Theralase Technologies : Q321 Management Discussion and Analysis

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 should be read in conjunction with the unaudited condensed interim consolidated financial statements for the nine-month period ended September 30, 2021.

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 November 29, 2021.

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 orw ar d L o oki ng S t at em en ts

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 the timing of them; 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; supply and demand of products or services; ability to meet current and future financial obligations; 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, clinical study liability and patent- related rights of the United States government in Photo Dynamic Therapy ("PDT") technology. 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.

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C o m p a n y P ro fil 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 and clinical research and 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.

L e ad ers h i p Tr ansi tion

Effective August 20, 2021, Shawn Shirazi, Chief Executive Officer ("CEO"), left the employ of the Company.

Effective August 23, 2021, John Trikola joined the Company in the capacity of Chief Operating Officer ("COO") and interim CEO.

Effective October 25, 2021, Dr. Vera Madzarevic, Ph.D. assumed the role of Director of Clinical Development and Quality Assurance. Dr. Madzarevic holds a Ph.D. in both clinical pharmacology and biochemistry and brings over 25 years of global experience in clinical research and quality assurance in the biopharmaceutical and medical device industry to Theralase®.

Effective, November 15, 2021, Mr. Trikola agreed to resign from his positions as the COO and interim CEO of the Company, as a result of certain facts that came to the Company's attention concerning Mr. Trikola's background that the Company's vetting process failed to detect. The Company has taken steps to improve its vetting process for incoming officers and directors.

Effective November 15, 2021, Dr. Arkady Mandel, M.D., Ph.D., D.Sc., who is currently the Chief Scientific Officer ("CSO") of the Company, assumed the role of interim CEO, replacing Mr. Trikola.

C OVI D - 1 9 P a n demic

On March 11, 2020, the World Health Organization ("WHO") declared the outbreak of a novel coronavirus ("COVID-19") as a global pandemic, which continues to spread throughout Canada and around the world, through various waves and variants. As of the MD&A date, the Company is aware of significant changes in its business as a result of COVID-19, notably: the reduction and inability to retain personnel, personnel working remotely or virtually, significant delays in clinical research studies and significant delays / cancellations in customer purchasing decisions. Management is uncertain of the full extent of theses impacts on its financial statements and believes that the business disruption caused by COVID-19 could be transient; however, there is uncertainty around its expected duration and hence the potential impact on the business cannot be fully estimated as of the date of this MD&A.

Theralase® continues to experience variations in sales and the timing of these sales due to the ongoing COVID- 19 pandemic and has taken actions to minimize expenses by eliminating non-essential personnel and imposing a temporary hiring freeze commencing in March 2020. The Company recently lifted the temporary hiring freeze now that the Canadian and United States ("US") economies have started to demonstrate a sustainable business and economic recovery from COVID-19.

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Theralase® continues to experience delays in patient enrollment and treatment rates in the Phase II Non- Muscle Invasive Bladder Cancer ("NMIBC") clinical study ("Study II") due to the ongoing COVID-19 pandemic; however, these rates have improved as Canada and the US commence their recovery from the business and economic impacts of the COVID-19 pandemic.

A dv a nc i ng t he Th er al ase ® T ec hn ol og y Pla t for m

The Company's primary focus is the ACT division, with strategic objectives of: preclinical and clinical research and development of PDCs and the laser 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, is currently under investigation in Study II for the treatment of Bacillus Calmette Guérin ("BCG")- Unresponsive Carcinoma In-Situ ("CIS") NMIBC.

TLD-1433, has been demonstrated preclinically to bind with transferrin, a human glycoprotein, forming the Company named compound, Rutherrin®. Various cancer cells in peer-reviewed publications have demonstrated significantly more transferrin receptors versus healthy cells, allowing the deposition of the TLD- 1433 payload inside the cancer cell, versus a healthy cell, through endocytosis. When laser light or radiation activated, TLD-1433 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 currently in the preclinical research and development of Rutherrin® intended to be utilized as an injectable form of TLD-1433, for the treatment of Glio Blastoma Multiforme ("GBM") and Non-Small Cell Lung Cancer ("NSCLC").

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 clinical study ("Study") for BCG-Unresponsive patients diagnosed with NMIBC; whereby, patients were treated with a Study Drug (TLD-1433) and a Study Device (TLC- 3200 Medical Laser System or TLC-3200) (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 TLD-1433;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 demonstrate 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

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cystoscopy and negative urine cytology) with no presence, recurrence or progression of the disease at up to 24 months post treatment.

Based on the encouraging data from patients treated at the Therapeutic Dose, the Medical and Scientific Board ("MSAB") unanimously recommended that the Company undertake a registration Phase II NMIBC clinical study ("Study II") with a primary objective of CR at any point in time, secondary objective of duration of CR at one year post initial CR and a tertiary objective of safety, as measured by Adverse Events ("AEs") Grade 4 or higher that do not resolve within 450 days on initial Study II Treatment, with a larger patient sample size.

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 TLD-1433 and focus on the treatment of approximately 100 to 125 BCG-Unresponsive NMIBC patients presenting with Carcinoma In-Situ ("CIS") alone or with recurrent Ta/T1 (non-invasive/resected papillary disease/tumour that invades the subepithelial connective tissue) disease within 12 months of completion of BCG therapy (BCG-Unresponsive) or who are intolerant to BCG therapy in approximately 15 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.

Study TLD-1433-2 (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 Study II Treatment.

Study II objectives are as follows:

Primary: Efficacy, evaluated by the CR at any point in time in patients confirmed to have CIS with completely 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 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 60 minutes and subsequently activated by the Study Device (TLC-3200) to deliver an intended energy density of 90 J/cm2.

Patients will be 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

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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 and bladder and/or prostate biopsies) and safety (i.e.: AEs) will be collected. Primary assessments will be conducted on day 0, 7, 90, 180, 187, 270, 360 and 450.

In 2018, Health Canada granted the Company both a Clinical Trial Application ("CTA") for the Study Drug and an Investigational Testing Authorization ("ITA") for the Study Device to allow clinical use of TLD-1433, in conjunction with the TLC-3200, to commence enrolling and treating patients in Study II.

As of November 29, 2021, Theralase® has the following CSSs open for patient enrollment and treatment:

Clinical Study Sites (Canada)	Location	Commenced
University Health Network ("UHN")	Toronto, Ontario	April 25, 2019
McGill University Health Centre ("MUHC")	Montreal, Quebec	July 30, 2019
London Health Sciences Centre ("LHSC")	London, Ontario	October 7, 2019
Nova Scotia Health Authority ("NSHA")	Halifax, Nova Scotia	February 25, 2020
University of British Columbia ("UBC")	Vancouver, British Columbia	December 7, 2020

Clinical Study Sites (United States)	Location	Commenced
Virginia Urology ("VU")	Richmond, Virginia	January 19, 2021
Urology Associates P.C. ("UAPC")	Nashville, Tennessee	January 20, 2021
MidLantic Urology ("MLU")	Bala Cynwyd, Pennsylvania	January 25, 2021
Carolina Urologic Research Center ("CURC")	Myrtle Beach, South Carolina	January 27, 2021
University of Wisconsin-Madison ("UWM")	Madison, Wisconsin	February 24, 2021
Urology San Antonio P. A. ("USAPA")	San Antonio, Texas	March 25, 2021
University of Chicago ("UC")	Chicago, Illinois	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 Institutional Review Board ("IRB") to launch Study II in 7 US CSSs, subject to site level IRB approval.

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 papillary Ta or T1 tumors. 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 to represent approximately 20 to 25 patients enrolled and treated, who demonstrate significant safety and efficacy clinical outcomes.

Study II commenced in April 2019 with an estimated completion time of approximately 4 years and an estimated cost of approximately $11 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

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