Algae Dynamics Corp. (Form: S-1/A, Received: 11/19/2014 15:32:48)

Connectus Inc.

Algae Dynamics Corporation

P. Blair Mullin, President

Paul Ramsay, President

As filed with the Securities and Exchange Commission on November 19, 2014

Registration No. 333-199612

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

ALGAE DYNAMICS CORP

(Exact name of registrant as specified in its charter)

CONVERTED CARBON TECHNOLOGIES CORP.

(Former Name)

Canada	2836	N/A
(State or jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.)

4120 Ridgeway Drive. Unit 37, Mississauga, ON L5L 5S9 Canada

(Address and telephone number of principal executive offices and principal place of business)

Joseph P. Galda, Esq.

143 Clover Hollow Road

Easton, Pennsylvania 18045

(Name, address and telephone number of agent for service)

Approximate date of proposed sale to the public:

From time to time after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount of Shares to be Registered		Proposed maximum offering price per share			Proposed maximum aggregate offering price			Amount of Registration Fee

Common Shares		1,801,212	$	0.05	(1)	$	90,060.60	(1)	$	500.00	(2)
Total		1,801,212	$	0.05	(1)	$	90,060.60	(1)	$	500.00	(2)

1 Pursuant to Rule 457, the maximum offering price per share is based upon the stated value of the common shares since there is no established market for the common shares and the book value of the common shares is negative.

2 Previously paid.

In the event of stock splits, stock dividends, or similar transactions involving the Registrant’s common shares, the number of shares registered shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

We hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until we shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. The shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED November 19, 2014

PROSPECTUS

1,801,212 SHARES

ALGAE DYNAMICS CORP.

COMMON SHARES

●

This is a resale prospectus for the sale of up to 1,801,212 of our common shares by the selling shareholders listed herein. We will not receive any proceeds from any sales made by the selling shareholders.

●

This is the initial registration of our common shares. Our common shares are presently not traded on any market or securities exchange and are not now quoted on any over-the-counter market .

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Until our common shares are traded on the OTC Bulletin Board, the selling shareholders will sell their shares at US$1.50 per share and thereafter may offer the shares through public or private transactions, at prevailing market prices or any privately negotiated prices. See “Plan of Distribution .”

INVESTING IN OUR COMMON SHARES INVOLVES A HIGH DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON PAGE 3.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful and complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is ____________ ___, 2014.

TABLE OF CONTENTS

PART I - INFORMATION REQUIRED IN PROSPECTUS

		Page

PROSPECTUS SUMMARY		1

SUMMARY OF THE OFFERING		2

SUMMARY OF FINANCIAL INFORMATION		2

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS		3

RISK FACTORS		3

USE OF PROCEEDS		8

SELLING STOCKHOLDERS AND CERTAIN BENEFICIAL OWNERS		9

PLAN OF DISTRIBUTION		11

DESCRIPTION OF BUSINESS		12

DESCRIPTION OF SECURITIES TO BE REGISTERED		27

INTERESTS OF NAMED EXPERTS AND COUNSEL		28

LEGAL PROCEEDINGS		28

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		28

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		31

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		31

DIRECTORS AND EXECUTIVE OFFICERS		32

EXECUTIVE COMPENSATION		33

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND DIRECTOR INDEPENDENCE		37

DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES		39

WHERE YOU CAN FIND MORE INFORMATION		39

FINANCIAL STATEMENTS		39

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION		II-1

INDEMNIFICATION OF DIRECTORS AND OFFICERS		II-1

RECENT SALES OF UNREGISTERED SECURITIES		II-1

EXHIBIT INDEX		II-2

UNDERTAKINGS		II-3

SIGNATURES		II-5

You should rely only on the information contained in this Prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted.

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed information and the financial statements appearing elsewhere in this Prospectus. This Prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” and elsewhere in this Prospectus. Unless the context indicates or suggests otherwise, references to “we,” “our,” “us,” the “Company,” or the “Registrant” refer to Algae Dynamics Corp., a Canadian corporation. References to “$” refer to monetary amounts expressed in Canadian dollars. All references to “US$” refer to monetary expressed in United States dollars.

Our Business

Corporate Information

We were incorporated under the Canada Business Corporations Act on October 7, 2008. We recently amended our articles of incorporation to change our name, to remove private company restrictions and to effect a one for four reverse stock split. All share references in this prospectus have been adjusted to give effect to the reverse stock split.

We are currently engaged in the commercialization of our proprietary BioSilo™ algae cultivation system for the high volume, low cost production of pure contaminant-free algae biomass. This biomass is high in Omega-3s DHA/EPA, vitamins, minerals and antioxidants, all of which are in demand by the growing multibillion dollar food/beverage and health care sectors. Our integrated BioSilo™ manufacturing system provides low cost algae biomass production with modest capital cost requirements compared to conventional approaches. Furthermore, our “controlled outcomes” technology provides ultra-high purity algae biomass, differentiating it from other producers in the market. Following completion of a commercial-scale demonstration facility we intend to produce algae biomass for sale into the functional additive and supplement markets.

BioSilo™ has a small footprint and is modular in nature to allow scalable construction. The system cultivates a wide variety of algae species specific to the requirements of customers.

Global consumer spending on the omega-3 foods and beverage products (excluding fish), health and beauty care products (including supplements), and pet products was estimated at $13 billion in 2011. The global retail market for omega-3-enhanced foods was estimated at nearly $8 billion in 2010, a 17% increase over 2009 sales. The global market for omega-3 packaged consumer products was projected to continue robust growth through 2015, at annual growth rates of 15%-20%. (source: Packaged Facts - Global Trends and Opportunities, September 2011)

We expect to generate revenue by supplying powdered algae biomass, initially chlorella powder and tablets, and subsequently Omega-3 oil, which can be used as nutrient rich ingredients for our customers. The current average prices (May 2014) are $46.80/kg for Chlorella powder – wholesale (source: Frost & Sullivan, Chris Shanahan April 2013), Chlorella tablets $250/kg (retail) and $87.85/kg -wholesale for Omega-3 oils ((source: F & S June 2011) While this pricing data is the most recent available to us, and we believe it to be indicative of current market conditions, investors are cautioned not to place undue reliance upon such data. There are nearly 1,000 new products with Chlorella as an ingredient for food and beverage markets. (source: Agriculture Canada, April 2013)

The BioSilo ™ system is comprised of the Pure BioSilo ™ and Pro-BioSilo ™ components. The Pure-BioSilo™ process was proven to be successful during cultivation of three different species supplied by Dr. Kirsten Muller, Phycology/Biology department at the University of Waterloo. This system will be utilized to inoculate our commercial scale Pro-BioSilo™, designed for enhanced productivity without affecting nutritional values of Chlorella microalgae. This system demonstrates a high growth rate at high biomass concentrations with consistent properties.

Pro-BioSilo™ operates in a fed-batch mode for suspended cell cultures. In fed-batch mode, additional media and nutrients are added to the bioreactor at different times during the cell cultivation process to supplement the carbon source and other nutrients.

An experimental 5 litre set-up has demonstrated concentrations of 100 grams/litre over a five day period, when its expediential productivity curve was reached. The Pure-BioSilo™ process has been successfully scaled up to 500 litres. During the initial commercialization phase, the Pro-BioSilo™ process will be utilizing a 50 litre system. Once the growth rates are confirmed and parameters established, we intend to add multiple 100 litre vessels - each producing 800 grams/day of chlorella powder. This production volume will be used to obtain all necessary certifications and provide prospective customers with samples to secure initial sales.

While we have been in business since 2008, we have not generated any revenues to date. Our activities have been principally directed towards development of our BioSilo™ algae cultivation system, as well as proving the ability of the system to scale to a level sufficient to meet commercial demand that may develop. However, there can be no assurance that our commercial scale facility will produce the pure contaminant – free algae biomass in sufficient quantity or that the market will accept our powdered algae biomass.

We incurred a net loss of $232,956 for the year ended March 31, 2014, and a working capital deficit of $434,263 as of March 31, 2014, and our net loss increased to $566,598 during the six month period ended September 30, 2014 as we increased our activities leading up to commercial production. We do not anticipate having a positive net income in the immediate future. Net cash used by operations for the year ended March 31, 2014 was $207,105 and $263,957 for the six month period ended September 30, 2014. These conditions create an uncertainty as to our ability to continue as a going concern.

Emerging Growth Company Status

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including, but not limited to: presenting only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure in this prospectus; not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; having reduced disclosure obligations regarding executive compensation in our periodic reports and proxy or information statements; being exempt from the requirements to hold a non-binding advisory vote on executive compensation or seek stockholder approval of any golden parachute payments not previously approved; and not being required to adopt certain accounting standards until those standards would otherwise apply to private companies. As an "emerging growth company" under the JOBS Act, we are permitted to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. However, we are electing not to take advantage of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to not take advantage of the extended transition period for complying with new or revised accounting standards is irrevocable.

Although we are still evaluating our options under the JOBS Act, we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an "emerging growth company" and thus the level of information we provide may be different than that of other public companies. If we do take advantage of any of these exemptions, some investors may find our securities less attractive, which could result in a less active trading market for our common stock, and our stock price may be more volatile.

We could remain an "emerging growth company" until the earliest to occur of:

	●	the last day of the fiscal year following the fifth anniversary of this offering;

	●	the last day of the first fiscal year in which our annual gross revenues exceed US$1 billion;

	●	the last day of the fiscal year in which we are deemed to be a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700 million as of the last business day of the second fiscal quarter of such fiscal year; or

	●	the date on which we have issued more than US$1 billion in non-convertible debt securities during the preceding three-year period.

SUMMARY OF THE OFFERING

Common shares offered by the Company		None

Common shares offered by the selling shareholders		1,801,212(1)

Common shares outstanding after the offering		9,541,210(1)

Use of proceeds		We will not receive any proceeds from the resale of the shares offered hereby, all of which proceeds will be paid to the selling shareholders.

Risk Factors		The common shares offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors”.

(1) Includes 327,500 common shares issuable upon the exercise of outstanding warrants the resale of which is registered pursuant to this registration statement but does not include common shares issuable upon exercise of warrants which are currently exercisable but have not been registered under the registration statement.

SUMMARY OF FINANCIAL INFORMATION

The following selected financial information is derived from the Company’s Financial Statements appearing elsewhere in this Prospectus and should be read in conjunction with the Company’s Financial Statements, including the notes thereto, appearing elsewhere in this Prospectus. The amounts below are expressed in Canadian dollars.

	Fiscal year ended March 31, 2014 (audited)			Fiscal year ended March 31, 2013 (audited)			Six months ended September 30, 2014 (unaudited)			Six months ended September30, 2013 (unaudited)
Operating Statement Data:
Revenues	$	0		$	0		$	0		$	0
Expenses		232,956			91,369			566,598			40,613
Profit (Loss) from Operations	$	(232,956	)	$	(91,369	)	$	(566,598	)	$	(40,613	)
Net Loss	$	(232,956	)	$	(91,369	)	$	(566,598	)	$	(40,613	)
Net Profit (Loss) Per Share	$	(0.03	)	$	(0.01	)	$	(0.06	)	$	(0.00	)
Balance Sheet Data:
Total Assets	$	125,132		$	13,575		$	174,286
Total Liabilities		518,936			502,603			797,218
Common shares issued and outstanding		8,606.250			8,606.250			9,207,010
Shareholders’ Equity (Deficiency)	$	(393,804	)	$	(489,028	)	$	(622,932	)

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

Except for statements of historical facts, this Prospectus contains forward-looking statements involving risks and uncertainties. The words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan” or the negative of these terms and similar expressions or variations thereof are intended to forward looking statements. Such statements reflect the current view of the Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the section of this registration statement on Form S-1 entitled “Risk Factors”) relating to the Registrant’s industry, the Registrant’s operations and results of operations and any businesses that may be acquired by the Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Although the Registrant believes that the expectations reflected in the forward looking statements are reasonable, the Registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with the Registrant’s financial statements and the related notes included in this registration statement on Form S-1.

RISK FACTORS

You should carefully consider the risks described below together with all of the other information included in our public filings before making an investment decision with regard to our securities. The statements contained in or incorporated into this registration statement on Form S-1 that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. While the risks described below are the ones we believe are most important for you to consider, these risks are not the only ones that we face. If any of the following events described in these risk factors actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common shares could decline, and you may lose all or part of your investment.

General Risk Factors

We have a limited operating history and number of commercialized products, have incurred significant losses to date and anticipate continuing to incur losses in the future, and we may not achieve or maintain profitability. As a result, our financial statements contain a "going concern" explanatory paragraph.

We are an early stage company with a limited operating history, and we have only recently begun to commercialize our products. We have incurred operating losses since our inception in October 2008, and we expect to continue to incur operating losses for the foreseeable future. At March 31, 2014, we had an accumulated deficit of $722,084. For the years ended March 31, 2014 and 2013, we had a net loss attributable to common shareholders of $232,956, and $91,369, respectively. The loss accelerated in the six month period ended September 30, 2014 to $566,598 as we increased our activities leading up to commercial production. As a result, the financial statements of the Company include an explanatory paragraph stating that there is substantial doubt that the Company will continue as a going concern. If our revenues grow slower than anticipated, or if operating expenses exceed expectations, then we may not be able to achieve profitability in the near future or at all, which may depress our stock price.

Our products are in the early stages of commercialization, and our business may fail if we are not able to successfully generate significant revenues from these products.

Our future success will depend in part on our ability to commercialize the product candidates we are developing. Successful development of our product candidates will require significant additional investment, including costs associated with research and development, completing field trials and obtaining regulatory approval, as well as the ability to manufacture our products in large quantities at acceptable costs while also preserving high product quality. Difficulties often encountered in scaling up production include problems involving production yields, quality control and assurance, shortage of qualified personnel, production costs and process controls. In addition, we are subject to inherent risks associated with new products and technologies. These risks include the possibility that any product candidate may:

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be found unsafe;

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be ineffective or less effective than anticipated;

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fail to receive necessary regulatory approvals;

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be difficult to competitively price relative to alternative methods of production of Chlorella and Omega-3;

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be difficult or impossible to manufacture on an economically viable scale;

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be subject to supply chain constraints for raw materials;

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fail to be developed and accepted by the market prior to the successful marketing of similar products by competitors;

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be impossible to market because it infringes on the proprietary rights of third parties; or

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be too expensive for commercial use.

Failure to achieve expected manufacturing yields for our products could negatively impact our operating results.

Low yields may result from process design, development stage or process technology failures. We do not know whether a yield problem exists until our products are manufactured based on our design. When a yield issue is identified, the product is analyzed and tested to determine the cause. As a result, yield deficiencies may not be identified until well into the production process. We have limited experience producing our products at commercial scale, and we will not succeed if we cannot maintain or decrease our production costs and effectively scale our technology and manufacturing processes.

We have limited experience in marketing and selling our products and will need to expand our sales and marketing infrastructure.

We currently have limited sales and marketing experience and capabilities. We will need to further develop our sales and marketing capabilities in order to successfully commercialize the products we are developing, which may involve substantial costs. There can be no assurance that the members of our sales and marketing team will successfully compete against the sales and marketing teams of our current and future competitors, many of which may have more established relationships with distributors and growers. Our inability to recruit, train and retain sales and marketing personnel or their inability to effectively market and sell the products we are developing could impair our ability to gain market acceptance of our products and cause our sales to suffer.

If we are unable to maintain and further establish successful relations with third-party distributors, or they do not focus adequate resources on selling our products or are unsuccessful in selling them to end users, we may not achieve significant sales of our products.

Our future revenue growth will depend in large part on our success in establishing and maintaining this sales and distribution channel. If our distributors are unable to sell our products, or receive negative feedback from end users, they may not continue to purchase or market our products.

In addition, there can be no assurance that our distributors will focus adequate resources on selling our products to end users or will be successful in selling them. Many of our potential distributors are in the business of distributing and sometimes manufacturing other, possibly competing, products. As a result, these distributors may perceive our products as a threat to various product lines currently being distributed or manufactured by them. In addition, these distributors may earn higher margins by selling competing products or combinations of competing products. If we are unable to establish or maintain successful relationships with independent distributors, we will need to further develop our own sales and distribution capabilities, which would be expensive and time-consuming and the success of which would be uncertain.

We rely on the experience and expertise of our senior management team and other key personnel, and if we are unable to recruit or retain qualified personnel, our development and commercialization efforts may be significantly delayed.

We depend heavily on the principal members of our management, particularly Richard Rusiniak, our co-founder and Chief Executive Officer, and Paul Ramsay, our co-founder and President, the loss of whose services might significantly delay or prevent the achievement of our business objectives. We do not maintain key-man insurance on their lives.

As we expand our operations, we will need to hire additional qualified research and development and management personnel to succeed. The process of hiring, training and successfully integrating qualified personnel into our operation is a lengthy and expensive one. The market for qualified personnel is very competitive because of the limited number of people available with the necessary technical skills and understanding of our technology and anticipated products. Our failure to hire and retain qualified personnel could impair our ability to meet our research and development and business objectives and adversely affect our results of operations and financial condition.

We also have relationships with scientific collaborators at academic and other institutions, some of whom conduct research at our request or assist us in formulating our research and development strategy. These scientific collaborators are not our employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us. We have limited control over the activities of these scientific collaborators and can generally expect these individuals to devote only limited amounts of time to our activities. The inability of any of these persons to devote sufficient time and resources to our programs could harm our business. In addition, these collaborators may have arrangements with other companies to assist those companies in developing technologies that may compete with our products.

Our intellectual property is integral to our business. If we are unable to protect our patents and proprietary rights, our business could be adversely affected.

Our success depends in part on our ability to obtain and maintain patent and other proprietary rights protection for our technologies and products in the United States and other countries. If we are unable to obtain or maintain these protections, we may not be able to prevent third parties from using our proprietary rights. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. As of March 31, 2014, we had one U.S. and one Canadian engineering and process patents allowed and we anticipate filing additional patent applications in the medium term.

The patent position of biotechnology and biochemical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. The laws of some foreign countries do not protect proprietary rights to the same extent as the laws of the United States, and we may encounter significant problems and costs in protecting our proprietary rights in these foreign countries.

Our patents may be challenged, narrowed, invalidated or circumvented. In addition, our issued patents may not contain claims sufficiently broad to protect us against third parties with similar technologies or products or provide us with any competitive advantage. We are not certain that our future patent applications will be issued. Moreover, our competitors could challenge or circumvent our patents or pending patent applications. It is also not possible to patent and protect all knowledge and know-how associated with our products so there may be areas that are not protected such as certain formulations and manufacturing processes. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Intellectual property litigation could cause us to spend substantial resources and could distract our personnel from their normal responsibilities.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development, sales, marketing or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.

We have taken measures to protect our trade secrets and know-how, including the use of confidentiality agreements with our employees, consultants, advisors and third-party manufacturers. It is possible that these agreements may be breached and that any remedies for a breach will not make us whole. In addition, some courts inside and outside of the United States are less willing or unwilling to protect trade secrets. We generally control and limit access to, and the distribution of, our product documentation and other proprietary information. Despite our efforts to protect these proprietary rights, our trade secret-protected know-how could fall into the public domain, unauthorized parties may copy aspects of our process and obtain and use information that we regard as proprietary. We also cannot guarantee that other parties will not independently develop our knowhow or otherwise obtain access to our technologies.

Third parties may misappropriate our algae strains.

Third parties, including contract manufacturers, often have custody or control of our algae strains. If our algae strains were stolen, misappropriated or reverse engineered, they could be used by other parties who may be able to reproduce the algae strains for their own commercial gain. If this were to occur, it would be difficult for us to challenge and prevent this type of use, especially in countries with limited intellectual property protection.

Other companies may claim that we infringe their intellectual property or proprietary rights, which could cause us to incur significant expenses or prevent us from selling our products.

Our success depends in part on our ability to operate without infringing the patents and proprietary rights of third parties. Product development is inherently uncertain in a rapidly evolving technological environment such as ours in which there may be numerous patent applications pending, many of which are confidential when filed, with regard to similar technologies. Patents issued to third parties may contain claims that conflict with our patents and that may place restrictions on the commercial viability of our products and technologies. Third parties could assert infringement claims against us in the future. We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products, product candidates and technology. We may not be aware of all such third-party intellectual property rights potentially relevant to our products and product candidates.

Any litigation, adversarial proceeding or proceeding before governmental authorities regarding intellectual property rights, regardless of its outcome, would probably be costly and require significant time and attention of our key management and technical personnel. Litigation, adversarial proceedings or proceedings before governmental authorities could also force us to:

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stop or delay using our proprietary technology;

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stop or delay selling, manufacturing or using products that incorporate the challenged intellectual property;

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pay damages; and/or

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enter into licensing or royalty agreements which, if available at all, may only be available on unfavorable terms.

Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

If we fail to maintain and successfully manage our existing, or enter into new, strategic collaborations and other relationships, we may not be able to expand commercial development and sales of many of our products.

Our ability to enter into, maintain and manage collaborations and other relationships in our markets is fundamental to the success of our business. We may not be successful in entering into such arrangements with third parties for the sale and marketing of our products. Any failure to enter into new strategic arrangements on favorable terms or to maintain or manage our existing strategic arrangements could delay or hinder our ability to develop and commercialize our ingredients and could increase our costs of development and commercialization.

We may be exposed to product liability claims, which could harm our business.

The manufacture and sale of food additives and health products is regulated by various local, state, federal and foreign environmental and public health agencies. The costs of remediation or product liability could materially adversely affect our future quarterly or annual operating results.

We may be held liable for, or incur costs to settle, liability claims if any products we develop, or any products that use or incorporate any of our technologies, cause injury or are found unsuitable during product testing, manufacturing, marketing, sale or use. These risks exist even with respect to products that have received, or may in the future receive, regulatory approval, registration or clearance for commercial use. We cannot guarantee that we will be able to avoid product liability exposure.

We currently maintain product liability insurance at levels we believe are sufficient and consistent with industry standards for companies at our stage of development. We cannot guarantee that our product liability insurance is adequate and, at any time, it is possible that this insurance coverage may not be available on commercially reasonable terms or at all. A product liability claim could result in liability to us greater than our assets or insurance coverage. Moreover, even if we have adequate insurance coverage, product liability claims or recalls could result in negative publicity or force us to devote significant time and attention to those matters, which could harm our business.

Our business is subject to various governmental regulations, and compliance with these regulations may cause us to incur significant expenses. If we fail to maintain compliance with applicable regulations, we may be forced to recall products and cease their manufacture and distribution, which could subject us to civil or criminal penalties.

The complex legal and regulatory environment exposes us to compliance and litigation costs and risks that could materially affect our operations and financial results. These laws and regulations may change, sometimes significantly, as a result of political or economic events. They include environmental laws and regulations, tax laws and regulations, import and export laws and regulations, government contracting laws and regulations, labor and employment laws and regulations, securities and exchange laws and regulations, and other laws such as the Foreign Corrupt Practices Act. In addition, proposed laws and regulations in these and other areas could affect the cost of our business operations. We face the risk of changes in both domestic and foreign laws regarding trade, potential loss of proprietary information due to piracy, misappropriation or foreign laws that may be less protective of our intellectual property rights. Violations of any of these laws and regulations could subject us to criminal or civil enforcement actions, any of which could have a material adverse effect on our business, financial condition or results of operations.

Risks Related to this Offering

There is no active market for the Company’s securities

Currently, no active market exists for the common shares and there is no assurance that an active trading market will ever develop or, if developed, that it will be sustained. A purchaser of the common shares may, therefore, be unable to resell the purchased securities. Consequently, holders of the common shares may not be able to liquidate their investment in the event of an emergency or for any other reason, and the purchased securities may not be readily accepted as collateral for a loan. Therefore, proposed investors are advised that the purchase of the common shares should be considered only as a long-term and speculative high-risk investment. Due to the absence of a public market for the purchased securities: (i) investors may not be able to liquidate their investment in the event of an unexpected need for cash; (ii) transferability of the purchased securities is extremely limited; and (iii) in the event of a disposition of the purchased securities, the investor could sustain a loss of all or any part of his investment.

The Company has no current plans to pay dividends on its Common Shares.

The Company does not anticipate paying any cash dividends in the foreseeable future. If the Company incurs indebtedness in the future to fund its future growth, its ability to pay dividends may be further restricted by the terms of such indebtedness.

Because a small number of existing shareholders own a large percentage of the Company's voting stock, you will have minimal influence over shareholder decisions.

Existing management has significant stock ownership in the Company and will retain control of the Company in the future. As a result of such ownership concentration, these individuals will have significant influence over the management and affairs of the Company and its business. It will also exert considerable, ongoing influence over matters subject to stockholder approval, including the election of directors and significant corporate transactions, such as a merger, sale of assets or other business combination or sale of the Company. This concentration of ownership may have the effect of delaying, deferring, or preventing a change in control, impeding a merger, consolidation, takeover or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, even if such a transaction would benefit other stockholders.

If we fail to maintain proper and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors' views of us and, as a result, the value of our common stock.

Pursuant to Section 404 of the Sarbanes-Oxley Act, our management will be required to report upon the effectiveness of our internal control over financial reporting beginning with the annual report for our fiscal year ending March 31, 2016. When and if we are a "large accelerated filer" or an "accelerated filer" and are no longer an "emerging growth company," each as defined in the Exchange Act, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting. However, for so long as we remain an emerging growth company, we intend to take advantage of an exemption available to emerging growth companies from these auditor attestation requirements. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. To comply with the requirements of being a reporting company under the Exchange Act, we will need to upgrade our systems including information technology; implement additional financial and management controls, reporting systems, and procedures; and hire additional accounting and finance staff. If we or, if required, our auditors are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in our financial reporting, and the trading price of our common stock may decline.

We are an emerging growth company, and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act and are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements, exemptions from the requirements of holding non-binding advisory votes on executive compensation and seeking stockholder approval of any golden parachute payments not previously approved and not being required to adopt certain accounting standards until those standards would otherwise apply to private companies. We could be an emerging growth company until the last day of the fiscal year following the fifth anniversary of this offering, although circumstances could cause us to lose that status earlier, including if we become a large accelerated filer (in which case we will cease to be an emerging company as of the date we become a large accelerated filer, which, generally, would occur if, at the end of a fiscal year, among other things, the market value of our common stock that is held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter), if we have total annual gross revenue of US$1.0 billion or more during any fiscal year (in which cases we would no longer be an emerging growth company as of March 31 of such fiscal year), or if we issue more than US$1.0 billion in non-convertible debt during any three year period before that time (in which case we would cease to be an emerging growth company immediately). Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company," which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile

You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under Canadian law, we conduct substantially all of our operations in Canada and most of our directors and all of our executive officers reside outside the United States.

We are incorporated in Canada and conduct substantially all of our operations in Canada. Most of our directors and all of our executive officers reside outside the United States and a substantial portion of their assets are located outside of the United States. As a result, it may not be possible for investors to enforce, outside the United States, judgments against the Company obtained in the United States in any such actions, including actions predicated upon the civil liability provisions of the United States federal and state securities laws. In addition, certain of the directors and officers of the Company are residents of Canada or other jurisdictions outside of the United States, and all or a substantial portion of the assets of those directors and officers are or may be located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon those persons, or to enforce against them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of United States federal and state securities laws.

USE OF PROCEEDS

We will receive no proceeds from the sale of any of or all of the shares being offered by the selling security holders under this prospectus.

DETERMINATION OF OFFERING PRICE

This prospectus covers the resale by selling shareholders of shares of our Common Stock that they have already acquired from us. The selling shareholders initially will sell shares of common stock at a price of US$1.50 per share until they are quoted on the OTCBB, and thereafter may sell some or all of their shares from time to time at prevailing market prices, once they are quoted on the OTCBB, or at privately negotiated prices, and may sell either directly or through a broker-dealer in transactions between selling shareholders and purchasers, or otherwise. The initial offering price was determined based on the selling shareholders’ internal assessment of what the market would support. There is no relationship whatsoever between this price and our assets, results of operations, book value or any other objective criteria of value. A FINRA registered broker-dealer unaffiliated with the Company or the selling shareholders has applied to have our common shares quoted on the OTC Bulletin Board. We intend to file a registration statement under the Exchange Act concurrently with the effectiveness of the registration statement of which this prospectus is a part. If our common shares become quoted on the OTC Bulletin Board and a market for the shares develops, the actual price of shares will be determined by prevailing market prices at the time of sale or by private transactions. The offering price would thus be determined by market factors.

SELLING SHAREHOLDERS AND CERTAIN BENEFICIAL OWNERS

The following table sets forth as of November 14, 2014, certain information with respect to the beneficial ownership of the common shares as to each selling stockholder listed below (collectively, the “Selling Shareholders”), together with the beneficial ownership of each of our directors and officers, and our directors and officers as a group.

	Shares Beneficially Owned Prior to Offering						Shares which may be offered Pursuant to this Offering			Shares Beneficially Owned After Offering
Name	Number			Percent (a)			Number			Number (b)			Percent (a)

Paul Ramsay		3,894,230			42.3	%		389,423			3,504,807			38.0	%
4120 Ridgeway Drive. Unit 37,
Mississauga, ON L5L 5S9 Canada
Richard Rusiniak		3,894,230			42.3	%		389,423			3,504,807			38.0	%
4120 Ridgeway Drive. Unit 37,
Mississauga, ON L5L 5S9 Canada
W. Cameron McDonald		0			0	%		0			0			0	%
4120 Ridgeway Drive. Unit 37,
Mississauga, ON L5L 5S9 Canada
Ross Eastley		311,538			3.38	%		31,154			280,384			3.0	%
4120 Ridgeway Drive. Unit 37,
Mississauga, ON L5L 5S9 Canada
P. Blair Mullin		337,500	(1)		3.5	%		325,000	(1)		12,500	(1)		*
7185 Joshua Road
Oak Hills, CA 92344
Graeme Phipps		66,963	(2)		*			44,642			22,321	(2)		*
Kristen Muller		312,500			3.39	%		31,250			281,250			3.1	%
Brendan McConkey		75,000			*			7,500			67,500			*
Sarah Ruffell		112,500			1.22	%		11,250			101,250			1.1	%
Sandra Ramsay and Paul Gowan		17,250	(3)		*			12,750			4,500	(3)		*
Robert MacLean		9,250	(4)		*			7,000			2,250	(4)		*
Catherine Chiesa		26,786	(5)		*			17,857			8,929	(5)		*
Roy Gallo		33,482	(6)		*			22,321			11,161	(6)		*
Cindy Paskey		33,482	(6)		*			22,321			11,161	(6)		*
Burt Schertzing		13,392	(7)		*			8,928			4,464	(7)		*
David Fast		22,875	(8)		*			15,250			7,625	(8)		*
Dianne Green		53,571	(9)		*			35,714			17,857	(9)		*
Michael Green		60,267	(10)		*			40,178			20,089	(10)		*
Fayroon Kandasamy		91,071	(11)		*			60,714			30,357	(11)		*
Michael Cordasco		26,384	(12)		*			17,589			8,795	(12)		*
6846360 Canada Ltd.
Carmen Menechella		13,500	(13)		*			9,000			4,500	(13)		*
632162 Ontario Ltd.
Marvin Mimms		13,500	(13)		*			9,000			4,500	(13)		*
Peter Padula		13,500	(13)		*			9,000			4,500	(13)		*
Padula Holdings Inc.
Dino Padula		13,500	(13)		*			9,000			4,500	(13)		*
D.P. Holdings Inc.
Elio Petrocelli		13,500	(13)		*			9,000			4,500	(13)		*
Petrocelli Holdings Inc.
Monika Pompetzki		13,392	(7)		*			8,928			4,464	(7)		*
Sandra Elsley		22,500	(14)		*			22,500	(14)		0			0	%
Fred Hawa		5,000	(15)		*			5,000	(15)		0			0	%
Gillies Hunter		20,088	(16)		*			13,392			6,696	(16)		*
Patricia Johann Widdis		200,892	(17)		2.16	%		133,928			66,964	(17)		*
Teresa Nowak		13,500	(13)		*			9,000			4,500	(13)		*
Sylvia Nowak		27,750	(18)		*			18,500			9,250	(18)		*
Michael Lynch		13,500	(13)		*			9,000			4,500	(13)		*
Lawrence MacLean		6,750	(19)		*			4,500			2,250	(19)		*
Marc Sawicki		7,500	(20)		*			5,000			2,500	(20)		*
Marianna Glazounova		44,250	(21)		*			29,500			14,750	(21)		*
Joseph P. Galda		10,050	(22)		*			6,700			3,350	(22)		*
All directors and officers as a group (6 persons)		8,459,998	(1)(14)		88.6	%		1,157,500	(23)		7,302,498			79.2	%

(1)	Includes 25,000 common shares and exercisable warrants to purchase 312,500 common shares registered in the name of Apollo Marketing LLC, as to which Mr. Mullin exercises sole voting and investment control.

(2)	Includes exercisable warrants to purchase 22,321 common shares.

(3)	Includes exercisable warrants to purchase 4,500 common shares.

(4)	Includes exercisable warrants to purchase 2,250 common shares.

(5)	Includes exercisable warrants to purchase 8,929 common shares.

(6)	Includes exercisable warrants to purchase 11,161 common shares.

(7)	Includes exercisable warrants to purchase 4,464 common shares.

(8)	Includes exercisable warrants to purchase 7,625 common shares.

(9)	Includes exercisable warrants to purchase 17,857 common shares.

(10)	Includes exercisable warrants to purchase 20,089 common shares.

(11)	Includes exercisable warrants to purchase 30,357 common shares.

(12)	Includes exercisable warrants to purchase 8,795 common shares.

(13)	Includes exercisable warrants to purchase 4,500 common shares.

(14)	Includes exercisable warrants to purchase 22,500 common shares.

(15)	Includes exercisable warrants to purchase 5,000 common shares.

(16)	Includes exercisable warrants to purchase 6,696 common shares.

(17)	Includes exercisable warrants to purchase 66,964 common shares.

(18)	Includes exercisable warrants to purchase 9,250 common shares.

(19)	Includes exercisable warrants to purchase 2,250 common shares.

(20)	Includes exercisable warrants to purchase 2,500 common shares.

(21)	Includes exercisable warrants to purchase 14,750 common shares.

(22)	Includes exercisable warrants to purchase 3,350 common shares.

(23)	Includes exercisable warrants to purchase 322,500 common shares.

* Less than 1%

(a) Applicable percentage of ownership is based on 9,213,710 shares of Common Stock outstanding as of November 14, 2014 plus all applicable options, warrants and other securities convertible into shares of Common Stock for the named stockholder. Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting and investment power with respect to shares. Shares of Common Stock subject to options, warrants or other convertible securities exercisable within 60 days after November 14, 2014 are deemed outstanding for computing the percentage ownership of the person holding such options, warrants or other convertible securities, but are not deemed outstanding for computing the percentage of any other person. Except as otherwise noted, the named beneficial owner has the sole voting and investment power with respect to the shares shown .

(b) Assumes sale of all shares offered under this prospectus.

Certain of the Selling Shareholders are related to one another. Mr. Ramsay is common law to Sylvia Nowak, and is the brother of Sandra Ramsay and brother-inlaw to Paul Gowan. Teresa Nowak is the mother of Sylvia Nowak.

Mr. Rusiniak is common law to Marianna Glasounova. Dianne and Michael Green and Cindy Paskey and Roy Gallo are married to each other, respectively. Peter and Dino Padula are brothers.

Messrs. Ramsay, Rusiniak, and Eastley, Dr. McConkey, Dr. Muller and Ms. Ruffell are founding shareholders of the Company and acquired all of their common shares at the founding of the Company at a price of $0.0012 per share. Sandra Ramsay and Paul Gowan acquired 3,750 shares and Robert MacLean acquired 2,500 common shares at the founding of the Company at a price of $0.0012 per share and the balance of their shares and warrants in the private placement described below. Of Mr. Mullin’s common shares, beneficial ownership of 300,000 common shares was acquired under warrants issued pursuant to an advisory agreement (See “Certain Relationships and Related Party Transactions”) and the balance were acquired in the private placement. Ms. Elsley and Mr. Hawa acquired their warrants as compensation for services provided to the Company. Graeme Phipps acquired his units at $0.56 on June 6, 2014.The balance of the common shares offered by the selling shareholders was acquired in a private placement for cash at a purchase price of $1.12 per unit, each unit consisting of one common share and one-half common share purchase warrant. See “Description of Securities.” Mr. Galda acquired his common shares and warrants on October 22, 2014 upon cancellation of US$10,050 of legal fees at a deemed purchase price of US$1.50 per unit, each unit consisting of one common share and one-half common share purchase warrant, exercisable for two years at US$1.50 per share.

None of the selling shareholders are broker-dealers.

Except for Messrs. Rusiniak, Ramsay, Eastley, Mullin, and Ms. Elsley, each of whom is a current director and/or officer of the Company, and Drs. Muller and McConkey and Ms. Ruffell, each of whom is a current consultant to the Company, none of the selling shareholders have had any material relationship with the Company.

PLAN OF DISTRIBUTION

The selling shareholders may use any one or more of the following methods when selling shares:

●

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

●

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

●

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

●

privately negotiated transactions;

●

short sales;

●

agreements with broker-dealers to sell a specified number of such shares at a stipulated price per share;

●

a combination of any such methods of sale; and

●

any other method permitted pursuant to applicable law.

The selling shareholders may also sell shares under Rule 144 under the Securities Act of 1933, or the Securities Act, if available, rather than under this prospectus.

The selling shareholders may enter into hedging transactions with third parties, which may in turn engage in short sales of the Common Stock in the course of hedging the position they assume. The selling shareholders may also enter into short positions or other derivative transactions relating to the Common Stock, or interests in the Common Stock, and deliver the Common Stock, or interests in the Common Stock, to close out their short or other positions or otherwise settle short sales or other transactions, or loan or pledge the Common Stock, or interests in the Common Stock, to third parties that in turn may dispose of these securities.

Our obligation to register, or maintain, a registration statement governing the shares registered for resale hereunder will terminate:

●

if all the shares have been registered and sold pursuant to this registration effected or pursuant to exempt transactions; or

●

at such time as all shares held by the selling shareholders may be sold within a three-month period under Rule 144, either because each selling stockholder holds 1% or less of our then-outstanding Common Stock or because each selling stockholder can sell all of its shares under Rule 144(k) without volume or time limitations.

The selling shareholders may also sell their shares directly to market makers acting as principals or brokers or dealers, who may act as agent or acquire the Common Stock as a principal. Any broker or dealer who participates in such transactions as an agent may receive a commission from the selling shareholders, or, if it acts as agent for the purchaser of such Common Stock, from such purchaser. The selling shareholders will likely pay the usual and customary brokerage fees for such services. Brokers or dealers may agree with the selling shareholders to sell a specified number of shares at a stipulated price per share and, to the extent such broker or dealer is unable to do so acting as agent for the selling shareholders, to purchase, as principal, any unsold shares at the price required to fulfill the respective broker’s or dealer’s commitment to the selling shareholders. Brokers or dealers who acquire shares as principals may thereafter resell such shares from time to time in transactions in a market or on an exchange, in negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices, and in connection with such re-sales may pay or receive commissions to or from the purchasers of such shares. These transactions may involve cross and block transactions that may involve sales to and through other brokers or dealers. If applicable, the selling shareholders may distribute shares to one or more of their partners who are unaffiliated with us. Such partners may, in turn, distribute such shares as described above. The selling shareholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. We can provide no assurance that all or any of the Common Stock offered will be sold by the selling shareholders.

We are bearing all costs relating to the registration of the Common Stock. The selling shareholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the Common Stock. The selling shareholders must comply with the requirements of the Securities Act and the Securities Exchange Act of 1934 in the offer and sale of the Common Stock. In particular, during such times as the selling shareholders may be deemed to be engaged in a distribution of the Common Stock, and therefore be considered to be underwriters, they must comply with applicable law and, among other things, must:

1. Not engage in any stabilization activities in connection with our Common Stock;

2. Furnish each broker or dealer through which Common Stock may be offered such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and

3. Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Securities Exchange Act.

Under the Securities Exchange Act and the regulations thereunder, any person engaged in a distribution of the shares of our Common Stock offered by this prospectus may not simultaneously engage in market making activities with respect to our Common Stock during the applicable “cooling off” periods prior to the commencement of such distribution. Also, the selling shareholders are subject to applicable provisions that limit the timing of purchases and sales of our Common Stock by the selling security holders.

We have informed the selling shareholders that, during such time as they may be engaged in a distribution of any of the shares we are registering by this registration statement, they are required to comply with Regulation M. In general, Regulation M precludes any selling stockholder, any affiliated purchasers and any broker-dealer or other person who participates in a distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase, and any security which is the subject of the distribution until the entire distribution is complete. Regulation M defines a “distribution” as an offering of securities that is distinguished from ordinary trading activities by the magnitude of the offering and the presence of special selling efforts and selling methods. Regulation M also defines a “distribution participant” as an underwriter, prospective underwriter, broker, dealer, or other person who has agreed to participate or who is participating in a distribution.

No stockholder may offer or sell shares of our Common Stock under this prospectus unless such stockholder has notified us of his or her intention to sell shares of our Common Stock and the registration statement of which this prospectus is a part has been declared effective by the SEC, and remains effective at the time such selling stockholder offers or sells such shares. We are required to amend the registration Statement of which this prospectus is a part to reflect material developments in our business and current financial information. Each time we file a post-effective amendment to our registration statement with the SEC, it must first become effective prior to the offer or sale of shares of our Common Stock by the selling shareholders.

DESCRIPTION OF BUSINESS

Mission

Algae Dynamics’ mission is to be a leading producer of low-cost ultra-pure algae oil and biomass with high nutrient content for the functional food/beverage additive and health supplement industries.

Overview

The Company has developed the scalable BioSilo™ algae cultivation system for the production of ultra-pure algae biomass for the functional food/beverage additives and pure supplement markets. Management believes this core technology produces algae biomass that exceeds the purity of our competitors, without the need for additional refinement, providing a key cost advantage. This positions the Company to meet the increasing market gap between supply and demand for algae biomass in several rapidly growing markets including high value ingredients for beverage, food, healthcare, nutraceuticals and supplement products.

The Company is ready to build its first commercial scale system to be followed by multiple additional systems as part of its commercial growth strategy. The Company will generate revenue by supplying algae biomass in a powder form or oil that can be used as nutrient rich ingredients for its customers. The average prices are US$87.85/kg for the Omega-3 oils (source: Frost & Sullivan June, 2011) and US$46.80 per kg for algae Chlorella powder (source F & S, Chris Shanahan April, 2013).

The reader is cautioned that the price data is the most recent available for the Company. While management believes this price is still representative of market conditions, there is a risk that prices have decreased in the meantime, as a result of which, the profit margins anticipated by the Company could be less than anticipated. However, even if prevailing market prices have decreased, the lower margins could work to the Company’s advantage because, as management believes, its BioSilo™ process gives it a production cost advantage over certain competing production methods, such as the more common open-pond system.

Our key competitive advantage is process engineering control which ensures the best possible outcomes for each algae species at a low cost. Growing algae is a blend of a controlled environment and species selection. The Company's production flexibility and tight control allows it to interchange selected species for improved algae yield and quality or client and marketplace demands as required. This provides an immediate and long term competitive advantage allowing the Company to quickly and profitably enter the market as R&D on species selection evolves.

Through its original shareholders' agreement with researchers at the the University of Waterloo, the Company has access to proprietary algae species developed in the researcher's labs that management believes have very high growth rates and nutrient content. The design enables full control of all cultivation parameters allowing Algae Dynamics to achieve optimum growing conditions for any algae species. As well, a unique CO2 delivery system enhances delivery efficiency and minimizes CO 2 losses from the system. In essence, Algae Dynamics is combining expertise in the science of algae cultivation with the efficiency of thoughtful engineering. While the shareholder agreement was recently terminated in connection with this offering , pursuant to the agreement terminating the shareholder agreement, the obligation to continue to provide access to algae strains remains intact.

The Company has entered into a memorandum of understanding with POS Biosciences for key process variables such as oil extraction and EPA/DHA separation, although there is no definitive agreement in place. CO₂and agriculture quality nutrients are expected to be supplied by outside suppliers which will be managed by us. Under the POS memorandum of understanding, POS will assist the Company in the commercialization of the Company's algae strains by idenitfying, isolating, extracting, concentating, spray drying and purifying a wide range of algae-based components. POS also has in place the appropriate licenses and quality assurance standards for food and nutriceutical products. Billing for POS services will be on a project by project basis on terms to be negotiated.

BioSilo™

Algae Dynamics has engineered a proprietary algae production technology, the Algae Dynamics BioSilo ™ , which maximizes growth and purity, while minimizing its footprint through a modular design. It allows us to cultivate a wide variety of algae species to the nutrient and purity requirements of our prospective customers. BioSilo ™ is a novel method of cultivating algae that combines the positive features of open pond systems with those of enclosed photobioreactor algae production systems. The system produces a continuous supply of ultra-pure algae biomass in high volumes. The design's small footprint and scalability results in very low maintenance costs. The BiolSilo ™ is capable of producing a variety of species, including Chlorella and algae suited for Omega-3 rich Algae oil.

The BioSilo ™ is comprised of two distinct components - the Pure BioSilo ™ and the Pro-BioSilo ™ . These two components are part of the same production method and process, each designed to perform a different function in order to optimize the cultivation of algae biomass. Essentially, the Pure BioSilo ™ produces algae biomass in batches in low concentrations. This low density biomass is then used to inoculate (i.e. introduced to) the larger scale Pro-BioSilo ™ component, which when combined with carbon sources and air/oxygen, the high density biomass is produced.

The Pro -BioSilo™ operates in a fed-batch mode for suspended cell cultures. In fed-batch mode, additional media and nutrients are added to the bioreactor at different times during the cell cultivation process to supplement the carbon source and other nutrients.

During the cultivation process, the mammalian cells exhibit four phases:

lag phase

2.	exponential growth phase

3.	stationary or production phase and

4.	end of life phase

To achieve the highest biological product yields possible in the least amount of time, we have sourced sensors and controls to be installed in the scaled-up Pro-BioSilo™ . These sensors which measure states such as dissolved oxygen, dissolved CO 2 , pH, temperature and conductivity have been sourced, purchased and are being installed into both 50 and 100 liter bioreactors. The data equation and control units have been purchased and are ready to be installed together with air, oxygen and nutrients/medium feeding connections. In order to achieve the highest biological product yield without compromise on purity and quality the system must have two distinct production phases. In the first phase the process is to ensure quality not quantity. All procedures should concentrate to provide the best condition for biological life in order to maximize product quality ignoring yield. After the growing parameters are established the second process is employed to maximize the growth. In the case of algae growth under heterotrophic conditions the cell multiply very fast. The objective when producing products such as Chlorella is to modify the growing parameters in order to establish a steep growing curve and harvest at “the midpoint” at which algae is young and healthy. In contrast, when growing algae to maximize lipids (omega oil), the maximum density and maximum lipid production is achieved at the top flat portion of the growth cycle.

Recognized critical process parameters are as follows:

●

●	dissolved oxygen (DO)

●	temperature

●	nutrient composition and by-product profiles

●	agitation profile

●	gas sparging method

●	nutrient feed and product harvest profiles

●	dissolved carbon dioxide (dCO 2 ) and osmolality (i.e. concentration of dissolved particles per kilogram of solution)

The following flow chart shows a schematic of the Algae Dynamics Production Process:

●	Competing Algae Production Systems

Algae production systems can be divided into two broad categories: open pond and photobioreactors.

Open pond systems

Open pond systems involve large areas of land which are converted into artificial ponds in which algae is cultured in the open air. Although they are capable of producing large volumes of algae, they suffer from a number of drawbacks, including:

●	Requires vast areas of land
●	Algae growth depends on consistent temperatures
●	Sunlight variation adversely affects production
●	High risk of pond contamination
●	Evaporation
●	Low CO 2 availability	An open pond algae production system

Closed photobioreactors

At the other end of the spectrum are photobioreactors which involve the use of complex enclosed reactor systems. These systems allow the continuous cultivation of algae in a highly controlled environment.

Common systems often involve rows of tubes of various shapes and configurations. Although much effort has been put into these systems in recent years, their large scale commercialization for algae production has been hampered by a number of drawbacks including:
		Close Tube photobioreactor

●	High construction costs

●	High maintenance costs, especially for cleaning

●	Poor gas diffusivity

●	poor control of growth conditions (e.g. oxygen accumulation, overheating)

●	CO ₂ delivery limitations

A problem common to all enclosed reactors is that algae sticks to the internal surfaces of the light source(s), reducing the amount of light available to the algae. This viscous film must be cleaned to ensure optimal growth, increasing operating costs and down-time.

BioSilo™ Advantages

●	Complete control of all growth parameters

●	Small foot print

●	Efficient aeration, agitation and mixing, thus DO (dissolved oxygen) control

●	Effective CO 2 removal

●	Water recycling with inline continuous decontamination method

Intellectual Property

Algae Dynamics is protecting its technological advantage through a two-pronged strategy. Firstly, a United States Patent (US 2011/0203171A1) Bioreactor has been issued and a Patent Application (CA 2735635) on the same claims as the U.S. patent has been filed for Canada.

The patent abstract is: “Biomass production apparatus is disclosed and comprises a stack of trays, each tray, in use, being in receipt of a respective layer of liquid, the layers being spaced apart from one another such that each layer has associated therewith a respective headspace. Light sources are provided for each layer and are disposed in the headspace associated with said each layer, to illuminate, at least in part, said each layer”.

Secondly, significant know-how and proprietary in-house knowledge was acquired during development at the University of Waterloo. This will protect the engineering component of intellectual property related to the BioSilo™. As well, the company has identified proprietary algae species isolated by phycology (the study of algae) researchers at the University of Waterloo, Drs. K. Muller and B. McConkey. Algae Dynamics has exclusive access to these species. These species which are not genetically modified have been selected for their high nutrient values.

History

During 2008 and 2009, and subsequent to algae industry and technical research, Algae Dynamics developed the BioSilo™ design. In 2010, Algae Dynamics partnered with algae or phycology experts Dr. Muller and Dr. McConkey at the University of Waterloo. This partnership provided the company with exclusive access to proprietary algae species along with phycology expertise. Through this arrangement, Algae Dynamics operated its laboratory and advanced from bench scale algae experiments to operating a one meter BioSilo™ installation. Algae Dynamics successfully completed its R&D validating key data points allowing Algae Dynamics to deploy its technology at commercial scale, producing algae biomass of the highest quality at significantly reduced costs. Algae Dynamics was funded in part by Ontario Power Authority “OPA” for the design and construction of its one meter BioSilo™.

Algae Dynamics has operated its system for three years, harvested algae biomass and analyzed the product. In summary, it has achieved the following technical developments:

●	Demonstrated full control over algae growing parameters, facilitating optimum growth

●	Grown three different species of algae successfully

●	Produced algae biomass with key nutrient content that meets market requirements

●	Inoculated algae culture at low levels, maintaining viability and rapid growth

●	Designed, installed, and proved the nutrient and CO ₂ delivery system

●	Discovered and mastered a biological dewatering method

●	Extracted BioOil successfully

●	Demonstrated and measured the very low energy usage requirements of the system

The Company has moved into an industrial facility to commission a commercial demonstration system in readiness for commercial roll out.

To date, Algae Dynamics has obtained investments from a variety of sources:

Funders	Amount ($)
Ontario Power Authority (Grant)		250,000
Scientific Research and Experimental Development Tax Credit		72,400
Founders Cash		435,057
Private Funds raised to-date		647,860

Marketing Strategy

The Company intends to enter the North American market through food/beverage and health supplement distributors as well as food and beverage manufacturers directly. Many of these companies have distribution globally which could provide Algae Dynamics access to world markets.

Although we will be primarily focused on selling Algae powders and tablets, subsequently, Omega-3 oils will be extracted from Algae Dynamics’ algae biomass under a toll processing agreement with POS Biosciences, Saskatoon, Saskatchewan which is subject to a memorandum of understanding. There can be no assurance that we will be able to complete a definitive agreement. POS is approved by the Canadian Food Inspection Agency and experienced in the oil extraction process. Under the POS memorandum of understanding, POS will assist the Company in the commercialization of the Company's algae strains by idenitfying, isolating, extracting, concentating, spray drying and purifying a wide range of algae-based components. POS also has in place the appropriate licenses and quality assurance standards for food and nutriceutical products. Billing for POS services will be on a project by project basis on terms to be negotiated.

The Company has entered into an agreement with Corey Bigras, a brand/marketing professional specializing in the food and health market, to manage direct sale to customers (online) as well as wholesale. Under the agreement, Mr. Birgas has agreed to spend six months providing a wide range of services developing a marketing plan for the Company, for monthly compensation of $6,000. This agreement expires on January 6, 2015, although the Company anticipates reaching a new agreement with Mr. Birgas at the end of the term.

We are also utilizing channel partners, or indirect connections to potential customers.

World Demand for Algae-Derived Products

Algae oil is a good source of DHA and is widely promoted for its cognitive health benefits in infant formula and other formulas throughout the world.

Infant nutrition is the largest application sector for algae oils, accounting for over 90% of the volume. A relatively small proportion of this product is also used in dietary supplements. The usage of algae oils in the functional foods sector is relatively new and is growing. Globally, algae oils were the fastest growing form of omega-3 fatty acids in 2009 and are expected to follow this trajectory in the immediate future. The prime growth drivers of this market are the well-established health benefits of algae oil and the fact that it is a more sustainable source of omega-3. Algae oil is nearing the mature phase of the product lifecycle in the infant formula sector, but is in the early growth phase in the food and beverage, the animal feed and the dietary supplements sectors. (source: F & S June 2011)

Source: Adapted from Virginia Cooperative Extension, 2009

Chlorella Market

Due to strict safety regulations and commercial factors, chlorella is one of the few microalgae species eligible for human consumption. Algae Dynamics’ business model initially focuses on the cultivation of chlorella, a species which Algae Dynamics believes has underutilized properties:

Ounce per ounce, Chlorella contains the following:

●	Six times more beta-carotene than spinach.

●	More dietary fibre than leading fruits and vegetables.

●	More complete protein per serving than soy – and twice as much as steak.

●	Higher nucleic acid content than any food – even more than sardines – for slowing down the visible signs of aging.

●	50 times the antioxidants and flavonoids as Vitamin C or Vitamin E for fighting free radical damage.

●	18 powerful amino acids including glutamic acid to help sharpen memory and defence boosting lysine, and arginine to enhance your natural production of immune cells.

●	More than 20 vitamins and minerals to encourage optimum health and energy.

While chlorella is often packaged in the US, there are no commercial-scale chlorella production operations in North America. According to “The Chlorella Factor”, most production is centered in Asia, with China, Taiwan, Japan, and Korea producing the bulk of commercial chlorella. In 2003, recorded production of chlorella, which has a nutrient value and high protein content, was 2,000 tons per annum. As of April, 23, 2013 chlorella production reached 4,000 tons per annum and is projected to grow at 6% Compounded Annual Growth Rate (“CAGR”). Frost and Sullivan estimates the global market or chlorella to be $200,000,000 annually. (source: F & S, Chris Shanahan April 2013)

Algae-based Omega-3 Market

Algae in the Omega-3 market is well established and Algae Dynamics’ algae biomass business is validated by production of Omega-3 derived from algae. This will be a significant opportunity for Algae Dynamics, given that the CAGR for the Omega-3 ingredients market is expected to be 12%, resulting in $2.8 billion in revenue by 2015 with algae omega-3 oil being the fastest growing sector.

Specifically, Algae Dynamics expects to see a more significant growth rate within the algae-derived Omega-3 segment.

Traditionally, the use of Omega-3 in food and beverage applications was hindered by unappealing taste/smell properties and poor shelf life. However, recent technological advancements have enabled some manufacturers to overcome these formulation challenges. (source: F & S Sept. 2011)

●	Algae expects a higher CAGR due in part to increasing concerns about the marine industry’s sustainability, and the risk associated with continuing to deal with an industry that may face the restricted fish supplies in the coming years.

●	Algae’s growth may also be partly attributed to consumer perceptions of potential heavy metal toxicity of fish-based Omega-3 after recent lawsuits in the US. (source: F & S Sept. 2011)

●	Pricing stability is also an advantage to algae-derived Omega-3. In February, 2013, fish-derived Omega-3 prices rose dramatically, triggered by crude fish oil prices which had skyrocketed in the face of increasing demands on global fisheries.

●	Algae has been successfully penetrating the functional foods market due to increasing consumer awareness about the health benefits of desirable DHA, a type of Omega-3 native to selected algae species. (source: F & S Sept. 2011)

●	Algae is also penetrating the market due to its distinction as the sole vegan source of Omega-3.

The omega-3 Polyunsaturated Fatty Acid (PUFAs) ingredients market analyzed in this study include EPA and DHA omega-3s from marine oils such as fish oils, krill oils, squid oils, and algal oils. The end use application markets covered in the report include dietary supplements, food & beverages, pet nutrition, infant nutrition, pharmaceuticals and clinical nutrition. Worldwide, consumption of omega-3 PUFAs, estimated at 123.8 thousand metric tons worth US$2.3 billion in 2013, is forecast to be 134.7 thousand metric tons valued at US$2.5 billion in 2014. By 2020, it is projected that demand for omega-3 PUFAs globally will reach 241 thousand metric tons with a value of US$4.96 billion, thereby posting a volume CAGR of almost 10% and a value CAGR of 11.6% between 2013 and 2020. (source: Health & Nutrition, Omega-3: A Global Market Overview, Feb. 25 2014)

Algae oils represent approximately 16.8% of the global Omega-3 Ingredients market, and are expected to increase their market share, as indicated above. Algae Dynamics is focused on providing North American clients with ultra-pure algae products; however Algae Dynamics recognizes that the market for its potential products is global in nature, connecting Algae Dynamics’ business to many other markets around the world. Algae-derived Omega-3 is a relatively new entry into the food and beverage additive industry, competing against fish oil which has been produced for centuries. Still, by 2010, algae made up 16.8% of the global Omega-3 ingredients market. In Asia, algae’s market share is much greater at 24%. (source: F & S. June 2011) As mentioned above, Algae Dynamics expects algae-based Omega-3’s revenue to grow by up to 17.6% (CAGR) by 2015.

In 2012, the global market for microalgae based DHA +30% oil was estimated to be nearly $350 million, and about 4,614 metric tons. Globally, the infant formula application represented about 48.9 percent (unit shipment) of microalgae based DHA +30% oils sold, followed by dietary supplements with about 28.4 percent. Food and beverage was 19.4 percent of the volumes. (source: F & S Chris Shanahan, The global algae oil omega-3 market in 2014, May, 2014)

"Prices for algal oil-based omega-3s generally remain fairly stable because there are only two major producers and pricing is typically set on a long-term contract basis. In mid-2011, the price of algal oil was estimated to range between $95 and $140 per kilo, depending on how the oil was to be used." (source: Oilgae, April 2014)

Algae oil world price is estimated by Frost and Sullivan to be US$ 87.85 per kg. (source; F & S, June 2011)

Nutritional and Functional Food Ingredients Market for Algae Biomass

The North American nutritional and functional ingredient market was valued at US$2.2 billion in 2011. It is expected to grow to US$3.29 billion in 2018, a CAGR of approximately 6 percent. North America offers the largest investment and growth opportunities in the wake of rapidly increasing consumer awareness regarding the advantages of such products. Food fortification is classified into beverages, snacks, confectionary, and dairy products. (source: F & S, May 2012)

Consumers represent the strongest driver for the nutritional and functional ingredients market as they switch to functional foods. The functional food trend has seen substances such as ginseng, kombucha, Omega-3 and vitamins added to food and beverages. Algae Dynamics’ products, powder algae biomass and Omega-3, can be used as additives in these functional foods and additives. This functional food trend offers food manufacturers many possibilities for developing customized functional food products. In 2011, functional foods accounted for approximately 30 percent of the North American Food Market volume.

●	The largest segment (22%) of the functional food ingredients market is a collection of additives that do not neatly fit into other categories. These include polyol, phytoestrogens, and Omega-3.

●	The second-largest segment (21%) is vitamins. Major ingredients of this category are vitamin A, B3 (niacin), B2 (riboflavin), B1 (thiamine), B5 (pantothenic acid), B6 (pyridoxine), B9 (folate), B12 (cobalamine), C, D, E, and biotin.

●	The third-largest segment (16%) is minerals. The major minerals used as functional ingredients are calcium, potassium, magnesium, and selenium.

Algae Dynamics’ algae biomass is rich in all of these elements, allowing it to penetrate the entire market, rather than only one segment. One of the initial target products is the chlorella algae species.

Sales & Marketing Strategy

There are nearly 1,000 New Products with Chlorella as an Ingredient for food and beverage market. (source: Agriculture Canada, April 2013).

Algae Dynamics is entering the North American market through food and health supplement distributors as well as food and beverage manufacturers directly. Many of these companies have distribution globally providing Algae Dynamics access to world markets.

Christopher Shanahan, Global Program Manager – Food & Agriculture, Frost & Sullivan, North America, San Antonio, United States has agreed in principle to be Algae Dynamics’ market development and customer integration advisor. Mr. Shanahan has direct experience in data analysis, project management, consulting and market engineering. Particular expertise in: econometric-based market analysis including mathematical programming, statistical benefit-cost analysis, market forecasting, scenario engineering, product innovation adoption models and business strategy decision models. While Mr. Shanahan has agreed to be an advisor to the Company, this relationship is informal and does not obligate Mr. Shanahan to provide any specified level of service to the Company, nor does the Company compensate him either for his advice or for the research quoted in this prospectus.

Algae Dynamics is also utilizing channel partners to gain access to potential clients. Key channel partners are:

Bioenterprise Corporation, a business accelerator and commercialization agent. Bioenterprise was established to help promote the creation, growth and expansion of businesses engaged in Agri-Technologies . Acting as coach and catalyst, Bioenterprise works with companies at all stages, from start-ups to emerging and well-established businesses. Through their global network of industry contacts and professionals, they are able to assess the critical components needed to mitigate risks inherent in early stage business. Areas of expertise include; market/industry research and competitive analysis, nutraceutical, functional food, and biomaterial based technologies. Algae Dynamics is working directly with Jessica Bowes, M.Sc. in Human Health & Nutritional Science, Sr. Business Analyst, Food Nutrition & Health.

Innovation Guelph (“IG”). IG assists companies in achieving growth of market share, entry into new markets, and improving the bottom line. IG is also a member of the Ontario Network of Excellence (ONE). Algae Dynamics is working directly with Dr. James Doran the Chief Operating Officer for Innovation Guelph “IG” since September 2013. Dr. Doran has helped IG grow into Guelph’s focal point for innovative ideas and entrepreneurial spirit.

These relationships are informal and do not obligate these parties to provide any specified level of service, nor do they require the Company to make any payments to them.

Competition

Companies Developing Open Pond Systems

Companies such as HR BioPetroleum, PetroAlgae, Sapphire and Kent BioEnergy are focusing on the cultivation of algae in large open ponds. The basic premise of this methodology is that by mimicking the natural environment of algae, commercially profitable amounts of algae can be produced albeit with a degree of unpredictability due to Mother Nature. Unfortunately, there are drawbacks with this method as previously described “Competing Algae Production Systems”.

Companies Developing Enclosed Photobioreactors

Cultivating algae in enclosed photobioreactors has drawn a lot of attention in recent years due to the ability to better control algae cultivation conditions. We believe this has resulted in larger algae yields compared to open pond systems, with some photobioreactor systems able to reach 150g/m 2 /day biomass production compared to 3,600g/m 2 /day for Algae Dynamics’ technology. However, this production rate was achieved only at laboratory scale, and is, in any event, appears lower than Algae Dynamics’ production rate. In addition, there seems to be many reported technical and commercial problems with these systems, inhibiting their wide scale implementation as previously described in “Competing Algae Production Systems”.

The Omega-3 food ingredient industry is comprised of the following companies, with the following global revenue share:

Company	Source	Share (%)
DSM Ocean Nutrition Canada	Marine		23.2
Denomega Pure Health	Marine		14.3
Seven Seas	Marine		12.6
BASF	Marine		12.5
DSM Martek Biosciences	Algae		8.1
Nissui Group	Marine		4.6
KD-Pharma Bexbach GmbH	Marine		3.4
Nu-Mega Ingredients Pty Ltd	Marine		1.8
Other Companies			19.5
Total			100

Note: All figures are rounded; the base year is 2010

Source: F & S, September 2011, 18i pg.29

Industry Structure, Trends and Landscape

The supply chain of Omega-3 ingredients is complex with several participants including traders, distributors, industry organizations, and legislative bodies. The North American marine and algae oil omega-3 EPA and DHA ingredients market has over 20 manufacturers active in this market. The companies involved in the market are classified as:

●

Tier 1 - Leading global multinational companies such as Pronova, Ocean Nutrition Canada, (acquired by DSM), Martek Biosciences (acquired by DSM), GC Reiber, and EPAX. These companies exclusively focus on the production of refined omega-3 ingredients. This Tier also includes multi-ingredient companies such as Croda and Napro Pharma, a division of Cognis, which has a significant presence in the market.

●	Tier 2 - This Tier of competition includes multi-ingredient manufacturers such as DSM and other smaller omega-3 focused suppliers. It also includes companies, such as Enzymotec, Numega, KD Pharma, and Neptune Biosciences, and bulk oil manufacturers such as Lysi Ltd.

●

Tier 3 - This Tier includes medium-sized and smaller companies and regional participants such as Omega Protein and P&G Food Ingredients. Other stakeholders in this market include contract manufacturers, such as ProBio, AquaCap, Pfizer Inc.’s Capsugel, and Soft Gel Technologies, Inc., and distributors of marine nutritional oils such as Jedwards International, Inc, AerChem Inc, and Charles Bowman And Company.

As of 2010, DSM had acquired control of a third of the long-chain Omega-3 market, reflecting a “slow wave” towards consolidation in the fish-oil Omega-3 ingredient industry at the Tier 1 level. According to Nutraceuticals World, there are two drivers pushing this trend. The first pertains to increased investment in DHA and EPA omega-3 based pharmaceuticals. The pharmaceutical industry is not Algae Dynamics’ target market. The second driver is the longer term depletion of fish stocks rich in Omega-3.This has started to create supply constraints and forced the consolidation of companies looking to preserve their market share. In the shorter term, flat fish oil production and increased consumer demand for Omega-3 functional foods are straining inventories. Algae Dynamics’ algal products and competitive pricing will position Algae Dynamics to take advantage of this slack while enhancing the value of the company to investors.

●	Risks & Risk Mitigation Strategy

Algae Dynamics has identified several key risk factors including:

1.	Biological expertise is important . It is not enough to build an algae cultivation system but only have limited expertise on the algae itself. Algae are complex organisms that require knowledge and experience to effectively culture.

Algae Dynamics Response . Algae Dynamics has access to a number of propriety species collected, isolated and incubated by Dr. Muller and her colleagues.

2.	Growth Rate critical . There must be complete control of all parameters in a contaminant-free environment and it is critical to efficiently uptake nutrients and carbon sources.

Algae Dynamics Response . The closed loop design minimizes contamination issues and all parameters are integrated for optimum growing conditions.

3.	Impurities must be avoided . Cultivation systems in the open environment are exposed to variable elements. If their design does not facilitate sectional integrity, detrimental contamination can result.

Algae Dynamics Response . The Algae Dynamics BioSilo™ will be in a clean room environment and the modular design facilitates isolating contamination. Each module can be disinfected and re-inoculated.

4.	CO 2 delivery must be efficient . Most systems rely on “bubbling” of CO 2 into the algae allowing large amounts to pass through the culture to atmosphere reducing CO 2 sequestration by the algae.

Algae Dynamics Response . The Algae Dynamics BioSilo™ has a unique CO 2 delivery system that significantly reduced bubbling and CO 2 loss to the atmosphere.

5.	Land area must be minimized . Using large tracts of land for cultivating algae can be costly and inefficient.

Algae Dynamics Response . The Algae Dynamics BioSilo™ has a small footprint and can be located at any industrial site.

6.	Operating and energy costs must be minimized . Although some photobioreactor designs have demonstrated excellent algae yields, their maintenance costs are high.

Algae Dynamics Response . The Algae Dynamics BioSilo™ operates using a dual lighting system and a low amount of electrical energy. The multi- layer design takes advantage of gravity and the selection of narrow spectrum LED lighting reduces energy requirements. As well, Algae Dynamics ’s design eliminates tube fouling.

Description of Properties and Production Plans

The Company has entered into a five year operating lease, expiring November 2018, for Unit 37-4120 Ridgeway Drive in Mississauga, Ontario, which consists of 2,224 square feet of office and production facilities. The current space is adequate for the purpose of constructing a demonstration facility. The monthly base rental of the current facility is $1,382 plus the Company’s estimated portion of property taxes and operating expenses which are currently C$782 per month. The Company will require additional space to complete its commercial facility; however suitable facilities are readily available.

Over the next twelve months the Company requires approximately $750,000 to complete a commercial scale facility. The Company has installed and instrumented both the 50 and 100 litre reactors, along with a bank of water filter tanks and UV lights. To achieve commercial scale operations, Company intends to acquire a 1,500 litre reactor for approximately C$400,000. These components are readily available from third party manufacturers.

The Company obtains its algae strains from the University of Waterloo. Other raw ingredients include water, nutrients, and carbon dioxide, all of which are readily available. During the first year of operations, we anticipate using approximately 1,526 gallons of water, 312 pounds of nutrients such as (glucose, chemical fertilizer, metal trace elements, and vitamins) and 3,330 pounds of carbon dioxide. When the Company commences production of algae, there will be certain lead times before completed products reach market. We estimate that the amount of time between commencement of production and product reaching market will be as follows: chlorella: 3 months and omega oil: 15 months

When in service, the Company believes it will require only four employees to operate the facility, a process control engineer, biochemical engineer, biochemical technician and a maintenance technician.

Regulatory Risks

Algae Dynamics will be subject to various US, federal, provincial, and local environmental laws and regulations including the health and safety of employees, and manufacturing practices. In addition, some of these laws and regulations require contemplated facilities to operate under permits that are subject to renewal or modification. A violation of these laws and regulations or permit conditions can result in substantial fines, natural resource damages, criminal sanctions, permit revocations and/or facility shutdowns.

United States . The processing, formulation, safety, manufacturing, packaging, labeling, advertising, and distribution of food supplement products are subject to regulation by one or more federal agencies, including the FDA, the Federal Trade Commission (“FTC”), the Consumer Product Safety Commission (“CPSC”), the United States Department of Agriculture (“USDA”), and the Environmental Protection Agency (“EPA”), and by various agencies of the states and localities in which the products are sold. The area of business that these and other authorities regulate include, among others:

● claims and advertising;

● labels;

● ingredients; and

● manufacturing, distributing, importing, selling and storing of products.

In particular, the FDA regulates the formulation, manufacturing, packaging, storage, labeling, promotion, importation, and distribution and sale of dietary supplements and food ingredients in the United States, while the FTC regulates marketing and advertising claims.

Some of our potential products are packaged and sold directly to retailers and consumers, and therefore are subject to greater oversight and enforcement action by the FTC. In recent years, the FTC has instituted numerous enforcement actions against consumer packaged goods companies for failure to have adequate substantiation for claims made in advertising or for use of false or misleading advertising claims.

The Dietary Supplement Health and Education Act of 1994 (“DSHEA”), an amendment to the Federal Food, Drug and Cosmetic Act (“FDC Act”), established a framework governing the composition, safety, labeling, manufacturing and marketing of dietary supplements. Generally, under DSHEA, dietary ingredients that were marketed in the United States prior to October 15, 1994 may be used in dietary supplements without notifying the FDA. “New” dietary ingredients (i.e., dietary ingredients that were “not marketed in the United States before October 15, 1994”) must be the subject of a new dietary ingredient notification submitted to the FDA unless the ingredient has been “present in the food supply as an article used for food” without being “chemically altered”. A new dietary ingredient notification must provide the FDA evidence of a “history of use or other evidence of safety” establishing that use of the dietary ingredient "will reasonably be expected to be safe”. A new dietary ingredient notification must be submitted to the FDA at least 75 days before the initial marketing of the new dietary ingredient. The FDA may determine that a new dietary ingredient notification does not provide an adequate basis to conclude that a dietary ingredient is reasonably expected to be safe. Such a determination could prevent the marketing of such dietary ingredient.

The FDA has issued a draft guidance governing notification of new dietary ingredients. While it is not mandatory to comply with FDA guidance, it is a strong indication of the FDA's current views on the topic of the guidance, including the agency’s position on enforcement. Depending on the recommendations made in the guidance, if and when it is finalized, particularly those relating to animal or human testing, such guidance could make it more difficult for Algae Dynamics to successfully provide notification of new dietary ingredients. Moreover, such guidance could change the status of ingredients that the industry has viewed as “old” dietary ingredients to “new” dietary ingredients that may require submission of a new dietary ingredient notification.

The FDA or other agencies could take actions against products or product ingredients that in its determination present an unreasonable health risk to consumers which would make it illegal for us to sell such products. In addition, the FDA could issue consumer warnings with respect to the products or ingredients that Algae Dynamics sells. Such information could be based on information received through reporting of serious adverse events mandated by the FDC Act.

DSHEA permits “structure/function claims” to be included in labeling for dietary supplements without FDA pre-market approval. Such statements must be submitted to the FDA within 30 days of marketing. Such statements may describe how a particular dietary ingredient affects the structure, function, or general well-being of the body, or the mechanism of action by which a dietary ingredient may affect body structure, function, or well-being, but may not expressly or implicitly represent that a dietary supplement will diagnose, cure, mitigate, treat, or prevent a disease. A company that uses a structure/function claim in labeling must possess scientific evidence substantiating that the statement is truthful and not misleading. If the FDA determines that a particular structure/function claim is an unacceptable drug claim or an unauthorized version of a “health claim”, or, if the FDA determines that a particular claim is not adequately supported by existing scientific data or is false or misleading, we would be prevented from using the claim.

In addition, DSHEA provides that so-called “third-party literature”, e.g., a reprint of a peer-reviewed scientific publication linking a particular dietary ingredient with health benefits, may be used “in connection with the sale of a dietary supplement to consumers” without the literature being subject to regulation as labeling. The literature: (1) must not be false or misleading; (2) may not “promote” a particular manufacturer or brand of dietary supplement; (3) must present a balanced view of the available scientific information on the subject matter; (4) if displayed in an establishment, must be physically separate from the dietary supplements; and (5) should not have appended to it any information by sticker or any other method. If the literature fails to satisfy each of these requirements, the Company may be prevented from disseminating such literature in connection with Algae Dynamics products, and any dissemination could subject our products to regulatory action as an illegal drug.

In June 2007, pursuant to the authority granted to the FDA by DSHEA, the FDA published detailed Current Good Manufacturing Practice ("GMP") regulations that govern the manufacturing, packaging, labeling and holding operations of dietary supplement manufacturers. The GMP regulations, among other things, impose significant recordkeeping requirements on manufacturers. The GMP requirements are in effect for all manufacturers, and the FDA is conducting inspections of dietary supplement manufacturers pursuant to these requirements. There remains considerable uncertainty with respect to the FDA's interpretation of the regulations and their actual implementation in manufacturing facilities. In addition, the FDA's interpretation of the regulations will likely change over time as the agency becomes more familiar with the industry and the regulations. The failure of a manufacturing facility to comply with the GMP regulations renders products manufactured in such facility "adulterated," and subjects such products and the manufacturer to a variety of potential FDA enforcement actions.

In addition, under the FDA Food Safety Modernization Act (“FSMA”), which was enacted on January 4, 2011, the manufacturing of dietary ingredients contained in dietary supplements will be subject to similar or even more burdensome requirements, which will likely increase the costs of dietary ingredients and will subject suppliers of such ingredients to more rigorous inspections and enforcement. The FSMA will also require importers to take measures to ensure that the foods they import, including dietary supplements and dietary ingredients, meet domestic requirements. This could increase the cost of those articles, subject their importation to greater scrutiny, and potentially restrict their availability.

The FDA has broad authority to enforce the provisions of federal law applicable to dietary supplements, including powers to issue a public warning or notice of violation letter to a company, publicize information about illegal products, detain products intended for import, request a recall of illegal products from the market, and request the Department of Justice to initiate a seizure action, an injunction action, or a criminal prosecution in the U.S. courts. The FSMA expands the reach and regulatory powers of the FDA with respect to the production of food, including dietary supplements. The expanded reach and regulatory powers include the FDA's ability to order mandatory recalls, administratively detain domestic products and administratively revoke manufacturing facility registrations, thereby effectively enjoining manufacturing of dietary ingredients and dietary supplements without judicial process. The regulation of dietary supplements may increase or become more restrictive in the future.

The FTC exercises jurisdiction over the advertising of dietary supplements. In recent years, the FTC has instituted numerous enforcement actions against dietary supplement companies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims. Such actions could result in substantial financial penalties and significantly restrict the marketing of a dietary supplement.

Legislation or regulations may be introduced which, if passed, would impose substantial new regulatory requirements on the manufacture, packaging, labeling, advertising and distribution and sale of our products. In March 2009, the General Accounting Office (the “GAO”) issued a report that made four recommendations to enhance the FDA's oversight of dietary supplements. The GAO recommended that the Secretary of the Department of Health and Human Services direct the Commissioner of the FDA to: (1) request authority to require dietary supplement companies to identify themselves as a dietary supplement company and update this information annually, provide a list of all dietary supplement products they sell and a copy of the labels and update this information annually, and report all adverse events related to dietary supplements; (2) issue guidance to clarify when an ingredient is considered a new dietary ingredient, the evidence needed to document the safety of new dietary ingredients, and appropriate methods for establishing ingredient identity; (3) provide guidance to industry to clarify when products should be marketed as either dietary supplements or conventional foods formulated with added dietary ingredients; and (4) coordinate with stakeholder groups involved in consumer outreach to identify additional mechanisms for educating consumers about the safety, efficacy, and labeling of dietary supplements, implement these mechanisms, and assess their effectiveness. These recommendations could lead to increased regulation by the FDA or future legislation concerning dietary supplements.

International. In foreign markets, prior to commencing operations and prior to making or permitting sales of our products in the market, we may be required to obtain an approval, license or certification from the relevant country’s ministry of health or comparable agency. Where a formal approval, license or certification is not required, we nonetheless seek a favorable opinion of counsel regarding our compliance with applicable laws. Prior to entering a new market in which a formal approval, license or certificate is required, we work extensively with local authorities in order to obtain the requisite approvals. The approval process generally requires us to present each product and product ingredient to appropriate regulators and, in some instances, arrange for testing of products by local technicians for ingredient analysis. The approvals may be conditioned on reformulation of our products, or may be unavailable with respect to some products or some ingredients. Product reformulation or the inability to introduce some products or ingredients into a particular market may have an adverse effect on sales. We must also comply with product labeling and packaging regulations that vary from country to country. Our failure to comply with these regulations can result in a product being removed from sale in a particular market, either temporarily or permanently.

The Company cannot determine what effect additional domestic or international governmental legislation, regulations, or administrative orders, when and if promulgated, would have on Company’s business in the future. New legislation or regulations may require the reformulation, elimination, or relabeling of certain products to meet new standards and revisions to certain sales and marketing materials, and it is possible that the costs of complying with these new regulatory requirements could be material.

Technical Risks

Although algae growth is well documented, there are three primary challenges in cultivating algae at high volumes:

1.	Growth Rates

The BioSilo™ system is designed to tailor the growing parameters for several species of algae, allowing Algae Dynamics to exceed the average production rate of other systems.

Growing parameters control		Benefits
- Light source intensity - CO 2 absorption efficiency - Algae cell mixing method and rate - PH and temperature - Nutrients delivery ratio - A proprietary liquefied CO 2 technology that resolves the problems associated with widely used CO 2 diffusers (bubblers)		- Extremely high purity levels - Scalable - Minimized cultivation costs - Computer controlled process - Consistent nutrient composition - Computer controlled O2/N2/CO 2 Ratios - Continuous production 24/7 process without maintenance interruption

Space

Small production space requirement		Benefits Need to think in 3 dimensions:
Stacks of shallow cultivation trays - Compact light source (maximum absorption) - Combined CO 2 and nutrient supply system - Recyclable media (water + minerals) - Compact mixing and temperature control - In - situ harvesting process		- Efficient use of space (volume not just area) - Maximizes heating and cooling efficiencies to facilitate optimal growing conditions - Minimizes capital and operating costs - Easy process component access - Automatic in-situ process control

3.	Energy Requirements

Algae Dynamics Solution		Benefits
- Algae Dynamics uses a proprietary design taking advantage of gravity - Algae biomass solution flows down through the tank layers with optimal conditions throughout the trays. - Algae is harvested at the bottom, the water is cleaned and re-circulated for reuse.		- Extremely efficient use of energy - Fewer moving parts reduces energy, labour and maintenance costs - Use of LED lighting system provides additional energy efficiency

DESCRIPTION OF SECURITIES TO BE REGISTERED

Our authorized capital stock consists of an unlimited number of common shares. As of November 14, 2014, there were 9,213,710 common shares outstanding.

The following description of our common shares and provisions of our articles of association and By-laws is only a summary. Investors are directed for a complete description of the terms and provisions of our articles and By-laws, which are exhibits to the registration statement which contains this prospectus. We encourage you to review complete copies of our articles and By-laws.

Voting Rights

Each holder of our common shares is entitled to one vote for each share on all matters submitted to a vote of our shareholders, including the election of our directors. The rights attached to the common shares do not provide for cumulative voting rights or preemptive rights. Accordingly, the holders of a majority of our outstanding common shares entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose.

Dividend Rights

Subject to limitations under the Canada Business Corporations Act (the “CBCA”), preferences that may apply to any outstanding shares of preferred stock and contractual restrictions, holders of our common shares are entitled to receive ratably dividends or other distributions when and if declared by the Company’s board of directors. Whether any future dividends are paid to our shareholders will depend on decisions that will be made by our board of directors and will depend on then existing conditions, including our financial condition, contractual restrictions, corporate law restrictions, capital requirements and business prospects. Under the CBCA, the Company may pay dividends unless there are reasonable grounds for believing that (i) the Company is, or would after such payment be, unable to pay its liabilities as they become due or (ii) the realizable value of the Company’s assets would be less than the aggregate of its liabilities and stated capital of all classes of shares.

Change of Control

Under the CBCA, the affirmative vote of two-thirds of the votes cast is required for shareholder approval of an amalgamation (other than certain short form amalgamations), for any sale, lease or exchange of all, or substantially all, of our assets, if not in the ordinary course of our business, and certain other fundamental changes including an amendment to the articles of amalgamation. Other shareholder action is generally decided by a majority of the votes cast at a meeting of shareholders.

There is no limitation imposed by Canadian law or by our articles or other charter documents on the right of a non-resident to hold or vote common shares, other than as provided by the Investment Canada Act, which requires notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a non-Canadian of control of a Canadian business.

The authorization of undesignated preferred shares in our articles of amalgamation makes it possible for our board of directors to issue preferred shares with rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of us.

INTERESTS OF NAMED EXPERTS AND COUNSEL

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

The financial statements included in this prospectus and in the registration statement have been audited by McGovern, Hurley, Cunningham, LLP and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

The validity of the issuance of the common shares hereby will be passed upon for us by Peterson Law Professional Corporation, Suite 806, 390 Bay Street, Toronto, Ontario M5H 2Y2.

LEGAL PROCEEDINGS

There are no material pending legal proceedings to which we are a party or to which any of our property is subject, nor are there any such proceedings known to be contemplated by governmental authorities. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-Looking Information

All statements contained in this Registration Statement, other than statements of historical facts, that address future activities, events or developments are forward-looking statements, including, but not limited to statements containing the words “believe”, “expect,” “anticipate,” “intends”, “estimate:, “forecast,” “project,” and similar expressions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new acquisitions, products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief; and statements of assumptions underlying any of the foregoing. These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results will conform to expectations and predictions of management is subject to a number of risks and uncertainties described under “Risk Factors” under Item 1A above that may cause actual results to differ materially.

Consequently, all of the forward-looking statements made in this Registration Statement are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations. Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of the Company’s views as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All results are presented in Canadian dollars ($) unless otherwise stated.

The following discussion and analysis should be read in connection with the Company’s financial statements and related notes thereto, as included in this prospectus.

The following discussion and analysis should be read in connection with the Company’s year-end financial statements and related notes thereto, as included in this report.

The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying financial statements, as well as information relating to the plans of our current management.

Results of Operations and Going Concern

We incurred a net loss of $232,956 for the year ended March 31, 2014, (2013 - $91,369). We do not anticipate having a positive net income in the immediate future. Net cash used by operations for the year ended March 31, 2014 was $207,105. These financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company is in the development stage, and has not yet realized profitable operations and has relied on non-operational sources to fund operations. In addition, as of March 31, 2014, the Company has a working capital deficiency of $434,263 (March 31, 2013 - $494,989) and has accumulated deficit of $722,084 (March 31, 2013 - $489,128). The Company’s ability to continue as a going concern is dependent on successfully executing its business plan, which includes the raising of additional funds. The company will continue to seek additional forms of debt or equity financing, but it cannot provide assurances that it will be successful in doing so. These circumstances raise substantial doubt as to the ability of the company to meet its obligations as they come due and accordingly, the appropriateness, ultimately, of the use of accounting principles applicable to a going concern. The accompanying financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

Results of Operations for the year ended March 31, 2014 compared to the year ended March 31, 2013

Operating Expenses

The operating expenses increased in 2014 ($232,956) versus 2013 ($91,369) by $141,587 as the Company initiated the process of developing a demonstration production facility. By initiating this process extra consulting fees ($117,000), facility occupancy costs ($6,317) were incurred. In addition, extra professional fees ($30,010) were incurred as the process for undertaking a Private Placement to raise equity was commenced during the fiscal year.

Net Income (Loss)

We recognized a net loss of $232,956 for the year ended March 31, 2014 as compared to a net loss of $91,369 for the same period of 2013. Changes in net income (loss) are primarily attributable to changes in expenses, each of which is described above.

Liquidity and Capital Resources

Net cash used by operating activities was $207,105 and $38,689 for the years ended March 31, 2014 and 2013, respectively. The increase is mainly attributable to the commencing the development of the demonstration production facility and the costs associated with raising new equity.

We had negative working capital of $434,263 as of March 31, 2014 compared to $494,989 as of March 31, 2013. The decrease is primarily attributable to the funds received ($328,180) from the private placement in process at March 31, 2014.

The current level of development activity necessitates a cash requirement of approximately $30,000 monthly, this monthly cash requirement will increase as the development activity increases. The Company anticipates it will require a further $750,000 to complete the demonstration phase of the development process.

We do not have any material commitments for capital expenditures. However, should we execute our business plan as anticipated, we would incur substantial capital expenditures and require financing in addition to the amount required to fund our present operation.

Additional Financing

Additional financing is required to continue operations. As of June 6, 2014 the Company closed a Private Placement in the amount of $647,860 ($328,180 was raised by March 31, 2014 and was reflected as Equity to be issued on the March 31, 2014 financial statements).

The Company has signed a consulting agreement with Connectus Inc (a company which has experience in the area of corporate finance and structuring, investor communication and securities law). The purpose of the agreement is to advise on the structuring of a public offering intended to raise approximately US$4 Million. Connectus will provide project management support for the project from start to finish. The Company, of course cannot provide assurances that such equity funding will be available.

Off Balance Sheet Arrangements

None

Critical Accounting Policies and Recent accounting Pronouncements

The financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”) applied on a consistent basis. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods.

We have identified the policies below as critical to our business operations and the understanding of our financial statements. A complete discussion of our accounting policies is included in Notes 2 and 3 of the Notes to the Financial Statements.

Use of estimates

The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from these estimates.

Going Concern

The accompanying financial statements have been prepared on a going concern basis which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and liabilities settled in the ordinary course of business. Accordingly, the financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.

As shown in the financial statements, the Company incurred a net operating loss of $232,986 for the year ended March 31, 2014, (2013 Net Loss of $91,369). The Company’s current liabilities exceed its current assets by $434,263 as of March 31, 2014.

In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis by raising additional funds through debt or equity financing. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

Accordingly, our independent auditors included an explanatory paragraph in their report on the March 31, 2014 financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional notes and disclosure describing the circumstances that lead to this disclosure by our independent auditors.

The following discussion and analysis should be read in connection with the Company’s September 30, 2014 quarter ending financial statements and related notes thereto, as included in this report.

Results of Operations and Going Concern

We are an early stage company with a limited operating history, and we have only recently begun to commercialize our products.. As a result, we will need to generate significant revenues to achieve and maintain profitability. If our revenues grow slower than anticipated, or if operating expenses exceed expectations, then we may not be able to achieve profitability in the near future or at all, which may depress our stock price. These conditions create an uncertainty as to our ability to continue as a going concern.

We continue to rely on advances and sale of equity to fund operating shortfalls and do not foresee a change in this situation in the immediate future. There can be no assurances that we will continue to be able to access advances and sell equity, without which we will not be able to continue operations. As a result of the recently completed private placement, the Company has adequate capital resources to fund its operations through to the end of November 2014. The Company intends to commence a raise via private placement or direct offering as early as feasible in order to fund operations going forward. If the funding from the private placement or direct offering is not available in a timely manner then management will be foregoing salary and operations will be scaled back to operate within the funds available. In the normal course of business, management considers various alternatives to ensure that the Company can meet some of its operating cash flow requirements through financing activities, such as private placements of common stock, preferred stock offerings and offerings of debt and convertible debt instruments as well as through merger or acquisition opportunities. Management may also consider strategic alternatives, including strategic investments and divestitures. As future operations may be financed out of funds generated from financing activities, the ability to do so is dependent on, among other factors, the overall state of capital markets and investor appetite for investments in the green technology industry and the Company’s securities in particular. Should the Company elect to satisfy its cash commitments through the issuance of securities, by way of either private placement or public offering or otherwise, there can be no assurance that the efforts to obtain such additional funding will be successful, or achieved on terms favorable to the Company or its existing shareholders. If adequate funds are not available on favorable terms, the Company may have to reduce substantially or eliminate expenditures or obtain funds through other sources such as divestiture or monetization of certain assets or sublicensing (where permitted) of certain rights to certain of the Company’s technologies or products.

For the three months ended September 30, 2014

Results of Operations and Going Concern

We are an early stage company with a limited operating history, and we have only recently begun to commercialize our products. We have incurred operating losses since our inception in October 2008, and we expect to continue to incur operating losses for the foreseeable future. At September 30, 2014, we had an accumulated deficit of $1,288,682. For the quarters ended September 30, 2014 and 2013, we had a net loss attributable to common stockholders of $301,180, and $25,527, respectively. As a result, we will need to generate significant revenues to achieve and maintain profitability. If our revenues grow slower than anticipated, or if operating expenses exceed expectations, then we may not be able to achieve profitability in the near future or at all, which may depress our stock price. These conditions create an uncertainty as to our ability to continue as a going concern.

Results of Operations for the quarter ended September 30, 2014 compared to the quarter ended September 30, 2013

Revenue

We had no revenues for the three months ended September 30, 2014 and 2013 respectively.

Operating Expenses

The operating expenses increased in the three month period ended September 30, 2014 ($301,180) compared to the same period of 2013 ($25,527) as the Company continued the process of developing a demonstration production facility. By developing this process management and contract fees ($78,375), facility occupancy costs ($6,261), professional fees ($160,411), property insurance ($3,525), research & development ($7,735) and office ($9,568) increased during the three month period ended September 30, 2014 compared to the same period of 2013.

Net Income (Loss)

The Company recognized a net loss of $301,180 for the three month period ended September 30, 2014 as compared to a net loss of $25,527 for the same period of 2013. Changes in net (loss) are primarily attributable to changes in expenses, each of which is described above.

Liquidity and Capital Resources

Net cash used by operating activities was $146,843 and $22,105 for the three month periods ended September 30, 2014 and 2013, respectively. The increase is mainly attributable to the development of the demonstration production facility, professional fees and the costs associated with additional management personnel.

The Company had a working capital deficiency of $710,930 as of September 30, 2014 compared to $434,263 as of March 31, 2014.

On March 11, 2014 and as amended on July 18, September 3, 2014 and again on September 5, 2014, the Company entered into a consulting agreement with Connectus Inc. (the “Agreement”) to assist and advise the Company in matters concerning corporate finance and the Company’s current and proposed financing activities for the period commencing April 1, 2014 and ending December 31, 2014. Pursuant to the Agreement, the Company agreed to issue to this consulting corporation (the “Consultant”), 625,000 warrants of the Company. Each warrant will be exercisable at USD$0.040 per common share for a period of three years. Of the warrants granted, 300,000 vested on September 3 rd , 2014 with the unvested portion vesting pro-rata for each USD$250,000 ($280,200) raised in the offering, fully vesting upon USD$1,500,000 ($1,681,200) being raised. All of the Company's financial liabilities other than the warrant liability of $237,300 have contractual maturities of less than 30 days and are subject to normal trade terms. The increase in the working capital deficiency is largely due to the recognition of the liability for the warrants.

The current level of development activity necessitates a cash requirement of approximately $50,000 per month. This monthly cash requirement will increase as the demonstration production facility is developed. The Company anticipates it will require a further $750,000 to complete the demonstration phase of the production facility.

The Company does not have any material commitments for capital expenditures. However, should the Company execute its business plan as anticipated, it would incur substantial capital expenditures and require financing in addition to the amount required to fund its present operation.

Additional Financing

Additional financing is required to continue operations. On June 6, 2014, the Company closed a Private Placement in the amount of $647,860 ($328,180 was raised by March 31, 2014 and was reflected as Equity to be Issued on the March 31, 2014 financial statements).

For the six months ended September 30, 2014

Results of Operations and Going Concern

We are an early stage company with a limited operating history, and we have only recently begun to commercialize our products. We have incurred operating losses since our inception in October 2008, and we expect to continue to incur operating losses for the foreseeable future. At September 30, 2014, we had an accumulated deficit of $1,288,682. For the six months ended September 30, 2014 and 2013, we had a net loss attributable to common stockholders of $566,598, and $40,613, respectively. As a result, we will need to generate significant revenues to achieve and maintain profitability. If our revenues grow slower than anticipated, or if operating expenses exceed expectations, then we may not be able to achieve profitability in the near future or at all, which may depress our stock price. These conditions create an uncertainty as to our ability to continue as a going concern.

Results of Operations for the six months ended September 30, 2014 compared to the six months ended September 30, 2013

Revenue

We had no revenues for the six months ended September 30, 2014 and 2013 respectively.

Operating Expenses

The operating expenses increased in the six month period ended September 30, 2014 ($566,598) compared to the same period of 2013 ($40,613) as the Company continued the process of developing a demonstration production facility. By developing this process management and contract fees ($107,375), facility occupancy costs ($13,199), professional fees ($349,806), property insurance ($5,979), research & development ($13,108) and office ($13,991) increased during the six month period ended September 30, 2014 compared to the same period of 2013.

Net Income (Loss)

The Company recognized a net loss of $566,598 for the six month period ended September 30, 2014 as compared to a net loss of $40,613 for the same period of 2013. Changes in net (loss) are primarily attributable to changes in expenses, each of which is described above.

Liquidity and Capital Resources

Net cash used by operating activities was $263,957 and $38,943 for the six month periods ended September 30, 2014 and 2013, respectively. The increase is mainly attributable to the development of the demonstration production facility, professional fees and the costs associated with additional management personnel.

The Company had a working capital deficiency of $710,930 as of September 30, 2014 compared to $434,263 as of March 31, 2014.

Additional Financing

Off Balance Sheet Arrangements

None

Critical Accounting Policies and Recent accounting Pronouncements

We have identified the policies below as critical to our business operations and the understanding of our financial statements. A complete discussion of our accounting policies is included in Note 3 of the Annual Audited Financial Statements for the year ended March 31, 2014.

Use of estimates

Going Concern

As shown in the financial statements, the Company incurred a net operating loss of $566,598 for the six month period ended September 30, 2014. The Company’s current liabilities exceed its current assets by $710,930 as of September 30, 2014.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, the Company is not required to provide this disclosure.

DIRECTORS AND EXECUTIVE OFFICERS

Board of Directors

Directors serve for a term of one year and until their successors have been duly elected and qualified. The following is a description of the business experience of each of our directors and officers.

Paul Ramsay (BBA) - Co-Founder, Chairman & President

Mr. Ramsay has served as President of the Company since its founding in 2008. Over 25 years of business development and management experience. Co-founder and former CEO and VP Business Development of Cymat Corp, (TSX: CYM) with a market valuation over $150 million upon his resignation in 2002. Was instrumental in securing the Stabilized Aluminum Foam (SAF) license from Alcan International Ltd. Successfully negotiated a $10 Million technology development program with Industry Canada (TPC). Participated in the completion of $25 million in financing with financial institutions. Mr. Ramsay also introduced and sold several newly developed products to major corporations.

Mr. Ramsay’s qualifications to serve of the Board include over 25 years of business experience and his experience as a founder, and seller, of companies, and his experience with the Company since its founding.

Richard Rusiniak (Mechanical Engineer) - Co-Founder, Director & CEO

Mr. Rusiniak has served as Chief Executive Officer of the Company since its founding in 2008. Over 30 years of management, design and process experience. Co-founder and former President, CFO, and CTO of Cymat Corp (TSX: CYM) with a market valuation over $150 million upon his resignation in 2002. Negotiated an Aluminum Foam Manufacturing licence with Alcan International Ltd., and successfully commercialized the technology. Prepared full documentation and completed a $10 Million technology development program with Industry Canada (TPC). Participated in the completion of $25 million in financing with financial institutions. From 1978 to 1988, he was project manager with Long Manufacturing, as well as The Ontario Research Foundation (Ortech). Projects on which he has consulted include NASA’s Zero Gravity Program, Atomic Energy of Canada’s Re-tubing Program and Hawker Siddeley’s Bi-Level GO Train Modularization.

Mr. Rusiniak’ s qualifications to serve on Algae Dynamics’ board of directors include his years of managerial experience and technology and engineering experience and his experience with the Company since its founding.

Ross Eastley (CA) – Director & CFO

Since 2009 Mr. Eastley has been the Chief Financial Officer of the Company. Prior to that, he was CEO for the Canadian Society of Immigration Consultants (CSIC) from 2006 – 2009. Mr. Eastley reported to a nine-member Board, responsible for strategic planning, corporate communications, initial regulatory functions, creation of the staffing structure and management of legal processes. Former V P/Controller for Brandon University.

Mr. Eastley’s qualifications to serve on the Board include his over 30 years of accounting and CFO experience in both private and public sector organizations.

P. Blair Mullin (BA, MBA) - Director

Mr. Mullin’s principal occupation during the past five years includes managing various funds and providing management consulting services including Managing Partner of Apollo Ventures, LLC, Aldercreek Capital LLC and Apollo Marketing LLC, which provide investment capital to emerging companies. He is also President & CEO of Connectus Inc., which provides advisory services to emerging companies. Previously, Mr. Mullin served as consultant to and then CFO of DRS Inc. from 2010 to 2012; as President & CEO of Samarium Group Corporation (now Samaranta Mining Corporation) from 2009 to 2010; as Chief Financial Officer of Zi Corporation from 2006 to 2009; as Chief Financial Officer of Homax Products Inc from 2005 to 2006; as Interim Vice President Finance of Yakima Products Inc. in 2005. From 2003 to 2005, Mr. Mullin served as consultant to numerous clients engaged in manufacturing. In addition, he was a Partner in Tatum Partners (later Tatum LLC), a national executive services firm, from 2003 to 2010. From 2001 to 2003, Mr. Mullin was President and CEO of Blair Mullin & Associates, Inc., a consulting firm. From 2000 to 2001, Mr. Mullin served as President and Chief Operating Officer of International DisplayWorks, Inc., which was a successor company to Morrow Snowboards, Inc., where he served as President and CFO from 1997 to 2000. Mr. Mullin holds an MBA from University of Western Ontario and BA from Wilfrid Laurier University, in Canada. Mr. Mullin also serves on the Board of Directors of Greatland Power Corporation, a privately-held independent power producer.

Mr. Mullin’s qualifications to serve on Algae Dynamics’ board of directors include his 25 years of managerial experience and his experience as chief financial officer of public and private companies, Mr. Mullin is the Board’s finance and accounting expert. Mr. Mullin also brings several years of public company corporate governance experience to the Board.

W. Cameron MacDonald (BA, BSc, MBA Finance & Accounting, CFA) - Director

Mr. McDonald has since 2009 been the founder , CEO of Global SeaFarms Corporation. Public listing by way of RTO on the Canadian National Stock Exchange “CNSX”. Was an Investment Banker with Canaccord Adams, Montreal, Quebec (now Canaccord Genuity) from 2004 to 2009. Part of number one ranked technology investment banking deal team in Canada in 2006 and 2007. Over $500M of Canaccord lead TSX and AIM IPOs. Over $500M of Canaccord follow-on public offerings. Advisory to $110M Amex listed SPAC transaction – due diligence and transaction structuring. Was an Account Manager with Business Development Bank of Canada from 1995 to 1998. Administered a portfolio of 40 companies. Is a Certified Financial Analyst “CFA” and passed the Partners, Directors, and Officers Qualifying Exam in 2006.

Mr. McDonald’s qualifications to serve on the Company’s Board include his years of finance and management experience and his experience as a founder and CEO of Global SeaFarms Corporation.

Other Management

Sandra Elsley (Hon. B.A., M.A., M.Ed) - VP Corporate Communications

Over 25 years of experience in human relations and the organizational development field as a communications and relationship expert, working in government, corporate and private sectors. Extensive experience developing, marketing and managing peak - performance programs to enhance individual and company dynamics in Canada and internationally. Was involved in the start up of an Ontario based company, was instrumental in raising funds and working as VP Corporate Communications/Investor Relations - share price went from $0.50 to $7.70. Has privately owned and managed a successful psychotherapy and consulting practice since 1991.

Corey Bigras (Hon. B.S. Chem., Marketing Certification) – Director of Sales & Marketing

Over 15 years experience in the nutritional supplement industry, Corey has developed and marketed some of the world’s most successful products. Brands that Corey was responsible for won several retail awards from Wal-Mart US and GNC US. Corey was instrumental in helping Iovate Health Sciences increase their sales from $20MM per year to over $500MM per year by developing breakthrough brands, products and marketing.

Advisors

Graeme G. Phipps (BSc, Geology and Geophysics) – Strategic Advisor

Over 30 years of oil & gas operational and management experience with Exxon, CanOxy/Nexen and Petro Canada. In 2005, he was Executive V P of PetroKazakhstan and was preparing to become President and CEO when it was successfully sold for US$4.2 billion to China National Petroleum Corporation. Mr. Phipps is a director of several public and private international oil & gas companies. He has extensive experience with financial transactions and investment banking.

Dr. Kirsten Muller (PhD) – Lead Phycologist

Over 10 years’ experience researching and cultivating algae. Currently Associate Professor at the University of Waterloo and Associate Director of the Canadian Phycology Culture Centre (CPCC), which is housed within her laboratory at the University of Waterloo (500 species). Has authored over 25 papers in leading phycology journals and has received many national and international research awards. Dr. Muller recently won The Luigi Provasoli Award in recognition of authoring the outstanding paper published in the Journal of Phycology (Phycological Society of America) during 2011.

Dr. Brendan McConkey (PhD) – Oil Analysis

Over 7 years research experience as Associate Professor at the University of Waterloo. His areas of expertise include proteomics, biochemistry, toxicology, and computational biology. Research emphasis has been on interdisciplinary approaches that combine biology, chemical engineering, and computational research.

Dr. Terry H. Walker (Ph.D., FE, Biosystems Engineering) – Bioprocess Advisor

Dr Walker has over 20 years experience in Biosystems Engineering; food and bioprocess engineering and biochemical engineering. Currently Professor, Clemson University, South Carolina - Biosystems and Environmental Engineering. Has authored 17 papers and obtained a patent and provisional patent. Is affiliated with the Institute of Biological Engineering (IBE); Society for Industrial Microbiologists (SIM), Phi Kappa Phi and Gamma Sigma Delta Honor Societies; Sigma Xi Scientific Research Society. Elected member of SC Biomass Council (2010 SC State Energy Office); Received SCBio reward (2006) – research reward for development of antibiotics.

Dr. James (Jamie) Doran (Ph.D Plant Physiology, H.B.Sc. Biochemistry, B.Ed) – Strategic Advisor

Over 13 years’ experience in the innovation and entrepreneurship space. Has been the Chief Operating Officer for Innovation Guelph “IG” since September 2013, one of 17 Regional Innovation Centres in the Ontario Network of Entrepreneurs. Since joining IG in January, 2012, Dr. Doran has helped IG grow into Guelph’s focal point for innovative ideas and entrepreneurial spirit. His experience comes from his own entrepreneurial adventures and his time at the Ontario Centres of Excellence “OCE”. Dr. Doran is also an Advisor and Board Member of several organizations. Has knowledge and experience assisting companies comes from many sectors, including cleantech, biotech, manufacturing, food and agriculture, social innovation and education.

Christopher Shanahan (Master of Science in Agricultural Economics) – Market Integration Advisor

Global Program Manager - Food & Agriculture, Frost & Sullivan, North America, San Antonio, United States – Market Integration Advisor: Direct experience in data analysis, project management, consulting and market engineering. Econometric-based market analysis including mathematical programming, statistical benefit-cost analysis, market forecasting, and scenario engineering. Product innovation adoption models and business strategy decision models. Experience base covering broad range of sectors, leveraging past experience across various industry verticals such as agriculture and food & beverage markets with a focus on ag chemicals, food ingredients, animal feed additives, consumer packaged goods, food packaging, and dietary supplements. Mr. Shanahan has the ability to understand client requirements and deliver optimum solutions.

Family Relationships

There are no family relationships among our directors or executive officers.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control persons has been involved in any events requiring disclosure under Item 401(f) of Regulation S-K.

Compensation Committee Interlocks and Insider Participation

As a smaller reporting company, the Company is not required to provide this disclosure.

Nominations to the Board of Directors

Our directors take a critical role in guiding our strategic direction and oversee the management of the Company. Board candidates are considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of the shareholders, diversity, and personal integrity and judgment.

In addition, directors must have time available to devote to Board activities and to enhance their knowledge in the growing business. Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the Company.

In carrying out its responsibilities, the Board will consider candidates suggested by shareholders. If a shareholder wishes to formally place a candidate’s name in nomination, however, he or she must do so in accordance with the provisions of the Company’s Bylaws. Suggestions for candidates to be evaluated by the proposed directors must be sent to the Board of Directors.

Committees of the Board

We do not have any committees of the Board. With the recent addition of independent directors to the Board we anticipate the creation of an audit and a compensation committee.

Director Compensation

We reimburse our directors for all reasonable ordinary and necessary business related expenses, but we did not pay directors’ fees or other cash compensation for services rendered as a director in the year ended March 31, 2014 to any individual serving on our Board during that period. We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors. We may pay fees for services rendered as a director when and if additional directors are appointed to the board of Directors.

EXECUTIVE COMPENSATION

The particulars of the compensation paid to the following persons:

our principal executive officer; and

each of our two most highly compensated executive officers who were serving as executive officers at the end of the fiscal year ended March 31, 2014

who we will collectively refer to as the named executive officers of the Company, are set out in the following summary compensation table:

SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($) (i)		Total ($) (i)

Richard Rusiniak,	2014	0	0	0	0	0	0	$	50,000	$	50,000
Chief Executive	2013	0	0	0	0	0	0	$	0	$	0

Paul Ramsay	2014	0	0	0	0	0	0	$	50,000	$	50,000
President	2013	0	0	0	0	0	0	$	0	$	0

Ross Eastley	2014	0	0	0	0	0	0	$	20,000	$	20,000
Chief Financial Officer	2013	0	0	0	0	0	0	$	3,000	$	3,000

(i) Represents consulting fees paid to the named executive officers.

Other than as disclosed below, there are no compensatory plans or arrangements with respect to our executive officers resulting from their resignation, retirement or other termination of employment or from a change of control.

Richard Rusiniak - Employment Agreement

On April 23, 2014, we entered into an employment agreement with Richard Rusiniak (the "Rusiniak Employment Agreement"), effective as of July 1, 2014.

The Rusiniak Employment Agreement provides for Mr. Rusiniak’s continued employment as Chief Executive Officer of the Company for a term of three years, subject to certain termination rights, during which time he will receive monthly base salary at the rate of $10,000. Mr. Rusiniak base salary shall be subject to annual review. Mr. Rusiniak is entitled to a car allowance of $750 per month and the maximum contribution to his RRSP up to $30,000.

In addition, Mr. Rusiniak is entitled, at the sole and absolute discretion of the Compensation Committee of the Company's Board of Directors, to receive in equity and other incentive compensation plans. Mr. Rusiniak will also be entitled to participate in all employee benefit plans or programs of the Company to the extent that his position, title, tenure, salary, age, health and other qualifications make him eligible to participate in accordance with the terms of the applicable plans or programs.

The Rusiniak Employment Agreement contains a non-competition covenant provision effective during the term of his employment and for a period of two years after termination of Mr. Rusiniak's employment.

The Rusiniak Employment Agreement, as do the other employment agreements described below, provides for a payment following a “change in control” upon a “triggering event” equal to $250,000 plus one months’ salary for each year of service. Subject to certain exceptions, a “change in control” includes a merger or other transaction resulting in change in ownership amounting to 50% or the sale of 50% or more of the assets of the Company. A “triggering event” involves the termination of the executive or a diminution of his responsibilities and certain other events adversely affecting the executive.

Paul Ramsay - Employment Agreement

On April 23, 2014, we entered into an employment agreement with Paul Ramsay (the "Ramsay Employment Agreement"), effective as of July 1, 2014.

The Ramsay Employment Agreement provides for Mr. Ramsay’s continued employment as President of the Company for a term of three years, subject to certain termination rights, during which time he will receive monthly base salary at the rate of $10,000. Mr. Ramsay base salary shall be subject to annual review. Mr. Ramsay is entitled to a car allowance of $750 per month and the maximum contribution to his RRSP up to $30,000.

In addition, Mr. Ramsay is entitled, at the sole and absolute discretion of the Compensation Committee of the Company's Board of Directors, to receive in equity and other incentive compensation plans. Mr. Ramsay will also be entitled to participate in all employee benefit plans or programs of the Company to the extent that his position, title, tenure, salary, age, health and other qualifications make him eligible to participate in accordance with the terms of the applicable plans or programs.

The Ramsay Employment Agreement contains a non-competition covenant provision effective during the term of his employment and for a period of two years after termination of Mr. Ramsay's employment.

The Ramsay Employment Agreement has the identical change in control provisions to the Rusiniak Employment Agreement.

Ross Eastley - Employment Agreement

On April 23, 2014, we entered into an employment agreement with Ross Eastley (the "Eastley Employment Agreement"), effective as of July 1, 2014.

The Eastley Employment Agreement provides for Mr. Eastley’s continued employment as Chief Financial Officer of the Company for a term of three years, subject to certain termination rights, during which time he will receive monthly base salary at the rate of $8,333. Mr. Eastley base salary shall be subject to annual review.

In addition, Mr. Eastley is entitled, at the sole and absolute discretion of the Compensation Committee of the Company's Board of Directors, to receive in equity and other incentive compensation plans. Mr. Eastley will also be entitled to participate in all employee benefit plans or programs of the Company to the extent that his position, title, tenure, salary, age, health and other qualifications make him eligible to participate in accordance with the terms of the applicable plans or programs.

The Eastley Employment Agreement contains a non-competition covenant provision effective during the term of his employment and for a period of two years after termination of Mr. Eastley's employment.

The Eastley Employment Agreement has similar change in control provisions to the Rusiniak Employment Agreement, with a payment of $100,000 plus one month’s salary per year of employment.

Outstanding Equity Awards at Fiscal Year-End

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

Option Awards

Stock Awards

Name

(a)

Number

Securities

Underlying

Unexercised

options

(#) (b)

Number of

Securities

Underlying

Unexercised

Options

(#)

(c)

Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)

(d)

Option

Exercise

Price

($)

(e)

Option

Expiration

Date

($)

(f)

Number of

S hares or

Common Shares of

Stock that

have not Vested

(#)

(g)

Market

Value of

Shares of

Common Shares of

Stock that

Have not

Vested

($)

(h)

Equity Incentive

Plan Awards:

Number of

Unearned Shares,

Common Shares or

Other

Rights that

have not

Vested

(#)

(i)

Equity Incentive

Plan Awards:

Market or

Payout Value

of Unearned

Shares, Common Shares

or other

Rights that

have not

Vested

($)

(j)

Richard Rusiniak

Nil

N/A

Nil

N/A

Nil

N/A

Paul Ramsay

Nil

N/A

Nil

N/A

Nil

N/A

Ross Eastley

Nil

N/A

Nil

N/A

Nil

N/A

Options Grants in the Fiscal Year Ended March 31, 2014

During the fiscal year ended March 31, 2014, no stock options were granted to our executive officers.

Aggregated Options Exercised in the Fiscal Year March 31, 2014 and Year End Option Values

There were no stock options exercised during the fiscal year ended March 31, 2014 and no stock options held by our executive officers at the end of the fiscal year ended March 31, 2014.

Re-pricing of Options/SARS

We did not re-price any options previously granted to our executive officers during the fiscal year ended March 31, 2014.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.

Indebtedness of Directors, Senior Officers, Executive Officers and Other Management

None of our directors or executive officers or any associate or affiliate of the Company during the last two fiscal years, is or has been indebted to the Company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

AND DIRECTOR INDEPENDENCE

Except as disclosed below, there have been no transactions or proposed transactions in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years in which any of our directors, executive officers or beneficial holders of more than 5% of the outstanding shares of our common shares, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest.

Working Capital Advances

Messrs. Rusiniak and Mr. Ramsay have advanced as of September 30, 2014 $212,882 and $212,055, respectively, to the Company for working capital purposes. These advances are on an interest-free basis without any stated payment terms.

Employment Agreements with Management

On April 23, 2014 we entered into employment agreements with Richard Rusiniak, Paul Ramsay and Ross Eastley.

Advisory Agreement with Connectus, Inc.

P. Blair Mullin, a director, is Managing Director of Connectus Inc. (“Connectus”). Connectus has entered into an advisory agreement with the Company dated as of March 11, 2014 in connection with development of the Company’s business plan and financial strategies for the Company. As consideration for the advisory agreement, the Company shall issue to Connectus 625,000 (post-split) three-year warrants of the Company (the “Warrants”) exercisable at $0.04 per common share. Of the Warrants, 300,000 vested over time and have fully-vested and the balance vest one-sixth for each $250,000 raised in the Company’s initial offering of securities registered under the Securities Act with all warrant shares vesting upon the Company having raised $1,500,000.

Review, Approval or Ratification of Transactions with Related Persons

We have not adopted a Code of Ethics and we rely on our board to review related party transactions on an ongoing basis to prevent conflicts of interest. Our board reviews a transaction in light of the affiliations of the director, officer or employee and the affiliations of such person’s immediate family. Transactions are presented to our board for approval before they are entered into or, if this is not possible, for ratification after the transaction has occurred. If our board finds that a conflict of interest exists, then it will determine the appropriate remedial action, if any. Our board approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company.

Director Independence

We currently have five directors, one (Mr. MacDonald) of whom is independent.

We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by The New York Stock Exchange, Inc., the NASDAQ National Market, and the Securities and Exchange Commission.

Subject to some exceptions, these standards generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee of ours; (b) a member of the director’s immediate family is, or in the past three years has been, an executive officer of ours; (c) the director or a member of the director’s immediate family has received more than US$120,000 per year in direct compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity by our independent public accountants, or has worked for such firm in any capacity on our audit; (e) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves on the compensation committee; or (f) the director or a member of the director’s immediate family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the past three years, exceeds the greater of US$1,000,000 or two percent of that other company’s consolidated gross revenues.

DISCLOSURE OF COMMISSION POSITION OF

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Under the Canada Business Corporations Act (the “CBCA”), the Registrant may indemnify its current or former directors or officers or another individual who acts or acted at the Registrant’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with the Registrant or another entity. The CBCA also provides that the Registrant may also advance moneys to a director, officer or other individual for costs, charges and expenses reasonably incurred in connection with such a proceeding.

However, indemnification is prohibited under the CBCA unless:

●

the individual acted honestly and in good faith with a view to the Registrant’s best interests, or the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the Registrant’s request; and

●

in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful.

The Registrant’s Bylaws require it to indemnify each current or former director or officer or other individual who acts or acted at the Registrant’s request as a director or officer or in a similar capacity of the Registrant or another entity at the Registrant’s request. The Registrant will indemnify such individual against all costs, charges and expenses reasonably incurred in respect of any civil, criminal, administrative, investigative or other proceeding in which such individual is involved because of his or her association with the Registrant or such other entity. However, the Registrant shall not indemnify such individual if, among other things, he or she did not act honestly and in good faith with a view to the Registrant’s, or other such entity’s, best interests and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual did not have reasonable grounds for believing that his or her conduct was lawful. The by-laws also require the Registrant to advance moneys to such individuals for the costs, charges and expenses of such proceedings, provided that the individual agrees in advance, in writing, to repay the moneys if the conditions above are not satisfied.

The Registrant’s Bylaws authorize it to purchase and maintain insurance for the benefit of each of its current or former directors or officers and each person who acts or acted at the Registrant’s request as a director or officer, or an individual acting in a similar capacity, of the Registrant or another entity. The Registrant has not purchased director and officer liability insurance, but intends to do so when funds permit.

The Registrant included in the Employment Agreement of some of its officers (who also serve as Directors) an indemnification clause which provides, among other things, that the Registrant will indemnify such officers to the fullest extent permitted by law from and against all losses that the officer may reasonably suffer, sustain or incur, including in a civil, criminal or administrative proceeding, by reason of such individual being or having been a director or officer, provided that the Registrant shall not indemnify such individual if, among other things, he or she did not act honestly and in good faith with a view to the Registrant’s best interests.

Insofar as indemnification for liabilities arising under the U.S. Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1, together with all amendments and exhibits, with the SEC. This Prospectus, which forms a part of that registration statement, does not contain all information included in the registration statement. Certain information is omitted and you should refer to the registration statement and its exhibits. With respect to references made in this Prospectus to any of our contracts or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contracts or documents. You may read and copy any document that we file at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our filings and the registration statement can also be reviewed by accessing the SEC’s website at http://www.sec.gov.

FINANCIAL STATEMENTS

Our audited financial statements as of and for the fiscal years ended March 31, 2014 and 2013, and unaudited financial statements as of and for the six month periods ended September 30, 2014 and 2013, are included herewith.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Converted Carbon Technologies Corp.

We have audited the accompanying balance sheets of Converted Carbon Technologies Corp. as of March 31, 2014 and 2013, and the related statements of operations and comprehensive loss, stockholders’ (deficiency), and cash flows for each of the years in the two year period ended March 31, 2014. Converted Carbon Technologies Corp.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Converted Carbon Technologies Corp. as of March 31, 2014 and 2013, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s operating losses, negative working capital, and an accumulated deficit raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

		McGOVERN, HURLEY, CUNNINGHAM, LLP



		Chartered Accountants Licensed Public Accountants

Toronto, Canada

September 29, 2014

Financial Statements of

CONVERTED CARBON TECHNOLOGIES CORP.

March 31, 2014 and 2013

(Stated in Canadian Dollars)

F-2

CONVERTED CARBON TECHNOLOGIES CORP.

Balance Sheet

(Stated in Canadian Dollars)

	As at March 31,			As at March 31,
	2014			2013

ASSETS

Current Assets
Cash	$	64,674		$	4,001
Prepaid expenses		12,124			-
Amounts receivable		7,875			3,613
Total Current Assets		84,674			7,614

Equipment and leasehold improvements (Note 4)		33,318			-

Intangible assets (Note 5)		7,141			5,961

Total Assets	$	125,132		$	13,575

LIABILITIES

Current Liabilities
Accounts payable and accrued liabilities (Note 11)	$	87,530		$	52,030
Advances from investor (Note 6)		-			25,000
Advances from shareholders (Note 7)		431,406			425,573
Total Current Liabilities		518,936			502,603

STOCKHOLDERS' EQUITY (DEFICIENCY)

Common stock (Note 8), $Nil par value, unlimited amount
authorized, 8,606,250 issued and outstanding
as of March 31, 2014, (2013 - 8,606,250)		100			100
Equity to be issued (Note 8)		328,180			-
Accumulated deficit		(722,084	)		(489,128	)
Total Stockholders' (Deficiency)		(393,804	)		(489,028	)

Total Liabilities and Stockholders' (Deficiency)	$	125,132		$	13,575

Going Concern (Note 1)

Commitments and Contingencies (Note 10)

F-3

CONVERTED CARBON TECHNOLOGIES CORP.

Statements of Operations and Comprehensive Loss

(Stated in Canadian Dollars)

		For the		For the
		Year Ended		Year Ended
		March 31,		March 31,
		2014		2013

OPERATING EXPENSES
Amortization expense (Note 4)		$	6,737	$	-
Business development			14,575		17,633
Management and contract fees			120,000		3,000
Occupancy costs			11,248		4,931
Office and general			7,218		7,410
Professional fees			49,987		19,977
Property insurance			3,588		-
Research and development			3,006		24,724
Telephone and internet services			9,195		8,620
Travel			7,402		5,074
Total Operating Expenses			232,956		91,369

Net Loss and Comprehensive Loss			232,956	$	91,369

Net loss per common share -
	Basic and diluted	$	0.03	$	0.01

Weighted average common shares
	outstanding - basic and diluted		8,668,418		8,606,250

The accompanying notes are an integral part of these financial statements

F-4

CONVERTED CARBON TECHNOLOGIES CORP.

Statements of Stockholders' Equity (Deficiency)

(Stated in Canadian Dollars)

	Common		Common
	Shares		Shares		Equity to		Accumulated			Stockholders'
	Number		Amount		be Issued		Deficit			(Deficency)

March 31, 2012		8,606,250	$	100	$	-	$	(397,759	)	$	(397,659	)

Net loss and
comprehensive loss
for the year		-		-		-		(91,369	)		(91,369	)
March 31, 2013		8,606,250		100	$	-	$	(489,128	)		(489,028	)
Unit subscriptions
received		-		-		328,180		-			328,180
Net loss and
comprehensive loss
for the year		-		-		-		(232,956	)		(232,956	)
March 31, 2014		8,606,250	$	100	$	328,180	$	(722,084	)	$	(393,804	)

The accompanying notes are an integral part of these financial statements

F-5

CONVERTED CARBON TECHNOLOGIES CORP.

Statements of Cash Flows

(Stated in Canadian Dollars)

	Year			Year
	Ended			Ended
	March 31,			March 31,
	2014			2013
Operating activities

Net loss for the year	$	(232,956	)	$	(91,369	)
Items not affecting cash
Amortization		6,737			-


Prepaid expenses		(12,124	)		-
Amounts receivable		(4,262	)		69,056
Accounts payable		35,500			(16,376	)
Net cash flows from operating activities		(207,105	)		(38,689	)

Financing activities
Advances from shareholders		5,833			43,241
Unit subscriptions received		303,180			-
Net cash flows from financing activities		309,013			43,241

Investing activities
Investment in equipment and leasehold improvements		(40,055	)		-
Investment in patents		(1,180	)		(1,003	)
Net cash flows from investing activities		(41,235	)		(1,003	)

Net change in cash		60,673			3,549
Cash position - beginning of year		4,001			452

Cash position - end of year	$	64,674		$	4,001

The accompanying notes are an integral part of these financial statements

F-6

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

1.)	Nature of the Business and Going Concern

Converted Carbon Technologies Corp. (the “Company”) was incorporated under the Canada Business Corporations Act on October 7, 2008 as Converted Carbon of Canada Corp. On November 19, 2010, the Company amended its Articles of Incorporation to change its name to Converted Carbon Technologies Corp.

The Company is a nutrient ingredient company and has developed a scalable Pure-BioSilo™ for sanitary cultivation of microalgae targeted to the functional food and beverage additives and supplement markets. The Company’s planned principal operations are the design, engineering and manufacturing of a proprietary algae cultivation system for the high volume production of pure contaminant-free algae biomass. The Company is currently conducting research and development activities to operationalize certain technology currently in the allowed patent application stage, so it can produce pure contaminate-free algae biomass.

During the year ended March 31, 2014, the Company secured a research facility in Mississauga, Ontario, which houses all of its employees and research and development activities. The Company is also in the process of raising additional equity capital to support the completion of its development activities to begin production of pure contaminate-free algae biomass as soon as possible.

The Company’s activities are subject to significant risks and uncertainties, including failing to obtain patents and failing to secure additional funding to operationalize the Company’s current technology before another company develops similar technology.

These financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company is in the development stage and has not yet realized profitable operations and has relied on non-operational sources to fund operations. The Company has suffered recurring losses and additional future losses are anticipated as the Company has not yet been able to generate revenue. In addition, as of March 31, 2014, the Company has a working capital deficiency of $434,263 (2013 - $494,989) and an accumulated deficit of $722,084 (2013 - $489,128). The Company’s ability to continue as a going concern is dependent on successfully executing its business plan, which includes the raising of additional funds. The Company will continue to seek additional forms of debt or equity financing, but it cannot provide assurances that it will be successful in doing so. See Note 13 for additional funds raised subsequent to March 31, 2014. These circumstances raise substantial doubt as to the ability of the Company to meet its obligations as they come due and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Such adjustments could be material.

F-7

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

2.) Presentation of Financial Statements

Basis of Presentation

The financial statements have been prepared in accordance with U.S Generally Accepted Accounting Principles (“US GAAP”). All adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows as of March 31, 2014 have been included.

The Company’s financial statements are prepared using the accrual basis of accounting in accordance with US GAAP and the Company’s functional and reporting currency is the Canadian dollar.

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-10 “ASU 2014-10” to eliminate certain financial reporting requirements for development stage entities. The amendments in ASU 2014-10 remove the incremental financial reporting requirements from US GAAP for development stage entities, including the presentation of inception-to-date information in the statements of income, cash flows and shareholder equity, and disclosure of the financial statements as those of a development stage entity. The Company has chosen to early adopt these amendments as financial statements had not been issued or made available for issuance prior to the issue of these annual financial statements for the years ended March 31, 2014 and 2013.

Use of Estimates and Assumptions

The preparation of the financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could materially differ from these estimates. The significant areas requiring the use of management estimates are related to the valuation of deferred taxes, stock based compensation, and intangible assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ materially from those estimates.

3.)	Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, and all highly liquid debt instruments purchased with an original maturity of three months or less. As at March 31, 2014 and March 31, 2013 there were no cash equivalents.

Prepaid Expenses

Prepaid expenses consist of services paid, for which the Company has not yet received the benefit.

F-8

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

3.)

Summary of Significant Accounting Policies

Equipment and Leasehold Improvements

Equipment and leasehold improvements are stated at cost less accumulated amortization and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The carrying amount of an asset is derecognized when replaced.

Repairs and maintenance costs are charged to the statements of operations, during the year in which they are incurred.

Amortization is provided for over the estimated useful life of the asset as follows:

Computer equipment 30% on a declining balance

Production equipment 20% on a declining balance

Leasehold improvements are amortized over the term of the lease or useful life of the improvements, whichever is shorter, which is currently 5 years.

Useful lives and residual values are reviewed and adjusted, if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The cost and accumulated amortization of assets retired or sold are removed from the respective accounts and any gain or loss is recognized in operations.

Intangible Assets

Intangible assets are comprised of patents. Patents represent capitalized legal costs incurred in connection with applications for patents. In-process patents are not amortized. All patents subject to amortization are amortized on a straight line basis over an estimated useful life. The Company regularly evaluates patents and patent applications for impairment or abandonment, at which point the Company charges the remaining net book value to expenses.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying amount exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows.

F-9

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

3.)

Summary of Significant Accounting Policies

Research and Development

Research and development costs include costs directly attributable to the conduct of research and development programs, including the cost of consulting fees, materials, supplies, and the maintenance of research equipment. All costs associated with research and development are expensed as incurred. The approved refundable portion of tax credits are netted against the related expenses. Non-refundable investment tax credits are recorded in the period when reasonable assurance exists that the Company has complied with the terms and conditions required for approval of the tax credit and it is more likely than not that the Company will realize the benefits of these tax credits against the deferred taxes. Refundable investment tax credits are recorded in the period when reasonable assurance exists that the Company has complied with the terms and conditions required for approval of the tax credit and it is more likely than not that the Company will collect it.

Stock-based Compensation

The Company uses the fair value based method of accounting for all its stock-based compensation in accordance with FASB Accounting Standards Codification ("ASC") ASC 718 “Compensation – Stock Compensation”. The estimated fair value of the options and warrants that are ultimately expected to vest based on performance related conditions, as well as the options and warrants that are expected to vest based on future service, is recorded over the instrument’s requisite service period and charged to stock-based compensation. In determining the amount of options and warrants that are expected to vest, the Company takes into account, voluntary termination behavior as well as trends of actual option and warrant forfeitures. Stock options and warrants which are indexed to a factor which is not a market, performance or service condition, in addition to the Company’s share price, are classified as liabilities and re-measured at each reporting date based on the Black-Scholes option pricing model with a charge to operations, until the date of settlement.

Income Taxes

Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, deferred tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply when the asset is realized or the liability is settled. The effect of a change in income tax rates on deferred tax liabilities and assets is recognized in income in the period in which the change occurs. Deferred tax assets are recognized to the extent that they are considered more likely than not to be realized.

FASB issued ASC 740-10 “Accounting for Uncertainty in Income Taxes”. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The implementation of this standard had no impact on the Company’s financial statements.

F-10

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

3.)

Summary of Significant Accounting Policies

Fair Value of Financial Instruments

ASC 820 “Fair Value Measurement” defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows:

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – inputs other than quoted prices that are observable for the asset or liability or indirectly; and

Level 3 – inputs that are not based on observable market data.

As at March 31, 2014 and March 31, 2013, the Company did not have any financial instruments measured at fair value. The Company’s financial instruments include cash, accounts payable and accrued liabilities, advances from investor and advances from shareholders. The fair values of these financial instruments approximate their carrying values due to their short-term nature. Management is of the opinion that the Company is not exposed to significant interest, credit or currency risks from these financial instruments.

Loss per Share

Basic loss per share is calculated by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted loss per share is calculated using the treasury stock method and reflects the potential dilution of securities by including warrants and contingently issuable shares, if any, in the weighted average number of common shares outstanding for a year, if dilutive. In a loss year, dilutive common shares are excluded from the loss per share calculation as the effect would be anti-dilutive. Accordingly, for the years ended March 31, 2014 and 2013, the basic loss per share was equal to diluted loss per share as there were no dilutive securities.

Comprehensive Income (Loss)

ASC 220 “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The net loss is equivalent to the comprehensive loss for the periods presented.

F-11

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

3.)

Summary of Significant Accounting Policies

New Accounting Pronouncements

In December 2011, the FASB issued ASU 2011-11 "Disclosures about Offsetting Assets and Liabilities" and in January 2013 issued ASU No. 2013-01 “Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities”. These standards create new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain disclosures of the amounts of certain instruments subject to enforceable master netting arrangements would be required, irrespective of whether the entity has elected to offset those instruments in the statement of financial positions. ASU 2011-11 and ASU 2013-01 are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of ASU 2011-11 did not have a material impact on the Company’s financial position or results of operations.

In July 2013, the FASB issued ASU No. 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. The objective of ASU No. 2013-11 is to provide guidance on the financial statement presentation of an unrecognized tax benefit when a net loss carryforward, similar tax loss, or tax credit carryforward exists. The amendments in this standard are effective prospectively for interim and annual reporting periods beginning after December 15, 2013. The Company is evaluating the effect, if any, the adoption of ASU No. 2013-11 will have on its financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.

4.)	Property and Equipment

	Cost		2014 Accumulated Amortization		Cost		2013 Accumulated Amortization
Computer equipment	$	1,865	$	560		-		-
Production equipment		27,236		5,447		-		-
Leasehold improvements		10,954		730		-		-
Total	$	40,055	$	6,737	$	-	$	-

Net carrying amount			$	33,318			$	-

During the year ended March 31, 2014 the Company recorded total amortization of $6,737 (2013 - $Nil) which was recorded to amortization expense on the statements of operations.

5.)	Intangible Assets

The Company has recorded allowed patents pending with a cost of $7,141 at March 31, 2014 (2013 - $5,961) that are not currently being amortized and accordingly, the Company did not record amortization expense relating to its intangible assets for the years ended March 31, 2014 and 2013.

F-12

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

6.)	Advances from Investor

During the year ended March 31, 2012, the Company received $25,000 from a prospective investor for the sale of 44,642 units of the Company at $0.56 per unit which were issued subsequent to March 31, 2014 (see Note 13). This balance was reflected as Advances from Investor as at March 31, 2013. During the year ended March 31, 2014, this balance was subsequently reclassified to Equity to be Issued, as the Company had met the requirement to raise a minimum offering of $100,000 in subscription proceeds prior to January 15, 2014. If this minimum offering had not been met, no units would have been issued and any proceeds received by the Company would have been returned.

7.)	Advances from Shareholders

As at March 31, 2014, the Company had received cumulative working capital advances in the amount of $431,406 (2013 - $425,573) from two shareholders who are also officers and directors of the Company. These advances are unsecured, non-interest bearing and payable upon demand.

8.)	Capital Stock

Authorized

The Company is authorized to issue an unlimited number of common shares with no par value.

Issued and Outstanding

Founders of the Company received 8,606,250 common shares of the Company for nominal consideration.

The total number of voting common shares issued and outstanding at March 31, 2014 was 8,606,250 (2013 – 8,606,250) issued to the founders of the Company for nominal proceeds of $100. No dividends were declared or paid by the Company during the period from inception to March 31, 2014.

On June 3, 2013, the Company effected a 2:1 stock split. All share and per share numbers have been restated to reflect the effect of the stock split retrospectively.

As at March 31, 2014, the Company had received subscription proceeds of $328,180 (2013 - $25,000) pursuant to subscription agreements for 315,339 units of the Company (2013 – 44,642 units), with each unit comprised of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable at $1.68 per share for the first twelve months and $2.24 per share for the second twelve month period to expiration. The private placement closed and the common shares and warrants were issued subsequent to March 31, 2014 (see Note 13).

F-13

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

9.)	Income Taxes

The following table reconciles the income tax benefit at the Canadian statutory rate to income tax benefit at the Company’s effective tax rates.

	2014			2013
Loss before income taxes	$	(232,956	)	$	(91,369	)
Statutory tax rate		26.5	%		26.5	%
Expected income tax (recovery)	$	(62,000	)	$	(23,000	)
Non-deductible items		1,000			1,000
Change in valuation allowance		61,000			22,000
Total income taxes (recovery)	$	-		$	-

Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities and their respective tax bases for financial reporting purposes. Deferred tax assets as at March 31, 2014 and 2013 are comprised of the following:

	2014			2013
Net operating loss carry forwards	$	187,000			93,000
Equipment and leasehold improvements					33,000
Valuation allowance		(187,000	)		(126,000	)
Net deferred tax asset	$	-		$	-

The Company has net operating loss carry forwards of approximately $706,000 (2013 - $351,000)which may be carried forward to apply against future year income for Canadian income tax purposes, subject to final determination by taxing authorities, expiring in the following years:

Expiry

2029	$	65,000
2030		83,000
2031		29,000
2032		81,000
2033		93,000
2034		355,000
Total	$	706,000

The deferred tax assets have not been recognized because at this stage of the Company’s development, it is not determined that future taxable profits will be available against which the Company can utilize such deferred tax assets. Tax years 2009 through 2014 remain open to examination by the taxing jurisdictions to which the Company is subject. The Company has not been notified by any taxing jurisdictions of any proposed or planned examination. The Company has non-refundable tax credits as at March 31, 2014 of $5,449 (2013 - $5,449) which expire in the year 2031.

F-14

Converted Carbon Technologies Corp.

Notes to Financial Statements

(Stated in Canadian Dollars)

March 31, 2014 and 2013

10.)	Commitments and Contingencies

The Company entered into a five (5) year operating lease for office and production facilities. The lease commenced on December 1, 2013 and expires on November 30, 2018. The base monthly rental is $1,362 plus the Company’s estimated portion of property taxes and operating expenses which are currently $782 per month. The future commitments pursuant to this lease arrangement, including property taxes and operating expenses are:

2015	$	25,732
2016		25,732
2017		25,732
2018		25,732
2019		17,154

For the year ended March 31, 2014, rental expenses related to this lease were $6,427 (2013 - $nil).

On June 7, 2013, the Company agreed to issue an officer of the Company, 22,500 warrants exercisable at the price of a future offering to be issued after the close of the private placement. These warrants were issued subsequent to March 31, 2014, with an exercise price of $1.12 per share and an expiration date of June 7, 2016. (See Note 13)

On March 11, 2014, the Company entered into a consulting agreement to assist and advise the Company in matters concerning corporate finance and the Company’s current and proposed financing activities for the period commencing April 1, 2014 and ending December 31, 2014. Pursuant to this agreement, the Company agreed to issue to the consultant, that number of warrants equal to 5% of the fully-diluted shares of the Company as at the date of the closing of a proposed financing. Subsequent to the signing of the agreement the number was fixed on September 5, 2014 at a total of 625,000 warrants Each warrant will be exercisable at USD$0.04 per common share for a period of three years. Of the warrants to be issued, 300,000 will vest on September 5 th , 2014 with the unvested portion vesting pro-rata for each US$250,000 raised in the offering, fully vesting upon US$1,500,000 being raised.

See Note 13 with respect to employment agreements entered into subsequent to March 31, 2014.

11.)	Related Party Transactions

Included in accounts payable and accrued liabilities as at March 31, 2014 is $64,030 (2013 - $52,030) owing to two directors who are also officers and significant shareholders of the Company for unpaid management fees. This balance is unsecured, non-interest bearing and due on demand.

See also Notes 6a, 6b and 8.

F-28

Algae Dynamics Corp. (Formerly Converted Carbon Technologies Corp.)

Notes to the Condensed Interim Financial Statements

(Stated in Canadian Dollars)

(Unaudited)

September 30, 2014

10.)	Financial Instruments

(a)

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flow primarily from its financing activities and advances from shareholders. As at September 30, 2014, the Company had cash of $56,213 (March 31, 2014 - $64,674) to settle current liabilities of $797,218 (March 31, 2014 - $518,936). All of the Company's financial liabilities other than the warrant liability of $237,300 have contractual maturities of less than 30 days and are subject to normal trade terms. The Company regularly evaluates its cash position to ensure preservation and security of capital as well as liquidity.

In the normal course of business, management considers various alternatives to ensure that the Company can meet some of its operating cash flow requirements through financing activities, such as private placements of common stock, preferred stock offerings and offerings of debt and convertible debt instruments as well as through merger or acquisition opportunities. Management may also consider strategic alternatives, including strategic investments and divestitures. As future operations may be financed out of funds generated from financing activities, the Company’s ability to do so is dependent on, among other factors, the overall state of capital markets and investor appetite for investments in the green technology industry and the Company’s securities in particular. Should the Company elect to satisfy its cash commitments through the issuance of securities, by way of either private placement or public offering or otherwise, there can be no assurance that the efforts to obtain such additional funding will be successful, or achieved on terms favorable to the Company or its existing shareholders. If adequate funds are not available on terms favorable to the Company, it may have to reduce substantially or eliminate expenditures or obtain funds through other sources such as divestiture or monetization of certain assets or sublicensing (where permitted) of certain rights to certain of the Company’s technologies or products.

(b)

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Cash deposits with a major Canadian chartered bank are insured by the Canadian Deposit Insurance Corporation up to $100,000. As at September 30, 2014, the Company held $56,213 (March 31, 2014 - $64,674) with a major Canadian chartered bank.

F-29

Algae Dynamics Corp. (Formerly Converted Carbon Technologies Corp.)

Notes to the Condensed Interim Financial Statements

(Stated in Canadian Dollars)

(Unaudited)

September 30, 2014

10.)	Financial Instruments (continued)

(c)

Foreign exchange risk

(d)

Interest rate risk

(e) Derivative liability – warrant liability

In connection with a consulting agreement, the Company granted warrants to purchase up to 625,000 common shares of the Company as disclosed in Note 6 (b). The warrants have an exercise price of USD$0.04 ($0.044). The warrants are exercisable at any time prior to April 1, 2017. The warrants are accounted for as derivative liabilities because the exercise price is denominated in a currency other than the Company’s functional currency.

The table below summarizes the fair value of the Company’s financial liabilities measured at fair value:

	Fair Value at September 30,		Fair Value Measurement Using
	2014		Level 1		Level 2		Level 3
Derivative liability – Warrants	$	237,300	$	-	$	-	$	237,300

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (warrant derivative liability) for the periods ended September 30, 2014 and March 31, 2014:

	September 30, 2014			March 31, 2014
Balance at beginning of period
Additions to derivative instruments, recognized in earnings as professional fees	$	-		$	-
Change in fair market value, recognized in earnings as professional fees		240,000			-
Balance at end of period		(2,700	)		-
	$	237,300		$	-

F-30

Algae Dynamics Corp. (Formerly Converted Carbon Technologies Corp.)

Notes to the Condensed Interim Financial Statements

(Stated in Canadian Dollars)

(Unaudited)

September 30, 2014

10.)	Financial Instruments (continued)

(e)

Derivative liability – warrant liability (continued)

These instruments were valued using pricing models that incorporate the price of a share of common stock (based upon the price of the most recent private placement), volatility, risk free rate, dividend rate and estimated life. The Company estimated the value of the warrants using the Black-Scholes model. There were no transfers of assets or liabilities between Level 1, Level 2, or Level 3 during the periods ended September 30, 2014 and March 31, 2014.

The following are the key assumptions used in connection with this computation:

	September 30, 2014
Number of shares underlying the warrants		625,000
Fair market value of the stock	$	0.82
Exercise price	USD$	0.04
	$	(0.044	)
Expected volatility		144	%
Risk-free interest rate		1.16	%
Expected dividend yield		0	%
Expected warrant life (years)		2.5

11.)	Subsequent Event

On October 22, 2014, the Company issued 6,700 units in settlement of debt owed to a vendor of USD$10,050 ($11,256), each unit is comprised of one (1) common share and one-half of one (1/2) common share purchase warrant. Each whole warrant is exercisable at USD$1.50 ($1.68) per share within twenty four (24) months of the date of issuance.

Until (insert date), all dealers that effect transactions in these securities, whether or not participating in this offereing, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to thier unsold allotments or subscriptions.

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The estimated expenses of the offering (assuming all shares are sold), all of which are to be paid by the Registrant, are as follows:

SEC Registration Fee	$	500
Printing Expenses		6,000
Accounting Fees and Expenses		15,000
Legal Fees and Expenses		30,000
Blue Sky Fees/Expenses		-
Transfer Agent Fees		2,000
TOTAL	$	53,500

Item 14.

Indemnification of Directors and Officers.

The only statute, charter provision, bylaw, contract, or other arrangement under which any controlling person, director or officer of the Registrant is insured or indemnified in any manner against any liability which he may incur in his capacity as such, is as follows:

1.	Section 11.02 of the Company's Bylaws, filed as Exhibit 3.2 to the Registration Statement.
2.	In the Employment Agreement of some of the officers (who also serve as Directors).

The general effect of the foregoing is to indemnify a control person, officer or director from liability, thereby making the Company responsible for any expenses or damages incurred by such control person, officer or director in any action brought against them based on their conduct in such capacity, provided they have acted honestly and in good faith with a view to the Company's best interests.

Item 15.

Recent Sales of Unregistered Securities.

In the three years preceding the filing of this Registration Statement, the Registrant has sold the following securities that were not registered under the Securities Act of 1933, as amended (the “Securities Act”), as follows:

The Company entered into an advisory agreement with Connectus Inc. dated as of March 11, 2014 in connection with development of the Company’s business plan and financial strategies for the Company. As consideration for the advisory agreement, the Company issued to Connectus 625,000 (post-split) three-year warrants of the Company (the “Advisory Warrants”) exercisable at US$0.04 per common share. Of the Advisory Warrants, 300,000 vested over time and have fully-vested and the balance vest one-sixth for each $250,000 raised in the Company’s initial offering of securities registered under the Securities Act with all warrant shares vesting upon the Company having raised $1,500,000. The issuance of the Advisory Warrants was exempt from registration under Section 4(2) of the Securities Act.

In June 2014, the Company issued an aggregate of 2,403,071 common shares and 1,201,536 warrants to purchase common shares for gross cash proceeds of $647,860 in a private placement to accredited investors which was exempt from registration under the Securities Act pursuant to Regulation S or Regulation D under the Securities Act and/or Section 4(2) thereof. The offering consisted of units, with each unit consisting of one common share and one common share purchase warrant. One whole warrant is exercisable into one common share at $0.42 within twelve months or $0.56 prior to twenty four months. No brokerage commissions were paid in connection with the issuance of such shares or warrants.

On October 22, 2014 the Company issued 6,700 common shares and 3,350 common share purchase warrants to Joseph P. Galdz in connection with the cancellation of U.S. $10,050 of legal fees. The common share purchase warrants are exercisable for two years at an exercise price of U.S. $1.50 per share. The issuance was exempt from registration under Section 4(2) of the Securities Act.

II-1

Item 16. Exhibits .

The following Exhibits are filed as part of this Registration Statement, pursuant to Item 601 of Regulation S-K.

Exhibit		Document Description

3.1		(a) Articles of Incorporation.*
		(b) Articles of Amendment to Change the Corporation Name*
		(c) Articles of Amendment to Eliminate Share Transfer Restrictions and Effect Reverse Stock Split*
3.2		Bylaws.*
4.1		Specimen Stock Certificate *
4.2		Form of Private Placement Warrant to Purchase Common Shares*
5.1		Opinion of The Law Office of Peterson Law Professional Corporation, regarding the legality of the securities being registered.*
10.1		Employment Agreement with Richard Rusiniak*
10.2		Employment Agreement with Paul Ramsay*
10.3		Employment Agreement with Ross Eastley*
10.4		Lease agreement dated October 29, 2013 with 2725312 Canada Inc.*
10.6		(a) Advisory Agreement with Connectus Inc. dated March 11, 2014, as amended*
		(b) Amendment to Advisory Agreement with Connectus*
		(c) First Tranche Warrant (initially with Connectus, assigned to Apollo Marketing LLC)*
		(c) Second Tranche Warrant (initially with Connectus, assigned to Apollo Marketing LLC)*
10.7		(a) Agreement with Sandra Elsley*
		(b) Warrant Issued to Sandra Elsley*
10.8		Agreement with Corey Bigras *
23.1		Consent of McGovern, Hurley, Cunningham, LLP.
23.2		Consent of The Law Office of Peterson Law Professional Corporation**

** Included in Exhibit 5.1

Item 17. Undertakings.

A. The undersigned Registrant hereby undertakes:

(1)

To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to:

(a)

include any prospectus required by Section 10(a)(3) of the Securities Act;

(b)

reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and

(c)

include any additional or changed material information with respect to the plan of distribution.

(2)

That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)

For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the Registration Statement as of the time it was declared effective.

(5)

For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(6)

For the purpose of determining liability under the Securities Act to any purchaser:

Each prospectus filed pursuant to Rule 424(b) under the Securities Act as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§§230.430A of this chapter), shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. Provided however, that no statement made in a registration statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use.

(7)

For the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution of securities:

The Registrant undertakes that in a primary offering of securities of the Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

II-3

(a)

Any preliminary prospectus or prospectus of the Registrant relating to the offering required to be filed pursuant to Rule 424 of this chapter;

(b)

Any free writing prospectus relating to the offering prepared by or on behalf of the Registrant or used or referred to by the Registrant;

(c)

The portion of any other free writing prospectus relating to the offering containing material information about the Registrant or its securities provided by or on behalf of the Registrant; and

(d)

Any other communication that is an offer in the offering made by the Registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

C.	The undersigned Registrant hereby undertakes that:

(1)

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(2)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 2 to this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Ontario, Canada on this 19th day of November 2014.

ALGAE DYNAMICS CORP.
(the “Registrant”)

	BY:	/s/ Richard Rusiniak
		Richard Rusiniak
		Chief Executive Officer and Director

	BY:	/s/ Paul Ramsay
		Paul Ramsay
		President and Director

	BY:	/s/ Ross Eastley
		Ross Eastley
		Chief Financial Officer and Director and Principal Accounting Officer

	BY:	/s/ P. Blair Mullin
		P. Blair Mullin
		Director

	BY:	/s/ W. Cameron McDonald
		W. Cameron McDonald
		Director

BY-LAW NUMBER 1

A by-law relating generally to the transaction of the business and affairs of Converted Carbon Technologies Inc. (hereinafter called the “Corporation”).

CONTENTS

INTERPRETATION		SECTION

	Defined Terms	1.01
	Number and Gender	1.02
	Headings	1.03

MEETINGS OF SHAREHOLDERS

	Annual Meeting	2.01
	Special Meetings	2.02
	Notices	2.03
	List of Shareholders Entitled to Notice	2.04
	Record Date for Notice of Shareholder Meeting	2.05
	Persons Entitled to be Present	2.06
	Quorum	2.07
	Pledged Shares	2.08
	Representatives	2.09
	Proxies	2.10
	Shareholders	2.12
	Votes to Govern	2.13
	Show of Hands	2.14
	Ballots	2.15
	Casting Vote	2.16
	Adjournment	2.17
	Transaction of Business by Signature	2.18
	Chairman and Secretary	2.19

DIRECTORS
	Power of Directors	3.01
	Quorum	3.02
	Qualifications	3.03
	Election and Term	3.04
	Removal of Directors	3.05

	Vacancies	3.06
	Calling of Meetings	3.07
	Meetings by Telephone	3.08
	Place of Meetings	3.09
	Votes to Govern	3.10
	Adjournment	3.11
	Remuneration of Directors	3.12
	Interest of Directors in Contracts	3.13
	Declaration of Interest	3.14
	Loans to Employees, Shareholders and Directors	3.15
	Directors' Duties	3.16
	Transaction of Business by Signature	3.17
	Director Ceasing to Hold Office	3.18
	Chairman	3.19

COMMITTEES

	Committee of Directors	4.01
	Transaction of Business	4.02
	Audit Committee	4.03
	Procedure at Committee Meetings	4.04

OFFICERS

	Appointment of Officers	5.01
	Chairman of the Board	5.02
	President	5.03
	Vice-President	5.04
	Secretary	5.05
	Treasurer	5.06
	Other Officers	5.07
	Term of Office and Remuneration	5.08
	Variation of Duties	5.09
	Agents and Attorneys	5.10
	Fidelity Bonds	5.11

BANKING ARRANGEMENTS AND CONTRACTS

	Banking Arrangements	6.01
	Execution of Instruments	6.02

SHARES

	Allotment	7.01
	Payment of Commissions	7.02
	Share Certificates	7.03
	Replacement of Share Certificates	7.04
	Transfer Agent and Registrar	7.05
	Registration of Transfer	7.06
	Lien for Indebtedness	7.07
	Enforcement of Lien	7.08
	Joint Shareholders	7.09
	Non-Recognition of Trust	7.10
	Deceased Shareholders	7.11

FINANCIAL

	Financial Year	8.01
	Dividends	8.02
	Dividend Cheques	8.03
	Non-Receipt of Cheques	8.04
	Stock Dividends	8.05
	Record Date for Dividends and Rights	8.06
	Unclaimed Dividends	8.07
	Purchase of Business as of Past Date	8.08

NOTICES

	Method of Giving Notice	9.01
	Computation of Time	9.02
	Omissions and Errors	9.03
	Notice to Joint Shareholders	9.04
	Persons Entitled by Death or Operation of Law	9.05
	Waiver of Notice	9.06

VOTING RIGHTS

	Voting Rights in Other Corporations	10.01

PROTECTION OF DIRECTORS, OFFICERS AND OTHERS

	Limitation of Liability	11.01
	Indemnity	11.02
	Insurance	11.03

BY-LAW NUMBER 1

SECTION ONE

INTERPRETATION

1.01 DEFINED TERMS

In this by-law and all other by-laws, special resolutions and resolutions of the Corporation, unless the context otherwise specifies or requires:

	"Act"		means the Canada Business Corporations Act , as from time to time amended, and any Act that may be substituted therefor and in the event of such substitution any reference in the by-laws of the Corporation to the Act shall be read as referring to the amended or substituted provisions therefor in the new statute or statutes;

	"Articles of Incorporation" and "Articles"		means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of arrangement, articles of continuance, articles of revival, articles of reorganization, letters patent, supplementary letters patent, a special act and any other instrument by which the Corporation is incorporated;

	"board"		means the board of directors of the Corporation;

	"by-law"		means any by-law of the Corporation from time to time in force and effect;

	"Corporation"		means the corporation subsisting under the Act and named CONVERTED CARBON TECHNOLOGIES INC.

	"meeting of shareholders"		includes an annual meeting of shareholders and a special meeting of shareholders;

	"number of directors"		means the number of directors provided for in the Articles or, where a minimum and maximum number of directors is provided for in the Articles, the number of directors determined by a special resolution or resolution;

1.02 NUMBER AND GENDER

Words importing the singular number shall include the plural and vice versa; words importing the masculine gender shall include the feminine and neuter genders; and words importing persons shall include bodies corporate, corporations, companies, partnerships, syndicates, trusts or unincorporated organizations and any number of aggregate of persons. All terms contained in the by-laws and which are defined in the Act shall have the meanings given to such terms in the Act.

1.03 HEADINGS

The headings used in the by-laws are inserted for reference purposes only and are not to be considered or taken into account in construing the terms or provisions thereof or to be deemed in any way to clarify, modify or explain the effect of any such terms or provisions.

SECTION TWO

MEETINGS OF SHAREHOLDERS

2.01 ANNUAL MEETING

The annual meeting of the shareholders shall be held, subject to the provisions of Section 2.17 hereof, at any place in or outside Ontario as the directors determine or, in the absence of such determination, at the place where the registered office of the Corporation is located, at such time and on such day in each year as the board, the chairman of the board, if any, or any officer who is also a director, may from time to time determine, for the purpose of hearing and receiving the reports and financial statements required by the Act to be read at and laid before the shareholders at an annual meeting, electing directors, appointing, if necessary, the auditor, fixing or authorizing the board to fix the auditor's remuneration, and for the transaction of such other business as may properly be brought before the meeting. At such meeting, any shareholder shall have the right to raise any matter relevant to the affairs of the Corporation.

2.02 SPECIAL MEETINGS

The directors may at any time call a special meeting of the shareholders of the Corporation to be held at such time and at such place in or outside Ontario as may be determined by the directors.

2.03 NOTICES

No public notice or advertisement of any meeting of shareholders shall be required, but notice of the time and place of each such meeting shall be given in the manner provided in Section Nine to each shareholder who at the close of business on the record date for notice is entered in the register of shareholders as the holder of one or more shares carrying the right to vote at the meeting, to each director, and to the auditor, if any, of the Corporation not fewer than ten days, or if the Corporation is an offering corporation, not fewer than twenty-one days, but not more than fifty days before the day on which the meeting is to be held. Notice of a special meeting of shareholders at which special business is to be transacted shall state or be accompanied by a statement of the nature of that business in sufficient detail to permit the shareholder to form a reasonable judgment thereon, and the text of any special resolution or by-law to be submitted to the meeting. A meeting of shareholders may be held at any time without notice if all shareholders entitled to vote thereat are present in person or represented by proxy or has waived notice and if the auditor, if any, is present or have waived such notice, and at such meeting any business may be transacted which the Corporation at a special meeting of the shareholders may transact.

2.04 LIST OF SHAREHOLDERS ENTITLED TO NOTICE

For every meeting of shareholders, the Corporation shall prepare a list of shareholders entitled to receive notice of the meeting, arranged in alphabetical order and showing the number of shares entitled to vote at the meeting held by each shareholder. If a record date for the meeting is fixed pursuant to Section 2.05, the list shall be prepared not later than 10 days after such record date. If no record date is fixed, the shareholders listed shall be those registered at the close of business on the day immediately preceding the day on which notice of the meeting is given, or where no such notice is given, the day on which the meeting is held. The list shall be available for examination by any shareholder during usual business hours at the registered office of the Corporation or at the place where the securities register is kept and at the place where the meeting is held.

2.05 RECORD DATE FOR NOTICE OF SHAREHOLDER MEETING

The board may fix in advance a time and a date, as a record date, for the determination of the shareholders entitled to notice of a meeting of the shareholders, which record date for notice shall be not more than fifty days and not fewer than twenty-one days before the date of the meeting. If no such record date for notice of the meeting is fixed by the board, the record date for notice shall be at the close of business on the day immediately preceding the day on which notice is given or sent, or if no notice is given, the day on which the meeting is held.

2.06 PERSONS ENTITLED TO BE PRESENT

The only persons entitled to attend a meeting of shareholders shall be those entitled to vote thereat, the directors and the auditor of the Corporation and others who, although not entitled to vote, are entitled or required under any provisions of the Act or by-laws of the Corporation to be present at the meeting. Any other person may be admitted only on the invitation of the chairman of the meeting or with the consent of the meeting.

2.07 QUORUM

Two (2) shareholders entitled to vote at a meeting of shareholders, whether present or represented by proxy, shall constitute a quorum.

2.08 PLEDGED SHARES

Where a person mortgages or hypothecates his shares, that person or his proxy is the person entitled to vote at all meetings of shareholders in respect of such shares unless, in the instrument creating the mortgage or hypothec, he has expressly empowered the person holding the mortgage or hypothec to vote in respect of such shares in which case, subject to the Articles, such holder or his proxy is the person entitled to vote in respect of the shares.

2.09 REPRESENTATIVES

A personal representative and, where a corporation is such personal representative, any person duly appointed as proxy for such corporation, upon filing with the secretary of the meeting sufficient proof of his appointment, shall represent the shares at all meetings of the shareholders of the Corporation and may vote accordingly as a shareholder in the same manner and to the same extent as the shareholder of record. If there be more than one personal representative, the provisions of Section 2.11 hereof shall apply.

2.10 PROXIES

Every shareholder, including a corporate shareholder, entitled to vote at meetings of shareholders may by instrument in writing appoint a proxyholder or one or more alternate proxyholders, who need not be shareholders, to attend and act at the meeting in the manner, to the extent and with the authority conferred by the proxy. A proxy shall be executed by the shareholder or his attorney in writing or, if the shareholder is a corporation, by an officer or attorney duly authorized. If the Corporation is an offering corporation, a proxy shall cease to be valid one year from its date.

2.11 JOINT SHAREHOLDERS

Where two or more persons hold the same share jointly, any one of such persons present in person or represented by proxy at a meeting of shareholders has the right, in the absence of the other or others, to vote in respect of such share but, if more than one of such persons are present in person or represented by proxy and vote, they shall vote together as one on the share jointly held by them.

2.12 SCRUTINEERS

At each meeting of shareholders, one or more scrutineers may be appointed by a resolution of the meeting or by the chairman with the consent of the meeting to serve at the meeting. Such scrutineers need not be shareholders of the Corporation.

2.13 VOTES TO GOVERN

At all meetings of shareholders every question shall, unless otherwise required by the Articles or by-laws of the Corporation or by law, be decided by a majority of the votes duly cast on the question.

2.14 SHOW OF HANDS

Voting at a meeting of shareholders shall be by show of hands, except where a ballot is demanded by a shareholder or proxyholder entitled to vote at the meeting. A shareholder or proxyholder may demand a ballot either before or after any vote by show of hands. Upon a show of hands every person who is present and entitled to vote shall have one vote, and the result of the vote so taken shall be the decision of the shareholders upon the said question.

2.15 BALLOTS

If a ballot is duly demanded by any shareholder or proxyholder and the demand is not withdrawn, a ballot upon the question shall be taken in such manner as the chairman of the meeting shall direct. Upon a ballot each shareholder who is present in person or represented by proxy shall be entitled to one vote for each share in respect of which he is entitled to vote at the meeting and the result of the ballot on the questions shall be the decision of the shareholders upon the said question.

2.16 CASTING VOTE

In case of an equality of votes at any meeting of shareholders, either upon a show of hands or upon a ballot, the chairman of the meeting shall not be entitled to a second or casting vote.

2.17 ADJOURNMENT

If a meeting of shareholders is adjourned for less than thirty days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of thirty days or more, notice of the adjourned meeting shall be given as for an original meeting.

2.18 TRANSACTION OF BUSINESS BY SIGNATURE

A resolution in writing signed by all of the shareholders of the Corporation entitled to vote at a meeting of shareholders is valid and effective as if passed at a meeting of the shareholders duly called, constituted and held for that purpose unless a written statement with respect to the subject matter of the resolution is submitted by a director or the auditor in accordance with the Act. By-laws or resolutions passed by the directors of the Corporation may at any time, in lieu of confirmation at a meeting of shareholders, be confirmed in writing by the signatures of all the shareholders entitled to vote at such meeting.

2.19 CHAIRMAN AND SECRETARY

The chairman of any meeting of shareholders shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting: chairman of the board, managing director, president or a vice-president who is a shareholder. If no such officer is present within fifteen minutes from the time fixed for the holding of the meeting, the persons present and entitled to vote shall choose one of their number to be chairman. If the secretary of the Corporation is absent, the chairman shall appoint some person, who need not be a shareholder, to act as secretary of the meeting.

SECTION THREE

DIRECTORS

3.01 POWERS OF DIRECTORS

The board of directors shall manage or supervise the management of the business and affairs of the Corporation.

3.02 QUORUM

The quorum for the transaction of business at any meeting of the board of directors shall consist of a majority of the number of directors.

3.03 QUALIFICATIONS

In addition to any other provisions contained in the Act relating to the qualifications of directors, no person shall be qualified to be a director of the Corporation if he is less than eighteen years of age, if he is of unsound mind and has been so found by a court in Canada or elsewhere, if he is not an individual, or if he has the status of a bankrupt. A director need not be a shareholder. A majority of the directors shall be resident Canadians, but where the number of directors is two, only one of the directors must be a resident Canadian.

3.04 ELECTION & TERM

Directors shall be elected yearly to hold office until the next annual meeting of shareholders or until their successors shall have been duly elected or appointed. The whole board shall be elected at such annual meetings, and all the directors then in office shall retire, but, if qualified, are eligible for re-election. If an election of directors is not held at the proper time, the directors shall continue in office until their successors are elected or appointed.

If a meeting of shareholders fails to elect the number of directors by reason of the disqualification, incapacity or death of one or more candidates, the directors elected at that meeting, if they constitute a quorum, may exercise all the powers of the directors of the Corporation pending the holding of a special meeting of shareholders to fill the vacancies.

3.05 REMOVAL OF DIRECTORS

Subject to the provisions of the Act, the shareholders may, by resolution passed by a majority of the votes cast at an annual or special meeting of shareholders, remove any director before expiration of his term of office and may, by a majority of the votes cast at that meeting, elect any qualified person in his stead for the remainder of his term.

3.06 VACANCIES

Subject to the Act, a quorum of the board may fill a vacancy in the board, except a vacancy resulting from an increase in the number of directors or in the maximum number of directors or from a failure of the shareholders to elect the number of directors. In the absence of a quorum of the board, or if the vacancy has arisen from a failure of the shareholders to elect the number of directors, the board shall forthwith call a special meeting of shareholders to fill the vacancy. If the board fails to call such a meeting or if there are no directors in office, any shareholder may call the meeting.

3.07 CALLING OF MEETINGS

Subject to the provisions of the Act, meetings of the board shall be held from time to time at such place, at such time and on such day as the chairman of the board, if any, the president or a vice-president who is a director, or any two directors may determine. Notice of every meeting so called shall be given in accordance with Section Nine to each director not less than 48 hours (excluding any part of a Saturday or a holiday as defined by the Interpretation Act of Canada for the time being in force) before the time when the meeting is to be held, save that no notice of the meeting shall be necessary if a quorum of the directors is present and all the directors absent have waived notice of, or have otherwise signified their consent to the holding of such meeting.

3.08 MEETINGS BY TELEPHONE

Where all the directors have consented thereto (either before or after the meeting), any director may participate in a meeting of the board of directors or of any committee, by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and subject to the provisions of the Act, a director participating in a meeting pursuant to this paragraph shall be deemed to be present in person at that meeting. If a majority of directors participating in a meeting held pursuant to this section are then in Canada, the meeting shall be deemed to have been held in Canada.

3.09 PLACE OF MEETINGS

Meetings of the board may be held at the registered office of the Corporation or any other place within or outside Ontario, and in any financial year of the Corporation a majority of the meetings of the board need not be held at a place within Canada.

3.10 VOTES TO GOVERN

At all meetings of the board, every question shall be decided by a majority of the votes cast on the question, and in case of any equality of votes, the chairman of the meeting shall not be entitled to a second or casting vote.

3.11 ADJOURNMENT

Any meeting of the board or of any committee of directors may be adjourned from time to time by the chairman of the meeting, with consent of the meeting, to a fixed time and place and no notice of the time and place for the holding of the adjourned meeting need be given to any director. Any adjourned meeting must be duly constituted and held in accordance with the terms of the adjournment and a quorum must be present thereat. The directors who form the quorum at the original meeting are not required to form the quorum at the adjourned meeting. If there is no quorum at the adjourned meeting, the original meeting shall be deemed to have terminated forthwith after its adjournment.

3.12 REMUNERATION OF DIRECTORS

The directors shall be paid such remuneration for their services as directors as may from time to time be fixed by the board. Any remuneration so payable to a director who is also an officer or employee of the Corporation or who is counsel or solicitor to the Corporation or otherwise serves the Corporation in a professional capacity, shall be in addition to his salary as such officer or to his professional fees, as the case may be. The directors shall also be paid such sums in respect of their out-of-pocket expenses incurred in attending board, committee or shareholders' meetings or otherwise in respect of the performance by them of their duties as the board may from time to time determine.

3.13 INTEREST OF DIRECTORS IN CONTRACTS

No director or officer shall be disqualified by his office from contracting with the Corporation nor shall any contract or arrangement entered into by or on behalf of the Corporation with any director or officer or in which any director or officer is in any way interested, be liable to be voided, nor shall any director or officer so contracting or being so interested be liable to account to the Corporation for any profit realized by any such contract or arrangement by reason of such director or officer holding that office or of the fiduciary relationship thereby established; provided that the director or officer shall have complied with the provisions of the Act and Section 3.14 hereof.

3.14 DECLARATION OF INTEREST

A director or officer who is a party to, or who is a director or officer of or has a material interest in any person who is a party to a material contract or a proposed material contract with the Corporation shall disclose the nature and extent of his interest at the time and in the manner provided by the Act. Any such contract or proposed contract shall be referred to the board or shareholders for approval even if such contract is one that in the ordinary course of the Corporation's business would not require approval by the board or shareholders, and a director interested in a contract so referred to the board shall not vote on any resolution to approve the same except as provided by the Act.

3.15 LOANS TO EMPLOYEES, SHAREHOLDERS & DIRECTORS

The Corporation may from time to time give financial assistance by means of a loan, guarantee or otherwise:

a)	to employees of the Corporation or any of its affiliates, whether or not they are shareholders or directors, to enable or assist them to purchase or erect live-in accommodations for their own occupation, or in accordance with a plan for the purchase of shares of the Corporation or any of its affiliates;
b)	to any person on account of expenditures incurred or to be incurred on behalf of the Corporation;
c)	to a holding body corporate if the Corporation is a wholly-owned subsidiary of such holdings body corporate; or
d)	to a subsidiary body corporate of the Corporation.

3.16 DIRECTORS' DUTIES

Every director and officer of the Corporation in exercising his powers and discharging his duties shall act honestly and in good faith with a view to the best interests of the Corporation, and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

3.17 TRANSACTION OF BUSINESS BY SIGNATURE

By-laws or resolutions may be consented to at any time by the signatures of all the directors of the Corporation and such by-laws or resolutions are as valid and effective as if passed at meeting of directors duly called, constituted and held for that purpose.

3.18 DIRECTOR CEASING TO HOLD OFFICE

A director shall forthwith cease to hold office when:

he acquires the status of a bankrupt;

he becomes of unsound mind and is so found by a court in Canada or elsewhere;

he is removed from office by resolution of the shareholders as provided in Section 3.05;

he dies; or

he resigns in accordance with the Act.

3.19 CHAIRMAN

The chairman of any meeting of the board shall be the first mentioned of such of the following officers as having been appointed and who is a director and is present at the meeting: chairman of the board, managing director, president or vice-president. If no such officer is present, the directors present shall choose one of their number to be chairman.

SECTION FOUR

COMMITTEES

4.01 COMMITTEE OF DIRECTORS

The directors may from time to time appoint from their number a managing director, or a committee of directors, and allocate to such managing director or committee any of the powers of the directors except those which, under the Act, a managing director or committee of directors has no authority to exercise. Such managing director, or a majority of the members of the committee of directors, shall be resident Canadians.

4.02 TRANSACTION OF BUSINESS

The powers of a committee of directors may be exercised by a meeting at which a quorum is present or by resolution in writing signed by all of the members of such committee who would have been entitled to vote on that resolution at a meeting of the committee. The powers of a managing director may be exercised by a written resolution signed by the managing director or by a meeting constituted only of the managing director. Meetings of a committee of directors or of the managing director may be held at any place within or outside Ontario.

4.03 AUDIT COMMITTEE

If the Corporation is an offering corporation, it shall have an audit committee composed of not fewer than three directors of the Corporation, a majority of whom are not officers or employees of the Corporation or any of its affiliates, to hold office until the next annual meeting of the shareholders. Where an audit committee is elected or appointed as aforesaid:

the auditor of the Corporation is entitled to receive notice of every meeting of the audit committee and at the expense of the Corporation, to attend and be heard thereat;

the auditor of the Corporation or any member of the audit committee may call a meeting of the audit committee; and

the audit committee shall review the financial statements of the Corporation and shall report thereon to the board of directors of the Corporation before such financial statements are approved by the board of directors.

4.04 PROCEDURE AT COMMITTEE MEETINGS

Unless otherwise determined by the board of directors, each committee (including the audit committee) shall have the power to fix its quorum at not more than a majority of its members, to elect a chairman, and to regulate its procedure.

SECTION FIVE

OFFICERS

5.01 APPOINTMENT OF OFFICERS

The board of directors may from time to time appoint a president, one or more vice-presidents (to which title may be added words indicating seniority or function), a secretary, a treasurer and such other officers as the board of directors may determine, including one or more assistants to any of the officers so appointed. The board may specify the duties of and, in accordance with this by-law and subject to the provisions of the Act, delegate to such officers powers to manage the business and affairs of the Corporation.

5.02 CHAIRMAN OF THE BOARD

The board of directors may from time to time also elect or appoint a chairman of the board who shall be a director. If a chairman of the board is so elected or appointed, the board of directors may assign to him any of the powers and duties that are by any provisions of this by-law assigned to the managing director or to the president; and he shall, subject to the provisions of the Act or the Articles, have such other powers and duties as the board may specify. During the absence or disability of the chairman of the board, his duties shall be performed and his powers exercised by the managing director, if any, or by the president, or by such other officers as the board of directors may decide.

5.03 PRESIDENT

The president, if any, shall be charged with the general supervision of the business and affairs of the Corporation. Except when the board has appointed a managing director, the president shall also have the powers and be charged with the duties of that office.

5.04 VICE-PRESIDENT

During the absence or inability of the president, his duties may be performed and his powers may be exercised by the vice-president, or if there are more than one, by the vice-presidents in order of seniority (as determined by the board), save that no vice-president shall preside at a meeting of the board or at a meeting of shareholders who is not qualified to attend the meeting as a director or a shareholder, as the case may be. If a vice-president exercises any such duty or power, the absence or inability of the chairman of the board, if any, and the president shall be presumed with reference thereto. A vice-president shall also perform such duties and exercise such powers as the president may from time to time delegate to him or the board may prescribe.

5.05 SECRETARY

The secretary, if any, shall give, or cause to be given, all notices required to be given to shareholders, directors, auditors and members of committees; he shall attend all meetings of the directors and of the shareholders and shall enter, or cause to be entered, in books kept for that purpose minutes of all proceedings at such meetings; he shall be the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Corporation and of all books, papers, records, documents and other instruments belonging to the Corporation; and he shall perform such other duties as may from time to time be prescribed by the board or the president.

5.06 TREASURER

The treasurer, if any, shall keep full and accurate books of account in which shall be recorded all receipts and disbursements of the Corporation and, under the direction of the board, shall control the deposit of money, the safekeeping of securities and the disbursement of the funds of the Corporation; he shall render to the board at the meetings thereof, or whenever required of him, an account of all his transactions as treasurer and of the financial position of the Corporation; and he shall perform such other duties as may from time to time be prescribed by the board.

5.07 OTHER OFFICERS

The duties of all officers of the Corporation shall be such as the terms of their engagement call for or the board requires of them. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant, unless the board otherwise directs.

5.08 TERM OF OFFICE & REMUNERATION

In the absence of written agreement to the contrary, the board may remove at its pleasure any officer of the Corporation. Each officer shall continue to hold office until the appointment of officers at the first meeting of the board after the election of directors and, in default of the appointment of officers at such meeting, shall continue to hold office after such meeting. The terms of employment and remuneration of the chairman of the board, if any, the president and other officers elected or appointed by it shall be settled from time to time by the board.

5.09 VARIATION OF DUTIES

From time to time the board may prescribe, vary, add to or limit the powers and duties of any officer.

5.10 AGENTS & ATTORNEYS

The board shall have power from time to time to appoint agents or attorneys for the Corporation in or out of Ontario with such powers of management or otherwise (including the power to subdelegate) as may be thought fit.

5.11 FIDELITY BONDS

The board may require such officers, employees and agents of the Corporation as the board deems advisable to furnish bonds for the faithful discharge of their duties, in such form and with such surety as the board may from time to time prescribe.

SECTION SIX

BANKING ARRANGEMENTS & CONTRACTS

6.01 BANKING ARRANGEMENTS

The banking business of the Corporation, or any part thereof, shall be transacted with such bank, trust company or other firm or corporation carrying on a banking business as the board may designate, appoint or authorize from time to time by resolution and all such banking business, or any part thereof, shall be transacted on behalf of the Corporation by such one or more officers and such other persons as the board may designate, direct or authorize from time to time by resolution and to the extent therein provided, including, but without restricting the generality of the foregoing, the operation of the accounts of the Corporation; the making, signing, drawing, accepting, endorsing, negotiating, lodging, depositing or transferring of any cheques, promissory notes, drafts, acceptances, bills of exchange and orders for the payment of money; the giving of receipts for and orders relating to any property of the Corporation; the execution of any agreement relating to any banking business and defining the rights and powers of the parties thereto; and the authorizing of any officer of such banker to do any act or thing on behalf of the Corporation to facilitate such banking business.

6.02 EXECUTION OF INSTRUMENTS

Contracts, documents or instruments in writing requiring the signature of the Corporation may be signed by any two officers and/or directors and the corporate seal shall be affixed to such instruments as require the same. All and any such contracts, documents or instruments so signed shall be binding upon the Corporation without any further authorization or formality.

Notwithstanding any provision to the contrary contained in the by-laws of the Corporation, the board may at any time and from time to time direct the manner in which the person or persons by whom any particular contract, document or instrument in writing or any class of contracts, documents or instruments in writing of the Corporation may or shall be signed.

The term "contracts, documents or instruments in writing" as used in this by-law include deeds, mortgages, hypothecs, charges, conveyances, transfers, and assignments of property, real or personal, movable or immovable, agreements, releases, receipts, and discharges for the payment of money or other obligations, conveyances, transfers and assignments of shares, share warrants, stocks, bonds, debentures or other securities and all paper writings. Without restricting the generality of the foregoing, any two officers or any two directors or any officer together with any director shall have the authority to sell, assign, transfer, exchange, convert or convey any and all shares, stocks, bonds, debentures, rights, warrants or other securities owned by or registered in the name of the Corporation and to sign and execute (under the seal of the Corporation or otherwise), all assignments, transfers, conveyances, powers of attorney and other instruments that may be necessary for the purpose of selling, assigning, transferring, exchanging, converting or conveying any such shares, stocks, bonds, debentures, rights, warrants or other securities.

SECTION SEVEN

7.01 ALLOTMENT

The board may from time to time allot or grant options to purchase the whole or any part of the authorized and unissued shares in the capital stock of the Corporation, including any shares created by any amending Articles increasing or otherwise varying the capital stock of the Corporation, to such person or persons or class of persons as the board shall by resolution determine, provided that no shares shall be issued until the shares are fully paid as provided for in the Act.

7.02 PAYMENT OF COMMISSIONS

The board may from time to time authorize the Corporation to pay a reasonable commission to any person in consideration of his purchasing or agreeing to purchase shares of the Corporation from the Corporation or from any other person, or procuring or agreeing to procure purchasers for any such shares.

7.03 SHARE CERTIFICATES

Every holder of one or more fully paid shares of the Corporation shall be entitled, at his option and without payment, to a share certificate in respect of the shares held by him that complies with the Act. Share certificates shall be in such form or forms as the board shall from time to time approve. Each share certificate shall be signed by at least one director or officer of the Corporation or by or on behalf of a registrar, transfer agent, branch transfer agent or issuing or other authenticating agent of the Corporation.

7.04 REPLACEMENT OF SHARE CERTIFICATES

The board or any officer or agent designated by the board may, in its or his discretion, direct the issue of a new share certificate in lieu of and upon cancellation of a share certificate that has been mutilated or in substitution for a share certificate that has been lost, apparently destroyed or wrongfully taken, on payment of such fee, not exceeding three dollars ($3.00), and on such terms as to indemnity, reimbursement of expenses and evidence of loss and title as the board may from time to time prescribe, whether generally or in any particular case.

7.05 TRANSFER AGENT & REGISTRAR

The board may from time to time appoint or remove a transfer agent to maintain the securities register and the register of transfers, and one or more branch transfer agents to keep branch registers, and a registrar to maintain the securities register, and one person may (but need not be) appointed both registrar and transfer agent.

7.06 REGISTRATION OF TRANSFER

Subject to the provisions of the Act, no transfer of shares shall be registered in a register of transfers or branch register of transfers except upon surrender of the certificate representing such shares with a transfer endorsed thereon or delivered therewith duly executed by the registered holder or by his attorney or successor duly appointed, together with such assurance or evidence of signature, identification and authority to transfer as the board may from time to time prescribe, and upon payment of applicable taxes, compliance with such restrictions on transfer as are authorized by the Articles, and in satisfaction of any lien referred to in Section 7.07.

7.07 LIEN FOR INDEBTEDNESS

Subject to the provisions of the Act, the Corporation shall have a lien on the shares registered in the name of a shareholder or his legal representative for a debt of that shareholder to the Corporation.

7.08 ENFORCEMENT OF LIEN

The lien referred to in Section 7.07 may be enforced by any means permitted by law and:

where the share or shares are redeemable pursuant to the Articles, by redeeming such share or shares and applying the redemption price to the debt;

subject to the Act, by purchasing the share or shares for cancellation for a price equal to the book value of such share or shares and applying the proceeds to the debt;

by selling the share or shares to any third party whether or not such party is at arm's length to the Corporation, including, without limitation, any officer or director of the Corporation, for the best price which the directors consider to be obtainable for such share or shares; or

by refusing to register a transfer of such share or shares until the debt is paid.

7.09 JOINT SHAREHOLDERS

If two or more persons are registered as joint holders of any share, the Corporation shall not be bound to issue more than one certificate in respect thereof, and delivery of such certificate to one of such persons shall be sufficient delivery to all of them. Any one of such persons may give effectual receipts for the certificate issued in respect thereof or for any dividend, bonus, return of capital or other money payable or warranty issuable in respect of such share.

7.10 NON-RECOGNITION OF TRUST

The Corporation shall not be required to inquire into the existence of, or see to the performance or observance of, any duty owed to a third party by a registered holder of any of its shares or by any one whom it treats, as permitted or required by the Act, as the owner or registered holder thereof.

7.11 DECEASED SHAREHOLDERS

In the event of the death of a holder, or one or more of the joint holders, of any share, the Corporation shall not be required to make any entry in the register of shareholders in respect thereof or to make payment of any dividends thereon except upon production of all such documents as may be required by law and by the Act and upon compliance with the reasonable requirements of the Corporation and its transfer agent.

SECTION EIGHT

FINANCIAL

8.01 FINANCIAL YEAR

Until changed by resolution of the board of directors, the financial year of the Corporation shall end on a day to be determined by resolution of the board.

8.02 DIVIDENDS

Subject to the provisions of the Act and the Articles, the board may from time to time declare dividends payable to the shareholders according to their respective rights and interests in the Corporation, and such dividends may be paid in money or property.

8.03 DIVIDEND CHEQUES

A dividend payable in cash shall be paid by cheque drawn on the Corporation's bankers or one of them to the order of each registered holder of shares of the class or series in respect of which it has been declared and mailed by ordinary mail, postage prepaid, to such registered holder at his address appearing on the register of shareholders, unless such holder otherwise directs. In the case of joint holders the cheque shall, unless such joint holders otherwise direct, be made payable to the order of all such joint holders and mailed to them at the address appearing on the register of shareholders in respect of such joint holding, or to the first address so appearing if there are more than one. The mailing of such cheque as aforesaid, unless the same be not paid at par on due presentation, shall satisfy and discharge the liability for the dividend to the extent of the sum represented thereby plus the amount of any tax which the Corporation is required to and does withhold.

8.04 NON-RECEIPT OF CHEQUES

In the event of non-receipt of any dividend cheque by the person to whom it is sent as aforesaid, the Corporation shall issue to such person a replacement cheque for a like amount on such terms as to indemnity, reimbursement of expenses and evidence of non-receipt and of title as the board may from time to time prescribe, whether generally or in any particular case.

8.05 STOCK DIVIDENDS

For the amount of any dividend that the board may lawfully declare payable in cash, it may declare a stock dividend and issue therefor shares of the Corporation as fully paid.

8.06 RECORD DATES FOR DIVIDENDS AND RIGHTS

The board may fix in advance a date, preceding by not more than fifty days the date for the payment of any dividend or the date for the issue of any warrant or other evidence of right to subscribe for securities of the Corporation, as a record date for the determination of the persons entitled to receive payment of such dividend or to exercise the right to subscribe for such securities and to receive the warrant or other evidence in respect of such right, notwithstanding the transfer or issue of shares after the record date so fixed. Where a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of a class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice thereof shall be given, not less than seven days before the date so fixed, by advertisement in a newspaper published or distributed in the place where the Corporation has its registered office and in each place in Canada where it has a transfer agent or a transfer of the shares may be recorded, and by written notice to each stock exchange in Canada on which the shares of the Corporation are listed for trading. Where no such record date is fixed, the record date for the determination of the persons entitled to receive payment of any dividend or to exercise the right to subscribe for securities of the Corporation shall be at the close of business on the day on which the resolution relating to such dividend or a right to subscribe is passed by the board.

8.07 UNCLAIMED DIVIDENDS

Any dividend unclaimed after a period of six years from the date on which the same has been declared to be payable shall be forfeited and shall revert to the Corporation.

8.08 PURCHASE OF BUSINESS AS OF PAST DATE

Where any business is bought by the Corporation as of a past date (whether such date be before or after the incorporation of the Corporation) upon terms that the Corporation shall, as from that date, take the profits and bear the losses of the business, such profits or losses as the case may be shall, at the discretion of the directors, be credited or debited wholly or in part to revenue account, and in that case the amount so credited or debited shall, for the purposes of ascertaining the funds available for dividends, be treated as a profit or loss arising from the business of the Corporation.

SECTION NINE

NOTICES

9.01 METHOD OF GIVING NOTICE

Any notice (which term includes any communication or document) to be given (which term includes sent, delivered or served) pursuant to the Act, the regulations thereunder, the Articles, the by-laws or otherwise to a shareholder, director, officer, auditor or member of a committee of the board, shall be sufficiently given if delivered personally to the person to whom it is to be given, or if delivered to his last address as recorded on the books of the Corporation, or if mailed to him at his last address as recorded on the books of the Corporation by pre-paid ordinary or air mail or if sent to him at his last address as recorded on the books of the Corporation by any means of pre-paid, transmitted or recorded communication. A notice so delivered shall be deemed to have been given when it is delivered personally or to the recorded address as aforesaid; a notice so mailed shall be deemed to have been given when deposited in a post office or public letter box and shall be deemed to have been received on the fifth day after so depositing; and a notice so sent by any means of transmitted or recorded communication shall be deemed to have been given when dispatched or delivered to the appropriate communication company or agency or is representative for dispatch. The secretary may change or cause to be changed the recorded address of any shareholder, director, officer, auditor or member of a committee of the board in accordance with any information believed by him to be reliable. The recorded address of a director shall be his latest address as shown in the records of the Corporation or in the most recent notice filed under the Corporations Information Act, whichever is more current.

9.02 COMPUTATION OF TIME

In computing the date when notice must be given under any provision of the Articles or by-laws requiring a specified number of days' notice of any meeting or other event, the date of giving the notice shall be excluded and the date of the meeting or other event shall be included.

9.03 OMISSIONS & ERRORS

The accidental omission to give any notice to any shareholder, director, officer, auditor, or member of a committee of the board, or the non-receipt of any notice by any such person, or any error in any notice not affecting the substance thereof, shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise founded thereon.

9.04 NOTICE TO JOINT SHAREHOLDERS

If two or more persons are registered as joint holders of any share, notice to one of such persons shall be sufficient notice to all of them. Any notice shall be addressed to all of such joint holders and the address to be used for the purposes of Section 9.01 shall be the address appearing on the register of shareholders in respect of such joint holding, or the first address so appearing if there are more than one.

9.05 PERSONS ENTITLED BY DEATH OR OPERATION OF LAW

Every person who by operation of law, transfer, death of a shareholder or by any other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of such share which shall have been duly given to the person from whom he derives his title to such share prior to his name and address being entered on the register of shareholders (whether such notice was given before or after the happening of the event upon which he became so entitled) and prior to his furnishing to the Corporation the proof of authority or evidence of his entitlement prescribed by the Act.

9.06 WAIVER OF NOTICE

Any shareholder (or his duly appointed proxyholder), director, officer, member of a committee of the board or auditor may at any time waive any notice required to be given under any provision of the Articles or by-laws of the Corporation or of the Act, or waive or abridge the time for any notice, and such waiver, whether given before or after the meeting or other event of which notice is required to be given, shall cure any default in the giving or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing except a waiver of notice of a meeting of shareholders or of the board which may be given in any manner.

SECTION TEN

VOTING RIGHTS

10.01 VOTING RIGHTS IN OTHER CORPORATIONS

The proper signing officers of the Corporation may execute and deliver instruments of proxy and arrange for the issuance of voting certificates or other evidence of the right to exercise the voting rights attaching to any securities held by the Corporation.

Such instruments, certificates or other evidence shall be in favour of such person or persons as may be determined by the officer signing them or arranging therefor. In addition, the board may from time to time direct the manner in which or the person or persons by whom any particular voting rights or class of voting rights may or shall be exercised.

All shares and securities beneficially owned by the Corporation may be issued and held in the name of the nominee or nominees of the Corporation (and if issued or held in the names of more than one nominee shall be held jointly with right of survivorship) and shall be endorsed in blank with endorsement guaranteed in order to enable the transfer thereof to be completed and registration thereof to be effective.

SECTION ELEVEN

PROTECTION OF DIRECTORS, OFFICERS AND OTHERS

11.01 LIMITATION OF LIABILITY

No director or officer shall be liable for the acts, receipts, neglects or defaults of any other director or officer or employee, or for joining in any receipt or other act for conformity, or for any loss, damage or expense happening to the Corporation through the insufficiency or deficiency of title to any property acquired for or on behalf of the Corporation, or for the insufficiency or deficiency of any security in or upon which any of the monies of the Corporation shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious acts of any person with whom any of the monies, securities or effects of the Corporation shall be deposited, or for any loss occasioned by any error of judgment or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto, unless the same are occasioned by his own wilful neglect or default; provided that nothing herein shall relieve any director or officer from the duty to act in accordance with the Act and the regulations thereunder or from liability for any breach thereof.

11.02 INDEMNITY

Subject to the limitations contained in the Act, the Corporation shall indemnify a director or officer, a former director or officer, or a person who acts or acted at the Corporation's request as a director or officer of a body corporate of which the Corporation is or was a shareholder or creditor (or a person who undertakes or has undertaken any liability on behalf of the Corporation or any such body corporate) and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Corporation or such body corporate, if:

(a)

he acted honestly and in good faith with a view to the best interests of the Corporation; and

(b)

in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

11.03 INSURANCE

Subject to the limitations contained in the Act, the Corporation may purchase and maintain such insurance for the benefit of its directors and officers as such, as the board may from time to time determine.

MADE by the directors on the 8 th day of October, 2008.

SECRETARY

CONFIRMED by the shareholders on the 8 th day of October, 2008.

SECRETARY

COMMON SHARE PURCHASE WARRANT

CONVERTED CARBON TECHNOLOGIES CORP.

Warrant Shares: •	Initial Issuance Date: •
	Termination Date: •

THIS COMMON SHARE PURCHASE WARRANT (the “ Warrant ”) certifies that, for value received, • or its assigns (the “ Holder ”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after •(the “ Initial Issuance Date ”) and on or prior to the close of business on •(the “ Termination Date ”) but not thereafter, to subscribe for and purchase from CONVERTED CARBON TECHNOLOGIES CORP., a corporation organized under the Canada Business Corporations Act (the “ Company ”), • common shares (the “ Common Shares ”) of the capital of the Company (subject to adjustment hereunder, the “ Warrant Shares ”). The purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

Section 1 . Definitions . In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1:

“ Business Day ” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“ Commission ” means the United States Securities and Exchange Commission.

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Trading Day ” means a day on which the principal Trading Market is open for trading.

“ Trading Market ” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTCQB marketplace or the OTC Bulletin Board (or any successors to any of the foregoing).

“ Transfer Agent ” means initially the Company, and following the appointment of a transfer agent for the Company’s Common Shares, such transfer agent and any successor transfer agent of the Company.

All references to “ Dollar ” or “ $ ” refer to the lawful currency of Canada, or at the election of the Company, to the U.S. dollar equivalent thereof.

Section 2 . Exercise of Warrant .

a) Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Issuance Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto as Exhibit “A”. Within three (3) Trading Days following the date of exercise as aforesaid, the Holder shall deliver or otherwise satisfy the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise in one of the manners specified in Section 2 c). No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

b) Exercise Price. The exercise price per Common Share under this Warrant shall be $0.42 if exercised within one year of the Initial Issuance Date, and $0.56 if exercised after the first anniversary of the Initial Issuance Date and before the Termination Date, subject to adjustment hereunder (the “Exercise Price”).

c) Payment of Exercise Price. Payment of the Exercise Price shall be made as in accordance with either subsection (i) or (ii) below at the option of the Holder:

(i) Cash Exercise: The Holder may make the required payment due upon exercise of this Warrant in cash, cashier’s check, or wire transfer, equal to the applicable Exercise Price (a “ Cash Exercise ”).

(ii) Cashless Exercise: The Holder may make the required payment due upon exercise of this Warrant in a cashless exercise transaction pursuant to this subsection (ii) (a “ Cashless Exercise ”). In order to effect a Cashless Exercise, the Holder shall surrender this Warrant at the principal office of the Company together with a Notice of Exercise in the form attached as Exhibit “A”, completed and executed, indicating Holder’s election to effect a Cashless Exercise, in which event the Company shall issue Holder a number of Common Shares computed using the following formula: X = Y (A-B)/A

where:

X = the number of Common Shares to be issued to Holder;

Y = the number of Common Shares for which this Warrant is being Exercised;

A = the Market Price of one (1) Common Share (for purposes of this Section 2(c), where “ Market Price ,” means the VWAP (as defined herein) of one (1) Common Share during the ten (10) consecutive Trading Day period immediately preceding the date of exercise; and

B = the Exercise Price.

For purposes of Rule 144 under the Securities Actand sub-section (d)(3)(ii) thereof, it is intended, understood and acknowledged that the Common Shares issued upon exercise of this Warrant in a Cashless Exercise transaction shall be deemed to have been acquired at the time this Warrant was issued. Moreover, it is intended, understood and acknowledged that the holding period for the Common Shares issued upon exercise of this Warrant in a Cashless Exercise transaction shall be deemed to have commenced on the date this Warrant was issued.

d) Mechanics of Exercise .

i. Delivery of Warrant Shares Upon Exercise . The Company shall use best efforts to cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“ DWAC ”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via Cashless Exercise, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is one (1) Trading Day after the latest of (A) the delivery to the Company of the Notice of Exercise and (B) surrender of this Warrant (if required) (such date, the “ Warrant Share Delivery Date ”). The Warrant Shares shall be deemed to have been issued, and Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by Cashless Exercise) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(v) prior to the issuance of such shares, having been paid.

ii. Delivery of New Warrants Upon Exercise . If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii) Rescission Rights . If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise. In the event of such rescission, Holder shall promptly execute such documents and take such actions as may be necessary to promptly return to the Company any Warrant Shares that have been issued an delivered to the Holkder following the Warrant Share Delivery Date.

iv) No Fractional Shares or Scrip . No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

v) Charges, Taxes and Expenses . Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided , however , that in the event Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit “B” duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise.

vi) Closing of Books . The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

Section 3 . Certain Adjustments .

a) Stock Dividends and Splits . If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Share or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issues by reclassification of the Common Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

b) If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Shares (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security, then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of shareholders entitled to receive such distribution by a fraction of which the denominator shall be the ten-day volume-weighted average price (“ VWAP ”) of the Common Shares on the Trading Market determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the fair market value at such record date of the portion of such assets or evidence of indebtedness or rights or warrants so distributed applicable to one outstanding Common Share as determined by the Board of Directors of the Company in good faith. In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one Common Share. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

c) Subsequent Rights Offerings . If the Company, at any time while the Warrant is outstanding, shall issue rights, options or warrants to all holders of Common Shares (and not to the Holder) entitling them to subscribe for or purchase Common Shares at a price per share less than the VWAP on the record date mentioned below, then the Exercise Price shall be multiplied by a fraction, of which the denominator shall be the number of Common Shares outstanding on the date of issuance of such rights, options or warrants plus the number of additional Common Shares offered for subscription or purchase, and of which the numerator shall be the number of Common Shares outstanding on the date of issuance of such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares so offered (assuming receipt by the Company in full of all consideration payable upon exercise of such rights, options or warrants) would purchase at such VWAP. Such adjustment shall be made whenever such rights, options or warrants are issued, and shall become effective immediately after the record date for the determination of shareholders entitled to receive such rights, options or warrants.

d) Fundamental Transaction . If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Common Shares (not including any Common Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “ Fundamental Transaction ”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would otherwise have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Common Shares or other securities of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “ Alternate Consideration ”) receivable as a result of such Fundamental Transaction by a holder of the number of Common Shares for which this Warrant has been exercised and would have been exercisable immediately prior to such Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Common Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “ Successor Entity ”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the Exercise Price hereunder, adjusted as applicable in accordance with the terms of the Fundamental Transaction, to such shares of capital stock. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

e) Calculations . All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.

f) Notice to Holder .

i. Adjustment to Exercise Price . Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

ii. Notice to Allow Exercise by Holder . If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register (as defined below) of the Company, at least 10 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein

Section 4 . Transfer of Warrant .

a) Transferability . Subject to compliance with any applicable law, including the Securities Act and any applicable “blue sky law” (such compliance to be demonstrated by an opinion of counsel acceptable to the Company, in form and substance satisfactory to the Company), this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant in the form attached hereto as Exhibit “B” duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

b) New Warrants . This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Issuance Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

c) Warrant Register . The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “ Warrant Register ”), in the name of the registered Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

Section 5 . Miscellaneous .

a) No Rights as Shareholder Until Exercise . This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

b) Loss, Theft, Destruction or Mutilation of Warrant . The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such date of cancellation, in lieu of such Warrant or stock certificate.

c) Saturdays, Sundays, Holidays, etc . If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

d) Authorized Shares .

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares a sufficient number of shares to provide for the issuance of all of the Warrant Shares that may be issued upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment (or Cashless Exercise)for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e) Jurisdiction . This Warrant shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

f) Restrictions . The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by provincial, state and federal securities laws. By exercising this Warrant, the Holder consents to any restrictive legend the Company may require to ensure compliance with the provincial, state and federal securities laws, if applicable.

g) Notices . All notices and other communications given or made pursuant to this Warrant shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth in the Warrant Register or another address specified by the Holder in writing given pursuant to this subparagraph (h), or, if to the Company, at 4120 Ridgeway Drive, Unit 37, Mississauga, Ontario L5L 5S9, Canada. If notice is given to the Company, a copy shall also be sent to J.P. Galda & Co., 143 Clover Hollow Road, Easton, PA, 18045.

h) Limitation of Liability . No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

i) Remedies . The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

j) Successors and Assigns . Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

k) Amendment . This Warrant may be modified or amended or the provisions hereof waived with the written consent of both the Company and the Holder.

l) Severability . Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

m) Headings . The headings used in this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

	CONVERTED CARBON TECHNOLOGIES CORP.


	By:
		Name: Paul Ramsay
		Title: President

TO: CONVERTED CARBON TECHNOLOGIES CORP.

(1) The undersigned hereby elects to purchase ________ Warrant Shares pursuant to the terms of the attached Warrant (only if exercised in full), and [ ] (A) tenders herewith payment of the Exercise Price in full or [ ] (B) elects to exercise this Warrant by means of a Cashless Exercise, in either case, together with a cash payment of all applicable transfer taxes, if any.

(2) Payment shall take the form of in lawful money of Canada unless the Company has elected to take payment in U.S. dollars and has so notified the Holder.

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number:

_______________________________

[SIGNATURE OF HOLDER]

Name of Holder: ____________________________________________________

Signature of Holder : _________________________________________________

Name of Authorized Signatory of Holder (if applicable): _______________________

Title of Authorized Signatory of Holder (if applicable): ________________________

Date: _____________________________________________________________

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

Name:
			(Please Print)

Address:
			(Please Print)

Dated: _______________ __, ______

Holder’s Signature:

Holder’s Address:

DENNIS H. PETERSON

Solicitor

e: dhp@petelaw.com

www.petelaw.com

October 22, 2014

Algae Dynamics Corp. (formerly Converted Carbon Technologies Corp.)

4120 Ridgeway Drive, Unit 37

Mississauga, Ontario

L5L 5S9

Canada

Dear Sirs/Mesdames,

Re: Registration on Form S-1

We have acted as special Ontario counsel to Algae Dynamics Corp., a federal corporation incorporated under the laws of Canada (the “Company”), in connection with the registration with the United States Securities and Exchange Commission (the “SEC”) on Form S-1, as amended or supplemented from time to time (the “Registration Statement”), of 1,473,712 common shares in the capital of the Company (each, a “Share”), all of which are currently issued and outstanding (the “Issued Shares”) and held by the selling shareholders identified in the Registration Statement (the “Selling Shareholders”), and 327,500 Shares (the “Warrant Shares”) which are issuable upon the exercise of certain outstanding Share purchase warrants (the “Warrants”).

In connection with these opinions, we have examined and relied upon the originals, or copies certified or otherwise identified to our satisfaction, of such records, documents, certificates and other instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below.

In rendering these opinions, we have assumed the authenticity of all signatures on original documents; the legal capacity of all natural persons; the authenticity of all documents submitted to us as originals; the conformity to originals of all documents submitted to us as certified or photocopies; the authenticity of the originals of such latter documents; the accuracy and completeness of all documents and records reviewed by us; the accuracy, completeness and authenticity of certificates issued by any governmental official, office or agency, and the absence of any change in the information contained therein from the effective date of any such certificate; and the due authorization, execution and delivery of all documents where authorization, execution and delivery are prerequisites to the effectiveness of such documents.

Our opinions herein are expressed solely with respect to the laws of the Province of Ontario and the federal laws of Canada and are based on these laws as in effect on the date hereof. We express no opinion as to whether the laws of any other jurisdiction are applicable to the subject matter hereof. We are not rendering any opinion as to compliance with any federal, state or provincial law, rule or regulation relating to securities, or to the sale or issuance thereof.

For purposes of the opinions expressed below, without limiting any other exceptions or qualifications set forth herein, we have assumed that due and adequate consideration for each of the Issued Shares has been paid and, when issued in accordance with the Warrants, the exercise price of each of the Warrant Shares has been paid.

Based upon our review, it is our opinion that (i) the Issued Shares to be sold by the Selling Shareholders have been duly authorized and are validly issued as fully paid and non-assessable common shares in the capital of the Company, and (ii) the Warrant Shares, when issued and sold in accordance with and in the manner described in the Warrants, will be duly authorized and validly issued as fully paid and non-assessable common shares in the capital of the Company.

We hereby consent to the filing of this letter as an exhibit to the Registration Statement and to the reference to our firm under the caption “Interests of Named Experts and Counsel” in the Prospectus which forms part of the Registration Statement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the United States Securities Act of 1933 , as amended, or the rules and regulations of the SEC thereunder.

These opinions are expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable law.

Yours very truly,

PETERSON & COMPANY, LLP

Per: /s/ Dennis H. Peterson

Dennis H. Peterson - Solicitor

EMPLOYMENT AGREEMENT

THIS AGREEMENT made as of the 23 day of April 2014.

CONVERTED CARBON TECHNOLOGIES CORP. (hereinafter called “CCT” or the “Corporation”),

RICHARD RUSINIAK, (hereinafter called the “Executive"),

WHEREAS, CCT is engaged in the business of cultivating and distributing Algae biomass, powders, tablets and oils (the "Business”);

AND WHEREAS, CCT has agreed to continue to employ the Executive, and the Executive has agreed to accept such continued employment and additional consideration for such employment , subject to the terms, conditions and covenants herein provided;

AND WHEREAS, it is the shared objective of CCT and Executive that CCT become established as a pre-eminent player in the North American market in the Business and it is acknowledged that the Executive is being employed and compensated for the purpose of bringing this about provided that, for greater certainty, the failure to achieve such shared objective shall not constitute a default or breach by the Executive hereunder;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and after good and valuable consideration, CCT and the Executive, intending to be legally bound, agree as follows:

1.	CCT hereby employs the Executive and the Executive agrees to be employed as CEO on the terms and conditions herein contained.

The Executive shall serve CCT with such duties and responsibilities as the Board of Directors of CCT may from time to time reasonably assign to him. These duties and responsibilities shall be commensurate with a president of a business of comparable size and type, including, without limiting the generality of the foregoing, the duty to manage, supervise and conduct the ordinary and usual business and affairs of CCT and to advise CCT in connection therewith. Unless the Executive determines otherwise, the Executive shall, throughout the term of his employment hereunder and so long as the Executive is the beneficial owner (directly or indirectly) of at least 5% of the issued and outstanding common shares of CCT, be a director of CCT. During the currency of this Agreement, the Executive shall devote the whole of his time and attention to the Business and shall not, without the consent in writing of CCT, undertake any other business or occupation or become an executive, employee or agent of any other corporation, firm or individual.

3.	The Executive shall not be required to reside outside of the Greater Toronto region in connection with this employment, unless specifically agreed to by the Executive.

COMPENSATION AND BENEFITS

Effective as of July 1 st ., 2014, (the “Effective Date”), the Executive shall receive a base salary from CCT of $120,000 per annum (the “Base Salary"), less statutory deductions, payable in equal bi-weekly installments. Such compensation shall be subject to review annually provided that: (a) the Base Salary shall not be reduced; and (b) CCT shall be under no obligation to increase the Base Salary at the time of any review. Upon the Effective Date, CCT shall make, on behalf of the Executive, the maximum allowable contribution to his RRSP (not to exceed $30,000 per year) in each year, as well as providing him with a car allowance of up to $750 per month.

The Executive shall be entitled to participate in the benefits made available by CCT generally to its Executives and employees generally from time to time including, but not by way of limitation, medical, hospital, dental and extended health care benefits and life insurance and disability insurance.

The Executive shall be entitled to participate in equity and other incentive compensation plans that may be established and administered by the Board of Directors or a Compensation Committee that may be established by the Board of Directors provided, however, that nothing herein shall mandate a particular level of grant or participation.

CCT shall pay all normal business expenses as approved under CCT’s normal business practices by CCT's Chief Financial Officer, which are actually and properly incurred by the Executive in furtherance of or in connection with the business of CCT, including, but not by way of limitation, all travel and parking expenses, public relations expenses and all entertainment expenses. If any such expenses are paid in the first instance by the Executive, CCT shall reimburse him therefor, subject to the receipt by CCT of statements and vouchers in a form reasonably satisfactory to CCT’s Chief Financial Officer.

The Executive shall be entitled to up to five (5) weeks paid vacation in each calendar year; provided that such vacation may be taken only at such times as the Executive and CCT may from time to time reasonably determine having regard to the operations of CCT; and provided further that such vacation not taken within the year may not be carried forward into any subsequent years.

TERM AND TERMINATION

9.	The term of the Executive's employment shall be three (3) years commencing on the Effective Date unless sooner terminated in accordance with the provisions of paragraphs 10 through 13.

10.

The term of Executive’s employment and this Agreement shall terminate upon the Executive’s death or Disability. For the purposes of this Agreement, “Disability” shall mean a physical or mental impairment which substantially limits a major life activity of the Executive and which renders the Executive unable to perform the essential functions of the Executive’s position, even with reasonable accommodation which does not impose an undue hardship on CCT, for ninety (90) days in any consecutive one-hundred eighty (180) day period. The Board reserves the right, in good faith, to make the determination of whether or not a Disability exists for purposes of this Agreement based upon information supplied by the Executive and/or his medical personnel, as well as information from medical personnel (or others) selected by CCT or its insurers. If the Executive’s employment is terminated pursuant to this paragraph 10, the Executive, or his estate, shall be entitled to payment of accrued salary, awarded but unpaid bonuses and accrued and unused vacation pay through to the date of death or Disability.

11.

The Executive’s employment by CCT, and the term, may be terminated at any time during the term by the Executive, on no less than sixty (60) days prior written notice to CCT. If the Executive’s employment is terminated pursuant to this paragraph 11, the Executive, shall be entitled to payment of accrued salary, awarded but unpaid bonuses and accrued and unused vacation pay through to the date of termination. Notwithstanding any termination of this Agreement pursuant to this paragraph 11, the provisions of paragraphs 14 through 16 shall survive.

If the Executive's employment is terminated by CCT other than upon the expiry of this Agreement, death or Disability, upon a Change in Control pursuant to paragraph 13 or for Just Cause (as defined below), the Executive shall be entitled to an amount equal to twelve (12) months compensation including benefits payable hereunder which shall be increased by one month for each full year of service completed hereunder. In addition, the Executive shall be entitled to be paid the full amount owing in respect of any loans made to the Corporation by the Executive provided that if the Board of CCT determines that making such payment would not be in the best interests of CCT, CCT and the Executive shall negotiate in good faith to agree upon an acceptable repayment schedule. Such payments shall be the only entitlement of the Executive upon termination and the Executive acknowledges that it is fair and reasonable.

	For the			For the
	Six Month			Six Month
	Period Ended			Period Ended
	September 30,			September 30,
	2014			2013

Operating activities

Net loss for the period	$	(566,598	)	$	(40,613	)
Items not affecting cash
Amortization		8,676			-
Stock based compensation (Note 6b)		256,590			-


Items not affecting cash
Prepaid expenses		7,173			-
Amounts receivable		(17,249	)		1,670
Accounts payable		47,451			-
Net cash flows used in operating activities		(263,957	)		(38,943	)

Financing activities
Advances from shareholders		(6,469	)		12,118
Unit subscriptions received		319,680			120,000
Unit issue costs		(1,500	)		-
Net cash flows from financing activities		311,711			132,118

Investing activities
Investment in equipment and leasehold improvements		(50,322	)		-
Investment in patents		(5,893	)		-
Net cash flows used in investing activities		(56,215	)		-

Net change in cash		(8,461	)		93,175
Cash position - beginning of period		64,674			4,001

Cash position - end of period	$	56,213		$	97,176

Expiry Date	Number of Warrants		Number of Warrants Exercisable		Weighted Average Exercise Price			Grant Date Fair Value Equity		Fair Value at September 30, 2014 of Vested Warrants Liability

June 6, 2016		300,383		300,383	$	1.68	*	$	170,908	$	-
June 7, 2016		5,000		5,000	$	1.12			3,180		-
June 6, 2017		22,500		22,500	$	1.12			16,110		-
April 1, 2017		625,000		300,000	USD $	0.04			-		237,300
		952,883		627,883	$	0.67		$	190,198	$	237,300

1. LEASE SUMMARY			I
2. DEFINITIONS			2
3. NET LEASE			8
	3.1	Net Lease	8
4. LEASE OF PREMISES			8
	4.1	Premises	8
	4.2	Tenn	8
	4.3	Acceptance of Premises	8
	4.4	Licence to Use Common Facilities	8
	4.5	Quiet Enjoyment	8
	4.6	Fixturing of Premises	9
5. RENT			9
	5.1	Tenant to Pay	9
	5.2	Rent and Management Fee	9
	5.3	Deemed Rent and Allocation	9
	5.4	Monthly Payments of Operating Costs, Management Fee and Realty Taxes	9
	5.5	Adjustments	10
6. TAXES			10
	6.1	Payment of Taxes	10
	6.2	Taxes Payable by Tenant	10
	6.3	Determination of Tenant's Taxes	10
	6.4	Business Taxes and Sales Taxes	11
	6.5	Tax Bills and Assessment Notices	11
	6.6	Contest of Realty Taxes	11
7. OPERATING COSTS			11
	7.1	Tenant's Payment of Operating Costs	11
	7.2	Excess Costs	12
8. USE OF PREMISES			12
	8.1	Permitted Use	12
	8.2	Conduct of Business	12
	8.3	Tenant's Fixtures	12
	8.4	Signs	12
	8.5	Prohibited Uses	12
	8.6	Waste Removal	13
	8.7	Waste and Nuisance	13
	8.8	Compliance with Laws	13
	8.9	Telecom and Wireless Services	13
	8.10	Deliveries	14
	8.11	Environmental	14
9. SERVICES AND UTILITIES			16
	9.1	Utilities, Heating and Air Conditioning	16
	9.2	Exclusive Supplier	17
10. MAINTENANCE, REPAIRS AND ALTERATIONS			17
	10.1	Maintenance and Repairs of Premises	17
	10.2	Approval of Repairs and Alterations	17
	10.3	Notice by Tenant	19
	10.4	Ownership of Leasehold Improvements	19
	10.5	Construction Liens	19
	10.6	Landlord's Obligations	20
11. END OF TERM			20
	11.1	Vacating of Possession	20
	11.2	Removal of Trade Fixtures	20
	11.3	Removal of Leasehold Improvements	21
	11.4	Overholding by Tenant	21
12. DAMAGE AND DESTRUCTION			21
	12.1	Damage to Premises or Project	21
	12.2	Damage to Premises	21
	12.3	Damage to Project	22
	12.4	Restoration of Premises or Project	22
	12.5	Determination of Matters	23

13. INSURANCE AND INDEMNITY			23
	13.1	Landlord's Insurance	23
	13.2	Tenant's Effect On Landlord's and Other Insurance	23
	13.3	Tenant's Insurance	24
	13.4	Consequential Damage	25
	13.5	Indemnity of Landlord	25
	13.6	Parties	25
14. ASSIGNMENT, SUBLETTING AND CHANGE OF CONTROL			25
	14.1	Consent Required	25
	14.2	Obtaining Consent.	27
	14.3	Landlord's Option	28
	14.4	Terms of Transfer	28
	14.5	Effect of Transfer	29
	14.6	Assignment by Landlord	30
15. STATUS AND SUBORDINATION OF LEASE			30
	15.1	Status Statement	30
	15.2	Subordination	30
	15.3	Registration	31
16. DEFAULT AND REMEDIES			31
	16.1	Default and Remedies	31
	16.2	Interest and Costs	33
	16.3	Bankruptcy and Insolvency	33
	16.4	Landlord's Right of Distress	33
	16.5	Rent Deposit Agreement	33
	16.6	Remedies to Subsist	33
	16.7	Impossibility of Performance	34
17. CONTROL OF PROJECT			34
	17.1	Operation of Project by Landlord	34
	17.2	Alterations of the Project	35
	17.3	Landlord Not in Breach	35
	17.4	Use of Common Facilities	35
	17.5	Rules and Regulations	36
	17.6	Access to Premises and Suspension of Utilities	36
	17.7	Health Emergency	37
	17.8	Noise and Vibration	37
18. EXPROPRIATION			38
19. MISCELLANEOUS			38
	19.1	Notices	38
	19.2	Planning Act.	38
	19.3	Complete Agreement	38
	19.4	Time of the Essence	38
	19.5	Applicable Law	39
	19.6	Severability	39
	19.7	Section Numbers and Headings	39
	19.8	Interpretation	39
	19.9	Successors	39
	19.10	Acting Reasonably	39
	19.11	Joint and Several	39
	19.12	Privacy Policy	39
20. LIMITATION OF LIABILITY			40
21. INDEPENDENT LEGAL ADVICE/FREELY NEGOTIATED			40

Schedule "A"	Legal Description of Project
Schedule "B"	Outline Plan of Premises
Schedule "C"	Rent Deposit Agreement
Schedule "D"	Environmental Questionnaire
Schedule "E"	Rules and Regulations

	As at September 30,			As at March 31,
	2014			2014

ASSETS

Current Assets
Cash	$	56,213		$	64,674
Prepaid expenses		4,951			12,124
Amounts receivable		25,124			7,875
Total Current Assets		86,288			84,673

Equipment and leasehold improvements (Note 3)		74,964			33,318

Intangible assets (Note 4)		13,034			7,141

Total Assets	$	174,286		$	125,132

LIABILITIES

Current Liabilities
Accounts payable and accrued liabilities (Note 9)	$	134,981		$	87,530
Advances from shareholders (Note 5)		424,937			431,406
Warrant liability (Note 6b)		237,300			-
Total Current Liabilities		797,218			518,936

STOCKHOLDERS' (DEFICIENCY)

Common stock (Note 6a), $Nil par value, unlimited amount authorized, 9,207,010 issued and outstanding as of Sept 30, 2014, (March 31, 2014 - 8,606,250)		475,552			100
Warrants (Note 6b)		190,198			-
Equity to be issued (Note 6a)		-			328,180
Accumulated deficit		(1,288,682	)		(722,084	)
Total Stockholders' (Deficiency)		(622,932	)		(393,804	)

Total Liabilities and Stockholders' (Deficiency)	$	174,286		$	125,132

B E T W E E N:

	2725312 CANADA INC.
	(hereinafter called "Landlord")
		OF THE FIRST PART

	-and -

	CONVERTED CARBON TECHNOLOGIES CORP.

	(hereinafter called "Tenant")
		OF THE SECOND PART

RENTAL PERIOD		RATE PER SQUARE FOOT RENTABLE AREA PER ANNUM
Years 1, 2 and 3		$7.35
Years 4 and 5		$7.50

Warrant Shares: 1,200,000	Initial Issuance Date: April 1, 2014
	Termination Date: March 31, 2017

Warrant Shares: 1,300,000	Initial Issuance Date: April 1, 2014
	Termination Date: March 31, 2017

	CONVERTED CARBON TECHNOLOGIES CORP.


	By:	/s/ Paul Ramsey
		Name: Paul Ramsay
		Title: President

Warrant Shares: 90,000	Initial Issuance Date: June 7, 2013
	Termination Date: June 6, 2016

CCT Rollout Plan Step 9		Days
Compile market
research reports		14
Assess new and emerging markets		28
Business Opportunity Assessment		8
Targeted market research and analysis for algae value added products		7
Corporate Idenity/Rebranding		8
Establish brand for CCT products		7
Budget/P&L Development		7
Complete Assurance System -
International Standards		30
Evaluate packaging alternatives		2
Nutritional Analysis		5
Shelf Life Testing		7
Natural Health Claim Review Application		2
Seek approval from Canadian Food Inspection Agency		14
Select value added products to market		2
Complete export		5

marketing plan
Identify Warehousing/Shipping -Pick & Pack Partner			3
Product Launch Strategy			7
Customer/Distributor
Follow up Pitches			24
			180

	●	The Contractor agrees that the Company shall have no liability or responsibility for the withholding, collection or payment of any taxes, employment insurance premiums or Canada Pension Plan contributions on any amounts paid by the Company to the Contractor or amounts paid by the Contractor to its employees or contractors. The Contractor also agrees to indemnify the Company from any and all claims in respect to the Company’s failure to withhold and/or remit any taxes, employment insurance premiums or Canada Pension Plan contributions.

	●	The Contractor agrees that as an independent contractor, the Contractor will not be qualified to participate in or to receive any employee benefits that the Company may extend to its employees.

	●	The Contractor is free to provide services to other clients, so long as such other clients are not in competition with the Company and so long as there is no interference with the Contractor’s contractual obligations to the Company.

	●	The Contractor has no authority to and will not exercise or hold itself out as having any authority to enter into or conclude any contract or to undertake any commitment or obligation for, in the name of or on behalf of the Company.