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Item 7. Management’s Discussion and Analysis

2021-06-22 compared with 2020-06-29 · 483 added, 638 removed, 121 unchanged (90% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion should be read

in conjunction with the attached consolidated financial statements and notes thereto.

This annual report contains forward-looking

statements within the meaning of the U.S.

Management’s Discussion and Analysis of Financial Condition and Results

The following discussion should be read in conjunction with the attached

consolidated financial statements and notes thereto.

This annual report contains forward-looking statements within the meaning of the

Private Securities Litigation Reform Act of 1995.

These statements are subject to risks

and uncertainties that could cause actual results and events to differ materially from those expressed or implied by such forward-looking

For a detailed discussion of these risks and uncertainties, see Item 1A, “Risk Factors”

of this annual

We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s

analysis only as of the date of this annual report.

We undertake no obligation to update forward-looking statements which reflect

events or circumstances occurring after the date of this annual report, unless required by applicable securities laws.

This management’s discussion and

analysis, or MD&A, is presented in order to provide the reader with an overview of the financial results and changes to our

financial position as at March 31, 2020 and for the three and twelve-month periods then ended.

This MD&A explains the material

variations in our financial statements of operations, financial position and cash flows for the three and twelve-month periods

ended March 31, 2020, and 2019.

Market data and certain industry data and

forecasts included in this MD&A were obtained from internal corporation surveys, market research, and publicly available information,

reports of governmental agencies and industry publications and surveys.

We have relied upon industry publications as our primary

sources for third-party industry data and forecasts.

Industry surveys, publications and forecasts generally state that the information

they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information

is not guaranteed.

We have not independently verified any of the data from third-party sources or the underlying economic assumptions

Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable based upon our

management’s knowledge of our industry, have not been independently verified.

Our estimates involve risks and uncertainties,

including assumptions that may prove not to be accurate, and these estimates and certain industry data are subject to change based

on various factors, including those discussed under Item 1.A “Risk Factors”

These statements are subject to risks and uncertainties that could cause actual

results and events to differ materially from those expressed or implied by such forward-looking statements.

For a detailed discussion

of these risks and uncertainties, see Item 1A, “Risk Factors” of this annual report.

We caution the reader not to place undue

reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this annual report.

undertake no obligation to update forward-looking statements which reflect events or circumstances occurring after the date of this annual

report, unless required by applicable securities laws.

This management’s discussion and analysis, or MD&A, is presented

in order to provide the reader with an overview of the financial results and changes to our financial position as at March 31, 2021 and

for the three and twelve-month periods then ended.

This MD&A explains the material variations in our financial statements of operations,

financial position and cash flows for the three and twelve-month periods ended March 31, 2021, and 2020.

Market data and certain industry data and forecasts included in this MD&A

were obtained from internal corporation surveys, market research, and publicly available information, reports of governmental agencies

and industry publications and surveys.

We have relied upon industry publications as our primary sources for third-party industry data

and forecasts.

Industry surveys, publications and forecasts generally state that the information they contain has been obtained from sources

believed to be reliable, but that the accuracy and completeness of that information is not guaranteed.

We have not independently verified

any of the data from third-party sources or the underlying economic assumptions they made.

Similarly, internal surveys, industry forecasts

and market research, which we believe to be reliable based upon our management’s knowledge of our industry, have not been independently

Our estimates involve risks and uncertainties, including assumptions that may prove not to be accurate, and these estimates

and certain industry data are subject to change based on various factors, including those discussed under Item 1.A “Risk Factors”

in this annual report.

While we believe

our internal business research is reliable and the market definitions we use in this MD&A are appropriate, neither our business

research nor the definitions we use have been verified by any independent source.

This MD&A may only be used for the purpose

for which it has been published.

This MD&A, approved by the Board of Directors on June 29, 2020,

should be read in conjunction with our audited consolidated financial statements for the year ended March 31, 2020 and 2019.

audited financial statements were prepared in accordance with generally accepted accounting principles issued by the Financial

Accounting Standards Board in the United States, or GAAP.

Up to and including the third quarter ended December 31, 2019, we prepared

our consolidated financial statements in accordance with International Financial Reporting Standards, or IFRS, as issued by the

International Accounting Standards Board.

The comparative information in our financial statements for the year ended March 31,

2020 has been adjusted, as necessary, to be compliant with our accounting policies under GAAP.

Our financial results are now published

in United States dollars.

Effective March 31, 2020, the reporting currency used in the consolidated financial statements has changed

from Canadian dollars to U.S.

This change in reporting currency has been applied in the financial statements retrospectively

such that all amounts expressed in our consolidated financial statements and the accompanying notes thereto are in U.S.

While we believe our internal business, research is reliable and the market definitions we use in this MD&A

are appropriate, neither our business research nor the definitions we use have been verified by any independent source.

may only be used for the purpose for which it has been published.

This MD&A, approved by the Board of Directors on June 22, 2021, should

be read in conjunction with our audited consolidated financial statements for the year ended March 31, 2021, and 2020.

Our audited financial

statements were prepared in accordance with generally accepted accounting principles issued by the Financial Accounting Standards Board

in the United States, or GAAP.

Up to and including the third quarter ended December 31, 2019, we prepared our consolidated financial statements

in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board.

financial results are now published in United States dollars.

Effective March 31, 2020, the reporting currency used in the consolidated

financial statements changed from Canadian dollars to U.S.

This change in reporting currency has been applied in the financial

statements retrospectively such that all amounts expressed in our consolidated financial statements and the accompanying notes thereto

All amounts appearing in this MD&A for the period-by-period discussions are in thousands of U.S.

dollars, except share and

per share amounts or unless otherwise indicated.

COVID-19 Update

To date, the ongoing COVID-19 pandemic has not caused significant

disruptions to our business operations and research and development activities.

In January 2020, before the COVID-19 pandemic started

to have a widespread impact in North America, the last patients completed their final visits to our TRILOGY Phase 3 trials.

in light of our plan to raise additional capital (dilutive or non-dilutive) to fully execute our business plan, a continuation

of the COVID-19 pandemic and any resulting volatility generally in the capital markets could adversely impact our ability to access

capital on terms acceptable to us or at all.

In addition, a continuation of the COVID-19 pandemic in North America could negatively

affect our ability to conduct additional clinical work, if we require any.

See “Item 1A, Risk Factors –

General Risks

Related to the Company –

Our business and operations may be materially and adversely affected by the recent COVID-19 pandemic

Caution Regarding Non-GAAP Financial

We use multiple financial measures for

the review of our operating performance.

These measures are generally GAAP financial measures, but one adjusted financial measure,

non-GAAP operating loss, is also used to assess our operating performance.

This non-GAAP financial measure is directly derived

from our financial statements and is presented in a consistent manner.

We use this measure, in addition to the GAAP financial

measures, for the purposes of evaluating our historical and prospective financial performance, as well as our performance relative

to competitors and to plan and forecast future periods as well as to make operational and strategic decisions.

We believe that

providing this non-GAAP information to investors, in addition to GAAP measures, allows them to see our results through the eyes

of management, and to better understand our historical and future financial performance.

Earnings and other measures adjusted to

a basis other than GAAP do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies.

Accordingly, they should not be considered in isolation.

We use non-GAAP operating loss to measure our performance from one period

to the next without the variation caused by certain adjustments that could potentially distort the analysis of trends in our operating

performance, and because we believe it provides meaningful information on our financial condition and operating results.

for calculating non-GAAP operating loss may differ from that used by other companies.

We calculate our non-GAAP operating loss by adding to net loss

our finance expenses (which includes change in fair value of derivative warrant liabilities, foreign exchange gain (loss), interest

expense and accretion on convertible debentures, and transaction costs related to derivative warrant liabilities, net of interest

income) depreciation and amortization, impairment loss, litigation settlement that was settled via the issuance of common shares,

and stock-based compensation, and by subtracting deferred tax recovery.

Items that do not impact our core operating performance

are excluded from the calculation as they may vary significantly from one period to another.

We also exclude the effects of certain

non-monetary transactions recorded, such as stock-based compensation and litigation settlement that was settled via the issuance

common shares, from our non-GAAP operating loss calculation.

Excluding these items does not imply they are necessarily non-recurring.

A reconciliation of net loss to non-GAAP

operating loss is presented later in this MD&A.

Basis of presentation of the financial

Our consolidated financial statements,

which include the accounts of our subsidiary AIAG, have been prepared in accordance with GAAP and the rules and regulations of

the SEC related to annual reports filed on Form 10-K.

dollars, except

share and per share amounts or unless otherwise indicated.

Basis of presentation of the financial statements

Our consolidated financial statements, which include the accounts of our

subsidiary AIAG, have been prepared in accordance with GAAP and the rules and regulations of the SEC related to annual reports filed on

All intercompany transactions and balances are eliminated on consolidation.

Going concern uncertainty

The following summarizes the principal conditions or events relevant

to our going concern assessment, which primarily considers the period of one year from the issuance date of our consolidated financial

We have incurred operating losses and negative cash flows from operations since our inception.

Our current assets of

$16.1 million as at March 31, 2020 include cash and cash equivalents totaling $14.2 million.

Our current liabilities total $7.4

million at March 31, 2020 and are comprised primarily of amounts due to or accrued for creditors.

Management projects that assuming

positive results from our TRILOGY Phase 3 program, additional funds will be needed in the future for us to file an NDA to obtain

FDA approval for CaPre in the United States, to further scale-up our manufacturing capabilities, and to complete marketing and

other pre-commercialization activities.

Our plans include raising additional capital through additional securities offerings, as

well as non-dilutive sources of capital such as grants or loans and strategic alliances, but there can be no assurance as to when

or whether we will complete any financings or strategic alliances.

In particular, raising additional equity capital is subject

to market conditions not within our control.

If we do not raise additional funds or find one or more strategic partners, we may

not be able to realize our assets and discharge our liabilities in the normal course of business.

We have no arranged sources of

financing currently other than our “At-the-Market”

sales agreement which provides for only conditional selling of our

common shares.

As a result, there is a substantial

doubt about our ability to continue as a going concern.

Our consolidated financial statements have been prepared on a going

concern basis, which assumes we will continue our operations in the foreseeable future and will be able to realize our assets

and discharge our liabilities and commitments in the ordinary course of business.

These consolidated financial statements do

not include any adjustments to the carrying values and classification of assets and liabilities and reported expenses that

might result from the outcome of this uncertainty and that may be necessary if the going concern basis was not appropriate

for these consolidated financial statements.

If we were unable to continue as a going concern, material impairment of to the

carrying values of our assets, including the intangible asset, could be required.

Comparative financial information

for the three-month periods and years ended March 31, 2020 and 2019

Three-month periods ended

The following summarizes the principal conditions or events relevant to

our going concern assessment, which primarily considers the period of one year from the issuance date of our financial statements.

We have incurred operating losses and negative cash flows from operations

since our inception.

In prior years there was substantial doubt regarding our ability to realize our assets and discharge our liabilities

and commitments in the ordinary course of business.

During year ended March 31, 2021, we raised net proceeds of $59.3 million under our

Our assets as at March 31, 2021, include cash and cash equivalents and short-term investments totaling $60.8 million.

current liabilities total $1.6 million as at March 31, 2021 and are comprised primarily of amounts due to or accrued for creditors.

Our ability to continue as a going concern is

dependent upon our ability to achieve a successful completion of our proposed merger with Grace or another strategic alternative and ultimately

generate cashflows to meet our obligations.

To date, we have financed our operations primarily through public offerings of common shares,

private placements, and the proceeds from research tax credits, and will require additional financing in the future.

There is no assurance

that our proposed merger with Grace or another strategic transaction will be consummated as such transaction is not within our control.

As a result of our current liquidity profile, the reduction of operating expenses and the limited liabilities, management has assessed

that substantial doubt no longer exists regarding our ability to continue as a going concern for one year from the issuance date of these

financial statements.

Comparative financial information for the three-month periods and years ended March 31, 2021,

periods ended

March 31, 2021

4 unchanged sentences

Basic and diluted gain (loss) per share

Non-GAAP operating (loss) 1

Working capital 1

1 unchanged sentence

Total shareholders’ equity

Reconciliation of net loss

to non-GAAP Operating Loss

Three-month periods ended

_____________________________________

1 Working capital is calculated by subtracting current liabilities

from current assets.

Because there is no standard method endorsed by GAAP, the results may not be comparable to similar measurements presented

by other public companies.

Statement of Net Loss

periods ended

March 31, 2021

2 unchanged sentences

March 31, 2020

Net income (loss)

Add (deduct):

Stock-based compensation

Depreciation and amortization

Common shares issued as a legal settlement

Cost sales of products

Research and development expenses

General and administrative expenses

Sales and marketing expenses

Impairment of Intangible assets

Impairment of Equipment

Impairment of Other assets and prepaids

Financial Income (expenses)

Non-GAAP operating gain (loss)

Results of operations for the three and twelve-month periods ended March

31, 2020 and 2019

Results of operations for the three and twelve-month periods ended

March 31, 2021, and 2020

Three months ended March 31, 2021, and 2020

The net income of $16,615 or $0.18 per

share for the three months ended March 31, 2020 increased by $29,305 from the net loss $12,690 or ($0.16) per share for the three

months ended March 31, 2019.

The net income resulted primarily

from a net financial gain of $20,646 for the three months ended March 31, 2020, as compared to net financial expense of

$2,155 for the three months ended March 31, 2019, due mostly to the change in fair value of the warrant derivative liability,

which decreases as our share price decreases, partially offset by a decrease in the number of warrants outstanding due to

exercises in the current period.

In addition, the gain was also due to the decrease in research and development expenses of

$6,243 as the TRILOGY Phase 3 clinical program for CaPre moved closer to completion.

The financial gain was partially offset by increased sales and marketing

expenses of $298 due to increased headcount to support expanded business development activities, and by additional accounting and

legal fees incurred in connection with the conversion of the financial statements from IFRS to GAAP, as well as higher insurance

Stock-based compensation expense increased by $338 as result of 6.1 million stock options granted to existing and new employees

and directors during year ended March 31, 2020, partially offset by stock options exercised, forfeited and expired.

average fair value of the options granted to employees and directors during the year ended March 31, 2020 was CAD$0.85 compared

to CAD$0.51 for the year ended March 31, 2019 grants.

_____________________________

Non-GAAP operating loss is not a standard measure endorsed by

GAAP requirements.

A reconciliation to our net loss is presented in this MD&A.

capital is calculated by subtracting current liabilities from current assets.

there is no standard method endorsed by GAAP requirements, the results may not be comparable

to similar measurements presented by other public companies.

Years ended March 31, 2020, and 2019

The net loss of $25,513 or ($0.30) per

share for the year March 31, 2020 decreased by $13,853 from the net loss for the year ended March 31, 2019 of $39,366 or ($0.73)

The per share loss decreased in line with the lower net loss and with the issuance of shares in relation mainly to

the public financings that occurred in May and October 2018, the exercise of warrants during July and August 2019 and the sale

of shares under the at-the-market program during the second half of fiscal year 2020.

The decreased net loss was primarily due to a reduction of research

and development expenses of $13,399, as the TRILOGY Phase 3 clinical program for CaPre moved closer to completion.

the decrease in net loss resulted from lower net financial expenses of $1,075 for the year ended March 31, 2020, as compared to

net financial expenses of $4,960 for the year ended March 31, 2019, due mostly to the change in fair value of the warrant derivative

liability, partially offset by a decrease in the number of warrants.

In contrast, sales and marketing expenses

increased by $2,171 due to the increase in headcount to support expanded business and market development activities, and additional

administrative fees were incurred in connection with the implementation of a new enterprise resources planning system, and increased

insurance cost, as well as increased accounting and legal fees associated with the conversion from IFRS to GAAP.

Furthermore, stock-based compensation

expense increased by $1,176 as result of 6.1 million stock options granted to existing and new employees and directors during

the year ended March 31, 2020, partially offset by stock options exercised, forfeited and expired.

The weighted average fair value

of the options granted to employees and directors during the year ended March 31, 2020 was CAD$0.85 compared to CAD$0.51 for the

year ended March 31, 2019.

Breakdown of major components of the statement

of loss and comprehensive loss

The net loss of $5,646 or $0.03 per share for the three months ended March

31, 2021, increased by $22,262 from the net income of $16,616 or $0.18 per share for the three months ended March 31, 2020.

The increase in net loss resulted primarily from net financial expenses

decreasing by $23,992 to an expense of $3,346 for the three months ended March 31, 2021, as compared to net financial income of $20,646

for the three months ended March 31, 2020.

This is due mostly to a decrease from the change in fair value of the derivative warrant liability

as compared to the comparative fiscal quarter in 2020 caused by a proportionately higher decrease in the quarter over quarter closing

share price partly offset by a reduction in the number of warrants outstanding due to exercises during the prior year.

In October 2020, the Corporation entered into an agreement with the Centre

Integre Universitaire et des services sociaux de L’Estrie – Centre hospitalier Universitaire de Sherbrooke to start producing

and selling viral transport medium tubes to be utilized in testing related to the COVID-19 pandemic.

In addition, a decrease in research and development expenses of $1,465

occurred as the TRILOGY Phase 3 clinical program for CaPre was winding down.

General and administrative expenses decreased from the prior

period, with the current period being impacted by lower legal and professional fees.

Sales and marketing expenses also decreased as a

result of the termination of CaPre commercialization activities due to the TRILOGY 2 Phase 3 clinical trial results.

Fiscal years ended March 31, 2021, and 2020

The net loss of $19,678 or $0.17 per share for the year ended March 31,

2021, decreased by $5,835 from the net loss of $25,513 or $0.30 per share for the year ended March 31, 2020.

The decreased net loss resulted in part from a decrease in research and

development expenses of $11,801 occurred as the TRILOGY Phase 3 clinical program for CaPre was winding down.

General and administrative

expenses decreased from the comparative period due to decreased stock-based compensation.

Sales and marketing expenses also decreased

by $1,523, as a result of the termination of any CaPre commercialization activities due to the TRILOGY 2 Phase 3 clinical trial results.

Furthermore, operational events related to the TRILOGY results resulted in increased loss related to the impairment of equipment and intangible

assets amounting to $5,290.

The decreased net loss also resulted from financial expenses of $3,259 for the year ended March 31, 2021,

as compared to net financial expenses of $1,075 for the year ended March 31, 2020, due mostly to the change in fair value of the warrant

derivative liability.

Two separate derivative warrant liabilities are included in the statement

of financial position as at March 31, 2021, and March 31, 2020.

These derivative warrant liabilities stem from financing transactions

that took place in May 2018 and December 2017.

These derivative warrant liabilities are re-measured to fair value at each reporting date

using the Black-Scholes option pricing model.

The valuations are mainly driven by the fluctuation in our share price resulting in an increased

or decreased loss or gain related to the change in fair value of the warrant liabilities and increasing or decreasing the corresponding

liability in the balance sheet.

Breakdown of major components of the statement of loss and comprehensive loss

Research and development expenses

19 unchanged sentences

Stock-based compensation

Legal settlement expected to be settled via common shares

Sales and Marketing Expenses

7 unchanged sentences

Stock-based compensation

Three months ended March 31, 2020 compared

to the three months ended March 31, 2019

During the three months ended March 31, 2020, we continued our advancement

of the two-study TRILOGY Phase 3 clinical program for CaPre, in partnership with one of the world’s largest providers of

biopharmaceutical development and clinical outsourcing services.

Research and development expenses before depreciation, amortization

and stock-based compensation expense for the three months ended March 31, 2020 totaled $1,228 compared to $7,517 for the three

months ended March 31, 2019.

This $6,289 net decrease was mainly attributable to a $6,106 decrease in research contracts, and $244

decrease in professional fees.

The lower research contract expense is attributed primarily to the advancement of the Phase 3 clinical

trial program, as it moved closer to completion.

General and administrative expenses totaled $1,291 before stock-based

compensation expense for the three months ended March 31, 2020 and decreased by $43 from $1,334 for the three months ended March

The decrease is mainly attributable to the timing of recognition of bonus expense, partially offset by increased professional

accounting and legal fees in connection with the conversion from IFRS to U.S.

Sales and marketing expenses were $469

before stock-based compensation expense for the three months ended March 31, 2020 compared to $243 for the three months ended March

The increase is in line with a higher headcount in the commercial team to support expanded business and market development

The increase was partially offset by a reduction in professional fees as a result of a slowdown in pre-launch marketing

activities until the results of the TRILOGY Phase 3 clinical studies are obtained.

The stock-based compensation

expense increased by $339 to $445 for the three months ended March 31, 2020 from $106 for the three months ended March 31, 2019.

The increase is mainly due to 6.1 million stock options granted to existing and new employees and directors during the year ended

March 31, 2020, partially offset by stock options exercised, forfeited and expired.

The weighted average fair value of the options

granted to employees and directors during the year ended March 31, 2020 was CAD$0.85, compared to CAD$0.51 for the year ended

March 31, 2019.

The depreciation and amortization expense

remained relatively constant.

Financial income for the three months ended March 31, 2020 was $20,646

compared to a financial expense of $2,154 for the three months ended March 31, 2019.

The net increase in financial income of $22,800

was mainly attributable to $21,817 gain from the changes in fair value of derivative warrant liabilities, partially offset by a

lower number of warrants.

Year ended March 31, 2020 compared to

year ended March 31, 2019

During the year ended March 31, 2020, we continued our advancement

of the two-study TRILOGY Phase 3 clinical program for CaPre.

Research and development expenses before depreciation, amortization

and stock-based compensation expense for the year ended March 31, 2020 totaled $13,215, compared to $26,861 for the year ended

Three months ended March 31, 2021, compared to the three months ended March 31, 2020

During the three months ended September 30, 2020, we released our TRILOGY

2 Phase 3 clinical study results for CaPre.

TRILOGY 2 failed to meet the primary endpoint, and consequently we decided we will not file

an NDA with the FDA.

Research and development expenses are reduced due to the completion of the TRILOGY program, and we discontinued all

CaPre related marketing activities, while we evaluated a range of strategic alternatives.

As a result, research and development expenses

before depreciation, amortization and stock-based compensation expense for the three months ended March 31, 2021, totaled $404 compared

to $1,228 for the three months ended March 31, 2020.

The net decrease of $824 was mainly attributable to a reduction in research contracts

with the completion of the TRILOGY research and development activities of $667 as well as a reduction in headcount within the department

resulting in a decrease of salaries of $132.

The remaining decrease of $23 is a result of various other operational reductions.

General and administrative expenses totaled $1,321 before depreciation

and stock-based compensation expense for the three-months ended March 31, 2021 and increased by $31 from $1,291 for the three months ended

March 31, 2020.

This $13,646 net decrease was mainly attributable to a $14,416 decrease in research contracts, partially offset

by an increase in salaries and benefits of $385 due to increased headcount and related benefits.

The lower research contract expense

is attributed primarily to the advancement of the Phase 3 clinical trial program moved closer to completion.

General and administrative expenses totaled

$4,582 before stock-based compensation expense for the year ended March 31, 2020 and increased by $1,306 from $3,276 for the year

ended March 31, 2019.

This increase was mainly attributable to a $446 increase associated with our insurance policy, as well as

an increase of $829 in accounting, corporate and legal fees.

Sales and marketing expenses were $2,372

before stock-based compensation expense for the year ended March 31, 2020 compared to $423 for the year ended March 31, 2019.

increase is in line with a higher headcount in the commercial team to support expanded business and market development activities.

The stock-based compensation

expense increased by $1,176 to $1,953 for the year ended March 31, 2020 from $777 for the year ended March 31, 2019.

is mainly due to 6.1 million stock options granted to existing and new employees and directors during the year ended March 31,

2020, partially offset by stock options exercised, forfeited and expired.

The weighted average fair value of the options granted

to employees and directors during the year ended March 31, 2020 was CAD$0.85, compared to CAD$0.51 for the year ended March 31,

The depreciation and amortization expense

remained constant.

Net financial expenses for the year

ended March 31, 2020 was $1,075 compared to net financial expenses of $4,960 for the year ended March 31, 2019.

decrease in loss of $3,885 was mainly attributable to a decrease in the fair value of derivative warrant liabilities of

$2,663, partially offset by a decrease in financing transaction costs and a lower number of warrants outstanding that are

classified as a liability and subject to remeasurement.

Two separate derivative warrant liabilities

are included in the statement of financial position as at March 31, 2020, and March 31, 2019.

These derivative warrant liabilities

stem from the financing transactions that took place in May 2018 and December 2017.

The derivative warrant liabilities are re-measured

to fair value at each reporting date using the Black-Scholes option pricing model.

The valuations are mainly driven by the fluctuation

in our share price resulting in an increased or decreased loss or gain related to the change in fair value of the warrant liabilities

and increasing or decreasing the corresponding liability in the statement of financial position.

This increase is mostly a result of increased salaries of $49 related to retention amounts offset by a decrease in professional

Sales and marketing expenses were $66 before stock-based compensation expense

for the three months ended March 31, 2021, compared to $469 for the three months ended March 31, 2020.

The decrease of $403 was mostly

due to a decrease in salaries related to the reduction in headcount in the department of $324 as well as a decrease of $79 related to

other sales activities as a result of discontinuing planned pre-launch marketing activities for CaPre.

Stock-based compensation expense decreased by $274 to $171 for the three-month

period ended March 31, 2021, as compared to $445 for the three-month period ended March 31, 2020.

The decrease in expense is due to forfeited

options as well as the fact that no options have been granted in the current period.

The depreciation expense decreased by $597 for the three-month period ended

March 31, 2021, as compared to $597 for the three-month period ended March 31, 2020.

This is due to the impact of the equipment being

classified as held for resale and no additional depreciation recognized.

Year ended March 31, 2021, compared to year ended March 31, 2020

During the three months ended September 30, 2020, we released our TRILOGY

2 Phase 3 clinical study results for our lead product in development, CaPre.

TRILOGY 2 failed to meet its primary endpoint, and consequently

we will not file an NDA with the FDA.

Research and development expenses have been reduced due to the completion of the TRILOGY program,

and we discontinued all CaPre related marketing activities while we evaluate a range of strategic alternatives.

As a result, research

and development expenses before depreciation, amortization and stock-based compensation expense for the year ended March 31, 2021, totaled

$2,904 compared to $13,215 for the year ended March 31, 2020.

The net decrease of $10,311 was mainly attributable to a reduction in research

contracts with the completion of the CaPre R&D activities of $9,343 as well as a reduction in headcount within the department resulting

in a decrease of salaries of $300.

In addition, a decrease of $854 related to various other operational reductions such as professional

fees resulted, as well as a decrease to the government tax credits of $186.

General and administrative expenses totaled $4,685 before depreciation

and stock-based compensation expense for the year ended March 31, 2021 and increased by $103 from $4,582 for the year ended March 31,

This increase was mainly attributable to a $100 increase associated with our insurance policies, as well as an increase of $186

in legal fees, which was offset by a $185 decrease in salaries related to a reversal in bonus amounts accrued.

Sales and marketing expenses were $1,149 before stock-based compensation

expense for the year ended March 31, 2021, compared to $2,372 for the year ended March 31, 2020.

The decrease of $1,223 was mostly due

to a reduction in salaries of $156 due to a reduction in headcount, as well as a reduction in professional fees and other sales activities

of $1,067 due to the end of the planned pre-launch marketing activities for CaPre.

Stock-based compensation expense decreased by $779 to $1,174 for the year

ended March 31, 2021, as compared to $1,953 for the year ended March 31, 2020.

The decrease in expense is due to forfeited options as

well as the fact that no options have been granted in the current period.

The depreciation expense decreased by $1,392 to $924 for the year ended

March 31, 2021, as compared to $2,316 for the year ended March 31, 2020.

This is due to the impact of the equipment being classified as

held for resale and no additional depreciation recognized.

Liquidity and Capital Resources

Share Capital Structure

Our authorized share capital consists of

an unlimited number of Class A, Class B, Class C, Class D and Class E shares, without par value.

Issued and outstanding fully paid

shares, stock options, restricted shares units and warrants, were as follows for the periods ended:

Our authorized share capital consists of an unlimited number of Class A,

Class B, Class C, Class D and Class E shares, without par value.

Issued and outstanding fully paid shares, stock options, restricted shares

units and warrants, were as follows for the periods ended:

March 31, 2021

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Stock options granted and outstanding

May 2018 public offering of warrants exercisable

at CAD$1.31, until May 9, 2023

May 2018 public offering of warrants exercisable at CAD $1.31, until May 9, 2023

Public offering broker warrants May 2018 exercisable at CAD $1.05 until May 9, 2023

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February 2017 public offering of warrants exercisable at CAD $2.15, until February 21, 2022

2017 unsecured

convertible debentures conversion option contingent warrants exercisable at $1.90, until February 21, 2020 3

Total fully diluted shares

___________________________

3 The debentures were convertible into common shares at a fixed price

of CAD$1.90 per common share except if we pay, before the maturity, all

or any portion of the convertible debentures.

We paid the total balance of the debenture in cash at the maturity date.

Cash Flows and Financial Condition between the years ended March

31, 2021 and 2020

As at March 31, 2020, cash and cash equivalents

totaled $14,240, a net decrease of $2,631 compared to cash and cash equivalents totaling $16,871 at March 31, 2019.

As at March 31, 2021, cash and cash equivalents totaled $50,942, a net

increase of $36,702 compared to cash and cash equivalents totaling $14,240 at March 31, 2020.

Operating activities

During the years ended March 31, 2020 and March 31, 2019, our operating activities used cash

of $22,944 and $24,787, respectively.

The decrease of $1,843 during the year ended March 31, 2020, was due to the reduction of

spend as the TRILOGY Phase 3 clinical trials were nearing completion, partly offset by the timing of payment of invoices.

We expect that additional time and capital

will be required by us to file an NDA to obtain FDA approval for CaPre in the United States, to further scale-up our manufacturing

capabilities, and to complete marketing and other pre-commercialization activities, if our TRILOGY Phase 3 program is successful

and we can proceed to file an NDA.

Consequently, we expect to require additional capital to fund our daily operating needs beyond

the next fiscal year-end.

Based on a conservative estimate, we believe that our existing cash and cash equivalents will enable

us to fund our operating expenses and capital expenditure requirements through the first calendar quarter of 2021.

To fully execute

our business plan, we plan to raise the necessary capital primarily through additional securities offerings and multiple sources

of non-dilutive capital such as grants or loans and strategic alliances.

If we are unable to raise additional capital in sufficient

amounts or on terms acceptable to us, we may have to significantly delay the commercial launch of CaPre.

Negative or inconclusive

results in our TRILOGY Phase 3 clinical program for CaPre may adversely affect our ability to raise additional capital and/or

to complete strategic commercialization partnerships to support the commercial launch of CaPre.

Additional funding from third

parties may not be available on acceptable terms or at all to enable us to continue with the commercialization of CaPre.

During the years ended March 31, 2021, and March 31, 2020, our operating

activities used cash of $14,319 and $22,951, respectively, the decrease of which is a reflection of the completion of our Phase 3 program

for CaPre and related reduction of accounts payables and accruals.

Investing activities

During the year ended March 31, 2020, we generated cash of $8,138 due primarily to the maturity

of marketable securities.

During the year ended March 31, 2019, we used cash of $9,442 due primarily to the acquisition

of marketable securities.

During the year ended March 31, 2021, we used cash of $9,858 due primarily

to the acquisition of investments.

During the year ended March 31, 2020, we generated cash of $8,138 due primarily to the maturity of

Financing activities

During the year ended March 31, 2020, we generated cash of $13,176 due primarily to the net

proceeds from the sale of shares under the “at-the-market”, or ATM, program for a total of $6,981 and the exercise

of warrants for a total of $7,706, partially offset by the payment of convertible debentures upon their maturity for a total of

During the year ended March 31, 2019, our financing activities generated cash of $45,690

mainly from the net proceeds of the public offerings of $44,892 and proceeds from warrants of $796.

On February 14, 2019, we entered into an ATM sales agreement with

Riley FBR, Inc., pursuant to which common shares may be sold from time to time for aggregate gross proceeds of up to $30 million,

with sales only being made on the NASDAQ Stock Market.

The common shares may be distributed at market prices prevailing at the

time of any sale and as a result, prices may vary between purchasers and during the period of distribution.

During the year ended

March 31, 2020, a total of 4.1 million common shares were sold for total net proceeds of approximately $6.9 million under the ATM

The shares were sold at the prevailing market prices, which resulted in an average price of approximately $1.79 per share.

As at March 31, 2020, costs incurred in connection to the ATM amounted to $217 and were recorded as deferred financing while proportional

costs related to the common shares sold for a total of $40 were reclassified to equity.

There are several conditions that must

be met in order for us to access the ATM and the program only commits the agent to use commercially reasonable efforts, and thus

is not a guaranteed source of financing.

Further, the ATM may be cancelled by the agent at its sole discretion at any time with

5 days’

In the event we are unable to use our ATM, we would have to rely on other financing approaches and sources

to obtain additional new funding.

Transactions Subsequent to March

Subsequent to March 31, 2020, we sold

a total of 2,278,936 common shares through the ATM program, for net proceeds of approximately $1.8 million (net of commissions

paid for approximately $0.08 million).

The shares were sold at the prevailing market prices which resulted in an average price

of approximately $0.81 per share.

October 2018 Public Offering

On October 9, 2018, we closed a U.S.

offering of 16,600,000 common shares at a price of $1.00 per share.

In addition, the underwriters fully exercised their over-allotment

option to purchase 2,490,000 additional common shares at the same public offering price.

This offering generated gross proceeds

of $19.1 million (CAD$24.7 million), which resulted in net proceeds to us of $17.4 million (CAD$22.6 million) and a total of 19,090,000

common shares issued.

On October 23, 2018, we closed a Canadian

public offering of 18,750,000 common shares at a price of CAD$1.28 per share.

In addition, the underwriters fully exercised their

over-allotment option to purchase 2,812,500 additional common shares at the same public offering price.

This offering generated

gross proceeds of $21.1 million (CAD$27.6 million), which resulted in net proceeds to us of approximately $19.4 million (CAD$25.4

million) and a total of 21,562,500 common shares issued.

May 2018 Public Offering

On May 9, 2018, we closed a Canadian public

offering of 9,530,000 units at a price of CAD$1.05 per unit for gross proceeds of $7.8 million (CAD$10 million).

The units issued

consist of 9,530,000 common shares and 9,530,000 warrants.

Each warrant entitles the holder thereof to acquire one common share

at an exercise price of CAD$1.31 at any time until May 9, 2023.

On May 14, 2018, the underwriters exercised

their over-allotment option by purchasing an additional 1,429,500 units at a price of CAD$1.05 per unit, for additional gross proceeds

of $1.1 million (CAD$1.5 million).

The over-allotment units issued consist of 1,429,500 common shares and 1,429,500 warrants.

Warrant entitles the holder thereof to acquire one common share at an exercise price of CAD$1.31 at any time until May 9, 2023.

At the time of issuance, the warrant component

of these units are derivative warrant liabilities for accounting purposes due to certain contingent provisions that allow for cash

settlement in the warrant agreement (see note 13 of our consolidated financial statements).

The proceeds of the offering are required

to be split between the derivative warrant liabilities and the equity-classified Common shares at the time of issuance of the units.

The fair value of the derivative warrant liabilities at the time of issuance was determined to be $3.3 million (CAD$4.3 million)

and the residual of the proceeds of $4.8 million (CAD$6.2 million) were allocated to the common shares.

Issuance costs related

to this transaction totaled approximately $1.4 million (CAD$1.8 million) and have been allocated between the derivative warrant

liabilities and common shares based on relative value.

Resulting from this allocation, $0.5 million (CAD$0.7 million) has been

allocated to the derivative warrant liabilities and is recognized in finance expenses in the Statements of Earnings and Comprehensive

Loss, whereas the remaining portion of $0.86 million (CAD$1.1 million) in issuance costs was allocated to the common shares and

recognized as a reduction to common shares in the Balance Sheet.

The weighted average fair value of the

public offering warrants issued in May 2018 was determined to be $0.30 (CAD$0.39) per warrant.

Changes in the subsequent measurement

of fair value of the warrants are recognized in financial expenses.

As part of the transaction, we also issued

broker warrants to purchase up to 547,975 common shares.

Each broker warrant entitles the holder thereof to acquire one common

share at an exercise price of CAD$1.05, at any time until May 9, 2023.

The broker warrants are considered to be equity-classified

non-employee stock-based awards and are accounted for at fair value at grant date and not subsequently revalued.

During the year ended March 31, 2021, the Corporation’s financing

activities provided cash totaling $59,490 due to proceeds from the sale of shares under the “at-the-market”, or ATM, program,

compared to cash generated of $13,183 due to proceeds from the sale of shares under the “at-the-market” and exercise of warrants,

net of repayment of convertible debentures of $1,556 during the year ended March 31, 2020.

On June 29, 2020, we filed a registration statement on Form S-3 with the

SEC to register up to US $200 million of common shares, warrants and units that may be offered and sold by us from time to time (the “Registration

The Registration Statement was declared effective by the SEC on July 7, 2020.

On February 14, 2019, the Corporation entered into an “at-the-market”

(ATM) sales agreement with B.

Riley FBR, Inc.

Riley”) pursuant to which the Common Shares may be sold from time to time

for aggregate gross proceeds of up to $30 million, with sales only being made on the NASDAQ Stock Market.

The Common Shares would be issued

at market prices prevailing at the time of the sale and, as a result, prices may vary between purchasers and during the period of distribution.

The ATM has a 3-year term and requires the Corporation to pay between 3% and 4% commission to B.

Riley based on volume of sales made.

On June 29, 2020, the Corporation entered into an amended and restated sales agreement (the Sales Agreement) with B.

Riley, Oppenheimer&

Wainwright & Co., LLC (collectively, the “Agents”) to amend the existing ATM program.

Under the terms

of the Sales Agreement, the Corporation may issue and sell from time to time its common shares having an aggregate offering price of up

to US $75,000,000 through the Agents.

Subject to the terms and conditions of the Sales Agreement, the Agents will use their commercially

reasonable efforts to sell the common shares from time to time, based upon the Corporation’s instructions.

The Corporation has no

obligation to sell any of the common shares and may at any time suspend sales under the Sales Agreement.

The Corporation and the Agents

may terminate the Sales Agreement in accordance with its terms.

Under the terms of the Sales Agreement, the Corporation has provided the

Agents with customary indemnification rights and the Agents will be entitled to compensation, at a commission rate equal to 3.0% of the

gross proceeds from each sale of the common shares.

As at March 31, 2021, a total of 117.7 million common shares (March 31, 2020 –

4.1 million common shares) were sold for total net proceeds of approximately $59.3 million (March 31, 2020 - $7.0 million) under the ATM

Commission, legal and costs related to share sale amounted to $2.0 million (March 31, 2020 - $291).

The shares were sold at the

prevailing market prices, which resulted in an average price of approximately $0.52 per share (March 31, 2020 - $1.79 per share).

proportional costs of $18 related to the common shares sold, have been reclassified from deferred financings costs to equity (March 31,

Total costs incurred to register the Sales Agreements were initially recorded as deferred financing costs in the Consolidated

Balance Sheet.

As at March 31, 2021, the remaining balance of the costs incurred of $264 were written off to financing expenses.

Financial Position

The following table details the significant

changes to the statements of financial position as at March 31, 2020 compared to the prior fiscal year end at March 31, 2019:

The following table details the significant changes to the statements of

financial position as at March 31, 2021, compared to the prior fiscal year end at March 31, 2020:

Cash and cash equivalents

See cash flow statement

Marketable securities

Progression of research contracts

Mostly due to tax credit reimbursement from FY2019 and FY2018, partially offset by FY 2020 tax credit estimate

Increase in cash available to invest

Timing of reimbursement of sales taxes

Deferred financing costs

Additional accounting and legal fees incurred in connection with the ATM program, net of costs applied to equity

New costs, net of write off

Prepaid expenses

Advances to vendors, including insurance policy, net of usage costs

Acquisition of equipment net of depreciation

Expensing of insurance, impairment and other prepaid expenses

Use of other assets in research and development activities and impairment

Amortization & Impairment

Right of use asset

Lease contract for Sherbrooke

Adjustment to the net present value of lease contract for Sherbrooke

Intangible assets

Amortization and Impairment of license

Trade and other payables

Timing of payments net of accruals and settlement of provision for legal settlement via the issuance of common shares

Timing of payments net of accruals

Derivative warrant liabilities

Change in fair value and exercise of derivative warrants

Unsecured convertible debentures

Cash payment at maturity date

Change in fair value of derivative warrants

Lease liability

Lease contract for Sherbrooke

See the statement of changes in equity

in our financial statements for details of changes to the equity accounts since March 31, 2019.

Payment of lease liability

See the statement of changes in equity in our financial statements for

details of changes to the equity accounts since March 31, 2020.

Treasury Operations

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into instruments with an investment strategy based on capital preservation.

Cash equivalents and marketable securities are primarily

made in guaranteed investment certificates, term deposits and high-interest savings accounts, which are issued and held with Canadian

chartered banks, highly rated promissory notes issued by government bodies and commercial paper.

We hold cash denominated in both

Cash equivalents and marketable securities are primarily made

in guaranteed investment certificates, term deposits and high-interest savings accounts, which are issued and held with Canadian chartered

banks, highly rated promissory notes issued by government bodies and commercial paper.

We hold cash denominated in both U.S.

and CAD dollars.

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dollars from equity financings are invested as per our treasury policy in U.S.

investments and converted to CAD dollars as appropriate to fulfill operational requirements and funding.

dollar investments and converted

to CAD dollars as appropriate to fulfill operational requirements and funding.

Impairment loss Intangible assets:

The Corporation tests intangible assets for impairment

should circumstances change or events occur that would indicate that the fair value of an asset may be below its carrying value.

the second quarter of fiscal 2021, the Corporation released its topline TRILOGY 2 Phase 3 clinical trial results and the resulting decision

to not file an NDA to obtain FDA approval for CaPre as a result of TRILOGY 2 not meeting its primary endpoint.

As a result, a significant

share price reduction occurred.

Due to these indicators of impairment under ASC 350, the Corporation undertook an analysis to determine

the fair value of its intangible asset this quarter.

In prior years, the Corporation entered into agreements

with Neptune Wellness Solutions Inc.

(“Neptune”) pursuant to which the Corporation obtained a license and exercised its option

under this license agreement to pay in advance all of the future royalties payable to Neptune.

This license allows the Corporation to

exploit the intellectual property rights in-order to develop novel active pharmaceutical ingredients into commercial products for the

prescription drugs market.

In assessing the magnitude of any impairment of the license the Corporation considered all available evidence

including i) significant adverse impact from business climate due to the TRILOGY Phase 3 clinical programs failure to meet its primary

endpoints, and the resulting decision to not file an NDA to obtain FDA approval for CaPre, and the resulting internal forecasts that no

cash flows from the use of the license was possible, and (ii) management’s estimate that a market place participant would place

minimal to no value on the license if it were to be sold on its own or in combination with other assets, recognized or not, which is a

level 3 measurement in the fair value hierarchy which included unobservable inputs.

Accordingly, an impairment loss of $3,706 was recognized

during the year ended March 31, 2021, which represents the totality of the intangible assets net book value prior to the impairment trigger.

For the year ended March 31, 2021, amortization expense was $781 (2020 - $1,910) and was included in research and development expenses.

Assets held for sale

During the period the Corporation committed to

a plan and is actively marketing for sale Other assets and Equipment and has met the criteria for classification of assets held for sale:

Other assets represent krill oil (RKO) held by

the Corporation that was expected to be used in the conduct of R&D activities and commercial inventory scale up related to the development

and commercialization of the CaPre drug.

Given that the development of CaPre will no longer be pursued, the Corporation is expected to

sell this reserve.

The other asset is being recorded at the fair value less costs to sell, which has resulted in an impairment loss of

Management’s estimate of the fair value of the RKO less cost -to sell, is based primarily on estimated market prices obtained

from an appraiser specialized in the krill oil market.

These projections are based on Level 3 inputs of the fair value hierarchy and reflect

management’s best estimate of market participants’

pricing of the assets as well as the general condition of the asset.

total impairment loss recognized, includes amounts paid for krill oil in advance, but not yet received and was recorded as a prepaid.

March 31, 2021

Furniture and office equipment

Computer equipment

Laboratory equipment

Production equipment

March 31, 2020

Net book value

Furniture and office equipment

Computer equipment

Laboratory equipment

Production equipment

For the year ended March 31, 2021, depreciation expense

was $143 (2020 $410) and was included in research and development expenses.

Equipment is made up of laboratory, production,

computer and office equipment that was utilized in the development of CaPre.

Given that the development of CaPre will no longer be pursued

by the Corporation, it is expected to sell this equipment.

Similar, to how the intangible assets are treated, the announcement of the

outcomes of the TRILOGY clinical trials resulted in an impairment trigger for the laboratory and production equipment.

The impairment

loss is based on management’s estimate of the fair value of the equipment less cost -to sell, which is based primarily on estimated

market prices obtained from brokers specialized in selling used equipment.

These projections are based on Level 3 inputs of the fair value

hierarchy and reflect the management’s best estimate of market participants’

pricing of the assets as well as the general

condition of the assets.

Derivative warrant liabilities

The 10,188,100 warrants issued as part

of our May 2018 public offering in Canada were recognized as derivative warrant liabilities with a fair value of $3,323.

the year ended March 31, 2020, a total of 3,594,350 warrants were exercised.

As of March 31, 2020, the derivative warrant liability

for the remaining 6,593,750 warrants totaled $1,146, which represents the fair value of these warrants.

The weighted average fair

value of the warrants issued in the May 2018 public offering in Canada was determined to be CAD$0.39 per warrant at inception

and approximately CAD$0.24 (USD $0.17) per warrant as at March 31, 2020.

On December 27, 2017, 9,801,861 warrants were issued as part of

public offering and recognized as derivative warrant liabilities with a fair value of $4,548.

The December 2017 warrants

are derivative warrant liabilities for accounting purposes due to the currency of the exercise price (US$) being different from

our Canadian dollar functional currency.

During the year ended March 31, 2020, 2,728,899 warrants were exercised (including 52,288

warrants exercised on a cashless basis).

As of March 31, 2020, the derivative warrant liability for the remaining 7,072,962 warrants

totaled $1,247, which represents the fair value of these warrants.

The weighted average fair value of the 2017 warrants issued

was determined to be CAD$0.60 per warrant at inception and approximately CAD$0.25 (USD $0.17) per warrant as at March 31, 2020.

The decrease in the fair value of both

existing derivative warrant liabilities as at March 31, 2020 is due to the decrease in our share price and the dilution factor.

During the year ended March 31, 2020, the

following warrants were exercised with the resulting cash proceeds:

Number exercised

The 10,188,100 warrants issued as part of our May 2018 public offering

in Canada were recognized as derivative warrant liabilities with a fair value of $3,323.

As of March 31, 2021, the derivative warrant

liability for the remaining 6,593,750 warrants totaled $2,597, which represents the fair value of these warrants.

The weighted average

fair value of the warrants issued in the May 2018 public offering in Canada was determined to be CAD$0.39 per warrant at inception and

approximately CAD$0.49 (USD $0.39) per warrant as at March 31, 2021.

On December 27, 2017, 9,801,861 warrants were issued as part of our U.S.

public offering and recognized as derivative warrant liabilities.

The December 2017 warrants are derivative warrant liabilities for accounting

purposes due to the currency of the exercise price (US$) being different from our Canadian dollar functional currency.

As of March 31,

2021, the derivative warrant liability for the remaining 7,072,962 warrants totaled $2,622 which represents the fair value of these warrants.

The weighted average fair value of the 2017 warrants issued was determined to be CAD$0.60 per warrant at inception and approximately CAD$0.47

(USD $0.37) per warrant as at March 31, 2021.

The increase in the fair value of both existing derivative warrant liabilities

as at March 31, 2021 is due to the decrease in our share price and the dilution factor.

During the year ended March 31, 2021, no warrants were exercised.

2020, the following warrants were exercised with the resulting cash proceeds:

May 2018 over-allotment warrants 2018

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Contingent warrants private placement 2017

In addition, 235,929, broker warrants

and 52,288 derivative warrants issued as part of the December 2017 U.S.

public offering were exercised on a cashless basis to

acquire 136,013 common shares.

During the year ended March 31, 2019, 771,400

warrants issued as part of the May 2018 Canadian public offering were exercised at an exercise price of CAD$1.31 per common share,

resulting in $1.0 million of cash proceeds.

In addition, 4,455 warrants issued as part of the December 2017 U.S.

public offering

were exercised on a cashless basis to acquire 1,074 common shares.

A total of 772,474 common shares were issued as a result

of 775,855 warrants being exercised.

Contractual Obligations and Commitments

As at March 31, 2020, our liabilities

totaled $9,859, of which $7,395 was due within 1 year, and $2,393 related to derivative warrant liabilities that are expected

to be settled in common shares.

A summary of the contractual obligations

at March 31, 2020, is as follows:

As at March 31, 2021, our liabilities totaled $6,744, of which $1,525 was

due within 1 year, and $5,219 related to derivative warrant liabilities that are expected to be settled in common shares.

A summary of the contractual obligations at March 31, 2021, is as follows:

Contractual Obligations

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RKO supply agreement

On March 5, 2020, we renewed the lease agreement for our research

and development and quality control laboratory facility located in Sherbrooke, Québec, resulting in an obligation of $160

over 24 months of the lease term.

On March 5, 2020, we renewed the lease agreement for our research and development

and quality control laboratory facility located in Sherbrooke, Québec, resulting in an obligation of $160 over 24 months of the lease

As at March 31, 2021, the remaining balance of the commitment amounted to $86.

RKO supply agreement

On October 25, 2019, we signed a supply agreement with Aker, to

purchase RKO for a committed volume of commercial starting material for CaPre at a fixed price for a total value of $3.1 million

(take or pay).

The delivery of the RKO has been established following a calendar year basis and it is expected to be completed

in the 4 th calendar quarter of 2021.

As at March 31, 2020, the remaining balance of the commitment with Aker amounts

to $2.8 million.

Research and development

contracts and contract research organizations agreements

We utilize contract manufacturing organizations, for the development

and production of clinical materials and contract research organizations to perform services related to our clinical trials.

to the agreements with these contract manufacturing organizations and contract research organizations, we have either the right

to terminate the agreements without penalties or under certain penalty conditions.

On October 25, 2019, we signed a supply agreement with Aker to purchase

RKO for a committed volume of commercial starting material for CaPre at a fixed price for a total value of $3.1 million (take or pay).

The delivery of the RKO has been established following a calendar year basis and it is expected to be completed in the 4 th

calendar quarter of 2021.

As at March 31, 2021, the remaining balance of the commitment with Aker amounts to $2.8 million.

termination provisions within the supply agreement.

Management is currently assessing whether the Corporation can recover any value from

the raw krill oil product and given the uncertainty of recoverability, there is a risk that the Corporation may have a loss on this contract

in the near term.

Financial advisor agreement

On September 23, 2020, we engaged Oppenheimer & Co., Inc, as our financial

advisor to assist in the formal process to explore and evaluate strategic alternatives to enhance shareholder value.

This arrangement

includes fees of $1.2 million to be paid on the success of a strategic outcome.

Contingencies

We evaluate contingencies on an ongoing

basis and establish loss provisions for matters in which losses are probable and the amount of the loss can be reasonably estimated.

On May 10, 2019, we announced the settlement

regarding legal claims made by our former chief executive officer with respect to the termination of his employment.

to the settlement agreement, we agreed to issue 900,000 common shares valued at CAD$1.10 per share to the former CEO.

addition, we agreed to reimburse the former CEO for legal fees of $48.

Pursuant to the settlement agreement, we received a full

and final release from the former CEO on all procedures in connection with the termination of his employment.

This settlement

was accrued as a short-term liability as at March 31, 2019 and the expense of $790 was included as part of general and administrative

The case is closed, and no further costs are expected.

We evaluate contingencies on an ongoing basis and establish loss provisions

for matters in which losses are probable and the amount of the loss can be reasonably estimated.

Off-Balance Sheet Arrangements

As of the date of this annual report, we do not have any off-balance

sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in

financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are

material to investors.

Use of estimates and measurement of

The preparation of the financial statements

in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,

income and expenses.

Actual results may differ from these estimates.

Estimates are based on management’s

best knowledge of current events and actions that management may undertake in the future.

Estimates and underlying assumptions

are reviewed on an ongoing basis.

Revisions to accounting estimates are recognized in the period in which the estimates are revised

and in any future periods affected.

As of the date of this annual report, we do not have any off-balance sheet

arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,

revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Use of estimates and measurement of uncertainty

The preparation of the financial statements in conformity with GAAP requires

management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, and expenses.

Actual results

may differ from these estimates.

Estimates are based on management’s best knowledge of current events

and actions that management may undertake in the future.

Estimates and underlying assumptions are reviewed on an ongoing basis.

to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Estimates and assumptions include the measurement of derivative warrant

liabilities (see note 13 of the consolidated financial statements) and stock-based compensation (see note 15 of the consolidated

financial statements).

Estimates and assumptions are also involved in measuring the accrual of services rendered with respect to research and developments expenditures at each reporting date,

are determining which research and development expenses qualify

for research and development tax credits and in what amounts.

We recognize the tax credits once we have reasonable assurance that

they will be realized.

Recorded tax credits are subject to review and approval by tax authorities and therefore, could be different

from the amounts recorded.

liabilities (see note 10 of the consolidated financial statements), stock-based compensation (see note 14 of the consolidated financial

statements), and impairment and recoverability of other assets – RKO (see note 7 of the consolidated financial statements).

and assumptions are also involved in measuring the accrual of services rendered with respect to research and developments expenditures

at each reporting date, are determining which research and development expenses qualify for research and development tax credits and in

what amounts.

We recognize the tax credits once we have reasonable assurance that they will be realized.

Recorded tax credits are subject

to review and approval by tax authorities and therefore, could be different from the amounts recorded.

Critical Accounting Policies

Derivative warrant liabilities

The warrants forming part of the units issued in the May 2018 Canadian

public offering are derivative liabilities for accounting purposes given the fact that the warrant indenture contains certain contingent

provisions that allow for cash settlement.

The warrants forming part of the units issued from the December 2017 U.S.

public offering

are derivative liabilities for accounting purposes due to the currency of the exercise price being different from our functional

The derivative warrant liabilities are required to be measured at fair value at each reporting date with changes in fair

value recognized in earnings.

We use the Black-Scholes pricing model to determine the fair value.

The model requires the assumption

of future stock price volatility, which is estimated based on weighted average historic volatility.

Changes to the expected volatility

could cause significant variations in the estimated fair value of the derivative warrant liabilities.

Stock-based compensation

We have a stock-based compensation plan,

which is described in note 15 of the consolidated financial statements.

We account for stock options granted to employees based

on the fair value method, with fair value determined using the Black-Scholes model.

The Black Scholes model requires certain assumptions

such as future stock price volatility and expected life of the instrument.

Expected volatility is estimated based on weighted

average historic volatility.

The expected life of the instrument is estimated based on the average of the vesting and contractual

periods for employee awards as there is minimal prior exercises of options in which to establish historical exercise experience;

and contractual life is used for broker warrants.

Under the fair value method, compensation cost is measured at fair value at

date of grant and is expensed over the award’s vesting period with a corresponding increase in additional paid-in capital.

For stock options granted to non-employees, we measure the grant-date fair value based on the equity instruments issued.

cost is measured when we obtain the goods, or the counterparty renders the service.

Impairment of Long-Lived Assets

We review the recoverability of our long-lived assets and Assets held for

sale whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

The carrying amount is first

compared with the undiscounted cash flows.

If the carrying amount is higher than the sum of undiscounted cash flows, then we determine

the fair value of the underlying asset group.

Any impairment loss to be recognized is measured as the difference by which the carrying

amount of the asset group exceeds the estimated fair value of the asset group.

Measurement of Assets held for sale

Assets that are classified as held for sale are measured at

the lower of their carrying amount or fair value less expected selling costs (“estimated selling price”) with a loss recognized

to the extent that the carrying amount exceeds the estimated selling price.

The classification is applicable at the date upon which the

sale of assets is probable, and the assets are available for immediate sale in their present condition.

Assets once classified as held

for sale, are not subject to depreciation or amortization and both the assets and any liabilities directly associated with the assets

held for sale are classified as current in our Consolidated Balance Sheets.

Subsequent changes to the estimated selling price of assets

held for sale are recorded as gains or losses to the Consolidated Statements of Income wherein the recognition of subsequent gains is

limited to the cumulative loss previously recognized.

Financial Instruments

Credit risk is the risk of

a loss if a customer or counterparty to a financial asset fails to meet its contractual obligations.

We have credit risk relating

to cash, cash equivalents and marketable securities, which we manage by dealing only with highly-rated Canadian institutions.

The carrying amount of financial assets, as disclosed in the statements of financial position, represents our credit exposure

at the reporting date.

Credit risk is the risk of a loss if a customer or counterparty

to a financial asset fails to meet its contractual obligations.

We have credit risk relating to cash, cash equivalents and marketable

securities, which we manage by dealing only with highly rated Canadian institutions.

The carrying amount of financial assets, as disclosed

in the statements of financial position, represents our credit exposure at the reporting date.

Currency risk

We are exposed to the financial risk related

to the fluctuation of foreign exchange rates and the degrees of volatility of those rates.

Foreign currency risk is limited to

the portion of our business transactions denominated in currencies other than the Canadian dollar.

Fluctuations related to foreign

exchange rates could cause unforeseen fluctuations in our operating results.

A portion of the expenses, mainly

related to research contracts and purchase of production equipment, is incurred in U.S.

dollars and in Euros, for which no financial

hedging is required.

There is a financial risk related to the fluctuation in the value of the U.S.

dollar and the Euro in

relation to the Canadian dollar.

In order to minimize the financial risk related to the fluctuation in the value of the U.S.

in relation to the Canadian dollar, funds which were part of U.S.

dollar financings continue to be invested as short-term investments

Furthermore, a portion of our

cash and cash equivalents and marketable securities are denominated in U.S.

dollars, further exposing us to fluctuations in the

value of the U.S.

dollar in relation to the Canadian dollar.

The following table provides

an indication of our significant foreign exchange currency exposures as stated in Canadian dollars at the following dates:

March 31, 2020

March 31, 2019

We are exposed to the financial risk related to the fluctuation of foreign

exchange rates and the degrees of volatility of those rates.

Foreign currency risk is limited to the portion of our business transactions

denominated in currencies other than the Canadian dollar.

Fluctuations related to foreign exchange rates could cause unforeseen fluctuations

in our operating results.

A portion of the expenses, mainly related to research contracts

and salaries is incurred in U.S.

dollars and in Euros, for which no financial hedging is in place.

There is a financial risk related to

the fluctuation in the value of the U.S.

dollar and the Euro in relation to the Canadian dollar.

In order to minimize the financial

risk related to the fluctuation in the value of the U.S.

dollar in relation to the Canadian dollar, funds which were part of U.S.

financings continue to be invested as short-term investments in the U.S.

Furthermore, a portion of our cash and cash equivalents and marketable

securities are denominated in U.S.

dollars, further exposing us to fluctuations in the value of the U.S.

dollar in relation to the Canadian

The following table provides an indication of our significant

foreign exchange currency exposures as stated in Canadian dollars at the following dates:

Denominated in

Cash and cash equivalents

Marketable securities

Trade and other payables

The following exchange rates

are those applicable to the following periods and dates:

March 31, 2020

March 31, 2019

The following exchange rates are those applicable to the following

periods and dates:

CAD$ per Euro

Based on our foreign currency

exposures noted above, varying the above foreign exchange rates to reflect a 5% strengthening of the U.S.

dollar and Euro would

have an increase (decrease) in net loss as follows, assuming that all other variables remain constant:

Based on our foreign currency exposures noted above, varying

the above foreign exchange rates to reflect a 5% strengthening of the U.S.

dollar and Euro would have an increase (decrease) in net loss

as follows, assuming that all other variables remain constant:

March 31, 2021

1 unchanged sentence

Increase (decrease) in net loss

An assumed 5% weakening of the

foreign currencies would have an equal but opposite effect on the basis that all other variables remained constant.

An assumed 5% weakening of the foreign currencies would have

an equal but opposite effect on the basis that all other variables remained constant.

Interest rate risk

Interest rate risk is the risk

that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market rates.

Our exposure to interest rate

risk as at March 31, 2020 and March 31, 2019 is as follows:

Interest rate risk is the risk that the fair value or future

cash flows of a financial instrument will fluctuate because of changes in market rates.

Our exposure to interest rate risk as at March 31, 2021 and

March 31, 2020 is as follows:

Cash and cash equivalents

Short-term fixed interest rate

Marketable securities

Short-term fixed interest rate

Unsecured convertible debentures

Short-term fixed interest rate

Our capacity to reinvest the

short-term amounts with equivalent return will be impacted by variations in short-term fixed interest rates available on the market.

Management believes the risk we will realize a loss as a result of the decline in the fair value of our short-term investments

is limited because these investments have short-term maturities and are held to maturity.

Our capacity to reinvest the short-term amounts with equivalent

return will be impacted by variations in short-term fixed interest rates available on the market.

Management believes the risk we will

realize a loss as a result of the decline in the fair value of our short-term investments is limited because these investments have short-term

maturities and are held to maturity.

Liquidity risk

Liquidity risk is the risk that

we will not be able to meet our financial obligations as they fall due.

We manage liquidity risk through the management of our

capital structure and financial leverage.

Liquidity risk is the risk that we will not be able to meet

our financial obligations as they fall due.

We manage liquidity risk through the management of our capital structure and financial leverage.

We also manage liquidity risk by continuously monitoring actual and projected cash flows.

The Board of Directors reviews and approves our operating budgets and reviews material transactions outside the normal course of

Our contractual obligations

related to financial instruments and other obligations and liquidity resources are presented in the liquidity and capital resources

of this MD&A.

See also “Note 2 - Going Concern Uncertainty”

to the consolidated financial statements.

The Board of Directors reviews and approves

our operating budgets and reviews material transactions outside the normal course of business.

Our contractual obligations related to financial instruments

and other obligations and liquidity resources are presented in the liquidity and capital resources of this MD&A.

Future accounting changes

The following new standards, and amendments to standards and interpretations,

are not yet effective for the period ended March 31, 2020, and have not been applied in preparing our consolidated financial statements.

In June 2016, the Financial

Accounting Standards Board, or FASB, issued ASU 2016-13-Financial Instruments-Credit Losses (Topic 326), which amends guidance

on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.

For assets held at amortized

cost, the new guidance eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to

reflect its current estimate of all expected credit losses.

The allowance for credit losses is a valuation account that is deducted

from the amortized cost basis of the financial assets to present the net amount expected to be collected.

ASU 2016-13 will affect

loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, and any other financial

assets not excluded from the scope that have the contractual right to receive cash.

ASU 2016-13 is effective for annual periods,

and interim periods within those annual periods, beginning after December 15, 2022.

Management has not yet evaluated the impact

of this ASU on the consolidated financial statements.

In August 2018, the FASB issued

ASU 2018-15-Intangibles-Goodwill and Other-Internal-Use Software:

Customer’s Accounting for Implementation Costs Incurred

in a Cloud Computing Arrangement That is a Service Contract.

ASU 2018-15 aligns the requirements for capitalizing implementation

costs in such cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or

obtain internal-use software.

This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning

after December 15, 2019 and early adoption is permitted.

Entities can choose to adopt the new guidance prospectively or retrospectively.

The following new standards, and amendments to standards and

interpretations, are not yet effective for the period ended March 31, 2021, and have not been applied in preparing our consolidated financial

In June 2016, the Financial Accounting Standards Board, or FASB,

issued ASU 2016-13-Financial Instruments-Credit Losses (Topic 326), which amends guidance on reporting credit losses for assets held at

amortized cost basis and available for sale debt securities.

For assets held at amortized cost, the new guidance eliminates the probable

initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets

to present the net amount expected to be collected.

ASU 2016-13 will affect loans, debt securities, trade receivables, net investments

in leases, off balance sheet credit exposures, and any other financial assets not excluded from the scope that have the contractual right

to receive cash.

ASU 2016-13 is effective for annual periods, and interim periods within those annual periods, beginning after December

Management has not yet evaluated the impact of this ASU on the consolidated financial statements.

Quantitative and Qualitative Disclosure About Market Risk

Information relating to quantitative and

qualitative disclosures about market risks is detailed in “Item 7.

Management’s Discussion and Analysis of Financial

Condition and Results of Operation.”

Information relating to quantitative and qualitative disclosures about

market risks is detailed in “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

Financial Statements and Supplementary Data

See our consolidated financial statements beginning on page

F-1 of this annual report on Form 10-K.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

See our consolidated financial statements beginning on page F-1 of this annual report on Form

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis