Theralase Technologies : FY22 Management Discussion & Analysis – December 2022

Management's Discussion and Analysis of Financial Condition and Operations

The following Management's Discussion and Analysis ("MD&A"), of Theralase® Technologies Inc. ("Theralase®" or the "Company") should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022.

This MD&A has been filed in accordance with the provisions of National Instrument 51-102 (Continuous Disclosure Obligations). Additional information relating to the Company can be found on Sedar at www.sedar.com.

This MD&A is prepared as of April 25, 2023.

The Company's common shares are listed for trading on the TSX Venture Exchange (Symbol: TLT) and trade on the OTCQB marketplace

(Symbol: TLTFF).

F o r w a r d L o o k i n g S t a t e m e n t s

The information provided herein is intended to provide a general outline of the operations of the Company. This document contains certain forward-looking statements and information (collectively, "Forward-LookingStatements" or "FLS") within the meaning of applicable securities laws. FLS are statements and information that are not historical facts, but instead include financial projections and estimates; statements regarding plans, goals, objectives, intentions and expectations with respect to Theralase®'s future business, operations, research and development; including: anticipated timelines for the commencement or completion of certain activities, enrolment of patients in clinical studies or other information in future periods. FLS, which may be identified by words including, without limitation, "believe", "anticipate", "should", "could", "would", "estimate", "expect", "plan", "will", "intend", "may", "pending", "objective", "exploring", "potential", "project", "possible" and other similar expressions, and the negative of such expressions, are intended to provide information about management's current plans and expectations regarding future operations.

FLS in this MD&A include, but are not limited to, statements with respect to: future revenue projections, business initiatives and their timing; the competitive environment; business

strategic objectives; research, development and/or commercialization plans, acquisition and disposition of assets; preclinical and/or clinical studies: status, timing and/or strategies; the supply and demand of products or services; the ability to meet current and future financial obligations; the ability to execute on business and/or growth strategies; management's assessment of business strategies and/or operations; the intention and/or ability to pay dividends on the common shares of the Company.

Readers are cautioned not to place undue reliance on FLS since there can be no assurance that the plans, intentions or expectations, upon which they are based will occur. By their nature, FLS involve numerous assumptions, known and unknown, risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other things contemplated by the FLS will not occur. Such FLS or information are based on a number of assumptions, which may prove to be incorrect; including, those assumptions listed below and those discussed elsewhere in this MD&A. Some of the assumptions made by Theralase®, upon which such FLS are based, include; but are not limited to, assumptions about: the ability to continue as a going concern, the business operations continuing on a basis consistent with prior years; the ability to access financing from time to time on favourable terms, or at all; the continuation of executive management, operating management, key personnel or key consultants or the non-disruptive replacement of them on reasonable terms; the ability of Theralase® to maintain reasonably stable operating and general administrative expenses; current and future success of research, development, and/or commercialization initiatives; the ability to achieve development and/or commercialization milestones; market competition; the ability to secure all required regulatory, government and/or certification approvals; geographic protection over the intellectual property in the markets in which Theralase® does business; market acceptance and/or revenue generation of products under development; the stability of current economic and business conditions, the strength of the economy in Canada, the United States and elsewhere; currency, exchange and/or interest rates and commodity prices being reasonably stable at current rates.

FLS reflect current expectations of management regarding future events and operating performance as of the date of this MD&A. Such information: involves significant risks and uncertainties; should not be read as guarantees of future performance and/or results; and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the FLS; including, but not limited to, the risks related to: limited operating history; working capital and capital resources; ability to retain key personnel; protection of intellectual property; competition; implementation delays; strategic alliances; trade secret protection; product deficiencies; dependence on third party suppliers; volatility of share price; regulatory risks; early stage of product development; reliance on third parties; clinical study risk; clinical study timing delays; patient enrolment; failure to achieve milestones; currency risk; material weakness in internal controls over financial reporting; credit risk; product liability and clinical study liability. See "Risk and Uncertainties".

ALTHOUGH THE FLS CONTAINED IN THIS MD&A ARE BASED UPON WHAT THERALASE®'S MANAGEMENT BELIEVES TO BE REASONABLE ASSUMPTIONS, THERALASE® CANNOT ASSURE READERS THAT ACTUAL RESULTS WILL BE CONSISTENT WITH SUCH INFORMATION. FLS REFLECT MANAGEMENT'S CURRENT BELIEFS AND ARE BASED ON INFORMATION CURRENTLY AVAILABLE TO THERALASE®. READERS OF THIS MD&A ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THERALASE®'S FLS BECAUSE A NUMBER OF FACTORS, SUCH AS THOSE REFERRED TO IN THE PARAGRAPHS ABOVE, COULD CAUSE ACTUAL FUTURE RESULTS, CONDITIONS, ACTIONS OR EVENTS TO DIFFER MATERIALLY FROM THE TARGETS, EXPECTATIONS, ESTIMATES AND/OR INTENTIONS EXPRESSED IN THE FLS CONTAINED IN THIS MD&A. THE FLS ARE MADE AS OF THE DATE OF THIS MD&A AND THERALASE® ASSUMES NO OBLIGATION TO UPDATE OR REVISE SUCH INFORMATION TO REFLECT NEW EVENTS OR CIRCUMSTANCES, EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW.

C o m p a n y P r o f i l e

Theralase® is a clinical stage pharmaceutical company dedicated to the research and development of light activated Photo Dynamic Compounds ("PDCs") and their associated drug formulations with a primary objective of efficacy and a secondary objective of safety in the destruction of various cancers, bacteria and viruses. The Company in its Anti-Cancer Therapy ("ACT") division conducts preclinical research and clinical development of the PDCs, primarily in the treatment of cancer, with assistance from its Cool Laser Therapy ("CLT") division to develop medical lasers to activate them. The Company in its CLT division designs, develops, manufactures and markets proprietary super-pulsed CLT technology indicated and cleared by Health Canada and the Food and Drug Administration ("FDA") for the treatment of chronic knee pain and when used off-label for treating numerous nerve, muscle and joint conditions.

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Non-Brokered Private Placement

On September 22, 2022, the Company completed a financing by way of a non-brokered private placement, where 10,000,000 units were issued at a price of $0.25 per unit for gross proceeds of $2,500,000. Each unit consisted of 1 common share and 1 non- transferable common share purchase warrant. Each whole warrant entitles the holder thereof to acquire 1 common share at a price of $0.35, expiring on September 22, 2024. An aggregate of 2,400,000 Units, representing gross proceeds of $600,000, were issued to certain insiders of the Corporation.

On November 17, 2022, the Company completed a financing by way of a non-brokered private placement, where 1,000,000 units were issued at a price of $0.25 per unit for gross proceeds of $250,000. Each unit consisted of 1 common share and 1 non-transferable common share purchase warrant. Each whole warrant entitles the holder thereof to acquire 1 common share at a price of $0.35, expiring on November 17, 2024. An aggregate of 511,000 units, representing gross proceeds of $127,750, were issued to certain insiders of the Corporation.

TSX Venture 50TM

Theralase® was named to the Toronto Stock Exchange Venture ("TSXV") "2023 Venture 50™". The Venture 50™ is an annual ranking of the top-performing companies from five industry sectors; specifically: Clean Technology and Life Sciences, Diversified Industries, Energy, Mining and Technology. Theralase® was recognized in the Clean Technology and Life Sciences category. Theralase® was previously named a 2015, 2019 and 2020 Venture 50™ company making this the fourth year Theralase® has been recognized as a top performer in the Clean Technology and Life Sciences sector in the last 8 years.

Warrant Extension

On September 29, 2022, the Company extended the expiry date of 3,157,059 share purchase warrants, all of which are exercisable at $0.50 per share. The share purchase warrants were issued on October 3, 2018 pursuant to a private placement involving the issuance of 3,157,059 units of the Company. The new expiry date of the warrants is October 3, 2023.

On January 5, 2023, the Company extended the expiry date of 4,095,157 share purchase warrants, all of which are exercisable at $0.50 per share. The share purchase warrants were issued on January 9, 2019 pursuant to a private placement involving the issuance of 4,095,157 units of the Company. The new expiry date of the warrants is January 9, 2024.

A d v a n c i n g t h e T h e r a l a s e ® T e c h n o l o g y P l a t f o r m

The Company's primary focus is the ACT division, with strategic objectives of: preclinical research and clinical development of PDCs and the light and radiation systems that activate them, intended primarily for the destruction of various cancers, bacteria and viruses.

Theralase®'s patented lead study drug, TLD-1433 (Trade Name: Ruvidar™), is currently under clinical investigation in a Phase II clinical study for the treatment of Bacillus Calmette Guérin ("BCG")- Unresponsive Carcinoma In-Situ ("CIS") Non-Muscle Invasive Bladder Cancer ("NMIBC").

The trade name RuvidarTM was selected by the Company for its lead PDC, TLD-1433; where, Ru is the elemental symbol for Ruthenium (a rare transitional eight metal belonging to the platinum group, which the Theralase® PDC is based upon), vita is Latin for "life" and dar is Russian for "gift"; hence, roughly translated, "Ruthenium, the gift of life".

Ruvidar™, has been demonstrated preclinically to bind with transferrin, a human glycoprotein, forming the compound named, Rutherrin®. Various cancer cells, in peer-reviewed publications, have demonstrated significantly more transferrin receptors versus healthy cells, allowing the deposition of the Ruvidar® payload inside the cancer cell, versus a healthy cell, through endocytosis. When light or radiation activated, Ruvidar® has been demonstrated to destroy cancer cells through the production of singlet oxygen and/or Reactive Oxygen Species ("ROS"), from the inside out, inducing oxidative stress, leading to Immunogenic Cell Death ("ICD"), known as apoptosis.

The ACT division is in the preclinical research and development of Rutherrin® intended to be utilized as an injectable form of Ruvidar™, for the treatment of Glio Blastoma Multiforme ("GBM") and Non-Small Cell Lung Cancer ("NSCLC").

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There are no commercial and/or financial benefits of the ACT division for the Company at the present time, resulting in zero revenue, sales or commercial distribution of this technology.

Theralase® conducts its own research and development into the ACT technology, as well as enlisting the support of external scientific, research, regulatory and Clinical Research Organizations ("CROs").

Phase Ib NMIBC Clinical Study

In 2018, Theralase® successfully completed a Phase Ib NMIBC clinical study ("Study") for BCG-Unresponsive patients diagnosed with NMIBC; whereby, patients were treated with a Study Drug (Ruvidar™) and a Study Device (TLC-3200 Medical Laser System) (collectively the "Study Treatment").

Under the Study, entitled "A Phase Ib Trial of Intravesical Photo Dynamic Therapy in Patients with NMIBC at High Risk of Progression, Who are Refractory to Therapy with Bacillus Calmette-Guérin and Who are Medically Unfit for or Refuse a Cystectomy", treatment of patients commenced in March 2017. Three patients were treated at the Maximum Recommended Starting Dose ("MRSD") (0.35 mg/cm2) and three patients were treated at the Therapeutic Dose (0.70 mg/cm2) of Ruvidar™; whereby, both doses of the PDC were activated by laser light (520 nm, 90 J/cm2) delivered by the TLC-3200.

Theralase®'s Study successfully achieved the primary objective of safety and tolerability, secondary objective of pharmacokinetics and exploratory objective of efficacy. The Study results demonstrated a strong efficacy signal with a 67% Complete Response ("CR") rate in the Therapeutic Dose group (0.70 mg/cm2) after only a single Study treatment, with patients five and six demonstrating a Complete Response ("CR") (indicated by negative cystoscopy and negative urine cytology) with no presence, recurrence or progression of the disease at up to 24 months post treatment.

The results of the Study have been peer reviewed and published in the European Urology Open Science ("EUOS") Journal, Volume 41, July 2022. The publication is entitled, "A Phase 1b Clinical Study of Intravesical Photodynamic Therapy in Patients with Bacillus Calmette-Guérin-unresponsive Non-muscle-invasiveBladder Cancer" and states, "Despite efforts to bring new treatment strategies forward for Bacillus Calmette Guérin ("BCG")-UnresponsiveNMIBC,a clear consensus for a standard treatment other thanradical cystectomyhas yet to be established. An effective therapy that provides a high initial and durable responses remains an unmet need." The publication also states "Although limited by the small sample size typically inherent in phase 1 trials, we feel that the photosensitizer TLD-1433 (RuvidarTM) and the delivery device TLC-3200 hold promise for the treatment of NMIBC. In this study, PDT was well tolerated and demonstrated safety and potential efficacy, thus warranting further study."

The publication can be accessed online at no charge at:https://www.sciencedirect.com/science/article/pii/S2666168322005900

As a result, the Medical and Scientific Advisory Board ("MSAB") unanimously agreed that Theralase® should further investigate PDT in a multi-site, pivotal Phase II NMIBC Clinical Study ("Study II").

Phase II NMIBC Clinical Study ("Study II")

Based on the recommendation of the MSAB, Theralase® designed Study II to utilize the Therapeutic Dose (0.70 mg/cm2) of Ruvidar® and focus on the treatment of approximately 100 to 125 BCG-Unresponsive NMIBC patients presenting with persistent or recurrent CIS with or without resected Ta/T1 (non-invasive/resected papillary disease/tumour that invades the subepithelial connective tissue) disease within 12 months of completion of adequate BCG therapy (BCG-Unresponsive) or who are intolerant to BCG therapy ("Study II").

Study II was designed to enroll and treat patients in up to 20 Clinical Study Sites ("CSSs") located in Canada and the US. To date, Theralase® has successfully launched 12 CSSs ; specifically, 5 CSSs in Canada and 7 CSSs in the US, with 1 US CSS terminating patient enrollment in Study II, leaving 5 active CSSs in Canada and 6 active CSSs in the US .

Study II (NCT03945162) is an ongoing, Phase II, open-label,single-arm,multi-center study conducted in Canada and the US evaluating the safety and efficacy of the Company's study treatment.

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Study II objectives:

Primary: Efficacy, evaluated by Complete Response ("CR") at any point in time in patients confirmed to have CIS (with or without resected papillary disease (Ta / T1)).

CR is defined by at least one of the following:

• Negative cystoscopy and negative (including atypical) urine cytology
• Positive cystoscopy with biopsy-proven benign or low-grade NMIBC and negative cytology
• Negative cystoscopy with malignant urine cytology, if urothelial cancer is present in the upper tract or prostatic urethra and random bladder biopsies are negative

Secondary: Duration of CR at 12 months post initial CR.

Tertiary: Safety, evaluated by the incidence and severity of Adverse Events ("AEs"), Grade 4 or higher that do not resolve within 450 days post treatment (Grade 1 = Mild, Grade 2 = Moderate, Grade 3 = Severe, Grade 4 = Life-threatening or disabling, Grade 5 = Death).

The Study Treatment consists of a Study Drug at the Therapeutic Dose (0.70 mg/cm2) (equivalent to 0.65 mg/cm2 of active drug moiety) instilled into the patient's bladder intravesically for approximately 60 minutes and subsequently activated by the Study Device (TLC- 3200) to deliver an intended energy density of 90 J/cm2 (approximately 60 to 180 minutes depending on bladder volume).

Patients are asked to sign an Informed Consent Form ("ICF"), after which they will be evaluated according to Study II's Clinical Protocol (inclusion and exclusion criteria) during the screening period, which may last up to 45 days, prior to primary Study Treatment. If successful, they will be enrolled into Study II. The enrolled patient will be administered a primary Study Treatment on Day 0 and a maintenance Study Treatment on Day 180. All patients enrolled and treated by the Study Treatment will be followed until the end of Study II, defined as completion of all required assessments after 15 months of follow-up post primary Study Treatment or earlier due to discontinuation or withdrawal of informed consent.

During the follow-up assessments, information on efficacy (i.e.: urine cytology, cystoscopy and where indicated: Computerized

Tomography ("CT") scans, bladder and/or prostate biopsies) and safety (i.e.: AEs) will be collected. Primary assessments will be conducted on day 0, 90, 180, 270, 360 and 450.

In 2018, Health Canada granted the Company both a Clinical Trial Application ("CTA") for the Study Drug (Ruvidar™) and an Investigational Testing Authorization ("ITA") for the Study Device (TLC-3200) to allow commencement of enrolling and treating patients in Study II.

As of December 31, 2022, Theralase® the following CSSs have enrolled and/or treated patients:

Clinical Study Sites	Location	Commenced
University Health Network ("UHN")	Toronto, Ontario, Canada	April 25, 2019
McGill University Health Centre ("MUHC")	Montreal, Quebec, Canada	July 30, 2019
London Health Sciences Centre ("LHSC")	London, Ontario, Canada	October 7, 2019
Nova Scotia Health Authority ("NSHA")	Halifax, Nova Scotia, Canada	February 25, 2020
University of British Columbia ("UBC")	Vancouver, British Columbia, Canada	December 7, 2020
Virginia Urology ("VU")	Richmond, Virginia, United States	January 19, 2021
Urology Associates P.C. ("UAPC")	Nashville, Tennessee, United States	January 20, 2021
MidLantic Urology ("MLU")	Bala Cynwyd, Pennsylvania, United States	January 25, 2021
Carolina Urologic Research Center ("CURC")	Myrtle Beach, South Carolina, United States	January 27, 2021
University of Wisconsin-Madison ("UWM")	Madison, Wisconsin, United States	February 24, 2021
Urology San Antonio P. A. ("USAPA")	San Antonio, Texas, United States	March 25, 2021
University of Chicago ("UC")	Chicago, Illinois, United States	June 11, 2021

In 2020, the Company received FDA Investigational New Drug ("IND") authorization (Study Drug and Study Device) to commence enrolling and treating patients in Study II in the United States. Theralase® has received study level approval through a central

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Institutional Review Board ("IRB") to launch Study II in 7 US CSSs, subject to site level IRB approval, with 1 US CSS terminating patient enrollment in Study II, leaving 5 active CSSs in Canada and 6 active CSSs in the US.

Study II commenced in April 2019 with an estimated completion time of approximately 6 years and an estimated cost of approximately $15 million. The timing and cost may vary significantly depending on numerous factors including; number of CSSs enrolling and treating patients, patient enrollment rates in total and at each CSS, patient compliance, successful achievement of Study II primary, secondary and tertiary objectives and the ability of participating CSSs to enroll and treat patients considering challenges caused by current COVID- 19 pandemic restrictions.

Study II Clinical Study Site Update

As previously mentioned, patient enrollment and treatment rates have been significantly delayed due to the COVID-19 pandemic restrictions in place at various CSSs; however, they have improved as Canada and the US recover from the COVID-19 pandemic. Canadian CSSs placed themselves on temporary hold commencing March 20, 2020 and resumed normal operations between August 12, 2020 and September 24, 2020, respectively. Although Canadian CSSs recruiting activities were re-commenced in 4Q2020; patient recruitment and treatment activities have been significantly limited due to repeated waves of COVID-19.

The Company implemented a Study Treatment optimization, as communicated via press release on July 30, 2020, specifically:

1. Bladder volume calculation
2. Study drug volume calculation
3. Study device volume calculation
4. Study device treatment time

which was implemented in patients enrolled and treated by the CSSs, for either the primary or maintenance Study Treatment on or after August 1, 2020.

To date, Theralase® has enrolled and treated 57 patients in Study II, who have been provided the primary Study Treatment.

Break Through Designation Update

In 2020, the FDA granted Theralase® Fast Track Designation ("FTD") for Study II. As a Fast Track designee, Theralase® has access to early and frequent communications with the FDA to discuss Theralase®'s development plans and ensure the timely collection of clinical data to support the approval process. The accelerated communication with the FDA potentially allows, the Study Treatment, to be the first intravesical, patient-specific,light-activated,Ruthenium-based PDC for the treatment of patients diagnosed with BCG- Unresponsive NMIBC CIS, (with or without recurrent / resected papillary Ta or T1 tumours). FTD can also lead to Break Through Designation ("BTD"), Accelerated Approval ("AA") and/or Priority Review, if certain criteria are met, which the FDA has previously defined to the Company for BTD as clinical data on approximately 20 to 25 patients enrolled and provided the primary Study Treatment, who demonstrate significant safety and efficacy clinical outcomes.

In 2021, Theralase® completed its first significant milestone of Study II by enrolling and treating (primary Study Treatment) 25 patients.

In 2022, Theralase® completed its second significant milestone of Study II by enrolling and treating (primary Study Treatment) 50 patients.

The Company is currently working with both a biostatistics and regulatory organization to compile a clinical data report for submission to the FDA in support of the grant of a BTD approval.

Study II Preliminary Clinical Data

In accordance with the FDA's 2018 Guidance To Industry, "For intravesical therapies without systemic toxicity, the FDA includes, in the definition of a complete response, negative cystoscopy with malignant urine cytology, if cancer is found in the upper tract or prostatic urethra and random bladder biopsies are negative. Intravesical instillation does not deliver the investigational drug to the upper tract or prostatic urethra; therefore, the development of disease in these areas cannot be attributed to a lack of activity of the investigational drug. Thus, Sponsors can consider patients with new malignant lesions of the upper tract or prostatic urethra who have received

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