52,771(7)
	 	 Nil

 
 $99,756

 
 $80,730
	 	 $35,000

 
 $169,756

 
 $133,501

	 	 	 	 	 
	
Josef Vejvoda(10) 
	 	 2019

 
 2018

 
 2017
	 	 $37,500(5)
  
 $75,000(6)
  
 $50,887(7)
	 	 Nil

 
 $99,206

 
 $80,730
	 	 $37,500

 
 $174,206

 
 $131,617

 Notes: 
  

	 	1)	 Please see “Summary Compensation Table” above for details regarding Ms. Wyatt’s compensation.

  

	 	2)	 The fees earned by Messrs. Giffen, Mesher, Vejvoda, and Visca are/were paid in Canadian dollars. The fees earned in
Fiscal 2019 and Fiscal 2018 are denominated in US dollars, as such, they are converted at the rate at which the payments were translated from US to Canadian dollars. The amounts for Fiscal 2017 were denominated in Canadian dollars and were
translated into US dollars at the average monthly foreign exchange rate in effect when the payment is made. 

  

	 	3)	 The grant-date fair value of the DSU awards is the fair value of the Common Shares on the date of grant.

  -
 42
 - 
  

	 	4)	 Includes compensation of $30,000 for acting as Chairman of the Board. 

 

	 	5)	 Includes compensation for acting as Chair or Co-Chair of a Board committee.
This compensation amounted to $3,750 for Mr. Giffen (Governance and Nominating Committee for partial year), $5,000 for Mr. Mesher (Chair of Compensation Committee for partial year), $3,750 for Mr. Monahan (Chair of Governance and
Nominating Committee for partial year), $9,375 for Mr. Rosenfeld (Co-Chair of Strategic Planning Committee for partial year and Chair of Audit Committee for partial year), $7,500 for Mr. Vejvoda
(Chair of Audit Committee for partial year) and $6,875 for Mr. Watzinger (Co-Chair of Strategic Planning Committee for partial year and Chair of Compensation Committee for partial year).

  

	 	6)	 Includes compensation for acting as Chair or Co-Chair of a Board committee.
This compensation amounted to $7,500 for Mr. Giffen (Chair of Governance and Nominating Committee), $10,000 for Mr. Mesher (Chair of Compensation Committee), $3,750 for Mr. Rosenfeld (Co-Chair
of Strategic Planning Committee), $15,000 for Mr. Vejvoda (Chair of Audit Committee) and $3,750 for Mr. Watzinger (Co-Chair of Strategic Planning Committee). 

 

	 	7)	 Includes compensation for acting as Chair or Co-Chair of a Board committee.
This compensation amounted to $11,308 for Mr. Giffen (Chair of Audit Committee for partial year and Chair of Governance and Nominating Committee), $7,539 for Mr. Mesher (Chair of Compensation Committee), $3,750 for Mr. Rosenfeld (Co-Chair of Strategic Planning Committee), $5,654 for Mr. Vejvoda (Chair of Audit Committee for partial year), and $3,750 for Mr. Watzinger (Co-Chair of Strategic
Planning Committee). 

  

	 	8)	 Mr. Giffen’s tenure on the Board ended on November 11, 2018. 

 

	 	9)	 Mr. Mesher’s tenure on the Board ended on December 13, 2018. 

 

	 	10)	 Mr. Vejvoda’s tenure on the Board ended on December 13, 2018. 

Outstanding Option-Based Awards – Directors 
 The
following table sets out all Options outstanding as at June 30, 2019 for each Director: 
  

									
	 	 
	  	 	Option-based Awards
	 	 	 	 	 
	Name	 	
Number of
securities
underlying

unexercised
options (#)(1)
	 	Option
exercise
price(2) 	 	Option expiration date	 	
Value of unexercised
in-the-money options

 

	 Daniel Ryan
	 	  

6,250
  
	 	CAD$6.90	 	February 20, 2020	 	CAD$49,875
	 	  

6,250
  

6,250
  
	 	 CAD$9.16

 
 CAD$9.16
	 	 February 5, 2020

 
 February 5, 2021
	 	
CAD$49,875
  

CAD$49,875

	 Gregory Monahan
	 	  

6,250
  
	 	CAD$6.90	 	February 20, 2020	 	CAD$49,875
	 	  

6,250
  

6,250
  
	 	 CAD$9.16

 
 CAD$9.16
	 	 February 5, 2020

 
 February 5, 2021
	 	
CAD$49,875
  

CAD$49,875

	 Eric Rosenfeld
	 	  

6,250
  

6,250
  
	 	 CAD$9.16

 
 CAD$9.16
	 	 February 5, 2020

 
 February 5, 2021
	 	
CAD$49,875
  

CAD$49,875

	 Salvatore Visca
	 	  

25,000
  
	 	CAD$6.89	 	February 25, 2020	 	CAD$199,500
	 	  

6,250
  

6,250
  
	 	 CAD$9.16

 
 CAD$9.16
	 	 February 5, 2020

 
 February 5, 2021
	 	
CAD$49,875
  

CAD$49,875

	 Gerhard Watzinger
	 	  

25,000
  

25,000
  
	 	 CAD$8.04

 
 CAD$8.04
	 	 December 16, 2019

 
 December 16, 2020
	 	
CAD$199,500
  

CAD$199,500

 Notes: 
  

	 	1)	 Under the terms of the Company’s Option Plan prior to its amendment in December 2015, vested Options expire two
years after their date of vesting. Accordingly, Options granted prior to that amendment have four separate expiration dates, and therefore appear on multiple rows in the table. Options listed are grouped by each grant. 

 

	 	2)	 All Options have exercise prices denominated in Canadian dollars. 

  -
 43
 - 
  

 Outstanding Share-Based Awards – Directors 

Other than DSUs, there were no share-based awards outstanding for the Directors as at June 30, 2019. DSUs are redeemed by the Company in cash and
no Common Shares are issuable pursuant to the DSU Plan (See above under “Securities Authorized Under Equity Compensation Plans – Deferred Share Unit Plan”). The following table sets out all DSUs outstanding as at June 30, 2019
for each Director: 
  

							
	 	 
	  	 	Share-based Awards
	 	 	 	 
	Name	 	
Number of securities
underlying
 unvested share-based
awards
 (#)
	 	
Value of unvested
share-based awards

 
	 	
Value of vested share-

based awards not paid
out or distributed

 

	 	 	 	 
	
Daniel Ryan
	 	7,067	 	CAD$56,393	 	CAD$407,268
	 	 	 	 
	
Gregory Monahan
	 	7,067	 	CAD$56,393	 	CAD$407,268
	 	 	 	 
	
Eric Rosenfeld
	 	7,067	 	CAD$56,393	 	CAD$407,268
	 	 	 	 
	
Salvatore Visca
	 	7,067	 	CAD$56,393	 	CAD$430,761
	 	 	 	 
	
Gerhard Watzinger
	 	7,067	 	CAD$56,393	 	CAD$407,268
	 	 	 	 
	
Arthur Mesher(1) 
	 	Nil	 	Nil	 	CAD$378,281

 Note: 
  

	 	1)	 Mr. Mesher’s tenure on the Board ended on December 13, 2018. These DSUs will be redeemed no later than
December 31, 2019. 

 Incentive Plan Awards – Value Vested or Earned During the Year – Directors 

The following table sets out the value vested or earned under incentive plans during the year ended June 30, 2019 for each Director: 

 

							
	 	 	 	 
	Name	 	 Option-based awards –
 Value vested during the
year(1) 
	 	 Share-based
awards – Value
vested during
 the year(2) 
	 	Non-equity incentive
plan 
compensation –
Value earned during the
year
	 	 	 	 
	
Daniel Ryan
	 	Nil	 	CAD$109,580	 	Nil
	 	 	 	 
	
Gregory Monahan
	 	Nil	 	CAD$109,580	 	Nil
	 	 	 	 
	
Eric Rosenfeld
	 	Nil	 	CAD$109,580	 	Nil
	 	 	 	 
	
Salvatore Visca
	 	Nil	 	CAD$109,580	 	Nil
	 	 	 	 
	
Gerhard Watzinger
	 	Nil	 	CAD$109,580	 	Nil
	 	 	 	 
	
J. Ian Giffen(3) 
	 	Nil	 	CAD$24,341	 	Nil
	 	 	 	 
	
Arthur Mesher(4) 
	 	Nil	 	CAD$49,582	 	Nil
	 	 	 	 
	
Josef Vejvoda(5) 
	 	Nil	 	CAD$48,682	 	Nil

 Notes: 
  

	 	1)	 Amount is calculated as the number of Options vested multiplied by the difference between the Common Share price and
the exercise price on the date of vesting. 

  

	 	2)	 Amount is calculated as the number of Common Shares vested multiplied by the Common Share price on the date of vesting.

  

	 	3)	 Mr. Giffen’s tenure on the Board ended on November 11, 2018. 

 

	 	4)	 Mr. Mesher’s tenure on the Board ended on December 13, 2018. 

  -
 44
 - 
  

	 	5)	 Mr. Vejvoda’s tenure on the Board ended on December 13, 2018. 

Executive Officer and Director Share Ownership Policy 
 The
NEOs and certain other executive officers are required to hold Common Shares that are worth a specified percentage of their base salary depending on their role with the Company. In addition, all non-executive
Directors are required to hold a minimum number of 25,000 Common Shares. Each executive officer must fulfill their stock ownership requirement within 5 years of becoming subject to the policy. Each
non-executive Director must fulfill their stock ownership requirement within 3 years of becoming subject to the policy. This policy was approved by the Board effective January 1, 2016. The purpose of this
policy is to align the interests of the Company and its executive officers and Directors with the long-term interests of shareholders and to mitigate excessive short-term risk taking by requiring the executive officers and Directors to attain and
maintain a stated level of stock ownership in the Company. 
 INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS 

No individual who is, or at any time during Fiscal 2019 was, an executive officer, Director, proposed nominee for election as a Director, employee or
former executive officer, Director, or employee of the Company or any of its subsidiaries, and no associate of the foregoing persons: (a) is, or was at any time since the beginning of Fiscal 2019, indebted to the Company or any of its
subsidiaries; or (b) has or had indebtedness to another entity which, or at any time since the beginning of Fiscal 2019 has been, the subject of a guarantee, support agreement, letter of credit, or other similar arrangement or understanding
provided by the Company or any of its subsidiaries. 
 INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON 

None of the Directors or executive officers of Absolute, nor any person who has held such a position since the beginning of Fiscal 2019, nor any
proposed nominee for election as a Director of Absolute, nor any associate or affiliate of the foregoing persons, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on
at the Meeting other than the election of Directors as set out herein. 
 INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS 

To the knowledge of management of Absolute, no informed person (a Director, executive officer, or holder of 10% or more of the Common Shares) or nominee
for election as a Director of Absolute, or any associate or affiliate of any informed person or proposed Director had any material interest, direct or indirect, in any transaction since the beginning of Fiscal 2019 or in any proposed transaction
which has materially affected or would materially affect Absolute or any of its subsidiaries, other than as may be set out in this Information Circular. 

MANAGEMENT CONTRACTS 
 The management
functions of the Company or any subsidiary of the Company are not, to any substantial degree, performed by a person other than the Directors or executive officers of the Company or its subsidiaries. 

ADDITIONAL INFORMATION 
 Additional
information relating to Absolute, including the Annual Information Form, audited financial statements, and related management’s discussion and analysis for the period ended June 30, 2019, is available on the Company’s website and
under the Company’s profile on www.sedar.com. Copies of the financial statements and management’s discussion and analysis may be obtained upon request from Absolute in person at Suite 1400, Four Bentall Centre, 1055 Dunsmuir Street,
Vancouver, British Columbia or by telephone at (604) 730-9851 (ext. 117). 

  -
 45
 - 
  

 SCHEDULE “A” 

STATEMENT OF CORPORATE GOVERNANCE PRACTICES 
  

	 	1.	 Board of Directors 

  

	 	a)	 Independent Directors 

The Board currently consists of seven Directors, six of whom are independent within the meaning of “independence” set out in Section 1.4
of NI 52-110. The six independent Directors are: Daniel Ryan, Lynn Atchison, Gregory Monahan, Eric Rosenfeld, Salvatore Visca, and Gerhard Watzinger. Mr. Rosenfeld will not be standing for re-election as a Director at the Meeting. As such, assuming all six management nominees are elected at the Meeting, five of the Company’s six Directors following the Meeting will be considered independent. 

 

	 	b)	 Non-Independent Directors 

Christy Wyatt is the Company’s Chief Executive Officer and is therefore not considered to be independent under Section 1.4 of NI 52-110. 
  

	 	c)	 Majority Independent 

As described in (a) and (b) above: (i) a majority of the current Directors (six of seven) are considered to be independent for the purposes of
Section 1.4 of NI 52-110; and (ii) assuming that all six management nominees are elected at the Meeting, a majority of the Directors following the Meeting (five of six) will be considered to be
independent for the purposes of Section 1.4 of NI 52-110. 
  

	 	d)	 Involvement with Other Reporting Issuers 

The current Directors are also directors of the following other reporting issuers: 

 

			
	  

Name of Director
  
	 	Other Reporting Issuer Directorships
	 Daniel Ryan

 
	 	 Nil

	 Lynn Atchison

 
	 	  

Q2 Software, Inc.
  

	 Gregory Monahan

 
	 	  

Cott Corporation
  

	 Eric Rosenfeld
	 	 Aecon Group Inc.

 
 Cott Corporation

 
 CPI Aerostructures, Inc.

 
 NextDecade Corporation

 
 Pangaea Logistics Solutions

 

	 Salvatore Visca

 
	 	 Nil

	 Gerhard Watzinger
	 	  

CrowdStrike Holdings, Inc.
  

Mastech Digital, Inc.
  

	 Christy Wyatt
	 	  

Silicon Laboratories, Inc.
  

Quotient Technology Inc.
  

  

	 	e)	 Meetings of Independent Directors 

The independent Directors hold private sessions not less than quarterly in conjunction with the quarterly Board meetings at which the Company’s
financial statements are reviewed. Such meetings of the independent Directors exclude the non-independent Director(s) and management. The independent Directors held five such meetings during the period
July 1, 

  -
 46
 - 
  

 
2018 to November 6, 2019. In addition, communication amongst the independent Directors occurs on an ongoing basis as needs arise. 

 

	 	f)	 Independence of Chairman 

Daniel Ryan, Chairman of the Board, is an independent Director. 
  

	 	g)	 Attendance Record of Directors at Meetings 

The following table sets out the attendance at meetings of the Board and committees of the Board held during the period July 1, 2018 to
November 6, 2019(1): 
  

									
	  	 	  

Committee Meeting Attendance
  
	 	
Board Meeting
Attendance
  

	Director	 	Audit	 	Compensation	 	  

Governance and
Nominating
  

	  

Daniel Ryan
  
	 	3/4(2)	 	2/2(3)	 	5/6(4)	 	28/29
	  

Lynn Atchison(5)

 
	 	1/1	 	N/A	 	N/A	 	2/2
	  

Gregory Monahan
  
	 	7/7	 	N/A	 	7/7	 	28/29
	  

Eric Rosenfeld
  
	 	4/4(6)	 	8/8	 	N/A	 	29/29
	  

Salvatore Visca
  
	 	N/A	 	8/8	 	7/7	 	28/29
	  

Gerhard Watzinger
  
	 	N/A	 	6/6(7)	 	7/7	 	28/29
	  

Christy Wyatt(8)

 
	 	N/A	 	N/A	 	N/A	 	14/14

 Notes: 
  

	 	1)	 Directors who were unable to attend specific Board or committee meetings typically review all materials and provide
input directly to the Chair of the Board/committee. 

  

	 	2)	 Mr. Ryan joined the Audit Committee effective December 21, 2018. 

 

	 	3)	 Mr. Ryan served on the Compensation Committee until December 21, 2018. 

 

	 	4)	 Mr. Ryan joined the Governance and Nominating Committee effective December 21, 2018. 

 

	 	5)	 Ms. Atchison became a Director and joined the Audit Committee effective August 7, 2019.

  

	 	6)	 Mr. Rosenfeld joined the Audit Committee effective December 21, 2018. 

 

	 	7)	 Mr. Watzinger joined the Compensation Committee effective December 21, 2018. 

 

	 	8)	 Ms. Wyatt became a Director effective December 13, 2018. 

 

	2.	 Board Mandate 

The Board has no written mandate. The Board delineates its role and primary responsibilities as follows: (a) to establish and follow Board
procedures; (b) to direct the business and affairs of the Company, including approval of all significant decisions; and (c) to act honestly, in good faith, and with a view to the best interests of the Company. In doing so, the Board will:

  

	 	∎	 	 contribute to, review, and approve all materials in relation to management’s strategic plans;

  

	 	∎	 	 monitor the performance of management against the strategic plans; 

 

	 	∎	 	 review and approve all financial and other material corporate information before the public dissemination thereof;

  

	 	∎	 	 oversee and ensure the effectiveness of the Company’s disclosure policies; 

 

	 	∎	 	 ensure that relevant information is provided to the Board by management (inclusive of industry news);

  

	 	∎	 	 assist in the creation and selection of an appropriate management structure; 

  -
 47
 - 
  

	 	∎	 	 review the effectiveness of the Company’s internal control processes and management information systems;

  

	 	∎	 	 assess and review principal risks of all aspects of the Company’s business, and ensure proper structures are in
place to manage those risks; 

  

	 	∎	 	 participate in management and Director succession planning; 

 

	 	∎	 	 participate in the selection and evaluation of the CEO and other senior officers, inclusive of terms of employment,
compensation, and corporate objectives; 

  

	 	∎	 	 oversee the fulfilment of legal requirements such as the payment of taxes, adherence to regulatory requirements, and
maintenance of necessary documents and records; 

  

	 	∎	 	 oversee the governance practices and policies of the Company; 

 

	 	∎	 	 contribute Director expertise on specific issues and networking contacts as required; 

 

	 	∎	 	 monitor the effectiveness of the Board and its committees and the actions of the Board as viewed by the individual
Directors and senior management; and 

  

	 	∎	 	 assess the participation, contributions and effectiveness of individual Board members on an annual basis through the use
of surveys, discussion groups or informal feedback obtained from members of the Board and its committees. 

  

	 	3.	 Position Descriptions 

 

	 	a)	 Existence of Written Position Descriptions for Board and Committee Chairs 

The Board has not developed written position descriptions for the Chair of the Board or the Chair of any Board committee. Each Board committee has a
written charter which governs its responsibilities and activities, including setting out the responsibilities of the Chair of the respective Committee. 
  

	 	b)	 Existence of Written Position Description for Chief Executive Officer 

The Board has not developed a written position description for the CEO. The CEO’s role and responsibilities are assessed annually by the Board.

  

	 	4.	 Orientation and Continuing Education 

New Board members are provided with a comprehensive orientation program which includes: the provision of information respecting the functioning of the
Board and its committees; explanation of the responsibilities and duties of a Director and the Company under applicable corporate and securities law; copies of the Company’s governing documents and public filings; presentations from senior
management regarding the Company’s principal business units; and complete access to management and the Company’s professional advisors. 

The Board recognizes the importance of ongoing Director education, including the need for each Director to take personal responsibility for this
process. To facilitate ongoing education, Board members are encouraged to communicate with management and the Company’s professional advisors to keep themselves current with industry trends and developments and changes in legislation with the
Company’s assistance, to attend industry seminars, and to take opportunities to observe the Company’s operations first-hand. 
  

	 	5.	 Ethical Business Conduct 

The Board has adopted a written Code of Business Conduct (the “Code”) for the Directors, officers, and employees. The Code promotes
ethical business conduct through the nomination of Board members it considers ethical. In addition, the Code requires all Directors to fully disclose any conflicts or potential conflicts of interest immediately upon the identification thereof. The
Board monitors compliance with this Code primarily through the Company’s whistleblower policy and through 

  -
 48
 - 
  

 
regular updates from management of the Company. A copy of the Code may be obtained upon request from Absolute in person at Suite 1400, Four Bentall Centre, 1055 Dunsmuir Street, Vancouver,
British Columbia or by telephone at (604) 730-9851 (ext. 117). 
  

	 	6.	 Nomination of Directors 

The recruitment and nomination of Directors is overseen by the Governance and Nominating Committee. Recruitment of new Directors generally results from
recommendations made by the Directors, senior management, or shareholders. Candidates are assessed by the Governance and Nominating Committee on the basis of their skills, expertise, experience, independence, and other factors. 

 

	 	7.	 Compensation 

The amount and form of Director compensation is reviewed annually by the Compensation Committee, partly in comparison to compensation information
disclosed by other comparable companies. Resulting recommendations are made to the full Board for its final approval. See “Director Compensation” in this Information Circular. 

The Compensation Committee determines the compensation of the Company’s senior executives. See “Statement of Executive Compensation” in
this Information Circular. The Compensation Committee seeks to ensure that the Company has policies and plans for executive compensation that are motivational and competitive, in order to attract, retain, and motivate the performance of executive
management and other key personnel. The Compensation Committee typically meets quarterly, and at other intervals as necessary to fulfil its responsibilities. See “Statement of Executive Compensation” in this Information Circular. 

 

	 	8.	 Other Board Committees 

The Board currently has no standing committees other than the Audit Committee, the Compensation Committee, and the Governance and Nominating Committee.

  

	 	9.	 Director Assessments 

The Board, its committees, and individual Directors are regularly assessed with respect to their effectiveness and contribution. On an annual basis,
each Director is required to complete a questionnaire and self-evaluation in order to assess the effectiveness of the Board, each committee, and the individual Directors. The purpose of this annual review process is to assist the Board in assessing:

  

	 	∎	 	 Board structure, composition, diversity, experience, mandate and responsibilities, and effectiveness;

  

	 	∎	 	 committee meetings, composition, mandate, and effectiveness; and 

 

	 	∎	 	 Director attendance, preparedness, contribution and participation, knowledge of the business, and required skills and
expertise. 

 These surveys are collected by the Company’s legal counsel and the results are summarized and reported to the
Governance and Nominating Committee. The Chair of the Governance and Nominating Committee presents an appropriate report to the Board, which may include recommendations for improvements. 

In addition, the Board satisfies itself that the Board, its committees, and the individual Directors are performing effectively by conducting informal
assessments from time to time. 

  -
 49
 - 
  

	 	10.	 Director Term Limits and other Mechanisms of Board Renewal 

The Company has not adopted term limits or other mechanisms to force Board renewal. Given the normal process of annual elections of individual Directors
by the shareholders of the Company and the fact that individual Directors also undertake annual Director assessments, the Board has determined that term limits or a mandatory retirement policy is not necessary. Directors who have served on the Board
for an extended period of time are in a unique position to provide valuable insight into the operations and future of the Company based on their experience with a perspective on the Company’s history, performance, and objectives. The Board
believes it is important to have a balance between Directors who have tenure and an understanding of our company business and more recently-appointed Directors who bring new perspectives and ideas to the Board and the Company. 

 

	 	11.	 Women on the Board and in Executive Officer Positions 

The Company does not currently have a written policy regarding the representation of women on the Board or in executive officer positions. Accordingly,
the Company does not currently have a set target for the number of women on the Board or in executive officer positions. However, the Governance and Nominating Committee, the Board, and the executive leadership are mindful of the benefits of gender
and other forms of diversity in the Company’s leadership positions and throughout the Company’s workforce. In searches for new Directors and certain executive officers, the Governance and Nominating Committee considers the levels of female
representation within the Company’s leadership team as one of several factors used in its search process. As at November 12, 2019, 29% of our Directors and 23% of our executive officers were women. 

The Company is actively developing its talent management strategy for employees, executive officers, and Directors to ensure that diversity is
appropriately reflected in every area of the Company, including succession planning, leadership, development, and talent identification. The Company is actively considering the adoption of a written policy on the representation of women on the Board
and in executive officer positions, which may include set targets for same. 

  -
 50
 - 
  

 SCHEDULE “B” 

NEW EMPLOYEE SHARE OWNERSHIP PLAN 

2019 EMPLOYEE SHARE OWNERSHIP PLAN 
 of 

Absolute Software Corporation 
 1400 – 1055
Dunsmuir Street 
 Vancouver, BC V7X 1K8 
 (the
“Company”) 
 Date of Adoption: December 11, 2019 

 

	Article 1.	 PURPOSE OF THE PLAN 

The purpose of this Employee Share Ownership Plan (the “Plan”, as further defined below) is to: 

 

	 	(a)	 facilitate the purchase of the Company’s shares by its employees; 

 

	 	(b)	 continue the Company’s efforts to share Company success with all staff; 

 

	 	(c)	 reward participants on the success of the Company; 

 

	 	(d)	 improve the Company’s ability to retain a skilled workforce, and 

 

	 	(e)	 encourage teamwork and cooperation among all members and units of the Company. 

This Plan is intended to constitute an “employee stock purchase plan” as defined in Section 423(b) of the Code, and, for
so long as the Company qualifies as an “Eligible Company” under the Act, as an “Employee Share Ownership Plan” under the Act. It is the intention of the Company and the Committee that the Plan and its administration comply in all
respects with the Code, the Act, applicable securities laws and the Business Corporations Act (British Columbia). 
 This Plan
is intended to provide Shares for investment and not for resale. The Company does not, however, intend to restrict or influence the conduct of any Participating Employee’s affairs. A Participating Employee, therefore, may sell Shares that are
purchased under this Plan at any time, subject to compliance with all applicable federal, provincial or state tax and securities laws. B.C. Participating Employees who resell Shares purchased under the Plan prior to the end of a three year hold
period may be required to repay tax credits received under the Act. THE PARTICIPATING EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE SHARES. 
  

	Article 2.	 DEFINITIONS 

  

	2.1	 In this Plan, the following terms have the following meanings: 

 

	 	(a)	 “Act” means the Employee Investment Act (British Columbia), as amended from time to
time, together with its accompanying Regulations and Policy Statements; pursuant to and under which the British Columbia Employee Share Ownership Program is established and administered; 

  -
 51
 - 
  

	 	(b)	 “Administrator” means the person designated under the Act to perform the duties of the
administrator under the Act; 

  

	 	(c)	 “Affiliated Corporation” means an “affiliate” of the Company as defined in the Act,
and, for the purpose of this Plan, may include any affiliate of the Company designated by the Committee and whose employees are qualified participants in this Plan in accordance with the provisions of the Code or the Act; 

 

	 	(d)	 “Appendix A” means Appendix A to this Plan, as it may be amended from time to time;

  

	 	(e)	 “Associate” has the meaning ascribed thereto in the Securities Act (British Columbia);

  

	 	(f)	 “B.C. Participating Employee” means a Participating Employee who is resident in British
Columbia and is not a major shareholder (as defined in the Act) of the Company. 

  

	 	(g)	 “Board” means the Board of Directors of the Company; 

 

	 	(h)	 “Business Day” means a day other than a Saturday, Sunday or statutory holiday on which the
Vancouver office of the Company is open for business; 

  

	 	(i)	 “Code” means the Internal Revenue Code of 1986 (United States), as amended from time to
time; 

  

	 	(j)	 “Commitment Form” means the form of commitment for a monthly dollar contribution attached as
Appendix C; 

  

	 	(k)	 “Committee” means the Compensation Committee of the Board; 

 

	 	(l)	 “Compensation” means a Participating Employee’s base salary. 

 

	 	(m)	 “Disclosure Document” means a document delivered to Eligible Employees in connection with
obtaining commitments to the purchase of Shares under the Plan, a general form of which is attached as Appendix B; 

  

	 	(n)	 “Eligible Employee” means all employees employed by the Company (or a predecessor or an
Affiliated Corporation of the Company) on a continuing basis for at least twenty (20) hours a week, provided, however, that non-employee service providers to the Company,
non-employee members of the Board and highly compensated employees within the meaning of Section 414(q) of the Code who are members of the Board will not be eligible to participate in the Plan;

  

	 	(o)	 “Employee Contribution” means funds contributed by a Participating Employee solely by way of
payroll deduction for the purpose of purchasing Shares pursuant to the Plan; 

  

	 	(p)	 “Employee Shareholder” means, at any relevant time: 

 

	 	(i)	 a Shareholder who continues to be an employee of the Company or any Affiliated Corporation; or 

 

	 	(ii)	 a Shareholder which is a RRSP Trust where the annuitant or beneficiary of such Shareholder continues to be an employee
of the Company or any Affiliated Corporation; 

  

	 	(q)	 “Fair Market Value” of the Shares as of any day means the closing price (rounded to the next
highest cent in the case of fractions of a cent) of the Shares on the Toronto Stock Exchange or any other stock market or exchange upon which the Shares are quoted or listed and where the majority

  -
 52
 - 
  

	 	 
of the Shares are traded (the “Market”), as reported on such day or, if such day is not a trading day, on the immediately preceding trading day on which the Shares traded
on the Market. The Committee, in its sole discretion, shall make all determinations required by this definition; 

  

	 	(r)	 “Financial Statements” means: 

 

	 	(i)	 the financial statements of the Company filed with the Administrator in accordance with Section 2(1)(a) of the
Act; or 

  

	 	(ii)	 if more recent financial statements of the Company have subsequently been delivered to Eligible Employees by the
Company, the most recent of those financial statements; 

  

	 	(s)	 “Insider” has the meaning ascribed thereto in Part I of the Toronto Stock Exchange Company
Manual; 

  

	 	(t)	 “Offering Period” means a six month period commencing on January 1 or July 1 during
which Eligible Employees may commit to the purchase of Shares hereunder, as further described in Appendix A; 

  

	 	(u)	 “Outstanding Issue” means the number of Shares outstanding on a
non-diluted basis; 

  

	 	(v)	 “Participating Employee” means an Eligible Employee who has elected to commit to the purchase
of Shares under the Plan; 

  

	 	(w)	 “Plan” means this 2019 Employee Share Ownership Plan dated for reference December 11,
2019, including all appendices attached hereto, as supplemented and amended from time to time in accordance with the provisions hereof; 

  

	 	(x)	 “Plan Year” means the twelve-month period commencing on July 1 of each year; provided,
however, that the first Plan Year shall commence on January 1, 2020 and end June 30, 2020; 

  

	 	(y)	 “Purchase Date” means the first Business Day following the end of an Offering Period;

  

	 	(z)	 “Purchase Price” means the lesser of; 

 

	 	(i)	 85% of the Fair Market Value for the Shares on the first day of the Offering Period; or 

 

	 	(ii)	 85% of the Fair Market Value for the Shares on the Purchase Date. 

 

	 	(aa)	 “Regulations” means the regulations enacted pursuant to the Act in force from time to time;

  

	 	(bb)	 “RRSP Trust” means a trust governed by a registered retirement savings plan under the
Income Tax Act (Canada) for which an Eligible Employee is the annuitant; 

  

	 	(cc)	 “Shares” means common shares without par value of the Company; 

 

	 	(dd)	 “Share Certificate” means a share certificate or an appropriate equivalent representing Shares
purchased under the Plan; 

  

	 	(ee)	 “Share Entitlement” means the calculation of the number of shares to be issued each Offering
Period pursuant to the Plan as detailed in Appendix A; 

  

	 	(ff)	 “Shareholder” means, at any relevant time: 

  -
 53
 - 
  

	 	(i)	 any holder of Shares of the Company; 

 

	 	(ii)	 a person who has committed to the purchase of Shares under the Plan, whether or not the Shares have been paid for in
full or the Shares have been issued at that time, and continues to be entitled to receive the Shares when issued; or 

  

	 	(iii)	 an RRSP Trust, which acquired Shares pursuant to this Plan, if at such time the RRSP Trust continues to hold any such
Shares; 

  

	 	(gg)	 “Security Based Compensation Arrangement” has the meaning ascribed thereto in
Section 613(b) of the Toronto Stock Exchange Company Manual; 

  

	 	(hh)	 “Subscription Form” means the form of subscription for Shares to be used by B.C. Participating
Employees making purchases under the Plan eligible for tax credits under the Act; 

  

	 	(ii)	 “Tax Credit Eligible Employee” means an individual who, at the time of subscribing for Shares
under the Plan is: 

  

	 	(i)	 resident in British Columbia; 

 

	 	(ii)	 employed by the Company, (or the predecessor or Affiliated Corporation of the Company) on a continuing basis for an
average of at least twenty hours a week; 

  

	 	(iii)	 is not a major shareholder (as defined in the Act) of the Company; and 

 

	 	(iv)	 meets other conditions as may be prescribed under the Regulations from time to time. 

 

	 	(jj)	 “U.S. Participating Employee” means a Participating Employee who, by virtue of his citizenship
or residence, or otherwise, is subject to taxation under the Code on his or her Compensation. 

  

	2.2	 In this Plan, unless otherwise defined herein, words and phrases defined in the Act or the Regulations have the
meanings given to them in the Act or the Regulations. 

  

	2.3	 In this Plan, words (including defined terms) importing the singular number include the plural and vice versa and
words importing the masculine gender include the feminine and neuter genders. 

  

	Article 3.	 TERMS, TERMINATION AND AMENDMENT OF THE PLAN 

 

	3.1	 The Company hereby confirms that (a) the Plan has been adopted as its 2019 Employee Share Ownership Plan for the
benefit of its Eligible Employees, pursuant to approval by the Board on November 6, 2019 and by the shareholders of the Company on December 11, 2019; and (b) the Plan is intended to be a qualified plan pursuant to the provisions of
the Act 

  

	3.2	 In accordance with the terms of approval by the Board on November 6, 2019 and by the Company’s shareholders
on December 11, 2019, the Plan is effective upon registration under the Act and shall continue until terminated in accordance with this Plan. 

  

	3.3	 A maximum of 350,000 Shares are available for issuance under this Plan. The Committee, at its sole discretion, will
determine when an offering under this Plan is made and the maximum number of Shares available for issuance during each Offering Period. In the event of any changes in the outstanding Shares by reason of stock dividends, stock splits,
recapitalisation, mergers, consolidations, combinations or exchanges of Shares, split-ups, split-offs, spin-offs, liquidations or other similar changes in capitalization, or any distribution to shareholders
other than cash dividends, the Committee shall make such adjustments, if any, 

  -
 54
 - 
  

	 	 
in light of the change or distribution as the Committee in its sole discretion shall determine to be appropriate in the number and class of shares and the purchase prices of the Shares which may
be purchased by Participating Employees during the current Offering Period. In the event of any such change in the outstanding Shares, the aggregate number and class of shares available under this Plan and the maximum number of shares which may be
purchased and their purchase price shall be appropriately adjusted by the Committee. 

  

	3.4	 Upon the happening of an event specified in Section 3.3, the class and aggregate number of Shares available under
this Plan shall be appropriately adjusted to reflect the event. Notwithstanding the foregoing, such adjustments shall be made only to the extent that the Committee, based on advice of counsel for the Company, determines that such adjustments will
not constitute a change requiring shareholder approval under Section 423(b)(2) of the Code, the Act, the rules of any stock exchange or market upon which the Shares are listed or quoted, or other applicable law. 

 

	3.5	 The Board may terminate this Plan at any time, upon written notification to the Administrator, except that if the
termination occurs after the conclusion of an Offering Period and before the issue of Shares to participating employees, the Company will complete the sale of all Shares subscribed for. 

 

	3.6	 The Committee may terminate an Offering Period at any time prior to the conclusion of the Offering Period, provided
that all deposits received during the Offering Period are returned to the Participating Employees. 

  

	3.7	 Subject to Section 16.1, the Committee may, insofar as permitted by law and subject to any required approval of
any stock exchange on which the Shares are then listed or quoted or the Administrator, amend, modify, revise or otherwise change the terms of the Plan, in whole or in part, provided that no amendment or revision may use or divert any Employee
Contributions for purposes other than for the purchase of Shares pursuant to the Plan. For greater certainty, and without limiting this Section 3.7, the approval of the Company’s shareholders shall not be required for the following
amendments, subject to any regulatory approvals including, where required, the approval of any stock exchange on which the Shares are then listed or quoted or the Administrator: 

 

	 	(a)	 amendments of a “housekeeping” nature, including any amendment for the purpose of curing any ambiguity,
error or omission in the Plan or to correct or supplement any provision of the Plan that is inconsistent with any other provision hereof; 

  

	 	(b)	 amendments necessary to comply with the provisions of applicable law, including, without limitation, the rules,
regulations and policies of the Toronto Stock Exchange, the Code and the Act; 

  

	 	(c)	 amendments respecting administration of the Plan, including but not limited to changing the process by which an
Eligible Employee may participate in the Plan, such as changing the manner in which Employee Contributions may be made; and 

  

	 	(d)	 amendments to introduce vesting or retention periods in respect of Shares purchased under the Plan.

 Any amendment referred to in Section 3.7 shall be effective at such date as the Committee may determine.

  

	3.8	 Notwithstanding Section 3.7, and subject to Section 16.1, the Company’s shareholders’ approval
shall be required for: 

  

	 	(a)	 any amendment to increase the number of Shares reserved for issuance under the Plan or the maximum amount of Shares
available for issuance pursuant to the Plan; 

  

	 	(b)	 any amendment to the definitions of Eligible Employee, Purchase Price and Shares; 

  -
 55
 - 
  

	 	(c)	 any amendment to remove, exceed or increase the limits on Insider participation in the Plan established by
Section 8.11; 

  

	 	(d)	 any amendment to introduce Company matching of Employee Contributions; 

 

	 	(e)	 any amendment to the restrictions on the transferability of Participating Employee’s rights under this Plan; and

  

	 	(f)	 any amendment to the provisions of Sections 3.7 or 3.8. 

The threshold for the Company’s shareholders’ approval of an amendment, if required, shall be a majority of the Company’s
shareholders present in person or by proxy and entitled to vote at a duly called meeting of the Company shareholders and shall, if and only to the extent required under applicable securities laws and regulatory requirements, exclude the votes cast
by Insiders. 
  

	3.9	 The Committee will determine all questions arising with respect to the administration of this Plan. The determination
of the Committee will be conclusive and binding on all Participating Employees. 

  

	3.10	 The Company’s obligation to sell and deliver Shares under this Plan is subject to the availability of
registration and prospectus exemptions under applicable securities law, and the receipt of any required approval of any stock exchange or Market upon which the Shares are listed or quoted, and any approval by a governmental authority required in
connection with the authorization, issuance or sale of such Shares, including the Code and the Act. 

  

	3.11	 Upon (a) the dissolution or liquidation of the Company, (b) a merger, amalgamation, arrangement or other
reorganization of the Company with one or more corporations as a result of which the Company will not be a surviving corporation, (c) the sale of all or substantially all of the assets of the Company or a material division of the Company,
(d) a sale or other transfer, pursuant to a tender offer, takeover bid or otherwise, of more than fifty percent (50%) of the then outstanding Shares, or (e) any transaction similar to any of those listed in Section 3.11(a) to 3.11(d)
(any of such events is herein referred to as a “Terminating Event”), the Committee may but shall not be required to: 

  

	 	(a)	 make provision for the continuation of the Participating Employees’ rights under this Plan on such terms and
conditions as the Committee determines to be appropriate and equitable, including where applicable, but not limited to, an arrangement for the substitution on an equitable basis, for each Share that could otherwise be purchased at the end of the
Offering Period in progress at the time of the Terminating Event, of any consideration payable with respect to each then outstanding Share in connection with the Terminating Event; or 

 

	 	(b)	 terminate all rights of Participating Employees under the Plan for such Payment Period and 

 

	 	(i)	 return to the Participating Employees all of their payroll deductions for such Payment Period; and

  

	 	(ii)	 for each Share, if any, that could otherwise be purchased under the Plan by a Participating Employee at the end of
such Offering Period (determined by assuming that payroll deductions at the rate elected by the Participating Employee were continued to the end of the Offering Period and used to purchase Shares based on the Fair Market Value of the Shares on the
first day of the Offering Period) and with respect to which (A) the purchase price at which such Common Share could be purchased (determined with reference only to the Fair Market Value of the Shares on the first day of such Offering Period) is
exceeded by (B) the Fair Market Value of Shares on the date of the Terminating Event, as 

  -
 56
 - 
  

	 	 
determined by the Committee, pay to the Participating Employee an amount equal to such excess. 

The Committee shall make all determinations necessary or advisable in connection with Terminating Events, and its determinations shall,
in the absence of fraud or patent mistake, be conclusive and binding on all persons with any interest in the Plan. 
  

	Article 4.	 REPRESENTATIONS AND WARRANTIES 

 

	4.1	 The Company represents and warrants to each Eligible Employee that: 

 

	 	(a)	 the Company is validly existing and in good standing under the laws pursuant to which it was incorporated;

  

	 	(b)	 the Company is eligible to register an employee share ownership plan under the Act; 

 

	 	(c)	 the Company is not party to any agreement which prohibits or restricts it from adopting the Plan, completing any of
the transactions contemplated hereunder and complying with the terms hereof; 

  

	 	(d)	 all necessary corporate action has been taken to adopt the Plan as a valid and binding obligation of the Company;

  

	 	(e)	 as of the date of adoption of the Plan, the authorized share capital of the Company was as described in Appendix E;

  

	 	(f)	 the Shares are of a class of shares of the Company that: 

 

	 	(i)	 carry voting rights under all circumstances; 

 

	 	(ii)	 are not directly restricted in their right to share in the profits of the Company or in the division of the
Company’s assets on dissolution or winding up; and 

  

	 	(iii)	 do not have any rights and restrictions prohibited by the Regulations; 

 

	 	(g)	 the Shares to be issued under the Plan will be from the treasury of the Company and will not have been previously
issued; 

  

	 	(h)	 the price per Share at which Shares will be purchased through treasury purchases by Eligible Employees will be the
Purchase Price as calculated under this Plan; 

  

	 	(i)	 the Financial Statements are prepared in accordance with international financial reporting standards, present fairly
the financial position and condition of the Company as at the date thereof and do not omit to state any material liability or financial obligation of the Company as at the date thereof; 

 

	 	(j)	 since the date of the Financial Statements there has been no material adverse change in the financial position or
condition of the Company, except as disclosed in the Disclosure Document; 

  

	 	(k)	 the Disclosure Document discloses all outstanding options, warrants and conversion rights granted by the Company in
respect of its securities and contains no misrepresentations; 

  

	 	(l)	 the Company is in good standing with the Toronto Stock Exchange and will advise the Administrator within 30 days of
any discontinuance of such listing; 

  -
 57
 - 
  

	 	(m)	 each Eligible Employee has an equal pro-rated right to purchase Shares under
the Plan; and 

  

	 	(n)	 the representations and warranties set out in paragraphs (a) to (m) above will be true and correct at the start
of each Offering Period. 

  

	4.2	 Each Eligible Employee will be deemed to have relied on the representations and warranties contained in paragraphs
4.1(a) to 4.1(n) above in electing to commit to the purchase of Shares under the Plan. 

  

	4.3	 The availability of this Plan should not be considered a recommendation, invitation, inducement, encouragement or
request by the Company, its agents, officers or directors to participate in the Plan; in particular, securities or other investments referred to in the Plan may not be suitable for an Eligible Employee and each Eligible Employee should take care to
make any kind of investment decision only after having first obtained independent investment advice from a person authorized to give such advice. 

  

	4.4	 Among the risks in investing in the Shares pursuant to the Plan, it is expressly declared by the Company that the Plan
offers no guarantee or promise of gains or dividends, or protection against loss due to fluctuations in the market price of the Shares. Participation in this Plan will be on the express understanding that each Participating Employee accepts the
risks inherent in the purchase of Shares, including risk of such market fluctuations. 

  

	4.5	 Participation in this Plan will not be interpreted as the granting of a right to continued employment with the Company
or any of its subsidiaries and the expectation of any benefit by continuing to be a Participating Employee will not be taken into account in determining any compensation to which a Participating Employee may be entitled by reason of wrongful
dismissal. 

  

	Article 5.	 OFFERING PERIODS AND ELIGIBILITY TO SUBSCRIBE FOR SHARES 

 

	5.1	 The Company will offer Eligible Employees the right to participate in the Plan during the Offering Period under the
terms and conditions set out in this Plan. Should the aggregate number of Shares to be issued to all Participating Employees for the Offering Period pursuant to the terms of this Plan exceed the aggregate Share Entitlement for the Offering Period,
the Shares available for purchase will be distributed pro-rata to the Participating Employees. Excess Employee Contributions will be applied to future purchases or returned in accordance with paragraph 8.3.
Fractional Shares cannot be purchased. 

  

	5.2	 Each person who is an Eligible Employee at the commencement of an Offering Period will be eligible to commit to the
purchase of a dollar value of Shares under the Plan during the Offering Period as described in Appendix A. Each person who becomes an Eligible Employee during an Offering Period will be eligible to commit to the purchase of a dollar value of Shares
under the Plan during the Offering Period, pro rated to account for the duration of the Offering Period then remaining at the date of such Eligible Employee’s commitment to purchase Shares. 

 

	5.3	 The Company will notify each Eligible Employee of his or her eligibility to purchase Shares under the Plan.

  

	Article 6.	 SUBSCRIPTION ENTITLEMENT 

 

	6.1	 During an Offering Period each Eligible Employee has an equal entitlement opportunity to commit to the purchase of
Shares by delivering a completed Commitment Form that designates the amount of his or her Employee Contribution for the Offering Period. This shall be subject to the limitation disclosed in this Plan and Appendix A, as well as Section 5.2 with
respect to Eligible Employees who commence employment during an Offering Period. 

  

	6.2	 The Company will deliver a Disclosure Document to an Eligible Employee before he or she enters into an agreement to
commit to the purchase of Shares under the Plan. 

  -
 58
 - 
  

	Article 7.	 CONTRIBUTIONS 

  

	7.1	 Employee Contributions will be deducted from Participating Employees’ salary on a semi-monthly basis.

  

	Article 8.	 SHARE ENTITLEMENT 

  

	8.1	 The Company, on the first Business Day following the end of each Offering Period, will be responsible for calculating
each Participating Employee’s Share Entitlement in accordance with Appendix A. 

  

	8.2	 The Company will hold all Employee Contributions in one pool and will thereby also determine at the end of each
Offering Period the aggregate Share Entitlement for all Participating Employees. All purchases will be made in Canadian dollars and all contributions in a currency other than Canadian dollars will be converted into Canadian dollars at the Bank of
Canada’s daily average exchange rate on the first Business Day of the Offering Period, or such other exchange rate determined by the Company, acting reasonably. 

 

	8.3	 A Participating Employee who is enrolled in this Plan at the end of an Offering Period will, unless the Participating
Employee gives notice of his or her intent to withdraw from the Plan, automatically be enrolled as a Participating Employee in the subsequent Offering Period (subject to the requirement for B.C. Participating Employees who wish to make purchases
eligible for tax credits under the Act to deliver an executed Subscription Form prior to commencement of the Offering Period), and any portion of a Participating Employee’s accumulated Employee Contributions not used for the purchase of Shares
at the end of an Offering Period will be applied to the purchase of Shares in the next Offering Period if the Participating Employee is participating in the Plan during that Offering Period, or returned to the Participating Employee. An investment
confirmation will be issued to each Participating Employee by the Company within 50 Business Days of the Purchase Date, setting out the number of Shares purchased, the price paid per Share, the total amount paid, the name, address, telephone number
and contact person at the Company, and for B.C. Participating Employees, the procedure for obtaining the tax credit certificate under the Act, and any other prescribed information required under the Regulations. 

 

	8.4	 Any person who is properly enrolled as a Participating Employee at the beginning of an Offering Period, or becomes
enrolled as a Participating Employee during an Offering Period, may elect, in accordance with any procedures prescribed by the Committee, to have the Company deduct a specified percentage of the Participating Employee’s Compensation via payroll
deduction for the purchase of Shares pursuant to the Plan. An amount equal to the elected percentage of the Participating Employee’s Compensation, subject to the maximum amount set forth in Section 8.7, will be deducted on each regular pay
day falling within the Offering Period. All amounts will be deducted from a Participating Employee’s Compensation on an after-tax basis. 

 

	8.5	 No interest will be paid on payroll deductions accumulated under this Plan, which will be held on behalf of the
Participating Employees by the Company. 

  

	8.6	 B.C. Participating Employees who wish to enroll for purchases during an Offering Period eligible for tax credits under
the Act must request a Disclosure Document to read, and must provide an executed Subscription Form prior to the Offering Period. 

  

	8.7	 During any Offering Period the maximum amount of payroll deductions by a Participating Employee that can be used to
purchase Shares may not exceed Cdn$7,500. During any calendar year, the maximum amount of payroll deductions by a Participating Employee that can be used to purchase Shares under this Plan, together with all other Security Based Compensation
Arrangements of the Company, is Cdn$15,000. 

  

	8.8	 Tax credits are available to B.C. Participating Employees under the Act in respect of the first Cdn$5,250,000, or such
lesser amount as is allocated to the Company by the Administrator, in aggregate of subscriptions in 

  -
 59
 - 
  

	 	 
any two year period, but are limited to 20% of the subscription price to a maximum for each B.C. Participating Employee of Cdn$2,000 annually. 

 

	8.9	 No Participating Employee shall be permitted to subscribe for any Shares under this Plan if such Participating
Employee, immediately after such subscription, owns Shares that account for (including all Shares that may be purchased under outstanding subscriptions under the Plan and any other outstanding options or other rights to purchase or receive Shares)
five percent (5%) or more of the total combined voting power or value of all classes of shares of the Company. For the foregoing purposes the rules of Section 424(d) of the Code shall apply in determining share ownership. The dollar limitations
set forth in Section 8.7 are intended to and shall be interpreted in such a manner so as to comply with Section 423(b)(8) of the Code. In the event the maximum amount of payroll deductions by a Participating Employee in a calendar year
pursuant to the terms of this Plan exceeds US$25,000, such maximum amount of payroll deductions by such Participating Employee shall be reduced to US$25,000 in such calendar year. 

 

	8.10	 B.C. Participating Employees who wish to remain eligible for tax credits under the Act may not hold more than ten
percent (10%) of the issued share capital of the Company, calculated in the manner prescribed by the Act. 

  

	8.11	 Notwithstanding any other provision contained in this Plan, no Shares shall be purchased under the Plan on behalf of a
Participating Employee if, together with any other Security Based Compensation Arrangement of the Company, such purchase could result, at any time, in: 

  

	 	(a)	 the number of Shares issuable to Insiders, at any time, exceeding 10% of the Outstanding Issue; or

  

	 	(b)	 the number of Shares issued to Insiders, within any one-year period, exceeding
10% of the Outstanding Issue. 

  

	Article 9.	 ISSUANCE AND HOLDING OF SHARE CERTIFICATES 

 

	9.1	 Subject to section 10.5 relating to any Insider trading restrictions, the Company, within twenty (20) Business
Days of the end of each Offering Period, will cause Share Certificates to be issued representing those Shares either in the name of the Eligible Employee or, if the Shares are to be held by a RRSP Trust for the benefit of the Eligible Employee, in
the name of the trustee of the RRSP Trust. 

  

	9.2	 In accordance with section 4(1)(d) of the Act, each Share Certificate representing Shares acquired by a Tax Credit
Eligible Employee who wishes to obtain a tax credit certificate under the Act will be held in the custody of an authorized depository for a period of three years from the date of issue of the Share Certificate. 

 

	9.3	 Where an Eligible Employee is not a Tax Credit Eligible Employee, or does not wish to obtain a tax credit certificate
under the Act, each Share Certificate will be delivered to the respective Eligible Employee within five (5) Business Days of receipt of the Share Certificates from the Company. 

 

	9.4	 A Participating Employee or his or her legal representative may withdraw Shares from his or her account at any time,
not sooner than 30 days after a Purchase Date; however any withdrawal by a U.S. Participating Employee within 2 years of the first day of the Offering Period and one year of the Purchase Date will be treated by the Company as a disqualifying
disposition under Sections 421 and 423 of the Code and be reported on the Participating Employee’s tax Form W-2. B.C. Participating Employees who dispose of Shares within three years of the Purchase Date
may be required to repay the tax credits received under the Act. Subject to Section 3.11, upon termination, all payroll deductions not used to purchase Shares will be refunded to the Participating Employee entitled thereto.

  -
 60
 - 
  

	9.5	 Within 50 Business Days of the end of each Offering Period, the Company will deliver to the Eligible Employee an
investment confirmation setting out the information required by the Act and the Regulations. 

  

	Article 10.	 WITHDRAWAL FROM PARTICIPATION 

 

	10.1	 A Participating Employee may withdraw from participation in the purchase of Shares under the Plan by delivering
written notice of such to the Company on or before the 10th Business Day prior to the end of the Offering Period. A notice of withdrawal pursuant to this paragraph will be effective upon delivery of such to the Company. 

 

	10.2	 Upon termination of employment with the Company for any reason (including involuntary with or without cause,
resignation, retirement or death), a Participating Employee will be deemed to have withdrawn from participation in the purchase of Shares under the Plan, effective the last day of employment. If a Participating Employee’s payroll deductions are
interrupted by any garnishment or other legal process, the Participating Employee will be deemed to have elected to withdraw from the Plan for the Offering Period in which the interruption occurs. 

 

	10.3	 A Participating Employee’s participation and payroll deductions will continue during a sick leave or other bona
fide leave of absence, for up to three months, or for so long as the Participating Employee’s right to re-employment is guaranteed either by statute or contract, if longer than three months, unless the
Participating Employee elects to stop his or her payroll deductions. Such participation will end automatically at the end of the current Offering Period. Such Eligible Employee may re-enroll to participate in
subsequent Offering Periods which commence following the employee’s return from such leave. 

  

	10.4	 Upon receipt of a notice of withdrawal or termination, as described in either paragraph 10.1 or 10.2, the Company
will, within 10 Business Days, return all of the Participating Employee’s Employee Contributions which are being held at such time by the Company. 

  

	10.5	 An Insider who is a Participating Employee may, at any time, advise the Company that they wish to suspend the purchase
of Shares under the Plan if the Insider is of the view that such purchase would be contrary to any applicable insider trading provisions, and the Company may, on its initiative, also suspend sales to Insiders. Where the Company is precluded by this
paragraph from acquiring Shares for an Insider, the monies that would have otherwise have been used to subscribe for such Shares will be credited to such Insider’s account and, subject to withdrawal by the Insider from the Plan, will be applied
to future purchases of Shares under this Plan. 

  

	10.6	 A Participating Employee’s rights under this Plan, including rights to accumulated Employee Contributions, may
not be pledged, assigned, encumbered or otherwise transferred for any reason other than by will or the laws of descent and distribution. Any such attempt will be treated as an election by the Participating Employee to withdraw from this Plan.

  

	Article 11.	 APPLICATION FOR TAX CREDIT CERTIFICATES 

 

	11.1	 If the Company has received from a Tax Credit Eligible Employee who subscribed for Shares under the Plan:

  

	 	(a)	 all required information; and 

 

	 	(b)	 payment in full of the Purchase Price for the Shares; 

then the Company will, on behalf of such person, apply to the Administrator in accordance with the Act and Regulations for a tax credit
certificate in respect of the purchase of the Shares. 

  -
 61
 - 
  

	Article 12.	 USE OF FUNDS 

  

	12.1	 Subject to paragraph 12.2, the funds raised under this Plan will be used for general corporate operations including
working capital and capital expenditures. 

  

	12.2	 The Company will not use any funds received from the issue of Shares under the Plan for any purpose prohibited by the
Act or the Regulations. 

  

	Article 13.	 REPORTS TO EMPLOYEE SHAREHOLDERS 

 

	13.1	 To allow Employee Shareholders to monitor their investment in the Company, the Company will make available to the
Employee Shareholders all quarterly and annual public disclosure documents required to be filed and sent to the Company’s shareholders under applicable securities laws and Section 4(1)(g) of the Act. 

 

	13.2	 Upon request by a Shareholder, the Company will provide the Shareholder with access to or copies of the Plan.

  

	Article 14.	 OTHER COVENANTS OF THE COMPANY 

 

	14.1	 The Company covenants with the Eligible Employees that: 

 

	 	(a)	 the Company will comply at all times with the Plan, the Act and the Regulations; 

 

	 	(b)	 the Company will not enter into any agreement which would prohibit or restrict it from completing any of the
transactions contemplated hereunder or complying with the terms hereof; 

  

	 	(c)	 in any 2 year period, the amount of equity capital raised under the Plan will not exceed Cdn$5 million or such
other amount as may be permitted by the Act from time to time; and 

  

	 	(d)	 all required corporate action will be taken to duly allot and issue Shares purchased under this Plan from the treasury
of the Company and, upon receipt by the Company of payment in full for Shares subscribed for hereunder, the Shares will be validly authorized and issued as fully-paid. 

 

	Article 15.	 PURCHASE BY OR TRANSFER TO TRUSTS 

 

	15.1	 Notwithstanding any other provision of this Plan, an Eligible Employee may: 

 

	 	(a)	 purchase Shares under the Plan through a RRSP Trust; and 

 

	 	(b)	 transfer Shares purchased under the Plan to a RRSP Trust. 

 

	15.2	 Where an Eligible Employee purchases Shares under the Plan through a RRSP Trust, the provisions of the Plan shall
apply to the purchase by the RRSP Trust as if the purchase was being made by the Eligible Employee. 

  

	Article 16.	 AMENDMENTS FOR ELIGIBILITY UNDER THE EMPLOYEE INVESTMENT ACT 

 

	16.1	 For continuation under the Act, no alteration will be made to the Plan in accordance with Section 3.7 or
Section 3.8 without prior approval of the Administrator and a majority of Employee Shareholders. 

  -
 62
 - 
  

	Article 17.	 LIABILITY 

  

	17.1	 Neither the Company or any subsidiary of the Company, nor any directors, officers or employees of any of them will be
liable for anything done or omitted by such person to any other person with respect to the price, time, quantity or other conditions or circumstances of the purchase of Shares under this Plan or with respect to any fluctuation in the price or value
of Shares, or in any other manner in connection with this Plan, unless such act or omission constitutes willful misconduct on such person’s part. 

  

	Article 18.	 GENERAL 

  

	18.1	 The Plan will be construed and enforced in accordance with the laws of British Columbia. The Company and each
Participating Employee irrevocably and exclusively attorns to the jurisdiction of the courts of British Columbia and all courts having appellate jurisdiction thereover, and any proceeding commenced or maintained by a party in respect of this Plan
will be commenced or maintained only in such of those courts as is appropriate. 

  

	18.2	 The Administrator has not reviewed the investment merits of the Shares and in no way guarantees an investment in
Shares. Assessment of the investment merit, adequacy of this Plan, and due diligence review is entirely the responsibility of Participating Employees. 

  

	18.3	 Time will be of the essence in respect of this Plan. 

 

	18.4	 The Plan will be binding upon the Company, its successors and assigns and will enure to the benefit of each Eligible
Employee and their respective personal representatives and assignees. 

  -
 63
 - 
  

 Appendix A. Plan Data 

All Shares issued under this Plan will be from the un-issued and authorized treasury of the Company. All
purchases will be made at the end of each Offering Period, in accordance with this Appendix A. The Shares purchased will be free trading, subject to any Toronto Stock Exchange imposed restrictions. The terms of each Share offering will be determined
by the Committee and disclosed in the Disclosure Document. The general terms are as follows: 
 1. The Committee will determine the commencement date
and term of each Offering Period. The typical Offering Period will be for six months and are anticipated to be as follows: 
  

	 	•	 	 January 1 to June 30 

	 	•	 	 July 1 to December 31 

2. Maximum contribution per Participating Employee per Offering Period is Cdn$7,500 (Cdn$15,000/year). 

3. The aggregate Share Entitlement for an Offering Period will be determined by the Committee at the time each offering is made to a maximum of 350,000
Shares over the term of this Plan. The total number of Shares available for issue in any Offering Period is calculated as the lesser of: 
  

	 	•	 	 The aggregate Shares Entitlement set by the Committee for the Offering Period; 

	 	•	 	 The sum of all Employee Contributions for the Offering Period divided by the Purchase Price; and 

	 	•	 	 The remaining number of Shares available for issue. 

Where the start or end date of the Offering Period falls on a non-trading or
non-Business Day, the Fair Market Value of the prior Business Day in which the Shares were traded will be used in determining the Purchase Price. 

4. The Share Entitlement for each Participating Employee for the Offering Period is calculated as the lesser of: 

 

	 	•	 	 the number of Shares obtained by dividing the Participating Employee’s Contributions by the Purchase Price, rounded
down to the nearest Share; and 

	 	•	 	 the pro-rated Share Entitlement calculated as the Participating Employee’s
Contributions for the Offering Period, divided by the aggregate of all Employee Contributions for the Offering Period, and multiplied by the aggregate number of shares calculated in Section 3 of this Appendix, rounded down to the nearest Share.

 5. Estimated number of employees covered by the Plan: 
  

	 	•	 	 500 

6. Plan withdrawal deadline: 
  

	 	•	 	 10 Business Days before the end of each Offering Period 

7. Offering Period termination deadline: 
  

	 	•	 	 The Committee may terminate any Offering Period up to 10 Business Days before the end of each Offering Period, and repay
all Participating Employee contributions. 

  -
 64
 - 
  

 Appendix B. General Form of Disclosure Document 

DISCLOSURE DOCUMENT 
 Eligible Employees
(and/or their professional advisors) should carefully review the information contained in this document before making an investment decision. Defined terms used but not otherwise defined herein shall have the meanings ascribed thereto in the 2019
Employee Share Ownership Plan. 
 Absolute Software Corporation 

Suite 1400, Four Bentall Centre, 1055 Dunsmuir Street 

Vancouver, BC Canada V7X 1K8 
 (the
“Company”) 
  

			
	 Total Plan

 
	  	 350,000
Common Shares

 The Board will determine when offerings to purchase the Common Shares are made and will detail the particulars of each
offering in a Disclosure Document provided to each Eligible Employee. The offerings are for a maximum of six months with the following anticipated Offering Period dates, and with the following maximum contribution and Share Entitlement limits: 

 

					
	Share Offering Period (1)	 	Maximum    Individual
CDN$ Contribution	 	Maximum      Total    
Plan Allotment 
per    
period (2)
	 Jan. 1 – Jun
30
	 	$7,500	 	350,000
	 Jul. 1 – Dec.
31
	 	$7,500	 	350,000

  

	 	(1)	 Subject to the provisions of the Act (as defined below) respecting revocation, the Board may terminate an Offering
Period at any time prior to the conclusion of the Offering Period. If an Offering Period is terminated, all Employee Contributions will be returned to the Participating Employees. 

	 	(2)	 The total number of common shares issuable in any Offering Period is the lesser of (a) 350,000 shares; (b) the
total Share Entitlement set by the Board for the Offering Period; (c) the total of all Employee Contributions divided by the Purchase Price; and (d) the remaining number of Shares available for issue under the Plan.

 Purpose of the Plan 
 The
Company adopted its 2019 Employee Share Ownership Plan (the “Plan”) on December 11, 2019 with the following objectives in mind: 
  

	 	•	 	 Provide an opportunity for Eligible Employees to participate in the ownership of the Company; 

	 	•	 	 To enable Eligible Employees to share in the Company’s success; 

	 	•	 	 To improve the Company’s ability to retain a skilled work force; and 

	 	•	 	 To encourage teamwork and cooperation among all members and units of the Company. 

  -
 65
 - 
  

 The Plan was registered under the Employee Investment Act (British Columbia) (the
“Act”) so that Tax Credit Eligible Employees could receive a 20% employee investment tax credit on Share purchases under the Plan. See the section headed “Summary of EIA Tax Assistance” on page 3 for details. Where
Eligible Employees wish to participate in the tax credit, the offering and transfer of Shares issued under the Plan is governed by the Act. 
 Eligible
Employees 
 An employee who is eligible to purchase Shares under the Plan is referred to in this disclosure document as an “Eligible
Employee”. They are: employees of the Company or its Affiliate Corporations, excluding non-employee service providers to the Company, non-employee members of the
Board and highly compensated employees within the meaning of Section 414(q) of the Internal Revenue Code of 1986 (United States), employed on a continuing basis for at least twenty (20) hours a week: 

See the Section headed “Summary of EIA Tax Assistance” below for details concerning the investment tax credits available to “Tax Credit
Eligible Employees”, meaning those employees who, at the time of subscribing for Shares are: 
  

	 	(a)	 resident in British Columbia; 

 

	 	(b)	 employed by the Company, (or the predecessor or Affiliated Corporation of the Company) on a continuing basis for an
average of at least twenty hours a week; 

  

	 	(c)	 is not a major shareholder (as defined in the Act) of the Company; and 

 

	 	(d)	 meets other conditions as may be prescribed under the means the regulations enacted pursuant to the Act in force from
time to time (the “Regulations”). 

 Subscription Entitlement 

The Plan allows Share offerings to be made to Eligible Employees from time to time. The number of Shares available and period of the current Share
offering to Eligible Employees are shown on the first page. The characteristics of the Shares offered are described in the section headed “Share Capital” below. 

The Plan provides that each Eligible Employee has an equal right to subscribe for Shares. 

The maximum permitted participation by an employee in the offering is Cdn$7,500 per Offering Period to a maximum of Cdn$15,000 per annum. Eligible
Employees can commit to the purchase of Shares by committing semi-monthly payroll deductions up to this maximum. Eligible Employees who want to commit to the purchase of Shares in this Offering Period must complete the Commitment Form accompanying
this Disclosure Document and return it to the accounting department of the Company. 
 Share Purchases 

Eligible Employees who purchase Shares pursuant to the Plan will receive free trading common shares in the Company, subject to any TSX imposed holding
period, issued from the treasury of the Company. The Share certificates are delivered to employees within 20 Business Days of the end of any Offering Period, unless Tax Credit Eligible Employee applies for the investment tax credit as discussed
further in the “Summary of EIA Tax Assistance” section below. 
 Once delivered, the share certificates are available for deposit with a
broker and disposition, subject to any TSX imposed holding period. 

  -
 66
 - 
  

 The number of Shares purchased is calculated by dividing the Employee Contributions made during the
Offering Period by the Purchase Price. The Purchase Price is calculated as 85 % of the lower of: 
  

	 	•	 	 the Fair Market Value on the first day of the Offering Period, and 

	 	•	 	 the Fair Market Value on the Purchase Date, 

provided that if there is no Fair Market Value on the relevant day, the Fair Market Value will be calculated as of the last day on which there was a
Fair Market Value immediately before the relevant date. 
 The number of Shares actually purchased may be reduced if the maximum Share allotment for
that Offering Period is reached. Any excess funds due to this restriction will be either returned to the Eligible Employee or used in the purchase of Shares during the next Offering Period, as decided by the Eligible Employee. 

A copy of the Company’s most recent annual Financial Statements is attached to this Disclosure Document. 

Right to Review Plan 
 The Plan itself is a detailed
legal document. Any Eligible Employee who wishes to examine the Plan may obtain a copy from the Company upon request. 
 Summary of EIA Tax Assistance

 (Tax credits are only available to those Eligible Employees who meet the criteria set for Tax Credit Eligible Employees.)

 The Plan is registered under the Act (referred to from this point forward as the “EIA”). The Province of British Columbia
(the “Province”) enacted the EIA to encourage employee investment for the purposes of job creation, job protection and employee participation in corporate ownership. The EIA encourages employee investment by providing for
employee investment tax credits to be issued to Tax Credit Eligible Employees who purchase shares under registered employee share ownership plans. 

A summary of the key characteristics of the tax credit is set out below: 
  

	 	*	 	 the credit is equal to 20% of the share subscription proceeds received by the Company from the Tax Credit Eligible
Employee. 

  

	 	*	 	 the maximum credit is $2,000 for a calendar year (per person) (= $10,000 of investment/yr.). 

 

	 	*	 	 credit towards B.C. income tax otherwise payable. 

 

	 	*	 	 unused credits cannot be carried forward or back or be refunded in cash. 

 

	 	*	 	 if a Share purchase under the Plan is made during the first 60 days of a calendar year, the Tax Credit Eligible Employee
may claim the tax credit for that calendar year or the previous calendar year or allocate the Shares purchased between both years. 

  

	 	*	 	 the value of the tax credit will not be included in the Tax Credit Eligible Employee’s income for tax purposes or
reduce the adjusted cost base of the Shares acquired. 

  

	 	*	 	 the tax credit is only available to the first purchaser of the Shares (i.e. it is only available with respect to Shares
issued from treasury of the Company). 

  -
 67
 - 
  

 The Company will apply to the Province for tax credit certificates on behalf of Tax Credit Eligible
Employees. The tax credit certificate may then be claimed on and filed with a Tax Credit Eligible Employee’s income tax return. 
 A Tax Credit
Eligible Employee’s investment tax credit must be repaid to the Province if a Tax Credit Eligible Employee sells Shares purchased under the Plan within 3 years of buying them. The EIA seeks to encourage longer term, committed
investment. Therefore, tax assistance is withdrawn in the case of investments, which prove to be short term. The Tax Credit Eligible Employee is also jointly and severally liable with the Company to repay the credits. As a result, any Shares that a
Tax Credit Eligible Employee wishes to sell will not be released from escrow until the tax credit has been repaid. After expiry of the 3-year period, the Shares may be sold without repayment of the tax credit.

 To enable monitoring of Share transactions, the Province requires that the certificates representing the Shares issued under the Plan to Tax Credit
Eligible Employees be held in the custody of the Company during the 3 year hold period. Purchasers will receive an investment confirmation within 50 Business Days of paying for the Shares. Shares may be released prior to the 3-year period upon repayment of the tax credit. 
 The extent of the Province’s involvement in the Plan has
been to register it under the EIA to allow Tax Credit Eligible Employees to receive the tax assistance described above. The Province has not reviewed the investment merit of the Shares being offered by the Company and in no way guarantees an
investment in the Shares. Assessment of investment merit, adequacy of the Plan, and due diligence review is entirely the responsibility of the Tax Credit Eligible Employees. 

If the legislation governing the Plan is amended or repealed, any approval provided by the Ministry in connection with the Plan, including any approval
relating to payment of tax credits to Tax Credit Eligible Employees who purchased Shares under the Plan, could be subject to variation or cancellation by the Administrator. 

Cost Sharing For Employee Groups 
 The EIA allows for
Provincial cost sharing assistance to employee groups that obtain independent professional advice relating to the negotiation, evaluation and implementation of a registered employee share ownership plan. Reimbursement of 50% of eligible costs up to
$2,500 may be applied for. For more information about cost sharing for employee groups, contact the Investment Capital Branch of the Ministry of Economic Development at toll free 1-800-665-6597. 
 Share Capital 

The authorized share capital of the Company consists of 100,000,000 common shares without par value. 

The issued and outstanding share capital of the Company as at June 30, 2019 consisted of 41,645,552 common shares without par value, listed and
posted for trading on the TSX under the symbol “ABT”. 
 The holders of common shares are entitled to one vote for each share held on all
matters to be voted on by the shareholders of the Company and are entitled to receive such dividends as may be declared by the Board. In the event of the dissolution, liquidation, winding-up, or other
distribution of the assets of the Company, the shareholders are entitled to receive, on a pro-rata basis, all of the assets of the Company remaining after payment of all of the Company’s liabilities. The
common shares carry no pre-emptive or conversion rights. 

  -
 68
 - 
  

 Outstanding Convertible Securities (June 30, 2018) 

 

							
	  

Plan Category
	 	
Number of securities to be

issued under equity
 compensation plans

(a)
	 	 Weighted-average exercise
 price of outstanding options

(b)
	 	  

Number of securities remaining

available for future issuance
 under equity
compensation
 plans (excluding securities
reflected in column (a))

(c)
  

	
 
 Equity compensation plans approved by
securityholders
  

	  

Option Plan
  
	 	1,151,213	 	CAD$7.82	 	2,173,897
	  

PRSU Plan
  
	 	1,580,257	 	N/A	 	2,173,897
	  

Current ESOP
  
	 	N/A	 	N/A	 	92,099
	  

Total
  
	 	2,731,470	 	CAD$7.82	 	2,173,897

 Use of Proceeds 
 The
net proceeds of the offering will be used by the Company for general corporate purposes. 
 Prospectus Exemption 

The issuance of securities to residents of British Columbia is subject to the Securities Act (British Columbia) (the “Securities Act”),
which normally requires a prospectus to be prepared and delivered to the purchaser. The Securities Act provides a prospectus exemption where the purchaser is an Eligible Employee, so long as the purchaser’s participation in the distribution is
voluntary. 
 A purchaser under this exemption is not subject to a hold period pursuant to the Securities Act or the regulations thereunder. 

Shareholder Communication 
 As a shareholder, or an
Eligible Employee of the Company participating in the Plan, you will be eligible to elect to receive all reporting information sent to public shareholders. This will include all quarterly and annual filings, as well as the information set forth in
Section 4(1)(g) of the EIA. You may also view the Company’s public filings on www.sedar.com. 

  -
 69
 - 
  

 Board of Directors 

The Board has authority over management of the Company. The Board is elected each year by the shareholders at the Company’s annual general meeting.
There are 6 positions on the Board presently filled by the following persons: 
  

					
	Name of Director	  	Principal Occupation	  	 
	  
	  	
		
	 Christy Wyatt
	  	 Chief Executive Officer of Absolute

		
	 Gregory Monahan
	  	 Senior Managing Director of Crescendo Partners and Portfolio Manager of Jamarant Capital

		
	 Lynn Atchison
	  	 Corporate Director

		
	 Daniel Ryan
	  	 Chief Executive Officer of CiBO Technologies

		
	 Salvatore Visca
	  	 Chief Technical Officer of Elastic Path Software

		
	 Gerhard Watzinger
	  	 Corporate Director

 Principal Shareholders 

To the knowledge of the Company, as of November 6, 2019, Lynrock Lake LP held 6,247,066 common shares, or approximately 14.9% of the outstanding
common shares, and Trigran Investments, Inc. held 6,246,800 common shares, or approximately 14.9% of the outstanding common shares. To the knowledge of the Company, no other person or corporation beneficially owns, directly or indirectly, or
exercises control or direction over, Common Shares carrying more than 10% of the voting rights attached to all outstanding Common Shares. 
 Adverse Material
Changes 
 There have been no adverse material changes in the financial position of the Company that have occurred since the date of the
Financial Statements attached hereto. 
 Recent Information Releases 

The Company is listed on the TSX (TSX: ABT). Copies of the Company’s most recent Financial Statements are attached to this Disclosure Document.

 The following documents filed with the securities commission or similar regulatory authority in each of the provinces of Canada, are specifically
incorporated by reference in, and form an integral part of, this disclosure document: 
  

	 	(a)	 the audited Financial Statements of the Company for the last three fiscal years, together with the auditors’
report thereon, and management’s discussion and analysis in respect of those financial statements; 

  

	 	(b)	 the interim unaudited Financial Statements of the Company for each period since the end of the most recent fiscal
year, and management’s discussion and analysis in respect of these statements; 

  

	 	(c)	 the Information Circular for the last annual meeting of shareholders of the Company; 

 

	 	(d)	 the Company’s current Annual Information Form; 

  -
 70
 - 
  

	 	(e)	 any material change report (other than any confidential material change reports) filed by the Company since the date
of the Company’s current Annual Information Form. 

 Any statement contained in a document incorporated or deemed to be
incorporated by reference herein will be deemed to be modified or superseded for the purposes of this disclosure document to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes that statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any information set forth in the document that it modifies
or supersedes. The making of a modifying or superseding statement will not be deemed an admission that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission of a
material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. A statement so modified or superseded will not be deemed, except as so modified or superseded, to
constitute a part of this Disclosure Document. 
 Copies of documents incorporated by reference herein may be obtained upon request without charge
from the Company or by accessing the disclosure documents available through the Internet on SEDAR, which can be accessed at www.sedar.com.
Eligible Employees who wish to examine the whole of the Company’s public file may also do so by visiting the relevant sections of the Company’s website at
www.absolute.com. 
 Risks and
Uncertainties 
 In considering an investment in the Common Shares, prospective investors should evaluate the associated risks and
uncertainties in addition to other information contained in this Disclosure Document. Please refer to the Company’s current Annual Information Form for a detail list of the risks and uncertainties. 

Certificate 
 This document contains no untrue
statement of a material fact and does not omit to state a material fact that is necessary to prevent a statement that is made from being false or misleading in the circumstances in which it was made. 

Dated: [●], 2020 
  

			
	 Christy Wyatt

 
 Chief Executive Officer

 
	 	
	 Errol Olsen

 
 Chief Financial Officer
	 	

  -
 71
 - 
  

 The Company’s Most Recent Financial Statements 

  -
 72
 - 
  

 Appendix C: Commitment Form 

Additional Form for Tax Credit Eligible Employees 

Tax Credit Questionnaire 

  -
 73
 - 
  

 EMPLOYEE TREASURY SHARE PURCHASE PLAN COMMITMENT FORM 

This commitment form must be completed and signed by Eligible Employees of Absolute Software Corporation (the “Company”) who wish to purchase
shares under the Company’s 2019 Employee Share Ownership Plan (the “Plan”) during the offer period from          to         . 

Employee Information 
  

	
	  

Participant:
Mr./Mrs./Ms.                                       
                      
                                         
                   
                        

(Circle)                     
   Last
Name                                         
   First
Name                                        
Initial
  
 Address:
                                         
                                         
                                         
                                         
         
 No. and Street
Name            Apt.            City               
 Province/State                            Postal Code/ZIP

 
 SIN / SSN
                                         
                                     Date of Birth
                                         
                      

(MM / DD / YY)

 

 Contributions 
  

			
	  

I received and read the Disclosure Document the Company gave me. I agree to commit
Cdn$                 for the purchase of common shares (the “Shares”) of the Company under the Plan, paid by payroll deductions, for which I authorize
the Company to deduct from my wages and salary in 22 equal semi-monthly installments. My contributions will be invested as indicated in my instructions below until such time as a request for change is made. My contributions will be invested in
Absolute Software Corporation’s shares as subscribed for in the Plan.

	 
	 Allocation of
future contributions only:

	 	 
	 Registered Retirement Savings Plan (RRSP)
	 	
                    %

	 Note: Group
RRSP Application form must be completed

	 	 
	 Non-Registered Plan (NRP)
	 	
                    %

	 	 
	 Total
	 	 100%

	 	 	 

 Designation of Beneficiary (where permitted by law) 

	
	 In the event of my death, I hereby
designate
                                        
as my beneficiary, if living, to receive benefits payable under the Plan, otherwise such benefits shall be payable to my estate. I hereby revoke all prior beneficiary designations. I assume full responsibility for ensuring that this designation is
valid under applicable law.
  

	
Caution
  

In some provinces/states, designation of a beneficiary by means of a designation form will not be revoked or changed automatically
by any future marriage or divorce. Should you wish to change your beneficiary in the event of a future marriage or divorce, you will have to do so by means of new designation.

 

	
Note: I agree with full knowledge, to permit the Ministry of Economic Development (B.C.) and Absolute Software Corporation to
use the information collected about me in relation to the Plan, or otherwise, for any purpose relating to the Plan. I also hereby authorize them to communicate the information held on me to any person deemed necessary for the administration of the
Plan. I acknowledge that my “plan participant file” will be held at the employer’s and the Ministry of Economic Development (B.C.) offices or at any other location as indicated from time to time on the understanding that I will be
given access to examine and correct such information as prescribed by law.

  -
 74
 - 
  

 Acceptance of Terms and Conditions 
  

	
	  

I hereby accept all of the terms and conditions of the Plan, a copy of which I have received and read. I declare all of the above
information is accurate and I confirm that I am an Eligible Employee in accordance with the terms and conditions of the Plan.
  

Employee Signature:
                                         
                                         
    
  
 Date:
                                         
     
  

 For Office Use Only 
  

	
	 Approved by Employer Representative:
                                         
                                         
    
  

Date:                        
                                 

 

  -
 75
 - 
  

 EMPLOYEE TREASURY SHARE PURCHASE PLAN 

ADDITIONAL FORM FOR TAX CREDIT ELIGIBLE EMPLOYEES 

(Only Tax Credit Eligible Employees need complete this Additional Form 

This additional form must be completed and signed by Tax Credit Eligible Employees of Absolute Software Corporation (the “Company”) who wish
to purchase shares under the Company’s Employee Share Ownership Plan (the “Plan”) during the offer period from          to        . 

Employee Information (Please type or print clearly) 

 

	
	 Name (first, initials, last name):
  

                         
                                         
                                         
                                         
                                         
           
  

Social Insurance
Number:                                        
                                         
                                 

 
 Phone:
                                         
                
  

Address: 

	  

	
	  

	     

 
 Note: Tax credit certificates will only be issued at the end of each calendar year after the last payment
is made and the shares are issued. 
 Tax Credit Matters (This only applies to Tax Credit Eligible Employees. Check box below, if applicable.)

 ☐ Yes, I meet the criteria for a “Tax Credit Eligible Employee” set out on page 1
of the Plan share disclosure document. 
 I authorize the Company to apply for tax credit certificates for me and to provide the Administrator under
the Act with all necessary information. I have attached my completed Tax Credit Questionnaire and confirm it is accurate. I acknowledge that under the Employee Investment Act (British Columbia) share certificates issued to Tax Credit Eligible
Employees under the Plan must be held by an authorized depository (currently Royal Trust) for three years after purchase. I direct the Company to deliver the share certificate for the Shares to the depository and agree to be bound by the terms of
the escrow agreement with the depository about holding of the share certificates under the Plan. I irrevocably appoint the Company as my attorney for the sole purpose of matters related to the escrow agreement. 

I understand that it is my responsibility to notify the Ministry of Economic Development (B.C.) (the “Ministry”) immediately of any name or address
changes. 
  

					
	 Dated the              day of
                    , 20    .
	 		  	
			
		 		  	  

		 		  	 Employee Signature

 

			
	 Attached:
	  	 Tax Credit Questionnaire

		  	 Absolute Software Employee Share Purchase Form

  -
 76
 - 
  

 A FALSE OR MISLEADING STATEMENT IS AN OFFENCE UNDER THE EMPLOYEE INVESTMENT ACT

  -
 77
 - 
  

 Absolute Software Corporation 

EMPLOYEE SHARE OWNERSHIP PLAN 
 Tax Credit
Questionnaire 
 (Only Tax Credit Eligible Employees need complete this Questionnaire.) 

Employee Name:
                                         
                             SIN:
                                         
                             

Previous Tax Credit Related Share Transactions 
 I confirm
that as a result of this Share purchase I will not receive credit certificates under the Act totaling more than $2,000 in value in respect of any one calendar year; and 

Note:          Provincial tax credits received as a result of investments in the Working
Opportunity Fund and/or B.C. Medical Innovations Fund are included in the above calculation. 
 A FALSE OR MISLEADING STATEMENT IS AN OFFENCE UNDER
THE EMPLOYEE INVESTMENT ACT 

  -
 78
 - 
  

 SCHEDULE “C” 

BLACKLINE OF NEW SHARE OWNERSHIP PLAN TO CURRENT SHARE OWNERSHIP PLAN 

See attached 

 20052019 EMPLOYEE SHARE OWNERSHIP PLAN 

of 
 Absolute Software
Corporation 
 8001400 – 1111055 Dunsmuir Street 
 Vancouver, BC V6B 6A37X 1K8 
 (the “Company”) 

Date of Adoption: December 1611, 20052019 
  

	Article 1.	 PURPOSE OF THE PLAN 

The purpose of this Employee Share Ownership Plan (the “Plan”, as further defined below) is to: 

 

	 	(a)	 facilitate the purchase of the Company’s shares
by its employees at Fair Market Value (as defined below);

  

	 	(b)	 continue the Company’s efforts to share Company success with all staff; 

 

	 	(c)	 reward participants on the success of the whole Company;

  

	 	(d)	 improve the Company’s ability to retain a skilled workforce, and 

 

	 	(e)	 encourage teamwork and cooperation among all members and units of the Company. 

This Plan is intended to constitute an “employee stock purchase plan” as defined in Section 423(b) of the Code,
and, for so long as the Company qualifies as an
‘“
Eligible
Company’”
 under the Act, as an “Employee Share Ownership Plan” under the Act. It is the intention of the Company and the Committee that the Plan and its administration comply in all respects with
the Code, theAct, applicable securities laws and the Business Corporations Act (British Columbia). 
 This
Plan is intended to provide Shares for investment and not for resale. The Company does not, however, intend to restrict or influence the conduct of any Participating Employee’s affairs. A Participating Employee, therefore, may sell Shares that
are purchased under this Plan at any time, subject to compliance with all applicable federal, provincial or state tax and securities laws. B.C. Participating Employees who resell Shares purchased under the Plan prior to the end of a three year hold
period may be required to repay tax credits received under the Act. THE PARTICIPATING EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE
COMMON SHARES. 
  

	Article 2.	 DEFINITIONS 

  

	2.1	 In this Plan, the following terms have the following meanings: 

 

	 	(a)	 “Act” means the Employee Investment Act of
(British Columbia, R.S.B.C. 1996,
c.112), as amended from time to time, together with its accompanying Regulations and Policy Statements; pursuant to and under which the British
Columbia Employee Share Ownership Program is established and administered; 

 - 2 - 
  

	 	(b)	 “Administrator” means the person designated under the Act to perform the duties of
the administrator under the Act; 

  

	 	(c)	 “Affiliated Corporation” means an “affiliate” of the Company as defined in
the Act, and, for the purpose of this Plan, may include any affiliate of the Company designated by the Committee and whose employees are qualified participants in this
ESPPPlan in accordance with the provisions of the Code or the Act; 

 

	 	(d)	
“Appendix A” means Appendix A to this Plan, as it may be amended from time to time; 

  

	 	(e)	 (d) “Associate” has the meaning ascribed thereto in
the Securities Act (British Columbia); 

  

	 	(f)	 (e) “B.C. Participating Employee” means a Participating Employee who is resident in British Columbia and is not a major shareholder (as defined in the Act) of the Company.

  

	 	(g)	 (f) “Board” means the boardBoard of directorsDirectors of the Company; 

 

	 	(h)	 (g) “Business Day” means a day other than a Saturday, Sunday or statutory holiday on which the Vancouver office of the Company is open for business; 

 

	 	(i)	 (h) “Code” means the Internal Revenue Code of 1986
(United States), as amended from time to time; 

  

	 	(j)	 (i) “Commitment Form” means the form of commitment for a monthly dollar contribution attached as Appendix C; 

 

	 	(k)	 (j) “Committee” means the Compensation Committee of the Board; 

  

	 	(l)	 (k) “Compensation” means a Participating Employee’s base salary plus any bonuses and commissions paid. 

 

	 	(m)	 (l) “Disclosure Document” means a document delivered to Eligible Employees in connection with obtaining commitments to the purchase of Shares under the Plan, a general form of which is
attached as Appendix B; 

  

	 	(n)	 (m) “Eligible Employee” means all employees employed by the Company (or a predecessor or an Affiliated Corporation of the Company) for a period of at
least three months on a continuing basis for at least twenty (20) hours a week who are: 

  

	 	(i)	 Tax Credit Eligible Employees; 

 

	 	(ii)	 Other Eligible Employees; or 

 

	 	(iii)	 Employees that the Board determines are eligible to
participate in the Plan; 

 provided, however, that
the, provided, however, that non-employee service providers to
the Company, non-employee members of the Board and highly compensated employees within the meaning of Section 414(q) of the Code who are members of the
Board will not be eligible to participate in the Plan; 
  

	 	(o)	 (n) “Employee Contribution” means funds contributed by a Participating Employee solely by way of payroll deduction for the purpose of purchasing Shares pursuant to the Plan;

 - 3 - 
  

	 	(p)	 (o) “Employee Shareholder” means, at any relevant time: 

  

	 	(i)	 a Shareholder who continues to be an employee of the Company or any Affiliated Corporation; or

  

	 	(ii)	 a Shareholder which is a RRSP Trust where the annuitant or beneficiary of such Shareholder continues to be
an employee of the Company or any Affiliated Corporation; 

  

	 	(q)	 (p) “Fair Market Value” of the Shares as of any day means the closing price (rounded to the next highest cent in the case of fractions of a cent) of the Shares on the TSX – VentureToronto Stock Exchange or any other stock market or exchange upon which the Shares are quoted or
listed and where the majority of the Shares are traded (the “Market”), as reported on such day or, if such day is not a trading day, on the immediately preceding trading day on which the Shares traded on the Market. The
Committee, in its sole discretion, shall make all determinations required by this definition; 

  

	 	(r)	 (q) “Financial Statements” means: 

  

	 	(i)	 the financial statements of the Company filed with the Administrator in accordance
to sectionwith Section 2(1)(a) of the Act; or 

 

	 	(ii)	 if more recent financial statements of the Company have subsequently been delivered to Eligible Employees by
the Company, the most recent of those financial statements; 

  

	 	(s)	 (r) “Insider” means an insiderhas the meaning ascribed
thereto in Part I of the Toronto Stock Exchange Company as defined in the
Securities Act (British Columbia)Manual;

  

	 	(t)	 (s) “Offering Period” means a six month period commencing on January 1 or July 1 during which Eligible Employees may commit to the purchase of Shares hereunder, as further
described in Appendix A and as amended from time to time; 

 

	 	(u)	 (t) “Outstanding Issue” means the number of Common Shares outstanding on a non-diluted basis, less Common Shares issued pursuant to a Share Compensation Arrangement in the preceding 12 month period; 

  

	 	(v)	 (u) “Participating Employee” means an Eligible Employee who has elected to commit to the purchase of Shares under the Plan; 

 

	 	(w)	 (v) “Plan” means this 20052019 Employee Share
Ownership Plan dated for reference December 1611,
20052019, including all appendices attached hereto, as supplemented and amended from time to time in accordance
with the provisions hereof; 

  

	 	(x)	 (w) “Plan Year” means the twelve-month period commencing on July 1 of each year; provided, however, that the first Plan Year shall commence on January 1,
20062020 and end June 30,
20062020; 

  

	 	(y)	 (x) “Purchase Date” means the first Business Day following the end of an Offering Period; 

  

	 	(z)	 (y) “Purchase Price” means the lesser of; 

 - 4 - 
  

	 	(i)	 85% of the Fair Market Value for the Common Shares on the
first day of the Offering Period; or 

  

	 	(ii)	 85% of the Fair Market Value for the Common Shares on the
Purchase Date. 

  

	 	(aa)	 (z) “Regulations” means the regulations enacted pursuant to the Act in force from time to time; 

 

	 	(bb)	 (aa) “RRSP Trust” means a trust governed by a registered retirement savings plan under the Income Tax Act (Canada) for which an Eligible Employee is the annuitant;

  

	 	(cc)	 (bb) “Shares” means common shares without par value of the Company; 

  

	 	(dd)	 (cc) “Share Certificate” means a share certificate or an appropriate equivalent representing Shares purchased under the Plan; 

 

	 	(ee)	 (dd) “Share Entitlement” means the calculation of the number of shares to be issued each Offering Period pursuant to the Plan as detailed in Appendix A; 

 

	 	(ff)	 (ee) “Shareholder” means, at any relevant time: 

  

	 	(i)	
Anyany holder
 of Shares of the Company; 

  

	 	(ii)	
Aa
person who has committed to the purchase of Shares under the Plan, whether or not the Shares have been paid for in full or the Shares have been issued at that time, and continues to be entitled to receive the Shares when issued; or

  

	 	(iii)	
Aan
RRSP Trust, which acquired Shares pursuant to this Plan, if at such time the RRSP Trust continues to hold any such Shares; 

  

	 	(ff)	 “Share Compensation
Arrangement” means any stock option, stock option plan, employee stock purchase plan, share distribution plan or any other compensation or incentive mechanism involving the
issuance or potential issuance of shares to any director, officer or employee of the Company, including a share purchase from treasury which is financially assisted by the Company by way of a loan, guaranty or otherwise;

  

	 	(gg)	 “Share Option
Plan” means the Company’s 2000 Share Option Plan dated March 16, 2000 and amended on
May 11, 2000;“Security Based Compensation
Arrangement” has the meaning ascribed thereto in Section 613(b) of the Toronto Stock Exchange Company Manual; 

 

	 	(hh)	 “Subscription Form” means the form of subscription for Shares to be used by B.C.
Participating Employees making purchases under the Plan eligible for tax credits under the Act; 

  

	 	(ii)	 “Tax Credit Eligible Employee” means an individual who, at the time of subscribing
for Shares under the Plan is: 

  

	 	(i)	 resident in British Columbia; 

 

	 	(ii)	 employed by the Company, (or the predecessor or Affiliated Corporation of the Company) on a continuing basis
for an average of at least twenty hours a week; 

 - 5 - 
  

	 	(iii)	 is not a major shareholder (as defined in the Act) of the Company; and 

 

	 	(iv)	 meets other conditions as may be prescribed under the Regulations from time to time. 

 

	 	(jj)	 “Treasury Purchase” means the purchase of Shares from the treasury of the Company; 

  

	 	(kk)	 “Trustee” means the trust company selected by the Board, subject to review and substitution from time to time at the Board’s discretion, to administer the Plan;
and 

  

	 	(jj)	 (ll) “U.S. Participating Employee” means a Participating Employee who, by virtue of his citizenship or residence, or otherwise, is subject to taxation under the Code on his or her
Compensation. 

  

	2.2	 In this Plan, unless otherwise defined herein, words and phrases defined in the Act or the Regulations have
the meanings given to them in the Act or the Regulations. 

  

	2.3	 In this Plan, words (including defined terms) importing the singular number include the plural and vice
versa and words importing the masculine gender include the feminine and neuter genders. 

  

	Article 3.	 TERMS, TERMINATION AND AMENDMENT OF THE PLAN 

 

	3.1	 The Company hereby confirms that (a) the Plan has been adopted as its
2019 Employee Share
PurchaseOwnership Plan for the benefit of its Eligible Employees, pursuant to approval by the Board on November 46,
20052019 and by the
Shareholdersshareholders of the Company on December 1611, 20052019; and (b) the
Plan is intended to be a qualified plan pursuant to the provisions of the Act 

  

	3.2	 In accordance with the terms of approval by the Board on November
46,
20052019 and by the
ShareholdersCompany’s shareholders on December 1611, 20052019, the Plan is
effective upon registration under the Act and shall continue until terminated in accordance with this Plan. 

  

	3.3	 A maximum of
1,000,000350,000 Shares are available for issuance under this Plan and the Company
may, from time to time, as it sees fit, authorize and allot additional Shares for issuance under the Plan. The
BoardCommittee, at its sole discretion, will determine when an offering under this Plan is made and the maximum
number of Shares available for issuance during each Offering Period. In the event of any changes in the outstanding Shares of the Company by reason of stock dividends, stock splits, recapitalisation,
mergers, consolidations, combinations or exchanges of Shares, split-ups, split-offs, spin-offs, liquidations or other similar changes in capitalization, or any distribution to shareholders other than cash
dividends, the Committee shall make such adjustments, if any, in light of the change or distribution as the Committee in its sole discretion shall determine to be appropriate in the number and class of shares and the purchase prices of the Shares
which may be purchased by Participating Employees during the current Offering Period. In the event of any such change in the outstanding Shares of the Company, the aggregate number and class of shares
available under this Plan and the maximum number of shares which may be purchased and their purchase price shall be appropriately adjusted by the Committee. 

  

	3.4	 Upon the happening of an event specified in Section 3.3, the class and aggregate number of sharesShares available under this Plan shall be appropriately adjusted to reflect the event. Notwithstanding the
foregoing, such adjustments shall be made only to the extent that the Committee, based on advice of counsel for the Company, determines that such adjustments will not 

 - 6 - 
  

	 	 
constitute a change requiring shareholder approval under Section 423(b)(2) of the Code, the Act, the rules of any stock exchange or market upon which the Shares are listed or quoted, or other applicable Canadian law. 

 

	3.5	 The Board may terminate this Plan at any time, upon written notification to the Administrator, except that
if the termination occurs after the conclusion of an Offering Period and before the issue of sharesShares to
participating employees, the Company will complete the sale of all sharesShares subscribed for.

  

	3.6	 The
BoardCommittee may terminate an Offering Period at any time prior to the conclusion of the Offering Period,
provided that all deposits received during the Offering Period are returned to the Participating Employees. 

  

	3.7	 The
BoardSubject to Section 16.1, the Committee may amend any terms under the Plan upon 60 days written
notice, insofar as permitted by law and subject to the receipt of any required regulatory approval, and approval from the Administrator and a majority of the Employee
Shareholders. of any stock exchange on which the Shares are then listed or quoted or the Administrator, amend, modify, revise or otherwise change the terms
of the Plan, in whole or in part, provided that no amendment or revision may use or divert any Employee Contributions for purposes other than for the purchase of Shares pursuant to the Plan. For greater certainty, and without limiting this
Section 3.7, the approval of the Company’s shareholders shall not be required for the following amendments, subject to any regulatory approvals including, where required, the approval of any stock exchange on which the Shares are then
listed or quoted or the Administrator: 

  

	 	(a)	 amendments of a
“housekeeping” nature, including any amendment for the purpose of curing any ambiguity, error or omission in the Plan or to correct or supplement any provision of the Plan that is inconsistent with any other provision hereof;

  

	 	(b)	 amendments necessary to comply
with the provisions of applicable law, including, without limitation, the rules, regulations and policies of the Toronto Stock Exchange, the Code and the Act; 

 

	 	(c)	 amendments respecting
administration of the Plan, including but not limited to changing the process by which an Eligible Employee may participate in the Plan, such as changing the manner in which Employee Contributions may be made; and 

 

	 	(d)	 amendments to introduce
vesting or retention periods in respect of Shares purchased under the Plan. 

Any
 amendment referred to in Section 3.7 shall be effective at such date as the Committee may determine. 
  

	3.8	 Notwithstanding
Section 3.7, and subject to Section 16.1, the Company’s shareholders’ approval shall be required for: 

 

	 	(a)	 any amendment to increase the number of
Shares reserved for issuance under the Plan or the maximum amount of
Shares available for issuance pursuant to the Plan; 

  

	 	(b)	 any amendment to the
definitions of Eligible Employee, Purchase Price and Shares; 

 - 7 - 
  

	 	(c)	 any amendment to remove,
exceed or increase the limits on Insider participation in the Plan established by Section 8.11; 

  

	 	(d)	 any amendment to introduce
Company matching of Employee Contributions; 

  

	 	(e)	 any amendment to the
restrictions on the transferability of Participating Employee’s rights under this Plan; and 

  

	 	(f)	 any amendment to the
provisions of Sections 3.7 or 3.8. 

 The threshold for the Company’s shareholders’ approval of an amendment, if required, shall be a majority of the
Company’s shareholders present in person or by proxy and entitled to vote at a duly called meeting of the Company shareholders and shall, if and only to the extent required under applicable securities laws and regulatory requirements, exclude
the votes cast by Insiders. 
  

	3.9	 3.8 The BoardCommittee will determine all questions arising with respect to the administration of this Plan. The determination of the
BoardCommittee will be conclusive and binding on all Participating Employees. 

 

	3.10	 3.9 The Company’s obligation to sell and
deliver the Shares under this Plan is subject to the availability of registration and prospectus exemptions under applicable securities law, and the receipt of any required approval of any stock exchange
or Market upon which the Shares are listed or quoted, and any approval by a governmental authority required in connection with the authorization, issuance or sale of such Shares, including the Code and the Act. 

 

	3.11	 3.10 Upon (a) the dissolution or liquidation of the Company, (b) a
merger, amalgamation, arrangement or other reorganization of the Company with one or more corporations as a result of which the Company will not be a surviving corporation, (c) the sale of all or substantially all of the assets of the Company
or a material division of the Company, (d) a sale or other transfer, pursuant to a tender offer, takeover bid or otherwise, of more than fifty percent (50%) of the then outstanding Common Shares of the Company, or (e) an acquisition by the Company resulting in an extraordinary
expansion of the Company’s business or the addition of a material new line of businessany transaction similar to any of those listed in
Section 3.11(a) to 3.11(d) (any of such events is herein referred to as a “Terminating Event”), the Committee may but shall not be required to: 

 

	 	(a)	 make provision for the continuation of the Participating Employees’ rights under this ESPPPlan on such terms and conditions as the Committee determines to be appropriate and equitable, including where
applicable, but not limited to, an arrangement for the substitution on an equitable basis, for each Common Share that could otherwise be purchased at the end of the Offering Period in progress at the
time of the Terminating Event, of any consideration payable with respect to each then outstanding Common Share in connection with the Terminating Event; or 

 

	 	(b)	 terminate all rights of Participating Employees under the ESPPPlan for such Payment Period and 

  

	 	(i)	 return to the Participating Employees all of their payroll deductions for such Payment Period; and

 - 8 - 
  

	 	(ii)	 for each Common Share, if any, that could otherwise be
purchased under the ESPPPlan by a Participating Employee at the end of such Offering Period (determined by
assuming that payroll deductions at the rate elected by the Participating Employee were continued to the end of the Offering Period and used to purchase Common Shares based on the Fair Market Value of
the Common Shares on the first day of the Offering Period) and with respect to which (A) the purchase price at which such Common Share could be purchased (determined with reference only to the Fair
Market Value of the Common Shares on the first day of the Absolute Software Corporation Employee Share Ownership
Plansuch Offering Period) is exceeded by (B) the Fair Market Value of Common Shares on the
date of the Terminating Event, as determined by the Committee, pay to the Participating Employee an amount equal to such excess. 

The Committee shall make all determinations necessary or advisable in connection with Terminating Events, and its
determinations shall, in the absence of fraud or patent mistake, be conclusive and binding on all persons with any interest in the ESPPPlan. 

 

	Article 4.	 REPRESENTATIONS AND WARRANTIES 

 

	4.1	 The Company represents and warrants to each Eligible Employee that: 

 

	 	(a)	 the Company is validly existing and in good standing under the laws pursuant to which it was incorporated;

  

	 	(b)	 the Company is eligible to register an employee share ownership plan under the Act; 

 

	 	(c)	 the Company is not party to any agreement which prohibits or restricts it from adopting the Plan, completing
any of the transactions contemplated hereunder and complying with the terms hereof; 

  

	 	(d)	 all necessary corporate action has been taken to adopt the Plan as a valid and binding obligation of the
Company; 

  

	 	(e)	 as of the date of adoption of the Plan, the authorized share capital of the Company was as described in
Appendix E; 

  

	 	(f)	 the Shares are of a class of shares of the Company that: 

 

	 	(i)	 carry voting rights under all circumstances; 

 

	 	(ii)	 are not directly restricted in their right to share in the profits of the Company or in the division of the
Company’s assets on dissolution or winding up; and 

  

	 	(iii)	 do not have any rights and restrictions prohibited by the Regulations; 

 

	 	(g)	 the Shares to be issued under the Plan will be from the treasury of the Company and will not have been
previously issued; 

  

	 	(h)	 the price per Share at which Shares will be purchased through Treasury
Purchasestreasury purchases by Eligible Employees will be the Purchase Price as calculated under this Plan; 

 - 9 - 
  

	 	(i)	 the Financial Statements are prepared in accordance with generally accepted
accounting principlesinternational financial reporting standards, present fairly the financial position and condition of the Company as at the
date thereof and do not omit to state any material liability or financial obligation of the Company as at the date thereof; 

  

	 	(j)	 since the date of the Financial Statements there has been no material adverse change in the financial
position or condition of the Company, except as disclosed in the Disclosure Document; 

  

	 	(k)	 the Disclosure Document discloses all outstanding options, warrants and conversion rights granted by the
Company in respect of its securities and contains no misrepresentations; 

  

	 	(l)	 the Company is in good standing with the TSX – VentureToronto Stock Exchange and will advise the Administrator within 30 days of theany
discontinuance of such listing; 

  

	 	(m)	 each Eligible Employee has an equal pro-rated right to purchase sharesShares under the
planPlan; and 

  

	 	(n)	 the representations and warranties set out in paragraphs (a) to (m) above will be true and correct at
the start of each Offering Period. 

  

	4.2	 Each Eligible Employee will be deemed to have relied on the representations and warranties contained in
paragraphs 4.1(a) to 4.1(n) above in electing to commit to the purchase of sharesShares under the Plan.

  

	4.3	 The availability of this Plan should not be considered a recommendation, invitation, inducement,
encouragement or request by the Company, its agents, officers or directors to participate in the Plan; in particular, securities or other investments referred to in the Plan may not be suitable for an Eligible Employee and each Eligible Employee
should take care to make any kind of investment decision only after having first obtained independent investment advice from a person authorized to give such advice. 

 

	4.4	 Among the risks in investing in the Shares pursuant to the Plan, it is expressly declared by the Company
that this planthe Plan offers no guarantee or promise of gains or dividends, or protection against loss due to
fluctuations in the market price of the Shares. Participation in this Plan will be on the express understanding that each Participating Employee accepts the risks inherent in the purchase of Shares, including risk of such market fluctuations.

  

	4.5	 Participation in this Plan will not be interpreted as the granting of a right to continued employment with
the Company or any of its subsidiaries and the expectation of any benefit by continuing to be a Participating Employee will not be taken into account in determining any compensation to which a Participating Employee may be entitled by reason of
wrongful dismissal. 

  

	Article 5.	 OFFERING PERIODS AND ELIGIBILITY TO SUBSCRIBE FOR SHARES 

 

	5.1	 Subject to the annual share allotment as described in Appendix A,
theThe Company will offer Eligible Employees the right to participate in the Plan during the Offering Period under the terms and conditions set
out in this Plan. Should the aggregate Share Entitlement bynumber of Shares to be issued to all Participating
Employees for the Offering Period pursuant to the terms of this Plan Year exceed the
annual allotmentaggregate Share Entitlement for the Offering Period, the Shares available for purchase will be
distributed pro-rata to the participantsParticipating Employees.

 - 10 - 
  

	 	 
Excess Employee Contributions will be applied to future purchases or returned in accordance with paragraph 8.3. Fractional Shares cannot be purchased. 

 

	5.2	 Each person who is an Eligible Employee at the commencement of an Offering Period will be eligible to commit
to the purchase of a dollar value of Shares under the Plan during the Offering Period as described in Appendix A. Each person who becomes an Eligible Employee during an
Offering Period will be eligible to commit to the purchase of a dollar value of Shares under the Plan during the Offering Period, pro rated to account for the duration of the Offering Period then remaining at the date of such Eligible
Employee’s commitment to purchase Shares. 

  

	5.3	 The Company will notify each Eligible Employee of his or her eligibility to purchase Shares under the Plan.

  

	Article 6.	 SUBSCRIPTION ENTITLEMENT 

 

	6.1	 During an Offering Period each Eligible Employee has an equal entitlement opportunity to commit to the
purchase of Shares by delivering a completed Commitment Form that designates the amount of his or her Employee Contribution for the Offering Period. This shall be subject to the dollar limitation. This dollar limitation is as disclosed in this Plan and Appendix A, as amended by the
Board from time to timewell as Section 5.2 with respect to Eligible Employees who commence employment during an Offering Period.

  

	6.2	 The Company will deliver a Disclosure Document to an Eligible Employee before he or she enters into an
agreement to commit to the purchase of Shares under the Plan. 

  

	Article 7.	 CONTRIBUTIONS 

 

	7.1	 Employee Contributions will be deducted from Participating Employees’ salary on a semi-monthly basis and delivered by the Company to the Trustee within five (5) Business Days of the end of each month.

  

	Article 8.	 SHARE ENTITLEMENT 

 

	8.1	 The
TrusteeCompany, on the first Business Day following the end of each Offering
Period, will be responsible for calculating each Participating Employee’s Share Entitlement in accordance with Appendix A. 

 

	8.2	 The
TrusteeCompany will hold all Employee Contributions in one pool and will thereby also determine at the end of each
Offering Period the aggregate Share Entitlement for all Participating Employees. All purchases will be made in Canadian dollars and all contributions in a currency
other than Canadian dollars will be converted into Canadian dollars at the rate quoted by its principal bankers for
transactions withBank of Canada’s daily average exchange rate on the first Business Day of the Offering Period, or such other exchange rate determined
by the Company, acting reasonably. 

  

	8.3	
AtA
Participating Employee who is enrolled in this Plan at the conclusionend of
eachan Offering Period, the Company
will, unless the Participating Employee gives notice of his or her intent to withdraw from the Plan, automatically re-enroll eachbe enrolled as a Participating Employee in the
nextsubsequent Offering Period (subject to the requirement for B.C. Participating Employees who wish to make
purchases eligible for tax credits under the Act to deliver an executed Subscription Form prior to commencement of the Offering Period), and any portion of a Participating 

 - 11 - 
  

	 	 
Employee’s accumulated Employee Contributions not used for the purchase of Shares at the end of an Offering Period will be applied to the purchase of Shares in the next Offering Period if
the Participating Employee is participating in the Plan during that Offering Period, or returned to the Participating Employee. An investment confirmation will be issued to each Participating Employee by the Company within
30 days50 Business Days of the Purchase Date, setting out the number of Shares purchased, the price paid per
Share, the total amount paid, the name, address, telephone number and contact person at the TrusteeCompany, and
for B.C. Participating Employees, the procedure for obtaining the tax credit certificate under the Act, and any other prescribed information required under the
Regulations. 

  

	8.4	 Any person who is properly enrolled as a Participating Employee at the beginning of an Offering Period, or becomes enrolled as a Participating Employee
during an Offering Period, may elect, in accordance with any
procedures prescribed by the Committee, to have the Company deduct a specified percentage of the Participating Employee’s Compensation via payroll deduction for the purchase of Shares pursuant to the Plan. The
maximum rate of deduction that a Participating Employee may elect for any Offering Period is 10% of Compensation accrued or paid during the Offering Period,
provided that the maximum rate of deduction for B.C. Participating Employees during any Offering Period shall be the greater of 10% of Compensation or Cdn. $5,250. An amount equal to the elected percentage of the Participating
Employee’s Compensation, subject to the maximum amount set forth in
Section 8.7, will be deducted on each regular pay day falling within the Offering Period. All amounts will be deducted from a
Participating Employee’s Compensation on an after-tax basis. 

  

	8.5	 No interest will be paid on payroll deductions accumulated under this Plan, which will be held in trust foron behalf of the Participating Employees by the Trustee. A Participating Employee who is enrolled in this Plan at the end of an Offering Period will, unless the Participating Employee gives notice of his or her intent to withdraw from the
Plan, automatically be enrolled as a Participating Employee in
the subsequent Offering Period.Company.

  

	8.6	 B.C. Participating Employees who wish to enroll for purchases during an Offering Period eligible for tax
credits under the Act must request a Disclosure Document to read, and must provide an executed Subscription Form prior to the Offering Period. 

  

	8.7	 During any Offering Period the maximum amount of payroll deductions by a Participating Employee that can be
used to purchase Shares may not exceed Cdn$10,500 in the currency applicable to the Participating Employee’s
compensation7,500. During any calendar year, the maximum amount of payroll deductions by a Participating Employee that can be used to purchase
Shares under this Plan, together with all other employee stock purchase plansSecurity Based Compensation
Arrangements of the Company, its parents, subsidiaries and affiliates (including any Share Compensation Arrangement), is
Cdn$10,500 in the currency applicable to the Participating Employee’s compensation. With respect to U.S. Participating
Employees, the foregoing limitations are intended to and shall be interpreted in such a manner as will comply
with Section 423(b)(8) of the Code.15,000. 

 

	8.8	 Tax credits are available to B.C. Participating Employees under the Act in respect of the first
Cdn$5,250,000, or such lesser amount as is allocated to the Company by the Administrator, in aggregate of subscriptions in any two year period, but are limited to 20% of the subscription price to a maximum for each B.C. Participating Employee of Cdn$2,000 annually. 

 

	8.9	 No U.S. Participating Employee shall be permitted to subscribe
for any Shares under this Plan if such Participating Employee, immediately after such subscription, owns Shares that account for 

 - 12 - 
  

	 	 
(including all Shares that may be purchased under outstanding subscriptions under the Plan and any other outstanding
options or other rights to purchase or receive Shares) five percent
(5%) or more of the total combined voting power or value of all classes of shares of the Company. For the foregoing purposes the rules of Section 424(d) of the Code shall apply in determining share
ownership. The dollar limitations set forth in Section 8.7 are intended to and shall be interpreted in such a manner so as to comply with Section 423(b)(8) of the Code. In the event the maximum amount of payroll deductions by a Participating
Employee in a calendar year pursuant to the terms of this Plan exceeds US$25,000, such maximum amount of payroll deductions by such Participating Employee shall be reduced to US$25,000 in such calendar year. 

 

	8.10	 8.10 B.C. Participating Employees who wish to remain eligible
for tax credits under the Act may not hold more than ten percent (10%) of the issued share capital of the Company, calculated in the manner prescribed by the Act. 

 

	8.11	 Purchases of Shares that may be issued
or reserved for issuance underNotwithstanding any other provision contained in this Plan, no Shares shall be purchased under the Plan on behalf of a Participating Employee if, together with allany other employee stock purchase plans of the Company, its parents, subsidiaries and affiliates (including any
ShareSecurity Based Compensation Arrangement): 

 

	(a)	 to Insiders of the Company, in
total and within a one year period, may not exceedsuch purchase could result, at any time, in: 

 

	(a)	 the number of Shares issuable
to Insiders, at any time, exceeding 10% of the Outstanding Issue at that time, and; or

  

	(b)	 to any Insider and his or her
Associatesthe number of Shares issued to Insiders, within
aany one-year period, may not
exceedexceeding 10% of the Outstanding Issue at that time. 

 

	Article 9.	 ISSUANCE AND HOLDING OF SHARE CERTIFICATES 

 

	9.1	 Subject to section
10.410.5 relating to any Insider trading restrictions, the Trustee will submit the
Employee Contributions and Share Entitlement of each Participating Employee to the Company, within 5 business
daystwenty (20) Business Days of the end of each Offering Period. 

 

	9.2	 Upon receipt of the Employee Contributions and the Share Entitlement from the
Trustee, the Company, will cause Share Certificates to be issued to
the Trustee representing those Shares either in the name of the Eligible Employee or, if the Shares are to be held by a RRSP Trust for the benefit of the Eligible Employee, in the name of the trustee of the RRSP Trust. Such Share Certificates will be issued within fifteen (15) Business Days of the receipt of the contributions from the Trustee.

  

	9.2	 9.3 In accordance with section 4(1)(d) of the Act, each Share Certificate
representing Shares acquired by a Tax Credit Eligible Employee who wishes to obtain a tax credit certificate under the Act will be held in the custody of an authorized depository on the terms set forth in Appendix
D for a period of three years from the date of issue of the Share Certificate. 

  

	9.3	 9.4 Where an Eligible Employee is not a Tax Credit Eligible Employee, or does
not wish to obtain a tax credit certificate under the Act, each Share Certificate will be delivered to the respective Eligible
EmployeesEmployee within five (5) business daysBusiness Days of receipt of the Share Certificates from the Company. 

	9.4	 9.5 A Participating Employee or his or her legal representative may withdraw Common Shares from his or her account held by the Trustee at any time, not sooner than 30 days after a Purchase Date; however any withdrawal by a U.S.
Participating Employee within 2 years of the first day of the Offering Period and one year of the Purchase Date will be treated by the Company as a disqualifying disposition under Sections 421 and 423 of the Code and be reported on the Participating
Employee’s tax Form W-2. B.C. Participating Employees who dispose of Shares within three years of the Purchase Date may be required to repay the tax credits received under the Act.
UponSubject to Section 3.11, upon termination, all payroll deductions not used to purchase Shares will be
refunded to the Participating Employee entitled thereto. 

  

	9.5	 9.6 Within 30 business days of receiving Share
Certificates under paragraph 9.250 Business Days of the end of
each Offering Period, the
TrusteeCompany will deliver to the Eligible Employee an investment confirmation setting out the information
required by the Act and the Regulations. 

  

	Article 10.	 WITHDRAWAL FROM PARTICIPATION 

 

	10.1	 A Participating Employee may withdraw from participation in the purchase of
sharesShares under the Plan by delivering written notice of such to the Company and
the Trustee on or before the 10th Business Day prior to the end of the Offering Period. A notice of withdrawal pursuant to this paragraph will be effective upon delivery of such to the
TrusteeCompany. 

  

	10.2	 Upon termination of employment with the
Company for any reason (including involuntary with or without cause,
resignation, retirement or death), an employeea Participating Employee will be deemed to have withdrawn
from participation in the purchase of sharesShares under the Plan, effective the
datelast day of
terminationemployment. If a Participating Employee’s payroll deductions are interrupted by any garnishment or
other legal process, the Participating Employee will be deemed to have elected to withdraw from the Plan for the Offering Period in which the interruption occurs. The Company will promptly advise the Trustee if an
employee’s participation rights are terminated under this paragraph. 

  

	10.3	 A Participating Employee’s participation and payroll deductions will continue during a paidsick leave or other bona fide leave of
absence, for up to three months, or for so long as the Participating Employee’s right to re-employment is guaranteed either by
statute or contract, if longer than three months, unless the Participating Employee elects to stop his or her payroll deductions. Such participation will end automatically at the end of the current Offering Period.
A ParticipatingSuch Eligible Employee may re-enroll to participate in
subsequent Offering Periods which commence following the employee’s return from thesuch leave of absence. 

  

	10.4	 Upon receipt of a notice of withdrawal or termination, as described in either paragraph 10.1 or 10.2, the TrusteeCompany will, within 10
Business Days, return all of the Participating Employee’s Employee Contributions which are being held at such time by the
TrusteeCompany. 

  

	10.5	 An Insider who is a Participating Employee may, at any time, advise the
TrusteeCompany that they wish to
postponesuspend the purchase of
sharesShares under the Plan if the Insider is of the view that such purchase would be contrary to any applicable
insider trading provisions, and the Company may, on its initiative, also suspend sales to Insiders. Where the
TrusteeCompany is precluded by this paragraph from acquiring Shares for an Insider, the monies that would have
otherwise have been used to subscribe for such sharesShares will be credited to such Insider’s account and,
subject to withdrawal by the Insider from the Plan, will be applied to future purchases of Shares under this Plan. 

 - 14 - 
  

	10.6	 A Participating Employee’s rights under this Plan, including rights to accumulated Employee
Contributions, may not be pledged, assigned, encumbered or otherwise transferred for any reason other than by will or the laws of descent and distribution. Any such attempt will be treated as an election by the Participating Employee to withdraw
from this Plan. 

  

	Article 11.	 APPLICATION FOR TAX CREDIT CERTIFICATES 

 

	11.1	 If the Company has received from a Tax Credit Eligible Employee who subscribed for Shares under the Plan:

  

	 	(a)	 all required information; and 

 

	 	(b)	 payment in full of the Purchase Price for the Shares; 

then the Company will, on behalf of such person, apply to the Administrator in accordance with the Act and Regulations for a
tax credit certificate in respect of the purchase of the Shares. 
  

	Article 12.	 USE OF FUNDS 

 

	12.1	 Subject to paragraph 12.2, the funds raised under this Plan will be used for general corporate operations
including working capital and capital expenditures. 

  

	12.2	 The Company will not use any funds received from the issue of Shares under the Plan for any purpose
prohibited by the Act or the Regulations. 

  

	Article 13.	 REPORTS TO EMPLOYEE SHAREHOLDERS 

 

	13.1	 To allow Employee Shareholders to monitor their investment in the Company, the Company will providemake available to the Employee Shareholders with all quarterly and
annual public disclosure documents required to be filed and sent to the Company’s shareholders under applicable securities laws and Section 4(1)(g) of
the Act. 

  

	13.2	 Upon request by a Shareholder, the Company will provide the Shareholder with access to or copies of the
Plan. 

  

	Article 14.	 OTHER COVENANTS OF THE COMPANY 

 

	14.1	 The Company covenants with the Eligible Employees that: 

 

	 	(a)	 the Company will comply at all times with the Plan, the Act and the Regulations; 

 

	 	(b)	 the Company will not enter into any agreement which would prohibit or restrict it from completing any of the
transactions contemplated hereunder or complying with the terms hereof; 

  

	 	(c)	 in any 2 year period, the amount of equity capital raised under the Plan will not exceed Cdn$5 million or such other amount as may be permitted by the Act from time to time; and 

 

	 	(d)	 all required corporate action will be taken to duly allot and issue Shares purchased under this Plan from
the treasury of the Company and, upon receipt by the Company of payment in full for Shares subscribed for hereunder, the Shares will be validly authorized and issued as fully-paid. 

 - 15 - 
  

	Article 15.	 PURCHASE BY OR TRANSFER TO TRUSTS 

 

	15.1	 Notwithstanding any other provision of this Plan, an Eligible Employee may: 

 

	 	(a)	 purchase Shares under the Plan through a RRSP Trust; and 

 

	 	(b)	 transfer Shares purchased under the Plan to a RRSP Trust. 

 

	15.2	 Where an Eligible Employee purchases Shares under the Plan through a RRSP Trust, the provisions of the Plan
shall apply to the purchase by the RRSP Trust as if the purchase was being made by the Eligible Employee. 

  

	Article 16.	 AMENDMENTS FOR ELIGIBILITY UNDER THE EMPLOYEE INVESTMENT ACT 

 

	16.1	 For continuation under the Employee Investment Act, no
alteration will be made to the Plan in accordance with Section 3.7 or Section 3.8 without prior approval of the Administrator and a majority of
Employee Shareholders, notice of which must be at least 60 business days. 

  

	Article 17.	 LIABILITY 

  

	17.1	 Neither the Trustee, the Company or any subsidiary of the
Company, nor any directors, officerofficers or employeeemployees of any of them will be liable for anything done or omitted by such person of
byto any other person with respect to the price, time, quantity or other conditions or circumstances of the purchase of Shares under this Plan
or with respect to any fluctuation in the price or value of Shares, or in any other manner in connection underwith this Plan, unless such act or omission constitutes
wilfulwillful misconduct on such person’s part. 

 

	Article 18.	 GENERAL 

  

	18.1	 The Plan will be construed and enforced in accordance with the laws of British Columbia. The Company and
each Participating Employee irrevocably and exclusively attorns to the jurisdiction of the courts of British Columbia and all courts having appellate jurisdiction thereover, and any proceeding commenced or maintained by a party in respect of this
Plan will be commenced or maintained only in such of those courts as is appropriate. 

  

	18.2	 The Administrator has not reviewed the investment merits of the Shares and in no way guarantees an investment in Shares.
Assessment of the investment merit, adequacy of this Plan, and due diligence review is entirely the responsibility of Participating Employees. 

  

	18.3	 18.2 Time will be of the essence in respect of this Plan.

  

	18.4	 18.3 The Plan will be binding upon the Company, its successors and assigns and
will enure to the benefit of each Eligible Employee and their respective personal representatives and assignees. 

 IN WITNESS WHEREOF the Company has adopted the Plan under its seal as of the day and year first written above.

  

			
	 The common seal of the Company
	 	 )

	 was hereto affixed in the presence of: 
	 	 ) 

		 	 )

 - 16 - 
  

					
	 

                   
                 
	 	 )
	 	                                 
 c/s
	
                  
                  
	 	 )
	 	
	 Authorized Signatory
	 	
)

	 	
	
                  
                  
	 	 )
	 	
	
                  
                  
	 	 )
	 	
	
                  
                  
	 	 )
	 	
	
Authorized Signatory
	 	 )
	 	

 Appendix A. Plan Data 

All common shares of the CompanyShares issued under this Plan will be from the un-issued and authorized treasury of the Company. All purchases will be made at the end of each Offering Period, in accordance with this Appendix A. The Shares purchased will be free trading, subject to any TSX-VentureToronto
 Stock Exchange imposed restrictions. The terms of each Share offering will be determined by the
BoardCommittee
 and disclosed in the Disclosure Document. The general terms are as follows: 
 1.
The
BoardCommittee
 will determine the commencement date and term of each Share
Offering Period. The typical Offering Period will be for six months and are anticipated to be as follows: 
  

	 	•	 	 January 1 to June 30 

 

	 	•	 	 July 1 to December 31 

2. Maximum contribution per Participating Employee per Offering Period: 

	 	•	 	 Canadian
Employees is
Cdn.$5,2507,500 (Cdn.$10,500 per 15,000/year); and 

 

	 	•	 	 U.S. Employees U.S.$ 5,250
(U.S.$10,500 per year) 

 3. The aggregate Share Entitlement for an Offering Period will be
determined by the
BoardCommittee
 at the time each offering is made to a maximum of 1,000,000350,000 Shares over the term of this Plan. The total number of Shares
available for issue in any Offering Period is calculated as the lesser of: 
  

	 	•	 	 The aggregate Shares Entitlement set by the BoardCommittee for the Offering Period; 

  

	 	•	 	 The sum of all Employee Contributions for the Offering Period divided by the Purchase Price; and

  

	 	•	 	 The remaining number of
sharesShares available for issue. 

Where the start or end date of the Offering Period falls on a non-trading or non-business dayBusiness
Day, the Fair Market Value of the prior business dayBusiness Day in which the Shares were traded will be used in determining
the Purchase Price. 
 4. The Share Entitlement for each Participating Employee for the Offering Period is calculated as the lesser
of: 
  

	 	•	 	 the number of Shares obtained by dividing the Participating Employee’s Contributions by the Purchase
Price, rounded down 

	 	 to the nearest 50
SharesShare; and 

  

	 	•	 	 the pro-rated Share Entitlement calculated as the Participating
Employee’s Contributions for the Offering Period, divided by 

	 	 the aggregate of all Employee Contributions for the Offering Period, and multiplied by the aggregate number of shares
calculated in Section 3 of this Appendix, rounded down to the nearest 50 SharesShare. 

5. Estimated number of employees covered by the Plan: 
  

	 	•	 	 85 to 100 

6.
Plan enrollment deadline: 

 

	 	•	 	 10 business days before the beginning of each Offering Period500 

 6. 7. Plan withdrawal deadline: 

 - 2 - 
  

	 	•	 	 10 business
daysBusiness Days before the end of each Offering Period 

7.
 8. Offering Period termination deadline: 

 

	 	•	 	 The
BoardCommittee may terminate any Offering Period up to 10 business
daysBusiness Days before the end of 

	 	 each Offering Period, and repay all Participating Employee contributions. 

 Appendix B. General Form of Disclosure Document 

DISCLOSURE DOCUMENT 

Eligible employeesEmployees (and/or their professional advisors) should carefully review the 

information contained in this document before making an investment
decision.
Defined terms used 

but not otherwise defined
herein shall have the meanings ascribed thereto in the 2019 Employee 
 Share Ownership Plan. 

Absolute Software Corporation 
 800 – 111Suite 1400,
Four Bentall Centre, 1055 Dunsmuir Street 
 Vancouver, BC Canada V6B 6A37X 1K8 
 (the
“”Company””) 
  

							
	 Total Plan

 
	  	1,000,000350,000 Common Shares	  	

 The Board will determine when offerings to purchase the Common Shares are made and will detail the particulars
of each offering in a Disclosure Document provided to each Eligible Employee. The offerings are for a maximum of six months with the following anticipated Offering Period dates, and with the following maximum contribution and Share Entitlement
limits: 
  

							
	 Share Offering Period

(1)
	  	 Maximum

Individual
    CDN$
Contribution

 
	  	 Maximum Total

Plan Allotment
 per period (2)
	  	 
	 Jan. 1 – Jun 30

 
	  	 $5,250$7,500
	  	 500,000350,000
	  	
	 Jul. 1 – Dec. 31

(1)
	  	 $5,250$7,500
	  	 500,000350,000
	  	

(1)  
     Subject to the provisions of the Act (as defined below) respecting revocation, the Board may
terminate an Offering Period at any time with notice at least 10 days prior to the conclusion of the Offering Period. If an Offering Period is terminated, all Employee
Contributions will be returned to the Participating Employees. 

(2)  
     (2) The total number of common shares issuable in any Offering Period isthe lesser of (a) 500,000350,000 shares; (b) the total Share
Entitlement set by the Board for the Offering Period; (c) the total of all employee
contributionsEmployee Contributions divided by the
purchase pricePurchase Price; and
(d) the remaining number of
sharesShares available for issue under the
Plan. 
 PURPOSE OF THE PLAN 

Purpose of the Plan

 The Company adopted its
2019 Employee Share Ownership Plan (the “”Plan”
”) on December 1611, 20052019 with the following objectives in mind: 

 - 2 - 
  

	 	•	 	 Provide an opportunity for
employeesEligible Employees to participate in the ownership of the Company; 

	 	•	 	 Enable
employeesTo enable Eligible Employees to share in the Company’’s success; 

	 	•	 	
ImproveTo
improve the Company’’s ability to retain a skilled work force; and 

	 	•	 	
EncourageTo
encourage teamwork and cooperation among all members and units of the Company. 

 The Plan was registered under
the Employee Investment Act of
(British Columbia) (the “Act”) so that Tax Credit Eligible Employees
could receive a 20% employee investment tax credit on Share purchases under the Plan. See the section headed “”Summary of EIA Tax Assistance”” on page 3 for details. Where employeesEligible Employees wish to participate in the tax credit, the offering
and transfer of Shares issued under the Plan is governed by the Employee Investment Act. 

Eligible
Employees of the Company or its
Affiliate Companies, excluding directors of the Company, who fall into one of the following two groups and have been employed by the Company (or a
predecessor or an affiliate of the Company) for a period of at least three months are eligible to purchase Shares under the Plan if they meet the following criteria: 

An employee
who is eligible to purchase Shares under the Plan is referred to in this disclosure document as an “Eligible Employee”. They are: employees of the Company or its Affiliate
Corporations, excluding non-employee service providers to the
Company, non-employee members of the Board and highly compensated employees within the meaning of Section 414(q) of the Internal Revenue Code of 1986 (United States), employed on a continuing basis
for at least twenty (20) hours a week: 
 1.        They are “See the Section headed “Summary of EIA Tax Assistance” below for details concerning the investment tax credits available to “Tax Credit Eligible Employees””, meaning those employees who, at the time of subscribing for Shares areis: 

 

	 	(a)	 resident in British
Columbia residents,; 

  

	 	(b)	 employed by the Company,
(or athe predecessor or an AffiliateAffiliated Corporation of the
Company,) on a continuing basis for an average of at least
20twenty hours
eacha week,
and; 

  

	 	(c)	 is not already “a major
shareholders”shareholder (as defined in the Act) of the
Company.; and 

(A “major shareholder” means any
person who, together with his or her relatives, trusts or companies, holds 10% or more of the Shares of the Company. Employees who think they might be a “major shareholder” should check the precise legal definition in section 1 of the
Employee Investment Act to be sure). 
  

	2.	 They are “Other Eligible Employees” meaning employees who are not
British Columbia residents and who otherwise comply with paragraphs (b) and (c) of the definition of “Tax Credit Eligible Employees”. 

 

	3.	 An employee who the Board of Directors determines is eligible to participate
in the Plan. 

 An
employee who is eligible to purchase shares under this Plan is referred to in this disclosure document as an “Eligible Employee”. 

 - 3 - 
  

 See the
Section headed “Summary of ETA Tax Assistance” below for details concerning the investment tax credits available to Tax Credit Eligible Employees. 

SUBSCRIPTION ENTITLEMENT 

 

	 	(d)	 meets other conditions as may
be prescribed under the means the regulations enacted pursuant to the Act in force from time to time (the “Regulations”). 

Subscription Entitlement

 The Plan allows Share offerings to be made to Eligible Employees from time to time. The number of Shares available and period of
the current Share offering to Eligible Employees are shown on the
facefirst page. The characteristics of the Shares offered are described in the section headed “”Share Capital”” below. 
 The Plan provides that each Eligible Employee has an equal right to subscribe for
Shares. 
 The maximum permitted participation by an employee in the offering is Cdn$5,2507,500 per Offering Periodto a maximum of Cdn$10,50015,000
per annum. Eligible Employees can commit to the purchase of sharesShares by committing semi-monthly payroll deductions up to this maximum.
Eligible Employees who want to commit to the purchase of
sharesShares
in this offering periodOffering Period must complete the Commitment Form accompanying this
Disclosure Document and return it to the
Accountingaccounting
 department by 10 business days prior to the start
of the offering periodCompany. 

Share Purchases 
 FreeEligible Employees who
purchase Shares pursuant to the Plan will receive free trading common shares in the Company, subject to any
TSX-Venture Exchange imposed holding period, are generally
purchasedissued from the treasury of the Company
and the. The
Share
Certificatescertificates
 are delivered to employees within 30 days20 Business Days of the end of any Offering Period, unless Tax Credit Eligible Employee applies for the investment tax credit as discussed further in the “Summary of EIA
Tax Assistance” section below. 
 Once delivered, the Share Certificatesshare
certificates are available for deposit with a broker and disposition, subject to any TSX-Venture Exchange
imposed holding period. 
 The number of Shares purchased is calculated by
dividingthe
contributionsEmployee
Contributions made during the Offering Period by the Share Purchase Price. The Share Purchase Price is calculated as
85 % of the lower of: 
  

	 	●	 	 the Fair Market Value on the first day of the Offering Period, and 

	 	●	 	 the Fair Market Value on the last day on the Purchase Date, 

 provided that if there is no Fair
Market Value on the relevant day, the Fair Market Value price will be calculated as of the last day on which
there was a Fair Market Value immediately before the relevant date. 
 The number of Shares actually purchased may be reduced if the
maximum Share allotment
perfor that
Offering Period is reached. Any excess funds due to this restriction will be either returned to the
employeeEligible
 Employee or used in the purchase of Shares during the next Offering Period, as decided by the
employeeEligible
 Employee. 
 A copy of the Company’’s most recent annual Financial Statements is attached as to this
Disclosure Document. 

 - 4 - 
  

 Right to Review Plan 

The Plan itself is a detailed legal document. Any Eligible Employee who wishes to examine the Plan may obtain a copy from the Company upon
request. 
 SUMMARY OF EIA TAX ASSISTANCE 

Summary of EIA Tax
Assistance 
 (Tax Creditscredits are only available to those employeesEligible Employees who meet the criteria set for Tax Credit Eligible Employees.) 

The Plan is registered under the Employee Investment Act of British
ColumbiaAct (referred to from this point
forward as the
“ETA”“EIA”
). The Province of British Columbia (the
“Province”) enacted the ETAEIA to encourage employee investment for the purposes of job creation, job protection and employee participation in corporate ownership. The ETAEIA encourages employee investment by providing for employee investment tax credits to be issued to Tax Credit Eligible Employees who purchase shares under registered employee share ownership plans. 

A summary of the key characteristics of the tax credit is set out below: 

 

	 	*	
● the credit is equal to 20%
of the share subscription proceeds received by the Company from the Tax Credit Eligible Employee. 

  

	 	*	
● the
maximum credit is $2,000 for a calendar year (per person) (= $10,000 of investment/yr.). 

  

	 	*	 ● credit towards B.C.
income tax otherwise payable. 

  

	 	*	 ● unused credits cannot be carried forward
or back or be refunded in cash. 

  

	 	*	 ● if a
shareShare purchase under the Plan is made during the first 60 days of a calendar year, the Tax Credit Eligible
Employee may claim the tax credit for that calendar year or the previous calendar year or allocate the sharesShares purchased between both years.

  

	 	*	 ● the value of the tax credit will not be
included in the Tax Credit Eligible Employee’s income for tax purposes or reduce the adjusted cost base of the
sharesShares acquired. 

 

	 	*	 ● the tax credit is only available to the
first purchaser of the sharesShares
(i.e. it is only available with respect to Shares issued from treasury of the Company). 

The Company will apply to the Province for tax credit certificates on behalf of Tax Credit Eligible Employees. The tax credit certificatemay
then be claimed on and filed with a Tax Credit Eligible Employee’s income tax return. 
 An employeeA Tax Credit
Eligible Employee’s investment tax credit must be repaid to the Province if a Tax Credit Eligible Employee sells sharesShares purchased under the Plan within 3 years of buying them. The ETAEIA seeks to encourage longer term, committed investment. Therefore, tax
assistance is withdrawn in the case of investments, which proveto be short term. The buyer of the sharesTax Credit Eligible Employee is also jointly and severally liable with
the
sellerCompany
to repay the credits and the shares. As a result, any Shares that a Tax Credit Eligible Employee wishes to sell will not be released from escrow until the tax credit has been repaid. After expiry of the 3-year period, the sharesShares may be sold without repayment of the tax credit. 

 - 5 - 
  

 To enable monitoring of shareShare transactions, the
ETAProvince
 requires that the certificates representing sharesthe Shares issued under the Plan to Tax Credit Eligible Employees be
held in the custody of an authorized
depositorythe Company during the 3 year hold
period. Royal Trust Corporation of Canada will be the authorized depository. Purchasers will receive
an investment confirmation within 30
days50 Business Days of paying for the sharesShares. Shares may be released prior to the 3-year period upon repayment of the Tax
Credittax credit. 

The extent of the Province’s involvement in the Plan has been to register it under the EIA to allow Tax Credit Eligible Employees to
receive the tax assistance described above. The Province has not reviewed the investment merit of the
sharesShares being offered by the Company
and in no way guarantees an investment in the Shares. Assessment of investment merit, adequacy of the Plan, and due diligence review is entirely the responsibility of the
investorTax Credit Eligible Employees.

 If the legislation governing the Employee Share
Ownership programPlan is amended or repealed, any
approval provided by the Ministry in connection with the Company’s Plan, including any approval
relating to payment of Tax
Creditstax credits to Tax Credit Eligible
Employees who purchased
sharesShares
 under the Plan, could be subject to variation orcancellation by the Administrator. 
 Cost
Sharing For Employee Groups 
 The
ETAEIA allows for Provincial cost sharing assistance to employee groups that obtain independent professional advice relating to the negotiation, evaluation and implementation of a registered employee share ownership
plan. Reimbursement of 50% of eligible costs up to $2,500 may be applied for. For more informationabout cost sharing for employee groups, contact the
TnvestmentInvestment
 Capital Branch of the Ministry of EconomicDevelopment at toll free 1-800-665-54576597. 
 Share Capital 

The authorized share capital of the Company consists
of: 
  

	 	i.	 50,000,000
100,000,000 common shares without par value; and 

 

	 	ii.	 20,000,000 preference shares, redeemable.

 The issued and outstanding share capital of the Company as at June 30, 2005 consists of:2019
consisted of 41,645,552 common shares without par value, listed and posted for trading on the TSX under the symbol “ABT”. 

					
	 1.  Common Shares (TSX-V:
ABT)
	 		  	 20,985,773

	
2.  Preferred
Shares
	 		  	 nil

 Common Shares 

The holders of common shares are entitled to one vote for each share held aton all meetings
ofmatters to be voted on by the shareholders of
the Company (other than special class meetings at which only holders of another class of shares are entitled to vote) and, subject to the rights attached to the
preferred shares,and are entitled to
receive, pro-rata with all other holders of common shares,
such dividends as may be declared by the directors of the Company on the common shares and the
remaining assets of the Company inBoard. In the
event of
itsthe
dissolution, liquidation, dissolution or winding-up. 

Preferred Shares 

 - 6 - 
  

 The
Preference shares are issuable in series and the Board of Directors is entitled to determine the designation, preferences, rights, conditions, restrictions, limitations and prohibitions to be attached to each series of such shares. The Preference
shares are entitled to priority over the Common shares with respect to the payment of dividends and distributions in the event of the dissolution, liquidation or winding-up, or other distribution of the assets of the Company, the shareholders are entitled to receive, on a pro-rata basis, all of the assets of the Company remaining after payment of all of the Company’s liabilities. The holders of Preferencecommon
shares are entitled to receive notice of any meeting of the shareholders of Absolute and to attend and vote
thereat, except as otherwise provided in the rights and restrictions attached to the shares by the
Boardcarry no pre-emptive or conversion rights. 
  

							
	 Outstanding
OptionsConvertible Securities (June 30, 2018)

 

	  

Plan Category
	 	
Number of securities

to be issued under equity compensation

plans(1)

(a)
	 	
Weighted-average

exercise price of

outstanding options

(b)
	 	
Number of securities remaining
available
 for future
issuance
 under equity

compensation plans (excluding securities

reflected in column

(a))

(c)

	
Equity compensation plans approved by
securityholders

	
Option Plan
	 	1,151,213
	 	CAD$7.82	 	2,173,897

	
PRSU Plan
	 	1,580,257
	 	N/A	 	2,173,897

	
Current ESOP
	 	N/A	 	N/A	 	92,099
	
Number of Options
	 	
Exercise Price 
	 	
Weighted Average 

Price 
	 	
Weighted Average 

Years to Expiry 

	735,246 	 	$5.00	 	$5.00 	 	1.25 
	201,500 	 	$1.15 to $2.10	 	$1.72 	 	1.72 
	2,302,000 	 	$0.25 to $0.81	 	$0.39 	 	3.32 
	
Total: 3,238,246
	 	2,731,470	 	$1.52CAD$7.82
	 	2.752,173,897

 Use of Proceeds 

The net proceeds of the offering will be used by the Company for general corporate purposes. 

Prospectus Exemption 
 The
issuance of securities to residents of British Columbia is subject to the Securities Act (British Columbia) (the “”Securities Act””), which normally requires a prospectus to be prepared and delivered to the purchaser. The Securities Act provides a prospectus exemption where the purchaser is an Eligible Employee, so long as the
purchaser is not induced to purchase securities by the expectation of employment or continued employment’s participation in the distribution is voluntary. 

 - 7 - 
  

 A purchaser under this exemption is not subject to a hold period pursuant to the Securities
Act or Regulation. The TSX – Venture Exchange imposes a four month trading restriction for shares purchased under this plan. The Share Certificates will bear a
legend restricting transferthe regulations
thereunder. 
 Shareholder Communication 

As a shareholder, or an employeeEligible Employee of the Company participating in the Plan, the Companyyou will
providebe
eligible to elect to receive all reporting information sent to public shareholders. This will include all quarterly and annual filings, as well as the information set forth in Section 4(1)(g)
of the EIA. 

You may also
view the Company’s public filings on www.sedar.com. 

 - 8 - 
  

 Board Ofof Directors 

The Board of Directors of the Company has authority over management of the Company. The Board of Directors is elected each year by the shareholders at the Company’s annual general meeting. There are 56
positions on the Board presently filled by the following persons: 
  

			
	 Name of Director
	  	 Principal Occupation

		
	 Christy Wyatt
	  	 Chief Executive Officer of
Absolute

		
	 Gregory Monahan
	  	 Senior Managing Director of Crescendo
Partners and Portfolio Manager of Jamarant Capital

		
	 Lynn Atchison
	  	 Corporate Director

		
	 Daniel Ryan
	  	 Chief Executive Officer of CiBO
Technologies

		
	 Salvatore Visca
	  	 Chief Technical Officer of Elastic Path
Software

		
	 Gerhard Watzinger
	  	 Corporate
Director

  

			
	 Name of Director 
	  	 Occupation (for past 5 years) 

	 John Livingston 
	  	 Chairman and Chief Executive Officer of Absolute

	 Christian Cotichini 
	  	 Chief Executive Officer of Make Technologies, Inc.

	 Terry Libin 
	  	 President of Highfield Development Ltd. 

	 Ian Reid 
	  	 President of Rastus Holdings Ltd. 

 Principal Shareholders 

NoTo the knowledge of the Company, as of November 6, 2019, Lynrock Lake LP held 6,247,066 common shares, or approximately
14.9% of the outstanding common shares, and Trigran Investments, Inc. held 6,246,800 common shares, or approximately 14.9% of the outstanding common shares. To the knowledge of the Company, no
other person or corporation beneficially owns, directly or indirectly,
holdsor
exercises control or direction over, Common Shares carrying more than 2010% of the Company’svoting rights
attached to all outstanding voting securitiesCommon Shares. 

Adverse Material Changes 
 There
have been no adverse material changes in the financial position of the Company that hashave occurred since the date of the Financial Statements attached
hereto. 
 Recent Information Releases 

The Company is listed on the TSX – Venture Exchange
(TSX-V: ABT). Copies of the
Company’’s most recent Financial Statements are attached to this Disclosure Document. 
 The
following documents filed with the securities commission or similar regulatory authority in each of the provinces of Canada, are specifically incorporated by reference in, and form an integral part of, this disclosure document: 

 - 9 - 
  

	 	(a)	 the audited Financial Statements of the Company for the last three fiscal years, together with the
auditors’ report thereon, and management’s discussion and analysis in respect of those financial statements; 

  

	 	(b)	 the interim unaudited Financial Statements of the Company for each period since the end of the most recent
fiscal year, and management’s discussion and analysis in respect of these statements; 

  

	 	(c)	 the Information Circular for the last annual meeting of shareholders of the Company;
and 

  

	 	(d)	 the
Company’’s current Annual Information Form; 

 

	 	(e)	 any material change report (other than any confidential material change reports) filed by the Company since the date of the Company’s current Annual Information Form. 

Any statement contained in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or
superseded for the purposes of this disclosure document to the extent that a statement contained herein or in any othersubsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes that
statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any information set forth in the document that it modifies or supersedes. The making of a modifying or superseding
statement will not be deemed an admission that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission of a material fact that is required to be stated or that is
necessary to make a statement not misleading in light of the circumstances in which it was made. A statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectusDisclosure
Document. 
 Copies of documents incorporated by reference herein may be
obtained upon request without charge from the Company or by accessing the disclosure documents available through the Internet on SEDAR, which can be accessed at
www.sedar.comwww.sedar.com
. Eligible Employees who wish to examine the whole of the Company’’s public file may also do so by visiting the relevant sections of the Company’’s website at
wwwwww.absolute.com.
absolute.com. 

Risks and Uncertainties 
 In
considering an investment in the Common Shares, prospectiveinvestors should evaluate the associated risks and uncertainties in addition to other information contained in this
disclosure
documentDisclosure Document. Please refer to the
Company’’
s annual
reportcurrent Annual Information Form for a detail
list of the risks and uncertainties. 
 Certificate 

This document contains no untrue statement of a material fact and does not omit to state a material fact that is necessary to prevent a
statement that is made from being false or misleading in the circumstances in which it was made. 
 Dated:     [●], 2020 

 

	
	 (Signature of Chief Executive Officer)

	
	  

	 (Signature of Chief Financial Officer)

 - 10 - 
  

	
	
  Christy Wyatt

	
	   Chief Executive
Officer
  

	
  Errol Olsen

	
	   Chief Financial
Officer
  

 The Company’s Most Recent Financial Statements 

 Appendix C: Commitment Form 

Additional Form for Tax Credit Eligible Employees 

Tax Credit Questionnaire 

 EMPLOYEE TREASURY SHARE PURCHASE PLAN COMMITMENT FORM 

This commitment form must be completed and signed by Eligible Employees of Absolute Software Corporation (the “Company”) who wish to
purchase shares under the Company’s employee treasury share purchase
plan2019 Employee Share Ownership Plan (the
“Plan”) during the offer period from          to         . 

Employee Information 
  

															
	 	 	 	 	 	 	 	 
	 Participant: Mr./Mrs./Ms.
	 		  	 	  		  	 	  		  		 	 
	(Circle)	 		  	Last Name	  		  	First Name	  		  	Initial	 	 

													
	 						 
	 Address:
	 	 	  	 	  	 	  	 	  		 	 
	 	 	No. and Street Name	  	Apt.	  	City	  	Province/State	  	Postal Code/ZIP	 	 

													
	 						 
	 SIN / SSN
	 		  	 	  		  	 Date of Birth
	  	 	 	 
	 	 	 	  	 	  	 	  	 	  	(MM / DD / YY)	 	 

 Contributions 
  

							
	 
	 I
received and read the Disclosure Document the Company gave me. I agree to commit Cdn$                                   
      for the purchase of common shares (the “Shares”) of the Company under the Plan, paid by payroll deductions, for which I authorize the Company to deduct from my wages and salary in 22 equal semi-monthly
installments. My contributions will be invested as indicated in my instructions below until such time as a request for change is made. My contributions will be invested in Absolute Software Corporation’s shares as subscribed for in the Employee Treasury Share Purchase Plan.

	 		 
	 Allocation of future contributions only:
	 				 	 
	 		 
	 Registered Retirement Savings Plan (RRSP)
	 	
                       
         %
	 	 	  
	 Note: Group RRSP Application form must be completed
	 				 	 
	 		 
	 Non-Registered Plan
(NRP)
	 	
                       
         %
	 	 	  
	 		 
	 Total

 
	 	 	100%	 	 	 

 Designation of Beneficiary (where permitted by law) 

	
	 In the event of my death, I hereby designate
                                         
            as my beneficiary, if living, to receive benefits payable under the Plan, otherwise such benefits shall be payable to my estate. I hereby revoke all prior beneficiary
designations. I assume full responsibility for ensuring that this designation is valid under applicable law.

	
Caution
  

In some provinces/states, designation of a beneficiary by means of a designation form will not be revoked or changed automatically by any future
marriage or divorce. Should you wish to change your beneficiary in the event of a future marriage or divorce, you will have to do so by means of new designation.

	 
	
Note: I agree with full knowledge, to permit the Ministry of Economic Development (B.C.) and Absolute Software Corporation to use the
information collected about me in relation to the Plan, or otherwise, for any purpose relating to the Plan. I also hereby authorize them to communicate the information held on me to any person deemed necessary for the administration of the Plan. I
acknowledge that my “plan participant file” will be held at the employer’s and the Ministry of Economic Development (B.C.) offices or at any other location as indicated from time to time on the understanding that I will be given
access to examine and correct such information as prescribed by law.

 - 2 - 
  

 Acceptance of Terms and Conditions 

 

			
	 
	 I
hereby accept all of the terms and conditions of the Employee Share Ownership Plan, a copy of which I have received and
read. I declare all of the above information is accurate and I confirm that I am an Eligible Employee in accordance with the terms and conditions of the Plan.

	 	 
	 Employee Signature:
                                         
                                   
	 	 Date:
                                         
                                       

 

 For Office Use Only 
  

							
	 	 	 	 
	 Approved by Employer Representative:
	 		  	 	  	
Date:                      
              

	 	 	 	  	 Authorized Signature

 
	  	 

 EMPLOYEE TREASURY SHARE PURCHASE PLAN 

ADDITIONAL FORM FOR TAX CREDIT ELIGIBLE EMPLOYEES 

(Only Tax Credit Eligible Employees need complete this Additional Form 

This additional form must be completed and signed by Tax Credit Eligible Employees of Absolute Software Corporation (the “Company”)
who wish to purchase shares under the Company’s employee treasury share purchase planEmployee Share Ownership Plan (the “Plan”) during the offer
period from          to         . 
 Employee
Information (Please type or print clearly) 
  

									
	
Name (first, initials, last name):
	 	
 

									
	 			 
	 Social Insurance Number:
	  	  
	  	 Phone:
	  	
 

									
	  

Address:
	  	  

 

	 
	
 

	 
	 

 Note: Tax credit certificates will only be issued at the end of each calendar year after the last
payment is made and the shares are issued. 
 Tax Credit Matters (This only applies to Tax Credit Eligible Employees. Check box
below, if applicable.) 
 ☐ Yes, I meet the criteria for a “Tax Credit Eligible Employee” set out on page 1 of the Plan
share disclosure document. 
 I authorize the Company to apply for tax credit certificates for me and to provide the Administrator under the
Act with all necessary information. I have attached my completed Tax Credit Questionnaire and confirm it is accurate. I acknowledge that under the Employee Investment Act (British Columbia) share certificates issued to Tax Credit Eligible Employees
under the Plan must be held by an authorized depository (currently Royal Trust) for three years after purchase. I direct the Company to deliver the share certificate for the Shares to the depository and agree to be bound by the terms of the escrow
agreement with the depository about holding of the share certificates under the Plan. I irrevocably appoint the Company as my attorney for the sole purpose of matters related to the escrow agreement. 

I understand that it is my responsibility to notify the Ministry of Economic Development (B.C.) (the “Ministry”) immediately of
any name or address changes. 
 Dated the
                 day of
                                , 20    . 

 

					
		 		 	  

		 		 	 Employee Signature

 

			
	 Attached:
	  	 Tax Credit Questionnaire

		  	 Absolute Software Employee Share Purchase Form

 A FALSE OR MISLEADING STATEMENT IS AN OFFENCE UNDER THE EMPLOYEE INVESTMENT ACT

 Absolute Software Corporation 

EMPLOYEE SHARE OWNERSHIP PLAN 

Tax Credit Questionnaire 

(Only Tax Credit Eligible Employees need complete this Questionnaire.) 

Employee Name:
                                         
                                SIN:
                                         
        
 Previous Tax Credit Related Share Transactions 

I confirm that as a result of this Share purchase I will not receive credit certificates under the Act totaling more than $2,000 in value in
respect of any one calendar year; and 
 Note:             
Provincial tax credits received as a result of investments in the Working Opportunity Fund and/or B.C. Medical Innovations Fund are included in the above calculation. 

A FALSE OR MISLEADING STATEMENT IS AN OFFENSE UNDER THE EMPLOYEE INVESTMENT ACT 

 - 5 - 
  

 APPENDIX D – ESCROW
AGREEMENT – TO BE ATTACHED

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00315-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00315-of-00352.parquet"}]]