Appili Therapeutics Inc. — Capital/Financing Update 2021

Aug 18, 2021

FORM 51-102F3 MATERIAL CHANGE REPORT

1. Name and Address of Company

Appili Therapeutics Inc. (the " Company ") #21-1344 Summer Street Halifax, NS B3H 0A8

2. Date of Material Change

August 9, 2021 and August 18, 2021.

3. News Release

News releases dated August 9, 2021 and August 18, 2021, were disseminated through the facilities of Business Wire and subsequently filed on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

4. Summary of Material Change

On August 9, 2021, the Company announced that it had entered into a $3.5 million convertible security funding agreement (the " Agreement ") with Lind Global Fund II, LP, an investment entity managed by The Lind Partners, a New York based institutional fund manager (together " Lind ").

On August 18, 2021, the Company announced that it had closed the funding under the Agreement.

5. Full Description of Material Change

5.1 Full Description of Material Change

On August 9, 2021, the Company announced that it had entered into the Agreement with Lind. The Company intends to use the funding to support the operations of the Company as it prepares for top-line data from its PRESECO Phase 3 trial evaluating Avigan®/Reeqonus™ (favipiravir) as a potential oral therapy for patients with mild-to-moderate COVID-19. The funding will also be used to advance the broader Company pipeline, including ATI-2307, a novel clinical stage antifungal expected to enter Phase 2 study in 2022.

Under the terms of the Agreement, Lind agreed to make an investment of $3.5 million in exchange for a secured convertible security with a principal amount of $4.095 million (" Face Value ") and a 24-month maturity date. Lind is entitled to convert up to 1/20th of the Face Value per month into Class A common shares of the Company (" Shares ") at a price equal to 85% of the five-day volume weighted average share price (" VWAP ") immediately prior to conversion (the " Conversion Price "). Shares underlying the convertible security will be subject to resale restrictions for a period of four months and one day following the August 18, 2021 closing date. The Agreement also includes provisions entitling Lind to accelerated conversion rates based on the Company's trading price. The Company has the right to buy-back the outstanding Face Value at any time with no penalty. If the Company elects to exercise its buy-back rights, Lind will have

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the option to convert up to 25% of the Face Value into Shares. In addition, if such buy-back right is exercised within 180 days, the Face Value will be reduced to $3,794,000.

As part of the Agreement, Lind was issued 2,209,874 cash-exercise warrants, exercisable for 48 months, subject to acceleration, with a warrant exercise price of $0.9517, representing a 30% premium to the 20-day VWAP immediately prior to execution of the Agreement. The Agreement is secured against all of the assets and property of the Company pursuant to a general security agreement.

On August 18, 2021, the Company announced that it had closed the funding under the Agreement. The Company received net proceeds of $3.395 million from the funding (after deducting a commitment fee of $105,000).

5.2 Disclosure for Restructuring Transaction

Not applicable

6. Reliance on subsection 7.1(2) or (3) of National Instrument 51-102

Not applicable.

7. Omitted Information

Not applicable.

8. Executive Officer

Kimberly Stephens, the Corporate Secretary of the Company, is knowledgeable about this material change report and may be contacted at (902) 442-4655 Ext. 2 or at kstephens@appilitherapeutics.com.

9. Date of Report

August 18, 2021.