BioSyent Inc. - Management Reports 2021

BioSyent Inc. Management’s Discussion and Analysis

For the years ended December 31, 2020 and 2019

March 16, 2021

Corporate Office Suite 402 2476 Argentia Road Mississauga, Ontario, L5N 6M1 Canada

Telephone 905.206.0013 Facsimile 905.206.1413 Email: [email protected] Web: www.biosyent.com

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1	Introduction

1	Forward-Looking Statements
1	Accounting Estimates and Accounting Policies

2	Overview, Vision, Strategy, and Products
2	Overview
2	BioSyent’s Vision
3	BioSyent’s Strategy
4	Evolution of Strategy
4	Pharmaceutical Business
6	Pharmaceutical Product Cycle
7	Pharmaceutical Product Pipeline
7	Pharmaceutical Business Structure
7	Legacy Business

8	New Capabilities and Awards

9	Key Performance Measures

10	Results of Operations for the three and twelve months ended December 31, 2020 and 2019
10	Sales
11	Expenses
13	Net Income After Taxes (NIAT)
14	Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
16	Earnings per Share (EPS)

16	Financial Resources and Liquidity

18	Risk Management

22	Disclosure of Outstanding Share Data

23	Commitments
23	Offce Leases
23	Purchase Commitments

23	Disclosure Controls

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BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

23 Investor Relations Activities

24 Related Party Transactions
24 Key Management Personnel Compensation
24 Transactions with Directors
24 Legal Proceedings

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Introduction

The following discussion of BioSyent Inc.’s (“ BioSyent ” or the “ Company ”) operations, performance and financial condition is based on the Company’s audited consolidated financial statements for the years ended December 31, 2020 and December 31, 2019 (“ Consolidated Financial Statements ”), which were prepared in accordance with International Financial Reporting Standards

(“ IFRS ”). The discussion of financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements, including the notes thereto. Additional information relating to the Company, including the Consolidated Financial Statements and the accompanying notes can be found at www.sedar.com.

Forward-Looking Statements

This management’s discussion and analysis (“ MD&A ”) contains or incorporates forward-looking statements within the meaning of Canadian securities legislation (collectively, “forward-looking statements”). These forward-looking statements relate to, among other things, revenue, earnings, changes in costs and expenses, capital expenditures as well as changes in other objectives, strategic plans and business development goals, and may also include other statements that are predictive in nature or depend upon or refer to future events or conditions, and can generally be identified by words such as “may”, “will”, “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forwardlooking statements. These statements are not historical facts, but instead represent only BioSyent’s expectations, estimates, and projections regarding future events.

Although the Company believes the expectations reflected in such forward-looking statements are reasonable, such statements are not guarantees of future performance and involve certain risks and

uncertainties that are difficult to predict. Undue reliance should not be placed on such statements. Certain material assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Known and unknown factors could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Important assumptions, influencing factors, risks, and uncertainties are referred to in the body of this MD&A, in the press release announcing the Company’s financial results for the three months and full years ended December 31, 2020 and December 31, 2019 and in BioSyent’s annual and interim financial statements and the notes thereto. These documents are available at www.sedar.com.

The forward-looking statements contained in this MD&A are made as at the date of this MD&A and, accordingly, are subject to change after such date. Except as required by law, BioSyent does not undertake any obligation to update or revise any forwardlooking statements made or incorporated in this MD&A, whether as a result of new information, future events or otherwise.

Accounting Estimates and Accounting Policies

The Company has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.

The preparation of the Company’s Consolidated Financial Statements requires management to make critical judgments, estimates, and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. On an ongoing basis, management evaluates its judgments, estimates, and assumptions using historical experience and various other factors it believes to be reasonable under the given circumstances. In the future, actual experience may differ from these estimates and assumptions.

BioSyent’s significant accounting judgments and estimates include recoverability of asset carrying values, impairment of trade and other receivables, income taxes, the future useful lives and residual values of equipment, the useful lives of intangible assets, the fair value of share-based payments, the value of inventory, determination of the transaction price in revenue recognition, and determination of the incremental borrowing rate and lease term in leases. For a more detailed discussion of changes to the Company’s critical accounting estimates, please refer to Note 4 of the Consolidated Financial Statements for the year ended December 31, 2020.

Non-IFRS Financial Measures

This MD&A makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are unlikely to be comparable to similar measures presented by other companies. When used, these measures are defined in such terms as to allow the reconciliation to the closest IFRS measure. These measures are provided as additional information to complement those IFRS measures by providing a further understanding of the Company’s results of operations from management’s perspective.

Accordingly, these measures should not be considered in isolation nor as a substitute for analyses of the Company’s financial information reported under IFRS. Management uses non-IFRS measures such as Earnings Before Interest, Taxes, Depreciation and Amortization (“ EBITDA ”) and Compound Annual Growth Rate ( “CAGR” ) to provide investors with supplemental measures of the Company’s operating performance and thus highlight trends in the Company’s core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also believes that securities analysts, investors, and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets, and to assess the Company’s ability to meet future debt service, capital expenditure, and working capital requirements. The definition

and a reconciliation of EBITDA, as used and presented by the Company, to the most directly comparable IFRS measures follows later in this MD&A.

Overview, Vision, Strategy, and Products

Overview

BioSyent is a publicly traded specialty pharmaceutical company which, through its wholly owned subsidiaries, BioSyent Pharma Inc. (“ BioSyent Pharma ”) and BioSyent Pharma International Inc., sources, acquires or in-licences and further develops pharmaceutical and other healthcare products for sale in Canada and certain international markets. Hedley Technologies Ltd. and

Hedley Technologies (USA) Inc., also wholly owned subsidiaries of BioSyent, operate the Company’s legacy business, marketing biologically and health friendly non-chemical insecticides (the “ Legacy Business ”). BioSyent’s issued and outstanding common shares (the “ Common Shares ”) are listed for trading on the TSX Venture Exchange under the symbol “RX”.

BioSyent’s Vision

BioSyent’s vision is to be the leading independent Canadian healthcare company focused on commercializing innovative products improving patient lives and supporting healthcare providers.

BioSyent is focused on innovative products that are sourced through international partnerships. These products are unique due to manufacturing complexities, novel technologies, therapeutic advantages and/or strong, defendable intellectual property rights. The Company’s strategy allows it to commercialize these products as brands acquired or licensed to it by partners. The Company intends for its products to be differentiated and to improve patient lives. The Company works with, and supports, healthcare practitioners in achieving this objective.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

BioSyent’s Strategy

BioSyent has four key elements to achieving its strategic objectives:

Expand the product portfolio
Maximize profit with international distribution of FeraMAX[®]
Maintain profitable growth
Build sales and marketing teams

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• In-license and/or
acquire proven products
• Manage risk
• Focus on differentiated
products
• Strengthen Expand Build Sales
competitive position Product & Marketing
Portfolio Teams
Maximize
Maintain Profit with
• Reinvest to drive sustainable Profitable International
long-term EPS Growth Distribution
growth of FeraMAX [®]
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• Put in place when
needed and expand
when product sales can
support
• Optimize resources
against product portfolio
• Capitalize on
opportunities to partner
on FeraMAX [®] product in
territories outside of
Canada
• 100% owned
international subsidiary
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BioSyent has developed sourcing arrangements with partners from around the world. The Company has a flexible format for such arrangements.

The Company seeks long-term buy-sell agreements or in-licensing arrangements with or without royalties or payments linked to milestone events such as regulatory approvals or reimbursement by formularies.

The Company exercises diligence when sourcing new products. Some of the steps in this process involve reviewing market data and market trends, interviewing key healthcare practitioners or medical advisory boards and obtaining opinions on reimbursement possibilities with payers. Once the Company has decided to proceed with a new product opportunity, it acquires or licenses exclusive Canadian and/or international market rights to that product. After the acquisition or in-licensing of the product, the Company manages the product through the regulatory and product registration process and, once approved, commercializes the product in Canada and/or international markets.

practitioner detailing, direct to patient information through various media, product differentiation materials, and expansion of patient and healthcare practitioner support services to increase awareness of product efficacy and safety. The Company employs a salesforce of qualified sales professionals across Canada with experience in pharmaceutical detailing to healthcare practitioners and hospitals.

The Company focuses on medications that occupy a niche in the market and are unique due to manufacturing complexities or novel technological and therapeutic advantages or are backed by strong partners holding defendable intellectual property rights. This strategy allows the Company to market these medications as brands it owns or licenses. By virtue of its strong growth record, the Company is able to attract partners for new products that have niche positioning.

The Company uses various means of reducing risk in the marketplace. The Company adopts a gradually accelerating investment approach in promoting its products in the marketplace by balancing its investment behind brands with brand revenue and growth and by segmenting the market into immediate and longterm growth opportunities. It pursues possible reimbursement avenues for its products in both the private and public sectors. The Company uses various marketing techniques throughout the product life cycle, as it deems appropriate, including healthcare

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Evolution of Strategy

From time to time, the Company may acquire or in-license opportunities in late-stage development with which it, or its partners, have significant prior experience. Such experience and competency of the Company and its partners give the Company the ability to gauge risk in some depth. The Company may also seek in-licensing opportunities for new products launched in countries outside of Canada that require additional research and

development work before being launched in the Canadian market. The Company considers opportunities where there is a high probability that additional research and development work is likely to extend the lifecycle of portfolio products. Such studies might include in vitro or in vivo studies (including bio-equivalency studies, efficacy studies, or safety studies).

Pharmaceutical Business

FeraMAX[®] 150

In keeping with its strategy, the Company, through BioSyent Pharma, launched FeraMAX[® ] 150 to the Canadian healthcare market in 2007. FeraMAX[®] 150

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is also distributed in several markets outside of Canada. FeraMAX[®] 150 is an oral hematinic indicated for the prevention and treatment of iron deficiency anaemia. This non-ionic polysaccharide-iron complex formulation reduces adverse side effects common with other iron formulations. In 2015, the Company developed and launched a Certified Vegan formulation of FeraMAX[®] 150. In 2016, the Company developed a 100 mg formulation of FeraMAX[®] capsules (“FeraMAX[®] 100”) for distribution in certain markets outside of Canada.

FeraMAX[®] 150 was replaced by FeraMAX[®] Pd Therapeutic 150 at Canadian pharmacies starting in November 2020.

FeraMAX[®] Pd Therapeutic 150

In November 2020, BioSyent Pharma Inc. launched Fera MAX[®] Pd Therapeutic 150 in Canada, the first product launched under a new patented delivery system for the treatment

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of iron deficiency anemia based on a Polydextrose Iron Complex (“PDIC”) formulation. FeraMAX[®] Pd Therapeutic 150 in both a 30 capsule-count carton or a 100 capsule-count bottle replaces FeraMAX[®] 150 at Canadian pharmacies. FeraMAX[®] Pd Therapeutic 150 is Vegan Certified and is also recognized by the Society of Obstetricians and Gynaecologists of Canada.

Cathejell[®]

In July 2011, BioSyent Pharma received marketing 2% lidocaine hydrochloride jelly, USP approval from Health Canada for Cathejell[®] . Cathejell[®] was in-licensed by BioSyent Pharma from Pharmazeutische Fabrik Montavit. Shipments of Cathejell[®] commenced in May 2012. In April 2017, BioSyent Pharma extended its in-license agreement with Pharmazeutische Fabrik Montavit, giving BioSyent Pharma exclusive Canadian rights to the Cathejell[®] product until March 31, 2024.

Cathejell[®] is an innovative pharmaceutical product that combines a sterile gel with lidocaine in a unique collapsible applicator syringe providing a safe and effective solution for patients to ease the discomfort of a range of medical procedures. Cathejell[®] is indicated for surface anesthesia and lubrication for various procedures including male and female cystoscopies, catheterizations and other endourethral operations, endoscopies, proctoscopies, rectoscopies, and tracheal intubations.

Cathejell[®] can also be used for the symptomatic treatment of pain in connection with cystitis and urethritis. Cathejell[®] has a unique collapsible syringe design with a trauma-free applicator tip that makes it easy to use for healthcare professionals and makes the application of the drug more comfortable for the subject patient.

FeraMAX[®] Powder

In July 2012, BioSyent Pharma received marketing approval from Health Canada for its unique

oral iron supplement FeraMAX[®] Powder. FeraMAX[®] Powder is the only oral iron product available in Canada in a dissolvable powder and comes in pleasant tasting grape and raspberry flavoured crystals, which can be conveniently dosed by diluting them in water or mixing them with soft foods. This innovative product is based upon the same non-ionic polysaccharide-iron complex technology found in FeraMAX[® ] 150.

Other oral iron products made from common ferrous salts intended for infants and children either have an unpleasant heavy metallic taste which deters patient compliance, or they come in formulations containing alcohol which healthcare professionals and caregivers prefer to avoid. The Canadian market launch of FeraMAX[®] Powder in May 2013 was the global introduction of this product and provides BioSyent Pharma with a unique

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

offering for international marketing partners. The Company has also launched the product in several international markets through distribution agreements.

Aguettant System[®]

In August 2012, BioSyent Pharma signed an exclusive Licensing and Distribution Agreement (the “ Aguettant Agreement ”) with Laboratoire Aguettant S.A.S.

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(“ Laboratoire Aguettant ”). Pursuant to the Aguettant Agreement, the Company inlicensed pre-filled syringe (“ PFS ”) products which are medical syringes pre-filled with a specific dosage of medication and three of which are marketed to hospitals and acute care settings.

The Aguettant System[®] for PFS offers a patented innovation that can be used for a variety of injectable medications. The Aguettant System[®] for PFS features a needleless, glassless, sterile plastic syringe with a ready-to-use dual tamper-evident seal. These products provide hospitals, clinics and healthcare professionals with improved patient safety as well as operational efficiencies.

Aguettant System[®] – Atropine Sulphate

One Aguettant System[®] urgent care product contains atropine sulphate, a commonly used drug in emergency situations and anaesthetic procedures. The Company commenced distribution of this product in February 2015.

RepaGyn[®] is supported by clinical evidence of both efficacy and symptom relief and has been recommended by doctors and successfully used by women in several European countries including Italy, France, Belgium, Switzerland, Denmark and Poland for over 10 years under the brand names Cicatridine[®] , Cicatridina[®] , Cikatridina[®] , and Repadina[®] .

Proktis-M[®]

In March 2014, the Company entered into an in-licensing Rectal Suppositories Sodium Hyaluronate agreement for exclusive marketing and distribution rights in Canada of Proktis-M[®] rectal suppositories with Farma-Derma s.r.l. Proktis-M[®] rectal suppositories are designed to help the healing of the anus and rectum. Proktis-M[®] rectal suppositories, which were launched by the Company in November 2014, have been studied and tested in conditions such as operated severe internal hemorrhoids, anal fissures, and prevention of radiation-induced proctitis.

Proktis-M[®] rectal suppositories are formulated with sodium hyaluronate, a naturally occurring compound, and offer a temporary matrix to facilitate cell proliferation which enhances wound healing. Proktis-M[®] rectal suppositories can be used on their own or in combination with other products. Proktis-M[®] rectal suppositories are supported by clinical evidence and have been successfully used to treat men and women in several European countries.

Cysview[®]

Aguettant System[®] – Phenylephrine Hydrochloride

Phenylephrine hydrochloride injection is indicated for the treatment of clinically important hypotensive states, including overcoming peripheral vascular failure (shock, or shock-like states), maintenance of blood pressure in the setting of anesthesia, drug-induced hypotension, or hypersensitivity with circulatory compromise. The Company commenced distribution of this product in November 2016.

RepaGyn[®]

In October 2013, the ® Company signed an exclusive Canadian Licensing and

Distribution Agreement with Farma-Derma s.r.l. (the “ RepaGyn Agreement ”). Pursuant to the RepaGyn Agreement, the Company distributes a women’s health product, RepaGyn[®] , which is an innovative vaginal suppository that has received approval from Health Canada. RepaGyn[®] helps relieve dryness and promotes healing of the vaginal mucosa. It is also recommended in situations where tissue repair is required after invasive vaginal surgeries and biopsy procedures. RepaGyn[®] vaginal suppositories can be used with or without local hormone therapy.

In August 2015, BioSyent Pharma signed a Distribution and Supply Agreement with

Photocure ASA granting BioSyent Pharma an exclusive license to import, promote and sell the Cysview[®] product in Canada.

Cysview[®] is a patented, innovative technology that aids in the diagnosis and management of non-muscle-invasive bladder cancer. It is designed to selectively target malignant cells in the bladder and induce fluorescence during cystoscopic procedures using a blue-light enabled cystoscope.

This technology can lead to a 25% improvement in the detection of bladder cancer tumors as compared with traditional white light cystoscopy (Burger et al. 2013), leading to a reduced risk of recurrence. Cysview[®] has been successfully marketed in the U.S. and Europe and was approved by Health Canada in January 2015. The Company commenced the Canadian promotional launch of Cysview[®] in November 2015.

RepaGyn[®] is formulated with sodium hyaluronate, a naturally occurring compound, and offers a hormone-free treatment alternative proven to deliver symptom relief, restoration of pH balance and tissue repair all in one ovule.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Tibella[®]

In November 2016, the Company signed an exclusive License and Supply Agreement with a European partner for a prescription product in the women’s health therapeutic area for the Canadian market – Tibella[®] . Tibella[®] is a hormone replacement therapy (“HRT”) consisting of tibolone. Tibella[® ] is indicated for the short-term treatment of vasomotor symptoms due to estrogen deficiency in postmenopausal women, more than one year after menopause. Though new to the Canadian market, Tibolone has been successfully marketed in Europe for over 30 years and is also approved and marketed in other countries around the world.

The Company received regulatory approval from Health Canada for Tibella[®] in May 2019 and launched the product to the Canadian market in July 2020 with the first shipments to Canadian customers.

Combogesic[®]

In November 2019, the Company signed a License and Exclusive Supply Agreement with AFT Pharmaceuticals Ltd for a portfolio of pain management products for the Canadian market. These products will be marketed in Canada under the Combogesic[®] trademark. Combogesic[® ] combines two well-known and effective medicines, acetaminophen and ibuprofen, in a single form that has been demonstrated to synergistically provide pain relief. Health Canada approved the first form of Combogesic[® ] in 2019. The Company launched Combogesic[®] to the Canadian market in December 2020 with the first shipments to Canadian wholesalers.

New Women’s Health Product

On October 1, 2020, BioSyent Pharma Inc. signed an exclusive License and Supply Agreement with a European partner for a new women’s health product for the Canadian market. The product has been approved for sale in Canada, the U.S.A., Europe and in several other markets around the world. The Company is currently preparing for the launch of this innovative product to the Canadian market.

Pharmaceutical Product Cycle

The Company organizes its product lifecycle into six stages: (i) the in-license stage, (ii) the regulatory stage, (iii) the pre-launch stage, (iv) the launch stage, (v) the growth stage, and (vi) the maturity stage.

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Product Cycle Growth Maturity
Launch
Pre-Launch
Marketing Maintain
Regulatory Field staff training investment Life Cycle
Differentiate Develop selling aids Service HCP’s & Management
In-License Prepare Dossier Med. Advisory Board Detail HCP’s• FeraMAX [®] Pd Hospitals• Cathejell® •• Proktis-MFeraMAX®® Powder
File with Health Therapeutic 150 • RepaGyn®
Identify Canada Reimbursement • Tibella [®] • Cysview®
Due Diligence Production • Combogesic [®] • Aguettant System [®]
Approval
Negotiate • New Women’s
Sign Deal Health Product
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The Company currently has six products in the maturity stage (Proktis-M, FeraMAX[®] Powder, RepaGyn[®] , Cysview[®] , and Aguettant System[®] Atropine and Phenylephrine), one product in the growth stage (Cathejell[®] ), three products in the launch stage (FeraMAX[® ] Pd Therapeutic 150, Tibella[®] , and Combogesic[®] ), and one product in the pre-launch stage (a New Women’s Health Product).

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Pharmaceutical Product Pipeline

The Company is committed to expanding its product portfolio and accelerating its product pipeline with a focus on innovative products that are unique. Although launched in markets outside of

Canada, some of these products may require additional investment before the Company seeks approval from Health Canada for the Canadian.

Pharmaceutical Business Structure

The Company has three pharmaceutical business units: (i) the Community and Women’s Health Business Unit which commercializes pharmaceutical products focused on improving family and women’s health in Canada (the “ Community Business ”); (ii) the Specialty Business Unit (formerly, the

“Specialty / Hospital Business Unit”) which sells pharmaceutical and healthcare products to Canadian hospitals and specialists (the “ Specialty Business ”); and (iii) the International Pharmaceutical Business Unit which sells FeraMAX[®] to markets outside of Canada (the “ International Business ”).

Pharmaceutical Business

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Community Legacy
& Women’s Specialty International Business
Health
+
Corporate Operations
Finance Information Technology Human Resources
Supply Chain and Logistics Business Development Business Intelligence
Medical and Regulatory Market Access Legal
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These three business units, collectively, the “ Pharmaceutical Business ”, are supported by the Company’s Corporate Operations, including the finance, supply chain and logistics, medical and regulatory affairs, information technology, business development, market access, human resources, business intelligence, and legal functions. As the Company expands its product portfolio into new therapeutic areas, new business units may be established as part of the pharmaceutical business structure as and when considered appropriate.

Legacy Business

Protect-It[®]

The Company continues to manufacture and market Protect-It[®] , a bio-friendly, non-chemical, food-safe grain insecticide. Protect-It[®] was developed through collaborative research between the Cereal Research Centre of Agriculture and Agri-Food Canada. ProtectIt[®] is used as a preventative treatment against insect infestations in stored grains. The Legacy Business provides an additional source cash flows for the Company allowing it to focus on its strategic areas of growth in the Pharmaceutical Business.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

New Capabilities and Awards

On May 1, 2020, the Company’s FeraMAX[®] brand was named the #1 Pharmacist and Physician recommended over-the-counter oral iron supplement brand in Canada for the fifth consecutive year (EnsembleIQ Healthcare Group: Pharmacy Practice + Business, The Medical Post, Profession Santé , CanadianHealthcareNetwork. ca, and ProfessionSanté.ca 2020 Survey on OTC Counselling and Recommendations).

In July 2020, the Company launched Tibella[®] , a Health Canada approved prescription hormone replacement therapy (“HRT”) consisting of

tibolone. Tibella[®] substitutes for the loss of estrogen production in postmenopausal women and alleviates menopausal symptoms. This drug is marketed in Canada as part of the Company’s women’s health product portfolio.

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On October 15, 2020, BioSyent was named to the Growth List ranking of Canada’s fastest-growing companies by Canadian Business and Maclean’s for the eighth consecutive year based on a five-year revenue growth rate of 75% (2014 – 2019).

On November 5, 2020, BioSyent Pharma Inc. launched Fera MAX[®] Pd Therapeutic 150 in Canada, the first new product under the new FeraMAX[®] Pd delivery system, which replaces FeraMAX[®] 150 at Canadian pharmacies.

In December 2020, the Company launched Combogesic[® ] to Canada.

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Combogesic[®] is the first fixed-dose combination of acetaminophen and ibuprofen in a single tablet available in Canada.

On October 1, 2020, BioSyent Pharma Inc. signed and exclusive License and Supply Agreement with a European partner for a new women’s health product for the Canadian market. The product has been approved for sale in Canada, the U.S.A., Europe and in several other markets around the world. The Company is currently preparing for the launch of this product to the Canadian market.

On October 5, 2020, BioSyent Pharma Inc. introduced FeraMAX[®] Pd, a patented oral iron supplement delivery system for the treatment of iron deficiency anemia based on a proprietary Polydextrose Iron Complex (“PDIC”) formulation.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Key Performance Measures

Key performance measures for the fourth quarter (“Q4”) and full year (“FY”) ended December 31, 2020 and December 31, 2019 are presented in the tables below along with the preceding three quarters:

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% Change % to Total CAGR % Change % to Total
Key Performance
FY 2020 vs. FY Company (FY 2018 - Q4 2020 vs. Q4 Company Q3 2020 Q2 2020 Q1 2020
Indicator
2019 Sales FY 2020) 2019 Sales
Canadian 21,237,461 12% 95% 5,395,431 7% 94% 5,470,569 4,415,900 5,955,561
Pharma Sales
International 225,139 -84% 1% 56,668 -87% 1% 6,306 94,197 67,968
Pharma Sales
Legacy Business 869,568 -16% 4% 274,229 180% 5% 294,864 261,158 39,317
Sales
Total Total 22,332,168 4% 100% 2% 5,726,328 3% 100% 5,771,739 4,771,255 6,062,846
Company Sales
Gross Profit 17,423,847 5% 78% 4,399,715 1% 77% 4,494,094 3,728,295 4,801,743
EBITDA 5,577,206 -3% 25% 1,116,856 -34% 20% 1,399,781 1,062,582 1,997,987
NIAT 3,795,335 -13% 17% -18% 665,702 -43% 12% 955,909 722,206 1,451,518
Diluted EPS 0.29 -6% 0.05 -38% 0.07 0.06 0.11
Net Change in 3,604,229 1,875,305 2,234,657 276,242 (781,975)
Cash, Short-term
Investments
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% Change % to Total CAGR % Change % to Total
Key Performance
FY 2019 vs. FY Company (FY 2017 - Q4 2019 vs. Q4 Company Q3 2019 Q2 2019 Q1 2019
Indicator
2018 Sales FY 2019) 2018 Sales
Canadian 18,946,758 2% 88% 5,042,899 0% 91% 4,789,629 4,844,090 4,270,140
Pharma Sales
International 1,441,691 -35% 7% 428,620 -50% 8% 1,013,071 - -
Pharma Sales
Legacy Business 1,035,875 33% 5% 97,767 286% 2% 417,048 312,386 208,674
Sales
Total Total 21,424,324 0% 100% 2% 5,569,286 -6% 100% 6,219,748 5,156,476 4,478,814
Company Sales
Gross Profit 16,646,255 0% 78% 4,362,645 -3% 78% 4,692,397 4,070,823 3,520,390
EBITDA 5,747,706 -22% 27% 1,700,840 -19% 31% 1,985,461 860,259 1,201,146
NIAT 4,369,295 -23% 20% -8% 1,167,845 -30% 21% 1,532,426 690,843 978,181
Diluted EPS 0.31 -21% 0.08 -27% 0% 0.11 0.05 0.07
Net Change in (2,451,624) 2,161,146 (87,528) (2,559,074) (1,966,168)
Cash, Short-term
Investments
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*CAGR – Compound Annual Growth Rate – See “Non-IFRS Financial Measures”

The Canadian pharmaceutical business showed continued growth and resilience through Q4 2020, with sales increasing by 7% over Q4 2019. The Company also launched two new Canadian pharmaceutical products, FeraMAX[® ] Pd Therapeutic 150 and Combogesic[®] , in Q4 2020. However, the Company’s overall sales growth in the quarter was negatively impacted by continued challenges in the largest export market of the International pharmaceutical business due to COVID-19, with Q4 2020 international pharmaceutical sales decreasing by 87% versus Q4 2019.

This decline in Q4 2020 international pharmaceutical sales combined with significant marketing investment in Q4 2020 in three launch-stage products of approximately $694,000 (Tibella[®] , FeraMAX[® ] Pd Therapeutic 150, and Combogesic[®] ), resulted in a 43% decline in Q4 2020 NIAT versus Q4 2019. After adjusting for

a $626,006 write-down of intangible assets in the comparative Q4 2019 period, NIAT for Q4 2020 would have decreased by 59% versus Q4 2019.

For FY 2020, Canadian pharmaceutical sales increased by 12% over FY 2019, while international pharmaceutical sales decreased by 84% and legacy business sales decreased by 16%. As a result, total Company sales increased by 4% overall in FY 2020 over FY 2019. Sales CAGR between FY 2018 and FY 2020 was 2%.

Net Income After Tax (“NIAT”) decreased by 13% in FY 2020 versus FY 2019. FY 2019 NIAT was negatively impacted by impairment write-downs on intangible assets of $870,947. FY 2020 NIAT was negatively impacted by the decrease in international pharmaceutical sales as well as substantial marketing investment of approximately $1,711,000 in new product launches in 2020. NIAT CAGR between FY 2018 and FY 2020 was -18%.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Results of Operations for the three and twelve months ended December 31, 2020 and 2019

Sales

Total Company Sales:

Q4 2020 vs. Q4 2019

Total Company sales for Q4 2020 were $5,726,328, increasing by 3% compared to total Company sales for Q4 2019 of $5,569,286.

FY 2020 vs. FY 2019

Total Company sales for FY 2020 were $22,332,168, increasing by 4% compared to total Company sales for FY 2019 of $21,424,324.

Canadian Pharmaceutical Sales:

Q4 2020 vs. Q4 2019

Canadian pharmaceutical sales for Q4 2020 were $5,395,431, increasing by 7% compared to Canadian pharmaceutical sales for Q4 2019 of $5,042,899. The table below summarizes the Q4 2020 versus Q4 2019 percentage change in sales volumes (units) by product:

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----- Start of picture text -----

Q4 2020 vs. Q4 2019
Product
Change
FeraMAX [®] +5%
RepaGyn [®] -%
Tibella [®]
Combogesic [®]
Aguettant System [®] +2%
Cathejell [®] +13%
Cysview [®] -60%
----- End of picture text -----

*Newly-launched products – $nil comparative sales for Q4 2019

In the Community Business, Q4 2020 Canadian sales volumes (units) of FeraMAX[®] increased by 5% as compared to Q4 2019. The Company launched FeraMAX[®] Pd Therapeutic 150 in November 2020, which replaces FeraMAX[® ] 150 at Canadian pharmacies. Sales volumes (units) of RepaGyn[® ] were flat in Q4 2020 versus Q4 2019. In July 2020, the Community Business launched Tibella[®] to the Canadian market, which was revenuegenerating throughout Q4 2020. The Combogesic[®] product was launched in Canada late in Q4 2020 with the first sales to Canadian wholesaler customers in December 2020.

As a result of the ongoing impact of the COVID-19 pandemic in Canada, the Community Business’ field salesforce continued to experience in-person access limitations to healthcare professionals during Q4 2020, utilizing various means of virtual engagement to the extent possible.

In the Specialty Business, Q4 2020 Canadian sales volumes (units) of Aguettant System[®] PFS products increased by 2% as compared to Q4 2019. Sales volumes (units) of Cathejell[® ] increased by 13% in Q4 2020 over Q4 2019. As COVID-19 infection rates across Canada increased during Q4 2020, the Company observed

an overall decline in the scheduling of blue-light cystoscopy procedures, resulting in a 60% decrease in sales volumes (units) of Cysview[®] during Q4 2020 as compared to Q4 2019.

FY 2020 vs. FY 2019

Canadian pharmaceutical sales for FY 2020 were $21,237,461, increasing by 12% compared to Canadian pharmaceutical sales for FY 2019 of $18,946,758. The table below summarizes the FY 2020 versus FY 2019 percentage change in sales volumes (units) by product:

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FY 2020 vs. FY 2019
Product
Change
FeraMAX [®] +10%
RepaGyn [®] +6%
Tibella [®]
Combogesic [®]
Aguettant System [®] +21%
Cathejell [®] +15%
Cysview [®] -28%
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*Newly-launched products – $nil comparative sales for FY 2019

In the Community Business, FY 2020 Canadian sales volumes (units) of FeraMAX[®] increased by 10% as compared to FY 2019. Sales volumes (units) of the RepaGyn[® ] product increased by 6% in FY 2020 versus FY 2019. Following sales growth in the months of January and February 2020 and a rapid acceleration in sales volumes in March 2020 at the outset of the COVID-19 crisis due to increased demand for its products from consumers, as well as some accumulation of safety stock of these products by retail pharmacies and wholesalers, the Community Business experienced a marked decline in sales volumes in April 2020, followed by a normalization in the months of May and June 2020, and continued growth during the second half of 2020. Tibella[®] , launched in late July 2020, also contributed modestly to sales growth in the Community Business in the second half of 2020.

The further impact of COVID-19 on the selling activities of the Community Business’ field salesforce, consumer behaviour, and demand for pharmaceutical products in the community is uncertain. Nonetheless, the Company has not experienced any significant negative impact to cumulative sales volumes of established brands in its Community Business as a result of COVID-19 over the duration of the pandemic from March 2020 to the date hereof.

In the Specialty Business, FY 2020 Canadian sales volumes (units) of Aguettant System[®] PFS products increased by 21% as compared to FY 2019. Sales volumes (units) of Cathejell[®] increased by 15% in FY 2020 versus FY 2019 while sales volumes (units) of Cysview[® ] decreased by 28% in FY 2020 versus FY

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Following a decline in Q2 2020 sales of Cathejell[®] and Cysview[®] due to a reduction in elective procedures occurring in certain Canadian hospitals in response to the COVID-19 crisis, the Specialty Business observed an increase in the frequency of such procedures in late Q2 2020 and throughout Q3 2020. In Q4 2020, as COVID-19 infection rates increased across Canada, while sales of Cathejell[® ] grew by 13% over Q4 2019, sales of Cysview declined by 60% versus Q4 2019. Although new hospital sites implemented Cysview in Q3 2020, the Company observed a decline in the frequency of blue-light cystoscopy procedures scheduled among Canadian hospitals in Q4 2020.

There remains an ongoing risk that increased COVID-19 infection rates could affect demand for Aguettant System[®] PFS products, Cathejell[®] , and Cysview[®] in Canadian hospitals in 2021.

International Pharmaceutical Sales:

Q4 2020 vs. Q4 2019

International FeraMAX[®] sales for Q4 2020 were $56,668, as compared to sales of $428,620 for Q4 2019 – an 87% decrease.

FY 2020 vs. FY 2019

International FeraMAX[®] sales for FY 2020 were $225,139 as compared to sales of $1,441,691 for FY 2019 – an 84% decrease. In FY 2020, the International Business Unit shipped far less FeraMAX[®] product to its largest export market than it did in FY 2019. While this market has historically been a significant source of demand for FeraMAX[®] outside of Canada, business activity and the servicing of consumer demand in this market have been hindered by the COVID-19 pandemic. While the International Business Unit increased sales of FeraMAX[®] to certain other markets in FY 2020 versus FY 2019, such sales, on a cumulative basis, were not sufficient to offset the decline in FY 2020 sales to its largest export market.

Subsequent to FY 2020, in January 2021, the Company shipped a FeraMAX[®] order valued at approximately $1,140,000 to its largest export market, marking the Company’s first significant sale to this market after more than 12 months. Notwithstanding this recent activity, as the Company’s local distributors continue to navigate the challenges of the business environment in its largest export market, including COVID-19, management expects continued uncertainty in the timing and extent of international FeraMAX[®] sales to persist.

Legacy Business Sales Trend

Q4 2020 vs. Q4 2019

Legacy Business sales for Q4 2020 were $274,229, increasing by 180% compared to Legacy Business sales for Q4 2019 of $97,767.

FY 2020 vs. FY 2019

Legacy Business sales for FY 2020 were $869,568, decreasing by 16% overall compared to Legacy Business sales for FY 2019 of $1,035,875. While sales of Protect-It[® ] to customers in the United States increased by 33% in FY 2020 versus FY 2019, sales to Canadian customers decreased by 26% during this period, due to a carryover of customers’ inventory of the product from the prior year, some COVID-19 impact on demand, as well as general economic and trade conditions.

Legacy Business customers are generally less responsive to marketing and promotion, with demand for grain insecticides influenced more by weather conditions, prices of agricultural inputs, the quality and quantity of the food grain harvest, and the level of infestation of stored grain.

Expenses

Q4 2020 vs. Q4 2019

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Three months ended December 31,
% Change vs.
Prior Period
2020 2019
Cost of goods sold $1,326,613 $1,206,641 10%
Selling and marketing $2,268,725 $1,301,548 74%
General and administration $1,141,252 $1,489,204 -23%
New business development costs $6,312 $10,832 -42%
Finance costs $22,656 $24,472 -7%
Subtotal $4,765,558 $4,032,697 18%
Finance income $(75,360) $(132,564) -43%
----- End of picture text -----

Total expenses for Q4 2020 were $4,765,558, increasing by 18% versus Q4 2019 expenses of $4,032,697. The ratio of total expenses to sales for Q4 2020 was 83%, higher than a ratio of 72% for Q4 2019, such ratio increasing as a result of a significant increase in selling and marketing expenses related to launch-stage products, offset to some extent by savings on travel and other selling expenses as a result of COVID-19 restrictions.

Selling and marketing expenses for Q4 2020 were $2,268,725, increasing by 74% as compared to Q4 2019 selling and marketing expenses of $1,301,548. The ratio of selling and marketing expenses to sales for Q4 2020 was 40%, increasing from a ratio of 23% in Q4 2019. The increase in selling and marketing expenses relative to sales in Q4 2020 was due to significant advertising and promotion expenditures on Tibella[®] (launched in July 2020) and

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Combogesic[®] (launched in December 2020). While both of these products generated sales during Q4 2020, further sales growth and more material sales are expected in the future. The level of launchstage selling and marketing expenditures for these two products was high relative to their Q4 2020 sales. Management expects the ratio of selling and marketing expenses to sales for Tibella[®] and Combogesic[®] to remain relatively high in 2021, as compared to the Company’s established brands, but to normalize over the long term as these products establish footholds in their respective markets.

General and administration expenses for Q4 2020 were $1,141,252, decreasing by 23% as compared to Q4 2019 general and administration expenses of $1,489,204. After adjusting for non-recurring impairment write-downs on intangible assets of $626,006 incurred in Q4 2019, general and administration expenses would have increased by 32% in Q4 2020 over Q4 2019 due primarily to increased employee costs and unrealized foreign exchange losses on USD and EUR-denominated monetary assets

incurred in Q4 2020. After adjusting for the effect of the nonrecurring impairment write-downs incurred in Q4 2019, the ratio of general and administration expenses to sales would have been 15% in Q4 2019 as compared to 20% in Q4 2020.

Finance costs for Q4 2020 were $22,656, decreasing slightly from finance costs for Q4 2019 of $24,472. These costs are related to the Company’s head office lease which commenced in September 2019 and which is accounted for in accordance with IFRS 16 Leases .

Finance income for Q4 2020 was $75,360, decreasing by 43% as compared to Q4 2019 finance income of $132,564. Finance income was composed primarily of interest income which decreased by 45% to $55,310 in Q4 2020 as compared to $99,865 in Q4 2019. This decrease in interest income was primarily a result of significantly lower market interest rates in Q4 2020 as compared to Q4 2019.

FY 2020 vs. FY 2019

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Full year ended December 31,
% Change vs.
Prior Period
2020 2019
Cost of goods sold $4,908,321 $4,778,069 3%
Selling and marketing $7,423,311 $5,750,624 29%
General and administration $4,905,190 $5,417,376 -9%
New business development costs $65,322 $90,114 -28%
Finance costs $92,942 $32,456 186%
Subtotal $17,395,086 $16,068,639 8%
Finance income $(299,897) $(514,846) -42%
----- End of picture text -----

Total expenses for FY 2020 were $17,395,086, increasing by 8% compared to FY 2019 expenses of $16,068,639. The ratio of total expenses to sales for FY 2020 was 78%, higher than a ratio of 75% for Q4 2019, such ratio increasing as a result of a significant increase in selling and marketing expenses related to launch-stage products, including Tibella[®] and Combogesic[®] , and to a lesser extent, FeraMAX[®] Pd Therapeutic 150.

Selling and marketing expenses for FY 2020 were $7,423,311, increasing by 29% as compared to FY 2019 selling and marketing expenses of $5,750,624, driven largely by increased marketing expenditures made in the second half of FY 2020 on launch products. The ratio of selling and marketing expenses to sales for FY 2020 was 33%, increasing from a ratio of 27% in FY 2019. The increase in this ratio is a result of significant additional advertising and promotion expenditures related to product launches in the second half of 2020, including Tibella (launched in July 2020), FeraMAX[®] Pd Therapeutic 150 (launched in November 2020), and Combogesic[®] (launched in December 2020). These additional expenditures were offset to some extent by reductions in certain selling and travel expenses of the Company’s field salesforce as a result of COVID-19 restrictions.

The Company will make further selling and marketing investment in long-term growth initiatives in 2021 related to Tibella[®] , Combogesic[®] , FeraMAX[®] Pd, and a new women’s health product.

Management expects the ratio of selling and marketing expenses to sales to remain higher relative to historic levels until these new products gain traction in the market. Management expects the ratio of selling and marketing expenses to total sales to rebalance over the long-term, as the overall contribution of these growth products to Company sales increases.

General and administration expenses for FY 2020 were $4,905,190, decreasing by 9% as compared to FY 2019 general and administration expenses of $5,417,376. After adjusting for impairment write-downs on intangible assets of $870,947 incurred in FY 2019, general and administration expenses would have increased by 8% in FY 2020 over FY 2019 due primarily to research and product development expenditures of $222,361 incurred in FY 2020 and no such expenses incurred in the comparative prior period, as well as an overall increase in employee costs in FY 2020 over FY 2019. While the Company also incurred higher depreciation expense on property, equipment and a lease right-of-use asset related to the Company’s head office lease, this increase was offset by a decline in certain other corporate expenses in FY 2020 versus FY 2019. After adjusting for the effect of the impairment write-downs on intangible assets incurred in FY 2019, the ratio of general and administration expenses to sales would have been 21% in FY 2019 as compared to 22% in FY 2020.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

While the Company has limited certain discretionary expenditures in response to COVID-19 uncertainty, it will continue to invest corporate resources in long-term growth initiatives in 2021, including launch-stage and pre-launch stage products.

The Company recorded finance costs of $92,942 in FY 2020 as compared to $32,456 in FY 2019 related to its head office lease which commenced in September 2019. As a result of applying the requirements of IFRS 16 Leases , the Company recorded 12 months of lease interest expense in FY 2020 as compared to 4 months in FY 2019.

Finance income for FY 2020 was $299,897, decreasing by 42% as compared to FY 2019 finance income of $514,846. Finance income was composed primarily of interest income which decreased by 41% to $263,137 in FY 2020 as compared to $447,011 in FY 2019. This decrease in interest income was primarily a result of a significant decline in market interest rates during the period precipitated by the impact of COVID-19 on the economy and monetary policy measures effected by central banks in response.

Net Income After Taxes (NIAT)

Q4 2020 vs. Q4 2019

NIAT for Q4 2020 of $665,702 decreased by 43% compared to NIAT for Q4 2019 of $1,167,845 which decreased by 30% compared to Q4 2018. The Company incurred impairment losses on the write-down of intangible assets in Q4 2019 of $626,006. While no impairment losses were incurred in Q4 2020, the

Company increased its selling and marketing expenditures in new products launched in the second half of 2020, including Tibella[®] , Combogesic[®] , and FeraMAX[®] Pd Therapeutic 150. As a result of this additional selling and marketing investment in new products, the Company’s NIAT margin for Q4 2020 declined to 12% as compared to a NIAT margin of 21% in Q4 2019.

Sales and Net Income Before & After Tax For the three months ended December 31

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----- Start of picture text -----

7,000,000
5,910,965
6,000,000 5,726,328
5,569,286
5,000,000
0% -6%
+3%
4,000,000
3,000,000
2,168,171
2,000,000
1,671,410 1,669,153
+11% 1,167,845 1,036,130
1,000,000 +15%
-23% 665 ,702
-38%
-30% -43%
-
Q4 2018 Q4 2019 Q4 2020
Sales Net Income Before Tax Net Income After Tax
CAD
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Including currency translation losses of $32,053, total comprehensive income for Q4 2020 was $633,649, decreasing by 41% compared to total comprehensive income for Q4 2019 of $1,070,070.

FY 2020 vs. FY 2019

NIAT for FY 2020 of $3,795,335 decreased by 13% compared to NIAT for FY 2019 of $4,369,295 which decreased by 23% compared to FY 2018. The Company incurred impairment losses on the write-down of intangible assets in FY 2019 of $870,947. While no impairment losses were incurred in FY 2020, the decline in international pharmaceutical sales in FY 2020 and the substantial increase in selling and marketing expenditures on three

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

new product launches in the Canadian pharmaceutical business during FY 2020 contributed to a decline in the Company’s NIAT margin to 17% in FY 2020 as compared to 20% in FY 2019.

Management expects the Company’s NIAT margin to normalize over the long-term, as the overall contribution of 2020 launch products to total Company sales increases.

Sales and Net Income Before & After Tax For the twelve months ended December 31

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----- Start of picture text -----

25,000,000
22,332,168
21,527,028 21,424,324
+4%
+4%
20,000,000
0%
15,000,000
10,000,000
7,546,806
5,705,386 5,870,531
5,236,979
+10%
5,000,000 4,369,295
3,795,335
+10%
-22% -11%
-23% -13%
-
FY 2018 FY 2019 FY 2020
Sales Net Income Before Tax Net Income After Tax
CAD
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Including currency translation losses of $61,405, total comprehensive income for FY 2020 was $3,733,930, decreasing by 13% compared to total comprehensive income for FY 2019 of $4,278,729.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

EBITDA is a non-IFRS financial measure. The term EBITDA does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. The Company defines EBITDA as earnings before interest income and/or expense, income taxes, depreciation and amortization. A summary of the Company’s EBITDA for the three and twelve months ended December 30, 2018, 2019, and 2020 is provided in the graph below:

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

EBITDA for the three and twelve months ended December 31

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----- Start of picture text -----

8,000,000
7,405,988
7,000,000
+7%
6,000,000 5,747,706
5,577,206
5,000,000
-22% -3%
4,000,000
3,000,000
2,109,998
2,000,000 1,700,840
+8% 1,116,856
1,000,000 -19%
-34%
0
2018 2019 2020
Q4 EBITDA FY EBITDA
CAD
----- End of picture text -----

EBITDA for Q4 2020 of $1,116,856 decreased by 34% compared to EBITDA for Q4 2019 of $1,700,840. This decrease in EBITDA was a result of a decrease in Net Income Before Taxes of 38%

from $1,669,153 in Q4 2019 to $1,036,130 in Q4 2020. A reconciliation of EBITDA to NIAT for the three months ended December 31, 2020, 2019, and 2018 is provided in the table below:

RECONCILIATION OF EBITDA TO NIAT FOR THE THREE MONTHS (Q4) ENDED DECEMBER 31

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2020 2019 2018
Q4 EBITDA $1,116,856 $1,700,840 $2,109,998
Add: Interest Income 55,310 99,865 109,164
Less: Depreciation of Property and Equipment (84,015) (81,743) (26,494)
Amortization of Intangible Assets (29,365) (25,337) (24,497)
Interest Expense (22,656) (24,472) -
Income Tax Expense (370,428) (501,308) (496,761)
Q4 NIAT $665,702 $1,167,845 $1,671,410
----- End of picture text -----

EBITDA for FY 2020 of $5,577,206 decreased by 3% compared to EBITDA for FY 2019 of $5,747,706. This decrease in EBITDA was a result of a decrease in Net Income Before Taxes of 11% from $5,870,531 in FY 2019 to $5,236,979 in FY 2020 which was partially offset by an increase in non-cash expenses in FY 2020, including amortization of intangible assets as well as depreciation and lease interest expense arising from the Company’s 2019 office lease and leasehold improvements. A reconciliation of EBITDA to NIAT for the full years ended December 31, 2020, 2019, and 2018 is provided in the table below:

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

RECONCILIATION OF EBITDA TO NIAT FOR THE FULL YEAR (FY) ENDED DECEMBER 31

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----- Start of picture text -----

2020 2019 2018
FY EBITDA $5,577,206 $5,747,706 $7,405,988
Add: Interest Income 263,137 447,011 326,103
Less: Depreciation of Property and Equipment (334,186) (193,578) (87,295)
Amortization of Intangible Assets (176,236) (98,152) (97,990)
Interest Expense (92,942) (32,456) -
Income Tax Expense (1,441,644) (1,501,236) (1,841,420)
FY NIAT $3,795,335 $4,369,295 $5,705,386
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Earnings per Share (EPS)

Below is a summary of the Company’s quarterly sales, NIAT, and EPS for the eight most recently completed quarters:

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----- Start of picture text -----

Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019
Sales ($) 5,726,328 5,771,739 4,771,255 6,062,846 5,569,286 6,219,748 5,156,476 4,478,814
Net Income After Taxes ($) 665,702 955,909 722,206 1,451,518 1,167,845 1,532,426 690,843 978,181
Earnings Per Share – Basic ($) 0.05 0.07 0.06 0.11 0.08 0.11 0.05 0.07
Earnings Per Share – Diluted ($) 0.05 0.07 0.06 0.11 0.08 0.11 0.05 0.07
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Diluted EPS for Q4 2020 was $0.05, decreasing by $0.03 compared with diluted EPS of $0.08 for Q4 2019.

Diluted EPS for FY 2020 was $0.29, decreasing by $0.02 compared with diluted EPS of $0.31 in FY 2019.

Financial Resources and Liquidity

Working capital, defined here as the difference between current assets and current liabilities, increased to $24,635,207 as at December 31, 2020 from $23,486,067 as at December 31, 2019. Cash and short-term investments of $25,577,706 accounted for 104% of working capital as at December 31, 2020 as compared with cash and short-term investments of $21,973,477 accounting for 94% of working capital as at December 31, 2019. While the ongoing impact of the COVID-19 pandemic on the Company’s business operations, sales, and resultant cash flows is uncertain, the Company has sufficient cash and working capital to maintain its operating activities and to fund its planned growth and development activities.

the purchase of common shares for the Company’s Restricted Share Unit (“RSU”) Plan adopted by the Board of Directors on March 4, 2020. Comparatively, during FY 2019, the Company expended $6,351,603 for the repurchase and cancellation of common shares under its NCIB, resulting in the overall decrease in cash in FY 2019.

The graph below illustrates the company’s cash, cash equivalents and short-term investments as of December 31, 2018, 2019, and 2020 as well as the growth over the comparative prior year period:

During FY 2020, there was a net increase in cash and shortterm investments of $3,604,229 compared to a net decrease of $2,451,624 during FY 2019. While the Company’s NIAT decreased to $3,795,335 in FY 2020 from $4,369,295 in FY 2019, as a result of a net decrease in non-cash working capital, the Company generated cash from operations of $6,894,425 during FY 2020 as compared to $4,401,713 during FY 2019. The Company expended $2,648,194 for the repurchase and cancellation of the Company’s own common shares under a Normal Course Issuer Bid (“NCIB”) and a further $493,818 on

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Cash, Cash Equivalents and Short-term Investments at December 31

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----- Start of picture text -----

30,000,000
25,577,706
25,000,000 24,425,101
21,973,477
20,000,000
-10%
15,000,000 +26% +16%
10,000,000
5,000,000
0
2018 2019 2020
CAD (000’s)
----- End of picture text -----

Total shareholders’ equity increased by 4% to $26,795,956 at December 31, 2020 from $25,794,510 at December 31, 2019. While the Company generated comprehensive income of $3,733,930 during FY 2020, it repurchased and cancelled 594,275 of its own common shares during the year under the NCIB and a further 132,200 common shares held as treasury shares in trust for future settlements under its RSU Plan, reducing shareholders’ equity by $3,006,072 as a result.

The Company’s total assets at December 31, 2020 were $33,571,214, increasing by 8% compared to total assets of $30,965,314 as at December 31, 2019. This compares to a decrease of 1% in total assets to $30,965,314 at December 31, 2019 from total assets of $31,188,491 at December 31, 2018.

The Company has no short-term or long-term debt; however, the Company has credit facilities available with Royal Bank of Canada totaling $3,090,000, including a foreign exchange facility of $1,500,000, a credit card facility of $90,000, and a revolving demand credit facility of $1,500,000 which had not been utilized as of December 31, 2020. This credit facility bears interest at a variable rate of Royal Bank prime plus 0.75% and has been secured with a General Security Agreement constituting a first ranking security interest of the Bank in the Company’s property. The Company is subject to maintaining certain financial covenants if the demand credit facility is drawn upon. The Company has available additional foreign exchange facilities of $2,500,000 with other Canadian financial institutions.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Risk Management

The Company’s risk management policies and financial results are presided over by the Company’s Audit Committee, which reports to the Board of Directors of the Company (the “Board”). The pharmaceutical industry in which the Company operates is exposed to several risks due to a strict regulatory environment, an enhanced level of quality consciousness, competition from generic drug companies and heightened intellectual property litigation. The Company cannot predict or identify all risk factors nor can it accurately predict the impact, if any, of the risk factors on its business operations or the extent to which a factor, event or any such combination may materially change future results of the Company’s financial position from those reported or projected

in any forward-looking statements. Accordingly, the Company cautions the reader not to rely on reported financial information and forward-looking statements to predict actual future results.

This report and the accompanying financial information should be read in conjunction with this statement concerning risks and uncertainties. Some of the risks, uncertainties and events that may affect the Company, its business, operations and results are given in this section. However, the factors and uncertainties are not limited to those stated.

The Company has policies and practices mandated by the Board to manage the Company’s risks. Such risks include the following:

1. COVID-19 (Coronavirus)

On March 11, 2020, the World Health Organization characterized COVID-19 (Coronavirus) as a pandemic. The COVID-19 pandemic has impacted and is likely to continue to impact the Company’s operations in the following key areas:

a. Workforce:

The Company will continue to follow the recommendations of public health and government authorities and to take all necessary precautions, including remote work arrangements, the ongoing practice of physical distancing, making personal protective equipment available to employees, and ensuring employees’ understanding of good hygiene practices and infection risks, in order to protect the health and safety of its workforce, both in its head office and in the field.

b. Access to Healthcare Professionals:

COVID-19 restrictions have affected the ability of the Company’s field salesforce to access healthcare professionals in the community and in hospitals for the purposes of product detailing. While the extent and duration of such access restrictions varies by region in Canada, such restrictions may have an impact on the Company’s Canadian pharmaceutical sales during the time they are in place.

c. Demand for Products:

To the extent that the COVID-19 pandemic affects patient volumes (both in community clinics and in hospitals) and the nature of procedures performed in Canadian hospitals, this will affect the consumption of the Company’s urgent care products as well as its hospital products used in elective procedures.

Additionally, to the extent that the COVID-19 pandemic and safety restrictions affect consumer buying behaviour, this will affect demand for the Company’s pharmaceutical products in the community. The extent of the impact of COVID-19 on consumer demand for the Company’s products in the short-term and longterm is uncertain.

Finally, given the global scale of COVID-19, demand for the Company’s products in international markets may also be affected, depending on the extent of local infection rates, the measures implemented by local governments in response, and the overall impact of the pandemic on business activity in these international markets.

d. Supply Chain:

The Company sources its products globally. Given the global impact of the COVID-19 pandemic and varying localized impacts, this could result in interruptions to the Company’s supply chains, including the manufacturing, transportation, and delivery of products to customers.

2. Sourcing and Revenue Concentration

Some raw materials used in production are sourced from a single supplier and the Company is exposed to the same business risks that the supplier may experience. In line with

other pharmaceutical companies, the Company sells its products primarily through a limited number of wholesalers and retail pharmacy chains.

3. Foreign Exchange Risk

The Company currently earns revenue in Canadian dollars (“ CAD ”), U.S. dollars (“ USD ”), and Euros (“ EUR ”) and incurs costs in Canadian dollars, U.S. dollars, and Euros. Management monitors the U.S. dollar and Euro net liability position on an ongoing basis during the period and adjusts the total net monetary liability balance accordingly. When it is appropriate to

de-risk future foreign exchange transactions, the Company uses Dual Currency Deposits, foreign exchange options, and forward purchase contracts to manage foreign exchange transaction exposure.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

4. Interest Rate Risk

Cash flow interest rate risk is the risk that the future cash flow of a financial instrument will fluctuate because of changes in interest rates. Some of the Company’s cash and cash equivalents as at the date of the Company’s Consolidated Statements of Financial Position are invested in redeemable guaranteed investment certificates (each, a “ GIC ”), which earn interest at fixed rates during their tenure. The Company’s short-term investments consist of non-redeemable GICs which also earn interest at fixed rates during their tenure. These GICs all have terms of one year or less.

The Company manages its interest rate risk by maximizing the interest income earned on excess funds while maintaining the liquidity necessary to conduct operations on a day-to-day basis. Fluctuations in market rates of interest when these GICs are renewed may have an impact on the Company’s Finance Income for the period. Changes to the Bank of Canada’s Policy Interest Rate in response to the economic impact of the COVID-19 pandemic will affect market rates of interest and the rate of interest earned on the Company’s GICs.

5. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s cash and cash equivalents, short term investments, trade and other receivables, and loans receivable. The carrying amount of financial assets represents maximum credit exposure. As the Company invests in GICs with Canadian Chartered Banks, its credit risk on this account is negligible. The Company’s loans receivable (see Note 13 of the Consolidated Financial Statements) are full recourse and secured by a pledge of common shares of the Company purchased by the Borrowers, who are key management personnel. Based on these factors, the Company considers the credit risk associated with these loans receivable to be low. There are no factors at the end of the period to indicate a significant increase in credit risk has occurred and there are no defaults on the loans receivable.

a. Aging of Receivables

The majority of the Company’s current customers are corporations with whom the Company has transacted for several years. In assessing the credit risk of its trade accounts receivable, the Company considers historical default rates and payment patterns, the nature of its customer base, and forward-looking information including any anticipated changes to its customer base, credit terms, and pricing.

The Company’s gross trade accounts receivable decreased to $1,665,738 at December 31, 2020 from $1,850,325 at December 31, 2019.

The Company monitors its credit risk on an ongoing basis. The Company has provided for an expected credit loss of $66,710. Given the pervasive impact of the COVID-19 pandemic on general economic conditions and liquidity, there may be an increased risk of customer default on trade receivables in this environment; however, given the nature of size of the Company’s customer base, the risk of material default on trade accounts receivable is still considered low.

b. Concentration of Receivables

As of December 31, 2020, one customer represents 43% of trade receivables (December 31, 2019 - 19%) while another customer represents 19% of trade receivables (December 31, 2019 - 31%), a third customer represents 15% of trade receivables (December

31, 2019 - 18%), and a fourth customer represents 4% of trade receivables (December 31, 2019 – 13%). There have been no past defaults by any of these four customers.

c. Loans Receivable

The Company advanced loan proceeds totalling $391,500 on May 26, 2017, and a further $175,000 on December 11, 2018, in accordance with the terms of the MSLP for the purchase of the Company’s common shares by the Borrowers.

Each MSLP participant’s loan (collectively, the “MSLP Participant Loans”) bears interest at a rate of 1% - 2% per annum and is secured by a pledge of the common shares purchased under the MSLP by the Borrowers.

The MSLP Participant Loans are repayable by the Borrowers upon any sale of pledged shares by the Borrower in proportion to the then outstanding loan principal balance plus accrued interest. The remaining MSLP Participant Loan principal plus accrued interest must be fully repaid by the Borrowers no later than five years from the date the loan proceeds were advanced (the “Maturity Date”), specifically, May 26, 2022 for loans advanced on May 26, 2017 and December 11, 2023 for loans advanced on December 11, 2018.

If a Borrower ceases to be employed by the Company prior to the end of the five-year Maturity Date, all outstanding loan obligations shall become due and payable on the 30th day following the date of termination. In addition, in the event of a default by the Borrower of the terms of the loan, the loan obligations will become due and payable immediately.

As the loans are full recourse loans, they have not been accounted for as stock-based compensation, but as financial instruments within the scope of IFRS 9, Financial Instruments.

d. Cash and Cash Equivalents and Short-term Investments

Cash, cash equivalents and short-term investments are maintained with Canadian financial institutions and the wholly owned subsidiaries of these financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore bear minimal credit risk.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

6. Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they fall due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. Senior management is actively involved in the review and approval of planned expenditures. All contractual maturities of accounts payable and accrued liabilities are due within one year. The Company has no other liabilities.

The Company generates sufficient cash from operating activities to fund its operations and fulfill its obligations as they become due. The Company has credit facilities available with Royal Bank of Canada totalling $3,090,000, including a revolving demand credit facility of $1,500,000 which it has not drawn down as at the date hereof, a foreign exchange facility of $1,500,000, and credit card facilities totalling $90,000. The Company has available additional foreign exchange facilities of $2,500,000 with other Canadian financial institutions. The Company’s funds have not been committed in any way, except as set out in Note 24 of the Consolidated Financial Statements.

7. Information Technology (IT)

The integrity, reliability, and security of information in all forms are critical to the Company’s operations and inaccurate, incomplete or unavailable information could lead to incorrect financial reporting, poor decisions, privacy breaches, and/ or inappropriate disclosure of sensitive information.

The Company is reliant on the integrity of its IT systems, hardware, software and certain other IT infrastructure in maintaining business continuity and in securing proprietary and sensitive information as well as certain of its financial assets. The Company has implemented comprehensive IT security policies and controls in order to safeguard its assets and sensitive information and to maintain business continuity in the event of potential disruptions. The integrity of the Company’s IT systems

is exposed to a risk of malicious and unauthorized breaches by outside parties acting unlawfully. While extensive, the Company’s IT security policies and controls cannot guarantee that such unauthorized breaches, whether targeted or opportunistic in nature, will not occur in the future. Such a breach could result in loss of financial assets through fraud, loss of sensitive information, reputational loss, or disruption of operations and business continuity.

The Company monitors its exposure to IT security risks on a continual basis and modifies its IT security policies, practices, infrastructure and insurance coverage as needed to address the assessed level of such risk.

8. Competition

The Pharmaceutical Business is characterized by intense competition and the Company is faced with the risk of enhanced competitive activity which may impact operational results.

9. Climatic Conditions

The Legacy Business is dependent on agricultural production which, in turn, is impacted by climatic variations which may affect demand for its products.

10. General Economic Conditions

The Company has no control over changes in inflation and interest rates, foreign currency exchange rates and controls or other economic factors affecting its businesses, including uncertainty surrounding the economic impact of disease epidemics and pandemics and the risk of supply chain interruptions related

thereto, or the possibility of political unrest, legal or regulatory changes in jurisdictions in which the Company or its customers operate. These factors could negatively affect the Company’s future results of operations.

11. Innovation

The competitiveness of the Company’s products is subject to continuous innovation within the pharmaceutical industry. The Company tries to maintain the relevance of its products to the market but is exposed to new improved innovations that can undermine the competitiveness of its products.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

12. Width of Product Portfolio

While the Company continuously strives to increase the portfolio of products in its commercialization pipeline, the high cost of acquiring new products and the long lead-time for bringing these products to market creates a dependency on a limited range of products at this time.

13. Agreements Relating to the Development and Distribution of Products

The Company currently has several collaboration or distribution agreements relating to the marketing and distribution of FeraMAX[®] products in international markets. The Company relies on these agreements because it does not wish to market its products directly in these markets. The Company intends to secure additional agreements relating to the marketing and distribution of FeraMAX[®] and any other product for which it may receive commercial rights outside of Canada.

The Company may be unable to enter into in-licensing agreements for the development of new products and outlicensing agreements for the distribution of its existing products. The Company also faces and will continue to face, significant competition in seeking appropriate collaborators and marketing and distribution partners. Moreover, collaboration and distribution arrangements are complex and time-consuming to negotiate, document and implement.

Reliance on these agreements exposes the Company to a number of risks, including the following:

Collaborators and marketing and distribution partners may not devote sufficient resources to the Company’s products or product candidates;
Disputes may arise with respect to payments that the Company believes are due under such distribution and collaboration agreements;
Unwillingness on the part of collaborators and marketing and distribution partners to provide updates regarding the progress of its development, commercialization or marketing activities, or to permit public disclosure of these activities;
Collaborators and marketing and distribution partners may terminate the relationship; disputes may arise in the future with respect to the ownership of rights to technology developed with collaborators;
Disagreements with collaborators and marketing and distribution partners could result in litigation or arbitration;
Collaborators may elect to pursue the development of any additional product candidates and pursue technologies or products either on their own or in collaboration with other parties, including competitors;
Collaborators and marketing and distribution partners may pursue higher priority programs or change the focus of their programs, which could affect the collaborators’ and marketing and distribution partners’ commitment to their respective territories;
Collaborators and marketing and distribution partners may develop or distribute products that compete with the Company’s products; and
The Company’s pharmaceutical products are distributed to international markets where political and economic risks and uncertainties may exist. These risks and uncertainties could adversely affect the distribution of the Company’s products to such markets.

The occurrence of any of these or other events may impair commercialization of the Company’s products.

14. Regulatory Risks

With respect to BioSyent’s Legacy Business, regulatory and legislative requirements affect the development, manufacture and distribution of BioSyent’s products, including the testing and planting of seeds containing its biotechnology traits and the import of crops grown from those seeds. Non-compliance can harm sales and profitability. The failure to receive necessary permits or approvals could have near and long-term effects on BioSyent’s ability to produce and sell some current and future products.

With respect to BioSyent’s Pharmaceutical Business, the sale of pharmaceutical products is highly regulated, which significantly increases the difficulty and costs involved in obtaining and maintaining regulatory approval for marketing new and existing products.

Various business interruption risks inherent to the pharmaceutical industry, like product recalls, adverse drug reactions, quality issues and issues relating to good manufacturing practices may impact the financial results if they transgress regulatory boundaries.

The regulatory approval process can be long and may involve significant delays despite the Company’s best efforts. There is also a risk that the Company’s products may be withdrawn from the market and the required approvals suspended as a result of non-compliance with regulatory requirements. The extent of such regulation is increased for products designated by Health Canada as Controlled Substances, such as the Tibella[®] women’s health product. As a result, the Company’s costs of regulatory compliance and risks associated with non-compliance are higher for such Controlled Substances than for other non-controlled pharmaceutical products which it markets and sells.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Furthermore, there can be no assurance that the regulators will not require modification to any submissions, which may result in delays or failure to obtain regulatory approvals. Any delay or failure to obtain regulatory approvals could adversely affect the ability of

the Company to utilize its technology, thereby adversely affecting operations. Further, there can be no assurance that the Company’s products will prove to be safe and effective in clinical trials or receive the requisite regulatory approval.

15. Specific Risks

The Company has insurance policies in place against risks relating to general commercial liability, product liability, product recall, loss of Company assets, IT security, and business interruption. The Company reviews its insurance coverage on a regular basis as part of its risk management program and adjusts this coverage

as appropriate, based its current risk profile and operations. The Company is exposed to the potential risk that claims made on the Company or losses incurred may be in excess of the level of insurance coverage undertaken by the Company.

Disclosure of Outstanding Share Data

The authorized share capital of the Company consists of 100,000,000 common shares without par value and 25,000,000 preferred shares without par value. The holders of the preferred shares as a class shall not be entitled to receive notice of, to attend or to vote at any meeting of the shareholders of the Company.

As at March 16, 2021 the following common shares, stock options, and Restricted Share Units were outstanding:

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No. of Shares Exercise Price Range
Issued common shares 12,872,975
Treasury shares: RSU Plan in Trust (132,200)
Outstanding common shares 12,740,775
Stock options outstanding 173,230 $6.20 - $ 10.97
RSUs outstanding 129,125
Fully Diluted at March 16, 2021 13,043,130
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Normal Course Issuer Bid

On December 11, 2019, the Company announced that the TSX Venture Exchange had accepted its Notice of Intention to Make a NCIB for a 12-month period ending on December 16, 2020 during which the Company would be permitted to purchase up to 800,000 of its own common shares for cancellation. The Company repurchased and cancelled 645,275 common shares under this NCIB, of which 594,275 common shares were repurchased and cancelled during FY 2020.

On December 11, 2020, the Company announced that the TSX Venture Exchange had accepted its Notice of Intention to Make a NCIB for a further 12-month period ending on December 16, 2021 during which the Company would be permitted to purchase up to 950,000 of its own common shares for cancellation. 65,000 common shares have been repurchased under this NCIB subsequent to December 31, 2020 to the date hereof.

Restricted Share Unit Plan

On March 4, 2020, the Board of Directors adopted a Restricted Share Unit (“RSU”) Plan which was approved by shareholders on May 27, 2020 and which was subsequently approved by the TSX Venture Exchange. The RSU Plan was established as a vehicle by which equity-based incentives may be granted to eligible employees, consultants, directors and officers of the Company to recognize and reward their contributions to the long-term success of the Company including aligning their interests more closely with the interests of the Company’s shareholders. The RSU Plan is a fixed plan which reserves for issuance a maximum of 800,000 common shares of the Company.

During FY 2020, the Company purchased 132,200 of its own common shares pursuant to its RSU Plan with such shares held in trust for future settlement of vested RSUs granted to employees, senior management, and directors of the Company.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Commitments

Office Leases

The Company’s office lease agreement commenced on September 1, 2019 and extends to August 31, 2029.

The Company’s undiscounted minimum future rental payments and occupancy costs (including certain operating costs and realty taxes) for the next five fiscal years under this lease agreement as of the date hereof are approximately as follows:

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Fiscal Year Annual Rent and Occupancy Costs
2021 $ 269,089
2022 $ 360,542
2023 $ 364,056
2024 $ 364,056
Beyond Next 5 Fiscal Years $ 1,781,624
Total $ 3,139,367
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Purchase Commitments

In the normal course of business, the Company has minimum purchase commitments with certain of its suppliers.

Disclosure Controls

The Company constantly endeavours to allow for greater segregation of duties and operating level controls within the constraints of its operating infrastructure. While intending to strengthen both these aspects of internal control, the Company believes that strong management supervisory controls minimize the possibility of erroneous financial reporting.

The certifying officers of the Company have opted not to certify the design and evaluation of the Company’s disclosure controls and procedures (“ DC&P ”) and internal control over financial reporting (“ ICFR ”). Inherent limitations on the ability of the certifying officers to design and implement (on a cost-effective basis) DC&P and ICFR for the Company may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

Investor Relations Activities

Investor relations functions were accomplished through personnel whose duties include dissemination of news releases, investor communications and general day-to-day operations of the Company. Mr. René Goehrum, President and CEO, Mr. Robert March, Vice President and CFO, and Mr. Joost van der Mark, Vice President, Corporate Development, assist in the implementation of the Company’s investor relations program.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

Related Party Transactions

Key Management Personnel Compensation

The table below summarizes compensation for key management personnel of the Company for the three months and years ended December 31, 2020 and 2019:

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Three months ended December 31, Years ended December 31,
2020 2019 2020 2019
Number of Key Management Personnel 6 6 6 6
Salary, Benefits, and Bonus $702,826 $479,675 $1,635,408 $1,360,493
Share-Based Payments $84,778 $59,124 $207,785 $233,138
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During FY 2020, the Company recorded share-based payment expense of $207,785 (2019 - $233,138) related to the amortization of RSUs and the vesting of options granted to key management personnel under the Company’s RSU Plan and SOP, respectively, as well as the Company’s contributions to the ESPP for the purchase of common shares on behalf of participating key management personnel.

Transactions with Directors

During the year ended December 31, 2020, the Company paid cash fees to its directors in the amount of $54,376 (2019 - $142,600) and share-based payments of $22,022 (2019 - $15,899).

Legal Proceedings

From time to time the Company may be exposed to claims and legal actions in the normal course of business. As of the date hereof, the Company was not aware of any litigation or threatened claims either outstanding or pending.

BioSyent

Management’s Discussion and Analysis – For the years ended December 31, 2020 and 2019

AI assistant

BioSyent Inc. — Management Reports 2021

43507_rns_2021-03-17_4f4b0244-5e8a-49f1-ad09-fb254f3eb907.pdf

BioSyent Inc. Management’s Discussion and Analysis

Table of Contents

Introduction

Forward-Looking Statements

Accounting Estimates and Accounting Policies

Non-IFRS Financial Measures

Overview, Vision, Strategy, and Products

Overview

BioSyent’s Vision

BioSyent’s Strategy

Evolution of Strategy

Pharmaceutical Business

FeraMAX[®] 150

FeraMAX[®] Pd Therapeutic 150

Cathejell[®]

FeraMAX[®] Powder

Aguettant System[®]

Aguettant System[®] – Atropine Sulphate

Proktis-M[®]

Cysview[®]

Aguettant System[®] – Phenylephrine Hydrochloride

RepaGyn[®]

Tibella[®]

Combogesic[®]

New Women’s Health Product

Pharmaceutical Product Cycle

Pharmaceutical Product Pipeline

Pharmaceutical Business Structure

Pharmaceutical Business

Legacy Business

Protect-It[®]

New Capabilities and Awards

Key Performance Measures

Sales

Total Company Sales:

Q4 2020 vs. Q4 2019

FY 2020 vs. FY 2019

Canadian Pharmaceutical Sales:

Q4 2020 vs. Q4 2019

FY 2020 vs. FY 2019

International Pharmaceutical Sales:

Q4 2020 vs. Q4 2019

FY 2020 vs. FY 2019

Legacy Business Sales Trend

Q4 2020 vs. Q4 2019

FY 2020 vs. FY 2019

Expenses

Q4 2020 vs. Q4 2019

FY 2020 vs. FY 2019

Net Income After Taxes (NIAT)

Q4 2020 vs. Q4 2019

FY 2020 vs. FY 2019

Sales and Net Income Before & After Tax For the twelve months ended December 31

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

EBITDA for the three and twelve months ended December 31

RECONCILIATION OF EBITDA TO NIAT FOR THE THREE MONTHS (Q4) ENDED DECEMBER 31

RECONCILIATION OF EBITDA TO NIAT FOR THE FULL YEAR (FY) ENDED DECEMBER 31

Earnings per Share (EPS)

Financial Resources and Liquidity

Cash, Cash Equivalents and Short-term Investments at December 31

Risk Management

1. COVID-19 (Coronavirus)

a. Workforce:

b. Access to Healthcare Professionals:

c. Demand for Products:

d. Supply Chain:

2. Sourcing and Revenue Concentration

3. Foreign Exchange Risk

4. Interest Rate Risk

5. Credit Risk

a. Aging of Receivables

b. Concentration of Receivables

c. Loans Receivable

d. Cash and Cash Equivalents and Short-term Investments

6. Liquidity Risk

7. Information Technology (IT)

8. Competition

BioSyent Inc. Management Reports 2021