Document:

EX-4.3

 Exhibit 4.3 
  

 
 CYNAPSUS THERAPEUTICS INC. 

MANAGEMENT DISCUSSION AND ANALYSIS 

FOR THE THREE MONTHS ENDED MARCH 31, 2015 
  

 

  

 MANAGEMENT DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION 

FOR THE THREE MONTHS ENDED MARCH 31, 2015 
 The following
Management Discussion and Analysis (“MD&A”) relates to the financial position and results of operations of Cynapsus Therapeutics Inc. (“Cynapsus”, or the “Company”) for the three months ended March 31, 2015 and
should be read in conjunction with the Company’s Condensed Interim Consolidated Financial Statements for the three months ended March 31, 2015 as well as the Company’s Audited Annual Consolidated Financial Statements and related Notes
and Management’s Discussion and Analysis for the year ended December 31, 2014. The condensed interim consolidated financial statements for the period ended March 31, 2015 and related notes of Cynapsus have been prepared in accordance
with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board. Additional information, including its press releases, has been filed electronically through the System for Electronic
Document Analysis and Retrieval (“SEDAR”) and is available online under its profile at www.sedar.com. 
 The discussion and analysis within this
Management Discussion and Analysis (“MD&A”) are as of May 7, 2015. 
 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. 

Cautionary Statement Regarding Forward-Looking Statements 

Some of the statements contained in this MD&A constitute forward-looking statements within the meaning of applicable Canadian securities legislation.
Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases or state that certain actions,
events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of activity, performance or achievements of Cynapsus to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks
and uncertainties relating to Cynapsus’ business disclosed under the heading “Risk Factors” in the Company’s Annual Information Form dated March 17, 2015, under the heading “Risk Factors” in the “Management
Discussion and Analysis” for the year ended December 31, 2014, and its other filings with the various Canadian securities regulators which are available online at www.sedar.com. Although Cynapsus has attempted to identify important factors
that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements
will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cynapsus does not undertake to
update any forward-looking statements, except in accordance with applicable securities laws. 

  
 2 

 COMPANY PROFILE 

Overview 
 Cynapsus is a specialty central nervous system
pharmaceutical company developing and preparing to commercialize a Phase 3, fast-acting, easy-to-use, sublingual thin film for the on-demand turning ON of debilitating OFF episodes associated with Parkinson’s disease, or 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. The Company recently successfully completed a Phase 2 clinical trial for its product candidate, APL-130277, a sublingual formulation of apomorphine hydrochloride, or apomorphine. Apomorphine is the only molecule
approved for acute, intermittent treatment to provide rapid turning ON and relief from OFF episodes, but is currently only approved in the United States as a subcutaneous injection, which poses a number of problems. 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 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. The Company has initiated its Phase 3 clinical program for APL-130277, relying on the abbreviated Section 505(b)(2) regulatory pathway in the United States, and
intends to submit a New Drug Application (“NDA”) in 2016. 
 PD is the second most common neurodegenerative disease worldwide. Over one million
people in the United States and between four and six million people worldwide suffer from PD. There is no known cure or disease modifying treatment currently available for PD. Current medications and treatments only control the major symptoms of the
disease, with most drugs becoming less effective over time as the disease progresses. Cells that die in PD produce dopamine, a neurotransmitter critical to the signaling for movement. These current drugs and therapies either aim to supplement
dopamine levels in the brain, mimic the effect of dopamine in the brain by stimulating dopamine receptors, referred to as dopamine agonists, or prevent the enzymatic breakdown of dopamine, prolonging its effect. The standard of care for the
treatment of symptoms of PD remains oral levodopa, a drug approved nearly 50 years ago. While oral levodopa is efficacious, there are significant challenges for physicians in creating a dosing regimen of oral levodopa that consistently maintains
levodopa levels within a patient’s therapeutic range. Over time, the response to levodopa becomes less reliable and predictable and levodopa often cannot turn a patient from the OFF to the ON state. As a result, the majority of PD patients
experience OFF episodes despite taking PD medications. 
 OFF episodes are thought to occur when brain dopamine levels fall below a critical threshold to
sustain relatively normal motor function, or ON. It can be a period of time when a patient’s PD medication is not working adequately to alleviate the patient’s PD symptoms, when the medication has a delayed effect or does not work at all.
When experiencing an OFF episode, a PD patient is unable to perform simple daily tasks such as eating, bathing and dressing, thus becoming increasingly dependent on caregivers. OFF episodes are considered one of the greatest unmet medical needs
facing PD patients. The Company believes the current addressable market for its product candidate, APL-130277, in the United States alone is approximately 400,000 patients. 

Cynapsus has a substantial patent portfolio, including issued and pending patent applications in the United States and certain other jurisdictions that cover
APL-130277 and its use in the treatment of PD. The Company also relies on significant know-how for the creation of an optimal and functional sublingual apomorphine strip system that combines key mechanical, chemical reaction and pharmacokinetic
attributes. 

  
 3 

 APL-130277 Clinical and Regulatory Plan 

On February 4, 2015, Cynapsus held an End-of-Phase 2 meeting with the U.S. Food and Drug Administration (“FDA”). For development of APL-130277
in the United States, the Company will follow Section 505(b)(2) of the Food, Drug and Cosmetic Act. The drug substance (apomorphine) in APL-130277 is identical to the active pharmaceutical ingredient in the FDA approved subcutaneous injection,
Apokyn®, and APL-130277 is designed for similar usage. 
 The Section 505(b)(2) regulatory
pathway will require the Company 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. 

To achieve this, the Company currently plan to complete the following clinical studies: 

 

	 	•	 	CTH-200 Bridging Study. A single-dose, crossover comparative bioavailability and pharmacokinetic study in healthy volunteers. This study is designed to allow the Company to use the safety and efficacy data for
Apokyn® in its NDA submission to the FDA. This study is planned to commence in the second quarter of 2015. 

 

	 	•	 	CTH-300 Efficacy Study. A double-blind, placebo-controlled, parallel-design study with an estimated 126 PD patients who have at least one OFF episode every 24 hours, with total OFF time of at least two hours per
day. The objective is to evaluate the efficacy and safety of APL-130277 versus placebo in patients with PD. Sites will recruit patients over several months. The 126 patients will each be observed for 12 weeks, with dosing at home and in clinic.
Patients will be evaluated every four weeks in clinic. The primary end point will be measured at week 12 in clinic. The primary endpoint will be the mean change in the MDS-UPDRS Part III score at 30 minutes after dosing. This study was initiated in
the second quarter of 2015. 

  

	 	•	 	CTH-301 Safety Study. A long-term 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 objective is to
evaluate the safety and tolerability of APL-130277 in patients with PD over 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. The CTH-301 protocol has a built-in adaptive component potentially allowing the open label titration
procedure to be modified to at-home titration. This change will be based upon the safety assessment completed by a Drug Safety Monitoring Board in the CTH 300 study. This study is planned to commence in the third quarter of 2015. 

In parallel, the Company will continue to perform the necessary development activities, including process validation and stability studies as part of the
chemistry, manufacturing and controls, or CMC, requirements for the filing of the NDA. The Company expects that all development will be performed according to current Good Manufacturing Practices methodology. 

Upon completion of the efficacy and safety studies, as well as the CMC requirements, the Company intends to prepare and submit a Section 505(b)(2) NDA to
the FDA in 2016. 
 Additionally, the Company plans to apply for regulatory approval in Europe. The Company expects to use the United Kingdom as the
reference country. Management is working with regulatory consultants and apomorphine key opinion leaders in the United Kingdom. 

  
 4 

 REVIEW OF OPERATING RESULTS — THREE MONTHS ENDED MARCH 31, 2015 

Loss and Loss Per Share 
 For the three months ended
March 31, 
  

																	
	 	  	2015
($)	 	  	2014
($)	 	  	$ change in
2015	 	  	% change in
2015	 
	 Loss
	  	 	5,094,432	  	  	 	1,210,272	  	  	 	3,884,160	  	  	 	320.9	  
	 Basic and diluted loss per share
	  	 	0.06	  	  	 	0.03	  	  	 	0.03	  	  	 	100.0	  

 Net loss for the three months ended March 31, 2015 exceeded the loss for the three months ended March 31, 2014 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 eight to 17 people, higher professional fees, investor relations and shareholder relations
costs, higher share-based compensation expenses and acquisition milestone share-based payment. 
 Basic loss per share is calculated using the weighted
average number of shares outstanding during the period. As a result of the losses in the respective periods, there was no dilutive loss per share calculation. 

The weighted average number of shares outstanding for the three months ended March 31, 2015 was 83,740,263 (2014 – 39,459,170). 

Research and Development (“R&D”) 

For the three months ended March 31, 
  

																	
	 	  	2015
($)	 	  	2014
($)	 	  	$ change in
2015	 	  	% change in
2015	 
	 Salaries, benefits and bonuses
	  	 	374,527	  	  	 	27,250	  	  	 	347,277	  	  	 	1,274.4	  
	 Other R&D
	  	 	2,496,574	  	  	 	421,442	  	  	 	2,075,132	  	  	 	492.4	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total R&D
		 	2,871,101	  		 	448,692	  		 	2,422,409	  		 	539.9	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 R&D expenses for the three months ended March 31, 2015 were substantially higher than for the three months ended
March 31, 2014 due to increased activity associated with the APL-130277 program. Expenditures increased as a result of increases in salaries and benefits associated with additional staff, consulting, formulation development, packaging
development, patent protection, analytics, and scale-up CMC work for APL-130277. 

  
 5 

 Operating, General and Administrative (“OG&A”) 

For the three months ended March 31, 
  

																	
	 	  	2015
($)	 	  	2014
($)	 	  	$ change in
2015	 	  	% change in
2015	 
	 Salaries, benefits, bonuses and board fees
	  	 	451,504	  	  	 	345,516	  	  	 	105,988	  	  	 	30.7	  
	 Other OG&A
	  	 	1,326,646	  	  	 	612,847	  	  	 	713,799	  	  	 	116.5	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total OG&A
		 	1,778,150	  		 	958,363	  		 	819,787	  		 	85.5	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 OG&A costs for the three months ended March 31, 2015 were higher than for the comparable period due mainly to
increases in salaries and benefits associated with the addition of new staff, investor and public relations activities, professional fees, increases in employee base salaries, and travel costs. 

Other Expenses (Recoveries) 
 For the three months
ended March 31, 
  

																	
	 	  	2015
($)	 	  	2014
($)	 	  	$ change in
2015	 	  	% change in
2015	 
	 Share-based payments
	  	 	274,068	  	  	 	17,076	  	  	 	256,992	  	  	 	1,505.0	  
	 Amortization of intangible assets
	  	 	11,969	  	  	 	14,746	  	  	 	(2,777	) 	  	 	(18.8	) 
	 Depreciation of property, plant and equipment
	  	 	8,287	  	  	 	659	  	  	 	7,628	  	  	 	1,157.5	  
	 Acquisition milestone share-based payment
	  	 	1,500,000	  	  	 	—  	  	  	 	1,500,000	  	  	 	100.0	  
	 Foreign exchange (gain) loss
	  	 	(1,182,432	) 	  	 	22,898	  	  	 	(1,205,330	) 	  	 	(5,263.9	) 
	 Recovery on scientific research
	  	 	(30,000	) 	  	 	(10,000	) 	  	 	(20,000	) 	  	 	200.0	  
	 Research grant
	  	 	(127,710	) 	  	 	(239,969	) 	  	 	112,259	  	  	 	(46.8	) 
	 Interest income net of interest expense and related charges
	  	 	(9,001	) 	  	 	(2,193	) 	  	 	(6,808	) 	  	 	310.4	  

 Under the terms of the amended Adagio Share Purchase Agreement, the Company was required to pay the former shareholders
contingent consideration upon the completion of certain operational milestones. On March 11, 2015, the Company announced the results of the end of Phase 2 meeting with the FDA, which triggered a milestone payment to former Adagio shareholders
of 1,119,403 newly issued common shares. The fair value of these shares, in the amount of $1,500,000, was recorded as an expense during the three months ended March 31, 2015. 

Foreign exchange gains for three months ended March 31, 2015 were $1,182,432 compared to a loss of $22,898 in the three months ended March 31, 2014
due to unrealized gains on significantly higher U.S. dollar cash balances on hand at March 31, 2015, combined with a strengthening of the U.S. dollar, compared to March 31, 2014. As at March 31, 2015, the Company had cash of
$30,635,493 denominated in U.S. dollars, compared to $253,039 as at March 31, 2014. 
 Share-based payments increased to $274,068 for the three months
ended March 31, 2015 from $17,076 for the three months ended March 31, 2014, as compensation expense was recognized over the vesting period for stock options previously granted. 

  
 6 

 Research grants for the three months ended March 31, 2015 represent the final installment of the second
Michael J. Fox Foundation (“MJFF”) for Parkinson’s Research grant received, while research grants recognized in the three months ended March 31, 2014 relate to amounts previously deferred from the first MJFF grant. MJFF grants
were awarded to support clinical research activities and have been recognized in accordance with IFRS accounting standards. 
 SUMMARY OF QUARTERLY
RESULTS 
 FINANCIAL INFORMATION (IN DOLLARS): 
 (Numbers
rounded to the nearest thousands) 
  

																	
	 	  	Q1 2015
($)	 	  	Q4 2014
($)	 	  	Q3 2014
($)	 	  	Q2 2014
($)	 
	 Total assets
	  	 	38,434,000	  	  	 	18,551,000	  	  	 	20,397,000	  	  	 	21,540,000	  
	 R&D
	  	 	2,871,000	  	  	 	3,333,000	  	  	 	1,247,000	  	  	 	1,164,000	  
	 OG&A
	  	 	1,778,000	  	  	 	2,148,000	  	  	 	1,006,000	  	  	 	894,000	  
	 Other operating expenses
	  	 	582,000	  	  	 	(22,000	) 	  	 	(436,000	) 	  	 	775,000	  
	 Research grant
	  	 	(128,000	) 	  	 	(343,000	) 	  	 	(112,000	) 	  	 	—  	  
	 Interest income net of interest expense and related charges
	  	 	(9,000	) 	  	 	(16,000	) 	  	 	(13,000	) 	  	 	(17,000	) 
	 Loss and comprehensive loss
	  	 	5,094,000	  	  	 	5,100,000	  	  	 	1,692,000	  	  	 	2,816,000	  
	 Loss per share (basic and diluted)
	  	 	0.06	  	  	 	0.07	  	  	 	0.02	  	  	 	0.04	  
					
	 	  	Q1 2014
($)	 	  	Q4 2013
($)	 	  	Q3 2013
($)	 	  	Q2 2013
($)	 
	 Total assets
	  	 	2,398,000	  	  	 	3,149,000	  	  	 	4,301,000	  	  	 	5,383,000	  
	 R&D
	  	 	449,000	  	  	 	946,000	  	  	 	404,000	  	  	 	169,000	  
	 OG&A
	  	 	958,000	  	  	 	1,033,000	  	  	 	737,000	  	  	 	661,000	  
	 Other operating expenses
	  	 	45,000	  	  	 	85,000	  	  	 	117,000	  	  	 	232,000	  
	 Research grant
	  	 	(240,000	) 	  	 	(213,000	) 	  	 	—  	  	  	 	(91,000	) 
	 Interest income net of interest expense and related charges
	  	 	(2,000	) 	  	 	(1,000	) 	  	 	—  	  	  	 	1,000	  
	 Loss and comprehensive loss
	  	 	1,210,000	  	  	 	1,851,000	  	  	 	1,258,000	  	  	 	973,000	  
	 Loss per share (basic and diluted)
	  	 	0.03	  	  	 	0.04	  	  	 	0.03	  	  	 	0.03	  

  
 7 

 LIQUIDITY AND CAPITAL RESOURCES 

Since inception, cash requirements have been financed primarily through issuances of securities and secured debentures. Cynapsus anticipates future funding
requirements to be met primarily through additional securities issuances, debentures, research and development tax credits, other potential sources of government funding, grants from foundations that support PD research, or a combination of the
above. 
 The development of pharmaceutical products is a process that requires significant investment. Cynapsus expects to incur increased R&D
expenses, including expenses related to completing Phase 3 clinical trials, NDA submission with the FDA, commercialization studies, and preparation for a U.S. product launch. The Company also expects that its general and administrative expenses will
increase in the future as it adds infrastructure, including personnel costs, investor relations activities and professional fees. 
 The Company’s
future capital requirements will depend on a number of factors, including the continued progress of its R&D for its APL-130277 drug 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 the success of the Company in developing and maintaining markets for its product. 

The cash balance was $36,661,012 at March 31, 2015 compared to $17,448,497 at December 31, 2014. Accounts payable and accrued liabilities as at
March 31, 2015 was $2,431,677 compared to $3,080,631 at December 31, 2014. 
 The Company believes that it has sufficient resources available to
support its activities for up to the next 12 to 18 months. Based on the Company’s current operating plan, the Company would need to raise additional capital to fund completion of its preparation for commercial launch, and activities related to
European registration. There are a significant number of warrants and options outstanding, some of which are in-the-money and may provide future sources of capital. 

Operating Activities 
 For the three months ended
March 31, 2015, operating activities used cash of $5,689,901 compared to $1,676,386 in the three months ended March 31, 2014. The increase is primarily attributed to the resumption of expenditures that were constrained in the prior years
due to lack of financial resources. Cash used in operating activities for the three months ended March 31, 2015 reflects the net loss of $5,094,432 for the three months ended March 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 gain on foreign exchange. 
 Investing Activities 

For the three months ended March 31, 2015, $133,146 of computer equipment and leasehold improvements was purchased, compared to nil in the three months
ended March 31, 2014. 

  
 8 

 Financing Activities 

For the three months ended March 31, 2015, net financing activities generated cash of $23,853,130, compared to $669,266 for the three months ended
March 31, 2014. During the first quarter of 2015, the Company raised $20,981,579 through a private placement of common shares, less transaction costs of $1,468,029. In addition, during the three months ended March 31, 2015, the Company
generated $4,253,874 in proceeds from the exercise of warrants, and $85,706 in proceeds from the exercise of share-based payments, while in the three months ended March 31, 2014, the Company generated $724,495 in proceeds from the exercise of
warrants. 
 Effect of Exchange Rate Changes 

For the three months ended March 31, 2015, the effect of exchange rate changes on cash and cash equivalents was $1,182,432 as result of the Canadian
dollar weakening relative to the U.S. dollar. As at March 31, 2015, the Company had cash of $30,635,493 and accounts payable and accrued liabilities of $878,796 denominated in U.S. dollars (December 31, 2014 - $12,370,423 and $1,539,496,
respectively). 
 Commitments and Contingent Liabilities 

As at March 31, 2015, the Company had R&D and other service contract commitments, as well as minimum future payments under operating leases for the
periods presented as follows: 
  

													
	 	  	Less than
1 year
($)	 	  	1 - 2
Years
($)	 	  	Total
($)	 
	 Purchase Obligations
	  	 	2,150,000	  	  	 	137,000	  	  	 	2,287,000	  
	 Operating Leases
	  	 	110,000	  	  	 	18,000	  	  	 	128,000	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total Contractual Obligations
		 	2,260,000	  		 	155,000	  		 	2,415,000	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Subsequent to March 31, 2015, the Company entered into additional research and development contracts, resulting in
additional purchase obligations of $1,422,000 within one year. As a result, the total current purchase obligations as at May 7, 2015 are $3,709,000. 

Of the total purchase obligations, one consulting contract contains a change of control clause in which, subject to certain conditions, the Company agrees to
pay the vendor 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 these financial statements. The
Company does not have a practicable estimate for the expected value of this contingent liability due to the nature of the triggering event. As at March 31, 2015, the maximum amount of any contingent liability, based on a remaining term of 15
months, was $535,000, which was included in the amount of unrecognized purchase obligations. 
 The Company is a party to certain management contracts for
its executive officers. Minimum management contract termination commitments remaining under the agreements, for termination without cause, are approximately $1,252,325 and are all payable within one year. 

  
 9 

 On December 22, 2011, the Company completed the acquisition of 100% of the outstanding common shares of
Adagio and certain indebtedness of Adagio (the “Transaction”). The Transaction was structured as a share exchange with Adagio shareholders receiving newly issued common shares of the Company in exchange for all of the issued and
outstanding shares of Adagio. On January 28, 2015, the Company and the former Adagio shareholders, whom are substantially represented by key management and therefore are related parties, signed an amendment to the Adagio Share Purchase
Agreement to better reflect the contemplated agreement between the parties. Adagio shareholders are entitled to a payment of $2,500,000 conditional upon the successful 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 VWAP immediately prior to the first public announcement of the results of such study. This study had not been started as of March 31, 2015. With respect to the payment, the VWAP of the
common shares may not be less than the “discounted market price” as defined in the policies of the Exchange. 
 On July 3, 2014, as a
condition of the MJFF grant agreement, the Company is required to support further Parkinson’s research by making up to US$1,000,000 in contributions to MJFF conditional on future sales of APL-130277. 

Off-Balance Sheet Arrangements 
 The Company does
not have any off-balance sheet arrangements. 
 March 31, 2015 Private Placement 

On March 31, 2015, the Company announced the completion of a private placement of 22,039,472 common shares of the Company for gross proceeds of
$20,981,579. The issue price of $0.952 per share represents a 20% discount to the 5-day volume-weighted average price per common share on the TSX as of the close of business on March 27, 2015. The common shares issued are subject to a hold
period, which will expire four months plus one day from the date of issue. 

  
 10 

 SHARE CAPITAL 

Since the three months ended March 31, 2015, the following changes have occurred to Common Shares, stock options and warrants: 

 

																	
	 	  	As at May 7, 2015	 
	 	  	Number of
shares
#	 	  	Number of
shares issuable
on exercise of
options
#	 	  	Number of
shares issuable
on exercise of
warrants
#	 	  	Total
#	 
	 As at March 31, 2015
	  	 	110,311,428	  	  	 	5,324,316	  	  	 	53,343,218	  	  	 	168,978,962	  
	 Warrants exercised
	  	 	324,795	  	  	 	—  	  	  	 	(324,795	) 	  	 	—  	  
	 Options issued
	  	 	—  	  	  	 	3,980,000	  	  	 	—  	  	  	 	3,980,000	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 As at May 7, 2015
		 	110,636,223	  		 	9,304,316	  		 	53,018,423	  		 	172,958,962	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 On April 2, 2015, the Company granted stock options to acquire 3,980,000 common shares. The stock options were granted to
officers, directors and employees of the Company at an exercise price equal to $1.36 per share and expire 5 years from the date of grant. The closing price of the shares of the Company on the Toronto Stock Exchange (CTH: TSX) on the day prior to the
grant was $1.36. 
 Exercised Warrants 
 Summary
of warrants exercised since the three months ended March 31, 2015 are as follows: 
  

							
	 Number of

Warrants

#
	 	 Cash

Proceeds

$
	 	 Exercise

Price
 $
	 	 Expiry Date

	 108,695
	 	62,500	 	0.575	 	March 1, 2018
	 216,100
	 	175,041	 	0.810	 	April 15, 2019
	 324,795
	 	237,541	 		 	

  
 11 

 TRANSACTIONS WITH RELATED PARTIES 

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including
directors and senior executives. Compensation paid or payable to key management was composed of the following during the three months ended March 31, 2015 and March 31, 2014: 

 

									
	 	  	2015
$	 	  	2014
$	 
	 	  	  
	 Short-term salaries, benefits and bonuses to executives
	  	 	297,122	  	  	 	207,655	  
	 Director fees
	  	 	126,130	  	  	 	70,428	  
		  	  
	  
	 	  	  
	  
	 
			 	423,252	  		 	278,083	  
		  	  
	  
	 	  	  
	  
	 

 As at March 31, 2015, included in accounts payable and accrued liabilities was $201,299 (December 31, 2014 - $128,713)
due to officers and directors of the Company. These amounts are unsecured and non-interest bearing with no fixed terms of repayment. As at March 31, 2015, $100,000 was accrued as bonuses to related parties (December 31, 2014 - $508,710). 

The Company’s executive agreements provide for additional payments in the event of termination without cause. 

On March 11, 2015, the Company announced the results of the end of Phase 2 meeting with the FDA, which triggered a milestone payment to former Adagio
shareholders of 1,119,403 common shares. Of the total, 602,442 shares were issued to the Company’s President and Chief Executive Officer. 
 As part of
the March 31, 2015 private placement, the Dexcel Pharma group, a strategic pharmaceutical investor and significant shareholder of Cynapsus, and which also has two directors on the Board of Directors of the Company, subscribed for 4,342,105
common shares having an aggregate subscription price of $4,133,684. 
 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS 

A summary of significant accounting policies is included in Note 6 of the Company’s 2014 audited financial statements. Critical accounting estimates
require 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 management’s accounting estimates can have a material impact on the financial results of the Company. The Company’s significant
accounting judgments, estimates and assumptions are included in Note 5 of the Company’s 2014 audited financial statements. 
 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 the Company’s consolidated financial statements as at and for the year ended December 31, 2014. 

  
 12 

 FINANCIAL RISK MANAGEMENT 

In the normal course of business, the Company is exposed to a number of financial risks that can affect its operating performance. These risks are: credit
risk, liquidity risk and market risk. The Company’s overall risk management program and prudent business practices seek to minimize any potential adverse effects on the Company’s financial performance. There were no changes in the
Company’s approach to risk management during the three months ended March 31, 2015. 
 Credit risk 

The Company’s cash balance is on deposit with a Canadian chartered bank. The Company has no significant concentration of credit risk arising from
operations. Management believes that the credit risk concentration with respect to these financial instruments is remote. 
 Liquidity risk 

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at March 31,
2015, the Company had cash of $36,661,012 and other current assets of $828,186 (December 31, 2014 - $17,448,479 and $269,779, respectively) to settle current liabilities of $2,431,677 (December 31, 2014 - $3,080,631). The Company’s accounts
payable and accrued liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. 
 Market risk 

 

	(a)	Interest rate risk 

 The Company had a cash balance of $36,661,012 as at March 31,
2015. The Company’s current policy is to invest excess cash in a business savings account and investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is
satisfied with the credit ratings of its banks. The Company considers interest rate risk to be minimal as investments are short-term. 
  

	(b)	Foreign currency risk 

 The Company’s functional and presentation currency is the
Canadian dollar and all amounts in the condensed interim consolidated financial statements are expressed in Canadian dollars, unless otherwise noted. Most purchases are transacted in Canadian dollars. The Company funds the majority of research and
development expenses in the United States from its US dollar bank account held in Canada and certain expenses in Europe on a cash call basis using the euro converted from its Canadian dollar bank accounts held in Canada. Management believes the
foreign exchange risk derived from currency conversions is not significant and therefore does not hedge its foreign exchange risk. As at March 31, 2015, the Company had cash of $30,635,493 and accounts payable of $878,796 denominated in US
dollars (December 31, 2014 - $12,370,423 and $1,539,496). A plus or minus 10% change in foreign exchange rates could affect the Company’s net loss by approximately $3,000,000. 

 

	(c)	Price risk 

 The Company is exposed to price risk with respect to active pharmaceutical
ingredient, or API, prices used in research and development activities. The Company monitors API prices in the United States, Europe and Asia to determine the appropriate course of action to be taken by the Company. Management believes that the
price risk concentration with respect to API is minimal. 

  
 13 

	(d)	Fair value 

 IFRS require that the Company disclose information about the fair value of
its financial assets and liabilities. Fair value estimates are made at the statement of financial position date based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve
uncertainties in significant matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. 

Cash is classified as loans and receivables, which is measured at amortized cost. Accounts payable and accrued liabilities are classified as
other financial liabilities, which are measured at amortized cost. 
 The carrying amounts for cash and accounts payable and accrued
liabilities on the consolidated statement of financial position approximate fair value because of the short term of these instruments. 

  
 14 

 RISK FACTORS 

While the Company remains optimistic about its long-term outlook, the Company is subject to a number of risks and uncertainties in carrying out its
activities. In order to address the Company’s business risks and effectively manage them, the Company has developed a process for managing risk with the Company’s strategic plan. The Company provides regular updates to the Audit
Committee to identify, measure, and prioritize the critical risks facing the company and manage these risks by ensuring that they are adequately addressed through mitigating procedures where appropriate. The objectives of the risk-management
function include developing a common framework for understanding what constitutes principal business risks, ensuring that risk management activities are aligned with business strategies, and providing an effective mechanism for governance in the
area of risk management. 
 A list of the primary risks and uncertainties facing the Company is found below. A more detailed description of the
Company’s risk factors is disclosed in its most recently filed Annual Information Form, as well as other information which is available at www.cynapsus.ca and at the System for Electronic Document Analysis and Retrieval
(“SEDAR”) at www.sedar.com. 
 Risks Related to the Company’s Financial Position and Need for Additional Capital 

 

	 	•	 	The Company has incurred net losses since its inception and anticipate that it will continue to incur substantial operating losses for the foreseeable future. The Company may never achieve or sustain profitability.

  

	 	•	 	The Company will require substantial additional financing to achieve its goals, and a failure to obtain this necessary capital when needed could force it to delay, limit, reduce or terminate its product development or
commercialization efforts. 

  

	 	•	 	Raising additional capital may cause dilution to the Company’s existing shareholders, restrict its operations or require it to relinquish rights to its product candidate on unfavorable terms to the Company.

 Risks Related to Regulatory Review and Approval of the Company’s Product Candidate 

 

	 	•	 	Clinical failure may occur at any stage of clinical development, and the Company may never succeed in developing marketable products or generating product revenue. 

 

	 	•	 	Delays in the commencement, enrollment or completion of clinical trials of the Company’s drug candidate could result in increased costs to the Company as well as a delay or failure in obtaining regulatory approval,
or prevent the Company from commercializing its product candidate on a timely basis, or at all. 

  

	 	•	 	Clinical development, regulatory review and approval of the FDA and comparable foreign authorities are lengthy, time consuming, and inherently unpredictable. If the Company is ultimately unable to obtain regulatory
approval for its drug candidate, its business will be substantially harmed. 

  

	 	•	 	The Company currently has only one drug candidate, APL-130277, in clinical trials and is substantially dependent on this single drug candidate. A failure of this drug candidate in clinical development would
significantly adversely affect the Company’s business. 

  

	 	•	 	If the Company fails to obtain regulatory approval in jurisdictions outside the United States, the Company will not be able to market the Company’s products in those jurisdictions. 

  
 15 

	 	•	 	Even if the Company receives regulatory approval for its drug candidate, its product will be subject to ongoing regulatory review, which may result in significant additional expense. Additionally, the Company’s
product, if approved, could be subject to labeling and other restrictions, and the Company may be subject to penalties if the Company fails to comply with regulatory requirements or experience unanticipated problems with the Company’s product.

  

	 	•	 	The Company’s drug candidate may cause undesirable side effects or have other properties that delay or prevent its regulatory approval or limit its commercial potential. 

Risks Related to Development and Manufacturing of the Company’s Drug Candidate and Its Reliance on Third-Parties 

 

	 	•	 	The Company relies on third parties to supply APIs and manufacture its sublingual thin filmstrip formulation of apomorphine. The Company does not have long-term contracts with such manufacturers or suppliers.

  

	 	•	 	The Company is subject to a number of risks relating to its third party service providers, any of which could substantially increase its costs and limit supply of its products. 

 

	 	•	 	The ability of the Company’s third party manufacturers to continue manufacturing and supplying its drug candidate depends on their continued adherence to cGMP regulations. 

 

	 	•	 	If the Company changes the manufacturers of its drug candidate, the Company may be required to conduct comparability studies evaluating the manufacturing processes of the drug candidate. 

 

	 	•	 	The Company relies on third parties to conduct preclinical studies and clinical trials for APL-130277, and if they do not properly and successfully perform their obligations to the Company, the Company may not be able
to obtain regulatory approvals for APL-130277. 

  

	 	•	 	The Company may not be successful in establishing and maintaining strategic partnerships, which could adversely affect its ability to develop and commercialize products, negatively impacting its operating results.

 Risks Related to Commercialization of the Company’s Drug Candidate 

 

	 	•	 	The Company’s future commercial success depends upon attaining significant market acceptance of its drug candidate, if approved, among physicians, patients and health care payors. 

 

	 	•	 	The market for the Company’s drug candidate may not be as large as the Company expects. 

  

	 	•	 	The Company currently has no sales and marketing staff and no product distribution network. If the Company is unable to establish sales and marketing arrangements, the Company will not be successful in commercializing
its products. 

  

	 	•	 	Reimbursement may be limited or unavailable in certain market segments for the Company’s drug candidate, which could make it difficult for the Company to sell its product profitably. 

 

	 	•	 	Price controls may be imposed in foreign markets, which may adversely affect the Company’s future profitability. 

  

	 	•	 	The impact on the Company of health care reform legislation and other changes in the health care industry and in health care spending is currently unknown, and may adversely affect its business model. 

 

	 	•	 	The Company faces substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully than, the Company does. 

  
 16 

 Risks Related to the Company’s Intellectual Property 

 

	 	•	 	If the Company is unable to obtain or protect intellectual property rights related to its drug candidate, the Company may not be able to compete effectively. 

 

	 	•	 	The Company may become involved in lawsuits to protect or enforce its intellectual property, which could be expensive, time consuming and unsuccessful. 

 

	 	•	 	Third party claims of intellectual property infringement or misappropriation may prevent or delay the Company’s development and commercialization efforts. 

 

	 	•	 	Confidentiality agreements with employees and third-parties may not prevent unauthorized disclosure of trade secrets and other proprietary information. 

Risks Related to the Company’s Business and Industry 
  

	 	•	 	If the Company fails to attract and keep senior management and key scientific personnel, the Company may be unable to successfully develop its drug candidate, conduct its clinical trials and commercialize its drug
candidate. 

  

	 	•	 	The Company may encounter difficulties in managing its growth and expanding its operations successfully. 

  

	 	•	 	The Company’s relationships with health care professionals, institutional providers, principal investigators, consultants, customers (actual and potential) and third party payors are, and will continue to be,
subject, directly and indirectly, to health care fraud and abuse, false claims, marketing expenditure tracking and disclosure, government price reporting, and health information privacy and security laws. If the Company is unable to comply, or has
not fully complied, with such laws, the Company could face penalties, including, without limitation, civil, criminal, and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid
and other government health care programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of the Company’s operations. 

 

	 	•	 	The Company may experience a security breach that could lead to the loss of critical information. 

  

	 	•	 	The Company’s employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading. 

 

	 	•	 	If product liability lawsuits are brought against the Company, it may incur substantial liabilities and may be required to limit commercialization of its drug candidate. 

 

	 	•	 	The Company and its third party contract manufacturers must comply with environmental, health and safety laws and regulations, and failure to comply with these laws and regulations could expose the Company to
significant costs or liabilities. 

  
 17 

 Risks Related to the Company’s Common Shares 

 

	 	•	 	If the Company is a passive foreign investment company for U.S. federal income tax purposes in any year, certain adverse tax rules could apply to U.S. Holders of the Company’s Common Shares 

 

	 	•	 	The market price of the Company’s Common Shares may be highly volatile. 

  

	 	•	 	The Company does not expect to pay any cash dividends for the foreseeable future. 

  

	 	•	 	If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research about the Company’s business, its share price and trading volume could decline. 

 

	 	•	 	As the Company is a Canadian company, it may be difficult for U.S. shareholders to effect service on the Company or to realize on judgments obtained in the United States. 

DISCLOSURE CONTROLS AND INTERNAL CONTROL OVER FINANCIAL REPORTING 

The Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures. The evaluation was conducted
under the supervision and with the participation of management, including the Company’s President and Chief Executive Officer, and Chief Operating Officer and Chief Financial Officer, as of December 31, 2014. Based on the evaluation, the
Company’s President and Chief Executive Officer, and Chief Operating Officer and Chief Financial Officer, concluded that such disclosure controls and procedures – as defined in Canada under National Instrument 52-109 –
Certification of Disclosure in Issuers’ Annual and Interim Filings, are effective as at December 31, 2014. 
 It should be noted that while
the Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of achieving their objectives, the Company’s Chief Executive Officer and Chief Financial Officer do not expect that the Company’s
disclosure controls and procedures or internal control over financial reporting will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives
of the control system are met. 
 There were no changes in the Company’s internal control over financial reporting during the period ended
March 31, 2015 that materially affected or are reasonably likely to materially affect its internal control over financial reporting. 
 ADDITIONAL
INFORMATION 
 Additional information about the Company, including its most recent Annual Information Form, is available on the Company’s website at
www.cynapsus.ca, or on the Canadian Securities Administrators’ electronic filing website at www.sedar.com. 
 Contact Information

 Anthony Giovinazzo 
 President and Chief Executive
Officer 
 W: 416-703-2449 (Ext. 225) 
 ajg@cynapsus.ca

 Andrew Williams 
 Chief Operating Officer and Chief
Financial Officer 
 W: 416-703-2449 (Ext. 253) 

awilliams@cynapsus.ca 

  
 18EX-4.4

 Exhibit 4.4 

CYNAPSUS THERAPEUTICS INC. 

Annual and Special Meeting of Shareholders 

And 
 Management
Information Circular 
 April 3, 2015 

 MANAGEMENT INFORMATION CIRCULAR 

Table of Contents 
  

					
	 ARTICLE 1 - VOTING AND PROXIES
		 	1	  
		
	 1.1 SOLICITATION OF PROXIES
		 	1	  
	 1.2 APPOINTMENT OF PROXYHOLDERS
		 	1	  
	 1.3 REVOCATION OF PROXIES
		 	1	  
	 1.4 NON-REGISTERED HOLDERS OF SHARES
		 	2	  
	 1.5 NON-OBJECTING BENEFICIAL OWNERS
		 	2	  
	 1.6 VOTING SHARES AND PRINCIPAL SHAREHOLDERS
THEREOF
		 	3	  
		
	 ARTICLE 2 - BUSINESS TO BE TRANSACTED AT THE MEETING
		 	3	  
		
	 2.1 PRESENTATION OF THE FINANCIAL STATEMENTS
AND AUDITOR’S REPORT
		 	3	  
	 2.2 ELECTION OF DIRECTORS
		 	3	  
	 2.3 APPOINTMENT OF AUDITORS
		 	7	  
	 2.4 SHARE CONSOLIDATION
		 	8	  
		
	 ARTICLE 3 - STATEMENT OF CORPORATE GOVERNANCE PRACTICES
		 	12	  
		
	 3.1 GENERAL
		 	12	  
	 3.2 BOARD MANDATE
		 	12	  
	 3.3 COMPOSITION AND OPERATION OF THE
BOARD
		 	13	  
	 3.4 DIVERSITY
		 	14	  
	 3.5 ETHICAL BUSINESS CONDUCT
		 	14	  
	 3.6 BOARD COMMITTEES
		 	14	  
	 3.7 AUDIT COMMITTEE
		 	15	  
	 3.8 CORPORATE GOVERNANCE AND COMPENSATION
COMMITTEE
		 	15	  
	 3.9 ATTENDANCE AT BOARD AND COMMITTEE
MEETINGS
		 	17	  
		
	 ARTICLE 4 - STATEMENT OF EXECUTIVE COMPENSATION
		 	17	  
		
	 4.1 COMPENSATION DISCUSSION AND ANALYSIS
		 	17	  
	 4.2 SUMMARY COMPENSATION TABLE
		 	23	  
	 4.3 INCENTIVE PLAN AWARDS
		 	24	  
	 4.4 TERMINATION AND CHANGE OF CONTROL
BENEFITS
		 	26	  
	 4.5 EXECUTIVE EMPLOYMENT AGREEMENTS
		 	26	  
		
	 ARTICLE 5 - NON-EXECUTIVE DIRECTOR COMPENSATION
		 	32	  
		
	 5.1 GENERAL
		 	32	  
	 5.2 INDIVIDUAL DIRECTOR COMPENSATION
		 	33	  
	 5.3 INCENTIVE PLAN AWARDS
		 	34	  
	 5.4 OPTION BASED AWARDS - VALUE VESTED OR
EARNED
		 	35	  
		
	 ARTICLE 6 - SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
		 	35	  
		
	 ARTICLE 7 - INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
		 	36	  
		
	 ARTICLE 8 - INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
		 	36	  
		
	 ARTICLE 9 - AUDITED FINANCIAL STATEMENTS
		 	37	  
		
	 ARTICLE 10 - DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE
		 	37	  
		
	 ARTICLE 11 - TRANSFER AGENT AND REGISTRAR
		 	37	  

					
	 ARTICLE 12 - INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
		 	37	  
		
	 ARTICLE 13 - OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
		 	37	  
		
	 ARTICLE 14 - ADDITIONAL INFORMATION
		 	37	  
		
	 ARTICLE 15 - APPROVAL OF BOARD
		 	38	  

  

	Schedule “A”	Share Consolidation Resolution 

	Schedule “B”	Audit Committee Charter 

	Schedule “C”	Change of Auditor Reporting Package 

  
 - ii - 

 MANAGEMENT INFORMATION CIRCULAR 

ARTICLE 1 - VOTING AND PROXIES 
  

	1.1	Solicitation of Proxies 

 This Management Information Circular is furnished in connection with the
solicitation, by the Management of Cynapsus Therapeutics Inc. (the “Corporation”), of proxies to be used at the Annual and Special Meeting of Shareholders of the Corporation (the “Meeting”), to be held on May 7, 2015, at the
time and place and for the purposes set forth in the Notice of Annual and Special Meeting of Shareholders (the “Notice of Meeting”) or any adjournment thereof. 

Unless otherwise indicated, the information contained in this Management Information Circular is given as of April 3, 2015. All dollar amounts in this
Management Information Circular refer to Canadian dollars. 
 The solicitation of proxies will be conducted primarily by mail. Some proxies may also be
solicited directly in the case of directors, officers or employees of the Corporation, but without further compensation. The Corporation may also reimburse brokers and other persons holding the Corporation’s common shares (“Common
Shares”) on their behalf or on behalf of nominees, for costs incurred in sending the proxy documents to principals and to obtain their proxies. The Corporation will assume the costs of solicitation, which are expected to be minimal. 

 

	1.2	Appointment of Proxyholders 

 The persons named as proxyholders in the enclosed form of proxy are
directors and/or officers of the Corporation. 
 A shareholder has the right to appoint a person other than the persons indicated in such proxy form to
act as his or her proxyholder. To do so, the shareholder must write the name of such person in the appropriate space on the form of proxy. 
 In order
to ensure they are counted, duly completed proxies must be received at the office of Equity Financial Trust Company, 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1, Attention: Proxy Department no later than 5:00 p.m. on the second last
business day prior to the date of the Meeting or they may be delivered to the Chairman at the Meeting or at any adjournment thereof. A person acting as proxyholder need not be a shareholder of the Corporation. 

The persons named as proxies will vote or withhold from voting the shares in respect of which they are appointed or vote for or against any particular
question, in accordance with the instructions of the shareholder appointing them. In the absence of such instructions, the shares will be voted in favour of all matters identified in the enclosed Notice of Meeting. The enclosed form of proxy confers
discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the Notice of Meeting and to other matters which may properly come before the Meeting. At the time of printing of this
Management Information Circular, the management of the Corporation knows of no such amendment, variation or other matter expected to come before the Meeting other than the matters referred to in the Notice of Meeting. However, if any amendments or
other matters not known to management should properly come before the Meeting, the accompanying form of proxy confers discretionary authority upon the persons named therein to vote on such amendments or matters in accordance with their best
judgment. 
  

	1.3	Revocation of Proxies 

 A shareholder giving a proxy may revoke it at all times by a document signed by
him or her or by a proxyholder authorized in writing or, if the shareholder is a corporation, by a document signed by an 

 
officer or a proxyholder duly authorized, given to Equity Financial Trust Company, 200 University Avenue, Suite 300, Toronto, Ontario, M5H 4H1, Attention: Proxy Department, no later than 5:00
p.m. on the second last business day prior to the date of the Meeting or any adjournment thereof at which the proxy is to be used, or to the Chairman of the Meeting on the day of the Meeting or any adjournment thereof. 

 

	1.4	Non-Registered Holders of Shares 

 The information set forth in this section should be reviewed
carefully by the non-registered shareholders of the Corporation. Shareholders who do not hold their shares in their own name should note that only proxies deposited by shareholders who appear on the records maintained by the Corporation’s
registrar and transfer agent as registered holders of shares, or the persons they appoint as their proxies, will be recognized and acted upon at the Meeting. 

Non-registered shareholders may vote shares that are held by their nominees in one of two manners. Applicable securities laws and regulations, including
National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer, require nominees of non-registered shareholders to seek their voting instructions in advance of the Meeting. Non-registered shareholders
will receive (or will have received) from their nominees either a request for voting instructions or a proxy form for the number of shares held by them. The nominees’ voting instructions or proxy forms will contain instructions relating to
signature and return of the document and these instructions should be carefully read and followed by non-registered shareholders to ensure that their shares are appropriately voted at the Meeting. 

Non-registered shareholders who would like their shares to be voted for them must therefore follow the voting instructions provided by their nominees. 

Non-registered shareholders who wish to vote their shares in person at the Meeting must insert their own name in the space provided on the request for voting
instructions or proxy form, as the case may be, in order to appoint themselves as proxyholder and follow the signature and return instructions provided by their nominees. Non-registered shareholders who appoint themselves as proxyholders should
present themselves at the Meeting to a representative of Equity Financial Trust Company. Non-registered shareholders should not otherwise complete the form sent to them by their nominees as their votes will be taken and counted at the Meeting. 

All references to “shareholders” in this Management Information Circular and the accompanying form of proxy and Notice of Meeting are to
registered shareholders unless specifically stated otherwise. 
  

	1.5	Non-Objecting Beneficial Owners 

 These meeting materials are being sent to both registered and
non-registered owners of the securities. If you are a non-registered owner, and the Corporation or its agent has sent these materials directly to you, your name and address and information about your holdings of securities have been obtained in
accordance with applicable securities regulatory requirements from the intermediary holding securities on your behalf. By choosing to send these materials to you directly, the Corporation (and not the intermediary holding on your behalf) has assumed
responsibility for (a) delivering these materials to you, and (b) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions or form of proxy delivered to you. 

  
 - 2 - 

	1.6	Voting Shares and Principal Shareholders Thereof 

 The shares conferring voting rights at the Meeting are
Common Shares. At the date of this Management Information Circular, no shares of any other class are issued and outstanding. Each Common Share confers the right to one vote. As at April 3, 2015, there were 110,311,428 Common Shares issued and
outstanding. 
 Holders of Common Shares entered on the list of shareholders compiled at the close of business (Toronto time) on April 6, 2015 will
have the right to vote at the Meeting or at any adjournment thereof if they are present or represented by a proxyholder. 
 To the knowledge of the
directors and officers of the Corporation, the only persons who as of April 3, 2015, beneficially own or control, directly or indirectly, shares conferring more than 10% of the voting rights attached to the issued and outstanding shares of the
Corporation are indicated in the table below: 
  

									
	 Name of Shareholder
	  	Common Shares	 	  	Percentage of Voting Rights	 
	 Dexcel Pharma Technologies Ltd. / Dexxon Holdings Ltd. (“Dexcel”)
	  	 	18,104,647	  	  	 	16.4	% 

 ARTICLE 2 - BUSINESS TO BE TRANSACTED AT THE MEETING 

 

	2.1	Presentation of the Financial Statements and Auditor’s Report 

 Management, on behalf of the board
of directors of the Corporation (the “Board”), will submit to the shareholders at the Meeting the Audited Consolidated Financial Statements of the Corporation for the fiscal year ended December 31, 2014 and the Auditor’s
Report thereon. 
  

	2.2	Election of Directors 

 The Articles of the Corporation provide that the Board shall be composed of a
minimum of three and a maximum of 15 directors. Management of the Corporation proposes the eight persons named in the table on the following page as candidates for election as directors. Each elected director will remain in office until the next
annual meeting of the shareholders or until his or her successor is elected or appointed, unless his or her post is vacated earlier. The candidates proposed by management of the Corporation have been directors of the Corporation since the dates
indicated below. 
 Unless instructions are given to abstain from voting with regard to the election of directors, the persons whose names appear on the
enclosed form of proxy will vote in favour of the election of each of the eight nominees whose names are set out in the table on the following page. 

Management of the Corporation does not foresee that any of the following nominees listed below will be unable or, for any reason, unwilling to perform his or
her duties as director. In the event that the foregoing occurs for any reason, prior to the election, the persons indicated on the enclosed form of proxy reserve the right to vote for another candidate of their choice unless otherwise instructed by
the shareholder in the form of proxy to abstain from voting on the election of directors. 
 In order for the resolution to be passed, approval by the
majority of the votes cast by all of the shareholders, present in person and by proxy at the Meeting, is required. 
 The enclosed form of proxy allows
shareholders to direct proxyholders to vote individually for each of the nominees named below as a director of the Corporation. The Board adopted a policy in 2012 requiring that, at any meeting where shareholders vote on the election of directors,
any individual nominee who 

  
 - 3 - 

 
receives a greater number of votes “withheld” than votes “for” will be required to tender his or her resignation to the Board promptly following the meeting. The Board shall
accept the resignation promptly, while also ensuring proper transition. Within 90 days following the Meeting, the Board will announce its decision in a press release. Any director who tenders his or her resignation under this policy will not
participate in any meeting of the Board where his or her resignation is considered. 
 The following table and notes set out the name of each of the
individuals proposed by management for election as a director of the Corporation, their principal occupation, the year they first became a director of the Corporation and the number of shares of the Corporation beneficially owned, controlled or
directed, directly or indirectly, by each such individual as at April 3, 2015. 
  

									
	 Nominee Position with the Corporation

and Province/State and Country of

Residence
	  	 Principal Occupation
	  	 Director Since
	  	Common Shares
Beneficially Owned
or Controlled as at
April 3, 2015
(1)	 
	 Anthony Giovinazzo
 Ontario, Canada

•       Director

•       President and Chief Executive Officer
	  	President and Chief Executive Officer, Cynapsus Therapeutics Inc.	  	May 30, 2012	  	 	2,066,350	  
				
	 Tomer Gold (3)(4)(5)(6)

Herzliya, Israel

•       Director
	  	Vice President, Research and Development of Dexcel Pharma	  	May 9, 2013	  	 	NIL	  
				
	 Ronald Hosking(2)(3)

Ontario, Canada

•       Director

•       Chair of Audit Committee
	  	Chief Financial Officer of PlantForm Corporation	  	January 11, 2010	  	 	NIL	  
				
	 Tamar Howson
 New York, United States

•       Director
	  	Management Consultant	  	March 11, 2015	  	 	NIL	  
				
	 Nan Hutchinson(3)

Pennsylvania, United States

•       Director
	  	Management Consultant	  	February 11, 2014	  	 	NIL	  
				
	 Dr. Perry Molinoff(3)

Pennsylvania, United States

•       Director

•       Chair of the Corporate Governance and Compensation Committee
	  	Management Consultant	  	May 30, 2012	  	 	NIL	  
				
	 Ilan Oren (2)(4)(5)(6)

Kfar-Shmaryahu, Israel

•       Director
	  	Vice President, Business Development of Dexcel Pharma	  	May 9, 2013	  	 	NIL	  
				
	 Rochelle Stenzler(2)(3)

Ontario, Canada

•       Director

•       Chairman of the Board
	  	Management Consultant; Director at Humber River Regional Hospital	  	March 15, 2006	  	 	3,000	  
		  		  		  	  
	  
	 
	 TOTAL
						 	2,069,350	  
		  		  		  	  
	  
	 

 NOTES: 

	1.	The information as to shares beneficially owned, directly or indirectly, or over which control is exercised is not within the knowledge of the Corporation and has been furnished by the respective individuals.

	2.	Current Member of Audit Committee. 

	3.	Current Member of Corporate Governance and Compensation Committee. 

  
 - 4 - 

	4.	As part of a short form prospectus offering that closed on March 1, 2013, Dexcel, a strategic pharmaceutical investor, paid $3,500,000 for 7,608,696 units under the offering. Each unit consisted of one Common Share
and one Common Share purchase warrant of the Corporation. Following receipt of regulatory approval, Mr. Gold and Mr. Oren joined the Board on May 9, 2013. 

	5.	As part of a short form prospectus offering that closed on April 15, 2014, Dexcel paid $4,000,000 for 6,153,846 units under the offering. Each unit consisted of one Common Share in the capital of the Corporation
and one Common Share purchase warrant of the Corporation. 

	6.	As part of a private placement offering that closed on March 31, 2015, Dexcel paid $4,133,684 for 4,342,105 Common Shares under the offering. 

There are no contracts, arrangements or understandings between any nominee and any other person (other than the directors and officers of the Corporation
acting solely in such capacity) pursuant to which the nominee has been or is to be elected as a director. 
 The proposed directors of the Corporation as a
group (eight persons) owned beneficially or exercised control or direction over 2,069,350 Common Shares, or approximately 1.9% of the Common Shares, as at April 3, 2015. See also “Voting Shares and Principal Shareholders Thereof”.

 The following are brief biographies of each of the nominees for director: 

Anthony Giovinazzo: Mr. Giovinazzo is a Director and the President and Chief Executive Officer of the Corporation. He has a total of 35 years of
senior management experience of which he has been a biopharm CEO with more than 19 years in international pharmaceutical drug development, private and public financings, and M&A transactions. He has successfully managed pre-clinical to phase 3
development programs, regulatory submissions and negotiations with North American and European authorities. He has identified, licensed, and overseen the development of eight biotech drug development candidates, for the treatment of
Parkinson’s, Alzheimer’s, anxiety, neuropathic pain, and nausea. Mr. Giovinazzo successfully led the M&A trade sale of two biopharm entities to large acquirers resulting in significant returns to institutional investors.
Mr. Giovinazzo holds a Chartered Director (C.Dir.) and Audit Committee Certification (A.C.C.) from The Director’s College, in 2006 and 2011 respectively, where he is also currently a faculty member. He attended the Harvard Business School
Executive Program: Leadership and Strategy in Pharmaceuticals and Biotech in 2006. Mr. Giovinazzo completed his MBA at IMD Geneva, Switzerland in 1986, a Graduate Certificate Studies in Canadian Law (Taxation) Osgoode Hall Law School, York
University, Toronto, Ontario in 1984 and a BA Economics and Accounting, at McMaster University, Hamilton, Ontario in 1978. He is also a business advisory board member of the National Research Council of Canada’s Genomics funding program. He is
one of the inventors of the original APL-130277 intellectual property that was acquired by the Corporation. 
 Tomer Gold: Mr. Gold is currently
the Vice President, Research & Development of Dexcel Pharma where he oversees a group of 120 scientists and engineers. He is responsible for the development, registration and launching of generic and innovative products throughout the
world. Mr. Gold previously led the Pharmaceutical Development - European Union team of the Global Generic Research and Development branch of Teva Pharmaceuticals Ltd. His activities focused on the development of controlled release, enteric and
immediate release products. Mr. Gold holds a B.Sc in Chemical Engineering and was granted a M.Sc. degree in Biomedical Engineering from the Technion - Israel Institute of Technology in Haifa, Israel. 

Ronald Hosking: Mr. Hosking is a chartered accountant with 30 years of experience as a financial manager in the biotechnology and pharmaceutical
industries. Mr. Hosking is currently the CFO at PlantForm Corporation. From 1997 to 2008, Mr. Hosking was Vice-President Finance & Chief Financial Officer for PreMD Inc., a developer of point-of-care medical devices. He guided the
company through seven public financings and onto the Toronto Stock Exchange (2000) and AMEX (2002) stock exchanges. He also helped negotiate out-licensing partnerships with McNeil Consumer Healthcare and AstraZeneca. Mr. Hosking is a
graduate of the University of Toronto with a B.Com (Finance). 

  
 - 5 - 

 Tamar Howson: 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 Actavis, Oxigene Pharmaceuticals, Cardax and Organovo. She has formerly served as a director at several biotechnology companies, including Ariad, Idenix Pharmaceuticals, NPS Pharmaceuticals, SkyePharma and Warner Chilcott.
Ms. Howson holds an M.B.A from Columbia University, a M.S. from City University of New York, and a B.S. in Chemical Engineering from the Technion-Israel Institute of Technology. 

Nan Hutchinson: Ms. Hutchinson has more than twenty-five years of pharmaceutical experience spanning all aspects of commercialization, including
strategic planning, marketing, business development, sales leadership, talent identification and development. Over the past decade, Nan was the Senior Vice President of Marketing and Sales for URL Pharma, a privately held pharmaceutical company,
helping transform the commercial organization and leading to the acquisition by Takeda Pharmaceutical. Prior to URL Pharma, Nan was Senior Vice President of Marketing at Bristol Myers Squibb where she ran a $2 billion multi-asset portfolio and had
worldwide P&L responsibility in the Global Group. She ran several significant and profitable business units at Johnson & Johnson, winning several awards. Nan also founded a successful consulting company focused on helping companies to
accelerate innovation, raise capital and scale commercial operations, and currently serves as a Life Science Advisor at MaRs Discovery District. Ms. Hutchinson holds a bachelor’s degree of commerce from Mount Allison University and a
Master of Business Administration degree from Boston University. 
 Dr. Perry Molinoff: Dr. Molinoff is a neuropharmacologist with an M.D.
from Harvard University. Between 2003 and 2006 he was the Vice Provost for Research at the University of Pennsylvania. He holds a faculty position in the Department of Pharmacology and was the A.N. Richards Professor and Chairman of the Department
of Pharmacology at the University of Pennsylvania from 1981 to 1995. He is also an Adjunct Professor of Physiology and Neuroscience at the Medical University of South Carolina, Charleston, SC. In addition to his faculty appointments, from January
1995 until March 2001, Dr. Molinoff was the Vice President for Neuroscience and Genitourinary Drug Discovery at Bristol-Myers Squibb Pharmaceutical Research Institute, where he was responsible for implementing and directing the Institute’s
research efforts in these therapeutic areas. From September 2001 until November 2003, Dr. Molinoff served as Executive Vice President of Research and Development at Palatin Technologies, where he was responsible for all basic, preclinical and
clinical research. Dr. Molinoff has been a member of the board of directors of both publicly traded and private companies including Palatin Technologies, Cypress Biosciences, Aegera Therapeutics and Cita Neuropharma. He is or has been a member
of multiple editorial advisory boards for scientific and educational journals, has authored over 225 manuscripts and has authored or edited six books including two editions of Basic Neurochemistry and the 9th edition of Goodman and Gilman’s
textbook, The Pharmacological Basis of Therapeutics. 
 Ilan Oren: Mr. Oren is the Vice President of Business Development of Dexcel with
responsibility over corporate strategy, strategic investment, mergers and acquisitions, and licensing transactions. Mr. Oren also currently serves as a director of Roivant Sciences. He was previously with L.E.K. Consulting providing strategic
advice to clients in the biopharmaceutical industry, including biotech and specialty pharmaceutical companies. Mr. Oren holds a B.A. in Economics from Harvard University. 

Rochelle Stenzler: Ms. Stenzler is a senior executive with over 35 years’ experience, including 25 years in the pharmaceutical/healthcare
industry. Prior to establishing Rochelle Stenzler Consulting in 2004, she was President and Chief Executive Officer of Touchlogic Corporation. Previously, as President of International Operations for TLC Laser Eye Centers Inc., she served as
co-Chief Operating Officer of a $300 million laser vision correction business. In 1997, Rochelle was named President of Revlon Canada Inc. where she played a key role in the company’s restructuring. Between 1976 and 1988, Rochelle held
increasingly more responsible and senior positions in the pharmacy sector rising to Senior Vice President 

  
 - 6 - 

 
Operations at Pharma Plus Drugmarts Ltd. In 1992, she was named President and General Manager of Pharma Plus, a position she held until 1997. She also currently serves as a Board Director of the
Humber River Hospital in Toronto, serving on its Governance, Quality Assurance and Finance Committees. In addition, Rochelle serves on the Advisory Board of Social Capital Partners, which is developing new approaches to addressing Canada’s
employment challenges. She is the former Chair of Enwave Energy Corporation and Chairman, Executive Committee Member of the Canadian Association of Chain Drug Stores. Rochelle is a graduate of the University of Toronto with a BSc.Phm. and the Rotman
School of Management, Institute of Corporate Directors, with an ICD.D. 
 To the knowledge of the Corporation and based upon information provided to it by
the nominees for election to the Board, no such nominee: 
  

	(a)	is, as at the date of this Management Information Circular, or has been, within 10 years before the date of this Management Information Circular, a director, chief executive officer or chief financial officer of any
company (including the Corporation) that: 

  

	 	(i)	was subject to an order that was issued while the nominee was acting in the capacity as director, chief executive officer or chief financial officer; or 

 

	 	(ii)	was subject to an order that was issued after the nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the
capacity as director, chief executive officer or chief financial officer; or 

  

	(b)	is, as at the date of this Management Information Circular, or has been within 10 years before the date of this Management Information Circular, a director or executive officer of any company (including the Corporation)
that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any
proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or 

  

	(c)	has, within the 10 years before the date of this Management Information Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any
proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the nominee, with the exception of: 

For the purposes of paragraph (a) above, “order” means: 
  

	 	(i)	a cease trade order; 

  

	 	(ii)	an order similar to a cease trade order; or 

  

	 	(iii)	an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days. 

 

	2.3	Appointment of Auditors 

 A firm of auditors is to be appointed by vote of the shareholders at the
Meeting to serve as auditors of the Corporation until the close of the next annual meeting. The Board, upon the recommendation of the Audit Committee, proposes that Ernst & Young LLP, Chartered Accountants, be appointed as auditors of the

  
 - 7 - 

 
Corporation, in place of McGovern, Hurley, Cunningham, LLP, Chartered Accountants, and that the directors of the Corporation be authorized to determine their compensation. The Board resolved that
McGovern, Hurley, Cunningham, LLP, Chartered Accountants, not be proposed for reappointment as the auditor of the Corporation at the Meeting. Ernst & Young LLP have acted as auditors of the Corporation since their appointment on
September 19, 2014. There have been no reportable disagreements between the Corporation and McGovern, Hurley, Cunningham, LLP, Chartered Accountants, and no qualified opinions or denials of opinions by McGovern, Hurley, Cunningham, LLP for the
purposes of National Instrument 51-102 – Continuous Disclosure Obligations. The Corporation’s change of auditor reporting package is attached as Schedule “C” to this Management Information Circular. 

Unless instructed to abstain from voting with regard to the appointment of auditors, the persons whose names appear on the enclosed form of proxy will vote
in favour of the appointment of Ernst & Young LLP and authorizing the directors of the Corporation to determine their compensation. 
 In order
for the resolution to be passed, approval by a majority of the votes cast by all of the shareholders, present in person and by proxy at the Meeting, is required. 

The fees paid to the auditors of the Corporation are reviewed by the Audit Committee. The fees paid or payable by the Corporation to the Corporation’s
external auditors, Ernst & Young LLP, and the former auditors, McGovern, Hurley, Cunningham, LLP, for the periods noted below for all services performed were as follows: 

 

									
	 Service
	  	Year Ended December 31	 
	 	  	2014	 	  	2013	 
	 Audit Fees:
	  	$	106,000	  	  	$	111,000	  
	 Audit Related Fees:
	  	 	29,550	  	  	 	—  	  
	 Tax Fees:
	  	 	—  	  	  	 	5,500	  
	 All Other Fees:
	  	 	—  	  	  	 	—  	  
		  	  
	  
	 	  	  
	  
	 
	 Total:
		$	135,550	  		$	116,500	  
		  	  
	  
	 	  	  
	  
	 

  

	2.4	Share Consolidation 

 Shareholders will be asked at the Meeting to approve a special resolution to
consolidate all of the Corporation’s issued and outstanding Common Shares on the basis of a ratio within the range of one post-consolidation Common Share for every five pre-consolidation Common Shares to one post-consolidation Common Share for
every 25 pre-consolidation Common Shares (the “Consolidation”), with the ratio to be selected and implemented by the Corporation’s board of directors, if at all, at any time prior to December 31, 2015. The number of
pre-Consolidation shares in the ratio must be a whole number of Common Shares. The Consolidation remains subject to receipt of all necessary regulatory approvals, including approval of the Toronto Stock Exchange (the “TSX” or the
“Exchange”). 
 If the Board decides to implement the Consolidation, upon completion of the Consolidation the number of Common Shares
issued and outstanding will be reduced from approximately 110,311,428 Common Shares as of April 3, 2015 to between approximately 22,062,286 and 4,412,457 shares, depending on the ratio selected by the Board. The following table sets out the
approximate percentage reduction in the number of outstanding Common Shares and the approximate number of Common Shares that would be outstanding as a result of a Consolidation at the ratios indicated: 

  
 - 8 - 

					
	 Proposed Consolidation Ratio
	 	 Approximate Percentage Reduction
in
Number of Outstanding
	 	
Approximate Number of Outstanding
Common Shares (Post

Consolidation)(1)

	 1 for 5
	 	80.0%	 	22,062,286
	 1 for 6
	 	83.3%	 	18,385,238
	 1 for 7
	 	85.7%	 	15,758,775
	 1 for 8
	 	87.5%	 	13,788,929
	 1 for 9
	 	88.9%	 	12,256,825
	 1 for 10
	 	90.0%	 	11,031,143
	 1 for 11
	 	90.9%	 	10,028,312
	 1 for 12
	 	91.7%	 	9,192,619
	 1 for 13
	 	92.3%	 	8,485,494
	 1 for 14
	 	92.9%	 	7,879,388
	 1 for 15
	 	93.3%	 	7,354,095
	 1 for 16
	 	93.8%	 	6,894,464
	 1 for 17
	 	94.1%	 	6,488,908
	 1 for 18
	 	94.4%	 	6,128,413
	 1 for 19
	 	94.7%	 	5,805,865
	 1 for 20
	 	95.0%	 	5,515,571
	 1 for 21
	 	95.2%	 	5,252,925
	 1 for 22
	 	95.5%	 	5,014,156
	 1 for 23
	 	95.7%	 	4,796,149
	 1 for 24
	 	95.8%	 	4,596,310
	 1 for 25
	 	96.0%	 	4,412,457

 NOTE: 

	1.	Based on the number of Common Shares outstanding on April 3, 2015. 

 On April 2, 2015, the closing
price of the Common Shares on the TSX was $1.36. Management believes that it is possible that the Common Shares trade at prices that may impact the desirability of purchasing the Common Shares. Accordingly, management believes that a reduction in
the number of outstanding Common Shares, warrants and stock options will increase the Corporation’s flexibility and competitiveness in the market place and may make the Corporation’s securities more attractive to potential investors.
Management believes that a higher trading price for the Common Shares would be beneficial to the Corporation and its shareholders as it will enable the Corporation to attract interest from a broader range of institutional investors in Canada, the
United States and elsewhere. 
 The Board believes that shareholder approval of the range of potential Consolidation ratios (rather than a single
Consolidation ratio) provides the Board with maximum flexibility to achieve the desired results of the Consolidation. If the Share Consolidation Resolution (as defined below) is approved, the Consolidation will be implemented, if at all, only upon a
determination by the Board that the Consolidation is in the best interests of the Corporation and the shareholders at that time. In connection with any determination to implement a Consolidation, the Board will set the timing for such a
Consolidation and select the specific ratio from within the range of ratios set forth in the Share Consolidation Resolution. The Board’s selection of the specific ratio will be based primarily on the price

  
 - 9 - 

 
level of the Common Shares at that time and the expected stability of that price level. In addition, the Board may consider factors such as: 

 

	 	(a)	the prevailing trading volume of the Common Shares and the anticipated impact of the Consolidation on the trading market for the Common Shares; 

 

	 	(b)	the outlook for the trading price of the Common Shares; 

  

	 	(c)	threshold prices of brokerage houses or institutional investors that could impact their ability to invest or recommend investments in the Common Shares; 

 

	 	(d)	the greatest overall reduction in the Corporation’s administrative costs; and 

  

	 	(e)	prevailing general market and economic conditions. 

 No further action on the part of shareholders will be
required in order for the Board to implement the Consolidation. If the Board does not implement the Consolidation before December 31, 2015, the authority granted by the Share Consolidation Resolution to implement the Consolidation on these
terms will lapse and be of no further force or effect. The Share Consolidation Resolution will also authorize the Board to elect not to proceed with, and abandon, the Consolidation at any time if it determines, in its sole discretion, to do so. The
Board would exercise this right if it determined that the Consolidation was no longer in the best interests of the Corporation and its shareholders. 
 No
further approval or action by or prior notice to shareholders will be required in order for the Board to abandon the Consolidation. 
 Certain Risks
Associated with the Share Consolidation 
 There can be no assurance that the total market capitalization of the Corporation’s Common Shares (i.e.
the aggregate value of all Common Shares at the then market price) immediately after the proposed Consolidation will be equal to or greater than the total market capitalization immediately before the proposed Consolidation or that the per share
market price of the Common Shares following the Consolidation will remain higher than the per share market price immediately before the Consolidation or equal or exceed the direct arithmetical result of the Consolidation. There can be no assurance
that any increase in the market price per Common Share of the Corporation resulting from the Consolidation will be sustainable or that it will equal or exceed the direct arithmetical result of the Consolidation (that is, from five to 25 times the
pre-Consolidation price, depending on the ratio selected by the Board) since there are numerous factors and contingencies which would affect such price, including the status of the market for the Common Shares at the time, the Corporation’s
reported results of operations in future periods, and general economic, stock market and industry conditions. For example, based on the closing price of the Common Shares on the TSX on April 2, 2015 of $1.36 per share, if the Board decided to
implement the Consolidation and select a Consolidation ratio of one post-Consolidation share for every ten pre-Consolidation shares, there can be no assurance that the post-Consolidation market price of the Common Shares would be $13.60 per share or
greater. Accordingly, the total market capitalization of the Common Shares after the proposed Consolidation may be lower than the total market capitalization before the proposed Consolidation and, in the future, the market price of the Common Shares
may not exceed or remain higher than the market price prior to the proposed Consolidation. In addition, there can be no assurance that implementation of the Consolidation will make the Corporation’s securities more attractive to potential
investors, including institutional investors. 

  
 - 10 - 

 A decline in the market price of the Common Shares after the Consolidation may result in a greater percentage
decline than would occur in the absence of a Consolidation, and the liquidity of the Common Shares could be adversely affected following such a Consolidation 

If the Consolidation is implemented and the market price of the Common Shares declines, the percentage decline may be greater than would occur in the absence
of the Consolidation. The market price of the Common Shares will, however, also be based on the Corporation’s performance and other factors, which are unrelated to the number of Common Shares outstanding. Furthermore, the liquidity of the
Common Shares could be adversely affected by the reduced number of Common Shares that would be outstanding after the Consolidation. 
 No Fractional
Shares to be Issued 
 No fractional shares will be issued in connection with the Consolidation and, in the event that a shareholder would otherwise be
entitled to receive a fractional share upon Consolidation, those shareholders shall have such fractional share cancelled. Except for any variances attributable to fractional shares, the change in the number of issued and outstanding Common Shares
that will result from the Consolidation will cause no change in the capital attributable to the Common Shares and will not materially affect any shareholders’ percentage ownership in the Corporation, even though such ownership will be
represented by a smaller number of Common Shares. However, the Consolidation could lead to an increase in the number of shareholders who hold less than a board lot (100 shares), or board lots plus odd lots, and the cost to shareholders of
transferring odd lots may be higher than the cost of transferring board lots. 
 Effect on Stock Options and Other Arrangements 

The exercise or conversion price and/or the number of Common Shares issuable under any outstanding convertible securities, including under outstanding stock
options, warrants, rights and any other similar securities will be proportionately adjusted upon the implementation of the Consolidation, in accordance with the terms of such securities, based on the Consolidation ratio selected by the Board. 

Effect on Share Certificates 
 If the proposed
Consolidation is approved by the shareholders and implemented by the Board, registered shareholders will be required to exchange their share certificates representing pre-Consolidation Common Shares for new share certificates representing
post-Consolidation Common Shares. Following the announcement by the Corporation of the Consolidation ratio selected by the Board and the effective date of the Consolidation, registered shareholders will be sent a letter of transmittal from the
Corporation’s transfer agent, Equity Financial Trust Company, as soon as practicable after the effective date of the Consolidation. The letter of transmittal will contain instructions on how to surrender certificate(s) representing
pre-Consolidation shares to the transfer agent. The transfer agent will forward to each registered shareholder who has sent the required documents a new share certificate representing the number of post-Consolidation Common Shares to which the
shareholder is entitled. Until surrendered, each share certificate representing pre-Consolidation Common Shares will be deemed for all purposes to represent the number of whole post-Consolidation Common Shares to which the holder is entitled as a
result of the Consolidation. If a registered shareholder would otherwise be entitled to receive a fractional share, such fractional share shall be deemed to have been cancelled as described above under the heading “No Fractional Shares to be
Issued”. 

  
 - 11 - 

 Procedure for Implementing Share Consolidation 

If the Share Consolidation Resolution is approved by the shareholders, and the Board decides to implement the Consolidation, the Corporation will promptly file
articles of amendment (“Articles of Amendment”) with the Director under the Canada Business Corporations Act (the “CBCA”) in the form prescribed by that Act to amend the Corporation’s articles of
incorporation. The Consolidation will become effective on the date shown in the certificate of amendment in connection therewith, or such other date indicated in the Articles of Amendment. 

No Dissent Rights 
 Under the CBCA, shareholders do not
have dissent and appraisal rights with respect to the proposed Consolidation. 
 Vote Required and Recommendations of the Board 

The resolution of the shareholders approving the proposed Consolidation (the “Share Consolidation Resolution”) is a special resolution. The
text of the special resolution which will be submitted to the shareholders is set forth on Schedule “A” to this Management Information Circular. 

For the reasons indicated above, the Board and management believe that approval of the Share Consolidation Resolution is in the best interests of the
Corporation and its shareholders and, accordingly, recommend that shareholders vote FOR the Share Consolidation Resolution. The Share Consolidation Resolution must be approved by at least two-thirds of the votes cast by the holders of Common
Shares present in person or represented by proxy at the Meeting to be effective. The Share Consolidation Resolution provides that the Board may revoke the special resolution before the issuance of the certificate of amendment by the Director under
the CBCA without the approval of the shareholders. 
 ARTICLE 3 - STATEMENT OF CORPORATE GOVERNANCE PRACTICES 

 

	3.1	General 

 Effective June 30, 2005, the Canadian Securities Administrators adopted National Policy
58-201 – Corporate Governance Guidelines (the “Guidelines”) and National Instrument 58-101 – Disclosure of Corporate Governance Practices which requires that each reporting issuer annually disclose its
corporate governance practices. 
 The following disclosure is based on the disclosure requirements of the Guidelines. 

 

	3.2	Board Mandate 

 The Board assumes ultimate responsibility for the stewardship of the Corporation and
carries out its mandate directly and through considering recommendations it receives from the committees of the Board and from management. The Board approves all material acquisitions and dispositions of its operating businesses. 

Management is responsible for the day-to-day operations of the Corporation, and pursues Board approved strategic initiatives within the context of authorized
business, capital plans and corporate policies. Management is expected to report to the Chief Executive Officer who reports to the Board on a regular basis on short-term results and longer term development activities. 

  
 - 12 - 

 The Board is specifically responsible for adoption of a strategic planning process, identification of principal
risks and implementing risk-management systems, succession planning and the continuous disclosure requirements of the Corporation under applicable securities laws and regulations. 

A copy of the Charter of the Board of Directors (the “Charter of the Board of Directors”) may be found on SEDAR at www.sedar.com and on the
Corporation’s website at www.cynapsus.ca. 
  

	3.3	Composition and Operation of the Board 

 The Guidelines recommend that a majority of directors of a
listed corporation be “independent” as defined by National Instrument 52-110 – Audit Committees (“NI 52-110”). An independent director is a director who does not have any direct or indirect material
relationship with the issuer. “Material relationship” is defined as a relationship which could, in the view of the Corporation’s Board, be reasonably expected to interfere with the exercise of a director’s independent judgment.
NI 52-110 further sets out certain relationships which are deemed to be material relationships. 
 The Board currently has eight members. Each director is
elected annually by the shareholders and serves for a term that will end at the Corporation’s next annual meeting. 
 For the upcoming year the Board
believes that eight directors is a sufficient number to ensure the Board will be able to function independently of management. Given the above determinations, the Board has determined that out of the eight members of the Board, seven of the members
will be independent. 
 The Board has regularly scheduled quarterly meetings with special meetings to review matters when needed. The Board met (in person
or by conference call) or conducted business by resolution 11 times during the fiscal year ended December 31, 2014. Of the total, six Board meetings were approximately 1 1⁄2 to 3 hours in duration, and five meetings were short conference calls, usually under one hour. The Board encourages its independent members to hold separate discussions regarding the Corporation to the extent
such directors believe this is necessary. Should any matter arise in which a director has a material interest, he or she is expected to declare his or her interest and recuse himself or herself from the discussion and voting over such matter. The
independent members of the board did not hold any separate meetings or discussions in the fiscal year ended December 31, 2014. 
 Ms. Stenzler is
Chairman of the Board and is considered to be an independent director as she is not a member of management. No lead director has been appointed by the Board. The Chairman of the Board is responsible for providing overall direction to the Board and
is responsible for carrying out its overall mandate. Specific written position descriptions for the Chairman, the Chairs of the Committees and the Chief Executive Officer have been created. Individual directors may, with the approval of the Chairman
of the Board or of the entire Board, engage outside advisers at the expense of the Corporation. 
 The following table outlines the Corporation’s
independent and non-independent directors during the fiscal year ended December 31, 2014: 
  

			
	 Director
	  	Independent/Non-Independent
	 Anthony Giovinazzo(1)
	  	Non-Independent
	 Ronald Hosking
	  	Independent
	 Nan Hutchinson(2)
	  	Independent
	 Tomer Gold
	  	Independent

  
 - 13 - 

			
	 Director
	  	Independent/Non-Independent
	 Perry Molinoff
	  	Independent
	 Ilan Oren
	  	Independent
	 Alan Ryley(3)
	  	Independent
	 Rochelle Stenzler
	  	Independent

 NOTES: 
  

	1.	Mr. Giovinazzo is the Chief Executive Officer of the Corporation. 

	2.	Ms. Hutchinson was appointed as a director of the Corporation effective February 11, 2014. 

	3.	Dr. Ryley passed away on June 20, 2014. 

  

	3.4	Diversity 

 The Board has not yet adopted term limits or other mechanisms of board renewal but will
contemplate doing so. The Board is currently comprised of a diverse and effective group of members with business, pharmaceutical and scientific backgrounds whose accumulated knowledge, experience and expertise remain key to the development of the
Corporation’s drug candidate, APL-130277. 
 The Corporate Governance and Nominating Committee believes that diversity provides a depth of perspective
and enhances the overall functioning of the Board. The eight-member Board currently includes three women directors (37.5% of the Board), including the chair, Rochelle Stenzler. The Corporation does not currently employ any women in executive officer
positions but it does consider the level of representation of women on the Board and in executive positions as a significant factor in identifying proposed Board and management-level candidates. However, the Corporation does not currently support
the adoption of any specific targets or quotas, and believes that particular capabilities and contributions remain important factors in the identification and nomination of such candidates. As women are currently well represented on the Board, and,
in addition, the Corporation has retained women to serve as selected senior scientific advisors, the Board has not yet considered the adoption of a written policy relating to the identification and nomination of women directors and members of
management. While the Corporation’s track record in this regard is notable, the Corporation continues to search for and identify qualified women to serve the Corporation in various capacities, and in doing so, is considering the adoption of a
written policy to this effect. 
  

	3.5	Ethical Business Conduct 

 The Board has adopted a code of conduct which summarizes the values,
principles and practices that guide the business conduct of the Board (the “Code”). The Code has been adopted by the Board and all directors are expected to be familiar with the Code and to apply its guiding principles in the
performance of their responsibilities. In particular, the Board reasonably ensures that all directors are familiar with the provisions of the Code regarding disclosing conflicts of interest and how to obtain direction from management and/or external
professional advisors on any potential conflict of interest. This helps to ensure that independent judgment is exercised in all circumstances. A copy of the Code is available upon request from the Corporation and may be found on the
Corporation’s website at www.cynapsus.ca. 
  

	3.6	Board Committees 

 The Corporation had two committees of the Board, namely, the Audit Committee and the
Corporate Governance and Compensation Committee. All of the committee members are independent directors. The Board does not have any other standing committees. 

  
 - 14 - 

	3.7	Audit Committee 

 As a company listed on the TSX the Corporation is required to have an Audit Committee
for the purpose of monitoring and enhancing the quality of the financial information disclosed by the Corporation. A copy of the Audit Committee Charter (the “Audit Committee Charter”) is attached as Schedule “B” to this
Management Information Circular. 
 Composition of Audit Committee 

The Audit Committee is currently comprised of three members who are Mr. Hosking (Chairperson), Mr. Oren, and Ms. Stenzler. The members of the
Audit Committee are compensated as noted in the section “Non-Executive Director Compensation”. All of the members are independent directors. All members of the Audit Committee are “financially literate” (within the meaning given
to such term in the Audit Committee Charter). 
 Mandate 

The mandate of the Audit Committee provides that its members shall meet at least quarterly prior to the release of the interim and annual financial results.
The Audit Committee met four times in the fiscal year ended December 31, 2014. It is expected that the Audit Committee will be constituted at the first meeting of directors immediately following the Meeting. 

Relevant Education and Experience 
 All members of the
Audit Committee have the education and practical experience required to understand and evaluate statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that
can reasonably be expected to be raised by the Corporation’s financial statements. 
 Audit Committee Oversight 

At no time since the commencement of the Corporation’s most recently completed fiscal year have any recommendations by the Audit Committee respecting the
appointment and/or compensation of the Corporation’s external auditors not been adopted by the Board. 
 Pre-Approval Policies and Procedures

 The Corporation has not adopted any specific policies in relation to the engagement of non-audit services. 

 

	3.8	Corporate Governance and Compensation Committee 

 The Corporate Governance and Compensation Committee
currently consists of five members who are Mr. Gold, Mr. Hosking, Ms. Hutchinson, Dr. Molinoff (Chairperson), and Ms. Stenzler. All of the members are independent directors. The members of the Corporate Governance and
Compensation Committee are compensated as noted in the section “Non-Executive Director Compensation”. A copy of the Corporate Governance and Compensation Committee Charter (the “Corporate Governance and Compensation Committee
Charter”) may be found on SEDAR at www.sedar.com and on the Corporation’s website at www.cynapsus.ca. 
 The mandate of the Corporate
Governance and Compensation Committee provides that its members meet semi-annually. The Corporate Governance and Compensation Committee met four times in the fiscal year ended December 31, 2014. 

  
 - 15 - 

 Principal Responsibilities 

The principal responsibilities of the Corporate Governance and Compensation Committee include: (a) developing a corporate governance structure, reviewing
the corporate governance practices of the Corporation and assessing the functioning of the Board, its committees and its individual members; (b) reviewing and assessing the skills and competencies required and exhibited by the members of the
Board and providing recommendations concerning individuals qualified to serve as members of the Board; and (c) reviewing the compensation of the senior officers, executives and directors of the Corporation and providing recommendations to the
Board. 
 Nomination of Directors 
 Nominations for
proposed directors are currently solicited by the Corporate Governance and Compensation Committee through discussions and consultations with the drug development/biotechnology/health care sectors, coupled with recommendations put forward by
officers, directors and shareholders of the Corporation. The committee then reviews, interviews, references and recommends to the Board new candidates for the Board. The list is then submitted to the vote of the shareholders at the
Corporation’s Annual General Meeting. 
 The Chairman of the Board reviews and recommends on an annual basis to the Board a list of candidates for the
composition of the Board committees. The committees are reconstituted on an annual basis at the first meeting of the Board following the Corporation’s annual general meeting. 

Consultants 
 In 2014, the Corporate Governance and
Compensation Committee engaged Hugessen Consulting to provide independent advice on its executive and director compensation program. The professional fees for these services in 2014 were $16,000. 

Orientation and Continuing Education 
 The Board ensures
that new directors receive an appropriate orientation in order that they understand the role of the Board and its committees. Each new director meets with the President and Chief Executive Officer and select members of the Board who discuss with the
new director what is expected of that candidate as a member of the Board. 
 Ongoing director education respecting the Corporation, its operations and its
business environment as well as the evolving the role of the director in the governance of public companies is addressed chiefly though briefings from internal management, external experts or industry participants concerning salient industry issues,
market trends, technology developments or specific challenges facing the Corporation and its management. In addition, management regularly circulates to the directors copies of newswire releases, articles in industry periodicals and other
publications relevant to the Corporation’s business. 
 Compensation 

The Corporate Governance and Compensation Committee reviews and recommends for approval to the Board the President and Chief Executive Officer’s overall
compensation, including benefits and employment conditions. The President and Chief Executive Officer approves the compensation arrangements of the other executive officers of the Corporation, with the exception of stock option grants which are
approved by the Board. 

  
 - 16 - 

 Assessments of the Board 

It is the responsibility of the Corporate Governance and Compensation Committee to assess the overall effectiveness of the Board and of its committees. 

 

	3.9	Attendance at Board and Committee Meetings 

 The attendance records of the Board members at Board and
Committee meetings during the fiscal year ended December 31, 2014 are as follows: 
  

																					
	 	  	Number of Meetings Attended	 	  	 	 	  	 	 
	 	  	Regular
Board
Meetings	 	  	Short
Board
Meetings	 	  	Audit
Committee
Meetings	 	  	Corporate
Governance and
Compensation
Committee
Meetings	 	  	Total	 
	 Anthony Giovinazzo
	  	 	6 of 6	  	  	 	5 of 5	  	  	 	—  	  	  	 	—  	  	  	 	11 of 11	  
	 Ronald Hosking
	  	 	4 of 6	  	  	 	5 of 5	  	  	 	4 of 4	  	  	 	4 of 4	  	  	 	17 of 19	  
	 Nan Hutchinson(1)
	  	 	6 of 6	  	  	 	4 of 4	  	  	 	—  	  	  	 	2 of 2	  	  	 	12 of 12	  
	 Tomer Gold
	  	 	6 of 6	  	  	 	5 of 5	  	  	 	—  	  	  	 	4 of 4	  	  	 	15 of 15	  
	 Perry Molinoff
	  	 	6 of 6	  	  	 	5 of 5	  	  	 	—  	  	  	 	4 of 4	  	  	 	15 of 15	  
	 Ilan Oren
	  	 	5 of 6	  	  	 	5 of 5	  	  	 	3 of 4	  	  	 	—  	  	  	 	13 of 15	  
	 Alan Ryley(2)
	  	 	2 of 3	  	  	 	1 of 2	  	  	 	2 of 2	  	  	 	—  	  	  	 	5 of 7	  
	 Rochelle Stenzler
	  	 	6 of 6	  	  	 	4 of 5	  	  	 	4 of 4	  	  	 	4 of 4	  	  	 	18 of 19	  

 NOTES: 
  

	1.	Ms. Hutchinson was appointed as a director of the Corporation effective February 11, 2014. 

	2.	Dr. Ryley passed away on June 20, 2014. 

 ARTICLE 4 - STATEMENT OF EXECUTIVE
COMPENSATION 
  

	4.1	Compensation Discussion and Analysis 

 Corporate Governance and Compensation Committee 

The administration of the Corporation’s compensation practices is handled by the Corporate Governance and Compensation Committee. 

The Corporate Governance and Compensation Committee’s mandate is to examine matters relating to the compensation of executive officers of the
Corporation, including the President and Chief Executive Officer, the Chief Operating Office and Chief Financial Officer, and the Chief Scientific Officer (collectively the “Named Executive Officers”), as well as the Chairman of the
Board. 
 The Corporate Governance and Compensation Committee then makes its recommendations to the Board. The Corporate Governance and Compensation
Committee must ensure that the compensation of the Corporation’s executive officers is consistent with the aggregate compensation philosophy of the Corporation, as set out below. The Corporate Governance and Compensation Committee considers
recommendations of the President and Chief Executive Officer, with the exception that any compensation or award to the President and Chief Executive Officer under any of the elements of compensation described below is determined and approved
independently and without input from him. In addition, the Corporate Governance and Compensation Committee reviews and approves the President and Chief 

  
 - 17 - 

 
Executive Officer’s recommendations for stock option grants for the Chief Operating Officer / Chief Financial Officer and the Chief Scientific Officer. Salary and bonus information for the
Chief Operating Officer / Chief Financial Officer and the Chief Scientific Officer is shared by the President and Chief Executive Officer with the Corporate Governance and Compensation Committee for information purposes only. 

Neither the Board nor the Corporate Governance and Compensation Committee nor any other committee of the Board have formally established a mechanism to
consider the implications of the risks associated with the Corporation’s compensation policies and practices. However, the Board and the Corporate Governance and Compensation Committee inherently consider these risks. The Corporate Governance
and Compensation Committee reviews and manages the policies and practices of the Corporation and ensures that they are aligned with the interests of the shareholders. The Corporate Governance and Compensation Committee reviews, among other things,
the overall compensation and the annual salary increases of the executive officers of the Corporation while keeping as a reference both the financial performance of the Corporation and the turnover risk for the Corporation. The Board also addresses
risk related to compensation policies in the context of compensation mechanisms that are linked to the achievement of certain goals or projects (e.g. short term and long term objectives). The Board is involved in the supervision of the key projects
and initiatives of the Corporation and the manner in which they are being carried out. Consequently, the Board is in a position where it can control the risks that may be taken by the Corporation’s management and ensures that those risks remain
appropriate and that members of the management do not expose the Corporation to excessive risks. 
 All of the members of the Corporate Governance and
Compensation Committee are independent. They each have direct experience relevant to compensation matters resulting from their respective current and past backgrounds and/or roles. The members of the Corporate Governance and Compensation Committee
have experience dealing with compensation matters in large and small organizations, including public companies. The Corporation does not have a policy in place that limits the ability for directors or Named Executive Officers to hedge the shares of
the Corporation that they own. However, none of the current directors or Named Executive Officers of the Corporation are hedging any of the shares of the Corporation that they own. 

The Corporate Governance and Compensation Committee has been composed of five directors since May 7, 2014, namely Mr. Gold, Mr. Hosking,
Ms. Hutchinson, Ms. Stenzler and Dr. Molinoff, who is the chair of the Corporate Governance and Compensation Committee. 
 Compensation
Objectives 
 The Corporation’s executive compensation philosophy is designed to attract, retain and reward highly qualified individuals and
motivate them to achieve performance objectives aligned with the Corporation’s vision and strategic orientation and consistent with shareholder value creation. The Corporation’s goal is to provide market competitive remuneration consistent
with responsibility level, experience and performance. That said, however, the Corporate Governance and Compensation Committee must also ensure that the compensation of the Corporation’s Named Executive Officers is consistent with the aggregate
compensation philosophy and prevailing financial condition of the Corporation. 
 In accordance with the Corporation’s executive compensation
philosophy, a significant portion of the compensation of the Corporation’s Named Executive Officers is related to the financial performance of the Corporation and the responsibilities inherent to each executive’s duties. The Corporate
Governance and Compensation Committee reviews the compensation programs of the Named Executive Officers and of all the executive officers annually in order to ensure their competitiveness and compliance with the objectives, values and strategies of
the Corporation. 

  
 - 18 - 

 Elements of Compensation 

The Corporation seeks to achieve the compensation objectives described earlier through different elements of compensation, including salary and both short-term
and long-term incentive plans, with the incentives having both equity and non-equity components. The Corporation believes that these various elements are important to effectively achieve the objectives of its executive compensation philosophy. 

These elements of the Named Executive Officers’ compensation are: 
  

	 	(a)	base salaries; 

  

	 	(b)	annual performance bonuses; and 

  

	 	(c)	a stock option plan. 

 The Corporation also has a health, dental and disability insurance benefits program for
its employees. 
 If the circumstances require, the Corporate Governance and Compensation Committee may, in its sole discretion, recommend employment
conditions that are different from the policies in effect. 
 Benchmarking 

On an annual basis, the Corporate Governance and Compensation Committee has reviewed the compensation strategy and policies of the Corporation. This included a
benchmark analysis with respect to the base salary and annual performance bonus components of the Named Executive Officers’ compensation. 
 The annual
base salaries and annual performance bonuses of the Named Executive Officers were benchmarked against Canadian and U.S. public companies of comparable size in the Pharma/Biotech sector. The peer group was used to benchmark the base salary and annual
performance bonuses of the Named Executive Officers. This group was comprised of Canadian and U.S. public companies that were comparable to the Corporation, taking into consideration their market capitalizations, cash, annual sales, and annual
research and development expenditures, all of which are selection criteria that the Corporation believes are directly relevant for purposes of benchmarking. The most recent list of Canadian companies forming this peer group were: ImmunoVaccine Inc.,
BioSyent Inc. Pharmaceuticals, Resverlogix Corp., Lorus Therapeutics Inc., Diamedica Inc., biOasis Technologies Inc., iCo Therapeutics Inc., Bioniche Life Sciences Inc., Avagenesis Corp., GeneNews Limited, and Sernova Corp. The most recent list of
U.S. companies forming this peer group were: NovaBay Pharmaceuticals, Inc., Opexa Therapeutics, Inc., GenVec, Inc., CytoDyn Inc., Brainstorm Cell Therapeutics Inc., CorMedix, Inc., Heat Biologics, Inc., Arno Therapeutics, Inc., Biozone
Pharmaceuticals, Inc., Biocept, Inc., Soligenix, Inc., Palatin Technologies Inc., Interleukin Genetics, Inc., and ARCA biopharma, Inc. 
 The
Corporation’s goal is to remunerate executives at the 50th percentile level based on a comparison group of biotech and specialty pharmaceutical companies of comparable size and market capitalization. 

The recommendation of the Corporate Governance and Compensation Committee as to base salaries, was to continue to index and, when necessary, adjust the base
salaries of the Named Executive Officers periodically, as the Corporation has done over the past years, and in accordance with common practices within the market. The annual performance bonuses of the Named Executive Officers are targeted to be in a
range from 30% to 40% of their base salaries with the exception of the President and Chief Executive Officer. The annual performance bonus of the President and Chief Executive Officer is targeted to be in a range of 50% to 75% of his annual base
salary. 

  
 - 19 - 

 Base Salary 

Base salary is reflective of responsibilities and annual increases should, at a minimum, reflect inflationary pressures and changes in duties. At the date of
hire, base salary is determined using a number of factors including industry comparisons and relevant experience and is set out in the employment agreements. Annual increases are determined based upon reference to data on compensation levels of
executives in comparable companies (i.e. public companies in the drug development/biotech/health care sector) as well as annual performance evaluation and underlying economic circumstances. The Corporate Governance and Compensation Committee
recommends to the Board the annual base salary increases for the President and Chief Executive Officer for approval, and also presents the annual base salary for the direct reports of the President and Chief Executive Officer. 

Annual Incentive Plans and Benefits 
 Cash bonuses are
awarded on an annual basis to recognize the achievement of agreed corporate and individual objectives and to recognize contributions that enhance the intrinsic value of the Corporation. Benefits commensurate with those paid to senior officers of
companies of similar size and scope to the Corporation are paid to the Corporation’s executive officers. 
 The annual incentive plan is a cash bonus
under which a payment is to be made to executives following the end of the Corporation’s fiscal year, based on the achievement of established and agreed corporate and individual goals. For the President and Chief Executive Officer, only
corporate goals are considered in the determination of incentive plan achievement. The annual performance objectives of the Named Executive Officers are presented to the Corporate Governance and Compensation Committee and Board early in the fiscal
year and regular updates are provided by the President and Chief Executive Officer during the year. Following the completion of the fiscal year, the President and Chief Executive Officer presents an evaluation of corporate performance versus
objectives to the Corporate Governance and Compensation Committee. The President and Chief Executive Officer also presents the recommended bonus payments for each of his direct reports to the Corporate Governance and Compensation Committee,
including their achievement of individual objectives. The Board, on recommendation from the Corporate Governance and Compensation Committee, has final approval of the amounts to be paid to the President and Chief Executive Officer and his direct
reports under the annual incentive plan. As at December 31, 2014, bonus amounts awarded to officers and key management for 2014 total $414,810, which were subsequently paid during the first quarter of 2015. Payment of the bonuses is at the
discretion of the Board, based on an assessment of the financial position of the Corporation. 
 In 2014, the Corporation’s objectives related to three
key areas: firstly, regulatory and clinical milestones for the APL-130277 drug candidate, secondly, investor relations and, thirdly, capital raising. Personal objectives for the two executive direct reports of the President and Chief Executive
Officer are aligned with the corporate objectives and include departmental objectives for each of their areas of responsibility. 
 Stock Options

 The long-term incentive component of compensation for executive officers, including the President and Chief Executive Officer, is based on stock
option awards. This component of compensation is intended to reinforce management’s commitment to long term improvements in the Corporation’s performance and shareholder value. 

The Corporation’s stock option plan (the “Stock Option Plan”) includes initial option grants upon hire and eligibility for annual stock
option awards. An initial grant of options occurs at the initial hire date for each executive which is proportionate to annual base salary. Thereafter, options may be granted on an annual basis based upon guidelines set by the Corporate Governance
and Compensation Committee. The 

  
 - 20 - 

 
President and Chief Executive Officer recommends the amount of annual option grants for each of his direct reports which are then presented to the Corporate Governance and Compensation Committee
for review. The Corporate Governance and Compensation Committee will then, after making any revisions they deem necessary, recommend the annual option grants to the Board for their approval. The annual option grants for the President and Chief
Executive Officer are determined by the Corporate Governance and Compensation Committee based upon pre-determined guidelines. Annual option awards are made during the quarter of the fiscal year following the completion of the annual audit and the
determination of financial performance for the preceding year. The amount of options previously granted to an executive is not a factor in determining the amount of the annual option award. 

Compensation of the President and Chief Executive Officer 

The total compensation package available for the President and Chief Executive Officer includes a base salary, a discretionary bonus component and a long-term
equity component based on stock option awards. Compensation is based upon the factors outlined above, including a comparison with compensation of senior officers of companies of similar size and scope to the Corporation and the performance of the
Corporation. 
 Risk Management 
 The Corporate
Governance and Compensation Committee reviews the performance objectives associated with annual incentive plans to ensure that they do not result in any undue risks for the Corporation. The balance between short and long term objectives in the
design of the compensation programs is taken into account by the Corporation in the design of compensation plans and in the annual evaluation of the achievement of objectives when deciding on the amounts of annual incentive awards. The Corporation
has not implemented any claw-back arrangements related to the executive compensation programs. 
 Compensation policies and practices and the design of the
Corporation’s incentive plans for executives take into account risk elements, including the following: (a) incentive plan awards do not vary significantly from the overall compensation structure of the Corporation; and (b) incentive
plans are designed so they do not provide for rewards for the accomplishment of tasks while the risk to the Corporation extends over a significantly longer period of time. 

Performance Graph 
 The following graph compares the total
cumulative shareholder return for $100 invested in common shares of the Corporation on December 31, 2009 with the cumulative return of the S&P/TSX Composite Index and the S&P/TSX Capped Health Care Index for the five most recently
completed fiscal years. 

  
 - 21 - 

 

 
  

																									
	 Year
	  	2009
$	 	  	2010
$	 	  	2011
$	 	  	2012
$	 	  	2013
$	 	  	2014
$	 
	 S&P/TSX Composite Index
	  	 	100	  	  	 	114	  	  	 	102	  	  	 	106	  	  	 	116	  	  	 	125	  
	 S&P/TSX Capped Health Care Index
	  	 	100	  	  	 	140	  	  	 	159	  	  	 	176	  	  	 	246	  	  	 	291	  
	 Cynapsus Therapeutics Inc.
	  	 	100	  	  	 	45	  	  	 	25	  	  	 	60	  	  	 	76	  	  	 	110	  

 The total cumulative shareholder return from December 31, 2009 to December 31, 2014 for $100 invested in common
shares of the Corporation was $10, compared to $25 for the S&P/TSX Composite Index over the same period and $191 for the S&P/TSX Capped Health Care Index over the same period. 

In November 2009, the Corporation hired Anthony Giovinazzo as President and CEO. At this time, the Corporation shifted its focus to a Parkinson’s drug
candidate, APL-130277. The shareholder return for the Corporation pictured in the above graph generally follows the positive clinical advancement of the APL-130277 drug candidate. Positive Phase 1 study results (i.e. for the CTH-101, CTH-102,
CTH-103 and CTH-104 studies) were announced between January 2012 and April 2014, with positive Phase 2 study results for CTH-105 announced in November 2014. Clinical progress also enabled several critical
financings over this period, including March 2012 ($1 million), March 2013 ($7.3 million), April 2014 ($25 million), and, subsequent to the five year period, March 2015 ($21 million). 

The trend in executive compensation over the five-year period shows the following: 
  

	 	•	 	Increases in base salary have been in line with cost-of-living increases during the period. The Corporation’s goal is to remunerate executives at the 50th percentile level based on a comparison group of biotech and
specialty pharmaceutical companies of comparable size and market capitalization. One of the Named Executive Officers has been with the Corporation for the full five-year period, one joined the Corporation in
November 2009, one joined the Corporation in April 2013, one joined the Corporation in October 2014, and one joined in November 2014. 

  
 - 22 - 

	 	•	 	Bonuses awarded in the five year period have reflected the degree of achievement of the Corporation’s objectives during the period. 

The primary factors considered by the Board in reviewing executive compensation are described in the Compensation Discussion and Analysis section of this
Management Information Circular. Annual base salary increases are determined based upon comparison to data on compensation levels of executives in comparable companies. The cash bonus element of the annual incentive plan is based on the degree of
achievement of annual corporate objectives and to recognize contributions that enhance the intrinsic value of the Corporation. 
  

	4.2	Summary Compensation Table 

 The following table sets out the compensation noted below paid or payable to
the Named Executive Officers of the Corporation for the year ended December 31, 2014. 
  

																																					
	 	  	 	 	  	 	 	  	 	 	  	 	 	  	Non-Equity Incentive
Plan Compensation	 	  	 	 	  	 	 	  	 	 
	 Name and
Principal
Position
	  	Year	 	  	Salary
($)	 	  	Share-
based
(SARs)
Awards (6)
($)	 	  	Option-
based
Awards (7)
($)	 	  	Annual
Incentive
Plan or
Bonus(8) (9)(10)
($)	 	  	Long-
term
Incentive
Plan(11)
($)	 	  	Pension
Value (12)
($)	 	  	All Other
Compen-
sation
($)	 	  	Total
Compen-
sation
($)	 
	 Anthony Giovinazzo, President and Chief Executive Officer(1)
	  	 	2014	  	  	$	300,000	  	  	 	NIL	  	  	$	395,440	  	  	$	225,000	  	  	 	NIL	  	  	 	NIL	  	  	$	22,368	  	  	$	942,808	  
	  	 	2013	  	  	$	289,947	  	  	 	NIL	  	  	$	153,060	  	  	$	111,406	  	  	 	NIL	  	  	 	NIL	  	  	$	27,889	  	  	$	582,302	  
	  	 	2012	  	  	$	225,000	  	  	 	NIL	  	  	 	NIL	  	  	$	94,500	  	  	 	NIL	  	  	 	NIL	  	  	 	NIL	  	  	$	319,500	  
	 Andrew Williams, Chief Operating Officer and Chief Financial
Officer(2)
	  	 	2014	  	  	$	175,000	  	  	 	NIL	  	  	$	152,150	  	  	$	70,000	  	  	 	NIL	  	  	 	NIL	  	  	$	16,235	  	  	$	413,385	  
	  	 	2013	  	  	$	166,903	  	  	 	NIL	  	  	$	108,800	  	  	$	43,380	  	  	 	NIL	  	  	 	NIL	  	  	$	8,529	  	  	$	327,612	  
	  	 	2012	  	  	$	145,250	  	  	 	NIL	  	  	$	59,500	  	  	$	43,941	  	  	 	NIL	  	  	 	NIL	  	  	 	NIL	  	  	$	248,691	  
	 Thierry Bilbault, Chief Scientific Officer and Executive Vice President
CMC(3)
	  	 	2014	  	  	$	61,154	  	  	 	NIL	  	  	$	526,500	  	  	$	43,710	  	  	 	NIL	  	  	 	NIL	  	  	 	NIL	  	  	$	633,543	  
	 Albert Agro, Chief Medical Officer (4)
	  	 	2014	  	  	$	200,962	  	  	 	NIL	  	  	$	143,500	  	  	$	70,000	  	  	 	NIL	  	  	 	NIL	  	  	 	NIL	  	  	$	414,462	  
	  	 	2013	  	  	$	131,811	  	  	 	NIL	  	  	$	69,440	  	  	$	61,214	  	  	 	NIL	  	  	 	NIL	  	  	$	28,770	  	  	$	291,235	  
	  	 	2012	  	  	 	NIL	  	  	 	NIL	  	  	$	42,000	  	  	 	NIL	  	  	 	NIL	  	  	 	NIL	  	  	$	115,608	  	  	$	157,608	  
	 Jordan Dubow, Vice President, Medical Affairs(5)
	  	 	2014	  	  	$	24,272	  	  	 	NIL	  	  	$	190,833	  	  	$	6,099	  	  	 	NIL	  	  	 	NIL	  	  	 	NIL	  	  	$	221,204	  

 NOTES: 

	1.	Mr. Giovinazzo was appointed President and Chief Executive Officer of the Corporation on November 16, 2009. 

	2.	Mr. Williams was appointed Chief Operating Officer on March 15, 2006 and Chief Financial Officer on June 25, 2007. 

  
 - 23 - 

	3.	Mr. Bilbault was appointed Executive Vice President and Chief Scientific Officer on October 6, 2014. 

	4.	Mr. Agro was appointed Chief Medical Officer on April 8, 2013. Prior to his appointment, Mr. Agro was a consultant to the Corporation. 

	5.	Mr. Dubow was appointed Vice President, Medical Affairs on November 24, 2014. 

	6.	The Corporation does not have any share based awards, including share appreciation rights. 

	7.	Option-based awards to the Corporation’s Named Executive Officers are solely comprised of stock option grants made under the Stock Option Plan. The value of the options has been calculated using the
Black-Scholes-Merton model as at the date of the grants. 

	8.	For the year ended December 31, 2013, the Corporation awarded bonuses of $111,406 to Mr. Giovinazzo and $43,941 to Mr. Williams, with payment at the discretion of the Board and subject to the Corporation
completing a new financing. These amounts were accrued during the year ended December 31, 2013 and paid during the year ended December 31, 2014. 

	9.	For the year ended December 31, 2012, the Corporation awarded bonuses of $94,500 to Mr. Giovinazzo and $43,941 to Mr. Williams with payment at the discretion of the Board and subject to the Corporation
completing a new financing. These amounts were accrued during the year ended December 31, 2013 and paid during the year ended December 31, 2014. 

	10.	For the year ended December 31, 2011, the Corporation awarded bonuses of $82,000 to Mr. Giovinazzo and $33,000 to Mr. Williams, with payment at the discretion of the Board and subject to the Corporation
completing a new financing. These amounts were accrued during the year ended December 31, 2013 and paid during the year ended December 31, 2014. 

	11.	The Corporation does not have any non-equity long-term incentive plans, pursuant to which cash or non-cash compensation intended to serve as an incentive for performance (whereby performance is measured by reference to
financial performance or the price of the Corporation’s securities) was paid or distributed to the Named Executive Officers during the most recently completed financial year. 

	12.	The Corporation does not have a pension plan in place for its Named Executive Officers. 

  

	4.3	Incentive Plan Awards 

 Outstanding Share-Based and Option-Based Awards 

Option-based awards were granted to five of the Named Executive Officers in the fiscal year ended December 31, 2014. The Corporation does not grant any
share-based awards to any of its Named Executive Officers, including, but not limited to, share appreciation rights. 
 The following table provides
information regarding the option-based awards for each Named Executive Officer outstanding as of December 31, 2014. 
  

															
	 Named

Executive Officer
	  	 Grant

Date
	  	Aggregate
Number of
Shares
Underlying
Unexercised
Options
(#)	 	  	Option
Exercise Price
($)	 	  	 Option

Expiry Date
	  	Aggregate
Value of
Unexercised
In-the-Money
Options (1)
($)
	 Anthony Giovinazzo
 President
and
 Chief Executive
 Officer(3)
	  	August 12, 2010	  	 	20,000	  	  	$	1.00	  	  	August 12, 2015	  	2,000
	  	 March 4, 2011
	  	 	20,000	  	  	$	1.00	  	  	March 4, 2016	  	2,000
	  	 March 1, 2013
	  	 	373,316	  	  	$	0.46	  	  	March 1, 2016	  	238,922
	  	 May 20, 2014
	  	 	884,000	  	  	$	0.65	  	  	May 20, 2019	  	397,800
	  	 December 5, 2014
	  	 	50,000	  	  	$	1.24	  	  	December 5, 2019	  	NIL
						
	 Andrew Williams,

Chief Operating
 Officer and Chief

Financial Officer(3)
	  	March 3, 2010	  	 	15,000	  	  	$	1.00	  	  	March 3, 2015(2)	  	1,500
	  	 August 12, 2010
	  	 	20,000	  	  	$	1.00	  	  	August 12, 2015	  	2,000
	  	 March 14, 2011
	  	 	20,000	  	  	$	1.00	  	  	March 4, 2016	  	2,000
	  	 August 19, 2011
	  	 	40,000	  	  	$	1.00	  	  	August 19, 2016	  	4,000
	  	 March 23, 2012
	  	 	95,000	  	  	$	1.00	  	  	March 23, 2017	  	9,500
	  	 August 29, 2012
	  	 	5,000	  	  	$	1.00	  	  	August 29, 2017	  	500

  
 - 24 - 

															
	 Named

Executive Officer
	  	 Grant

Date
	  	Aggregate
Number of
Shares
Underlying
Unexercised
Options
(#)	 	  	Option
Exercise Price
($)	 	  	 Option

Expiry Date
	  	Aggregate
Value of
Unexercised
In-the-Money
Options (1)
($)
		  	May 1, 2013	  	 	340,000	  	  	$	0.36	  	  	May 1, 2018	  	251,600
		  	May 20, 2014	  	 	355,000	  	  	$	0.65	  	  	May 20, 2019	  	159,750
		  	December 5, 2014	  	 	10,000	  	  	$	1.24	  	  	December 5, 2019	  	NIL
						
	 Albert Agro, Chief

Medical Officer(3)
	  	March 23, 2012	  	 	70,000	  	  	$	1.00	  	  	March 23, 2017	  	7,000
	  	May 1, 2013	  	 	217,000	  	  	$	0.36	  	  	May 1, 2018	  	160,580
	  	May 20, 2014	  	 	350,000	  	  	$	0.65	  	  	May 20, 2019	  	157,500
						
	 Thierry Bilbault,

Chief Scientific

Officer (3)
	  	December 5, 2014	  	 	650,000	  	  	$	1.24	  	  	December 5, 2019	  	NIL
						
	 Jordan Dubow,

Vice President,

Medical Affairs (3)
	  	December 5, 2014	  	 	250,000	  	  	$	1.24	  	  	December 5, 2019	  	NIL

 NOTES: 
  

	1.	The closing market price of the Common Shares on the Exchange on December 31, 2014 was $1.10 per share. 

	2.	As the expiry date fell during a trading blackout period in effect, the expiry date has been extended to 10 days after the blackout period ends. 

	3.	On April 2, 2015, subsequent to the year ended December 31, 2014, stock options to acquire 3,980,000 Common Shares were granted to directors, members of management and employees. Of the total, 1,020,000
options were granted to Anthony Giovinazzo, 700,000 options were granted to each of Andrew Williams and Albert Agro, 350,000 options were granted to Thierry Bilbault, and 130,000 options were granted to Jordan Dubow. The exercise price of these
options is $1.36, and the expiry period is 5 years. 

 Incentive Plan Awards - Value Vested or Earned During the Year 

The following table presents, for each Named Executive Officer, the aggregate value that would have been realized if awards vested during the year ended
December 31, 2014 had been exercised on the vesting date. 
  

													
	 Name
	 	Option-based awards
–
Value during the year on
vesting
($)	 	 	Share-based awards –
Value during the year on
vesting
($)	 	 	Non-equity incentive plan
compensation – Value
earned during the
year
($)	 
	 Anthony Giovinazzo
	 	 	292,070	  	 	 	NIL	  	 	 	NIL	  
	 Andrew Williams
	 	 	94,750	  	 	 	NIL	  	 	 	NIL	  
	 Albert Agro
	 	 	84,747	  	 	 	NIL	  	 	 	NIL	  
	 Thierry Bilbault
	 	 	NIL	  	 	 	NIL	  	 	 	NIL	  
	 Jordan Dubow
	 	 	NIL	  	 	 	NIL	  	 	 	NIL	  

 Defined Benefit or Contribution Plans 

The Corporation does not have a pension plan that provides for benefits at or in connection with retirement. 

  
 - 25 - 

	4.4	Termination and Change of Control Benefits 

 The Corporation has entered into employment and management
agreements with the Named Executive Officers which provide for payments following or in connection with any termination, resignation, retirement, change in control or change in the responsibilities of the Named Executive Officer’s duties. The
details of these payments are set out under the description of the particular agreements. See “Executive Employment Agreements”. 
 In addition,
the provisions of the Stock Option Plan provide for the immediate vesting of all unvested options in the event of a takeover bid resulting in a change of control. 
  

	4.5	Executive Employment Agreements 

 The following describes the respective consulting/employment agreements
entered into by the Corporation and the Named Executive Officers: 
 Anthony Giovinazzo, President and Chief Executive Officer 

Anthony Giovinazzo and the Corporation entered into a consulting agreement dated as of November 16, 2009 which provided that Mr. Giovinazzo act as
the President and Chief Executive Officer of the Corporation. The consulting agreement was terminated and superseded by an employment agreement (the “Giovinazzo Agreement”) on January 1, 2012. Following the completion of the
March 2013 short form prospectus offering for gross proceeds of $7,317,160, the Giovinazzo Agreement was revised and updated effective March 1, 2013 and again on January 1, 2015. 

Base Salary: Under the terms of the Giovinazzo Agreement, Mr. Giovinazzo is entitled to a base salary (the “Base Salary”) of
$350,000 per annum, less statutory withholdings. 
 Bonus: Mr. Giovinazzo is also eligible for a discretionary bonus (the “Annual
Bonus”), as determined by the Board, for each year of Mr. Giovinazzo’s employment in an amount of 50% of the Base Salary, based on the achievement of agreed corporate objectives. The Annual Bonus may be increased to up to 75% of
the Base Salary, as determined by the Board, based on an overachievement of goals. The Annual Bonus is based on criteria approved by the Board, and relayed to Mr. Giovinazzo, which criteria shall reflect the annual corporate goals of the
Corporation and the role of Mr. Giovinazzo in attaining such goals. The Annual Bonus accrues and is payable at the discretion of the Board. 
 Stock
Options: Mr. Giovinazzo may also be granted options to acquire Common Shares in the capital of the Corporation at the discretion of the Board and pursuant to the terms and conditions of the Stock Option Plan. Mr. Giovinazzo was granted
884,000 options on May 20, 2014, 50,000 options on December 5, 2014 and 1,020,000 options on April 2, 2015. 
 Termination With Cause:
The Corporation is entitled, in its sole discretion, to terminate the employment of Mr. Giovinazzo, without notice or payment in lieu of notice, for cause. The Corporation has no obligation to Mr. Giovinazzo after the effective date of
termination except for payment of any Base Salary accrued to the date of termination and any other amounts which have accrued but not yet been paid in accordance with any benefit plan prior to the date of termination. Mr. Giovinazzo is not
entitled to receive any bonus in the event of termination with cause. 
 Termination Without Cause: The Corporation is entitled in its sole
discretion to terminate the Giovinazzo Agreement at any time upon 12 months’ notice to Mr. Giovinazzo (the “Notice Period”). Upon termination by the Corporation, the Corporation must provide Mr. Giovinazzo with
written notice or payment in lieu thereof and an amount equal to the average of the Annual Bonus paid to Mr. 

  
 - 26 - 

 
Giovinazzo in each of the three most recent completed financial, pro-rated to the effective date of termination (the “Deemed Annual Bonus”), together with all amounts which
Mr. Giovinazzo would have been entitled to during such period and a continuation of benefits coverage during such period in respect of the elements which are permitted to be continued in terms of the benefit plan then in place. The Corporation
has the option to pay the amount equal to the Base Salary on its regular payroll dates or in a lump sum as of the effective date of termination. As a result, upon termination without cause, Mr. Giovinazzo would be entitled to $350,000 in Base
Salary and $143,635 in Deemed Annual Bonus, assuming the termination took place on April 3, 2015. 
 Termination With Change in Control:
In the event of termination of the Giovinazzo Agreement as a result of a change of control, and for a period of six months following the change of control, the Corporation, or the purchaser or other third party, as the case may be, must pay to
Mr. Giovinazzo a lump sum equal to equal to 12 months of Base Salary and the Deemed Annual Bonus, together with all amounts which Mr. Giovinazzo would have been entitled to during such period and a continuation of benefits coverage during
such period in respect of the elements which are permitted to be continued in terms of any benefit plan then in place. As a result, upon termination with change in control, Mr. Giovinazzo would be entitled to $350,000 in Base Salary and
$143,635 in Deemed Annual Bonus, assuming the termination took place on April 3, 2015. 
 Non-Disclosure, Non-Solicitation and Non-Competition
Agreement: Mr. Giovinazzo and the Corporation are also parties to a Non-Solicitation and Non-Competition Agreement dated as of November 16, 2009, pursuant to which Mr. Giovinazzo is prohibited from competing with the Corporation
for a period of one year following the termination of the Giovinazzo Agreement, from soliciting clients of the Corporation for a period of one year following its termination and from soliciting employees of the Corporation for a period of two years
following its termination. 
 Andrew Williams, Chief Operating Officer and Chief Financial Officer 

Andrew Williams and the Corporation entered into an employment agreement dated as of January 1, 2006 (the “Williams Agreement”) which
provided that Mr. Williams will act as a senior officer of the Corporation. The Williams Agreement was revised and updated on January 1, 2012. Following the completion of the March 2013 short form prospectus offering for gross proceeds of
$7,317,160, the Williams Agreement was revised and updated effective May 1, 2013 and again on January 1, 2015. 
 Base Salary: Under the
terms of the Employment Agreement, Mr. Williams is entitled to a base salary (the “Base Salary”) of $225,000 per annum, less statutory withholdings. 

Bonus: Mr. Williams is also eligible for a discretionary bonus (the “Annual Bonus”), as determined by the President and Chief
Executive Officer and Board, for each year of Mr. Williams’ employment in the amount of 30% of the Base Salary, based on the achievement of agreed corporate objectives. The Annual Bonus may be increased to up to 40% of the Base Salary, as
determined by the Board, based on an overachievement of goals. The Annual Bonus is based on criteria approved by the Board, and relayed to Mr. Williams, which criteria shall reflect the annual corporate goals of the Corporation and the
individual goals relating to respective areas of oversight. The Annual Bonus accrues and is payable at the discretion of the Board. 
 Stock Options:
Mr. Williams may also be granted options to acquire Common Shares in the capital of the Corporation at the discretion of the Board and pursuant to the terms and conditions of the Stock Option Plan. Mr. Williams was granted 355,000 options
on May 20, 2014, 10,000 options on December 5, 2014 and 700,000 options on April 2, 2015. 

  
 - 27 - 

 Termination With Cause: The Corporation is entitled, in its sole discretion, to terminate the employment
of Mr. Williams, without notice or payment in lieu of notice, for cause. The Corporation has no obligation to Mr. Williams after the effective date of termination except for payment of any Base Salary accrued to the date of termination and
any other amounts which have accrued but not yet been paid in accordance with any benefit plan prior to the date of termination. Mr. Williams is not entitled to receive any bonus in the event of termination with cause. 

Termination Without Cause: The Corporation is entitled in its sole discretion to terminate the Williams Agreement at any time upon notice equal to four
months plus one additional month for every full year of employment (starting from January 1, 2006) (the “Notice Period”). Upon termination by the Corporation, the Corporation must provide Mr. Williams with written notice
or payment in lieu thereof and an amount equal to the average of the Annual Bonus paid to Mr. Williams in each of the three most recent completed financial, pro-rated to the effective date of termination (the “Deemed Annual
Bonus”), together with all amounts which Mr. Williams would have been entitled to during such period and a continuation of benefits coverage during such period in respect of the elements which are permitted to be continued in terms of
the benefit plan then in place. The Corporation has the option to pay the amount equal to the Base Salary on its regular payroll dates or in a lump sum as of the effective date of termination. As a result, upon termination without cause,
Mr. Williams would be entitled to $243,750 in Base Salary and $52,440 in Deemed Annual Bonus, assuming the termination took place on April 3, 2015. 

Termination With Change in Control: In the event of termination of the Williams Agreement as a result of a change of control, or during the six
months immediately following the change of control, the Corporation, or the purchaser or other third party, as the case may be, must pay to Mr. Williams a lump sum equal to four months plus one additional month for every full year of employment
(starting from January 1, 2006) of Base Salary and the Deemed Annual Bonus, together with all amounts which Mr. Williams would have been entitled to during such period and a continuation of benefits coverage during such period in respect
of the elements which are permitted to be continued in terms of any benefit plan then in place. As a result, upon termination with change in control, Mr. Williams would be entitled to $243,750 in Base Salary and $52,440 in Deemed Annual Bonus,
assuming the termination took place on April 3, 2015. 
 Non-Disclosure, Non-Solicitation and Non-Competition Agreement: Mr. Williams and
the Corporation are also parties to a Non-Solicitation and Non-Competition Agreement dated as of January 1, 2006, pursuant to which Mr. Williams is prohibited from competing with the Corporation for a period of one year following the
termination of the Employment Agreement, from soliciting clients of the Corporation for a period of one year following its termination and from soliciting employees of the Corporation for a period of two years following its termination. 

Thierry Bilbault, Chief Scientific Officer and Executive Vice President, CMC 

Thierry Bilbault and the Corporation entered into an employment agreement dated as of October 6, 2014 (the “Bilbault Agreement”) which
provided that Mr. Bilbault would act as Chief Scientific Officer and Executive Vice President, CMC of the Corporation. The Bilbault Agreement was revised and updated on January 1, 2015. 

Base Salary: Under the terms of the Bilbault Agreement, Mr. Bilbault is entitled to a base salary (the “Base Salary”) of $267,500
per annum, less statutory withholdings. 
 Bonus: Mr. Bilbault is also eligible for a discretionary bonus (the “Annual Bonus”),
as determined by the President and Chief Executive Officer and Board, for each year of Mr. Bilbault’s employment in the amount of 30% of the Base Salary, based on the achievement of agreed corporate objectives. The Annual

  
 - 28 - 

 Bonus may be increased to up to 40% of the Base Salary, as determined by the Board, based on an overachievement
of goals. The Annual Bonus is based on criteria approved by the Board, and relayed to Mr. Bilbault, which criteria shall reflect the annual corporate goals of the Corporation and the individual goals relating to respective areas of oversight.
The Annual Bonus accrues and is payable at the discretion of the Board. 
 Stock Options: Mr. Bilbault may also be granted options to acquire
Common Shares in the capital of the Corporation at the discretion of the Board and pursuant to the terms and conditions of the Stock Option Plan. Mr. Bilbault was granted 650,000 options on December 5, 2014 and 350,000 options on
April 2, 2015. 
 Termination With Cause: The Corporation is entitled, in its sole discretion, to terminate the employment of Mr. Bilbault,
without notice or payment in lieu of notice, for cause. The Corporation has no obligation to Mr. Bilbault after the effective date of termination except for payment of any Base Salary accrued to the date of termination and any other amounts
which have accrued but not yet been paid in accordance with any benefit plan prior to the date of termination. Mr. Bilbault is not entitled to receive any bonus in the event of termination with cause. 

Termination Without Cause: The Corporation is entitled in its sole discretion to terminate the Bilbault Agreement at any time upon notice equal to six
months plus one additional month for every full year of employment (starting from October 4, 2014) (the “Notice Period”). Upon termination by the Corporation, the Corporation must provide Mr. Bilbault with written notice
or payment in lieu thereof and an amount equal to the average of the Annual Bonus paid to Mr. Bilbault in each of the three most recent completed financial years (or such fewer number of recent completed financial years if Mr. Bilbault was
employed for less than the three most recent completed financial years), pro-rated to the effective date of termination (the “Deemed Annual Bonus”), together with all amounts which Mr. Bilbault would have been entitled to
during such period and a continuation of benefits coverage during such period in respect of the elements which are permitted to be continued in terms of the benefit plan then in place. The Corporation has the option to pay the amount equal to the
Base Salary on its regular payroll dates or in a lump sum as of the effective date of termination. As a result, upon termination without cause, Mr. Bilbault would be entitled to $133,750 in Base Salary and $43,710 in Deemed Annual Bonus,
assuming the termination took place on April 3, 2015. 
 Termination With Change in Control: In the event of termination of the Bilbault
Agreement as a result of a change of control, or during the six months immediately following the change of control, the Corporation, or the purchaser or other third party, as the case may be, must pay to Mr. Bilbault a lump sum equal to six
months plus one additional month for every full year of employment (starting from October 4, 2014) of Base Salary and the Deemed Annual Bonus, together with all amounts which Mr. Bilbault would have been entitled to during such period and
a continuation of benefits coverage during such period in respect of the elements which are permitted to be continued in terms of any benefit plan then in place. As a result, upon termination with change in control, Mr. Bilbault would be
entitled to $133,750 in Base Salary and $43,710 in Deemed Annual Bonus, assuming the termination took place on April 3, 2015. 
 Non-Disclosure,
Non-Solicitation and Non-Competition Agreement: Mr. Bilbault and the Corporation are also parties to a Non-Solicitation and Non-Competition Agreement dated as of October 6, 2014, pursuant to which Mr. Bilbault is prohibited from
competing with the Corporation for a period of one year following the termination of the Employment Agreement, from soliciting clients of the Corporation for a period of one year following its termination and from soliciting employees of the
Corporation for a period of two years following its termination. 

  
 - 29 - 

 Albert Agro, Chief Medical Officer 

Albert Agro and the Corporation entered into an employment agreement dated as of April 8, 2013 (the “Agro Agreement”) which provided that
Mr. Agro would act as Chief Medical Officer of the Corporation. The Agro Agreement was revised and updated on September 1, 2014 and again on January 15, 2015. 

Base Salary: Under the terms of the Agro Agreement, Mr. Agro is entitled to a base salary (the “Base Salary”) of $260,000 per
annum, less statutory withholdings. 
 Bonus: Mr. Agro is also eligible for a discretionary bonus (the “Annual Bonus”), as
determined by the President and Chief Executive Officer and Board, for each year of Mr. Agro’s employment in the amount of 30% of the Base Salary, based on the achievement of agreed corporate objectives. The Annual Bonus may be increased
to up to 40% of the Base Salary, as determined by the Board, based on an overachievement of goals. The Annual Bonus is based on criteria approved by the Board, and relayed to Mr. Agro, which criteria shall reflect the annual corporate goals of
the Corporation and the individual goals relating to respective areas of oversight. The Annual Bonus accrues and is payable at the discretion of the Board. 

Stock Options: Mr. Agro may also be granted options to acquire Common Shares in the capital of the Corporation at the discretion of the Board and
pursuant to the terms and conditions of the Stock Option Plan. Mr. Agro was granted 350,000 options on May 20, 2014 and 700,000 options on April 2, 2015. 

Termination With Cause: The Corporation is entitled, in its sole discretion, to terminate the employment of Mr. Agro, without notice or payment in
lieu of notice, for cause. The Corporation has no obligation to Mr. Agro after the effective date of termination except for payment of any Base Salary accrued to the date of termination and any other amounts which have accrued but not yet been
paid in accordance with any benefit plan prior to the date of termination. Mr. Agro is not entitled to receive any bonus in the event of termination with cause. 

Termination Without Cause: The Corporation is entitled in its sole discretion to terminate the Agro Agreement at any time upon notice equal to four
months plus one additional month for every full year of employment (starting from April 8, 2013) (the “Notice Period”). Upon termination by the Corporation, the Corporation must provide Mr. Agro with written notice or
payment in lieu thereof and an amount equal to the average of the Annual Bonus paid to Mr. Agro in each of the three most recent completed financial years (or such fewer number of recent completed financial years if Mr. Agro was employed
for less than the three most recent completed financial years), pro-rated to the effective date of termination (the “Deemed Annual Bonus”), together with all amounts which Mr. Agro would have been entitled to during such period
and a continuation of benefits coverage during such period in respect of the elements which are permitted to be continued in terms of the benefit plan then in place. The Corporation has the option to pay the amount equal to the Base Salary on its
regular payroll dates or in a lump sum as of the effective date of termination. As a result, upon termination without cause, Mr. Agro would be entitled to $130,000 in Base Salary and $50,607 in Deemed Annual Bonus, assuming the termination took
place on April 3, 2015. 
 Termination With Change in Control: In the event of termination of the Agro Agreement as a result of a change of
control, or during the six months immediately following the change of control, the Corporation, or the purchaser or other third party, as the case may be, must pay to Mr. Agro a lump sum equal to four months plus one additional month for every
full year of employment (starting from April 8, 2013) of Base Salary and the Deemed Annual Bonus, together with all amounts which Mr. Agro would have been entitled to during such period and a continuation of benefits coverage during such
period in respect of the elements which are permitted to be continued in terms of any benefit plan then in place. As 

  
 - 30 - 

 
a result, upon termination with change in control, Mr. Agro would be entitled to $130,000 in Base Salary and $50,607 in Deemed Annual Bonus, assuming the termination took place on
April 3, 2015. 
 Non-Disclosure, Non-Solicitation and Non-Competition Agreement: Mr. Agro and the Corporation are also parties to a
Non-Solicitation and Non-Competition Agreement dated as of April 8, 2013, pursuant to which Mr. Agro is prohibited from competing with the Corporation for a period of one year following the termination of the Employment Agreement, from
soliciting clients of the Corporation for a period of one year following its termination and from soliciting employees of the Corporation for a period of two years following its termination. 

Jordan Dubow, Vice President, Medical Affairs 
 Jordan
Dubow and the Corporation entered into an employment agreement dated as of November 24, 2014 (the “Dubow Agreement”) which provided that Mr. Dubow would act as Vice President, Medical Affairs of the Corporation. 

Base Salary: Under the terms of the Dubow Agreement, Mr. Dubow is entitled to a base salary (the “Base Salary”) of USD $200,000
per annum, less statutory withholdings. 
 Bonus: Mr. Dubow is also eligible for a discretionary bonus (the “Annual Bonus”), as
determined by the President and Chief Executive Officer and Board, for each year of Mr. Dubow’s employment in the amount of 30% of the Base Salary, based on the achievement of agreed corporate objectives. The Annual Bonus may be increased
to up to 40% of the Base Salary, as determined by the Board, based on an overachievement of goals. The Annual Bonus is based on criteria approved by the Board, and relayed to Mr. Dubow, which criteria shall reflect the annual corporate goals of
the Corporation and the individual goals relating to respective areas of oversight. The Annual Bonus accrues and is payable at the discretion of the Board. 

Stock Options: Mr. Dubow may also be granted options to acquire Common Shares in the capital of the Corporation at the discretion of the Board and
pursuant to the terms and conditions of the Stock Option Plan. Mr. Dubow was granted 250,000 options on December 5, 2014 and 130,000 options on April 2, 2015. 

Termination With Cause: The Corporation is entitled, in its sole discretion, to terminate the employment of Mr. Dubow, without notice or payment
in lieu of notice, for cause. The Corporation has no obligation to Mr. Dubow after the effective date of termination except for payment of any Base Salary accrued to the date of termination and any other amounts which have accrued but not yet
been paid in accordance with any benefit plan prior to the date of termination. Mr. Dubow is not entitled to receive any bonus in the event of termination with cause. 

Termination Without Cause: The Corporation is entitled in its sole discretion to terminate the Dubow Agreement at any time upon notice equal to six
months plus one additional month for every full year of employment (starting from November 24, 2014) (the “Notice Period”). Upon termination by the Corporation, the Corporation must provide Mr. Dubow with written notice or
payment in lieu thereof and an amount equal to the average of the Annual Bonus paid to Mr. Dubow in each of the three most recent completed financial years (or such fewer number of recent completed financial years if Mr. Dubow was employed
for less than the three most recent completed financial years), pro-rated to the effective date of termination (the “Deemed Annual Bonus”), together with all amounts which Mr. Dubow would have been entitled to during such
period and a continuation of benefits coverage during such period in respect of the elements which are permitted to be continued in terms of the benefit plan then in place. The Corporation has the option to pay the amount equal to the Base Salary on
its regular payroll dates or in a lump sum as of the effective date of termination. As a result, upon termination without cause, Mr. Dubow 

  
 - 31 - 

 
would be entitled to US$100,000 in Base Salary and $6,099 in Deemed Annual Bonus, assuming the termination took place on April 3, 2015. 

Termination With Change in Control: In the event of termination of the Dubow Agreement as a result of a change of control, or during the six months
immediately following the change of control, the Corporation, or the purchaser or other third party, as the case may be, must pay to Mr. Dubow a lump sum equal to six months plus one additional month for every full year of employment (starting
from November 24, 2014) of Base Salary and the Deemed Annual Bonus, together with all amounts which Mr. Dubow would have been entitled to during such period and a continuation of benefits coverage during such period in respect of the
elements which are permitted to be continued in terms of any benefit plan then in place. As a result, upon termination with change in control, Mr. Dubow would be entitled to US$100,000 in Base Salary and $6,099 in Deemed Annual Bonus, assuming
the termination took place on April 3, 2015. 
 Non-Disclosure, Non-Solicitation and Non-Competition Agreement: Mr. Dubow and the
Corporation are also parties to a Non-Solicitation and Non-Competition Agreement dated as of November 24, 2014, pursuant to which Mr. Dubow is prohibited from competing with the Corporation for a period of one year following the
termination of the Employment Agreement, from soliciting clients of the Corporation for a period of one year following its termination and from soliciting employees of the Corporation for a period of two years following its termination. 

ARTICLE 5 - NON-EXECUTIVE DIRECTOR COMPENSATION 
  

	5.1	General 

 Compensation of directors in the fiscal period ended December 31, 2014 was based on annual
retainer fees (effective July 1, 2013), attendance, and Board and Committee meeting fee rates recommended by the Corporate Governance and Compensation Committee and approved by the Board. All retainer and meeting fees are paid on a quarterly
basis. The following information details compensation paid to the directors in the fiscal year ended December 31, 2014. 
 Effective July 1, 2013,
the Corporation introduced annual retainer fees. In particular, the Chair of the Board receives an annual retainer of $40,000 per year, and non-Chair Board members receive a retainer of $20,000 per year. For the Audit Committee, the Chair of the
Committee receives an annual retainer of $8,000 per year, and the non-Chair members receive a retainer of $4,000 per year. For the Corporate Governance and Compensation Committee, the Chair of the Committee receives an annual retainer of $6,000 per
year, and the non-Chair members receive a retainer of $4,000 per year. In addition, each director is paid attendance fees of $1,500 for each regular Board meeting attended in person and $750 per meeting attended by conference call. For the
Committees, each member is paid $1,000 for each Committee meeting attended in person and $500 per Committee meeting attended by conference call. 

Effective January 1, 2015, the Corporation updated its annual retainer fees. In particular, the Chair of the Board receives an annual retainer of $60,000
per year, and non-Chair Board members receive a retainer of $30,000 per year. For the Audit Committee, the Chair of the Committee receives an annual retainer of $10,000 per year, and the non-Chair members receive a retainer of $5,000 per year. For
the Corporate Governance and Compensation Committee, the Chair of the Committee receives an annual retainer of $8,000 per year, and the non-Chair members receive a retainer of $5,000 per year. In addition, each director is paid attendance fees of
$1,500 for each regular Board meeting attended in person and $750 per meeting attended by conference call. For the Committees, each member is paid $1,000 for each Committee meeting attended in person and $500 per Committee meeting attended by
conference call. 

  
 - 32 - 

 There are no special arrangements between the Corporation and any director of the Board with respect to fees.

 Directors are entitled to participate in the Stock Option Plan, which is designed to give each option holder an interest in preserving and maximizing
shareholder value in the longer term. Individual grants are determined on an annual basis by the recommendation of the Corporate Governance and Compensation Committee and approval of the Board. New directors are typically granted 15,000 stock
options upon their initial appointment to the Board. In addition, each director is typically granted stock options annually to purchase a minimum of 10,000 shares at fair market value, with the total number of stock options granted each year based
on the Corporate Governance and Compensation Committee’s annual assessment of individual director contribution. 
 Executive officers who also act as
directors of the Corporation do not receive any additional compensation for services rendered in their capacity as directors. In addition, director Ilan Oren of Dexcel Pharma does not receive any compensation for services in his capacity as a
director. 
 During the fiscal year ended December 31, 2014, directors were granted the fees, options and bonuses in their capacity as directors of the
Corporation as set out in the table in Section 5.2 below. 
  

	5.2	Individual Director Compensation 

 The following table provides information regarding compensation paid
to the Corporation’s directors during the fiscal year ended December 31, 2014. 
  

																													
	 Director
	  	Fees
earned
($)	 	  	Share-
based
awards(1)
($)	 	  	Option-
based
awards(2)(6)
($)	 	  	Non-equity
incentive plan
compensation
(3)
($)	 	  	Pension
value
(4)
($)	 	  	All other
compensation
($)	 	  	Total
Compensation
($)	 
	 Anthony Giovinazzo
	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  
	 Ronald Hosking
	  	$	55,000	  	  	 	N/A	  	  	$	26,240	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	$	81,240	  
	 Tomer Gold
	  	$	44,000	  	  	 	N/A	  	  	$	17,220	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	$	61,220	  
	 Nan Hutchinson (5)
	  	$	39,278	  	  	 	N/A	  	  	$	10,250	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	$	49,528	  
	 Perry Molinoff
	  	$	47,500	  	  	 	N/A	  	  	$	22,960	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	$	70,460	  
	 Ilan Oren
	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  
	 Alan Ryley (6)
	  	$	20,000	  	  	 	N/A	  	  	$	7,107	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	$	27,107	  
	 Rochelle Stenzler
	  	$	75,500	  	  	 	N/A	  	  	$	41,820	  	  	 	N/A	  	  	 	N/A	  	  	 	N/A	  	  	$	117,320	  

 NOTES: 

	1.	The Corporation does not have any share based awards, including share appreciation rights. 

	2.	Option-based awards to the Corporation’s directors are solely comprised of stock option grants made under the Stock Option Plan. The value of the options has been calculated using the Black-Scholes-Merton model as
at the date of the grant. 

	3.	There was no non-equity incentive compensation or other compensation paid to the Corporation’s directors in the financial year ended December 31, 2014 that is not shown in this table. 

	4.	The Corporation does not have a pension plan for its directors. 

	5.	Ms. Hutchinson was appointed as a director February 11, 2014. 

	6.	Dr. Ryley passed away on June 20, 2014. Option-based awards presented is net of amounts attributed to unvested options that were forfeited. 

  
 - 33 - 

	5.3	Incentive Plan Awards 

 Option-based awards were granted to the directors in the fiscal year ended
December 31, 2014. The Corporation does not grant any share-based awards to any of its directors, including, but not limited to, share appreciation rights. 

The following table provides information regarding the option-based awards for each non-executive director outstanding as of December 31, 2014. 

 

																	
	 Director
	  	Grant Date	  	Aggregate
Number of Shares
Underlying
Unexercised
Options
(#)	 	  	Option
Exercise
Price
($)	 	  	Option Expiry Date	 	Value of
Unexercised In-
the-Money
Options(1)
($)	 
	 Ronald Hosking(3)
	  	March 3, 2010	  	 	12,500	  	  	$	1.00	  	  	March 3, 2015 (2)	 	$	1,250	  
		  	August 12, 2010	  	 	10,000	  	  	$	1.00	  	  	August 12, 2015	 	$	1,000	  
		  	March 23, 2012	  	 	20,000	  	  	$	1.00	  	  	March 23, 2017	 	$	2,000	  
		  	May 1, 2013	  	 	70,000	  	  	$	0.36	  	  	May 1, 2018	 	$	51,800	  
		  	May 20, 2014	  	 	64,000	  	  	$	0.65	  	  	May 20, 2019	 	$	28,800	  
	 Tomer Gold(3)
	  	May 20, 2014	  	 	42,000	  	  	$	0.65	  	  	May 20, 2019	 	$	18,900	  
	 Nan Hutchinson(3)
	  	May 20, 2014	  	 	25,000	  	  	$	0.65	  	  	May 20, 2019	 	$	11,250	  
	 Perry Molinoff(3)
	  	May 30, 2012	  	 	20,000	  	  	$	1.00	  	  	May 30, 2017	 	$	2,000	  
		  	May 1, 2013	  	 	54,000	  	  	$	0.36	  	  	May 1, 2018	 	$	39,960	  
		  	May 20, 2014	  	 	56,000	  	  	$	0.65	  	  	May 20, 2019	 	$	25,200	  
	 Alan Ryley (4)
	  	August 12, 2010	  	 	10,000	  	  	$	1.00	  	  	June 20, 2015	 	$	1,000	  
		  	November 10, 2010	  	 	5,000	  	  	$	1.00	  	  	June 20, 2015	 	$	500	  
		  	March 4, 2011	  	 	10,000	  	  	$	1.00	  	  	June 20, 2015	 	$	1,000	  
		  	March 23, 2012	  	 	20,000	  	  	$	1.00	  	  	June 20, 2015	 	$	2,000	  
		  	August 29, 2012	  	 	10,000	  	  	$	1.00	  	  	June 20, 2015	 	$	1,000	  
		  	May 1, 2013	  	 	54,000	  	  	$	0.36	  	  	June 20, 2015	 	$	39,960	  
		  	May 20, 2014	  	 	17,333	  	  	$	0.65	  	  	June 20, 2015	 	$	7,800	  
	 Rochelle Stenzler(3)
	  	August 12, 2010	  	 	10,000	  	  	$	1.00	  	  	August 12, 2015	 	$	1,000	  
		  	November 10, 2010	  	 	5,000	  	  	$	1.00	  	  	November 10, 2015	 	$	500	  
		  	March 23, 2012	  	 	40,000	  	  	$	1.00	  	  	March 23, 2017	 	$	4,000	  
		  	August 29, 2012	  	 	10,000	  	  	$	1.00	  	  	August 29, 2017	 	$	1,000	  
		  	May 1, 2013	  	 	105,000	  	  	$	0.36	  	  	May 1, 2018	 	$	77,700	  
		  	May 20, 2014	  	 	102,000	  	  	$	0.65	  	  	May 20, 2019	 	$	45,900	  

  
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 NOTES: 

	1.	The closing market price of the Common Shares on the Exchange on December 31, 2014 was $1.10 per share. 

	2.	As the expiry date fell during a trading blackout period in effect, the expiry date has been extended to 10 days after the blackout period ends 

	3.	On April 2, 2015, subsequent to the year ended December 31, 2014, stock options to acquire 3,980,000 Common Shares were granted to directors, members of management and employees. Of the total, 1,020,000
options were granted to Anthony Giovinazzo, 200,000 options were granted to Rochelle Stenzler, 125,000 options were granted to Ronald Hosking, 100,000 options were granted to Perry Molinoff, 85,000 options were granted to each of Tomer Gold and Nan
Hutchinson, and 40,000 options were granted to Tamar Howson. The exercise price of these options is $1.36, and the expiry period is 5 years. 

	4.	Dr. Ryley passed away on June 20, 2014. Options were held by his estate and 126,333 of such options were exercised in the first quarter of 2015. 

 

	5.4	Option Based Awards - Value Vested or Earned 

 The following table presents, for each director, the
aggregate value that would have been realized if awards vested during the year ended December 31, 2014 had been exercised on the vesting date. 
  

									
	 Name
	  	Option-based awards –
Value during the year 
on
vesting
($)	 	  	Share-based awards –
Value during the year on
vesting
($)	  	Non-equity incentive plan
compensation – Value
earned during the year
($)
	 Ronald Hosking
	  	 	17,720	  	  	NIL	  	NIL
	 Tomer Gold
	  	 	9,843	  	  	NIL	  	NIL
	 Nan Hutchinson
	  	 	4,916	  	  	NIL	  	NIL
	 Perry Molinoff
	  	 	14,974	  	  	NIL	  	NIL
	 Alan Ryley
	  	 	3,960	  	  	NIL	  	NIL
	 Rochelle Stenzler
	  	 	27,760	  	  	NIL	  	NIL

 ARTICLE 6 - SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS 

The Corporation’s Stock Option Plan is a 10% “rolling” plan. The Stock Option Plan was established to provide an incentive to the directors,
officers, employees, consultants and other personnel of the Corporation or any of its subsidiaries to achieve the longer-term objectives of the Corporation, to give suitable recognition to the ability and skill of such persons who contribute
materially to the success of the Corporation and to attract and retain in the employ of the Corporation, or any of its subsidiaries, persons of experience and ability by providing them with the opportunity to acquire an increased proprietary
interest in the Corporation. 
 The Stock Option Plan is administered by the Board or, if the Board so delegates, a special committee of directors appointed
from time to time by the Board. In administering the Stock Option Plan, the Board or a special committee, as the case may be, may select participants to whom options are granted, determine the terms relating to options, including the number of
Common Shares subject to option, the exercise price, the expiration date of each option and any vesting limitations. 
 The Stock Option Plan provides that
the Board may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Corporation, or its subsidiaries, non-transferable options to purchase Common Shares provided that the number of Common Shares
reserved for issuance under the Stock Option Plan does not exceed 10% of the issued and outstanding Common Shares exercisable for a period of up to 10 years from the date of the grant. Optionees may assign their options to a corporation

  
 - 35 - 

 
wholly-owned by the optionee or a registered retirement savings plan or registered income fund established by and where the sole beneficiary is the optionee. 

In addition, the number of Common Shares reserved for issuance in any 12 month period to any one person shall not exceed 5% of the issued and outstanding
Common Shares and the number of Common Shares reserved for issuance in any 12 month period to any one technical consultant shall not exceed 2% of the issued and outstanding Common Shares. 

Under the policies of the Exchange, all unallocated options, rights or other entitlements under the Stock Option Plan must be approved by shareholders every
three years after institution. The Stock Option Plan was most recently approved and adopted by the shareholders on May 7, 2014. 
 The following chart
details the number of securities to be issued upon the exercise of outstanding stock options issued under the Stock Option Plan as at December 31, 2014. The Corporation does not have any other equity compensation plan. 

 

													
	 Plan Category
	  	Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a) (1)	 	  	Weighted – average
exercise price of
outstanding options,
warrants and rights
(b)	 	  	Number of securities remaining
available for future issuance under
equity compensation plans
(excluding
securities reflected in
column (a)
(c)	 
	 Equity compensation plans approved by securityholders
	  	 	5,450,649	  	  	$	0.76	  	  	 	2,582,795	  
	 Equity compensation plans not approved by securityholders
	  	 	NIL	  	  	 	NIL	  	  	 	NIL	  
	 TOTAL
	  	 	5,450,649	  	  	$	0.76	  	  	 	2,582,795	  

 NOTE: 

	1.	Options to acquire 3,581,000 Common Shares were granted to directors, members of management, employees and certain key consultants during the financial year ended December 31, 2014. 

ARTICLE 7 - INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS 

No current or former directors, employees or executive officers of the Corporation or any associate of any such persons were indebted to the Corporation as at
December 31, 2014. 
 None of the current or former directors, employees or executive officers of the Corporation and none of the associates of such
persons is or has been indebted to the Corporation or any subsidiary thereof at any time since the beginning of the Corporation’s most recently completed fiscal year. Furthermore, none of such persons were indebted to a third party during such
period where their indebtedness was the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Corporation or a subsidiary thereof. 

ARTICLE 8 - INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS 

Other than as provided below, no “informed person” (as such term is defined in National Instrument 51-102 - Continuous Disclosure
Obligations) or any proposed director of the Corporation or any associate or affiliate of any informed person or proposed director has any material interest, directly or indirectly, in any transaction with the Corporation since the commencement
of the Corporation’s most recently 

  
 - 36 - 

 
completed fiscal year or in any proposed transaction which has materially affected or would materially affect the Corporation. 

The Corporation, subject to specified conditions, including approval of the TSX Venture Exchange and the shareholders as required by applicable securities
laws, acquired all of the issued and outstanding shares in the capital of Adagio Pharmaceuticals Ltd. on December 22, 2011, Anthony Giovinazzo, the President and Chief Executive Officer and President of the Corporation was also a director,
officer and majority shareholder of Adagio. 
 ARTICLE 9 - AUDITED FINANCIAL STATEMENTS 

The financial statements for the fiscal year ended December 31, 2014, together with the auditors’ report thereon will be submitted to the Meeting.
Receipt at the Meeting of the auditors’ report and the Corporation’s financial statements for its last completed financial year will not constitute approval or disapproval of any matters referred to therein. 

ARTICLE 10 - DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE 

The Corporation provides insurance for the directors and officers of the Corporation against liability incurred by them in their capacity as directors or
officers of the Corporation. The insurance policy provides coverage to a total limit of $5,000,000 for the protection of the personal liability of the directors and officers and includes insurance to reimburse the Corporation for its indemnity of
its directors and officers up to a limit of $5,000,000 per loss. Each loss or claim for which the Corporation seeks reimbursement is subject to a $25,000 deductible payable by the Corporation ($25,000 deductible for securities claims). The total
annual premium for the directors and officers liability policy is $24,000, which is paid in full by the Corporation. 
 ARTICLE 11 -
TRANSFER AGENT AND REGISTRAR 
 The transfer agent and registrar of the Corporation is Equity Financial Trust Company, Suite 300, 200 University Avenue,
Toronto, Ontario, M5H 4H1. 
 ARTICLE 12 - INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON 

No person or company who is, or at any time during the fiscal year ended December 31, 2014 was, a director or executive officer of the Corporation, a
proposed management nominee for election as a director of the Corporation or an associate or affiliate of any such director, executive officer or proposed nominee, has any material interest, direct or indirect, by way of beneficial ownership or
otherwise, in matters to be acted upon at the Meeting other than the election of directors. 
 ARTICLE 13 - OTHER MATTERS WHICH MAY COME
BEFORE THE MEETING 
 The management knows of no matters to come before the Meeting other than as set forth in this Management Information Circular.
HOWEVER, IF OTHER MATTERS WHICH ARE NOT KNOWN TO THE MANAGEMENT SHOULD PROPERLY COME BEFORE THE MEETING, THE ENCLOSED FORM OF PROXY WILL BE USED TO VOTE ON SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS VOTING THE PROXY.

 ARTICLE 14 - ADDITIONAL INFORMATION 

Additional information relating to the Corporation may be found on SEDAR at www.sedar.com. In addition, the holders of Common Shares may contact the
Corporation at 828 Richmond Street West, 

  
 - 37 - 

 
Toronto, Ontario, M6J 1C9 in order to obtain, without charge, copies of financial statements and MD&A of the Corporation for the fiscal year ending December 31, 2014. 

ARTICLE 15 - APPROVAL OF BOARD 
 Except
where otherwise indicated, information contained herein is given as of April 3, 2015. 
 The undersigned hereby certifies that the contents and the
sending of this Management Information Circular have been approved by the directors of the Corporation. 
 The foregoing constitutes full, true and plain
disclosure of all material facts relating to the particular matters to be acted upon by the shareholders of Cynapsus Therapeutics Inc. 
 The foregoing
contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it is made. 

DATED as of the 3rd day of April, 2015. 

 

	
	 “Anthony Giovinazzo”
  

	Anthony Giovinazzo
	President and Chief Executive Officer
	Cynapsus Therapeutics Inc.

  
 - 38 - 

 SCHEDULE “A” 

SHARE CONSOLIDATION RESOLUTION 
 BE IT
RESOLVED as a special resolution of the shareholders of the Corporation that: 
  

	 	(1)	the articles of the Corporation be amended to consolidate the issued and outstanding common shares of the Corporation (“Common Shares”), on the basis of a consolidation ratio to be selected by the
Corporation’s board of directors, in its sole discretion, provided that (a) the ratio may be no smaller than one post-consolidation share for every five pre-consolidation shares and no larger than one post-consolidation share for every 25
pre-consolidation shares, and (b) the number of pre-consolidation shares in the ratio must be a whole number of Common Shares; 

  

	 	(2)	no fractional Common Shares shall be issued in connection with the consolidation and, in the event that a shareholder would otherwise be entitled to receive a fractional share upon consolidation, such shareholder shall
have such fractional share cancelled; 

  

	 	(3)	the effective date of such consolidation shall be the date shown in the certificate of amendment issued by the Director appointed under the Canada Business Corporations Act (the “CBCA”) or such other
date indicated in the articles of amendment; 

  

	 	(4)	any one director or officer of the Corporation is hereby authorized to execute and deliver, for and on behalf of the Corporation, all such documents and to do all such other acts and things as may be considered
necessary or desirable to give effect to this resolution including, without limitation, the delivery of articles of amendment in the prescribed form to the Director appointed under the CBCA; and 

 

	 	(5)	notwithstanding the foregoing, the directors of the Corporation are hereby authorized, without further approval of the shareholders of the Corporation, to revoke this special resolution at any time prior to the
endorsement by the Director appointed under the CBCA of a certificate of amendment. 

 SCHEDULE “B” 

CYNAPSUS THERAPEUTICS INC. 

AUDIT COMMITTEE CHARTER 

ARTICLE 1 - ROLE AND OBJECTIVES 
  

	1.1	Role 

 The Audit Committee (the “Committee”) is a committee of the Board
of Directors (the “Board”) of the Corporation established for the purpose of overseeing the accounting and financial reporting process of the Corporation and external audits of the financial statement of the Corporation. 

 

	1.2	Objectives 

 The Committee will assist the Board in fulfilling its oversight
responsibilities for: 
  

	 	(a)	the financial reporting process; 

  

	 	(b)	the system of internal control over financial reporting; 

  

	 	(c)	the audit process; 

  

	 	(d)	compliance with legal and regulatory requirements; and 

  

	 	(e)	the processes for identifying, evaluating and managing the Corporation’s principal risks impacting financial reporting. 

ARTICLE 2 - DUTIES, POWERS AND RESPONSIBILITIES 
  

	2.1	Duties, Powers, and Responsibilities 

 The Audit Committee is hereby delegated the duties
and powers specified in section 158 of the Business Corporations Act (Ontario) and, without limiting these duties and powers, the Audit Committee shall: 
  

	 	(a)	Financial Reporting 

  

	 	(i)	Review and recommend for approval to the Board the annual financial statements, accounting policies that affect the statements, annual MD&A and associated press release. 

 

	 	(ii)	Review the annual report (if applicable) for consistency with the financial disclosure referenced in the annual financial statements. 

 

	 	(iii)	Be satisfied as to the adequacy of procedures in place for the review of the Corporation’s public disclosure of financial information extracted or derived from annual or quarterly financial statements and
periodically assess the adequacy of such procedures. 

  

	 	(iv)	Review and approve quarterly financial statements, accounting policies that affect the statements, the quarterly MD&A, and the associated press release. 

 

	 	(v)	Review significant issues affecting financial reports. 

  

	 	(vi)	Review emerging GAAP developments that could affect the Corporation. 

  

	 	(vii)	Understand how management develops interim financial information and the nature and extent of external audit involvement. 

	 	(viii)	In review of the annual and quarterly financial statements, discuss the quality of the Corporation’s accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the
financial statements. 

  

	 	(ix)	Review and approve any earnings guidance to be provided by the Corporation. 

  

	 	(b)	Internal and Disclosure Controls 

  

	 	(i)	Consider the effectiveness of the Corporation’s internal controls over financial reporting and related information technology security and control. 

 

	 	(ii)	Review and approve corporate signing authorities and modifications thereto. 

  

	 	(iii)	Review with the auditors any issues or concerns related to any internal control systems in the process of the audit. 

  

	 	(iv)	Review the plan and scope of the annual audit with respect to planned reliance and testing of controls and major points contained in the auditor’s management letter resulting from control evaluation and testing.

  

	 	(v)	Establish and maintain complaint procedures regarding accounting, internal accounting controls or auditing matters and the confidential anonymous submission by employees of concerns regarding questionable accounting or
auditing matters. Such procedures are appended hereto as Appendix A. 

  

	 	(vi)	Review with management, external auditors and legal counsel any material litigation claims or other contingencies, including tax assessments, and adequacy of financial provisions, that could materially affect financial
reporting. 

  

	 	(vii)	Review with the Chief Executive Officer and the Chief Financial Officer the Corporation’s disclosure controls and procedures, including any significant deficiencies in, or material non-compliance with, such
controls and procedures. 

  

	 	(viii)	Discuss with the Chief Executive Officer and the Chief Financial Officer all elements of certification required pursuant to National Policy 52-109. 

 

	 	(ix)	Approve all material related party transactions in advance. 

  

	 	(c)	External Audit 

  

	 	(i)	Oversee the work of the external auditor engaged for the purpose of preparing or issuing an auditor’s report or performing such other audit, review or attest services for the Corporation, including the resolution
of disagreements between management and the external auditor regarding financial reporting. 

  

	 	(ii)	Review and approve the audit plans, scope and proposed audit fees. 

  

	 	(iii)	Annually review the independence of the external auditors by receiving a report from the independent auditor detailing all relationships between them and the Corporation. 

 

	 	(iv)	Discuss with the auditors the results of the audit, any changes in accounting policies or practices and their impact on the financials, as well as any items that might significantly impact financial results.

  

	 	(v)	Receive a report from the auditors on critical accounting policies and practices to be used, all alternative treatments of financial information within GAAP that have been discussed with management, including the
ramifications of the use of such alternative treatments, and the treatment preferred by the auditor. 

  
 - 2 - 

	 	(vi)	Receive an annual report from the auditors describing the audit firm’s internal quality-control procedures, and material issues raised by the most recent internal quality-control review, or peer review, of the
firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more audits carried out by the firm, and any steps taken to deal with any such issues. 

 

	 	(vii)	Ensure regular rotation of the lead partner and reviewing partner. 

  

	 	(viii)	Evaluate the performance of the external auditor and the lead partner annually. 

  

	 	(ix)	Recommend to the Board (A) the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Corporation, and
(B) the compensation of the external auditor. 

  

	 	(x)	Separately meet with the auditors, apart from management, at least once a year. 

  

	 	(d)	Non-Audit Services 

  

	 	(i)	Pre-approve all non-audit services to be provided to the Corporation or its subsidiary entities by the external auditor. Pre-approval may be granted by any one member of the Audit Committee. 

 

	 	(e)	Risk Management 

  

	 	(i)	Review and monitor the processes in place to identify and manage the principal risks that could impact the financial reporting of the Corporation. 

 

	 	(ii)	Ensure that Directors and Officers insurance is in place. 

  

	 	(iii)	Review and approve corporate investment policies. 

  

	 	(iv)	Assess, as part of its internal controls responsibility, the effectiveness of the over-all process for identifying principal business risks and report thereon to the Board. 

 

	 	(f)	Other Responsibilities and Matters 

  

	 	(i)	Report through its Chair to the Board following meetings of the Audit Committee. 

  

	 	(ii)	Review annually the adequacy of the Charter and confirm that all responsibilities have been carried out. 

  

	 	(iii)	Evaluate the Audit Committee’s and individual member’s performance on a regular basis and report annually to the Board the result of its annual self-assessment. 

 

	 	(iv)	Prepare annually a report for inclusion in the proxy statement. 

  

	 	(v)	Review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the Corporation. 

 

	 	(vi)	Discuss the Corporation’s compliance with tax and financial reporting laws and regulation, if and when issues arise. 

  

	2.2	Authority 

 The Audit Committee has the authority to engage independent counsel and other
advisors as it determines necessary to carry out its duties and to set and pay the compensation for any advisors employed by the Audit Committee at the cost of the Corporation without obtaining Board approval, based on its sole

  
 - 3 - 

 
judgement and discretion. The Audit Committee has the authority to communicate directly with the internal and external auditors of the Corporation. 

ARTICLE 3 - COMPOSITION 
  

	3.1	Composition 

 The Committee shall comprise at least three directors, none of whom shall
be an officer or employee of the Corporation or any of its subsidiaries or any affiliate thereof. Each Committee member shall satisfy the independence, financial literacy and experience requirements of applicable securities laws, rules or
guidelines, any applicable stock exchange requirements or guidelines and any other applicable regulatory rules. In particular, each member of the Committee shall have no direct or indirect material relationship with the Corporation or any affiliate
thereof, which could reasonably interfere with the exercise of the member’s independent judgment. Determinations as to whether a particular director satisfies the requirements for membership on the Committee shall be made by the full Board.

  

	3.2	Appointment 

 Members of the Committee shall be appointed by the Board. Each member shall
serve until his successor is appointed, unless he/she shall resign or be removed by the Board or he/she shall otherwise cease to be a director of the Corporation. The Board shall fill any vacancy if the membership of the Committee is less than two
directors. 
  

	3.3	Chair 

 The Chair of the Committee may be designated by the Board or, if it does not do
so, the members of the Committee may elect a Chair by vote of a majority of the full Committee membership. The Committee Chair shall satisfy the independence, financial literacy and experience requirements (as described above). 

 

	3.4	Access 

 The Committee shall have access to such officers and employees of the
Corporation and all subsidiaries and to such information respecting the Corporation and the subsidiaries, as it considers to be necessary or advisable in order to perform its duties and responsibilities. 

ARTICLE 4 - MEETINGS 
  

	4.1	Time and Location 

 The Committee shall meet at least quarterly at such times and at such
locations as the Chair of the Committee shall determine. Any member of the Committee may also request a meeting of the Committee. 
  

	4.2	Quorum 

 The quorum for meetings shall be a majority of the members of the Committee,
present in person or by telephone or by other telecommunication device that permits all persons participating in the meeting to hear each other. 
  

	4.3	Agenda 

 The Chair shall, in consultation with management, establish the agenda for the
meetings and instruct management to ensure that properly prepared agenda materials are circulated to the Committee with sufficient time for study prior to the meeting. 
  

	4.4	Majority Vote 

 At all meetings of the Committee, every question shall be decided by a
majority of the votes cast. In case of an equality of votes, the matter will be referred to the Board for decision. 

  
 - 4 - 

	4.5	Management 

 The Chief Financial Officer shall attend meetings of the Committee, unless
otherwise excused from all or part of any such meetings by the Committee Chair. The Chair of the Committee shall hold in camera sessions of the Committee, without management present, at every meeting. 

 

	4.6	Minutes 

 A member of the Committee or the Secretary of the Corporation shall be
appointed at each meeting to act as secretary for the purpose of recording the minutes of each meeting. 
  

	4.7	Summary of Meetings 

 The Committee shall provide the Board with a summary of all
meetings together with a copy of the minutes from such meetings. Where minutes have not yet been prepared, the Chair shall provide the Board with oral reports on the activities of the Committee. All information reviewed and discussed by the
Committee at any meeting shall be retained and made available for examination by the Board upon request of the Chair. 
  

	4.8	External Auditor 

 The Committee shall meet periodically with the Corporation’s
external auditor (in connection with the preparation of the annual financial statements and otherwise as the Committee may determine), part or all of each such meeting to be in the absence of management. 

  
 - 5 - 

 Appendix A 

Cynapsus Therapeutics Inc. 

Audit Committee Charter 
 Procedures for
the Submission of Complaints or Concerns Regarding Accounting, Internal Accounting Controls or Auditing Matters 
  

	1.	The Corporation shall forward to the Committee of the Board any complaints that it has received regarding accounting, internal accounting controls, or auditing matters. 

 

	2.	Any employee of the Corporation may submit, on a confidential, anonymous basis if the employee so desires, any concerns by sending such concerns in writing and forwarding them in a sealed envelope to: 

Chair of the Audit Committee 
 c/o
Andrew Williams, Corporate Secretary 
 Cynapsus Therapeutics Inc. 

828 Richmond Street West 

Toronto, Ontario M6J 1C9 
 The
envelope is to be clearly marked, “To be opened by the Audit Committee only”. 
 Any such envelopes received by the Corporate
Secretary shall be forwarded promptly to the Chair of the Committee and appropriate confidentiality will be maintained. 
  

	3.	Contact information including a phone number and e-mail address shall be published for the Chair of the Committee on the Corporation’s website for those people wishing to contact the Chair directly.

  

	4.	At each of its meetings following the receipt of any information pursuant to this Appendix, the Committee shall review and consider any such complaints or concerns and take any action that it deems appropriate in the
circumstances. 

  

	5.	The Committee shall retain any such complaints or concerns along with the material gathered to support its actions for a period of no less than seven years. Such records will be held on behalf of the Committee by the
Committee Secretary. 

  

	6.	Appendix A shall appear on the Corporation’s website as part of this Charter. 

 SCHEDULE “C” 

CYNAPSUS THERAPEUTICS INC. 

CHANGE OF AUDITOR REPORTING PACKAGE 
  

 
 NOTICE OF CHANGE OF AUDITOR 

September 18, 2014 
  

			
	 To:
		McGovern, Hurley, Cunningham, LLP
		
	 And To:
		Ernst & Young LLP
		
	 And To:
		Ontario Securities Commission
			Alberta Securities Commission
			British Columbia Securities Commission
			TSX Venture Exchange
		
	 RE:
		Notice of Change of Auditor (“Notice”) – Cynapsus Therapeutics Inc. (the “Corporation”)

 This Notice is made pursuant to Section 4.11 of National Instrument 51-102 – Continuous Disclosure
Obligations (“NI 51-102”). 
  

	 	1.	On August 12, 2014, it was determined, pursuant to a resolution of the board of directors (the “Board”) of the Corporation, on the recommendation of the audit committee (the “Audit Committee”),
to commence the process of changing the Corporation’s auditor from McGovern, Hurley, Cunningham, LLP to Ernst & Young LLP. Effective September 18, 2014, at the request of the Corporation, McGovern, Hurley, Cunningham, LLP formally
resigned as auditor, and on September 19, 2014, Ernst & Young LLP will be formally appointed to fill the resulting vacancy and to hold office until the next annual meeting of shareholders of the Corporation, at which time
Ernst & Young LLP will be proposed for appointment as auditor of the Corporation. 

  

	 	2.	The determination was considered and approved by each of the Board and the Audit Committee, and constitutes a “termination” of McGovern, Hurley, Cunningham, LLP and “appointment” of Ernst &
Young LLP for the purposes of NI 51-102. 

  

	 	3.	The reports of McGovern, Hurley, Cunningham, LLP on the financial statements of the Corporation for the two most recently completed fiscal years, being the years ended December 31, 2012 and 2013, did not express a
modified opinion. 

  

	 	4.	There have been no reportable events (as defined in Section 4.11 of NI 51-102). 

 DATED this 18th day of
September, 2014. 
  

			
	CYNAPSUS THERAPEUTICS INC.
	By:		

	Name:		Andrew Williams
	Title:		Chief Operating Officer and Chief Financing Officer

 

 
 September 18, 2014 

Ontario Securities Commission 
 Alberta Securities Commission

 British Columbia Securities Commission 
 TSX Venture Exchange

 Dear Sirs/Mesdames: 
  

	Re:	Cynapsus Therapeutics Inc. 

 Notice of Change of Auditor September 18, 2014 (the
“Notice”) 
 Pursuant to National Instrument 51-102 (Part 4.11), we have read the above-noted Change of Auditor Notice and confirm our
agreement with the information contained in the Notice, except that we have no basis to agree or disagree with item 4 included in the Notice. 
 Yours
sincerely, 
  
 

 
 Chartered Professional Accountants 

Licensed Public Accountants 

 

 
 September 18, 2014 

British Columbia Securities Commission 
 Alberta Securities
Commission 
 Ontario Securities Commission 
 TSX Venture
Exchange 
 Dear Sirs/Mesdames: 
  

	Re:	Cynapsus Therapeutics Inc. 

 We have reviewed the information contained in the Notice of Change
of Auditor of Cynapsus Therapeutics Inc. dated September 18, 2014 (the “Notice”), which we understand will be filed pursuant to Section 4.11 of National Instrument 51-102 – Continuous Disclosure Obligations. Based on
our knowledge as of the date hereof, we agree with the statements contained in the Notice. 
 Yours very truly, 

McGOVERN, HURLEY, CUNNINGHAM, LLP 
  

 
 Chartered Accountants 

Licensed Public Accountants

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