6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2023

Commission File Number: 001-39152

FSD PHARMA INC.
(Translation of registrant's name into English)

199 Bay St., Suite 4000
Toronto, Ontario M5L 1A9, Canada
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [  ]      Form 40-F [ X ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):             

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FSD Pharma Inc.
	(Registrant)
Date: May 11, 2023	By: /s/ Nathan Coyle
	Name: Nathan Coyle
	Title: Chief Financial Officer

EXHIBIT INDEX

Exhibit	Description
99.1	Condensed Consolidated Interim Financial Statements for the period ended March 31, 2023 and 2022
99.2	Management’s Discussion and Analysis for the period ended March 31, 2023
99.3	Form 52-109F2 Certification of Interim Filings - CEO
99.4	Form 52-109F2 Certification of Interim Filings - CFO

EX-99.1

FSD Pharma Inc.

Condensed consolidated interim financial statements

For the three months ended March 31, 2023, and 2022

(unaudited) (expressed in United States dollars, except per share amounts)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS

Under Part 4, subsection 4.3(3)(a) of National Instrument 51-102 - Continuous Disclosure Obligations, if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice indicating that the condensed interim financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim financial statements of FSD Pharma [the "Company"] have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these condensed interim financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.

FSD PHARMA INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

[unaudited] [expressed in United States dollar]

As at		March 31		December 31,
		2023		2022
	Notes	$		$
ASSETS
Current assets
Cash and cash equivalents		9,222,852		16,980,472
Other receivables	4	425,048		374,377
Prepaid expenses and deposits	5	837,540		472,137
Note receivables		223,333		-
Net investment in lease		23,206		23,188
		10,731,979		17,850,174
Non-current assets
Equipment, net		102,821		105,729
Investments	7	650,334		827,612
Right-of-use asset, net	8	118,779		155,196
Finance receivables, net	6	7,407,408		7,431,656
Intangible assets, net	9	10,469,584		12,040,289
		29,480,905		38,410,656
LIABILITIES
Current liabilities
Trade and other payables	10	7,706,530		7,108,419
Lease obligations	11	141,702		177,870
Warrants liability	12	450,544		243,594
Notes payable		300,549		300,549
		8,599,325		7,830,432
Non-current liabilities
Lease obligations	11	24,122		38,004
		8,623,447		7,868,436
SHAREHOLDERS' EQUITY
Class A share capital	13	151,588		151,588
Class B share capital	13	137,287,903		143,258,972
Warrants	13	3,036,979		2,142,400
Contributed surplus		29,627,239		28,500,924
Foreign exchange translation reserve		668,003		652,601
Accumulated deficit		(149,914,254	)	(144,164,265	)
		20,857,458		30,542,220
		29,480,905		38,410,656
Commitments and contingencies	18
Subsequent events	20

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

On behalf of the Board:

"Signed"	"Signed"
Director - Donal Carroll	Director - Nitin Kaushal

1

FSD PHARMA INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
[unaudited] [expressed in United States dollar, except number of shares]

For the period ended March 31,		2023		2022
	Notes	$		$
Expenses
General and administrative	16	2,716,777		3,528,302
External research and development fees		2,311,596		937,052
Share-based payments	14	3,206,535		83,161
Depreciation and amortization	8 & 9	1,129,971		1,101,155
Impairment loss	9	480,096		-
Total operating expenses		9,844,975		5,649,670
Loss from continuing operations		(9,844,975	)	(5,649,670	)
Interest income	17	(272,341	)	-
Finance expense, net		667		16,382
Gain on settlement of financial liability		-		(82,725	)
Loss (gain) on change in fair value of derivative liability	12	206,950		(242,519	)
Loss on changes in fair value of investments	7	177,278		120,023
Net loss from continuing operations		(9,957,529	)	(5,460,831	)
Net loss from discontinued operations	3	-		(444,506	)
Net loss		(9,957,529	)	(5,905,337	)
Other comprehensive loss
Items that may be subsequently reclassified to loss:
Exchange gain (loss) on translation of foreign operations		15,402		(73,585	)
Comprehensive loss		(9,942,127	)	(5,978,922	)
Net loss per share
Basic and diluted - continuing operations	15	(0.26	)	(0.14	)
Basic and diluted - discontinued operations	15	-		(0.01	)
Weighted average number of shares outstanding - basic and diluted	15	38,962,415		39,998,791

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

2

FSD PHARMA INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
For the periods ended March 31, 2023 and 2022
[unaudited] [expressed in United States dollar, except number of shares]

											Foreign exchange		Accumulated
	Class A shares		Class B shares				Warrants		Contributed surplus		translation reserve		deficit		Total
	#	$	#		$		#	$	$		$		$		$
Balance, December 31, 2021	72	151,588	40,450,754		152,173,089		6,956,795	5,137,417	22,583,649		239,612		(126,154,317	)	54,131,038
Share repurchase [note 13]	-	-	(1,524,700	)	(5,735,821	)	-	-	-		-		4,260,912		(1,474,909	)
Share-based payments [note 14]	-	-	70,179		75,600		-	-	7,561		-		-		83,161
Share cancellation [note 13]	-	-	(504,888	)	(1,752,090	)	-	-	1,752,090		-		-		-
Comprehensive loss for the period	-	-	-		-		-	-	-		(73,585	)	(5,905,337	)	(5,978,922	)
Balance, March 31, 2022	72	151,588	38,491,345		144,760,778		6,956,795	5,137,417	24,343,300		166,027		(127,798,742	)	46,760,368
Balance, December 31, 2022	72	151,588	38,504,210		143,258,972		6,482,093	2,142,400	28,500,924		652,601		(144,164,265	)	30,542,220
Share repurchase [note 13]	-	-	(1,904,700	)	(7,165,356	)	-	-	-		-		4,207,540		(2,957,816	)
Share-based payments [note 14]	-	-	-				-	-	2,311,956		-		-		2,311,956
Share options exercised [note 13]	-	-	9,000		14,217		-	-	(5,571	)	-		-		8,646
PSUs converted to shares [note 14]	-	-	2,420,104		1,180,070		-	-	(1,180,070	)	-		-		-
Warrant issued [note 13]	-	-	-		-		3,300,000	894,579	-		-		-		894,579
Comprehensive loss for the period	-	-	-		-		-	-	-		15,402		(9,957,529	)	(9,942,127	)
Balance, March 31, 2023	72	151,588	39,028,614		137,287,903		9,782,093	3,036,979	29,627,239		668,003		(149,914,254	)	20,857,458

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

3

FSD PHARMA INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2023 and 2022
[unaudited] [expressed in United States dollar]

	2023		2022
	$		$
Operating activities
Net loss from continuing operations	(9,957,529	)	(5,460,831	)
Add (deduct) items not affecting cash
Depreciation and amortization	1,129,934		1,101,155
Interest expense	2,373		19,615
Share-based payments	3,206,535		83,161
Change in fair value of investments	177,278		120,023
Change in fair value of derivative liability	206,950		(242,519	)
Unrealized foreign exchange loss (gain)	-		(200,056	)
Gain on settlement of financial liability	-		(82,725	)
Impairment loss	480,096		-
Changes in non-cash working capital balances
Finance receivables	24,248		-
Other receivables	(50,671	)	(170,611	)
Prepaid expenses and deposits	(365,403	)	(195,016	)
Note receivable	(218,728	)	-
Trade and other payables	610,781		438,640
Cash used in continuing operating activities	(4,754,136	)	(4,589,164	)
Cash used in discontinued operating activities	-		(504,264	)
Cash used in operating activities	(4,754,136	)	(5,093,428	)
Investing activities
Purchase of equipment	-		(14,622	)
Additions to intangible assets	-		(250,000	)
Proceeds from sale of investments	-		158,036
Cash used in continuing investing activities	-		(106,586	)
Cash used in discontinued investing activities	-		-
Cash used in investing activities	-		(106,586	)
Financing activities
Share repurchase	(2,957,816	)	(1,474,909	)
Payment of lease obligation	(54,314	)	(11,838	)
Share options exercised	8,646		-
Cash used in continuing financing activities	(3,003,484	)	(1,486,747	)
Cash used in discontinued financing activities	-		-
Cash used in financing activities	(3,003,484	)	(1,486,747	)
Net decrease	(7,757,620	)	(6,686,761	)
Cash and cash equivalents, beginning of the period	16,980,472		35,259,645
Cash and cash equivalents, end of the period	9,222,852		28,572,884

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

4

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

1.Nature of business

FSD Pharma Inc. ("FSD" or the "Company") is a biotechnology company with three drug candidates in different stages of development. FSD Biosciences Inc., a wholly-owned subsidiary, is focused on pharmaceutical research and development ("R&D") of its lead compound, ultra-micronized palmitoylethanolamide ("PEA") or FSD-PEA (also known as FSD-201). Through the Company's wholly owned subsidiary, Lucid Psycheceuticals Inc. ("Lucid"), the Company is also focused on the research and development of its lead compounds, Lucid-PSYCH (also known as Lucid-201) and Lucid-MS (also known as Lucid-21-302). PEA, the active substance in FSD-PEA, interacts with the endocannabinoid system in the body and exhibits anti-inflammatory activities. Lucid PSYCH is a molecular compound identified for the potential treatment of mental health disorders. Lucid-MS is a molecular compound identified for the potential treatment of neurodegenerative disorders.

FV Pharma Inc. ("FV Pharma"), a wholly owned subsidiary of the Company, was a licensed producer of cannabis in Canada under the Cannabis Act (Canada) (together with the regulations promulgated thereunder (the "Cannabis Regulations"), the "Cannabis Act") and associated Cannabis Regulations. FV Pharma surrendered its cannabis license in July 2020 and suspended all activities in September 2020. In March 2020, the Company decided to focus its efforts and resources on the pharmaceutical business and initiated the process to exit the medical cannabis industry and sell FV Pharma's facility located at 520 William Street, Cobourg, Ontario, K9A 3A5 (the "Facility") and the 64-acre property on which the Facility is located (the "Facility Property"). On May 6, 2022, the Company closed the sale of the Facility and the Facility Property (refer to Note 3).

On May 13, 2022, FSD Strategic Investments Inc. ("FSD Strategic Investments"), a wholly owned subsidiary of the Company, was incorporated. FSD Strategic Investments is focused on generating returns and cashflow through the issuance of loans secured by residential or commercial property, with FSD Strategic Investments having a first collateral mortgage on the secured property.

On November 24, 2022, FSD Pharma Australia Pty Ltd. ("FSD Australia"), a wholly owned subsidiary of the Company, was incorporated. FSD Australia will be used to facilitate the Corporation's development of Lucid-PSYCH by running Australian clinical trials in respect of Lucid-PSYCH, and potentially other assets.

The Company's registered office is located at 199 Bay Street, Suite 4000, Toronto, Ontario, M5L 1A9.

Subsidiaries

These unaudited condensed consolidated interim financial statements are comprised of the financial results of the Company and its subsidiaries, which are the entities over which the Company has control. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and can affect those returns through its power over the investee.

The Company has the following subsidiaries:

		Ownership percentage as at
Entity Name	Country	March 31, 2023	December 31, 2022
		%	%
FSD Biosciences Inc.	USA	100	100
Prismic Pharmaceuticals Inc.	USA	100	100
FV Pharma Inc.	Canada	100	100
Lucid Psycheceuticals Inc.	Canada	100	100
FSD Strategic Investments Inc.	Canada	100	100
FSD Pharma Australia Pty Ltd	Australia	100	100

5

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

2.Basis of presentation

[a] Statement of compliance

These unaudited condensed consolidated interim financial statements ("financial statements') were prepared using the same accounting policies and methods as those used in the Company's audited consolidated financial statements for the year ended December 31, 2022. These financial statements have been prepared in compliance with IAS 34 - Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). Accordingly, certain disclosures normally included in annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") have been omitted or condensed. These financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2022.

These financial statements were approved and authorized for issuance by the Board of Directors of the Company on May 11, 2023.

[b] Functional currency and presentation currency

The financial statements of each company within the consolidated group are measured using their functional currency, which is the currency of the primary economic environment in which an entity operates. The Company's functional currency is the United States dollar and the functional currencies of its subsidiaries are as follows:

FSD Biosciences Inc.	United States Dollar
Prismic Pharmaceuticals Inc.	United States Dollar
FV Pharma Inc.	Canadian Dollar
Lucid Psycheceuticals Inc.	Canadian Dollar
FSD Strategic Investments Inc.	Canadian Dollar
FSD Pharma Australia Pty Ltd	Australian Dollar

[c] Use of estimates and judgments

The preparation of these financial statements in conformity with IFRS requires management to make estimates, judgements and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, consistent with those disclosed in the audited consolidated financial statements for the year ended December 31, 2022 and described in these financial statements. Actual results could differ from these estimates.

Estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

New standards, amendments and interpretations recently adopted by the Company

IAS 1, Presentation of financial statements ("IAS 1")

In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1). The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the consolidated statements of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity.

6

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

The amendments are effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. In July 2020, the effective date was deferred to January 1, 2023. The impact of adopting these amendments on the Company's financial statements was not significant.

IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors ("IAS 8")

In February 2021, the IASB issued Definition of Accounting Estimates, which amends IAS 8. The amendment will require the disclosure of material accounting policy information rather than disclosing significant accounting policies and clarifies how to distinguish changes in accounting policies from changes in accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". The amendment provides clarification to help entities to distinguish between accounting policies and accounting estimates.

The amendments are effective for annual periods beginning on or after January 1, 2023. The impact of adopting these amendments on the Company's financial statements was not significant.

IAS 12, Income Taxes ("IAS 12")

In May 2021, the IASB issued Deferred Tax related to Assets and Liabilities arising from a single transaction (Amendments to IAS 12). The amendment narrows the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal taxable and deductible temporary differences. As a result, companies will need to recognize a deferred tax asset and deferred tax liability for temporary differences arising on initial recognition of transactions such as leases and decommissioning obligations.

The amendments are effective for annual reporting periods beginning on or after January 1, 2023 and are to be applied retrospectively. The impact of adopting these amendments on the Company's financial statements was not significant.

New standards, amendments and interpretations not yet adopted by the Company

IFRS 16 - Leases ("IFRS 16")

In September 2022, the IASB issued amendments to IFRS 16, Leases, which add to requirements explaining how a company accounts for a sale and leaseback after the date of the transaction.

The amendments are effective for annual reporting periods beginning on or after January 1, 2024. Earlier application is permitted.

All other IFRSs and amendments issued but not yet effective have been assessed by the Company and are not expected to have a material impact on the Consolidated Financial Statements.

3.Discontinued operations

In March 2020, the Company decided to focus its efforts and resources on the pharmaceutical business and initiated the process to exit the medical cannabis industry and sell the Facility and the Facility Property. On May 6, 2022, the Company closed the sale of the Facility and the Facility Property for total consideration of $12,730,942 (C$16,400,000). The Company recognized a gain of $4,249,582 on the sale of the Facility and the Facility Property and incurred selling expenses of $616,002 for the year ended December 31, 2022.

Results of operations related to the Disposal Group are reported as discontinued operations for the period ended March 31, 2022.

7

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

Net loss and comprehensive loss from discontinued operations for the three months ended March 31, 2022 is comprised of the following:

		For the three months
		ended March 31,
	Notes	2022
		$
Expenses
General and administrative	16	459,674
Total operating expenses		459,674
Loss from discontinued operations		(459,674	)
Other income		(15,168	)
Net loss from discontinued operations		(444,506	)

Cash flows from discontinued operations for the three months ended March 31, 2022 is comprised of the following:

	For the three months
	ended March 31,
	2022
	$
Operating activities
Net income (loss) from discontinued operations	(444,506	)
Add (deduct) items not affecting cash
Changes in non-cash working capital balances
Other receivables	(37,140	)
Prepaid expenses and deposits	(17,424	)
Trade and other payables	(5,194	)
Cash used in operating activities	(504,264	)

4.Other receivables

The Company's other receivables are comprised of the following:

	March 31, 2023	December 31, 2022
	$	$
Sales tax recoverable	416,981	279,333
Interest receivable	8,067	95,044
	425,048	374,377

5.Prepaid expenses and deposits

The Company's prepaid expenses and deposits include the following:

	March 31, 2023	December 31, 2022
	$	$
Research and development	325,942	308,502
Insurance	361,833	95,697
Other prepaids and deposits	149,765	67,938
	837,540	472,137

8

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

6.Finance receivables

Finance receivables consist of secured loans to customers measured at amortized cost, net of allowance for credit losses.

Finance receivables as at March 31, 2023 are as follows:

	$
Balance - December 31, 2022	7,431,656
Add: Interest income	133,412
Less: Interest payments	(163,722	)
Effects of foreign exchange	6,062
Balance - March 31, 2023	7,407,408
Current	-
Non-current	7,407,408
Balance - March 31, 2023	7,407,408

Allowances for credit losses as at March 31, 2023, were $nil. Finance receivables earn fees at fixed rates and have an average term to maturity of two years from the date of issuance. The loans are secured by residential or commercial property with a first collateral mortgage on the secured property. Loans are issued up to 55% of the initial appraised value of the secured property.

Finance receivables include the following:

	$
Minimum payments receivable	8,190,180
Unearned income	(782,772)
Net investment	7,407,408
Allowance for credit losses	-
Balance - March 31, 2023	7,407,408

As at March 31, 2023, all loans were classified as stage 1 and there were no changes between stages during the year.

7.Investments

The following tables outline changes in investments during the periods:

				Change in fair
			Balance at December	value through		Balance at
Entity	Instrument	Note	31, 2022	profit or loss		March 31, 2023
			$	$		$
Solarvest BioEnergy Inc.	Shares	(i)	221,490	(110,655	)	110,835
Solarvest BioEnergy Inc.	Convertible debenture	(i)	177,192	(88,524	)	88,668
A2ZCryptoCap Inc.	Shares	(ii)	10,632	8		10,640
Lions Bay Fund	Shares	(III)	418,298	21,893		440,191
			827,612	(177,278	)	650,334

(i) Solarvest BioEnergy Inc. ("Solarvest")

The Company holds 3,000,000 common shares of Solarvest and a convertible debenture with a principal amount of C$2,400,000 maturing on May 31, 2024. The convertible debenture can be converted into common shares of Solarvest at a price of $1.00 per share.

9

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

As at March 31, 2023, the fair value of the shares was determined based on the quoted market price of the shares of C$0.05 per share (December 31, 2022 - C$0.10). The fair value of the convertible debenture is calculated as the fair value of the shares the Company would receive if the debenture were converted into 2,400,000 common shares at the Solarvest share price of C$0.05 as at March 31, 2023 (December 31, 2022 - C$0.10). The shares have been classified as level 1 within the fair value hierarchy - quoted market price, and the convertible debenture has been classified as level 2 - valuation technique with observable market inputs.

(ii) A2ZCryptoCap Inc. ("A2Z")

On June 23, 2022, the Company acquired 80,000 shares of A2Z for C$0.10 per share. As at March 31, 2023, the fair value of the shares was determined based on the quoted market price of the shares of C$0.18 per share (December 31, 2022 - C$0.18). The shares have been classified as level 1 within the fair value hierarchy - quoted market price.

(iii) Lions Bay Fund ("Fund")

During the year ended December 31, 2022, the Company invested C$500,000 into the Fund. As at March 31, 2023, the fair value of the investment was determined to be C$595,738 (December 31, 2022 - C$566,569) based on the Company's share of the net asset value of the fund. The net asset value as provided by the Fund manager provides the most reasonable assessment of the investment's fair value given the magnitude of the investment. Due to the unobservable nature of the net asset value, the investment has been classified as level 3 within the fair value hierarchy and is measured at fair value through profit or loss. Therefore, the Company cannot assess whether applying reasonable possible alternative assumptions would have an impact on the fair value of the investment.

8.Right-of-use asset

Right-of-use assets as at March 31, 2023 are as follows:

	$
Balance - December 31, 2022	155,196
Amortization	(36,417	)
Balance - March 31, 2023	118,779

9.Intangible assets

Intangible assets as at March 31, 2023 are as follows:

	Innovet		Prismic	Lucid	Total
	$		$	$	$
As at December 31, 2022	750,000		19,201,493	6,314,571	26,266,064
Impairment	(750,000	)	-	-	(750,000	)
As at March 31, 2023	-		19,201,493	6,314,571	25,516,064
Accumulated amortization
As at December 31, 2022	229,933		13,457,622	538,220	14,225,775
Amortization	39,971		946,913	103,725	1,090,609
Impairment	(269,904	)	-	-	(269,904	)
As at March 31, 2023	-		14,404,535	641,945	15,046,480
Net book value
As at December 31, 2022	520,067		6,263,938	5,776,351	12,040,289
As at March 31, 2023	-		4,796,958	5,672,626	10,469,584

10

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

On March 9, 2021, the Company entered into a license agreement ("Innovet License Agreement") with Innovet Italia S.R.L. ("Innovet"), under which Innovet granted the Company a license to use ultra-micro PEA to develop FDA approved veterinary drugs for the treatment of gastro-intestinal diseases in canines and felines. Under the Innovet license agreement, the Company is required to make payments to Innovet upon the achievement of certain milestones (Note 18), including $500,000 which was paid upon execution of the Innovet License Agreement as consideration in exchange for the rights to the Licensed Products. The Company made a payment of $250,000 on March 9, 2022, as part of the consideration payable for the rights to use the intellectual property. During the three months ended March 31, 2023, the Company recognized an impairment loss of $480,096 in the statement of loss and comprehensive loss related to the Innovet License Agreement as the Company made a strategic decision to no longer pursue the development of ultra-micro PEA for veterinary purposes.

10.Trade and other payables

Trade and other payables consist of the following:

	March 31, 2023	December 31, 2022
	$	$
Trade payables	3,378,275	2,760,002
Accrued liabilities (i)	4,328,255	4,348,417
	7,706,530	7,108,419
(i) Accrued liabilities consist of the following:
	March 31, 2023	December 31, 2022
	$	$
External research and development fees	3,362,910	3,531,996
Operational expenses	69,032	92,783
Professional and other fees	487,120	314,445
Accrued interest	409,193	409,193
	4,328,255	4,348,417

11.Lease obligations

The lease obligations as at March 31, 2023, are as follows:

	$
Balance - December 31, 2022	215,874
Add: Interest Expense	4,055
Less: Lease Payments	(54,314	)
Effects of foreign exchange	209
Balance - March 31, 2023	165,824
Current	141,702
Non-current	24,122
Balance - March 31, 2023	165,824

Lease obligations are related to the Company's office leases.

The following table sets out a maturity analysis of the lease payments payable, showing the undiscounted lease payments to be paid on an annual basis, reconciled to the lease obligation.

11

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

	$
Less than one year	148,851
One to two years	24,350
Thereafter	-
Total undiscounted lease payments payable	173,201
Less: impact of present value	(7,377	)
Balance - March 31, 2023	165,824

12.Warrants Liability

In August 2020, the Company issued 2,762,430 Class B shares and 1,381,215 warrants to purchase Class B shares for total cash proceeds of $9,999,997. Each warrant is exercisable to purchase one Class B share of the Company at an exercise price of $4.26 per share and expire five years from the date of issuance. The fair value of these warrants is classified as Level 2 in the fair value hierarchy.

On initial recognition the Company determined that these warrants did not meet the IFRS definition of equity due to the exercise price being denominated in United States dollar, which was not the functional currency of the Company at the time resulting in variability in exercise price. The change in functional currency on October 1, 2020, was determined to be a change in circumstance and, as such, the Company has made an accounting policy choice to continue to recognize the warrants as a financial liability classified at fair value through profit or loss.

The fair value of the warrants liability as at March 31, 2023, was $450,544 (December 31, 2022 - $243,594) resulting in a loss on change in fair value of $206,950 for the period ended March 31, 2023. The fair value was determined using the Black-Scholes option pricing model and the following assumptions:

		March 31, 2023		December 31, 2022
Share price	$	1.55	$	0.79
Exercise price	$	4.26	$	4.26
Expected dividend yield		-		-
Risk free interest rate		3.78%		4.07%
Expected life		2.35		2.60
Expected volatility		77%		96%

13.Share capital

[a] Authorized

The Company is authorized to issue an unlimited number of Class A multiple voting shares ("Class A shares") and an unlimited number of Class B subordinate voting shares ("Class B shares"), all without par value. All shares are ranked equally with regard to the Company's residual assets.

The holders of Class A shares are entitled to 276,660 votes per Class A share held. Class A shares are held by certain Directors and the former CEO of the Company. The holders of Class B shares are entitled to one (1) vote per share held.

12

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

[b] Issued and outstanding

Reconciliation of the Company's share capital is as follows:

	Class A shares		Class B shares				Warrants
	#	$	#		$		#	$
Balance, December 31, 2021	72	151,588	40,450,754		152,173,089		6,956,795	5,137,417
Shares-based payments [a]	-	-	70,179		75,600		-	-
Share repurchase [b]	-	-	(1,524,700	)	(5,735,821	)	-	-
Share cancellation [c]	-	-	(504,888	)	(1,752,090	)	-	-
Balance, March 31, 2022	72	151,588	38,491,345		144,760,778		6,956,795	5,137,417
Balance, December 31, 2022	72	151,588	38,504,210		143,258,972		6,482,093	2,142,400
Share repurchase [d]	-	-	(1,904,700	)	(7,165,356	)	-	-
Warrants issued [e]	-	-	-		-		3,300,000	894,579
Share options exercised [f]	-	-	9,000		14,217		-	-
PSU converted to shares [note 14]	-	-	2,420,104		1,180,070		-	-
Balance, March 31, 2023	72	151,588	39,028,614		137,287,903		9,782,093	3,036,979

[a]During the three months ended March 31, 2022, the Company issued 70,179 Class B shares for services received during the period with a fair value of $75,600.

[b]During the three months ended March 31, 2022, the Company repurchased and cancelled 1,524,700 Class B Common Shares at prevailing market prices as part of its share repurchase program.

[c]On March 29, 2022, the Company cancelled 504,888 Class B shares previously held by the former CEO following a court decision with respect to the shares issued in February 2021.

[d]During the three months ended March 31, 2023, the Company repurchased 1,904,700 and cancelled Class B Common Shares at prevailing market prices as part of its share repurchase program.

[e]During the three months ended March 31, 2023, the Company issued 3,300,000 warrants for consulting services with a fair value of $894,579. The Company determined the fair value of the services received could not be measured reliably and determined the fair value using the Black-Scholes model.

[f]During the three months ended March 31, 2023, 9,000 share options were exercised with an exercise price of C$1.30 in exchange for 9,000 Class B Common Shares.

The changes in the number of warrants outstanding during the three months ended March 31, 2023 and 2022 were as follows:

		Weighted average
	Number of warrants	exercise price
	#	C$
Outstanding as at December 31, 2021	6,956,795	5.50
Outstanding as at March 31, 2022	6,956,795	5.46
Outstanding as at December 31, 2022	6,482,093	5.48
Issued	3,300,000	5.14
Outstanding as at March 31, 2023	9,782,093	5.36

13

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

Measurement of fair values

The fair value of the warrants issued during the three months ended March 31, 2023, were estimated at the date of grant using the Black-Scholes option pricing model with the following inputs:

	2023
Grant date share price	C$1.92 - C$2.29
Exercise price	C$2.03 - C$10.82
Expected dividend yield	-
Risk free interest rate	3.42% - 4.26%
Expected life	1 - 2 years
Expected volatility	64% - 67%

There were no warrants granted during the three months ended March 31, 2022.

The following table is a summary of the Company's warrants outstanding as at March 31, 2023:

	Warrants Outstanding
	Exercise price	Number outstanding
Expiry Date	C$	#
May 20, 2023	16.08	7,311
June 23, 2023	2.50	100,000
July 24, 2023	13.07	3,357
September 11, 2023	5.43	22,382
March 14, 2024 (i)	2.50	200,000
March 14, 2024 (i)	5.77	100,000
March 14, 2024 (i)	10.83	200,000
March 30, 2024 (i)	2.03	300,000
March 30, 2024 (i)	4.06	250,000
March 30, 2024 (i)	6.09	250,000
February 27, 2025 (i)	2.37	400,000
February 27, 2025 (i)	5.41	400,000
February 27, 2025 (i)	10.83	200,000
March 24, 2025 (i)	2.37	400,000
March 24, 2025 (i)	5.41	400,000
March 24, 2025 (i)	10.83	200,000
May 4, 2025	26.73	3,730
May 10, 2025	26.73	1,865
May 17, 2025	26.73	3,730
May 31, 2025	26.73	1,865
June 8, 2025	9.65	1,500,000
August 6, 2025 (i)	5.77	1,381,215
October 20, 2025 (i)	3.52	3,454,543
January 16, 2026	26.73	1,722
January 20, 2026	26.73	373
	5.36	9,782,093

(i)Warrants were issued in US$

14

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

The following table is a summary of the Company's warrants outstanding as at March 31, 2022:

	Warrants Outstanding
	Exercise price	Number outstanding
Expiry Date	C$	#
May 24, 2022	18.09	163,535
September 15, 2022	4.42	199,005
November 30, 2022	1.21	46,242
December 31, 2022	2.43	65,920
May 20, 2023	16.08	7,311
June 23, 2023	2.50	100,000
July 24, 2023	13.07	3,357
September 11, 2023	5.43	22,382
May 4, 2025	26.73	3,730
May 10, 2025	26.73	1,865
May 17, 2025	26.73	3,730
May 31, 2025	26.73	1,865
June 8, 2025	9.65	1,500,000
August 6, 2025 (i)	5.32	1,381,215
October 20, 2025 (i)	3.25	3,454,543
January 16, 2026	26.73	1,722
January 20, 2026	26.73	373
	5.46	6,956,795

(i)Warrants were issued in US$

14.Share-based compensation

The Company has established a share option plan (the "Option Plan") for directors, officers, employees and consultants of the Company. The Company's Board of Directors determines, among other things, the eligibility of individuals to participate in the Option Plan, the term and vesting periods, and the exercise price of options granted to individuals under the Option Plan.

Each share option converts into one common share of the Company on exercise. No amounts are paid or payable by the individual on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

[i] Share-based payment arrangements

During the three months ended March 31, 2023, the Company granted 2,488,000 share options to directors, officers, employees and consultants of the Company.

The changes in the number of share options during the three months ended March 31, 2023 and 2022 were as follows:

			Weighted average
	Number of options		exercise price
	#		C$
Outstanding as at December 31, 2022	418,529		3.71
Granted	2,488,000		1.52
Exercised	(9,000	)	1.30
Outstanding as at March 31, 2023	2,897,529		1.84
Exercisable as at March 31, 2023	2,679,521		1.79

15

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

			Weighted average
	Number of options		exercise price
	#		C$
Outstanding as at December 31, 2021	3,224,859		2.75
Expired	(12,438	)	3.86
Outstanding as at March 31, 2022	3,212,421		2.75
Exercisable as at March 31, 2022	3,185,413		2.71

During the three months ended March 31, 2022, 12,438 share options related to former officers and employees who are no longer with the Company expired. Individuals who are no longer with the Company have 30 days after their last day to exercise any vested share options. Vested options that remain unexercised after 30 days expire.

Measurement of fair values

The fair value of share options granted during the three months ended March 31, 2023, were estimated at the date of grant using the Black-Scholes option pricing model with the following inputs:

	2022
Grant date share price	C$1.28 - C$2.30
Exercise price	C$1.30 - C$2.45
Expected dividend yield	-
Risk free interest rate	2.88% - 3.99%
Expected life	2.91 - 5 years
Expected volatility	95% - 110%

Expected volatility was estimated by using the annualized historical volatility of the Company. The expected option life represents the period of time that options granted are expected to be outstanding. The risk-free interest rate is based on Canadian government bonds with a remaining term equal to the expected life of the options.

There were no share options granted during the three months ended March 31, 2022.

16

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

The following table is a summary of the Company's share options outstanding as at March 31, 2023:

	Options outstanding		Options exercisable
		Weighted average
		remaining contractual
Exercise price	Number outstanding	life [years]	Exercise price	Number exercisable
C$	#	#	C$	#
1.30	2,051,000	4.76	1.30	2,051,000
1.70	103,453	1.97	1.70	103,453
2.25	168,898	0.79	2.25	168,898
2.37	15,000	2.92	2.37	10,000
2.37	15,000	2.98	2.37	5,000
2.45	458,000	2.90	2.45	257,000
2.61	12,687	0.24	2.61	12,683
2.91	5,150	2.75	2.91	5,150
3.75	5,000	0.97	3.75	5,000
3.86	5,000	3.61	3.86	3,000
5.43	16,265	0.24	5.43	16,264
10.65	3,731	0.24	10.65	3,730
13.07	10,856	0.24	13.07	10,855
13.47	1,418	0.24	13.47	1,418
16.08	18,410	0.24	16.08	18,409
17.89	4,178	0.24	17.89	4,178
50.25	3,483	1.04	50.25	3,483
1.84	2,897,529	4.00	1.79	2,679,521

The following table is a summary of the Company's share options outstanding as at March 31, 2022:

	Options outstanding		Options exercisable
		Weighted average
		remaining contractual
Exercise price	Number outstanding	life [years]	Exercise price	Number exercisable
C$	#	#	C$	#
1.70	154,953	3.21	1.70	154,953
2.25	2,559,995	2.18	2.25	2,559,995
2.61	12,684	1.24	2.61	12,683
2.91	5,150	3.75	2.91	5,150
3.75	10,500	3.67	3.75	6,500
3.86	243,807	3.02	3.86	240,805
4.42	99,503	0.46	4.42	99,502
4.75	15,000	3.04	4.75	15,000
5.43	16,265	1.24	5.43	16,264
7.63	50,000	3.76	7.63	30,000
10.65	3,731	1.24	10.65	3,730
13.07	10,856	1.24	13.07	10,855
13.47	1,418	1.24	13.47	1,418
16.08	18,410	1.24	16.08	18,409
17.89	4,178	1.24	17.89	4,178
18.09	2,488	0.99	18.09	2,488
50.25	3,483	2.04	50.25	3,483
2.75	3,212,421	2.25	2.71	3,185,413

17

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

[ii] Performance Share Units ("PSUs")

In May 2022, the Company established a performance share unit plan ("PSU Plan"), for directors, offers, employees and consultants of the Company. The Company's Board of Directors determines the eligibility of individuals to participate in the PSU Plan in order to align their interests with those of the Company's shareholders.

No amounts are paid or payable by the individual on receipt of the PSUs. Each PSU converts into one common share of the Company at $nil exercise price. The Company's PSU Plan provides that the number of common shares reserved for issuance may not exceed 10% of the aggregate number of common shares that are outstanding unless the Board has increased such limit by a Board resolution.

The change in the number of PSUs during the three months ended March 31, 2023, is as follows:

	Number of PSUs
	#
Outstanding as at December 31, 2022	2,420,104
Granted	400,000
Converted to Class B Common shares	(2,420,104	)
Outstanding as at March 31, 2023	400,000

During the three months ended March 31, 2023, the Company converted 2,420,104 PSUs to Class B Common shares following the completion of the vesting condition on January 6, 2023, the filing of the MS Phase 1 IND. During the three months ended March 31, 2023, the Company granted 400,000 PSUs to independent directors of the Company. As at March 31, 2023, the PSUs had fully vested upon the filing of the MS Phase 1 IND on January 6, 2023.

The Company recognized share-based compensation for the three months ended March 31, 2023 and 2022 as follows:

	For the three months ended March 31,
	2023	2022
	$	$
Share options	1,853,703	7,561
PSUs	458,253	-
Class B Common Shares issued for services	-	75,600
Warrants issued for services	894,579	-
	3,206,535	83,161

15.Loss per share

Net loss per common share represents net loss attributable to common shareholders divided by the weighted average number of common shares outstanding during the year.

For all the periods presented, diluted loss per share equals basic loss per share due to the anti-dilutive effect of warrants, share options and PSUs. The outstanding number and type of securities that could potentially dilute basic net loss per share in the future but would have decreased the loss per share (anti-dilutive) for the three months ended March 31, 2023 and 2022 are as follows:

18

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

	March 31, 2023	March 31, 2022
	#	#
Warrants	9,782,093	6,956,795
Share Options	2,897,529	3,212,421
PSUs	400,000	-
	13,079,622	10,169,216

16.General and administrative

Components of general and administrative expenses for the three months ended March 31, 2023 and 2022 were as follows:

	For the three months ended March 31,
	2023	2022
	$	$
Professional fees	594,286	2,132,377
General office, insurance and administration
expenditures	622,316	471,523
Consulting fees	556,804	351,689
Salaries, wages and benefits	630,027	578,350
Investor relations	247,392	291,170
Building and facility costs	-	412,360
Foreign exchange loss (gain)	65,952	(249,493	)
	2,716,777	3,987,976
Allocated to:
Continuing operations	2,716,777	3,528,302
Discontinued operations	-	459,674

17.Segment information

Reportable segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker, with appropriate aggregation. The chief operating decision maker is the CEO who is responsible for allocating resources, assessing the performance of the reportable segment and making key strategic decisions. The Company operates in two segments: Biotechnology and Strategic Investments.

The Company's Biotechnology segment is focused on furthering the research and development of the Company's three drug candidates consisting of FSD-PEA, Lucid-PSYCH and Lucid-MS. The Biotechnology segment primarily earns interest income on guaranteed investment certificates.

The Company's Strategic Investments segment is focused on generating returns and cashflow through the issuance of loans secured by residential or commercial property, with FSD Strategic Investments having a first collateral mortgage on the secured property.

Assets by segment are as follows:

	As at March 31, 2023		As at December 31, 2022
	Biotechnology	Strategic Investments	Biotechnology	Strategic Investments
	$	$	$	$
Current assets	10,508,646	223,333	17,850,174	-
Non-current assets	11,341,518	7,407,408	13,128,826	7,431,656

19

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

Interest income by segments is presented below:

	For the three months ended March 31, 2023		For the three months ended March 31, 2022
	Biotechnology	Strategic Investments	Biotechnology	Strategic Investments
	$	$	$	$
Interest income	136,516	135,825	-	-

18.Commitments and contingencies

Commitments

Epitech License Agreement

Under the terms of the Company's License Agreement with Epitech Group SPA ("Epitech"), the Company has payments due to Epitech pending the achievement of specified milestones. Upon first notification by the U.S. Food and Drug Administration ("FDA") of approval of a New Drug Application, the non-refundable sum of $700,000 will be due and payable to Epitech. Within thirty days of the first notification by the FDA of approval of a New Drug Application, the Company is required to pay the non-refundable sum of $500,000 to Epitech. Within ten business days of the first notification of approval of a Supplemental New Drug Application by the FDA, the Company will pay the non-refundable sum of $1,000,000 to Epitech.

For non-prescription drug rights, any one-off lump sum payments received by the Company as consideration for granting a sub-license to a Commercial Partner with respect to a Licensed Product, shall require the Company to pay to Epitech 25% of the lump sum payment received by the Company. For prescription drug rights the Company shall pay 5% of any one-off lump sum payments to Epitech as consideration for granting a sub-license to a Commercial Partner with respect to a Licensed Product. The Company will pay the amounts payable on a quarterly basis within 60 days of the end of each calendar quarter.

The Company shall pay either a) 7% of Net Sales of the Licensed Product in a Product Regulatory Category other than prescription drugs placed on the market by the Company; or b) 25% of Net Receipts received by the Company from Commercial Partners where Licensed Products in a Product Regulatory Category other than prescription drugs are placed on the market by such Commercial Partners; or c) 5% of Net Sales or Net receipts of the Licensed Products in the Product Regulatory Category of prescription drugs. The Company will pay the amounts payable on a quarterly basis within 60 days of the end of each calendar quarter. No payments have been made to date related to these milestones.

Lucid-MS Agreement

The Company has entered into a license agreement that governs the Lucid-MS compound. Under the terms of the agreement, the Company shall pay a yearly license maintenance fee of C$100,000 until the first commercial sale of a product is made.

Under the agreement the Company is committed to minimum milestone payments of $nil and maximum milestone payments of C$12,500,000 if all product development and regulatory milestones are met.

Furthermore, the Company is also responsible to pay revenue milestone payments and royalties if revenue milestones from commercial sales are achieved. Milestones can be extended by mutual agreement. No payments have been made to date related to these milestones.

Contingencies

Legal Matters

20

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

From time to time, the Company is named as a party to claims or involved in proceedings, including legal, regulatory and tax related, in the ordinary course of its business. While the outcome of these matters may not be estimable at the reporting date, the Company makes provisions, where possible, for the estimated outcome of such claims or proceedings. Should a loss result from the resolution of any claims or proceedings that differs from these estimates, the difference will be accounted for as a charge to profit or loss in that period.

Contract Research Organization ("CRO") Dispute

The Company is involved in arbitration proceedings with a CRO regarding amounts claimed to be owed to the CRO by the Company. The CRO is claiming it is owed amounts outstanding for work on clinical trials in the United States. The Company is disputing the amounts claimed to be owed. The Company believes it has sufficiently provided for amounts claimed to be owed to the CRO which are recorded in trade and other payables.

In November 2022, evidentiary hearings were held in New York. The parties submitted post-hearing briefs in December 2022. Subsequent to March 31, 2023, the arbitrator declared the hearings closed as of April 20, 2023. The Company awaits a decision and final award to be rendered by the tribunal. As at March 31, 2023, the ultimate outcome of the matter cannot be reliably determined at this time, however, the Company believes it is sufficiently provisioned for any potential outcome.

Raza Bokhari

On July 15, 2021, the Company's former CEO, Raza Bokhari, filed a notice of arbitration seeking relief and support for breach of contract and severance and damages in the amount of $30,200,000, for aggravated and punitive damages in the amount of $500,000 and legal fees and disbursements associated with the arbitration.

Raza Bokhari was placed on administrative leave from his role as the Company's Chief Executive Officer following the Company's annual general and special meeting of shareholders on May 14, 2021, pending the outcome of an investigation of various concerns by a Special Committee comprised of independent directors using independent legal counsel. Upon the recommendation of the Special Committee, Raza Bokhari's employment was terminated for cause by the Company's board of directors on July 27, 2021.

The Company disputed the allegations and counterclaimed against Raza Bokhari for losses sustained as a result of his alleged breaches of his duties to the Corporation. The arbitration hearing concluded in August 2022 and the arbitrator issued his decision in November 2022. Raza Bokhari's claim for USD $30.2 million was dismissed in its entirety along with his claim that he had been wrongfully dismissed. The arbitrator ordered that Raza Bokhari repay certain monies to FSD Pharma, while also holding him responsible for FSD Pharma's costs of the arbitration.

On December 9, 2022, Raza Bokhari filed an application in the Ontario Superior Court seeking to set aside the arbitral award of the court on the grounds that he was not treated equally and fairly and the arbitrator's written award provided inadequate reasons for his decision.

On December 20, 2022, the Company's legal counsel wrote to the Commercial List of the Ontario Superior Court of Justice seeking to transfer the application from the Civil List to the Commercial List. The request was granted on January 12, 2023.

Indemnity Application

Raza Bokhari commenced an application in the Superior Court seeking an order appointing an arbitrator to arbitrate his claim to be entitled to indemnification of his legal expenses associated with the litigation he has commenced against the Company or in which he has been named as a party by the Company. The Company denies the validity of the underlying indemnification agreement and is opposing the application. In April 2022, the parties agreed to adjourn the application without setting a new hearing date.

21

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

19.Related party transactions

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling activities of the entity, directly or indirectly.

Transactions with key management and directors comprised the following:

a)In fiscal 2023, the Company pays independent directors' compensation of C$60,000, with the chair of the audit committee receiving an additional C$20,000 and the chair of the compensation committee receiving an additional C$10,000. Director's compensation for the three months ended March 31, 2023, was $49,932 (2022

- $55,260).

b)During the three months ended March 31, 2023, the Company granted 400,000 PSUs to independent members of the Board of Directors. As at March 31, 2023, the PSUs had fully vested upon the filing of the MS Phase 1 IND on January 6, 2023.

c)During the three months ended March 31, 2023, the Company granted the CEO, President, COO and CEO of Lucid, 500,000 share options each with an exercise price of C$1.30, expiry date of January 25, 2028 and all options are fully vested. Each share option can be exercised to acquire one Class B Common Share.

Key management personnel compensation during the three months ended March 31, 2023 and 2022 is comprised of:

	2023	2022
	$	$
Salaries, benefits, bonuses and consulting fees	317,831	321,846
Share-based payments	1,963,983	6,077
Total	2,281,814	327,923

20.Subsequent events

Options exercised

On April 23, 2023, 12,000 share options were exercised at C$1.30 in exchange for 12,000 Class B Common Shares.

Raza Bokhari

On May 6, 2023, the Ontario Superior Court of Justice awarded C$2,814,229 in favour of the Company against Raza Bokhari for legal costs incurred by the Company with respect to the arbitration matter.

Finance receivables

Subsequent to March 31, 2023, the Company entered into a loan agreement with the President of the Company. The Company issued a loan receivable in the aggregate amount of C$1,200,000. The loan is secured by a second charge against a residential property and was issued at loan to value ratio below 50%. The loan carries interest at a rate of 6% per annum, payable monthly, and matures two years from the date of issuance. The principal balance is due at maturity and can prepaid, in whole or in part, at any time without notice or penalty.

22

FSD PHARMA INC.

Notes to the condensed consolidated interim financial statements

(expressed in United States dollars)

March 31, 2023 and 2022

GBB Drink Lab, Inc.

GBB Drink Lab, Inc. has filed a complaint with the United States District Court of Southern District of Florida, Fort Lauderdale Division against FSD Biosciences, Inc. and FSD Pharma, Inc. claiming a material breach of a mutual nondisclosure agreement and misappropriation of trade secrets, which has and continues to cause irreparable harm to Plaintiff, which has been valued, as of August 30, 2022 (prior to the misappropriation and material breach) at $53,047,000. The ultimate outcome of the matter cannot be determined at this time.

23

EX-99.2

FSD PHARMA INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this management's discussion and analysis of financial condition and results of operations ("MD&A"), unless the context indicates or requires otherwise, all references to the "Company", "FSD", "we", "us" or "our" refer to FSD Pharma Inc., together with our subsidiaries, on a consolidated basis as constituted on March 31, 2023.

This MD&A for the three months ended March 31, 2023 and 2022 should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements and the accompanying notes for the three months ended March 31, 2023 and 2022. The financial information presented in this MD&A is derived from the Company's unaudited condensed consolidated interim financial statements for the three months ended March 31, 2023 and 2022 ("financial statements") which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). All amounts are in United States dollars except where otherwise indicated.

This MD&A is dated as of May 12, 2023.

About FSD Pharma

FSD Pharma Inc. is a biotechnology company with three drug candidates in different stages of development. FSD BioSciences, Inc., a wholly owned subsidiary, is focused on pharmaceutical research and development of its lead compound, FSD-201, a proprietary ultra-micronized PEA formulation, for the treatment of inflammatory diseases. Lucid Psycheceuticals Inc., a wholly owned subsidiary, is focused on the research and development of its lead compounds, Lucid-Psych and Lucid-MS. Lucid-Psych is a molecular compound identified for the potential treatment of mental health disorders, and expanding this category, the Company is investigating other products addressing acute medical needs due to the abuse of drugs such as alcohol. Lucid-MS is a molecular compound identified for the potential treatment of neurodegenerative disorders.

FORWARD-LOOKING INFORMATION

This MD&A contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this MD&A that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "plans", "expects", "expected", "scheduled", "estimates", "intends", "anticipates", "hopes", "planned" or "believes", or variations of such words and phrases, or states that certain actions, events, or results "may", "could", "would", "might", "potentially" or "will" be taken, occur or be achieved. More particularly, and without limitation, this MD&A contains forward-looking statements contained in this MD&A include statements concerning the future of FSD Pharma Inc. and are based on certain assumptions that FSD Pharma has made in respect thereof as of the date of this MD&A. FSD Pharma cannot give any assurance that such forward-looking statements will prove to have been correct.

Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. The Company cautions that although it believes the expectations and material factors and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct, and these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties including, but not limited to: the fact that the drug development efforts of both Lucid and FSD BioSciences are at a very early stage; the fact that preclinical drug development is uncertain, and the drug product candidates of Lucid and FSD BioSciences may never advance to clinical trials; the fact that results of preclinical studies and early-stage clinical trials may not be predictive of the results of later stage clinical trials; the uncertain outcome, cost, and timing of product development activities, preclinical studies and clinical trials of Lucid and FSD BioSciences; the uncertain clinical development process, including the risk that clinical trials may not have an effective design or generate positive results; the potential inability to obtain or maintain regulatory approval of the drug product candidates of Lucid and FSD BioSciences; the introduction of competing drugs that are safer, more effective or less expensive than, or otherwise superior to, the drug product candidates of Lucid and FSD BioSciences; the initiation, conduct, and completion of preclinical studies and clinical trials may be delayed, adversely affected, or impacted by COVID-19 related issues; the potential inability to obtain adequate financing; the potential inability to obtain or maintain intellectual property protection for the drug product candidates of Lucid and FSD BioSciences; and other risks. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this MD&A, which speak only as of the date of this MD&A.

1

Further information regarding factors that may cause actual results to differ materially are included in the Company's annual and other reports filed from time to time with the Canadian Securities Administrators on SEDAR (www.sedar.com) and with the U.S. Securities and Exchange Commission on EDGAR (www.sec.gov), including the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2022, under the heading "Risk Factors." This list of risk factors should not be construed as exhaustive. Readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. The forward-looking statements contained in this document speak only as of the date of this document. FSD Pharma does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. Additional information relating to FSD can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

OVERVIEW

The Company was formed under and is governed by the provisions of the Business Corporations Act (Ontario) (the "OBCA") on November 1, 1998, pursuant to the amalgamation of Olympic ROM World Inc., 1305206 Ontario Company, 1305207 Ontario Inc., Century Financial Capital Group Inc. and Dunberry Graphic Associates Ltd. The Company’s registered office is located at 199 Bay Street, Suite 4000, Toronto, Ontario, M5L 1A9.

On March 15, 2018, the Company's shareholders approved the amendments contemplated by the Articles of Amendment at the 2018 annual and special meeting of the shareholders, pursuant to which, among other things, the Company's shareholders approved certain changes to the capital structure of the Company.

On May 24, 2018, pursuant to Articles of Amendment, the Company changed its name to "FSD Pharma Inc." and the capital structure of the Company was reorganized to create a new class of Class A shares, amend the terms of and re-designate the existing common shares as Class B subordinate voting shares (the “Class B Shares”), and eliminate the existing non-voting Class A preferred shares and non-voting Class B preferred shares.

On May 29, 2018, the Class B shares commenced trading on the Canadian Securities Exchange under the trading symbol “HUGE”.

On October 16, 2019, the Company amended its articles of incorporation to complete a consolidation of all of its issued and outstanding share capital. Pursuant to the amendment, all of the issued and outstanding Class A shares and Class B shares were consolidated on the basis of one post-consolidation share for every 201 pre-consolidation shares of the Company (the "Consolidation"). Unless otherwise noted, presentation in this MD&A of the number of Class A shares, Class B shares, stock options, warrants and the issue or exercise prices and any other data related to the foregoing securities are all presented on a post-Consolidation basis.

On January 9, 2020, the Class B Shares commenced trading on the Nasdaq under the trading symbol "HUGE".

The Company operates in two segments: Biotechnology and Strategic Investments. The Company’s Biotechnology segment is focused on furthering the research and development of the Company’s three drug candidates consisting of FSD-PEA, Lucid-PSYCH and Lucid-MS, as further defined below. The Company’s Strategic Investments segment is focused on generating returns and cashflow through the issuance of loans secured by residential or commercial real estate property, with FSD Strategic Investments (as defined below) having a first collateral mortgage on the secured property.  

As of the date hereof, the Company currently has five material subsidiaries:

(i)FSD Biosciences Inc. ("FSD Biosciences"), which is wholly owned by the Company and incorporated under the laws of the State of Delaware;

(ii)FV Pharma Inc. ("FV Pharma"), which is wholly owned by the Company and incorporated under the OBCA;

(iii)Lucid Psycheceuticals Inc. ("Lucid"), which is wholly owned by the Company and incorporated under the OBCA;

(iv)Prismic Pharmaceuticals Inc. ("Prismic"), which is wholly owned by the Company and incorporated under the laws of the State of Arizona;

(v)FSD Strategic Investments Inc. ("FSD Strategic Investments"), which is wholly owned by the Company and incorporated under the OBCA; and

2

(vi)FSD Pharma Australia Pty Ltd. ("FSD Australia"), which is wholly owned by the Company and incorporated under the laws of Australia.

BIOTECHNOLOGY OPERATIONS

The Company, through its wholly owned subsidiaries, FSD Biosciences, Prismic, Lucid and FSD Australia, is a pharmaceutical research and development (“R&D”) company focused on developing over time multiple applications of its three compounds:

1.Ultra micro-palmitoylethanolamide ("PEA") or FSD-PEA (also known as FSD-201), which is a licensed compound (as described below);

2.Lucid-PSYCH (formerly Lucid-201); and

3.Lucid-MS (formerly Lucid-21-302), which is a licensed compound (as described below).

Through the acquisition of Prismic, the Company acquired an exclusive, worldwide license (excluding Italy and Spain) to exploit, for certain specified pharmaceutical purposes, patents and other intellectual property rights to PEA owned by Epitech Group SpA ("Epitech"). Pursuant to a royalty agreement between Prismic and FSD Pharma, Prismic holds the right to receive, from FSD, a percentage of the net sales of products developed for conditions relating to pain in humans and certain other conditions using certain intellectual property owned or controlled by Epitech or its affiliates, including those relating to PEA. PEA is a naturally occurring substance that is produced within the body in response to inflammation. FSD Pharma is currently seeking to advance pharmaceutical development programs centered on PEA that meet one or more selected criteria. All efforts are intended to be founded on a biological plausibility of an efficacious effect with a high safety profile.

The Company has successfully completed Phase 1 first-in-human safety and tolerability study for PEA and has found the compound to be safe with no serious adverse side effects. This study also validated considerable scientific literature already published in the European Union that claims safety and tolerability of PEA. PEA is currently being dispensed in Italy and Spain as a prescription based medical food supplement since 2004.

The Company received permission from the FDA in June 2020 to submit an IND Application for the use of PEA to treat COVID-19, the disease caused by the SARS-CoV-2 virus.

The Company submitted to the FDA an IND Application for the use of PEA in August 2020. In September 2020, the Company received authorization from the FDA to initiate a Phase 2 clinical program for the use of PEA to treat COVID-19. On August 24, 2021, the Company announced it was terminating the Phase 2 clinical program specific to treating COVID-19, while the Company continues to evaluate other indications to potentially target for PEA. The Company had retained an independent biotechnology and pharma-focused investment banking firm to evaluate FSD-PEA's current potential commercial viability for COVID-19 treatment (the "FSD-PEA Review"). The findings of the FSD-PEA Review suggested that while there were potential commercial opportunities for FSD-PEA, the treatment of COVID-19 by FSD-PEA is specifically unlikely to be commercially viable.

On May 31, 2022, the Company submitted an IND application with the FDA and Health Canada detailing a planned Phase 2 clinical trial of FSD-PEA for the treatment of a yet-to-be-disclosed inflammatory disorder.

On July 13, 2022, Lucid filed a provisional patent application on novel formulations of PEA. The new patent application is based on the results of completed preclinical animal toxicology studies and the Phase 1 clinical trial sponsored by FSD Pharma.

On September 6, 2022, the Company announced that it received a "Study May Proceed" letter for the IND application from the FDA and "Notice of Authorization" from Health Canada for its Phase 2 clinical trial of FSD-PEA.

On January 17, 2023, the Company announced the submission of the Company's clinical trial application for a planned Phase 1 clinical trial for Lucid-MS, a candidate for the treatment of multiple sclerosis.

On April 17, 2023, the Company announced completion of the first-in-human sentinel dosing of Lucid-MS in the Company's Phase I clinical trial evaluating its novel drug candidate as an orally administered treatment for multiple sclerosis.

On March 22, 2023, the Company announced FSD Australia received the certificate of approval from the Alfred Ethics Committee in Australia to proceed with a Phase 1 clinical trial of Lucid-201, as a novel drug candidate for the potential treatment of Major Depressive Disorder. 

3

Epitech License Agreement

On January 8, 2020, the Company entered into an amended and restated license agreement with Epitech, as further amended in July 2020 (defined in this subsection as the "License Agreement"), which amended and restated the license agreement between Prismic and Epitech through which Prismic secured certain intellectual property rights to PEA from Epitech. The License Agreement grants the Company an exclusive, worldwide license (excluding Italy and Spain where the Company is not licensed and Epitech remains entitled to commercialize the Licensed Products (as defined herein), directly or indirectly) (the "Epitech License") to research, manufacture and commercialize products (defined in this subsection as the "Licensed Products") that are developed using certain proprietary formulations of PEA owned by Epitech and that are to be used to treat chronic kidney disease in humans or, if a prescription drug, any other human condition that is related to pain and chronic pain. In addition, under the terms of the Epitech License, as further amended on July 9, 2020, if Epitech develops or commercializes a prescription drug for the treatment of any other human condition unrelated to pain and chronic pain (a "Different Prescription Drug") in its territory, the Company has a first refusal right to use Epitech's patents to develop and commercialize this Different Prescription Drug in its territory (i.e. worldwide excluding Italy and Spain). Should the Company exercise this right, but then fail to demonstrate commercially reasonable efforts to develop the Different Prescription Drug in the two years following, Epitech would be free to exploit and/or license to third parties the use of the patents for the Different Prescription Drug. Finally, the Epitech License provides the Company with a nonexclusive license to use Epitech's scientific and technical know-how with respect to FSD-PEA in connection with the development or commercialization of the Licensed Products discussed above.

Under the terms of the License Agreement, the Company is required to make payments to Epitech upon the achievement of specified milestones. The Company was required to pay the non-refundable sum of $300,000 on or before October 31, 2019. Upon first notification by the FDA of approval of a New Drug Application, the non-refundable sum of $700,000 is due and payable to Epitech. Within thirty days of the first notification by the FDA of approval of a New Drug Application, the Company is required to pay the non-refundable sum of $500,000. Within ten business days of the first notification of approval of a Supplemental New Drug Application by the FDA, the Company is required to pay the non-refundable sum of $1,000,000 to Epitech.

The License Agreement also specifies certain royalty payments. Pursuant to the License Agreement, the Company must pay Epitech 25% (in the case of non-prescription drug rights) and 5% (in the case of prescription drug rights) of any one-off lump sum payments it receives as consideration for granting a sub-license to a third-party with respect to a Licensed Product. In addition, the Company is required to pay either: (a) 7% of net sales of the Licensed Products in a product regulatory category other than prescription drugs placed on the market by the Company; (b) 25% of the royalties received by the Company from sub-licensees (such royalties, the "Net Receipts") where Licensed Products in a product regulatory category other than prescription drugs are placed on the market by such sub-licensees; or (c) 5% of net sales or Net Receipts of the Licensed Products that are prescription drugs.

Unless otherwise terminated in accordance with its terms, the Epitech License will remain in force until the Company is no longer obligated to pay royalties under the License Agreement, which obligation will expire on a country-by-country basis when the last valid claim of the Licensed Patents covering the Licensed Products in a given country expires. The approval of a therapeutically equivalent, generic version of the Licensed Product(s) in a country will conclusively demonstrate that a valid claim does not cover the Licensed Products in that country. If there are no patents covering the Licensed Products in a country, royalties are payable for the license of the scientific and technical know-how under the Epitech License until expiration of the last-to expire Epitech patent that relates to PEA.

The above description of the License Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is available under the Company's SEDAR and EDGAR profiles.

Lucid-MS Agreement

On May 19, 2021, prior to its acquisition by the Company, Lucid entered into a license agreement with the University Health Network ("UHN") that governs the world-wide licensing of certain intellectual property rights and data associated with Lucid-MS. Under the terms of the agreement, the Company shall pay a yearly license maintenance fee of C$100,000 to UHN until the first commercial sale of a product utilizing the intellectual property licensed to the Company under the agreement including Lucid-MS is made.

Under the agreement the Company is committed to minimum milestones payments of $nil and maximum milestones payments of C$12,500,000 if all product development and regulatory milestones are met.

Furthermore, the Company is also responsible to pay revenue milestone payments and royalties if revenue milestones from commercial sales are achieved. Milestones can be extended by mutual agreement.

4

Lucid-PSYCH Agreement

On October 1, 2021, the Company entered into an agreement with Covar Pharmaceuticals Inc. (“Covar”), a contract development and manufacturing services organization, to commence work on providing research quantities of the Company’s drug candidate, Lucid-PSYCH, on an exclusive basis for further clinical evaluation (the “Covar Agreement”). Covar’s research and development facility is licensed to handle psychoactive compounds such as Lucid-PSYCH, which are “controlled substances” listed under the Controlled Drugs and Substances Act (Canada). Pursuant to the Covar Agreement, Covar will produce non-good manufacturing practices and good manufacturing practices for Lucid-PSYCH for use in the Company’s planned pre-clinical and Phase 1 clinical trials, respectively.

STRATEGIC INVESTMENT OPERATIONS

On May 13, 2022, FSD Strategic Investments, a wholly owned subsidiary of the Company, was incorporated. FSD Strategic Investments is focused on generating returns and cashflow through the issuance of loans secured by residential or commercial property. FSD Strategic Investments earns interest through fixed rate lending arrangements that have an average term to maturity of two years from the date of issuance. The loans are secured by residential or commercial property with a first collateral mortgage on the secured property. Loans are issued up to 55% of the appraised value of the secured property. As at March 31, 2023, the Company has a finance receivable balance of $7,407,408, minimum payments receivable at the end of the loan terms is $8,190,180. The loans will start to mature in June 2024 to December 2024.   

DISCONTINUED OPERATIONS

In March 2020, the Company decided to focus its efforts and resources on the pharmaceutical business and initiated a process to sell FV Pharma's facility located at 520 William Street, Cobourg, Ontario, K9A 3A5 (the "Facility") and the 64-acre property on which the Facility is located (the "Facility Property") and exit the medical cannabis industry. On May 6, 2022, the Company closed the sale of the Facility and the Facility Property for total consideration of $12,730,942 (C$16,400,000). The Company recognized a gain of $4,249,582 on the sale of the Facility and the Facility Property and incurred selling expenses of $616,002.

Assets included in the sale consisted of the Facility and Facility Property. No liabilities of the Company were transferred as part of the sale. Subsequent to the sale of the Facility and the Facility Property results of operations related to FV Pharma are reported as continued operations.

SELECTED FINANCIAL HIGHLIGHTS

The following table presents selected financial information for the three months ended March 31, 2023 and 2022:

	For the three months ended
	March 31,
	2023 $		2022 $
General and administrative	2,716,777		3,528,302
External research and development fees	2,311,596		937,052
Share-based payments	3,206,535		83,161
Depreciation and amortization	1,129,971		1,101,155
Impairment loss	480,096		—
Total operating expenses	9,844,975		5,649,670
Net loss from continuing operations	(9,957,529	)	(5,460,831	)
Net loss from discontinued operations	—		(444,506	)
Net loss for the period	(9,957,529	)	(5,905,337	)

OVERALL FINANCIAL PERFORMANCE

Three months ended March 31, 2023

For the three months ended March 31, 2023, general and administrative expenses were $2,716,777 compared to $3,528,302 for the comparative period in the prior year. This represents a decrease of $811,525 or 23% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. The decrease for the three months ended March 31, 2022, was primarily related to approximately $1,200,000 of legal fees directly related to non-recurring litigation expenses during the three months ended March 31, 2022 compared to $103,000 for the three months ended March 31, 2023, offset by increases in general office, insurance and administrative expenses, consulting and change in foreign exchange.

5

For the three months ended March 31, 2023, external research and development fees were $2,311,596 compared to $937,052 for the comparative period in the prior year. This represents an increase of $1,374,544, or 147% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. For the three months ended March 31, 2023, the Company has incurred increased expenses related to its key compounds as it progresses in planned trials and development.

For the three months ended March 31, 2023, share-based payments expense was $3,206,535 compared to $83,161 for the comparative period in the prior year. This represents an increase of $3,123,374 or 3756% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. Share-based payments change based on the variability in the number of options granted, vesting periods of the options, number of PSUs granted, vesting periods of the PSUs, and the grant date fair values and share-based bonuses issued. During the three months ended March 31, 2023, the Company issued warrants for services for $894,579 and recognized $2,311,956 related to share-options and PSUs.

For the three months ended March 31, 2023, depreciation and amortization was $1,129,971 compared to $1,101,155 for the comparative period in the prior year. This represents an increase of $28,816 or 3% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. Depreciation and amortization is primarily related to the amortization of intellectual property.

For the three months ended March 31, 2023, impairment loss was $480,096 compared to $nil for the comparative period in the period year. This represents an increase of $480,096 or 100% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. The impairment loss is related to a license agreement to use ultra-micro PEA to develop FDA approved veterinary drugs for the treatment of gastro-intestinal diseases in canines and felines, as the Company made a strategic decision to no longer pursue the development.

For the three months ended March 31, 2023, net loss was $9,957,529 compared to $5,905,337 for the three months ended March 31, 2023. Net loss for the three months ended March 31, 2023, is comprised of net loss from continuing operations of $9,957,529 and net loss from discontinued operations of $nil compared to net loss from continuing operations for the three months ended March 31, 2022 of $5,460,831 and net loss from discontinued operations of $444,506.

	As at March 31,	As at December 31,
	2023	2022	Change
	$	$	$		%
Cash	9,222,852	16,980,472	(7,757,620	)	-46%
Total assets	29,961,001	38,410,656	(8,449,655	)	-22%
Total liabilities	8,623,447	7,868,436	755,011		10%

The Company concluded the three months ended March 31, 2023, with cash of $9,222,852 (December 31, 2022 - $16,980,472).

6

RESULTS OF OPERATIONS

The following table outlines our consolidated statements of loss for three months ended March 31, 2023 and 2022:

	For the three months ended March 31,
	2023		2022		Change
	$		$		$		%
Expenses
General and administrative	2,716,777		3,528,302		(811,525	)	-23%
External research and development fees	2,311,596		937,052		1,374,544		147%
Share-based payments	3,206,535		83,161		3,123,374		3756%
Depreciation and amortization	1,129,971		1,101,155		28,816		3%
Impairment loss	480,096		-		480,096		100%
Total operating expenses	9,844,975		5,649,670		4,195,305		74%
Loss from continuing operations	(9,844,975	)	(5,649,670	)	(4,195,305	)	74%
Interest income	(272,341	)	-		(272,341	)	100%
Finance expense, net	667		16,382		(15,715	)	-96%
Gain on settlement of financial liability	-		(82,725	)	82,725		-100%
Loss (gain) on change in fair value of derivative liability	206,950		(242,519	)	449,469		-185%
Loss on changes in fair value of investments	177,278		120,023		57,255		48%
Net loss from continuing operations	(9,957,529	)	(5,460,831	)	(4,496,698	)	82%
Net loss from discontinued operations	-		(444,506	)	444,506		-100%
Net loss	(9,957,529	)	(5,905,337	)	(4,052,192	)	69%
Other comprehensive income (loss)
Items that may be subsequently reclassified to income:
Exchange gain (loss) on translation of foreign operations	15,402		(73,585	)	88,987		-121%
Comprehensive loss	(9,942,127	)	(5,978,922	)	(3,963,205	)	66%

REVIEW OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

General and administrative

General and administrative expenses for the three months ended March 31, 2023 and 2022 are comprised of:

	For the three months ended March 31,
	2023	2022		Change
	$	$		$		%
Professional fees	594,286	2,132,377		(1,538,091	)	-72%
General office, insurance and administration
expenditures	622,316	471,523		150,793		32%
Consulting fees	556,804	351,689		205,115		58%
Salaries, wages and benefits	630,027	578,350		51,677		9%
Investor relations	247,392	291,170		(43,778	)	-15%
Building and facility costs	-	412,360		(412,360	)	-100%
Foreign exchange loss	65,952	(249,493	)	315,445		-126%
	2,716,777	3,987,976		(1,271,199	)	-32%
Allocated to:
Continuing operations	2,716,777	3,528,302		(811,525	)	-23%
Discontinued operations	-	459,674		(459,674	)	-100%

7

Professional fees

	For the three months ended March 31,
	2023	2022	Change
	$	$	$		%
Professional fees	594,286	2,132,377	(1,538,091	)	-72%

Professional fees decreased from $2,132,377 to $594,286 or 72% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. The Company incurred $1,200,000 of legal fees directly related to non-recurring litigation expenses during the three months ended March 31, 2022, compared to $103,000 for the three months ended March 31, 2023. Professional fees fluctuate from period to period based on the nature of the transactions the Company undertakes.

General office, insurance and administration expenditures

General office, insurance and administration expenditures for the three months March 31, 2023 and 2022 are comprised of the following:

	For the three months ended March 31,
	2023	2022	Change
	$	$	$		%
Insurance, shareholders and public company costs	151,774	284,752	(132,978	)	-47%
Travel, meals and entertainment	43,696	87,201	(43,505	)	-50%
Office and general administrative	426,846	99,570	327,276		329%
General office, insurance and administration expenditures	622,316	471,523	150,793		32%

Insurance, shareholders and public company costs

Insurance, shareholders and public company costs decreased from $284,752 to $151,774 or 47% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. These costs primarily consist of insurance and other related expenditures associated with being a publicly listed Company on the NASDAQ.

Travel, meals and entertainment

Travel, meals and entertainment expenses decreased from $87,201 to $43,696 or 50% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. Travel, meals and entertainment expenses fluctuate from period to period based on the nature of the transactions the Company undertakes.

Office and general administrative

Office and general administrative expenses increased from $99,570 to $426,846 or 329% for the three months ended March 31, 2023, respectively, compared to the equivalent periods in the prior year. Office and general administrative expenses may vary from period to period based on operational activities. The primary reason for the increase for the three months ended March 31, 2023, compared to the equivalent periods in the prior year is due to general office expenditures incurred for special project.

Consulting fees

	For the three months ended March 31,
	2023	2022	Change
	$	$	$	%
Consulting fees	556,804	351,689	205,115	58%

Consulting fees increased from $351,689 to $556,804 or 58% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. Consulting fees include fees paid to individuals and professional firms who provide advisory services to the Company and fluctuate from period to period based on the nature of the transactions the Company undertakes.

Salaries, wages and benefits

	For the three months ended March 31,
	2023	2022	Change
	$	$	$	%
Salaries, wages and benefits	630,027	578,350	51,677	9%

8

Salaries, wages and benefits expenses increased from $578,350 to $630,027 or 9% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. The increase is primarily due to increase in headcount for the three months ended March 31, 2023, compared to the three months ended March 31, 2022.

Investor relations

	For the three months ended March 31,
	2023	2022	Change
	$	$	$		%
Investor relations	247,392	291,170	(43,778	)	-15%

Investor relations expenses decreased from $291,170 to $247,392 or 15% for the three months ended March 31, 2023, respectively, compared to the equivalent period in the prior year. Investor relations expenses fluctuate from period to period based on the on the Company's business strategy.

Building and facility costs

	For the three months ended March 31,
	2023	2022	Change
	$	$	$		%
Building and facility costs	-	412,360	(412,360	)	-100%

Building and facility costs decreased from $412,360 to $nil or 100% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. Such costs include property taxes, security services, repairs and maintenance expenditures and utilities. All costs relate to FV Facility and FV property that was sold in 2022. 

Foreign exchange loss (gain)

	For the three months ended March 31,
	2023	2022		Change
	$	$		$	%
Foreign exchange loss (gain)	65,952	(249,493	)	315,445	-126%

Foreign exchange loss (gain) decreased from gain of $249,493 to loss of $65,952 for the three months ended March 31, 2023, compared to the equivalent period in the prior year. The primary reason for the foreign exchange change was due to the change of the Canadian dollar relative to the US dollar and its impact on cash balances denominated in the Canadian dollar.

External research and development fees

	For the three months ended March 31,
	2023	2022	Change
	$	$	$	%
External research and development fees	2,311,596	937,052	1,374,544	147%

External research and development fees increased from $937,052 to $2,311,596 or 147% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. For the three months ended March 31, 2023, the Company has incurred increased expenses related to its key compounds as it progresses in planned trials and development.

Share-based payments

	For the three months ended March 31,
	2023	2022	Change
	$	$	$	%
Share-based payments	3,206,535	83,161	3,123,374	3756%

Share-based payments increased from $83,161 to $3,206,535 for the three-month ended March 31, 2023, compared to the equivalent period in the prior year. This represents an increase of $3,123,374, or 3756% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. Share-based payments change based on the variability in the number of options granted, vesting periods of the options, number of PSUs granted, vesting periods of the PSUs, and the grant date fair values and share-based bonuses issued. During the three months ended March 31, 2023, the Company issued warrants for services for $894,579 and recognized $2,311,956 related to share-options and PSUs.

9

Depreciation and amortization

	For the three months ended March 31,
	2023	2022	Change
	$	$	$	%
Depreciation and amortization	1,129,971	1,101,155	28,816	3%

Depreciation and amortization increased from $1,101,155 to $1,129,971 or 3% for the three months ended March 31, 2023, compared to the equivalent period in the prior year. Depreciation and amortization is primarily related to the intellectual property.

Impairment loss

	For the three months ended March 31,
	2023	2022	Change
	$	$	$	%
Impairment loss	480,096	-	480,096	100%

During the three months ended March 31, 2023 the Company recognized an impairment loss of $480,096 (2022 – $nil) relating to the Company’s license agreement with Innovet Italia S.R.L. (“Innovet”). The Company had been granted a license to use ultra-micro PEA to develop veterinary drugs for the treatment of gastro-intestinal diseases in canines and felines. The Company had recognized an intangible asset for the payments made to Innovet under the license agreement. During the three months ended March 31, 2023, the Company made a strategic decision to no longer pursue the development of ultra-micro PEA for veterinary purposes and as a result the remaining balance of the intangible asset was impaired in the period.

Interest income

For the three months ended March 31, 2023, interest income was $272,341 compared to $nil, for the three months ended March 31, 2022. Interest income is primarily comprised user fees earned on finance receivables and interest earned on Guaranteed Investment Certificates.

Gain on settlement of financial liability

For the three months and year ended March 31, 2023, the Company recognized $nil on settlement of financial liabilities, compared to a gain of $82,725, for the three months ended March 31, 2022.

Loss (gain) on change in fair value of derivative liability

In August 2020, the Company issued 2,762,430 Class B shares and 1,381,215 warrants to purchase Class B shares for total cash proceeds of $9,999,997. Each warrant is exercisable to purchase one Class B share of the Company at an exercise price of $4.26 per share and expires five years from the date of issuance.

The fair value of the warrants liability as at March 31, 2022 was $522,884 resulting in a gain on change in fair value of $242,519 for the period ended March 31, 2022.

The fair value of the warrants liability as at March 31, 2023, was $450,544 resulting in a loss on change in fair value of $206,950 for the period ended March 31, 2023.

Loss (gain) on changes in fair value of investments

The Company has various investments accounted for at fair value through profit or loss resulting in recognition of loss or gain as the fair value fluctuates.

		Balance at December	Change in fair value		Balance at March
Entity	Instrument	31, 2022	through profit or loss		31, 2023
		$			$
Solarvest BioEnergy Inc.	Shares	221,490	(110,655	)	110,835
Solarvest BioEnergy Inc.	Convertible debenture	177,192	(88,524	)	88,668
A2ZCryptoCap Inc.	Shares	10,632	8		10,640
Lions Bay Fund	Shares	418,298	21,893		440,191
		827,612	(177,278	)	650,334

10

REVIEW OF DISCONTINUED OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2022

The following table outlines our net loss from discontinued operations for the three months ended March 31, 2022:

	For the three months
	ended March 31,
	2022
	$
Expenses
General and administrative	459,674
Total operating expenses	459,674
Loss from discontinued operations	(459,674	)
Other income	(15,168	)
Net loss from discontinued operations	(444,506	)

General and administrative

	For the three months
	ended March 31,
	2022
	$
General office and administration	24,064
Salaries, wages and benefits	23,250
Building and facility costs	412,360
	459,674

General and administrative expenses from discontinued operations decreased from $459,674 to $nil for the three months ended March 31, 2023, compared to the equivalent period in the prior year.

SELECTED QUARTERLY INFORMATION

The following table sets forth selected unaudited quarterly statements of operations data for each of the eight quarters commencing April 1, 2021 and ended March 31, 2023. The information for each of these quarters has been prepared on the same basis as the audited annual financial statements for the year ended December 31, 2022 and the financial statements for the period ended March 31, 2023. This data should be read in conjunction with our audited annual financial statements for the year ended December 31, 2022 and the financial statements for the period ended March 31, 2023. These quarterly operating results are not necessarily indicative of our operating results for a full year or any future period.

	March 31,		December 31,		September 30,		June 30,		March 31,		December 31,		September 30,		June 30,
	2023		2022		2022		2022		2022		2021		2021		2021
	$		$				$		$		$		$		$
Interest income	(272,341	)	(300,018	)	(65,499	)	(2,218	)	-		-		-		-
Net loss for the period	(9,957,529	)	(6,148,441	)	(7,128,885	)	(4,424,165	)	(5,905,337	)	(6,347,723	)	(5,790,925	)	(13,207,327	)
Net loss per share - basic	(0.26	)	(0.16	)	(0.19	)	(0.11	)	(0.15	)	(0.16	)	(0.16	)	(0.37	)
Net loss per share - diluted	(0.26	)	(0.16	)	(0.19	)	(0.11	)	(0.15	)	(0.16	)	(0.16	)	(0.16	)

11

FINANCIAL POSITION

	As at		As at
	March 31,		December 31,		Change
	2023		2022		$		%
ASSETS
Current assets
Cash and cash equivalents	9,222,852		16,980,472		(7,757,620	)	-46%
Other receivables	425,048		374,377		50,671		14%
Prepaid expenses and deposits	837,540		472,137		365,403		77%
Note receivables	223,333		-		223,333		100%
Net investment in lease	23,206		23,188		18		0%
	10,731,979		17,850,174		(7,118,195	)	-40%
Non-current assets
Equipment, net	102,821		105,729		(2,908	)	-3%
Investments	650,334		827,612		(177,278	)	-21%
Right-of-use asset, net	118,779		155,196		(36,417	)	-23%
Finance receivables, net	7,407,408		7,431,656		(24,248	)	0%
Intangible assets, net	10,469,584		12,040,289		(1,570,705	)	-13%
	18,748,926		20,560,482		(1,808,648	)	-9%
Total assets	29,480,905		38,410,656		(8,929,751	)	-23%
LIABILITIES
Current liabilities
Trade and other payables	7,706,530		7,108,419		598,111		8%
Lease obligations	141,702		177,870		(36,168	)	-20%
Warrants liability	450,544		243,594		206,950		85%
Notes payable	300,549		300,549		-		0%
	8,599,325		7,830,432		768,893		10%
Non-current liabilities
Lease obligations	24,122		38,004		(13,882	)	-37%
Total liabilities	8,623,447		7,868,436		755,011		10%
SHAREHOLDERS' EQUITY
Class A share capital	151,588		151,588		-		0%
Class B share capital	137,287,903		143,258,972		(5,971,069	)	-4%
Warrant	3,036,979		2,142,400		894,579		42%
Contributed surplus	29,627,239		28,500,924		1,126,315		4%
Foreign exchange translation reserve	668,003		652,601		15,402		2%
Accumulated deficit	(149,914,254	)	(144,164,265	)	(5,749,989	)	4%
Total shareholders' equity	20,857,458		30,542,220		(9,684,762	)	-32%
Total liabilities and shareholders' equity	29,480,905		38,410,656		(8,929,751	)	-23%

Assets

Current assets

Cash decreased by $7,757,620 or 46%, as a result of cash used during the period.

Other receivables increased by $50,671 or 14%, primarily due to an increase in sales taxes receivable and income tax receivables. 

Prepaid expenses and deposits increased by $365,403 or 77% primarily related to payments made for the Company's insurance policies.

Note receivables increased by $223,333 or 100%, due to the issuance of a promissory note.

12

Non-current assets

Investments decreased by $177,278 or 21%, primarily due to the change in fair value of investments as a result of decreases in the underlying share prices.

Intangible assets decreased by $1,570,705 or 13%, due to impairment loss of $480,096 and amortization expense incurred for the three months ended March 31, 2023.

Liabilities

Current liabilities

Trade and other payables increased by $598,111 or 8%, primarily due to timing of payments.

Warrants liability

In August 2020, the Company issued 2,762,430 Class B shares and 1,381,215 warrants to purchase Class B shares for total cash proceeds of $9,999,997. Each warrant is exercisable to purchase one Class B share of the Company at an exercise price of $4.26 per share and expire five years from the date of issuance. The fair value of these warrants is classified as Level 2 in the fair value hierarchy.

On initial recognition the Company determined that these warrants did not meet the IFRS definition of equity due to the  exercise price being denominated in United States dollar, which was not the functional currency of the Company at the  time resulting in variability in exercise price. The change in functional currency on October 1, 2020, was determined to  be a change in circumstance and, as such, the Company has made an accounting policy choice to continue to recognize  the warrants as a financial liability classified at fair value through profit or loss. 

The fair value of the warrants liability as at March 31, 2023, was $450,544 (December 31, 2022 - $243,594) resulting in a loss on change in fair value of $206,950 for the period ended March 31, 2023.

Notes payable

The Company recognized notes payable from the acquisition of Prismic on June 29, 2019, made up of convertible notes and short-term notes. The notes and short-term notes are due to former board members of Prismic. The notes carry an annual interest rate of 20% and the short-term notes carry an annual interest rate of 10%.

Non-current liabilities

Non-current portion of lease liability represents the Company's obligations for office leases.

Shareholders' equity

Shareholder's equity decreased by $9,684,762 due to a decrease of $5,971,069 related to share buyback program offset by issuance of common shares on PSUs conversion, gain of $15,402 related to the translation of foreign operations and cancellation of shares, net loss of $9,957,529, offset by $1,126,315 of contribution surplus related to share cancelation and share based payments and $894,579 of warrants related to share-based payments.

LIQUIDITY, CAPITAL RESOURCES AND FINANCING

The general objectives of our capital management strategy are to preserve our capacity to continue operating, provide benefits to our stakeholders and provide an adequate return on investment to our shareholders by continuing to invest in our future that is commensurate with the level of operating risk we assume. We determine the total amount of capital required consistent with risk levels. This capital structure is adjusted on a timely basis depending on changes in the economic environment and risks of the underlying assets. We are not subject to any externally imposed capital requirements.

The financial statements and this MD&A have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. In making this assessment, management concluded that it has sufficient working capital as of March 31, 2023, in order to carry out its planned operations over the next twelve months.

The Company is in the preliminary stages of its planned operations and has not yet determined whether its processes and business plans are economically viable. The continuing operations of the Company are dependent upon the ability of the Company to complete the pharmaceutical research and development programs centered on the Company's compounds (two of which are licensed). The discontinued operations of the Company are in the process of being sold to fund the continuing operations.

13

As at March 31, 2023, the Company had cash of $9,222,852 representing a decrease of $7,757,620 from December 31, 2022. This decrease is primarily due to $4,754,136 of cash used in operating activities and $3,003,484 of cash used in financing activities.

Cash flows for the three months ended March 31, 2023 and 2022

	For the three months ended March 31,
	2023		2022
	$		$
Net cash provided by (used in):
Cash used in continuing operating activities	(4,754,136	)	(4,589,164	)
Cash used in discontinued operating activities	-		(504,264	)
Cash used in operating activities	(4,754,136	)	(5,093,428	)
Cash used in investing activities	-		(106,586	)
Cash used in financing activities	(3,003,484	)	(1,486,747	)
Net increase in cash during the period	(7,757,620	)	(6,686,761	)

Cash Flows Used in Operating Activities

Cash flows used in continuing operating activities for the three months ended March 31, 2023, were $4,754,136 compared to cash flows used in continuing operating activities of $4,589,164 for the three months ended March 31, 2022. Cash flows used in discontinued operating activities for the three months ended March 31, 2023, were $nil compared to cash flows used in discontinued operating activities of $504,264 for the three months ended March 31, 2022. The decrease in cash used in operating activities of $339,292 is primarily due to a decrease in cash used in discontinued operations for the three months ended March 31, 2023.

Cash Flows Used in Investing Activities

Cash flows used in investing activities for the three months March 31, 2023, were $nil compared to cash flows used in by investing activities of $106,586 for the three months ended March 31, 2022. The change is primarily due to a decrease in the additions of intangible assets, offset by the sale of investments during the three months ended March 31, 2022.

Cash Flows Used in Financing Activities

Cash flows used in financing activities for the three months ended March 31, 2023, were $3,003,484 compared to cash used in financing activities of $1,486,747 for the three months ended March 31, 2022. The increase is primarily related to the share repurchase program.

CONTRACTUAL OBLIGATIONS

We have no significant contractual arrangements other than those noted in our financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements other than those noted in our financial statements.

TRANSACTIONS WITH RELATED PARTIES

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling activities of the entity, directly or indirectly.

14

Transactions with key management and directors comprised the following:

a.In fiscal 2023, the Company pays independent directors' compensation of C$60,000, with the chair of the audit committee receiving an additional C$20,000 and the chair of the compensation committee receiving an additional C$10,000. Director's compensation for the three months ended March 31, 2023, was $49,932 (2022 - $55,260).

b.During the three months ended March 31, 2023, the Company granted 400,000 PSUs to independent members of the Board of Directors. As at March 31, 2023, the PSUs had fully vested upon the filing of the MS Phase 1 IND on January 6, 2023.

c.During the three months ended March 31, 2023, the Company granted the CEO, President, COO and CEO of Lucid, 500,000 share options each to acquire Class B Common Shares with an exercise price of C$1.30 and an expiry date of January 25, 2028. All options were fully vested at the grant date.

Key management personnel compensation during the three months ended March 31, 2023 and 2022 is comprised of:

	2023	2022
	$	$
Salaries, benefits, bonuses and consulting fees	317,831	321,846
Share-based payments	1,963,983	6,077
Total	2,281,814	327,923

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from deposits with banks and outstanding other receivables and finance receivables. The Company trades only with recognized, creditworthy third parties.

The Company does not hold any collateral as security for its outstanding finance receivables but mitigates this risk by dealing only with, what management believes to be, financially sound counterparties and, accordingly, does not anticipate significant loss for non-performance. The loans are secured by residential or commercial properties and the Company is granted a first collateral charge mortgage on the properties for a sum equal to the interest payments plus the principal amount. The Company performs assessments on factors such as: timing of payments, loan to value, communications with the borrower and external macro factors such as interest rates and economic conditions to mitigate risks.

Liquidity risk

Liquidity risk is the risk the Company will not be able to meet its financial obligations as they come due. The Company's exposure to liquidity risk is dependent on the Company's ability to raise additional financing to meet its commitments and sustain operations. The Company mitigates liquidity risk by management of working capital, cash flows, the issuance of share capital and if desired, the issuance of debt. The Company's trade and other payables and notes payables are all due within twelve months from the date of these financial statements.

If unanticipated events occur that impact the Company's ability to carry out the planned clinical trials, the Company may need to take additional measures to increase its liquidity and capital resources, including issuing debt or additional equity financing or strategically altering the business forecast and plan. In this case, there is no guarantee that the Company will obtain satisfactory financing terms or adequate financing. Failure to obtain adequate financing on satisfactory terms could have a material adverse effect on the Company's results of operations or financial condition.

Market risk

Market risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk.

•Foreign currency risk

15

Foreign currency risk arises on financial instruments that are denominated in a currency other than the functional currency in which they are measured. The Company's primary exposure with respect to foreign currencies is from Canadian dollar denominated cash and trade and other payables. A 1% change in the foreign exchange rates would not result in any significant impact to the financial statements.

•Interest rate risk

Interest rate risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's finance receivables are at fixed rates and there are no material long-erm borrowings outstanding. The Company is not exposed to interest rate risk as at March 31, 2023.

•Other price risk

Other price risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company is not exposed to other price risk as at March 31, 2023.

Fair values

The carrying values of cash, other receivables, trade and other payables and notes payable approximate fair values due to the short-term nature of these items or they are being carried at fair value or, for notes payable, interest payables are close to the current market rates. The risk of material change in fair value is not considered to be significant. The Company does not use derivative financial instruments to manage this risk.

Financial instruments recorded at fair value on the consolidated statement of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company's valuation techniques. A level is assigned to each fair value measurement based on the lowest-level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

•Level 1 - Unadjusted quoted prices as at the measurement date for identical assets or liabilities in active markets.

•Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Significant unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.

Private company investments measured at fair value are classified as Level 3 financial instruments. The valuation method and significant assumptions used to determine the fair value of private company investments have been disclosed in the financial statements. The Company did not hold any private company investments as of March 31, 2023. The Company's investment in the Lion's Bay Fund is measured at fair value and classified as Level 3. During the year, there were no transfers of amounts between levels.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to Note 2 and Note 3 of the audited consolidated financial statements for the fiscal year ended December 31, 2022, for a full discussion of our critical accounting policies and estimates.

OUTSTANDING SHARE DATA

The Company is authorized to issue an unlimited number of Class A multiple voting shares ("Class A shares") and an unlimited number of Class B subordinate voting shares ("Class B shares"), all without par value. All shares are ranked equally with regards to the Company's residual assets.

The holders of Class A shares are entitled to 276,660 votes per Class A share held. Class A shares are held by certain Directors of the Company.

16

The Company's outstanding capital was as follows as at the date of this MD&A:

Class A shares	72
Class B shares	39,040,614
Share options	2,885,529
Warrants	11,163,308
RSUs	400,000

SUBSEQUENT EVENTS

Options exercised

On April 23, 2023, 12,000 share options were exercised at C$1.30 in exchange for 12,000 Class B Common Shares.

Raza Bokhari

On May 6, 2023, the Ontario Superior Court of Justice awarded C$2,814,229 in favour of the Company against Raza Bokhari for legal costs incurred by the Company with respect to the arbitration matter. 

Finance receivables

Subsequent to March 31, 2023, the Company entered into a loan agreement with the President of the Company. The Company issued a loan receivable in the aggregate amount of C$1,200,000. The loan is secured by a second charge against a residential property and was issued at loan to value ratio below 50%. The loan carries interest at a rate of 6% per annum, payable monthly, and matures two years from the date of issuance. The principal balance is due at maturity and can prepaid, in whole or in part, at any time without notice or penalty.

GBB Drink Lab, Inc.

GBB Drink Lab, Inc. has filed a complaint with the United States District Court of Southern District of Florida, Fort Lauderdale Division against FSD Biosciences and FSD Pharma claiming a material breach of a mutual nondisclosure agreement and misappropriation of trade secrets, which has and continues to cause irreparable harm to plaintiffs, which has been valued, as of August 30, 2022 (prior to the misappropriation and material breach) at $53,047,000. The ultimate outcome of the matter cannot be determined at this time.

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

A.Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our CEO and CFO, our management has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023, the end of the period covered by this report. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2023.

The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.

17

B.Management's Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is the process designed by and under the supervision of our CEO and CFO to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Management has evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

Under the supervision and with the participation of our CEO and CFO, our management has assessed the effectiveness of our internal control over financial reporting as of March 31, 2023 and concluded that it was effective.

18

EX-99.3

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, Anthony Durkacz, Chief Executive Officer of FSD Pharma Inc., certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of FSD Pharma Inc. (the "issuer") for the interim period ended March 31, 2023.

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is the Internal Control - Integrated Framework (COSO Framework 2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2ICFR - material weakness relating to design: N/A

5.3Limitation on scope of design: N/A

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6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on January 1, 2023 and ended on March 31, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: May 12, 2023

/s/ Anthony Durkacz

Anthony Durkacz

Chief Executive Officer

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EX-99.4

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, Nathan Coyle, Chief Financial Officer of FSD Pharma Inc., certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of FSD Pharma Inc. (the "issuer") for the interim period ended March 31, 2023.

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is the Internal Control - Integrated Framework (COSO Framework 2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2ICFR - material weakness relating to design: N/A

5.3Limitation on scope of design: N/A

1

6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on January 1, 2023 and ended on March 31, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: May 12, 2023

/s/ Nathan Coyle

Nathan Coyle

Chief Financial Officer

2