Eupraxia Pharmaceuticals Inc 6-K, filed Nov 4, 2025
Eupraxia Pharmaceuticals Inc. (EPRX)
About this 6-K
Eupraxia Pharmaceuticals Inc filed this 6-K on November 4, 2025.
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 November 2025
Commission File Number 001-41923
EUPRAXIA PHARMACEUTICALS INC.
(Translation of registrant’s name into English)
201-2067 Cadboro Bay Road
Victoria, British Columbia, Canada V8R 5G4
Telephone: (250) 590-3968
(Address of principal executive office)
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 ☒
INCORPORATION BY REFERENCE
Exhibits 99.1 and 99.2 of this Form 6-K are incorporated by reference into the registrant’s Registration Statement on Form F-10 (File No. 333-276586) and the registrant’s Registration Statement on Form S-8 (File No. 333-278534).
DOCUMENTS INCLUDED AS PART OF THIS REPORT
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.
| Eupraxia Pharmaceuticals Inc. | ||||||
| Date: November 4, 2025 | By: | /s/ Alex Rothwell | ||||
| Name: Alex Rothwell | ||||||
| Title: Chief Financial Officer | ||||||
Exhibit 99.1
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months ended September 30, 2025
(Unaudited and Expressed in U.S. Dollars)
EUPRAXIA PHARMACEUTICALS INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2025
(Unaudited and Expressed in U.S. Dollars)
CONTENTS
| CONSOLIDATED BALANCE SHEETS |
2 | |||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
3 | |||
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY |
4-6 | |||
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
7 | |||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
8-27 | |||
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited and Expressed in U.S. Dollars, except share amounts)
| September 30, 2025 |
December 31, 2024 |
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| ASSETS |
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| Current assets |
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| Cash |
$ | 88,959,281 | $ | 33,101,294 | ||||
| Prepaid expenses and deposits |
2,300,678 | 1,106,512 | ||||||
| Amounts receivable (Note 4) |
139,904 | 228,872 | ||||||
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| Total current assets |
91,399,863 | 34,436,678 | ||||||
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| Non-current assets |
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| Prepaid expenses |
97,597 | 80,761 | ||||||
| Property and equipment, net (Note 5) |
682,835 | 357,893 | ||||||
| Right-of-use asset, net (Note 6) |
168,760 | 67,023 | ||||||
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| Total assets |
$ | 92,349,055 | $ | 34,942,355 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) |
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| Current liabilities |
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| Accounts payable and accrued liabilities (Note 7) |
$ | 3,734,890 | $ | 3,031,527 | ||||
| Lease liability – current portion (Note 9) |
76,136 | 71,859 | ||||||
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| Total current liabilities |
3,811,026 | 3,103,386 | ||||||
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| Non-current liabilities |
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| Lease liability – non-current portion (Note 9) |
94,467 | — | ||||||
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| Total liabilities |
3,905,493 | 3,103,386 | ||||||
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| Shareholders’ equity |
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| Preferred shares, without par value; unlimited shares authorized; issued and outstanding: 8,905,638 (December 31, 2024: 8,905,638 (Notes 12(c)) |
31,705,219 | 31,705,219 | ||||||
| Common shares, without par value; unlimited shares authorized; issued and outstanding: 50,598,331 (December 31, 2024 - 35,641,603 (Note 12(b)) |
191,017,262 | 116,360,066 | ||||||
| Additional paid-in capital (Notes 12(b), 12(d)(iii) and 12(e)) |
23,471,064 | 20,503,904 | ||||||
| Deficit |
(152,868,722 | ) | (131,003,831 | ) | ||||
| Accumulated other comprehensive loss |
(3,296,002 | ) | (4,160,555 | ) | ||||
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| Equity attributable to the owners of the Company |
90,028,821 | 33,404,803 | ||||||
| Non-controlling interest |
(1,585,259 | ) | (1,565,834 | ) | ||||
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| Total shareholders’ equity |
88,443,562 | 31,838,969 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 92,349,055 | $ | 34,942,355 | ||||
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Nature of business and going concern (Note 1)
Commitments (Note 15)
Subsequent event (Note 20)
The accompanying notes are an integral part of these consolidated financial statements.
2
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited and Expressed in U.S. Dollars, except share amounts)
| Three months ended September 30, 2025 |
Three months ended September 30, 2024 |
Nine months ended September 30, 2025 |
Nine months ended September 30, 2024 |
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| Expenses |
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| General and administrative (Note 13) |
$ | 2,465,378 | $ | 2,223,356 | $ | 8,807,256 | $ | 7,324,505 | ||||||||
| Research and development (Note 14) |
4,417,722 | 4,049,865 | 13,464,163 | 12,197,293 | ||||||||||||
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| Total expenses |
6,883,100 | 6,273,221 | 22,271,419 | 19,521,798 | ||||||||||||
| Other income/(expenses) |
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| Interest income |
180,185 | 304,342 | 745,595 | 941,937 | ||||||||||||
| Interest expense (Note 18) |
— | (451 | ) | — | (603,436 | ) | ||||||||||
| Gain/(loss) on sale of equipment (Note 5) |
— | — | (1,075 | ) | 11,368 | |||||||||||
| Foreign exchange gain/(loss) |
332,934 | (21,990 | ) | (349,665 | ) | (240,759 | ) | |||||||||
| Change in fair value of financial instruments (Note 11) |
— | — | — | 1,200,541 | ||||||||||||
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| Total other income/(expense) |
513,119 | 281,901 | 394,855 | 1,309,651 | ||||||||||||
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| Net loss before tax expense |
(6,369,981 | ) | (5,991,320 | ) | (21,876,564 | ) | (18,212,147 | ) | ||||||||
| Tax recovery/(expense) |
623 | — | (7,752 | ) | — | |||||||||||
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| Net loss for the period |
$ | (6,369,358 | ) | $ | (5,991,320 | ) | $ | (21,884,316 | ) | $ | (18,212,147 | ) | ||||
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| Loss attributable to: |
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| Owners of the Company |
$ | (6,361,367 | ) | $ | (5,943,325 | ) | $ | (21,864,891 | ) | $ | (17,993,579 | ) | ||||
| Non-controlling interest |
(7,991 | ) | (47,995 | ) | (19,425 | ) | (218,568 | ) | ||||||||
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| (6,369,358 | ) | (5,991,320 | ) | (21,884,316 | ) | (18,212,147 | ) | |||||||||
| Foreign currency translation adjustment |
(508,633 | ) | 124,431 | 864,553 | (88,167 | ) | ||||||||||
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| Comprehensive loss for the period |
$ | (6,877,991 | ) | $ | (5,866,889 | ) | $ | (21,019,763 | ) | $ | (18,300,314 | ) | ||||
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| Loss per share – basic and diluted (Owners of the Company (Note 12(g)) |
$ | (0.19 | ) | $ | (0.17 | ) | $ | (0.66 | ) | $ | (0.54 | ) | ||||
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| Weighted average shares outstanding – basic and diluted |
36,915,009 | 35,622,553 | 36,175,714 | 33,360,867 | ||||||||||||
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The accompanying notes are an integral part of these consolidated financial statements.
3
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited and Expressed in U.S. Dollars, except share amounts)
| Preferred shares |
Amount | Common shares |
Amount | Additional paid-in capital |
Deficit | Accumulated other comprehensive loss |
Non-controlling interest |
Total-Shareholders’ Equity |
||||||||||||||||||||||||||||
| Balance, December 31, 2023 |
— | $ | — | 27,282,165 | $ | 92,913,585 | $ | 17,510,469 | $ | (105,501,295 | ) | $ | (2,706,552 | ) | $ | (1,323,881 | ) | $ | 892,326 | |||||||||||||||||
| Non-brokered private placement, net of transaction costs (Note 12(b)(iii)) |
— | — | 8,260,435 | 22,853,391 | — | — | — | — | 22,853,391 | |||||||||||||||||||||||||||
| Share-based payments |
— | — | — | — | 213,130 | — | — | — | 213,130 | |||||||||||||||||||||||||||
| Redemption of warrants |
— | — | 79,943 | 551,246 | (214,062 | ) | — | — | — | 337,184 | ||||||||||||||||||||||||||
| Redemption of options |
— | — | 10 | 23 | (9 | ) | — | — | — | 14 | ||||||||||||||||||||||||||
| Net loss for the period |
— | — | — | — | — | (6,043,038 | ) | — | (113,895 | ) | (6,156,933 | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | — | — | — | — | (32,392 | ) | — | (32,392 | ) | |||||||||||||||||||||||||
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| Balance, March 31, 2024 |
— | $ | — | 35,622,553 | $ | 116,318,245 | $ | 17,509,528 | $ | (111,544,333 | ) | $ | (2,738,944 | ) | $ | (1,437,776 | ) | $ | 18,106,720 | |||||||||||||||||
| Share-based payments |
— | — | — | — | 1,474,920 | — | — | — | 1,474,920 | |||||||||||||||||||||||||||
| Net loss for the period |
— | — | — | — | — | (6,007,216 | ) | — | (56,678 | ) | (6,063,894 | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | — | — | — | — | (180,206 | ) | — | (180,206 | ) | |||||||||||||||||||||||||
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| Balance, June 30, 2024 |
— | $ | — | 35,622,553 | $ | 116,318,245 | $ | 18,984,448 | $ | (117,551,549 | ) | $ | (2,919,150 | ) | $ | (1,494,454 | ) | $ | 13,337,540 | |||||||||||||||||
| Share-based payments |
— | — | — | — | 507,246 | — | — | — | 507,246 | |||||||||||||||||||||||||||
| Net loss for the period |
— | — | — | — | — | (5,943,325 | ) | — | (47,995 | ) | (5,991,320 | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | — | — | — | — | 124,431 | — | 124,431 | |||||||||||||||||||||||||||
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| Balance, September 30, 2024 |
— | $ | — | 35,622,553 | $ | 116,318,245 | $ | 19,491,694 | $ | (123,494,874 | ) | $ | (2,794,719 | ) | $ | (1,542,449 | ) | $ | 7,977,897 | |||||||||||||||||
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The accompanying notes are an integral part of these consolidated financial statements
4
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited and Expressed in U.S. Dollars, except share amounts)
| Preferred shares |
Amount | Common shares |
Amount | Additional paid-in capital |
Deficit | Accumulated other comprehensive loss |
Non-controlling interest |
Total-Shareholders’ Equity |
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| Balance, December 31, 2024 |
8,905,638 | $ | 31,705,219 | 35,641,603 | $ | 116,360,066 | $ | 20,503,904 | $ | (131,003,831 | ) | $ | (4,160,555 | ) | $ | (1,565,834 | ) | $ | 31,838,969 | |||||||||||||||||
| Share-based payments (Note 12(d)(iii)) |
— | — | — | — | 1,493,407 | — | — | — | 1,493,407 | |||||||||||||||||||||||||||
| Redemption of warrants (Notes 12(b)(iv) and 12(e)) |
— | — | 200,000 | 458,047 | (41,641 | ) | — | — | — | 416,406 | ||||||||||||||||||||||||||
| Redemption of options (Notes 12(b)(v) and 12(d)(iii)) |
— | — | 7,750 | 22,175 | (8,658 | ) | — | — | — | 13,517 | ||||||||||||||||||||||||||
| Net loss for the period |
— | — | — | — | — | (6,762,608 | ) | — | (4,667 | ) | (6,767,275 | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | — | — | — | — | 38,164 | — | 38,164 | |||||||||||||||||||||||||||
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| Balance, March 31, 2025 |
8,905,638 | $ | 31,705,219 | 35,849,353 | $ | 116,840,288 | $ | 21,947,012 | $ | (137,766,439 | ) | $ | (4,122,391 | ) | $ | (1,570,501 | ) | $ | 27,033,188 | |||||||||||||||||
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| Share-based payments (Note 12(d)) |
— | — | — | — | 1,117,248 | — | — | — | 1,117,248 | |||||||||||||||||||||||||||
| Redemption of warrants (Notes 12(b)(iv) and 12(e)) |
— | — | 100,000 | 239,200 | (21,745 | ) | — | — | — | 217,455 | ||||||||||||||||||||||||||
| Redemption of options (Notes 12(b)(v) and 12(d)(iii)) |
— | — | 10,215 | 37,294 | (14,971 | ) | — | — | — | 22,323 | ||||||||||||||||||||||||||
| Net loss for the period |
— | — | — | — | — | (8,740,916 | ) | — | (6,767 | ) | (8,747,683 | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | — | — | — | — | 1,335,022 | — | 1,335,022 | |||||||||||||||||||||||||||
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| Balance, June 30, 2025 |
8,905,638 | $ | 31,705,219 | 35,959,568 | $ | 117,116,782 | $ | 23,027,544 | $ | (146,507,355 | ) | $ | (2,787,369 | ) | $ | (1,577,268 | ) | $ | 20,977,553 | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited and Expressed in U.S. Dollars, except share amounts)
| Preferred shares |
Amount | Common shares |
Amount | Additional paid-in capital |
Deficit | Accumulated other comprehensive loss |
Non-controlling interest |
Total-Shareholders’ Equity |
||||||||||||||||||||||||||||
| Balance, June 30, 2025 |
8,905,638 | $ | 31,705,219 | 35,959,568 | $ | 117,116,782 | $ | 23,027,544 | $ | (146,507,355 | ) | $ | (2,787,369 | ) | $ | (1,577,268 | ) | $ | 20,977,553 | |||||||||||||||||
| Common shares issued during financing (Note 12(b)(vi)) |
— | — | 14,636,363 | 73,891,109 | — | — | — | — | 73,891,109 | |||||||||||||||||||||||||||
| Share-based payments (Note 12(d)) |
— | — | — | — | 446,106 | — | — | — | 446,106 | |||||||||||||||||||||||||||
| Redemption of warrants (Notes 12(b)(iv) and 12(e)) |
— | — | 1,400 | 3,343 | (304 | ) | — | — | — | 3,039 | ||||||||||||||||||||||||||
| Redemption of options (Notes 12(b)(v) and 12(d)(iii)) |
— | — | 1,000 | 6,028 | (2,282 | ) | — | — | — | 3,746 | ||||||||||||||||||||||||||
| Net loss for the period |
— | — | — | — | — | (6,361,367 | ) | — | (7,991 | ) | (6,369,358 | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | — | — | — | — | (508,633 | ) | — | (508,633 | ) | |||||||||||||||||||||||||
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| Balance, September 30, 2025 |
8,905,638 | $ | 31,705,219 | 50,598,331 | $ | 191,017,262 | $ | 23,471,064 | $ | (152,868,722 | ) | $ | (3,296,002 | ) | $ | (1,585,259 | ) | $ | 88,443,562 | |||||||||||||||||
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The accompanying notes are an integral part of these consolidated financial statements.
6
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and Expressed in U.S. Dollars)
| Nine months ended September 30, 2025 |
Nine months ended September 30, 2024 |
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| CASH FLOWS FROM OPERATING ACTIVITIES |
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| Net loss |
$ | (21,884,316 | ) | $ | (18,212,147 | ) | ||
| Cash flows from operating activities |
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| Accrued interest on convertible debt, net of interest paid (Note 11) |
— | 241,597 | ||||||
| Depreciation (Note 5 and 6) |
164,911 | 117,207 | ||||||
| Interest – lease liability |
4,358 | 5,172 | ||||||
| Loss (gain) on sale of equipment (Note 5) |
1,075 | (11,368 | ) | |||||
| Share-based payments (Note 12(d)(iii)) |
3,056,761 | 2,195,296 | ||||||
| Change in fair value of financial instruments (Note 11) |
— | (1,200,541 | ) | |||||
| Lease payments (Note 9) |
(62,714 | ) | (48,354 | ) | ||||
| Unrealized foreign exchange (gain) loss |
377,152 | 224,381 | ||||||
| Changes in operating assets and liabilities |
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| Accounts payable and accrued liabilities |
597,861 | (1,585,694 | ) | |||||
| Prepaid expenses |
(1,176,787 | ) | (829,014 | ) | ||||
| Payable to Auritec (Note 10) |
— | (5,000,000 | ) | |||||
| Amounts receivable |
96,818 | 81,304 | ||||||
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| Cash used in operating activities |
(18,824,881 | ) | (24,022,161 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
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| Acquisition of equipment (Note 5) |
(395,646 | ) | (59,912 | ) | ||||
| Proceeds from sale of equipment |
— | 28,510 | ||||||
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| Cash provided used in investing activities |
(395,646 | ) | (31,402 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
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| Public offering (net of transaction costs) (Note 12(b)(vi) and Note 12(b)(iii)) |
73,891,109 | 22,853,391 | ||||||
| Redemption of warrants (Note 12(e)) |
636,900 | 337,184 | ||||||
| Redemption of options (Note 12 (d)(iii)) |
39,586 | 14 | ||||||
| Repayment of loans (Note 8) |
— | (62,651 | ) | |||||
| Repayment of convertible debt (Note 11) |
— | (9,074,813 | ) | |||||
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| Cash provided by financing activities |
74,567,595 | 14,053,125 | ||||||
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| Increase/(decrease) in cash and cash equivalents |
55,347,068 | (10,000,438 | ) | |||||
| Foreign exchange effect on cash and cash equivalents |
510,919 | (679,522 | ) | |||||
| Cash, beginning of period |
33,101,294 | 19,341,756 | ||||||
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| Cash, end of period |
$ | 88,959,281 | $ | 8,661,796 | ||||
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Supplemental disclosure with respect to cash flows (Note 19)
The accompanying notes are an integral part of these consolidated financial statements.
7
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 1. | NATURE OF BUSINESS AND GOING CONCERN |
Eupraxia Pharmaceuticals Inc. (the “Company”) was incorporated under the laws of the province of Alberta on May 12, 2011, under the name Plaza Capital Partners Inc. On May 11, 2012, the Company changed its name to Eupraxia Pharmaceuticals Inc. and continued from the province of Alberta to the province of British Columbia.
On October 10, 2012, Eupraxia Holdings, Inc. (“Holdings”) was incorporated under the laws of the State of Delaware, USA. On November 16, 2012, Holdings was registered as an extra-provincial corporation under the laws of the province of British Columbia, Canada. On October 10, 2012, Eupraxia Pharmaceuticals USA, LLC (“Eupraxia USA”) was incorporated under the laws of the State of Delaware. On November 16, 2012, Eupraxia USA was registered as an extra-provincial corporation under the laws of the province of British Columbia. On January 7, 2021, Eupraxia Pharma, Inc. (“Eupraxia Pharma”) was incorporated under the laws of the State of Delaware. On July 4, 2022, Eupraxia Pharmaceuticals Australia Pty Ltd. (“Eupraxia Australia”) was incorporated under the laws of the state of Victoria, Australia. On May 17, 2023, Eupraxia Pharma USA Inc. (“Eupraxia Pharma USA”) was incorporated under the laws of the State of Delaware.
On March 9, 2021, the Company completed its initial public offering on the Toronto Stock Exchange (“TSX”) and began trading under the symbol “EPRX”. On April 5, 2024, the Company began trading on the Nasdaq Capital Market under the symbol “EPRX”.
The Company is a clinical stage biotechnology company leveraging its proprietary Diffusphere™ technology to optimize drug delivery for applications with significant unmet medical need. The address of the Company’s corporate office and principal place of business is 201- 2067 Cadboro Bay Road, Victoria, British Columbia, Canada.
These unaudited interim consolidated financial statements of the Company have been prepared on a going concern basis with the assumption that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. At September 30, 2025, the Company had cash of $88,959,281. The Company has not yet generated revenue from operations. The Company incurred a net loss of $21,884,316 during the nine months ended September 30, 2025, and as of that date, the Company’s accumulated deficit was $152,868,722. As the Company is in the research and development stage, the recoverability of the costs incurred to date is dependent upon the ability of the Company to obtain the necessary funding to complete the research and development of its projects and upon future commercialization or proceeds from the monetization of research activities.
The Company will periodically have to raise funds to continue operations and recently raised net proceeds of $73,891,109 through a public offering of 14,636,363 common shares on September 24, 2025. Although it has been successful in doing so in the past, there is no assurance it will be able to do so in the future, especially with the ongoing geopolitical uncertainty affecting the global capital markets. The Company is active in its pursuit of additional funding through potential partnering and other strategic activities as well as grants to fund future research and development activities, and additional equity financing.
The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional funding. There is a risk that in the future, additional financing will not be available on a timely basis or on terms acceptable to the Company. These events and conditions may cast substantial doubt about the Company’s ability to continue as a going concern. These unaudited interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue in business.
8
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 2. | BASIS OF PRESENTATION |
These unaudited interim consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). These unaudited interim consolidated financial statements include the accounts of the Company and the accounts of its subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these consolidated financial statements do not include all the information and footnotes required for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2024 included in the Company’s 2024 40-F filed with SEC and on SEDAR+ on March 21, 2025.
These unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods presented. The results of operations for the nine months ended September 30, 2025, and 2024 are not necessarily indicative of results that can be expected for a full year. These unaudited interim consolidated financial statements follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company included in the Company’s 2024 Form 40-F for the year ended December 31, 2024 filed with SEC and on SEDAR+ on March 21, 2025.
| 3. | UPCOMING ACCOUNTING STANDARDS AND INTERPRETATIONS |
The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to the Company or that there was no material impact or no material impact is expected in the consolidated financial statements as a result of future adoption.
| 4. | AMOUNTS RECEIVABLE |
| September 30, 2025 |
December 31, 2024 |
|||||||
| GST/HST recoverable |
$ | 139,904 | $ | 82,097 | ||||
| Other refundable tax credits(1) |
— | 146,775 | ||||||
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| Total |
$ | 139,904 | $ | 228,872 | ||||
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| (1) | Other refundable tax credits represent tax incentives for R&D costs incurred by Eupraxia Australia (Note 14 – Research and Development Expenses). |
9
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 5. | PROPERTY AND EQUIPMENT |
Property and equipment consisted of the following:
| Computers | Office furniture and equipment |
Leasehold Improvements |
Lab Equipment |
Total | ||||||||||||||||
| Cost |
| |||||||||||||||||||
| As at January 1, 2024 |
$ | 85,625 | $ | 67,996 | $ | 128,767 | $ | 525,264 | $ | 807,652 | ||||||||||
| Additions |
13,953 | 5,701 | — | 104,819 | 124,473 | |||||||||||||||
| Disposals |
(13,219 | ) | (7,890 | ) | — | (15,473 | ) | (36,582 | ) | |||||||||||
| Foreign currency adjustments |
(7,122 | ) | (5,438 | ) | (10,408 | ) | (54,992 | ) | (77,960 | ) | ||||||||||
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| As at December 31, 2024 |
79,237 | 60,369 | 118,359 | 559,618 | 817,583 | |||||||||||||||
| Additions |
82,254 | 5,703 | 3,535 | 329,731 | 421,223 | |||||||||||||||
| Disposals |
— | (1,192 | ) | — | — | (1,192 | ) | |||||||||||||
| Foreign currency adjustments |
2,435 | 1,987 | 3,957 | 21,711 | 30,090 | |||||||||||||||
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| As at September 30, 2025 |
163,926 | 66,867 | 125,851 | 911,060 | 1,267,704 | |||||||||||||||
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| Accumulated Depreciation |
| |||||||||||||||||||
| As at January 1, 2024 |
56,181 | 49,667 | 115,816 | 176,401 | 398,065 | |||||||||||||||
| Depreciation |
12,668 | 6,349 | 8,148 | 86,867 | 114,032 | |||||||||||||||
| Disposals |
(7,774 | ) | (5,698 | ) | — | (12,653 | ) | (26,125 | ) | |||||||||||
| Foreign currency adjustments |
(4,895 | ) | (4,058 | ) | (9,787 | ) | (7,542 | ) | (26,282 | ) | ||||||||||
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| As at December 31, 2024 |
56,180 | 46,260 | 114,177 | 243,073 | 459,690 | |||||||||||||||
| Depreciation |
21,187 | 2,334 | 3,124 | 83,039 | 109,684 | |||||||||||||||
| Disposals |
— | (117 | ) | — | — | (117 | ) | |||||||||||||
| Foreign currency adjustments |
1,804 | 1,557 | 3,861 | 8,390 | 15,612 | |||||||||||||||
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| As at September 30, 2025 |
79,171 | 50,034 | 121,162 | 334,502 | 584,869 | |||||||||||||||
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| Net Book Value |
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| As at December 31, 2024 |
$ | 23,057 | $ | 14,109 | $ | 4,182 | $ | 316,545 | $ | 357,893 | ||||||||||
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| As at September 30, 2025 |
$ | 84,755 | $ | 16,833 | $ | 4,689 | $ | 576,558 | $ | 682,835 | ||||||||||
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During the three months ended September 30, 2025 and 2024, depreciation expense of $44,511 and $24,908, respectively, was recognized with $4,567 included in general and administrative and $39,944 included in research and development ($2,440 and $22,468 for general and administrative, and research and development in 2024, respectively). During the nine months ended September 30, 2025 and 2024, depreciation expense of $109,684 and $74,010, respectively, was recognized with $9,756 included in general and administrative and $99,928 included in research and development ($13,878 and $60,132 for general and administrative, and research and development in 2024, respectively).
10
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 6. | RIGHT-OF-USE ASSET |
On July 23, 2025, the Company extended the lease of the office space until November 30, 2026 (with the option to extend to an additional year). The lease extension increased the right-of-use asset by $158,508. The following table presents details of movement in the carrying value of the right-of-use asset:
| September 30, 2025 |
December 31, 2024 |
|||||||
| Balance, beginning |
$ | 67,023 | $ | 46,660 | ||||
| Depreciation |
(55,227 | ) | (57,687 | ) | ||||
| Lease extension |
158,508 | 78,580 | ||||||
| Foreign exchange |
(1,544 | ) | (530 | ) | ||||
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| Balance, ending |
$ | 168,760 | $ | 67,023 | ||||
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During the three months ended September 30, 2025 and 2024, depreciation expense of $18,482 and $12,851 respectively, was recognized with $6,914 included in general and administrative and $11,568 included in research and development in 2025 ($4,706 and $8,145 for general and administrative, and research and development in 2024, respectively). During the nine months ended September 30, 2025 and 2024, depreciation expense of $55,227 and $43,197 respectively, was recognized with $20,246 included in general and administrative and $34,981 included in research and development in 2025 ($15,436 and $27,761 for general and administrative, and research and development in 2024, respectively).
| 7. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
| September 30, 2025 |
December 31, 2024 |
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| Research and development |
$ | 1,823,966 | $ | 573,465 | ||||
| General and administrative |
1,882,785 | 943,376 | ||||||
| Wages and payroll remittances |
28,139 | 20,705 | ||||||
| Employee bonus payable |
— | 1,493,981 | ||||||
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| Total |
$ | 3,734,890 | $ | 3,031,527 | ||||
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11
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 8. | LOANS PAYABLE |
On September 10, 2021, the Company entered into a Master Loan and Security Agreement (“Loan Agreement”) whereby the Company borrowed $235,000 to purchase production and test equipment (see Note 5 – Property and Equipment).
The Loan Agreement has a term of 36 months commencing September 13, 2021. The Loan Agreement accrues interest at 5.84% per annum with monthly payments (principal and interest) being made on the 1st of each month, beginning October 1, 2021. As part of the agreement, the Company granted the lender first priority interest on the equipment it purchased.
Below is a breakdown of loan balance as at September 30, 2025 and December 31, 2024:
| September 30, 2025 |
December 31, 2024 |
|||||||
| Balance, beginning |
$ | — | $ | 62,709 | ||||
| Loan repayment |
— | (62,651 | ) | |||||
| Foreign exchange adjustment |
— | (58 | ) | |||||
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| Balance, ending |
$ | — | $ | — | ||||
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| 9. | LEASE LIABILITY |
The Company entered into an operating lease agreement for its Victoria, BC facility (of approximately 4,900 square feet of office space). As previously highlighted, the Company extended the term of the lease for 12 months. The lease expires on November 30, 2026 with the option of the Company to extend the term for an additional 12 months.
The cost components of the operating lease were as follows for the periods ended September 30, 2025 and 2024:
| Three months ended September 30, 2025 |
Three months ended September 30, 2024 |
Nine months ended September 30, 2025 |
Nine months ended September 30, 2024 |
|||||||||||||
| Lease Cost |
||||||||||||||||
| Operating lease expense |
$ | 21,226 | $ | 16,072 | $ | 62,714 | $ | 48,363 | ||||||||
| Variable lease expense |
18,129 | 17,858 | 53,567 | 53,724 | ||||||||||||
| Lease term and Discount Rate |
||||||||||||||||
| Weighted average remaining lease term (years) |
1.17 | 1.17 | 1.17 | 1.17 | ||||||||||||
| Weighted average discount rate |
6.05 | % | 9.02 | % | 6.05 | % | 9.02 | % | ||||||||
Variable lease costs are payments that vary because of changes in facts or circumstances and include common area maintenance and property taxes related to the premises. Variable lease costs are excluded from the calculation of minimum lease payments.
12
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 9. | LEASE LIABILITY (continued) |
The Company’s future minimum lease payments as of September 30, 2025 are as follows:
| Total undiscounted future minimum lease payments |
$ | 181,986 | ||
| Less: imputed interest |
(11,383 | ) | ||
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| Present value of lease liabilities at September 30, 2025 |
$ | 170,603 | ||
| Current Portion |
76,136 | |||
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| Non-current portion |
$ | 94,467 | ||
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|
During the three months ended September 30, 2025, the Company subleased approximately 616 square feet office space with amounts totaling $7,119 for the three months ended September 30, 2025 ($6,189 – three months ended September 30, 2024) being recorded as a reduction to general and administrative expenses. During the nine months ended September 30, 2025, the subleased amounts totaling $21,038 for the nine months ended September 30, 2025 ($18,403 – nine months ended September 30, 2024) being recorded as a reduction to general and administrative expenses.
| 10. | AURITEC LICENSE AGREEMENT |
Eupraxia Pharmaceuticals USA LLC (“Eupraxia LLC”) entered into an amended and restated license agreement with Auritec Pharmaceuticals Inc. (“Auritec”) on October 9, 2018 (as further amended, the “Amended and Restated License Agreement”). Under the terms of the Amended and Restated License Agreement, Auritec has granted Eupraxia LLC an exclusive license (including the right to sublicense to its affiliates and third parties) under the licensed patents held by Auritec and for all the technical information and know-how relating to the technology claimed in the licensed patents held by Auritec with respect to the use of Auritec’s “Plexis Platform” for the delivery of fluticasone in all medical fields (except for otolaryngology and the prevention, treatment and control of all diseases, disorders and conditions of the eye and its adnexa (collectively, the “Excluded Fields”)), to develop, make, have made, manufacture, use, commercialize, sell, sub-license, offer for sale, import, and have imported products for the delivery of fluticasone drug products using the Plexis Platform in all medical fields except the Excluded Fields (“Licensed Products”).
Pursuant to the terms of the Amended and Restated License Agreement, Eupraxia USA LLC has paid $5,000,000 to Auritec (the “Upfront Fee”). In addition, Eupraxia LLC has agreed to pay Auritec up to $30,000,000 upon achievement of certain regulatory and commercial milestones related to products licensed under the Amended and Restated License Agreement (“Licensed Products”) as well as a royalty of 4% of net sales of Licensed Products by Eupraxia LLC or its affiliates, subject to certain reductions.
13
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 10. | AURITEC LICENSE AGREEMENT (continued) |
The following table summarizes the remaining milestone payment schedule. During the year ended December 31, 2024, the Company paid $5,000,000 to Auritec upon successful completion of the Phase 2b study.
| Milestone Event |
Milestone Payment | |||
| First OA Regulatory Approval |
5,000,000 | |||
| Second OA Regulatory Approval |
5,000,000 | |||
| Non-OA Indication Regulatory Approval |
10,000,000 | |||
| First calendar year in which aggregate Net Sales by Eupraxia USA, its affiliates and sublicenses exceed $500,000,000 |
5,000,000 | |||
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| Maximum amount payable |
$ | 25,000,000 | ||
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Eupraxia LLC also agreed to pay to Auritec 20% of sublicensing royalties or other consideration based on net sales of Licensed Products. Eupraxia LLC further agreed to pay Auritec a percentage of Non-Royalty Monetization Revenue (as defined in the Amended and Restated License Agreement), which includes payments received for a sale of Eupraxia LLC or sale or sublicense of a Licensed Product, which percentage ranges from 10% to 30% depending on the development stage of the most-advanced Licensed Product, up to a maximum of $100,000,000. The following table summarizes the Non-Royalty Monetization Revenue percentage schedule:
| Date of Execution |
Percentage of Non-Royalty Monetization Revenue |
|||
| Prior to Successful Completion of a Phase 2b Study |
30 | % | ||
| After Successful Completion of a Phase 2b Study but prior to Successful Completion of a Phase 3 Study |
20 | % | ||
| After Successful Completion of a Phase 3 Study but prior to Regulatory Approval of a Product in the Eupraxia Field from FDA in the United States |
15 | % | ||
| After Regulatory Approval of a Product in the Eupraxia Field from FDA in the United States |
10 | % | ||
Either party may terminate the Amended and Restated License Agreement in the event of the other party’s bankruptcy, liquidation, or dissolution. Auritec may also terminate upon a material breach of the Amended and Restated License Agreement by Eupraxia LLC that is not cured within 60 days (15 days in the case of a payment breach). Further, if Eupraxia LLC directly or indirectly challenges any claim in any Auritec patent licensed under the Amended and Restated License Agreement, or assist a third party in doing so, Auritec may immediately terminate the Amended and Restated License Agreement. If Auritec directly or indirectly challenges any Eupraxia patent contemplated in the Amended and Restated License Agreement other than as reasonably required to defend Auritec patents as a basis for such challenge, or assists a third party in doing so, we may immediately terminate the Amended and Restated License Agreement.
| 11. | CONVERTIBLE DEBT |
| a) | Silicon Valley Bank |
On June 21, 2021, the Company entered into a contingent convertible debt agreement (the “Debt Agreement”) with SVB and concurrently drew down, in full, the CDN$10,000,000 principal amount under the Debt Agreement.
14
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 11. | CONVERTIBLE DEBT (continued) |
| a) | Silicon Valley Bank (continued) |
The Debt Agreement had a term of 36 months (or 48 months at SVB’s election) and accrued interest at the greater of 2.45% and the Canadian prime rate, requiring monthly interest payments. An additional payment in kind accrued interest at a rate of 7% per annum, which was partially settled at maturity. During the nine months ended September 30, 2024, the Canadian prime rate ranged from 6.45% - 7.20%.
On June 21, 2024, the loan under the Debt Agreement matured and a portion of the balance of $4,494,795 (CDN$6,161,016) was paid to SVB representing principal and interest. On September 11, 2024, the remaining balance of $4,580,018 (CDN$6,204,092) was paid to SVB representing the remaining principal and interest. This payment extinguished the liability the Company had with SVB. The convertible debt balance is comprised of the following:
| Balance - December 31, 2023 |
$ | 10,336,003 | ||
| Accrued interest |
320,318 | |||
| Interest paid |
(161,375 | ) | ||
| Change in fair value |
(770,042 | ) | ||
| Foreign exchange |
(247,200 | ) | ||
|
|
|
|||
| Balance - March 31, 2024 |
$ | 9,477,704 | ||
| Accrued interest |
281,319 | |||
| Interest paid |
(198,665 | ) | ||
| Change in fair value |
(430,499 | ) | ||
| Loan repayment |
(9,074,813 | ) | ||
| Foreign exchange |
(55,046 | ) | ||
|
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|
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| Balance – December 31, 2024 |
$ | — | ||
|
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| b) | Yabema Capital Limited |
On August 1, 2024, the Company entered into a new CDN$12 million convertible debt facility (the “Convertible Debt Facility”). Under the Convertible Debt Facility, Yabema Capital Limited and other current Eupraxia shareholders (together, the “Lenders”) made available for drawdown an aggregate amount of CDN$12 million for a period of 120 days following entry into the agreement. The Convertible Debt Facility was to mature 24 months from August 1, 2024 (the closing date) and could be extended for an additional 12 months at the Lenders’ option. The decision to draw on the facility within 120 days of closing was at the discretion of Eupraxia and was subject to the full and final release of the Debt Agreement. Commitment fees of $355,582 (CDN$480,000) were incurred by the Company.
The aggregate unpaid principal amount and any accrued and unpaid interest thereon would be convertible at the discretion of the lenders into Eupraxia common shares at a conversion price equal to CDN$4.84375 per common share.
The Company granted the Lenders a security interest in all of its assets, excluding its patents and other intellectual property. As a result of the closing of the Convertible Preferred Share Offering, on October 31, 2024 (see Note 12 – Convertible Preferred Shares), the Company entered into a Termination and Release Agreement (the “Termination Agreement”) with the Lenders to terminate the Convertible Debt Facility and discharge all security interests.
15
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 12. | SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY |
| a) | Authorized |
| • | An unlimited number of Common shares, with no par value, with one vote per share. |
| • | An unlimited number of Preferred shares, with no par value. |
| b) | Issued (Common Shares) |
Capital transactions which took place during the year ended December 31, 2024 are as follows:
| i) | During the year ended December 31, 2024, 80,243 common shares were issued on the exercise of warrants for gross proceeds of $337,816. The weighted average market share price during the period in which these warrants were exercised was CDN$5.50. On exercise, $214,125 was transferred from additional paid-in capital to share capital. |
| ii) | During the year ended December 31, 2024, 18,760 common shares were issued on the exercise of options for gross proceeds of $25,245. The weighted average market share price during the period in which these options were exercised was CDN$4.71. On exercise, $15,904 was transferred from additional paid-in capital to share capital. |
| iii) | On March 15, 2024, the Company closed an overnight marketed public offering (the “Offering”). Pursuant to the Offering, the Company issued 8,260,435 common shares at a price of CDN$4.10 for aggregate gross proceeds of $25,026,073, which includes the issuance of 943,435 Shares upon exercise of the over-allotment option. |
As consideration for the services rendered by the Underwriter in connection with the Offering, the Company paid the Underwriters a cash commission of $1,501,564 which is equal to 6% of the gross proceeds raised under the Offering. An additional $309,652 in legal and agents’ expenses were also paid to the Underwriters. The Company incurred an additional $361,466 in share issuance costs associated with the Offering.
Capital transactions which took place during the nine months ended September 30, 2025 as follows:
| iv) | During the nine months ended September 30, 2025, 301,400 common shares were issued on the exercise of warrants for gross proceeds of $636,900. On exercise, $63,690 was transferred from additional paid-in capital to share capital. |
| v) | During the nine months ended September 30, 2025, 18,965 common shares were issued on the exercise of options for gross proceeds of $39,586. On exercise, $25,911 was transferred from additional paid-in capital to share capital. |
| vi) | On September 24, 2025 the Company closed a public offering (the “Public Offering”). Pursuant to the Public Offering, the Company issued 14,636,363 common shares at a price of $5.50 for aggregate gross proceeds of $80,499,997, which includes the issuance of 1,909,090 common shares upon exercise of the over-allotment option. |
As consideration for the services rendered by the Underwriter in connection with the Public Offering, the Company paid the Underwriter a cash commission of $5,635,000 (equal to 7% of the gross proceeds raised under the Public Offering) in addition to $200,000 in legal and agents’ expenses. The Company incurred an additional $773,888 in share issuance costs associated with the Public Offering.
16
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 12. | SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued) |
| c) | Issued (Preferred Shares) |
On October 31, 2024, the Company issued convertible preferred shares in a non-brokered private placement (the “Private Placement”). Pursuant to the Convertible Preferred Share Offering, the Company issued 8,905,638 convertible preferred shares (the “Preferred Shares”) at a price of CDN$5.00 for aggregate gross proceeds of $31,997,837 (CDN$44,528,190).
The Company paid $242,116 (CDN$336,928) in legal expenses and an additional $50,502 ($70,279) in listing fees were paid in association with the Preferred Share Offering. Each Preferred Share is convertible at the option of the holder at any time into one common share without additional consideration.
The Preferred Shares would also mandatorily convert into common shares on a one-to-one basis, without additional consideration, upon the earliest of: (i) the common shares of the Company trade at a price of CDN$15.00 per common share on the Toronto Stock Exchange or the Nasdaq Stock Market LLC based on an average daily trading volume of at least 50,000 common shares during the rolling six-month period, or (ii) the holders of the Preferred Shares representing 75% of the outstanding Preferred Shares vote or consent to convert all outstanding Preferred Shares, in the event a liquidating event such as an amalgamation, arrangement, merger, reorganization or similar transaction occurs, provided that the conversion ratio will not be adjusted unless the Company receives all necessary TSX and shareholder approvals.
The Preferred Shares have a redemption feature that is subject to the occurrence of certain events, all of which are in the control of the Company. Accordingly, the Preferred Shares are classified as permanent equity.
The Preferred Shares will not initially be entitled to any dividends. Following the third anniversary of closing of the Private Placement, and subject to shareholder approval, any unconverted Preferred Shares will be entitled to a quarterly dividend equal to 1.5% (6% annually) of the original issue price, payable in additional Preferred Shares (the “PIK Preferred Shares”). If shareholder approval for the PIK Preferred Shares is not obtained by the third anniversary of closing, the quarterly dividends will be paid in cash at a rate of 2% (8% annually). No dividends will be payable on Common Shares while any Preferred Shares remain issued and outstanding. The Preferred Shares were not issued at a discount, so the impact of this feature is limited to the amounts allocable to common shareholders in calculating earnings per share.
| d) | Omnibus Incentive Plan |
The 2025 Omnibus Incentive Plan (the “Omnibus Plan”), initially approved by the Board of Directors on February 17, 2025 (later amended on April 25, 2025) was ratified by Shareholders on June 2, 2025. The Omnibus Plan provides for the grant of options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, performance awards, other stock-based awards and cash-based awards (each an “Award” and collectively, the “Awards”) at the discretion of the Board of Directors. The number of Common Shares available for issuance under the Omnibus Plan is a rolling maximum number equal to 18.5% of the issued and outstanding Common Shares. The Omnibus Plan is considered to be an “evergreen” plan as Common Shares covered by Awards which have been exercised or settled, as applicable, will be available for subsequent grant under the Omnibus Plan and the number of Awards that may be granted under the Omnibus Plan increases if the total number of issued and outstanding Common Shares increases.
17
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 12. | SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued) |
| d) | Omnibus Incentive Plan (continued) |
| i) | Options |
Options granted under the Omnibus Plan have lives of up to ten years from the date of grant. The vesting schedule of all granted options is determined at the discretion of the Board. Unless otherwise determined by the Board, in its sole discretion, all grants of options will vest over a three-year period, with the first twenty-five percent (25%) of the Options vesting on the date of grant, and the remaining options vesting over the following thirty-six-month period in three equal instalments on an annual basis.
| ii) | Option Re-Pricing |
On April 25, 2025, the Board approved (with Shareholders ratifying on June 2, 2025) the repricing of certain options totaling 258,450 (vested and unvested) with exercise prices ranging from CDN$6.75 to CDN$8.00 were repriced to CDN$5.05. All other terms of these stock option grants were unchanged. As a result of this repricing, the Company recognized additional share-based payments of $112,804 during the nine months ended September 30, 2025.
| iii) | Outstanding Options |
The following table summarizes the Company’s option transactions:
| Number of options |
Weighted average exercise price (CDN$) |
|||||||
| Outstanding, December 31, 2023 |
3,518,250 | 6.27 | ||||||
| Exercised |
(18,760 | ) | 1.90 | |||||
| Cancelled |
(220,500 | ) | 5.15 | |||||
| Granted |
2,028,880 | 4.10 | ||||||
|
|
|
|
|
|||||
| Outstanding, December 31, 2024 |
5,307,870 | 5.50 | ||||||
| Exercised |
(18,965 | ) | 2.91 | |||||
| Cancelled |
(703,750 | ) | 7.14 | |||||
| Expired |
(181,250 | ) | 8.00 | |||||
| Granted |
1,462,250 | 5.20 | ||||||
|
|
|
|
|
|||||
| Outstanding, September 30, 2025 |
5,866,155 | $ | 5.04 | |||||
|
|
|
|
|
|||||
Share-based payments for the three months ended September 30, 2025, was $446,106 (2024 - $507,246) (See Note 13 – General & Administrative Expenses and Note 14 – Research & Development Expenses for breakdown by function).
Share-based payments for the nine months ended September 30, 2025, was $3,056,761 (2024 - $2,195,296) (See Note 13 – General & Administrative Expenses and Note 14 – Research & Development Expenses for breakdown by function).
18
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 12) | SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued) |
| d) | Omnibus Incentive Plan (continued) |
| iii) | Outstanding Options (continued) |
| Grant Date |
Options Outstanding |
Options Exercisable |
Exercise Price (CDN$) |
Expiry Date |
Remaining Contractual Life (years) |
|||||||||||||||
| Nov 2, 2015 |
95,000 | 95,000 | $ | 8.00 | Nov 2, 2025 | 0.09 | ||||||||||||||
| Mar 5, 2018(1) |
46,250 | 46,250 | $ | 5.05 | March 5, 2028 | 2.43 | ||||||||||||||
| Mar 5, 2018 |
293,500 | 293,500 | $ | 8.00 | Mar 5, 2028 | 2.43 | ||||||||||||||
| Mar 9, 2021(1) |
135,000 | 135,000 | $ | 5.05 | Mar 9, 2031 | 5.44 | ||||||||||||||
| Mar 9, 2021 |
521,250 | 521,250 | $ | 8.00 | Mar 9, 2031 | 5.44 | ||||||||||||||
| May 3, 2021 |
257,000 | 257,000 | $ | 8.00 | May 3, 2031 | 5.59 | ||||||||||||||
| Dec 9, 2021 |
60,000 | 60,000 | $ | 2.02 | Dec 9, 2031 | 6.20 | ||||||||||||||
| Mar 31, 2022 |
349,990 | 349,990 | $ | 1.90 | Mar 31, 2032 | 6.51 | ||||||||||||||
| Dec 9, 2022 |
734,300 | 574,475 | $ | 3.85 | Dec 9, 2032 | 7.20 | ||||||||||||||
| May 18, 2023 |
180,000 | 135,000 | $ | 6.84 | May 18, 2033 | 7.64 | ||||||||||||||
| May 30, 2023(1) |
17,200 | 12,900 | $ | 5.05 | May 30, 2033 | 7.67 | ||||||||||||||
| Sep 27, 2023(1) |
60,000 | 45,000 | $ | 5.05 | Sep 27, 2033 | 8.00 | ||||||||||||||
| May 13, 2024 |
1,448,415 | 922,975 | $ | 3.96 | May 13, 2034 | 8.62 | ||||||||||||||
| May 28, 2024 |
50,000 | 50,000 | $ | 3.82 | May 28, 2034 | 8.66 | ||||||||||||||
| August 9, 2024 |
70,000 | 35,000 | $ | 3.48 | Aug 9, 2034 | 8.86 | ||||||||||||||
| December 10, 2024 |
90,000 | 90,000 | $ | 4.66 | December 10, 2034 | 9.20 | ||||||||||||||
| March 25, 2025 |
1,147,000 | 526,750 | $ | 5.14 | March 25, 2035 | 9.49 | ||||||||||||||
| May 13, 2025 |
311,250 | 213,750 | $ | 5.42 | May 13, 2035 | 9.62 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| 5,866,155 | 4,363,840 | $ | 5.04 | 7.50 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (1) | Options were repriced to $5.05 effective June 2, 2025 (see Note 12(d)(ii) above for further details). |
As of September 30, 2025, the unrecognized stock-based compensation expense related to the non-vested stock options was $1,780,823, which is expected to be recognized over a weighted-average period of 2.18 years.
| Options granted during the nine months ended |
September 30, 2025 |
September 30, 2024 |
||||||
| Expected dividend yield |
0 | % | 0 | % | ||||
| Expected forfeiture rate |
0 | % | 0 | % | ||||
| Weighted average annual volatility |
72.23 | % | 78.92 | % | ||||
| Weighted average risk-free interest rate |
2.81 | % | 3.70 | % | ||||
| Weighted average expected option life |
5.49 years | 5.56 years | ||||||
| Weighted average share price (CDN$) |
$ | 5.18 | $ | 3.93 | ||||
| Weighted average exercise price (CDN$) |
$ | 5.20 | $ | 3.93 | ||||
| Weighted average fair value of options granted (CDN$) |
$ | 2.55 | $ | 2.68 | ||||
| iv) | Other Performance Awards |
As of September 30, 2025, there were no other performance-based awards granted and outstanding.
19
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 12. | SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued) |
| e) | Warrants |
The following table summarizes the Company’s warrant transactions:
| Number of warrants |
Weighted average exercise price (CDN$) |
|||||||
| Outstanding December 31, 2023 |
9,119,330 | $ | 5.49 | |||||
| Exercised |
(80,243 | ) | 5.61 | |||||
| Expired |
(231,110 | ) | 5.88 | |||||
|
|
|
|
|
|||||
| Outstanding December 31, 2024 |
8,807,977 | $ | 5.48 | |||||
| Exercised |
(301,400 | ) | 3.00 | |||||
|
|
|
|
|
|||||
| Outstanding September 30, 2025 |
8,506,577 | $ | 5.56 | |||||
|
|
|
|
|
|||||
As at September 30, 2025, the following warrants were outstanding:
| Expiry date |
Exercise price (CDN$) |
Remaining contractual life (years) |
Warrants outstanding and exercisable |
|||||||||
| 120 days after related party ceases to be a Director/ Officer or consultant |
$ | 0.7572 | N/A | 380,921 | ||||||||
| 120 days after related party ceases to be a Director/ Officer or consultant(1) |
0.4984 | N/A | 315,500 | |||||||||
| March 9, 2026 |
11.20 | 0.44 | 2,826,024 | |||||||||
| April 20, 2026 |
3.00 | 0.55 | 4,894,850 | |||||||||
| April 20, 2026 |
2.05 | 0.55 | 50,054 | |||||||||
| April 29, 2026 |
11.20 | 0.58 | 39,228 | |||||||||
|
|
|
|
|
|||||||||
| $ | 5.56 | 8,506,577 | ||||||||||
|
|
|
|
|
|||||||||
| (1) | Represents unit purchase to acquire 315,500 units consisting of one Common Share and one additional warrant at an exercise price of $0.75CDN. These underlying warrants expire two years from the date of exercise of the primary warrant. |
20
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 12. | SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued) |
| f) | Class B Non-Voting shares |
On January 31, 2021, the Company entered into a contribution agreement with the Chief Scientific Officer of the Company, and certain of the Company’s subsidiaries (the “Contribution Agreement”). Pursuant to the Contribution Agreement, the Company acquired AMDM Holdings Inc., a corporation wholly-owned by the Chief Scientific Officer, which held 5% of the equity interest in the Company’s subsidiary, Eupraxia USA. In exchange, the Company issued to the Chief Scientific Officer 225 non-voting Class B shares (the “Class B Shares”) in Eupraxia Pharma Inc. representing 5% of the outstanding securities of Eupraxia Pharma. The Company holds the remaining 95% of such securities, which consists of 4,275 voting Class A shares.
Each Class B Share is exchangeable into common shares of the Company based on an exchange rate of 2,500 common shares for each Class B Share, subject to adjustments upon the occurrence of certain events, for a total of 562,500 common shares. The Class B Shares are exchangeable by the Chief Scientific Officer at her election, provided that the Company may force the exchange of the Class B Shares into common shares of the Company at any time on or after January 31, 2031, or on or after January 31, 2026, if the Company is listed on a stock exchange and is a reporting issuer in Canada at such time. The Company may also force the exchange of the Class B Shares into common shares if there is a change of control transaction involving the Company, a change in law which makes the exchange necessary or desirable or if there are a de minimis number of Class B Shares outstanding. If the Company is listed on a stock exchange at the time of the applicable exchange, the Company may elect to pay the Chief Scientific Officer cash in lieu of issuing common shares, with such cash amount to be determined based on the then current market price of the common shares of the Company.
| g) | Earnings (loss) per Share |
As a result of the Preferred Shares being classified as increasing rate preferred stock with dividends not being declared until the third anniversary of closing of the Private Placement, the Company has calculated an implied dividend in determining the loss attributable to common shareholders. The impact on loss per share on the Consolidated Statements of Operations and Comprehensive Loss is as follows:
| Three months ended September 30, 2025 |
Three months ended September 30, 2024 |
Nine months ended September 30, 2025 |
Nine months ended September 30, 2024 |
|||||||||||||
| Loss attributable to the Owners of the Company |
(6,361,367 | ) | (5,943,325 | ) | (21,864,891 | ) | (17,993,579 | ) | ||||||||
| Less: implied dividend on Preferred Shares |
646,601 | — | 1,910,541 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Loss attributable to the Owners of the Company |
(7,007,968 | ) | (5,943,325 | ) | (23,775,432 | ) | (17,993,579 | ) | ||||||||
| Weighted average shares outstanding - basic and diluted |
36,915,009 | 35,622,553 | 36,175,714 | 33,360,867 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss per Share - Basic and Diluted (Owners of the Company) |
(0.19) | (0.17) | (0.66) | (0.54) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
21
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 13. | GENERAL AND ADMINISTRATIVE EXPENSES |
General and administrative expenses are comprised of the following:
| Three months ended September 30, 2025 |
Three months ended September 30, 2024 |
Nine months ended September 30, 2025 |
Nine months ended September 30, 2024 |
|||||||||||||
| Office expenses |
$ | 316,848 | $ | 110,236 | $ | 765,769 | $ | 316,215 | ||||||||
| Insurance |
247,050 | 291,938 | 740,572 | 677,975 | ||||||||||||
| Travel |
93,003 | 29,955 | 335,453 | 250,646 | ||||||||||||
| Professional fees |
463,855 | 507,841 | 1,542,381 | 1,864,993 | ||||||||||||
| Public company costs |
365,146 | 475,254 | 1,129,992 | 1,270,454 | ||||||||||||
| Salaries and benefits |
754,124 | 556,655 | 2,199,194 | 1,624,801 | ||||||||||||
| Share based payments (Note 12(d)(iii)) |
225,352 | 251,477 | 2,093,895 | 1,319,421 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses during the period |
$ | 2,465,378 | $ | 2,223,356 | $ | 8,807,256 | $ | 7,324,505 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 14. | RESEARCH AND DEVELOPMENT EXPENSES |
Research and development expenses are comprised of the following:
| Three months ended September 30, 2025 |
Three months ended September 30, 2024 |
Nine months ended September 30, 2025 |
Nine months ended September 30, 2024 |
|||||||||||||
| Preclinical |
$ | 922,982 | $ | 723,810 | $ | 2,257,337 | $ | 1,690,099 | ||||||||
| Clinical |
1,048,758 | 223,309 | 2,948,359 | 1,590,668 | ||||||||||||
| Manufacturing & analytical |
772,035 | 1,778,981 | 3,194,391 | 4,729,819 | ||||||||||||
| Regulatory |
12,217 | 62,050 | 24,258 | 152,626 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Direct research and development |
2,755,992 | 2,788,150 | 8,424,345 | 8,163,212 | ||||||||||||
| Other research and development |
404,422 | 142,441 | 1,149,359 | 516,614 | ||||||||||||
| Salaries and benefits |
1,036,554 | 863,505 | 2,958,301 | 2,641,592 | ||||||||||||
| Share based payments (Note 12(d)(iii)) |
220,754 | 255,769 | 962,866 | 875,875 | ||||||||||||
| R&D Tax Incentive |
— | — | (30,708 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses during the period |
$ | 4,417,722 | $ | 4,049,865 | $ | 13,464,163 | $ | 12,197,293 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
22
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 15. | COMMITMENTS AND CONTINGENCIES |
| i. | As previously mentioned in Note 9 – Lease Liability, the Company had entered into a lease extension on May 13, 2024. On July 15, 2025, a second lease extension was signed whereby the Company renewed its lease for its Victoria, BC facility for an additional twelve months commencing December 1, 2025 and ending November 30, 2026. The total variable lease expenses for the remaining term of the lease is anticipated to be $81,952. This amount is subject to adjustment at the end of each lease year based on actual costs incurred and does not reflect the impact of the additional twelve-month renewal that would commence December 1, 2026. |
On March 31, 2025, the Company entered into a short-term lease agreement for its research and development laboratory located in Vancouver, BC. The lease is for a period of eleven months, expiring on February 28, 2026. The total rent for the remaining term of the lease (inclusive of base rent and additional rent costs) is anticipated to be $85,883.
| ii. | The Company may be required to make milestone, royalty, and other research and development funding payments under agreements with third parties (see Note 10 – Auritec License Agreement). These payments are contingent upon the achievement of specific development, regulatory and/or commercial milestones. The Company has not accrued these payments as at September 30, 2025 due to the uncertainty over whether these milestones will be achieved. |
| iii. | Eupraxia has entered into a number of service contracts with its vendors. Some of those contracts have cancellation clauses which state Eupraxia would pay a cancellation fee of between 15% and 100% of the next service milestone if it terminates the contract. As of September 30, 2025, there have been no cancellation of contracts that would trigger a cancellation fee. As of September 30, 2024, the Company did cancel a contract with one of its vendors which triggered a cancellation fee of $87,598 which was expensed during the nine months ended September 30, 2024. |
| iv. | The Company has entered into service agreements with third parties that include indemnification provisions that are customary in the industry. These indemnification provisions generally require the Company to compensate the other party for certain damages and costs incurred as a result of third-party claims or damages arising from these transactions. |
The maximum amount of potential future indemnification is unlimited; however, the Company currently holds commercial general liability insurance. This insurance limits the Company’s exposure and may enable it to recover a portion of any future amounts paid. Historically, the Company has not made any indemnification payments under such agreements and the Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented.
23
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 16. | SEGMENTED INFORMATION |
The Company operates as a single reportable segment with the CODM being the Company’s Chief Executive Officer who manages the Company’s operations on a consolidated basis. The accounting policies of the segment are the same as those described in the summary of significant accounting policies.
As the Company does not currently generate revenue, the CODM assesses Company performance through the achievement of pre-clinical and clinical research goals while evaluating the Company’s performance and allocates resources to the operations of the Company on a total company basis. This enables the CEO to assess the overall level of resources available and how to best deploy these resources.
The CODM uses net loss to monitor budget versus actual results and to analyze cash flows in assessing performance of the segment and allocating resources. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets, with a majority of these assets located in Canada.
The following table presents information about significant segment expenses and segment loss:
| Three months ended September 30, 2025 |
Three months ended September 30, 2024 |
Nine months ended September 30, 2025 |
Nine months ended September 30, 2024 |
|||||||||||||
| Direct external research and development costs: |
||||||||||||||||
| EP-104IAR |
$ | 47,689 | $ | 359,449 | $ | 107,699 | $ | 2,943,945 | ||||||||
| EP-104GI |
1,785,321 | 1,704,891 | 6,060,242 | 3,529,631 | ||||||||||||
| Preclinical |
922,982 | 723,810 | 2,257,337 | 1,689,637 | ||||||||||||
| Salaries and benefits |
1,790,678 | 1,420,160 | 5,157,495 | 4,266,393 | ||||||||||||
| Share based payments |
446,106 | 507,246 | 3,056,761 | 2,195,295 | ||||||||||||
| Other Research and Development expenses |
404,422 | 142,441 | 1,117,718 | 516,614 | ||||||||||||
| Other General and Administrative expenses |
1,485,902 | 1,415,224 | 4,514,167 | 4,380,283 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total segment expenses |
6,883,100 | 6,273,221 | 22,271,419 | 19,521,798 | ||||||||||||
| Reconciling items: |
||||||||||||||||
| Interest income |
180,185 | 304,342 | 745,595 | 941,937 | ||||||||||||
| Interest expense |
— | (451 | ) | — | (603,436 | ) | ||||||||||
| Gain/(loss) on sale of equipment |
— | — | (1,075 | ) | 11,368 | |||||||||||
| Foreign exchange gain/(loss) |
332,934 | (21,990 | ) | (349,665 | ) | (240,759 | ) | |||||||||
| Change in fair value of financial instruments |
— | — | — | 1,200,541 | ||||||||||||
| Tax recovery/(expense) |
623 | — | (7,752 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss for the period |
$ | (6,369,358 | ) | $ | (5,991,320 | ) | $ | (21,884,316 | ) | $ | (18,212,147 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
24
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 17. | FINANCIAL INSTRUMENTS |
The Company’s financial instruments for the current and comparative periods consist of cash, amounts receivable, accounts payable and accrued liabilities.
There were no changes to the Company’s risk exposures or management of risks during the three and nine months ended September 30, 2025. The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company believes it has no significant credit risk, as its cash, being its primary exposure to credit risk, is held with a large Canadian bank. The Company’s maximum exposure to credit risk is the carrying value of these financial assets.
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to the extent possible to meet liabilities when due. As at September 30, 2025, the Company had cash of $88,959,281 (2024 - $33,101,294) in addition to current liabilities of $3,811,026 (2024 - $3,103,386), and amounts receivable of $139,904 (2024 – $228,872). Management is currently working on certain strategic alternatives including, but not limited to raising additional capital. There is no assurance, however, that any or all of these alternatives will materialize or that additional funding will be available, if and when needed.
Market risk
Market risk is the risk that 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: interest rate risk, currency risk and other price risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate cash flow risk; and to the extent that the prevailing market interest rates differ from the interest rate on the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency risk due to its frequency of transactions in US dollars. The Company does not use derivatives to hedge against this risk, however, it does purchase US dollars to cover anticipated costs that will be denominated in US dollars.
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EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 17. | FINANCIAL INSTRUMENTS (continued) |
Currency risk (continued)
At September 30, 2025, the Company held cash of $83,519,651 (2024 – $3,740,799) and had accounts payable and accrued liabilities of $1,092,840 (2024 – $376,541) denominated in US dollars which were translated to Canadian dollars at 1.3921 (2024 – 1.4389). The impact of a 10% change in the exchange rates would have an impact of approximately $8,242,681 (2024 – $336,426) on profit or loss. The Company held cash of $2,038,887 (2024 - $149,736), accounts payable and accrued liabilities of $617,217 (2024 - $120,361) and had $78,149 in accounts receivable (2024 - $258,074) denominated in Australian Dollars which were translated into Canadian Dollars at 0.9151 (2024 – 0.8915). The impact of a 10% change in the exchange rate would have an impact of approximately $98,591 (2024 - $17,810) on profit or loss. The Company also has accounts payable in Great British pounds, Euros, and New Zealand dollars. The impact of a 10% change in the exchanges of these currencies would have an immaterial effect on future cash flows.
Other price risk
Other price risk is the risk that 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 and foreign currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market. The Company is not exposed to significant price risk with respect to commodity or equity prices.
Fair Value Measurement
The Company categorizes its financial instruments measured at fair value into one of three different levels depending on the observation of inputs used in the measurement.
Level 1: Fair value is based on unadjusted quoted prices for identical assets or liabilities in active markets
Level 2: Fair value is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Fair value is based on valuation techniques that require one or more significant unobservable inputs
The Company’s financial instruments consist of cash, amounts receivable, accounts payable and accrued liabilities. The carrying value of the Company’s financial instruments approximate their fair values due to their short-term maturities with cash classified as Level 1 while amounts receivable, accounts payable and accrued liabilities are classified as Level 2.
The following table summarizes information regarding the classification and carrying values of the Company’s financial instruments measured at amortized cost:
| Financial assets/liabilities |
September 30, 2025 |
December 31, 2024 |
||||||
| Cash |
$ | 88,959,281 | $ | 33,101,294 | ||||
| Amounts receivable |
$ | 139,904 | $ | 228,872 | ||||
| Accounts payable and accrued liabilities |
$ | 3,734,890 | $ | 3,031,527 | ||||
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EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025 and 2024
(Unaudited and Expressed in U.S. Dollars, unless otherwise stated)
| 18. | INTEREST EXPENSE |
Interest expense is comprised of the following:
| Three months ended September 30, 2025 |
Three months ended September 30, 2024 |
Nine months ended September 30, 2025 |
Nine months ended September 30, 2024 |
|||||||||||||
| Interest on SVB debt facility (Note 11) |
$ | — | $ | — | $ | — | $ | 601,637 | ||||||||
| Other interest and accretion |
— | 451 | — | 1,799 | ||||||||||||
|
|
|
|
|
|
|
|
|
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| Total |
$ | — | $ | 451 | $ | — | $ | 603,436 | ||||||||
|
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|
|
|
|
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| 19. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS |
The Company paid interest of $nil during the nine months ended September 30, 2025 (2024 - $393,637).
Company received interest of $763,107 during the nine months ended September 30, 2025 (2024 - $941,898).
The Company had non-cash transactions for the nine months ended September 30, 2025:
| • | Entered into a second lease extension for its Victoria, BC office space and recognized an additional $158,508 in right-of-use asset and lease liability (see Note 6 – ROU Asset). |
| • | Purchased $25,415 of lab equipment, leasehold improvements, and computers which were not paid until subsequent to September 30, 2025. |
The Company had the following non-cash transactions for the nine months ended September 30, 2024:
| • | Entered into a lease extension for its Victoria, BC office space and recognized an additional $78,580 in right-of-use asset and lease liability (see Note 6 – ROU Asset). |
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Exhibit 99.2
EUPRAXIA PHARMACEUTICALS INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the Three and Nine Months ended September 30, 2025
1
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025
This management’s discussion and analysis (“MD&A”) has been prepared as of November 4, 2025 and should be read in conjunction with the unaudited interim consolidated financial statements of Eupraxia Pharmaceuticals Inc. (“Eupraxia” or the “Company”) as at and for the three and nine months ended September 30, 2025 and the related notes thereto and in conjunction with the audited consolidated financial statements of the Company and related notes thereto for the years ended December 31, 2024 and 2023 which are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All dollar amounts are expressed in U.S. dollars unless otherwise noted. In this MD&A, unless the context requires otherwise, references to “we” or “our” are references to Eupraxia. Additional information relating to the Company is available in our annual information form (“AIF”), filed on SEDAR+ and EDGAR on March 21, 2025.
All regulatory filings to-date and communication from the Company have been made referencing EP-104IAR. In the interest of greater clarity for investors, the Company will use EP-104IAR when referring to the product candidate that is intended for intra-articular (“IAR”) injections for indications such as osteoarthritis (“OA”), EP-104GI when referring to the product candidate that is intended for submucosal injections in the GI tract for indications such as eosinophilic esophagitis (“EoE”), and simply refer to the product candidate as EP-104 in conjunction with topics that are related to both EP-104IAR and EP-104GI.
Forward-Looking Statements
Certain statements and information in this MD&A contain forward-looking statements or forward-looking information under applicable securities legislation that may not be based on historical fact, including, without limitation, statements containing the words “may,” “might,” “will,” “likely,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “goal,” “outlook,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “forecast,” “estimate,” “potential,” “target,” “seek,” “contemplate,” “continue,” “design,” and “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words and similar expressions. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Such forward-looking statements are made as of the date of this MD&A.
Forward-looking statements are necessarily based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as factors that we believe are appropriate. Forward-looking statements in this MD&A include, but are not limited to, statements relating to:
| • | the Company’s business strategies and objectives, including current and future plans, expectations and intentions; |
| • | the Company’s intention to evaluate funding alternatives for the continued development of EP-104IAR, including potential partnership opportunities; |
| • | the Company’s ability to obtain sufficient funding for its operations, including funding for research, development and commercial activities; |
| • | the Company’s projected operating expenses and capital expenditures; |
| • | the Company’s ability to achieve profitability; |
| • | projected revenues, future trends, opportunities and growth in the Company’s industry and the drug development markets; |
| • | the Company’s ability to maintain and enhance its competitive advantages and technological advantages; |
| • | the entry into commercial partnerships and commercialization of the Company’s technology; |
| • | the Company’s ability to enter into definitive agreements with its contract research organizations (“CROs”); |
| • | the Company’s ability to enter into co-development and/or collaborative partnerships; |
| • | the Company’s clinical development programs and activities and the estimated timing thereof; |
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| • | the timing, status and results of clinical trials, including with respect to patient recruitment and data readout, including the Company’s belief that its planned clinical trials will support future New Drug Application (“NDA”) submissions for EP-104IAR and EP-104GI; |
| • | the success of regulatory submissions; |
| • | the obtaining of potential regulatory approval; |
| • | the hiring of additional research and development team members; |
| • | the potential for the Company’s technology to impact the drug delivery process; |
| • | the development of additional intellectual property, ability to patent or otherwise protect such developed intellectual property and licenses with third parties for intellectual property; |
| • | the ability of patents and notices of allowance to provide protection over intellectual property in applicable jurisdictions; |
| • | the Company’s ability to protect, expand upon and exploit its existing intellectual property; |
| • | the entry into sponsored research agreements and the benefits therefrom; |
| • | the competitive advantages of the Company and its technology; |
| • | the planned development and future success of the Company’s product candidates and results gathered from studies thereof; |
| • | the development of products from the Company’s competitors; |
| • | the application of regulations and standards to the Company’s future products and services or research and development activities; |
| • | the Company’s retention of funds or payment of dividends; |
| • | the translation of the Company’s technologies and expansion of its offerings into clinical applications; |
| • | the potential benefits to patients from Eupraxia’s platforms; |
| • | the value of the strategic relationship to Eupraxia’s clients and investors; |
| • | the Company’s engagement with legal and regulatory authorities in various jurisdictions; |
| • | the Company’s anticipated use of its existing cash and cash equivalents, including the use of net proceeds from the Offering (as defined herein) and the related estimated cash runway; |
| • | the sufficiency of the Company’s existing cash and cash equivalents to fund its future operating expenses and capital expenditure requirements and potential sources of additional capital; |
| • | the issuance of common shares of the Company (the “Common Shares”) upon conversion of the Series 1 Preferred Shares of the Company (the “Preferred Shares”); |
| • | the expected exercise of outstanding EPRX.WT.A warrants on or prior to expiry; |
| • | the demand and commercial viability of the Company’s technology; and |
| • | the demand and market acceptance for product candidates developed by the Company and for which it receives marketing authorization. |
Forward-looking statements and information involve significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking statements or information and, accordingly, should not be read as guarantees of future performance or results. These risks and factors include, but are not limited to:
| • | we have a limited operating history and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability; |
| • | we will require substantial additional financing to achieve our goals and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts, if any of our product candidates receive marketing authorization; |
| • | we are substantially dependent on the success of our lead product candidates EP-104GI, which is currently being studied in a Phase 2 clinical study, and EP-104IAR, for which we are evaluating funding alternatives for the continued development, including potential partnership opportunities. If we are unable to complete development of, obtain approval for and commercialize EP-104GI or EP-104IAR, alone or through a potential partnership, in a timely manner, our business will be harmed; |
| • | if we breach any of the agreements under which we license rights to our product candidates or technology from third parties, we could lose license rights that are important to our business. Our current license agreement may not provide an adequate remedy for its breach by the licensor; |
| • | adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations; |
3
| • | clinical trials are expensive, time consuming and difficult to design and implement and may fail to demonstrate adequate safety and efficacy of our product candidates to the satisfaction of the U.S. Food and Drug Administration ”FDA” or comparable foreign regulatory authorities; |
| • | our lead product candidates may not be successful for their intended use; |
| • | our current and future product candidates will require regulatory approval, which is costly, and we may not be able to obtain it and we may fail to obtain regulatory approvals or only obtain approvals for limited uses or indications; |
| • | the clinical trials of our product candidates may not demonstrate safety and efficacy to the satisfaction of the FDA, European Medicine Agency (“EMA”) or other comparable foreign regulatory authorities or otherwise produce positive results; |
| • | we completely rely on third parties to provide supplies and inputs required for our product candidates and, if these third parties fail to fulfill their contractual obligations, we may be unable to pursue further development of our product candidates and our business could be substantially harmed; |
| • | we rely on CROs to provide clinical and non-clinical research services; if such CROs do not successfully carry out their contractual duties including to comply with applicable laws and regulations or meet expected deadlines, our business could be substantially harmed; |
| • | the manufacture of drugs is complex and our third-party manufacturers may encounter difficulties in production. If any of our third-party manufacturers encounter such difficulties, our ability to provide adequate supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or prevented; |
| • | our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor or other third party will discover them or that our trade secrets will be misappropriated or disclosed; |
| • | the outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA or other comparable foreign regulatory authorities or provide the basis for regulatory approval Terminating the development of any of our product candidates could materially harm our business and the market price of our Common Shares; |
| • | interim, initial, “top-line”, and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data; |
| • | any negative safety outcomes observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications, which could seriously harm our business; |
| • | significant adverse events, toxicities or other undesirable adverse events observed with our current or future product candidates when used alone or in combination with other products that may result in a safety profile that could inhibit regulatory approval, prevent market acceptance, limit their commercial potential, if approved, or result in significant negative consequences; |
| • | where appropriate and applicable, we may seek approval from the FDA or comparable foreign regulatory authorities through the use of expedited approval pathways, such as Fast Track designation or Breakthrough Therapy designation. Even if we receive a designation that would allow for expedited review, we can provide no assurance that we will be able to obtain FDA approval sooner or at all; |
| • | if we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our drug candidates, if approved, we may be unable to generate any product revenue; |
| • | we have a novel technology with uncertain market acceptance if any of our product candidates are approved; |
| • | if we experience delays or difficulties in the enrollment and/or maintenance of patients in clinical trials, our clinical development activities could be delayed or otherwise adversely affected; |
| • | clinical drug development is a lengthy, expensive, and inherently uncertain process, and we may experience delays in completing, or ultimately be unable to successfully complete the clinical trials and other testing needed for regulatory approval; |
| • | the FDA, EMA and other comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction; |
| • | obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions; |
| • | if the market opportunity for any product candidate that we or our strategic partners develop is smaller than we believe, our revenue may be adversely affected and our business may suffer; |
| • | even if our product candidates receive regulatory approval, we will be subject to significant post marketing regulatory requirements and oversight; |
| • | FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates; |
4
| • | the FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses and failure to comply could subject us to enforcement action; |
| • | disruptions at the FDA and other government agencies, including disruptions caused by actions taken by the current U.S. presidential administration or through legislative or judicial action or lack thereof, funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business; |
| • | we rely on key personnel; |
| • | we may not be able to successfully execute our business strategy; |
| • | we are in a highly competitive industry which is continuously evolving with technological changes; |
| • | our future success will depend on our ability to continually enhance and develop our product candidates; |
| • | we may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success; |
| • | changes in methods of product candidate manufacturing or formulation may result in additional costs or delay; |
| • | if we are unable to differentiate EP-104 from existing therapies or if the FDA or other applicable regulatory authorities approve additional, and potentially less costly, therapies that compete with EP-104, our ability to successfully commercialize EP-104GI or EP-104IAR would be adversely affected; |
| • | there is uncertainty regarding U.S. tariffs and support for existing treaty and trade relationships, including with Canada, and implementation of new legislative or regulatory policies by the U.S. government could impose additional costs on the Company, result in delayed timelines, or otherwise negatively impact the Company, which could have a material adverse impact on the Company’s business; |
| • | a variety of risks associated with potential international business relationships could materially adversely affect our business; |
| • | collaboration arrangements we may enter into in the future may not be successful; |
| • | provisions of any future debt instruments may restrict our ability to pursue our business strategies; |
| • | we may acquire businesses or products, or form strategic alliances in the future, and we may not realize the benefits of such acquisitions or alliances; |
| • | we are subject to evolving global laws and regulations relating to privacy, data protection and information security, which may require us to incur substantial compliance costs, and any failure or perceived failure by us to comply with such laws and regulations may harm our business and operations; |
| • | our business and operations could suffer in the event of an actual or perceived information security incident such as a cybersecurity breach, system failure, or other compromise of our systems or those of a third-party or other contractor or vendor; |
| • | we may fail to manage our growth successfully, which may adversely impact our operating results; |
| • | guidelines and recommendations published by various organizations can reduce the use of products that we may commercialize; |
| • | we use hazardous chemicals and biological materials in our business. Any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly; |
| • | if product liability lawsuits are brought against us, then we may incur substantial liabilities and may be required to limit commercialization of EP-104, if approved, for any indication, and any other future products or product candidates; |
| • | our employees, independent contractors, principal investigators, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading, which could significantly harm our business; |
| • | we may be subject to securities litigation, which is expensive and could divert management attention; |
| • | our directors and executive officers may be affiliated with other biotech companies and may have conflicts of interest; |
| • | our business may be affected by macroeconomic conditions; |
| • | our business may be affected by global geopolitical risks; |
| • | we may be responsible for corruption and anti-bribery law violations; |
| • | we are subject to foreign exchange risks; |
| • | we are subject to taxation risks and changing rules by different tax authorities; |
| • | we are subject to a number of risks and hazards and may not be sufficiently insured for all of them; |
| • | we devote significant resources to regulatory compliance as a public entity; |
| • | if we are unable to develop and maintain effective disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and may adversely affect our business, financial condition and results of operations; |
5
| • | our success depends on our ability to protect our intellectual property and our proprietary technologies; |
| • | if the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected; |
| • | intellectual property rights do not necessarily address all potential threats to our competitive advantage; |
| • | our patent rights may prove to be an inadequate barrier to competition; |
| • | our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties. Claims by third parties that we infringe their proprietary rights may result in liability for damages or prevent or delay our developmental and commercialization efforts; |
| • | we may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses; |
| • | we may be involved in lawsuits to protect or enforce our patents or our future licensors’ patents, which could be expensive, time consuming, and unsuccessful. Further, our issued patents or our current or future licensors’ patents could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad; |
| • | intellectual property litigation may lead to unfavorable publicity that harms our reputation and causes the market price of our Common Shares to decline; |
| • | derivation proceedings may be necessary to determine priority of inventions, and an unfavorable outcome may require us to cease using the related technology or to attempt to license rights from the prevailing party; |
| • | we may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products and product candidates; |
| • | changes in U.S. patent law, or laws in other countries, or their interpretation could diminish the value of patents in general, thereby impairing our ability to protect our product candidates; |
| • | we may be subject to claims challenging the inventorship or ownership of our patents, the patents we license, and other intellectual property; |
| • | patent terms may be inadequate to protect our competitive position on our product candidates, if approved, for an adequate amount of time; |
| • | we may not be able to protect or enforce our intellectual property rights throughout the world; |
| • | obtaining and maintaining our patent protection depends on compliance with various procedural, documentary submission, fee payment and other requirements imposed by regulations and governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements; |
| • | if our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected; |
| • | if we are unable to protect the confidentiality of our trade secrets, the value of the Company’s technology could be materially adversely affected, harming our business and competitive position; |
| • | we may be subject to claims that we or our employees, independent contractors, or consultants have wrongfully used or disclosed alleged confidential information or trade secrets; |
| • | we may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees, independent contractors, or consultants have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers; |
| • | we may be subject to claims challenging the inventorship of our patents and other intellectual property; |
| • | our rights to develop and commercialize the Company’s technology and product candidates may be subject, in part, to the terms and conditions of any future licenses granted to us by others; |
| • | if we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our future licensors, we could lose license rights that are important to our business; |
| • | the patent protection and patent prosecution for some of our product candidates may be dependent on third parties; |
| • | coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, if approved, which could make it difficult for us to sell any product candidates or therapies, if approved, profitably; |
| • | our relationships with healthcare providers and physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings; |
| • | our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs, suppliers and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements; |
6
| • | our research and development activities could be affected or delayed as a result of possible restrictions on animal testing; |
| • | ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations; |
| • | the market price of the Common Shares may be volatile; |
| • | investors may lose their entire investment; |
| • | we have no history of dividends; |
| • | our existing executive officers and directors own a significant percentage of Common Shares and may have a significant impact over matters submitted to our shareholders for approval; |
| • | future sales of Common Shares by our existing shareholders could cause our share price to decline; |
| • | we will need to raise additional financing in the future which may dilute our share capital; |
| • | if securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, or if they adversely change their recommendations regarding our Common Shares, the trading price or trading volume of our Common Shares could decline; |
| • | the outstanding Preferred Shares, and any future issuance of preferred shares could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Common Shares, which could depress the price of our Common Shares; |
| • | our constating documents permit us to issue an unlimited number of Common Shares without additional shareholder approval; |
| • | raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to the Company’s technologies or product candidates; |
| • | we have warrants, Preferred Shares convertible into Common Shares, and shares of a subsidiary exchangeable for Common Shares outstanding, which in each case, if exercised, converted or exchanged, respectively, could cause dilution to existing shareholders; |
| • | our Common Shares may have limited liquidity; |
| • | we cannot assure you that an active market will develop or be sustained for our Common Shares on the Nasdaq Capital Market (“Nasdaq”); |
| • | United States investors may not be able to obtain enforcement of civil liabilities against us; |
| • | as a foreign private issuer, we are subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to our U.S. shareholders; |
| • | we may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses to us; |
| • | U.S. holders of our shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company; and |
| • | if a U.S. holder is treated as owning at least 10% of our Common Shares, such U.S. holder may be subject to adverse U.S. federal income tax consequences. |
Such statements reflect our current views with respect to future events, are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Eupraxia as of the date of such statements, are inherently subject to significant medical, scientific, business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward-looking statements included in this MD&A, the Company has made various material assumptions, including but not limited to (i) the Company’s ability to attract and retain skilled staff; (ii) future research and development plans for the Company proceeding substantially as currently envisioned; (iii) industry growth trends, including with respect to projected and actual industry sales; (iv) the Company’s ability to obtain positive results from the Company’s research and development activities, including clinical trials; (v) sufficient working capital and the Company’s ability to control costs and raise additional financing going forward; (vi) obtaining regulatory approvals and the potential benefits of our product candidates, if approved; (vii) general business and economic conditions; (viii) the Company’s ability to achieve profitability; (ix) the Company’s ability to successfully commercialize its current product candidates, if approved, enter into commercial partnerships and develop new products; (x) the availability of financing on reasonable terms; (xi) market competition; (xii) the products and technology offered by the Company’s competitors; (xiii) the Company’s ability to protect patents and proprietary rights; and (xiv) the availability and cost of personnel, materials and supplies.
7
In evaluating forward-looking statements, current and prospective shareholders should specifically consider various factors, including the risks listed above and outlined herein under the headings “Credit risk”, “Liquidity risk”, “Market risk”, “Other price risk”, “Interest rate risk” and “Currency risk” and under the heading “Risk Factors” in the AIF. Should one or more of these risks or uncertainties, or a risk that is not currently known to us materialize, or should assumptions underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this MD&A and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.
Overview of the Company
We are a clinical-stage biotechnology company seeking to leverage our proprietary Diffusphere™ technology to optimize drug delivery for applications with significant unmet medical need. Each of our product candidates is designed to improve patient benefit by providing more prolonged activity than currently available treatments, combined with an improved pharmacokinetics (“PK”) and related safety profile and precisely targeted local delivery. We believe a product with this profile could offer the dual potential of providing long-lasting treatment and being well-tolerated in target and non-target tissues. Our strategy is to develop a portfolio of product candidates based on this delivery technology.
We currently have two distinct clinical development programs, one targeting eosinophilic esophagitis (“EoE”) and the second targeting chronic osteoarthritis (“OA”) pain in the knee. Both programs are broadly based upon the same active pharmaceutical ingredient (“API”), fluticasone propionate. The injectable drug is dispensed together with a “vehicle” diluent specifically designed for the target delivery modality and co-administered with the API. The same underlying API and extended-release formulation is being used in both development programs. In the future, we anticipate that therapeutic targets will be differentiated by dosing levels, vehicle and delivery methods and will be distinct product candidates. The product candidate that is being developed specifically for submucosal injections in the GI tract with an initial indication of EoE is referred to as EP-104GI, and the product candidate that is being developed for intra-articular (“IA”) injections with an initial indication of knee OA is referred to as EP-104IAR. EP-104 is intended to refer to the extended-release Fluticasone Propionate encapsulated with the DiffusphereTM technology, which is used in the formulation of both EP-104GI and EP-104IAR.
We are currently conducting a Phase 2 clinical trial with EP-104GI in Canada, the Netherlands, Australia, the UK, Switzerland, and New Zealand. We also received pre-IND feedback from the FDA on December 3, 2024, to clarify IND-enabling early phase program requirements for conducting studies in the US. We intend to continue development of EP-104GI through the ongoing clinical trial and any subsequent trials and other testing required by the FDA for submission of an NDA to obtain approval for marketing in the United States. We intend to evaluate the possibility of identifying a European corporate partner to help with the development of EP-104GI.
We have successfully completed a Phase 2b clinical trial with EP-104IAR in knee OA, and in January 2024 held a meeting with the FDA to determine the late phase program requirements for an NDA submission and potential approval in the United States. We believe that the future success of the product candidate will be dependent on late phase development and commercialization expertise and will require significant resources. We are currently evaluating funding alternatives for the continued development of EP-104IAR, including potential partnership opportunities and intend to modulate investment levels pending the outcomes. We are undertaking certain preclinical and manufacturing activities as well as Phase 3 planning and preparation related to EP-104IAR to ensure continuity of the project, but we intend to wait until we have funding needs addressed before committing to additional significant spend for this program.
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EP-104 (Long-Acting Fluticasone Propionate Injectable Suspension)
The primary active ingredient of the EP-104 product candidates consists of a solid core of fluticasone propionate (“FP”) coated with an outer layer of polyvinyl alcohol (“PVA”). FP is a synthetic trifluorinated corticosteroid with potent anti-inflammatory activity and a well-established systemic safety record in the form of widely used inhaled, intranasal, and topical agents. It has been shown to be locally active, and FP that is systemically absorbed is rapidly metabolized. Relative to other corticosteroids (including triamcinolone acetonide or “TCA”), FP has a high affinity for the glucocorticoid receptor, low solubility, a low rate of dissociation, and a comparatively long half-life. It is currently approved by the FDA, Health Canada, European Medicines Agency, and many other regulatory agencies around the world. PVA is a biocompatible polymer with numerous biomedical applications and a 30-year safety record in various human tissues. We believe these characteristics make EP-104 a promising candidate for prolonged anti-inflammatory use.
EP-104 technology is designed to work by membrane mediated diffusion. When EP-104 particles are injected at the disease site, extracellular fluid diffuses across the polymer membrane and into the particles themselves, dissolving some of the solid drug core creating a saturated drug solution inside the microsphere with relatively low drug concentrations outside the microenvironment. Steady-state diffusion of FP across the polymer membrane and into the extracellular space then delivers the drug candidate to the intended area at a prolonged and steady rate with close to constant drug levels. This rate can be controlled by changing the size of the drug core and the properties of the polymer membrane, creating a target drug release profile designed to maximize disease treatment and reduce systemic and local adverse events often accompanying drugs having conventional release profiles.
Another key feature differentiating EP-104 from other extended-release IA corticosteroid formulations is that more than 90% by weight of EP-104 is the active FP component in the investigational drug product, compared to less than 30% in other polymer-based extended-release products which use degradation.
FP, although approved by the FDA, Health Canada, EMA and other regulatory agencies, is not currently approved for use in any formulation for the treatment of symptoms in either EoE or OA. To our knowledge, EP-104GI and EP-104IAR are the only extended-release formulations of FP in development for these conditions. We believe that the EP-104 drug delivery technology platform has the potential to have a beneficial application for EoE, given the already-established efficacy of oral immediate release of FP in this indication. We believe the drug delivery technology platform also has the potential to be an effective treatment for OA based on the proven efficacy of other corticosteroids for this condition. The potential for an improved treatment of EoE and OA with our proprietary formulations of EP-104 is further supported by a continually expanding library of data supporting the value of extended-release steroids.
EP-104 consists of a vial of EP-104 powder and a separate vial of liquid (referred to as the “Vehicle”). Before injection, the Vehicle is mixed with the dry powder to suspend the EP-104 particles; this enables the EP-104 powder to be injected into the patient. In an ongoing stability study, the powder has proven stable for 48 months when stored at room temperature. Batches of EP-104 are currently manufactured at the projected initial batch scale required for launch.
EP-104GI for Eosinophilic Esophagitis (EoE)
EP-104 is being developed for the treatment of EoE, a disease that was once classified by the U.S. National Organization for Rare Disorders (“NORD”) as a rare disease, but that has been steadily increasing in prevalence such that it is no longer considered rare. We believe adaptations to the original formulation of EP-104 will result in the creation of EP-104GI for this specific indication, including modifications to the carrier vehicle and dose.
EoE is characterized by inflammation and the accumulation of large numbers of eosinophils (a type of white blood cells) within the epithelial lining of the esophagus. In adults, EoE leads to dysphagia and food impaction. In children, it often presents with irritability, nausea and vomiting. Patients with EoE frequently develop esophageal strictures, a narrowing or tightening of the esophagus, accompanied by proliferations of fibrotic tissue.
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Development of EP-104GI for EoE
Non-clinical Studies
Non-clinical studies are underway to support the registration program. These activities include safety and biocompatibility evaluations of EP-104IAR excipients and non-clinical studies to provide information needed to support the continued clinical investigation of EP-104GI product candidates in humans.
Clinical Studies
The RESOLVE clinical study is active at sites in Canada, the Netherlands, Australia, UK and Switzerland and New Zealand, with expansion planned in other jurisdictions. The trial comprises two parts: (1) an open-label dose Phase 1b escalation and (2) a randomized, blinded, vehicle-controlled Phase 2b dose optimization.
Part One: Enrolment of this phase of the trial is now complete. Safety observations from the ongoing study include mild to moderate adverse events, the majority of which are not considered related to EP-104GI. No dose-limiting toxicities or serious adverse events have occurred. There have been no reports of gastrointestinal candidiasis or significant impact on glucose metabolism or adrenal function. Available pharmacokinetic data reveal dose-dependent plasma FP concentrations with near-constant levels achieved after the initial peak and there was no evidence of premature or exaggerated release of FP. Symptom responses assessed by patient questionnaires have generally improved with increasing EP-104GI dose. In the available data, initial symptom improvements at Week 4 have been maintained or enhanced by Week 24 and have remained below baseline values for up to 36 weeks. Histological assessments at Week 12 demonstrate progressive improvements with increasing EP-104GI dose. The Week 36 data available indicate these histological responses can be maintained. Initial data after 52 weeks of treatment demonstrated sustained symptom response. We anticipate ongoing data readouts from subsequent dose-escalation cohorts throughout 2025, and ongoing enrolment in the dose optimization portion.
Part Two: The RESOLVE clinical study was amended to add a randomized, blinded, vehicle-controlled, dose optimization portion that will enroll at least 120 adult patients with a confirmed diagnosis and active EoE symptoms. In this part of the study, an initial 30 patients will be randomized 2:1 to receive EP-104GI 120mg total dose or matching vehicle control. Subsequently, 30 additional patients will be randomized 2:1 to receive 160mg or a matching vehicle control. Then an additional 60 patients will be randomized 1:1:1 to receive 120mg, 160mg or placebo. The first patient was dosed in the randomized dose optimization portion of the study on July 7, 2025. Outcomes for safety, pharmacokinetics and efficacy are being collected at multiple timepoints for up to 52 weeks post-dose.
Subsequent steps in the research program will be determined following analysis of results as well as interaction with key opinion leaders and regulatory authorities. Pre-IND feedback from the US FDA received on December 3, 2024 provided clarity on IND-enabling early program requirements. We agreed on the design of an IND-enabling non-clinical study and have initiated this study. To seek marketing approval for EP-104GI, we expect to carry out at least one Phase 3 study assessing both efficacy (reduced histological signs and improved symptoms) and safety of EP-104GI in this indication. The development program is subject to further discussions with FDA.
EP-104IAR for Osteoarthritis
OA is a chronic progressive disease characterized by deterioration of joint cartilage and inflammation, which results in pain and stiffness, usually in the morning or after a period of inactivity; and loss of joint function which limits daily activities. In normal joints, cartilage acts as a cushion between bones and provides a smooth gliding surface for movement. In OA, the inflammatory processes integral to disease progression damages the cartilage, and over time cartilage wears away, causing bone to rub directly against bone resulting in joint damage, severe pain and disability.
Globally, OA is a leading cause of disability in older adults. Estimates of prevalence and incidence vary according to the definition of OA used (i.e., radiographic (X-Ray) versus symptomatic) and the joints assessed. The global prevalence of knee OA is estimated at approximately 23% in adults over the age of 40. According to a report by the Centers for Disease Control and Prevention, OA is estimated to affect more than 32.5 million adults in the United States alone. A 2018 report estimated there were 14 million people with symptomatic knee OA. OA is also often associated with depression and loss of sleep which can greatly affect quality of life.
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Current evidence-based OA treatment guidelines aim to manage signs and symptoms, with the goal of slowing progression, if possible. Recommended pharmacological interventions include topical and oral non-steroidal anti-inflammatory drugs, and IA corticosteroids. IA corticosteroid injections have been used for decades to manage pain and stiffness associated with inflammation in knee OA and have been approved by regulatory authorities as safe and effective. However, IA corticosteroid injections often result in suboptimal patient outcomes because of their short duration of activity and systemic adverse events such as flushing, glucose alterations and cortisol suppression due to the high peak exposures required to maintain efficacious concentrations for prolonged durations. Evidence is also emerging regarding the risk of adverse joint findings and/or OA progression following frequent/repeated immediate release IA corticosteroid injections.
Development of EP-104IAR
Non-clinical Studies
We have completed multiple non-clinical investigations with EP-104IAR, including a large IND-enabling non-clinical study in dogs. Non-clinical data have indicated that after a single high-dose IA injection of EP-104IAR to the knees of dogs, FP was released locally for over ten months with moderate exposure in the plasma. There was no evidence of cartilage damage in dogs over the ten-month follow-up period at any of the administered doses. In this study, a low dose of EP-104IAR released FP locally for longer than eight months with minimal systemic exposure. This dose was used to justify the dose selection in our Phase 2 clinical trial. Both U.S. and European competent authorities have reviewed our non-clinical safety data and deemed this information suitable to support clinical research studies.
Several non-clinical studies are underway to support the Phase 3 and registration program. These activities include safety and biocompatibility evaluations of EP-104IAR excipients as well as non-clinical studies to provide information needed to support the continued clinical investigation of EP-104IAR product candidates in humans.
Clinical Studies
EP-104IAR has been evaluated in two clinical studies in OA patients. The first clinical study was a Phase 1, double-blind, placebo-controlled clinical study (protocol EP-104-101) to assess safety, PK and preliminary efficacy in 32 knee OA patients at three sites in Canada. The single 15 mg dose was generally well tolerated and showed predictable PK. The study was not powered to detect efficacy; however, patient-reported outcome measures were collected and analyzed to evaluate pain and symptom relief. Despite the limitations of this study (small size, low dose, significant underdosing in nine subjects, and high placebo response), we believe it provides promising tolerability and PK data and preliminary clinical activity data to support future development of EP-104IAR. Results of the study have been published in Osteoarthritis and Cartilage Open.
The second clinical study was SPRINGBOARD – a Phase 2, double-blind, placebo-controlled clinical study (protocol EP-104IAR-201) that assessed the efficacy, safety and PK of a single 25 mg dose of EP-104IAR in 318 patients with moderate knee OA. The trial was conducted at 12 sites in Denmark, Poland and Czech Republic, with the last patient visit announced on May 25, 2023. Top-line data readout was announced on June 26, 2023. Results of the study have been published in The Lancet Rheumatology.
EP-104IAR-201 met its primary endpoint with a clinically meaningful and statistically significant (p=0.004) improvement over vehicle-placebo in Western Ontario and McMaster Universities Osteoarthritis (“WOMAC”) Pain at 12 weeks in the Intent to Treat population.
EP-104IAR-201 also showed statistically significant improvement over placebo at 12 weeks in three key secondary endpoints: WOMAC Function (p=0.014), OMERACT-OARSI strict responders (p=0.011) and Area Under the Curve (“AUC”) for WOMAC Pain (p<0.001). Importantly, statistical significance with OMERACT-OARSI strict responders to 15 weeks and AUC for WOMAC Pain to 24 weeks was also seen in the Phase 2b study, highlighting a strong and durable response. The secondary endpoint of the difference in change from baseline in the WOMAC Pain subscale at 24 weeks was not met, delivering statistical significance to 14 weeks.
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We also performed pre-specified analyses in the moderate sub-population, which comprised 68% of the study population (n=214). Statistically significant efficacy outcomes were seen for WOMAC Pain (17 weeks) and OMERACT-OARSI strict responders (22 weeks). Additionally, 40% of moderate patients achieved near complete pain relief (WOMAC Pain score of ≤2) which was statistically significant for 22 weeks.
EP-104IAR was well tolerated, with adverse events similar to placebo, and no withdrawals due to adverse events. Changes in cortisol were minimal and transient and there were no differences in blood glucose levels between treatment groups, including diabetics. We believe these safety data and the observed PK profile support our goal of developing a product that can be used for repeat and bilateral dosing, and in certain at-risk populations.
End-of-Phase-2 Meeting with FDA for EP-104IAR
In January 2024, we engaged with the FDA in an End-of-Phase-2 meeting to discuss results from the SPRINGBOARD study and to discuss planned clinical and non-clinical activities to support a New Drug Application (“NDA”) for EP-104IAR. Based on these interactions, we believe that the following clinical trials will be required in support of a future NDA submission for EP-104IAR:
| • | PROMENADE – A Phase 3 trial in approximately 740 knee OA patients to evaluate the safety and efficacy of EP-104IAR. We anticipate that patients will be followed for a maximum of six to nine months after injection. |
| • | A Phase 1 study carried out in approximately 30 patients comparing the pharmacokinetics of EP-104IAR and Flovent® HFA (required to satisfy PK requirements for a US 505(b)(2) application). |
In addition to the anticipated clinical trials described above, we anticipate that we or a potential partner would need to conduct additional non-clinical work to support repeat dosing of EP-104IAR and the characterization of PVA in-line with the FDA’s feedback.
We anticipate that we or a potential partner would submit the NDA for EP-104IAR under Section 505(b)(2) of the FDCA to obtain FDA approval, which is required before marketing a new drug in the United States. A 505(b)(2) NDA would rely in part on non-clinical studies and clinical trials conducted by us or a potential partner, and in part on the FDA’s prior findings of safety and efficacy for the active ingredient for which we do not have a right of reference or which have been established in the scientific literature in the public domain. We intend to, either alone or with a partner, pursue marketing approval and commercialization of EP-104 in the U.S. and additional ex-U.S. geographies along with the potential partner.
Lifecycle Opportunities for EP-104 Products
Corticosteroids are broadly used for various indications that may benefit from a targeted delivery and extended-release profile with minimal adverse events. Natural lifecycle extensions for EP-104 products could include other joints affected by OA, other inflammatory arthropathies, or other inflammatory conditions.
Eupraxia Business Strategy
Our focus over the 24 months following the date of this MD&A will be the execution of the EP-104 development programs, including:
EP-104GI Program:
| • | Complete the patient follow up for the Phase 1b RESOLVE clinical study to evaluate the safety and effectiveness of EP-104GI in the treatment of EoE; |
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| • | Complete the RESOLVE Phase 2b randomized, placebo-controlled trial to further assess the two optimal dose(s). |
| • | Complete non-clinical work to support filing an IND in the US. |
| • | Optimize and manufacture material to support EP-104GI clinical trials, including development of a new vehicle better suited to the location and mode of injection; |
| • | Initiate a Phase 3 program to evaluate the effectiveness and safety of EP-104GI in EoE, subject to discussions with the FDA. |
EP-104IAR Program:
| • | Complete non-clinical studies to support NDA filing that would enhance the EP-104IAR label and evaluate the safety and biocompatibility of all excipients; |
| • | Engage with the FDA to achieve agreement on the commercial manufacturing program; |
| • | Progress the EP-104IAR clinical program into Phase 3, in conjunction with additional funding opportunities (including a potential collaboration partner). |
EP-104 Platform:
| • | Continue to strengthen the IP portfolio around the EP-104 technology; |
| • | Continue to evaluate portfolio options for EP-104 and the Diffusphere™ technology platform; and |
| • | Continue to develop the manufacturing process to support all programs. |
Where appropriate, we may use strategic collaborations or partnerships to accelerate development and maximize the commercial potential of our development programs. In parallel, we intend to seek out-licencing, co-development or marketing partners for our technology, with the potential to expand and exploit its application fully. It is our intention to put in place conditions and resources, including the potential use of licensing partnerships, that support the success of the development program, marketing authorization(s) and commercialization across multiple jurisdictions, as well as exploitation of any opportunities for lifecycle and patent extension. Depending on market conditions, this may take the form of co-development or commercialization partnerships, transactional opportunities and/or public financing options.
Pipeline programs are another area of potential growth in the next 24 months. Our technology is potentially compatible with various drugs and therapeutic indications. The pipeline strategy focuses on modulating the release of existing drugs to achieve better clinical outcomes in areas of high medical need. The technology has the potential to be particularly suitable for diseases requiring precisely targeted and controlled localized therapy where broader tissue or systemic exposure should be avoided (e.g., tumour oncology). We have previously investigated indications involving post-surgical pain (EP-105) and post-surgical site infections (EP-201). While both programs demonstrated preclinical evidence of supporting our technology, these programs are currently paused so we can remain focused on the programs described previously in this MD&A.
We currently have several pipeline candidates in development with a goal to add a pipeline product candidate over the next 24 months to allow for sustained corporate growth. We expect this to involve a multidisciplinary review of candidate drugs, formulation development, in vitro screening to identify the most promising lead candidates and non-clinical proof-of-concept studies. The information generated from these inquiries will determine whether we should proceed with further development.
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Significant Company Events
On September 2, 2025, the Company announced the first set of 1-year clinical results from the RESOLVE Trial. After 12 months, 2/3rds of Cohort 5 (N=3) patients remained in clinical remission after treatment with EP-104GI.
On September 24, 2025, the Company announced the closing of a public offering of Commons Shares (the “Offering”). The Company issued 14,636,363 Common Shares at a price of $5.50 per Common Share for gross proceeds of approximately $80.5 million which included the issuance of 1,909,090 Common Shares upon full exercise of the option to purchase additional shares granted to the underwriters.
Selected Financial Information
The financial information reported herein for the period ended September 30, 2025 has been derived from the interim consolidated financial statements for the period ended September 30, 2025 prepared in accordance with U.S. GAAP. The Company’s reporting currency is the U.S. dollar. The Canadian dollar continues to be the functional currency of the Company.
Selected Consolidated Balance Sheet Data
| September 30, 2025 $ |
December 31, 2024 $ |
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| Cash |
88,959,281 | 33,101,294 | ||||||
| Total assets |
92,349,055 | 34,942,355 | ||||||
| Equity attributable to owners of the Company |
90,028,821 | 33,404,803 | ||||||
| Non-controlling interest |
(1,585,259 | ) | (1,565,834 | ) | ||||
| Total shareholders’ equity |
88,443,562 | 31,838,969 | ||||||
Cash increased by $55,857,987 to $88,959,281 as at September 30, 2025 from December 31, 2024. This increase was attributable primarily to the Offering of $73,891,109 (net of transaction costs) and exercise of common share purchase warrants of $636,900 offset by the net loss of $21,884,315 for the nine months ended September 30, 2025 less share-based payments of $3,056,761.
Total assets increased by $57,406,700 to $92,349,055 as at September 30, 2025 from December 31, 2024. This increase was primarily due to the increase in referenced above.
The Company did not pay any dividends or make any distributions to shareholders in any of the above periods.
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Selected Consolidated Statements of Operations and Comprehensive Loss Data
| Three months ended September 30, 2025 $ |
Three months ended September 30, 2024 $ |
Nine months ended September 30, 2025 $ |
Nine months ended September 30, 2024 $ |
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| Revenue |
— | — | ||||||||||||||
| Net loss for the period – Owners of the Company |
(6,361,367 | ) | (5,943,325 | ) | (21,864,891 | ) | (17,993,579 | ) | ||||||||
| Net loss for the period – Non-controlling interest |
(7,991 | ) | (47,995 | ) | (19,425 | ) | (218,568 | ) | ||||||||
| Net loss for the period |
(6,369,358 | ) | (5,991,320 | ) | (21,884,316 | ) | (18,212,147 | ) | ||||||||
| Comprehensive loss for the period |
(6,877,991 | ) | (5,866,889 | ) | (21,019,763 | ) | (18,300,314 | ) | ||||||||
| Loss per share, basic and diluted – Owners of the Company |
(0.19 | ) | (0.17 | ) | (0.66 | ) | (0.54 | ) | ||||||||
The net loss for the three months ended September 30, 2025 increased by $378,038 when compared to the three months ended September 30, 2024, primarily due to an increase in research and development costs of $367,857 and increase of general and administrative costs of $242,022 offset by an increase in other income of $231,218 and tax recovery of $623.
The net loss for the nine months ended September 30, 2025 increased by $3,672,169 when compared to the nine months ended September 30, 2024, primarily due to an increase in research and development costs of $1,266,870 and increase of general and administrative costs of $1,482,751 as well as tax expense of $7,752 and a decrease in other income of $914,796.
While several of the Company’s vendors have inflationary clauses in their contracts, the impact of inflation is considered immaterial.
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Comparison of the Three and Nine Months Ended September 30, 2025 and 2024
Results of Operations
| Three months ended September 30, 2025 $ |
Three months ended September 30, 2024 $ |
Change $ |
Change % |
Nine months ended September 30, 2025 $ |
Nine months ended September 30, 2024 $ |
Change $ |
Change % |
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| General and administrative expenses |
2,465,378 | 2,223,356 | 242,022 | 10.9 | 8,807,256 | 7,324,505 | 1,482,751 | 20.2 | ||||||||||||||||||||||||
| Research and development expenses |
4,417,722 | 4,049,865 | 367,857 | 9.1 | 13,464,163 | 12,197,293 | 1,266,870 | 10.4 | ||||||||||||||||||||||||
| Other income |
513,119 | 281,901 | 231,218 | 82.0 | 394,855 | 1,309,651 | (914,796 | ) | (69.9 | ) | ||||||||||||||||||||||
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| Net loss before tax expense |
(6,369,981 | ) | (5,991,320 | ) | (378,661 | ) | 6.3 | (21,876,564 | ) | (18,212,147 | ) | (3,664,417 | ) | 20.1 | ||||||||||||||||||
| Tax recovery (expense) |
623 | — | 623 | N/A | (7,752 | ) | — | (7,752 | ) | N/A | ||||||||||||||||||||||
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| Net loss |
(6,369,358 | ) | (5,991,320 | ) | (378,038 | ) | 6.3 | (21,884,316 | ) | (18,212,147 | ) | (3,672,169 | ) | 20.2 | ||||||||||||||||||
| Foreign currency translation adjustment |
(508,633 | ) | 124,431 | (633,064 | ) | (508.8 | ) | 864,553 | (88,167 | ) | 952,720 | (1,080.6 | ) | |||||||||||||||||||
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| Comprehensive loss |
(6,877,991 | ) | (5,866,889 | ) | (1,011,102 | ) | 17.2 | (21,019,763 | ) | (18,300,314 | ) | (2,719,449 | ) | 14.9 | ||||||||||||||||||
General and Administrative
Comparing the three months ended September 30, 2025, to the same period in 2024, general and administrative activities increased by $242,022. This increase is primarily due to an increase in salaries and benefits, as well as an increase in office costs and travel. This is partially offset by a decrease in professional fees, public company costs, insurance and share based payments.
Comparing the nine months ended September 30, 2025, to the same period in 2024, general and administrative activities increased by $1,482,751. This increase is primarily due to an increase in salaries and benefits, as well as an increase in share-based payments, insurance and office costs. This is partially offset by a reduction in professional fees related to audit and accounting fees in addition to a decrease in business development activities.
Research and Development
Comparing the three months ended September 30, 2025, to the same period in 2024, research and development activities increased by $367,857. This increase is primarily due to an increase in activities associated with the EP-104GI program, increases in salaries and benefits due to increased headcount and salary increases as well as an increase in other research and development costs. This is offset by a decrease in costs related to direct research programs given the reduced activity with the EP-104IAR program.
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Comparing the nine months ended September 30, 2025, to the same period in 2024, research and development activities increased by $1,266,870. This in is primarily due to an increase in activities associated with the EP-104GI program, increases in salaries and benefits due to increased headcount and salary increases as well as increased share-based payments. This is partially offset by a decrease in costs related with the EP-104IAR program due to reduced activity.
Other Income/(Expenses)
Comparing the three months ended September 30, 2025, to the same period in 2024, other income increased by $231,218. Interest income decreased by $124,157 as a result of a lower average cash balance during the three months ended September 30, 2025. This is offset by an increase in foreign exchange gains of $354,924 due to fluctuations in the value of the U.S. dollar compared to the Canadian dollar. As well, there was no interest expense during the three months ended September 30, 2025 as the equipment loan was paid off in late 2024.
Comparing the nine months ended September 30, 2025, to the same period in 2024, other income decreased by $914,796 primarily due to interest income decreasing by $196,342 as a result of a lower cash balance during the nine months ended September 30, 2025. In addition, there was an increase in foreign exchange losses of $108,906 due to fluctuations in the value of the U.S. dollar compared to the Canadian dollar. Lastly, as a result of the convertible debt being repaid during fiscal 2024, interest expense decreased by $603,436 which was offset by a decrease in the change in the fair value of $1,200,541.
Summary of Quarterly Results
The information in the tables below has been derived from both the Company’s audited consolidated financial statements and unaudited interim consolidated financial statements.
The Company’s quarterly operating results have varied substantially in the past and may vary substantially in the future. Accordingly, the information below is not necessarily indicative of results for any future quarter.
| Sep 30, 2025 $ |
Jun 30, 2025 $ |
Mar 31, 2025 $ |
Dec 31, 2024 $ |
Sep 30, 2024 $ |
Jun 30, 2024 $ |
Mar 31, 2024 $ |
Dec 31, 2023 $ |
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| Total Revenue |
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| Total net loss |
(6,369,358 | ) | (8,747,683 | ) | (6,767,275 | ) | (7,532,342 | ) | (5,991,320 | ) | (6,063,894 | ) | (6,156,933 | ) | (10,607,396 | ) | ||||||||||||||||
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| Loss per share, basic and diluted (Owners of the Company) |
(0.19 | ) | (0.26 | ) | (0.21 | ) | (0.21 | ) | (0.17 | ) | (0.17 | ) | (0.21 | ) | (0.38 | ) | ||||||||||||||||
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The Company has incurred net losses in each of its preceding eight quarters as a result of continued activities associated with the Phase 1b/2 clinical trial for EP-104GI. In addition, during the three months ended December 31, 2023, the Company accrued and expensed $5,000,000 related to the successful completion of the Phase 2b clinical study under the Auritec agreement. This trend is expected to continue into the future as we make further investments in our EP-104 programs. Research and development expenses are expected to remain high as we undertake clinical trials and incur significant costs for CROs and consultants, and further investment in additional drug candidates in support of broader pipeline development. General and administrative expenses are likely to remain high in the future as a result of ongoing costs associated with public company compliance.
17
Use of Proceeds
The following table shows the estimated use of net proceeds from the Company’s Offering excluding the effect of the option to purchase additional common compared with the actual use of net proceeds:
September 2025 Financing
| Estimated Amount to be Expended |
Actual Amount Expended |
|||||||
| Phase 2 development of EP-104GI Nonclinical Studies Enabling Phase 3 and NDA Patient Pool Expansion |
|
28,400,000 5,000,000 |
|
|
— — |
| ||
| Additional Phase 2 trial in GI Indications for EP-104GI |
7,100,000 | — | ||||||
| Pipeline |
3,400,000 | — | ||||||
|
|
|
|
|
|||||
| Total |
$ | 43,900,000 | $ | — | ||||
|
|
|
|
|
|||||
To date, there have been no material variances to the way the Company intended to use proceeds from the Offering. We intend to allocate the remaining net proceeds to working capital and other general corporate purposes.
Liquidity, Capital Resources and Outlook, Management of Cash Resources
As of September 30, 2025, the Company had cash of $88,959,281 (December 31, 2024—$33,101,294).
The Company’s business does not currently generate revenue or positive cash flows from operations and is reliant on equity and debt financing to provide the necessary cash to continue its research and development activities and ongoing operations. There can be no assurance that financing will be available in the future with terms that are satisfactory to the Company.
The Company’s cash flow forecasts are continually updated to reflect actual cash inflows and outflows so to monitor the requirements and timing for additional financial resources. Given the volatility of the Canadian dollar, U.S. dollar, and Australian dollar (“AUD”) exchange rates, the Company estimates its USD and AUD expenses for the year and sets aside appropriate levels of USD and AUD cash. By holding USD and AUD, the Company remains subject to currency fluctuations which effects its loss during any given year.
Based on current cash on hand and assuming the full exercise of the EPRX.WT.A warrants prior to their April 20, 2026 expiry, the Company anticipates sufficient liquidity to fund operations into the first half of 2028. While the Company expects that the EPRX.WT.A warrants will be exercised, the Company acknowledges this is subject to market conditions. The Company is also evaluating additional measures to preserve and extend its liquidity availability, including leveraging upfront proceeds from potential business development transactions, or securing additional equity or debt financing. The Company will continue to monitor its liquidity position closely and act as needed to protect shareholder value and minimize dilution.
The Company expects that its growth plans will require further capital. To meet these needs, the Company may pursue similar funding sources, with a focus on maintaining shareholder value and minimizing dilution.
18
Comparison of Cash Flow for the Nine Months ended September 30, 2025 and 2024.
| Nine months ended September 30, 2025 $ |
Nine months ended September 30, 2024 $ |
|||||||
| Net cash provided by (used in): |
||||||||
| Operating activities |
(18,824,881 | ) | (24,022,161 | ) | ||||
| Investing activities |
(395,646 | ) | (31,402 | ) | ||||
| Financing activities |
74,567,595 | 14,053,125 | ||||||
|
|
|
|
|
|||||
| Net increase (decrease) in cash |
55,347,068 | (10,000,438 | ) | |||||
| Foreign exchange effect on cash |
510,919 | (679,522 | ) | |||||
Cash used in operating activities for the nine months ended September 30, 2025 decreased by $5,197,280 compared to the same period in the prior year. The primary driver of this decrease was that during the nine months ended September 30, 2024, the Company paid a milestone payment to Auritec Pharmaceuticals Inc. (“Auritec”) of $5,000,000.
Cash used in investing activities for the nine months ended September 30, 2025 increased by $364,244 compared to cash used in investing activities for the same period in the prior year. The primary driver of the increase was the purchase of equipment during the nine months ended September 30, 2025.
Cash provided by financing activities for the nine months ended September 30, 2025 increased by $60,514,470 compared to the same period in the prior year. The primary driver of the increase was the closing of Offering for net proceeds of $73,891,109-that occurred September 24, 2025. The primary drivers of financing activity cash flows for the nine months ended September 30, 2024 was the net proceeds of the overnight public offering of $22,853,391 offset by repayment of the convertible debt of $9,074,813.
Going Concern
The unaudited interim consolidated financial statements of the Company have been prepared on a going concern basis with the assumption that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. At September 30, 2025, the Company had cash of $88,959,281. The Company has not yet generated revenue from operations. The Company incurred a net loss of $21,884,316 during the nine months ended September 30, 2025, and as of that date, the Company’s accumulated deficit was $152,868,722. As the Company is in the research and development stage, the recoverability of the costs incurred to date is dependent upon the ability of the Company to obtain the necessary funding to complete the research and development of its projects and upon future commercialization or proceeds from the monetization of research activities.
The Company will periodically have to raise funds to continue operations and recently raised net proceeds of $73,891,109 through the Offering of 14,636,363 Common Shares on September 24, 2025. Although it has been successful in doing so in the past, there is no assurance it will be able to do so in the future, especially with the ongoing geopolitical uncertainty affecting the global capital markets. The Company is active in its pursuit of additional funding through potential partnering and other strategic activities as well as grants to fund future research and development activities, and additional equity financing.
The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional funding. There is a risk that in the future, additional financing will not be available on a timely basis or on terms acceptable to the Company. These events and conditions may cast substantial doubt about the Company’s ability to continue as a going concern. The unaudited interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue in business.
19
Long-Term Obligations and Other Contractual Commitments
The Company may be required to make milestone, royalty, and other research and development funding payments under research and development collaboration and other agreements with third parties. These payments are contingent upon the achievement of specific development, regulatory and/or commercial milestones. The Company has not accrued for these payments as of September 30, 2025 due to the uncertainty over whether these milestones will be achieved. The Company’s significant contingent milestone, royalty and other research and development commitments are as follows:
Auritec License Agreement
Auritec is a privately held clinical-stage drug delivery company that holds patents in the field of extended-release delivery of drug products utilizing its proprietary drug delivery platform, the “Plexis Platform”. Eupraxia, through its subsidiary, Eupraxia Pharmaceuticals USA LLC (“Eupraxia LLC”), is a party to an amended and restated license agreement dated effective October 9, 2018 (as further amended, the “Amended and Restated License Agreement”) with Auritec.
Under the terms of the Amended and Restated License Agreement, Auritec has granted Eupraxia LLC an exclusive license (including the right to sublicense to its affiliates and third parties) under the licensed patents owned or controlled by Auritec and for all the technical information and know-how relating to the technology claimed in such patents or possessed by Auritec with respect to the use of the Plexis Platform for the delivery of fluticasone in all medical fields (except for the Excluded Fields (as defined in the Amended and Restated License Agreement)), to develop, make, have made, manufacture, use, commercialize, sell, sub-license, offer for sale, import, and have imported the Licensed Products (as defined in the Amended and Restated License Agreement).
Pursuant to the terms of the Amended and Restated License Agreement, in consideration for the rights and exclusive license granted to Eupraxia LLC, Eupraxia LLC paid the Upfront Fee (as defined in the Amended and Restated License Agreement) of $5,000,000 with the agreement currently in good standing.
In addition to the Upfront Fee, pursuant to the Amended and Restated License Agreement, Eupraxia LLC has agreed to pay Auritec up to $30,000,000 upon achievement of certain regulatory and commercial milestones related to Licensed Products under the Amended and Restated License Agreement as well as a royalty of 4% of net sales of Licensed Products by Eupraxia USA or its affiliates, subject to certain reductions.
The following table summarizes the remaining milestone payment schedule. During the year ended December 31, 2024, the Company paid $5,000,000 to Auritec upon successful completion of the Phase 2b study.
| Milestone Event |
Milestone Payment | |||
| First OA Regulatory Approval |
5,000,000 | |||
| Second OA Regulatory Approval Non-OA Indication Regulatory Approval |
|
5,000,000 10,000,000 |
| |
| First calendar year in which aggregate Net Sales by Eupraxia USA, its affiliates and sublicenses exceed $500,000,000 |
5,000,000 | |||
|
|
|
|||
| Maximum milestones payable |
$ | 25,000,000 | ||
|
|
|
|||
Eupraxia LLC has also agreed to pay to Auritec 20% of sublicensing royalties or other consideration based on net sales of Licensed Products. Eupraxia LLC has further agreed to pay Auritec a percentage of Non-Royalty Monetization Revenue (as defined in the Amended and Restated License Agreement), which includes payments received for a sale of Eupraxia LLC or its assets or sale or sublicense of a Licensed Product, which percentage ranges from 10% to 30% depending on the development stage of the most-advanced Licensed Product, up to a maximum of $100,000,000. The following table summarizes the Non-Royalty Monetization Revenue percentage schedule:
20
| Date of Execution |
Percentage of Non-Royalty Monetization Revenue |
|||
| Prior to Successful Completion of a Phase 2b Study |
30 | % | ||
| After Successful Completion of a Phase 2b Study but prior to Successful Completion of a Phase 3 Study |
20 | % | ||
| After Successful Completion of a Phase 3 Study but prior to Regulatory Approval of a Product in the Eupraxia Field from FDA in the United States |
15 | % | ||
| After Regulatory Approval of a Product in the Eupraxia Field from FDA in the United States |
10 | % | ||
Either party may terminate the Amended and Restated License Agreement in the event of the other party’s bankruptcy, liquidation, or dissolution. Auritec may also terminate upon a material breach of the Amended and Restated License Agreement by Eupraxia LLC that is not cured within 60 days (15 days in the case of a payment breach). Further, if Eupraxia LLC directly or indirectly challenges any claim in any Auritec patent licensed under the Amended and Restated License Agreement, or assist a third party in doing so, Auritec may immediately terminate the Amended and Restated License Agreement. If Auritec directly or indirectly challenges any Eupraxia patent contemplated in the Amended and Restated License Agreement other than as reasonably required to defend Auritec patents as a basis for such challenge, or assists a third party in doing so, we may immediately terminate the Amended and Restated License Agreement.
Lease Agreements
On October 21, 2019, the Company entered into a 5 year lease agreement for its head office located at Suite 201 – 2067 Cadboro Bay Road, Victoria BC, expiring November 30, 2024. It was subsequently renewed May 13, 2024 for an additional year. On July 15, 2025, the Company signed a Second Lease Renewal Agreement (“Renewal Agreement”) whereby the Company renewed its lease for its Victoria, BC facility for an additional twelve months commencing December 1, 2025 and ending November 30, 2026. In addition, the Renewal Agreement allows the Company to renew its lease for an additional twelve months commencing December 1, 2026 and ending November 30, 2027. All other terms of the lease remain unchanged. The total rent for the remainder of the lease extension to December 31, 2026 (inclusive of base rent and additional rent costs) is anticipated to be $179,946 (CDN$250,502). Additional rent is subject to adjustment at the end of each lease year based on actual costs incurred.
On March 31, 2025, the Company entered into a short-term lease agreement for its research and development laboratory located in Vancouver, BC. The lease is for a period of eleven months, expiring on February 28, 2026. The total rent for the remaining term of the lease (inclusive of base rent and additional rent costs) is anticipated to be $85,883 (CDN$119,558).
Terminated Convertible Debt Facilities
Silicon Valley Bank
On June 21, 2021, the Company entered into a contingent convertible debt agreement (the “SVB Agreement”) with SVB and concurrently drew down, in full, the CDN$10,000,000 principal amount under the SVB Agreement.
The Debt Agreement had a term of 36 months (or 48 months at SVB’s election) and accrued interest at the greater of 2.45% and the Canadian prime rate, requiring monthly interest payments. An additional payment in kind accrued interest at a rate of 7% per annum, which was partially settled at maturity. During the year ended December 31, 2024, the Canadian prime rate ranged from 5.45% - 7.20%. During the year ended December 31, 2023, the Canadian prime rate ranged from 6.45% - 7.20%.
21
Subject to the terms and conditions of the SVB Agreement, SVB had the option to elect to convert the principal amount of the convertible debt and the accrued and unpaid interest thereon into Common Shares at a conversion price equal to CDN$5.68 per Common Share. The conversion price of the accrued and unpaid interest would be subject to the minimum pricing requirements of the TSX, to the extent applicable, at the time of conversion.
The Company granted SVB a security interest in all of its assets, excluding its patents and other intellectual property, and the testing and product equipment by way of the loan agreement it entered into on September 10, 2021 as security for its obligations under the SVB Agreement.
On June 21, 2024, the loan under the SVB Agreement matured and a portion of the balance of $4,494,795 (CDN$6,161,016) was paid to SVB representing principal and interest. On September 11, 2024, the remaining balance of $4,580,018 (CDN$6,204,092) was paid to SVB representing the remaining principal and interest. This payment extinguished the liability the Company had with SVB.
Yabema Capital
On August 1, 2024, the Company entered into a $8,659,200 (CDN$12,000,000) convertible debt facility (the “Convertible Debt Facility”) with Yabema Capital Limited and other Eupraxia shareholders (the “Lenders”). Under the Convertible Debt Facility, the Lenders agreed to make available for drawdown an aggregate amount of CDN$12,000,000 for a period of 120 days following entry into the Convertible Debt Facility. The Convertible Debt Facility was to mature 24 months from August 1, 2024 (the closing date) and could be extended for an additional 12 months at the Lenders’ option. The decision to draw on the facility within 120 days of closing was at the discretion of the Company and was subject to the full and final release of the Debt Agreement. Commitment fees of $355,582 (CDN$480,000) were incurred by the Company in connection with the entry into the Convertible Debt Facility.
The aggregate unpaid principal amount and any accrued and unpaid interest thereon were to be convertible at the discretion of the Lenders into Common Shares at a conversion price equal to CDN$4.84375 per Common Share.
The Company granted the Lenders a security interest in all of its assets, excluding its patents and other intellectual property.
As a result of the closing of the Private Placement, on October 31, 2024, the Company entered into a Termination and Release Agreement with the Lenders to terminate the Convertible Debt Facility and discharge all security interests.
Transactions with Related Parties
There were no transactions with related parties during the nine months ended September 30, 2025 and 2024, reportable under U.S. GAAP.
Off-Balance Sheet Arrangements
The Company has no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have, a current or future effect on our results of operations or financial condition.
Critical Accounting Estimates and Judgments
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting year, which, by their nature, are uncertain. Actual outcomes could differ from these estimates. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future events. Revisions to accounting estimates are recognized in the year in which the estimate is revised and future periods if the revision affects both current and future years. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances that affect the reported amounts of assets, liabilities, income and expenses.
22
Critical accounting estimates
Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:
| • | Share-based payments are measured at fair value, using the Black-Scholes option pricing model, at the grant date and expensed over the vesting period. In determining the fair value, the Company makes estimates of the expected volatility of the shares, the expected life of the share-based instrument, and an estimated risk-free interest rate. |
Critical accounting judgments
Critical accounting judgments are accounting policies that have been identified as being complex or involving subjective judgments or assessments. The Company’s management made the following critical accounting judgments:
| i) | The determination of the functional currency of the Company and its subsidiaries; and |
| ii) | Assessment of the appropriateness of the going concern assertion and events and conditions that indicate a material uncertainty that may cast substantial doubt thereon. |
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirement. The Company adopted this ASU in 2025 and will apply this standard to tax note disclosures presented in the consolidated financial statements on an annual basis.
Upcoming Accounting Standards and Interpretations
The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to the Company or that there was no material impact or no material impact is expected in the condensed consolidated financial statements as a result of future adoption
Financial Instruments
The Company’s financial instruments consist of cash, amounts receivable, accounts payable and accrued liabilities.
There were no changes to the Company’s risk exposures or management of risks during the nine months ended September 30, 2025. The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company believes it has no significant credit risk, as its cash, being its primary exposure to credit risk, is held with a large Canadian bank. The Company’s maximum exposure to credit risk is the carrying value of these financial assets.
23
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to the extent possible to meet liabilities when due. As at September 30, 2025, the Company had cash of $88,959,281 (2024 - $33,101,294) in addition to current liabilities of $3,811,026 (2024 - $3,103,386), and amounts receivable of $139,904 (2024 - $228,872). Management is currently working on certain strategic alternatives including, but not limited to raising additional capital. There is no assurance, however, that any or all of these alternatives will materialize or that additional funding will be available, if and when needed.
| Contractual Obligations at September 30, 2025 |
Total | Less than 1 year | 1 to 3 Years | |||||||||
| Accounts Payable |
$ | 3,734,890 | $ | 3,734,890 | $ | — | ||||||
| Leases(1) |
265,829 | 201,667 | 64,162 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Contractual Obligations |
$ | 4,000,719 | $ | 3,936,557 | $ | 64,162 | ||||||
|
|
|
|
|
|
|
|||||||
| (1) | Includes both basic lease payments as well as variable lease payments for the remaining lease term. |
Market risk
Market risk is the risk that 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: interest rate risk, currency risk and other price risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate cash flow risk; and to the extent that the prevailing market interest rates differ from the interest rate on the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency risk due to its frequency of transactions in US dollars. The Company does not use derivatives to hedge against this risk, however, it does purchase US dollars to cover anticipated costs that will be denominated in US dollars.
At September 30, 2025, the Company held cash of $83,519,651 (2024 – $3,740,799) and had accounts payable and accrued liabilities of $1,092,840 (2024 – $376,541) denominated in US dollars which were translated to Canadian dollars at 1.3921 (2024 – 1.4389). The impact of a 10% change in the exchange rates would have an impact of approximately $8,242,681 (2024 – $336,426) on profit or loss. The Company held cash of $2,038,887 (2024 – $149,736), accounts payable and accrued liabilities of $617,217 (2024 – $120,361) and had $78,149 in accounts receivable (2024—$258,074) denominated in Australian Dollars which were translated into Canadian Dollars at 0.9151 (2024 – 0.8915). The impact of a 10% change in the exchange rate would have an impact of approximately $98,591 (2024 – $17,810) on profit or loss. The Company also has accounts payable in Great British pounds, Euros, and New Zealand dollars. The impact of a 10% change in the exchanges of these currencies would have an immaterial effect on future cash flows.
24
Other price risk
Other price risk is the risk that 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 and foreign currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market. The Company is not exposed to significant price risk with respect to commodity or equity prices.
Fair Value Measurement
The Company categorizes its financial instruments measured at fair value into one of three different levels depending on the observation of inputs used in the measurement.
Level 1: Fair value is based on unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2: Fair value is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Fair value is based on valuation techniques that require one or more significant unobservable inputs.
The Company’s financial instruments consist of cash, amounts receivable and accounts payable and accrued liabilities. The carrying value of the Company’s financial instruments approximate their fair values due to their short-term maturities with cash classified as Level 1 while amounts receivable, accounts payable and accrued liabilities are classified as Level 2..
The following table summarizes information regarding the classification and carrying values of the Company’s financial instruments measured at amortized cost:
| Financial assets/liabilities |
September 30, 2025 |
December 31, 2024 |
||||||
| Cash |
$ | 88,959,281 | $ | 33,101,294 | ||||
| Amounts receivable |
$ | 139,904 | $ | 228,872 | ||||
| Accounts payable and accrued liabilities |
$ | 3,734,890 | $ | 3,031,527 | ||||
Risks and Uncertainties
The primary risk factors affecting the Company are set forth under the heading “Risk Factors” in the AIF.
Outstanding Share Capital
As of the date of this MD&A, the Company had 50,648,331 Common Shares issued and 8,855,638 Preferred Shares outstanding. The maximum number of additional Common Shares issuable, should all convertible rights be exercised are as follows:
25
| Common Shares Issuable: |
As of the date of MD&A | |||
| Options (1) |
5,853,655 | |||
| 2013 Warrants (2) |
380,921 | |||
| Founders Warrants (3) |
315,500 | |||
| Underlying Founders Warrants (4) |
315,500 | |||
| Class B Shares (5) |
562,500 | |||
| Warrants – Listed EPRX.WT(6) |
2,826,024 | |||
| Warrants – Listed EPRX.WT.A(7) |
4,894,850 | |||
| Compensation Warrants (8) |
50,054 | |||
| Nordic Warrants (9) |
39,228 | |||
| Convertible Preferred Shares (10) |
8,855,638 | |||
|
|
|
|||
| Total Common Shares Issuable |
24,093,870 | |||
|
|
|
|||
Notes:
| (1) | Represents options outstanding under the Company’s stock option plan, each having an exercise price between CDN$1.90 and CDN$8.00 and expiry dates ranging from November 2, 2025 to May 13, 2035. |
| (2) | Represents common share purchase warrants to acquire up to 380,921 Common Shares at an exercise price of CDN$0.7572 per share, with each such common share purchase warrant expiring 120 days after the warrant holder or the holder’s spouse ceases to be a director, officer or consultant of the Company. |
| (3) | Represents common share purchase warrants to acquire 315,500 units, with each unit consisting of one Common Share and one underlying common share purchase warrant (an “Underlying Founder Warrant”) at an exercise price of CDN$0.4984 per unit, expiring 120 days after the warrant holder ceases to be a director, officer or consultant of the Company. |
| (4) | Represents Underlying Founder Warrants to acquire up to 315,500 Common Shares, at an exercise price of CDN$0.75 per share, expiring two years from the date of exercise of the Underlying Founder Warrant. |
| (5) | Represents 562,500 Common Shares that are issuable upon conversion of the 225 Class B Shares of Eupraxia Pharma Inc., the Company’s subsidiary, held by Amanda Malone, the Chief Scientific Officer of the Company. Each Class B Share is exchangeable into Common Shares based on an exchange rate of 2,500 Common Shares for each Class B Share, subject to adjustments upon the occurrence of certain events, for a total of 562,500 Common Shares. The Class B Shares are exchangeable by Ms. Malone at her election, provided that the Company may force the exchange of the Class B Shares into Common Shares at any time on or after January 31, 2031, or on or after January 31, 2026, if the Company is listed on a stock exchange and is a reporting issuer in Canada at such time. The Company may also force the exchange of the Class B Shares into Common Shares if there is a change of control transaction involving the Company, a change in law which makes the exchange necessary or desirable or if there are a de minimis number of Class B Shares outstanding. If the Company is listed on a stock exchange at the time of the applicable exchange, the Company may elect to pay Ms. Malone cash in lieu of issuing Common Shares, with such cash amount to be determined based on the then current market price of the Common Shares. |
| (6) | Each common share purchase warrant is exercisable into one Common Share of the Company (each, a “Warrant Share”) at an exercise price of CDN$11.20 per Warrant Share at any time prior to 5:00 p.m. (Eastern time) on the date that is five years following the closing of the Company’s initial public offering in Canada, subject to adjustment in certain events. The common share purchase warrants include an acceleration provision, exercisable at the Company’s option, if the Company’s daily volume weighted average share price is greater than CDN$22.40 for five consecutive trading days. Of the 2,826,274 warrants issued, 250 warrants have been exercised as of the date hereof. |
| (7) | Each common share purchase warrant entitles the holder thereof to acquire one Common Share at an exercise price of CDN$3.00 per Common Share for a period of 48 months following the closing date of the Company’s 2022 public offering (the “2022 Offering”), being April 20, 2022. Of the 7,331,550 warrants issued, 2,436,700 warrants have been exercised as of the date hereof. |
| (8) | 500,538 common share purchase warrants were issued to the agents of the 2022 Offering and represents 7% of the units issued in the 2022 Offering including the over-allotment option (the “Compensation Warrants”). Each Compensation Warrant shall entitle the agents to acquire a Common Share at the price of CDN$2.05 for a period of 48 months following completion of the 2022 Offering, being April 20, 2022. Of the 500,538 Compensation Warrants issued, 450,484 Compensation Warrants have been exercised as of the date hereof. |
| (9) | Each Nordic Warrant is exercisable into one Common Share at an exercise price of CDN$11.20 per share at any time prior to 5:00 p.m. (Eastern time) on April 29, 2026, subject to adjustment in certain events. The Nordic Warrants include an acceleration provision, exercisable at the Company’s option, if the Company’s daily volume weighted average share price is greater than CDN$22.40 for five consecutive trading days. |
| (10) | Represents 8,855,638 Common Shares that are issuable on a one-to-one basis for no additional consideration upon conversion of the 8,855,638 Preferred Shares. Of the original 8,905,638 preferred shares issued on October 31, 2024, 50,000 have been converted to common shares as of the date hereof. |
26
Disclosure Controls and Procedures and Internal Controls Over Financial Reporting
The Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have designed or caused to be designed under their supervision, disclosure controls and procedures which provide reasonable assurance that material information regarding the Company is accumulated and communicated to the Company’s management, including its CEO and CFO, in a timely manner.
In addition, the CEO and CFO have designed or caused to be designed under their supervision internal controls over financial reporting (“ICFR”) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. The control framework used to design the Company’s ICFR uses the framework and criteria established in the Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Due to inherent limitations in all such systems, no evaluations of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Accordingly, our disclosure controls and procedures and our ICFR are designed to be effective in providing reasonable, not absolute, assurance that the objectives of our control systems have been met.
The CEO and the CFO have evaluated, or caused to be evaluated under their supervision, whether or not there were changes to its ICFR during the three months ended September 30, 2025 that have materially affected or are reasonably likely to materially affect the Company’s ICFR. As previously stated, the Company implemented a new Enterprise Resource Planning (“ERP”) system during the three months ended March 31, 2025 to improve its management of key processes. During the three months ended September 30, 2025, the Company continued to evaluate the impact of the implementation of the ERP on its ICFR and revised certain controls to align with the new system. The Company concluded as part of its evaluation that the implementation of the ERP system did not materially affect the Company’s ICFR during the three months ended September 30, 2025. There were no other changes to our ICFR that occurred during the three months ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR. The Company’s CEO and CFO will certify Eupraxia’s interim filings with the Canadian securities regulatory authorities.
Additional Information
Additional information about the Company is available on SEDAR+ at www.sedarplus.ca. and EDGAR at www.sec.gov/edgar.
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Exhibit 99.3
Eupraxia Pharmaceuticals Reports Third Quarter 2025 Financial Results
Durable symptom and tissue responses observed out to 52 weeks following a single treatment with EP-104GI
Enrollment continues in Phase 2b portion of the RESOLVE Trial, with topline data expected by Q3 2026
Completed $80.5 million public offering supported by leading life science investors
Cash runway to fund pipeline development and operations into the first half of 2028
VICTORIA, British Columbia, Nov. 4, 2025 (GLOBE NEWSWIRE) – Eupraxia Pharmaceuticals Inc. (“Eupraxia” or the “Company”) (NASDAQ:EPRX) (TSX:EPRX), a clinical-stage biotechnology company leveraging its proprietary Diffusphere™ technology to optimize local, controlled drug delivery for diseases with significant unmet need, today announced its financial results for the third quarter of 2025 and provided a business update. All dollar values are in U.S. dollars unless stated otherwise.
“The compelling 52-week data from our RESOLVE trial reported this quarter further reinforce the potential of EP-104GI as a highly effective and durable treatment for eosinophilic esophagitis (EoE),” said Dr. James Helliwell, Chief Executive Officer of Eupraxia. “Our highest-dose cohort delivered the largest improvements in tissue health outcomes and eosinophil reduction observed to date, with no additional safety concerns. Coupled with the successful completion of our $80.5 million financing supported by strong life-science focused investors, we are now well resourced to advance the EP-104GI program, including through topline data from the Phase 2b RESOLVE Trial expected in the third quarter of 2026.”
Recent Operational and Financial Highlights
Positive 52-Week Data from Phase 1b/2a RESOLVE Trial: On September 2, 2025, the Company announced the first set of 1-year clinical results from the RESOLVE Trial showing that two-thirds of Cohort 5 patients (N=3) remained in clinical remission after treatment with EP-104GI. Results demonstrated durable symptom and tissue responses beyond nine months of therapy, supporting long-term disease control. Additional 52-week data from cohort 6 is expected later this year.
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Closing of $80.5 Million Public Offering: On September 24, 2025, the Company announced the closing of a public offering of Commons Shares (the “Offering”). The Company issued 14,636,363 Common Shares at a price of $5.50 per Common Share for gross proceeds of approximately $80.5 million which included the issuance of 1,909,090 Common Shares upon full exercise of the option to purchase additional shares granted to the underwriters. Proceeds will support clinical development of EP-104GI and broader pipeline advancement.
Third Quarter 2025 Financial Review
The Company incurred a net loss of $6.4 million for the three months ended September 30, 2025, versus a net loss of $6.0 million for the three months ended September 30, 2024. The increase in net loss was primarily due to an increase in research and development costs and general and administrative costs, partially offset by an increase in other income.
The Company had cash of $89.0 million as of September 30, 2025, up from $33.1 million at the end of the fourth quarter of 2024. These funds are being used to fund clinical trials in EP-104 and the remainder of the funds will be used for general and administrative expenses, working capital needs and other general corporate purposes.
The Company anticipates that existing cash reserves, and proceeds from the anticipated future exercise of in-the-money warrants, will be sufficient to fund the Company into the first half of 2028.
As of September 30, 2025, the Company had 50,598,331 common shares and 8,905,638 preferred shares outstanding.
Potential Impact of Tariffs
Management continues to monitor the North American trade situation stemming from the February 2025 announcement by the U.S. government of proposed 25% tariffs on selected imported Canadian goods, and the subsequent Canadian announcement of planned retaliatory tariffs on selected imported U.S. goods.
Eupraxia manufactures its clinical supplies of EP-104IAR and EP-104GI in the U.S. by a third-party. The Company expects to continue to access manufactured products from the U.S.
The Company maintains U.S. dollar balances to pay U.S. dollar expenses and to minimize the impact of short-term fluctuations in exchange rates.
Management continues to assess the potential direct and indirect impacts of tariffs, counter-tariffs and other trade protection measures on Eupraxia’s business and will take those steps it deems necessary to attempt to mitigate any impact as the situation evolves.
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Financial Statements and Management Discussion & Analysis
Please see the unaudited interim consolidated financial statements and related MD&A for more details. The unaudited interim consolidated financial statements for the quarter ended September 30, 2025, and related MD&A have been reviewed and approved by Eupraxia’s Audit Committee and Board of Directors. For a more detailed explanation and analysis, please refer to the MD&A that has been filed under the Company’s profile on EDGAR at www.sec.gov and on SEDAR+ at sedarplus.ca and which is also available on the Company’s website at www.eupraxiapharma.com.
About Eupraxia Pharmaceuticals Inc.
Eupraxia is a clinical-stage biotechnology company focused on the development of locally delivered, extended-release products that have the potential to address therapeutic areas with high unmet medical need. Diffusphere™, a proprietary, polymer-based micro-sphere technology, is designed to facilitate targeted drug delivery of both existing and novel drugs. The technology is designed to support extended duration of effect and delivery of drugs in a hyper-localized fashion, targeting only the tissues that physicians are wanting to treat. We believe the potential for fewer adverse events may be achieved through the precision targeting and the stable and flat delivery of the active ingredient when using the Diffusphere™ technology, versus the peaks and troughs seen with more traditional drug delivery methods. The precision of Eupraxia’s Diffusphere™ technology platform has the potential to augment and transform existing FDA-approved drugs to improve their safety, tolerability, efficacy and duration of effect. The potential uses in therapeutic areas may go beyond pain and inflammatory gastrointestinal disease, where Eupraxia currently is developing advanced treatments, to also be applicable in oncology, infectious disease and other critical disease areas.
Eupraxia’s EP-104GI is currently in a Phase 1b/2 trial, the RESOLVE trial, for the treatment of EoE. EP-104GI is administered as an injection into the esophageal wall, providing local delivery of drug. This is a unique treatment approach for EoE. Eupraxia also recently completed a Phase 2b clinical trial (SPRINGBOARD) of EP-104IAR for the treatment of pain due to knee osteoarthritis. The trial met its primary endpoint and three of the four secondary endpoints. In addition, Eupraxia is developing a pipeline of later and earlier-stage long-acting formulations. Potential pipeline indications include candidates for other inflammatory joint indications and oncology, each designed to improve on the activity and tolerability of currently approved drugs. For further details about Eupraxia, please visit the Company’s website at: www.eupraxiapharma.com.
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Notice Regarding Forward-looking Statements and Information
This news release includes forward-looking statements and forward-looking information within the meaning of applicable securities laws. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “is expected”, “expects”, “suggests”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes”, “potential” or variations (including negative and grammatical variations) of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements in this news release include statements regarding the expected cash runway to fund pipeline development and operations into the first half of 2028; the use of proceeds from the $80.5 million public offering; the anticipated proceeds from future exercise of in-the-money warrants; the Company’s expectation that it will continue to access manufactured products from the U.S.; the potential imposition of a new reciprocal tariff rate; the Company’s product candidates, including their expected benefits to patients with respect to safety, tolerability, efficacy and duration; the expectations around proceeding to clinical trials for the Company’s product candidates; the results gathered from studies and trials of Eupraxia’s product candidates and the timing of the release thereof; the potential for the Company’s technology to impact the drug delivery process; potential market opportunity for the Company’s product candidates; and potential pipeline indications. Such statements and information are based on the current expectations of Eupraxia’s management, and are based on assumptions, including but not limited to: future research and development plans for the Company proceeding substantially as currently envisioned; industry growth trends, including with respect to projected and actual industry sales; the Company’s ability to obtain positive results from the Company’s research and development activities, including clinical trials; and the Company’s ability to protect patents and proprietary rights. Although Eupraxia’s management believes that the assumptions underlying these statements and information are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this news release may not occur by certain dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting Eupraxia, including, but not limited to: risks and uncertainties related to the Company’s limited operating history; the Company’s novel technology with uncertain market acceptance; if the Company breaches any of the agreements under which it licenses rights to its product candidates or technology from third parties, the Company could lose license rights that are important to its business; the Company’s current license agreement may not provide an adequate remedy for its breach by the licensor; the Company’s technology may not be successful for its intended use; the Company’s future technology will require regulatory approval, which is costly and the Company may not be able to obtain it; the Company may fail to obtain regulatory approvals or only obtain approvals for limited uses or indications; the Company’s clinical trials may fail to demonstrate adequately the safety and efficacy of its product candidates at any stage of clinical development; the Company may be required to suspend or discontinue clinical trials due to side effects or other safety risks; the Company completely relies on third parties to provide supplies and inputs required for its product candidates and services; the potential impact of tariffs on the cost of the Company’s active pharmaceutical ingredients and clinical supplies of EP-104IAR and EP-104GI; the Company relies on external contract research organizations to provide clinical and non-clinical research services; the Company may not be able to successfully execute its business strategy; the Company will require additional financing, which may not be available; any therapeutics the Company develops will be subject to extensive, lengthy and uncertain regulatory requirements, which could adversely affect the Company’s ability to obtain regulatory approval in a timely manner, or at all; the impact of health pandemics or epidemics on the Company’s operations; the Company’s restatement of its consolidated financial statements, which may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on the Company’s common share price; and other risks and uncertainties described in more detail in Eupraxia’s public filings on SEDAR+ (sedarplus.ca) and EDGAR (sec.gov). Although Eupraxia has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement or information can be guaranteed. Except as required by applicable securities laws, forward-looking statements and information speak only as of the date on which they are made and Eupraxia undertakes no obligation to publicly update or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise.
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For investor and media inquiries, please contact:
Danielle Egan, Eupraxia Pharmaceuticals Inc.
778.401.3302
degan@eupraxiapharma.com
or
Kevin Gardner, on behalf of:
Eupraxia Pharmaceuticals Inc.
617.283.2856
kgardner@lifesciadvisors.com
SOURCE Eupraxia Pharmaceuticals Inc.
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Exhibit 99.4
Form 52-109F2
Certification of Interim Filings
Full Certificate
I, James Helliwell, Chief Executive Officer of Eupraxia Pharmaceuticals Inc., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Eupraxia Pharmaceuticals Inc. (the “issuer”) for the interim period ended September 30, 2025. |
| 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. |
| 5.1 | Control 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 (2013 COSO Framework) published by the Committee of Sponsoring Organizations of the treadway Commission. |
| 5.2 | ICFR – material weakness relating to design: N/A |
| 5.3 | Limitation 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 July 1, 2025 and ended on September 30, 2025 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
Date: November 4, 2025
| /s/ James Helliwell |
| James Helliwell |
| Chief Executive Officer |
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Exhibit 99.5
Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Alex Rothwell, Chief Financial Officer of Eupraxia Pharmaceuticals Inc., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Eupraxia Pharmaceuticals Inc. (the “issuer”) for the interim period ended September 30, 2025. |
| 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. |
| 5.1 | Control 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 (2013 COSO Framework) published by the Committee of Sponsoring Organizations of the treadway Commission. |
| 5.2 | ICFR – material weakness relating to design: N/A |
| 5.3 | Limitation 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 July 1, 2025 and ended on September 30, 2025 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
Date: November 4, 2025
| /s/ Alex Rothwell |
| Alex Rothwell |
| Chief Financial Officer |
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