UNITED STATES



SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K/A

Amendment
No. 1

(Mark One)

| | x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ------------------------------------------------------------------------------------



For the fiscal year ended December 31, 2015



| | o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------



For the transition period from ______ to _______



Commission File Number:
001-37426



CYNAPSUS THERAPEUTICS INC.

(Exact name of registrant
as specified in its charter)



|Canada(State or other jurisdictionof incorporation or organization)                       | 98-1226819(I.R.S. EmployerIdentification No.)
|----------------------------------------------------------------------------------------- | ---------------------------------------------
|828 Richmond Street West,Toronto, Ontario, Canada(Address of principal executive offices) | M6J 1C9
        (Zip
        Code)           
|416-703-2449(Registrant’s telephone number, including area code)                         

Securities registered
pursuant to Section 12(b) of the Act:



|Title of each class:        | Name of each exchange on which registered:
|--------------------------- | ------------------------------------------
|Common shares, no par value | The NASDAQ Stock Market LLC               



Securities registered pursuant to Section
12(g) of the Act: None



Indicate by check mark
if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o
No x



Indicate by check mark
if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o
No x



Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes x No o



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes o No o



Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the
registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. x



Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.



|Large accelerated filer o                                            | Accelerated filer o        
|-------------------------------------------------------------------- | ---------------------------
|Non-accelerated filer x(Do not check if a smaller reporting company) | Smaller reporting company o



Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x



The aggregate market value of the common
shares held by non-affiliates of the registrant computed by reference to the price at which the common shares were last sold on
the NASDAQ Global Market, as of June 30, 2015, was approximately US$165,350,146.



As of March 8, 2016, there were 12,300,566
common shares, no par value per share, of Cynapsus Therapeutics Inc. outstanding.











EXPLANATORY NOTE



Cynapsus Therapeutics Inc. is filing this
Amendment No. 1, or this Amendment, to its Annual Report on Form 10-K for the fiscal year ended December 31, 2015, or the Original
Form 10-K, which was filed with the United States Securities and Exchange Commission, or the SEC, on March 9, 2016, solely to correct
certain numerical errors in the first table appearing under the heading “Share Capital” in “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations” of the Original Form 10-K. The “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations” included in this Amendment supersedes in its entirety
the “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” previously
included in the Original Form 10-K.



Except as described above, no other changes
have been made to the Original Form 10-K. This Amendment does not reflect events occurring after the date of the Original Form
10-K or modify or update any of the other information contained in the Original Form 10-K in any way other than as required to
reflect the amendment discussed above. Accordingly, this Amendment should be read in conjunction with the Original Form 10-K and
our other filings with the SEC.





- i -







CYNAPSUS THERAPEUTICS
INC.



FORM 10-K/A

AMENDMENT NO. 1

TABLE OF CONTENTS





|              |                                                                                       | Page
|------------- | ------------------------------------------------------------------------------------- | ----
|PART II      
|              |                                                                                       |     
|Item 7.       | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 1   
|              |                                                                                       |     
|Signatures    |                                                                                       | 17  
|Exhibit Index |                                                                                       | 18  











- ii -







ITEM 7.	MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



The following “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”, or MD&A, relates to the financial position
of Cynapsus for the years ended December 31, 2015 and 2014 and its results of operations for the years ended December 31, 2015,
2014 and 2013 and should be read in conjunction with the audited consolidated financial statements and related notes for such years.
Our consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB.



In this MD&A, unless otherwise indicated,
all dollar amounts are expressed in Canadian dollars. The term “dollars” and the symbols “$” and “Cdn$”
refer to Canadian dollars and the term “U.S. dollars” and the symbol “US$” refer to United States dollars.



The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those
discussed in the forward-looking statements and you are cautioned not to place undue reliance on forward-looking statements. Factors
that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K,
particularly in “Special Note Regarding Forward-Looking Statements” and “Risk Factors.” The forward-looking
statements included in this Annual Report on Form 10-K are made only as of the date hereof.



Overview



Cynapsus is a specialty CNS, pharmaceutical
company developing and preparing to commercialize a Phase 3, fast-acting, easy-to-use, sublingual thin film for the on-demand management
of debilitating OFF episodes associated with PD. PD is a chronic, progressive neurodegenerative disease characterized by motor
symptoms including tremor at rest, rigidity and impaired movement as well as significant non-motor symptoms such as cognitive impairment
and mood disorders. The re-emergence of PD symptoms is referred to as an OFF episode. We have successfully completed a Phase 2
clinical trial for our product candidate, APL-130277, a sublingual formulation of apomorphine hydrochloride, or apomorphine. Apomorphine
is the only molecule approved for acute, intermittent treatment of OFF episodes for advanced PD patients, but is currently only
approved as a subcutaneous injection in the United States. APL-130277 is a “turning ON” medication designed to rapidly,
safely and reliably convert a PD patient from the OFF to the ON state while avoiding many of the issues associated with subcutaneous
delivery of apomorphine. It is designed to convert all types of OFF episodes, including morning OFF episodes, often considered
the most difficult to treat. We have initiated our Phase 3 clinical program for APL-130277, relying on the abbreviated Section
505(b)(2) regulatory pathway in the United States, and we intend to submit a NDA, near the end of 2016 or in early 2017.



Since our inception in 2004, we have
devoted substantially all of our resources to business planning, capital raising and identifying and developing our product candidates,
preparing for and conducting clinical studies of our product candidates, providing general and administrative support for these
operations and protecting our intellectual property. We have funded our operations primarily through the public and private placements
of common shares and warrants, the exercise of warrants, and the issuance of secured debentures. From inception, we have received
net proceeds of approximately Cdn$149.0 million from such transactions. As of December 31, 2015, we had cash in the amount of Cdn$104.9
million.



We expect to continue to incur significant
expenses and increasing operating losses for at least the next several years. We also expect expenses will increase substantially
in connection with our ongoing activities, as we:



- 1 -









| | · | continue the development of our APL-130277 product candidate, including conducting planned and future clinical trials;
| | - | ----------------------------------------------------------------------------------------------------------------------



| | · | continue to engage third-party providers to supply and manufacture our clinical study materials and to develop large-scale
manufacturing capabilities;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | seek regulatory approvals for our product candidate in the United States, Europe and other jurisdictions;
| | - | ---------------------------------------------------------------------------------------------------------



| | · | add personnel, including personnel to support our product development and future commercialization of APL-130277 in the United
States;
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | · | add operational, financial and management information systems;
| | - | --------------------------------------------------------------



| | · | maintain, leverage and expand our intellectual property portfolio; and
| | - | ----------------------------------------------------------------------



| | · | operate as a public company in the United States and Canada.
| | - | ------------------------------------------------------------



We are a clinical stage company and
have not generated any revenue. We have incurred significant losses and negative cash flows from operations since our inception.
As of December 31, 2015, we had a deficit accumulated of Cdn$60 million and expect to continue to incur significant losses for
the foreseeable future. Management expects our research and development and general and administrative expenses to continue to
increase substantially for the foreseeable future and, as a result, we may need additional capital to fund operations, which may
be obtained through one or more public or private equity or debt financings, or other sources such as potential licensing or partnership
arrangements.



Recent Developments



On February 4, 2015, we held our end
of Phase 2 meeting with the FDA. We will follow Section 505(b)(2) of the FDCA for the development of APL-130277 in the U.S. The
drug substance (apomorphine) in APL-130277 is identical to the API in the FDA approved subcutaneous injection, Apokyn, and APL-130277
is designed for similar usage but potentially for a broader range of PD patients. The Section 505(b)(2) regulatory pathway will
require us to provide statistically significant clinical evidence that PD patients experience improvement in their motor function
as a result of delivery of apomorphine via the sublingual thin film route compared to placebo.



On March 11, 2015, following the End-of-Phase
2 meeting with the FDA, we announced that an agreement was reached on the design, duration and size for the Phase 3 program clinical
studies, as well as for primary and key secondary endpoints. As a result, we have initiated a pivotal Phase 3 program evaluating
the safety and efficacy of APL-130277 in PD patients.



On March 12, 2015, Tamar Howson was
appointed to our board of directors. Ms. Howson is a seasoned business development executive within the pharmaceutical industry,
having formerly served as Senior Vice President at both Bristol-Myers Squibb and SmithKline Beecham. Ms. Howson currently serves
as a business development and strategy consultant to biopharmaceutical companies and she also serves as a director at Oxigene,
Inc., Organovo Holdings Inc. and Enzymotic Ltd. She has formerly served as a director at several biotechnology companies, including
Actavis plc, Ariad Pharmaceuticals, Inc., Cardax, Inc., Idenix Pharmaceuticals Inc., NPS Pharmaceuticals Inc., SkyePharma PLC and
Warner Chilcott plc.



On March 31, 2015, we announced the completion
of a private placement of 1,377,467 common shares for gross proceeds of approximately Cdn$21.0 million (approximately US$17 million).
The financing was led by funds associated with OrbiMed, Aisling Capital and Venrock, with participation from various other institutional
investors, including existing shareholders Broadfin Capital, Sphera Funds Management, Pura Vida Investments, DAFNA Capital Management
and Dexxon Holdings Ltd.





- 2 -







On April 22, 2015, we presented data at
the American Academy of Neurology annual meeting that demonstrated that a minimum efficacious plasma threshold of apomorphine was
required to convert a patient from the OFF state to the ON state. APL-130277 reached this threshold in as early as 10 minutes and
levels were maintained over this threshold through 90 minutes after dosing. This translated to clinically meaningful improvement
in motor function as assessed by the Movement Disorders Society UPDRS Part III (a newer version of the UPDRS Part III scale), or
MDS-UPDRS Part III, score.



On May 15, 2015, we announced the filing
of a registration statement with the SEC relating to our initial public offering in the United States of our common shares and
the filing of an application to list our common shares on The NASDAQ Stock Market LLC. We also announced an amendment to our articles
to consolidate our issued and outstanding common shares on the basis of one post-consolidation common share for 16 pre-consolidation
common shares to facilitate the proposed listing on The NASDAQ Stock Market LLC.



On June 4, 2015, we announced the
issuance of a U.S. Patent No. 9,044,475 providing broad coverage for sublingual apomorphine.  This patent is solely owned
by Cynapsus and granted with claims that provide us with protection of pharmaceutical dosage forms that combine apomorphine hydrochloride
particles with an organic pH neutralizing agent and a permeation enhancer in a sublingual film. This patent is scheduled to expire
in June of 2030 and covers APL-130277 and related formulations. The issued patent is the third to issue as a U.S. patent from our
patent application filings directed to sublingual apomorphine therapies.



On June 18, 2015, following the pricing
of our initial public offering in the United States, our common shares commenced trading on the NASDAQ Global Market under the
symbol “CYNA”.  Our common shares also continue to be listed on the TSX under the symbol “CTH.” 
On June 23, 2015, we announced the completion of our initial public offering in the United States of 5,175,000 common shares for
total gross proceeds of approximately Cdn$89.3 million (approximately US$72.5 million), including the exercise in full of the underwriters’
option to purchase additional common shares.



On June 25, 2015, we announced that we presented
data from clinical trials of APL-130277 at the 19th International Congress of Parkinson’s Disease and Movement
Disorders (MDS) in San Diego, California, showing APL-130277 significantly improved PD symptoms (as measured by MDS-UPDRS Part
III), rapidly turning patients from the OFF to ON state and was generally safe and well-tolerated.



On June 29, 2015, we announced enrollment
of the first patient in the CTH-300 clinical trial, a pivotal Phase 3 study to examine the efficacy, safety and tolerability of
APL-130277 for the acute treatment of OFF episodes in patients with PD. The CTH-300 trial is a double-blind, placebo-controlled,
parallel-design study with an estimated enrollment of 126 PD patients in 35 centers who have at least one OFF episode every 24
hours, with total OFF time of at least two hours per day. The study objective is to evaluate the efficacy and safety of APL-130277
versus placebo in patients with PD. The 126 patients will each be observed for 12 weeks, with dosing at home and in clinic. The
primary endpoint will be measured at week 12 in clinic and will be the mean change in the MDS-UPDRS Part III score at 30 minutes
after dosing. The key secondary endpoint will be the percentage of patients who convert from the OFF to the ON state at or before
30 minutes of dosing with APL-130277 in clinic at the week 12 visit.



On September 2, 2015, we announced enrollment
of the first patient in the CTH-301 clinical trial, a pivotal Phase 3 study to examine the safety and tolerability of APL-130277
for the acute treatment of OFF episodes in patients with PD. The CTH-301 trial is a 6-month, open-label, single arm safety study
in PD patients who have at least one OFF episode every 24 hours, with total OFF time of at least two hours per day. The primary
endpoint for the study is the safety and tolerability of APL-130277 in patients with PD. The secondary endpoints examine efficacy
variables, including the change in the MDS-UPDRS Part III scores over the 6-months of treatment. Sites will recruit patients over
several months, with each patient being evaluated for six months. An estimated 226 patients will be enrolled, including up to 126
who had been enrolled in the CTH-300 efficacy study and rolled over to this study, plus an additional 100 new patients.





- 3 -







On December 10, 2015, we announced that
we have successfully completed the CTH-200 bridging study comparing APL-130277 to subcutaneous apomorphine. In addition, we provided
an update on our European clinical plans. The CTH-200 study was a single-dose, crossover comparative bioavailability and PK study
in healthy volunteers. CTH-200 is a bioavailability study required for the Section 505(b)(2) NDA to confirm the PK characteristics
and comparability of APL-130277 to the reference listed drug. This short study was completed in December 2015 comparing a single
dose of APL-130277 to a single dose of the subcutaneous apomorphine product ApoGo. ApoGo is the European approved bioequivalent
of the FDA approved product Apokyn. Results of this study are expected to be submitted to the FDA as part of an NDA submission,
as well as to European regulatory authorities as part of a European submission. Based on advice from European regulators and European
experts, we are also planning to run an active comparator study in approximately 150 PD patients who suffer the debilitating effects
of OFF episodes. This study is expected to start in the second half of 2016.



On January 4, 2016, we announced that, in
order to simplify the corporate structure of Cynapsus and to reduce administrative costs, effective January 1, 2016, we have completed
a vertical short-form amalgamation pursuant to the Canada Business Corporations Act with our previously wholly-owned subsidiary,
Adagio. Pursuant to the amalgamation, all of the issued and outstanding shares of Adagio have been cancelled and the assets and
liabilities of Adagio have been assumed by Cynapsus. No securities of Cynapsus were issued in connection with the amalgamation
and the share capital of Cynapsus remains unchanged. The amalgamation will not have any significant effect on the business and
operations of Cynapsus.



On January 7, 2016, we and the MJFF announced
that we are working together to incorporate wearable device technology and “big data” approaches into our pivotal Phase
3 clinical study of APL-130277. This is a pilot effort to understand how clinical studies can harness data science approaches to
objectively measure disease progression with the goal of speeding progress toward breakthroughs in drug development. The project
builds on MJFF’s ongoing data science partnership with Intel Corporation, launched in August 2014, to develop platforms for
the storage of large volumes of patient-generated data and algorithms to glean insights from this data.



On February 2, 2016, we formed our wholly-owned
subsidiary, Cynapsus Therapeutics (USA) Inc., a Delaware corporation.





- 4 -







Results of Operations – Comparison of the year ended
December 31, 2015 and the year ended December 31, 2014



Loss
and Loss Per Share



For the year ended December 31,

|                                 |  | 2015 (Cdn$) |            |  | 2014 (Cdn$) |  |            | Cdn$ change in 2015 |  |  | % change in 2015 |  
|-------------------------------- |  | ----------- | ---------- |  | ----------- |  | ---------- | ------------------- |  |  | ---------------- | -
|Loss                             |  |             | 27,470,147 |  |             |  | 10,818,587 |                     |  |  | 16,651,560       |  
|Basic and diluted loss per share |  |             | 2.97       |  |             |  | 2.56       |                     |  |  | (0.41            | )



Net loss for the year ended December
31, 2015 exceeded the loss for the year ended December 31, 2014 due mainly to higher research and development program costs related
to the APL-130277 Phase 3 clinical program, higher personnel costs with the number of staff increasing from 17 to 25 people, higher
professional and consulting fees, investor relations and shareholder relations costs, and higher share-based compensation expenses.
Net loss for the year ended December 31, 2015 also included a Cdn$1,500,000 acquisition milestone share-based payment. Higher expenditures
in the year ended December 31, 2015 were partially offset by large unrealized foreign exchange gains upon currency translation.



Total share-based payments expense for the
year ended December 31, 2015 increased to Cdn$4,827,307 from Cdn$975,627 in the year ended December 31, 2014 due to the higher
Black Scholes fair value recognized for options vested during the current year. During the year ended December 31, 2015 704,693
options were granted, compared to 223,812 granted in the year ended December 31, 2014. Share-based payments expense has been allocated
to components of research and development expenses and operating, general and administrative expenses according to the respective
classification of the grantee.



Basic loss per share is calculated using
the weighted average number of common shares outstanding during the year. As a result of losses in the respective years, there
is no dilutive loss per share calculation.



The weighted average number of common shares
outstanding for the year ended December 31, 2015 was 9,246,242 (December 31, 2014 – 4,231,885). The weighted average number
of common shares outstanding increased primarily as a result of 1,377,467 common shares issued in a private placement on March
31, 2015, and 5,175,000 common shares issued in our initial public offering in the United States on June 23, 2015.



Research and Development (R&D)



For the years ended
December 31,

|                                                                   |  | 2015 (Cdn$) |            |   | 2014 (Cdn$) |  |           | Cdn$ change in 2015 |  |  | % change in 2015 |  
|------------------------------------------------------------------ |  | ----------- | ---------- | - | ----------- |  | --------- | ------------------- |  |  | ---------------- | -
|APL-130277 research and development, excluding the following items |  |             | 23,631,302 |   |             |  | 5,507,680 |                     |  |  | 18,123,622       |  
|Salaries, benefits and bonuses                                     |  |             | 2,078,986  |   |             |  | 685,487   |                     |  |  | 1,393,499        |  
|Share-based payments                                               |  |             | 1,921,196  |   |             |  | 237,043   |                     |  |  | 1,684,153        |  
|Amortization of intangible assets                                  |  |             | 47,877     |   |             |  | 58,986    |                     |  |  | (11,109          | )
|Depreciation of property, plant and equipment                      |  |             | 930        |   |             |  | -         |                     |  |  | 930              |  
|Recovery on scientific research                                    |  |             | (150,924   | ) |             |  | (91,717   | )                   |  |  | (59,207          | )
|Research grant                                                     |  |             | (127,710   | ) |             |  | (694,628  | )                   |  |  | 566,918          |  
|Total R&D                                                          |  |             | 27,401,657 |   |             |  | 5,702,851 |                     |  |  | 21,698,806       |  





- 5 -







Research and development expenses
for the year ended December 31, 2015 were substantially higher than for the year ended December 31, 2014 due to increased activity
associated with the APL-130277 program. Expenditures increased as a result of increases in consulting, clinical research, packaging
development, patent protection, analytics, scientific communications and educational initiatives, and scale-up CMC work for APL-130277.
Salaries and benefits increased during the year ended December 31, 2015 due to an increase in the number of R&D employees from
7 to 12. Share-based payments expense increased due to the higher Black Scholes fair value recognized for options vested during
the current year.



Research grants for
the year ended December 31, 2015 represent the final installment of the second MJFF grant received, while research grants recognized
in the year ended December 31, 2014 relate to amounts previously deferred from the first MJFF grant, as well as from the first
installment of the second MJFF grant. MJFF grants were awarded to support clinical research activities and have been recognized
in accordance with IFRS.



Operating, General and Administrative (OG&A)



For
the years ended December 31,

|                                                                    |  | 2015 (Cdn$) |            |  | 2014 (Cdn$) |  |           | Cdn$ change in 2015 |  |  | % change in 2015 | 
|------------------------------------------------------------------- |  | ----------- | ---------- |  | ----------- |  | --------- | ------------------- |  |  | ---------------- | 
|Operating, general and administrative excluding the following items |  |             | 5,853,061  |  |             |  | 3,298,863 |                     |  |  | 2,554,198        | 
|Salaries, benefits, bonuses and board fees                          |  |             | 2,494,178  |  |             |  | 1,707,238 |                     |  |  | 786,940          | 
|Share-based payments                                                |  |             | 2,906,111  |  |             |  | 738,584   |                     |  |  | 2,167,527        | 
|Depreciation of property, plant and equipment                       |  |             | 122,946    |  |             |  | 16,131    |                     |  |  | 106,815          | 
|Total OG&A                                                          |  |             | 11,376,296 |  |             |  | 5,760,816 |                     |  |  | 5,615,480        | 



OG&A costs for the year ended
December 31, 2015 were higher than the year ended December 31, 2014 due mainly to increases in investor and public relations activities,
professional and consulting fees, commercialization activities, and travel costs. Salaries, benefits and board fees increased with
the addition of new staff and higher employee base salaries. Share-based payments expense increased due to the higher Black Scholes
fair value recognized for options vested during the current year.



Other Expenses (Recoveries)



For
the years ended December 31,

|                                                            |  | 2015 (Cdn$) |             |   | 2014 (Cdn$) |  |          | Cdn$ change in 2015 |  |  | % change in 2015 |  
|----------------------------------------------------------- |  | ----------- | ----------- | - | ----------- |  | -------- | ------------------- |  |  | ---------------- | -
|Unrealized foreign exchange gain                            |  |             | (12,788,721 | ) |             |  | (691,578 | )                   |  |  | (12,097,143      | )
|Acquisition milestone share-based payment                   |  |             | 1,500,000   |   |             |  | -        |                     |  |  | 1,500,000        |  
|Loss on impairment of intangible assets                     |  |             | -           |   |             |  | 94,449   |                     |  |  | (94,449          | )
|Interest income net of interest expense and related charges |  |             | (19,085     | ) |             |  | (47,951  | )                   |  |  | 28,866           |  





- 6 -







Unrealized foreign exchange gains for year
ended December 31, 2015 were Cdn$12,788,721 compared to Cdn$691,578 in the year ended December 31, 2014 due to significantly higher
U.S. dollar cash balances on hand at December 31, 2015, combined with a significant strengthening of the U.S. dollar, as compared
to December 31, 2014. As at December 31, 2015, we had cash of US$75,525,191 denominated in U.S. dollars, compared to US$10,663,238
as at December 31, 2014.



During the year ended December 31, 2014,
we recognized an impairment loss on an intangible asset. We had previously licensed to another research and development company
patented technologies associated with our previous product candidate. On December 31, 2014, due to the lack of any progress on
the licensed project, we reviewed the carrying value of the intangible asset for potential impairment. We determined that there
were no expected future cash flows attributable to this asset and recorded an impairment charge of Cdn$94,449 to write down the
carrying value of the intangible asset to zero.



Under the terms of the amended Adagio Share
Purchase Agreement, we are required to pay the former Adagio shareholders contingent consideration upon the completion of certain
operational milestones (see “Commitments and Contingent Liabilities” below). On March 11, 2015, we announced the
results of our end of Phase 2 meeting with the FDA, which triggered a milestone payment to former Adagio shareholders of 69,960
newly issued common shares. The fair value of these shares, in the amount of Cdn$1,500,000, was recorded as an expense during the
year ended December 31, 2015.



Results of Operations – Comparison of the year ended
December 31, 2014 and the year ended December 31, 2013



Loss and Loss Per Share



For the years ended December 31,

|                                 |  | 2014 (Cdn$) |            |  | 2013 (Cdn$) |  |           | Cdn$ change in 2014 |  |  | % change in 2014 |  
|-------------------------------- |  | ----------- | ---------- |  | ----------- |  | --------- | ------------------- |  |  | ---------------- | -
|Loss                             |  |             | 10,818,587 |  |             |  | 4,433,287 |                     |  |  | 6,385,300        |  
|Basic and diluted loss per share |  |             | 2.56       |  |             |  | 2.05      |                     |  |  | (0.51            | )



Net loss for the year ended December 31,
2014 exceeded the loss for the year ended December 31, 2013 due mainly to higher research and development program costs related
to the APL-130277 program, higher personnel costs with the number of staff increasing from 8 to 17 people, higher professional
fees, investor relations and shareholder relations costs, and higher share-based compensation expenses.



Basic loss per share is calculated using
the weighted average number of shares outstanding during the year. There were no dilutive shares due to the losses incurred.



The weighted average number of common shares
outstanding for the year ended December 31, 2014 was 4,231,885 (2013 – 2,167,054). The weighted average number of common
shares outstanding increased primarily as a result of 2,403,846 common shares issued in a short form prospectus offering in Canada
on April 15, 2014.



Total share-based payments expense for the
year ended December 31, 2014 increased to Cdn$975,627 from Cdn$516,274 in the year ended December 31, 2013 due to the higher Black
Scholes fair value recognized for options vested during the year ended December 31, 2014. During the year ended December 31, 2014,
223,812 options were granted, compared to 111,894 granted in the year ended December 31, 2013. Share-based payments expense has
been allocated to components of research and development expenses and operating, general and administrative expenses according
to the respective classification of the grantee.





- 7 -







Research and Development (R&D)



For the year ended
December 31,

|                                                                   |  | 2014 (Cdn$) |           |   | 2013 (Cdn$) |  |           | Cdn$ change in 2014 |  |  | % change in 2014 |  
|------------------------------------------------------------------ |  | ----------- | --------- | - | ----------- |  | --------- | ------------------- |  |  | ---------------- | -
|APL-130277 research and development, excluding the following items |  |             | 5,507,680 |   |             |  | 1,578,314 |                     |  |  | 3,929,366        |  
|Salaries, benefits and bonuses                                     |  |             | 685,487   |   |             |  | 83,509    |                     |  |  | 601,978          |  
|Share-based payments                                               |  |             | 237,043   |   |             |  | 161,644   |                     |  |  | 75,399           |  
|Amortization of intangible assets                                  |  |             | 58,986    |   |             |  | 58,986    |                     |  |  | -                |  
|Recovery on scientific research                                    |  |             | (91,717   | ) |             |  | (44,232   | )                   |  |  | (47,485          | )
|Research grant                                                     |  |             | (694,628  | ) |             |  | (424,187  | )                   |  |  | (270,441         | )
|Total R&D                                                          |  |             | 5,702,851 |   |             |  | 1,414,034 |                     |  |  | 4,288,817        |  



The increase in R&D expense for
the year ended December 31, 2014 compared to December 31, 2013 was primarily attributed to higher costs associated with the APL-130277
program. Following the closing of the Cdn$25 million financing in April 2014, increases included expenditures on hiring new staff,
consulting, formulation development, analytics, toxicology, and API related to clinical studies and scale-up CMC work for APL-130277.
Share-based payments expense increased due to the higher Black Scholes fair value recognized for options vested during the year
ended December 31, 2014.



Research grants for
the year ended December 31, 2014 consist of amounts relating to previously deferred receipts from the first MJFF grant in addition
to amounts received in 2014 relating to the second MJFF grant. MJFF grants were awarded to support clinical research activities
and have been recognized in accordance with IFRS.



Operating, General and Administrative (OG&A)



For
the years ended December 31,

|                                                                    |  | 2014 (Cdn$) |           |  | 2013 (Cdn$) |  |           | Cdn$ change in 2014 |  |  | % change in 2014 | 
|------------------------------------------------------------------- |  | ----------- | --------- |  | ----------- |  | --------- | ------------------- |  |  | ---------------- | 
|Operating, general and administrative excluding the following items |  |             | 3,298,863 |  |             |  | 1,553,949 |                     |  |  | 1,744,914        | 
|Salaries, benefits, bonuses and board fees                          |  |             | 1,707,238 |  |             |  | 1,266,111 |                     |  |  | 441,127          | 
|Share-based payments                                                |  |             | 738,584   |  |             |  | 354,630   |                     |  |  | 383,954          | 
|Depreciation of property, plant and equipment                       |  |             | 16,131    |  |             |  | 2,050     |                     |  |  | 14,081           | 
|Total OG&A                                                          |  |             | 5,760,816 |  |             |  | 3,176,740 |                     |  |  | 2,584,076        | 



OG&A costs for the year ended
December 31, 2014 were higher than the prior year due mainly to increases in salaries and benefits associated with the hiring of
new staff, investor and public relations activities, professional, legal and listing fees incurred in connection with the Company’s
uplisting to the TSX, increases in employee base salaries, and travel costs. In addition, there were consulting fees associated
with commercial assessments and studies of APL-130277 during the year ended December 31, 2014. Share-based payments expense increased
due to the higher Black Scholes fair value recognized for options vested during the year ended December 31, 2014.





- 8 -







Other Expenses (Recoveries)



For
the years ended December 31,

|                                                            |  | 2014 (Cdn$) |          |   | 2013 (Cdn$) |  |            | Cdn$ change in 2014 |  |  | % change in 2014 |  
|----------------------------------------------------------- |  | ----------- | -------- | - | ----------- |  | ---------- | ------------------- |  |  | ---------------- | -
|Unrealized foreign exchange (gain) loss                     |  |             | (691,578 | ) |             |  | 44,520     |                     |  |  | (736,098         | )
|Loss on impairment of intangible assets                     |  |             | 94,449   |   |             |  | -          |                     |  |  | 94,449           |  
|Severance and prior years’ bonuses                          |  |             | -        |   |             |  | 762,103    |                     |  |  | (762,103         | )
|Debenture accretion and interest costs                      |  |             | -        |   |             |  | 187,975    |                     |  |  | (187,975         | )
|Gain on debenture exchange                                  |  |             | -        |   |             |  | (1,153,000 | )                   |  |  | 1,153,000        |  
|Interest income net of interest expense and related charges |  |             | (47,951  | ) |             |  | 915        |                     |  |  | (48,866          | )



There were several one-time transactions
that occurred during the year ended December 31, 2013, which did not recur during the year ended December 31, 2014. Primarily,
on March 1, 2013, debentures were exchanged for common shares and warrants, resulting in a gain of Cdn$1,153,000, and the elimination
of further accretion and interest expenses associated with the debentures. The gain on the exchange of debentures for common shares
and warrants was recorded due to the Cdn$4,030,244 carrying value of debt instruments extinguished exceeding the fair value of
the common shares and warrants issued in exchange. In addition, specific severance and bonus accruals that were triggered upon
completion of the March 2013 short form prospectus offering did not recur in 2014.



Unrealized foreign exchange gains for the
year ended December 31, 2014 were higher than the loss for the year ended December 31, 2013 due to unrealized gains on significantly
higher U.S. dollar cash balances on hand at December 31, 2014, combined with a strengthening of the U.S. dollar, compared to December
31, 2013. As at December 31, 2014, we had cash of US$10,663,238 denominated in U.S. dollars, compared to US$237,964 at December
31, 2013.



During the year ended December 31, 2014,
we recognized an impairment loss on an intangible asset. We had previously licensed to another research and development company
patented technologies associated with our previous product candidate. On December 31, 2014, due to the lack of any progress on
the licensed project, the Company reviewed the carrying value of the intangible asset for potential impairment. The Company determined
that there were no expected future cash flows attributable to this asset and recorded an impairment charge of Cdn$94,449 to write
down the carrying value of the intangible asset to zero.



Income Taxes



Management uses estimates when determining
deferred income taxes. These estimates are used to determine the recoverability of tax loss carry forward amounts, research and
development expenditures and investment tax credits. Significant judgment is required regarding future profitability of the Company
to be able to recognize deferred taxes. Changes in market conditions, changes in tax legislation, patent challenges and other factors,
including the approval or launch of generic versions of our products, could adversely affect the ongoing value of deferred taxes.
The carrying amount of deferred income tax assets is reassessed at each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to utilize all or part of the deferred income tax assets. Unrecognized
deferred income tax assets are reassessed at each reporting period and are recognized to the extent that it is probable that there
will be sufficient taxable profits to allow all or part of the asset to be recovered.



We had approximately Cdn$61,757,000 of non-capital
losses as at December 31, 2015, which under certain circumstances can be used to reduce the taxable income of future years. We
currently have not recognized any deferred income tax assets with respect to these balances.



- 9 -







Summary of Quarterly Results



The following table presents a summary of
our unaudited quarterly results of operations for each of our last eight quarters. This data has been derived from our unaudited
condensed interim consolidated financial statements. The policies applied were based on IFRS, the same basis as our annual audited
financial statements, and, in our opinion, include all adjustments necessary, consisting solely of normal recurring adjustments,
for the fair presentation of such information.



Financial Information



(Numbers rounded
to the nearest thousands, except for per share amounts)



|                                                            |  | Q4 2015 (Cdn$) |             |   | Q3 2015 (Cdn$) |  |             | Q2 2015 (Cdn$) |  |  | Q1 2015 (Cdn$) |  
|----------------------------------------------------------- |  | -------------- | ----------- | - | -------------- |  | ----------- | -------------- |  |  | -------------- | -
|Total assets                                                |  |                | 106,875,000 |   |                |  | 111,724,000 |                |  |  | 112,957,000    |  
|R&D                                                         |  |                | 8,639,000   |   |                |  | 7,447,000   |                |  |  | 8,397,000      |  
|OG&A                                                        |  |                | 3,675,000   |   |                |  | 2,704,000   |                |  |  | 3,130,000      |  
|Other operating expenses (recoveries)                       |  |                | (3,782,000  | ) |                |  | (7,262,000  | )              |  |  | (562,000       | )
|Interest income net of interest expense and related charges |  |                | (2,000      | ) |                |  | (2,000      | )              |  |  | (6,000         | )
|Loss and comprehensive loss                                 |  |                | 8,530,000   |   |                |  | 2,887,000   |                |  |  | 10,959,000     |  
|Loss per share (basic and diluted)                          |  |                | 0.70        |   |                |  | 0.24        |                |  |  | 1.50           |  



|                                                            |  | Q4 2014 (Cdn$) |            |   | Q3 2014 (Cdn$) |  |            | Q2 2014 (Cdn$) |  |  | Q1 2014 (Cdn$) |  
|----------------------------------------------------------- |  | -------------- | ---------- | - | -------------- |  | ---------- | -------------- |  |  | -------------- | -
|Total assets                                                |  |                | 18,551,000 |   |                |  | 20,397,000 |                |  |  | 21,540,000     |  
|R&D                                                         |  |                | 3,094,000  |   |                |  | 1,167,000  |                |  |  | 1,246,000      |  
|OG&A                                                        |  |                | 2,365,000  |   |                |  | 1,182,000  |                |  |  | 1,220,000      |  
|Other operating expenses (recoveries)                       |  |                | (343,000   | ) |                |  | (644,000   | )              |  |  | 367,000        |  
|Interest income net of interest expense and related charges |  |                | (16,000    | ) |                |  | (13,000    | )              |  |  | (17,000        | )
|Loss and comprehensive loss                                 |  |                | 5,100,000  |   |                |  | 1,692,000  |                |  |  | 2,816,000      |  
|Loss per share (basic and diluted)                          |  |                | 1.03       |   |                |  | 0.34       |                |  |  | 0.62           |  



Other operating expenses (recoveries) consist
of unrealized foreign exchange gain or loss, and an acquisition milestone share-based payment in the first quarter of 2015, and
a loss on impairment of intangible assets in the fourth quarter of 2014.



- 10 -







Liquidity and Capital Resources



Since inception, our cash requirements
have been financed primarily through issuances of common shares, warrants and secured debentures. We anticipate future funding
requirements to be met primarily through additional securities issuances, research and development tax credits, other potential
sources of government funding, grants from foundations that support PD research, or a combination of the foregoing.



The development of pharmaceutical
products is a process that requires significant investment. We expect to incur significant research and development expenses, including
expenses related to completing Phase 3 clinical trials, NDA submissions with the FDA, commercialization studies, clinical trials
in Europe, and preparation for a U.S. product launch. We also expect that our general and administrative expenses will increase
in the future as we add infrastructure, including personnel costs, investor relations activities and professional fees.



Our future capital requirements will depend
on a number of factors, including, without limitation, the continued progress of our research and development for our APL-130277
product candidate, the timing and outcome of clinical trials and regulatory approvals, payments received or made under licensing
or other collaborative agreements, if any, the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing
patent claims and other intellectual property rights, defending against patent infringement claims, the acquisition of licenses
or technologies, the status of competitive products and our success in developing and maintaining markets for our product candidate,
if approved.



Our cash balance was Cdn$104,911,307 at
December 31, 2015 compared to Cdn$17,448,497 at December 31, 2014. Such increase was substantially due to our underwritten
public offering in the United States that closed on June 23, 2015 and our private placement that closed on March 31, 2015. Accounts
payable and accrued liabilities as at December 31, 2015 was Cdn$5,240,617 compared to Cdn$3,080,631 at December 31, 2014.
Such increase was primarily due to increased research and development activity being conducted.



Based on our current operating plan, we
believe that existing cash will be sufficient to fund research and development and OG&A overhead expenditures, complete Phase
3 clinical studies and CMC requirements for an NDA in the United States near the end of 2016 or in early 2017, continue to prepare
for commercial launch of APL-130277 in the U.S. market in late 2017 or early 2018, commence initial regulatory, clinical and commercial
activities for European market registration, and initiate other early stage pipeline development programs.



There are a significant number of warrants
and options of Cynapsus outstanding, some of which are in-the-money and may provide future sources of capital. As at December 31,
2015, we had 766,867 warrants outstanding with an exercise price of Cdn$9.20, which, if exercised as of December 31, 2015, would
have resulted in gross proceeds to us of approximately Cdn$7,055,176. Also, as at December 31, 2015, we had 2,322,159 warrants
outstanding with an exercise price of Cdn$12.96, which, if exercised as of December 31, 2015, would have resulted in gross proceeds
to us of approximately Cdn$30,095,181. There can be no assurance that such warrants or options of Cynapsus will ever be exercised
or that we will realize the gross proceeds resulting from exercise of those securities.



Operating Activities



For the year ended December 31, 2015,
our operating activities used cash of Cdn$32,200,061 compared to Cdn$9,990,841 in the year ended December 31, 2014 and Cdn$4,138,319
in the year ended December 31, 2013. The increase is primarily attributed to increased research and development expenses associated
with Phase 3 clinical trials for the APL-130277 product candidate. Cash used in operating activities for the year ended December
31, 2015 reflects the net loss of Cdn$27,470,147 for the year ended December 31, 2015, adjusted for non-cash items including share-based
payments, amortization of intangible assets, depreciation of property, plant and equipment, changes in non-cash working capital
(including prepaid expenses and other current assets, and accounts payable and accrued liabilities), acquisition milestone share-based
payment and unrealized gains on foreign exchange.





- 11 -







Investing Activities



For the year ended December 31, 2015, we
purchased Cdn$432,680 of property, plant and equipment, compared to Cdn$260,224 in the year ended December 31, 2014 and Cdn$11,442
in the year ended December 31, 2013.



Financing Activities



For the year ended December 31, 2015, our
net financing activities generated cash of Cdn$107,306,830 compared to Cdn$24,718,938 for the year ended December 31, 2014 and
Cdn$6,432,926 for the year ended December 31, 2013.



During the year ended December 31, 2015,
we raised net proceeds of Cdn$19,551,377 through a private placement of common shares, and completed an underwritten public offering
in the United States of 5,175,000 common shares for net proceeds of Cdn$81,175,277 (approximately US$66.4 million). During the
year ended December 31, 2014, we generated Cdn$22,840,236 from the completion of a short form prospectus offering in Canada with
a concurrent private placement in the U.S. During the year ended December 31, 2013, we generated Cdn$6,650,350 from prospectus
offerings in Canada. During the year ended December 31, 2015, we generated Cdn$6,454,478 in proceeds from the exercise of warrants,
compared to Cdn$1,758,584 during the year ended December 31, 2014. In addition, during the year ended December 31, 2015, we generated
Cdn$125,698 in proceeds from the exercise of stock options, compared to Cdn$120,118 during the year ended December 31, 2014. During
the year ended December 31, 2013, we repaid debentures of Cdn$217,424.



Effect of Exchange
Rate Changes



For the year ended December 31, 2015, the
effect of exchange rate changes on cash was Cdn$12,788,721 as result of the Canadian dollar weakening relative to the U.S. dollar,
compared to Cdn$691,578 in the year ended December 31, 2014 and (Cdn$44,520) in the year ended December 31, 2013.



As at December 31, 2015, we had cash of
Cdn$104,526,864 and accounts payable of Cdn$1,470,185 denominated in U.S. dollars (December 31, 2014 – Cdn$12,370,423 and
Cdn$1,539,496, respectively, and December 31, 2013 – Cdn$253,050 and Cdn$474,868, respectively).



See “Item 1A. Risk Factors –
Risks Related to Our Financial Position and Need for Additional Capital.”



Off-Balance Sheet Arrangements



We do not have any off-balance sheet arrangements.



- 12 -







Related Party Transactions



Key management personnel are those persons
having authority and responsibility for planning, directing and controlling the activities of Cynapsus, including directors and
officers. Compensation paid or payable to key management was composed of the following during the years ended December 31:



|                                                      |  | 2015 |            |  | 2014 |  |           | 2013 | 
|----------------------------------------------------- |  | ---- | ---------- |  | ---- |  | --------- | ---- | 
|                                                      |  | Cdn$ |            |  | Cdn$ |  |           | Cdn$ | 
|Short-term salaries, benefits and bonuses to officers |  |      | 1,790,297  |  |      |  | 1,333,789 |      | 
|Prior years’ bonuses to executives                    |  |      | -          |  |      |  | -         |      | 
|Director fees                                         |  |      | 623,620    |  |      |  | 281,438   |      | 
|Share-based payments                                  |  |      | 8,643,428  |  |      |  | 1,373,900 |      | 
|                                                      |  |      | 11,057,345 |  |      |  | 2,989,127 |      | 



Prior years’ bonuses recognized
in 2013 represent bonuses awarded for performance in 2010 to 2012, but which were contingent on the raising of additional capital
and were at the discretion of our board of directors. During 2013, we completed two closings of a short-form prospectus offering
in Canada for gross proceeds of Cdn$7,317,160 and as a result, these bonuses became payable.



Share-based payments presented above represent
the grant date fair value of options issued during the year to key management.



As at December 31, 2015, included in accounts
payable and accrued liabilities was Cdn$254,932(December 31, 2014 - Cdn$128,713) due to officers
and directors. These amounts are unsecured and non-interest bearing with no fixed terms of repayment. As at December 31, 2015,
there were accrued bonuses to related parties of Cdn$533,000(December 31, 2014 - Cdn$508,710).



Employment agreements with our executive
officers provide for additional payments in the event of termination without cause. See “Item 11. Executive Compensation
– Employment Agreements” in this Annual Report on Form 10-K.



On March 11, 2015, we announced the results
of the end of Phase 2 meeting with the FDA, which triggered a milestone payment to former Adagio shareholders of 69,960 common
shares of Cynapsus. Of the total, 37,652 common shares were issued to our President and Chief Executive Officer, the value of which
is not included in the table above.



As part of the April 15, 2014 offering,
Dexcel Pharma Technologies Ltd. subscribed for 384,615 units comprised of common shares and warrants having an aggregate subscription
price of Cdn$4,000,000. Dexcel Pharma Technologies Ltd. is an affiliate of Dexxon Holdings Ltd., which is a strategic pharmaceutical
investor and significant shareholder of Cynapsus, and which also has two directors on our board of directors.



As part of the March 31, 2015 private placement,
Dexxon Holdings Ltd. subscribed for 271,381 common shares having an aggregate subscription price of Cdn$4,133,684.



As part of the June 23, 2015 public
offering in the United States, Dexxon Holdings Ltd. subscribed for 733,500 common shares having an aggregate subscription price
of Cdn$12,658,596 (US$10,269,000).



During the year ended December 31, 2015,
fees of Cdn$52,726 were paid or payable to one of our directors as compensation for consulting services rendered.



- 13 -







Commitments and Contingent Liabilities



As at December 31, 2015, we had research
and development and other service contract commitments, as well as minimum future payments under operating leases for the periods
presented as follows:



|                              |  | Less than 1 year |            |  | 1 - 3 years |  |           | Total | 
|----------------------------- |  | ---------------- | ---------- |  | ----------- |  | --------- | ----- | 
|                              |  | Cdn$             |            |  | Cdn$        |  |           | Cdn$  | 
|Purchase Obligations          |  |                  | 18,284,000 |  |             |  | 4,778,000 |       | 
|Operating Leases              |  |                  | 172,000    |  |             |  | 362,000   |       | 
|Total Contractual Obligations |  |                  | 18,456,000 |  |             |  | 5,140,000 |       | 



Of the total purchase obligations, one consulting
contract contains a change of control clause in which, subject to certain conditions, we have agreed to pay the consultant an amount
equal to fees based on the minimum billable hours for the remainder of the agreement term. As a triggering event has not taken
place, these contingent payments have not been recognized in our financial statements for the year ended December 31, 2015. We
do not have a practicable estimate for the expected value of this contingent liability due to the nature of the triggering event.
As at December 31, 2015, the maximum amount of any contingent liability, based on a remaining term of five months, was Cdn$343,453,
which was included in the amount of unrecognized purchase obligations.



We are a party to certain employment agreements
for our executive officers and employees. Minimum employment contract termination commitments under the agreements, for termination
without cause, total approximately Cdn$3,629,431 and would be payable within one year, but are not included in the table of purchase
obligations above.



As part of the MJFF grant agreement, we
are required to support further PD research by making up to US$1,000,000 in contributions to MJFF based on future sales of APL-130277
beginning the year that we post net sales of APL-130277 in excess of US$5,000,000 (if ever). This amount has not been included
in the table of purchase obligations above.



Under the terms of the amended Adagio Share
Purchase Agreement, we are required to pay the former Adagio shareholders contingent consideration of Cdn$2,500,000 upon the completion
of the APL-130277 final safety study, to be satisfied by the issuance of common shares at a deemed value equal to the 30-day volume-weighted
average price immediately prior to the first public announcement of the results of such study. This study had not been started
as at December 31, 2015, and the amount has not been included in the table of purchase obligations above.



Critical Accounting Policies and Estimates



A summary of significant accounting
policies is included in Note 5 of our audited consolidated financial statements for the years ended December 31, 2015, 2014
and 2013. Critical accounting estimates require our management to make judgments, estimates and assumptions that affect the application
of accounting policies and reported amounts of assets and liabilities at the date of the consolidated financial statements and
reported amounts of revenue and expenses during the reporting period. Actual outcomes could differ from these estimates. Changes
in our management’s accounting estimates can have a material impact on our financial results. Our significant accounting
judgments, estimates and assumptions are included in Note 4 of our audited consolidated financial statements for the years ended
December 31, 2015, 2014 and 2013 and are also described below.





- 14 -







The estimates and underlying assumptions
are reviewed on a regular basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised
and in any future periods affected. The areas involving a higher degree of judgment or complexity, or areas where the assumptions
and estimates are significant to the financial statements were the same as those applied to our consolidated financial statements
as at and for the years ended December 31, 2014 and 2013.



Intangible assets



We estimate the useful lives of intangible
assets from the date they are available for use in the manner intended by our management and periodically review the useful lives
to reflect our management’s intent about developing and commercializing the assets. Our management also estimates their recoverability
to assess if there has been an impairment. The amounts and timing of recorded expenses for amortization and impairments of intangible
assets for any period are affected by these estimates. The estimates are reviewed at least annually and are updated if expectations
change as a result of technical or commercial obsolescence, generic threats and legal or other limits to use. It is possible that
changes in these factors may cause significant changes in the estimated useful lives of our intangible assets in the future.



Share-based payments



Our management determines costs for
share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based share awards
are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgments are used
in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price,
expected dividend yield, future employee turnover rates and future employee stock option exercise behaviors and corporate performance.
Such judgments and assumptions are inherently uncertain. Any changes in these assumptions would affect the fair value estimates.



Share Capital



Since the year ended December 31,
2015, the following changes have occurred to common shares, stock options and warrants of Cynapsus:



|                           |  | As at March 8, 2016 |           
|-------------------------- |  | ------------------- | ----------
|                           |  | Number of shares    |           
|                           |  | #                   |           
|As at December 31, 2015    |  |                     | 12,278,133
|Warrants exercised in 2016 |  |                     | 22,433    
|Options granted in 2016    |  |                     | -         
|As at March 8, 2016        |  |                     | 12,300,566





- 15 -









Exercised Warrants



Summary of warrants exercised since the
year ended December 31, 2015 are as follows:



|Number of Warrants |        |  | Cash Proceeds |  |         | Exercise Price |  |  | Expiry Date
|------------------ | ------ |  | ------------- |  | ------- | -------------- |  |  | -----------
|#                  |        |  | Cdn$          |  |         | Cdn$           |  |  |            
|                   | 12,858 |  |               |  | 118,294 |                |  |  | 9.20       
|                   | 5,200  |  |               |  | 52,000  |                |  |  | 10.00      
|                   | 4,375  |  |               |  | 56,700  |                |  |  | 12.96      
|                   | 22,433 |  |               |  | 226,994 |                |  |  |            





- 16 -









SIGNATURES



Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Amendment No. 1 to Annual Report
on Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized.





| | CYNAPSUS THERAPEUTICS INC.
| | --------------------------
| |                           
| |                           
| | By:                       
| |                           
| |                           
| |                           
| | Date: March 18, 2016      







Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this Amendment No. 1 to Annual Report on Form 10-K/A has been signed by the following persons
in the capacities indicated on March 18, 2016:



|/s/ Anthony Giovinazzo | President, Chief Executive Officer and Director               
|---------------------- | --------------------------------------------------------------
|Anthony Giovinazzo     | (Principal Executive Officer)                                 
|                       |                                                               
|/s/ Andrew Williams    | Chief Operating Officer and Chief Financial Officer           
|Andrew Williams        | (Principal Financial Officer and Principal Accounting Officer)
|                       |                                                               
|*                      | Director                                                      
|Rochelle Stenzler      |                                                               
|                       |                                                               
|                       | Director                                                      
|Tomer Gold             |                                                               
|                       |                                                               
|*                      | Director                                                      
|Ronald Hosking         |                                                               
|                       |                                                               
|*                      | Director                                                      
|Dr. Perry Molinoff     |                                                               
|                       |                                                               
|*                      | Director                                                      
|Ilan Oren              |                                                               
|                       |                                                               
|*                      | Director                                                      
|Nan Hutchinson         |                                                               
|                       |                                                               
|*                      | Director                                                      
|Tamar Howson           |                                                               







|* By: | /s/ Andrew Williams | 
|----- | ------------------- | 



| | Name:            | Andrew Williams
| | ---------------- | ---------------
| | Attorney-in-Fact





- 17 -







EXHIBIT
INDEX





|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                        
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|2.1^          |  | Share Purchase Agreement dated December 22, 2011 among Cynapsus, Adagio and the former shareholders of Adagio (incorporated by reference to Exhibit 2.1 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 12, 2015 (File No. 001-37426))                                         
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|2.2           |  | Share Purchase Agreement Amending Agreement dated January 28, 2015 among Cynapsus and the former shareholders of Adagio (incorporated by reference to Exhibit 2.2 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 12, 2015 (File No. 001-37426))                               
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|3.1           |  | Certificate and Articles of Amalgamation of Cynapsus, dated as of January 1, 2016 (incorporated by reference to Exhibit 3.1 to Cynapsus’s current report on Form 8-K filed with the SEC on January 4, 2016 (File No. 001-37426))                                                                                                                   
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|3.2           |  | By-law No. 2 of Cynapsus (incorporated by reference to Exhibit 3.2 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))                                                                                                                                     
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|4.1           |  | Specimen Common Share Certificate of Cynapsus (incorporated by reference to Exhibit 4.1 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))                                                                                                                
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|4.2           |  | Form of Warrant Certificate dated July 18, 2012 (incorporated by reference to Exhibit 4.2 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))                                                                                                              
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|4.3           |  | Form of Warrant Certificate dated October 24, 2012 (incorporated by reference to Exhibit 4.3 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))                                                                                                           
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|4.4           |  | Form of Warrant Certificate dated November 23, 2012 (incorporated by reference to Exhibit 4.4 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))                                                                                                          
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|4.5           |  | Warrant Indenture dated March 1, 2013, by and between Equity Financial Trust Company and Cynapsus (incorporated by reference to Exhibit 4.5 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))                                                            
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|4.6           |  | Supplemental Indenture dated May 15, 2015, by and between Equity Financial Trust Company and Cynapsus (relating to the Warrant Indenture dated March 1, 2013) (incorporated by reference to Exhibit 4.6 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))
|              |  |                                                                                                                                                                                                                                                                                                                                                    
|4.7           |  | Warrant Indenture dated April 15, 2014, by and between Equity Financial Trust Company and Cynapsus (incorporated by reference to Exhibit 4.7 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))                                                           





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|4.8   |  | Supplemental Indenture dated May 15, 2015, by and between Equity Financial Trust Company and Cynapsus (relating to the Warrant Indenture dated April 15, 2014) (incorporated by reference to Exhibit 4.8 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.1  |  | Lease, effective February 1, 2016, by and between Richmond Walnut Business Centre Inc. and Cynapsus (incorporated by reference to Exhibit 10.1 to Cynapsus’s current report on Form 8-K filed with the SEC on February 3, 2016 (File No. 001-37426))                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.2  |  | Short Occupancy Agreement dated August 31, 2015 between Cynapsus and Images Life Media Inc. (incorporated by reference to Exhibit 10.2 to Cynapsus’s Form 8-K filed with the SEC on September 4, 2015 (File No. 001-37426))                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.3# |  | Agreement dated March 17, 2015 by and between ARx, LLC and Cynapsus (incorporated by reference to Exhibit 10.3 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015 (File No. 001-37426))                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.4+ |  | 2014 Amended and Restated Stock Option Plan (incorporated by reference to Exhibit 4.1 to Cynapsus’s registration statement on Form S-8 filed with the SEC on July 29, 2015 (File No. 333-205929))                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.5+ |  | Employment Agreement, dated October 1, 2015, between Anthony Giovinazzo and Cynapsus (incorporated by reference to Exhibit 10.1 to Cynapsus’s Form 8-K filed with the SEC on October 2, 2015 (File No. 001-37426))                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.6+ |  | Employment Agreement, dated October 1, 2015, between Andrew Williams and Cynapsus (incorporated by reference to Exhibit 10.2 to Cynapsus’s Form 8-K filed with the SEC on October 2, 2015 (File No. 001-37426))                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.7+ |  | Employment Agreement, dated October 1, 2015, between Thierry Bilbault and Cynapsus (incorporated by reference to Exhibit 10.3 to Cynapsus’s Form 8-K filed with the SEC on October 2, 2015 (File No. 001-37426))                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.8+ |  | Employment Agreement, dated October 1, 2015, between Albert Agro and Cynapsus (incorporated by reference to Exhibit 10.4 to Cynapsus’s Form 8-K filed with the SEC on October 2, 2015 (File No. 001-37426))                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.9+ |  | Form of Director and Officer Indemnification Agreement dated effective as of September 2, 2015 (incorporated by reference to Exhibit 10.1 to Cynapsus’s Form 8-K filed with the SEC on September 4, 2015)                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.10 |  | Non-disclosure, Non-solicitation and Non-competition Agreement dated November 16, 2009 between Anthony Giovinazzo and Cynapsus (incorporated by reference to Exhibit 10.11 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 12, 2015 (File No. 001-37426))                       
|      |  |                                                                                                                                                                                                                                                                                                                                                     
|10.11 |  | Non-disclosure, Non-solicitation and Non-competition Agreement dated January 1, 2006 between Andrew Williams and Cynapsus (incorporated by reference to Exhibit 10.12 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 12, 2015 (File No. 001-37426))                            





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|10.12     |  | Non-disclosure, Non-solicitation and Non-competition Agreement dated October 6, 2014 between Thierry Bilbault and Cynapsus (incorporated by reference to Exhibit 10.13 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 12, 2015 (File No. 001-37426))
|--------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|          |  |                                                                                                                                                                                                                                                                                                                          
|10.13     |  | Non-disclosure, Non-solicitation and Non-competition Agreement dated April 1, 2013 between Albert Agro and Cynapsus (incorporated by reference to Exhibit 10.14 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 12, 2015 (File No. 001-37426))       
|          |  |                                                                                                                                                                                                                                                                                                                          
|10.14     |  | Consulting and Advisory Agreement effective July 1, 2015 between Cynapsus and Hutchinson and Associates LLC (incorporated by reference to Exhibit 10.15 to Cynapsus’s quarterly report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 12, 2015 (File No. 001-37426))               
|          |  |                                                                                                                                                                                                                                                                                                                          
|16.1***   |  | Letter of McGovern, Hurley, Cunningham, LLP                                                                                                                                                                                                                                                                              
|          |  |                                                                                                                                                                                                                                                                                                                          
|21.1***   |  | Subsidiary of Cynapsus                                                                                                                                                                                                                                                                                                   
|          |  |                                                                                                                                                                                                                                                                                                                          
|23.1***   |  | Consent of Ernst & Young LLP                                                                                                                                                                                                                                                                                             
|          |  |                                                                                                                                                                                                                                                                                                                          
|23.2***   |  | Consent of McGovern, Hurley, Cunningham, LLP                                                                                                                                                                                                                                                                             
|          |  |                                                                                                                                                                                                                                                                                                                          
|24.1***   |  | Power of Attorney                                                                                                                                                                                                                                                                                                        
|          |  |                                                                                                                                                                                                                                                                                                                          
|31.1*     |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                            
|          |  |                                                                                                                                                                                                                                                                                                                          
|31.2 *    |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                            
|          |  |                                                                                                                                                                                                                                                                                                                          
|32.1 **   |  | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                           
|_________ |  |                                                                                                                                                                                                                                                                                                                          



|*   | Filed herewith.                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**  | Furnished herewith.                                                                                                                                                       
|*** | Previously filed.                                                                                                                                                         
|^   | Certain schedules have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. We will furnish copies of any of the schedules to the SEC upon request.
|#   | Confidential portions of the exhibit have been redacted and filed separately with the SEC pursuant to a confidential treatment order granted by the SEC.                  
|+   | Indicates management contract or compensatory plan.                                                                                                                       





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