Small Pharma : Q3 2021-22 MD&A

SMALL PHARMA INC. (FORMERLY, UNILOCK CAPITAL CORP.)

Management's Discussion and Analysis of Financial Condition and Results of Operations

For the three and nine months ended November 30, 2021

Date: January 31, 2022

SMALL PHARMA INC.

Management's Discussion and Analysis

This Management's Discussion and Analysis ("MD&A") has been prepared by management of Small Pharma Inc. ("Small Pharma" or the "Company") and should be read in conjunction with Small Pharma's audited financial statements and notes for the three and nine months ended November 30, 2021 (the "Financial Statements"), which may be viewed under the Company's SEDAR profile at www.sedar.com. The Financial Statements have been prepared using International Financial Reporting Standards. All amounts are in Canadian dollars unless otherwise specified.

This MD&A contains disclosure of material changes related to Small Pharma occurring up to and including January 31, 2022.

Exchange Rates

The following table sets forth the value of one £ expressed in Canadian dollars, based on the daily average exchange rates quoted by the Bank of Canada for the dates indicated:

	Three months	Three months	Nine months	Nine months
	ended	ended	ended	ended
	November 30,	November 30,	November 30,	November 30,
	2021	2020	2021	2020
As at end of period	1.7005	1.7306	1.7005	1.7306
Low for the period	1.6767	1.6874	1.6767	1.6733
High for the period	1.7536	1.7513	1.7636	1.7835
Average rate for the period	1.7117	1.7178	1.7223	1.7208

Forward-Looking Statements

Certain statements contained in this MD&A constitute "forward-looking information" and "forward- looking statements". All statements other than statements of historical fact contained in this MD&A are forward-looking statements. Such statements can, in some cases, be identified by the use of forward-looking terminology such as "expect," "likely", "may," "will," "should," "intend," or "anticipate," "potential," "proposed," "estimate" and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. The forward-looking statements included in this MD&A are made only as of the date of this MD&A and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by applicable securities laws.

Forward-looking statements in this MD&A are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict regarding the Company's present and future business strategies and the environment in which the Company will operate in the future, including assumptions regarding business and operating strategies, and the Company's ability to operate on a profitable basis. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Management provides forward-looking statements because it believes they provide useful information to readers when considering their

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investment objectives and cautions readers that the information may not be appropriate for other purposes.

Some of the risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include:

Risks related to the Company's financial position:

• limited operating history;
• clinical-stageneuropharmaceutical company with history of losses since inception;
• lack of profits or significant revenues;
• negative cash flow from operations;
• additional capital requirements;
• costs of operating as a public company;

Risks pertaining to the Company's business and industry:

• novel coronavirus "COVID-19";
• early stage of the industry and product development;
• limited product scope;
• no assurance of commercial success;
• risk of partnering or out-licensing products;
• lack of commercialization experience;
• achieving publicly announced milestones;
• market access and acceptance;
• unfavourable publicity or consumer perception;
• biotechnology and pharmaceutical market competition;
• decriminalisation of psychedelics;
• product liability;
• product recalls;
• distribution and supply chain interruption;
• product viability;
• success of quality control systems;
• reliance on key inputs;
• enforcing contracts;
• business expansion and growth;
• reliance on key executives and scientists;
• employee misconduct;
• liability arising from fraudulent or illegal activity;
• conflicts of interest;
• operating risk and insurance coverage;
• computer system failures;
• foreign operations;
• exchange rate fluctuations;
• estimates or judgments relating to critical accounting policies;

Risks related to regulatory compliance:

• change in controlled substance laws or breach in compliance;
• products subject to controlled substance laws and regulations;
• risks pertaining to legislation changes;
• nature of regulatory approvals;
• continued regulatory review and obligations;
• failure to comply with health and data protection laws and regulations;

Risks pertaining to clinical development:

• reliance on third parties for clinical development activities;

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• risks related to third party relationships;
• reliance on contract manufacturers;
• commercial scale product manufacturing;
• safety and efficacy of products;
• clinical testing and commercializing product candidates;
• clinical trial publications;
• completion of clinical trials;
• later stage clinical trials failure;
• negative results of external client trials or studies;

Risks related to intellectual property:

• reliance on patents and other intellectual property rights;
• patent litigation;
• protection of intellectual property;
• invalid or unenforceable patents;
• compliance with procedural requirements;
• trade secrets;
• trademark protection;
• intellectual property litigation costs;
• third-partylicenses;
• failure to comply with potential future intellectual property or license agreements;
• intellectual property rights may fail to protect competitive advantage;
• employee patent claim liability;
• intellectual property rights of third parties;
• obtaining or maintaining necessary rights for current or future therapeutic candidates through acquisitions and in-licenses;
• patent law reforms;
• difficulties securing jurisdictional intellectual property rights;

Risks related to the common shares in the capital of the Company (the "Shares")

• substantial number of authorized but unissued Shares;
• dilution;
• market for Shares;
• significant sales of Shares;
• volatile market price for Shares;
• tax issues;
• no dividends;

Risks related to the Company:

• forward-lookingstatements may prove to be inaccurate;
• potential dilution;
• potential need for additional financing;
• negative operating cash flow and going concern;
• discretion over the use of proceeds;
• management of growth;
• the Shares are subject to market price volatility;
• no history of payment of cash dividends;
• limited operating history as a public company; and
• risks relating to research and development objectives and milestones.

Although the forward-looking statements contained in this MD&A are based upon what management currently believes to be reasonable assumptions, the Company cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. In particular, the Company has made assumptions regarding, among other things:

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• substantial fluctuation of losses from quarter to quarter and year to year due to numerous external risk factors, and anticipation that we will continue to incur significant losses in the future;
• uncertainty as to the Company's ability to raise additional funding to support operations;
• the Company's ability to access additional funding;
• the fluctuation of foreign exchange rates;
• the duration of COVID-19 and the extent of its economic and social impact;
• the risks associated with the development of the Company's product candidates which are at early stages of development;
• reliance upon industry publications as the Company's primary sources for third-party industry data and forecasts;
• reliance on third parties to plan, conduct and monitor the Company's preclinical studies and clinical trials;
• reliance on third party contract manufacturers to deliver quality clinical and preclinical materials;
• the Company's product candidates may fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or may not otherwise produce positive results;
• risks related to filing investigational new drug applications to commence clinical trials and to conduct clinical trials, if approved;
• the risks of delays and inability to complete clinical trials due to difficulties enrolling patients;
• competition from other biotechnology and pharmaceutical companies;
• the Company's reliance on the capabilities and experience of the Company's key executives and scientists and the resulting loss of any of these individuals;
• the Company's ability to fully realize the benefits of potential acquisitions;
• the Company's ability to adequately protect the Company's intellectual property and trade secrets;
• the risk of patent-related or other litigation; and
• the risk of unforeseen changes to the laws or regulations in the UK, the EU and other jurisdictions in which the Company operates.

Drug development involves long lead times, is very expensive and involves many variables of uncertainty. Anticipated timelines regarding drug development are based on reasonable assumptions informed by current knowledge and information available to the Company. Every subject treated in future studies can change those assumptions either positively (to indicate a faster timeline to new drug applications and other approvals) or negatively (to indicate a slower timeline to new drug applications and other approvals). This MD&A contains certain forward-looking statements regarding anticipated or possible drug development timelines. Such statements are informed by, among other things, regulatory guidelines for developing a drug with safety and tolerability studies, proof of concept studies, and pivotal studies for new drug application submission and approval, and assumes the success of implementation and results of such studies on timelines indicated as possible by such guidelines, other industry examples, and the Company's development efforts to date.

Please also refer to the Company's filing statement dated April 23, 2021 (the "Filing Statement"), which may be viewed under the Company's SEDAR profile at www.sedar.com,for additional risks that could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein.

In addition to the factors set out above and those identified in this MD&A under "Risks and uncertainties", other factors not currently viewed as material could cause actual results to differ materially from those described in the forward-looking statements. Although Small Pharma has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and

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