CHITOGENX INC — Interim / Quarterly Report 2025

Jul 2, 2024

ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024

(In thousands of Canadian dollars, except for units, share and per share amounts)

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

This Management’s Discussion and Analysis (“MD&A”) for ChitogenX Inc. (the “Corporation” or “ChitogenX”) provides an overview of the Corporation’s operations, performance and financial results for the first quarter and fiscal year 2025 ended on April 30, 2024, and compares those of the same period for fiscal quarter ended April 30, 2023. This MD&A is the responsibility of management and has been reviewed and approved by its Board of Directors. The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the MD&A. The Board of Directors carries out this responsibility principally through its Audit Committee. The Audit Committee is appointed by the Board of Directors and is comprised of financially literate directors. This report was reviewed by the Corporation’s Audit Committee and approved by ChitogenX’ Board of Directors on June 28, 2024.

This document should be read in conjunction with the unaudited condensed interim consolidated financial statements and notes thereto for fiscal year ended on April 30, 2024, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Further information about ChitogenX, is available online on SEDAR at www.sedarplus.ca.

Unless otherwise noted, all amounts are presented in thousands of Canadian dollars, except for share and per share amounts.

Going concern

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 three-month period ended April 30, 2024, the Corporation incurred a net loss of $157 and used cash in operations of $73. As at April 30, 2024, the Corporation had a negative working capital balance of $6,696.

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.

Non-IFRS Financial Measures

This MD&A refers to certain non-IFRS measures. Management uses these non-IFRS financial measures for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the results of ongoing operations and in analyzing our business performance and trends. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use a non-IFRS measure, “EBITDA Loss”, to provide supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. EBITDA Loss is defined as net loss before (i) provision for (recovery of) income taxes; (ii) interest (income) expense and other financing costs; (iii) depreciation; and (iv) amortization of intangible assets.

Cautionary note regarding forward-looking statements

This MD&A may contain some forward-looking information as defined under applicable Canadian securities laws. Forward looking information can generally be identified using forward-looking terminology such as “may”, “anticipate”, “expect”, “intend”, “estimate”, “continue” or similar terminology. Forward looking information is subject to various known and unknown risks and uncertainties, many of which are beyond the ability of the Corporation to control or predict, that may cause the Corporation’s actual results or performance to be materially different from actual results and are developed based on assumptions about such risks and other factors set out herein.

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024 (In thousands of Canadian dollars, except for units, share and per share amounts)

GLOSSARY TERMS

Calendar & Financial CDU Convertible Debenture Units EBITDA (L) EBITDA Loss FVA Fair Value Adjustment FY Fiscal Year G&A General and Administrative IR Investors Relations ITC Investment tax credits NCDUs Non-Convertible Debenture Units Q1-25 First quarter FY-25 Q4-24 Fourth Quarter FY-24 Q3-24 Third quarter FY-24 Q2-24 Second quarter FY-24 Q1-24 First quarter FY-24 Q4-24 Fourth quarter FY-23 Q3-23 Third quarter FY-23 Q2-23 Second quarter FY-23 SR&ED Scientific Research and Experimental Development Expenses R&D Research and Development YTD Year to date YE Year-end WA Weighted Average W/C Working Capital, defined as short-term assets less short-term liabilities

Corporate & Operations API Active Pharmaceutical Ingredient CEBA Canadian Emergency Business Assistance CHGX ChitogenX Inc. CMC Chemistry Manufacturing and Controls cGMP current Good Manufacturing Practice CMO Contract Manufacturing Organization CSE Canadian Securities Exchange FDA US Food and Drug Administration IND Investigational New Drug application with the FDA MCRA MCRA, LLC, a US based orthopedic specialty CRO MRI Magnetic Resonance Imaging MTA Material Transfer Agreement NSERC Natural Sciences and Engineering Research Council of Canada ORTHO-R Proprietary biopolymer for Rotator cuff repair OTCQB US over-the-counter venture trading market Polytechnique Ecole Polytechnique de Montreal PRP Platelet-rich plasma Pre-RFD Pre-Request for Designation

OVERVIEW OF THE BUSINESS AND BUSINESS STRATEGY

ChitogenX is a clinical stage biotech company incorporated under the Canada Business Corporations Act. 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, OR4102023 Inc. has been incorporated on April 20, 2022 and is located at 12 Penns Trail in Newtown, Pennsylvania, USA. The Corporation’s shares are publicly traded on the CSE under the symbol “ CHGX ”, as well as on the United States OTCQB market under the symbol “ CHNXF ”.

Regenerative Medicine Overview

The concept of regenerative medicine is to provide solutions to return anatomy and physiology to a more normal appearance and behaviour. Although there are many definitions, of what constitutes regenerative medicine, the following is succinct:

Regenerative Medicine is an emerging interdisciplinary field of research and clinical applications focused on the repair, replacement or regeneration of cells, tissues or organs to restore impaired function resulting from any cause, including congenital defects, disease, trauma and aging. It uses a combination of several technological approaches that moves it beyond traditional transplantation and replacement therapies. These approaches may include, but are not limited to, the use of soluble molecules, gene therapy, stem cell transplantation, tissue engineering and the reprogramming of cell and tissue types.

Combinations of these approaches can 1) improve the natural healing process in areas of the body where it is most needed, 2) take over the function of a permanently damaged organ, 3) heal or repair a damaged organ or tissue, or 4) deliver healing “accelerators” chemicals that might inspire repair to specific damaged areas of the body.

Regenerative medicine is a relatively new and rapidly expanding field that brings together experts in biology, chemistry, materials and computer science, engineering, genetics, robotics, and other fields to find solutions to some of the most challenging medical problems faced by humankind. We believe ChitogenX is at the forefront of playing a critical role in enabling this rapidly expanding field of medicine.

The Global Regenerative Medicine Market was estimated at $US9B market in 2021 and is projected to grow at 22.8% CAGR through 2030. It is one of the most dynamic markets in medicine today. The musculoskeletal and wound healing segment accounted for about 60% share of the regenerative medicine market in 2021. Biological, cell and pharmaceutical therapies are used in the treatment of musculoskeletal damage to cartilage, tendon, and ligaments as well as skin and organ repair disease or damage. ChitogenX is well positioned to become the preferred regenerative medicine delivery system for this rapidly growing part of the industry.[1]

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024 (In thousands of Canadian dollars, except for units, share and per share amounts)

Regenerative medicine is applicable in cardiovascular, oncology, dermatology, musculoskeletal, wound healing, ophthalmology, neurology, and others. The musculoskeletal and wound healing application segment accounted for over 60% share of the market in 2021 and are expected to grow at a CAGR of 30%+during the forecast period (2023-2030) and is the are of focus for ChitogenX.

¹ Source: Precedence Research, Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2022 – 2030, published Jan 2022

Problem & Solution

The delivery of a tissue scaffold, cellular or molecular therapy or any combination thereof makes a fundamental assumption; that the substance(s) will stay where they were placed and function as desired; if they wander off-target, the desired enhanced healing might not occur and furthermore, the potential exists for off-target effects.

Providing a reliable, biologically safe delivery mechanism that would allow the targeted body system to receive the regenerative material to aid in body system repair is, therefore, a mission-critical goal and a problem that requires solving for the regenerative medicine market to meet its projected growth estimates.

ChitogenX has acquired such a solution from the Polytechnique at the University of Montreal. Our patented muco-adhesive CHITOSAN based scaffold is a versatile biopolymer scaffold that can help various regenerative medicine treatments to adhere to the targeted surgical site or wound.

PRODUCT POSITIONING:

For the regenerative medicine market ChitogenX’s chitosan-based biopolymer is a safe and reliable regenerative medicine delivery mechanism to targeted body systems to aid in tissue and organ repair.

CHITOSAN-BASED BIOPOLYMER: Key points of differentiation

Our Chitosan-based Biopolymer is formulated and designed to be combined with products to improve the healing of body tissues.

Our Chitosan-based Biopolymer is a patent-protected freeze-dried, sticky biopolymer.

Unlike other natural biopolymer matrix such as Hyaluronic Acid (HA) or Collagen, the chitosan natural biopolymer molecules are positively charged and therefore electrostatically stick to the negatively charged soft tissues of the human body (skin, tendons, ligaments, meniscus). Our Chitosan-based Biopolymer’s muco-adhesive feature offer the unique benefit of significantly increasing the in-situ residency time of cell, pharmaceutical, or biologic implants so that they may deliver their regenerative effects.

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BUSINESS STRATEGY

1. Prioritize activities to secure commercial status and partnerships

Considering the industry significant unmet needs and interest expressed by several regenerative medicine companies, we intend to prioritize activities that will lead to faster commercial status, enabling us to leverage on our ability to provide potential licensees with a reliable source of cGMP sterile Chitosan-Based Polymer.

2. Leverage non-dilutive grants secured with Polytechnique’s partnership to drive proof of concept in multiple indications for our Chitosan-Based Biopolymer

ChitogenX has and can continue to secure non-dilutive research grants through its partnership with Polytechnique.

Meniscus

A first $0.5 million grant has been secured to test the efficacy of our Chitosan-based Biopolymer/PRP Drug-Biologic Implant formulation, for meniscus repair. In a 22 large animal study, the Corporation successfully demonstrated protection from joint degeneration post meniscal repair surgery. The results showed that the ORTHO-R treated group retained better structure and much milder form of OA and, in some

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024 (In thousands of Canadian dollars, except for units, share and per share amounts)

cases, appeared near normal. This study provides the first evidence that treatment with ChitogenX’ proprietary chitosan-based biopolymer + PRP prevents structural changes to radially incised and sutured menisci in a large animal model, and most likely contributed to protecting the joints against OA development. Further proof of concept application was also successfully completed on soft tissue where the improved adherence of PRP was demonstrated.

Tissue Healing

In February 2023, ChitogenX and its scientific partner Polytechnique secured a $3.5 million grant (inclusive of ChitogenX’ $0.9 million contribution) from NSERC and Prima Québec. The 4-year grant will be used to advance scientific development, expand the scope of indications, develop new biomaterials for regenerative medicine and accelerate the commercial readiness of the Corporation’s flagship CBB technology platform.

3. Leverage IP portfolio and proof of concept data to attract partnership agreements.

We intend to leverage the various positive proof of concept data generated to date to capitalize on the growth potential of the regenerative medicine market by entering into partnerships. We are currently evaluating opportunities for fast-track regulatory programs with potential 510(k) pre-market submissions in the US and commercial readiness in other jurisdictions.

We expect to soon announce our plans to take full advantage of the broad clinical and commercial opportunities available to the company.

4. Leverage safety data from the Rotator Cuff Tear Repair U.S. phase I/II clinical trial

. ChitogenX concluded enrolment of its U.S. Phase I/II rotator cuff tear repair clinical trial entitled: A Blinded, Randomized Controlled Study Investigating the Safety of Ortho-R® for Rotator Cuff Repair Compared with Standard of Care: ORT-2020-01 (Ortho-R® Study) . Study results are expected during the fall of 2024. The Company, and its clinical and regulatory advisors believe that concluding subject enrollment 20 subjects allows for key study objectives to be met.

ORTHO-R is formulated and designed to improve the healing of body tissues beginning with sports and occupation related injuries to tendons, meniscus, and ligaments.

ORTHO-R is a patent-protected freeze-dried formulation of a biopolymer, a lyo-protectant and a clot activator. ORTHOR is solubilized in platelet-rich plasma (“PRP”) to form an injectable combination of the chitosan scaffold and the PRP-biologic, and an FDA designated bioactive implant that coagulate and stick to tissue after implantation.

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In vitro testing has allowed the Corporation to identify specific formulations that meet the following criteria for optimal commercial products:

• (i) rapid and complete solubilization in PRP;

• (ii) biopolymer-PRP mixtures having mucoadhesive paste-like handling properties desired by surgeons;

• (iii) biopolymer-PRP mixtures that coagulate rapidly to form soft tissue-adherent Drug-Biologics hybrid implants;

• (iv) biopolymer-PRP biologics implants that are mechanically stable and resist platelet-mediated clot retraction; and

• (v) dispersion of the biopolymer in the implants that is homogenous for optimal biodegradability.

The polymer-biologics hybrid mix, designated as drug/biologic combination product by the FDA, but may be considered a medical device by other regulatory jurisdictions, can be directly applied at the site of injury by a surgeon during a routine operative procedure without significantly extending the time of surgery and without further intervention.

The use of ORTHO-R as an adjunct to standard of care anchoring/suturing techniques produced promising histological findings in small and large animal experimental models, which is hoped to translate to faster and superior rotator cuff tear repair in humans. No adverse events were found in any of the above-mentioned animal studies nor in the 20 patients of the phase I/II ongoing clinical trial, which suggests a high level of safety.

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024 (In thousands of Canadian dollars, except for units, share and per share amounts)

ChitogenX Overall Value Proposition

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• Chitosan-based biopolymer compatible with cells, PRP, biologics

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• In situ gelling provides mechanical stability, extends residence time

• GMP compliant manufacturing supply

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• Chemistry, Manufacturing and Controls (CMC) reviewed through IND

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• Low cost of goods (COGS)

• Lyophilized, permitting room temperature storage

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• Shelf-stable for up to 3 years

• ✓ • Proof of concept data of improved tissue regeneration

• Skin tendons meniscus cartilage

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Q1-25 CORPORATE HIGHLIGHTS (January 31 to April 30, 2024)

• On February 28, 2024, the Corporation announced that Philippe Deschamps, Chief Executive Officer, has decided to step down as CEO and has resigned from the Board of Directors, effective February 28, 2024. Mr. Pierre Laurin, previously Chairman of the Board of Directors, is now acting as Chaiman and interim CEO. Unvested Options and RSUs were cancelled on February 28, 2024, resulting in a reduction of the stock-based compensation expense of $253 during the first quarter of fiscal 2025.

• On March 6, 2024, the Corporation secured a $75 unsecured note from a shareholder, bearing interest at 15% per annum and repayable on March 6, 2026.

• On March 27, 2024, the Corporation received a grant of $53 which will be recognized as a reduction of the expenses on a systematic basis over the period in which the related development costs are incurred. The remaining balance of the grant of $22 will be received during fiscal year 2025.

SUBSEQUENT EVENTS

• On June 28, 2024, the Corporation granted an aggregate of 1,330,252 DSUs and 2,664,498 to Directors and Officers of the Company, in lieu of cash remuneration.

SELECTED FINANCIAL DATA

The following table sets forth financial information relating to the periods indicated and should be read in conjunction with the April 30, 2024 unaudited interim condensed consolidated financial statements.

	Q1-25 Q1-24 Change $ $ $ %
Expenses R&D G&A Share-based compensation Financial FVA embedded derivative FVA on warrants	30 418 (388) -93% 150 584 (434) -74% (185) 56 (241) -430% 229 339 (110) -32%
	224 1 397 (1 173) -84% (67) (1 443) 1 376 -95% - (51) 51 -100%
Net(Loss) and Comprehensive loss	(157) 97 (254) -262%
(Loss) per share WA # of shares outstanding Basic and diluted lossper share	83 129 520 51 038 776 32 090 744 63% 0.00 0.00 0.00 0%

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024

(In thousands of Canadian dollars, except for units, share and per share amounts)

EBITDA(L) Reconciliation (See “Management’s Responsibility for Financial Reporting” – “Non-IFRS Financial Measures”) The following table provides a reconciliation of net loss to EBITDA(Loss) for the Q1-25 period as compared to the prior year.

	Q1-25	Q1-24	Change
	$	$	$	%
Net loss	(157)	97	(254)	-262%
Add (deduct)
Financial	229	339	(110)	-32%
Fair Value adjustment embedded derivative	(67)	(1 443)	1 376	-95%
Fair Value adjustment on warrants	-	(51)	51	-100%
Depreciation – equipment	1	3	(2)	-67%
Amortization – intangible assets	8	8	-	0%
EBITDA(L)	14	(1 047)	1 061	-101%

Selected items	Q1-25 vs Q1-24
Revenues	• CHITOGENX is a clinical stage company. No revenues weregenerated duringeach ofQ1-25 andQ1-24
R&D expenses	• R&D expenses include internal and external expenses. Internal expenses represent mostly salaries and consulting fees for our staff. External expenses include all development costs related to work performed under our Collaborative R&D contract with Polytechnique as well as specific manufacturing activities, regulatory, pre-clinical and clinical work to advance our pipeline. R&D expenses are presented net of R&D tax credits (ITCs) recoverable from the provincial government for Scientific Research and Experimental Development (SR&ED) programs, and net of government grants. • R&D expenses are alsopresented net ofgrants which are amortized over their respective term.
	• R&D expenses for Q1-25 was significantly lower than Q1-24. • R&D expenses decreased due to the timing and nature of R&D activities, the conclusion of enrolment for the Corporation’s Phase I/II rotator cuff trial, as well as the use of R&D grants which serve to fund a large portion of our R&D activities since the$2.6 million INSERC R&Dgrant was secured inQ1-24.
G&A expenses	• G&A expenses include salaries and consulting fees paid to non-R&D staff, professional fees, conferences, travel expenses,as well as investors relation activities.
	• G&A spending in Q1-25 was down compared to Q1-24 at $0.2 million compared to $0.4 million. • G&A in Q1-24 included a special charge for salary deferral, as management opted to defer salaries for preservingcash to support R&D operations.
Share-based compensation (SBC)	• Represents the expense related to issuing stock options to staff, consultants and board members. Variances for the comparative quarters include non-recurrent grant to a new Board member as well contractual vesting for members of management on options already outstanding. • SBC expenses in Q1-25 p 215% included a recovery of $260 due to the cancellation of non-vested options held bytheprior CEO followinghis departure in February2024.
Financial expenses	• Financial expenses include interest on loans, notes and convertible debentures, as well as effective interest on debentures and foreign exchangegain or loss.
	• Financial expenses were down 32% in Q1-25 compared to Q1-24. The reduction was mainly due to the conversion of $2.3 million of CDUs into the May/June 2023 Private Placement.
Fair Value Adjustment (“FVA”) of Embedded Derivative	• During the Q1-25 and Q1-24 periods, the change in the Fair Value of the Conversion Option of the convertible debentures led to a Fair Value Adjustment (“FVA”) of the conversion option representing a $67 million and $1.4 million gain.
Fair Value Adjustment (“Fair Value Adjustment”) on warrants	• The terms of the warrants issued as part of the December 2022 Bridge financing led to the creation of a warrant liability. • During each of Q1-25 and Q1-24, the revaluations of the Warrants’ fair value were nominal.
Net loss for the period	• Due to the significant reduction in expenses, the reversal of SBC as well as the gain on re-evaluating the Fair Value of the Conversion Option on the debentures, the Corporation net loss was nominal during Q1-25, while the Corporation realized a gain in Q1-24 due the large gain on the Fair Value Adjustment of the conversion option on the debentures.

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024 (In thousands of Canadian dollars, except for units, share and per share amounts)

• EBITDA (L) • After eliminating the impact of the financial expenses, as well as depreciation and amortization, but also after eliminating the impact of the combined gain on revaluation of the CDU embedded derivative and warrant liability, the Corporation generated a nominal EBITDA gain of $14 for Q1-24 compared to a $1.1 million EBITDA loss in Q1-24 as the Corporation was still enrolling patients in its Phase I/II Ortho-R rotator cuff repair trial.

SELECTED BALANCE SHEET HIGHLIGHTS

The following table sets forth the financial information related to the Corporation’s consolidated statements of financial position for the years indicated and should be read in conjunction with the audited consolidated financial statements for fiscal quarter ended April 30, 2024.

As at, April 30, 2024 January 31, 2024 Change $ $ $ %	As at, April 30, 2024 January 31, 2024 Change $ $ $ %
Cash 37 35 2 6% Prepaids and deposits 76 110 -34 -31% Intangible Assets 259 267 -8 -3% Total assets 500 534 -34 -6%
Trade accounts payable and accrued liabilities 2 567 2 456 111 5% Notes (Short-term) 510 180 330 183% Convertible Debentures - Short term 3 408 416 2 992 719% Convertible Debentures - Long term - 2 909 -2 909 -100% Total liabilities 7 020 6 712 308 5%
Common shares 14 201 14 201 0 0% Warrants 1 705 2 325 -620 -27% Contributed surplus 4 442 4 007 435 11% Deficit (26 868) (26 711) -157 1%
Selected items	Q1-25 vs YE-24
Cash	• Cash at the end ofQ1-25 was$37 compared to$35 at the start of the fiscalyear,a nominal$2 variance.
Total Assets	• Total assets decreased slightly between YE-24 and Q1-25 with a $34 representing mainly a reduction in prepaids as the Corporation is reducingits overall spending.
Trade AP and accrued liabilities	• Trade accounts payables and accrued liabilities increased slightly by 0.1 million during Q1-25. The main increase compared to YE-24 relates to an increase in unpaid amounts due to management as no salaries/fees were paid inQ1-25.
Notes	• Short-term Notes have increased to take into consideration the $330 of notes previously presented as long- term.
Convertible debentures (Short-term)	• During FY-20 and FY-21, the Corporation issued $3.2 million of CDUs to fund its operations. • The amount increased by $3.0 Million compared to YE-24 as the debentures are now presented as short-term due to their maturity on February 1, 2025.
Convertible debentures (Long-term)	• Now presented as short-term (see above)
Total Liabilities	• Total liabilities increased in Q1-25 due to management salaries being accrued as opposed to paid, and interest on financial instruments are also being accrued as opposed to being paid to enable the Corporation to operate with nominal liquidityrequirements while it is implementingits corporate/operationalplan.
Common Shares	• No change since YE-24
Warrants	• Warrants decreased inQ1-25 compared to YE-24 as 16 million warrants expired duringtheperiod.
Contributed Surplus	• The contributed surplus increased by $0.4 million due to the expiry of warrants net of SBC expenses.
Deficit	• The increase reflects theperformance of the Corporation duringFY-24.(See “Statement of Loss” commentaries)

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024

(In thousands of Canadian dollars, except for units, share and per share amounts)

SELECTED QUARTERLY FINANCIAL INFORMATION

The following table sets out the Corporation’s selected unaudited quarterly financial information for the eight quarters ended April 30, 2024. This information is derived from unaudited quarterly financial statements prepared by management in accordance with IFRS. The following quarterly information is presented on the same basis as the audited consolidated financial statements and should be read in conjunction with those statements and their accompanying notes.

	Q1-25 Q4-24 Q3-24 Q2-24	Q1-24 Q4-23	Q3-23 Q2-23
R&D Expenses (Net) G&A expenses Share-based compensation Financial expenses FVA embedded derivative FVA on warrants	30 290 74 195	418 561 584 509 56 92 339 1 070 (1 443) - (51) (72)	567 444 523 484 95 162 373 349 277 78) 22 2
	150 157 254 345
	(185) 290 29 44
	229 98 257 124
	(67) (377) 171 (299)
	- - (1) -
Net loss	(157) (458) (784) (409)	97 (2 160)	(1 857) (1 363)
EBITDA(Loss)	14 (728) (346) (573)	(1 047) (1 149)	(1 171) (1 076)

(See “Management’s Responsibility for Financial Reporting” – “Non-IFRS Financial Measures”)

Notes	Valuable information
R&D expenses	• R&D expenses fluctuate based on the timing of R&D activities. R&D expenses in Q1-25 are down compared to prior year and show the impact of the reduction of R&D activities which followed the conclusion of enrollment into the Phase I/II rotator cuff study,as well as the use of R&Dgrants which serve to fund a largeportion of our R&D activities.
G&A expenses	• G&A expenses have fluctuated due to the impact of senior management changes that took place during the various periods. G&A expenses were the same as the prior quarter but decreased after Q3-24 due to reduction of compensation to senior management.
Share-Based Compensation	• Share-based compensation fluctuates as a results of staff changes, and due to the timing of expense recognition associated with the vesting of the options issued. The increase in Q4-23 represented new incentives to management to compensate no salaries being paid. The reversal in Q1-25 represented the impact of cancelling non-vested options to the departingCEO.
Financial expenses	• Financial expenses have increased over the last year following the conversion of debentures into shares. The Q4-24 expenses were positively impacted by a favorable FX gain as well as a gain on issuance of debt. Financial expenses increased by $0.7 million between Q3-23 and Q4-23 due to the non-recurrent loss on extinguishment of the NCDU debt.
FVA of embedded derivative	• The changes to the terms of the conversion price of convertible debentures as well as the variation in share price during the last quarters has led to quarterly adjustments to the FVCO of the debentures representing respective decreases(gains)or increases(losses)since the embedded derivative were created.
FVA on warrants	• There have been nominal quarterly variations (adjustments) to the fair value of the warrants issued as part of the December 2021 bridge financing. Warrants have expired inQ1-24.
Net loss	• Over the last 2 years, fluctuations in net income or loss have been mainly impacted by the FVA of the derivative liability related to the CDUs as well as to a lesser extent to the fluctuations of the R&D, G&A and SBC expenses. • Net income inQ1-24 is due to the$1.4 millionpositive FVA of the derivative liability.
EBITDA (Loss)	• EBITDA (Loss) (See “Management’s Responsibility for Financial Reporting” – “Non-IFRS Financial Measures”) eliminates the impact of the FVA on the CDU, NCDU, ITC and other financings which reflect the Corporation’s financing strategy adopted to attract the required capital to fund its operations. • After eliminating such expenses, the EBITDA gain in Q1-25 includes the positive impact of reduction in overall spending as well as the SBC expense reversal commented earlier. Fluctuations over the prior quarter were directly related to variations in R&D and G&A spendings described above.

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024 (In thousands of Canadian dollars, except for units, share and per share amounts)

LIQUIDITIES AND CAPITAL RESSOURCES

			Change
For the 3-monthperiod ended on,	30-Apr-24	30-Apr-23	$	%
Operating activities:
Net loss from operations	(157)	97	(254)	-262%
Other items not affecting cash	(160)	(1 249)	1 089	-87%
Changes in non-cash workingcapital	244	953	(709)	-74%
Cash used in operations	(73)	(199)	126	-63%
Investing activities:
Cash used in investingactivities	-	-	-	100%
Financing activities:
Cashprovided byfinancingactivities	75	517	(442)	-85%
Cash, beginning of period	35	108	(73)	-68%
(Decrease) increase in cash	2	318	(316)	-99%
Cash, end ofperiod	37	426	(389)	-91%

Selected items	Q1-25 vs Q1-24
Cash used in operations	• Cash used in operations represents the cash flows from operations, excluding income and expenses not affectingcashplus changes in non-cash workingcapital items.
	• Cash used in operations was $0.1 million for Q1-25 indicating a reduction in spending and accrual of salaries and interest to help finance operations.
Cash used in investing activities	• No investments during FY-24, and FY-23.
Cash provided by financing activities	• The Corporation secured a 15%, $75 note during the quarter. No warrants were issued with that Note. In Q1- 25 the Corporation raised $517 as part of its April 2023 PIPE.
Cash, End of the year	• The Corporation ended Q1-25 with cash of $37 compared to $0.4 million at the end of Q1-24. The Q1-24 balance was impacted by the closing of the April 2024 PIPE.

Cash, and Working Capital

As at,	April 30,	2024	January 31,	2024	Change
		$		$	$	%
Cash		37		35	2	6%
Total current assets		209		234	(25)	-11%
Accounts payables and accrued liabilities	2 567		2 456		111	5%
Convertible debentures - Short term	3 408			416	2 992	719%
Convertible unit Bridge		510		180	330	100%
Current portion of long-term loan		-		-	-	100%
Warrants presented as a liability		-		-	-	100%
Total current liabilities	6 905		3 269		3 636	111%
WorkingCapital	(6 696)		(3 035)		(3 661)	121%

Cash at the end of Q1-25 was $37, representing a nominal $2 variance compared to YE-24. Cash raised during FY-25 was used to fund operations. The working capital deficit has increased due to the convertible debentures maturing February 1, 25 now presented as shortterm. Working Capital at the end of Q1-25 showed a $6.7 million deficit compared to a $3,0 million deficit as at YE-24. We have initiated discussion with holders of the convertible debentures and are assessing options to address these maturities.

During prior periods, the Corporation has raised the necessary capital to support its operations. However, there is no assurance that the Corporation will be able to secure the necessary financing to fund it various development programs. Management has continued to

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ChitogenX Inc.

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Management’s Discussion and Analysis for the three-month period ended April 30, 2024 (In thousands of Canadian dollars, except for units, share and per share amounts)

implement IR and financing initiatives to attract the required capital to fund its operations and deliver R&D and corporate milestones over the next fiscal year. (See “Overview of the Business” and “Going concern”).

The Corporation’s use of available funds over the coming year is of utmost concern to the Board. Since the extent and timing of warrant exercise as a source of financing are uncertain, management continues to look for alternative sources of financing to secure the required capital necessary to fund its operations and development projects. Management’s focus is on securing equity-based financings from Canadian and US based institutional and/or accredited investors. The Corporation is also actively promoting its technologies to strategic partners.

Discussion of operating cash requirements

All programs in the Corporation’s current portfolio will require additional financial commitments to increase their market value (through, for example, clinical trials) or to attract a strategic partner.

Soft Tissue / Rotator Cuff Repair program

After having concluded enrolment on the Phase I/II rotator cuff program, we estimate that $0.5 million will be required to complete the study and position ChitogenX for Phase II readiness on this program.

Burn healing and Skin Repair program.

In order to leverage the recently announced notice of allowance providing protection for the use of our proprietary chitosan scaffold on its own and in combination with a wide variety of therapeutic agents, ChitogenX has launched 2 new R&D programs focusing on burn healing and skin repair. Development of the new programs will be covered by the 3-year NSERC grant and will provide for accelerated timelines compared to soft-tissue program development.

We wish to make best use of our financial resources and leverage out strong intellectual properties. The notice of allowance on new patents (“See Q4-highlights”) provides for:

• proprietary chitosan scaffold on its own and in combination with a wide variety of therapeutic agents,

• protects for the use of ChitogenX’ proprietary scaffold in combination with biologics in addition to existing PRP and blood products applications,

• provides huge boost to the Company’s attractiveness as a regenerative medicine with a proprietary scaffold and positioned the Corporation to leverage opportunities for commercial readiness and fast-tracking regulatory programs with potential 510(k) premarket submissions in the US.

We are now in a unique position to secure co-development agreements using our Ortho-R (Chitosan-PRP), as well as our new Chitosan based IP. Co-development agreements represent the best approach to create value while leveraging 3[rd] party funding. In order to successfully advance its current R&D programs, ChitogenX entered into a Collaborative R&D Agreement with Polytechnique to ensure access to Polytechnique’s staff, expertise, and laboratories. The agreement expired on August 14, 2024. R&D activities at Polytechnique are now funded by the Corporation and since February 2023, from a new $3.5 million (gross) grant from NSERC and Prima Québec (inclusive of the Corporation $0.9M contribution) in partnership with Polytechnique Montréal. The 3-year grant will be used 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 cash burn has significantly reduced over the last year, as evidenced by 1) the steep reduction in overall R&D expenses following the conclusion of the Phase I/II rotator cuff trial enrolment, 2) the securing of the $3.5 million (gross) NSERC grant, 3) management’s decision to significantly reduce and defer the majority of payment on its compensation, and 4) the conversion of a significant portion of the debt leading to reduced financial costs. Management is actively pursuing strategic initiatives and R&D partnering to attract/secure non-dilutive financing while continuing to seek financing via traditional financing means.

Statement of Compliance

These audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”) as well as with those standards and interpretations as issued by the International Financial Reporting Interpretations Committee (“IFRIC”) issued and effective or issued and early adopted as at the time of preparing these consolidated financial statements.

Use of Estimates and Judgements

Reference should be made to the Corporation’s audited consolidated financial statements for the year ended January 31, 2024, note 3 – use of estimates and judgment , for an extended description of the information concerning the Corporation’s significant judgments, estimates and assumptions that have the most significant effect on the recognition and measurement of assets, liabilities, income and expenses.

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