Cipher Pharmaceuticals : Financial Document

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2024

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following is a discussion and analysis of the operating results and financial position of Cipher Pharmaceuticals Inc. and its subsidiaries ("Cipher" or "the Company") as at and for the three months ended March 31, 2024. This document should be read in conjunction with the unaudited condensed interim consolidated financial statements of Cipher for the three months ended March 31, 2024 and the accompanying notes, and Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2023. The unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. Additional information about the Company, including the Audited Annual Financial Statements and Annual Information Form for the year ended December 31, 2023, is available on SEDAR+ at www.sedarplus.ca.

The discussion and analysis within this MD&A are prepared as of May 9, 2024. All dollar figures are stated in thousands of U.S. dollars unless otherwise indicated.

Caution Regarding Forward-Looking Statements

This document includes forward-looking statements within the meaning of applicable securities laws. These forward-looking statements include, among others, statements with respect to the timing of the receipt of the topline results from MOB-015 Phase 3 North American study, the expectation of approval of MOB-015 in the U.S. and Canada, our objectives and goals and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective", "hope" and "continue" (or the negative thereof), and words and expressions of similar import, are intended to identify forward- looking statements.

By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on these statements as a number of important factors, many of which are beyond our control, could cause our actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the publication of negative results of clinical trials; our ability to enter into development, manufacturing and marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect; our dependency on a limited number of products; our dependency on protection from patents that will expire; integration difficulties and other risks if we acquire or in-license technologies or product candidates; reliance on third parties for the marketing of certain products; the product approval process by regulators which can be highly unpredictable; the timing of completion of clinical trials, regulatory submissions and regulatory approvals; reliance on third parties to manufacture our products and events outside of our control that could adversely impact the ability of our manufacturing partners to supply products to meet our demands; we may be subject to future product liability claims; unexpected product safety or efficacy concerns may arise; we generate license revenue from a limited number of distribution and supply agreements; the pharmaceutical industry is highly competitive with new competing product entrants; requirements for additional capital to fund future operations; products may be subject to pricing regulation; dependence on key managerial personnel and external collaborators; certain of our products are subject to regulation as controlled substances; limitations on reimbursement in the healthcare industry; the extent and impact of health pandemic outbreaks on our business; unpredictable development goals and projected time frames; rising insurance costs; ability to enforce covenants not to compete; we may be unsuccessful in evaluating material risks involved in completed and future acquisitions; we may be unable to identify, acquire or integrate acquisition targets successfully; compliance with privacy and security regulation; our policies regarding product returns, allowances and chargebacks may reduce revenues; additional regulatory burden and controls over financial reporting; general commercial litigation, class actions, other litigation claims and regulatory actions; the difficulty for shareholders to realize in the United States upon judgments of U.S. courts predicated upon civil liability of the Company and its directors and officers who are not residents of the United States; the potential violation of intellectual property rights of third parties; our efforts to obtain, protect or enforce our patents and other intellectual property rights related to our products; changes in U.S., Canadian or foreign patent laws; inability to protect our trademarks from infringement; shareholders may be further diluted if we issue securities to raise capital; volatility of our share price; the fact that we have a significant shareholder; our operating results may fluctuate significantly; and our debt obligations will have priority over the common shares of the Company in the event of a liquidation, dissolution or winding up.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When reviewing our forward- looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or

Management's Discussion and Analysis | 2

assumptions applied in making forward-looking statements, may be found in the "Risk Factors" section of this MD&A and the Annual Information Form for the year ended December 31, 2023, and elsewhere in our filings with Canadian securities regulators. Except as required by Canadian securities law, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.

Market Industry Data

The market and industry data contained in this MD&A is based upon information from independent industry and other publications and our knowledge of, and experience in, the industry in which the Company operates. Market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data at any particular po int in time, the voluntary nature of the data gathering process or other limitations and uncertainties inherent in any statistical survey. Accordingly, the accuracy and completeness of this data are not guaranteed. Cipher has not independently verified any of the data from third p arty sources referred to in this MD&A or ascertained the underlying assumptions relied upon by such sources.

Business & Strategy

Cipher (TSX:CPH) (OTCQX:CPHRF) is a specialty pharmaceutical company with a diversified portfolio of commercial and early to late- stage products. Cipher acquires products that fulfill unmet medical needs, manages the required clinical development and regulatory approval process, and currently markets these products directly in Canada or indirectly through partners in the U.S., Canada, and Latin America.

Cipher's corporate strategy is to assemble and manage a portfolio of prescription products across a broad range of therapeuti c areas. The Company's strategy includes the following components:

• Strategically market and distribute its Canadian commercial assets directly;
• Out-licenseproducts in markets where Cipher does not have a commercial presence;
• Selectively invest in drug development programs where we see a favourable risk/return profile;
• Conservatively manage capital and maximize cashflow and
• Distribute products through established sales organizations using a royalty based model.

Cipher is actively managing the advancement of our product pipeline development programs including:

• The MOB-015 product for the treatment of nail fungus with our partner Moberg Pharma AB ("Moberg"), presently in a pivotal phase 3 clinical trial in the U.S.
• Completion of proof-of-concept studies for our DTR-001 topical product treatment for the removal of tattoos.
• The Piclidenoson CF-101 ("Piclidenoson") program with our partner Can-Fite BioPharma Ltd. ("Can-Fite"), which received positive top-line results from its initial Phase 3 COMFORT study of Piclidenoson in the treatment of moderate to severe psoriasis.

The Company is actively assessing and sourcing opportunities that would build on the strengths of the organization, including strategic commercial deployment in Canada and the U.S. The execution of any transaction is contingent on the Company being able to negotiate acceptable terms and securing the necessary financing, where required.

Management's Discussion and Analysis | 3

Pharmaceutical Business

Distributed by Cipher in Canada

Product Revenue	Therapeutic Area	Product Description
		Epuris® (isotretinoin) is an oral retinoid indicated for the treatment
	Dermatology	of severe nodular and/or inflammatory acne, acne conglobate and
		recalcitrant acne in patients 12 years of age and older.
		Actikerall is a topical solution indicated for the treatment of slightly
	Dermatology	palpable and/or moderately thick hyperkeratotic actinic keratosis
	(Grade I/II) of the face, forehead and balding scalp in
		immunocompetent adult patients.
	Dermatology	Vaniqa is a topical cream indicated for the slowing of the growth of
	unwanted facial hair in women.
		Durela is an opioid analgesic indicated for the management of
	Pain Management	moderate to moderately severe pain in adults who require
		continuous treatment for several days or more.
		Brinavess® (vernakalant hydrochloride) is for the rapid conversion
	Hospital Acute Cardiovascular Care	of recent onset atrial fibriallation ("AF") to sinus rhythm in adults, for
	non-surgery patients with AF of seven days or less and for use in
		post-cardiac surgery patients with AF of three days or less.
		Aggrastat® (tirofiban hydrochloride) is a reversible GP IIb/IIIa
	Hospital Acute Cardiovascular Care	inhibitor (an intravenous anti-platelet drug) for use in patients with
		Acute Coronary Syndrome.
Licensing Revenue	Therapeutic Area/	Product Description
Commercial Partner
		Absorica® (isotretinoin) is an oral retinoid indicated for the
	Dermatology	treatment of severe nodular and/or inflammatory acne, acne
	Sun Pharmaceutical Industries, Inc.	conglobate and recalcitrant acne in patients 12 years of age and
		older.
		Lipofen® is indicated as adjunctive therapy to diet to reduce
		elevated LDL-C,total-C, triglycerides (TG) and Apo B, and to
		increase HDL-C in adult patients with primary
	Cardiovascular	hypercholesterolemia or mixed dyslipidemia (Fredrickson Types
	ANI Pharmaceuticals, Inc.	IIa and IIb).
		Lipofen is also indicated as adjunctive therapy to diet to reduce
		triglycerides in adult patients with severe hypertriglyceridemia
		(Fredrickson Types IV and V hyperlipidemia).
		Conzip is an opioid agonist indicated for the management of
	Pain Management	moderate to moderately severe chronic pain in adults who
	Vertical Pharmaceuticals, LLC	require around-the-clock treatment of their pain for an extended
		period of time.

Management's Discussion and Analysis | 4

Key Performance Measures

Key performance measures for the first quarter ended March 31, 2024 and 2023 are presented in the tables below, along with the quarterly information for the preceding three quarters:

	Financial Summary			Q1 2024		% Change vs.			Q4 2023		Q3 2023			Q2 2023
				Q1 2023
	Licensing revenue			2,600		55%			1,547		3,090			2,170
	Product revenue	3,267	2%		3,373	2,978		3,118
	Net revenue			5,867		20%			4,920		6,068			5,288
	Gross profit	4,812	23%		3,965	4,992		4,227
	EBITDA *			2,702		0%			3,399		2,858			3,085
	Adjusted EBITDA *	3,568	13%		2,864	3,607		3,077
	Net income			4,923		87%			7,655		7,031			3,071
	Basic EPS	0.21	110%		0.32	0.28		0.12
	Diluted EPS			0.20		100%			0.30		0.27			0.12
	Total assets	92,552	20%		86,031	90,529		80,612
	Increase (decrease) in Cash			2,156					(2,261)		5,748			2,911
	balances for the period

	Financial Summary			Q1 2023		% Change vs.			Q4 2022		Q3 2022			Q2 2022
				Q1 2022
	Licensing revenue			1,676		-20%			1,987		2,013			2,046
	Product revenue	3,210	-3%		2,922	2,779		3,512
	Net revenue			4,886		-10%			4,909		4,792			5,558
	Gross profit	3,909	-9%		3,973	3,932		4,486
	EBITDA *			2,696		-12%			3,008		2,476			3,449
	Adjusted EBITDA *	3,171	3%		3,147	2,632		3,571
	Net income			2,626		22%			19,681		2,654			2,152
	Basic EPS	0.10	25%		0.78	0.11		0.08
	Diluted EPS			0.10		25%			0.77		0.10			0.08
	Total assets	76,960	43%		73,776	57,434		55,951
	Increase (decrease) in Cash			4,591					1,359		3,286			2,341
	balances for the period

• See "Non-IFRS Financial Measures"

Management's Discussion and Analysis | 5

Recent Events

CORPORATE EVENTS

Commencement of OTCQX Trading

On January 29, 2024, the Company announced that its common shares were now trading on the OTCQX® Best Market ("OTCQX") under the symbol "CPHRF". The OTCQX is the highest market tier of OTC Markets on which 12,000 U.S. and global securities trade. To qualify for OTCQX, companies must meet prescribed financial standards, follow best practice corporate governance guidelines, and demonstrate compliance with applicable securities laws. Trading on OTCQX is expected to enhance the visibility and accessibility of the Company to U.S. investors. In addition to trading on OTCQX, the Company's common shares continue to trade on the Toronto Stock Exchange ("TSX") under the symbol "CPH".

COMMERCIAL EVENTS

MOB-015 Launched as Terclara® in Sweden

On February 7, 2024, Moberg announced that its partner, Allderma AB, had launched sales of MOB-015 under the Terclara® brand in Sweden, with significant interest for the product from pharmacies. Moberg reported that the majority of pharmacies throughout Sweden have decided to start selling Terclara®.

Update on Terclara® (MOB-015) Launch in Sweden

On April 23, 2024, Moberg reported that since the February 2024 launch of MOB-015 in Sweden under the brand Terclara®, interest for the product has been strong from pharmacists, physicians, and end customers. Interest in the product within Sweden has exceeded the forecasts of pharmacies, whereby Terclara® has occasionally sold out at several pharmacy chains. Accordingly, pharmacies are increasing their orders to maintain supply of the product on their shelves.

Cipher holds the exclusive Canadian rights to MOB-015. In Canada, the total prescription market for Onychomycosis was approximately CDN$92.4 million at March 31, 2024 according to IQVIA, with a single product having over 97% market share.

MOB-015 Approval in 13 European Countries

On May 6, 2024, Moberg announced that MOB-015 had received national approvals in all 13 European countries included in the decentralized procedure with which Moberg was seeking approval in the European Union ("EU"). MOB-015 was approved in the following EU countries: Austria, Belgium, Czech Republic, Denmark, Finland, France, Hungary, Ireland, Italy, Netherlands, Norway, Spain and Sweden.

Management's Discussion and Analysis | 6

Review of Operating Results

REVENUE

(IN THOUSANDS OF U.S. DOLLARS)	Three months	Three months
	ended	ended
	March 31, 2024	March 31, 2023
	$	$
Licensing revenue	2,600	1,676
Product revenue	3,267	3,210
Net revenue	5,867	4,886

Total net revenue increased by $1.0 million or 20% to $5.9 million for the three months ended March 31, 2024 compared to $4.9 million for the three months ended March 31, 2023.

Licensing Revenue

Licensing revenue increased by $0.9 million or 55% to $2.6 million for the three months ended March 31, 2024 compared to $1.7 million for the three months ended March 31, 2023.

Licensing revenue from Absorica in the U.S. was $1.9 million for the three months ended March 31, 2024, an increase of $0.9 million or 90% compared to $1.0 million for the three months ended March 31, 2023. The overall increase in licensing revenue on the Absorica portfolio (inclusive of the brand, Authorized Generic ("AG") and LD products) for the three months ended March 31, 2024 is primarily attributable to higher product shipments by $1.1 million, on which the Company earns revenue from supplying product to its distribution partner. This was partially offset by lower sales volumes from the Absorica portfolio, on which the Company earns a net sales royalty, resulting in $0.2 million lower royalty revenue for the three months ended March 31, 2024.

The decrease in licensing revenue associated with Absorica AG as described above, is representative of the Absorica AG market share which has decreased by 0.5% to 4.1% market share at March 31, 2024, from 4.6% market share at March 31, 2023, according to Symphony Health. The market share of the total Absorica portfolio has decreased by 0.3% to 6.5% market share at March 31, 2024, from 6.8% market share at March 31, 2023, according to Symphony Health.

Licensing revenue from Lipofen and Lipofen AG of $0.7 million for the three months ended March 31, 2024, was materially consistent with the three months ended March 31, 2023.

Product Revenue

Product revenue increased by $0.1 million or 2% to $3.3 million for the three months ended March 31, 2024 compared to $3.2 million for the three months ended March 31, 2023.

Product revenue from Epuris was $2.9 million for the three months ended March 31, 2024, an increase of $0.2 million or 7%, from $2.7 million for the three months ended March 31, 2023. Product revenue from Epuris is transacted in Canadian dollars, and is therefore subject to foreign exchange rate changes with the U.S. dollar. However, the impact from foreign exchange translation when comparing the three months ended March 31, 2024 to the comparative period, was negligible. Accordingly, the increase in Epuris revenue was primarily attributable to higher sales volumes year-over-year. Market share of Epuris during this same period has remained materially consistent at 44%, according to IQVIA.

Product revenue for the remaining portfolio (Actikerall, Brinavess, Aggrastat, Vaniqa and Durela) was $0.4 million for the three months ended March 31, 2024, a decrease of $0.1 million or 29%, compared to $0.5 million for the three months ended March 31, 2023. The decrease in product revenue was mainly due to decreased sales of Acktikerall, which was in turn largely due to timing of sales activity during the quarter.

Management's Discussion and Analysis | 7

OPERATING EXPENSES

(IN THOUSANDS OF U.S. DOLLARS)	Three months	Three months
	ended	ended
	March 31, 2024	March 31, 2023
	$	$
Cost of products sold	1,055	977
Research and development	-	3
Depreciation and amortization	289	343
Selling, general and administrative	1,468	1,217
Total operating expenses	2,812	2,540

Total operating expenses increased by $0.3 million or 11% to $2.8 million for the three months ended March 31, 2024 compared to $2.5 million for the three months ended March 31, 2023. The increase in operating expenses for the three months ended March 31, 2024 primarily reflect an increase in selling, general and administrative expenses of $0.3 million.

Cost of Products Sold

Cost of products sold for the three months ended March 31, 2024 was $1.1 million, an increase of $0.1 million or 8% compared to the three months ended March 31, 2023. Gross margin on product revenue decreased by 2% to 68% for the three months ended March 31, 2024 compared to 70% for the three months ended March 31, 2023, due to the impact of foreign exchange rate changes on the cost of inventory purchases, and the timing of when the inventory is sold. Inventory is predominantly purchased in U.S. dollars, whereas product revenue is transacted in Canadian dollars, therefore the timing of the purchase of inventory and the revenue generated from its subsequent sale has an impact on translated product margins.

Depreciation and amortization

Depreciation and amortization for the three months ended March 31, 2024 includes $0.3 million for amortization of intangible assets and a nominal amount for depreciation of property and equipment, which is materially consistent with the three months ended March 31, 2023.

Selling, General and Administrative

Selling, general and administrative ("SG&A") expense for the three months ended March 31, 2024 was $1.5 million, an increase of $0.3 million or 21% from $1.2 million for the three months ended March 31, 2023. This increase was primarily due to higher salaries and benefits costs and other selling, general and administrative expenses incurred, partially offset by lower non-cashshare-based compensation, for the three months ended March 31, 2024.

A further breakdown of SG&A expense for the three months ended March 31, 2024 and 2023 is presented in the table below:

(IN THOUSANDS OF U.S. DOLLARS)	Three months	Three months
	ended	ended
	March 31, 2024	March 31, 2023
	$	$
Salaries and benefits	419	22
Share-based compensation	224	444
Restructuring costs	-	38
Professional fees	503	476
Other selling, general and administrative	322	237
Total selling, general and administrative	1,468	1,217

Salaries and benefits included in SG&A for the three months ended March 31, 2024 was $0.4 million, an increase of $0.4 million from a nominal amount for the three months ended March 31, 2023. The increased salaries and benefits costs are reflective of a higher employee headcount during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The Company has hired additional employees since March 31, 2023, in part, to strengthen productivity and the breadth of experience within

Management's Discussion and Analysis | 8

its various organizational functions. Additionally, included within salaries and benefits for the three months ended March 31, 2023 was a reversal of certain one-time accrued compensation, resulting in comparatively lower salaries and benefits expense in the comparative period.

Share-based compensation expense included in SG&A for the three months ended March 31, 2024 was $0.2 million, a decrease of $0.2 million from $0.4 million for the three months ended March 31, 2023. The decrease in share-based compensation expense for the three months ended March 31, 2024 was primarily attributable to certain one-timeshare-based awards made to certain employees during the three months ended March 31, 2023.

Other selling, general and administrative expenses included in SG&A are comprised of costs associated with data management and market research, regulatory and pharmacovigilance activities, and various other administrative costs. For the three months ended March 31, 2024 other selling, general and administrative costs were $0.3 million, compared to $0.2 million for the three months ended March 31, 2023. This increase is attributable to higher regulatory costs during the period.

OTHER (INCOME) EXPENSES

(IN THOUSANDS OF U.S. DOLLARS)

Three months	Three months
ended	ended
March 31, 2024	March 31, 2023
$	$

Interest income	(555)	(355)
Unrealized foreign exchange loss (gain)	642	(7)
Total other (income) expenses	87	(362)

Total other (income) expense for the three months ended March 31, 2024 was an expense of $0.1 million compared to income of $0.4 million for the three months ended March 31, 2023. The decrease for the three months ended March 31, 2024 relates to the impact of significant foreign exchange rate movements on the translation of net assets and certain transactions denominated in Canadian dollars, partially offset by interest income earned on cash and cash equivalents held at financial institutions.

Interest income

Interest income increased by $0.2 million to $0.6 million for the three months ended March 31, 2024, compared to $0.4 million for the three months ended March 31, 2023. The increase is due to higher prevailing market interest rates on the Company's higher cash balances on-hand.

Unrealized foreign exchange loss (gain)

The Company is exposed to currency risk through its net assets and certain transactions denominated in Canadian dollars.

Unrealized foreign exchange loss increased by $0.6 million to $0.6 million for the three months ended March 31, 2024, compared to a nominal unrealized foreign exchange gain for the three months ended March 31, 2023. Due to the appreciation of the U.S. dollar relative to the Canadian dollar during the three months ended March 31, 2024, there has been a negative impact on the translation to U.S. dollars of the Company's net assets, as well as the Company's earnings denominated in Canadian dollars.

INCOME TAXES

Income tax expense is recognized based on domestic and international statutory income tax rates in the jurisdictions in which the Company operates. These rates are then adjusted to effective tax rates based on management's estimate of the weighted average annual income tax rate expected for the full year in each jurisdiction taking into account taxable income or loss in each jurisdiction and available utilization of deferred tax assets. Deferred tax assets are recognized to the extent that it is probable that the asset can be recovered.

Income tax recovery for the three months ended March 31, 2024 was $2.0 million, compared to a nominal amount of income tax expense for the three months ended March 31, 2023. The increase in the income tax recovery is due to a change in the Company's deferred tax assets associated with unused tax loss carryforwards. This change arose from the probable nature of future taxable income projections, for which the loss carryforwards can be applied, as determined by the Company's assessment during the three months ended March 31, 2024.

At each reporting date, the Company assesses whether the realization of future tax benefits is sufficiently probable to recognize a deferred tax asset. This assessment requires the exercise of judgement, which includes a review of various factors including projected taxable income.

Management's Discussion and Analysis | 9

As at March 31, 2024, the Company has recognized deferred tax assets in the condensed interim consolidated statement of financial position of $21.4 million, compared to $19.9 million as at December 31, 2023. The Company believes that it is probable that future taxable income will be available against which tax losses can be utilized.

NET INCOME AND INCOME PER COMMON SHARE

(IN THOUSANDS OF U.S. DOLLARS, except for per share amounts)	Three months	Three months
	ended	ended
	March 31, 2024	March 31, 2023
	$	$
Net income and comprehensive income for the period	4,923	2,626
Basic income per share	0.21	0.10
Diluted income per share	0.20	0.10

Basic income per common share is calculated using the weighted average number of common shares outstanding during the period. Diluted income per common share is calculated taking into account dilutive instruments that are outstanding.

The weighted average number of common shares outstanding for the three months ended March 31, 2024 was 23,994,826 (three months ended March 31, 2023 - 25,116,365).

The dilutive weighted average number of common shares outstanding for the three months ended March 31, 2024 was 24,395,501 (three months ended March 31, 20243 - 25,552,236).

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"), Adjusted EBITDA, Adjusted EBITDA per share and Compound Rate of Return ("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 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 expen diture, and working capital requirements.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are non-IFRS financial measures and are presented as additional information to complement IFRS measures by providing a further understanding of operations from management's perspective. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation of property and equipment, amortization of intangible assets, non-cashshare-based compensation, changes in fair value of derivative financial instruments, provisions for legal settlements, loss on disposal of assets and loss on extinguishment of lease, impairment of intangible assets, restructuring costs and unrealized foreign exchange gains and losses.

The Company considers Adjusted EBITDA as a key metric in assessing business and management performance and considers Adjusted EBITDA to be an important measure of operating performance and cash flow, providing useful information to investors and analysts. Adjusted EBITDA is a calculation that is not standardized and may not be comparable to similar financial measures disclosed by other issuers.

Management's Discussion and Analysis | 10