Exhibit 99.1

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE three and nine-month periods ended December 31, 2021 and 2020

INTRODUCTION

This management discussion and analysis (‟MD&A”) comments on the consolidated financial results and the consolidated financial situation of Neptune Wellness Solutions Inc. (‟Neptune”, the ‟Corporation” or the ‟Company”) for the three and nine-month periods ended December 31, 2021 and 2020. It is based on the condensed consolidated interim financial statements of the Corporation, which were prepared in accordance with IAS 34, Interim Financial Reporting of International Financial Reporting Standards (‟IFRS”), as issued by the International Accounting Standards Board (‟IASB”). Unless otherwise noted, all amounts in this report refer to Canadian dollars. References to ‟CAD” and ‟USD” refer to Canadian dollars and US dollars, respectively. This MD&A should be read in conjunction with our condensed consolidated interim financial statements for the three and nine-month periods ended December 31, 2021 and 2020, and our audited consolidated financial statements for the years ended March 31, 2021 and 2020 . Additional information about the Corporation, as well as registration statements and other public filings, are available on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml.

In accordance with its terms of reference, the Audit Committee of the Corporation’s Board of Directors reviews the contents of the MD&A and recommends its approval to the Board of Directors. The Board of Directors approved this MD&A on February 10, 2022. Disclosure contained in this document is current to that date, unless otherwise noted. Unless otherwise indicated, all references to the terms ‟we”, ‟us”, ‟our”, ‟Neptune”, ‟enterprise”, ‟Company” and ‟Corporation” refer to Neptune Wellness Solutions Inc. and its subsidiaries.

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GOING CONCERN

The condensed interim consolidated financial statements have been prepared on a going concern basis, which presumes that the Corporation will continue realizing its assets and discharging its liabilities in the normal course of business for the foreseeable future. For the nine-month period ended December 31, 2021, the Corporation incurred a net loss of $58.5 million and negative cash flows from operations of $53.3 million, and had an accumulated deficit of $383.3 million as at December 31, 2021. The Company currently has no committed sources of financing available. These conditions indicate the existence of a material uncertainty that casts substantial doubt about the Corporation’s ability to continue as a going concern. The Corporation’s business plan is dependent upon, amongst other things, its ability to achieve and maintain profitability, and/or continue to obtain adequate ongoing debt and/or equity financing with creditors, officers, directors and stakeholders to finance operations within and beyond the next twelve months. While the Corporation has limited debt, all of which is subordinated, assets available for financing include real estate, accounts receivable and inventories, as well as having been successful in obtaining financing from public issuances, private placements, and related parties in the past, there is no certainty as to future financings. The Corporation is seeking additional financing in various forms as part of its plan to have the right funding structure in place to support its growth trajectory and path to profitability. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the going concern basis not be valid. These adjustments could be material.

The Company announced the completion of its strategic review and unveiled a comprehensive action plan on November 15, 2021. The main focuses of that plan were the following:

The financial commitments and obligations of the Company are limited. Furthermore, certain liabilities, such as the warrant liabilities, are dependent on Neptune’s share price and would only become payable if they are in the money. The warrants, if exercised, settle in common shares of the Company and therefore do impact on the Company’s cash. Indeed, warrant holders are required to pay the cash strike price to exercise the warrant and thus the exercise of warrants would result in a cash infusion to the Company.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Statements in this MD&A that are not statements of historical or current fact constitute ‟forward-looking statements” within the meaning of the U.S. securities laws and Canadian securities laws. Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of Neptune to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. Such risks, in addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," “feels,” "expects," "intends," "projects," “seeks,” “may,” "anticipates," "will," "should," or "plans" or the negative use of those words or other similar expressions to be uncertain and forward-looking. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this management analysis of the financial situation and operating results. The forward-looking statements contained in this MD&A are expressly qualified in their entirety by this cautionary statement and the ‟Cautionary Note Regarding Forward-Looking Information” section contained in Neptune’s latest Annual Information Form (the ‟AIF”), which also forms part of Neptune’s latest annual report on Form 40-F, and which is available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov/edgar.shtml and on the Investors section of Neptune’s website at www.neptunecorp.com. All forward-looking statements in this MD&A are made as of the date of this MD&A. Neptune does not undertake to update any such forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in Neptune public securities filings with the Securities and Exchange Commission (“SEC”) and the Canadian securities commissions. Additional information about these assumptions and risks and uncertainties is contained in this MD&A (under “Risk Disclosure”) and the AIF (under ‟Risk Factors”).

OVERVIEW

Neptune is a diversified and fully integrated health and wellness company with a brand portfolio of consumer packaged goods. With a mission to redefine health and wellness, Neptune is focused on building a broad pipeline of high quality, affordable consumer products in response to long-term secular trends and market demand for natural, plant-based, sustainable and purpose-driven lifestyle brands. The Company utilizes a highly flexible, cost efficient manufacturing and supply chain infrastructure that can be scaled up and down or into adjacent product categories to identify new innovation opportunities, quickly adapt to consumer preferences and demand, and bring new products to market through its mass retail partners and e-commerce channels. Leveraging decades of expertise in product formulation, registration, and supply chain management, Neptune also provides turnkey product development and supply chain solutions to business customers primarily in the nutraceutical industry. The Company has a strong position in cannabis with research, development and commercialization focused on the use of cannabinoids in household products to make them safer, healthier, and more effective.

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ABOUT NEPTUNE

BUSINESS UPDATE

Neptune’s vision is to change consumer habits through the creation and distribution of environmentally friendly, ethical and innovative consumer product goods. Our mission is to redefine health and wellness and help humanity thrive by providing sustainable consumer focused solutions. Despite the decline in global economic activity since the outbreak of the COVID-19 virus, Neptune has taken transformative, and successful, actions to increase its sales, distribution and reach in both the business-to-business (“B2B”) and business-to-consumer (“B2C”) model in the consumer-packaged goods (“CPG”) market. During the fiscal year ended on March 31, 2021, Neptune underwent a significant transformation from a B2B cannabis and hemp extraction company to a fully integrated and diversified consumer products company. The Company's long-term strategy is focused on the health and wellness sector with an emphasis on select CPG verticals, including Cannabis, Nutraceuticals, Beauty & Personal Care, and Organic Foods & Beverages. Neptune's current brand portfolio across these verticals include Mood Ring™, PanHash™, Sprout®, Neptune Wellness™, Forest Remedies®, and MaxSimil®.

Neptune has a dual go-to market B2B and B2C strategy focused on expanding its global distribution reach. The strategy sets Neptune apart from its competition and has started to yield consistent, long-term revenue opportunities for the Company. Neptune has completed the transition to focus its Sherbrooke facility from B2B to B2C begun during FY2021. In 2021, the hemp extraction operations of SugarLeaf at the Conover facility ceased and Neptune is examining multiple options to either convert the facility to an alternate use or to exit the remainder of the lease obligation in the most efficient way possible.

Neptune plans to continue expanding its line of cannabis consumer packaged goods readying itself for expansion into the United States if and when permitted by United States Federal law. While Federal legalization is not anticipated in the near term, we continue to prepare for potential U.S. cannabis legalization under Federal law. In Canada, Neptune’s Mood Ring™ cannabis product line was launched in select Canadian markets during the third quarter of FY2021, and its PanHashTM cannabis product line was launched in Quebec during spring 2021. Both brands have enjoyed widespread acceptance and success.

In February 2021, Neptune acquired a 50.1% interest in Sprout Foods, Inc. (“Sprout”), a portfolio investment of Morgan Stanley Expansion Capital ("MSEC"). As part of the transaction, investment funds managed by MSEC became a shareholder in Neptune. Sprout is an organic plant-based baby food and toddler snack company. Sprout’s focus on wholesome organic baby food products resonates strongly with Neptune’s core values. By combining high-quality plant-based ingredients and cruelty-free ingredients, Sprout has created a trusted brand with a comprehensive range of products.

Sprout represents an opportunity for Neptune to:

o Capitalize on a shared mission to redefine health and wellness for children;

o Focus on building a portfolio of high quality, organic and affordable consumer products;

o Capitalize on the market demand for natural, plant-based, sustainable, and purpose-driven brands.

On June 9, 2021, Neptune announced a multi-year licensing agreement between Sprout and CoComelon, the world's leading children's entertainment brand, owned and operated by Moonbug Entertainment. In addition, on July 27, 2021, an initial launch was announced for Sprout products into Canada, in Metro grocery stores in the province of Ontario.

Neptune’s future will be focused on brand creation, accelerating organic growth with emphasis on increased efficiency and margin expansion. This will be complimented by accretive acquisitions with a proven track record of operational excellence. On July 22, 2021, the Company launched Forest Remedies’ plant-based Omega 3-6-9 gummies and soft gels. Neptune is focused on expanding its exclusive Omega-3 delivery technology MaxSimil® while improving growth and profitability in its Nutraceuticals vertical. The MaxSimil® product lineup will be expanded with the launch of two new consumer products: MaxSimil® with CoQ10 and MaxSimil® with Curcumin. Additionally, the Company launched a new consumer line of Vitamin Sprays and Pumps for both children and adults with selected retail partners.

Neptune is focused on expanding its exclusive Omega-3 delivery technology MaxSimil® while improving growth and profitability in its Nutraceuticals vertical. The MaxSimil® product lineup will be expanded with the launch of two new consumer products: MaxSimil® with CoQ10 and MaxSimil® with Curcumin. Additionally, the Company plans to launch a new consumer line of Vitamin Sprays and Pumps for both children and adults with selected retail partners. To support anticipated accelerated growth, the Nutraceuticals U.S. sales force has been expanded to maximize awareness and distribution of the capabilities and expertise in CBD formulation, prebiotics and probiotics, and proteins within this important vertical.

The Company currently sells its Mood Ring™ and PanHash™ products in four provinces: British Columbia, Ontario, Alberta and Quebec. Additionally, Neptune recently received a license amendment from Health Canada to allow the sale of dried cannabis flower and pre-rolled cannabis joints throughout the Canadian market. Furthermore, Neptune launched in spring of 2021 three new Mood Ring™ branded cannabis products in British Columbia, including the first branded flower product. That same Mood Ring™ branded flower product was launched in Alberta during summer 2021, and in Ontario in September 2021. In November 2021, the Company successfully launched its line of vape products in the provinces of Alberta, British Columbia and Ontario.

The Company’s Board of Directors has formed a Strategic Review Committee to evaluate the Company’s business plan, capital deployment, and long-term strategy in order to identify alternatives to enhance shareholder value. These strategic options may include, but are not limited to, changes in strategy or operations, strategic business combinations, divestitures, a spin-off of a portion of the Company, or continuing to execute the Company’s current business plan. On November 15, 2021, following recommendations of the Strategic Review Committee, Neptune commenced cost-cutting initiatives to right size the organizational structure to support the Company’s current business size and scope. These initiatives resulted in immediate reduction in personnel by close to 10%, including the role of Chief Operating Officer.

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MARKETS

Cannabis

Neptune obtained its license to process Cannabis from Health Canada on January 16, 2019, which was amended to authorize the sale of certain cannabis products to provincially and territorially authorized retailers, and to holders of a license for sale for medical purposes on June 28, 2020. This amendment includes the authorization of the activity of the sale of cannabis edible products, cannabis extracts, and cannabis topicals. Subsequently, Neptune introduced its proprietary Mood Ring™ cannabis brand for the Canadian market on August 18, 2020 and received its first orders on November 25, 2020. A further amendment to its sale license was announced on March 22, 2021, allowing Neptune to sell dried cannabis flower and pre-rolled cannabis in the Canadian recreational market. A letter of intent was also signed with SQDC, for the sale of Neptune’s new cannabis brand, PanHash™, in Quebec. On April 28, 2021, Neptune announced it had entered into a supply agreement with Alberta Gaming, Liquor and Cannabis, the wholesaler and sole online retailer for recreational cannabis in Alberta, for the sale and distribution of Neptune’s Mood Ring™.

As mentioned above, Neptune now sells cannabis products in four Canadian provinces (British Columbia, Ontario, Quebec and Alberta), more than 80% of the total legal Canadian cannabis market, through its brands, Mood Ring™ and PanHash™. Mood Ring™ products cover several form factors including, but not limited to, dried flower, pre-rolls, vapes, concentrates, capsules and oils/tinctures. PanHash™ initially launched two product lines with a high concentration of CBD in cannabis oil and capsules, leveraging the Company’s cold ethanol extraction technology. Since then, six additional products have launched, including high THC oil and capsule products, balanced oil and capsule products, pressed hashish, and dried flower. In November and December, 2021, Vapes and pre-rolls were launched in selected markets. Please see the “Our B2C Brand Portfolio Strategy” section of this MD&A for a description of those products.

Nutraceuticals

Neptune offers a variety of specialty ingredients, including our licensed specialty ingredient MaxSimil®, a technology that helps increase digestion and absorption of fat-soluble and nutritional ingredients. Additionally, the Company sources a variety of other marine oils, seed oils and specialty ingredients that are available for sale as raw material or transformed into finished products. The Company has recently launched a new line of Vitamin Sprays and Pumps for both children and adults. Neptune is focused on expanding its exclusive Omega-3 delivery technology MaxSimil® while improving growth and profitability in its Nutraceuticals vertical through its brand Biodroga.

Neptune’s core strength is product innovation with a focus on specialty ingredients offered in bulk soft gels and liquid delivery systems. The Company continues to expand its delivery system capabilities with projects for pumps, sprays, roll-ons and CBD enhancements. All of Neptune’s Nutraceutical products are available under distributors’ private labels, primarily sold in the Canadian and U.S. nutraceutical markets. Neptune, through its nutraceuticals products business, also formulates, develops and provides customers with turnkey nutrition solutions.

Beauty & Personal Care

The Company sells wellness products to the Beauty & Personal Care market through its Forest Remedies brand. Forest Remedies offers plant-based supplements, including first-of-its kind multi-omega gummies and soft gels with packaging that is 100% plastic-free.

Organic Foods and Beverages

In February 2021, Neptune acquired a controlling interest in Sprout Foods, Inc., an organic plant-based baby food and toddler snack company. Sprout is an integral piece of Neptune’s health and wellness portfolio and represents a key brand within the Organic Foods and Beverages vertical. Since completing the Sprout acquisition, the Company has begun expansion efforts in Sprout’s distribution across substantially all of Target’s U.S. retail stores. The Company also announced, on July 27, 2021, the initial launch of Sprout products into Canada, in Metro grocery stores in the province of Ontario. Neptune further expects to launch Sprout products in North America throughout the remainder of the fiscal year. The Company expects the Neptune/Sprout combination to result in significant incremental revenue growth, with several near and long-term revenue synergy opportunities identified within Neptune’s existing relationships and current sales channels. As described above, Neptune also announced on June 9, 2021, an exclusive multi-year licensing agreement between Sprout and CoComelon, the #1 children’s entertainment and educational show in the world with more than 110 million subscribers worldwide. We expect to announce product availability and provide additional information about the rollout of CoComelon licensed products in the near future.

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RECENT CORPORATE DEVELOPMENTS

Neptune’s Presence in Canada’s Cannabis Market

Neptune currently supplies the market with premium cannabis extracts and dried flower, under its Mood Ring™ and PanHash™ brands, and has completed its launch of all significant regulated product categories. This empowers the Company to provide a comprehensive portfolio, enhance its total addressable market and target the lucrative flower, vape and pre-roll segments, which are a dominant force in the industry both in sales and revenue and comprise approximately 85% of all cannabis sales in Canada. All cannabis products are manufactured and packaged at the Company’s purpose-built facility in Sherbrooke, Quebec.

Mood Ring™

The Mood Ring™ brand and product line were launched to meet consumer demand for high-quality, affordable and environmentally friendly cannabis products. Mood Ring™ leverages Neptune’s decades of experience in the wellness, extraction and consumer packaged goods (“CPG”) industries to bring product offerings to market that are designed to meet the specific demands of Canadian consumers. Mood Ring™ uses Neptune’s proprietary and patented cold ethanol extraction process technology for the Company’s vape, capsule, oil/tincture and concentrate products. This processes allow Mood Ring™ to provide consumers with all of the cannabinoid and terpene benefits of the plant with a significantly lower environmental impact, requiring significantly less energy use when compared to CO2 extraction. With the March 2021 sales amendment Neptune is also authorized to sell dried flower, and pre-rolls, of which both form factors were launched under the Mood Ring brand in 2021.

British Columbia

As of December 31, 2021 Neptune had launched a total of eight Mood Ring branded cannabis products in the province of British Columbia. These products include, but are not limited to, Mood Ring’s first dried flower offering, Florida Citrus Kush, along with Mood Ring’s first two vape cartridge offerings – Jack Flash and Pure Kush. Based on the success of Mood Ring’s High CBD Capsule and Oil products launched in 2020, line extensions were launched in 2021 with both High THC Capsules and High THC Oil launching in June 2021.

Ontario

The Company entered into a supply agreement on October 27, 2020 with the Ontario Cannabis Store (“OCS”), the wholesaler and sole online retailer for recreational cannabis, for the sale and distribution of Neptune’s new proprietary recreational product line, Mood Ring™. Ontario is Canada’s largest market for adult-use cannabis products. The agreement authorizes Neptune to supply Mood Ring™ products to the OCS for sale and wholesale distribution. Mood Ring products have been available for purchase since February 22, 2021 through the OCS online store, and is available to licensed private retailers in Ontario. As of December 31, 2021 Neptune had launched a total of nine Mood Ring branded products in Ontario, including products from every form factor produced by Neptune, including but not limited to, dried flower, pre-rolls and vape cartridges.

Quebec (PanHashTM)

Previously this year, Neptune announced it entered into a letter of intent with Société québécoise du cannabis (“SQDC”), the province’s sole legal retailer for recreational cannabis, for the sale of Neptune’s new cannabis brand, PanHash™, exclusively for the Province of Quebec. The initial PanHash™ launch consisted of two products with a high concentration of CBD: cannabis oil and capsules which was increased to a total of eight products by December 31, 2021, including PanHash’s first dried flower offering, Artisanal Golden Berry. PanHash™ products have been available for purchase since May 27, 2021.

Alberta

Neptune announced on April 28, 2021 it entered into a supply agreement with Alberta Gaming, Liquor and Cannabis (“AGLC”), the wholesaler for recreational cannabis in Alberta, for the sale and distribution of Neptune’s proprietary recreational cannabis brand, Mood Ring™. This is the fourth supply agreement the Company has secured with a provincial cannabis wholesaler, and enables Neptune to sell recreational cannabis products, through its Mood Ring™ and PanHashTM brands, to over 2,000 retailers across British Columbia, Alberta, Ontario and Quebec; these four provinces accounted for over 80% of the Canadian cannabis retail sales in 2020. As of December 31, 2021 Neptune had launched a total of eleven Mood Ring branded cannabis products in the province of Alberta, including Mood Ring’s first pre-roll offering, Florida Citrus Kush 2 x 0.5g Pre-Rolls, and both of Mood Ring’s first two vape cartridge offerings.

Neptune Completes its Strategic Transition from Extraction to Cannabis Consumer Packaged Goods

In April 2021, Neptune completed its transition from revenue derived from hemp and cannabis extraction to revenue from consumer packaged goods and branded products, such as Mood Ring™ — an end-to-end developed and manufactured cannabinoid-based product portfolio targeting both wellness-focused CBD consumers looking for natural products, and the recreational market with multiple high THC products.

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Changes to the Board of Directors

On May 17, 2021, Neptune announced that Richard Schottenfeld resigned as a director of the Company for personal considerations.

Jane Pemberton and Frank Rochon were not standing for re-election at the Annual General Meeting (“AGM”) that was held on August 26, 2021 and their mandates ceased on that date.

Ms. Julie Phillips was elected as Director at the AGM. Ms. Phillips currently serves as Vice President for Herschend Family Entertainment where she has held this and prior roles since 2013. Ms. Phillips also serves since April 2019 as a member of the Board of Directors of the Lane Thomas Foundation, which is dedicated to supporting families of children needing lifesaving organ transplants.

Mr. John Moretz, the previous Chairman of the Board of Directors, announced his retirement from the Corporation’s Board of Directors on February 9, 2022 and Ms. Julie Phillips was appointed as the successor Chair of the Board of Directors.

Neptune Announces Exclusive Licensing Agreement Between Sprout Foods and CoComelon®

On June 9, 2021, the Company announced a multi-year licensing agreement between Sprout and CoComelon®, the world’s leading children’s entertainment brand, owned and operated by Moonbug Entertainment Ltd (“Moonbug”). With more than 110 million subscribers worldwide, CoComelon is the #1 children’s entertainment and educational show in the world claiming a #1 ranking on YouTube with its top three episodes generating nearly nine billion views around the world. Additionally, the show was #1 on Netflix and maintains a Top 10 ranking across all genres with the recent launch of Season 3. Sprout products bearing the licensed property are expected to launch in the near future in North America.

Neptune Launches Forest Remedies Plant-Based Omega 3-6-9 Supplements

On July 22, 2021, Neptune announced the launch of Forest Remedies’ plant-based Multi Omega 3-6-9 gummies and soft gels. Forest Remedies’ new plant-based multi-omega soft gels and gummies use all natural oil from Ahiflower® grown in the United Kingdom, which is a much sustainable and eco-friendly source of omegas 3, 6, and 9 in contrast to fish or krill oil. The product is vegan.

Neptune Launches Sprout Foods, Inc. Products in Canada

On July 27, 2021, Neptune announced the initial launch of Sprout Organic Foods products into Canada, in Metro grocery stores in the province of Ontario. The initial launch includes Broccoli Curlz and White Cheddar Curlz toddler snacks as well as Blueberry Apple and Pumpkin Butter & Jelly Wafflez toddler snacks. The Company will expand its Metro offerings with additional products from its Crinklez toddler snacks.

Changes to Management

On August 19, 2021, Neptune announced the appointment of John S. Wirt as the Company’s Executive Vice President of Business and Legal Affairs, Chief Legal Officer and General Counsel. Mr. Wirt comes to Neptune Wellness from Epic Sports & Entertainment, a sports and entertainment company, where he served as President and General Counsel. Prior to that, Mr. Wirt served as the Chief Executive Officer and General Counsel for Roy Jones, Jr.'s Square Ring Promotions, a global sports and entertainment promotion company. In addition to organizing and staging global events at Madison Square Garden and at Las Vegas casinos, which were televised live throughout the world in over 150 countries, Mr. Wirt has considerable international experience having organized and distributed sports and entertainment events in Europe, Asia, Australia, Africa and North America. Mr. Wirt began his legal career at Jenner & Block and Sidley & Austin in Chicago before moving in-house to client Don King Productions where he was Associate General Counsel for 12 years. Mr. Wirt graduated Phi Beta Kappa from Knox College in Galesburg, Illinois and obtained his juris doctorate and CPA from the University of Illinois Champaign. He has been a director of publicly traded corporations, including, the audit chair of a NASDAQ-listed company. As General Counsel, Mr. Wirt lead Neptune’s internal legal department in addition to managing Neptune’s businesses generally.

On September 27, 2021, the Company appointed Randy Weaver as Interim Chief Financial Officer. Mr. Weaver joins Neptune as Interim Chief Financial Officer with a successful track record of leading numerous CPG companies as a senior executive, bringing the knowledge and experience to help Neptune build a solid foundation of growth.

Receipt of Nasdaq Notification

On August 31, 2021, Neptune announced that that the Company has received a written notification (the “Notification Letter”) from the Nasdaq Stock Market LLC (“Nasdaq”) on August 30, 2021, notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2), which requires that the closing bid price for the Company’s common shares listed on Nasdaq be maintained at a minimum of US$1.00.

Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company’s common shares for the 30 consecutive business days from July 16, 2021, to August 27, 2021, the Company no longer met the minimum bid price requirement.

The Notification Letter has no immediate effect on the listing of the Company’s common shares on Nasdaq.

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In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until February 28, 2022, to regain compliance with the minimum bid price requirement, during which time the Company’s common shares will continue to trade on the Nasdaq Capital Market. To regain compliance, the Company’s common shares must have a closing bid price of at least US$1.00 for a minimum of 10 consecutive trading days. The Company has requested and expects to receive an additional 180-day period to regain compliance.

The Company’s business operations are not affected by the receipt of the Notification Letter. The Company intends to monitor the closing bid price of its common shares and may, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse share split of its outstanding common shares, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.

Change in Auditor

On November 4, 2021, the Company announced the appointment of KPMG LLP (“KPMG”) as its independent registered public accounting firm, effective October 22, 2021. The appointment of KPMG was made after a thorough evaluation process and has been approved by Neptune’s Board of Directors and its Audit Committee. KPMG replaces Ernst & Young LLP as Neptune’s independent registered public accounting firm for the fiscal year ending March 31, 2022.

Loss of Foreign Private Issuer Status

As of September 30, 2021, the Company is no longer considered a foreign private issuer and accordingly, such change in status will require the Company to file as a U.S. domestic filer, effective April 1, 2022, and will comply with all periodic disclosures and reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) applicable to U.S. domestic issuers including the requirement to transition from IFRS to US GAAP for the year ended March 31, 2022 The Company will also be required to modify certain of our policies to comply with governance practices associated with U.S. domestic issuers. As a result, the Company expects that the loss of foreign private issuer status will increase its legal and financial compliance costs and would make some activities more time consuming and costly.

Neptune Wellness Solutions Granted U.S. Patent for its Unique Organic Solvent Cannabis Extraction Process

On October 20, 2021, Neptune announced that the United States Patent and Trademark Office has granted Neptune a patent covering a method for extracting and isolating compounds from the plants of the Cannabis genus at low temperature using cold organic solvents. Leveraging this patent, the Company plans to pursue licensing opportunities for its unique extraction process with manufacturers.

Neptune Launches Mood Ring Vape Products in Canada

On November 9, 2021, Neptune announced the launch of Mood Ring branded cannabis vape products in Canada. The initial launch consists of Jack Flash and Pure Kush vape products in Alberta and British Columbia, and Jack Flash in Ontario.

Neptune Extends Mood Ring Product Line with In-Demand Pre-rolls Launching in Ontario and Alberta

On December 20, 2021, Neptune announced the launch of Mood Ring's new cannabis pre-roll product line in Alberta and Ontario. With the introduction of pre-rolls, Neptune now has an offering for every major cannabis product category in Canada.

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1 The Adjusted EBITDA is a non-GAAP measure. It is not a standard measure endorsed by IFRS requirements. A reconciliation to the Corporation’s net loss is presented below.

2 The restatements are discussed under “Revenues” in the Consolidated Results section of this MD&A. The interim financial statements for the periods ended September 30, 2020 and December 31, 2020 have not been refiled, but the comparatives for the period ended September 30, 2021 were corrected in the interim financial statement for that period and the results for the period ended December 31, 2021 are corrected in the interim financial statement accompanying this MD&A.

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1 The Adjusted EBITDA is a non-GAAP measure. It is not a standard measure endorsed by IFRS requirements. A reconciliation to the Corporation’s net loss is presented below.

2 The restatements are discussed under “Revenues” in the Consolidated Results section of this MD&A. The interim financial statements for the periods ended September 30, 2020 and December 31, 2020 have not been refiled, but the comparatives for the period ended September 30, 2021 were corrected in the interim financial statement for that period and the results for the period ended December 31, 2021 are corrected in the interim financial statement accompanying this MD&A.

3 This restatement is discussed below under “Restatement of Comparative Period Figures” in the Consolidated Results section of this MD&A. The interim financial statements for the period ended June 30, 2020 have not been refiled, but the comparatives were corrected in the interim financial statements for the period ended June 30, 2021.

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CONSOLIDATED FINANCIAL ANALYSIS

NON-IFRS FINANCIAL PERFORMANCE MEASURES

The Company uses one adjusted financial measure, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) to assess its operating performance. This non-IFRS financial measure is presented in a consistent manner, other than for those changes previously disclosed. The Company uses this measure for the purposes of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. The measure also helps the Company to plan and forecast for future periods as well as to make operational and strategic decisions. The Company believes that providing this information to investors, in addition to IFRS measures, allows them to see the Company’s results through the eyes of Management, and to better understand its historical and future financial performance. Neptune’s method for calculating Adjusted EBITDA may differ from that used by other corporations.

A reconciliation of net loss to Adjusted EBITDA is presented below.

ADJUSTED EBITDA

Although the concept of Adjusted EBITDA is not a financial or accounting measure defined under IFRS and it may not be comparable to other issuers, it is widely used by companies. Neptune obtains its Adjusted EBITDA measurement by adding to net loss, net finance costs (income) and depreciation and amortization, and by subtracting income tax expense (recovery). Other items such as stock-based compensation, non-employee compensation related to warrants, litigation provisions, business acquisition and integration costs, signing bonuses, severances and related costs, impairment losses on non-financial assets, write-downs of non-financial assets, costs related to a cybersecurity incident, revaluations of derivatives, system migration, conversion and implementation, CEO directors and officers insurance, and other changes in fair values are also added back. The exclusion of net finance costs (income) eliminates the impact on earnings derived from non-operational activities. The exclusion of depreciation and amortization, stock-based compensation, non-employee compensation related to warrants, litigation provisions, impairment losses, write-downs revaluations of derivatives and other changes in fair values eliminates the non-cash impact, and the exclusion of acquisition costs, integration costs, signing bonuses, severance and related costs, and costs related to cybersecurity incident present the results of the on-going business. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. Adjusting for these items does not imply they are non-recurring. For purposes of this analysis, the Net finance costs (income) caption in the reconciliation below includes the impact of the revaluation of foreign exchange rates.

Adjusted EBITDA1 reconciliation, in thousands of dollars

1 The Adjusted EBITDA is not a standard measure endorsed by IFRS requirements.

2.This restatement is discussed below under “Restatement of Comparative Period Figures” in the Consolidated Results section of this MD&A. The interim financial statements for the period ended December 31, 2020 has not been refiled, but the comparatives are corrected in the interim financial statements for the period ended December 31, 2021 filed with this MD&A

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management discussion and analysis

OPERATING SEGMENTS

The Corporation’s management structure and performance is measured based on a single segment, which is the consolidated level, as this is the level of information used in internal management reports that are reviewed by the Corporation’s Chief Operating Decision Maker.

Geographical information

Revenue is attributed to geographical locations based on the origin of customers’ location.

1 This restatement is discussed above under “Restatement of Comparative Period Figures” in the Consolidated Results section of this MD&A. The interim financial statements for the period ended December 31, 2020 has not been refiled, but the comparatives are corrected in the interim financial statements for the period ended December 31, 2021 filed with this MD&A.

The Corporation’s property plant and equipment, intangible assets and goodwill are attributed to geographical locations based on the location of the assets.

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management discussion and analysis

RESULTS ANALYSIS

Restatement of Comparative Period Figures

At the end of the previous fiscal year, the Company restated its results as at and for the three-month and six-month periods ended September 30, 2020 and as at and for three-month and nine-month periods December 31, 2020 with respect to recognition of revenue relating to two transactions, for which revenues were recognized during the three-month period ended September 30, 2020, that did not meet the conditions for recognition of revenue pursuant to the guidance of IFRS 15, specifically related to transfer of control of goods. Accordingly, the cost of sales, trade receivables and inventories were adjusted. The related inventories were written down during the third and fourth quarters of fiscal year 2021, resulting in a restatement for the three-month and nine-month periods ended December 31, 2020. The condensed consolidated interim financial statements for the periods ended September 30, 2020 and December 31, 2020 were not adjusted and refiled at the time of discovery of the revenue recognition reclassification, rather the comparatives are being corrected now with the filing of the interim financial statements for the periods ended September 30, 2021 and December 31, 2020.

The impacts of these restatements are as follow:

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management discussion and analysis

These restatements did not impact the Corporation’s cash and cash equivalent amounts and reported amounts of operating, investing and financing activities within the consolidated interim statements of cash flows for three-month and six-month periods ended September 30, 2020 and the three-month and nine-month periods ended December 31, 2020.

During the second quarter of fiscal year 2021, the Corporation restated its results for the three-month period ended June 30, 2020, as it concluded that it did not meet the conditions for recognition of revenue as a principal for a significant transaction completed during the three-month period ended June 30, 2020, pursuant to the guidance of IFRS 15, Revenue Recognition. The interim financial statements for the periods ended June 30, 2020 were not adjusted and refiled at the time of discovery of the revenue recognition reclassification, rather the comparatives were corrected with the filing of the interim financial statements for the periods ended June 30, 2021. There was no impact on the net loss in the condensed consolidated interim statement of loss and comprehensive loss resulting from this restatement.

The impact of this restatement was as follow:

This restatement did not impact the Corporation’s cash and cash equivalent amounts and reported amounts of operating, investing and financing activities within the consolidated interim statements of cash flows for three-month period ended June 30, 2020 neither the statement of financial position as at June 30, 2020.

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management discussion and analysis

Total consolidated revenues for the three-month period ended December 31, 2021 amounted to $18.4 million representing an increase of $15.1 million or 456% compared to $3.3 million for the three-month period ended December 31, 2020.

For the nine-month period ended December 31, 2021, consolidated revenues totaled $46.6 million representing an increase of $6.5 million or 16% compared to $40.0 million for the nine-month period ended December 31, 2020.

When compared to the previous quarter, the consolidated revenues increased by $2.7 million or 17% , which was mainly attributable to the cannabis revenues (increase of $3.2 million), slightly decreased by timing of shipping of nutraceuticals and food and beverages revenues (decrease of $0.5 million).

three-month period ended December 31, 2021 compared to December 31, 2020

Cannabis revenues and food and beverages revenues. Cannabis revenues represented a $5.3 million increase in comparison to the three-month period ended December 31, 2020, resulting from the successful repositioning of the business from the B2B Cannabis market to the B2C Cannabis market, with significant increase in sales volumes as Neptune has been continuing to expand its product portfolio in its existing markets with new cannabis products. $1.1 million of that increase was also attributed to a change of estimate over provisions for returns that management revaluates at each reporting period.

Food and beverages revenues represented an $8.5 million increase in comparison to the three-month period ended December 31, 2020, resulting from the Sprout acquisition finalized in the last quarter of fiscal 2021 that were not present in the comparative period.

nine-month period ended December 31, 2021 compared to December 31, 2020

For the nine-month period ended December 31, 2021, the $6.5 million increase was mainly attributable to decreases of revenues from Health and Wellness products, a net decrease resulting from the repositioning of the cannabis business from B2B to B2C market, as well as an increase in the Food and Beverages revenues.

Health and Wellness revenues decreased by $15.2 million due to a reduction in sales in hand sanitizers and other COVID-19 related products by the Company.

Cannabis revenues represented a net decrease of $3.7 million in comparison to the nine-month period ended December 31, 2020, resulting from the first shipments of B2C cannabis revenues occurring in the quarter ended December 31, 2020, as the Company was repositioning the business from the B2B Cannabis market to the B2C Cannabis market in Canada. Management revised the estimate of provisions for returns for the cannabis revenues as a result of new information and experience with sales returns. The impact of the revised estimate is a reduction of the provision of $1.1 million and an increase in revenue from sales and services. The Company was also ceasing placing order in its SugarLeaf facility in North Carolina for the B2B market in the USA, due to a continuous decline in pricing and demand. As part of the Company's execution of the strategic plan, liquidation of non-performance legacy stock inventory of SugarLeaf resulted in sales of $0.3 million in fiscal 2022 for the B2B market in the USA and no future sales are expected in fiscal 2022.

This is partially offset by the addition of $24.3 million of Food and Beverages revenues, representing average quarterly sales for the first three quarters of fiscal 2022 of over $8 million, which were due to the acquisition of Sprout in the last quarter of fiscal 2021 that were not present in the comparative period.

Geographic Revenues

From a geographic point of view, revenues for the current quarter increased by $7.6 million or 426% in Canada, increased by $7.7 million or 764% in the United States and decreased by $0.2 million or 33% for other countries (all royalty revenues) compared to the quarter ended December 31, 2020.

Year to date revenues increased by $4.1 million or 24% in Canada, increased by $2.8 million or 13% in the United States and decreased by $0.3 million or 28% for other countries (all royalty revenues) compared to the nine-month period ended December 31, 2020.

The increase of revenue in Canada for both the quarter and year to date variance is mainly due to the repositioning of the Cannabis business from the B2B Cannabis market to the B2C Cannabis market, which is in a growth state. The decrease in revenues for the nine-month period ended December 31, 2021 in the United States is due to a decrease in sales of hand sanitizers and other COVID-19 related products in Health and Wellness, offset by sales in Sprout (acquired on February 10, 2021), which explains the increase in revenues for the quarter ended December 31, 2021.

Gross Profit (Loss)

Gross profit (loss) is calculated by deducting the cost of sales from total revenues. Cost of sales consists primarily of costs incurred to manufacture products, including sub-contractors, freight expenses and duties on raw materials, storage and handling costs and lab testing on raw materials, and to acquire finished goods.

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management discussion and analysis

The consolidated gross profit (loss) for the three-month period ended December 31, 2021 amounted to $2.0 million compared to $(10.0) million for the three-month period ended December 31, 2020, an improvement of $12 million or 121% .

As for the nine-month period ended December 31, 2021, the consolidated gross profit (loss) amounted to $(2.3) million compared to $(11.4) million for the nine-month period ended December 31, 2020, an improvement of $9.1 million or 80% .

three-month period ended December 31, 2021 compared to December 31, 2020

The change for the quarter is mainly attributable to reduction in sales and related cost of sales from the Health and Wellness products, increases in volumes of sales from cannabis products, and an addition of gross profit from food and beverages resulting from the acquisition of Sprout on February 10, 2021.

For Health and Wellness products, there was a $7.9 million reduction in the gross loss of Health and Wellness products in the December 31, 2021 period, resulting from a reduction in sales in hand sanitizers and other COVID-19 related products by the Company as part of its strategic review plan.

The gross margin for cannabis products improved by $5.0 million for the December 31, 2021 period which was driven by the repositioning of the business as well as the consistent increase in sales from the B2C cannabis products, as explained in the revenue section above; the $1.1 million positive impact of the change of estimates for deferred revenues was also a factor in this improvement. We were able to cover larger portions of the asset production amortization, bringing the COGS from 144% of sales to 76% of sales. This was partially offset by government wage subsidies related to the Canada Emergency Wage Subsidy (“CEWS”) for the quarter ended December 31, 2020 of $0.9 million, compared to nil in 2021.

nine-month period ended December 31, 2021 compared to December 31, 2020

As for the nine-month period ended December 31, 2021, the change is mainly attributable to reduction in sales and related cost of sales from the Health and Wellness products and partially offset by inventory write-downs as well as government wage subsidies.

For the December 31, 2021 period, the gross loss improved by $13.8 million for the Health and Wellness products resulting from the reduction in sales in hand sanitizers and other COVID-19 related products. The gross loss improvement was partially offset by the completion of $1.5 million inventory write-downs of legacy products in the first two quarters of fiscal 2022. The Company does not expect any further write downs in inventories related to such products.

During the last six months of fiscal 2021, the Company was also ceasing placing order in its SugarLeaf facility in North Carolina for the B2B market in the USA, due to a continuous decline in pricing and demand. This resulted in a decrease of gross margin loss of $1.0 million for the period ended December 31, 2021 in comparison to 2020. The Company completed inventory write downs for legacy products related to the SugarLeaf facility in the first six months of fiscal 2022, resulting in $2.2 million of expense. The Company does not expect any further write downs in inventories related to such products.

Government wage subsidies, related to the Canada Emergency Wage Subsidy (“CEWS”) and to the Canadian Emergency Rent Subsidy (“CERS”), represented an increase of $0.8 million for the nine-month period ended December 31, 2021 compared to the same period ended December 31, 2020.

Gross Margin Percentage

For the three-month periods ended December 31, 2021 and 2020, the consolidated gross margin went from (300.8)% in 2020 to 11.1% in 2021, an increase of 311.9% . As for the nine-month periods ended December 31, 2021 and 2020, the consolidated gross margin went from (28.5)% in 2020 to -4.9% in 2021, an increase of 23.5% .

All changes in gross margins result from the changes in revenues and gross profit (loss) are described above.

Research and Development (“R&D”) Expenses

For the quarter ended December 31, 2021, the consolidated R&D expenses net of tax credits and grants amounted to $0.3 million, compared to $0.4 million for the quarter ended December 31, 2020, a decrease of $0.1 million or 28% mainly due to vesting on November 7, 2021 of the warrants issued to non-employees for co-development. As such, no further expense is expected by the Company in relation to those warrants.

Consolidated R&D expenses net of tax credits and grants amounted to $0.6 million in the nine-month period ended December 31, 2021 compared to $1.4 million for the same period the prior year, a decrease of $0.9 million or 61% . The decrease is mainly attributable to a $0.4 million reduction of expense resulting from the vesting on November 7, 2021 of the warrants issued to non-employees for co-development as well as the ceasing of operations for the SugarLeaf Facility which contributed to a decrease of $0.2 million for the period.

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management discussion and analysis

Selling, General and Administrative (“SG&A”) Expenses

three-month period ended December 31, 2021 compared to December 31, 2020

Consolidated SG&A expenses net of subsidies for the quarter ended December 31, 2021 amounted to $22.9 million compared to $31.6 million for the same period the prior year, a decrease of $8.7 million or 28% .

Salaries and benefits as well as accounting fees contributed to an increased expense in the quarter of $5.0 million, directly attributable to the Company's continuous improvement process plan with regards to its various projects related to the system migration and implementation of SAP, the implementation of controls and compliance projects, the establishment of new and optimization of existing processes, as well as development of shared services.

The Company recognized an additional $6.6 million expense in the quarter in relation to the agreement it had entered on November 14, 2021 with the CEO as disclosed in the Contractual Obligations section of this MD&A.

As announced on November 15, 2021, the Company initiated and completed its strategic plan review which resulted in an increase of severance expense of $1.1 million when compared to the same quarter in last fiscal 2021. Stock based compensation decreased by $2.3 million as a result of the strategic plan review.

Legal fees decreased by $1.6 million for the quarter explained by a financing private placement in last year's quarter as well as litigation matters related to the PMGSL case. These initiatives did not exist in the current quarter.

Compensation expense related to warrants granted to non-employee in exchange for services decreased in the quarter by $2.5 million as these warrants vested in fiscal 2021.

Expected credit losses decreased by $3.4 million explained by the successful transition from B2B operations to B2C operations for Cannabis and the impairment of SugarLeaf Facility in the quarter of fiscal 2021.

The impairment of the SugarLeaf Facility in last year's quarter had resulted in accelerated amortization charges of customer and farmer relationships in the amount of $14.0 million.

nine-month period ended December 31, 2021 compared to December 31, 2020

Regarding the nine-month period ended December 31, 2021 compared to the same period in 2020, consolidated SG&A expenses net of subsidies amounted to $61.1 million compared to $62.9 million, a decrease of $1.8 million or 3% .

Salaries and benefits as well as accounting fees contributed to an increase expense of $5.0 million in the nine-month period , directly attributable to the Company's continuous improvement process plan with regards to its various projects related to the system migration and implementation of SAP, the implementation of controls and compliance projects, the establishment of new and optimization of existing processes, as well as development of shared services.

Marketing and product development expense increased by $2.8 million for the nine-month period due to the continuous launch of new cannabis products as well as food and beverage product sales.

The Company recognized a $8.8 million expense in the quarter in relation to the agreement it had entered on November 14, 2021 with the CEO as disclosed in the Contractual Obligations section of the MD&A.

Integration expense increased by $1.3 million in the nine-month period by the Company subsequent to the acquisition of Sprout during the last quarter of the previous fiscal year.

As announced on November 15, 2021, the Company initiated and completed its strategic plan review which resulted in an increase of severance expense of $1.1 million when compared to the same quarter in fiscal 2021. Stock based compensation decreased by $2.3 million as a result of the strategic plan review.

Amortization expense related to warrants granted to non-employee in exchange for services decreased in the quarter by $6.5 million as these warrants vested in fiscal 2021.

Expected credit losses decreased by $2.1 million explained by the successful transition from B2B operations to B2C operations for Cannabis and the impairment of SugarLeaf Facility in the quarter of fiscal 2021.

The impairment of the SugarLeaf Facility in last year's quarter had resulted in accelerated amortization charges of customer and farmer relationships in the amount of $14.0 million.

SG&A expense decreased by $2.0 million due to a non-recurring expense related to a cyber security incident in the previous fiscal year.

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management discussion and analysis

Finance costs

three-month period ended December 31, 2021 compared to December 31, 2020

Net finance costs, foreign exchange and derivatives revaluations amounted to a gain of $0.2 million for the quarter ended December 31, 2021, compared to a gain of $3.0 million for the three-month period ended December 31, 2020, a change of $2.8 million or 94% for the quarter ended December 31, 2021. The variation for this period is mainly attributable to the revaluation of warrant liabilities as well as foreign exchange impact. The gain on revaluation of the warrants was primarily driven by the decrease in the Company's stock price.

During the quarter ended December 31, 2020, the Company issued warrants as part of the financing offering of the private placement that occurred on October 20, 2020. This resulted in an initial recognition of the warrants liability followed by a revaluation in the same quarter end for a total gain of $5.3 million. The revaluation of these warrants for the quarter ended December 31, 2021, contributed to a gain of $1.2 million.

The revaluation of the warrants that were issued as part of the business combination in February 10, 2021 for the quarter ended December 31, 2021 contributed to a gain of $0.8 million.

The net impact of the revaluation of the warrant liabilities was a decrease of $ 3.3 million.

The favorable impact on foreign exchange for the quarter ended December 31 was of $0.8 million.

nine-month period ended December 31, 2021 compared to December 31, 2020

As for the nine-month period ended December 31, 2021, the net finance costs, foreign exchange and derivatives revaluations amounted amounted to a gain of $8.4 million, compared to a gain of $0.5 million for the nine-month period ended December 31, 2020, a change of $7.9 million or 1718% for the nine-month period ended December 31, 2021. The variation for this period is mainly attributable to the revaluation of the liability related to warrants (recovery of $ 11.0 million, mainly as a result of movements in the stock price of the Company’s shares) and the favorable impact of foreign exchange ($3.3 million).

Income taxes

For the three-month periods ended December 31, 2021 and 2020, income tax expense (recovery) were nil and $1.8 million, respectively.

Income tax expense (recovery) for the nine-month periods ended December 31, 2021 and 2020 were nil and $4.7 million, respectively;

For the quarter and the nine-month period ended December 31, 2021 and 2020, the variances in income tax expense (recovery) resulted from the SugarLeaf Facility impairment as well as Health and Wellness operations. As the other entities are in carry forward loss positions, there is no impact to income taxes for the nine-month period ended December 31, 2021.

Adjusted EBITDA

three-month period ended December 31, 2021 compared to December 31, 2020

Consolidated Adjusted EBITDA loss decreased by $2.7 million or 21% for the quarter ended December 31, 2021 to an Adjusted EBITDA loss of $9.8 million compared to $12.5 million for the quarter ended December 31, 2020. The decrease in Adjusted EBITDA loss for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020 driven by the quarter's improved performance over the comparative quarter as explained in the net loss section.

Changes in adjusted EBITDA include:

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management discussion and analysis

nine-month period ended December 31, 2021 compared to December 31, 2020

Consolidated Adjusted EBITDA loss increased by $3.7 million or 12% for the nine-month period ended December 31, 2021 to an Adjusted EBITDA loss of $33.7 million compared to $30.0 million for the nine-month period ended December 31, 2020. The increase in Adjusted EBITDA loss for the nine-month period ended December 31, 2021 compared to the nine-month period ended December 31, 2020 is explained by the Company's execution of its strategic review plan of refocusing over its core products which decreased net loss as explained in the net loss section.

Recurring adjustments to EBITDA decreased by $16.6 million, driven by permanent impacts to adjusted EBITDA with the accelerated amortizations of long-lived non-financial assets as part of the SugarLeaf CGU impaired in the period of 2021 ($14.0 million) and the vesting of equity warrants to non-employees in exchange for services ($5.1 million).

Recurring adjustments to EBITDA decreased by a further $8.6 million due to revaluations of financial instruments (increase of gain of $5.6 million) which are dependent on Neptune's stock price performance as well as foreign exchange (decrease of loss of $3.0 million) dependent on the performance of the Canadian dollar versus US dollar.

Non-recurring adjustments to EBITDA decreased by $45.0 million due to the impairment of the SugarLeaf CGU's long-term assets ($37.7 million) as well as write-down of inventories ($7.4 million) related to Health and Wellness hand sanitizers which were incurred in the quarter of 2021. The decreases were offset by the current period's increase of severance expense of $1.1 million and write downs of legacy inventories of Health and Wellness and SugarLeaf Facility ($3.7 million) as part of the strategic plan review as well as the Company's expense of $8.7 million in relation to the agreement it had entered on November 14, 2021 with the CEO.

Net loss

three-month period ended December 31, 2021 compared to December 31, 2020

For the quarter ended December 31, 2021, the net loss amounted to $20.9 million compared to $74.9 million for the quarter ended December 31, 2020, a decrease of $53.9 million or 72% . The Company's transition of the B2B to B2C cannabis product lines through its Moodring and PanHash brands, the revised estimate over product return provisions, as well as its product portfolio growth contributed to the increase in gross profit of $12.0 million or 121%. The Company's execution of its strategic review plan of refocusing on its core businesses has decreased SG&A expenses by $8.7 million, as explained in the SG&A section above. The shutdown of the SugarLeaf Facility in the previous quarter ended December 31, 2020 had resulted in total impairments of $37.7 million, for which there are none in the current quarter.

These decreases in loss and finance costs were partially offset by a decrease of $3.3 million of fair value gains on derivative instruments, as explained in the finance cost section above.

nine-month period ended December 31, 2021 compared to December 31, 2020

The net loss for the nine-month period ended December 31, 2021 totaled $58.5 million compared to $108.3 million for the nine-month period ended December 31, 2020, a decrease of $49.7 million or 46% . The Company's execution of its strategic review plan of refocusing over its core products/(businesses?) has decreased the gross profit loss by $9.1 million as hand sanitizer and COVID-19 related product sales were no longer pursued and legacy inventories were impaired. The strategic review plan resulted in a decrease of SG&A expenses by $1.8 million, as explained in the SG&A section above. The shutdown of the SugarLeaf Facility in fiscal 2021 resulted in impairments of $37.7 million in the previous period ended December 31, 2020. These impairments were partially offset by legacy PP&E impairments of $3.0 million in the current nine-month period. The decrease in finance costs from the revaluation of the liability related to warrants (recovery of $ 11.0 million, mainly as a result of movements in the stock price of the Company’s shares) and the favorable impact of foreign exchange ($3.3 million) also contributed to the decrease in net loss for the nine-month period ended December 31, 2021.

A decrease in income tax recovery of $4.7 million derived from the SugarLeaf facility shutdown in the nine-month period of fiscal 2021 partially offset the decrease of net loss mentioned above.

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management discussion and analysis