UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.     )

Filed by the Registrant þ                           Filed by a Party other than the Registrant o

Check the appropriate box:

o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ  Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12


ATLAS FINANCIAL HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
 

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


Payment of Filing Fee (Check the appropriate box):

þ  No fee required
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(1) Title of each class of securities to which transaction applies:     
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o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(4) Date Filed:     



 










ATLAS FINANCIAL HOLDINGS, INC.

150 NW Point Boulevard
Elk Grove Village, Illinois 60007

To the Shareholders of Atlas Financial Holdings, Inc.:
You are cordially invited to attend the extraordinary general meeting of shareholders (the “Meeting”) of Atlas Financial Holdings, Inc. (the “Company”), to be held at the offices of the Company, 150 NW Point Boulevard, Elk Grove Village, Illinois 60007 on - Friday, December 7, 2012, at 10 a.m., Central Standard Time, to consider and vote upon the following proposals:

1.To consider and vote upon a special resolution to effect a share consolidation or reverse stock split of the Company's ordinary shares, par value $.001 per share (the “Ordinary Shares”), and restricted voting common shares, par value $.001 per share (the “Restricted Shares”) at a ratio of one-for-three such that the number of the Company's authorized Ordinary Shares and Restricted Shares is decreased and the par value of each Ordinary Share and Restricted Share is increased by that ratio (the “Reverse Split” and the proposal the “Reverse Split Proposal”), and with such special resolution to become effective upon the Company's receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements;

2.To consider and vote upon a special resolution to amend Article SIX of the Company's Memorandum of Association to reflect the Reverse Split (the “Amendment” and the proposal the “Amendment Proposal”) with such special resolution to become effective upon the Company's receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements; and

3.Such other procedural matters as may properly come before the Meeting or any adjournment or postponement thereof.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERSTHE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE REVERSE SPLIT PROPOSAL AND A VOTE “FOR” THE AMENDMENT PROPOSAL.
TO BE HELD ON MAY 15,
The Board has fixed the close of business on October 31, 2012 as the record date (the “Record Date”) for the determination of shareholders entitled to notice of, and to vote at, the Meeting or any postponement or adjournment thereof.  Accordingly, only shareholders of record at the close of business on the Record Date are entitled to notice of, and shall be entitled to vote at, the Meeting or any postponement or adjournment thereof.
AND
PROXY STATEMENTPlease review in detail the attached notice and proxy statement, which are first being mailed to our shareholders on or about November 16, 2012.
DATED April 11, 2012
Your vote is very important to us regardless of the number of shares you own.  Whether or not you are able to attend the Meeting in person, please follow the voting instructions on the enclosed proxy card to vote your shares.  Granting a proxy will not limit your right to vote in person if you wish to attend the Meeting and vote in person.


By Order of the Board,


/s/ Gordon G. Pratt
Gordon G. Pratt
Chairman of the Board




October 29, 2012










ATLAS FINANCIAL HOLDINGS, INC.
150 NorthwestNW Point Boulevard
Elk Grove Village, Illinois 60007
60007 USA
NOTICE OF ANNUALEXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
TAKE NOTICE THAT an annual meetingTO BE HELD ON DECEMBER 7, 2012

 To the Shareholders of shareholdersAtlas Financial Holdings, Inc.:
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Meeting”“Board”) of Atlas Financial Holdings, Inc. (the “Corporation”“Company”) for use at the extraordinary general meeting of shareholders of the Company and at all adjournments and postponements thereof (the “Meeting”).  The Meeting will be held at theCorporation's headquarters at offices of the Company, 150 NorthwestNW Point Boulevard, Elk Grove Village, ILIllinois 60007, on May 15,Friday, December 7, 2012, at 10:0010 a.m. (central time) for, Central Standard Time, to consider and vote upon the following purposes:proposals:

(i)
1.
To consider and vote upon a special resolution to elect the directorseffect a share consolidation or reverse stock split of the CorporationCompany's ordinary shares, par value $.001 per share (the “Ordinary Shares”), and restricted voting common shares, par value $.001 per share (the “Restricted Shares”) at a ratio of one-for-three such that the number of the Company's authorized Ordinary Shares and Restricted Shares is decreased and the par value of each Ordinary Share and Restricted Share is increased by that ratio (the “Reverse Split” and the proposal the “Reverse Split Proposal”), and with such special resolution to serve untilbecome effective upon the next annual meetingCompany's receipt of shareholders, as more fully described ina written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Proxy Statement dated April 11, 2012 (the “Proxy Statement”), a copyCompany that enables us to meet all of which accompanies this notice;
the Nasdaq listing requirements;

(ii)
2.		toTo consider and vote onupon a proposalspecial resolution to ratify the appointment of Johnson Lambert & Co. LLP, as the auditoramend Article SIX of the Corporation forCompany's Memorandum of Association to reflect the fiscal year ending December 31, 2012;Reverse Split (the “Amendment” and the proposal the “Amendment Proposal”) with such special resolution to become effective upon the Company's receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements; and

(iii)
3.		to consider and, if deemed appropriate, to pass, with or without variation, a resolution approving the continued use of the stock option plan of the Corporation, as more fully described in the Proxy Statement; and
(iv)
to transact suchSuch other businessprocedural matters as may be properly broughtcome before the Meeting.Meeting or any adjournment or postponement thereof.
The Proxy Statement provides additional information relating to the matters to be dealt with at the Meeting and is deemed to form part of this notice of annual meeting.
Only holdersTHE BOARD UNANIMOUSLY RECOMMENDS SHAREHOLDERS VOTE “FOR” THE REVERSE SPLIT PROPOSAL AND A VOTE “FOR” THE AMENDMENT PROPOSAL.
Holders of record of ordinary sharesour Ordinary Shares and restricted voting common shares as ofour Restricted Shares (collectively the “Voting Shares”) at the close of business on April 20,October 31, 2012 the record date, are(the “Record Date”) will be entitled to receive notice of attend and to vote, at the Meeting.
SHAREHOLDERS WHO ARE UNABLE TO ATTEND THE MEETING IN PERSON ARE ENCOURAGED TO RETURN THEIR PROXY AS SOON AS POSSIBLE. A PRE-ADDRESSED ENVELOPE IS PROVIDED. AS AN ALTERNATIVE, SHAREHOLDERS MAY CHOOSE TO VOTE BY THE INTERNET AS PROVIDED FOR ON THE PROXY.
Proxies to be usedas further described herein, at the Meeting or any adjournment or postponement thereof.  Each Ordinary Share entitles the holder thereof to one vote. Each Restricted Share entitles the holder thereof to one hundred and sixty six thousandths (.166) of one vote, such that the Restricted Shares as a class shall not carry more than 30% of the aggregate votes, after giving effect to the voting power of the Ordinary Shares.
Your vote is important, regardless of the number of voting shares you own. Both the Reverse Split Proposal and the Amendment Proposal require the affirmative vote of not less than two-thirds of those shareholders that, being entitled to do so, vote in person or by proxy at the Meeting, assuming the presence of a quorum. The Ordinary Shares and Restricted Shares will vote together as a single class.

Proxies must be deposited withreceived by the Company's transfer agent, Equity Financial Trust Company, Proxy Department, 200 University Avenue, Suite 400, Toronto, Ontario Canada, M5H 4H1, before 10:00 a.m. (central time) on May 11, 2012, or ifnot later than forty-eight (48) hours, excluding Saturdays, Sundays and holidays, prior to the Meeting is adjourned, no later than 10:00 a.m. (central time) on the second business day preceding the day to which the Meeting is adjourned. The proxy voting cut-offor any adjournment or postponement thereof (the “Cut-off Time”). Late proxies may be waivedaccepted or rejected by the chairman of the Meeting in his or her discretion.

A complete list of shareholders of record entitled to vote at his discretion without notice.the Meeting will be available for ten days before the Meeting at the principal executive offices of the Company for inspection by shareholders during ordinary business hours for any purpose germane to the Meeting.
DATED



Even if you plan to attend the Meeting in person, it is strongly recommended that you follow the voting instructions on the enclosed proxy card to vote your shares, to ensure that your shares will be represented at Elk Grove Village, IL this 11th day of April,the Meeting if you are unable to attend.
You are urged to review carefully the information contained in the enclosed proxy statement prior to deciding how to vote your shares.
This notice and the enclosed proxy statement are first being mailed to shareholders on or about November 16, 2012.
The contents of this Proxy Statement have been approved and its mailing has been authorized by the Board of Directors.
By orderOrder of the Board,

/s/ Gordon G. Pratt
Gordon G. Pratt
Chairman of Directorsthe Board

October 29, 2012


IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR VOTING SHARES WILL BE VOTED IN FAVOR OF THE REVERSE SPLIT PROPOSAL AND IN FAVOR OF THE AMENDMENT PROPOSAL.





TABLE OF CONTENTS

 “Gordon Pratt”Page
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Gordon Pratt
Chairman4
THE EXTRAORDINARY GENERAL MEETING5
Date, Time, Place and Purpose of the BoardMeeting5
Record Date; Voting and Quorum, Mailing Date5
Disclosure Regarding Offers Made to Holders of Ordinary Shares5
Required Vote6
Voting6
Revocability of Proxies
Attendance at the Meeting
Solicitation of Proxies
No Right of Appraisal
Other Business
Expenses
Principal Offices
6
6
6
7
7
7
7
PROPOSAL ONE- APPROVAL OF A SPECIAL RESOLUTION TO EFFECT A SHARE CONSOLIDATION OF THE COMPANY'S ORDINARY SHARES AND RESTRICTED VOTING COMMON SHARES AND8
General
Reasons for the Reverse Split
Nasdaq Requirements for Listing
Potential Disadvantages of the Reverse Split
Effecting the Reverse Split
Anti-Takeover and Dilutive Effects
Accounting Consequences
United States Federal Income Tax Consequences
Certain Canadian Federal Income Tax Considerations
8
9
9
10
10
12
12
13
13
PROPOSAL TWO - ADOPTION OF AN AMENDMENT TO ARTICLE SIX OF THE COMPANY'S AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION TO REFLECT THE REVERSE SPLIT15
General
Text of Proposed Amendment
Effective Date
15
15
15
OTHER INFORMATION16
Principal Shareholders
Shareholder Proposals
Interest of Informed Persons in Material Transactions
Auditor of the Company
Management Contracts
Where You Can Find Additional Information
16
17
17
17
17
18










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ATLAS FINANCIAL HOLDINGS, INC.
150 NW Point Boulevard
Elk Grove Village, Illinois 60007
PROXY STATEMENT AND INFORMATION CIRCULAR
SOLICITATION
EXTRAORDINARY GENERAL MEETING OF PROXIESSHAREHOLDERS
to be held on Friday, December 7, 2012, 10 a.m. CST
150 NW Point Boulevard
Elk Grove Village, Illinois 60007
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS
Why am I receiving this proxy statement?
This proxy statement (the “Proxy Statement”) is provided in connection withdescribes the solicitationproposals on which our Board of proxies by management of Atlas Financial Holdings, Inc. (the “Corporation” or “Atlas”) for useDirectors would like you, as a shareholder, to vote at the Annual Meetingour extraordinary general meeeting (the “Meeting”) of the holders (“Shareholders”) of ordinary voting shares (“Ordinary Shares”) and restricted voting common shares (“Restricted Voting Shares” and, together with Ordinary Shares, “Voting Shares”) inshareholders, which will take place on Friday, December 7, 2012 at 10 a.m. Central Standard Time at the capitaloffices of the Corporation. The Meeting will be held on May 15, 2012 at 10:00 a.m. (central time) at the Corporation's headquarters atCompany, 150 NorthwestNW Point Boulevard, Elk Grove Village, IL 60007Illinois 60007.
This proxy statement also gives you information on the proposals so that you can make an informed decision. We intend to mail this proxy statement and accompanying proxy card on or at such other time or placeabout November 16, 2012 to which the Meeting may be adjourned, for the purposes set forth in the notice of annual meeting accompanying this Proxy Statement (the “Notice of Meeting”).
Although it is expected that the solicitation of proxies will be primarily by mail, proxies may also be solicited personally or by telephone, facsimile or other means of electronic communication. In accordance with National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer, arrangements have been made with brokerage houses and other intermediaries, clearing agencies, custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of Voting Shares heldall shareholders of record by such persons andentitled to vote at the Corporation may reimburse such persons for reasonable fees and disbursements incurred by them in doing so. The costs thereof will be borne byMeeting.
In this proxy statement, we refer to Atlas Financial Holdings, Inc. as the Corporation.“Company”, “we”, “us” or “our.”
These securityholder materials are being sent to both registered and non-registered owners of Voting Shares. If you are a non-registered owner, and the Corporation or its agent has sent these materials directly to you, the Corporation's name and address and information about the Corporation's holdings or securities, have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding Voting Shares on the Corporation's behalf.
Accompanying this Proxy Statement is a form of proxy for useWho can vote at the Meeting (“Instrument of Proxy”shareholders?
Shareholders who owned ordinary shares, par value $.001 per share (“Ordinary Shares”). or restricted voting common shares, par value $.001 per share (“Restricted Shares” and together with the Ordinary Shares, the “Voting Shares”) on October 31, 2012 (the “Record Date”) may attend and vote at the Meeting. There were 5,149,125 Ordinary Shares and 13,284,028 Restricted Shares outstanding on the Record Date. Each Shareholder whoOrdinary Share entitles the holder thereof to one vote and each Restricted Share entitles the holder thereof to one hundred and sixty six thousandths (.166) of one vote, such that the Restricted Shares as a class shall not carry more than 30% of the aggregate votes, after giving effect to the voting power of the Ordinary Shares. The Ordinary Shares and Restricted Shares will vote together as a single class. Information about the stockholdings of our directors and executive officers is entitled to attend is encouraged to participatecontained in the Meetingsection of this proxy statement entitled “Beneficial Ownership of Principal Shareholders, Officers and Shareholders are urgedDirectors” on page 17 of this proxy statement.
What is the proxy card?
The proxy card enables you to vote on matters to be considered in person appoint Scott D. Wollney, our President, Chief Executive Officer and a Director, and/or by proxy.
Unless otherwise stated, the information contained in this Proxy Statement is given as of April 11, 2012 (the “Reference Date”).
All time references in this Proxy Statement are in Central Daylight Time, referred to as “central time”. Unless otherwise noted, allGordon G. Pratt, our Chairman of the dollar amounts in this Proxy Statement are expressed in Canadian dollars.
APPOINTMENT AND REVOCATION OF PROXIES
Appointment of a Proxy
Those Shareholders who wish to be representedBoard, as your representative at the Meeting by proxy must complete and deliver a proper form of proxy to Equity Financial Trust Company (the “Transfer Agent”) either in person, or by mail or courier to, 200 University Avenue, Suite 400, Toronto, Ontario, Canada, M5H 4H1.
The persons named as proxyholders in the Instrument of Proxy accompanying this Proxy Statement are directors or officers of the Corporation and are representatives of the Corporation's management for the Meeting. A Shareholdershareholder who wishes to appoint some other person (who need not be a Shareholder)shareholder) as his or her representative at the Meeting may do so by either: (i) crossing out the names of the management nominees AND legibly printing the other person's name in the blank space provided in the accompanying Instrument of Proxy;proxy card; or (ii) completing another valid form of proxy. In either case,By completing and returning the completed form of proxy must be deliveredcard as described herein, you are authorizing these persons to the Transfer Agent,vote your shares at the placeMeeting in accordance with your instructions on the proxy card. This way, your shares will be voted whether or not you attend the Meeting. Even if you plan to attend the Meeting, it is strongly recommended to complete and withinreturn your proxy card before the time specified hereinMeeting date just in case your plans change. If a proposal comes up for vote at the depositMeeting that is not on the proxy card, the proxyholder will vote your shares, under your proxy, according to their best judgment.
You are being asked to consider and vote upon (i) a special resolution to effect a share consolidation or reverse split of proxies. A the Company's Ordinary Shares and Restricted Shares at a ratio of one-for-three such that the number of the Company's authorized Ordinary Shares and Restricted Shares is decreased and the par value of each Ordinary Share and Restricted Share is increased by that ratio (the “Reverse Split” and the proposal the “Reverse Split Proposal”), and (ii) an amendment to Article SIX of the Company's Memorandum of Association to reflect the Reverse Split (the “Amendment” and the proposal the “Amendment Proposal”). We will also transact any other business that properly comes before the Meeting.


1


How does the Board of Directors recommend that I vote?
The Board of Directors of the Company (the “Board of Directors” or the “Board”) unanimously recommends that shareholders vote “FOR” the Reverse Split Proposal and vote “FOR” the Amendment Proposal.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Certain of our shareholders hold their shares in an account at a brokerage firm, bank or other nominee holder, rather than holding share certificates in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
Shareholder of Record / Registered Shareholders
If, on the Record Date, your shares were registered directly in your name with our transfer agent, Equity Financial Trust Company, you are a “shareholder of record” who appointsmay vote at the Meeting, and we are sending these proxy materials directly to you. As the shareholder of record, you have the right to direct the voting of your shares by returning the enclosed proxy card to us or to vote in person at the Meeting. Whether or not you plan to attend the Meeting, please complete, date and sign the enclosed proxy card to ensure that your vote is counted.
Beneficial Owner
If, on the Record Date, your shares were held in an account at a brokerage firm or at a bank or other nominee holder, you are considered the beneficial owner of shares held “in street name,” and these proxy materials are being forwarded to you by your broker or nominee who is someoneconsidered the shareholder of record for purposes of voting at the Meeting. As the beneficial owner, you have the right to direct your broker on how to vote your shares and to attend the Meeting. However, since you are not the shareholder of record, you may not vote these shares in person at the Meeting unless you receive a valid proxy from your brokerage firm, bank or other thannominee holder. To obtain a valid proxy, you must make a special request of your brokerage firm, bank or other nominee holder. If you do not make this request, you can still vote by using the management representatives namedvoting instruction card enclosed with this proxy statement; however, you will not be able to vote in person at the Meeting.
How do I vote?
(1) You may vote by mail. You may vote by mail by completing, signing and dating your proxy card and returning it in the Instrument of Proxy should notify the nominee of the appointment, obtain the nominee's consent to act as proxy,enclosed, postage-paid and provide instructions on how its Voting Shares are to be voted. The nominee should bring personal identification to the Meeting. In any case, the form of proxy should be dated and executed by the Shareholder or an attorney authorized in writing, with proof of such authorization attached (where an attorney executed the proxy form).
In order to validly appoint a proxy, Instruments of Proxyaddressed envelope. Proxies must be received by the Transfer Agent at least 48Company's transfer agent, Equity Financial Trust Company, 200 University Avenue, Suite 400, Toronto, Ontario M5H 4H1, not later than forty-eight (48) hours, excluding Saturdays, Sundays and holidays, prior to the Meeting or any adjournment or postponement thereof. After such time,thereof (the “Cut-off Time”). Late proxies may be accepted or rejected by the chairman of the Meeting may accept or reject a form of proxy delivered to him in his discretion but is under no obligation to accept or reject any particular late form of proxy.
Revoking a Proxy
A Shareholder who has validly given a proxy may revoke it for any matter upon which a vote has not already been cast by the proxyholder appointed therein. In addition to revocation in any other manner permitted by law, a proxy may be revoked with an instrument in writing signed and delivered to either the registered office of the Corporation or the Transfer Agent, 200 University Avenue, Suite 400, Toronto, Ontario, Canada, M5H 4H1, at any time up to and including the last business day preceding the date

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of the Meeting, or any postponement or adjournment thereof at which the proxy is to be used, or deposited with the chairman of the Meeting on the day of the Meeting, or any postponement or adjournment thereof. The document used to revoke a proxy must be in writing and completed and signed by the Shareholder or his or her attorney authorized in writing or,discretion. If we receive your proxy card prior to the Cut-off Time and if the Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized.
As well, a Shareholder who has given a proxy may attend the Meeting in person (or where the Shareholder is a corporation, its authorized representative may attend), revokeyou mark your voting instructions on the proxy (by indicating such intention to the chairman of the Meeting before the proxy is exercised) and vote in person (or withhold from voting).
Signature on Proxies
The Instrument of Proxy must be executed by the Shareholder or his or her duly appointed attorney authorized in writing or, if the Shareholder is a corporation, by a duly authorized officer whose title must be indicated. An Instrument of Proxy signed by a person acting as attorney or in some other representative capacity should indicate that person's capacity (following his signature) and should be accompanied by the appropriate instrument evidencing qualification and authority to act (unless such instrument has been previously filed with the Corporation).
Voting of Proxies
Each Shareholder may instruct his proxy how to vote his Voting Shares by completing the blanks on the Instrument of Proxy.
Voting Shares represented by the enclosed Instrument of Proxycard, your shares will be voted or withheld from voting on any motion, by ballot or otherwise, in accordance with any indicated instructions. In the absence of such direction, such Voting Shares will be voted IN FAVOUR OF PASSING THE RESOLUTIONS DESCRIBED IN THE INSTRUMENT OF PROXY AND BELOW.voted: If any amendment or variation to the matters identified in the Notice of Meeting is proposed at the Meeting or any adjournment or postponement thereof, or if any other matters properly come before the Meeting or any adjournment or postponement thereof, the accompanying Instrument of Proxy confers discretionary authority to vote on such amendments or variations or such other matters

as you instruct, and
according to the best judgment of the appointed proxyholder. Unless otherwise stated, Voting Shares represented byproxyholders if a valid Instrument of Proxy will be voted in favourproposal comes up for a vote at the Meeting that is not on the proxy card.

 If you return a signed card, but do not provide voting instructions, your shares will be voted:

FOR the approval of the electionspecial resolution to effect a one-for-three share consolidation of nominees set forththe Ordinary Shares and Restricted Shares and adoption of an amendment to Article SIX of the Company's Memorandum of Association; and
according to the best judgment of either Mr. Wollney and/or Mr. Pratt if a proposal comes up for a vote at the Meeting that is not on the proxy card.
(2) You may vote in this Proxy Statement except where a vacancy among such nominees occurs priorperson at the Meeting. We will pass out written ballots to anyone who wants to vote at the Meeting. However, if you hold your shares in street name, you must bring to the Meeting in which case, such Voting Shares may be voted in favoura valid proxy from the broker, bank or other nominee holding your shares that confirms your beneficial ownership of the electionshares and gives you the right to vote your shares. Holding shares in street name means you hold them through a brokerage firm, bank or other nominee, and therefore the shares are not held in your individual name. We encourage you to examine your proxy card closely to make sure you are voting all of another nomineeyour shares in the proxyholder's discretion. AsCompany.
What does it mean if I receive more than one proxy card?
You may have multiple accounts at the Reference Date, management of the Corporation knows of no such amendments or variations or other matters to come before the Meeting.
Advice to Beneficial Shareholders
The information set forth in this section is of importance to many Shareholders, as a substantial number of Shareholders do not hold Voting Shares in their own name. Shareholders who hold their Voting Shares through their brokers, intermediaries, trustees or other persons, or who otherwise do not hold their Voting Shares in their own name (referred to in this Proxy Statement as “Beneficial Shareholders”) should note that only proxies deposited by Shareholders who are registered shareholders (that is, shareholders whose names appear on the records maintained by the registrar and transfer agent for the Voting Shares as registered holders of Voting Shares) will be recognizedand/or with brokerage firms. Please sign and acted upon at the Meeting. If Voting Shares are listed in an account statement provided to a Beneficial Shareholder by a broker, those Voting Shares will, inreturn all likelihood, not be registered in the Shareholder's name. Such Voting Shares will more likely be registered under the name of the Shareholder's broker or an agent of that broker. In Canada, the vast majority of such shares are registered under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc., which acts as nominee for many Canadian brokerage firms) and in the United States, in the name of Cede & Co. as nominee for the Depository Trust Company (which acts as depositary for many US brokerage firms and custodian banks). Voting Shares held by brokers (or their agents or nominees) on behalf of a broker's client can only be voted at the direction of the Beneficial Shareholder. Without specific instructions, brokers and their agents and nominees are prohibited from voting shares for the broker's clients. Therefore, each Beneficial Shareholder should ensure that voting instructions are communicated to the appropriate person well in advance of the Meeting.
Existing regulatory policy requires brokers and other intermediaries to seek voting instructions from Beneficial Shareholders in advance of shareholders' meetings. The various brokers and other intermediaries have their own mailing procedures and provide their own return instructions to clients, which should be carefully followed by Beneficial Shareholders in orderproxy cards to ensure that their Voting Sharesall of your 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 substantially similar to the Instrument of Proxy provided directly to registered shareholders by the Corporation. However, its purpose is limited to instructing the registered shareholder (i.e., the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. The vast majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc. (“BFS”) in Canada. BFS typically prepares a machine-readable voting instruction form, mails those forms to Beneficial Shareholders and asks Beneficial Shareholders to return the forms to BFS, or otherwise communicate voting instructions to BFS (by way of the Internet or telephone, for example). BFS then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of shares to be represented at the Meeting. A Beneficial Shareholder who receives a BFS voting instruction form cannot use that form to vote Voting Shares directly at the Meeting. The voting instruction forms must be returned to BFS (or instructions respecting the voting of Voting Shares must otherwise be communicated tovoted.

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BFS) well in advanceWhat if I change my mind after I return my proxy?
You may revoke your proxy and change your vote at any time before the polls close at the Meeting. You may do this by:
sending a written notice to the Secretary of the Company stating that you would like to revoke your proxy of a particular date;
signing another proxy card with a later date and returning it before the polls close at the Meeting; or
attending the Meeting and voting in orderperson.
 Please note, however, that if your shares are held by a brokerage firm, bank or other nominee, you must instruct your broker, bank or other nominee that you wish to have Voting Shares voted. If you have any questions respectingchange your vote by following the procedures on the voting of Voting Shares held through aform provided to you by the broker, bank or other intermediary, please contact that broker or other intermediary for assistance.
Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting Voting Shares registerednominee. If your shares are held in thestreet name, of his broker, CDS & Co. or another intermediary, the Beneficial Shareholder may attend the Meeting as proxyholder and vote the Voting Shares in that capacity. Beneficial Shareholders whoyou wish to attend the Meeting and indirectly vote their Voting Shares as proxyholder, should enter their own names in the blank space on the form of proxy provided to them by their broker (or the broker's agent) and return the same to their broker (or the broker's agent) in accordance with the instructions provided by such broker.
All references to Shareholders in this Proxy Statement and the accompanying Instrument of Proxy and Notice of Meeting are to registered Shareholders unless specifically stated otherwise.
VOTING SHARES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
Voting Shares
Shareholders of record as of April 20, 2012 (the “Record Date”) are entitled to receive notice of, attend and vote at the Meeting. AsMeeting, you must bring to the Meeting a legal proxy from the broker, bank or other nominee holding your shares, confirming your beneficial ownership of the shares and giving you the right to vote your shares.
Will my shares be voted if I do not sign and return my proxy card?
If your shares are held in street name or in your name and you do not sign and return your proxy card, your shares will not be voted unless you vote in person at the Record Date,Meeting.
How many votes are required to approve the Corporation had issued and outstanding 4,628,292Ordinary Shares and 13,804,861 Restricted Voting Shares.Reverse Split Proposal?
On a show
The Reverse Split Proposal requires the affirmative vote of hands, every Shareholder present in person or represented by proxy (andnot less than two-thirds of those shareholders that, being entitled to vote) has one vote. Subject to the below restrictions, on a poll or ballot, every Shareholder presentdo so, vote in person or by proxy has one vote for each Voting Share held. All votes on special resolutions (if any) will be conducted byat the Meeting, assuming the presence of a poll and no demand for a poll is required.
quorum. The Ordinary Shares and Restricted Voting Shares will carryvote together as one class.

How many votes are required to approve the Amendment Proposal?

The Amendment Proposal requires the affirmative vote of not less than two-thirds of those shareholders that, being entitled to do so, vote in person or by proxy at the Meeting, assuming the presence of a quorum. The Ordinary Shares and Restricted Shares will vote together as one class.
What happens if I do not indicate how to vote my proxy?
If you just sign your proxy card without providing further instructions, your shares will be counted as a “for” vote for all of the proposals being placed before our shareholders at the Meeting.
Is my vote kept confidential?
Proxies, ballots and voting tabulations identifying shareholders are kept confidential and will not be disclosed except as may be necessary to meet legal requirements.
Where do I find the voting results of the Meeting?
We will announce voting results at the Meeting.
Who can help answer my questions?
You can contact our counsel, Adam Mimeles Esq. of Ellenoff Grossman & Schole LLP at (212) 370-1300 or by sending a letter to Scott Wollney at the offices of the Company at 150 NW Point Boulevard, Elk Grove Village, Illinois 60007 with any questions about proposals described in this proxy statement or how to execute your vote.


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CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

This proxy statement contains “forward-looking information” which may include, but is not limited to, statements with respect to; trends affecting financial condition and results of operations; the Company's ability to execute on its strategic plan, including with respect to the ability to raise capital through an underwritten financing as described herein; the timing of and other procedural matters associated with the reverse split and the listing of the Company's shares on the Nasdaq Capital Market; the anticipated beneficial effects of the Reverse Split Proposal and Amendment Proposal on the Company's share price, the availability and terms of additional capital; dependence on strategic partners; the competitive and regulatory environment and other factors referenced in this proxy statement. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, general business, economic, competitive, political, regulatory and social uncertainties, and the risk factors discussed in the “Risk Factors” section of the Company's Form 10-K for the year ended December 31, 2011. All such forward looking information and statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors the Company believes are appropriate in the circumstances, which assumptions include but are not limited to the positive benefits of listing the Company's shares on the Nasdaq Capital Market. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this proxy statement and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results, or otherwise, except as required by applicable law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty in them.


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THE EXTRAORDINARY GENERAL MEETING

We are furnishing this proxy statement to you, as a shareholder of Atlas Financial Holdings, Inc., as part of the solicitation of proxies by our Board of Directors (the “Board of Directors” or the “Board”) for use at our Meeting of shareholders to be held on December 7, 2012, or any adjournment or postponement thereof (the “Meeting”).  In this proxy statement, the terms “Atlas,” “Company,” “we,” “our,” “ours,” and “us” refer to Atlas Financial Holdings, Inc., a Cayman Islands corporation, and its subsidiaries.
Date, Time, Place and Purpose of the Meeting
This proxy statement is being furnished to our shareholders in connection with the solicitation of proxies by our Board for use at the Meeting, to be held at the offices of the Company, 150 NW Point Boulevard, Elk Grove Village, Illinois 60007, on Friday, December 7, 2012, at 10 a.m., Central Standard Time. You are cordially invited to attend the Meeting, at which shareholders will be asked to consider and vote upon the following proposals, which are more fully described in the enclosed proxy statement:

1.To consider and vote upon a special resolution to effect a share consolidation or reverse stock split of the Company's ordinary shares, par value $.001 per share (the “Ordinary Shares”), and restricted voting common shares, par value $.001 per share (the “Restricted Shares”) at a ratio of one-for-three such that the number of the Company's authorized Ordinary Shares and Restricted Shares is decreased and the par value of each Ordinary Share and Restricted Share is increased by that ratio (the “Reverse Split” and the proposal the “Reverse Split Proposal”), and with such special resolution to become effective upon the Company's receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements;

2.To consider and vote upon a special resolution to amend Article SIX of the Company's Memorandum of Association to reflect the Reverse Split (the “Amendment” and the proposal the “Amendment Proposal”) with such special resolution to become effective upon the Company's receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements; and

3.Such other procedural matters as may properly come before the Meeting or any adjournment or postponement thereof.
The Board unanimously recommends a vote “FOR” the approval of Reverse Split Proposal and a vote “FOR” the approval of the Amendment Proposal.
Record Date, Voting and Quorum, Mailing Date
Our Board fixed the close of business on October 31, 2012, as the record date (the “Record Date”) for the determination of holders of our outstanding shares entitled to notice of and to vote on all matters presented at the Meeting.  As of the record date, there were 5,149,125 Ordinary Shares and 13,284,028 Restricted Shares outstanding and entitled to vote.  Each Ordinary Share entitles the holder thereof to one vote per share held, except where the number of outstanding Restricted Voting Shares exceeds 30% of the total number of all issued and outstanding Voting Shares. If the foregoing threshold is surpassed at any time, the votes attached to each Restricted Voting Share will decrease automatically without further act or formalityentitles the holder thereof to equal the maximum permittedone hundred and sixty six thousandths (.166) of one vote, per Restricted Voting Share such that the Restricted Voting Shares as a class shall not carry more than 30% of the total voting rights attachedaggregate votes, after giving effect to the voting power of the Ordinary Shares. Accordingly, a total of 7,355,892 votes may be cast at the Meeting.
Two or more holders of the Ordinary Shares or Restricted Shares holding at least five percent of the aggregate outstanding Voting Shares.votes present in person or by proxy and entitled to vote at the Meeting, shall form a quorum.

The Proxy Statement is first being mailed to shareholders of the Company on or about November 16, 2012.
Disclosure Regarding Offers Made to Holders of Ordinary Shares

In the event that an offer is made to purchase Ordinary Shares and the offer is one which is required, pursuant to applicable securities legislation or the rules of a stock exchange on which the Ordinary Shares are then listed, to be made to all or substantially all of the holders of Ordinary Shares, each Restricted Voting Share shall become convertible at the option of the holder into one Ordinary Share at any time while the offer is in effect until one day after the time prescribed by applicable securities legislation for the offeror to take up and pay for such shares as are to be acquired pursuant to the offer. The conversion right may only be exercised in respect of Restricted Voting Shares for the purpose of depositing the resulting Ordinary Shares pursuant to the offer and for no other reasons, including notably with respect to voting rights attached thereto, which are deemed to remain subject to the provisions concerning the voting rights for Restricted Voting Shares notwithstanding their conversion.

Preferred Shares
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Required Vote
The Reverse Split Proposal and the Amendment Proposal require the affirmative vote of not less than two-thirds of those shareholders that, being entitled to do so, vote in person or by proxy at the Meeting, assuming the presence of a quorum. The Ordinary Shares and Restricted Shares will vote together as one class.

Voting
Shareholders may vote their shares:

By Mail: by completing the enclosed proxy card, signing and dating it and mailing it in the enclosed post-prepaid envelope.
In Person: by attending the Meeting and voting their shares in person.
Our Board is asking for your proxy.  Giving the Board your proxy means you authorize it to vote your shares at the Meeting in the manner you direct.  You may vote for or against the proposals, abstain from voting or withhold your vote for the proposals.  All valid proxies received prior to the Meeting will be voted.  All shares represented by a proxy will be voted, and where a shareholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the specification so made.  If no choice is indicated on the proxy, the shares will be voted “FOR” the approval of the Reverse Split Proposal and “FOR” the approval of the Amendment Proposal, and as the proxy holders may determine in their discretion with respect to any other matters that may properly come before the Meeting.
Shareholders who have questions or need assistance in completing or submitting their proxy cards should contact us at (847) 472-6700.
Shareholders who hold their shares in “street name,” meaning the name of a broker or other nominee who is the record holder, must either direct the record holder of their shares to vote their shares or obtain a proxy or voting instruction from the record holder to vote their shares at the Meeting.
Revocability of Proxies
Any proxy may be revoked by the person giving it at any time before the polls close at the Meeting.  A proxy may be revoked by filing with our Secretary (Atlas Financial Holdings, Inc., 150 NW Point Boulevard, Elk Grove Village, Illinois 60007) either (i) a written notice of revocation bearing a date later than the date of such proxy or (ii) a subsequent proxy relating to the same shares, or (iii) by attending the Meeting and voting in person.
Simply attending the Meeting will not constitute revocation of your proxy.  If your shares are held in the name of a broker or other nominee who is the record holder, you must follow the instruction of your broker or other nominee to revoke a previously given proxy.
Attendance at the Meeting
Only holders of Ordinary Shares and Restricted Shares, their proxy holders and guests we may invite may attend the Meeting.  If you wish to attend the Meeting in person but you hold your shares through someone else, such as a broker, you must bring proof of your ownership and identification with a photo at the Meeting.  For example, you may bring an account statement showing that you beneficially owned shares of Atlas as of the record date as acceptable proof of ownership.

Solicitation of Proxies
The cost of preparing, assembling, printing and mailing this proxy statement and the accompanying form of proxy, and the cost of soliciting proxies relating to the Meeting, will be borne by the Company.  Some banks and brokers have customers who beneficially own Voting Shares in the names of nominees.  We intend to request banks and brokers to solicit such customers and will reimburse them for their reasonable out-of-pocket expenses for such solicitations.  If any additional solicitation of the holders of our outstanding Voting Shares is deemed necessary, we (through our directors and officers) anticipate making such solicitation directly.  The solicitation of proxies by mail may be supplemented by telephone, telegram and personal solicitation by officers, directors and other employees of the Company, but no additional compensation will be paid to such individuals.



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No Right of Appraisal
Neither Cayman Islands law nor our Memorandum or Articles of Association provides for appraisal or other similar rights for dissenting shareholders in connection with the proposal to be voted upon at the Meeting.  Accordingly, our shareholders will have no right to dissent and obtain payment for their shares.
Other Business
Only certain procedural matters may be properly brought before the Meeting without the consent of all shareholders entitled to receive notice of the Meeting. No Special Business, as defined below, shall be transacted at the Meeting without the consent of all shareholders entitled to receive notice of the Meeting. Special Business is defined as all matters requiring a shareholder vote except consideration of the accounts, balance sheets and any report of the Board or of the auditors thereon, the appointment and removal of directors, the appointment of the auditors and the fixing of the remuneration of the auditors. We are not currently aware of any procedural matters to be acted upon at the Meeting.  The form of proxy accompanying this proxy statement confers discretionary authority upon the named proxy holders with respect to amendments or variations to the matters identified in the accompanying notice of Meeting and with respect to any other matters which may properly come before the Meeting.  If other matters do properly come before the Meeting, or at any adjournment or postponement of the Meeting, we expect that Voting Shares represented by properly submitted proxies will be voted by the proxy holders in accordance with the recommendations of our Board.

Expenses

The expense of preparing, printing and mailing this Proxy Statement, exhibits and the proxies solicited hereby will be borne by the Company. In addition to the aboveuse of the mail, proxies may be solicited by officers, directors and regular employees of the Company, without additional remuneration, by personal interviews, telephone, email or facsimile transmission. The Company will also request brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of Voting Shares held of record and will provide reimbursements for the cost of forwarding the material in accordance with customary charges.

Principal Offices

The principal executive offices of our Company are located at Atlas Financial Holdings, 150 NW Point Boulevard, Elk Grove Village, Illinois 60007. The Company's telephone number at such address is (847) 472-6700.


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PROPOSAL ONE - APPROVAL OF A SPECIAL RESOLUTION
TO EFFECT A SHARE CONSOLIDATION OF THE COMPANY'S
ORDINARY SHARES AND RESTRICTED VOTING COMMON SHARES

General

On October 26, 2012, our Board unanimously approved the calling of the Meeting at which shareholders are being asked to consider passing a special resolution to effect a share consolidation or reverse split of the Company's Ordinary Shares and Restricted Shares at a ratio of one-for-three such that the number of the Company's authorized Ordinary Shares and Restricted Shares is decreased and the par value of each Ordinary Share and Restricted Share is increased by that ratio (the “Reverse Split” and the proposal the “Reverse Split Proposal”).
The intention of the Board in effecting the Reverse Split is to increase the stock price of our Ordinary Shares, which are currently trading on the TSX Venture Exchange (“TSX-V”), to a level sufficiently above the US$3.00 minimum bid price requirement that is required for initial listing on the Nasdaq Capital Market. Accordingly, Atlas will file the notice of special resolution with the Registrar of Companies of the Cayman Islands immediately following our receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements.
While the purpose of the Reverse Split is to affect solely the Ordinary Shares, our Articles of Association provide that no subdivision or consolidation of the Ordinary Shares or Restricted Shares may occur unless, simultaneously, the Ordinary Shares and the Restricted Shares are subdivided or consolidated in the same manner, so as to maintain and preserve the respective rights of the holders of the Voting Shares. As a result, the holders of our Ordinary Shares and Restricted Shares shall each be entitled to vote on the Reverse Split. Additionally, our Article of Association provide that the conversion rights of our preferred shares, par value $0.001 per share (the “Preferred Shares”) shall be equitably adjusted to provide for the issuance (upon subsequent conversion) of an equal amount of additional Ordinary Shares or Restricted Shares or other assets, rights, warrants or other securities as if the Preferred Shares had been converted at that time. Preferred Shares are not entitled to vote on the Reverse Split Proposal, however if the Reverse Split Proposal is approved, the conversion rate of the Preferred Shares, which are convertible into Ordinary Shares at the Record Date,option of the Corporation hadholder at any date that is after December 31, 2015, the fifth year after issuance, at the rate of 0.3808 Ordinary Shares for each Preferred Share, shall be adjusted such that the conversion rate will be .12693 Ordinary Shares for Each Preferred Share. The Company has issued and outstanding 18,000,000 preferred shares in the capitalPreferred Shares.
One principal effect of the Corporation (“Preferred Shares”). Such Preferred Shares are convertible into suchReverse Split would be to decrease the number of outstanding shares of each of our Ordinary Shares and Restricted Shares. Except for de minimus adjustments that may result from the treatment of fractional shares as described below, the Reverse Split will not have any dilutive effect on our shareholders since each shareholder would hold the same percentage of our Ordinary Shares and Restricted Shares outstanding immediately following the Reverse Split as such shareholder held immediately prior to the Reverse Split. The relative voting and other rights that accompany the shares of Voting Shares would not be affected by the Reverse Split. The table below sets forth the voting rights of our Voting Shares before and after the Reverse Split based on 5,149,125 Ordinary Shares and 13,284,028 Restricted Shares outstanding as is determined by multiplyingof October 31, 2012 (assuming no additional share issuances between October 31, 2012 and the numberEffective Time).

 Ordinary Shares*Restricted Shares*
Prior to the Reverse SplitPercentage of Voting Shares**Number of Votes After Reverse SplitPercentage of Voting Shares**Prior to the Reverse Split**Percentage of Voting Shares**Number of Votes After Reverse Split**Percentage of Voting Shares**
Aggregate Number of Votes5,149,125
70%1,716,375
70%13,284,028
30%4,428,009
30%

* The Reverse Split will also effect the conversion rate of the Preferred Shares bysuch that following the “Conversion Factor” set out inReverse Split, the Corporation's Articlesconversion rate will be adjusted to ensure that upon conversion the holders of Association. The initial Conversion Factor per share forthe Preferred Shares will hold the same percentage of Ordinary Shares as they would have held prior to the Reverse Split.    

** The holders of the Ordinary Shares shall behave the right to receive notice of, attend at and vote at any Meeting of the Company. The holders of the Restricted Shares have the right to receive notice of, attend at and vote as a shareholder at any Meeting of the Company, PROVIDED THAT if the number of outstanding Restricted Shares exceeds 30% of the total number of all issued and outstanding Voting Shares of the Company, the votes attached

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to each Restricted Share will decrease automatically without further act or formality to equal to 0.3808, subject to adjustment as provided in the Corporation's Articles of Association. Upon a disposition of a Preferredmaximum permitted vote per Restricted Share such that the Preferred Share ceasesRestricted Shares as a class shall not carry more than 30% of the aggregate votes.

The Reverse Split will not have any dilutive effect on our shareholders. In addition, the proportion of shares owned by our shareholders relative to the number of shares authorized for issuance will remain the same because the authorized number of our Ordinary Shares and Restricted Shares will be decreased in proportion to the Reverse Split at the Effective Time. As a result, the number of Ordinary Shares authorized will decrease from 800,000,000 to 266,666,667 and the number of Restricted Shares authorized will decrease from 100,000,000 to 33,333,333. The Reverse Split is not part of a broader plan to take us private.
Reasons for the Reverse Split
The Board of Director's primary objective in proposing the Reverse Split is to raise the per share trading price of our Ordinary Shares, which are currently trading only on the TSX-V, to allow for a listing of our Ordinary Shares on the Nasdaq Capital Market. Upon receiving shareholder approval, the Board will file the notice of special resolution with the Registrar of Companies of the Cayman Islands immediately following our receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements. On September 7, 2012, we applied to have our Ordinary Shares initially listed on the Nasdaq Capital Market. On September 28, 2012, we received a letter from the Nasdaq Staff advising, among other things, that for our listing application to be beneficiallyaccepted, the bid price of our Ordinary Shares had to be trading above US$3.00 per share for at least five days prior to inclusion on the Nasdaq Capital Market. Our Board of Directors determined that by increasing the market price per share of our Ordinary Shares, we would meet the requirements of Nasdaq Marketplace Rule 5505(a)(1)(B) and our Ordinary Shares could be initially listed on the Nasdaq Capital Market. Our Board of Directors concluded that the liquidity and marketability of our Ordinary Shares in the United States may be adversely affected if it is not quoted on a national securities exchange as investors can find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, our Ordinary Shares. Our Board of Directors believes that current and prospective investors may view an investment in our Ordinary Shares more favorably if our Ordinary Shares are quoted on the Nasdaq Capital Market.
Our Board of Directors also has confidence that the Reverse Split and any resulting increase in the per share price of our Ordinary Shares should enhance the acceptability and marketability of our Ordinary Shares to the financial community and investing public. Many institutional investors have policies prohibiting them from holding lower-priced stocks in their portfolios, which reduces the number of potential buyers of our Ordinary Shares, although we have not been specifically advised that this is a reason for not investing in our Ordinary Shares. Additionally, analysts at many brokerage firms are reluctant to recommend lower-priced stocks to their clients or monitor the activity of lower-priced stocks. Brokerage houses frequently have internal practices and policies that discourage individual brokers from dealing in lower-priced stocks. Further, because brokers' commissions on lower-priced stock generally represent a higher percentage of the stock price than commissions on higher priced stock, investors in lower-priced stocks pay transaction costs which are a higher percentage of their total share value, which may limit the willingness of individual investors and institutions to purchase our Ordinary Shares.
We cannot assure you that the Reverse Split will have any of the desired effects described above. More specifically, we cannot assure you that after the Reverse Split the market price of our Ordinary Shares will increase proportionately to reflect the ratio for the Reverse Split, that the market price of our Ordinary Shares will not decrease to its pre-split level, that our market capitalization will be equal to the market capitalization before the Reverse Split, or that we will be initially listed on the Nasdaq Capital Market, or once initially listed, that we will be able to maintain such listing.
Nasdaq Requirements for Listing

On September 7, 2012, we applied to have our Ordinary Shares initially listed on the Nasdaq Capital Market. In order to initially list our Ordinary Shares on the Nasdaq Capital Market, among other requirements which have or will all be satisfied, our Ordinary Shares must maintain a minimum bid price of at least $3.00 pursuant to Nasdaq Marketplace Rule 5505(a)(1)(B). On September 28, 2012, we received a letter from the Nasdaq Staff advising that, among other things, our Ordinary Shares cannot be initially listed unless the bid price of our Ordinary Shares had closed above the minimum US$3.00 per share on the TSX-V for at least five consecutive days prior to listing. Our Ordinary Shares have not traded above US$2.00 on the TSX-V over the past 52 weeks.
Our Board of Directors has considered the potential harm to us of our Ordinary Shares not being listed on the Nasdaq Capital Market and has concluded that even though the desired effects cannot be assured, it is in the best interests of our Company and our shareholders to effect the Reverse Split to help attain a US$3.00 bid price and ensure compliance with the listing requirements of the Nasdaq Capital Market.

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Potential Disadvantages of the Reverse Split
As noted above, the principal purpose of the Reverse Split would be to help increase the per share market price of our Ordinary Shares by up to factor of three. We cannot assure you, however, that the Reverse Split will accomplish this objective for any meaningful period of time. While we expect that the reduction in the number of outstanding Ordinary Shares will increase the market price of our Ordinary Shares, we cannot assure you that the Reverse Split will increase the market price of our Ordinary Shares by an equivalent multiple, or result in any permanent increase in the market price of our Ordinary Shares. The price of our Ordinary Shares is dependent upon many factors, including our business and financial performance, general market conditions and prospects for future success. If the per share market price does not increase proportionately as a result of the Reverse Split, then the value of our Company as measured by our stock capitalization will be reduced, perhaps significantly.
The number of shares held by each individual shareholder would be reduced if the Reverse Split is implemented. This will increase the number of shareholders who hold less than a “round lot,” or 100 shares. This has two disadvantages. First, the Nasdaq Marketplace Rules require that we have 300 round lot shareholders in order to be initially listed. While the Reverse Split will potentially reduce the number of round lot shareholders that we currently have, prior to our initial listing, we anticipate effectuating a financing which should result in the Company having greater than 300 round lot holders. Second, the transaction costs to shareholders selling “odd lots” are typically higher on a per share basis. Consequently, the Reverse Split could increase the transaction costs to existing shareholders in the event they wish to sell all or a portion of their position.
The Reverse Split is also subject to the approval of the TSX-V. TSX-V policies require listed issuers to have a minimum of 150 public holders of "board lots" (100 shares). The Reverse Split may initially reduce the number of board lots below the number required to maintain listing on the TSX-V. As noted above, however, we anticipate effectuating a financing which should result in the Company having greater than 300 board lots.
Although our Board of Directors believes that the decrease in the number of our Ordinary Shares outstanding as a consequence of the Reverse Split and the anticipated increase in the market price of our Ordinary Shares could encourage interest in our Ordinary Shares and possibly promote greater liquidity for our shareholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the Reverse Split.
Effecting the Reverse Split
Pursuant to certain resolutions adopted by the Board on October 26, 2012 and Section 62 of the Cayman Island Companies Law and subject to receiving the required regulatory approvals, the Company will file the notice of special resolution with the Registrar of Companies of the Cayman Islands immediately following our receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements. The Company will be compelled to file the notice of the special resolution, even if the price of our Ordinary Shares is above US$3.00 at the time the Reverse Split is to be effected, as long as the Company closes an offering that enables us to meet all of the Nasdaq listing requirements. The Reverse Split will be effective as of the date of filing with the Registrar of Companies in the Cayman Islands (the “Effective Time”).
We are currently pursuing a five million dollar ($5,000,000) underwritten offering with Sandler, O'Neill and Partners L.P. that would enable us to meet the Nasdaq listing requirements. We have filed a registration statement with the Securities and Exchange Commission on Form S-1 (File No. 333-183276, the “Registration Statement”) and a preliminary short form prospectus with the securities regulatory authorities in each of the provinces of British Columbia, Alberta and Ontario (the “Preliminary Short Form Prospectus”) describing the offering.
Upon the filing of the notice of special resolution, without further action on our part or our shareholders, the outstanding Ordinary Shares and Restricted Shares held by shareholders of record as of the Effective Time would be converted into a lesser number of shares of Ordinary Shares and Restricted Shares, respectively, based on a Reverse Split ratio of one-for-three. For example, if you presently hold 600 shares of our Ordinary Shares or our Restricted Shares, you would hold 200 shares of our Ordinary Shares or Restricted Shares following the Reverse Split. Additionally, the conversion rate for our Preferred Shares, as described above, will be converted to reflect the Reverse Split.
Effect on Outstanding Shares, Options and Certain Other Securities
If the Reverse Split is implemented, the number of our Ordinary Shares and Restricted Shares owned by each shareholder will be reduced in the same proportion as the reduction in the total number of shares outstanding, such that the percentage of our Ordinary Shares and controlled directlyRestricted Shares owned by each shareholder will remain unchanged except for any de minimus change resulting from rounding up to the nearest number of whole shares so that we are not obligated to issue cash in lieu of any fractional

10


shares that such shareholder would have received as a result of the Reverse Split. The number of our Ordinary Shares that may be purchased upon exercise of outstanding options or indirectly by Kingsway Financial Services Inc. or Kingsway America Inc., such Preferred Share shall beother securities convertible into, or exercisable or exchangeable for, shares of our Ordinary Shares rather than(no such options or other convertible securities exist for our Restricted Shares), and the exercise or conversion prices for these securities, will also be ratably adjusted in accordance with their terms as of the Effective Time.
 
 
 
 
Prior to the
Reverse Split
After the
Reverse Split (1)
 
 Warrants3,983,5021,327,834
 Options401,849133,950
(1) -Assumes no additional issuances of options or warrants between October 31, 2012 and the Effective Time.
Effect on Registration and Stock Trading
Our Ordinary Shares are the subject of the pending Registration Statement on Form S-1 pursuant to the Securities Act of 1933, as amended, and we are subject to the periodic reporting and other requirements of the Securities Exchange Act of 1934, as amended. The proposed Reverse Split will not affect the registration of our Ordinary Shares. On August 13, 2012, the Company filed the Preliminary Short Form Prospectus for a treasury offering of its Ordinary Shares and a secondary offering of its Ordinary Shares.
If the proposed Reverse Split is implemented and our application for initial listing is otherwise accepted, our Ordinary Shares will be initially listed on the Nasdaq Capital Market under the symbol “AFH”.
Fractional Shares; Exchange of Stock Certificates
Our Board of Directors does not currently intend to issue fractional shares in connection with the Reverse Split. Therefore, we do not expect to issue certificates representing fractional shares. In lieu of any fractional shares, we will issue to shareholders who would otherwise hold a fractional share because the number of shares of Ordinary Shares or Restricted Shares they hold before the Reverse Split is not evenly divisible by the Reverse Split ratio that number of Ordinary Shares or Restricted Shares as rounded up to the nearest whole share. For example, if a shareholder holds 150.75 Ordinary Shares following the Reverse Split, that shareholder will receive certificate representing 151 Ordinary Shares. No shareholders will receive cash in lieu of fractional shares.
As of October 31, 2012, we had 100 holders of record of our Ordinary Shares (although we have significantly more beneficial holders) and 1 holder of record of our Restricted Shares. We do not expect the Reverse Split and the rounding up of fractional shares to whole shares to result in a significant reduction in the number of record holders. We presently do not intend to seek any change in its status as a reporting company for federal securities law purposes, either before or after the Reverse Split.
On or after the Effective Time, we will mail a letter of transmittal to each shareholder. Each shareholder will be able to obtain a certificate evidencing his, her or its post-Reverse Split shares only by sending the exchange agent (who will be the Company's transfer agent) the shareholder's old stock certificate(s), together with the properly executed and completed letter of transmittal and such evidence of ownership of the shares as we may require. Shareholders will not receive certificates for post-Reverse Split shares unless and until their old certificates are surrendered. Shareholders should not forward their certificates to the exchange agent until they receive the letter of transmittal, and they should only send in their certificates with the letter of transmittal. The exchange agent will send each shareholder, if elected in the letter of transmittal, a new stock certificate after receipt of that shareholder's properly completed letter of transmittal and old stock certificate(s). A shareholder that surrenders his, her or its old stock certificate(s) but does not elect to receive a new stock certificate in the letter of transmittal will be deemed to have requested to hold that shareholder's shares electronically in book-entry form with our transfer agent.
Certain of our registered holders of Voting Shares hold some or all of their shares electronically in book-entry form with our transfer agent. These shareholders do not have stock certificates evidencing their ownership of our Voting Shares. They are, however, provided with a statement reflecting the number of shares registered in their accounts. If a shareholder holds registered shares in book-entry form with our transfer agent, the shareholder will need to return a properly executed and completed letter of transmittal.
Shareholders who hold shares in street name through a nominee (such as set outa bank or broker) will be treated in the Corporation's Articlessame manner as shareholders whose shares are registered in their names, and nominees will be instructed to effect the Reverse Split for their beneficial holders. However, nominees may have different procedures and shareholders holding shares in street name should contact their nominees.

11


Shareholders will not have to pay any service charges in connection with the exchange of Association. Excepttheir certificates.
Authorized Shares
Provided the Reverse Split Proposal and the Amendment Proposal are approved, the authorized number of our Ordinary Shares (800,000,000) and Restricted Shares (100,000,000) will be decreased in proportion to the Reverse Split at the Effective Time such that we will have 266,666,667 Ordinary Shares authorized and 33,333,333 Restricted Shares authorized. As a result, the proportion of shares owned by our shareholders relative to the number of shares authorized for issuance will remain unchanged. The authorized but unissued Ordinary Shares and Restricted Shares will be available for issuance at such times and for such purposes as otherwiseour Board of Directors may deem advisable without further action by our shareholders, except as required by applicable laws and regulations. Authorized but unissued Ordinary Shares and Restricted Shares may be used for various purposes, including, without limitation, raising capital, providing equity incentives to employees, officers or directors, effecting stock dividends, establishing strategic relationships with other companies and expanding our business through the acquisition of other businesses or products. We do not currently have any plans, proposals or arrangements to issue any of the authorized shares for any purposes. The Board of Directors believes that the number of Ordinary Shares and Restricted Shares available for issuance following the Reverse Split and the Amendment will be sufficient to support our projected need for additional equity capital.
If our Ordinary Shares are initially listed on the Nasdaq Capital Market, shareholder approval must be obtained, under applicable Nasdaq rules, prior to the issuance of shares for certain purposes, including the issuance of Ordinary Shares equal to or greater than 20% of our then outstanding shares of Ordinary Shares in connection with a private refinancing or an acquisition or merger, unless an exemption is available from such approval. Such an exemption would be available if our Audit Committee authorized the filing of a prior written application with Nasdaq to waive the shareholder vote requirement if it believed the delay associated with securing such vote would seriously jeopardize our financial viability and Nasdaq granted us such an exemption.
The Company will also remain subject to the policies of the TSX-V.
In accordance with our amended and restated Memorandum of Association and Cayman Islands law, our shareholders do not have any preemptive rights to purchase or subscribe for any of our unissued or treasury shares.
Anti-Takeover and Dilutive Effects

We are not effectuating this Reverse Split to establish any barriers to a change of control or acquisition of our Company. The Ordinary Shares and Restricted Shares that are authorized but unissued provide our Board of Directors with flexibility to effect, among other transactions, public or private refinancings, acquisitions, stock dividends, stock splits and the granting of equity incentive awards. While these authorized but unissued shares may also be used by our Board of Directors, consistent with and subject to its fiduciary duties, to deter future attempts to gain control of us or make such actions more expensive and less desirable, the Reverse Split does not affect our Board of Directors' authority to issue additional shares from time to time without delay or further action by the shareholders except as may be required by applicable law, the Nasdaq rules or the policies of the TSX-V. The Reverse Split is not being recommended in response to any specific effort of which we are aware to obtain control of us, nor does our Board of Directors have any present intent to use the authorized but unissued Ordinary Shares or Restricted Shares to impede a takeover attempt. There are no plans or proposals to adopt other provisions or enter into any arrangements that have material anti-takeover effects.
In addition, the issuance of additional Ordinary Shares and Restricted Shares for any of the corporate purposes listed above could have a dilutive effect on earnings per share and the book or market value of our outstanding Ordinary Shares and Restricted Shares, depending on the circumstances, and would likely dilute a shareholder's percentage voting power in us. Holders of our Ordinary Shares and Restricted Shares are not entitled to preemptive rights or other protections against dilution. Our Board of Directors intends to take these factors into account before authorizing any new issuance of shares.
Accounting Consequences
The Reverse Split will not have an effect on the stated capital attributable to Ordinary Shares and Restricted Shares on our balance sheet because the par value of each of the Ordinary Shares and Restricted Shares will be increased by the same ratio as the ratio contemplated by the Reverse Split. Reported net income or loss per common share and book value per common share will be higher because there will be fewer Ordinary Shares and Restricted Shares, respectively. For purposes of this “Accounting Consequences” section, references to “common shares” refer to both the Ordinary Shares and Restricted Shares.


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United States Federal Income Tax Consequences
The following summary describes certain material U.S. federal income tax consequences of the Reverse Split to holders of Preferredour Ordinary Shares shalland Restricted Shares. This summary addresses the tax consequences only to a beneficial owner of our Ordinary Shares and Restricted Shares that is a citizen or individual resident of the United States, a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia or otherwise subject to U.S. federal income taxation on a net income basis in respect of our Ordinary Shares and Restricted Shares (a “U.S. holder”). This summary does not address all of the tax consequences that may be relevant to any particular shareholder, including tax considerations that arise from rules of general application to all taxpayers or to certain classes of taxpayers or that are generally assumed to be known by investors. This summary also does not address the tax consequences to persons that may be subject to special treatment under U.S. federal income tax law or persons that do not hold our Ordinary Shares and Restricted Shares as “capital assets” (generally, property held for investment). This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (“IRC”), U.S. Treasury regulations, administrative rulings and judicial authority, all as in effect as of June 15, 2011. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income tax consequences of the Reverse Split.
If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our Ordinary Shares and Restricted Shares, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Partnerships that hold our Ordinary Shares and Restricted Shares, and partners in such partnerships, should consult their own tax advisors regarding the U.S. federal income tax consequences of the Reverse Split.
Each shareholder should consult his, her or its own tax advisor regarding the U.S. federal, state, local and foreign income and other tax consequences of the Reverse Split.
The Reverse Split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, no gain or loss should be recognized by a U.S. holder upon the Reverse Split. Accordingly, the aggregate tax basis in the Ordinary Shares and Restricted Shares received pursuant to the Reverse Split should equal the aggregate tax basis in the Ordinary Shares and Restricted Shares surrendered and the holding period for the Ordinary Shares and Restricted Shares received should include the holding period for the Ordinary Shares and Restricted Shares surrendered.

Certain Canadian Federal Income Tax Considerations

The following is a summary of the principal Canadian federal income tax consequences generally applicable to a shareholder who, for purposes of the Income Tax Act (Canada) (the “Tax Act”) and at all relevant times, holds Ordinary Shares or Restricted Shares, as the case may be, as capital property and who is not affiliated with, and deals at arm's length with, the Company. Generally, the Ordinary Shares or Restricted Shares will be considered to be capital property of a shareholder provided that they are not held in the course of carrying on a business or in connection with an adventure or concern in the nature of trade.

This summary is not applicable to a shareholder: (i) that is a “financial institution” for the purposes of the mark-to market rules contained in the Tax Act; (ii) that is a “specified financial institution” or “restricted financial institution” as defined in the Tax Act; (iii) an interest in which is a “tax shelter investment” as defined in the Tax Act; or (iv) that reports its Canadian tax results in a currency other than Canadian currency. Such shareholders are advised to consult their own tax advisors. This summary also does not address any tax considerations relevant to the acquisition, holding or disposition of Ordinary Shares or Restricted Shares, as the case may be, other than those Canadian federal income tax issues that are directly the consequence of the proposed Reverse Split.

The summary is based on the current provisions of the Tax Act and the regulations thereunder, (the “Regulations”), and the current administrative practices and assessing policies of the Canada Revenue Agency (“CRA”) published in writing and publicly available prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act and the Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof and assumes that all such proposed amendments will be enacted in the form proposed. This summary does not otherwise take into account or anticipate any change in law, or administrative practices and assessing policies, whether by legislative, government or judicial decision or action.

This summary is of a general nature only and is not intended to be, and should not be entitledconstrued as, legal or tax advice to any particular shareholder. This summary is not exhaustive of all Canadian federal income tax considerations and does not take into account provincial, territorial or foreign tax considerations, which may vary from the Canadian federal income tax

13


considerations described herein. Shareholders are advised to consult their own tax advisors with regard to their particular circumstances.

Based on the Company's understanding of the current administrative practices and assessing policies of the CRA, a shareholder will not be considered to have disposed of his, her or its Ordinary Shares or Restricted Shares, as the case may be, solely as a result of the Reverse Split. Consequently, the Reverse Split will not result in the realization of a capital gain or capital loss by a shareholder. In general, the aggregate adjusted cost base of the Ordinary Shares or Restricted Shares, as the case may be, held by a shareholder immediately after the Reverse Split will be the same as the aggregate adjusted cost base of the Ordinary Shares or Restricted Shares, as the case may be, held by such shareholder immediately before the Reverse Split.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE REVERSE SPLIT PROPOSAL

14


PROPOSAL TWO - ADOPTION OF AN AMENDMENT TO ARTICLE SIX
OF THE COMPANY'S AMENDED AND RESTATED MEMORANDUM
OF ASSOCIATION TO REFLECT THE REVERSE SPLIT
General

On October 26, 2012, 2012, our Board unanimously approved the calling of the Meeting at which the shareholders are being asked to consider passing a special resolution to amend Article SIX of the Company's Memorandum of Association to reflect the Reverse Split (the “Amendment” and the proposal the “Amendment Proposal”). The Amendment Proposal will only be put forth to a vote of the holders of the Voting Shares if the Reverse Split Proposal is approved in such manner as described above. If the Reverse Split Proposal is not approved, this Amendment Proposal will not be deliberated at the Meeting.

We will adopt the Amendment upon the affirmative vote of not less than two-thirds of those shareholders that, being entitled to do so, vote in person or by proxy at the Meeting, assuming the presence of a quorum. The additional text added to Article SIX is attached as Appendix A to this proxy statement. If the Amendment Proposal is approved, the amended Memorandum of Association will be filed with the Registrar of Companies in the Cayman Islands concurrently with the special resolution relating to the Reverse Split Proposal becoming effective.
Security OwnershipThe sole purpose of Certain Beneficial Ownersthe Amendment is to ensure that our Memorandum of Association reflects the proposed Reverse Split. The Amendment will have no effect on your rights as a shareholder. The Amendment Proposal does not need to be approved in order to approve the Reverse Split Proposal. If the Reverse Split Proposal is not approved, the Amendment Proposal will not be deliberated at the Meeting.
Text of Proposed Amendment
The text of the proposed Amendment is set forth in Appendix A to this Proxy Statement. If and Directors & Executive Officerwhen effected by our Board, the Amendment will become effective upon its filing with the Registrar of Companies in the Cayman Islands. 
Effective Date
Upon receipt of shareholder approval for the Reverse Split Proposal and the Amendment Proposal and pursuant to Section 62 of the Cayman Island Companies Law and the resolutions of the Board dated October 26, 2012 and upon the Company's receipt of a written letter from an underwriter or underwriters indicating that such underwriter or underwriters are ready, willing and able to proceed with an offering by the Company that enables us to meet all of the Nasdaq listing requirements, the Board will file the Amendment with the Registrar of Companies of the Cayman Islands. The Amendment will be effective as of the date of filing with the Registrar of Companies in the Cayman Islands (the “Effective Time”).

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE AMENDMENT PROPOSAL


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OTHER INFORMATION

Principal Shareholders

The following table sets forth information concerning the beneficial ownership of the Ordinary Shares and VotingRestricted Shares held onas of the Reference Datedate of this proxy statement by (i) each person known to the Corporationus to own beneficially more than 5% of the issued and outstanding Ordinary Shares or Restricted Voting Shares, (ii) each of the Corporation'sour directors, (iii) each of the executive officers, and (iv) all directors and executive officers as a group.

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Applicable percentage ownership is based on 5,149,125 Ordinary Shares, 13,284,028 Restricted Shares, 3,983,502 warrants to acquire an aggregate of 3,983,502 Ordinary Shares and 216,974 options to acquire an aggregate of 216,974 Ordinary Shares. Each of the warrants and options included in this beneficial ownership table are exercisable within 60 days of the Proxy Statement.

5% Beneficial Owners
Name and Address of Beneficial OwnerNature of Beneficial Ownership
Percentage of Class
of Outstanding
Securities(1) (2)
Type of OwnershipNumberClass of Shares
KBW Financial Services Master Fund, Ltd.
787 Seventh Avenue, 6th Floor
New York, NY 10019
Direct500,000Ordinary10.8%
Stilwell Value Partners V, L.P.
111 Broadway. 12th Floor
New York, NY 10006
Direct506,500Ordinary10.9%
Oakmont Capital Inc.
45 St. Clair Avenue West
Suite 400. Toronto, Ontario
Direct500,000Ordinary10.8%
Atlas Investors LLC (3)
Four Forest Park
Farmington, CT 06032
Direct2,330,092Ordinary40.1%
Kingsway America Inc.
150 Northwest Point Boulevard, 2nd Floor
Elk Grove Village, IL 60007
Direct13,044,851Restricted Voting94.5%
Mendota Insurance Company
2805 Dodd Road
Eagan, MN 55121
Direct760,010Restricted Voting5.5%
Officers and Directors
Scott WollneyDirect961,058Ordinary18.8%
Jordan KupinskyDirect182,892Ordinary3.9%
Gordon PrattIndirect
2,330,092(4)
Ordinary40.1%
Larry Swets, Jr.Direct40,792Ordinary*
Paul RomanoDirect218,965Ordinary4.6%
Joseph ShugrueDirect265,750Ordinary5.5%
Bruce GilesDirect217,286Ordinary4.7%
Leslie DiMaggioDirect248,023Ordinary5.2%
All Directors, Director Nominees and Executive Officers as a Group4,464,858Ordinary64.6%
Name and Address of Beneficial Owner 
Title
Of Class
 
Amount and
Nature of
Beneficial
Ownership(1) (2)
 
Voting
 Power
 
5% Beneficial Owners
Atlas Investors LLC(3)
 Ordinary Shares  2,330,092
 31.68
%
Kingsway America, Inc. (5)
 Restricted Shares  13,284,028
 30.00
%
Directors and Executive Officers
Scott Wollney Ordinary Shares  961,058
 13.07
%
Jordan Kupinsky Ordinary Shares  182,891
 2.49
%
Gordon Pratt(4)
 Ordinary Shares  2,330,092
 31.68
%
Larry Swets, Jr. Ordinary Shares  40,791
 *
%
Paul Romano Ordinary Shares  218,965
 2.98
%
Joseph Shugrue Ordinary Shares  265,750
 3.61
%
Bruce Giles Ordinary Shares  217,286
 2.95
%
Leslie DiMaggio Ordinary Shares  248,023
 3.37
%
All Directors, Director Nominees and Executive Officers as a Group (8 individuals) Ordinary Shares  4,464,856
 60.7
%
* -- Less than 1% of the outstanding Ordinary Shares.ordinary shares

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Notes:
(1)
As atof the Reference Date,date of this Proxy Statement, there were 4,628,2925,149,125 Ordinary Shares and 13,804,86113,284,028 Restricted Voting Shares outstanding. Included in the shares above are the following convertible securities, exercisable within 60 days of the Reference Date,date hereof, that are deemed to be beneficially owned by the persons holding them for the purpose of computing that person's percentage ownership: Scott Wollney holds 471,045 warrants and 12,500 options; Jordan Kupinsky holds 72,89272,891 options; Gordon Pratt (managed through Atlas Investors LLC, see (3) below)holds 1,144,650 warrants and 40,792 options; Larry Swets, Jr. holds 40,79240,791 options; Paul Romano holds 101,300 warrants and 12,500 options; Joseph Shugrue holds 126,625 warrants and 12,500 options; Bruce Giles holds 101,300 warrants and 12,500 options; and Leslie DiMaggio holds 116,495 warrants and 12,500 options. These shares are not treated as outstanding for the purpose of computing the percentage beneficial ownership of any other person.

(2)
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of a vested option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of Ordinary Shares outstanding on the Record Date
Date.

(3)Managed by Gordon Pratt, Managing Member, who is a director of the Corporation.
our director.
(4)Held through Atlas Investors LLC, of which he is a Managing Member.
MANAGEMENT PROPOSALS TO BE VOTED ON
To the knowledge of the board of directors of the Corporation (the “Board”), the only matters to be brought before the Meeting are set forth in the accompanying Notice of Meeting. These matters are described in turn under the headings below.

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Proposal 1: Election of Directors
At the Meeting, the Shareholders will be asked to elect the Corporation's directors of the Corporation to hold office until the next annual meeting of Shareholders or until the successors of such directors are duly elected or appointed.
The persons designated as proxyholders in the accompanying Instrument of Proxy (absent contrary directions) intend to vote for the election of the directors as set forth herein and therein. The Corporation does not contemplate that any of such nominees will be unable to serve as directors; however, if for any reason any of the proposed nominees do not stand for election or are unable to serve as such, proxies held by the persons designated as proxyholders in the accompanying Instrument of Proxy will be voted for another nominee in their discretion unless the Shareholder has specified in his or her form of proxy that his or her Voting Shares are to be withheld from voting in the election of directors.
Directors
The following sets forth the name and age of each of the persons proposed to be nominated for election as a director of the Corporation, and the period during which the respective nominees have served as directors. The four nominees proposed for election are currently directors of the Corporation.
(5)Includes 253,337 shares held by Mendota Insurance Company, a 100% owned subsidiary of Kingsway America Inc.
(6)
NameAgeDate First AppointedCurrent Position
Jordan Kupinsky39Director since: December 21, 2009Director
Gordon Pratt50Director since: December 31, 2010Chairman of
Kingsway America, Inc. recently sold 1,621,621 shares to Magnolia Capital Partners, LLC, however the Board
Larry Swets, Jr.37Director since: December 31, 2010Director
Scott Wollney43Director since: December 31, 2010President, Chief Executive Officer and Directortransaction was not completed until after the Record Date.


Business Experience
The following is a brief accountDeadline for Submission of Shareholder Proposals for the 2013 Annual Meeting of the educationShareholders
If a shareholder wishes to have a proposal included in the Company's Proxy Statement and business experienceform of proxy for the 2013 annual meeting of shareholders, the proposal must conform to the applicable proxy rules of the nominees during at leastSecurity Exchange Commission concerning the past five years, indicating their principal occupation duringsubmission and content of proposals and must be received by the period, and the name and principal business of the organization by which they were employed.
Jordan Kupinsky
Since 2008, Mr. Kupinsky has been a Managing Director with Windsor Private Capital Inc. and its predecessor JJR Capital Corp. Prior to joining Windsor, he was a Vice President at Greenhill & Co., an independent global investment banking firm, listed on the NYSE, focused on mergers & acquisitions, financial restructuring and merchant banking, from March 2006 to May 2008. Prior to joining Greenhill, Mr. Kupinsky held the positions of Vice President of Corporate Development and General Counsel at Minacs Worldwide Inc., a publicly traded company on the Toronto Stock Exchange from July 2002 to February 2005. Mr. Kupinsky began his career practicing corporate and securities law at Torys LLP in Toronto (from 1997 to 1999) and was also an investment banking associate at Houlihan Lokey Howard & Zukin from 1999 to 2002. He holds a Joint MBA and LL.B. degree from the Schulich School of Business and Osgoode Hall Law School.at York University.
Gordon Pratt
Since March 2004, Mr. Pratt has been a Managing Member of Fund Management Group LLC in Connecticut. From June 2004 to April 2006, he was also the Senior Vice-President, Finance of the Willis Group in New York, prior to which he was the Managing Director of Hales Capital Advisors LLC and the Managing Partner of Distribution Partners Investment Capital L. P. Mr. Pratt has also served as Chairman and Vice Chairman of the boards of directors of NASDAQ listed companies, including FMG Acquisition Corp. and United Insurance Holdings Corp. He holds a Master of Management degree from Northwestern University as well as a Bachelor of Arts degree from Cornell University.
Larry Swets, Jr.
Since June 30, 2010, Mr. Swets has been the CEO of Kingsway Financial Services Inc. a shareholder of the Corporation, prior to which he was the Executive VP, Corporate Development of Kingsway Financial Services Inc. since January 2010. He was the Managing Director of Itasca Financial LLC from May 2005 until January 2010. Mr. Swets holds a Chartered Financial Analyst designation from the CFA Institute. He received a Masters of Science degree from De Paul University in 1999 and a Bachelors of Business and Finance degree from Valparaiso University in 1997.
Scott Wollney
Mr. Wollney has served as President and CEO of the Corporation since its formation on December 31, 2010. From July 19, 2009 until December 31, 2010, Mr. Wollney was President and CEO of Kingsway America Inc., a shareholder of the Corporation. From April 1, 2009 through July 18, 2009, he was President and Chief Executive Officer of Kingsway America Inc. - Commercial Lines. From May 13, 2008 until March 31, 2009, he was the President and CEO of Lincoln General Insurance Company prior to which

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he held various positions with Avalon Risk Management, Inc. since 1998, including as President. Mr. Wollney received a Master of Business Administration degree from the Northwestern University Kellogg Graduate School of Management in 2000 and a Bachelor of Arts degree from the University of Illinois in 1991.
Family Relationships
There are no family relationships between any director or executive officer.
Involvement in Certain Legal Proceedings
To the best of the Corporation's knowledge, none of the Corporation's directors, director nominees or executive officers has, during the past ten years:
had any bankruptcy or insolvency petition filed by or against him, or had a receiver or similar officer appointed with respect to, him, his property or any business of which he was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time;
been convicted in a criminal proceeding or been a named subject of a pending criminal proceeding (excluding traffic violations and other minor offences);
been subject to any cease trade or other order, judgment, or decree not subsequently reversed, suspended or vacated of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his engaging or involvement in any typeclose of business securities, futures, commodities or banking activities; or
been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission (“SEC”), the Commodity Futures Trading Commission or any self-regulatory organization to have violated a federal or state securities or commodities law, where the judgment has not been reversed, suspended, or vacated, or been the subject of, or a party to, any order, judgment, decree or finding, not subsequently reversed, suspended or vacated, of any such body alleging any such violation.
Proposal 2. Ratification of Appointment of Independent Registered Public Accountant
The Board has selected the firm of Johnson Lambert & Co. LLP, which firm has been the auditor of the Corporation since June 20, 2011to hold office until the next annual meeting and is submitting selection to the Shareholders for ratification. A representative of Johnson Lambert & Co. LLP is expected to be available in person or by conference telephone at the Meeting and will have the opportunity to make a statement if the representative desires to do so. The representative is expected to be available to respond to appropriate questions.

KPMG LLP was appointed the Corporation's auditor on an interim basis on December 31, 2010 in connection with the formation of the Corporation through27, 2012. In addition, if a business combination structured asshareholder intends to present a reverse triangular merger (the “Qualifying Transaction”) among JJR VI Acquisition Corp., American Insurance Acquisition Inc. (“AIAI”), and Atlas Acquisition Corp., a wholly-owned subsidiary of JJR VI Acquisition Corp. Since that time, the Audit Committee, with the approval of the Board, undertook a request for proposals (“RFP”) process to select a firm of chartered accountants to be proposed to the Shareholders as auditor for 2011.
The RFP process was conducted by management with oversight by the Audit Committee. Firms were invited to bid including KPMG LLP and Johnson Lambert & Co. LLP. Following written and oral presentations by each firm, management and the Audit Committee evaluated each firm against specific criteria. The Audit Committee recommended the appointment of Johnson Lambert & Co. LLP to the Board in June 2011.
KPMG LLP's reports onproposal at Atlas' financial statements for the year ended December 31, 2010 did not contain any adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles. During the period in which KPMG LLP was engaged there were no disagreements with the Corporation on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Corporation would have caused it to make reference thereto in, or in connection with, its reports on the financial statements for the period covered by its audit.
Audit Fees
The aggregate fees billed by the Corporation's external auditors in each of the last two fiscal years are set out in the table below.
Financial Year Ending
Audit Fees
(US$)
Audit-Related Fees (US$)
Tax Fees
(US$)
All Other Fees
(US$)
December 31, 2011$211,000NilNilNil
December 31, 2010$783,604NilNil$40,000

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“All Other Fees” incurred during financial year ending December 31, 2010 relate to KPMG LLP's preparation of an “Agreed Upon Procedures” letter in support of the pro forma financial statements prepared by the Corporation for use in connection with the private placement that formed part of the Qualifying Transaction.
Reliance on Certain Exemptions
At no time since the commencement of the Corporation's most recently completed financial year has the Corporation relied on the exemption in Section 2.4 (De Minimis Non-audit Services) of Multilateral Instrument 52-110 Audit Committees (“MI 52-110”), a Canadian pronouncement relevant to the Corporation's listing on the TSX Venture Exchange (“TSX-V”) or an exemption from MI 52-110, in whole or in part, granted under Part 8 (Exemptions).
Pre-Approval Policies and Procedures
The Audit Committee has adopted specific policies and procedures for the engagement of non-audit services as described in its charter set out at Appendix “A” attached hereto.
The ratification of the selection of Johnson Lambert & Co. LLP as the Corporation's independent accountants will require the affirmative vote of the holders of a majority of the votes cast by the holders of Voting Shares.
The persons designated as proxyholders in the accompanying Instrument of Proxy (absent contrary directions) intend to vote for the ratification of the selection of Johnson Lambert & Co. LLP as the auditor of the Corporation, unless the Shareholder has specified in the Instrument of Proxy that Voting Shares represented by such form of proxy are to be withheld from voting in respect thereof.
Proposal 3: Approval of Stock Option Plan
On January 3, 2011, the Corporation adopted a 10% rolling stock option plan (the “Stock Option Plan”) in order to advance the interests of the Corporation by providing Eligible Persons (as defined under the Stock Option Plan) with incentives. In accordance with TSX-V Policy 4.4 - Incentive Stock Options, rolling option plans must receive shareholder approval annually at the Corporation's annual meeting. Shareholders will therefore be asked at the Meeting to consider and, if deemed appropriate, to pass, with or without variation, a resolution re-approving the Stock Option Plan (the “Option Plan Resolution”).
The Stock Option Plan provides for the granting of options to purchase Ordinary Shares (“Options”) to Eligible Persons. Options may be granted at the discretion of the Compensation Committee in such number that may be determined at the time of grant, subject to the limits set out in the Stock Option Plan. The number of Ordinary Shares issuable under the Stock Option Plan is not more than 10% of the number of Ordinary Shares that are issued and outstanding as at the date of the grant of an Option. Any increase in the issued and outstanding Ordinary Shares will result in an increase in the available number of Ordinary Shares issuable under the Stock Option Plan, and any exercises of Options or expirations or terminations of Options will make new grants available under the Stock Option Plan.
The exercise price of all Options is established by the Compensation Committee at the time of grant, provided that the exercise price shall not be less than the market price of the Ordinary Shares which will be equal to the volume weight average trading price of the Ordinary Shares on the TSX-V (or any other stock exchange on which the Ordinary Shares are then listed for trading) for the five trading days immediately preceding the date on which the Option is granted. The expiry of Options is also established by the Compensation Committee at the time of the grant, provided that the Options have a maximum term of ten years. The Compensation Committee may determine when any Option will become exercisable and may determine that the Option will be exercisable in instalments or pursuant to a vesting schedule.
A complete copy of the Stock Option Plan is attached hereto as Appendix “B”.
As of the Reference Date, the Corporation had 401,849 outstanding Options, at an average exercise price of $1.92 per Ordinary Share, broken down as follows:
Date of GrantNumber of Ordinary Shares underlying unexercised OptionsOption Exercise Price ($)Option Expiration Date
March 18, 2010(1)
32,100$1.00March 18, 2020
January 18, 2011369,749$2.00January 18, 2021
Notes:
(1)Issued pursuant to stock option agreements prior to implementation of the Stock Option Plan.
On January 18, 2011, the Corporation granted 369,749 Options to directors and officers of the Corporation under the Stock Option Plan. Each Option is exercisable into one Ordinary Share at an exercise price of $2.00 per Ordinary Share. The Options vest 25% at the date of grant and 25% on each of the next three anniversary dates of the grant date and expire on January 18, 2021.

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The Board believes that passing of the following resolution is in the best interest of the Corporation. Accordingly, Shareholders will be asked to approve the following ordinary resolution:
BE IT RESOLVED THAT the Stock Option Plan be and it is hereby ratified and approved.
The persons designated as proxyholders in the accompanying Instrument of Proxy (absent contrary directions) intend to vote for the Option Plan Resolution.
CORPORATE GOVERNANCE PRACTICES AND CODE OF ETHICS
Board Leadership Structure and Risk Oversight
Currently, Gordon Pratt serves as the Chairman of the Board and Scott Wollney serves as the Corporation's President & Chief Executive Officer. Separating the positions of Chief Executive Officer and Chairman of the Board allows the Corporation's Chief Executive Officer to focus on day-to-day leadership and the Corporation's performance, while allowing the Chairman of the Board to lead the Board in its fundamental role of providing advice and oversight to management.

The Board does not have a policy as to whether the Chairman of the Board should be a non-management director or a member of management.The Board recognizes that no single leadership structure is right for all companies and, depending on the circumstances, other leadership structures might be appropriate. The Board believes, however, that the current leadership structure is effective and appropriate, allows for a separation of executive powers, provides an experienced Chairman with whom the Chief Executive Officer can discuss issues facing the Corporation, and gives a significant voice to non-management directors.
Board Meetings
During the fiscal year ended December 31, 2011, there were 11 meetings of the Board and each director attended at least 75% of all meetings of the Board and the Audit Committee (if he was a member). Three of the directors attended the 20112013 annual meeting of Shareholders.
Determinationshareholders without the inclusion of Independencethe proposal in the Company's proxy materials and written notice of Nominees for Election
Thethe proposal is not received by the Company on or before December 27, 2012, proxies solicited by the Board assumes overall responsibility for the direction of the Corporation through its delegation to senior management and through the ongoing function of the Board and its committees, as applicable.
Directors are considered independent if they have no direct or indirect material relationship with the Corporation. A “material relationship” is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of a director's independent judgment. In determining whether a material relationship exists, the Board consults with Atlas' legal counsel to ensure that its determinations are consistent with relevant securities and other laws, rules and regulations and court decisions.
Further, the Board has adopted corporate governance guidelines that are contained in the National Instrument 58-101 Disclosure of Corporate Governance Practices, (“NI 58-101”), which prescribes certain disclosure of Atlas' corporate governance practices, and National Policy 58-201 Corporate Governance Guidelines (“NP 58-201”), which provides non-prescriptive guidelines on corporate governance practices for reporting issuers. The Board believes that good corporate governance improves corporate performance and benefits the Shareholders. This discussion addresses the Corporation's compliance with NI 58-101.
There are four directors on the Board, of which two are independent directors for purposes of NI 58-101 and NP 58-201. Scott Wollney is not independent as he is a member of management of the Corporation. Larry Swets is not independent as he is a member of management of Kingsway Financial Services, Inc., a company that may have a material relationship with the Corporation.
Directorships
The following table sets out the proposed directors of the Corporation that are presently directors of other reporting issuers:
Name
Name and Jurisdiction
of Reporting Issuer
Name of Exchange or Market
Jordan KupinskyFerrum Americas Mining Inc.TSX
WB II Acquisition Corp.TSX
Larry Swets, Jr.Kingsway Financial Services Inc. (Canada)TSX, NYSE
Orientation and Continuing Education
The Board is committed to having appropriate levels of knowledge among members of the Board relative both to the Corporation and its industry. New members to the Board are oriented through direct interaction with the balance of the Board and management and will have visibility to past and current corporate records as well as operating results. Committee chairpersons and other members of the Board maintain subject matter expertise through activities relating both to the Corporation and other educational resources.

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Compensation
The Compensation Committee is responsible for making recommendations to the Board in respect of director and executive officer remuneration matters, with the overall objective of ensuring maximum shareholder benefit from the retention of high quality board and executive team members. For details on the compensation of the Chief Executive Officer, Chief Financial Officer and Directors, please see the section below entitled “Executive Compensation”.
Assessments
The Board, through its Corporate Governance and Nominating Committee, regularly assesses the overall performance of the Board, the committees, and the individual directors through a combination of formal and informal means.
Committees of the Board
The Board has three standing committees to assist it in carrying out its duties. The standing committees are: (i) Audit Committee; (ii) Compensation Committee; and (iii) Corporate Governance and Nominating Committee.
(i) Audit Committee
The Audit Committee is elected annually at the first meeting of the Board held after the Corporation's2013 annual meeting of Shareholders. Duringshareholders will confer discretionary authority to vote on the fiscal year ended December 31, 2011, the Audit Committee met eleven times. In addition, the Audit Committee meets annually with the Corporation's external auditors.

The Audit Committee is comprised of Jordan Kupinsky (Chairman), Gordon Pratt and Larry Swets. Except for Mr. Swets, each member of the Audit Committee is independent. While the Corporation is not subject to any independence standards of a US national securities exchange or national securities association dealer quotation system, the Corporation follows the independence standards set forth in MI 52-110. See discussion below under “TSX Venture Exchange Matters”.
Relevant Education and Experience
Mr. Kupinsky has been actively involvedproposal if presented at the Board level of the Corporation as an independent director and member of the Audit Committee since the date of formation of the capital pool company. Prior to the Qualifying Transaction, Mr. Kupinsky has considerable experience in corporate finance, mergers and acquisitions, financial restructuring and merchant banking. Mr. Kupinsky has experience in financial statement review with both public and private companies. Mr. Kupinsky holds a Masters of Business Administration degree and a JD from the Schulich School of Business and Osgoode Hall Law School.
Mr. Pratt has more than 25 years' experience in insurance company financial statement analysis and assessment. He holds a Master of Management degree in Finance from Northwestern's Kellogg School of Management. His experience includes: service as a director of eight insurance companies and/or such insurance companies' holding company parents, including service as chairman or vice chairman of the board of directors of two publicly-traded insurance companies and/or such insurance companies' holding company parents, and service as a member of the Audit Committee for one insurance company's holding company parent. Mr. Pratt had specialized training in insurance company statutory and GAAP accounting while serving as an officer of The Chase Manhattan Bank, N.A. As a partner in four private equity funds focused on investment in insurance companies and insurance-related businesses, Mr. Pratt has evaluated financial statements for more than 50 insurance companies and/or their holding company parents, including such companies' use of accounting estimates, accruals, and provisions. He has made investment decisions and offered his opinion to company managements as a result of his evaluation concerning such financial statements, which covered a wide range of complexity and accounting issues. From his service as a member of certain boards of directors, he has an understanding of internal controls and procedures for financial reporting for insurance companies and/or insurance holding company parents.
Mr. Swets holds a Chartered Financial Analyst designation from the CFA Institute. He received a Masters of Science degree from De Paul University in 1999 and a Bachelors of Business and Finance degree from Valparaiso University in 1997. He has served as executive officer and director of public and private companies.
The Board has determined that Mr. Kupinsky, as Audit Committee Chairman, along with Mr. Pratt as Chairman of the Board, because of their accounting and financial management expertise discussed above, are both considered an “audit committee financial expert” as that term is defined under the Securities Exchange Act of 1934 and, accordingly, that at least one audit committee financial expert is serving on the Corporation's audit committee. MI 52-110 provides that an individual is “financially literate” if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation's financial statements. All of the members of the audit committee are financially literate as that term is defined.
Audit Committee Oversight
At no time since the commencement of the Corporation's most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board.

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Reliance on Certain Exemptions
At no time since the commencement of the Corporation's most recently completed financial year has the Corporation relied on the exemption in Section 2.4 (De Minimis Non-audit Services) of MI 52-110 or an exemption from MI 52-110, in whole or in part, granted under Part 8 (Exemptions) of MI 52-110.
Audit Committee Report
The Audit Committee reviews the Corporation's annual and quarterly financial statements, oversees the annual audit process and internal accounting controls, the resolution of issues identified by the Corporation's auditors and recommends to the Board the firm of independent auditors to be nominated for appointment by the Shareholders at the next annual meeting of Shareholders. Management is responsible for the Corporation's financial statements and reporting process, including the Corporation's system of internal controls.

The independent registered public accounting firm is responsible for expressing an opinion on the conformity of the Corporation's audited financial statements with US Generally Accepted Accounting Principles (US GAAP). The Audit Committee reports as follows:
The Audit Committee reviewed and discussed with management the Corporation's 2011 audited financial statements;
The Audit Committee discussed with the Corporation's independent registered public accounting firm, Johnson Lambert & Co. LLP, the matters required to be discussed by the statement on Auditing Standards No. 61, as amended, which include matters related to the conduct of the audit of the Corporation's financial statements;
The Audit Committee has received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding its communications with the Audit Committee concerning independence and the Audit Committee has discussed with the independent registered public accounting firm its independence from the Corporation; and
Based on the reviews and discussions described above, the Audit Committee recommended to the Corporation's Board that the Corporation's 2011 audited financial statements, including management's discussion and analysis of the Corporation's financial condition and results of operations, be included in the 2011 Annual Report on Form 10-K filed with the US Securities and Exchange Commission.
The Audit Committee
Jordan Kupinsky
Gordon Pratt
Larry Swets Jr.
A copy of the Audit Committee's charter is posted on the Corporation's website at www.atlas-fin.com, under “Investor Relations” and a written copy is available to Shareholders upon written request to the Corporation, to the attention of the Scott Wollney.
TSX Venture Matters
With regard to the Corporation's listing on the TSX-V, it is a “venture issuer” as defined in MI 52-110 and it relies on the exemption in Section 6.1 of MI 52-110 relating to Parts 3 (Composition of Audit Committee) and 5 (Reporting Obligations).

(ii) Compensation Committee
The Compensation Committee is comprised of Larry Swets, Jr. (Chairman), Jordan Kupinsky and Gordon Pratt. Except for Mr. Swets, each member of the Compensation Committee is independent. The Compensation Committee met one time during the fiscal year ended December 31, 2011.
The Compensation Committee oversees the remuneration policies and practices of the Corporation. The principal responsibilities of the Compensation Committee include: (i) considering the Corporation's overall remuneration strategy and, where information is available, verifying the appropriateness of existing remuneration levels using external sources for comparison; (ii) comparing the nature and amount of the Corporation's directors' and executive officers' compensation to performance against goals set for the year while considering relevant comparative information, independent expert advice and the financial position of the Corporation; and (iii) making recommendations to the Board in respect of director and executive officer remuneration matters, with the overall objective of ensuring maximum shareholder benefit from the retention of high quality board and executive team members.
The Compensation Committee reviewed executive compensation with management in the course of the 2012 budgeting process. Authority was extended to management within the approved budget for compensation. Neither the Corporation nor the Board engaged a compensation consultant in the years ended December 31, 2010 or 2011.

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(iii) Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee is comprised of Jordan Kupinsky (Chairman), Larry Swets and Scott Wollney. Jordan Kupinsky is considered the only independent member of the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee met one time during the fiscal year ended December 31, 2011.
The Corporate Governance and Nominating Committee oversees the Corporation's approach to corporate governance matters. The principal responsibilities of the Corporate Governance and Nominating Committee include: (i) monitoring and overseeing the quality and effectiveness of the corporate governance practices and policies of the Corporation; (ii) considering nominees for independent directors of the Corporation; (iii) adopting and implementing corporate communications policies and ensuring the effectiveness and integrity of communication and reporting to the Corporation'smeeting. shareholders and the public generally; (iv) planning for the succession of directors and executive officers of the Corporation, including appointing, training and monitoring senior management to ensure that the board and management have appropriate skill and experience; and (v) administering the Board's relationship with the management of the Corporation.
The Corporation receives suggestions for potential director nominees from many sources, including members of the Board, advisors, and Shareholders. Any such nominations, together with appropriate biographical information, should be submitted to the Corporation in accordance with the Corporation's policies governing submissions of nominees discussed below. Any candidates submitted by a Shareholder or Shareholder group are reviewed and considered in the same manner as all other candidates. Qualifications for consideration as a board nominee may vary according to the particular areas of expertise being sought as a complement to the existing board composition. However, qualifications include high level leadership experience in business activities, breadth of knowledge about issues affecting the Corporation, experience on other boards of directors, preferably public company boards, and time available for meetings and consultation on Corporation matters. The Corporate Governance and Nominating Committee seeks a diverse group of candidates who possess the background, skills and expertise to make a significant contribution to the Board, to the Corporation and its Shareholders, though the Corporation does not have a formal policy with regard to the consideration of diversity in identifying director nominees. The independent directors, in addition to any other board members as may be desirable, evaluate potential nominees, whether proposed by Shareholders or otherwise, by reviewing their qualifications, reviewing results of personal and reference interviews and reviewing such other information as may be deemed relevant.
Candidates whose evaluations are favorable are then recommended by the Corporate Governance and Nominating Committee for selection by the full Board. The Board then selects and recommends candidates for nomination as directors for Shareholders to consider and vote upon at the annual meeting. In general, the Corporation does not employ executive search firms, or pay a fee to any third party, to locate qualified candidates for director positions.
Shareholder Nominations for Directors
A Shareholder wishing to nominate a candidate for election to the Board at any annual meeting at which the Board has determined that one or more directors will be elected shall submit a written notice of his or her nomination of a candidateproposals to Atlas' executive offices, 150 Northwest Point Boulevard, Elk Grove Village, IL 60007 Attention: Scott Wollney. The submission must be received atAtlas reserves the Corporation's principal executive offices within the timeframe set forth below in “Shareholder Proposals for the 2013 Annual Meetingright to reject, rule out of Shareholders”.
In order to be valid, a Shareholder's notice must set forth (i) the name and address of the Shareholder, as they appear on the Corporation's books, as well as the Shareholder's business address and telephone number and residence address and telephone number; (ii) the class and number of shares of the Corporation which are beneficially owned by the nominating Shareholder; (iii) the name, age, business address and residence address of each nominee proposed in the notice; (iv) any relationship of the nominating Shareholder to the proposed nominee; (v) the principal occupation or employment of the nominee; (vi) the class and number of shares of the Corporation's stock beneficially owned by the nominee, if any; (vii) a description of all arrangements or understandings between the Shareholder and each nominee and anytake other persons pursuant to which the Shareholder is making the nomination; and (viii) any other information required to be disclosed in solicitations of proxies for election of directors or information otherwise required pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, relating to any person that the Shareholder proposes to nominate for election as a director, including the nominee's written consent to being named in the proxy statement as a nominee and to serving as a director if elected.
Executive Officers
The following table sets forth certain information regarding Atlas' and its insurance subsidiaries' executive officers:

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NameAgeDate First AppointedCurrent Position
Scott Wollney43December 31, 2010President, Chief Executive Officer and Director
Paul Romano50December 31, 2010Vice President and Chief Financial Officer
Bruce Giles53December 31, 2010Vice President, Underwriting
Joseph Shugrue48December 31, 2010Vice President, Claims
Leslie DiMaggio43December 31, 2010Vice President, Operations

Biographical information for each of the officers is set out below, except for Scott Wollney, President & Chief Executive Officer, which is contained in the section captioned “Business Experience” under the heading Proposal 1: Election of Directors of the Proxy Statement.
Paul Romano
Prior to his current position with the Corporation, Mr. Romano was the Vice President and Treasurer of Kingsway America Inc. Since 2002, he has held various Vice President and Director positions with American Country Insurance Company and its affiliates. Mr. Romano holds a Certified Public Accountant designation in the State of Illinois. He received a Master of Business Administration degree from the Northwestern University Kellogg Graduate School of Management in 1996 and a Bachelor of Science, Accounting degree from the University of Illinois in 1984.
Bruce Giles
Bruce Giles was previously Assistant Vice President of Commercial Underwriting for Kingsway America Inc., prior to which he held various positions with Kingsway America Inc. from December 2003 to June 2010. From 2000 to 2003, he held various positions with Allstate Insurance Group.

Joseph Shugrue
Joseph Shugrue held various senior management positions with American Service and Kingsway America Inc. beginning in March 2004. Prior to that time, he held positions with other specialized insurance businesses beginning in October 1986.
Leslie DiMaggio
Leslie DiMaggio was previously the Vice President, Information Technology for Kingsway Financial Services Inc. from November 2008 to June 2010, prior to which she was the President, CEO and COO of Southern United Fire Insurance Company from April 2007 to November 2008. From 2000 until 2008, she held various other executive positions at Kingsway America Inc.
Code of Business Conduct and Ethics
The Corporation has a Code of Business Conduct and Ethics that applies to all of Atlas' employees, officers and directors. The Code of Ethics is designed to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure of financial information in the public filings and the Corporation's communications and compliance with applicable laws, rules and regulations. The Code of Business Conduct and Ethics is posted on the Corporation's website at www.atlas-fin.com, under “Investor Relations” and a written copy is available to Shareholders upon written request to the Corporation, to the attention of Scott Wollney.
EXECUTIVE COMPENSATION
Compensation for executives of the Corporation is reviewed annually by the Compensation Committee of the Board. Current compensation was set based on the following criteria: (i) size and scale of the Corporation; (ii) nature of the Corporation's strategic objectives; and (iii) each executive's role and responsibility. Industry data as well as the potential for incentive compensation is also taken into consideration in the regular evaluation of base salary.
Employment agreements were executed with the Corporation's executives in 2011 with an initial effective term of January 1, 2011 through December 31, 2013. These agreements provide for compensation based on a combination of base salary and incentive compensation. Incentive compensation in the first year is based primarily on the Corporation achieving financial objectives set forth in the Filing Statement dated December 16, 2010 made in support of the Qualifying Transaction. Incentive compensation in subsequent years will be based on a combination of financial results and the achievement of strategic objectives. Under the current plan, incentive compensation can be paid in an amount up to 75% of the subject employees' base salary. Final determination of incentive compensation is subject to approval by the Board. See also “Employment Agreements with Named Executive Officers” below.
Option-based Awards
Subject to the terms and conditions of the Stock Option Plan, the Compensation Committee of the Board is responsible for granting Option-based awards to executive officers as an incentive. In determining appropriate grants, the Compensation Committee considers

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contributions to the Corporation's operating results as well as expectations relative to near and longer term strategic goals and objectives in support of profitable growth.
Summary Compensation Table
The following table sets forth information concerning the total compensation for the years ended December 31, 2011 and December 31, 2010 to the Chief Executive Officer, the Chief Financial Officer, and the three highest paid executive officers of the Corporation whose total compensation exceeded $100,000, if any (collectively, the “Named Executive Officers”) and the Corporation's directors:
Name and Principal PositionYear Ended Dec. 31Salary (US$)
Bonus
(US$)
Option-Based Awards ($)(1)
Non-Equity Incentive Plan Compensation ($)Nonqualified Deferred Compensation Earnings
All Other Compensation (US$)(5)
Total Compensation ($)(5)
Paul A. Romano(2)
Vice-President and Chief Financial Officer
2011$175,000$70,000$30,900NilNil$6,646$287,050
2010——————N/A
Scott Wollney(2)
Chief Executive Officer and Director
2011$275,000$110,000$30,900NilNil$8,654$431,600
2010——————N/A
Ronald D. Schmeichel(3)
Former Chief Executive Officer and Chief Financial Officer
2011NilNilNilNilNilNilNil
2010NilNil$56,381NilNilNil$56,381
Leslie DiMaggio
VP Operations
2011$175,000$70,000$30,900NilNilNil$280,250
2010——————N/A
Bruce Giles(4)
VP Product Development and Underwriting
2011$150,000$60,000$30,900NilNilNil$244,659
2010——————N/A
Joseph Shugrue(4)
VP Claims
2011$175,000$70,000$30,900NilNilNil$280,250
2010——————N/A
Notes:
(1)
Black-Scholes option pricing model was used to estimate the fair value of option awards using the following assumptions - risk-free interest rate 2.27% to 3.13%; dividend yield 0.0%; expected volatility 100%; expected life of 6 to 9 years. Each of the individuals noted in the above Summary Compensation Table received 25,000 options each for the year ended December 31, 2011, at an exercise price of $2.00 per Ordinary Share and expiring January 18, 2021.
(2)Scott Wollney and Paul Romano became Chief Executive Officer and Chief Financial Officer, respectively, of the Corporation effective at 11:59 p.m. on December 31, 2010, upon the closing of the Qualifying Transaction under TSX-V Policy 2.4. Pursuant to the Qualifying Transaction, American Country Insurance Company (“ACIC”) and American Service Insurance Company, Inc. (“ASI”), together with their holding company AIAI, merged with and into a wholly-owned subsidiary of the Corporation. For the year ended December 31, 2010, Messrs Wollney and Romano did not receive any compensation from the Corporation; however, they did receive compensation from the former parent of AIAI, ACIC and ASI, Kingsway Financial Services Inc., for services provided to Kingsway Financial Services Inc. and its subsidiaries in various capacities including but not limited to their capacities as officers of AIAI, ACIC and ASI. No compensation was paid directly by AIAI, ACIC or ASI to Messrs. Wollney and Romano.
(3)As a result of the Qualifying Transaction, Ronald D. Schmeichel resigned as Chief Executive Officer and Chief Financial Officer effective December 31, 2010. Option-based awards granted to him in 2010 expired on December 31, 2011. Options valued at $16,109 granted as compensation for his directorship expired on September 29, 2010 as a result of his resignation as a director on June 29, 2010.
(4)Leslie DiMaggio, Bruce Giles and Joseph Shugrue were appointed as VP Operations, VP Product Development and Underwriting and VP Claims of the Corporation's insurance subsidiaries, respectively on December 31, 2010.
(5)Includes annual car allowance.
(6)For the purposes of calculating total compensation, the dollar amounts set out under the columns captioned “Salary”, “Bonus” and “All Other Compensation” were converted into Canadian dollars based on the exchange rate on December 31, 2011 of $1.0179 CAD per USD.
Capital Pool Company
Pursuant to Section 8.1 of TSX-V Policy 2.4 - Capital Pool Companies, until the completion of the Qualifying Transaction on December 31, 2010, the only compensation that the Corporation was permitted to provide to the directors, officers, employees and consultants of the Corporation was the granting of incentive stock options.

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Employment Agreements with Named Executive Officers
Concurrently with the completion of the Qualifying Transaction, the Corporation entered into employment agreements with Scott Wollney, Paul Romano, Joseph Shugrue, Bruce Giles, and Leslie DiMaggio. The key terms of such employment agreements include:
(a)
employment being “at-will” and, subject to the severance and post-termination obligations described below, the employment agreement being terminable by either party at any time;
(b)
an annual base salary as set out in the table under the heading “Summary Compensation Table”;
(c)
the executive being entitled to participate in such employee benefit plans as the Corporation shall approve including, retirement plans, paid vacation and sick days/paid time off, disability plans, the Stock Option Plan, or such other plans as may be offered from time to time; and
(d)
severance payments and post-termination obligations as further described below under “Termination and Change of Control Benefits”.
Outstanding Equity Awards
The following table sets forth all equity awards of the Corporation granted to the Named Executive Officers that were outstanding at the end of the most recently completed financial year.
Outstanding Equity Awards as at December 31, 2011
Name 
Number of Securities Underlying unexercised Options
(#) Exercisable
Number of Securities Underlying  Unexercised Unearned Options
(#) Unexercisable
Option Exercise
Price ($)
Option Expiration Date
Scott Wollney
Chief Executive Officer and Director
6,25018,750$2.00January 18, 2021
Paul A. Romano)
Vice-President and Chief Financial Officer
6,25018,750$2.00January 18, 2021
Leslie DiMaggio
VP Operations
6,25018,750$2.00January 18, 2021
Bruce Giles
VP Product Development and Underwriting
6,25018,750$2.00January 18, 2021
Joseph Shugrue
VP Claims
6,25018,750$2.00January 18, 2021
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth the securities of the Corporation that are authorized for issuance under the Corporation's equity compensation plans as at the end of the most recently completed financial year, December 31, 2011.
Plan CategoryNumber of securities to be issued upon exercise of outstanding Options, warrants and rights
Weighted-average exercise price of outstanding
Options ($)
Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by securityholders
369,749 Ordinary Shares(1)
$2.00Nil
Equity compensation plans not approved by securityholders
85,600 Ordinary Shares(2)
$1.00Nil
Total455,349 Ordinary Shares$1.80Nil
Notes:
(1)Issued pursuant to the Stock Option Plan on January 18, 2011.
(2)Issued pursuant to stock option agreements on March 18, 2010, prior to implementation of the Stock Option Plan.
See “Matters to be Voted On - Proposal 3: Approval of Stock Option Plan” for a description of the material features of the Stock Option Plan.
Pension Plan Benefits
The Corporation does not currently maintain any pension or retirement plans that provide for payments or benefits at, following, or in connection with retirement.

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Termination and Change of Control Benefits
As at the Reference Date, the Corporation is party to employment agreements with Scott Wollney and Paul Romano pursuant to which, if the Corporation terminates the executive without Cause (as defined in the employment agreement), or the executive's employment is terminated in connection with a Change of Control (as defined in the employment agreement), the executive will be entitled to certain payments and benefits as set out below.
If terminated without Cause:
Continuation of base salary for: (1)
Lump-sum Payment equal to:
Continuation of employee health benefits covered under COBRA for: (1) (2)
During Year 124 months100% of base salary24 months
During Year 224 months50% of base salary12 months
During Year 312 monthsMost recently awarded bonus12 months
Notes:
(1)The continuation of base salary and COBRA benefits will cease on the first of the month immediately following the date on which the executive becomes employed.
(2)Or for the maximum period of time allowed by law, if shorter.
If, after a Change of Control (as defined in the employment agreement), the executive maintains employment with the Corporation (or its successor) for at least 180 days, the executive may terminate his employment at will and will be entitled to the severance payments and post-termination benefits set out above.
Director Compensation
During the financial year ended December 31, 2011, the Corporation paid cash compensation and granted Optionsfor services rendered to the directors for serving in their capacity as directors, and the Corporation reimburses the out-of-pocket expenses of its directors incurred in connection with attendance at or participation in meetings of the Board.
The following table shows the compensation paid to directors for the most recently completed financial year (other than directors who also served as Named Executive Officers). Named Executive Officers, who also act as directors of the Corporation, do not receive any additional compensation for services rendered in such capacity, other than as paid by the Corporation to such officers in their capacity as officers. See “Summary Compensation Table”.
Name
Fees Earned
($)
Share-Based Awards
($)
Option-Based Awards ($)(2)
Non-Equity Incentive Plan Compensation ($)
Pension Value
($)
All Other Compensation ($)Total Compensation ($)
Jordan Kupinsky$50,000Nil$100,838NilNilNil$150,838
Gordon Pratt (1)
$60,000Nil$100,838NilNilNil$160,838
Larry Swets, Jr. (1)
$40,000Nil$100,838NilNilNil$140,838
Notes:
(1)Gordon Pratt and Larry Swets, Jr. became directors of the Corporation effective at 11:59 p.m. on December 31, 2010, upon the closing of the Qualifying Transaction.
(2)The Black-Scholes option pricing model was used to estimate the fair value of option awards using the following assumptions - risk-free interest rate 2.27% to 3.13%; dividend yield 0.0%; expected volatility 100%; expected life of 6 to 9 years. Each of Mr. Kupinsky, Mr. Pratt and Mr. Swets were awarded 81,583 on January 18, 2011, such options to expire on January 18, 2021 and exercisable at $2.00 per Ordinary Share.
Issuer Repurchase of Equity Securities
None.
Indemnification Agreements
Cayman Islands law does not limit the extent to which a company's articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as a provision purporting to provide indemnification against civil fraud or the consequences of committing a crime.
Atlas' memorandum and articles of association permit indemnification of officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained in their capacities as such unless such losses or damages arise from dishonesty, fraud or willful default of such directors or officers.

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Pursuant to indemnification agreements, Atlas has entered into indemnification agreements with its directors and senior executive officers that provide such persons with additional indemnification beyond that provided in its memorandum and articles of association.
Atlas also maintains a directors and officers liability insurance policy for its directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (“Securities Act”) may be permittedaction with respect to Atlas' directors or officers or persons controlling Atlas under the foregoing provisions, the Registrant has been informedany proposal that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable as a matter of US law.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 12(b) of the U.S. Securities Exchange Act of 1934, non-US companies must test to see if they qualify for domestic issuer status as of the last day of the second quarter of each fiscal year, and, if so, will be considered “domestic issuers” in the United States effective the beginning of the next fiscal year. Atlas has determined that, as of June 30, 2011, it qualified to become a U.S. domestic issuer effective January 1, 2012 and, as such, became subject to Section 16(a) of the Securities Exchange Act of 1934. Section 16(a) requires Atlas' officers and directors, and persons who own more than ten percent of a registered class of Atlas' equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater-than-ten-percent stockholders are required by SEC regulation to furnish the Corporation with copies of all Section 16(a) forms they file. Based solely on Atlas' review of any such reports furnished to the Corporation, it believes that during the year ended December 31, 2011, all of Atlas' officers and directors timely filed their required Section 16(a) reports.
MANAGEMENT CONTRACTS
The Corporation entered into an agreement on March 15, 2011 with Asset Allocation & Management Company, L.L.C. (“AAM”) of Chicago, Illinois, to manage the investment portfolios of the Corporation's subsidiaries ACIC and ASI. Combined invested assets of these subsidiaries, as reported in their December 31, 2010 statutory annual statements, was US$182.3 million. Pursuant to the agreement, AAM will manage the invested assets in the Corporation's investment portfolio subject to investment guidelines prescribed by the Corporation. AAM will also provide accounting services related to these investment activities. AAM's compensation under the agreement is paid quarterly and determined as a percentage of the market value of assets under management on a sliding scale. The fee schedule is subject to amendment upon 60 days prior written notice to the Corporation. Either party may terminate the agreement with 30 days written notice. If the agreement is terminated by either party on any day other than the first day of a calendar quarter, the fee for such quarter shall be prorated based on the number of days that remain in such quarter.
The Corporation does not currently have anycomply with these and other management contractsapplicable requirements.
Interest of Informed Persons in place.Material Transactions
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
As at the Reference Date, no executive officers, directors, employees or former executive officers, directors or employees of the Corporation or any of its subsidiaries, was indebted to the Corporation, any of its subsidiaries, or any other entity if the indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Corporation or any of its subsidiaries, in connection with a purchase of securities or otherwise.
RELATED PERSON TRANSACTIONS
As further disclosed in the Filing Statement dated December 16, 2010, the Corporation was formed on December 31, 2010 through the Qualifying Transaction. Prior to the Qualifying Transaction, Kingsway America Inc. transferred 100% of the capital stock of its insurance subsidiaries, ASI and ACIC to AIAI in exchange for US$35.1 million in AIAI common shares, US$18.0 million of AIAI preferred shares and promissory notes aggregating $7.9 million payable by AIAI. In addition, AIAI raised $7.9 million through a private placement offering of subscription receipts to qualified investors at a price of $2.00 per subscription receipt. In the Qualifying Transaction, Kingsway America Inc. received 13.8 million Restricted Voting Shares valued at US$27.4 million, 18 million Preferred Shares valued at US$18.0 million, and $7.9 million in cash from the private placement in exchange for 100% of the outstanding shares of AIAI and full payment of the promissory notes. At the time of the Qualifying Transaction, Jordan Kupinsky was a director of JJR VI Acquisition Corp., Scott Wollney was an executive officer of Kingsway America Inc. and AIAI, and Larry Swets, Jr. was a director of Kingsway America Inc. The Qualifying Transaction was negotiated on an arm's length basis. Copies of the Annual Report and Filing Statement dated December 16, 2010 are available on SEDAR at www.sedar.com.
No director or senior officer, and no associate or affiliate of the foregoing persons, no insider and no family member of such persons has or has had any material interest, direct or indirect, in any transactions during the fiscal year ended December 31, 2011, or any transaction, or any proposed transaction, which has materially affected or will materially affect the Corporation.Company.
Shareholder Proposals for
Auditor of the 2013 Annual MeetingCompany

The firm of ShareholdersJohnson Lambert & Co. LLP has been the auditor of the Company since June 20, 2011.
If a Shareholder wishes
Management Contracts

The Company entered into an agreement on March 15, 2011 with Asset Allocation & Management Company, L.L.C. (“AAM”) of Chicago, Illinois, to have a proposal includedmanage the investment portfolios of the Company's subsidiaries ACIC and ASI. Combined invested assets of these subsidiaries, as reported in their December 31, 2010 statutory annual statements, was US$182.3 million. Pursuant to the agreement, AAM will manage the invested assets in the Corporation's Proxy StatementCompany's investment portfolio subject to investment guidelines prescribed by the Company. AAM will also provide accounting services related to these investment activities. AAM's compensation under the agreement is paid quarterly and formdetermined as a percentage of proxy for the 2013 annual meetingmarket value of Shareholders, the proposal must conformassets under management on a sliding scale. The fee schedule is subject to amendment upon 60 days prior written notice to the applicable proxy rulesCompany. Either party may terminate the agreement with 30 days written notice. If the agreement is terminated by either party on any day other than the first day of a calendar quarter, the Security Exchange Commission concerningfee for such quarter shall be prorated based on the number of days that remain in such quarter.

The Company does not currently have any other management contracts in place.

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Where You Can Find More Information
We have recently begun filing annual and quarterly reports and other reports and information with the submissionSecurities and contentExchange Commission. These reports and other information can be inspected and copied at, and copies of proposalsthese materials can be obtained at prescribed rates from, the Public Reference Section of the Securities and must be receivedExchange Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549-1004. We have distributed to our shareholders certain annual reports containing financial statements audited by our independent registered public accounting firm and, upon request, quarterly reports for the Corporation priorfirst three quarters of each fiscal year containing unaudited financial information. Financial information relating to the close of business on December 27, 2012.Company is provided in the Company's comparative annual financial statements and Management's Discussion and Analysis (“MD&A”) for the Company's most recently completed financial year. In addition, ifthe reports and other information relating to the Company are filed through Electronic Data Gathering, Analysis and Retrieval (known as “EDGAR”) system and are publicly available on the Securities and Exchange Commission's site on the Internet, located at http://www.sec.gov and on SEDAR at http://www.sedar.com. We will provide without charge to you, upon written or oral request, a Shareholder intends to present a proposal at Atlas' 2013 annual meeting of Shareholders without the inclusioncopy of the proposal inreports and other information filed with the Corporation's proxy materialsSecurities and written noticeExchange Commission.
Any requests for copies of information, reports or other filings with the Securities and Exchange Commission and copies of the proposal is not received by the Corporation on or before December 27, 2012, proxies solicited by the Board for the 2013 annual meeting of Shareholders will confer discretionary authorityCompany's financial statements and MD&A should be directed to vote on the proposal if presented at the meeting. Shareholders should submit proposals to Atlas' executive offices,Atlas Financial Holdings, Inc. 150 NorthwestNW Point Boulevard, Elk Grove Village, ILIllinois 60007, Attention:Attn: Scott Wollney. Atlas reserves the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.
COMMUNICATIONS WITH BOARD OF DIRECTORS
Shareholders who wish to send communications on any topic to any memberBy Order of the Board, should address such communications to Atlas at 150 Northwest Point Boulevard,

/s/ Gordon G. Pratt
Gordon G. Pratt
Chairman of the Board

October 29, 2012


Dated: October 29, 2012
Elk Grove Village, IL 60007, Attention: Scott Wollney. All communications will be forwarded to the Board, individual director, lead director or group of non-employee directors, as applicable, although the Secretary will not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.
ANNUAL REPORT
All Shareholders of record on the Record Date are concurrently being sent a copy of Atlas' 2011 Annual Report, which contains Atlas' certified financial statements for the fiscal year ended December 31, 2011. Additional information relating to the Corporation is available on EDGAR at www.sec.gov and SEDAR at www.sedar.com.
Any person who was a Shareholder of Atlas at the close of business on the Record Date, may obtain copies of Atlas' 2011 Annual Report on Form 10-K as filed with the SEC, without charge, via the Corporation's website at www.atlas-fin.com or by written request to Atlas at, 150 Northwest Point Boulevard, Elk Grove Village, IL 60007, Attention: Scott Wollney.
OTHER MATTERS
As of the date of this Proxy Statement the Corporation is not aware of any matter other than those described in this Proxy Statement that will be presented for consideration at the Meeting. If any other matter or matters properly come before the Meeting, it is the intention of the persons named in the accompanying proxy to vote, or otherwise act, on such matters in accordance with their best judgment.

 


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APPENDIX “A”
AUDIT COMMITTEE CHARTER
Name
There shall be a committee of the board of directors (the “Board”) of Atlas Financial Holdings, Inc. (the “Company”) known as the Audit Committee.
Purpose of Audit Committee
The Audit Committee has been established to assist the Board in fulfilling its oversight responsibilities with respect to the following principal areas:
(a)
the Company's external audit function; including the qualifications, independence, appointment and oversight of the work of the external auditors;
(b)
the Company's accounting and financial reporting requirements;
(c)
the Company's reporting of financial information to the public;
(d)
the Company's compliance with law and regulatory requirements;
(e)
the Company's risks and risk management policies;
(f)
the Company's system of internal controls and management information systems; and
(g)
such other functions as are delegated to it by the Board.
Specifically, with respect to the Company's external audit function, the Audit Committee assists the Board in fulfilling its oversight responsibilities relating to: the quality and integrity of the Company's financial statements; the independent auditors' qualifications; and the performance of the Company's independent auditors.
Membership
The Audit Committee shall consist of as many members as the Board shall determine but, in any event not fewer than three directors appointed by the Board. Each member of the Audit Committee shall continue to be a member until a successor is appointed, unless the member resigns, is removed or ceases to be a director of the Company. The Board may fill a vacancy that occurs in the Audit Committee at any time.
Members of the Audit Committee shall be selected based upon the following and in accordance with applicable laws, rules and regulations:
(a)
Financially Literate. Each member shall be financially literate or must become financially literate within a reasonable period of time after his or her appointment to the Audit Committee. For these purposes, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company's financial statements.
Chair and Secretary
The Chair of the Audit Committee shall be designated by the Board. If the Chair is not present at a meeting of the Audit Committee, the members of the Audit Committee may designate an interim Chair for the meeting by majority vote of the members present. The Secretary of the Company shall be the Secretary of the Audit Committee, provided that if the Secretary is not present, the Chair of the meeting may appoint a secretary for the meeting with the consent of the Audit Committee members who are present. A member of the Audit Committee may be designated as the liaison member to report on the deliberations of the Audit Committees of affiliated companies (if applicable).
Meetings
The Chair of the Audit Committee, in consultation with the Audit Committee members, shall determine the schedule and frequency of the Audit Committee meetings provided that the Audit Committee will meet at least four times in each fiscal year and at least once in every fiscal quarter. The Audit Committee shall have the authority to convene additional meetings as circumstances require.
Notice of every meeting shall be given to the external and internal auditors of the Company, and meetings shall be convened whenever requested by the external auditors or any member of the Audit Committee in accordance with applicable law. The Audit Committee shall meet separately and periodically with management, legal counsel and the external auditors. The Audit Committee shall meet separately with the external auditors at every meeting of the Audit Committee at which external auditors are present.

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Meeting Agendas
Agendas for meetings of the Audit Committee shall be developed by the Chair of the Audit Committee in consultation with the management and the corporate secretary, and shall be circulated to Audit Committee members as far in advance of each Audit Committee meeting as is reasonable.
Resources and Authority
The Audit Committee shall have the resources and the authority to discharge its responsibilities, including the authority, in its sole discretion, to engage, at the expense of the Company, outside consultants, independent legal counsel and other advisors and experts as it determines necessary to carry out its duties, without seeking approval of the Board or management.
The Audit Committee shall have the authority to conduct any investigation necessary and appropriate to fulfilling its responsibilities, and has direct access to and the authority to communicate directly with the internal and external auditors, the counsel of the Company and other officers and employees of the Company.
The members of the Audit Committee shall have the right for the purpose of performing their duties to inspect all the books and records of the Company and its subsidiaries and to discuss such accounts and records and any matters relating to the financial position, risk management and internal controls of the Company with the officers and external and internal auditors of the Company and its subsidiaries. Any member of the Audit Committee may require the external or internal auditors to attend any or every meeting of the Audit Committee.
Responsibilities
The Company's management is responsible for preparing the Company's financial statements and the external auditors are responsible for auditing those financial statements. The Audit Committee is responsible for overseeing the conduct of those activities by the Company's management and external auditors, and overseeing the activities of the internal auditors.
The specific responsibilities of the Audit Committee shall include those listed below. The enumerated responsibilities are not meant to restrict the Audit Committee from examining any matters related to its purpose.
1.Financial Reporting Process and Financial Statements
The Audit Committee shall:
(a)
in consultation with the external auditors and the internal auditors, review the integrity of the Company's financial reporting process, both internal and external, and any major issues as to the adequacy of the internal controls and any special audit steps adopted in light of material control deficiencies;
(b)
review all material transactions and material contracts entered into between (i) the Company or any subsidiary of the Company, and (ii) any subsidiary, director, officer, insider or related party of the Company, other than transactions in the ordinary course of business;
(c)
review and discuss with management and the external auditors: (i) the preparation of Company's annual audited consolidated financial statements and its interim unaudited consolidated financial statements; (ii) whether the financial statements present fairly (in accordance with Canadian generally accepted accounting principles) in all material respects the financial condition, results of operations and cash flows of the Company as of and for the periods presented; (iii) any matters required to be discussed with the external auditors according to Canadian generally accepted auditing standards; (iv) an annual report by the external auditors describing: (A) all critical accounting policies and practices used by the Company; (B) all material alternative accounting treatments of financial information within generally accepted accounting principles that have been discussed with management of the Company, including the ramifications of the use such alternative treatments and disclosures and the treatment preferred by the external auditors; and (C) other material written communications between the external auditors and management;
(d)
following completion of the annual audit, review with each of: (i) management; (ii) the external auditors; and (iii) the internal auditors, any significant issues, concerns or difficulties encountered during the course of the audit;
(e)
resolve disagreements between management and the external auditors regarding financial reporting;
(f)
review the interim quarterly and annual financial statements and annual and interim press releases prior to the release of earnings information; and
(g)
review and be satisfied that adequate procedures are in place for the review of the public disclosure of financial information by the Company extracted or derived from the Company's financial statements, other than the disclosure referred to in (f), and periodically assess the adequacy of those procedures.

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2.External Auditors
The Audit Committee shall:
(a)
require the external auditors to report directly to the Audit Committee;
(b)
be directly responsible for the selection, nomination, compensation, retention, termination and oversight of the work of the Company's external auditors engaged for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Company, and in such regard recommend to the Board the external auditors to be nominated for approval by the shareholders;
(c)
approve all audit engagements and must pre-approve the provision by the external auditors of all non-audit services, including fees and terms for all audit engagements and non-audit engagements, and in such regard the Audit Committee may establish the types of non-audit services the external auditors shall be prohibited from providing and shall establish the types of audit, audit related and non-audit services for which the Audit Committee will retain the external auditors. The Audit Committee may delegate to one or more of its members the authority to pre-approve non-audit services, provided that any such delegated pre-approval shall be exercised in accordance with the types of particular non-audit services authorized by the Audit Committee to be provided by the external auditor and the exercise of such delegated pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting following such pre-approval;
(d)
review and approve the Company's policies for the hiring of partners and employees and former partners and employees of the external auditors;
(e)
consider, assess and report to the Board with regard to the independence and performance of the external auditors; and
(f)
request and review the audit plan of the external auditors as well as a report by the external auditors to be submitted at least annually regarding: (i) the external auditing firm's internal quality-control procedures; (ii) any material issues raised by the external auditor's own most recent internal quality-control review or peer review of the auditing firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the external auditors, and any steps taken to deal with any such issues.
3.Accounting Systems and Internal Controls
The Audit Committee shall:
(a)
oversee management's design and implementation of and reporting on internal controls. The Audit Committee shall also receive and review reports from management, the internal auditors and the external auditors on an annual basis with regard to the reliability and effective operation of the Company's accounting system and internal controls; and
(b)
review annually the activities, organization and qualifications of the internal auditors and discuss with the external auditors the responsibilities, budget and staffing of the internal audit function.
4.Legal and Regulatory Requirements
The Audit Committee shall:
(a)
receive and review timely analysis by management of significant issues relating to public disclosure and reporting;
(b)
review, prior to finalization, periodic public disclosure documents containing financial information, including the Management's Discussion and Analysis and Annual Information Form, if required;
(c)
prepare the report of the Audit Committee required to be included in the Company's periodic filings;
(d)
review with the Company's counsel legal compliance matters, significant litigation and other legal matters that could have a significant impact on the Company's financial statements; and
(e)
assist the Board in the oversight of compliance with legal and regulatory requirements and review with legal counsel the adequacy and effectiveness of the Company's procedures to ensure compliance with legal and regulatory responsibilities.
5.Additional Responsibilities
The Audit Committee shall:
(a)
discuss policies with the external auditor, internal auditor and management with respect to risk assessment and risk management;
(b)
establish procedures and policies for the following:
(i)
the receipt, retention, treatment and resolution of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and
(ii)
the confidential, anonymous submission by directors or employees of the Company of concerns

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regarding questionable accounting or auditing matters or any potential violations of legal or regulatory provisions;
(c)
prepare and review with the Board an annual performance evaluation of the Audit Committee;
(d)
report regularly to the Board, including with regard to matters such as the quality or integrity of the Company's financial statements, compliance with legal or regulatory requirements, the performance of the internal audit function, and the performance and independence of the external auditors; and
(e)
review and reassess the adequacy of the Audit Committee's Charter on an annual basis.
6.Limitation on the Oversight Role of the Audit Committee
Nothing in this Charter is intended, or may be construed, to impose on any member of the Audit Committee a standard of care or diligence that is in any way more onerous or extensive than the standard to which all members of the Board are subject.
Each member of the Audit Committee shall be entitled, to the fullest extent permitted by law, to rely on the integrity of those persons and organizations within and outside the Company from whom he or she receives financial and other information, and the accuracy of the information provided to the Company by such persons or organizations.
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and in accordance with generally accepted accounting principles in Canada and applicable rules and regulations. These are the responsibility of management and the external auditors.

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APPENDIX “B”A
STOCK OPTION PLAN
ARTICLE I: PURPOSE
1.
Purpose
The purpose of this stock option plan (as amended from time to time, the “Plan”) is to advance the interestsATLAS FINANCIAL HOLDINGS, INC.


IT WAS RESOLVED AS A SPECIAL RESOLUTION THAT following consolidation of the Corporation by: (i) providing Eligible Persons with financial incentives; (ii) encouraging stock ownership by Eligible Persons; (iii) increasing the proprietary interestCompany's ordinary shares and restricted voting common shares on a ratio of Eligible Persons in the successone for three clause 6 of the Corporation; (iv) encouraging Eligible PersonsCompany's Memorandum of Association be and is hereby amended to remain with the Corporation or its Affiliates; and (v) attracting new Employees, Officers, Directors and Consultants to the Corporation or its Affiliates.
ARTICLE II: INTERPRETATION
1.Definitions
When used herein, the following terms have the following meanings, respectively:
(a)
“Act” means the Securities Act (Ontario);
(b)
“Affiliate” means any corporation that is an affiliate of the Corporation as defined in the Act;
(c)
“Blackout Period” means a period of time when, pursuant to any policies of the Corporation, securities of the Corporation may not be traded by certain persons as designated by the Corporation, including an Optionee;
(d)
“Board” means the board of directors of the Corporation;
(e)
“Change of Control” means the occurrence of any one or more of the following events:
(i)
a consolidation, merger, amalgamation, arrangement or other reorganization, takeover bid or acquisition involving the Corporation or any of its Affiliates and another corporation or other entity, as a result of which the holders of Shares immediately prior to the completion of the transaction hold less than 50% of the outstanding rights to vote in respect of the shares of the successor corporation after completion of the transaction;
(ii)
the sale, lease, exchange or other disposition, in a single transaction or a series of related transactions, of assets, rights or properties of the Corporation and/or any of its Subsidiaries which have an aggregate book value greater than 50% of the book value of the assets, rights and properties of the Corporation and its Subsidiaries on a consolidated basis to any other person or entity, other than a disposition to an Affiliate of the assets, rights and properties of the Corporation in the course of a reorganization of the assets of the Corporation and its Affiliates;
(iii)
a resolution is adopted to wind-up, dissolve or liquidate the Corporation; or
(iv)
the Board adopts a resolution to the effect that a Change of Control as defined herein has occurred or is imminent.
(f)
“Commitment Form” means the notice of grant of an Option delivered by the Corporation hereunder to an Optionee in the form of Schedule “A” attached hereto, or in such other form as the Compensation Committee may approve for any one or more Optionees or for a group of Optionees, as same may be amended from time to time;
(g)
“Compensation Committee” means the compensation committee of the Board;
(h)
“Consultant” means any individual or Consulting Company, other than an Employee or a Director, that:
(i)
is engaged to provide on a ongoing bona fide basis, consulting, technical, management or other services to the Corporation or to an Affiliate, other than services provided in relation to a Distribution (as such term is defined in the Act);
(ii)
provides the services under a written contract between the Corporation or the Affiliate and the individual or the Consultant Company;
(iii)
in the reasonable opinion of the Corporation, spends or will spend a significant amount of time and attention on the affairs and business of the Corporation or an Affiliate; and
(iv)
has a relationship with the Corporation or an Affiliate that enables the individual to be knowledgeable about the business and affairs of the Corporation.
(i)
“Consulting Company” means a company or partnership providing consulting services to the Corporation or an Affiliate and, if applicable, for whom an individual consultant providing consulting services to the Corporation or an Affiliate may be an employee, shareholder or partner;

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(j)
“Control” means:
(i)
when applied to the relationship between a person and a corporation, the beneficial ownership by the person, at the relevant time, of shares of the corporation carrying either (A) more than 50% of the voting rights ordinarily exercisable at meetings of shareholders of the corporation or (B) the percentage of voting rights ordinarily exercisable at meetings of shareholders of the corporation sufficient in fact to elect a majority of the directors of the corporation; and
(ii)
when applied to the relationship between a person and a partnership or joint venture, the beneficial ownership by the person, at the relevant time, of more than 50% of the ownership interests of the partnership or joint venture in circumstances where it can reasonably be expected that the person directs the affairs of the partnership or joint venture;
(k)
“Corporation” means Atlas Financial Holdings, Inc., and includes any successor corporation thereto;
(l)
“Director” means a director of the Corporation or of an Affiliate;
(m)
“Effective Date” for an Option means the date on which the Option is granted;
(n)
“Eligible Person” means, subject to the administrative guidelines and other rules and regulations relating to the Plan and to all applicable law, any Employee, Officer, Director, or Consultant who is approved for participation in the Plan by the Compensation Committee;
(o)
“Employee” means:
(i)
an individual who would be considered an employee of the Corporation or its Subsidiary under the Income Tax Act (Canada) (i.e. for whom income tax, employment insurance and Canada Pension Plan deductions must be made at source);
(ii)
an individual who works full-time for the Corporation or its Subsidiary providing services normally provided by an employee and who is subject to the same control and direction by the Corporation over the details and methods of work as an employee of the Corporation, but for whom income tax deductions are not made at source; or
(iii)
an individual who works for the Corporation or its Subsidiary on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Corporation over the details and methods of work as an employee of the Corporation, but for whom income tax deductions are not made at source;
(p)
“Exchange” means the TSX Venture Exchange Inc. or any other stock exchange on which the Shares are then listed for trading;
(q)
“Exercise Form” means the notice of exercise of option in the form of Schedule “B” attached hereto;
(r)
“Exercise Period” means the period of time during which an Option granted under the Plan may be exercised (provided, however, that the Exercise Period may not exceed ten (10) years from the relevant Effective Date unless permitted under Section 4.4(b));
(s)
“Exercise Price” has the meaning ascribed thereto in Section 4.2;
(t)
“Incapacity” of an Optionee means his total or substantially total mental, physical, natural or legal inability to perform regularly his day-to-day functions for a period of six (6) months, the whole as evidenced and determined by an independent medical expert chosen by the Compensation Committee or as determined by a final and definitive judgment rendered by a court of competent jurisdiction thereto;
(u)
“Insider” has the meaning given to such term in the Act;
(v)
“Merger and Acquisition Transaction” means (i) any merger; (ii) any acquisition; (iii) any amalgamation; (iv) any offer for Shares which if successful would entitle the offeror to acquire more than 50% of all Shares; (v) any arrangement or other scheme of reorganization; or (vi) any consolidation, that results in a Change of Control;
(w)
“Officer” means an officer of the Corporation or of an Affiliate;
(x)
“Option” means the right to purchase Shares granted to an Eligible Person in accordance with the terms of the Plan;
(y)
“Optioned Shares” means Shares subject to an Option;
(z)
“Optionee” means an Eligible Person to whom an Option is granted by the Corporation under the Plan, whether a Director, Officer, Employee, or Consultant (including, for greater certainty, an individual or a Consulting Company);
(aa)
“person” or “persons” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted;
(ab)
“Plan” has the meaning ascribed thereto in Section 1.1;
(ac)
“Regulatory Approval” means the approval of any securities or other applicable regulatory agency (including the Exchange) which may have jurisdiction in the circumstances;

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(ad)
“Shares” means the ordinary shares in the capital of the Corporation;
(ae)
“Subsidiary” means a corporation which is a subsidiary of the Corporation as defined in the Act;
(af)
“Termination Date” means:
(i)
in the case of an Optionee whose employment or term of office with the Corporation or an Affiliate terminates in the circumstances set out in Section 4.10(b) or 4.10(c)(i), the date that is designated by the Corporation or the Affiliate, as the case may be, as the last day of such person's employment or term of office with the Corporation or the Affiliate, as the case may be;
(ii)
in the case of an Optionee whose employment or term of office with the Corporation or an Affiliate terminates in the circumstances set out in Section 4.10(c)(ii), the date of the notice of termination of employment or term of office given by the Corporation or the Affiliate, as the case may be;
(iii)
in the case of an Optionee whose employment or term of office with the Corporation or an Affiliate terminates in the circumstances set out in Section 4.10(c)(iii), the date of retirement;
(iv)
in the case of an Optionee whose consulting arrangements (or, if applicable, those of its Consulting Company if the Optionee is an individual) are terminated by the Corporation or an Affiliate in the circumstances set out in Section 4.10(d), the date that is designated by the Corporation or the Affiliate, as the case may be, as the last day of the Optionee's consulting arrangements (or those of its Consulting Company) with the Corporation or the Affiliate, as the case may be;
(v)
in the case of an Optionee whose consulting arrangements (or, if applicable, those of its Consulting Company if the Optionee is an individual) are terminated in the circumstances set out in Section 4.10(e), the date of the notice of termination given to the Optionee (or, if applicable, those of its Consulting Company if the Optionee is an individual) or the expiry of the original term or any subsequent renewal term of the consulting arrangements, as the case may be;
and in each such case, “Termination Date” specifically does not mean the date on which any period of reasonable notice that the Corporation or the Affiliate,read as the case may be, may be required at law to provide to the Optionee would expire.
2.    Interpretation
(a)A reference to a statute includes all regulations made thereunder, all amendments to the statute or regulations in force from time to time, and any statute or regulation that supplements or supersedes such statute or regulations.
(b)Words importing the singular number include the plural and vice versa and words importing the masculine gender include the feminine.

ARTICLE III:ADMINISTRATION
1.    Administration of Plan
(a)The Compensation Committee will, subject to any terms and conditions the Board may prescribe from time to time, in accordance with the Plan, be responsible for the general administration of the Plan and the proper execution of its provisions, the interpretation of the Plan and the determination of all questions arising hereunder.
(b)
Subject to the limitations of the Plan, the Compensation Committee has the authority to: (i) grant Options to purchase Shares to Eligible Persons; (ii) determine the terms, including the limitations, restrictions and conditions, if any, upon such grants; (iii) interpret the Plan and to adopt, amend and rescind such administrative guidelines and other rules and regulations relating to the Plan as it may from time to time deem advisable, subject to required Regulatory Approval; and (iv) make all other determinations and to take all other actions in connection with the implementation and administration of the Plan as it may deem necessary or advisable.
(c)Any decision, interpretation or other action made or taken in good faith by or at the direction of the Corporation, the Board or the Compensation Committee (or any of its members) arising out of or in connection with the Plan shall be within the absolute discretion of all and each of them, as the case may be, and shall be final, binding and conclusive on the Corporation and Optionees and their respective heirs, executors, administrators, successors and assigns and all other persons.
(d)
The day-to-day administration of the Plan may be delegated to such officers and employees of the Corporation or of an Affiliate as the Board or the Compensation Committee determines.
(e)    The Corporation is responsible for all costs of administration of the Plan.

2.Eligibility
Eligible Persons are eligible to participate in the Plan, provided that eligibility to participate does not confer upon any Eligible Person any right to be granted Options pursuant to the Plan. The extent to which any Eligible Person is entitled to be granted Options pursuant to the Plan will be determined in the sole and absolute discretion of the Compensation Committee.

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3.Shares Reserved Under the Plan
(a)
The maximum number of Shares reserved for issuance under the Plan and all of the Corporation's other security based compensation arrangements at any given time is equal to 10% of the issued and outstanding Shares as at the date of grant of an Option under the Plan, subject to adjustment or increase of such number pursuant to Section 4.13. The Plan is an “evergreen” plan. Any Shares subject to an Option which has been granted under the Plan, and which has been cancelled, expired or terminated in accordance with the terms of the Plan, without having been exercised, will again be available under the Plan. Any increase in the issued and outstanding Shares will result in an increase in the available number of Shares issuable under the Plan, and any exercises of Options will make new grants available under the Plan, effectively resulting in a re-loading of the number of Options available to grant under the Plan.
(b)
The aggregate number of Shares reserved for issuance pursuant to Options granted to any one person within any twelve-month period shall not exceed 5% of the issued and outstanding Shares at the time of the grant of the Option. The aggregate number of Shares issued to Insiders of the Corporation within any twelve-month month period, or issuable to Insiders of the Corporation at any time, under the Plan and any other security based compensation arrangements of the Corporation may not exceed 10% of the total number of issued and outstanding Shares at such time.
(c)
Notwithstanding the foregoing, (i) no more than 2% of the issued and outstanding Shares may be granted to any one Consultant in any 12 month period; and (ii) no more than an aggregate of 2% of the issued and outstanding Shares may be granted to all Employees conducting investor relations activities in any 12 month period.
4.Incorporation of Terms of Plan
Subject to specific variations approved by the Compensation Committee, all terms and conditions set out in the Plan will be deemed to be incorporated into and form part of each Option granted under the Plan.follows:

ARTICLE IV: GRANT OF OPTIONS

1.     Grant“The capital of Options
The Compensation Committee may, from time to time,the Company is US$1,000,000 divided into 266,666,667 ordinary shares of par value US$0.003 each, 100,000,000 preferred shares of par value US$0.001 each, and 33,333,333 restricted voting common shares of par value US$0.003 each provided always that subject to the provisionsLaw and the Articles of Association the Plan and such other terms and conditions as the Board or Compensation Committee may prescribe, grant Options to any Eligible Person.
2.     Exercise Price
The Compensation Committee will establish the exercise price of an Option (the “Exercise Price”) at the time each Option is granted. The Exercise Price shall not be less than the market price of the Shares which will be equal to the volume weighted average trading price of the Shares on the Exchange for the five trading days immediately preceding the Effective Date.
3.    Number of Shares Subject to Option
The number of Shares subject to each Option shall be determined by the Compensation Committee, and such number shall be set out in the Commitment Form evidencing the grant of such Option.
4.    Expiration of Options
(a)
Subject to any accelerated termination as set forth in the Plan, all Options granted pursuant to the Plan will expire on the date (the “Expiry Date”) as determined by the Compensation Committee at the date of grant provided that no Option may be exercised beyond ten (10) years from the Effective Date.
(b)
Notwithstanding the above, if the Expiry Date for any Option falls within a Blackout Period or within 10 business days from the expiration of a Blackout Period (such Options to be referred to as “Restricted Options”), the Expiry Date of such Restricted Options shall be automatically extended to the date that is the 10th business day following the end of the Blackout Period, such 10th Business Day to be considered the Expiry Date for such Restricted Options for all purposes under the Plan.
5.Non-Assignable and Non-Transferable
Options are non-assignable and non-transferable although they are assignable to and may be exercisable by an Optionee's legal heirs, personal representatives or guardians as provided in Section 4.9. Upon written notice from an Eligible Person under the Plan, any Option that might otherwise be granted to that Eligible Person, will be granted, in whole or in part, to a registered retirement savings plan (“RRSP”) or a holding company established by, and for the sole benefit of, the Eligible Person.
6.Vesting of Option Rights
(a)
Subject to Subsection (b) below, the Compensation Committee may determine when any Option will become exercisable and may determine that the Option will be exercisable in instalments or pursuant to a vesting schedule. Such terms shall be set out in the Commitment Form evidencing the grant of such Option. Unless the Compensation Committee determines otherwise, and subject to the other provisions of the Plan, Options issued

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will be subject to a vesting schedule as follows:
(i)
one-third on the Effective Date;
(ii)
one-third upon the first anniversary of the Effective Date; and
(iii)
one-third upon the second anniversary of the Effective Date.
(b)
Options issued to Consultants performing investor relations activities must vest in stages over 12 months with no more than one-quarter of the Options vesting in any three month period.
7.Amendment of Option
The Compensation Committee may amend the terms of an Option in accordance with the Plan provided that any amendment that extends the term or reduces the Exercise Price of an Option held by an Insider at the time of the proposed amendment shall be subject to disinterested shareholder approval.
8.Acceleration of Vesting Period
Subject to the Board or the Compensation Committee determining otherwise, in the event of a Change of Control, all Options outstanding shall be immediately exercisable, notwithstanding any determination of the Board pursuant to Section 4.6, if applicable. Notwithstanding the vesting schedule for an Option, the Compensation CommitteeCompany shall have power to redeem or purchase any of its shares and to sub-divide or consolidate the right with respect to any one or more Optionees in the Plan to accelerate the time at which an Option may be exercised.
9.Death or Incapacity of Optionee
In the event of the death or Incapacity of an Optionee:
(a)
the executor or administrator of the Optionee's estate or the Optionee, as the case may be, may exercise any Options of the Optionee to the extent that the Options were exercisable at the date of such death or Incapacity and the right to exercise the Options terminates on the earlier of: (i) the date that is twelve months from the date of the Optionee's death, if the Optionee has died, or 30 days after the six month period referred to in the definition of “Incapacity”, in the event of Incapacity; and (ii) the date on which the Exercise Period of the particular Option expires. Any Options held by the Optionee that were not exercisable at the date of death or Incapacity immediately expire and are cancelled on such date; and
(b)
such Optionee's eligibility to receive further grants of Options under the Plan ceases as of the date of the Optionee's death or Incapacity, as the case may be.

10.Termination of Employment or Cease to Hold Office
(a)
In the event an Optionee's employment or consulting arrangements (or, if applicable, those of its Consulting Company if the Consultant who is an Optionee is an individual) or term of office with the Corporation or an Affiliate ceases by reason of the Optionee's death or Incapacity, then the provisions of Section 4.9 will apply.
(b)
In the event an Optionee's employment or term of office with the Corporation or an Affiliate is terminated by the Corporation or an Affiliate for lawful cause, then any Options held by such Optionee, whether or not such Options are exercisable at the applicable Termination Date, immediately expire and are cancelled on the Termination Date at a time determined by the Compensation Committee, at its discretion.
(c)
In the event an Optionee's employment or term of office terminates by reason of: (i) voluntary resignation by such Optionee; (ii) termination by the Corporation or an Affiliate without cause (whether such termination occurs with or without any or adequate reasonable notice or with or without any or adequate compensation in lieu of such reasonable notice); or (iii) the retirement of such Optionee in accordance with the then customary policies and practices of the Corporation in relation to retirement, then any Options held by such Optionee that are exercisable at the Termination Date continue to be exercisable by such Optionee until the earlier of (A) the date that is 90 days from the Termination Date; and (B) the date on which the Exercise Period of the particular Option expires. Any Options held by such Optionee that are not exercisable at the Termination Date immediately expire and are cancelled on the Termination Date.
(d)
In the event an Optionee's consulting arrangements (or, if applicable, those of its Consulting Company if the Optionee is an individual) with the Corporation or an Affiliate are terminated by the Corporation or an Affiliate for breach of agreement prior to the expiry of the original term or any subsequent renewal term of such arrangements, then any Options held by the Optionee (or, if applicable, those of its Consulting Company if the Optionee is an individual), whether or not such Options are exercisable at the applicable Termination Date, immediately expire and are cancelled on the Termination Date at a time determined by the Compensation Committee, at its discretion.
(e)
In the event an Optionee's consulting arrangements (or, if applicable, those of its Consulting Company if the Optionee is an individual) with the Corporation or an Affiliate are terminated in circumstances other than those referred to in Section 4.10(d), any Options held by the Optionee that are exercisable at the Termination Date continue to be exercisable by the Optionee until the earlier of: (i) the date that is 90 days from the Termination Date; and (ii) the date on which the Exercise Period of the particular Option expires. Any Options held by the

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Optionee that are not exercisable at the Termination Date immediately expire and are cancelled upon the Termination Date.
(f)
An Optionee's eligibility to receive further grants of Options under the Plan ceases as of the applicable Termination Date.
11.Discretion to Permit Exercise
Notwithstanding the provisions of Sections 4.9 and 4.10, the Board may, in its discretion, at any time prior to or following the events contemplated in such sections and in any Commitment Form, permit the exercise of any or all Options held by the Optionee in the manner and on terms authorized by the Board, provided that, subject to an extension pursuant to Section 4.4(b), the Board will not, in any case, authorize the exercise of an Option pursuant to this section beyond the Expiry Date of the particular Option.
12.General
The existence of any Options does not affect in any way the right or power of the Corporation or its shareholders to make, authorize or determine any adjustment, recapitalization, reorganizationsaid shares or any other change in the Corporation's capital structure or its business, or any amalgamation, merger or consolidation involving the Corporation,of them and to create or issue any bonds, debentures, shares or other securities of the Corporation or to determine the rights and conditions attaching thereto, to effect the dissolution or liquidation of the Corporation or any sale or transfer of all or any part of its assetscapital whether original, increased or business,reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to effect any other corporate actconditions or proceeding,restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether of a similar characterstated to be ordinary, preference or otherwise whether or not any such action referred to in this section would have an adverse effect on the Plan or any Option granted hereunder, subject to Sections 4.13(a) and 4.13(b).
13.Adjustment
(a)
In the event of a subdivision, consolidation or reclassification of Shares or any similar capital reorganization, or any other change to be made in the capitalization of the Corporation including an exchange of Shares for another security of the Corporation that, in the opinion of the Compensation Committee, acting reasonably and in good faith, would warrant the replacement or amendment of any existing Options in order to adjust:
(i)
the number of Shares or other securities that may be acquired on the exercise of any outstanding Options; or
(ii)
the Exercise Price of any outstanding Options,
in order to preserve proportionately the rights and obligations of the Optionees, the Compensation Committee will authorize such steps, subject to Regulatory Approval, if required, to be taken as are equitable and appropriate to that end.
(b)
In the event of an amalgamation, combination, merger or other reorganization involving the Corporation, by exchange of shares, by sale or lease of assets, or otherwise, that, in the opinion of the Compensation Committee, acting reasonably and in good faith, warrants the replacement or amendment of any existing Options in order to adjust:
(i)
the number of Shares or other securities that may be acquired on the exercise of any outstanding Options; or
(ii)
the Exercise Price of any outstanding Options,
in order to preserve proportionately the rights and obligations of the Optionees, the Compensation Committee will authorize such steps, subject to Regulatory Approval, if required, to be taken as are equitable and appropriate to that end.
(c)
Except as expressly provided in Sections 4.13(a) and 4.13(b), neither the issue by the Corporation of shares of any class or securities convertible into or exchangeable for shares of any class, nor the conversion or exchange of such shares or securities, affects, and no adjustment by reason thereof is to be made with respect to: (i) the number of Shares that may be acquired on the exercise of any outstanding Options; or (ii) the Exercise Price of any outstanding Options.

(d)The Corporation will not be required to issue fractional Shares in satisfaction of its obligations hereunder and any fractional interest in a Share that would, except for the provisions of this Section 4.13(d), be deliverable upon the exercise of an Option will be cancelled and not be deliverable by the Corporation.

14.Disputes
If any questions arise at any time with respect to the Exercise Price or number of Optioned Shares or other securities deliverable upon exercise of an Option in any of the events set out in Section 4.13(a) and 4.13(b), such questions will be conclusively determined by the Corporation's auditors, or, if they decline to so act, any other firm of chartered accountants that the Corporation may designate and who will have access to all appropriate records and such determination will be binding upon the Corporation and all Optionees.

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15.Compliance with Law and Tax Withholding
(a)
The Corporation is not obligated to grant any Options, issue any Shares or other securities, make any payments or take any other action if, in the opinion of the Compensation Committee, in its sole discretion, such action would constitute a violation by an Optionee or the Corporation of any provision of any applicable law, including any statutory or regulatory enactment of any government or government agency. Optioned Shares shall not be issued with respect to an Option unless the exercise of such Option and the issuance and delivery of such Optioned Shares shall comply with all relevant provisions of law, including, without limitation, any applicable provincial, state or federal securities laws, and the requirements of the Exchange, and such issuance shall be further subject to the approval of counsel for the Corporation with respect to such compliance. The inability of the Corporation to obtain from any regulatory body the authority deemed by the Corporation to be necessary for the lawful issuance and sale of any Optioned Shares under the Plan, or the inability of the Corporation to lawfully issue, sell, or deliver any Optioned Shares, shall relieve the Corporation of any liability with respect to the non-issuance, sale or delivery of such Optioned Shares.
(b)
Delivery of the Shares, upon exercise of Options, is subject to the satisfaction of all applicable federal, state, provincial, local and foreign tax obligations, including obligations to make withholdings or deductions in respect of the benefits arising hereunder. The Corporation will have the power and right to require the Optionee to remit to the Corporation an amount sufficient to satisfy any applicable tax or withholding obligations required by law. Further, the Corporation may require the Optionee to satisfy, in whole or in part, such tax or withholding obligations by instructing the Corporation to withhold Shares that would otherwise be received by the Optionee upon exercise, sell such Shares on behalf of the Optionee and remit the proceeds of such sale to the relevant taxing authority in satisfaction of the tax or withholding obligations.

16.Sale of Corporation, etc.
If the Board at any time by resolution declares it advisable to do so in connection with a Merger and Acquisition Transaction, the Board has the right to provide for the conversion, exchange, replacement or substitution of any outstanding Options into or for options, rights or other securities of similar value of, or the assumption of outstanding Options by any entity or affiliate participating in or resulting from a Merger and Acquisition Transaction. Any such conversion, exchange, replacement, substitution or assumption shall be on such terms as the Board in good faith may consider fair and appropriate in the circumstances. In addition, and notwithstanding this Section 4.16, the Board has the right to determine, at its sole discretion, that (2) any or all Options shall thereupon terminate; provided that only such outstanding Options that have vested shall remain exercisable until consummation of the Merger and Acquisition Transaction; or (3) Options not exercisable may be exercisable in full.
ARTICLE V: PROCEDURE
1.     Option Commitment
(a)
Upon grant of an Option hereunder to an Optionee, a senior officer of the Corporation designated by the Compensation Committee will deliver to the Optionee a Commitment Form detailing the terms of the Option.
(b)
Upon the occurrence of an event to which Section 4.13(a) or 4.13(b) applies, a senior officer of the Corporation designated by the Compensation Committee may deliver to any Optionee with respect to any Option, a revised Commitment Form identified as such, with respect to Shares as to which the Option has not been exercised, reflecting the application of Section 4.13(a) or 4.13(b), as applicable, by reason of that event.

2.    Manner of Exercise
(a)Subject to the provisions of the Plan and the provisions of the Commitment Form issued to an Optionee, Options which are exercisable may be exercised by means of a fully completed Exercise Form delivered to the Corporation. The Exercise Form must be accompanied by the payment in full of the Exercise Price for the Shares to be purchased. The Exercise Price must be fully paid in cash, by wire transfer or by certified cheque or bank draft payable to the Corporation or by such other means as might be specified from time to time by the Compensation Committee. No Shares will be issued until full payment therefor has been received by the Corporation. As soon as practicable after receipt of any Exercise Form and full payment, the Corporation will forthwith cause the transfer agent and registrar of the Shares to deliver to the Optionee a certificate or certificates or a statement of account, representing in the aggregate the acquired Shares.
Notwithstanding any other provision of the Plan, the Corporation will not be obligated to issue Optioned Shares on the exercise of an Option granted under the Plan until the Corporation has received the deliveries specified in Section 5.2(a).
3.    Use of an Administrative Agent and Trustee
The Compensation Committee may in its sole discretion appoint from time to time one or more entities to act as administrative agent to administer the Options granted under the Plan and to act as trustee to hold and administer the assets that may be held in respect of Options granted under the Plan, the whole in accordance with the terms and conditions determined by the

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Compensation Committee in its sole discretion. In such case, the Corporation and the administrative agent will maintain records showing the number of Options granted to each Optionee under the Plan.
ARTICLE VI: GENERAL

1.    Optionee has no Rights as a Shareholder
An Optionee has no rights whatsoever as a shareholder in respect of any of the Optioned Shares (including, without limitation, any right to receive dividends or other distributions therefrom or thereon) other than in respect of Optioned Shares purchased by and fully paid for and issued to the Optionee on exercise of the Option.
2.    Accounts and Statements
The Corporation will maintain, or cause to be maintained, records indicating the number of Options granted to each Optionee and the number of Optioned Shares issued under the Plan.
3.    Employment and Services
Nothing contained in the Plan will confer upon any Optionee (or his Consulting Company) any right with respect to employment, term of office or consulting with the Corporation or an Affiliate, or interfere in any way with the right of the Corporation to terminate the Optionee's employment, term of office or consulting arrangements (or those of his Consulting Company) at any time. If an Optionee's employment, term of office or consulting arrangements (or those of his Consulting Company) with the Corporation or an Affiliate is terminated for any reason, no value will be ascribed to any unvested Options for the purposes of any severance entitlement. Participation in the Plan by an Optionee will be voluntary.
4.    Notice
Each notice, demand or communication required or permitted to be given under the Plan (each, a “Notice”) will be in writing and shall be given by personal delivery or by registered mail, postage prepaid, if to the Corporation, at the Corporation's address set out in the Commitment Form, to the attention of the Corporate Secretary, or at such other address as the Corporation may advise an Optionee of, in writing, as being the address for delivery of a Notice to the Corporation, and if to an Optionee, at the most recent residential address for the Optionee shown in the records of the Corporation. All such Notices given as aforesaid shall be deemed to have been received by the recipient when delivered or, if mailed, five days after 12:01 a.m. on the day following the day of the mailing thereof. If any Notice shall have been mailed and if regular mail service shall be interrupted by strikes or other irregularities, such Notice shall be deemed to have been received ten days after 12:01 a.m. on the day following the resumption of normal mail service, provided that during the period that regular mail service shall be interrupted all Notices shall be given by personal delivery.
5.    Amendment or Termination of Plan
(a)The Board reserves the right, in its absolute discretion, to amend, suspend or terminate the Plan, or any portion thereof, at any time without obtaining the approval of shareholders of the Corporation, subject to those provisions of applicable law and regulatory requirements (including the rules, regulations and policies of the Exchange), if any, that require the approval of shareholders. Such amendments may include, without limitation:
(i)
minor changes of a “house-keeping nature”, including, without limitation, 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 of the Plan;
(ii)
amending Options under the Plan, including with respect to the Exercise Period (provided, however, that the Exercise Period may not exceed ten (10) years from the relevant Effective Date unless permitted under Section 4.4(b)), vesting period, exercise method and frequency, exercise price and method of determining the Exercise Price, assignability and the effect of termination of an Optionee's employment or consulting arrangements (or, if applicable, those of its Consulting Company if the Optionee is an individual), or cessation of an Optionee's directorship, as applicable; provided that such amendment does not adversely alter or impair any Option previously granted to an Optionee without the consent of such Optionee;
(iii)
advancing the date on which any Option may be exercised or extending the Expiry Date of any Option (provided, however, that the Exercise Period may not exceed ten (10) years from the relevant Effective Date unless permitted under Section 4.4(b));
(iv)
adding or changing the terms and conditions of any financial assistance which may be provided by the Corporation to Optionees to facilitate the purchase of Shares under the Plan;
(v)
amendments necessary to comply with the provisions of applicable law or the applicable rules of the Exchange, including with respect to the treatment of Options granted under the Plan;
(vi)
amendments respecting the administration of the Plan;
(vii)
amendments necessary to suspend or terminate the Plan;
(viii)
a change relating to the eligibility of any Optionee or Eligible Person in the Plan; and

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(ix)
any other amendment, fundamental or otherwise, not requiring shareholder approval under applicable laws or the applicable rules of the Exchange.
(b)Notwithstanding the foregoing, the Corporation will be required to obtain the approval of the shareholders of the Corporation, and where required by the Exchange, approval of the disinterested shareholders of the Corporation, for any amendment related to:
(x)amending the provisions relating to the transferability of an Option, other than for transfers by will or the law of succession or to corporations controlled by the individual or family trusts;
(xi)reducing the Exercise Price of an Option held by an Insider;
(xii)extending the term of an Option held by an Insider;
(xiii)amending to remove or exceed the limits on participation in the Plan under Section 3.3(b);
(xiv)increasing the maximum number of Shares which may be issued under the Plan; and
(xv)granting additional powers to the Board to amend the Plan without shareholder approval.
(c)Any amendment to any provision of the Plan will be subject to any required regulatory or governmental approvals.
(d)The Board may terminate the Plan at any time in its absolute discretion. If the Plan is so terminated, no further Options shall be granted, but the Options then outstanding shall continue in full force and effect in accordance with the provisions of the Plan.
6.    Governing Law
The Plan will be governed and construed in accordance with the laws of the Province of Ontario.
7.     Effective Date
The Plan shall be effective on January 3, 2011.
8.    Subject to Approval
(e)To the extent a provision of the Plan requires regulatory approval which is not received, such provision shall be severed from the remainder of the Plan until the approval is received and the remainder of the Plan shall remain in full force and effect.
(f)The Plan must be approved periodically pursuant to the requirements of the Exchange.

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SCHEDULE “A”
COMMITMENT FORM
All capitalized terms used herein and not otherwise defined have the same meaning as in the Atlas Financial Holdings, Inc. (the “Corporation”) Stock Option Plan, as amended from time to time (the “Plan”).
Notice is hereby given and the Corporation confirms that:
(a)
on this _____ day of ______________ (the “Grant Date”);
(b)
________________________________ (the “Optionee”);
(c)
was granted options (the “Options”) to purchase _______________________ Shares (the “Option Shares”) of the Corporation;
(d)
for the price (the “Exercise Price”) of $_________ per Option Share;
(e)
which will become exercisable up to, but not after _________________, ________ (the “Expiry Date”), as follows;
(i)
up to ___________________ Option Shares after ______________;
(ii)
up to ___________________ Option Shares after ______________;
(iii)
up to ___________________ Option Shares after ______________; and
(iv)
up to ___________________ Option Shares after ______________;
all on terms and subject to the conditions set out inpowers on the Plan, and such terms and conditions are incorporated herein.
The Options may be exercised by the Optionee by the delivery of a duly completed and executed Notice of Exercise in the form attached to the Plan as Schedule “B”, together with payment in fullpart of the purchase price of the Option Shares purchased pursuant to the exercise of the Options, to the Corporate Secretary of the Corporation at the registered address of the Corporation.
The exercise of the Options is subject to the acceptance by the Corporation of these items.
DATED this ______ day of __________, ________.
Atlas Financial Holdings, Inc.
Per:
��Name:
Title:
Company hereinbefore provided”.


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SCHEDULE “B”
NOTICE OF EXERCISE
The undersigned, ___________________________________________, hereby exercises options to purchase ___________________ ordinary shares (collectively, the “Shares”) of Atlas Financial Holdings, Inc. (the “Corporation”) at a purchase price of $ ____________ per Share.
This Notice of Exercise is delivered in respect of the options to purchase Shares that were granted to the undersigned on ___________________ as evidenced by the Commitment Form delivered by the Corporation to the undersigned.
In connection with the foregoing, the undersigned delivers cash totalling, or a certified cheque or bank draft payable to the Corporation in the amount of, $_________________ as full payment for the Shares in respect of which the options are hereby being exercised.
The undersigned acknowledges that delivery of the Shares is subject to the satisfaction of all applicable federal, state, provincial, local and foreign tax obligations, including obligations to make withholdings or deductions in respect of the benefits arising hereunder. The Corporation has the power and right to require the undersigned to remit to the Corporation an amount sufficient to satisfy any applicable tax or withholding obligations required by law. Further, the Corporation may require the undersigned to satisfy, in whole or in part, such tax or withholding obligations by instructing the Corporation to withhold Shares that would otherwise be received by the undersigned, sell such Shares on behalf of the undersigned and remit the proceeds of such sale to the relevant taxing authority in satisfaction of the tax or withholding obligations.
DATED this ____ day of ________________, _______.

Print or Type Name

SIGNATURE

























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ATLAS FINANCIAL HOLDINGS, INC.

EXTRAORDINARY GENERAL MEETING
PROXY

FOR USE AT THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 15,DECEMBER 7, 2012



THIS PROXY IS SOLICITED BY MANAGEMENTON BEHALF OF THE
BOARD OF DIRECTORS OF ATLAS FINANCIAL HOLDINGS, INC.(the "Corporation") for use at the annual meeting (the "Meeting") of holders ("Shareholders") of ordinary shares ("Ordinary Shares") and restricted voting common shares ("Restricted Voting Shares" and, together with Ordinary Shares, "Voting Shares") in the capital of the Corporation. The Meeting will be held on May 15, 2012 at 10:00 a.m. (central time) at the Corporation's headquarters at 150 Northwest Point Boulevard, Elk Grove Village, IL 60007.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” BOTH PROPOSALS.
The undersigned holdershareholder of Voting SharesAtlas Financial Holdings, Inc., a Cayman Islands corporation (“Atlas” or the “Company”), having read the notice of extraordinary general meeting of shareholders and the definitive proxy statement, receipt of which are hereby acknowledged, revoking all prior proxies, hereby appoints Scott D. Wollney President and Chief Executive OfficerGordon G. Pratt, or either of the Corporation, or, failing him, Paul Romano, Chief Financial Officer of the Corporation,them, or instead of any of the foregoing, _______________________________________________________ with the full power and authority to act as proxyholder for and on behalfproxy of the undersigned and with full power of substitution, to attend the Meeting and any adjournments thereof, in the same manner and with the same power as ifvote all shares of capital stock which the undersigned were personally presentmay be entitled to vote at the Meeting or any adjournments thereof. Without limiting theextraordinary general authorization and powers conferred hereby, the undersigned specifies that allmeeting of the Voting Shares owned orshareholders of Atlas (the “Meeting”) to be held by the undersigned and represented by this proxy shall be voted as follows:

1.
The election of the following directors as nominated by management of the Corporation as set forth in the Proxy Statement dated April 11, 2012
2.

NAME OF NOMINEEFORWITHHOLD FROM VOTING
Jordan Kupinsky
Gordon Pratt
Larry Swets, Jr.
Scott Wollney

2
FORo
WITHHOLDo
the appointment of Johnson Lambert & Co. LLP as auditor of the Corporation, to hold office until the next annual meeting of Shareholders; and
3
FORo
AGAINSTo
the ordinary resolution re-approving the Corporation's stock option plan as described in the Proxy Statement dated April 11, 2012.

If any amendments or variations to the matters referred to above or to any other matters identified in the notice of meeting are proposed at the meeting orCompany's offices, 150 NW Point Boulevard, Elk Grove Village, Illinois 60007, at 10 a.m. Central Standard Time, on Friday, December 7, 2012, and at any adjournment or adjournmentspostponement thereof, or if anyon the matters set forth in this proxy and described in the definitive proxy statement, and in their discretion with respect to such other matters which are not now known to management shouldas may be properly comebrought before the meeting or any adjournmentadjournments or adjournments thereof, this proxy confers discretionary authority on the person voting the proxy to vote on such amendments or variations or such other matters in accordance with the best judgment of such person.

To be valid, this proxy must be received by the Corporation's transfer agent, Equity Financial Trust Company, 200 University Avenue, Suite 400, Toronto, ON M5H 4H1, not later than 48 hours, excluding Saturdays, Sundays and holidays, prior to the Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chair of the meeting in their discretion, and the Chair is under no obligation to accept or reject any particular late proxy.

This proxy revokes and supersedes all proxies of earlier date.

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DATED this day of , 2012.

Signature of Shareholder

Name of Shareholder (Please Print)NOTES:

THIS PROXY IS SOLICTED BY MANAGEMENT OF THE CORPORATION.postponements thereof:

(1)     The shares representedReverse Split Proposal- to consider and vote upon a special resolution to effect a share consolidation of the Company's Ordinary Shares and Restricted Shares at a ratio of one-for-three such that the number of the Company's authorized Ordinary Shares and Restricted Shares is decreased and the par value of each Ordinary Share and Restricted Share is increased by thisthat ratio as set out in the attached notice of meeting and management proxy will be voted.  Wherestatement;
o    FOR                o    AGAINST            o    ABSTAIN
(2)    The Amendment Proposal- to consider and vote upon a choice is specified,special resolution to effect an amendment to Article Six of the Company's Memorandum of Association to reflect the Reverse Split as set out in the attached notice of meeting and management proxy will be voted as directed. statement;
oWhere no choice is specified, this    FOR                o    AGAINST            o    ABSTAIN
IN THEIR DISCRETION THE PROXYHOLDERS ARE AUTHORIZED AND EMPOWERED TO VOTE UPON AMENDMENTS OR VARIATIONS TO MATTERS IDENTIFIED IN THE NOTICE OF MEETING OR OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS AND ALL CONTINUATIONS, ADJOURNMENTS OR POSTPONEMENTS THEREOF, INCLUDING, IF SUBMITTED TO A VOTE OF THE SHAREHOLDERS, A MOTION TO ADJOURN THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS TO ANOTHER TIME OR PLACE FOR THE PURPOSE OF SOLICITING ADDITIONAL PROXIES.

This proxy when properly executed will be voted in favour of the matters listed onmanner directed herein by the proxy.undersigned shareholder. The proxy confers discretionary authority on the above named person to vote in his or her discretion with respect to amendments or variations to the matters identified in the Notice of Meeting accompanying the proxy or such other matters which may properly come before the Meeting.

Each shareholder has the right to appoint a person other than the management designees specified above to represent them at the Meeting. Such right may be exercised by inserting in the space provided the name of the person to be appointed, who need not be a shareholder of the Corporation.Company.

Each shareholder
Proxy cards properly executed and returned without direction will be voted “FOR��� the proposals.
To be valid, this proxy must be received by the Company's transfer agent, Equity Financial Trust Company, 200 University Avenue, Suite 400, Toronto, ON M5H 4H1, not later than 48 hours, excluding Saturdays, Sundays and holidays, prior to the Meeting or any adjournment or postponement thereof. Late proxies may be accepted or rejected by the Chair of the meeting in their discretion.

(SEE REVERSE)

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Note: Please sign exactly as your name or names appear on this proxy. Please date the proxy.Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the shareholdersigner is a corporation, the proxy must be executedplease sign full corporate name by anduly authorized officer, or attorney thereof duly authorized.giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

If the proxy is not dated in the space provided, it is deemed to bear the date of its mailing to the shareholders of the Corporation.Dated: _____________, 2012      

If the shareholder appoints any of the persons designated above, including persons other than Management Designees, as proxy to attend and act at the said Meeting:INDIVIDUAL OR JOINT HOLDER:

Signature

Print Name Here

Signature (if held jointly)

Print Name Here

(a) the shares represented by the proxy will be voted in accordance with the instructions of the shareholder on any ballot that may be called for;
CORPORATE OR PARTNERSHIP HOLDER:

Print Company Name Here

(b) where the shareholder specifies a choice in the proxy with respect to any matter to be acted upon, the shares represented by the proxy shall be voted accordingly; and
By: ________________________________________

Print Name Here

(c) IF NO CHOICE IS SPECIFIED WITH RESPECT TO THE MATTERS LISTED ABOVE, THE PROXY WILL BE VOTED FOR SUCH MATTERS.Its: ________________________________________
Print Title Here







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