Policy on Audit CommitteePre-Approval of Audit and Permissible

Non-audit Services of Independent Registered Public Accounting Firm

Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation, and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to “U.S. holders” (as defined below)pre-approve all audit and permissiblenon-audit services provided by the independent registered public accounting firm.

Prior to engagement of Company capital stock relatingthe independent registered public accounting firm for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the Reverse Stock Split. This discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, judicial authorities, published positions of the Internal Revenue Service (“IRS”), and other applicable authorities, all as currently in effect and all of which are subject to change or differing interpretations (possibly with retroactive effect). We have not obtained a ruling from the IRS or an opinion of legal or tax counsel with respect to the tax consequences of the Reverse Stock Split. The following discussion isAudit Committee for information purposes only and is not intended as tax or legal advice. Each holder should seek advice based on the holder’s particular circumstances from an independent tax advisor.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Company capital stock that is for United States Federal income tax purposes:approval.

This discussion assumes that a U.S. holder holds Company capital stock as a capital asset withinPrior to engagement, the meaningAudit Committeepre-approves these services by category of Code Section 1221. This discussion doesservice. The fees are budgeted, and the Audit Committee requires the independent registered public accounting firm and

management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not address all ofcontemplated in the tax consequences thatoriginalpre-approval. In those instances, the Audit Committee requires specificpre-approval before engaging the independent registered public accounting firm.

The Audit Committee may be relevantdelegatepre-approval authority to a particular Company stockholder or to Company stockholders that are subject to special treatment under United States Federal income tax laws including, but not limited to, financial institutions, tax-exempt organizations, insurance companies, regulated investment companies, persons that are broker-dealers, traders in securities who elect the mark-to-market method of accounting for their securities, or Company stockholders holding their shares of Company capital stock as part of a “straddle,” “hedge,” “conversion transaction,” or other integrated transaction. This discussion also does not address the tax consequences to the Company, or to Company stockholders that own 5%one or more of the Company’s capital stock, are affiliates of Company, or are not U.S. holders. In addition, this discussion does not address other United States Federal taxes (such as gift or estate taxes or alternative minimum taxes), the tax consequences of the Reverse Stock Split under state, local, or foreign tax laws or certain tax reporting requirements that may be applicable with respectits members. The member to whom such authority is delegated must report, for informational purposes only, anypre-approval decisions to the reverse stock split. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences set forth below.

If a partnership (or other entity treated as a partnership for United States Federal income tax purposes) is a Company stockholder, the tax treatment of a partner in the partnership (or any equity owner of such other entity) will generally depend upon the status of the person and the activities of the partnership or other entity treated as a partnership for United States Federal income tax purposes.

Tax Consequences of the Reverse Stock Split Generally

We believe that the Reverse Stock Split will qualify as a “reorganization” under Section 368(a)(1)(E) of the Code. Accordingly, provided that the fair market value of the post-Reverse Stock Split shares is equal to the fair market value of the pre-Reverse Stock Split shares surrendered in the Reverse Stock Split:

Cash Received Instead of a Fractional Share

A U.S. holder who receives cash instead of a fractional share of post-Reverse Stock Split shares will be treated as having received the fractional share of post-Reverse Stock Split shares pursuant to the Reverse Stock Split and then as having exchanged the fractional share of post-Reverse Stock Split shares for cash in a redemption by the Company. In general, this deemed redemption will be treated as a sale or exchange, provided the redemption is not essentially equivalent to a dividend as discussed below. Gain or loss generally will be recognized based on the difference between the amount of cash received and the portion of the U.S. holder’s adjusted tax basis of the pre-Reverse Stock Split shares exchanged in the Reverse Stock Split which is allocable to such fractional share. Such gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for such pre-Reverse Stock Split shares is more than one year as of the effective date of the Reverse Stock Split, and otherwise will be short-term capital gain or loss.

The receipt of cash is “not essentially equivalent to a dividend” if the reduction in a U.S. holder’s proportionate interest in Company resulting from the Reverse Stock Split (taking into account for this purpose shares of common stock which such holder is considered to own under certain attribution rules) is considered a “meaningful reduction” given such U.S. holder’s particular facts and circumstances. The IRS has ruled that a small reduction by a minority stockholder whose relative stock interest is minimal and who exercises no control over the affairs of a corporation can satisfy this test. If the receipt of cash in lieu of a fractional share is not treated as capital gain or loss under the test just described, it will be treated first as ordinary dividend income to the extent of a U.S. holder’s ratable share of Company’s current and accumulated earnings and profits, then as a tax-free return of capital to the extent of the portion of the U.S. holder’s adjusted tax basis of the pre-Reverse Stock Split shares which is allocable to such fractional share, and any remaining amount will be treated as capital gain.

Information Reporting and Backup Withholding

Cash payments received by a U.S. holder of Company capital stock pursuant to the Reverse Stock Split are subject to information reporting, and may be subject to backup withholding at the applicable rate specified by the U.S. Internal Revenue Service (currently 28%) if the holder fails to provide a valid taxpayer identification number and comply with certain certification procedures or otherwise establish an exemption from backup withholding. Backup withholding is not an additional United States Federal income tax. Rather, the U.S. Federal income tax liability of the person subject to backup withholding will be reduced by the amount of the tax withheld. If backup withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is timely furnished to the IRS.

Reservation of Right to Abandon Reverse Stock Split

We reserve the right to not file the certificate of amendment and to abandon any reverse stock split without further action by our stockholders at any time before the effectiveness of the filing with the Secretary of the State of Delaware of the certificate of amendment, even if the authority to effect this amendment is approved by our stockholders at the Special Meeting. By voting in favor of a reverse stock split, you are expressly also authorizing the Board to delay, not proceed with, and abandon, this proposed amendment if it should so decide, in its discretion, that such action is in the best interests of our stockholders.

Vote Required and Board of Directors’ Recommendationnext scheduled meeting.

Approval of the amendment toratification of appointment of our Charter to effect the Reverse Stock Split requires an affirmative vote of a majority of the common stock outstanding and entitled to vote at the Special Meeting. Abstentions and broker non-votes will be counted towards the vote total for this proposal and will have the same effect as “against” votes.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO AUTHORIZE THE FILING OF AN AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF OUR COMMON STOCK, $0.01 PAR VALUE PER SHARE, AT A RATIO IN THE RANGE OF 1:2 TO 1:4, SUCH RATIO WITHIN THAT RANGE TO BE DETERMINED BY THE BOARD OF DIRECTORS CONSISTENT WITH THE GUIDELINES DESCRIBED IN THIS PROXY STATEMENT, AND THE FILING OF SUCH AMENDMENT TO BE IMPLEMENTED, IF AT ALL, NOT LATER THAN NOVEMBER 27, 2016.

PROPOSAL 2: THE ADJOURNMENT OF THE SPECIAL MEETING

Our stockholders are being asked to consider and vote upon an adjournment of the Special Meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of approval of a proposed amendment to our restated certificate of incorporation to effectuate a reverse stock split as described in Proposal 1.

Approval of the adjournment of the Special Meetingindependent registered public accounting firm requires an affirmative vote of a majority of the votes properly cast for or against thison the proposal at the SpecialAnnual Meeting. Abstentions and broker non-votes (to the extent a broker does not exercise its authority to vote) will not be counted towards, and will have no effect on, the vote total for this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVERATIFY THE ADJOURNMENTAPPOINTMENT OF THE SPECIAL MEETING, IF A QUORUM IS PRESENT, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES TO APPROVE PROPOSAL 1,OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR OF THE ADJOURNMENTRATIFICATION UNLESS A STOCKHOLDER HAS INDICATEDINDICATES OTHERWISE ON THE PROXY.

MANAGEMENT AND CORPORATE GOVERNANCE

The Board of Directors

Our Board of Directors currently consists of five members: Dr. David J. Chaplin, Dr. Simon C. Pedder, Mr. Donald R. Reynolds, Dr. Bobby W. Sandage, Jr. and Dr. William D. Schwieterman. Under ourBy-laws, the number of members of our Board of Directors is fixed from time to time by the Board of Directors, and directors serve in office until the next annual meeting of stockholders and until their successors have been elected and qualified.

Committees of the Board and Meetings

Meeting Attendance. During the fiscal year ended December 31, 2016, the Board of Directors held eight meetings, and the various committees of the Board met a total of ten times. The Board of Directors has established three committees whose functions and current members are noted below. The Audit Committee, the Compensation Committee, and the Nominating and Governance Committee (collectively, the “Board Committees”) are committees of the Board of Directors and consist solely of members of the Board of Directors. Each director who served during fiscal year 2016 attended 75% or more of the aggregate number of meetings of the Board of Directors and Board Committees on which he or she served during fiscal year 2016. The Board has also adopted a policy under which each member of the Board who chooses to attend the annual meeting of our stockholders is expected to do so at his or her own expense. One director in office at the time of our annual meeting of stockholders in 2016 standing forre-election attended our 2016 annual meeting, William D. Schwieterman, M.D., and two shareholders attended the meeting.

Audit Committee. The Audit Committee consists of Dr. Sandage (Chairman), Dr. Pedder and Mr. Reynolds. During fiscal year 2016, the Audit Committee held five meetings. Our Audit Committee has the authority to retain and terminate the services of our independent registered public accounting firm, reviews our annual financial statements, considers matters relating to accounting policy and internal controls, and reviews the scope of our annual audits. The Board has determined that Dr. Sandage is an “audit committee financial expert,” as the SEC has defined that term in Item 407 of RegulationS-K. Please also see the “Audit Committee Report” set forth elsewhere in this proxy statement. The Board of Directors has adopted a charter for the Audit Committee, which is reviewed and reassessed annually by the Audit Committee. A copy of the Audit Committee’s written charter is publicly available on our website at www.mateon.com. All members of our Audit Committee qualify as independent under the definition promulgated by The NASDAQ Stock Market and OTC Markets’ OTCQX Rules for U.S. Companies.

Compensation Committee. The Compensation Committee consists of Dr. Pedder (Chairperson), Mr. Reynolds and Dr. Sandage. During fiscal year 2016, the Compensation Committee held three meetings. The Compensation Committee’s roles and responsibilities are set forth in the Compensation Committee’s written charter, and include making recommendations to the Board of Directors regarding the compensation philosophy and compensation guidelines for our executives, the role and performance of our executive officers, and appropriate compensation levels for our Chief Executive Officer (or “CEO”), which are determined without the CEO present, and other executives based on a comparative review of compensation practices of similarly situated businesses. The Compensation Committee also makes recommendations to the Board regarding the design and implementation of our compensation plans and the establishment of criteria and the approval of performance results relative to our incentive plans. Our Compensation Committee also administers our 2015 Plan and our 2017 Plan. Each member of the Compensation Committee qualifies as independent under the definition promulgated by The NASDAQ Stock Market and OTC Markets’ OTCQX Rules for U.S. Companies, and qualifies as a“Non-Employee Director” within the meaning ofRule 16b-3 under the Exchange Act.

The Compensation Committee reviews and assesses the three main components of each named executive officer’s compensation: base salary, incentive compensation, and equity compensation. Adjustments to base salary are generally only made when there has been a change in the scope of the responsibilities of the

named executive officer or when, based on a review of the base salary component of executive officers in companies of a similar size and stage of development, the Compensation Committee members believe that an adjustment is warranted in order to remain competitive. The executive management of the Company determines and agrees with the Compensation Committee on its corporate goals and objectives for the ensuing year. At the end of each year, the attainment of each objective is assessed and incentive awards may be made to each executive based on his or her contribution to achieving the objectives. Awards are made based on either provisions of an executive’s employment agreement, or an assessment of each executive’s equity compensation position relative to the Company’s other executives.

The Compensation Committee also typically reviews our director compensation on at least an annual basis.

The Compensation Committee has the authority to directly retain the services of independent consultants and other experts to assist in fulfilling its responsibilities. In 2016, the Compensation Committee engaged the services of Radford, an Aon Hewitt Company (“Radford”), a national executive compensation consulting firm, to assist the Compensation Committee in defining the appropriate market of the Company’s peer companies for executive and director compensation and practices and in benchmarking our executive and director compensation program against the peer group, with an emphasis on equity compensation. Radford performed these services solely on behalf of the Compensation Committee and had no relationship with the Company or management except as it may have related to the performance of such services. The Compensation Committee has assessed the independence of Radford pursuant to SEC rules and the corporate governance rules of The NASDAQ Stock Market and concluded that no conflict of interest exists that would prevent Radford from independently representing the Compensation Committee.

A copy of the Compensation Committee’s written charter is publicly available on our website at www.mateon.com.

Compensation Committee Interlocks and Insider Participation. None of the members of our Compensation Committee is or has been employed by us in the last completed fiscal year. In addition, none of our executive officers served as a member of the Board of Directors or Compensation Committee, or other committee serving an equivalent function, of any entity that has an executive officer who serves on our Board or Compensation Committee during fiscal year 2016.

Nominating and Governance Committee. During fiscal year 2016, the Nominating and Governance Committee held two meeting. The Nominating and Governance Committee consists of Mr. Reynolds (Chairman), Dr. Pedder and Dr. Sandage. The Nominating and Governance Committee’s role and responsibilities are set forth in the Nominating and Governance Committee’s written charter and include making recommendations to the full Board as to the size and composition of the Board and making recommendations as to particular nominees to the Board. All members of the Nominating and Governance Committee qualify as independent under the definition promulgated by The NASDAQ Stock Market and OTC Markets’ OTCQX Rules for U.S. Companies.

If a stockholder wishes to nominate a candidate to be considered for election as a director at the 2018 annual meeting of stockholders using the procedures set forth in theBy-laws, it must follow the procedures described below under “Stockholder Proposals and Nominations for Director” at the end of this proxy statement.

In addition, the Nominating and Governance Committee may consider candidates recommended by stockholders, as well as from other sources, such as current directors or officers, third-party search firms or other appropriate sources. For all potential candidates, the Nominating and Governance Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment, business and professional skills and experience, independence, knowledge of the biotechnology industry, possible conflicts of interest, diversity, the extent to which the candidate would fill a present need on the Board, and concern for the long-term

interests of the stockholders. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes simply to propose a candidate for consideration as a nominee by the Nominating and Governance Committee, it should submit any pertinent information regarding the candidate to the Chairman of the Nominating and Governance Committee by mail at 701 Gateway Boulevard, Suite 210, South San Francisco, California 94080. The Nominating and Governance Committee considers issues of diversity among its members in identifying and considering nominees for director, and strives where appropriate to achieve a diverse balance of backgrounds, perspectives, experience, age, gender, ethnicity and country of citizenship of the Board and its committees.

A copy of the Nominating and Governance Committee’s written charter is publicly available on our website at www.mateon.com.

Board of Directors Leadership Structure

The Board does not have a policy regarding the separation of the roles of CEO and Chairman of the Board, as the Board believes it is in the best interests of the Company to periodically make that determination based on the position and direction of the Company and the membership of the Board. The Board has determined that having an employee director serve as Chairman is in the best interest of the Company’s stockholders at this time.

The Chairman of the Board of Directors provides leadership to the Board and works with the Board to define its activities and the calendar for fulfillment of its responsibilities. The Chairman of the Board of Directors approves the meeting agendas after input from management, facilitates communication among members of the Board and presides at meetings of our Board and stockholders. Dr. Schwieterman has served as Chairman of the Board of Directors since August 18, 2016.

The Chairman of the Board of Directors, the Chairman of the Audit Committee, the CEO and the other members of the Board work in concert to provide oversight of our management and affairs. We believe that the leadership of the Chairman of the Board fosters a culture of open discussion and deliberation, with a thoughtful evaluation of risk, to support our decision-making. Our Board encourages communication among its members and between management and the Board to facilitate productive working relationships. Working with the other members of the Board, the Chairman also works to ensure that there is an appropriate balance and focus among key board responsibilities such as strategic development, review of operations and risk oversight.

The Board of Directors’ Role in Risk Oversight

The Board plays an important role in risk oversight through direct decision-making authority with respect to significant matters and the oversight of management by the Board and its committees. In particular, the Board administers its risk oversight function through (1) the review and discussion of regular periodic reports to the Board and its committees on topics relating to the risks that we face, (2) the required approval by the Board (or a committee of the Board) of significant transactions and other decisions, (3) the direct oversight of specific areas of our business by the Audit and Compensation Committees, and (4) regular periodic reports from our auditors and outside advisors regarding various areas of potential risk, including, among others, those relating to our internal control over financial reporting. The Board also relies on management to bring significant matters impacting us to the Board’s attention.

Pursuant to the Audit Committee’s charter, the Audit Committee is responsible for discussing the guidelines and policies that govern the process by which our exposure to financial risk is assessed and managed by management. As part of this process, the Audit Committee discusses our major financial risk exposures and steps that management has taken to monitor, control, and report such exposure. In addition, we, under the supervision of the Audit Committee, have established procedures available to all employees for the anonymous and confidential submission of complaints relating to any matter to encourage employees to report questionable activities directly to our senior management and the Audit Committee.

Because of the role of the Board in risk oversight, the Board believes that any leadership structure that it adopts must allow it to effectively oversee the management of the risks relating to our operations. The Board recognizes that there are different leadership structures that could allow it to effectively oversee the management of the risks relating to our operations; however, the Board believes its current leadership structure enables it to effectively provide oversight with respect to such risks.

Stockholder Communications to the Board

Generally, stockholders who have questions or concerns should contact our Investor Relations department at(650) 635-7000. However, any stockholders who wish to address questions regarding our business directly with the Board of Directors, or any individual director, should submit his or her questions to the appropriate director using the Investor Relations email link in the “Contact Us” section on the Company’s website at www.mateon.com. Communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of the Board may be excluded, such as:

In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is filtered out will be made available to any outside director upon request.

Our whistleblower hotline is accessible by telephone at844-990-0002, bye-mail at reports@lighthouse-services.com, and online at http://www.lighthouse-services.com/Mateon.

EXECUTIVE OFFICERS OF THE COMPANY

See “Proposal 1 – Election of Directors” above for the biography of our President and Chief Executive Officer, William D. Schwieterman, M.D. and for the biography of our Chief Scientific Officer, David J. Chaplin, Ph.D.

Matthew M. Loar, age 54, was appointed as our Chief Financial Officer in July 2015. Mr. Loar was previously Chief Financial Officer of KineMed, Inc., a privately held biotechnology company, from January 2014 to July 2015. From January 2010 to January 2014, Mr. Loar was an independent financial consultant to companies in the biopharmaceutical industry. While consulting, he also served as acting Chief Executive Officer and Chief Financial Officer of Neurobiological Technologies, Inc. (NTI), a publicly traded pharmaceutical company, beginning in February 2010 and currently continuing, and as Chief Financial Officer of Virolab, Inc., a biotechnology company, from May 2011 to August 2012. Previously, he was Chief Financial Officer of NTI from April 2008 to December 2009. Earlier in his career, Mr. Loar was Chief Financial Officer of Osteologix, Inc., a publicly traded pharmaceutical company, from 2006 to 2008, and of Genelabs Technologies, Inc., a publicly traded biopharmaceutical and diagnostics company, from 1995 to 2006. Mr. Loar currently serves on the board of directors of NTI. Mr. Loar received a B.A. in Legal Studies from the University of California, Berkeley and is a Certified Public Accountant (inactive) in California. We have an employment agreement with Mr. Loar, as further described under “Execution Compensation – Narrative Disclosure to Summary Compensation Table.”

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors, the members of which have been appointed by the Board of Directors and which consists entirely of directors who meet the independence and experience requirements of The NASDAQ Stock Market and the independence requirements of the OTC Markets’ OTCQX Rules for U.S. Companies, has furnished the following report:

The Audit Committee assists the Board in overseeing and monitoring the integrity of our financial reporting process, compliance with legal and regulatory requirements and the quality of internal and external audit processes. This committee’s role and responsibilities are set forth in our charter adopted by the Board, which is available on our website at www.mateon.com. This committee reviews and reassesses our charter annually and recommends any changes to the Board for approval. The Audit Committee is responsible for overseeing our overall financial reporting process, and for the appointment, compensation, retention, and oversight of the work of OUM & Co. LLP. In fulfilling its responsibilities for the financial statements for fiscal year 2016, the Audit Committee took the following actions:

Based on the Audit Committee’s review of the audited financial statements and discussions with management and OUM & Co. LLP, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form10-K for the fiscal year ended December 31, 2016, for filing with the SEC.

RESPECTFULLY SUBMITTED,

Members of the Mateon Therapeutics, Inc. Audit Committee

Bobby W. Sandage, Jr., Ph.D.

Simon C. Pedder, Ph.D.

Donald R. Reynolds

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of our common stock to file with the SEC and us initial reports of beneficial ownership and reports of changes in beneficial ownership of our common stock and other equity securities. For these purposes, the term “other equity securities” would include options granted under the Mateon Therapeutics, Inc. 2005 Stock Plan (the “2005 Stock Plan”), the Mateon Therapeutics, Inc. 2015 Equity Incentive Plan (the “2015 Plan”) and the Mateon Therapeutics, Inc. 2017 Equity Incentive Plan (the “2017 Plan”). To our knowledge, based solely on a review of the forms and written representations received by us from our Section 16 reporting persons, during the fiscal year ended December 31, 2016, all Section 16(a) filing requirements applicable to the reporting persons were properly and timely satisfied.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Our Audit Committee reviews and approves in advance all related person transactions.

On July 21, 2014, Mateon entered into a consultancy agreement with Dr. Schwieterman, a member of our Board of Directors at the time, to provide consulting services regarding regulatory development of our investigational drugs. We paid Dr. Schwieterman $21,600 for services performed under this consultancy agreement between January 1, 2015 and May 11, 2015. Dr. Schwieterman was appointed our President and Chief Executive Officer on May 12, 2015, the consultancy agreement was terminated effective with this appointment, and no further consultancy payments were made. The compensation Dr. Schwieterman received from the Company during 2015, as further described under “Executive Compensation,” includes compensation received under his consultancy agreement prior to his appointment as President and Chief Executive Officer.

In January 2013, Mateon entered into a consultancy agreement with Dr. Chaplin and also appointed Dr. Chaplin to our Board of Directors. On August 8, 2013, this consultancy agreement was assigned to Aston Biopharma LTD, an entity which is controlled by Dr. Chaplin. Dr. Chaplin is a resident of the United Kingdom, and the services he performs for Mateon while in the United Kingdom are conducted through Aston Biopharma LTD. Services Dr. Chaplin performs for Mateon while he is in the United States are paid directly to Dr. Chaplin. We paid Aston Biopharma LTD approximately $190,000 and $105,750 as compensation for services Dr. Chaplin performed while in the United Kingdom under this consultancy agreement during 2015 and 2016, respectively, and his compensation for services as an employee was reduced by these amounts. On October 25, 2016, Aston Biopharma LTD and Mateon agreed to terminate the consultancy agreement effective as of January 1, 2017.The compensation Dr. Chaplin received from the Company as further described under “Executive Compensation” includes compensation received under our consultancy agreement with Aston Biopharma LTD. From May 15, 2014, until May 12, 2015, Dr. Chaplin served as our President and Chief Executive Officer, and since May 12, 2015, Dr. Chaplin has served as our Chief Scientific Officer.

On June 14, 2012, we entered into a License Agreement with Angiogene Pharmaceuticals Ltd. (the “License Agreement”), pursuant to which we obtained certain rights to patent applications held by Angiogene in exchange for our payment of certain upfront fees, milestone payments, and royalty payments to Angiogene. In October 2012, Dr. Chaplin became the beneficial owner of 16.7% of the then issued and outstanding equity of Angiogene, and Dr. Chaplin’s spouse also became the beneficial owner of 16.7% of the then issued and outstanding equity of Angiogene. During 2015, we paid $75,000 to Angiogene under the License Agreement. No payments were made to Angiogene during 2016. On March 31, 2016, we sent a letter to Angiogene terminating the License Agreement.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth certain information with respect to the beneficial ownership of our common stock as of September 15, 2016,April 13, 2017, for (a) each of our named executive officers listednamed in our proxy statement for the 2016 annual meeting of stockholders held on June 1, 2016,Summary Compensation Table, (b) each of our directors, (c) all of our current directors and executive officers as a group, and (d) each stockholder known by us to own beneficially more than 5% of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of September 15, 2016April 13, 2017, pursuant to the exercise of options or warrants to be outstanding for the purpose of computing the percentage ownership of such individual or group, but such shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the tables. Except as indicated in footnotes to these tables, we believe that the stockholders named in these tables have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Ownership determinations are based on 26,544,934 shares of common

stock outstanding on September 15, 2016.April 13, 2017. Unless otherwise indicated, the address of each stockholder is c/o Mateon Therapeutics, Inc., 701 Gateway Boulevard, Suite 210, South San Francisco, CA 94080.

The determination that there were no other persons, entities or groups known to us to beneficially own more than 5% of our outstanding common stock as of September 15, 2016,April 13, 2017, was based on a review of all statements filed with respect to us since the beginning of the past fiscal year with the SEC pursuant to Section 13(d) or 13(g) of the Exchange Act.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows the total compensation paid or accrued during the fiscal years ended December 31, 2016 and December 31, 2015 to (1) our current President and Chief Executive Officer, (2) our former President and Chief Executive Officer, who continues as Chief Scientific Officer of the Company, and (3) our Chief Financial Officer, who is our next most highly compensated executive officer earning more than $100,000 during the fiscal year ended December 31, 2016.

See Note 6 to our Financial Statements included in our Annual Report on Form10-K for the year ended December 31, 2016, for additional information regarding the assumptions used to determine the fair value of each of the stock awards and option awards set forth in this table. See also our discussion of stock-based compensation under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Significant Judgments and Estimates” in the Form10-K.

exercise price of $1.43 per share which will only vest upon a change of control (as defined in Dr. Schwieterman’s employment agreement) in which the value of our common stock in connection with such change of control is at least $15.00 per share. Because of the significant uncertainty regarding the likelihood of a change in control for a value of at least $15.00 per share, the estimated value of these options ($41,440) has been excluded from the Summary Compensation Table.

(6)	Includes $90,015 for the costs of a furnished apartment in San Francisco, California, inclusive of utilities, and the cost of one economy class round-trip ticket between San Francisco, California and Mobile, Alabama per month, and the income tax impact of these expenses.

(7)	Includes $24,000 for fees earned or paid in cash in connection with Dr. Schwieterman’s service as a member of the Board prior to his employment as our President and Chief Executive Officer in May 2015.

(8)	Includes $21,600 as compensation for regulatory consulting services Dr. Schwieterman provided to us prior to his appointment as our President and Chief Executive Officer in May 2015.

(9)	Mr. Loar became our Chief Financial Officer in July 2015.

(10)

On March 21, 2016, we granted Mr. Loar options to purchase 262,500 shares of our common stock with an exercise price per share of $0.7277 per share. Twenty-five percent of the options will vest on the first anniversary of the grant date, and the remaining seventy-five percent will vest in substantially equal monthly installments over the nextthirty-six months following the first anniversary of the grant date, such that 100% of the options will be fully vested as of the fourth anniversary of the date of grant.

(11)	Mr. Loar was paid aone-time signing bonus of one month’s salary, or $27,083, shortly following his employment and an annual incentive bonus of $41,137 for work performed during 2015.

(12)

On July 20, 2015, we granted Mr. Loar options to purchase 150,000 shares of our common stock with an exercise price per share of $1.37 per share. Twenty-five percent of the options will vest on the first anniversary of the grant date, and the remaining seventy-five percent will vest in substantially equal monthly installments over the nextthirty-six months following the first anniversary of the grant date, such that 100% of the options will be fully vested as of the fourth anniversary of the date of grant.

(13)	Dr. Chaplin served as our President and Chief Executive Officer from May 2014 until May 2015, and has served as our Chief Scientific Officer since May 2015.

(14)

On March 21, 2016, we granted Dr. Chaplin options to purchase 262,500 shares of our common stock with an exercise price per share of $0.7277 per share. Twenty-five percent of the options will vest on the first anniversary of the grant date, and the remaining seventy-five percent will vest in substantially equal monthly installments over the nextthirty-six months following the first anniversary of the grant date, such that 100% of the options will be fully vested as of the fourth anniversary of the date of grant.

(15)

On May 28, 2015, we granted Dr. Chaplin options to purchase 225,000 shares of our common stock with an exercise price per share of $1.43. Twenty-five percent of the options vested on the grant date, and the remainder will vest inthirty-six substantially equal monthly installments beginning on the one month anniversary of the grant date.

(16)	Represents the costs of furnished housing in San Francisco, California, inclusive of utilities, and the cost of one business class round-trip ticket between San Francisco, California and London, United Kingdom per month, and the income tax impact of these expenses.

Narrative Disclosure to Summary Compensation Table

Dr. William D. Schwieterman. On May 15, 2015, we entered into an employment agreement with Dr. Schwieterman with respect to his service as President and Chief Executive Officer, which was subsequently amended on July 31, 2015. Pursuant to the terms of this agreement, Dr. Schwieterman is eligible to receive an annual base salary of $410,000. In addition, Dr. Schwieterman is eligible to be awarded an annual bonus of up to fifty percent of his then-current annual base salary, at our sole discretion, based on our assessment of Dr. Schwieterman’s performance and the Company’s performance. On May 28, 2015 and pursuant to the terms of the 2015 Plan and Dr. Schwieterman’s employment agreement, we granted Dr. Schwieterman options to purchase 375,000 shares of our common stock with an exercise price per share of $1.43. With respect to 300,000 of these options, twenty-five percent of the options will vest on the first anniversary of the grant date, and the remaining seventy-five percent will vest inthirty-six substantially equal monthly installments beginning one year

and one month after the grant date. The vesting with respect to options to purchase 75,000 shares of common stock will only occur upon a change of control in which the value of our common stock in connection with such change of control is at least $15.00 per share. On March 21, 2016, we granted Dr. Schwieterman options to purchase 500,000 shares of our common stock with an exercise price of $0.7277 per share. Twenty-five percent of those options will vest on the first anniversary of the date of grant, and the remaining seventy-five percent will vest in substantially equal monthly installments over the next thirty six months following the first anniversary of the grant date, such that 100% of the options will be fully vested as of the fourth anniversary of the date of grant. We also agreed to reimburse Dr. Schwieterman for customary expenses incurred and accounted for in connection with his employment. In addition, we agreed to reimburse Dr. Schwieterman or pay on his behalf the costs of furnished housing in San Francisco, California inclusive of utilities, the retention of a rental car, and the cost of one economy class roundtrip airplane ticket between San Francisco, California and Mobile, Alabama per month.

Dr. Schwieterman may terminate his employment agreement upon written notice to us. We may terminate the employment agreement without prior written notice for cause, or without cause on sixty days’ prior written notice. If Dr. Schwieterman’s employment is terminated by us for cause, by reason of Dr. Schwieterman’s death or disability or by Dr. Schwieterman without good reason, we will pay to Dr. Schwieterman the amount of our accrued obligations, as of the date of such termination. If Dr. Schwieterman’s employment is terminated by us other than for cause or by Dr. Schwieterman with good reason, we will pay to Dr. Schwieterman the accrued obligations, an amount equal to twelve months of his then-current base salary and premiums pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), for Dr. Schwieterman and his immediate family for twelve months, subject to the conditions outlined in the agreement.

If Dr. Schwieterman’s employment is terminated by us other than for cause or by Dr. Schwieterman with good reason in the one year following the effective date of a change in control of the Company, we will pay to Dr. Schwieterman our accrued obligations, an amount equal to twelve months of his then-current base salary, and COBRA premiums for a period of twelve months on the same conditions described above. In addition, all of Dr. Schwieterman’s unvested equity outstanding on the date of termination shall vest and be immediately exercisable. Dr. Schwieterman has also agreed not to directly or indirectly solicit for employment, during his employment and for a twelve month period following termination of his employment, any person who is (or has been in the past year) a Company officer, executive or key employee.

All payments made and benefits available to Dr. Schwieterman in connection with his employment agreement will comply with Internal Revenue Code Section 409A in accordance with the terms of his employment agreement.

Prior to his appointment as our President and CEO in May 2015, Dr. Schwieterman was also compensated in exchange for his services as a member of our Board of Directors pursuant to the terms of our Amended & Restated Director Compensation Policy applicable tonon-employee directors (the “2014 Director Compensation Policy”) as further described under “Director Compensation” below, and was compensated for his services as a consultant as further described under “Certain Relationships and Related Transactions.”

Matthew M. Loar. On July 20, 2015, we entered into an employment agreement with Mr. Loar with respect to his service as our Chief Financial Officer. Pursuant to the terms of this agreement, Mr. Loar is eligible to receive an annual base salary of $325,000 and was paid aone-time signing bonus of one month’s salary, or $27,083, shortly following the execution of his agreement. In addition, Mr. Loar is eligible to be awarded an annual bonus of up to thirty-five percent of his then-current annual base salary, at our sole discretion, based on our assessment of Mr. Loar’s performance and the Company’s performance. On July 20, 2015 and pursuant to the terms of the 2015 Plan and Mr. Loar’s employment agreement, we granted Mr. Loar options to purchase 150,000 shares of our common stock with an exercise price per share of $1.37. Twenty-five percent of the options will vest on the first anniversary of the grant date, and the remaining seventy-five percent will vest in substantially equal monthly installments over the nextthirty-six months following the first anniversary of the

grant date, such that the options will be fully vested as of the fourth anniversary of the date of grant. On March 21, 2016, we granted Mr. Loar options to purchase 262,500 shares of our common stock with an exercise price per share of $0.7277 per share. Twenty-five percent of the options will vest on the first anniversary of the grant date, and the remaining seventy-five percent will vest in substantially equal monthly installments over the nextthirty-six months following the first anniversary of the grant date, such that 100% of the options will be fully vested as of the fourth anniversary of the date of grant.

Mr. Loar may terminate his employment agreement upon written notice to us. We may terminate the employment agreement without prior written notice for cause, or without cause on sixty days’ prior written notice. If Mr. Loar’s employment is terminated by us for cause, by reason of Mr. Loar’s death or disability or by Mr. Loar without good reason, we will pay to Mr. Loar the amount of our accrued obligations, as of the date of such termination. If Mr. Loar’s employment is terminated by us other than for cause or by Mr. Loar with good reason, we will pay to Mr. Loar the accrued obligations, an amount equal to twelve months of his then-current base salary and premiums pursuant to COBRA, for Mr. Loar and his immediate family for twelve months, subject to the conditions outlined in the agreement.

If Mr. Loar’s employment is terminated by us other than for cause or by Mr. Loar with good reason in the one year following the effective date of a change in control of the Company, we will pay to Mr. Loar our accrued obligations, an amount equal to twelve months of his then-current base salary, and COBRA premiums for a period of twelve months on the same conditions described above. In addition, all of Mr. Loar’s unvested equity outstanding on the date of termination shall vest and be immediately exercisable. Mr. Loar has also agreed not to directly or indirectly solicit for employment, during his employment and for a twelve month period following termination of his employment, any person who is (or has been in the past year) a Company officer, executive or key employee.

All payments made and benefits available to Mr. Loar in connection with his employment agreement will comply with Internal Revenue Code Section 409A in accordance with the terms of his employment agreement.

Dr. David J. Chaplin. On May 16, 2014, we entered into an employment agreement with Dr. Chaplin with respect to his service as President and Chief Executive Officer, which was subsequently amended on August 7, 2014 and then amended and restated on May 12, 2015 when Dr. Chaplin became our Chief Scientific Officer. Pursuant to the terms governing Dr. Chaplin’s service as our President and CEO, Dr. Chaplin was eligible to receive an annual base salary of $410,000, which included compensation for consultancy services to the Company under Dr. Chaplin’s consultancy agreement with Aston Biopharma LTD, as further described under “Certain Relationships and Related Person Transactions.” In addition, during the period of time in which Dr. Chaplin served as our President and CEO he was eligible to be awarded an annual bonus of up to fifty percent of his then-current annual base salary, at our sole discretion, based on our assessment of Dr. Chaplin’s performance and the Company’s performance.

Pursuant to Dr. Chaplin’s employment agreement governing his service as our Chief Scientific Officer during 2016, Dr. Chaplin was eligible to receive an annual base salary of $220,000, which includes compensation for consultancy services to the Company under Dr. Chaplin’s consultancy agreement with Aston Biopharma LTD, as further described under “Certain Relationships and Related Person Transactions.” In addition and in connection with his services as our Chief Scientific Officer during 2016, Dr. Chaplin was eligible to be awarded an annual bonus of up to thirty-five percent of his then-current annual base salary, at our sole discretion, based on our assessment of Dr. Chaplin’s performance and the Company’s performance. On May 28, 2015, Dr. Chaplin also received, pursuant to his employment agreement and the 2015 Plan, options to purchase 225,000 shares of the Company’s common stock at an exercise price per share equal to $1.43. Twenty-five percent of the options vested on the grant date, and the remaining are subject to vesting in 36 substantially equal monthly installments beginning on the one month anniversary from the date of grant. On March 21, 2016, we granted Dr. Chaplin options to purchase 262,500 shares of our common stock with an exercise price per share of $0.7277 per share.

Twenty-five percent of the options will vest on the first anniversary of the grant date, and the remaining seventy-five percent will vest in substantially equal monthly installments over the nextthirty-six months following the first anniversary of the grant date, such that 100% of the options will be fully vested as of the fourth anniversary of the date of grant.

On October 25, 2016, we amended Dr. Chaplin’s employment agreement regarding his service as Chief Scientific Officer, effective as of January 1, 2017. Pursuant to the amended employment agreement, Dr. Chaplin will receive an annual base salary of $220,000 per year. In addition, Dr. Chaplin may be awarded an annual bonus of up to 35% of his then-current annual base salary, at the sole discretion of Mateon, based on Mateon’s assessment of Dr. Chaplin’s performance and Mateon’s performance.

We have agreed to reimburse Dr. Chaplin, or pay on his behalf, the cost of one business class round-trip ticket between San Francisco, California and London, United Kingdom per month. We also agreed to reimburse Dr. Chaplin for the costs of furnished housing in San Francisco, California, inclusive of utilities and the retention of a rental car during Dr. Chaplin’s tenure as our President and CEO, and in connection with his services as our Chief Scientific Officer, we will reimburse Dr. Chaplin for the cost of living expenses when traveling with the Company.

Dr. Chaplin may terminate his employment agreement upon written notice to us. We may terminate the employment agreement without prior written notice for cause, or without cause on sixty days’ prior written notice. If Dr. Chaplin’s employment is terminated by us for cause, by reason of Dr. Chaplin’s death or disability or by Dr. Chaplin without good reason, we will pay to Dr. Chaplin the amount of our accrued obligations, as of the date of such termination. If Dr. Chaplin’s employment is terminated by us other than for cause or by Dr. Chaplin with good reason, we will pay to Dr. Chaplin the accrued obligations, an amount equal to twelve months of his then-current base salary and premiums pursuant to COBRA, for Dr. Chaplin and his immediate family for twelve months, subject to the conditions outlined in the agreement.

If Dr. Chaplin’s employment is terminated by us other than for cause or by Dr. Chaplin with good reason in the one year following the effective date of a change in control of the Company, we will pay to Dr. Chaplin our accrued obligations, an amount equal to twelve months of his then-current base salary, and COBRA premiums for a period of twelve months on the same conditions described above. In addition, all of Dr. Chaplin’s unvested equity compensation outstanding on the date of termination shall vest and be immediately exercisable. Dr. Chaplin has also agreed not to directly or indirectly solicit for employment, during his employment and for a twelve month period following termination of his employment, any person who is (or has been in the past year) a Company officer, executive or key employee.

All payments made and benefits available to Dr. Chaplin in connection with his employment agreement will comply with Internal Revenue Code Section 409A in accordance with the terms of his employment agreement.

Outstanding Equity Awards at FiscalYear-End

The following table shows grants of stock options and grants of unvested stock awards outstanding on the last day of the fiscal year ended December 31, 2016, including both awards subject to performance conditions andnon-performance-based awards, to each of the executive officers named in the Summary Compensation Table. There were no grants of unvested stock awards outstanding on the last day of the fiscal year ended December 31, 2016.

Pension Benefits

We do not have any qualified ornon-qualified defined benefit plans.

Nonqualified Deferred Compensation

We do not have anynon-qualified defined contribution plans or other deferred compensation plans.

Potential Payments Upon Termination orChange-In-Control

We have entered into certain agreements and maintain certain plans that may require us to make certain payments and/or provide certain benefits to Dr. Schwieterman, Dr. Chaplin and Mr. Loar in the event of a termination of employment or a change of control of the Company. The following table summarizes the potential payments to Dr. Schwieterman, Dr. Chaplin and Mr. Loar assuming that one of the described termination events occurs. The table assumes that the event occurred on December 31, 2016, the last day of our fiscal year. On December 30, 2016, the last trading day of 2016, the closing price of our common stock on OTCQX marketplace was $0.36 per share.

William D. Schwieterman, M.D.

Matthew M. Loar

David J. Chaplin, Ph.D.

The information set forth above is described in more detail in the Narrative Disclosure to the Summary Compensation Table.

A “Change in Control,” as defined in Dr. Schwieterman’s, Mr. Loar’s and Dr. Chaplin’s employment agreements, means the occurrence of the following during the term of Dr. Schwieterman’s employment as President and Chief Executive Officer, during the term of Mr. Loar’s employment as Chief Financial Officer and during the term of Dr. Chaplin’s employment as Chief Scientific Officer, respectively:

Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company or its affiliates or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions which the Board of Directors does not approve;

In each such case the Change of Control must also meet the requirements of a “Change of Control Event” within the meaning of Section 409(a)(2)(A)(v) of the Code.

Each of Dr. Schwieterman, Mr. Loar and Dr. Chaplin will be entitled to certain benefits as described in the table above if his employment is terminated by the Company for reasons other than cause or by him with good reason. “Cause,” as defined in Dr. Schwieterman’s, Mr. Loar’s and Dr. Chaplin’s employment agreements, means:

“Good Reason,” as defined in Dr. Schwieterman’s/Mr. Loar’s/Dr. Chaplin’s employment agreement, means the Company:

(2)

relocates its headquarters more than sixty (60) miles from their current location (unless the relocation results in the headquarters being closer to Dr. Schwieterman’s/Mr. Loar’s/Dr. Chaplin’s residence);

Good Reason must also meet the requirements for a good reason termination in accordance with Code Section 409A, and any successor statute, regulation and guidance thereto.

Director Compensation

The following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2016 to each of ournon-employee directors. Directors who are employed by us are not compensated for their service on our Board of Directors.

See Note 6 to our Financial Statements included in our Annual Report on Form10-K for the year ended December 31, 2016, for additional information regarding the assumptions used to determine the fair value of each of the stock awards and option awards set forth in this table. See also our discussion of stock-based compensation under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Judgments and Estimates” in the Form10-K.

The following is a description of the standard compensation arrangements under which ournon-employee directors are compensated for their service as directors, including as members of the various Committees of our Board.

Fees. In July 2014, the Board of Directors adopted the 2014 Director Compensation Policy, and on October 25, 2016, the Board amended and restated the 2014 Director Compensation Policy (as amended and restated, the “2016 Director Compensation Policy”). In accordance with the 2014 Director Compensation Policy, effective July 1, 2014, the following cash fees were payable tonon-employee directors quarterly in advance on the first day of each fiscal quarter:

In accordance with the 2016 Director Compensation Policy, effective October 25, 2016, the following cash fees were payable tonon-employee directors quarterly in arrears at the end of each fiscal quarter:

A newnon-employee director joining the Board during the course of the year on a date other than the first day of the fiscal quarter will receive his or her cash compensation for that fiscal quarterpro-rated.

Equity Grants. In accordance with the 2014 Director Compensation Policy and the 2016 Director Compensation Policy, on the date of each annual meeting, eachnon-employee director is granted anon-qualified stock option to purchase shares of our common stock valued at $40,000 on the date of grant, which will vest in full one year from the grant date, subject to the applicable director’s continued service on the Board as of the vesting date.

A newnon-employee director joining the Board will be granted an option to purchase shares of our common stock valued at $50,000 on or shortly after the first date of his or her service, which will vest over a three year period subject to the director’s continued service on the Board as of each vesting date.

Each option granted under the 2014 Director Compensation Policy and 2016 Director Compensation Policy will have an exercise price equal to the closing price of our common stock on OTCQX marketplace (or other applicable trading market) on the date of grant, or if the date of grant is not a trading day, the closing price on the next trading day following the date of grant, and each option will have a term of six years. The number of options to be received under the 2014 Director Compensation Policy and the 2016 Director Compensation Policy will be calculated using the Black-Scholes valuation method.

Options granted pursuant to the 2014 Director Compensation Policy and the 2016 Director Compensation Policy are subject to the terms and conditions of the applicable stock plan. Under the terms of the 2015 Incentive Plan and the 2017 Incentive Plan, directors may be granted shares of common stock, stock-based awards, and/or stock options to purchase shares of common stock.

Equity Compensation Plan Information

The following table provides certain aggregate information with respect to all of the Company’s equity compensation plans in effect as of December 31, 2016.

Summary Description of the Company’s 2017 Plan

On January 12, 2017, the Board of Directors, with the approval of the Compensation Committee of the Board, adopted and approved the Mateon Therapeutics, Inc. 2017 Equity Incentive Plan (the “2017 Plan”). The following is a summary of the 2017 Plan, which is qualified in its entirety by reference to the text of the 2017 Plan and the form of option agreement under the 2017 Plan, copies of which are attached as Exhibits 10.1 and 10.2, respectively, to the Company’s Form8-K, filed with the SEC on January 13, 2017.

Eligibility. The 2017 Plan allows us, under the direction of our Compensation Committee, to make grants of stock options, restricted and unrestricted stock awards, and other stock-based awards to employees, consultants and directors. The purpose of these awards is to attract and retain key individuals, further align employee and stockholder interests, and provide additional incentive for them to promote our success or the success of our affiliates.

Shares Available for Issuance. The 2017 Plan provides for the issuance of up to 2,000,000 shares of our common stock. Generally shares of common stock reserved for awards under the 2017 Plan that lapse or are cancelled, forfeited, surrendered or terminated for any reason will be added back to the share reserve available for future awards. However, shares of common stock tendered in payment for an award or shares of common stock withheld for taxes will not be available again for grant.

Stock Options. Stock options granted under the 2017 Plan must benon-qualified stock options, which are not intended to meet the requirements of Section 422 of the Internal Revenue code. Award agreements for

stock options include rules for exercise of the stock options after termination of service. Options may not be exercised unless they are vested, and no option may be exercised after the end of the term set forth in the award agreement. Generally, stock options will be exercisable for three months after termination of service for any reason other than death or total and permanent disability, and for twelve months after termination of service on account of death or total and permanent disability.

Restricted Stock. Restricted stock is common stock that is subject to restrictions, including a prohibition against transfer and a substantial risk of forfeiture, until the end of a “restricted period” during which the grantee must satisfy certain vesting conditions. If the grantee does not satisfy the vesting conditions by the end of the restricted period, the restricted stock is forfeited. During the restricted period, the holder of restricted stock has the rights and privileges of a regular stockholder, except that the restrictions set forth in the applicable award agreement apply. For example, the holder of restricted stock may vote and receive dividends on the restricted shares; but he or she may not sell the shares until the restrictions are lifted.

Other Stock-Based Awards. The 2017 Plan also authorizes the grant of other types of stock-based compensation including, but not limited to stock appreciation rights, phantom stock awards, and stock unit awards. Our Compensation Committee may award such stock-based awards subject to such conditions and restrictions as it may determine. These conditions and restrictions may include continued employment with us through a specified restricted period.

Plan Administration. In accordance with the terms of the 2017 Plan, our Board of Directors has authorized our Compensation Committee to administer the 2017 Plan. The Compensation Committee may delegate part of its authority and powers under the 2017 Plan to one or more of our directors and/or officers, but only our Board of Directors or our Compensation Committee can make awards to participants who are directors or executive officers of the Company. In accordance with the provisions of the 2017 Plan, our Compensation Committee determines the terms of awards, including, which employees, directors and consultants will be granted awards, the number of shares subject to each award, the vesting provisions of each award, the termination and cancellation provisions applicable to awards, and all other terms and conditions upon which each award may be granted in accordance with the 2017 Plan. In addition, our Compensation Committee may, in its discretion, amend any term or condition of any outstanding award, other than reducing the exercise price or purchase price, provided that (i) the term or condition as amended is not prohibited by the 2017 Plan; (ii) any amendment does not impair the rights of a participant under any award previously granted without that participant’s consent; and (iii) any amendment will be made only after the Compensation Committee determines whether the amendment would cause any adverse tax consequences to the participant.

Stock Dividends and Stock Splits. If our common stock shall be subdivided or combined into a greater or smaller number of shares or if we issue any shares of common stock as a stock dividend, the number of shares of our common stock deliverable upon exercise of an option issued or upon issuance of an award shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made in the purchase price per share to reflect such subdivision, combination, or stock dividend.

Corporate Transactions. Upon a merger or other reorganization event, the Compensation Committee or the successor board, may, in its sole discretion, take any one or more of the following actions pursuant to the 2017 Plan, as to some or all outstanding awards (i) to provide that all outstanding options shall be assumed or substituted by the successor corporation, (ii) upon written notice to a participant, to provide that the participant’s unexercised options will terminate immediately prior to the consummation of such transaction unless exercised by the participant, (iii) in the event of a merger pursuant to which holders of our common stock will receive a cash payment for each share surrendered in the merger, to make or provide for a cash payment to the participants equal to the difference between the merger price times the number of shares of our common stock subject to such outstanding options, and the aggregate exercise price of all such outstanding options, in exchange for the termination of such options, (iv) to provide that outstanding awards shall be assumed or substituted by the successor corporation, become realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon the merger or reorganization event, and (v) with respect to stock grants and in

lieu of any of the foregoing, the Compensation Committee or the successor board may provide that, upon consummation of the transaction, each outstanding stock grant shall be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such transaction to a holder of the number of shares of common stock comprising such award (to the extent such stock grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Compensation Committee, all forfeiture and repurchase rights being waived upon such transaction).

Amendment and Termination. The 2017 Plan may be amended by the Compensation Committee, in their capacity as administrator of the 2017 Plan. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent.

Duration of Plan. The 2017 Plan will expire by its terms on January 12, 2027.

Federal Income Tax Considerations. The material federal income tax consequences of the issuance and exercise of stock options and other awards under the 2017 Plan, based on the current provisions of the Code and regulations, are as follows. Changes to these laws could alter the tax consequences described below. This summary assumes that all awards granted under the 2017 Plan are exempt from or comply with, the rules under Section 409A of the Code related to nonqualified deferred compensation.

Non-Qualified Options.Non-qualified options may be granted under the 2017 Plan. Anon-qualified option ordinarily will not result in income to the optionee or deduction to us at the time of grant. The optionee will recognize compensation income at the time of exercise of suchnon-qualified option in an amount equal to the excess of the then value of the shares over the option price per share. Such compensation income of optionees may be subject to withholding taxes, and a deduction may then be allowable to us in an amount equal to the optionee’s compensation income. An optionee’s initial basis in shares so acquired will be the amount paid on exercise of thenon-qualified option plus the amount of any corresponding compensation income. Any gain or loss as a result of a subsequent disposition of the shares so acquired will be capital gain or loss.

Stock Grants. With respect to stock grants under the 2017 Plan that result in the issuance of shares that are either not restricted as to transferability or not subject to a substantial risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of shares received. Thus, deferral of the time of issuance will generally result in the deferral of the time the grantee will be liable for income taxes with respect to such issuance. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee. With respect to stock grants involving the issuance of shares that are restricted as to transferability and subject to a substantial risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of the shares received at the first time the shares become transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier. A grantee may elect to be taxed at the time of receipt of shares rather than upon lapse of restrictions on transferability or substantial risk of forfeiture, but if the grantee subsequently forfeits such shares, the grantee would not be entitled to any tax deduction, including as a capital loss, for the value of the shares on which he previously paid tax. The grantee must file such election with the Internal Revenue Service within 30 days of the receipt of the shares. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.

Stock Units. The grantee recognizes no income until the issuance of the shares. At that time, the grantee must generally recognize ordinary income equal to the fair market value of the shares received. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.

EXPENSES OF SOLICITATION

We will bear the costs of soliciting proxies from our stockholders. We will make this solicitation by mail, and our directors, officers, and employees may also solicit proxies by telephone, fax,e-mail or in person, for which they will receive no compensation other than their regular compensation as directors, officers, or employees. As noted above in “What are the Costs of Soliciting These Proxies,” Morrow & Co., LLC has been engaged to act as our proxy solicitor in connection with the proposals to be acted upon at the Special Meeting. For these services, we will pay Morrow & Co., LLC a fee of approximately $7,500 plus expenses. Arrangements will also be made with brokerage houses and other custodians, nominees and

fiduciaries to send proxies and proxy materials to beneficial owners of our voting securities. We will reimburse these brokerage firms, custodians, nominees and fiduciaries for reasonableout-of-pocket expenses that are incurred by them.

COMPENSATION PRACTICES AND POLICIES RELATING TO RISK MANAGEMENT

Consistent with SEC disclosure requirements, we have assessed our compensation policies, practices and awards, and have concluded that our compensation policies, practices and awards do not create risks that are reasonably likely to have a material adverse effect on the Company. Management and the Compensation Committee of our Board of Directors each assessed our compensation and benefits programs to determine if the programs’ provisions and operations create undesired or unintentional risk of a material nature. Our compensation programs include a combination of fixed base salaries, cash bonuses, long-term incentive awards, including performance-based compensation, and employee retirement plans that are generally uniform in design and operation throughout the Company and with all levels of employees.

Based on the foregoing, we believe that our compensation policies, practices and awards do not create risks that are likely to have a material adverse effect on the Company as a whole. We also believe that our incentive compensation arrangements provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage significant risks, are compatible with our effective internal controls and our risk management practices, and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs.

CORPORATE CODE OF CONDUCT AND ETHICS

We have adopted a Corporate Code of Conduct and Ethics (the “Code of Conduct”) that applies to all of our employees, including our CEO and CFO. The text of the Code of Conduct has been filed as an exhibit to our Annual Report on Form10-K for the year ended December 31, 2014, and is posted on our website at www.mateon.com. Disclosure regarding any amendments to, or waivers from provisions of the code of conduct and ethics that apply to our directors, principal executive, and financial officers will be included in a Current Report on Form8-K within four business days following the date of the amendment or waiver.

STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR

FOR THE NEXT ANNUAL MEETING

Your eligibility as a stockholder to submit proposals and director nominations, the proper subjects of such proposals and other issues governing stockholder proposals and director nominations are regulated by the rules adopted under Section 14 of the Exchange Act and our By-laws. To be considered for inclusion in the proxy statement relating to our next annual meeting2018 Annual Meeting of stockholdersStockholders, we must receive stockholder proposals (other than for director nominations) no later than Wednesday, December 27, 2017. To be considered for presentation at the 2018 Annual Meeting, although not included in the proxy statement, proposals (including director nominations that are not requested to be heldincluded in 2017, stockholder proposals and nominationsour proxy statement) must be received no earlier than 75 days prior to the date that is one year from this year’s mailing date and no later than March 11, 2017 and no earlier than February 9, 2017.45 days prior to the date that is one year from this year’s mailing date. Proposals that are not received in a timely manner will not be voted on at the 2018 Annual Meeting. If a proposal is received on time, the proxies that management solicits for the meeting may still exercise discretionary voting authority on the proposal under circumstances consistent with the proxy rules of the SEC. All stockholder proposals should be marked for the attention of The Secretary, Mateon Therapeutics, Inc., 701 Gateway Boulevard, Suite 210, South San Francisco, California 94080.94080.

OTHER MATTERS

The Board of Directors knows of no other business that will be presented at the SpecialAnnual Meeting. If any other business is properly brought before the SpecialAnnual Meeting, it is intended that proxies in the enclosed form will be voted in accordance with the judgment of the persons voting the proxies.

ANNUAL REPORT

Our Annual Report on Form10-K for the fiscal year ended December 31, 2016, which includes our financial statements, provides additional information about us and can be found on the website of the SEC at www.sec.gov. They are also available on our website at www.mateon.com. You may obtain a printed copy of our Annual Report on Form10-K, including our financial statements, free of charge, from us by sending a written request to: Mateon Therapeutics, Inc., 701 Gateway Boulevard, Suite 210, South San Francisco, California 94080, Attention: Investor Relations.

South San Francisco, CA

October 3, 2016April 26, 2017

APPENDIX A

PROXY CARD

1:						To authorize the filing of an amendment to the Company’s Restated Certificate of Incorporation to effect a reverse stock split of our common stock, $0.01 par value per share, at a ratio in the range of 1:2 to 1:4, such ratio within that range to be determined by the Board of Directors consistent with the guidelines described in this proxy statement, and the filing of such amendment to be implemented, if at all, not later than November 27, 2016.

KEEP THIS PORTION FOR		AGAINST		ABSTAIN
¨		¨		¨

2:		To approve the adjournment of the Special Meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes to approve Proposal 1.

FOR		AGAINST		ABSTAIN
¨		¨		¨

		To attend the meeting and vote your sharesin person, please mark this box.				¨
		Authorized Signatures - This section must becompleted for your Instructions to be executed.

		Please Sign Here				Please Date Above
		Please Sign Here				Please Date Above
		Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.

Please separate carefully at the perforation and return just this portion in the envelope provided.

A-1

MATEON THERAPEUTICS, INC.

Special Meeting of Mateon Therapeutics, Inc.

to be held on Friday, November 11, 2016

for Holders as of September 15, 2016

This proxy is being solicited on behalf of the Board of Directors

				VOTE BY:
		INTERNET								TELEPHONE

Go To										Call
www.proxypush.com/matn										866-250-6197

•		Cast your vote online 24 hours a day/7 days a week.				OR		•		Use any touch-tone telephone toll-free 24 hours a day/7 days a week.
•		Have your Proxy Card/Voting Instructions Form ready.				MAIL		• •		Have your Proxy Card/Voting Instruction Form ready. Follow the simple recorded instructions.
•		View Meeting Documents.

		OR		•		Mark, sign and date your Proxy Card/Voting Instruction Form. YOUR RECORDS
				•		Detach your Proxy Card/Voting Instruction Form.
				•		Return your Proxy Card/Voting Instruction Form in the
						postage-paid envelope provided.

The undersigned hereby appoints Matthew M. Loar and a representative of Mediant Communications Inc., and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Mateon Therapeutics, Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR THE PROPOSALS IN ITEM 1 AND ITEM 2.

All votes must be received by 11:59 P.M., Eastern Time, November 10, 2016.

PROXY TABULATOR FOR   MATEON THERAPEUTICS, INC. c/o MEDIANT COMMUNICATIONS P.O. BOX 8016 CARY, NC 27512-9903 DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

APPENDIX B

CERTIFICATE OF AMENDMENT OF

RESTATED CERTIFICATE OF INCORPORATION OF

MATEON THERAPEUTICS, INC.

It is hereby certified that:

EXECUTED, effective as of this          day of                     , 2016.

B-1