Theralase Technologies Inc. - Annual Report 2020

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Theralase® Technologies Inc.

Annual Information Form Year-ended December 31, 2020

June 3, 2021

Interpretation ............................................................................................................................................................... 1

Forward-Looking Statements ....................................................................................................................................... 1 Corporate Structure ...................................................................................................................................................... 2 Name, Address and Incorporation ............................................................................................................................ 2 Intercorporate Relationships .................................................................................................................................... 3 Summary Description of the Business .......................................................................................................................... 3 General Overview ..................................................................................................................................................... 3 Anti-Cancer Therapy Division .................................................................................................................................... 4 Cool Laser Therapy Division ................................................................................................................................... 14 Intellectual Property ............................................................................................................................................... 15 Specialized Skill and Knowledge ............................................................................................................................. 22 Competitive Conditions .......................................................................................................................................... 22 Employees ............................................................................................................................................................... 23 General Development Of The Business ...................................................................................................................... 23 Developments Over the Last Three Fiscal Years ..................................................................................................... 23 Significant Acquisitions: .......................................................................................................................................... 33 Risk Factors ................................................................................................................................................................. 33 COVID-19 Pandemic ................................................................................................................................................ 33 Limited Operating History ....................................................................................................................................... 33 Working Capital and Capital Resources .................................................................................................................. 34 Key Personnel ......................................................................................................................................................... 34 Protection of Intellectual Property ......................................................................................................................... 34 Competition ............................................................................................................................................................ 34 Implementation Delays ........................................................................................................................................... 35 Strategic Alliances ................................................................................................................................................... 35 Trade Secret Protection .......................................................................................................................................... 35 Dependence on Third Party Suppliers .................................................................................................................... 36 Volatility of Share Price ........................................................................................................................................... 36 Regulatory Risk ....................................................................................................................................................... 36 Early Stage of Product Development ...................................................................................................................... 36 Reliance on Third Parties ........................................................................................................................................ 37 Clinical Study and Study Risk .................................................................................................................................. 37 Clinical Study Timing Delays.................................................................................................................................... 37 Patient Enrollment .................................................................................................................................................. 38 Failure to Achieve Milestones ................................................................................................................................. 39 Material Weakness in Internal Control Over Financial Reporting .......................................................................... 39 Currency Risk .......................................................................................................................................................... 39 Credit Risk ............................................................................................................................................................... 39 Product Liability ...................................................................................................................................................... 40 Clinical Trial Liability................................................................................................................................................ 40 Patent-Related Rights of the U.S. Government in PDT Technology........................................................................ 40

Dividends and Distributions ....................................................................................................................................... 40

Description of Capital Structure ................................................................................................................................. 40 Market for Securities .................................................................................................................................................. 41 Market Listing ......................................................................................................................................................... 41 Trading Price and Volume ....................................................................................................................................... 41 Prior Sales ............................................................................................................................................................... 42 Escrowed Securities and Securities Subject to Contractual Restriction on Transfer ................................................ 42 Directors and Officers ................................................................................................................................................. 42 Directors ................................................................................................................................................................. 42 Medical and Scientific Advisory Board (“ MSAB ”) ................................................................................................... 43 Officers .................................................................................................................................................................... 43 Shareholdings of Directors and Executive Officers ................................................................................................. 44 Cease Trade Orders, Bankruptcies, Penalties or Sanctions .................................................................................... 44 Conflicts of Interest ................................................................................................................................................. 45 Promoters .................................................................................................................................................................... 45 Legal Proceedings and Regulatory Actions ................................................................................................................ 46 Legal Proceedings ................................................................................................................................................... 46 Regulatory Actions .................................................................................................................................................. 46 Interest of Management and Others in Material Transactions ............................................................................. 46 Transfer Agent and Registrar ............................................................................................................................... 46 Material Contracts ............................................................................................................................................... 46 Interests of Experts .............................................................................................................................................. 47 Additional Information ........................................................................................................................................ 47

Interpretation

As used in this Annual Information Form (“ AIF ”), unless the context indicates or requires otherwise, the terms “ Theralase® ” or “ Company ” refer to Theralase® Technologies Inc. (including, where applicable, its predecessor entities) and its wholly owned subsidiaries. Unless otherwise stated, the information contained in this AIF is as of June 3, 2021.

The Company’s functional currency is Canadian dollars. Accordingly, all dollar amounts herein are expressed in Canadian dollars and financial information in this AIF regarding the Company has been prepared in accordance with applicable International Financial Reporting Standards (“ IFRS ”), as issued by the International Accounting Standards Board (“ IASB ”).

Forward-Looking Statements

This AIF contains forward-looking information and statements within the meaning of applicable Canadian securities laws (herein referred to as “ Forward-Looking Statements ” or “ FLS ”) that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, achievements or industry results to be materially different from any future results, performance, achievements or industry results expressed or implied by such FLS. All information and statements in this AIF, which are not statements of historical fact may be FLS. Such statements and information may be identified by words such as “ may ”, “ believe ”, “ could ”, “ expect ”, “ will ”, “ intend ”, “ should ”, “ plan ”, “ objective ”, “ predict ”, “ potential ”, “ project ”, “ anticipate ”, “ estimate ”, “ suggest ”, “ continuous ” or similar words or the negative thereof or other comparable terminology, including references to assumptions. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations or future actions.

FLS included in this AIF include, but are not limited to, statements with respect to: the outlook of the revenues, business and timing of initiatives of the Company; the competitive environment in which the Company operates; the potential impacts of COVID-19 on the Company’s business; the business strategy and objectives of the Company; research, development and/or commercialization plans, as well as acquisition and disposition plans of the Company; preclinical and/or clinical studies, status, timing and/or strategies; the supply and demand of products or services; the Company's future revenue projections; the Company’s ability to meet its current and future obligations; the Company’s ability to execute its business and/or growth strategy; management’s assessment of future plans and/or operations; the intention and/or ability of the Company to pay dividends on the common shares of the Company (“ Common Shares ”) and the anticipated outcome of litigation.

Readers are cautioned not to place undue reliance on FLS as 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 AIF. Some of the assumptions made by the Company, upon which such FLS are based, include, but are not limited to, assumptions about: the business operations of the Company continuing on a basis consistent with prior years; the ability of the Company 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 the Company to maintain reasonably stable operating and general administrative expenses; future success of current research, development and/or commercialization activities of the Company; the ability of the Company to achieve development and/or commercial milestones; market competition; the ability of the Company to secure all necessary regulatory and/or certification approvals; geographic protection over the intellectual property of the Company in the markets in which the Company does business; market acceptance

and/or revenue generation of the Company’s products under development; the stability of current economic 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 AIF. 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: impacts of the COVID-19 pandemic; 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 and study risk; clinical study timing delays; patient enrolment; failure to achieve milestones; currency risk; material weakness in internal control 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 Factors ”.

Although the FLS Contained in this AIF are Based Upon What the Company’s Management Believes to be Reasonable Assumptions, the Company 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 the Company. Readers of this AIF are Cautioned not to Place Undue Reliance on the Company’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 AIF. The FLS are Made as of the Date of this AIF and the Company Assumes No Obligation to Update or Revise such Information to Reflect New Events or Circumstances, Except as May be Required by Applicable Law.

Corporate Structure

Name, Address and Incorporation

The Company was originally incorporated under the Canada Business Corporation Act (“ CBCA ”) by Articles of Incorporation dated August 22, 1989, under the name Interstar Mining Group Inc. By Articles of Amendment dated October 28, 2003, the Company changed its name to Interstar Group Inc. On November 11, 2003, Interstar Group Inc. completed a reverse takeover of Theralase® Inc., a privately held CBCA company, and by way of share exchange acquired 100% of the issued and outstanding shares of Theralase® Inc. The Company then changed its name to Theralase® Technologies Inc., by Articles of Amendment dated September 22, 2004.

The registered office and head office of the Company is located at:

41 Hollinger Road, Toronto, Ontario, M4B 3G4, CANADA Telephone: (416) 699-LASE (5273) Toll free: 1 (866) THE-LASE (843-5273) Fax: (416) 699-5250 www.theralase.com

The Company leases approximately 9,200 square feet of office and manufacturing space in Toronto, Ontario, Canada. The premises provide Theralase® with ISO-13485:2016 certified laser research, development and manufacturing space, as well as corporate office space.

Intercorporate Relationships

The Company has two 100% wholly owned direct subsidiaries, specifically: Theralase® Inc. and Theralase® Biotech Inc.

Theralase® Inc. is the operating company acquired pursuant to the reverse takeover noted above and was incorporated pursuant to the CBCA by way of Articles of Incorporation on July 13, 1995.

Theralase® Biotech Inc. was incorporated under the General Corporation Law of Delaware, U.S.A. (Title 8, Chapter 1), by way of Certificate of Incorporation dated May 7, 2004.

Summary Description of the Business

General Overview

Theralase® is a clinical stage pharmaceutical company with two main divisions.

The Anti-Cancer Therapy (“ ACT ”) division conducts preclinical and clinical research and development for Photo Dynamic Compounds (“ PDCs ”), in the destruction of cancer, bacteria and viruses, with assistance from the CLT division to research and develop proprietary medical lasers to activate them.

The Cool Laser Technology (“ CLT ”) division designs, develops, manufactures and markets proprietary superpulsed laser 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.

COVID-19 Pandemic

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. As of the AIF date, the Company is aware of significant changes in its business as a result of COVID-19, notably: reduced workforce, personnel working remotely or virtually, delays in the enrollment of patients into clinical research studies and delays / outright cancellations in customer purchasing decisions. Management is uncertain of the full extent that these impacts may have on its financial statements and believes that the business disruption caused by COVID-19 could be temporary; however, there is uncertainty surrounding its duration and the restrictions that local, provincial and federal governments may impose on businesses and the community at large; hence, the potential impact on the business cannot be fully estimated as of the date of this AIF.

Theralase® continues to experience variations in the dollar amount and timing of sales due to the ongoing COVID19 pandemic and has taken actions to reduce expenses by eliminating non-essential personnel and imposing a temporary hiring freeze on personnel, to be lifted, subject to the Canadian and United States economies demonstrating sustainable recovery from COVID-19.

Theralase® continues to experience delays in patient enrollment and treatments in the Phase II Non-Muscle Invasive Bladder Cancer (“ NMIBC ”) clinical study due to the ongoing COVID-19 pandemic; however, these rates are expected to improve once Canada and the US demonstrate a sustainable recovery from the COVID-19 pandemic.

Anti-Cancer Therapy Division

The Company’s primary focus is the Anti-Cancer Therapy (“ ACT ”) division with a primary objective of conducting pre-clinical research and clinical studies, using Photo Dynamic Compounds (“ PDCs ”) and the medical laser systems that activate them, to destroy various cancers, bacteria and viruses.

ACT is a promising strategy for treating cancer; whereby, laser light is used to activate an otherwise non-toxic PDC in order to destroy cancer cells and to induce an immune response to prevent their recurrence. Following light activation, the PDC is able to deliver a toxic burst of cytotoxic singlet oxygen and other Reactive Oxygen Species (“ ROS ”) that are confined spatially and temporally to the irradiated region, thus destroying cancer cells, while sparing healthy tissue.

An ideal PDC should:

exhibit cancer cell kill at low concentrations
be effective when light activated (high light toxicity), but be virtually inactive when not exposed to light (low dark toxicity);
be soluble in aqueous solvents;
exhibit an oxygen-independent mechanism of action for treating hypoxic tissue;
be effective in a wide range of light exposure wavelengths; and
exhibit efficacy in red light, as well as Near Infra-Red (“ NIR ”) light to allow penetration of light into deep cancerous regions.

Theralase® has optimized and modernized traditional ACT treatments by in-licensing a new PDC, TLD-1433, for ACT, where a soluble form of the PDC is used for the treatment of NMIBC. In addition, it has been proven scientifically to bind with transferrin, a human glycoprotein, allowing localization to cancer cells, which have been proven scientifically to have more Transferrin Receptors (“ TfR ”) versus healthy cells. When laser light activated, TLD-1433, has been shown pre-clinically and clinically to destroy bladder cancer cells through the production of singlet oxygen and/or ROS.

TLD-1433, is a metal-based PDC derived from organic ligands chelated to a specific metal atom; specifically, Ruthenium (“ Ru ”).

The resulting molecular structure allows for:

absorption of light in a wide wavelength range in a biological context, from ultraviolet through the visible spectrum to NIR light and x-ray;
high solubility and stability in water;
resistance to photobleaching (retaining its PDC properties over extended light exposure times, allowing for longer treatments without the need for reapplication);
singlet oxygen quantum yield near unity (resulting in efficient conversion of photons to cytotoxic ROS); and
activation via both Type I (oxygen independent) and Type II (oxygen dependent) processes (allowing it to be a versatile PDC in oxygen rich and/or poor environments).

TLD-1433 Mechanism of Action

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TLD-1433, when combined with transferrin (Rutherrin®), has been scientifically proven to be photo-activated by green, red, NIR light and radiation in a biological context. It is a very versatile PDC, with the ability to be activated at various tissue treatment depths by varying the activation wavelength(s). In previous clinical studies, red light treatment of bladder carcinoma with porphyrins (i.e.: Photofrin[®] ) led to deep tissue PDT effects, which in turn led to deep bladder muscle tissue damage and morbidity. TLD-1433 mediated PDT treatment of bladder carcinoma is performed with green light irradiation, ensuring that only superficial bladder layers are light activated (i.e.: urothelium); hence, preventing deep tissue or musculature damage.

Theralase’s lead PDT is TLD-1433 and the lead cancer indication is NMIBC.

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Carcinoma In-Situ (“ CIS ”) – very early, high grade cancer; cells are located only in the innermost layer of the bladder lining.
Ta – Papillary cancer located in the innermost layer of
NMIBC the bladder lining and protrudes from the bladder wall.
T1 – Papillary cancer has started to grow into the
MIBC connective tissue beneath the bladder lining and protrudes from the bladder wall.
T2, T3, T4 – Papillary cancer has grown into the muscle wall beneath the bladder lining and is now referred to as Muscle Invasive Bladder Cancer (“ MIBC ”).

Phase Ib NMIBC Clinical Study

Theralase® successfully completed a Phase Ib clinical study (“ Study ”) for Bacillus Calmette-Guerin (“ BCG ”) - Unresponsive patients diagnosed with NMIBC.

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-Guerin and Who are Medically Unfit for or Refuse a Cystectomy ”, commenced treating patients in March 2017. Three patients were treated at the Maximum Recommended Starting Dose (“ MRSD ”) (0.35 mg/cm[2] ) and three patients were treated at the Therapeutic Dose (0.70 mg/cm[2] ) of TLD-1433 PDC activated by laser light (525 nm, 90 J/cm[2] ) delivered by the TLC-3200 Medical Laser System (“ TLC-3200 ”).

Study Outcome Endpoints:

1) Primary: Safety and Tolerability. (Measured by patients who experience Adverse Events (“ AEs ”) Grade 4 or greater that do not resolve within thirty (30) days for MSRD patients and within one hundred and eighty (180) days for Therapeutic Dose patients; whereby: Grade 1 = Mild, Grade 2 = Moderate, Grade 3 = Severe, Grade 4 = Life-threatening or disabling and Grade 5 = Death).
2) Secondary: Pharmacokinetics. (Maximum concentration time for the drug to exit the body) of TLD-1433 (Measured by TLD-1433 concentration levels at various time points in plasma and urine).
3) Exploratory: Efficacy. (Measured by Complete Response (“ CR ”), defined as negative cystoscopy (no detectable cancer in bladder) and negative urine cytology (no bladder cancer cells in urine), evaluated at 90 days for the first three patients treated at the MRSD and primarily at 90 days for the last three patients treated at the Therapeutic Dose and secondarily at 180 days post treatment).

Study Outcome Results:

Theralase’s NMIBC Study successfully achieved the primary endpoint of safety and tolerability, secondary endpoint of pharmacokinetics and exploratory endpoint of efficacy. The Study results demonstrated a strong efficacy signal with a 67% CR in the Therapeutic Dose Group (0.70 mg/cm[2] ) after only a single PDT treatment, with patients five and six demonstrating duration of CR and cancer-free status with no presence, recurrence or progression of the disease, 18 months post treatment.

Phase II NMIBC Clinical Study (“Study II”)

Study II, entitled “A Phase II Clinical Study of Intravesical Photo Dynamic Therapy in Patients with BCGUnresponsive Non-Muscle Invasive Bladder Cancer or Patients Who are Intolerant to BCG Therapy” has been designed to utilize the Therapeutic Dose (0.70 mg/cm[2] ) of TLD-1433 (“ Study Drug ”) activated by the TLC-3200 Medical Laser System (“ Study Device ”) in the treatment of approximately 100 to 125 BCG-Unresponsive NMIBC patients presenting with CIS in approximately 20 clinical study sites located in Canada and the U.S.

Study II has a:

Primary endpoint of efficacy (evaluated by CR) at any point in time
Secondary endpoint of duration (evaluated by CR at approximately 360 days post-initial CR (approximately 450 days post initial Study treatment assuming CR achieved at 90 days post initial treatment)
Tertiary endpoint of safety (evaluated by incidence and severity of AEs grade 4 or higher that do not resolve within 450 days post-initial treatment).

For single-arm trials of patients with BCG-Unresponsive disease, the FDA in their 2018 guidance to industry[1] defines CR as 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
For intravesical therapies without systemic toxicity, the FDA includes, in the definition of a CR, 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 intravesical therapy to have achieved a CR in the primary analysis; however, sponsors should record these lesions and conduct sensitivity analyses in which these patients are not considered to have achieved a CR.”[1]

1 “BCG-Unresponsive Nonmuscle Invasive Bladder Cancer: Developing Drugs and Biologics for Treatment – Guidance for Industry” Dated: February 2018

Study II Design and Plan

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Study II Treatment Procedure

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Study II Update

Health Canada granted the Company Investigational Testing Authorization (“ ITA ”) approval (originally submitted in December 2018 and subsequently amended) to utilize its TLC-3200 Medical Laser System (“ TLC-3200 ”or “ Study Device ”), in conjunction with its Clinical Trial Application (“ CTA ”) approved lead PDC, TLD-1433 (“ Study Drug ”) (collectively the “ Study Treatment ”) (originally submitted in November 2018 and subsequently amended), to commence enrolling and treating patients in Study II, subject to submitting a Clinical Trial Site

Information Form and receipt of individual Research Ethics Board (“ REB ”) approvals for each Canadian Clinical Study Site (“ CSS ”) that will conduct Study II.

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 6 US CSSs, subject to site level IRB approval.

In 2020, the FDA granted Theralase® Fast Track Designation (“ FTD ”) for Study II. As a FastTrack designee, Theralase® has access to early and frequent communication with the FDA to discuss Theralase®’s development plans and ensure timely collection of the appropriate 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 BCGUnresponsive NMIBC CIS, with or without papillary Ta or T1 tumors. FTD can lead to an Accelerated Approval (“ AA ”), Break Through Designation (“ BTD ”) and 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 Clinical Site Update

To date, Theralase® has the following Canadian CSSs open for patient enrollment and treatment:

Clinical Study Sites(Canada)	Location	Commenced
UniversityHealth Network(“UHN”)	Toronto,Ontario	April 25,2019
McGill UniversityHealth Centre(“MUHC”)	Montreal, Quebec	July30,2019
London Health Sciences Centre(“LHSC”)	London,Ontario	October 7,2019
Nova Scotia Health Authority (“NSHA”)	Halifax,Nova Scotia	February25,2020
Universityof British Columbia(“UBC”)	Vancouver,British Columbia	December 7,2020

To date the following US CSSs have received site level IRB approval to commence patient enrollment and treatment:

Clinical Study Sites(United States)	Location	Commenced
Virginia Urology (“VU”)	Richmond,Virginia	January19,2021
UrologyAssociates P.C.(“UA”)	Nashville,Tennessee	January20,2021
MidLantic Urology (“MU”)	Bala Cynwyd,Pennsylvania	January25,2021
Carolina Urologic Research Center(“CURC”)	Myrtle Beach,South Carolina	January27,2021
Universityof Wisconsin Health-Madison(“UWH”)	Madison,Wisconsin	February24,2021
UrologySan Antonio(“USA”)	San Antonio,Texas	March 25,2021

Patient enrollment and treatment rates have been delayed due to the COVID-19 pandemic restrictions in place at various CSSs; however, they are expected to improve once Canada and the US sustainably 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. Although Canadian CSSs recruiting activities were re-commenced in 4Q2020; patient recruitment and treatment activities have been limited due to the second and third wave of COVID-19 infections. With the addition of 6 additional US-based CSSs in 1Q2021, Theralase® is hopeful that patient recruitment and treatment activities will increase in the latter part of 2021 to help achieve the Company’s strategic objectives.

Theralase® is currently focused on working with its Canadian and US-based CSSs to enroll and provide the primary Study Treatment for up to 6 additional patients in 2Q2021 for a total of 20 to 25 patients enrolled and treated in Study II. Theralase® plans to compile progressively the 90, 180, 270, 360 and 450 day assessment data (urine cytology and cystoscopy) for these patients with the intent of submitting this interim data to the FDA for consideration of Breakthrough Designation (“ BTD ”) approval.

Study II Preliminary Clinical Data

To date, the phase II NMIBC clinical study has enrolled and provided the primary study treatment for 19 patients (including three patients from Phase Ib study treated at the Therapeutic Dose) for a total of 22 patients.

The most recent analysis of the clinical data supports that Study II has met the primary, secondary and tertiary objectives at 180 days post initial Study Treatment, demonstrating a strong initial efficacy, duration of efficacy and high safety profile.

An analysis of the primary (Complete Response (“ CR ”) at any point in time) and secondary (Duration of CR) objectives, at 90 and 180 days, the CR rate (negative urine cytology and negative cystoscopy) is 31.8% and 31.8%, respectively, while the Partial Response (“ PR ”) rate (positive urine cytology and negative cystoscopy) is 9.1% and 9.1%, respectively, leading to a 40.9% and 40.9%, Total Response rate (CR and PR), respectively.

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Comparing the 90 and 180 day assessment data, demonstrates that once a patient has obtained CR or PR, the duration of the response remains durable.

In accordance with FDA guidelines to industry, the patients who have achieved a PR are being further assessed via CT scan and biopsy of the prostatic urethra to determine if upper tract Urothelial Cell Carcinoma (“ UCC ”) or prostatic urethra UCC can be detected to allow these patients to be re-categorized as CR.

In support of the tertiary objective, all patients have experienced some transient grade 1 or grade 2 AEs (i.e.: bladder spasms, constipation, urge incontinence, fatigue, urinary frequency, hematuria, penile discomfort, urinary urgency, pain, urinary tract infections and other) where > 80% have completely resolved with 180 days.

One patient was diagnosed with urosepsis (infection in the urinary tract) that completely resolved within 1 week, after antibiotic treatment and was considered unrelated to the Study Drug, possibly related to the Study Procedure and possibly related to the Study Device, by the PI.

An analysis of the tertiary objective (Adverse Events (“ AE ”) > 4, that do not resolve within 450 days) showed that 1 patient, who had a negative cytology (no presence of cancer cells in urine) after a single Study Treatment,

experienced a grade 3 AE (Acute Kidney Injury) that was discovered at the 30 day check-up that was considered unlikely related to the Study Drug, probably related to the Study Procedure and possibly related to the Study Device, by the Principal Investigator (“ PI ”).

This same patient, 5 days later, experienced a grade 5 adverse event (Death due to cardiac arrest) that was considered unlikely related to the Study Drug, unlikely related to the Study Procedure and unlikely related to the Study Device, by the PI. The patient had a complex medical history, including diabetes, cardiovascular disease, as well as suffering from benign prostatic hyperplasia. Based on the patient’s history and the timing of the AE, the Company has concluded that both these events were unrelated to the Study Drug and/or Study Device.

Study II Optimization

Commencing August 1, 2020, all new and existing patients to be enrolled and treated (Primary and Maintenance Study Treatment) in Study II were treated using the Study II treatment optimizations as communicated via press release on July 30, 2020, specifically:

a) Bladder volume calculation
b) Study drug volume calculation
c) Study device volume calculation
d) Study device treatment time

To date, 7 patients have received the optimized Primary Study Treatment and 11 patients have received the optimized Maintenance Study Treatment in Study II.

A preliminary analysis of the primary objective at 90 days for patients receiving the optimized primary Study Treatment demonstrates a 28.6% CR rate, with 57.1% data pending and 14.3% with no response.

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Although very early in the data collection and assessment phase, with significant clinical data still to be collected, an interim analysis of the clinical data, for Study Treatments (Primary and Maintenance), completed post August 1, 2020 to date, supports that Study II continues to achieve its primary, secondary and tertiary objectives at 90 days post initial Study Treatment, demonstrating a strong initial efficacy, duration of efficacy and high safety profile.

Additional Oncology Targets:

Theralase® has worldwide exclusive rights to the Theralase® Ruthenium and Osmium based PDCs and any improvements to the PDCs listed in the Company’s issued and pending patents; therefore, Theralase® has full commercial control on these patented and patent pending PDCs, including TLD-1433.

Theralase® has championed the research and development of its Intellectual Property (“ IP ”) platform for PDCs, through scientific and preclinical research to fine-tune the photophysical and photochemical properties of the PDCs, by the inventor, while demonstrating Type I (oxygen independent) and II (oxygen dependent) photoreactions and activation in hypoxia.

By combining these PDCs with transferrin (human glycoprotein), as a delivery system it has been pre-clinically demonstrated that transferrin is able to significantly:

Increase the resistance of TLD-1433, the lead drug candidate, to photobleaching (loss of potency of the PDC over time)
Increase ROS production (ability to destroy cancer cells quickly and effectively)
Increase selective tumour uptake (destruction of cancer cells, while sparing healthy cells) through the Transferrin Receptor (“ TfR ”)
Increase anti-cancer efficacy (efficiency in cancer cell destruction)
Decrease systemic toxicity (damage to healthy cells and/or organs)

This strongly suggests that Rutherrin® (TLD-1433 + transferrin) would be indicated for the systemic treatment of recurrent, deep seated and/or progressive cancers, subject to successful completion of Good Laboratory Practices (“ GLP ”) toxicology studies. The Company continues to conduct extensive scientific and preclinical research towards new oncology indications and has developed significant expertise and IP assets regarding its patented PDCs, in pursuit of this goal.

Once Rutherrin®’s Maximum Tolerated Dose (“ MTD ”) and hence Human Equivalent Dose (“ HED ”) limits have been determined through non-GLP and GLP toxicology studies, Theralase® plans to inject Rutherrin® systemically into patients via a Phase Ib clinical study, planned for 2022, to allow localization to various cancer cells, including GlioBlastoma Multiforme (“ GBM ”) and Non-Small Cell Lung Cancer (“ NSCLC ”) and then activate Rutherrin® with radiation to safely and effectively, destroy the cancer of interest.

Rutherrin®, if proven successful, would thus be able to “hunt” and “localize” into cancer cells and when activated by radiation “destroy” them; wherever, they may reside in the body.

The Company has demonstrated significant anti-cancer efficacy of Rutherrin®, when activated by laser light or radiation, across numerous preclinical in-vitro (cell lines) and in-vivo (animal) models focused primarily on GBM and NSCLC.

Due to the limitations of using laser light to activate Rutherrin® in deep oncological targets, Theralase®’s research strongly suggests that Rutherrin® may be activated with radiation therapy, which is able to increase the “tumour damage zone” and the effectiveness of Theralase®’s Anti-Cancer Therapy (“ ACT ”) beyond the reach of light in the body.

Additional Virus Targets

Theralase® executed a Sponsored Research Agreement (“ SRA ”) with the University of Manitoba (“ UM ”) Medical Microbiology department in 3Q2020 to commence development of a coronavirus vaccine utilizing Theralase®’s patented and proprietary PDCs. The primary objective of the SRA was to investigate the efficacy of Theralase®’s lead PDC to destroy a variety of viruses; including: Influenza H1N1, Zika and coronaviruses (Biological Safety Level (“ BSL ”) 2).

The secondary objective was to optimize the concentration of PDC required, the activation methodology and how to potentially administer the treatment to humans to be used as a vaccine (prevention of a patient from contracting COVID-19) (BSL-3).

The Company’s PDC technology was effective in the destruction of Influenza H1N1 and Zika viruses at low nanomolar concentrations and were expanded to include coronavirus (BSL-2).

- - As a cautionary note, COVID 19 is caused by coronavirus (BSL 3), not coronavirus (BSL 2).

A rapid test was established to measure coronavirus destruction and using this new assay the Theralase® PDC technology was able to destroy coronavirus (BSL-2) with drug doses 5 times lower than what was used to kill Influenza H1N1 virus and Zika virus. These drug doses are significantly lower than those used by the Company to treat cancers and are considered safe for human use.

All coronaviruses are highly similar in their structure and these new results strongly suggest that Theralase®’s proposed vaccine could be highly effective against the SARS-CoV-2 virus responsible for COVID-19. Further studies have shown that the human coronavirus (“ CoV ”) appears to be much more sensitive to the action of the activated Theralase® PDC vaccine, with as low a dose of 3.3 nM required to inactivate 50%, whereas; 9.2 nM was required to inactivate the same amount of Influenza H1N1 and 12 nM was required inactivate the same amount of Zika Virus. Similarly, the amount of PDC required to inactivate 99.9% of each virus are 61 nM for CoV, 322 nM for Zika Virus and 497 nM for Influenza H1N1; therefore, the Theralase® PDC is 3 to 5 times more effective against CoV compared to the other tested viruses.

The Theralase® compound is also effective without activation, but on average, its activation results in a 4.2 fold enhancement of Zika Virus inactivation, a 12 fold enhancement of Influenza H1N1 inactivation and an 18.7 fold enhancement of CoV inactivation.

==> picture [356 x 265] intentionally omitted <==

Human coronavirus OC-43 stocks were treated with 32 μg/mL (PDC)- activator and with indicated concentrations of Theralase® PDC incubated 30 minutes, either activated or not as indicated, and residual virus infectivity determined by immunofocus assay. Horizontal dashed line indicates 50% effective inhibitory dose n=3; error bars are Standard Error of Means

In April 2021, Theralase® executed a Collaborative Research Agreement (“ CRA ”) with the National Microbiology Laboratory, Public Health Agency of Canada (“ PHAC” ) for the research and development of a Canadian-based SARS-CoV-2 (“ COVID-19” ) vaccine. Under the terms of the agreement, Theralase® and PHAC are collaborating on the development and optimization of a COVID-19 vaccine by treating the SARS-CoV-2 virus grown on cell lines with Theralase®’s patented PDC and then light activating it with Theralase®’s proprietary TLC-3000A light technology to inactivate the virus and create the fundamental building blocks of a COVID-19 vaccine. This inactivated virus would then be purified and used to inoculate naive animals followed by challenge with the SARS-CoV-2 virus, to ascertain the efficacy of the vaccine. The project is entitled, “ Photo Dynamic Compound Inactivation of SARS-CoV-2 Vaccine ” and commenced in April 2021.*

The Company does not claim or profess that they have the ability to treat, cure or prevent the contraction of the COVID-19 coronavirus.

Cool Laser Technology Division

TLC-1000 Therapeutic Laser Product:

The Theralase® TLC-1000 (“ TLC-1000 ”) Cool Laser Therapy (“ CLT ”) is a non-invasive, superpulsed, dual wavelength, multiple diode laser system that has three specifically designed probes used to treat knee pain and, when used off-label, to treat numerous nerve, muscle and joint conditions. It can be supplied with a multiple probe to treat large regions, a triple probe to treat medium sized regions and/or a single probe to treat small regions.

On September 14, 2004, and on January 13, 2017, Health Canada approved Theralase’s TLC-1000 for Canadian distribution through issue of a medical device license, Class 3, License # 65816 and 98358, respectively. On July 11, 2005, the FDA cleared the TLC-1000 under 510k #: K050342.

The TLC-1000 is Health Canada approved and FDA cleared for knee pain, under a blinded, randomized clinical study “ Adjunctive Use in the Temporary Relief of Pain Associated with Knee Disorders ”.

The Company launched the controllerless CLT series from this platform, which uses similar laser probes, but eliminates the controller by placing a microprocessor and display into each of the three laser probes. The controllerless series, is an adaptation of the TLC-1000, that reduces memory functions, but as a benefit reduces manufacturing costs and hence overall retail sales cost.

In 2021, Theralase® plans to discontinue the manufacture of the controller portion of the TLC-1000 product; however, will continue to manufacture the controllerless version of the TLC-1000 CLT systems.

Theralase® will currently continue to service the TLC-1000 controller and controllerless series of products.

TLC-2000 Therapeutic Laser Product:

The Theralase® TLC-2000 Cool Laser Therapy (“ TLC-2000 ”) is a professional-grade, non-invasive, superpulsed, dual wavelength, multiple diode laser system used to treat knee pain and, when used off-label, to treat numerous nerve, muscle and joint conditions. The TLC-2000 consists of a multiple probe, power pack and computer. Each multiple laser probe connects to a power pack via cable and to a computer wirelessly, which in turn connects to the internet allowing for laser treatment protocols to be uploaded and downloaded. The TLC-2000 can control up to four (4) multiple laser probes simultaneously.

On December 9, 2015, and on January 13, 2017, Health Canada approved Theralase’s TLC-2000 for Canadian distribution through issue of a medical device license, Class 3, License # 96209 and 98357, respectively. On November 19, 2015, the FDA cleared the Theralase® TLC-2000 under 510k #: K151816.

The TLC-2000 is Health Canada approved and FDA cleared for knee pain and is the latest product in the Company’s current sales and marketing initiatives.

TLC-3200 Medical Laser System (“TLC-3200”)

The Theralase® TLC-3200 medical laser system (“ TLC-3200 ”) is a 520 nm laser light system that is used to lightactivate PDCs to destroy specifically targeted cancers. The TLC-3200 consists of a laser emitter detector and controller that are controlled by a computer.

The TLC-3200 is used to activate the PDC, TLC-1433, in Study and Study II. The TLC-3200 produces green laser light (520 nm) to activate the PDC in superficial bladder layers (i.e.: urothelium) to destroy NMIBC; however, to limit light penetration in the detrusor muscle to prevent deep tissue/musculature damage.

The TLC-3200 uses in situ dosimetry to monitor for safety and assist the Principal Investigator (“ PI ”) in the delivery of laser light to the inner surface bladder wall; alerting, the PI to errors in the placement or occlusion of the Emitter Detector. The PI is able to adjust the physical location of the Emitter Detector or replace them, depending on the warning error message, helping to increase patient safety.

Manufacturing, Distribution and Service:

In 2021, Theralase® derives 100% of its current revenue from the sale of the TLC-1000 controllerless and TLC2000 Cool Laser Therapy (“ CLT ”) systems to healthcare practitioners, primarily in Canada and the United States and warranty service of the installed product base of CLT systems.

The primary target market for the Company’s products are healthcare practitioners, which include: medical doctors, chiropractors, physical therapists, athletic therapists, professional sport teams, sports injury clinics, podiatrists, chiropodists, naturopathic doctors, registered massage therapists and veterinarians.

Geographic primary markets include: United States of America and Canada.

Trends

The Company anticipates that its current level of cash and cash equivalents will be sufficient to execute its current planned expenditures for the next 13 months. This estimate assumes completion of Study II, but does not include pre-clinical research and validation of TLD-1433 used in GBM, NSCLC or viruses such as COVID-19 as it moves towards a Phase Ib study, for these various indications, in which additional financing will be needed.

Intellectual Property

The Company has agreements in place with various inventors and co-inventors to license or assign the patented or patent pending PDC or medical laser system technology to the Company.

The Company has license agreements place to license PDCs from both Virginia Tech Intellectual Property (“ VTIP ”) and Dr. Sherri McFarland.

Patents:

CLT Division: (TLC-2000 Patents)

Title: Therapeutic laser device and method including noninvasive subsurface monitoring and controlling means

Abstract: A method is provided for treating a patient having a disorder, wherein the method includes irradiating a tissue surface of the patient with at least one laser beam, automatically monitoring the tissue, and automatically controlling the at least one laser beam to adjust and/or terminate the treatment in a therapeutically effective manner. The method noninvasively determines in real-time the irradiance and/or radiant exposure of a target tissue at a predetermined depth below the tissue surface by detecting the radial dependence of light remitted from the tissue surface. Preferably, the method employs a near-infrared light laser beam and a visible laser light beam in combination. An apparatus for performing the method is also provided.

Issued Patents: USA: 6,413,267 Granted: July 2, 2002 Expiry: August 9, 2019 Canada: 2,315,521 Granted: July 5, 2011 Expiry: August 9, 2020 Belgium, Italy, United Kingdom, Granted: November 10, 2004 Expiry: August 8, 2020 Germany, France, Spain: EP1075854 (August 9, 2020 in Germany)

ACT Division (TLC-3000 Patents):

Title: Supramolecular complexes as photoactivated DNA cleavage agents

Abstract: The invention provides supramolecular metal complexes as DNA cleaving agents. In the complexes, charge is transferred from one light absorbing metal (e.g., Ru or Os) to an electron accepting metal (e.g. Rh) via a bridging pi-acceptor ligand. A bioactive metal-to-metal charge transfer state capable of cleaving DNA is thus generated. The complexes function when irradiated with low energy visible light with or without molecular oxygen.

Issued Patent: USA: 6,962,910 Granted: November 8, 2005 Expiry: December 6, 2023

_____________

Title: Supramolecular complexes as photoactivated DNA cleavage agents

Issued Patent: USA: 7,612,057 Granted: November 3, 2009 Expiry : January 31, 2023

_____________

Title: Supramolecular metallic complexes exhibiting both DNA binding and photocleavage

Abstract: Supramolecular complexes that target and cleave DNA are provided. The supramolecular complexes include at least one metal-to-ligand charge transfer (MLCT) light absorbing unit, at least one Pt based DNA binding unit, and at least one bridging unit that serves to connect the components. The Pt-based DNA binding unit binds the complex to DNA, and the MLCT unit absorbs light, thereby sensitizing molecular oxygen to produce ROS in close proximity to the complex and the bound DNA. The ROS cleave the bound DNA.

Issued Patent: USA: 8,148,360 Granted: April 3, 2012 Expiry: January 3, 2030

_____________

Title: Supramolecular complexes as photoactivated DNA cleavage agents

Abstract: The invention provides supramolecular metal complexes as DNA cleaving agents. In the complexes, charge is transferred from one light absorbing metal (e.g. Ru or Os) to an electron accepting metal (e.g. Rh) via a bridging pi-acceptor ligand. A bioactive metal-to-metal charge transfer state capable of cleaving DNA is thus generated. The complexes function when irradiated with low energy visible light with or without molecular oxygen.

Issued Patent: USA: 8,445,475 Granted: May 21, 2013 Expiry: April 16, 2023

_____________

Title: Metal-Based Thiophene Photodynamic Compounds and Their Use

Abstract: Compositions of the invention include tunable metal-based thiophene photodynamic compounds useful as therapeutic agents and as in vivo diagnostic agents for treating or preventing diseases that involve hyperproliferating cell etiology including cancer and diseases associated with hyperproliferating cells. The compositions are also useful for treating infectious diseases and for pathogen disinfection.

Issued Patent: USA: 9,345,769 Granted: May 24, 2016 Expiry: June 22, 2034 USA: 9,676,806 Granted: June 13, 2017 Expiry: April 15, 2033 Russia: 2677855 Granted: January 22, 2019 Expiry: April 15, 2033 China: ZL201380030975.2 Granted: June 25, 2019 Expiry: April 15, 2033 EPO Europe: 137,269,023 Granted: September 25, 2019 Expiry: April 15, 2033 Canada: 2,883,068 Granted: April 20, 2020 Expiry: April 15, 2033 Patent Application Number: Brazil: BR1120140257027 Filing Date: April 15, 2013 Status: Pending India: 9613DELNP2014 Filing Date: April 15, 2013 Status: Published

Title: Metal-Based Coordination Complexes as Photodynamic Compounds and their Use

Abstract: This invention relates to metal-based coordination complexes that are useful as therapeutic and diagnostic agents. The invention further relates to photodynamic compounds that can be activated with ultraviolet to infrared (UV-IR) light, particularly near infrared light, that are useful as therapeutic and diagnostic agents. In particular, the invention provides tunable metal-based photodynamic compounds that are coordination complexes derived from organic ligands. The photodynamic compounds can be activated by light

to destroy unwanted cells, for example hyperproliferative cells and microbial cells. The photodynamic compounds can also be activated by light to destroy viruses.

Issued Patent: USA: 10,766,915 Granted: September 8, 2020 Expiry: September 15, 2035 Russia: 2682674 Granted: March 20, 2019 Expiry: March 17, 2034 China: ZL201480027613.2 Granted: September 13, 2019 Expiry: March 17, 2034 Patent Application Number: Brazil: BR1120150235689 Filing Date: March 17, 2014 Status: Pending Canada: 2,907,356 Filing Date: March 17, 2014 Status: Pending EPO (Europe): 147232011 Filing Date: March 17, 2014 Status: Published India: 9668DELNP2015 Filing Date: March 17, 2014 Status: Published

Title: Apparatus and Method for Multiwavelength Photodynamic Therapy

Abstract: This invention relates to the use of photodynamic compounds as therapeutic agents and as in vivo diagnostic agents. In particular, the invention provides a method and system for applying radiation at selectable wavelengths and powers such that subsurface excitation of photodynamic compounds can be tuned.

Issued Patent: USA: 10525279 Granted: January 7, 2020 Expiry: October 28, 2036 China: ZL201580030362.8 Granted: June 4, 2019 Expiry: April 29, 2035 Russia: 2016146786 Granted: August 13, 2019 Expiry: April 29, 2035 Patent Application Number: International: PCTUS15000597 Filing Date: April 29, 2015 Status: Published Brazil: BR1120160254686 Filing Date: April 29, 2015 Status: Pending Canada: 2,947,392 Filing Date: April 29, 2015 Status: Pending EPO (Europe): 157867516 Filing Date: April 29, 2015 Status: Published India: 201617040681 Filing Date: April 29, 2015 Status: Pending _____________

Title: Metal-Glycoprotein Complexes and Their Use as Chemotherapeutic Compounds (US) / Compositions Comprising Transition Metal Chemotherapeutic Agents and Metal-Binding Glycoproteins (International)

Abstract: This invention relates to metal-based coordination complexes, and more particularly to metalglycoprotein complexes that are particularly useful as therapeutic and diagnostic agents.

Issued Patent: USA: 9,737,565 Granted: August 22, 2017 Expiry: January 19, 2036 Canada: 2974329 Granted: October 2, 2018 Expiry: January 19, 2036 Russia: 2017129587 Granted: December 11, 2021 Expiry: January 19, 2036 India: 201717029422 Granted: January 19, 2016 Expiry: January 19, 2036 EPO (Europe): 3 247 397 Granted: May 19, 2021 Expiry: January 19, 2036

Patent Application Number: International: PCTIB2016050253 Filing Date: January 19, 2016 Status: Published China: 2016800156464 Filing Date: January 19, 2016 Status: Published

Brazil: BR1120170154994 Filing Date: January 19, 2016

Status: Pending

Title: Metal-Glycoprotein Complexes and Photodynamic Therapy of Immune Privileged Sites with Same

Abstract: This invention relates to metal-based coordination complexes, and more particularly to photodynamic therapy using metal-glycoprotein complexes as photo dynamic compounds.

Issued Patent: USA: 10,111,936 Granted: October 30, 2018 Expiry: January 19, 2036

Title: Fiber Optic Light Delivery, Monitoring and Apparatus Therefor

Abstract: Apparatus for illuminating comprises one or more fibers, the one or more fibers including fiber portions meeting at an apex and a bottom location to form a three dimensional cage; a detector attached to each of the fiber portions for receiving light and transmitting light along each of the fiber portions, respectively; and an illumination member situated within the cage. A method for illuminating a hollow member includes the steps of inserting one or more fibers into the hollow member, wherein one or more fibers include fiber portions that meet at a location to form a three-dimensional cage; permitting light to emit from within the three-dimensional cage and towards the fiber portions; receiving light at distinct locations on each of said fibers; and allowing each of the fibers to transmit the light received on each of the fiber portions out of the hollow member.

Patent Application Number:

USA: 15/289,574 Filing Date: October 10, 2016 Status: Published International: PCTIB2016056061 Filing Date: October 10, 2016 Status: Published Canada: 3001273 Filing Date: October 10, 2016 Status: Pending

Title: Method and Apparatus for Photoactivating Nuclear Receptors

Abstract: This invention relates to the modification of biological processes, and more particularly to the use of laser and/or non-coherent (monochromatic and/or polychromatic) light alone or in combination with other stimuli to modify biological processes of living organisms.

A first aspect of the invention is a method of activating a nuclear receptor in an organism, said method comprising irradiating the nuclear receptor with light effective to activate the nuclear receptor to cause a biological effect in the organism; wherein the nuclear receptor is not specific to a retina of the organism.

Patent Application Number: USA: 16/608,558 Filing Date: October 25, 2019 Status: Published Canada: 3,061,361 Filing Date: April 25, 2018 Status: Pending International: PCTUS1829336 Filing Date: April 25, 2018 Status: Pending _____________

Title: Photodynamic Compounds and Methods for Activating Them Using Ionizing Radiation and/or Other Electromagnetic Radiation for Therapy and/or Diagnostics

Abstract: This invention relates to the use of electromagnetic radiation to activate metal-based coordination complexes, and more particularly to diagnostic and therapeutic methods comprising the use of ionizing radiation to activate metal-based coordination complexes.

A first aspect of the invention comprises a method for destroying cells and/or microorganisms in an organism, said method comprising: administering to the organism a composition comprising a photodynamic compound containing at least one transition metal; and irradiating the photodynamic compound in the organism with electromagnetic radiation, wherein the electromagnetic radiation comprises ionizing radiation and is effective to activate the photodynamic compound to destroy at least one of the cells and the microorganisms in the organism.

Issued Patent: USA: 10335608 Granted: July 2, 2019 Expiry: July 2, 2036 _____________

Title: Vaccine Containing Cancer Cells Inactivated by Photodynamic Treatment with Metal-Based Coordination Complexes, and Immunotherapy Method Using Same

Abstract: A first aspect of the invention is a method for treating a tumor in a patient, said method comprising administering to the patient an immunogenic composition comprising antigenic material inactivated by treatment with a metal-based coordination complex and electromagnetic radiation, wherein the immunogenic composition is effective to elicit an immune response to the antigenic material in the patient after administration and the metal-based coordination complex (s).

Patent Application Number: USA: 16/610,991 Filing Date: November 5, 2019 Status: Published Canada: 3,062,883 Filing Date: May 11, 2018 Status: Pending International: PCTUS1832274 Filing Date: May 11, 2018 Status: Published EPO (Europe): 18799412.4 Filing Date: May 11, 2018 Status: Published _____________

Title: Method for Treating Conditions Associated with Hyperproliferating Cells Comprising Combined Administration of a Cannabinoid Receptor Agonist and Radiation Therapy

Abstract: Disclosed is a method for treating a condition associated with hyperproliferating cells, the method including the steps of administering to a subject having the condition a composition including at least one cannabinoid receptor agonist, optionally administering to the subject a photodynamic compound, and administering radiation to the subject in whom the at least one cannabinoid receptor agonist is present so as to treat the condition.

Patent Application Number: USA: 16/365,148 Filing Date: March 26, 2019 Status: Published Canada: 3,038,108 Filing Date: March 26, 2019 Status: Published _____________

Title: Apparatus and Method for Irradiating Inside an Object

Abstract: An apparatus for irradiating inside an object is disclosed, including a lumen having a longitudinal axis; optical fibers within the lumen and aligned with the longitudinal axis; and an illumination member moveable or fixed within the lumen along the longitudinal axis. The apparatus can be used in a method for irradiating inside

an object, including the steps of: providing an object having a cavity defined by an internal surface; inserting the lumen into the cavity; activating the illumination member to irradiate the internal surface with emitted light; receiving in each of the optical fibers light redirected from the internal surface; conveying the redirected light in a proximal direction through the plurality of optical fibers; and analyzing the redirected light conveyed through the plurality of optical fibers.

Patent Application Number: USA: 17/008,497 Filing Date: August 31, 2020 Status: Pending _____________

Title: Sonodynamic Therapy using Sonodynamically Activated Coordination Complexes of Transition Metals as Sensitizing Agents

Abstract: This invention relates to sonodynamic therapy and more particularly to Sono Dynamic Therapy (“ SDT ”) using sensitizing agents activated by sonic waves.

Patent Application Number: USA: 17/192,569 Filing Date: March 3, 2021 Status: Pending _____________

Title: Inactivation of Pathogens Using Photodynamic Therapy with Metal-Based Coordination Complexes, and Methods and Compositions for Treating and Preventing Microbial and/or Viral Infections

Abstract: This invention relates to methods and compositions for treating and preventing infections caused by a pathogen, such as a virus or microbe, particularly coronavirus infections, including the SARS-CoV-2 virus.

Patent Application Number: USA: 17/192,597 Filing Date: March 4, 2021 Status: Pending

Trademarks

Canadian Trademarks:

“ Theralase® ” – TMA 519612 Registered: November 19, 1999 “ Healing at the Speed of Light® ” – TMA 661393 Registered: March 24, 2006 “ Light Speed Healing® ” – TMA1003642 Registered : August 27, 2018 “ Pain Relief at the Speed of Light® ” – TMA1012044 Registered: January 3, 2019 “ Cellsensing® ” – TMA1064358 Registered: November 26, 2019 “ Rutherrin® ” – TMA1050217 Registered: August 20, 2019

USA Trademarks:

“ Theralase® ” – 2629654 Registered: October 8, 2002 “ Healing at the Speed of Light® ” – 3285506 Registered: August 28, 2007 “ Light Speed Healing® ” – 5214634 Registered: May 30, 2017 “ Pain Relief at the Speed of Light® ” - 5292183 Registered: September 19, 2017 “ Cellsensing® ” - Application No. 86/467,154 Registered: July 24, 2018 “ Rutherrin® ” - Application No. 86/536,534 Status: Allowed

“ Cellsensing® ” - Application No. 86/467,154

“ Rutherrin® ” - Application No. 86/536,534

Office of Harmonization in the Markets:

“ Theralase® ” – 001150580 Registered: July 17, 2000

Registered: March 24, 2006

“ Healing at the Speed of Light® ” – 004309126

European Union Trademarks: “ Light Speed Healing® ” – 014503874 Registered: December 8, 2015 “ Pain Relief at the Speed of Light® ” - 015584411 Registered: February 13, 2017 “ Cellsensing® ” - 013537626 Registered: July 7, 2015 “ Rutherrin® ” – 1,269,420 Registered: September 1, 2016 Brazil Trademarks: “ Rutherrin® ” - 909863636 Registered: October 24, 2017 International Bureau (WIPO) Trademarks: “ Rutherrin® ” – 1,269,420 Registered: August 17, 2015 China Trademarks: “ Rutherrin® ” –1,269,420 Registered: January 26, 2017 India Trademarks: “ Rutherrin® ” - 1,269,420 Registered: January 15, 2018 Russia Trademarks: “ Rutherrin® ” – 1,269,420 Registered: September 8, 2016

Specialized Skill and Knowledge

The research, development and commercialization of the Company’s products requires specialized skill and knowledge. Theralase® believes that is has the required skill and knowledge to carry out the current stage of research, development and commercialization through its internal and external resources, including its: directors, officers, employees, consultants, external medical, technical and/or regulatory consulting firms. The Company assesses its requirements on an ongoing basis and as required, recruits and engages qualified personnel and firms, subject to budget limitations.

Competitive Conditions

In its CLT Division, the Company has numerous competitors that produce competitive products both in Canada, the United States and internationally.

The main competition in the U.S. market is from competitors selling certain Class IV lasers, whose main selling claim is that their enhanced power delivers superior clinical results. Certain clinical data produced to date has not supported these claims[2] ; however, this has not deterred these organizations from selling numerous products into the U.S. market.

Additional competition comes from Light Emitting Diode (“ LED ”) based technologies, that produce non coherent light and have proven less than optimal clinical results, according to certain clinical literature[3] , due to their non-

2 See Delia B. Roberts and Roger J. Kruse, "The Effectiveness of Therapeutic Class IV (10 W) Laser Treatment for Epicondylitis" in Brian Wong, ed, Lasers in Surgery and Medicine , 45:5 (Wiley Periodicals, 2013) 311 - 317, online: Wiley Online Library < https://doi.org/10.1002/lsm.22140>.

3 See Coldlasers.org, "Comparing LASERS and LEDs for Cold Laser Therapy", online: ColdLasers.org < https://www.coldlasers.org/therapy/laser-vs-led/>.

specific wavelengths, lack of coherence and lower optical power. Additional competition comes from lower power, continuous wave laser-based systems that either lack the correct wavelength or sufficient optical power to stimulate chromophores at tissue depth in the repair of tissue, reduction of inflammation and/or reduction of pain.

Theralase® produces a superpulsed, near infrared and visible red multiple laser diode technology that, according to a blinded, randomized clinical study, significantly reduced pain according to the Visual Analog Scale (“ VAS ”) versus placebo in patients presenting with chronic knee pain.[4]

Employees

As of June 3[rd] , 2021, the Company employed approximately 15 full time employees, including four holding PhD degrees, one holding a MD and DSc degree, one holding a P.Eng. degree and one holding a CPA degree.

Theralase® employees are not governed by a collective bargaining agreement. Theralase® depends on certain key members of its management and scientific staff and the loss of services of one or more of these persons could adversely affect the Company.

Theralase® also utilizes consultants and outside contractors to complete certain Theralase®’s activities: including drug manufacturing, clinical and regulatory affairs, pre clinical research, toxicology and clinical studies.

General Development of the Business

Developments Over the Last Three Fiscal Years

The following events and conditions have affected the general development of the business of the Company over the last three fiscal years, and those expected to influence the business in the current financial year.

Subsequent to Year Ended December 31, 2020

On January 8, 2021, the Company extended the expiry date of 4,095,157 share purchase warrants, all of which are exercisable at $0.50 per shares. The Warrants were issued on January 9, 2019 pursuant to a private placement involving the issuance of 4,095,157 units of the Company. The Company proposes to extend the expiry date of the Warrants that remain outstanding from the original expiry date of January 9, 2021 to January 9, 2023.

On January 19, 2021, Virginia Urology (“ VU ”) received Institutional Review Board (“ IRB ”) site approval for the commencement of Study II to enroll and treat patients. VU is the first US site to receive both central and IRB approval. VU has a long history of providing quality care to the Greater Richmond area since 1929. VU is comprised of 6 locations throughout the Greater Richmond area with over 55 board-certified physicians that span nearly every discipline within the field of urology. Because VU consists of diverse medical professionals, they are able to provide the latest technologies with a mission of providing the best possible care for each patient.

4 See Lothar Lilge, Nelson Marquina, Roger Dumoulin-White and Arkady Mandel, "Laser therapy applications for osteoarthritis and chronic joint pain - A randomized placebo-controlled clinical trial" (2012), online (pdf): De Gruyter < http://theralase.com/wp-content/uploads/2014/05/Laser-Therapy-Applications-for-Osteoarthritis-and-Chronic-Joint-PainClinical-Trial.pdf>.

On January 20, 2021, Urology Associates P.C. (“ UA ”) received IRB site approval for the commencement of Study II to enroll and treat patients. Founded in the 1940s, UA serves Middle Tennessee with over 20 board-certified urologists and 12 advanced practice providers, providing male and female urological care in over 10 locations. They were the first practice to open a center solely dedicated to female urology in Nashville. UA are committed to the innovation and the integration of advanced technology and advanced therapeutics in their treatment offerings. The practice provides unique treatment options and specialized care in their Urology Surgery Center, Women’s Institute for Sexual Health (“ WISH ”) and Advanced Therapeutics Center. UA was founded on the principles of compassionate, high-quality urological care and continues to serve that mission.

On January 22, 2021, the Company received 3 decisions to grant a patent from the following countries:

1) Russian – Metal-Glycoprotein Complexes

2) Indian – Metal-Glycoprotein Complexes

3) Chinese – Multiwavelength PDT

The patent entitled, “Metal-Glycoprotein Complexes and Their use as Chemotherapeutic Compounds” is important in protecting Theralase®’s systemic and targeted anti-cancer therapies to allow PDCs and their associated drug formulations to be systemically injected to “hunt” and “localize” into cancer cells for various cancer conditions. Once “localized” in the cancer cells of interest they can be activated by laser light or radiation to “destroy” the cancer cells safely and effectively.

The patent entitled “Apparatus and Method for Multiwavelength Photo Dynamic Therapy” is important for investigation into new oncological applications, including targeting cancers that are difficult, if not impossible to reach with surgery, such as GBM, NSCLC or other deep tissue related cancers. The multiwavelength PDT system advances the clinical utility of PDT by expanding the volume of tissue able to be treated. By using various laser light sources to activate the PDCs at various depths in the target tissue simultaneously or sequentially to increase the overall destruction of the cancerous tissue.

On January 25, 2021, MidLantic Urology (“ MU ”) received IRB site approval for the commencement of Study II to enroll and treat patients. MU, headquartered in Philadelphia, Pennsylvania, is a state-of-the-art urologic care center that embraces independent practice, innovation and research to improve patient outcomes. MU has 70+ physicians and 47 locations located throughout the region. Their world-class physicians set new standards in comprehensive urologic patient care and continue to innovate with the most advanced treatments backed by clinical research. The MU team thrives on pushing the envelope of what’s possible in urological medicine.

On January 27, 2021, the Carolina Urologic Research Center (“ CURC ”) received IRB site approval for the commencement of Study II to enroll and treat patients. CURC has been recognized both nationally and internationally as one of the most progressive and respected clinical research sites in the United States. Over the past 16 years, CURC has participated in over 300 national and international clinical research trials for patients with various urologic conditions. Areas of clinical research include prostate cancer, bladder cancer, renal cell carcinoma, Benign Prostatic Hyperplasia (“ BPH ”), erectile dysfunction, overactive bladder, urinary incontinence, urinary tract infections, kidney stones, as well as biomarker studies.

On February 24, 2021, the University of Wisconsin Health-Madison (“ UWH ”) received IRB site approval for the commencement of Study II to enroll and treat patients. The department of urology at UWH is a leading academic program offering comprehensive multidisciplinary urologic care in conjunction with innovative research, teaching, and learning opportunities. UWH is ranked #14 in the nation for urology, according to the 20192020 U.S. News & World Report’s “Best Hospitals” rankings.

On March 25, 2021, Urology San Antonio (“ USA ”) received IRB site approval for the commencement of Study II to enroll and treat patients. USA is the largest urology practice in South Texas with multiple locations offering care for men and women experiencing complications of the urinary system. Their subspecialists develop incredible expertise in different aspects of urologic care and can offer patients treatment options and guidance not commonly seen in a community urology practice.

On March 29, 2021, the Company launched the Theralase® Anti-Cancer Therapy (“ ACT ”) research center at the Li Ka Shing Knowledge Institute of St. Michael’s Hospital, Unity Health (Toronto, Ontario) relocating its research team from University Health Network (“ UHN ”). The ACT research center is a fully equipped laboratory dedicated exclusively to Theralase® ACT research and development, as Theralase® advances towards commercialization with its lead PDC, TLD-1433, as well as its systemic and targeted formulation – Rutherrin®. A partnership with the Li Ka Shing Knowledge Institute of Unity Health provides access to additional expertise, advisory networks and opportunities to accelerate product development and commercialization.

On April 9, 2021, the Company executed a Clinical Research Agreement (“ CRA ”) with the National Microbiology Laboratory (“ NML ”) Public Health Agency of Canada (“ PHAC” ) for the research and development of a Canadianbased SARS-CoV-2 (“ COVID-19” ) vaccine. Under the terms of the agreement, Theralase® and PHAC are collaborating on the research, development and optimization of a potential COVID-19 vaccine by treating the SARS-CoV-2 virus grown on cell lines with Theralase®’s patented PDC and Theralase®’s proprietary TLC-3000A light technology to inactivate the virus and create the fundamental building blocks of a COVID-19 vaccine. This inactivated virus would then be purified and used to inoculate naive animals followed by challenge with the SARS-CoV-2 virus, to ascertain the efficacy of the vaccine. The project is entitled, “ Photo Dynamic Compound Inactivation of SARS-CoV-2 Vaccine ” and commenced in April 2021. PHAC is a world leader in vaccine creation and has a long history of vaccine development. PHAC scientists developed the world’s first approved Ebola vaccine (Ervebo), which the Government of Canada donated to the World Health Organization (“ WHO ”) during the height of the 2014 to 2016 Ebola outbreak and in the process helped to save countless lives in Africa.

Year Ended December 31, 2020

On January 11, 2020, the Company won a precedent-setting lawsuit against anonymous internet posters for defamatory comments. The suit was filed due to false and disparaging statements posted online by anonymous individuals on the www.stockhouse.com bullboard from late 2014 through 2018.

On January 27, 2020, the Company was granted a U.S. patent from the U.S. Patent office entitled “ Apparatus and Method for Multiwavelength Photodynamic Therapy ”. This patent allows Theralase® to use various laser wavelengths in the activation of PDCs in cancerous tumours. The advantage is that a large or deep-seated tumour may be only partially destroyed with laser of a particular wavelength, but may be able to be fully destroyed by employing one or two additional laser wavelengths, as different laser wavelengths are able to penetrate to different tissue depths. This is may be important for deep-seated cancers, such as GBM or NSCLC.

On February 20, 2020, Theralase® was named a 2020 TSX Venture 50™ company. Presented by the TSX Venture Exchange, Theralase® was ranked eighth in the Clean Technology and Life Sciences sector. This award recognized the top 10 performing companies from five industry sectors based on three equally weighted criteria: market capitalization growth, share price appreciation and trading volume amount. Theralase® was previously named a TSX Venture 50™ company in 2015 and 2019 making this the third year Theralase® was recognized as a top performer in the Clean Technology and Life Sciences sector.

On February 25, 2020, Nova Scotia Health Authority (“ NSHA ”) Research Ethics Board (“ REB ”) approved the commencement of Study II to enroll and treat patients. NSHA is affiliated with the urology department at Dalhousie University of Medicine (“ UDD ”), an innovative leader in urological oncology research. UDD evaluates

new technologies designed to improve the lives of people suffering from urological cancers. Each year, more than 300 people are diagnosed with bladder cancer in Nova Scotia and seek attention. Two UDD doctors have extensive experience providing quality of care for bladder cancer patients, while maintaining an active research role to enhance overall patient care.

On March 20, 2020, the Company was notified by its Canadian Clinical Study Sites (“ CSSs ”) that enrollment of new patients and conducting the first treatment procedure in Study II had been temporarily placed on hold pending resolution of the COVID-19 global pandemic.

On May 19, 2020, the FDA approved the Company’s IND application, allowing for U.S. clinical study sites to enroll and treat patients in Study II.

On May 11, 2020, the Company extended the expiry date of 3,165,008 share purchase warrants, all of which are exercisable at $0.50 per share. The Warrants were issued on October 3, 2018 pursuant to a private placement involving the issuance of 3,157,059 units of the Company. The Company proposes to extend the expiry date of the Warrants that remain outstanding from the original expiry date of October 3, 2020 to October 3, 2022.

On July 30, 2020, the Company provided an update on Study II and Study II treatment optimization. Of the 12 patients enrolled and treated 25.0% demonstrated a CR at the clinical cystoscopy and urine cytology assessment. Study treatment optimizations include: bladder volume calculation and study device treatment time.

On August 12, 2020, the Company was notified by three out of four Canadian CSSs that they re-commenced new patient enrollment and treatment in Study II. The CSSs, which re-opened were UHN, London Health Sciences Centre (“ LHSC ”) and NSHA. McGill University Health Centre (“ MUHC ”) remained temporarily on hold due to COVID-19.

On August 19, 2020, the Company executed a Sponsored Research Agreement (“ SRA ”) with the University of Manitoba (“ UM ”) medical microbiology department to commence development of a coronavirus vaccine utilizing Theralase’s patented and proprietary PDCs. According to the SRA, UM will conduct experiments in conjunction with Theralase® for the research and development of a coronavirus vaccine to be further evaluated in animals and if proven successful in human clinical testing in 2021.

On August 19, 2020 , the Company amended its standard by-laws. The amendments to the Company’s standard by-laws include certain housekeeping amendments and updates to the general by-laws to better align with the current provisions of the Canada Business Corporations Act and corporate governance standards. The amended by-laws were approved by the TSX Venture Exchange and shareholders at the Company’s annual and special meeting of shareholders held on September 24, 2020.

In September 2020, the Company was granted a U.S. patent from the U.S. Patent office entitled “ Metal-Based Coordination Complexes as Photodynamic Compounds and their Use ”.

On September 30, 2020, the Company extended the expiry date of 3,157,059 share purchase warrants, all of which are exercisable at $0.50 per share. The Warrants were issued on October 3, 2018 pursuant to a private placement involving the issuance of 3,157,059 units of the Company. The Company proposes to extend the expiry date of the Warrants that remain outstanding from the original expiry date of October 3, 2020 to October 3, 2022.

On September 14, 2020, the Company was notified by MUHC that they re-commenced new patient enrollment and treatment in Study II.

On November 13, 2020, the Company demonstrated a high kill rate of coronavirus (BSL-2) at UM under the SRA. As a note, COVID-19 is caused by coronavirus (BSL-3), not coronavirus (BSL-2).

On November 23, 2020, the FDA granted the Company Fast Track Designation (“ FTD ”). As a FTD recipient, the Company will have access to early and frequent communications with the FDA to discuss Theralase®’s development plans and ensure timely collection of the appropriate clinical data to support the approval process. FTD can lead to a Break-Through Designation (“ BTD ”), Accelerated Approval or Priority Review, if certain criteria are met. The FDA previously defined to the Company that it may be eligible for BTD, if clinical data on approximately 20 to 25 patients enrolled and treated, demonstrated significant safety and efficacy clinical outcomes.

On December 7, 2020, University of British Columbia (“ UBC ”) REB approved the commencement of Study II to enroll and treat patients. UBC is a global center for teaching, learning and research, consistently ranked among the top 20 public universities in the world and recently recognized as North America’s most international university.

Year Ended December 31, 2019

On January 9, 2019, the Company closed a non-brokered private placement of 4,095,157 units at a price of $0.35 per unit for aggregate gross proceeds of approximately $1,433,306. Each Unit consisted of one common share and one warrant. Each warrant entitles the holder to acquire an additional common share at a price of $0.50 per share expiring on January 9, 2021, which was subsequently extended to January 9, 2023 . An aggregate of 542,857 units, representing gross proceeds of $190,000, were issued to certain insiders of the Company.

On January 30, 2019, the Company announced patient six, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 270 day clinical cystoscopy and urine cytology assessment.

On January 31, 2019, the Company announced patient five, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 360 day clinical cystoscopy and urine cytology assessment.

On February 25, 2019, the Company announced the appointment of Shawn Shirazi, Ph.D., to the role of Chief Executive Officer (“ CEO ”) of Theralase®’s Drug Division and Kipton Lade, B.Sc., M.Sc., MBA., to the role of CEO of Theralase®’s Device Division.

On February 28, 2019, the Company was ranked third on the 2019 TSX Venture 50[TM] in the Clean Technology and Life Sciences sector amongst all TSX Venture Exchange (“ TSXV ”) listed companies. The ranking is comprised of ten companies from each of five industry sectors, selected based on three equally weighted criteria: market capitalization growth, share price appreciation and trading volume amount.

On March 4, 2019, the Company was granted allowance for a United States patent to issue later in the year entitled “ Photodynamic Compounds and Methods for Activating Them Using Ionizing Radiation and/or Other Electromagnetic Radiation for Therapy and/or Diagnostics ”.

On April 2, 2019, the Company announced patient six, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 360 day clinical cystoscopy and urine cytology assessment.

On April 22, 2019, the International Photodynamic Association (“ IPA ”) World Congress selected nine of Theralase®’s scientific research papers pertaining to the Company’s Anti-Cancer Technology (“ ACT ”) platform and Rutherrin® based PDTs to be presented by Theralase® affiliated scientists and researchers at the 17[th] Annual IPA World Congress, held in Cambridge, Massachusetts, USA from June 28[th] to July 4[th] , 2019.

On April 25, 2019, UHN REB approved the commencement of Study II to enroll and treat patients.

On May 7, 2019, the Chinese Patent Office issued a Notice of Acceptance for a patent application for a patent entitled, “ Apparatus and Method for Multiwavelength PhotoDynamic Therapy ” validating the proprietary position of the Company and opened opportunities for the application of Theralase’s PDT technology in an international market.

On May 20, 2019, the Company was granted a Notice of Acceptance by the Chinese Patent Office for the patent entitled, “Metal-Based Thiophene Photodynamic Compounds and Their Use” . The patent encompasses an extensive library of PDCs, including Theralase’s lead PDC, TLD-1433.

On June 25, 2019, Theralase®’s brain cancer pre-clinical research was accepted for publication in Neuro-Oncology Advances demonstrating that Theralase®’s lead PDC, combined with transferrin (Rutherrin®) is able to cross the blood brain barrier through an active transport mechanism and is able to be activated by NIR laser light.

On June 27, 2019, a conference call with the FDA confirmed that the Company’s clinical protocol of Study II met FDA Guidance for Industry dated February 2018 on “BCG-Unresponsive Non-Muscle Invasive Bladder Cancer: Developing Drugs and Biologics for Treatment”. If the Company is able to show similar efficacy results observed in the Study II at an interim analysis, when approximately 20 to 25 patients have been enrolled and treated, Theralase® plans to submit the interim analysis to the FDA in support of a Breakthrough Therapy Designation as proposed by the FDA.

On July 16, 2019, the Russian Patent Office issued a Notice of Acceptance for a patent application entitled, “ Apparatus and Method for Multiwavelength Photo Dynamic Therapy ” that will issue into a patent later in the year.

On July 24, 2019, the Company signed an agreement with a Trial Management Organization (“ TMO ”) to provide 4 to 6 US based urology clinical study sites to commence enrolling and treating patients for Study II. The TMO’s mandate is to expeditiously complete clinical studies in uro-oncology by assisting in the onboarding of US-based CSSs. Each of these individual CSSs has a dedicated and robust clinical infrastructure that is lead by experienced principal investigators and clinical research co-ordinators. The TMO has a highly structured approach to executing and managing clinical studies, which allows a rapid enrolment and treatment of patients according to clinical protocols.

On July 29, 2019, UHN enrolled the first patient in Study II at UHN.

On July 30, 2019, McGill University Health Centre (“ MUHC ”) REB approved the commencement of Study II to enroll and treat patients. MUHC is one of the leading academic health centres in the world and attracts clinical and research expertise from around the world, assessing the latest in medical technology and training the next generation of medical professionals.

On July 31, 2019, the Company announced patient five, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 540 day clinical cystoscopy and urine cytology assessment.

On August 22, 2019, the Company closed an oversubscribed short form prospectus offering of 57,500,000 units at a price of $0.30 per unit for aggregate gross proceeds of $17,250,000. Each unit consisted of one Common Share and one Warrant. Each Warrant entitled the holder to acquire an additional Common Share at a price of $0.35 per share for a period of 60 months following the date of closing.

On September 4, 2019, UHN treated the first patient in Study II, which marked the official launch of Study II. On September 30, 2019, the Company announced patient six, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 540 day clinical cystoscopy and urine cytology assessment.

On October 1, 2019, the Company filed an Investigational New Drug (“ IND ”) application with the FDA for Study II.

On October 7, 2019, London Health Sciences Centre (“ LHSC ”) REB approved the commencement of Study II to enroll and treat patients. LHSC is recognized as one of Canada’s leading cancer research centres ranking, in the top ten of Canada’s research hospitals. LHSC’s research institute is affiliated with the University of Western Ontario and is responsible for training the next generation of medical professionals, while leading Ontario research into the latest medical technologies.

On October 22, 2019, the Company was granted a European patent entitled “ Metal-Based Thiophene ” Photodynamic Compounds and Their Use . The patent advances Theralase’s intellectual property portfolio internationally strengthening the patent portfolio around the ACT platform. The patent encompasses an extensive library of PDCs, including Theralase’s lead PDC, TLD-1433.

On October 31, 2019, Kipton Lade, CEO of the Device Division was terminated from the employment of the Company and Shawn Shirazi, Ph.D., (former CEO of the Drug Division) was appointed as the sole CEO of the Company.

On November 27, 2019, the Company announced recognition from three scientific institutes, which emphasized the strong science-based technology that the Company possesses, verifying that Theralase’s Ruthenium-based PDCs are at the forefront in terms of performance of metal based PDCs to become the next viable option for treating various cancers, and suggesting a major change in the way various cancers are treated in the future. The review article was titled “ Metal-Based photosensitizers for photodynamic therapy – the future of multimodal oncology . The article verifies that the Company’s lead PDC TLD-1433 has strong scientific support, is highly advanced in clinical studies and may become the next “gold standard” cancer treatment.

Year Ended December 31, 2018

On January 10, 2018, the fifth patient was enrolled and treated in the Study.

On January 17, 2018, the Company presented an optimization to the delivery schedule of its proprietary ACT vaccine increasing its efficacy on the destruction of brain cancer. In the latest research, rats were vaccinated twice and then subjected to glioma (brain tumour) induction. Post brain tumour induction, as an optimization, four additional maintenance vaccinations were completed. The latest data obtained on the optimized delivery timetable (six vaccinations versus two vaccinations) demonstrated a material increase in the survival of animals from 35% to 87.5% versus control (no vaccination).

On February 7, 2018, the sixth patient was enrolled and treated in the Study.

On February 26, 2018, Theralase® announced that the Company and Roger Dumoulin-White, former Chairman, President and CEO, had entered into a settlement agreement (“ Settlement Agreement ”) with Staff of the Ontario Securities Commission (“ OSC ”).

On March 5, 2018, the Company presented results that TLD-1433, when combined with transferrin to form Rutherrin®, targets and effectively kills human NSCLC cells. To further explore the efficacy of Rutherrin® in the destruction of NSCLC, the Company evaluated clinically relevant subcutaneous (under the skin) and orthotopic (tumours grown inside organs) models of NSCLC.

On March 7, 2018, the Company was granted allowance for a Canadian patent entitled “ Metal-Glycoprotein Complexes and Their Use as Chemotherapeutic Compounds ” to issue later in the year for Rutherrin® (TLD-1433 PDC combined with transferrin) for the treatment of cancer.

On March 15, 2018, Theralase® research scientists demonstrated the ability of TLD-1433, when combined with transferrin to form Rutherrin®, to destroy GSC-818 (an established human GBM cancer stem cell line) cancer cells in-vitro in the 300 to 600 nM range, when activated by green laser light (520 nM / 20 J/cm[2] ).

On March 27, 2018, the Company filed a U.S. patent application detailing the discovery of a significant increase in the destruction of cancer cells, when Theralase’s patented anti-cancer technology is combined with cannabinoids. In pre-clinical experiments, Theralase [®] scientific researchers combined a specific cannabinoid with the Company’s patented ACT technology to produce an unexpected synergistic effect in the destruction of rat glioma brain cancer cells (“ RG2 ”). In the study, RG2 brain cancer cells were preconditioned, in-vitro, with a specific cannabinoid and then subjected to Theralase®’s anti-cancer technology. The researchers discovered that the efficacy of this combined treatment increased 250%, compared to treatment with Theralase®’s ACT technology or the specific cannabinoid alone.

On April 6, 2018, the Company announced patient five, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 90 day clinical cystoscopy and urine cytology assessment.

On May 14, 2018, the Company completed a non-brokered private placement of 5,104,000 units at a price of $0.20 per unit for gross proceeds of $1,020,800. Each unit consisted of one common share and one warrant. Each warrant entitles the holder thereof to acquire one Common Share at a price of $0.30, expiring on May 14, 2020, which was subsequently extended to May 14, 2022. An aggregate of 750,000 units representing gross proceeds of $150,000 were issued to certain insiders of the Company.

On May 17, 2018, the Company announced patient six, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 90 day clinical cystoscopy and urine cytology assessment.

On May 19, 2018, Theralase’s Medical and Scientific Advisory Board (“ MSAB ”) was convened to examine the clinical results obtained on the first six patients enrolled and treated in the Study utilizing the Study Drug TLD1433; specifically: the primary objective of safety and tolerability, the secondary objective of pharmacokinetics (movement and exit of drug within tissue) and the tertiary objective of efficacy primarily at 90 days. The MSAB is comprised of world-renowned experts in bladder cancer and have been retained by the Company to provide advice and strategic guidance on the research, development and commercialization of the Study Treatment for patients inflicted with NMIBC. After reviewing the clinical data presented by Girish Kulkarni, MD, PhD, FRCSC, an Associate Professor at the University of Toronto, Department of Surgery and the Principal Investigator of the Study, the MSAB unanimously recommended the early termination of the Study due to achievement of the primary and secondary objectives. The MSAB also recommended that the clinical data collected from the first

three patients treated at the Maximum Recommended Starting Dose (“ MRSD ”) (0.35 mg/cm[2] ) and the three patients treated at the Therapeutic Dose (0.70 mg/cm[2] ) were sufficient to support the conclusion that the Study had successfully achieved the Study’s primary and secondary objectives and had adequately addressed the Study’s scientific, technical and clinical questions, as per the approved Study design and clinical protocol. The MSAB recommended the Company to successfully conclude the Study based on the six patients treated to date and suggested that the Company pursue a pivotal Phase II NMIBC clinical study approval with Health Canada and the FDA with efficacy as the primary objective.

On June 6, 2018, the Company demonstrated the 36-month long term stability of TLD-1433. TLD-1433 demonstrated that its purity has been virtually unchanged over 9, 12, 18, 24 and 36 months of long term stability testing, indicating extreme stability of the compound.

In June 2018, Theralase® researchers, specifically UHN and the University of Toronto, received an Ontario Research Fund – Research Excellence (“ ORF-RE ”) grant with a primary mandate of advancing personalized AntiCancer PDT for individual cancer patients to destroy their particular cancer safely and effectively, while maximizing quality of life for them. The ORF-RE grant valued at $4.5 million, with financial and technical support provided by world-class industrial and institutional partners, such as IBM Canada and Altera (Intel). Through the ORF-RE grant, the Company hopes to leverage academic resources to create value for both cancer patients and shareholders, while advancing Theralase’s innovative technology through various pre-clinical and clinical stages with an objective of commercialization.

On June 11, 2018, the Company presented significant benefits of its Rutherrin® (TLD-1433 + transferrin) formulation in comparison to a clinically approved PDC Amino Levulinic Acid (“ ALA ”), in the destruction of rat glioma brain tumours, representative of GBM, a deadly form of human brain cancer. Theralase® researchers demonstrated that Rutherrin® is able to provide a significant (up to 400%) improvement in survival in animals treated with Rutherrin® versus IV injection of ALA and subsequent laser light activation. They also observed an increased number of anti-tumour specific immune cells in brain tissue treated with Rutherrin® versus ALA treated animals. This is quantified by observing the density of intratumoural, anti-cancer CD8+ T cells in GBM tumors.

On June 22, 2018, the Company was issued a Notice of Allowance for the U.S. Patent Application No. 15/291,025: “ Metal-Glycoprotein Complexes and Photodynamic Therapy of Immune Privileged Sites With Same ” that encompasses the Company’s Rutherrin® based PDT for the treatment of cancers localised in immune privileged sites, such as: the eyes, brain and testis.

On July 16, 2018, the Company announced patient five, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 180 day clinical cystoscopy and urine cytology assessment.

On August 13, 2018, the Company announced patient six, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 180 day clinical cystoscopy and urine cytology assessment.

On September 4, 2018, Theralase® researchers were invited to present their latest research at the international conference, “Photodynamic Therapy and Photodiagnostics Update” held in Kochel am See (near Munich, Germany) from September 18 to 22, 2018. The “Photodynamic Therapy and Photodiagnostics Update” conference is a highly regarded event in the field of PDT bringing together researchers and clinicians working in all fields of PDT and Photo Diagnosis to foster scientific development of this technology in the fields of biology and medicine.

On September 10, 2018, Health Canada approved the Company’s CTA, allowing clinical study evaluation of Theralase’s lead anti-cancer drug, TLD-1433. The CTA approval allowed Theralase® to authorize clinical oncology sites in Canada to enroll and treat patients in a pivotal Phase II study titled “ A Phase II Clinical Study of Intravesical Photo Dynamic Therapy in Patients with BCG Unresponsive Non-Muscle Invasive Bladder Cancer or Patients Who are Intolerant to BCG Therapy ”.

On October 3, 2018, the Company completed a non-brokered private placement of 3,157,059 units at a price of $0.35 per unit for aggregate gross proceeds of $1,104,970. Each unit consisted of one Common Share and one Warrant. Each Warrant entitles the holder to acquire an additional Common Share at an exercise price of $0.50 per share expiring on October 3, 2020, which was subsequently extended to October 3, 2022. An aggregate of 920,000 units representing gross proceeds of $322,000 were issued to certain insiders of the Company.

On October 9, 2018, Theralase® affiliated researchers presented immunohistochemical analytical data supporting the use of TLD-1433 PDT in the destruction of gastrointestinal dysplasia and esophageal cancer. The aim of the research was to characterize CD71 expression in human samples of esophageal carcinomas and their precursor lesions. Remarkably, moderate to strong CD71 staining was seen almost universally (97.2%) in both squamous cell carcinoma and adenocarcinoma. There was a significantly stronger expression of CD71 in high grade dysplasia and carcinomas versus low grade dysplasia and normal squamous mucosa tissues (p <0.02). This research was presented at the annual Canadian Academy of Pathology Meeting held in Quebec City, Quebec, Canada from July 7 to 10, 2018.

On November 8, 2018, the Company announced patient five, enrolled and treated in the Study, demonstrated no tumour recurrence, progression or presence of NMIBC disease at the 270 day clinical cystoscopy and urine cytology assessment.

On November 15, 2018, the Company was granted a Canadian patent entitled “ Metal-Glycoprotein Complexes and Their Use as Chemotherapeutic Compounds ”. The Canadian patent is important in protecting Theralase®’s systemic and targeted ACT to allow PDCs and their associated drug formulations to be systemically injected to hunt and destroy cancer cells for various cancer conditions.

On November 30, 2018, the Company announced that Theralase®’s Rutherrin® PDT had been shown to increase its efficacy in cancer treatments, inducing a cancer specific immune response, by switching the so-called “Don’t eat me” signal to an “Eat me” signal on treated human glioblastoma cells. This switch in cellular signaling improves the uptake of treated cancer cells by immune cells, such as: Antigen Presenting Cells (“ APCs ”) (i.e.: macrophages and dendritic cells). APCs are a part of the immune system, with a primary responsibility of destroying foreign cells, such as bacteria and viruses, while also destroying dead and dying cells such as cancer cells, if they can detect them. Data obtained in human glioma cell line U87 showed that more than 40% of the dying cells in a Rutherrin® PDT treated group show extra cellular expression of Calreticulin (“ CRT”) (“Eat me” signal), compared to less than 20% of cells in controls (untreated). In the same set of experiments, the “Don’t eat me” signals were decreased in Rutherrin® PDT treated cells, showing a 45% decrease in CD47 expression. With an increase in CRT (“Eat me”) signal and a decrease in CD47 (“Don’t eat me”) signal, there is a strong immune response in the destruction of cancer cells versus control.

On December 10, 2018, Health Canada granted the Company ITA approval to utilize its patent pending TLC-3200, in conjunction with its CTA approved lead PDC, TLD-1433, to commence enrolling and treating patients in Study II subject to submitting a Clinical Trial Site Information Form and receipt of their respective Research Ethics Board approval for each Canadian oncology location that will conduct Study II.

Significant Acquisitions:

There were no significant acquisitions completed by Theralase® during its most recently completed financial year for which disclosure is required under Part 8 of National Instrument 51-102 – Continuous Disclosure Obligations .

Risk Factors

The Company’s operations involve certain risks and uncertainties, including those described below, that are inherent to the Company’s industry which could materially adversely affect Theralase®’s business, financial condition and results of operations and, in turn, the value of its securities. In addition, other risks not presently known to the Company or that Theralase® currently believes to be immaterial may also adversely affect its business, financial condition and results of operations, perhaps materially.

COVID-19 Pandemic

In March 2020, the World Health Organization (“ WHO ”) declared the outbreak of COVID-19 as a global pandemic, which continues to spread throughout Canada and around the world. As of the date of this AIF, the Corporation is aware of significant changes in its business as a result of COVID-19, notably: reduced workforce, personnel working remotely or virtually, delays in the enrollment of patients into clinical research studies and delays / outright cancellations in customer purchasing decisions. Management is uncertain of the full extent that these impacts may have on its financial statements and believes that the business disruption caused by COVID-19 could be temporary; however, there is uncertainty surrounding its duration and the restrictions that local, provincial and federal governments may impose on businesses and the community at large; hence, the potential impact on the business cannot be fully estimated as of the date of this AIF. All Canadian clinical study sites have recommenced new patient enrollment and treatment in the Company’s Phase II Non-Muscle Invasive Bladder Cancer (“ NMIBC ”) clinical study, following such Clinical Study Sites (“ CSSs ”) having been placed on hold temporarily on March 20, 2020, due to the COVID-19 pandemic. Theralase® continues to experience reduced sales in its CLT division due to the ongoing COVID-19 pandemic and has taken actions to reduce expenses by eliminating non-essential personnel and imposing a temporary hiring freeze, to be lifted subject to the Canadian and United States economies demonstrating sustainable recovery from COVID-19. COVID-19 is expected to have a material impact on the market and could also impact the ability of the Company to obtain financial resources in the future. COVID-19 can cause disruptions to the Company’s business and operational plans including; shortages of employees, interruption of supplies from third parties upon which the Company relies, restrictions that governments impose to address the COVID19 outbreak, and restrictions that the Company imposes to ensure the safety of employees and others. At this time, it is not possible to reliably estimate the financial impact of the length or severity of COVID-19 on the business and operations of the Company.

Limited Operating History

The Company is still in the research, development and commercialization stage of its businesses and therefore will be subject to the risks associated with early stage companies, including uncertainty of the success and acceptance of its products, uncertainty of revenues, markets and profitability and the continuing need to raise additional capital. The Company’s business prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in this stage of development. Such risks include the evolving and unpredictable nature of the Company’s business, the Company’s ability to anticipate and adapt to a developing market, acceptance by consumers of the Company’s products, the ability to identify, attract and retain qualified personnel and the ability to generate sufficient revenue or raise sufficient capital to carry out its business plans. There can be no assurance that the Company will be successful in adequately mitigating these risks.

Working Capital and Capital Resources

The Company has not been able to consistently generate sufficient profits from its revenue to provide the financial resources necessary to continue to have sufficient working capital for the development of its products and marketing activities. There is no assurance that future revenues will be sufficient to generate the required funds to continue product development, business development or marketing activities or that additional funds required for such working capital will be available from financings.

In order to achieve its long-term development and commercialization strategy for the Company’s CLT and ACT divisions, the Company may need to raise additional capital through the issuance of shares, collaboration agreements or strategic partnerships that would allow the Company to finance its activities. There is no assurance that additional funds will be available as required or that they may be available on acceptable terms and conditions. Additional financing may also result in dilution of shareholder value.

Key Personnel

The Company’s success is dependent upon its ability to attract and retain a highly qualified work force, and to establish and maintain close relationships with research centers. Competition is intense and the Company’s success will depend, to a great extent, on its senior and executive managers, scientific personnel and academic partners. The loss of one or more of its key employees or the inability to attract and retain highly skilled personnel could have a material adverse effect on the Company’s development of its products, operations or business prospects.

Protection of Intellectual Property

The Company’s success will depend in part on its ability to obtain patents, protect its trade secrets and operate without infringing the exclusive rights of other parties. There is no guarantee that any patent that will be granted to the Company will bring any competitive advantage to the Company, that its patent protection will not be contested by third parties or that the patents of competitors will not be detrimental to the Company’s commercial activities. It cannot be assured that competitors will not independently develop products similar to the Company’s products, that they will not imitate the Company’s products or that they will not circumvent or invalidate patents granted to the Company.

Although the Company does not believe that its products infringe the proprietary rights of any third parties, there can be no assurance that infringement or invalidity claims (or claims for indemnification resulting from infringement claims) will not be asserted or prosecuted against the Company or that any such assertions or prosecutions, valid or otherwise, will not materially adversely affect the Company’s business, financial condition or results of operations. Irrespective of the validity of the successful assertion of such claims, the Company could incur significant costs and diversion of resources with respect to the defense thereof, which could have a material adverse effect on the Company. The Company’s performance and ability to develop markets and compete effectively are dependent to a significant degree on its proprietary and patented technology. The Company relies on its patents and trade secrets, as well as confidentiality agreements and technical measures, to establish and protect its proprietary right. While the Company will endeavor to protect its intellectual property, there can be no assurance that the steps taken will prevent misappropriation or that agreements entered into for that purpose will be enforceable. The laws of certain other countries may afford the Company little or no effective protection of its intellectual property.

Competition

Many of the Company’s current and potential competitors have longer operating histories, larger customer bases, greater name and brand recognition and significantly greater financial, sales, marketing, technical and other resources than the Company. These competitors have research and development capabilities that may allow them to develop new or improved products that may compete with the Company’s products. New

technologies and the expansion of existing technologies may also increase competitive pressures on the Company. Increased competition may result in reduced operating margins as well as loss of market share and could result in decreased usage in the Company’s products and may have a material adverse affect on the Company.

Implementation Delays

Many of the Company’s products will be in a testing or preliminary stage and there may be delays or other problems in the introduction of the Company’s products. The Company cannot predict when customers that are in a testing or preliminary use phase of the Company’s products will adopt a broader use of the products. The market for the Company’s products is relatively new and continues to evolve. The Company’s products will involve changes in the manner in which businesses have traditionally used such products. In some cases, the Company’s customers will have little experience with products offered by the Company. The Company will have to spend considerable resources educating potential customers about the value of the Company’s products. It is difficult to assess, or predict with any assurance, the present and future size of the potential market for the Company’s products or its growth rate, if any. The Company cannot predict whether or not its products will achieve market acceptance.

Strategic Alliances

The Company’s ability to successfully complete the research and development of its products and its growth and marketing strategies are based, in significant part, on the strategic alliances it has in place and the licenses and agreements securing those strategic alliances. The Company’s success will depend upon the ability to seek out and establish new strategic alliances and working relationships. There can be no assurance that existing strategic alliances and working relationships will not be terminated or adversely modified in the future, nor can there be any assurance that new relationships, if any, will afford the Company the same benefits as those currently in place.

Trade Secret Protection

Because the Company relies on third parties to develop its products, the Company must share trade secrets with them. The Company seeks to protect its proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with its collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information. These agreements typically restrict the ability of its collaborators, advisors, employees or consultants to publish data potentially relating to its trade secrets. The Company’s academic collaborators typically have rights to publish data, provided that the Company is notified in advance and may delay publication for a specified time in order to secure its intellectual property rights arising from the collaboration. In other cases, publication rights are controlled exclusively by the Company, although in some cases the Company may share these rights with other parties. The Company also conducts joint research and development programs, which may require the Company to share trade secrets under the terms of research and development collaboration or similar agreements. Despite the Company’s efforts to protect its trade secrets, the Company’s competitors may discover the Company’s trade secrets, either through breach of these agreements, independent development or publication of information including the Company’s trade secrets in cases where the Company does not have proprietary or otherwise protected rights at the time of publication. A competitor’s discovery of the Company’s trade secrets may impair the Company’s competitive position and could have a material adverse effect on the Company’s business and financial condition.

Product Deficiencies

Given that the Company’s products are either fairly new, or are in stages of development, there may be difficulties in product design, performance or reliability which could result in lost revenue, delays in customer acceptance of the Company’s products and legal claims against the Company, which would be detrimental, perhaps materially to the Company’s market reputation or ability to generate further sales. Serious defects are

frequently found during the period immediately following the introduction of new products or enhancements to existing products and undetected errors or performance problems may be discovered in the future. Product defects may expose the Company to liability claims, for which the Company may not have sufficient liability insurance.

Dependence on Third Party Suppliers

The Company has established relationships with certain third-party suppliers upon whom, it relies to provide key materials and components for completion of its products. In the event of the inability of these third parties to supply such materials and components in a timely manner or to supply materials and components that continue to meet the Company’s quality, quantity or cost requirements, the Company would be required to purchase these materials and components from other suppliers. There is no assurance that other suppliers can be found in such circumstances who can supply the materials and components in a timely manner or that meet the Company’s quality, quantity or cost requirements.

Volatility of Share Price

The market price of the Common Shares is subject to volatility. General market conditions as well as differences between the Company’s financial, scientific or clinical results, and the expectations of shareholders, investors and/or securities analysts can have a significant impact on the trading price of the Common Shares.

Regulatory Risk

The Company is directly and indirectly engaged in the design, manufacture and distribution of medical laser equipment, as well as the research and development of light activated PDCs, all of which are subject to regulatory oversights, audits and controls by various national regulatory agencies and authoritative quality standards bodies, which all possess strict quality certification procedures. Successful execution of the Company’s strategy is contingent, in part, upon compliance with regulatory requirements, including those under the Settlement Agreement, and obtaining all regulatory approvals, where necessary. The Company incurs ongoing costs and obligations related to regulatory compliance. Failure to comply with regulations may result in additional costs for corrective measures, penalties or restrictions on the Company’s operations. In addition, changes in regulations, more vigorous enforcement thereof or other unanticipated events could require extensive changes to the Company’s operations, increased compliance costs or give rise to material liabilities, which could have a material adverse effect on the business, financial condition and/or operating results of the Company.

Early Stage of Product Development

Given the early stage of the Company’s product development, the Company can make no assurance that its research and development programs will result in regulatory approval or commercially viable products. To achieve profitable operations, the Company alone or with others, must successfully develop, gain regulatory approval and market its future products. To obtain regulatory approvals for its product candidates being developed and to achieve commercial success, clinical studies must demonstrate that the product candidates are safe and tolerable for human use and that they demonstrate efficacy equal to or greater than standard of care.

Many product candidates never reach the stage of clinical testing and even those that do have only a small chance of successfully completing clinical development and gaining regulatory approval. Product candidates may fail for a number of reasons, including, but not limited to: being unsafe for human use or due to the failure to provide therapeutic benefits equal to or better than the standard of treatment at the time of testing. Unsatisfactory results obtained from a particular clinical study relating to a research and development program may cause the Company or its collaborators to abandon commitments to that program. Positive results of early preclinical research may not be indicative of the results that may be obtained in later stages of preclinical or clinical research. Similarly, positive results from early-stage clinical studies may not be indicative of favorable

outcomes in later-stage clinical studies. The Company can make no assurance that any future preclinical or clinical studies, if undertaken, will yield favorable results.

Reliance on Third Parties

The Company relies and will continue to rely on third parties to conduct a significant portion of its preclinical and clinical development activities. Preclinical activities include: in-vitro and/or in-vivo studies providing access to specific disease models, pharmacology studies, toxicology studies or assay development. Clinical development activities include: clinical study design, regulatory submissions, clinical patient recruitment, clinical study monitoring, clinical data management and analysis, safety monitoring and project management. If there is any dispute or disruption in the Company’s relationship with third parties, or if they are unable to provide quality services in a timely manner or at a feasible cost, the Company’s active development programs may face delays. Further, if any of these third parties fails to perform as the Company expects or if their work fails to meet regulatory requirements, the Company’s testing could be delayed, cancelled or rendered ineffective.

Clinical Study and Study Risk

Before obtaining marketing approval from regulatory authorities for the sale of the Company’s product candidates, the Company must conduct preclinical studies in animals and extensive clinical studies in humans to demonstrate the safety, tolerability, pharmacokinetics and/or efficacy of the product candidates. Clinical testing is expensive and difficult to design and implement, can take many years to complete and has uncertain outcomes. The outcome of preclinical studies and early clinical studies may not predict the success of later clinical studies, and interim results of a clinical study do not necessarily predict final results. A number of companies in the pharmaceutical or biotechnology industries have suffered significant setbacks in advanced clinical studies due to lack of efficacy or unacceptable safety profiles, notwithstanding promising results in earlier studies. The Company does not know whether the clinical studies it may conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market any of the Company’s product candidates in any jurisdiction. A product candidate may fail for safety, tolerability, pharmacokinetics and/or efficacy reasons at any stage of the testing process. A major risk the Company faces is the possibility that none of the Company’s product candidates under development will successfully gain market approval from Health Canada, the FDA or other regulatory authorities, resulting in the Company being unable to derive any commercial revenue from them after investing significant amounts of capital in multiple stages of preclinical and clinical studies.

From time to time, preclinical and/or clinical studies on various aspects of biopharmaceutical products are conducted by academic researchers, competitors or others. The results of these studies, when published, may have a significant effect on the market for the biopharmaceutical product that is the subject of the study. The publication of negative results of clinical studies or adverse safety events related to the Company’s product candidates, or the therapeutic areas in which the Company’s product candidates compete, could adversely affect the Company’s share price and the Company’s ability to finance future development of its product candidates; hence, the Company’s business and financial results could be materially and adversely affected.

Clinical Study Timing Delays

The Company cannot predict whether any clinical studies will begin as planned, will need to be restructured, or will be completed on schedule, or at all. The Company’s product development costs may significantly increase if the Company experiences delays in clinical studies. Significant clinical study delays could shorten any periods during which the Company may have the exclusive right to commercialize its product candidates or allow the Company’s competitors to bring products to market before the Company, which would impair the Company’s ability to successfully commercialize its product candidates and may harm the Company’s financial condition, results of operations and / or prospects.

The commencement and completion of clinical studies for the Company’s products may be delayed for a number of reasons, including delays related, but not limited, to:

failure by regulatory authorities to grant permission to proceed or placing the clinical study on clinical hold;
patients failing to enroll or remain in the Company’s studies at the rate the Company expects;
suspension or termination of clinical studies by regulators for many reasons, including concerns about patient safety, tolerability, pharmacokinetics and/or efficacy
any changes to the Company’s manufacturing process that may be necessary or desired;
delays or failure to obtain clinical supply from contract manufacturers of the Company’s products necessary to conduct clinical studies;
product candidates demonstrating a lack of safety, tolerability, pharmacokinetics and/or efficacy during clinical studies;
patients choosing an alternative treatment for the indications for which the Company is developing any of its product candidates or participating in competing clinical studies;
patients failing to complete clinical studies due to dissatisfaction with the treatment, side effects and/or other reasons;
reports of clinical testing on similar technologies or products raising safety, tolerability, pharmacokinetics and/or efficacy concerns;
competing clinical studies and scheduling conflicts with participating clinicians;
clinical investigators not performing the Company’s clinical studies on their anticipated schedule, dropping out of a study or employing methods not consistent with the clinical study protocol, regulatory requirements or other third parties not performing data collection or analysis in a timely or accurate manner;
failure of the Company’s Clinical Research Organizations, to satisfy their contractual duties or meet expected deadlines;
inspections of clinical study sites by regulatory authorities or Institutional Review Boards (“ IRBs ”) or ethics committees finding regulatory violations that require the Company to undertake corrective action, resulting in suspension or termination of one or more sites or the imposition of a clinical hold on the entire study;
one or more CROs, IRBs or ethics committees rejecting, suspending or terminating the clinical study at an investigational site, precluding enrollment of additional subjects, or withdrawing its approval of the study; or
failure to reach agreement on acceptable terms with prospective clinical study sites.

The Company’s product development costs may increase if the Company experiences delays in testing or approval or if the Company needs to perform more or larger clinical studies than planned. Additionally, changes in regulatory requirements and policies may occur, and the Company may need to amend study protocols to reflect these changes. Amendments may require the Company to resubmit its study protocols to CROs, regulatory authorities, IRBs or ethics committees for re-examination, which may impact the cost, timing or successful completion of that study. Delays or increased product development costs may have a material adverse effect on the Company’s business, financial condition or prospects.

Patient Enrollment

As the Company’s product candidates advance from preclinical studies to clinical studies, and then through progressively larger and more complex clinical studies, the Company may need to enroll an increasing number of patients that meet the Company’s eligibility criteria. There is significant competition for recruiting cancer patients in clinical studies and the Company may be unable to enroll the patients it needs to complete clinical studies on a timely basis or at all. The factors that affect the Company’s ability to enroll patients are largely uncontrollable and include, but are not limited to, the following:

size and nature of the patient population;
eligibility, inclusion and exclusion criteria for the study;
design of the clinical study protocol;
competition with other companies for clinical sites or patients;
the perceived risks and benefits of the product candidate under study;
the patient referral practices of physicians; or
the number, availability, location or accessibility of clinical study sites

Failure to Achieve Milestones

From time to time, the Company may announce the timing of certain events it expects to occur, such as the anticipated timing of results from the Company’s clinical studies or product sales. These statements are forwardlooking and are based on the best estimates of management at the time relating to the occurrence of such events; however, the actual timing of such events may differ from what has been publicly disclosed. The timing of events such as initiation or completion of a clinical study, filing of an application to obtain regulatory approval or announcement of additional clinical studies for a product candidate or adoption / sales of the Company’s products may ultimately vary from what is publicly disclosed. These variations in timing may occur as a result of different events, including the nature of the results obtained during a clinical study or during a research phase or any other event having the effect of delaying the publicly announced timeline. The Company undertakes no obligation to update or revise any FLS; whether as a result of new information, future events or otherwise, except as otherwise required by law. Any variation in the timing of previously announced milestones could have a material adverse effect on the Company’s business plan, financial condition or operating results and the trading price of the Common Shares.

Material Weakness in Internal Control Over Financial Reporting

In connection with the audits of Theralase’s consolidated financial statements for the years ended December 31, 2020 and 2019, the Company’s independent registered public accountants identified a material weakness in its internal control over financial reporting. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness relates to not having a full segregation of duties within members of the Company’s accounting staff dedicated to financial reporting functions so that all journal entries and account reconciliations are reviewed by someone other than the preparer, heightening the risk of error or fraud, and a proper system for updating inventory values as of the end of each reporting period. If the Company is unable to remediate the material weakness, or other control deficiencies are identified, it may not be able to report its financial results accurately, prevent fraud or file its periodic reports as a public company in a timely manner.

Currency Risk

The Company’s primary risks are exposure to foreign currency exchange risk. These risks arise from the Company’s holdings of US or Canadian dollar denominated cash, accounts receivable or accounts payable. Changes arising from these risks could impact the Company’s reported foreign exchange gains or losses. The Company limits its exposure to foreign currency risk by holding US denominated cash in amounts of up to 100% of forecasted twelve month US dollar expenditures; thereby, creating a natural hedge against foreign currency fluctuations and limiting foreign currency risk to translation of US dollar balances at the balance sheet date.

Credit Risk

Credit risk is the risk of financial loss to the Company, if a customer or counter party to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s accounts receivable. The amounts reported in the balance sheet are net of allowances for bad debts, estimated by the Company’s management based on prior experience and their assessment of the current economic environment. The

Company reviews its trade receivable accounts regularly and reduces amounts to their expected realizable values by adjusting the allowance for doubtful accounts as soon as the account is determined not to be fully collectible. The Company has adopted credit policies in an effort to minimize these risks.

Product Liability

The Company has obtained product liability insurance coverage in the aggregate of $5,000,000. This coverage is limited and a product liability claim could potentially be greater than this coverage. The Company’s profitability would be adversely affected by any successful product liability claim in excess of its insurance coverage.

Clinical Trial Liability

The Company has obtained clinical study liability insurance coverage in the aggregate of $5,000,000. This coverage is limited and a clinical study liability claim could potentially be greater than this coverage. The Company’s profitability would be adversely affected by any successful product liability claim in excess of its insurance coverage.

Patent-Related Rights of the U.S. Government in PDT Technology

Some of Theralase’s licensed patented PDT technology was developed with US federal government funding. When new technologies are developed with US government funding, the government obtains certain rights in any resulting patents, including a nonexclusive license authorizing the government to use the invention for noncommercial purposes. These rights may permit the government to disclose Theralase’s confidential information to third parties and to exercise “march-in” rights to use or allow third parties to use Theralase’s patented technology. The government can exercise its march-in rights if it determines that action is necessary because Theralase® fails to achieve practical application of the U.S. government-funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations or to give preference to US industry. In addition, US government-funded inventions must be reported to the government and U.S. government funding must be disclosed in any resulting patent applications. Furthermore, Theralase’s rights in such inventions are subject to government license rights and certain restrictions on manufacturing products outside the United States.

Dividends and Distributions

The Company has not previously paid any dividends on its Common Shares. The Company is not restricted from paying dividends other than pursuant to certain solvency tests prescribed under the CBCA; however, the Company does not intend to pay dividends on any of its securities in the foreseeable future.

Description of Capital Structure

The Company’s authorized share capital consists of an unlimited number of Common Shares, of which 204,275,875 Common Shares were issued and outstanding as of June 3, 2021.

The holders of Common Shares are entitled to receive notice of and to attend all annual and special meetings of Theralase®’s shareholders and to one vote in respect of each Common Share held at the record date for each such meeting. The holders of Common Shares are entitled, at the discretion of the Board of Directors of the Company (“ Board ”), to receive out of any or all of Theralase®’s profits or surplus, properly available for the payment of dividends, any dividend declared by the Board and payable by Theralase® on the Common Shares. The holders of the Common Shares will participate pro rata in any distribution of the assets of Theralase® upon liquidation, dissolution or winding up or other distribution of the assets of Theralase®. Such participation will be subject to the rights, privileges, restrictions and conditions attached to any of Theralase®’s securities issued and outstanding at such time ranking in priority to the Common Shares upon the liquidation, dissolution or winding up of Theralase®.

The Company adopted a stock option plan under which it is authorized to grant options to officers, directors, employees and consultants enabling them to acquire Common Shares of the Company. The maximum number of Common Shares reserved for issuance of stock options that may be granted under the plan is 10% of the issued and outstanding Common Shares of the Company from time to time. Options granted under the plan have a term of five years and vest as determined by the Board. As of June 3, 2021, 2020, there were 14,130,000 options outstanding to purchase Common Shares. A copy of the stock option plan can be found in the Company’s management information circular dated May 31, 2021 filed on SEDAR.

As of June 3, 2021, there were 14,130,000 options outstanding, of which 6,730,000 were vested and exercisable into an equivalent number of the Company’s common shares. See “ Market for Securities – Prior Sales ”.

As of June 3, 2021, there were 72,473,931 warrants outstanding. Each whole warrant entitles the holder thereof to purchase one additional common share. The warrants are exercisable as follows: 4,555,266 at a price of $0.375 until November 10, 2021, 3,165,009 at a price of $0.50 until October 3, 2022, 4,095,157 at a price of $0.50 until January 9, 2023, 3,159,000 at a price of $0.30 until May 14, 2022 and 57,499,500 at a price of $0.30 until August 22, 2024. See “ Market for Securities – Prior Sales ”.

As of June 3, 2021 there were 2,023,077 broker compensation units that were issued in connection with the August 22, 2019 public offering. Each broker compensation unit entitles the holder thereof to acquire one common share and one common share purchase warrant at a price of $0.35 per unit until August 22, 2024. See “ Market for Securities – Prior Sales ”.

Market for Securities

Market Listing

The Common Shares are listed and posted for trading on the TSX Venture Exchange (“ TSXV ”) under the symbol “ TLT ” and on the Over the Counter (“ OTCQB ”) Open Market under the symbol “ TLTFF ”.

Trading Price and Volume

The following table sets forth the highest and lowest trading price ranges (high/low), closing price and the aggregate monthly volume of trading of the Common Shares on the TSXV for the twelve-month period ended December 31, 2020:

Month / Year	High Price ($)	Low Price ($)	Close ($)	Volume
January2020	0.38	0.27	0.28	7,898,300
February2020	0.30	0.25	0.26	5,045,700
March 2020	0.32	0.14	0.19	10,218,800
April 2020	0.25	0.17	0.21	6,552,500
May2020	0.30	0.21	0.25	5,634,700
June 2020	0.26	0.23	0.23	3,622,900
July2020	0.25	0.16	0.17	7,494,400
August 2020	0.25	0.16	0.19	10,679,500
September 2020	0.19	0.14	0.14	6,733,800
October 2020	0.16	0.13	0.13	7,823,300
November 2020	0.24	0.12	0.19	13,765,900

Month / Year	High Price ($)	Low Price ($)	Close ($)	Volume
December 2020	0.23	0.18	0.19	4,611,400

Prior Sales

The Company did not issue any class of securities that is not listed or quoted on a marketplace during the year ended December 31, 2020.

Escrowed Securities and Securities Subject to Contractual Restriction on Transfer

There are no securities of the Company that are held, to the Company’s knowledge, in escrow, or that are subject to a contractual restriction on transfer.

Directors and Officers

Directors

The name, province and country of residence of each director of the Company as of the date of this AIF, as well as their respective position(s) and office(s) with the Company, their respective principal occupations during the five preceding years, and the period during which each director has served as a director are provided in the table below:

Name and Municipality of Residence	Position and office with the Corporation	Year First became Director	Principal Occupation (last 5 years)	Number/Percentage of Outstanding Common Share of the Corporation Held
Matthew Perraton(3, 4, 5, 7) Toronto,Ontario	Chairman of the Board	2013	Director of the Corporation, Financial Planner,Aligned Capital	0 / 0.0%
Guy Anderson(2, 4, 5, 7) Toronto, Ontario	Director	2013	Director of the Corporation, Wealth Management and Personal Finance Advisor,Aligned Capital	656,349 / 0.32%
Randy Bruder(2, 4, 6, 7) Brampton, Ontario	Director	2008	Director of the Corporation, Owner /Operator of The Grainery, (wholesale and retail food processingbusiness)	1,736,174 / 0.85%
Arkady Mandel Toronto, Ontario	Chief Scientific Officer and Director	2018	Chief Scientific Officer of the Corporation and of Theralase Inc. (1)	60,000/0.03%
Kristina Hachey Toronto, Ontario	Chief Financial Officer and Director	2019	Chief Financial Officer of the Corporation and of Theralase Inc. (1)	1,706,267 / 0.83%
Total				4,158,790/ 2.04%

Notes: (1) Theralase Inc. is a wholly-owned subsidiary of the Corporation.

(2) Member of the Audit Committee.

(3) Chairman of the Audit Committee.

(4) Independent Director.

(5) Member of the Governance and Compensation Committee.

(6) Chairman of the Governance and Compensation Committee.

(7) Member of the Disclosure Committee.

Each of the directors has served continuously as a director following each re-appointment since the date he or she was first elected or appointed.

The present term of each director will expire immediately prior to the election of directors at the next annual meeting of shareholders, or when the director resigns or a successor is duly elected or appointed.

Medical and Scientific Advisory Board (“MSAB”)

Dr. Ashish Kamat, Member:

Ashish Kamat MD, MBBS, is a Professor of Urologic Oncology (Surgery) and Wayne B. Duddlesten Professor of Cancer Research, University of Texas, MD Anderson Cancer Center. Dr. Kamat is an internationally recognized expert in urologic oncology and an authority in the management of urologic cancers. Dr. Kamat’s expertise includes bladder cancer, organ sparing and minimally invasive techniques. Dr. Kamat maintains an active research portfolio with a focus on efforts to develop novel therapies and identifying predictors of response to therapy (i.e.: intravesical immunotherapy), as a first step towards personalized cancer therapeutics. He has initiated, led and been active in several large studies including multinational trials in bladder cancer, with findings published in high impact journals.

Dr. Michael O’Donnell, Member:

Michael O’Donnell MD, is a Professor of Urology, University of Iowa, Iowa City, Iowa. Dr. O’Donnell has a long history of focusing on bladder immunology and bladder cancer immunotherapy, particularly the anti-cancer mechanisms of BCG and its enhancement with combination therapies. Dr. O’Donnell recently headed a national trial of bladder cancer treatment utilizing BCG plus interferon (a natural protein which induces healthy cells to combat disease) comprised of over 1,000 patients and holds several U.S. patents for his work.

Officers

Officers hold their offices until the meeting of the Board following the annual meeting of the shareholders of the Company following their nomination or until their successors are appointed.

The name, province and country of residence of each executive officer of the Company as of the date of this AIF, their respective position(s) and office(s) held with the Company, and their respective occupations during the five preceding years is provided in the following table:

Names and Residency	Position(s) and Office(s) with the Company	Principal Occupation (Past 5 years)
Shawn Shirazi, Ontario, Canada	Chief Executive Officer	Chief Executive Officer of the Company; and President and CEO of Nature’s Factory Ingredients Ltd. (June 2012 to February 2019)
Arkady Mandel Ontario, Canada	Director, Chief Scientific Officer	Chief Scientific Officer of the Company; and Former Interim Chief Executive Officer (February2018 to February2019)
Kristina Hachey Ontario, Canada	Director, Chief Financial Officer	Chief Financial Officer of the Company

Dr. Shawn Shirazi, Ph.D., M.Sc., B.Sc. – Chief Executive Officer

Dr. Shirazi, obtained his B.Sc. in Chemistry from York University (Toronto, Ontario, Canada) and a M.Sc. and Ph.D. in Pharmacology from the University of Ottawa (Ottawa, Ontario, Canada).

Dr. Shirazi brings over 20 years of hands-on experience in: pharmaceutical drug formulation and development, clinical trial management, Good Manufacturing Practices (“ GMP ”) international drug manufacture, international regulatory guidelines and quality assurance in GMP drug manufacture. He has held senior roles with both startups and large pharmaceutical organizations, including: Executive Director and Vice President of Research and Development for Torpharm Inc (Division of Apotex), Senior Director Global Research and Development of Perrigo Company (NYSE: PRGO) and Chief Operating Officer – North America for Daxinganling Lingonberry Boreal Biotech Co . Ltd . (Leading manufacturer of high quality plant extracts, based in China), During his career, Dr. Shirazi has led the generic drug development programs for numerous pharmaceutical organizations, resulting in multiple “First To File” drug applications, allowing product exclusivity, as well as global leadership of research and development and merger and acquisition portfolios.

Dr. Arkady Mandel, M.D., Ph.D., DSc. – Chief Scientific Officer and Director

Dr. Mandel earned his designation as a medical doctor from the Moscow State Medical University in 1978. His medical residency included internships in dermatology, infectious diseases, urology and venereal diseases at the Central Research Institute of Dermatology and Venerology in 1980, followed by a Ph.D. from the same institution in 1982. Dr. Mandel was then awarded, in recognition of his scientific knowledge, original research, publications and extensive contributions to the field of clinical medicine the highest academic research degree in science, that of a Doctor of Science. Dr. Mandel’s Doctor of Science accreditation majored in biochemistry, microbiology, immunology, biophysics, and photobiology, and was awarded jointly from the Academy of Sciences and the U.S.S.R. Ministry of Public Health in 1989. Dr. Mandel is one of the key founders of the therapeutic use of lasers in dermatology and other areas of clinical medicine, as well as the originator and developer of phototherapy methods that offer numerous benefits to patients throughout the world.

Kristina Hachey, CPA – Chief Financial Officer and Director

Ms. Hachey earned her designation as a CPA in 2002. Ms. Hachey graduated from Ryerson University with a bachelor’s degree in business management and Administration, majoring in Accounting and Finance, minoring in International Business. Ms. Hachey has been employed as Theralase’s Chief Financial Officer since May 2004. Prior to joining Theralase, Ms. Hachey served as VP Finance of Kensington Capital Partners from April 1998 to May 2004.

Shareholdings of Directors and Executive Officers

As of the date of this AIF, the directors and officers of the Company collectively beneficially own, or control or direct, directly or indirectly, 4,158,790 Common Shares, representing approximately 2.04% of the issued and outstanding Common Shares as of such date on a non-diluted basis, and 14,640,933 Common Shares, representing approximately 5.0 % of the issued and outstanding Common Shares as of such date on a fully diluted basis.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the knowledge of the Company, no current director or executive officer of the Company is, as at the date of this AIF, or was, within ten years before the date of this AIF, a director, Chief Executive Officer or Chief Financial Officer of any company (including Theralase) that:

(a) was the subject of a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemptions under Canadian securities legislation, that was in effect for a period of more than thirty (30) consecutive days, (“ Order ”), that was issued while the director or executive officer was acting in the capacity as director, Chief Executive Officer or Chief Financial Officer; or

(b) was subject to an Order that was issued after the director or executive officer ceased to be a director, Chief Executive Officer or Chief Financial Officer and which resulted from an event that occurred while that person was acting in the capacity as director, Chief Executive Officer or Chief Financial Officer.

To the knowledge of the Company, no current director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company:

(a) is, as at the date of this AIF, or has been within the ten years before the date of this AIF, a director or executive officer of any company (including Theralase) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
(b) has, within the ten years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

(a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
(b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest

Certain of the Company’s directors and officers serve or may agree to serve as directors or officers of other companies or have significant shareholdings in other companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors and officers of the Company may have a conflict of interest in negotiating or concluding terms respecting the extent of such participation. In the event that such a conflict of interest arises at a meeting of the Company’s directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. To the knowledge of the Company, there are no existing or potential material conflicts of interest between Theralase® or any of its subsidiaries or any director or officer of Theralase® or of any of its subsidiaries.

Promoters

No person or company has been, within the two most recently completed financial years, or during the current financial year, of the Company, a promoter of Theralase® or any of its subsidiaries.

Legal Proceedings and Regulatory Actions

Legal Proceedings

Management of the Company is not aware of any legal proceeding that the Company is or was a party to, or that any of its property is or was the subject of, during the Company’s most recently completed financial year. In addition, management of the Company is not aware of any such legal proceeding to be contemplated.

Regulatory Actions

There were no: (a) penalties or sanctions imposed against the Company by a court relating to securities legislation or by a securities regulatory authority during the financial year ended December 31, 2020; (b) other penalties or sanctions imposed by a court or regulatory body against the Company that would likely be considered important to a reasonable investor in making an investment decision; and (c) settlement agreements the Company entered into before a court relating to securities legislation or with a securities regulatory authority during the financial year ended December 31, 2020.

Interest of Management and Others in Material Transactions

To the knowledge of the Company, there hasn’t been any material interest, direct or indirect, of any director or executive officer of the Company, or a person or company that is the direct or indirect beneficial owner of, or who exercises control or direction over, more than 10 percent of any class or series of the outstanding voting securities of the Company, or any associate or affiliate thereof, within the three most recently completed financial years or during the current financial year, that has materially affected or is reasonably expected to materially affect the Company, other than as set out herein.

Transfer Agent and Registrar

The Company’s transfer agent and registrar is TSX Trust Company with offices located in Toronto, Ontario, Canada.

Material Contracts

The Company has not entered into any material contracts within the last financial year, or before the last financial year that is still in effect, other than as disclosed below.

On July 1, 2004, Theralase® Biotech Inc. entered into an exclusive worldwide licensing agreement with Virginia Tech Intellectual Property (“ VTIP ”), the intellectual property office of Virginia Tech, representing Dr. Karen Brewer a chemistry professor at Virginia Tech. The agreement granted Theralase® any and all rights to all allowed claims in intellectual property of United States Patent Application File No. 20030180767 dated September 23, 2003, titled Supramolecular Complexes as Photoactivated DNA Cleavage Agents and in VTIP Invention disclosure #01.124 Molecular Design for Supramolecular Complexes as a Photoactivated DNA Cleavage Agent and all intellectual property rights related to or arising from subsequent improvements by the parties during the currency of the agreement in PDT related therapies and in general, utilizing PDT for medical related applications. Medical related applications; include but are not limited to research and development of the destruction of biological tissue, especially hyperproliferating cells, such as cancer and destruction of microbial entities, such as bacteria. The license will expire ten years following the expiry of the last patent, including improvements. Based on the latest expiry date of the Company’s existing patents, the license is expected to continue in effect until May 21, 2040. In consideration for the license as granted herein, Theralase® agreed to pay VTIP a license issue

fee, license maintenance fee, milestone payments and a royalty of 2.5% of net sales received by Theralase. Each such payment shall be made within thirty days of the end of each quarter.

On September 9, 2011, Theralase® entered into an exclusive worldwide licensing agreement with Dr. Sherri McFarland, a chemistry professor at Acadia University, granting Theralase® any and all rights to all allowed claims in intellectual property of Invention Disclosure dated July 22, 2011 and all intellectual property rights related to or arising from subsequent improvements by the parties during the currency of the agreement in cancer related therapies and in general, utilizing PDT for the following applications: medical, sterilization, cosmetic, bacteria, virus , cancer related therapies or PDT. Medical or sterilization related applications; include but are not limited to research and development of the destruction of biological tissue, especially hyperproliferating cells, such as cancer and destruction of microbial entities, such as bacteria. The license will expire twenty years following the expiry of the last patent, including improvements. Based on the latest expiry date of the Company’s existing patents, the license is expected to continue in effect until April 15, 2053. In consideration for the license as granted herein, Theralase® agreed to pay Dr. Sherri McFarland milestone payments and a royalty of 3% of net sales received by Theralase. Each such payment shall be made within sixty days of the end of each quarter.

On November 10, 2016, the Company entered into a warrant indenture with TSX Trust Company, as warrant agent, governing the terms of up to 20,000,000 common share purchase warrants of the Company issued in connection with an offering of units. Each warrant is exercisable to acquire one common share at a price of $0.375 per share and expires at 5:00 p.m. (Toronto time) on November 10, 2021.

On August 22, 2019, the Company entered into a warrant indenture with TSX Trust Company, as warrant agent, governing the terms of up to 59,800,000 common share purchase warrants issuable pursuant to the Company’s offering of units completed on August 22, 2019. Each warrant expires at 5:00 p.m. (Toronto time) on August 22, 2024.

Interests of Experts

The auditors of the Company are Richter LLP at its office located at 181 Bay Street, Suite 3320, Bay Wellington Tower, Toronto, Ontario. Richter LLP has informed the Company that it is independent with respect to the Company within the meaning of the Code of Ethics of the Chartered Professional Accountants of Canada.

Additional Information

Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of the Company’s securities and securities authorized for issuance under the Company’s equity compensation plans, where applicable, is contained in the Company’s Management Information Circular prepared in connection with the annual and special meeting of shareholders of the Company to be held on June 30, 2021 . Additional financial information relating to the Company is contained in the Company’s financial statements and associated MD&A for its most recently completed fiscal year ended December 31, 2020.

All of these documents and other ancillary information relating to Theralase® are available on SEDAR (www.sedar.com).

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Theralase Technologies Inc. — Annual Report 2020

42925_rns_2021-06-04_6049a1c4-223f-4768-bf03-dc2e5550cab1.pdf

Table Of Contents

Interpretation

Forward-Looking Statements

Corporate Structure

Name, Address and Incorporation

Intercorporate Relationships

Summary Description of the Business

General Overview

COVID-19 Pandemic

Anti-Cancer Therapy Division

TLD-1433 Mechanism of Action

Phase Ib NMIBC Clinical Study

Study Outcome Endpoints:

Study Outcome Results:

Phase II NMIBC Clinical Study (“Study II”)

Study II Design and Plan

Study II Treatment Procedure

Study II Update

Study II Clinical Site Update

Study II Preliminary Clinical Data

Study II Optimization

Additional Oncology Targets:

Additional Virus Targets

Cool Laser Technology Division

TLC-1000 Therapeutic Laser Product:

TLC-2000 Therapeutic Laser Product:

TLC-3200 Medical Laser System (“TLC-3200”)

Manufacturing, Distribution and Service:

Trends

Intellectual Property

Patents:

CLT Division: (TLC-2000 Patents)

ACT Division (TLC-3000 Patents):

Title: Fiber Optic Light Delivery, Monitoring and Apparatus Therefor

Patent Application Number:

Title: Method and Apparatus for Photoactivating Nuclear Receptors

Trademarks

Canadian Trademarks:

USA Trademarks:

Specialized Skill and Knowledge

Competitive Conditions

Employees

General Development of the Business

Developments Over the Last Three Fiscal Years

Subsequent to Year Ended December 31, 2020

Year Ended December 31, 2020

Year Ended December 31, 2019

Year Ended December 31, 2018

Significant Acquisitions:

Risk Factors

COVID-19 Pandemic

Limited Operating History

Working Capital and Capital Resources

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 Risk

Early Stage of Product Development

Reliance on Third Parties

Clinical Study and Study Risk

Clinical Study Timing Delays

Patient Enrollment

Failure to Achieve Milestones

Material Weakness in Internal Control Over Financial Reporting

Currency Risk

Credit Risk

Product Liability

Clinical Trial Liability

Patent-Related Rights of the U.S. Government in PDT Technology

Dividends and Distributions

Description of Capital Structure

Theralase Technologies Inc. Annual Report 2020