CHITOGENX INC — Interim / Quarterly Report 2025

Dec 22, 2024

ChitogenX Inc.

Condensed Interim Consolidated Financial Statements (Unaudited)

Three-month and nine-month periods ended October 2024 and 2023

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim consolidated financial statements, the statements must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying condensed interim consolidated financial statements of the Corporation have been prepared by management and are the responsibility of the Corporation's management. The Corporation's independent auditor has not performed a review or an audit of these condensed interim consolidated financial statements.

---

ChitogenX Inc.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

As at	Notes	October 31, 2024	January 31, 2024
ASSETS
Current
Cash		48	35
Sales tax and other receivables		12	16
Investment tax credits receivable		(10)	73
Prepaid expenses and deposits		62	110
Total current assets		112	234
Equipment		30	33
Intangible assets		243	267
Total assets		385	534
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current
Accounts payable and accrued liabilities	4	2,972	2,456
Accrued interest on debentures, notes and loans	6,7	543	217
Notes	7	510	180
Convertible debentures	6	3,609	416
Total current liabilities		7,634	3,269
Long-term loans	5	115	40
Notes	7	-	330
Convertible debentures	6	-	2,909
Conversion options	6	-	164
Total liabilities		7,749	6,712
SHAREHOLDERS’ DEFICIT
Common shares	8	14,201	14,201
Warrants	8	1,705	2,325
Contributed surplus		4,537	4,007
Deficit		(27,807)	(26,711)
Total shareholders’ deficit		(7,364)	(6,178)
Total liabilities and shareholders’ deficit		385	534

Going Concern Uncertainty (Note 1); Commitments (Note 17).

"/s/ "Tim Cunningham" ", Director

"/s/ "Pierre Laurin" ", Director

The accompanying notes are an integral part of these consolidated financial statements.

---

ChitogenX Inc.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

	Notes	Three months ended,		Nine months ended,
		October 31, 2024	October 31, 2023	October 31, 2024	October 31, 2023
Expenses
Research and development	11	169	74	234	687
General and administrative	12	193	254	445	1,183
Share-based compensation	8	16	29	(90)	129
Financial	13	228	257	671	720
Total Expenses		606	614	1,260	2,719
Other items
Fair Value adjustment on embedded derivative	6b)	-	171	(164)	(1,571)
Fair Value adjustment on warrants		-	(1)	-	(52)
Net loss (gain) and comprehensive loss (gain)		606	784	1,096	1,096
Loss per share
Weighted average number of common shares outstanding	9	83,129,520	80,324,904	83,129,520	64,209,464
Loss per common share	9	0.01	0.01	0.01	0.02

The accompanying notes are an integral part of these consolidated financial statements.

---

ChitogenX Inc.

Condensed Interim Consolidated Statements of Changes in Shareholders' Deficit (Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

	Notes	Number of Class "A" common shares	Share capital	Warrants	Contributed surplus	Deficit	Total
Balance as at January 31, 2023		51,038,776	10,357	2,406	2,551	(25,157)	(9,843)
Shares issued		32,090,744	3,954	873	(27)	-	4,800
Share-based compensation		-	-	-	128	-	128
Expired warrants	8	-	-	(1,099)	1,099	-	-
Net loss		-	-	-	-	(1,096)	(1,096)
Balance as at October 31, 2023		83,129,520	14,311	2,180	3,751	(26,253)	(6,011)
Balance as at January 31, 2024		83,129,520	14,201	2,325	4,007	(26,711)	(6,178)
Share-based compensation	8	-	-	-	(90)	-	(90)
Expired warrants	8	-	-	(620)	620	-	-
Net loss		-	-	-	-	(1,096)	(1,096)
Balance as at October 31, 2024		83,129,520	14,201	1,705	4,537	(27,807)	(7,364)

The accompanying notes are an integral part of these consolidated financial statements.

---

ChitogenX Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
In thousands of Canadian dollars except for share, unit, warrant and per share amounts

For the nine months ended	Notes	October 31, 2024	October 31, 2023
Operating activities:
Net (loss) income		(1,096)	(1,096)
Adjustments for:
Share-based compensation	8	(90)	128
Consulting fees and other payable settled through the issuance of shares or warrants		-	17
Depreciation and amortization		27	32
Unrealized gain on foreign exchange		-	52
Interest on loans and debentures	13	284	308
Fair Value adjustment – embedded derivative	6b)	(164)	(1,571)
Fair Value adjustment – warrants liability		-	(52)
Net change in non-cash operating working capital	10	977	1,264
Cash used in operating activities		(62)	(918)
Financing activities:
Proceeds from long-term loan		75	937
Cash provided by financing activities		75	937
Effect of foreign exchange on cash		-	(16)
Cash, beginning of period		35	108
Increase in cash		13	19
Cash, end of period		48	111

The accompanying notes are an integral part of these consolidated financial statements.

6

---

7

ChitogenX Inc.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

1. Reporting entity and going concern

ChitogenX Inc. (“the Corporation”, or “ChitogenX”), was incorporated under the Canada Business Corporations Act on February 5, 2015. The Corporation’s head office, principal address and registered office is located at 16667 Hymus Blvd., Kirkland, Quebec, Canada and its wholly owned US subsidiary, OR4102022 Inc. has been incorporated on April 20, 2022 and is located at 12 Penns Trail in Newtown, Pennsylvania, USA. Since September 12, 2022, the Corporation’s shares are listed on the Canadian Securities Exchange (“CSE”), under the symbol “CHGX” and on the United States OTCQB (“OTCQB”) market, under the symbol “CHNXF”.

The Corporation is an emerging Orthopaedic and Sports Medicine biologics company dedicated to the development of novel therapeutic soft tissue repair technologies to dramatically improve the success rate of orthopaedic and sports medicine surgeries. The Corporation’s proprietary biopolymer has been specifically designed to increase the healing rates of occupational and sports related injuries to tendons, ligaments, meniscus, and cartilage. The biopolymer – autologous PRP combination implant, can be directly placed into the site of injuries by surgeons during routine operative procedures without significantly extending the duration of surgeries and without further interventions. Considering the significant bioactivity and residency of our proprietary biopolymer – PRP implants, ChitogenX continues to assess its potential for therapeutic uses outside of the soft tissue repair market.

These condensed interim consolidated financial statements have been prepared on the going concern basis, which presumes the Corporation will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. In its assessment to determine if the going concern assumption is appropriate, management considers all data available regarding the future for at least, without limiting to, the next twelve months.

The Corporation has yet to generate revenue and has relied upon the issuance of debt and equity instruments to fund its operations. During the nine-month period ended October 31, 2024, the Corporation incurred a net loss of $1,096 and used cash in operations of $62. As at October 31, 2024, the Corporation had a negative working capital balance of $7,522.

The ability of the Corporation to fulfill its obligations and finance its future activities depends on its ability to raise capital and on the continuous support of its creditors. The Corporation believes its efforts to raise sufficient funds to support its activities will be successful, however, there is no assurance that funds will continue to be raised on acceptable terms. This indicates the existence of a material uncertainty that may cast a significant doubt about the ability of the Corporation to continue as a going concern without obtaining additional financial resources.

Failure to obtain such additional financing could result in delay or indefinite postponement of the Corporation’s strategic goals. These condensed interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that would be necessary should the Corporation be unable to continue as a going concern. Such adjustments could be material.

These condensed interim consolidated financial statements were approved and authorized for issuance by the Board of Directors on Dec 20, 2024.

2. Summary of Material Accounting Policies

Basis of measurement

These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for the revaluation of certain financial liabilities to fair value.

Functional and presentation currency

These condensed interim consolidated financial statements are presented in thousands of Canadian dollars, which is also the functional currency of the Corporation.

Transactions denominated in foreign currencies are initially recorded in the functional currency of the related entity using the exchange rates in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the closing exchange rates. Any resulting exchange difference is recognized in the consolidated statement of loss and comprehensive loss. Non-monetary assets and liabilities denominated in foreign currencies and measured at historical cost are translated using historical exchange rates, and those measured at fair value are translated using the exchange rate in effect at the date the fair value is determined. Expenses are translated using the average exchange rates for the period or the exchange rate at the date of the transaction for significant items.

	October 31, 2024	January 31, 2024
End of period exchange rate – USD	1.3916	1.3397
Period average exchange rate – USD	1.3755	1.3495

---

8

ChitogenX Inc.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

Statement of Compliance

These condensed interim consolidated financial statements of the Corporation have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). Therefore, these condensed interim consolidated financial statements comply with International Accounting Standard ("IAS") 34 "Interim Financial Reporting". IFRS included IFRSs, International Accounting Standards ("IAS"), and interpretations issued by the IFRS Interpretations Committee ("IFRIC"). The same accounting policies and methods of computation were followed in the preparation of these condensed interim consolidated financial statements as were followed in the preparation of the most recent annual audited consolidated financial statements. These condensed interim consolidated financial statements should be read in conjunction with the audited financial statements for fiscal year ended January 31, 2024.

3. Use of Estimates and Judgment

The preparation of these condensed interim consolidated financial statements in conformity with IFRS requires management to undertake several judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses and the disclosures. The actual results may differ from these judgements and estimates. These estimates and judgements are based on management's best knowledge of the events or circumstances and actions the Corporation may take in the future. The estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected.

Information about the significant judgements, estimates and assumptions that have the most significant effect on the recognition and measurement of assets, liabilities, income and expenses are discussed in the Corporation's 2024 annual audited consolidated financial statements and are still applicable for the first nine-month period ended October 31, 2024.

4. Accounts Payable and Accrued Liabilities

Balance as at	October 31, 2024	January 31, 2024
Trade accounts payable	2,622	2,191
Accrued liabilities	350	265
Total	2,972	2,456

5. Long-Term Loan

	Interest Rate	Maturity	October 31, 2024	January 31, 2024
Canada Emergency Business Account	5%	December 31, 2026	40	40
Loan	15%	March 6, 2026	75	-
Total			115	40

The Corporation secured a Canadian Emergency Business Account ("CEBA") loan from the Canadian Federal government in 2021, as financial support program during COVID. The loan was bearing 0% interest up to December 31, 2023. Effective January 19, 2024, an interest rate of 5% per annum will apply to any outstanding unpaid balance on the loan, payable or capitalized monthly. The CEBA loan will become due on December 31, 2026.

On March 6, 2024, the Corporation borrowed from an arms length party an amount of $75 bearing interest at 15% per annum, repayable on March 6, 2026.

For the nine months ended October 31, 2024, $13 of interest expense was recorded and includes $8 of Interest payable on loans in the condensed interim consolidated statement of financial position.

---

ChitogenX Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
In thousands of Canadian dollars except for share, unit, warrant and per share amounts

1. Convertible Debentures

a) Host instrument

	Nine months ended October 31, 2024	Year ended January 31, 2024
Opening balance	3,325	5,044
Additions	-	259
Conversion of debentures into units	-	(2,367)
Accretion expense	284	389
Total	3,609	3,325
Current portion	3,609	416
Non-current portion	-	2,909
Total	3,609	3,325

For the nine months ended October 31, 2024, $275 of interest expense was recorded and included in the $462 of Interest payable on debentures in the condensed interim consolidated statement of financial position.

During the year ended January 31, 2024, the Corporation completed a non-brokered private placement of units and settled certain debts and interests outstanding representing $2,367 and $221 respectively (see note 8).

On November 30, 2023, the Corporation capitalized $300 of accrued interests to the principal amount of the debenture with the same conditions. The carrying amount was recorded by using the discounted cash flows method assuming an effective interest of 24.6% determined on the estimated rate for a loan with similar terms from comparable companies. The Corporation utilized a Monte Carlo simulation model to determine the fair value of the conversion option. The conversion option of $18 is considered as an embedded derivative to be classified as a liability instrument because of its anti-dilution feature. The total value of the host instrument and conversion option is $277. The difference between the total value and the interests capitalized was recorded as a gain on debt issuance of $23.

Accretion charges, included in financing expense on the consolidated statement of loss and comprehensive loss, attributable to the convertible debentures for the year ended January 31, 2024, was $389. In addition, $405 of interest expense was recorded, of which $184 is included as Interest payable on debentures in the consolidated statement of financial position. Debentures totaling $2,367 were converted into common shares of the Corporation during the year ended January 31, 2024.

Convertible debentures totaling $3,300 of nominal value are secured by a $4,000 hypothec against the universality of the Corporation's present and future assets.

b) Embedded Derivative

	Nine months ended October 31, 2024	Year ended January 31, 2024
Opening balance	164	2,094
Additions	-	18
Fair Value adjustment	(164)	(1,948)
Total	-	164
Current portion	-	-
Non-current portion	-	164
Total	-	164

For the nine-month period ended October 31, 2024, the Corporation recorded a positive adjustment on revaluation of the debentures' conversion options or embedded derivative's fair value of $164 ($1,948 for the year ended January 31, 2024) resulting from the decrease in the Corporation's share price going down from $0.09/share on January 31, 2024 to $0.005/share as of October 31, 2024 (from $0.26/share as of January 31, 2023 to $0.09/share as of January 31, 2024).

---

10

ChitogenX Inc.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

7. Notes

	Nine months ended October 31, 2024	Year ended January 31, 2024
Opening Balance	510	480
Additions	-	30
Total	510	510
Current portion	510	180
Non-current portion	-	330
Total	510	510

For the nine months ended October 31, 2024, $39 of interest expense was recorded and included in the $73 of Interest payable on notes in the condensed interim consolidated statement of financial position.

On December 8, 2023, the Corporation agreed with certain investors to convert $30 of accrued interests into their principal totalling $300 and to amend certain terms (the "Amended Notes"). The Amended Notes bear interest at 12% and with a maturity date of February 1, 2025 and are convertible, at the option of the holder, should the Corporation complete a capital raise. The Amended Notes would then be convertible at the same terms and conditions of the capital raise. The remaining notes of $180 that were not part of the amendment are currently expired and still bear interest at 10%.

Accretion expense included in financing expense on the consolidated statement of loss and comprehensive loss, attributable to the Notes for the year ended January 31, 2024 was nil. In addition, $48 of accrued interest expense was recorded and included in the $33 of included in accrued interest on debentures and notes in the consolidated statement of financial position.

8. Share Capital and other equity instruments

(a) Share capital

The Authorized Share Capital is composed of

i. Unlimited number of Class "A" common shares, with no par value
ii. Unlimited number of Class "AA" preferred shares, non-voting, non-cumulative dividends at the discretion of the directors, no par value
iii. Unlimited number of Class "B" preferred shares, redeemable, non-voting, non-cumulative dividends of 1%, no par value

On May 5, 2023, the Corporation completed the first closing of a non-brokered private placement (the "Private Placement") of 25,708,988 units for $3,856, consisting of gross cash proceed of $1,267, consulting fees of $496, outstanding debentures and interest accrued of $2,093, settled through the issuance of units. Each Unit consists of one (1) Class "A" common share of the Company (each, a "share") and one share purchase warrant (each a "Warrant"). Each Warrant will entitle the holder to purchase one Share of the Corporation ("Warrant Share") at a price of $0.35 per Warrant Share for a period of 36 months from closing (the "Closing Date"), subject to adjustment in certain events. If, at any time following the Closing Date, the daily volume weighted average trading price of the Shares on the Canadian Securities Exchange is greater than $0.50 per Share for the preceding 10 consecutive trading days, the Corporation shall have the right to accelerate the expiry date of the Warrants to a date that is at least 30 days following the date of such notice to holders of Warrants.

On June 5, 2023, the Corporation completed the second closing of the Private Placement of 1,922,608 units for $288, consisting of gross cash proceed of $41 and outstanding debentures and interest accrued totalling $247, settled through the issuance of units.

On September 29, 2023, the Corporation completed the third closing of the Private Placement of 4,255,138 units for $639, consisting of gross cash proceed of $390 and outstanding debentures and interest accrued totalling $249, settled through the issuance of units.

The same conditions as the first closing applies to the second and third closing.

Shares and warrants were valued based on their relative fair values. The fair value of the shares was determined by the closing price on the date of the transaction and the fair value of the warrants was determined based on a Monte Carlo simulation model. The Private Placement's gross proceeds of $4,783 was allocated between common shares and warrants for $3,800 and $983 respectively. The remaining of the common shares issued during the year arise from a settlement with a supplier of $17 and RSUs issuance of $27.

---

11

ChitogenX Inc.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

(b) Share based compensation

The Corporation implemented an incentive stock option plan for directors, officers, employees and consultants to participate in the growth and development of the Corporation by providing such persons with the opportunity, through stock options, to purchase common shares of the Corporation. The stock option plan provides that the aggregate number of shares reserved for issuance, set aside and made available for issuance may not exceed 10% of the number of issued shares at the time the options are to be granted. The maximum number of options which may be granted to any one beneficiary shall not exceed 5% of the issued shares, calculated at the date the option is granted.

The stock option plan is administered by the Board of Directors of the Corporation and it has full and final authority with respect to the granting of all options thereunder. The exercise price of any options granted under the stock option plan shall be determined by the Board of Directors, subject to any applicable regulations or policies. The term and vesting of any options granted under the stock option plan shall be determined by the Board of Directors at the time of grant, and vary from one grant to another, however, subject to earlier termination in the event of dismissal for cause, termination other than for cause or in the event of death, the term of any options granted under the stock option plan may not exceed 8 years.

Options granted under the stock option plan are not to be transferable or assignable other than by will or other testamentary instrument or pursuant to the laws of succession to a qualified successor. In the event of death of an option holder, options granted under the stock option plan expire upon the earlier of the normal expiry date of the options or one year from the date of death of the option holder.

Subject to certain exceptions, if an employee, director, officer, consultant ceases to hold office or provide consulting services, options granted to such a holder under the stock option plan will expire 90 days after the holder ceases to hold office or such earlier date as the Board of Directors may decide at the date the options were granted. Notwithstanding the foregoing, in the event of a termination for cause of an option holder, all unexercised options held by such option holder shall immediately expire.

Following the resignation of the former Chief Executive Officer, on February 28, 2024, his unvested Options and RSUs were cancelled, resulting in a reversal of the cumulative stock-based compensation expense of $260 during the three months ended April 30, 2024.

During the nine-month period ended October 31, 2024 and 2023, the Corporation recorded compensation expense of $170 and $128, respectively, with corresponding credits to contributed surplus related to the stock option plan. The weighted average fair value of the options granted during the nine-month period ended October 31, 2024, estimated by using the Black-Scholes options pricing model, was $0.005. No option was granted during the nine-month period ended October 31, 2024.

The number of common shares issuable on exercise of the share-based payment transaction granted has varied as follows:

	Nine months ended October 31, 2024		Year ended January 31, 2024
	Number of Shares	Weighted Average Exercise Price	Number of Shares	Weighted Average Exercise Price
Options outstanding, beginning of period	3,821,750	0.27	4,776,000	0.32
Granted during the year	2,664,499	0.04	500,000	0.18
Options cancelled/expired	(2,250,000)	0.22	(1,454,250)	0.42
Options outstanding, end of period	4,236,249	0.15	3,821,750	0.27

All share-based payments will be settled in equity. The Corporation has no legal or contractual obligation to repurchase or settle the options in cash.

During the year ended January 31, 2025, the following options were granted:

Number	Notes	Date of grant	Expiry date	Exercise price	Fair value
2,664,499	(i)	June 28, 2024	June 28, 2032	0.05	0.02

(i) 33% vesting at the date of the grant, 33% vesting on January 1, 2024 and the balance on January 1, 2025.

---

12

ChitogenX Inc.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

(c) Restricted Stock Units

The following tables present in the number of outstanding RSUs has varied as follows:

	Nine months ended October 31, 2024	Year ended January 31, 2024
Units outstanding, beginning of period	418,553	551,938
Granted during the year	-	(133,385)
Cancelled during the period	(418,553)	-
Units outstanding, end of period	-	418,553

During the nine-month period ended October 31, 2024 and 2023, the Corporation recorded compensation expenses of $2 and $23, respectively, with corresponding credits to contributed surplus related to the restricted stock units.

(d) Deferred Stock Units

The Corporation implemented a DSU equity incentive plan to allow for certain discretionary bonuses and similar awards as an incentive and reward for selected directors, officers, employees and consultants ("Recipient"). DSUs are acquired at the date of grant and are redeemed by the issuance of shares at a date to be determined by the Recipient, provided that such date must occur between (a) the date of Separation from Service and (b) December 31 of the calendar year commencing after the Separation from Service. "Separation from Service" occurs upon (i) termination or resignation (ii) retirement or (iii) death, of the Recipient. Fair value of DSUs equals the market price of the shares on the date of grant.

The following tables present in the number of outstanding DSUs has varied as follows:

	Nine months ended October 31, 2024	Year ended January 31, 2024
Units outstanding, beginning of year	3,316,667	-
Granted during the year	1,330,252	3,316,667
Units outstanding, end of year	4,646,919	3,316,667

During the year ended January 31, 2025, the following DSUs were granted:

Number	Date of grant	Vesting terms	Fair value
1,330,252	June 28, 2024	100% on grant date	0.03

During the nine-month period ended October 31, 2024 and 2023, the Corporation recorded compensation expenses of $36 and nil, respectively, with corresponding credits to contributed surplus related to the deferred stock units.

(e) Warrants

The number of common shares issuable on exercise of full warrants varied as follows:

	Nine months ended October 31, 2024		Year ended January 31, 2024
	Number of Shares	Weighted Average Exercise Price	Number of Shares	Weighted Average Exercise Price
Balance, beginning of period	49,557,584	$0.36	34,325,312	$0.42
Granted during the period	-	-	31,886,734	$0.35
Expired during the period	(16,000,000)	$0.35	(16,654,462)	$0.48
Balance, end of period	33,557,584	$0.37	49,557,584	$0.36

---

ChitogenX Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
In thousands of Canadian dollars except for share, unit, warrant and per share amounts

1. Loss per share

Loss per share is calculated by dividing net loss by the weighted average number of commons shares outstanding during the period.

	Nine months ended,
	October 31, 2024	October 31, 2023
Net loss for the year	1,096	1,096
Weighted average number of common shares outstanding	83,129,520	69,654,683
Loss per share	0.01	0.02

For the nine-month periods ended October 31, 2024 and 2023, there were no dilutive items.

1. Supplemental Cash Flow Information

	Nine months ended,
	October 31, 2024	October 31, 2023
Net change in non-cash operating working capital items
Sales tax receivable and other receivables	4	8
Prepaid expenses and deposits	48	(49)
Investment tax credits receivable	83	58
Accounts payable and accrued liabilities	842	1,247
Total	977	1264

During the nine-month period ended October 31, 2024 and 2023, interests paid in cash were $2 and $311 respectively.

1. Research and Development Expenses

	Three months ended,		Nine months ended,
	October 31, 2024	October 31, 2023	October 31, 2024	October 31, 2023
Development costs	144	107	235	720
Patent costs	16	(10)	27	24
Depreciation – equipment	1	3	3	9
Amortization – intangible assets	8	8	24	24
	169	108	289	777
Investment tax credit	-	(34)	(2)	(90)
Government grants	-	-	(53)	-
Total	169	74	234	687

1. General and Administrative Expenses, by nature

	Three months ended,		Nine months ended,
	October 31, 2024	October 31, 2023	October 31, 2024	October 31, 2023
Office and administrative (i)	193	240	387	1,001
Professional and investor’s relations fees	-	14	58	182
Total	193	254	445	1,183

(i) Includes consulting fees paid to management in lieu of salary.

---

ChitogenX Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
In thousands of Canadian dollars except for share, unit, warrant and per share amounts

1. Financial Expenses

	Three months ended,		Nine months ended,
	October 31, 2024	October 31, 2023	October 31, 2024	October 31, 2023
Interest on debentures, notes and loans	109	97	327	351
Difference between effective interest and actual interest on debentures	106	78	284	308
Gain on foreign exchange	13	82	60	61
Total	228	257	671	720

1. Financial Instruments

As at October 31, 2024:	FVTPL	Amortized cost
Financial asset:
Cash	-	48
Financial liabilities:
Accounts payable and accrued liabilities	-	2,972
Accrued interest on debentures and notes	-	543
Notes	-	510
Long-term loan	-	115
Convertible debentures	-	3,609
Conversion options classified as liability	-	-

During the nine-month period ended October 31, 2024, the convertible debentures conversion options and the warrants issued as part of the notes in December 2021 are still being carried at fair value through profit and loss ("FVTPL"). During the year ended January 31, 2024, the convertible debentures conversion options were revaluated and reclassified from equity to liabilities and carried at FVTPL. The Corporation has no financial instruments carried at fair value through other comprehensive income ("FVTOCI") as at October 31, 2024 and January 31, 2024.

As at January 31, 2024:	FVTPL	Amortized cost
Financial asset:
Cash	-	35
Financial liabilities:
Accounts payable and accrued liabilities	-	2,456
Accrued interest on debentures and notes	-	217
Notes	-	510
Long-term loan	-	40
Convertible debentures	-	3,325
Conversion options classified as liability	164	-

As at October 31, 2024 and January 31, 2024, all financial instruments at fair value of the Corporation were considered a Level 2, except for the embedded derivative which is a Level 3. The Corporation's policy is to recognize transfers between the different hierarchy levels as of the date of the event or change in circumstances that caused the transfer. No financial instruments were transferred between levels 1, 2 and 3.

The carrying value of all of the Corporation's financial instruments approximates their fair value as at October 31, 2024 and January 31, 2024.

14

---

15

ChitogenX Inc.

Notes to Condensed Interim Consolidated Financial Statements (Unaudited)

In thousands of Canadian dollars except for share, unit, warrant and per share amounts

15. Financial Risk Factors

The Corporation's activities expose it to financial risks: market risk, more specifically cash flow and fair value interest rate risk, and liquidity risk. The Corporation's overall risk management program focuses on the unpredictability of the financial market and seeks to minimize potential adverse effects on its financial performance. The Corporation does not use derivative financial instruments to hedge these risks.

(a) Credit risk

Credit risk arises from cash deposited with a financial institution. The Corporation reduces this risk by dealing with creditworthy financial institutions.

(b) Market risk

(i) Cash flow and fair value interest rate risk

The Corporation is exposed to fair value interest rate risk due to its short-term debt and convertible debenture negotiated at a fixed rate.

(ii) Currency risk

The Corporation has cash and accounts payable and accrued liabilities denominated in USD and EUR. The Corporation does not hold financial derivatives to manage fluctuation in these risks.

The following presents the accounts that are exposed to foreign exchange volatility, as at:

	October 31, 2024		January 31, 2024
	Foreign Currency	CAD equivalent	Foreign Currency	CAD equivalent
Cash – USD	0	0	11	14
Accounts payable and accrued liabilities – USD	1,272	1,769	1,172	1,570
Accounts payable and accrued liabilities – EUR	10	15	10	15

A plus or minus 5% variation in exchange rate, all else being held equal, would result in a foreign exchange gain or loss of $89 for the nine-month period ended October 31, 2024 ($80 for the year ended January 31, 2024).

(c) Liquidity risk

Liquidity risk is the risk that the Corporation will not be able to meet its obligations as they fall due. The following are the contractual maturities of financial liabilities calculated based on contractual undiscounted cash flows including interest coupons (if applicable):

As at October 31, 2024:	Carrying value	Contractual cash flows	Less than 12 months	Between 12 months and 24 months
Financial liabilities
Accounts payable and accrued liabilities	2,972	2,972	2,972	-
Accrued interest on debentures and notes	543	543	543	-
Long-term loan	115	134	13	121
Convertible debentures	3,609	3,842	3,842	-
Notes	510	568	568	-
Total	7,749	8,059	7,938	121

---

ChitogenX Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
In thousands of Canadian dollars except for share, unit, warrant and per share amounts

As at January 31, 2024:	Carrying value	Contractual cash flows	Less than 12 months	Greater than 12 months
Financial liabilities
Accounts payable and accrued liabilities	2,456	2,456	2,456	-
Accrued interest on debentures and notes	217	217	217	-
Long-term loan	40	40	40	-
Convertible debentures	3,325	4,272	914	3,358
Notes	510	602	268	333
Total	6,548	7,587	3,896	3,691

(d) Capital risk management

The Corporation's objective when managing capital is to maintain its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. The Corporation's definition of capital includes equity, comprised of issued common shares, warrants and contributed surplus. The Corporation's primary objective with respect to its capital management is to ensure that it has enough financial resources to meet its financial obligations. To secure the additional capital necessary to carry out these plans, the Corporation will attempt to raise additional funds through the issuance of debt, equity or by securing funds from strategic partners. The Corporation is not subject to any externally imposed capital requirements. The Corporation's overall strategy with respect to capital risk management remains unchanged since the year ended January 31, 2024.

1. Related Party Transactions

The following table presents the related party transactions presented in the condensed interim consolidated statement of loss and comprehensive for the three-months period ended:

	Three months ended		Nine months ended
	October 31, 2024	October 31, 2023	October 31, 2024	October 31, 2023
Transactions with key management and members of the Board of Directors:
Share-based compensation	20	29	(171)	127
Consulting fees	30	97	134	665
Interest earned on debentures	9	10	26	72
Interest earned on debentures by Manitex, a shareholder of the Corporation:	-	-	-	58
R&D expenses incurred with École Polytechnique, a partner of Polyvalor	-	67	-	311

The following table presents the related party transactions presented in the condensed interim consolidated statement of financial position as at:

	October 31, 2024	January 31, 2024
Key management and directors:
Accounts payable and accrued liabilities	982	793
Debentures and notes	155	155
Conversion options classified as embedded derivatives	-	9
Accrued interest on debentures and notes	53	42

---

ChitogenX Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
In thousands of Canadian dollars except for share, unit, warrant and per share amounts

1. Commitments

a) Polytechnique contract / NSERC

In June 2015, the Corporation entered into collaborative research agreement with École Polytechnique ("Poly") which stipulated that when the Corporation's products are commercialized, it must make non-refundable payments to Polyvalor, a shareholder of the Corporation, equal to 1.5% of net sales. The agreement has been extended until August 14, 2024 and subsequently replaced by the NSERC funding.

On February 16, 2023, the Corporation secured a $2,604 million 4-year grant from The Natural Sciences and Engineering Research Council of Canada ("NSERC") and Prima Québec in partnership with Poly. The 4-year grant will be received and used on a linear basis to advance the scientific development, expand the scope of indications, develop new biomaterials for regenerative medicine and accelerate the commercial readiness of the Company's flagship ORTHO-R technology platform. The Corporation's contribution to the NSERC Project totals $940 over 4 years but eliminates any contractual obligations under the Poly contract.

b) Platelet-rich plasma Project

In April 2021, the Corporation entered into a collaborative research agreement with École Polytechnique and two industrial partners to delineate the Platelet-rich plasma (PRP) components, the distinct impact of each component and their collective action towards tissue repair. The Corporation committed to contribution to the PRP project totals $240 over 2 years including of in-kind contributions. During the year ended January 31, 2024, the project was extended to March 2024. The Corporation received a $56 grant during the three months ended April 30, 2024.

c) Axelys Project

In May 2022, the Corporation entered into a research and financing agreement with Axelys and École Polytechnique whereby Axelys, a non-for-profit organization, agreed to grant a sum of $524 to advance the development of its second technology platform indication, ORTHO-M, for meniscus repair (the "Axelys Project"). The Corporation's contribution to the Axelys Project totals $139 over 2 years, of which $111 was disbursed as of April 30 2024 and January 31, 2024.

17