These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Beginning in fiscal the Corporation’s fiscal year end is on Fiscal is a transition year, and includes months of operations, beginning on and ending on As a result, for comparative purposes the above financial statements and corresponding notes to financial statements include unaudited periods: the -month period ended and the -month period ended The Canadian Securities regulator permits, in the transition year, the presentation of a -month period for the financial year ended

 

The financial statements were approved by the Board of Directors on

 

 

The financial statements have been prepared on the historical cost basis, except for:

 

 

 

 

 

The Corporation has incurred operating losses and negative cash flows from operations since inception. The Corporation’s current assets of million as at include cash and cash equivalents totalling million, mainly generated by the net proceeds from the Public Offering completed on The Corporation’s current liabilities total million at and are comprised primarily of amounts due to or accrued for creditors. Since the Corporation’s year end, the current assets have been increased by approximately million from the net proceeds, of a public financing completed in early including the exercise of the over allotment option (note – subsequent event). However, in spite of this incremental financing, these current assets are projected to be significantly less than what will be needed to support the current liabilities as at this date when combined with the projected level of expenses for the next months, including the continued advancement of the TRILOGY Phase clinical study program for its drug candidate, CaPre. Additional funds will also be needed for the expected expenses for the total CaPre Phase research and development phase beyond the next months, including the potential regulatory (NDA) submission. The Corporation also expects to incur increased general and administrative expenses as a result of a planned increase in business development and commercialization planning expenses, and a reduction of its shared services agreement with Neptune, with those added expenses having begun during the year ended In addition to the recently raised additional funds, the Corporation is working towards development of strategic partner relationships and plans to raise additional funds in the future, but there can be assurance as to when or whether Acasti will complete any additional financing or strategic collaborations. In particular, raising financing is subject to market conditions and is within the Corporation’s control. If the Corporation does raise additional funds, find or more strategic partners, it be able to realize its assets and discharge its liabilities in the normal course of business. As a result, there exists a material uncertainty that casts substantial doubt about the Corporation’s ability to continue as a going concern and, therefore, realize its assets and discharge its liabilities in the normal course of business.

The financial statements have been prepared on a going concern basis, which assumes the Corporation will continue its operations in the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the ordinary course of business. These financial statements do include any adjustments to the carrying values and classification of assets and liabilities and reported expenses that be necessary if the going concern basis was appropriate for these financial statements. If the Corporation was unable to continue as a going concern, material write-downs to the carrying values of the Corporation’s assets, including the intangible asset, could be required.

 

 

These financial statements are presented in Canadian dollars, which is the Corporation’s functional currency.

 

 

The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results differ from these estimates.

 

Estimates are based on management’s best knowledge of current events and actions that the Corporation undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

 

Critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include the following:

 

 

 

Assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year include the following:

 

 

 

Also, management uses judgment to determine which research and development (“R&D”) expenses qualify for R&D tax credits and in what amounts. The Corporation recognizes the tax credits once it has reasonable assurance that they will be realized. Recorded tax credits are subject to review and approval by tax authorities and therefore, could be different from the amounts recorded.