6-K - EPRX - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OFFOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2024

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 ☒

INCORPORATIONBY 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

Exhibit
99.1	Consolidated Financial Statements for the three and nine months ended September 30, 2024.
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended September 30, 2024.
99.3	Press Release, dated November 7, 2024.
99.4	Form 52-109F2 Certification of Interim Filings by CEO.
99.5	Form 52-109F2 Certification of Interim Filings by CFO.

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 7, 2024	By:	/s/ Bruce Cousins
		Name: Bruce Cousins
		Title: President and Chief Financial Officer

EX-99.1

Exhibit 99.1

EUPRAXIA PHARMACEUTICALS INC.

CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months ended September 30, 2024

(Unaudited and Expressed in U.S. Dollars)

EUPRAXIA PHARMACEUTICALS INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

(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 (DEFICIT)	4-5
CONSOLIDATED STATEMENTS OF CASH FLOWS	6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	7-24

EUPRAXIA PHARMACEUTICALS INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited and Expressed in U.S. Dollars, except share amounts)

	September 30,<br>2024			December 31,2023
ASSETS
Current assets
Cash	$	8,661,796		$	19,341,756
Prepaid expenses (Note 11(b))		1,122,253			270,710
Amounts receivable (Note 4)		105,930			190,612
Total current assets		9,889,979			19,803,078
Non-current assets
Prepaid expenses		18,430			6,904
Property and equipment, net (Note 5)		370,004			409,587
Right-of-use<br>asset, net (Note 6)		86,489			46,660
Total assets	$	10,364,902		$	20,266,229
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities (Note 7)	$	2,293,956		$	3,921,875
Loans payable (Note 8)		—			62,709
Lease liability (Note 9)		78,752			53,316
Payable to Auritec (Note 10)		—			5,000,000
Convertible debt (Note 11(a))		—			10,336,003
Total current liabilities		2,372,708			19,373,903
Non-current liabilities
Lease liability (Note 9)		14,297			—
Total liabilities		2,387,005			19,373,903
Shareholders’ equity
Share capital, without par value; unlimited shares authorized; issued and outstanding: 35,622,553<br>(December 31, 2023 - 27,282,165 (Note 12(b))		116,318,245			92,913,585
Additional paid-in capital (Notes 12(b), 12(c) and<br>12(d))		19,491,694			17,510,469
Deficit		(123,494,874	)		(105,501,295	)
Accumulated other comprehensive loss		(2,794,719	)		(2,706,552	)
Equity attributable to the owners of the Company		9,520,346			2,216,207
Non-controlling interest		(1,542,449	)		(1,323,881	)
Total shareholders’ equity		7,977,897			892,326
Total liabilities and shareholders’ equity	$	10,364,902		$	20,266,229

Nature of business and going concern (Note 1)

Commitments (Note 16)

Subsequent event (Note 20)

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

EUPRAXIA PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited and Expressed in U.S. Dollars, except share amounts)

	Three monthsended September 30,2024			Three monthsended September 30,2023			Nine monthsended September 30,2024			Nine monthsended September 30,2023
Expenses
General and administrative (Note 13)	$	2,223,356		$	1,863,782		$	7,324,505		$	5,048,186
Research and development (Note 14)		4,049,865			4,758,934			12,197,293			10,820,753
Total expenses		6,273,221			6,622,716			19,521,798			15,868,939
Other income/(expenses)
Interest income		304,342			193,875			941,937			509,179
Interest expense (Note 18)		(451	)		(320,466	)		(603,436	)		(913,713	)
Gain (loss) on sale of equipment (Note 5)		—			—			11,368			(4,658	)
Foreign exchange gain (loss)		(21,990	)		(25,965	)		(240,759	)		7,010
Change in fair value of financial instruments (Note 11(a))		—			1,879,190			1,200,541			(2,087,491	)
Total other income/(expense)		281,901			1,726,634			1,309,651			(2,489,673	)
Net loss for the period	$	(5,991,320	)	$	(4,896,082	)	$	(18,212,147	)	$	(18,358,612	)
Loss attributable to:
Owners of the Company	$	(5,943,325	)	$	(4,721,341	)	$	(17,993,579	)	$	(17,993,796	)
Non-controlling interest		(47,995	)		(174,741	)		(218,568	)		(364,816	)
		(5,991,320	)		(4,896,082	)		(18,212,147	)		(18,358,612	)
Foreign currency translation adjustment		124,431			90,538			(88,167	)		69,464
Comprehensive loss for the period	$	(5,866,889	)	$	(4,805,544	)	$	(18,300,314	)	$	(18,289,148	)
Loss per share – basic and diluted (Owners of the Company)	$	(0.17	)	$	(0.18	)	$	(0.54	)	$	(0.78	)
Weighted average shares outstanding – basic and diluted		35,622,553			25,524,188			33,360,867			23,093,158

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

EUPRAXIA PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(Unaudited and Expressed in U.S. Dollars, except share amounts)

		Amount		Additionalpaid-in<br>capital			Deficit			Accumulatedothercomprehensiveloss			Non-controllinginterest			Total
Balance, December 31, 2022	21,593,145	$	71,003,225	$	16,850,165		$	(77,280,499	)	$	(2,786,366	)	$	(578,671	)	$	7,207,854
Share-based payments	—		—		317,419			—			—						317,419
Redemption of warrants	150,000		263,127		(33,591	)		—			—						229,536
Redemption of options	500		1,132		(438	)		—			—						694
Net loss for the period	—		—		—			(3,895,392	)		—			(60,696	)		(3,956,088	)
Foreign currency translation adjustment	—		—		—			—			(5,521	)					(5,521	)
Balance, March 31, 2023	21,743,645	$	71,267,484	$	17,133,555		$	(81,175,891	)	$	(2,791,887	)	$	(639,367	)	$	3,793,894
Share-based payments	—		—		426,119			—			—			—			426,119
Redemption of warrants	2,050,484		5,057,531		(466,252	)		—			—			—			4,591,279
Redemption of options	1,100		5,204		(2,094	)		—			—			—			3,110
Net loss for the period	—		—		—			(9,377,063	)		—			(129,379	)		(9,506,442	)
Foreign currency translation adjustment	—		—		—						(15,553	)		—			(15,553	)
Balance, June 30, 2023	23,795,229	$	76,330,219	$	17,091,328		$	(90,552,954	)	$	(2,807,440	)	$	(768,746	)	$	(707,593	)
Non-brokered private placement, net of transaction costs<br>(Note 12(b)(iii))	3,282,936		15,886,537		—			—			—			—			15,886,537
Share-based payments	—		—		358,875			—			—			—			358,875
Redemption of warrants	185,000		654,330		(233,333	)		—			—			—			420,997
Net loss for the period	—		—		—			(4,721,342	)		—			(174,741	)		(4,896,083	)
Foreign currency translation adjustment	—		—		—			—			90,538			—			90,538
Balance, September 30, 2023	27,263,165	$	92,871,086	$	17,216,870		$	(95,274,296	)	$	(2,716,902	)	$	(943,487	)	$	11,153,271

EUPRAXIA PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(Unaudited and Expressed in U.S. Dollars, except share amounts)

		Amount		Additionalpaid-incapital			Deficit			Accumulatedothercomprehensiveloss			Non-controllinginterest			Total
Balance, December 31, 2023	27,282,165	$	92,913,585	$	17,510,469		$	(105,501,295	)	$	(2,706,552	)	$	(1,323,881	)	$	892,326
Overnight marketed public offering, net of transaction costs (Note 12(b)(vi))	8,260,435		22,853,391		—			—			—			—			22,853,391
Share-based payments (Note 12(c))	—		—		213,130			—			—			—			213,130
Redemption of warrants (Notes 12(b)(iv) and 12(d))	79,943		551,246		(214,062	)		—			—			—			337,184
Redemption of options (Notes 12(b)(v) and 12(c))	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	)
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 (Note 12(c))	—		—		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	)
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 (Note 12(c))	—		—		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
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

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

EUPRAXIA PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and Expressed in U.S. Dollars)

	Nine months<br>ended September 30,2024			Nine months<br>ended September 30,2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(18,212,147	)	$	(18,358,612	)
Cash flows from operating activities
Accrued interest on convertible debt, net of interest paid (Note 11(a))		241,597			473,384
Depreciation (Note 5 and 6)		117,207			114,294
Interest – lease liability		5,172			10,833
Loss (gain) on sale of equipment (Note 5)		(11,368	)		4,658
Share-based payments (Note 12(c))		2,195,296			1,102,413
Change in fair value of financial instruments (Note 11(a))		(1,200,541	)		2,087,491
Lease payments (Note 9)		(48,354	)		(48,892	)
Unrealized foreign exchange (gain) loss		224,381			(5,284	)
Changes in operating assets and liabilities
Accounts payable and accrued liabilities		(1,585,694	)		(68,158	)
Prepaid expenses		(829,014	)		(116,487	)
Payable to Auritec (Note 10)		(5,000,000	)		—
Amounts receivable		81,304			20,497
Cash used in operating activities		(24,022,161	)		(14,783,863	)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of equipment (Note 5)		(59,912	)		(23,992	)
Proceeds from sale of equipment		28,510			—
Cash provided by (used in) investing activities		(31,402	)		(23,992	)
CASH FLOWS FROM FINANCING ACTIVITIES
Overnight marketed public offering (net of transaction costs) (Note 12(b)(vi))		22,853,391			—
Non-brokered private placement, net of transaction costs<br>(Note 12(b)(iii))		—			15,886,537
Redemption of warrants (Note 12(d))		337,184			5,241,812
Redemption of options (Note 12 (c))		14			3,804
Repayment of loans (Note 8)		(62,651	)		(59,143	)
Repayment of convertible debt (Note 11(a))		(9,074,813	)		—
Cash provided by financing activities		14,053,125			21,073,010
Increase (decrease) in cash and cash equivalents		(10,000,438	)		6,265,155
Foreign exchange effect on cash and cash equivalents		(679,522	)		34,907
Cash, beginning of period		19,341,756			18,263,389
Cash, end of period	$	8,661,796	****	$	24,563,451	****

Supplemental disclosure with respect to cash flows (Note 19)

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

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

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.

The unaudited interim consolidated financial statements 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, 2024, the Company had cash of $8,661,796. The Company has not yet generated revenue from operations. The Company incurred a net loss of $18,212,147 during the nine months ended September 30, 2024, and as of that date, the Company’s accumulated deficit was $123,494,874. 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 raised gross proceeds of $25,026,073 (CDN$33,867,784) through an overnight marketed public offering of 8,260,435 Common Shares in March 2024, and a further $31,997,837 (CDN$44,528,190) through a non-brokered private placement of 8,905,638 Series 1 Preferred Shares on October 31, 2024 (see Note 20 – Subsequent Event). 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 conflicts in the Ukraine and the Middle East 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.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

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”) which the Company transitioned to in 2023. 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, 2023 included in the Company’s 2023 40-F filed with SEC and on SEDAR+ on April 1, 2024.

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, 2024, and 2023 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 2023 Form 40-F for the year ended December 31, 2023 filed with SEC and on SEDAR+ on April 1, 2024.

Comparative Figures

Comparative figures for the three and nine months ended September 30, 2023, which were previously prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”), have been adjusted as required to be compliant with the Company’s accounting policies under U.S. GAAP.

Change in Reporting Currency to the U.S. Dollar

Effective December 31, 2023, the Company changed its reporting currency to the U.S. dollar (“USD”) from the Canadian dollar (“CDN”). As such, all prior amounts originally reported in CDN are now reported in USD. The change in reporting currency was made to enhance comparability of the Company’s results with other publicly traded companies in the life sciences industry. The Canadian dollar continues to be the functional currency of the Company.

In accordance with ASC 830, the unaudited interim consolidated financial statements of the Company are translated into U.S. dollars using the current rate method. Assets and liabilities are translated at the rate of exchange prevailing at the consolidated balance sheet date. Shareholders’ equity is translated at the applicable historical rate. Revenue, expense and cash flow items are translated at the exchange rate in effect on the transaction dates. Translation gains and losses are reported as a separate component of shareholders’ equity titled Accumulated Other Comprehensive Loss.

The financial information for all prior periods is presented in U.S. dollars as if the U.S. dollar had been used as the reporting currency during those periods.

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 unaudited interim consolidated financial statements as a result of future adoption.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

4.	AMOUNTS RECEIVABLE
	September 30,2024		December 31,2023
---	---	---	---	---
GST/HST recoverable	$	72,352	$	85,879
Taxes receivable		33,578		—
Other refundable tax credits ^(1)^		—		104,733
Total	$	105,930	$	190,612
(1)	Other refundable tax credits are due to tax incentives for R&D costs incurred by Eupraxia Australia which<br>were refunded during the nine months ended September 30, 2024.
---	---
5.	PROPERTY AND EQUIPMENT
---	---

Property and equipment consisted of the following:

	Computers			Office furniture<br>and equipment			Leasehold<br>Improvements			Lab<br>Equipment			Total
Cost															****
As at December 31, 2022	****	70,578	****	****	66,399	****	****	125,744	****	****	473,553	****	****	736,274	****
Additions		18,534			—			—			54,843			73,377
Disposals		(5,488	)		—			—			(16,124	)		(21,612	)
Foreign currency adjustments		2,001			1,597			3,023			12,992			19,613
As at December 31, 2023	****	85,625	****	****	67,996	****	****	128,767	****	****	525,264	****	****	807,652	****
Additions		13,953			1,263			—			44,696			59,912
Disposals		(2,498	)					—			(25,718	)		(28,216	)
Foreign currency adjustments		(1,592	)		(1,371	)		(2,604	)		(10,398	)		(15,965	)
As at September 30, 2024	****	95,488	****	****	67,888	****	****	126,163	****	****	533,844	****	****	823,383	****
Accumulated Depreciation															****
As at December 31, 2022	****	42,505	****	****	44,026	****	****	99,301	****	****	106,978	****	****	292,810	****
Depreciation		17,612			4,492			13,849			76,930			112,883
Disposals		(5,162	)		—			—			(11,604	)		(16,766	)
Foreign currency adjustments		1,226			1,149			2,666			4,097			9,138
As at December 31, 2023	****	56,181	****	****	49,667	****	****	115,816	****	****	176,401	****	****	398,065	****
Depreciation		11,872			2,694			7,002			52,441			74,010
Disposals		(1,553	)		—			—			(9,521	)		(11,074	)
Foreign currency adjustments		(1,005	)		(984	)		(2,330	)		(3,302	)		(7,622	)
As at September 30, 2024	****	65,495	****	****	51,377	****	****	120,488	****	****	216,019	****	****	453,379	****
Net Book Value															****
As at December 31, 2023	$	29,444	****	$	18,329	****	$	12,951	****	$	348,863	****	$	409,587	****
As at September 30, 2024	$	29,993	****	$	16,511	****	$	5,675	****	$	317,825	****	$	370,004	****

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

5.	PROPERTY AND EQUIPMENT (continued)

During the three months ended September 30, 2024 and 2023, depreciation expense of $24,908 and $27,989, respectively, was recognized with $2,440 included in general and administrative and $22,468 included in research and development ($4,100 and $23,889 for general and administrative, and research and development in 2023, respectively). During the nine months ended September 30, 2024 and 2023, depreciation expense of $74,010 and $82,215, respectively, was recognized with $13,878 included in general and administrative and $60,132 included in research and development ($16,153 and $66,062 for general and administrative, and research and development in 2023, respectively).

6.	RIGHT-OF-USE ASSET

On May 13, 2024, the Company extended the lease of the office space until November 30, 2025. The lease extension increased the right-of-use asset by $78,580. The following table presents details of movement in the carrying value of the right-of-use asset:

	September 30,<br>2024			December 31,<br>2023
Balance, beginning	$	46,660	****	$	87,286	****
Depreciation		(43,197	)		(42,644	)
Lease extension		78,580			—
Foreign Exchange		4,446			2,018
Balance, ending	$	86,489	****	$	46,660	****

During the three months ended September 30, 2024 and 2023, depreciation expense of $12,851 and $10,727 respectively, was recognized with $4,706 included in general and administrative and $8,145 included in research and development in 2024 ($4,053 and $6,674 for general and administrative, and research and development in 2023, respectively). During the nine months ended September 30, 2024 and 2023, depreciation expense of $43,197 and $32,079 respectively, was recognized with $15,436 included in general and administrative and $27,761 included in research and development in 2024 ($11,935 and $20,144 for general and administrative, and research and development in 2023, respectively).

7.	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
	September 30,<br>2024		December 31,<br>2023
---	---	---	---	---
Research and development	$	1,396,293	$	1,968,263
General and administrative		875,347		1,040,204
Wages and payroll remittances		22,316		18,357
Employee bonus payable^(1)^		—		858,628
Taxes payable		—		36,423
Total	$	2,293,956	$	3,921,875
(1)	Bonus relates to corporate bonuses for the year ended December 31, 2023.
---	---

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

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 1^st^ 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, 2024 and December 31, 2023:

	September 30,<br>2024			December 31,<br>2023
Balance, beginning	$	62,709	****	$	142,127	****
Loan repayment		(62,651	)		(79,441	)
Foreign exchange adjustment		(58	)		23
Balance, ending	$	—	****	$	62,709	****
Current portion	$	—	****	$	62,709	****
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, 2025.

The cost components of the operating lease were as follows for the years ended September 30, 2024 and 2023:

	Three months<br>ended September 30,<br>2024			Three months<br>ended September 30,<br>2023			Nine months<br>ended September 30,<br>2024			Nine months<br>ended September 30,<br>2023
Lease Cost
Operating lease expense	$	16,072		$	16,344		$	48,363		$	48,888
Variable lease expense		17,858			17,252			53,724			51,597
Lease term and Discount Rate
Weighted average remaining lease term (years)		1.17			0.67			1.17			0.67
Weighted average discount rate		9.02	%		14.00	%		9.02	%		14.00	%

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.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

9.	LEASE LIABILITY

The Company’s future minimum lease payments as of September 30, 2024 are as follows:

Total undiscounted future minimum lease payments	$	97,447	****
Less: imputed interest		(4,398	)
Present value of lease liabilities at September 30, 2024	****	93,049	****
Current Portion	****	78,752	****
Non-current portion	$	14,297	****

During the three months ended September 30, 2024, the Company subleased approximately 616 square feet office space with amounts totaling $6,189 for the three months ended September 30, 2024 ($6,060 – three months ended September 30, 2023) being recorded as a reduction to general and administrative expenses. During the nine months ended September 30, 2024, the subleased amounts totaling $18,403 for the nine months ended September 30, 2024 ($18,271 – nine months ended September 30, 2023) being recorded as a reduction to general and administrative expenses.

During the nine months ended September 30, 2024, Management identified that lease payments should be presented within cash flows from operating activities as opposed to cash flows from financing activities in the consolidated statements of cash flows. As such, Management changed the presentation for the current and comparative periods to conform to the requirements under U.S. GAAP with lease payments of $48,354 for the nine months ended September 30, 2024 ($48,892 for the nine months ended September 30, 2023) being presented within cash flows from operating activities as opposed to cash flows from financing activities.

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.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

10.	AURITEC LICENSE AGREEMENT (continued)

The following table summarizes the milestone payment schedule. During the three months ended September 30, 2024, the Company paid $5,000,000 to Auritec upon successful completion of the Phase 2b study.

Milestone Event
Successful Completion of a Phase 2b Study	5,000,000
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<br>exceed 500,000,000	5,000,000
Maximum amount payable	30,000,000

All values are in US Dollars.

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<br>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<br>Study		20	%
After Successful Completion of a Phase 3 Study but prior to Regulatory Approval of a Product in<br>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<br>States		10	%
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.

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%. During the nine months ended September 30, 2023, the Canadian prime rate ranged from 6.45% - 7.20%.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

11.	CONVERTIBLE DEBT (continued)
a)	Silicon Valley Bank
---	---

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, 2022	$	8,741,996	****
Accrued interest		1,162,773
Interest paid		(591,170	)
Change in fair value		836,595
Foreign exchange		185,809
Balance - December 31, 2023	$	10,336,003	****
Accrued interest		601,637
Interest paid		(360,040	)
Change in fair value		(1,200,541	)
Loan repayment		(9,074,813	)
Foreign exchange		(302,246	)
Balance - September 30, 2024	$	—	****
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”) will make 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 will mature 24 months from August 1, 2024 (the closing date) and can be extended for an additional 12 months at the Lenders’ option. The decision to draw on the facility within 120 days of closing is at the discretion of Eupraxia and is subject to the full and final release of the Debt Agreement.

The aggregate unpaid principal amount and any accrued and unpaid interest thereon will 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,

Commitment fees of $351,597 (CDN$480,000) related to the convertible debt were paid during the three and nine months ended September 30, 2024. Since there has not been a drawdown on the Convertible Debt during the period, the fees have been included in current prepaid expense.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

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 (none have been issued to date).<br>
---	---
b)	Issued
---	---

Capital transactions which took place during the year ended December 31, 2023, are as follows:

i)	During the year ended December 31, 2023, 2,385,484 common shares were issued on the exercise of warrants<br>for gross proceeds of $5,241,811. The weighted average share price during the period in which these warrants were exercised was CDN$7.15. On exercise, $733,177 was transferred from additional paid-in capital<br>to share capital.
ii)	During the year ended December 31, 2023, 20,600 common shares were issued on the exercise of options for<br>gross proceeds of $30,059. The weighted average share price during the period in which these options were exercised was CDN$2.00. On exercise, $18,776 was transferred from additional paid-in capital to share<br>capital.
---	---
iii)	On August 18, 2023, the Company closed a non-brokered private<br>placement (the “Private Placement”). Pursuant to the Private Placement, the Company issued 3,183,875 common shares at a price of CDN$7.00 per Common share for aggregate gross proceeds of $16,445,635. The Company incurred cash costs of<br>issuing shares of $559,098. In addition, the Company issued 99,061 common shares as finder’s fees which were valued at $511,681.
---	---

Capital transactions which took place during the nine months ended September 30, 2024.

iv)	During the nine months ended September 30, 2024 79,943 common shares were issued on the exercise of<br>warrants for gross proceeds of $337,184. The weighted average share price during the period in which these warrants were exercised was CDN$5.50. On exercise, $214,062 was transferred from additional paid-in<br>capital to share capital.
v)	During the nine months ended September 30, 2024, 10 common shares were issued on the exercise of options<br>for gross proceeds of $14. The weighted average share price during the period in which these options were exercised was CDN$5.15. On exercise, $9 was transferred from additional paid-in capital to share<br>capital.
---	---
vi)	On March 15, 2024, the Company closed an overnight marketed public offering (the “Offering”).<br>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.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

12.	SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued)
c)	Options
---	---

Under the Amended Stock Option Plan (the “Amended Plan”), approved by the Board of Directors on October 27, 2021, and ratified by Shareholders on December 3, 2021, the Board of Directors may grant stock options to directors, officers, employees and consultants of the Company up to an aggregate of 18.5% of the Company’s then issued and outstanding common shares.

Options granted under the Amended 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.

The following table summarizes the Company’s option transactions:

	Number of<br>options
Outstanding, December 31, 2022		3,306,450
Exercised		(20,600	)
Cancelled		(24,800	)
Granted		257,200
Outstanding, December 31, 2023	****	3,518,250	****
Exercised		(10	)
Cancelled		(40,750	)
Granted		1,588,880
Outstanding, September 30, 2024	****	5,066,370	****

All values are in US Dollars.

Share-based payments for the three months ended September 30, 2024, were $507,246 (2023 - $358,875) (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, 2024, were $2,195,296 (2023 - $1,102,413) (See Note 13 – General & Administrative Expenses and Note 14 – Research & Development Expenses for breakdown by function).

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

12.	SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued)
c)	Options (continued)
---	---

As of September 30, 2024, the unrecognized stock-based compensation expense related to the non-vested stock options was $1,837,479, which is expected to be recognized over a weighted-average period of 2.56 years.

Grant<br><br><br>Date	OptionsOutstanding		OptionsExercisable			RemainingContractualLife (years)
Sep 27, 2015		181,250		181,250	Mar 31, 2025		0.50
Nov 2, 2015		95,000		95,000	Nov 2, 2025		1.09
Mar 5, 2018		446,000		446,000	Mar 5, 2028		3.43
Mar 9, 2021		1,063,750		1,063,750	Mar 9, 2031		6.44
May 3, 2021		257,000		257,000	May 3, 2031		6.59
Dec 9, 2021		60,000		57,500	Dec 9, 2031		7.20
Mar 31, 2022		382,990		284,865	Mar 31, 2032		7.51
Dec 9, 2022		734,300		407,983	Dec 9, 2032		8.20
May 18, 2023		180,000		90,000	May 18, 2033		8.64
May 30, 2023		17,200		8,600	May 30, 2033		8.67
Sep 27, 2023		60,000		30,000	Sep 27, 2033		9.00
May 13, 2024		1,456,880		576,720	May 13, 2034		9.62
May 28, 2024		50,000		25,000	May 28, 2034		9.66
August 9, 2024		82,000		25,500	Aug 9, 2034		9.86
	****	5,066,370	****	3,549,168		****	7.33

All values are in US Dollars.

Options granted during the nine months ended
Expected dividend yield	0%	0%
Expected forfeiture rate	0%	0%
Weighted average annual volatility	78.92%	79.60%
Weighted average risk-free interest rate	3.70%	3.54%
Weighted average expected option life	5.56 years	5.75 years
Weighted average share price (CDN)	3.93	$6.91
Weighted average exercise price (CDN)	3.93	$6.91
Weighted average fair value of options granted (CDN)	2.68	$4.78

All values are in US Dollars.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

12.	SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued)
d)	Warrants
---	---

The following table summarizes the Company’s warrant transactions:

	Number of<br>warrants
Outstanding December 31, 2022	****	11,504,814	****
Exercised		(2,385,484	)
Outstanding December 31, 2023	****	9,119,330	****
Exercised		(79,943	)
Expired		(231,110	)
Outstanding September 30, 2024	****	8,808,277	****

All values are in US Dollars.

As at September 30, 2024, the following warrants were outstanding:

Expiry date		Warrants<br>outstanding<br>and<br>exercisable
120 days after holder to be a Director/ Officer or consultant	N/A		243,421
120 days after former spouse ceases to be a Director/ Officer or consultant	N/A		137,500
120 days after holder ceases to be a Director/ Officer or consultant^(1)^	N/A		315,500
March 9, 2026	1.44		2,826,024
April 20, 2026	1.55		5,196,550
April 20, 2026	1.55		50,054
April 29, 2026	1.58		39,228
		****	8,808,277

All values are in US Dollars.

(1)	Represents unit purchase to acquire 315,500 units consisting of one Common Share and one additional warrant at<br>an exercise price of $0.75CDN. These underlying warrants expire two years from the date of exercise of the primary warrant.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

12.	SHARE CAPITAL AND OTHER COMPONENTS OF EQUITY (continued)
e)	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 minimisnumber 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.

13.	GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses are comprised of the following:

	Three months<br>ended September 30,<br>2024		Three monthsended September 30,<br>2023		Nine monthsended September 30,2024		Nine monthsended September 30,2023
Office expenses	$	110,236	$	79,214	$	316,215	$	268,631
Insurance		291,938		102,261		677,975		276,024
Travel		29,955		107,902		250,646		248,766
Professional fees		507,841		888,665		1,864,993		2,099,130
Public company costs		475,254		73,688		1,270,454		249,128
Salaries and benefits		556,655		432,845		1,624,801		1,343,123
Share based payments (Note 12(c))		251,477		179,207		1,319,421		563,384
Total expenses during the period	$	2,223,356	$	1,863,782	$	7,324,505	$	5,048,186

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

14.	RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses are comprised of the following:

	Three monthsended September 30,<br>2024		Three monthsended September 30,2023			Nine months<br>ended September 30,<br>2024		Nine months<br>ended September 30,<br>2023
Preclinical	$	723,810	$	693,337		$	1,690,099	$	1,342,868
Clinical		223,309		1,066,999			1,590,668		3,500,240
Manufacturing & analytical		1,778,981		1,974,687			4,729,819		3,074,560
Regulatory		62,050		96,912			152,626		290,225
Direct research and development		2,788,150		3,831,935			8,163,212		8,207,893
Pipeline development		—		10,812			—		80,373
Other research and development		142,441		133,300			516,614		440,324
Salaries and benefits		863,505		630,055			2,641,592		1,674,304
Share based payments (Note 12(c))		255,769		179,668			875,875		539,029
Government grants (Note 15)		—		(26,836	)		—		(121,170	)
Total expenses during the period	$	4,049,865	$	4,758,934	****	$	12,197,293	$	10,820,753	****
15.	GOVERNMENT GRANTS AND ASSISTANCE
---	---

National Research Council – Industrial Research Assistance Program (“NRC-IRAP”)

On October 1, 2021, the Company entered into an agreement with NRC-IRAP for funding support of specified research and development activities during a project phase, commencing on September 1, 2021, and ending on December 15, 2023. Under the agreement, NRC-IRAP would reimburse up to 80% of supported salary costs, and 50% of supported contractor fees to a maximum of $553,185. The Company claimed $26,836 pertaining to the agreement during the three months ended September 30, 2023 ($121,170 for the nine months ended September 30, 2023). There were no amounts claimed during the three and nine months ended September 30, 2024 as the project ended December 31, 2023.

The following table summarizes the government grants and assistance the Company received or accrued during the three and nine months ended September 30, 2024 and 2023:

	Three monthsended September 30,2024		Three monthsended September 30,2023		Nine monthsended September 30,2024		Nine monthsended September 30,2023
NRC-IRAP	$	—	$	26,836	$	—	$	121,170
Total	$	—	$	26,836	$	—	$	121,170

Government assistance of $nil (2023 - $121,170) relating to research and development activities has been offset against research and development expenses.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

16.	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 any payments as at September 30, 2024 due to the uncertainty over whether these milestones will be achieved.

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, 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. There were no cancelled contracts during the three and nine months ended September 30, 2023.

17.	FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, amounts receivable, accounts payable and accrued liabilities, payable to Auritec, loans payable and convertible debt.

There were no changes to the Company’s risk exposures or management of risks during the year ended September 30, 2024. 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 with a large Canadian bank. In addition, amounts receivable relate to tax refunds and tax credit owed by various government agencies. 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 assets. The Company’s approach to managing liquidity risk is to ensure, to the extent possible, that it will have sufficient liquidity to meet liabilities when due. As at September 30, 2024, the Company had cash of $8,661,796 (2023 - $19,341,756) and amounts receivable of $105,930 (2023 – $190,612) in addition to total liabilities of $2,387,005 (2023 - $19,373,903). Management is working on certain strategic alternatives to preserve its liquidity 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: currency risk, interest rate risk and other price risk.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

17.	FINANCIAL INSTRUMENTS (continued)

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 U.S. dollars. The Company does not use derivatives to hedge against this risk, however, it does pre-purchase U.S. dollars to cover the majority of anticipated U.S. dollar costs.

At September 30, 2024, the Company held cash of $2,595,605 (2023 – $933,816), had accounts payable of $817,887 (2023 – $1,292,128), a payable owing to Auritec of $nil (2023 - $5,000,000), amounts receivable of $33,578 (2023 – nil) and a loan payable of $nil (2023 – $62,709) denominated in U.S. dollars which were translated to Canadian dollars at 1.3499 (2023 – 1. 3226). The impact of a 10% change in the exchange rates would have an impact of approximately $181,130 (2023 – $542,102) on profit or loss. The Company also has accounts payable of £87,800 (2023 - £676) denominated in Great Britain pound sterling which was translated to Canadian dollars at 1.8080 (2023 – 1.6837). The impact of a 10% change in the exchange rate would have an impact of $11,760 (2023 - $86) on profit and loss. The Company also has cash in accounts payable in Australian dollars and Euros. 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.

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

17.	FINANCIAL INSTRUMENTS (continued)

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, loans payable and convertible debt. With the exception of the convertible debt, the carrying value of the Company’s financial instruments approximate their fair values due to their short-term maturities.

The following table summarizes information regarding the carrying values of the Company’s financial instruments measured at amortized cost:

Financial assets/liabilities	September 30,<br>2024		December 31,<br>2023
Cash	$	8,661,796	$	19,341,756
Amounts receivable		105,930		190,612
Accounts payable and accrued liabilities		2,293,956		3,921,875
Payable to Auritec		—		5,000,000
Loans payable		—		62,709

See Note 11(a) – Convertible Debt to see the movement in the SVB debt facility (there were no key inputs that affected the valuation since the balance was paid via cash during the three months ended September 30, 2024).

18.	INTEREST EXPENSE

Interest expense is comprised of the following:

	Three monthsended September 30,2024		Three monthsended September 30,2023		Nine monthsended September 30,2024		Nine monthsended September 30,2023
Interest on SVB debt facility (Note 11(a))	$	—	$	318,658	$	601,637	$	907,491
Other interest and accretion		451		1,808		1,799		6,222
Total	$	451	$	320,466	$	603,436	$	913,713

EUPRAXIA PHARMACEUTICALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

(Unaudited and Expressed in U.S. Dollars, except share amounts)

19.	SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

The Company paid interest of $32,251 during the three months ended September 30, 2024 ($157,088 paid during the three months ended September 30, 2023). The Company paid interest of $393,637 during the nine months ended September 30, 2024 ($439,652 paid during the nine months ended September 30, 2023).

The Company received interest of $304,303 during the three months ended September 30, 2024 ($193,881 received during the three months ended September 30, 2023). The Company received interest of $941,898 during the nine months ended September 30, 2024 ($558,382 received during the nine months ended September 30, 2023).

The Company did not have non-cash transactions for nine months ended September 30, 2024. The Company had the following non-cash transactions during the nine months ended September 30, 2023:

•	99,061 common shares (valued at $693,427) were issued as part of the financing on August 18, 2023 as payment<br>of finder’s fees (see Note 12 (b)(iii)).
20.	SUBSEQUENT EVENT
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On October 31, 2024, the Company issued 8,905,638 Series 1 Preferred Shares at a price of CDN$5.00 per share for aggregate gross proceeds of $31,997,837 (CDN$44,528,190) by way of a non-brokered private placement. The Preferred Shares rank as a class senior to the Common Shares of the Company with respect to priority in the payment of dividends and the distribution of assets on the dissolution, liquidation or winding up of the Company. The Preferred Shares may be converted at the option of the holder at any time into Common Shares without additional consideration on a one-to-one basis. The Preferred Shares will automatically convert into Common Shares on a one-to-one basis, without additional consideration, in the event that the Common Shares trade at a price above CDN$15.00 per Common Share on the Toronto Stock Exchange (the “TSX”) or The Nasdaq Stock Market LLC (the “Nasdaq”) based on average daily trading volume of at least 50,000 Common Shares during any rolling six-month period. 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.

Concurrent with 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 (the “Termination Agreement”) (Note 11(b)), in connection with the closing of the Private Placement. Commitment fees of $351,597 (CDN$480,000) that were treated as a prepaid expense will be expensed as other expense in the fourth quarter.

EX-99.2

Exhibit 99.2

LOGO

EUPRAXIA PHARMACEUTICALS INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

For the Three and Nine Months ended September 30, 2024

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

This management’s discussion and analysis (“MD&A”) has been prepared as of November 7, 2024 and should be read in conjunction with the unaudited consolidated financial statements of Eupraxia Pharmaceuticals Inc. (“Eupraxia” or the “Company”) as at and for the three and nine months ended September 30, 2024 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, 2023 and 2022 which are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) as issued by the Financial Accounting Standards Board (which the Company transitioned to in 2023). In addition, comparative figures, which were previously prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”) have been adjusted as required to be compliant with the Company’s accounting policies under 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 April 1, 2024.

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.

Change in Reporting Currency to the U.S. Dollar

Effective December 31, 2023, the Company changed its reporting currency to the U.S. dollar (“USD”) from the Canadian dollar (“CDN”). As such, all prior amounts originally reported in CDN are now reported in USD. The change in reporting currency was made to enhance comparability of the Company’s results with other publicly traded companies in the life sciences industry. The Canadian dollar continues to be the functional currency of the Company.

The financial information for all prior periods is presented in U.S. dollars as if the U.S. dollar had been used as the reporting currency during those periods.

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<br>intentions;

•	the Company’s intent to use capital resources previously identified for<br>EP-104IAR to continue the development of EP-104GI;
•	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,<br>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<br>development markets;
---	---
•	the Company’s ability to maintain and enhance its competitive advantages and technological advantages;<br>
---	---
•	the entry into commercial partnerships and commercialization of our technology;
---	---
•	the Company’s ability to enter into definitive agreements with its contract research organizations<br>(“CROs”);
---	---
•	the Company’s ability to enter into co-development and/or<br>collaborative partnerships;
---	---
•	the Company’s clinical development programs and activities and the estimated timing thereof;<br>
---	---
•	the timing, status and results of clinical trials, including with respect to patient recruitment and data<br>readout, including the Company’s belief that its planned clinical trials will support a future New Drug Application (“NDA”) submission for EP-104IAR;
---	---
•	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<br>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<br>jurisdictions;
---	---
•	the Company’s ability to protect, expand upon and exploit its existing intellectual property;<br>
---	---
•	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<br>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<br>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;<br>
---	---
•	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;<br>
---	---
•	the Company’s anticipated use of proceeds from the Offering (as defined herein) and its existing cash and<br>cash equivalents and the related estimated cash runway;
---	---
•	the sufficiency of the Company’s existing cash and cash equivalents to fund its future operating expenses<br>and capital expenditure requirements;
---	---
•	the issuance of Common Shares upon conversion of the Preferred Shares;
---	---
•	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<br>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<br>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<br>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<br>EP-104GI, which is currently being studied in an open label Phase 1b/2a clinical study, and EP-104IAR, for which we are evaluating funding alternatives for the continued<br>development, including potential partnership opportunities. If we are unable to complete development of, obtain approval for and commercialize EP-104GI or EP-104IAR,<br>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<br>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<br>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<br>of operations;
---	---
•	clinical trials are expensive, time consuming and difficult to design and implement and may fail to demonstrate<br>adequate safety and efficacy of our product candidates. Furthermore, the results of previous preclinical studies and clinical trials may not be predictive of future results, and the results of our current and planned clinical trials may not satisfy<br>the requirements of the U.S. Food and Drug Administration (the “FDA”) or comparable non-U.S. regulatory authorities or provide the basis for regulatory approval;
---	---
•	our lead product candidates may not be successful for their intended use;
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•	our current and future product candidates will require regulatory approval, which is costly, and we may not be<br>able to obtain it and we may fail to obtain regulatory approvals or only obtain approvals for limited uses or indications;
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•	the clinical trials of our product candidates may not demonstrate safety and efficacy to the satisfaction of the<br>FDA, European Medicine Agency (“EMA”) or other comparable foreign regulatory authorities or otherwise produce positive results;
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•	we completely rely on third parties to provide supplies and inputs required for our product candidates and, if<br>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;<br>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;
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•	the manufacture of drugs is complex and our third-party manufacturers may encounter difficulties in production.<br>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;<br>
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•	our reliance on third parties requires us to share our trade secrets, which increases the possibility that a<br>competitor or other third party will discover them or that our trade secrets will be misappropriated or disclosed;
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•	the outcome of preclinical testing and early clinical trials may not be predictive of the success of later<br>clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA or other comparable foreign regulatory authorities. Terminating the development of any of our product candidates could materially harm our<br>business and the market price of our common shares (“Common Shares”);
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•	interim, initial, “top-line”, and preliminary data from our<br>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;
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•	any safety concerns observed in any one of our clinical trials in our targeted indications could limit the<br>prospects for regulatory approval of our product candidates in those and other indications, which could seriously harm our business;
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•	our current or future product candidates may cause significant adverse events, toxicities or other undesirable<br>side effects 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<br>negative consequences;
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•	where appropriate and applicable, we may seek approval from the FDA or comparable foreign regulatory authorities<br>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<br>FDA approval sooner or at all;
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•	if we are unable to establish sales and marketing capabilities or enter into agreements with third parties to<br>market and sell our drug candidates, if approved, we may be unable to generate any product revenue;
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•	we have a novel technology with uncertain market acceptance if any of our product candidates are approved;<br>
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•	if we experience delays or difficulties in the enrollment and/or maintenance of patients in clinical trials, our<br>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<br>in completing, or ultimately be unable to successfully complete the clinical trials needed for regulatory approval;
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•	We cannot be certain of the timely completion or outcome of our preclinical testing and cannot predict if the FDA<br>will agree that the results of our preclinical testing will support the initiation of clinical trials;
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•	There can be no guarantee that we will be successful in our scheduled<br>pre-IND meeting for EP-104GI. The FDA may require additional IND enabling pre-clinical testing prior to initiation of clinical<br>trials, which could negatively impact our clinical trial timeline;
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•	Even if our meeting with the FDA is successful, the FDA may request changes to the design of the clinical trials<br>after the IND is submitted which would delay initiation of the clinical trials and could negatively impact our clinical trial timeline;
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•	the FDA, EMA and other comparable foreign regulatory authorities may not accept data from trials conducted in<br>locations outside of their jurisdiction;
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•	obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we<br>will be successful in obtaining regulatory approval of our product candidates in other jurisdictions;
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•	if the market opportunity for any product candidate that we or our strategic partners develop is smaller than we<br>believe, our revenue may be adversely affected and our business may suffer;
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•	even if our product candidates receive regulatory approval, we will be subject to significant post marketing<br>regulatory requirements and oversight;
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•	FDA’s and other regulatory authorities’ policies may change, and additional government regulations may<br>be enacted that could prevent, limit or delay regulatory approval of our product candidates;
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•	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;
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•	disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could<br>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<br>performing normal business functions on which the operation of our business may rely, which could negatively impact our business;
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•	we rely on key personnel;
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•	we may not be able to successfully execute our business strategy;
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•	we are in a highly competitive industry which is continuously evolving with technological changes;<br>
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•	our future success will depend on our ability to continually enhance and develop our product candidates;<br>
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•	we may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize<br>on product candidates or indications that may be more profitable or for which there is a greater likelihood of success;
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•	changes in methods of product candidate manufacturing or formulation may result in additional costs or delay;<br>
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•	if we are unable to differentiate EP-104 from existing therapies or if<br>the FDA or other applicable regulatory authorities approve additional, and potentially less costly, therapies that compete with EP-104, our ability to successfully commercialize<br>EP-104GI or EP-104IAR would be adversely affected;
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•	a variety of risks associated with potential international business relationships could materially adversely<br>affect our business;
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•	collaboration arrangements we may enter into in the future may not be successful;
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•	provisions of our existing and any future debt instruments may restrict our ability to pursue our business<br>strategies;
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•	we may acquire businesses or products, or form strategic alliances in the future, and we may not realize the<br>benefits of such acquisitions or alliances;
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•	we have traditionally relied on key collaborations and grants;
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•	we are subject to evolving global laws and regulations relating to privacy, data protection and information<br>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;
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•	our business and operations could suffer in the event of an actual or perceived information security incident<br>such as a cybersecurity breach, system failure, or other compromise of our systems or those of a third-party or other contractor or vendor;
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•	we may fail to manage our growth successfully, which may adversely impact our operating results;<br>
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•	we use hazardous chemicals and biological materials in our business. Any claims relating to improper handling,<br>storage or disposal of these materials could be time consuming and costly;
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•	if product liability lawsuits are brought against us, then we may incur substantial liabilities and may be<br>required to limit commercialization of EP-104, if approved, for any indication, and any other future products;
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•	our employees, independent contractors, principal investigators, consultants, commercial partners and vendors may<br>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;<br>
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•	our directors and executive officers may be affiliated with other biotech companies and may have conflicts of<br>interest;
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•	our business may be affected by macroeconomic conditions;
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•	our business may be affected by global geopolitical risks;
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•	we may be responsible for corruption and anti-bribery law violations;
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•	we are subject to foreign exchange risks;
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•	we are subject to taxation risks and changing rules by different tax authorities;
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•	we are subject to a number of risks and hazards and may not be sufficiently insured for all of them;<br>
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•	we will devote significant resources to regulatory compliance as a public entity;
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•	changes in accounting standards from IFRS to U.S. GAAP can be difficult to predict and could adversely impact how<br>we record and report our financial condition and results of operations;
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•	in the past, we have had to restate our previously issued consolidated financial statements and as part of that<br>process identified a material weakness in our disclosure controls and procedures and internal control over financial reporting as of December 31, 2022. If we are unable to develop and maintain effective disclosure controls and procedures and<br>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<br>of operations;
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•	our success depends on our ability to protect our intellectual property and our proprietary technologies;<br>
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•	if the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent<br>protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected;
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•	intellectual property rights do not necessarily address all potential threats to our competitive advantage;<br>
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•	our patent rights may prove to be an inadequate barrier to competition;
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•	our commercial success depends significantly on our ability to operate without infringing the patents and other<br>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;
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•	we may not be successful in obtaining or maintaining necessary rights to our product candidates through<br>acquisitions and in-licenses;
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•	we may be involved in lawsuits to protect or enforce our patents or our future licensors’ patents, which<br>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<br>abroad;
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•	intellectual property litigation may lead to unfavorable publicity that harms our reputation and causes the<br>market price of our Common Shares to decline;
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•	derivation proceedings may be necessary to determine priority of inventions, and an unfavorable outcome may<br>require us to cease using the related technology or to attempt to license rights from the prevailing party;
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•	we may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration<br>of a third-party patent, which might adversely affect our ability to develop and market our products and product candidates;
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•	changes in U.S. patent law, or laws in other countries, or their interpretation could diminish the value of<br>patents in general, thereby impairing our ability to protect our product candidates;
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•	we may be subject to claims challenging the inventorship or ownership of our patents, the patents we license, and<br>other intellectual property;
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•	patent terms may be inadequate to protect our competitive position on our product candidates for an adequate<br>amount of time;
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•	we may not be able to protect or enforce our intellectual property rights throughout the world;<br>
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•	obtaining and maintaining our patent protection depends on compliance with various procedural, documentary<br>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;<br>
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•	if our trademarks and trade names are not adequately protected, then we may not be able to build name recognition<br>in our markets of interest and our business may be adversely affected;
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•	if we are unable to protect the confidentiality of our trade secrets, the value of our technology could be<br>materially adversely affected, harming our business and competitive position;
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•	we may be subject to claims that we or our employees, independent contractors, or consultants have wrongfully<br>used or disclosed alleged confidential information or trade secrets;
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•	we may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our<br>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;<br>
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•	our rights to develop and commercialize our technology and product candidates may be subject, in part, to the<br>terms and conditions of any future licenses granted to us by others;
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•	if we fail to comply with our obligations in the agreements under which we license intellectual property rights<br>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;
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•	the patent protection and patent prosecution for some of our product candidates may be dependent on third<br>parties;
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•	coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates,<br>if approved, which could make it difficult for us to sell any product candidates or therapies, if approved, profitably;
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•	our relationships with healthcare providers and physicians and third-party payors will be subject to applicable<br>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;
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•	our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs,<br>suppliers and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements;
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•	our research and development activities could be affected or delayed as a result of possible restrictions on<br>animal testing;
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•	ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business<br>and results of operations;
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•	the market price of the Common Shares may be volatile;
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•	investors may lose their entire investment;
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•	we have no history of dividends;
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•	our existing executive officers and directors own a significant percentage of Common Shares and may have a<br>significant impact over matters submitted to our shareholders for approval;
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•	future sales of Common Shares by our existing shareholders could cause our share price to decline;<br>
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•	we will need to raise additional financing in the future which may dilute our share capital;<br>
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•	if securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable<br>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;
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•	any issuance of preferred shares could make it difficult for another company to acquire us or could otherwise<br>adversely affect holders of our Common Shares, which could depress the price of our Common Shares;
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•	our constating documents permit us to issue an unlimited number of Common Shares without additional shareholder<br>approval;
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•	raising additional capital may cause dilution to our shareholders, restrict our operations or require us to<br>relinquish rights to our technologies or product candidates;
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•	we have warrants, convertible debt, and shares of a subsidiary exchangeable for Common Shares outstanding, which<br>in each case, if exercised, converted or exchanged, respectively, could cause dilution to existing shareholders;
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•	our Common Shares may have limited liquidity;
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•	we cannot assure you that an active market will develop for our Common Shares on the Nasdaq Capital Market<br>(“Nasdaq”);
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•	United States investors may not be able to obtain enforcement of civil liabilities against us;<br>
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•	as a foreign private issuer, we are subject to different U.S. securities laws and rules than a domestic U.S.<br>issuer, which may limit the information publicly available to our U.S. shareholders;
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•	we may lose our foreign private issuer status in the future, which could result in significant additional costs<br>and expenses to us;
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•	U.S. holders of our Common Shares may suffer adverse tax consequences if we are characterized as a passive<br>foreign investment company; and
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•	if a U.S. holder is treated as owning at least 10% of our Common Shares, such U.S. holder may be subject to<br>adverse U.S. federal income tax consequences.
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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.

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 short form base shelf prospectus dated February 5, 2024 (the “ShelfProspectus”) and 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 while minimizing tolerability complications 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. For our ongoing clinical studies, we are using the same underlying API and extended-release formulation. 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 in the Diffusphere^TM^ technology, which is used in the formulation of both EP-104GI and EP-104IAR.

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 preclinical and clinical requirements for an NDA submission and 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.

We are currently conducting a Phase 1b/2a clinical trial with EP-104GI. We intend to continue development of EP-104GI through the ongoing clinical trial and any subsequent trials required by the FDA to obtain commercial approval. We intend to evaluate the possibility of identifying a corporate partner to help with the development of EP-104GI.

EP-104 (Long-Acting Fluticasone PropionateInjectable 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 through diffusion of the drug particles through a microns-thin polymer membrane. When the 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 side effects 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 20% 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. We expect to use the same coated and cured FP particles from our EP-104IAR program for use in EP-104GI. However, we anticipate refinements to both the dose and vehicle to optimize patient outcomes in EoE.

EP-104GI for Eosinophilic Esophagitis (EoE)

EP-104 is being developed for the treatment of EoE, a rare immune-mediated disease recognized by the U.S. National Organization for Rare Disorders. 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.

Development of EP-104GI for EoE

Clinical Studies

We commenced dosing patients in the second quarter of 2023 in an open label Phase 1b/2a clinical study (RESOLVE) using EP-104GI for treatment of EoE. The RESOLVE study will be conducted in up to 50 adult patients with a confirmed diagnosis and active EoE symptoms. Primary outcomes for safety, PK and efficacy are being collected at various points over a 12-week total period, with a subsequent follow up at six, nine and twelve months. Initial low-dose cohorts showed improvement in patients’ perception of pain on swallowing, ease of swallowing, and histologic endpoints, with minimal adverse events—no reports of candidiasis, no impact on glucose metabolism or adrenal function. We anticipate ongoing readouts on adverse events, patient-reported outcomes, histologic outcomes, and pharmacokinetic parameters from subsequent cohorts throughout 2024 and 2025. The RESOLVE trial is actively enrolling in Canada, the Netherlands, New Zealand, and Australia. It is our intention to modify the protocol to include a randomized, placebo controlled component to the trial to further assess the optimal dose(s).

Subsequent steps in the research program will be determined following analysis of results as well as interaction with key opinion leaders and regulatory authorities. To seek marketing approval for EP-104GI, we expect to carry out at least one Phase 3 study assessing both efficacy (reduced eosinophils and improved symptoms) and safety of EP-104GI in this indication.

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.

Current evidence-based OA treatment guidelines aim to manage signs and symptoms, with the goal of slowing progression of the disease, 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 side effects 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 greater than 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 key 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.

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.

In parallel to the main study, Magnetic Resonance Imaging (“MRI”), with macrocyclic gadolinium-based contrast agent, was obtained from participating patients who received EP-104IAR (n=6) or placebo (n=6). Scans were performed at baseline and weeks 12, 24 and 52 (or on early exit). The data obtained in the MRI sub-study demonstrated the following results:

•	Treatment with EP-104IAR resulted in a trend of non-statistically significant decrease in inflammation at weeks 12 and 24 when compared to placebo. The two groups were similar at one year as the clinical effect of the single<br>EP-104IAR injection had waned by one year.
•	A correlation between reduction in inflammation and a reduction in WOMAC Pain scores was observed.<br>
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•	A trend of equivalent or improved T2 relaxation times was observed in the<br>EP-104IAR treated group compared to the placebo group at 12 weeks and that trend held steady, or improved, at 24 weeks and 52 weeks but was not statistically significant. These data suggest a trend of<br>potential improvement in cartilage quality and morphology in the treated group.
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Regulatory

We participated in a pre-IND meeting with the FDA regarding the OA program before submission and subsequent clearance of an IND, allowing evaluation of the product candidate under the SPRINGBOARD Phase 2 OA protocol.

In June 2023, EP-104IAR received Fast Track designation from the FDA. The Fast Track process is designed to facilitate and potentially expedite the development review of drugs to treat serious conditions and fill an unmet medical need. The designation recognizes both the seriousness of knee OA pain and the potential for EP-104IAR to fill the need for extended-release pain relief for this indication.

We believe our planned development pathway for EP-104IAR is supported by several key factors:

•	following our recent End-of-Phase<br>2 meeting with the FDA in January 2024, we believe we have alignment on the required endpoints for our Phase 3 clinical trials in order to support an NDA submission;
•	an open Investigational New Drug (IND) application with the FDA;
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•	an abbreviated NDA regulatory pathway under the FDCA, Section 505(b)(2);
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•	FDA Fast Track designation, recognizing the potential of EP-104IAR to<br>meet an unmet medical need in a serious condition such as OA pain;
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•	a corticosteroid (FP) with a well-established record of clinical use that supports anti-inflammatory effects, and<br>a well-characterized systemic tolerability profile;
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•	no evidence of cartilage damage at the therapeutic concentrations intended for humans in the IND-enabling preclinical study; and
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•	preliminary evidence of rapid and extended pain reduction versus placebo in both Phase 1 and Phase 2 clinical<br>trials.
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End-of-Phase-2 Meeting with FDAfor 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 support a future NDA submission for EP-104IAR for both single and repeat dose administration:

•

PROMENADE – A Phase 3 trial of knee OA patients to evaluate the safety and efficacy of single and repeat<br>doses of EP-104IAR. We anticipate that patients will be followed for a maximum of nine months after the second injection. A Phase 1 study carried out in approximately 30 patients comparing<br>the pharmacokinetics of EP-104IAR and Flovent^®^^^HFA (required to satisfy pharmacokinetic<br>requirements for a 505(b)(2) application).

In addition to the anticipated clinical trial 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 United States and additional ex-U.S. geographies along with the potential partner.

Lifecycle Opportunities forEP-104 Products

Corticosteroids are broadly used for various indications that may benefit from a targeted delivery and extended-release profile with minimal side effects. 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:

•	Continued dose escalation and completed enrollment of the Phase 1b/2a RESOLVE clinical study to evaluate the<br>safety and effectiveness of EP-104GI or treatment of EoE;
•	Engage with the FDA in a Pre-IND meeting to discuss clinical and non-clinical topics related to the development program;
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•	Optimize and manufacture material to support EP-104GI clinical trials,<br>including development of a new vehicle better suited to the location and mode of injection;
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•	Initiate a Phase 2 / 3 trial to evaluate the effectiveness and safety of<br>EP-104GI in EoE.
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EP-104IAR Program:

•	Complete non-clinical studies to support NDA filing that would enhance<br>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;
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•	Progress the EP-104IAR clinical program into Phase 3 and in conjunction<br>with additional funding opportunities, including a potential collaboration partner.
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EP-104 Platform:

•	Continue to strengthen the IP portfolio around the EP-104 technology;<br>
•	Continue to evaluate portfolio options for EP-104 and the Diffusphere^TM^ technology platform; and
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•	Continue to develop the manufacturing process to support all programs.
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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.

Significant Company Events for the Quarter

On August 2, 2024, the Company announced 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”) will make 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 will mature 24 months from August 1, 2024 (the closing date) and can be extended for an additional 12 months at the Lenders’ option. The decision to draw on the facility within 120 days of closing is at the discretion of Eupraxia. The aggregate unpaid principal amount and any accrued and unpaid interest thereon will be convertible at the discretion of the lenders into Eupraxia Common Shares at a conversion price equal to CDN$4.84375 per Common Share. An existing debt agreement with SVB and SVB Innovation Credit Fund VIII, L.P. was subsequently repaid September 12, 2024.

On September 11, 2024, the Company announced additional positive clinical data from its RESOLVE Phase 1b/2a trial which is evaluating the safety and efficacy of EP-104GI as a treatment for EoE.

On October 2, 2024, the Company announced the appointment of Dr. Amanda Malone as the Chief Operating and Scientific Officer of the Company. The Company further announced the appointment of Dr. Rahul Sarugaser as Executive Vice President of Corporate Development.

On October 15, 2024, the Company announced that Phase 2b data from the SPRINGBOARD trial evaluating EP-104IAR for the treatment of knee osteoarthritis was published in Lancet Rheumatology.

On October 31, 2024, the Company announced the closing of a non-brokered private placement (the “Private Placement”) of newly issued Series 1 Preferred shares in the capital of the Company (the “Preferred Shares”). The Company issued 8,905,638 Preferred Shares for gross proceeds of CDN$44,528,190. The Preferred Shares are convertible into Common Shares without additional consideration on a one-to-one basis, subject to customary anti-dilution protection for share splits, reorganizations and other customary conditions.

The Preferred Shares are not initially 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 holders of Preferred Shares will be entitled to nominate one representative to the board of directors of the Company. Concurrently with the closing of the Private Placement, Joseph Freedman was appointed to the board of directors of the Company as the first nominee of the holders of Preferred Shares.

SelectedFinancial Information

The financial information reported herein for the period ended September 30, 2024 has been derived from the interim consolidated financial statements for the period ended September 30, 2024 prepared in accordance with U.S. GAAP. The Company’s reporting currency is the U.S. dollar. The Company has retained the Canadian dollar as its functional currency.

Selected Consolidated Balance Sheet Data


Cash
Total assets
Equity attributable to owners of the Company
Non-controlling interest	)	)
Total shareholders’ equity

All values are in US Dollars.

Cash decreased by $10,679,960 to $8,661,796 as at September 30, 2024. This decrease was attributable primarily to the net loss of $18,212,147, repayment of the SVB convertible debt facility of $9,074,813 and the milestone payment to Auritec Pharmaceuticals of $5,000,000 offset by net funds of $22,853,391 received related to an overnight marketed public offering and redemption of warrants of $337,184.

Total assets decreased by $9,901,327 to $10,364,902 as at September 30, 2024. This decrease was primarily due to the decrease in cash referenced above.

The Company did not pay any dividends or make any distributions to shareholders in any of the above periods.

Selected Consolidated Statements of Operations and Comprehensive Loss Data


Revenue
Net loss for the period – Owners of the Company	)	)	)	)
Net loss for the period – Non-controlling<br>interest	)	)	)	)
Net loss for the period	)	)	)	)
Comprehensive loss for the period	)	)	)	)
Loss per share, basic and diluted – Owners of the Company	)	)	)	)

All values are in US Dollars.

The net loss for the three months ended September 30, 2024 increased **** by $1,095,238 when compared to the three months ended September 30, 2023, primarily due to an increase in general and administrative costs of $359,574 offset by a decrease of research and development costs of $709,069 and other income of $1,444,733.

The net loss for the nine months ended September 30, 2024 decreased **** by $146,465 when compared to the nine months ended September 30, 2023, primarily due to an increase in general and administrative costs of $2,276,319 as well as research and development costs of $1,376,540 offset by a decrease to other expenses of $3,799,324.

While several of the Company’s vendors have inflationary clauses in their contracts, the impact of inflation is considered immaterial.

Comparison of the Three and Nine Months Ended September 30, 2024, and 2023

Results of Operations


General and administrative expenses				19.29	%				45.09	%
Research and development expenses			)	(14.90	%)				12.72	%
Other income/ (expenses)			)	(83.67	%)		)		(152.60	%)
Net loss	)	)		22.37	%	)	)		(0.80	%)
Foreign currency translation adjustment				37.44	%	)		)	(226.92	%)
Comprehensive loss	)	)	)	22.09	%	)	)	)	0.06	%

All values are in US Dollars.

General and Administrative

General and administrative expenses consist of office and administrative costs, travel, professional fees, public company costs and salaries and benefits.

Comparing the three months ended September 30, 2024, to the same period in 2023, general and administrative activities increased by $359,574. This increase is due to the following items:

•	A decrease of $380,824 related to professional fees. This decrease is a result of decreased business development<br>consulting fees, corporate legal fees and accounting fees.
•	An increase of $196,080 related to employee related costs as a result of increased headcount, salary increases<br>and share-based payments.
---	---
•	An increase of $401,566 related to public company costs associated with investor relation and compliance<br>activities in addition to costs the Company incurred in becoming listed on the Nasdaq in early April 2024.
---	---
•	A decrease of $77,947 related to travel expenses associated with business development and financing activities.<br>
---	---
•	An increase in office related costs of $220,699 is primarily due to an increase in D&O insurance as a result<br>of uplisting on the Nasdaq.
---	---

Comparing the nine months ended September 30, 2024, to the same period in 2023, general and administrative activities increased by $2,276,319. This increase is due to the following items:

•	A decrease of $234,137 related to professional fees. This decrease is a result of decreased accounting and audit<br>fees following the change of auditor in the prior year, and decreased business development consulting costs, offset by increased legal fees.
•	An increase of $1,037,715 related to salaries, bonuses, and benefits as a result of increased headcount and<br>salary increases as well as an increase in share-based payments.
---	---
•	An increase of $1,021,326 related to public company costs associated with investor relations and compliance<br>activities in addition to costs the Company incurred in becoming listed on the Nasdaq in early April 2024.
---	---
•	An increase in office related costs of $449,535 is primarily due to an increase in D&O insurance as a result<br>of listing on the Nasdaq.
---	---

Research and Development

Comparing the three months ended September 30, 2024, to the same period in 2023, research and development activities decreased by $709,069. This decrease is primarily due to the following items:

•	A decrease of $1,043,785 in costs related to direct research programs. Clinical, manufacturing and analytical,<br>and regulatory costs have decreased as a result of reduced activities associated with our EP-104IAR program. This has been offset by increased preclinical associated with our<br>EP-104GI program.
•	A decrease of $10,812 related to pipeline development costs due to no pipeline activity in 2024.<br>
---	---
•	An increase of $318,692 related to salaries and benefits due to increased headcount and salary increases as well<br>as increased share-based payments and other research and development costs.
---	---
•	A decrease of $26,836 related to government grants and tax incentives due to the completion of our IRAP grant in<br>2023.
---	---

Comparing the nine months ended September 30, 2024, to the same period in 2023, research and development activities increased by $1,376,540. This increase is primarily due to the following items:

•	A decrease of $44,681 in costs related to direct research programs. Clinical and regulatory costs have decreased<br>as a result of reduced activities associated with our EP-104IAR program. This has been offset by increased preclinical and manufacturing and analytical costs associated with our<br>EP-104GI programs.
•	A decrease of $80,373 related to pipeline development costs due to no pipeline related activities in 2024.<br>
---	---
•	An increase of $76,290 related to other research and development costs due increase in travel related expenses<br>for conferences, increased subscription costs, and increases in intellectual property legal costs.
---	---
•	An increase of $1,304,134 related to salaries and benefits due to increased headcount and salary increases as<br>well as increased share-based payments.
---	---
•	A decrease of $121,170 related to government grants and tax incentives due to the completion of our IRAP grant in<br>2023.
---	---

Other Income/(Expenses)

Comparing the three months ended September 30, 2024, to the same period in 2023, other income decreased by $1,444,733. This decrease is primarily due to the following items:

•	An increase of $110,467 related to interest income as a result of an increase in the Canadian prime rate for the<br>purposes of interest on cash as well as a larger cash balance in interest bearing accounts for the period.
•	A decrease of $320,015 related to interest expense. This was primarily a result of the maturity and repayment of<br>the SVB debt before the quarter ended June 30, 2024.
---	---
•	A decrease of $3,975 related to foreign exchange loss. The foreign exchange loss is a result of fluctuations in<br>the U.S. and Australian exchange rate versus the Canadian dollar on our U.S. and Australian denominated assets and liabilities during the current period.
---	---
•	A decrease of $1,879,190 related to changes in fair value of financial instruments on the SVB convertible debt<br>facility as the facility matured before the quarter ended June 30, 2024.
---	---

Comparing the nine months ended September 30, 2024, to the same period in 2023, other expenses decreased by $3,799,324. This decrease is primarily due to the following items:

•	An increase of $432,758 related to interest income as a result of an increase in the Canadian prime rate for the<br>purposes of interest on cash as well as a larger cash balance in interest bearing accounts for the period.
•	A decrease of $310,277 related to interest expense. This was primarily a result of the maturity and repayment of<br>the SVB debt before the quarter ended June 30, 2024.
---	---
•	An increase of $247,769 related to foreign exchange loss. The foreign exchange loss is a result of fluctuations<br>in the U.S. and Australian exchange rate versus the Canadian dollar on our U.S. and Australian denominated assets and liabilities during the current period.
---	---
•	An increase of $3,288,032 related to changes in fair value of financial instruments on the SVB convertible debt<br>facility as the facility matured before the quarter ended June 30, 2024.
---	---
•	An increase in gain on sale of equipment of $16,026 due to the sale of lab equipment.
---	---

Summary of Quarterly Results

The information in the tables below has been derived from the Company’s unaudited consolidated financial statements. Effective December 31, 2023, the Company transitioned to U.S. GAAP and changed its reporting currency to USD from CDN. As such, all prior amounts originally reported in CDN are now reported in USD. The change in reporting currency was made to enhance comparability of the Company’s results with other publicly traded companies in the life sciences industry. The Company has retained the Canadian dollar as its functional currency. In addition, all quarters have been retrospectively restated for the adoption of U.S. GAAP effective December 31, 2023.

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.


Total Revenue
Total net loss	)	)	)	)	)	)	)	)
Loss per share, basic and diluted (Owners of the Company)	)	)	)	)	)	)	)	)

All values are in US Dollars.

The Company has incurred net losses in each of its preceding eight quarters as a result of continued activities associated with the Phase 2 clinical trial for EP-104IAR and the Phase 1b/2a clinical trial of EP-104GI. 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.

Use of Proceeds

The following tables show the estimated use of net proceeds from the Company’s most recent financing, compared with the actual use of net proceeds:

March 2024 Financing

	Estimated Amount tobe ExpendedCDN	Estimated Amount tobe Expended(1)US	ActualAmount ExpendedUS
Research and development activities for EP-104GI and EP-104IAR
General and administrative expenses
Amended and restated license agreement payment
Total

All values are in US Dollars.

(1)	Converted as of March 15, 2024 using the daily rate of exchange published by the Bank of Canada of US$1.00<br>= CDN$1.3533 with the exception of the license payment which is denominated in the Company’s reporting currency.

We intend to use a portion of the capital resources previously identified for EP-104IAR development to continue development of EP-104GI.

Liquidity, Capital Resources and Outlook, Management of Cash Resources

As at September 30, 2024, the Company had cash of $8,661,796 (December 31, 2023 - $19,341,756).

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 rate, 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 effect its loss during any given year.

Further, we continue to monitor additional opportunities to raise equity capital and/or secure additional funding through non-dilutive sources such as government grants and potential license agreements. However, it is possible that our cash and working capital position may not be enough to meet our business objectives in the event of unforeseen circumstances or a change in our strategic direction.

On March 15, 2024, the Company announced it had closed an overnight marketed public offering (the “Offering”) of Common Shares of the Company. Pursuant to the Offering, Eupraxia issued 8,260,435 Common Shares at a price of CDN$4.10 per share for gross proceeds of $25,026,073 (CDN$33,867,784).

As consideration for the services rendered by the underwriters 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.

These funds are being used to fund our clinical trials in EP-104 and the remainder of the proceeds will be used for general and administrative expenses, a milestone payment, working capital needs and other general corporate purposes. After the closing of the Private Placement and assuming the full exercise of EPRX.WT.A warrants prior to their April 20, 2026 expiry, we anticipate our cash resources will be sufficient to fund the Company to the third quarter of 2026.

Comparison of Cash Flow for the Nine Months ended September 30, 2024 and 2023.


Net cash provided by (used in):
Operating activities	)	)
Investing activities	)	)
Financing activities
Net increase (decrease) in cash	)
Foreign Exchange effect on cash	)

All values are in US Dollars.

Cash used in operating activities for the nine months ended September 30, 2024 increased by $9,238,298 compared to the same period in the prior year. The primary driver was the increase in expenditure on the EP-104GI clinical trials, increased manufacturing and analytical activities, and financing related costs, payment of accounts payable and accrued liabilities including the milestone payment to Auritec Pharmaceuticals of $5,000,000, and increased salary costs.

Cash used in investing activities for the nine months ended September 30, 2024 increased by $7,410 compared to the same period in the prior year. The primary driver of the increase was the purchase of lab equipment in 2024.

Cash provided by financing activities for the nine months ended September 30, 2024 decreased by $7,019,885 compared to the same period in the prior year. The primary driver of the decrease was the repayment of the SVB convertible debt facility of $9,074,813 and fewer warrants being redeemed in the period ($337,184 during the period as compared to $5,241,812 in the comparable period of 2023) offset by overnight marketed public offering of $22,853,391 (net of financing costs) which occurred during the nine months ended September 30, 2024, where more funds were raised than the Private Placement financing in August of 2023 of $15,886,537 (net of financing costs).

Going Concern

The Company’s unaudited interim consolidated financial statements relating to this MD&A 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, 2024, the Company had cash of $8,661,796. The Company has not yet generated revenue from operations. The Company incurred a net loss of $18,212,147 during the nine months ended September 30, 2024, and as of that date, the Company’s accumulated deficit was $123,494,874. 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 raised gross proceeds of $25,026,073 (CDN$33,867,784) through an overnight marketed public offering of 8,260,435 Common Shares in March 2024, and a further $31,997,837 (CDN$44,528,190) through a non-brokered private placement of 8,905,638 Series 1 Preferred Shares on October 31, 2024. 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 conflicts in the Ukraine and the Middle East affecting the global capital markets. The Company is active in its pursuit of additional funding through potential partnering and other strategic activities, 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 Company’s unaudited interim consolidated financial statements relating to this MD&A 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.

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, 2024 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 Pharmaceuticals, Inc. (“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 RestatedLicense 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 million 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.

Milestone Event
Successful Completion of a Phase 2b Study	5,000,000
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<br>exceed 500,000,000	5,000,000
Maximum milestones payable	30,000,000

All values are in US Dollars.

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 million. The following table summarizes the Non-Royalty Monetization Revenue percentage schedule:

Date of Execution
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<br>Study	20	%
After Successful Completion of a Phase 3 Study but prior to Regulatory Approval of a Product in<br>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<br>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 Agreement

On October 21, 2019, the Company entered into a lease agreement for its head office located at Suite 201 – 2067 Cadboro Bay Road, Victoria BC. The lease is for a period of 5 years, expiring November 30, 2024. The base rent for the next 12 months is anticipated to be $83,011 (CDN$112,056). The 12 month base rent takes into consideration the lease extension the Company signed on May 13, 2024 to extend the term of the lease by 12 months, expiring November 30, 2025.

In addition, the Company anticipates additional rent costs to be $72,183 (CDN$97,440) which relates to its portion of property taxes and operating costs. Additional rent is subject to adjustment at the end of each lease year based on actual costs incurred.

Convertible Debt Facility

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 SVB Agreement had a term of 36 months (or 48 months at SVB’s election). As SVB did not make such an election, the SVB Agreement matured on June 21, 2024.

The SVB Agreement 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 6.95% - 7.20%. During the nine months ended September 30, 2023, the Canadian prime rate ranged from 6.45% - 7.20%.

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 CDN$12 million convertible debt facility (“Convertible Debt Facility”). Under the Convertible Debt Facility, the Lenders will make available for drawdown an aggregate amount of CDN$12 million for a period of 120 days following entry into the agreement. The decision to draw on the facility within 120 days of closing is at the discretion of Eupraxia.

The Company granted the Lenders a security interest in all of its assets, excluding its patents and other intellectual property,

Convertible debt fees of $351,597 (CDN$480,000) were paid during the three and nine months ended September 30, 2024. Since there has not been a drawdown on the Convertible Debt Facility during the period, the fees have been treated as a prepaid expense.

On October 31, 2024, the Company entered into the Termination Agreement to terminate the Convertible Debt Facility, in connection with the closing of the Private Placement. Prior to termination, the Company did not drawdown on the Convertible Debt Facility. The Company has no further obligations to the Lenders under the Convertible Debt Facility. Commitment fees that were treated as a prepaid expense will be expensed as other expense in the fourth quarter.

Transactions with Related Parties

There were no transactions with related parties during the nine months ended September 30, 2024 and 2023, 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.

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:

i)	Share-based payments are measured at fair value, using the Black-Scholes option pricing model, at the grant<br>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; and<br>
ii)	The determination of the amount allocated to the liability and equity components (for those financial<br>instruments that are comprised of both). This requires management to estimate various components and characteristics of present value calculations used in determining the fair value of the instrument, including the market interest rates of non-convertible debentures.
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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<br>material uncertainty that may cast substantial doubt thereon.
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Upcoming Accounting Standards and Interpretations

Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, amounts receivable, accounts payable and accrued liabilities, payable to Auritec, loans payable and convertible debt.

There were no changes to the Company’s risk exposures or management of risks during nine months ended September 30, 2024. The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:

Creditrisk

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 with a large Canadian bank. In addition, amounts receivable relate to tax refunds and tax credit owed by various government agencies 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 assets. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at September 30, 2024, the Company had cash of $8,661,796 (2023 - $19,341,756) in addition to total liabilities of $2,387,005 (2023 - $19,373,903). Management is working on certain strategic alternatives to preserve its liquidity 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	Total		Less than 1 year		1-2 years
Accounts Payable and Accrued Interest<br>^(1)^ ****	$	2,293,956	$	2,293,956	$	—
Leases		97,447		83,011		14,436
Total Contractual Obligations	$	2,391,403	$	2,376,967	$	14,436
(1)	Included amounts owing to vendors as well as accrued interest.
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Market risk

Interest rate 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 U.S. dollars. The Company does not use derivatives to hedge against this risk however, it does pre-purchase U.S. dollars to cover the majority of anticipated U.S. dollar costs.

At September 30, 2024, the Company held cash of $2,595,605 (2023 – $933,816), had accounts payable of $817,887 (2023 – $1,292,128), a payable owing to Auritec of $nil (2023 – $5,000,000), amounts receivable of $33,578 (2023 – nil) and a loan payable of $nil (2023 – $62,709) denominated in U.S. dollars which were translated to Canadian dollars at 1.3499 (2023 – 1. 3226). The impact of a 10% change in the exchange rates would have an impact of approximately $181,130 (2023 – $542,102) on profit or loss. The Company also has accounts payable of £87,800 (2023 – £676) denominated in Great Britain pound sterling which was translated to Canadian dollars at 1.8080 (2023 – 1.6837). The impact of a 10% change in the exchange rate would have an impact of $11,760 (2023 – $86) on profit and loss. The Company also has cash in accounts payable in Australian dollars and Euros. The impact of a 10% change in the exchanges of these currencies would have an immaterial effect on future cash flows.

Other price risk

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, loans payable and convertible debt. With the exception of convertible debt, the carrying value of the Company’s financial instruments approximate their fair values due to their short-term maturities.

The following table summarizes information regarding the carrying values of the Company’s financial instruments measured at amortized cost:

Financial assets/liabilities	September 30,<br>2024		December 31,<br>2023
Cash	$	8,661,796	$	19,341,756
Amounts receivable		105,930		190,612
Accounts payable and accrued liabilities		2,293,956		3,921,875
Payable to Auritec		—		5,000,000
Loans payable		—		62,709

The following table summarizes information regarding the changes in fair value of convertible debt, categorized as Level 3:

Balance - December 31, 2022	$	8,741,996	****
Accrued interest		1,162,773
Interest paid		(591,170	)
Change in fair value		836,595
Foreign exchange		185,809
Balance - December 31, 2023	$	10,336,003	****
Accrued interest		601,637
Interest paid		(360,040	)
Change in fair value		(1,200,541	)
Principal repayment		(9,074,813	)
Foreign exchange		(302,246	)
Balance - September 30, 2024	$	—	****

For the convertible debt, the key inputs that affect the ongoing valuation are the discount price, the share price and the share price volatility.

Risks and Uncertainties

The primary risk factors affecting the Company are set forth under the heading “Risk Factors” in the Shelf Prospectus and the AIF.

Outstanding Share Capital

As of the date of this MD&A, the Company had 35,622,553 Common Shares issued and 8,905,638 Preferred Shares outstanding. The maximum number of additional Common Shares issuable, should all convertible rights be exercised are as follows:

Common Shares Issuable:	As of the date of MD&A
Options^(1)^		5,066,370
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)^		5,196,550
Compensation Warrants^(8)^		50,054
Nordic Warrants^(9)^		39,228
Preferred Shares ^(10)^		8,905,638
Total Common Shares Issuable	****	23,658,285

Notes:

(1)	Represents options outstanding under the Company’s stock option plan, each having an exercise price<br>between CDN$1.90 and CDN$8.00 and expiry dates ranging from March 31, 2025 to August 9, 2034.
(2)	Represents common share purchase warrants to acquire up to 380,921 Common Shares at an exercise price of<br>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.
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(3)	Represents common share purchase warrants to acquire 315,500 units, with each unit consisting of one Common<br>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<br>Company.
---	---
(4)	Represents Underlying Founder Warrants to acquire up to 315,500 Common Shares, at an exercise price of CDN$0.75<br>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<br>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,<br>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<br>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<br>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<br>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<br>the Common Shares.
---	---

(6)	Each common share purchase warrant is exercisable into one Common Share of the Company (each, a<br>“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<br>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<br>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<br>of CDN$3.00 per Common Share for a period of 48 months following the closing date of the 2022 Offering, being April 20, 2022. Of the 7,331,550 warrants issued, 2,135,000 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<br>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<br>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<br>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<br>average share price is greater than CDN$22.40 for five consecutive trading days.
---	---
(10)	Represents 8,905,638 Common Shares that are issuable on a one-to-one basis for no additional consideration upon conversion of the 8,905,638 Preferred Shares.
---	---

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, 2024 that have materially affected or are reasonably likely to materially affect the Company’s ICFR. No such changes were identified through their evaluation and concluded that as at September 30, 2024, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that material information regarding required disclosures was made known to them on a timely basis. The Company’s CEO and CFO will certify Eupraxia’s annual 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.

EX-99.3

Exhibit 99.3

LOGO

Eupraxia Pharmaceuticals Reports Third Quarter 2024 Financial Results

Victoria, B.C. – November 7, 2024 – Eupraxia Pharmaceuticals Inc. (“Eupraxia” or the “Company”) (NASDAQ:EPRX) (TSX: EPRX), a clinical-stage biotechnology company leveraging its proprietary DiffuSphere^™^ technology designed to optimize drug delivery for applications with significant unmet need, today announced its financial results for the third quarter of 2024. All dollar values are in U.S. dollars unless stated otherwise.

“During the third quarter, we advanced our Phase 1b/2a RESOLVE trial for EP-104GI as a treatment for eosinophilic esophagitis, reporting further positive results from the fourth cohort and presenting the data at prominent medical conferences internationally,” said Dr. James Helliwell, CEO of Eupraxia. “We also continued to raise the profile of our Phase 2b SPRINGBOARD osteoarthritis trial data through its publication in leading, peer-reviewed publication The Lancet Rheumatology. Beyond our important clinical progress, subsequent to quarter end, we raised C$44.5 million and now anticipate that our EP-104GI program is funded through Phase 2 development. Finally, we also strengthened our senior management team and board during the reporting period, ensuring we have the strongest possible team in place to drive Eupraxia forward. ”

Recent Operational and Financial Highlights

•	On September 11, 2024, the Company announced additional positive clinical data from its RESOLVE Phase 1b/2a<br>trial which is evaluating the safety and efficacy of EP-104GI as a treatment for eosinophilic esophagitis (“EoE”).
•	Presented RESOLVE clinical trial data at the Controlled Release Society 2024 Annual Meeting and Expo in Italy in<br>July, and at the 20th International Symposium on Digestive Endoscopy World Congress for Esophageal Diseases in Scotland in September.
---	---
•	Subsequent to quarter end, on October 2, 2024, the Company announced the appointment of Dr. Amanda<br>Malone as the Chief Operating and Scientific Officer of the Company. In addition, the Company announced the appointment of Dr. Rahul Sarugaser as Executive Vice President of Corporate Development.
---	---
•	Subsequent to quarter end, on October 15, 2024, the Company announced that Phase 2b data from its<br>SPRINGBOARD trial evaluating EP-104IAR for the treatment of knee osteoarthritis was published in leading peer reviewed medical journal The Lancet Rheumatology.
---	---
•	Subsequent to quarter end, on October 31, 2024, the Company announced the closing of a non-brokered private placement of C$44.5 million, the appointment of Mr. Joseph Freedman to its Board of Directors and the termination of its new C$12 million convertible debt facility.
---	---

Third Quarter 2024 Financial Review

The Company incurred a net loss of $6.0 million for the three months ended September 30, 2024, versus $4.9 million for the three months ended September 30, 2023. The increase in net loss was primarily driven by a reduction in Other Income associated with a change in the fair value of financial instruments.

The Company had cash of $8.7 million as of September 30, 2024, down from $19.3 million at the end of the fourth quarter of 2023. These funds are being used to fund clinical trials in EP-104 and the remainder of the proceeds will be used for general and administrative expenses, working capital needs and other general corporate purposes.

The Company anticipates that existing cash reserves, combined with the proceeds from the recently announced non-brokered private placement of C$44.5 million and anticipated proceeds from in-the-money warrants, will be sufficient to fund the Company to the third quarter of 2026.

As of September 30, 2024, the Company had 35,622,553 common shares issued and outstanding.

Financial Statements and Management Discussion & Analysis

Please see the unaudited interim condensed consolidated financial statements and related MD&A for more details. The unaudited interim condensed consolidated financial statements for the quarter ended September 30, 2024, 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/search-filings, and on SEDAR+ at sedarplus.ca and 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. The Company strives to provide improved patient benefit and has developed technology designed to deliver targeted, long-lasting activity with fewer adverse events. DiffuSphere^™^, a proprietary, polymer-based micro-sphere technology, is designed to facilitate targeted drug delivery, with extended duration of effect, and offers multiple, highly tuneable pharmacokinetic (PK) profiles. This investigational technology can be engineered for use with multiple active pharmaceutical ingredients and delivery methods.

Eupraxia’s EP-104GI is currently in a Phase 1b/2a 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 osteoarthritis of the knee. 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.

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 state 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 Company’s product candidates, including their expected benefits to patients with respect to safety, tolerability, efficacy and duration; the results gathered from studies and trials of Eupraxia’s product candidates; the potential for the Company’s technology to impact the drug delivery process; potential market opportunity for the Company’s products; potential pipeline indications; and expectations regarding the funding of the Company’s operations to the third quarter of 2026, including the funding of the EP-104GI program through Phase 2 development, and the use of proceeds. 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 products and services; 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.

For investor and media inquiries, please contact:

Danielle Egan, Eupraxia Pharmaceuticals Inc.

778.401.3302

degan@eupraxiapharma.com

Adam Peeler, on behalf of:

Eupraxia Pharmaceuticals Inc.

416.427.1235

adam.peeler@loderockadvisors.com

SOURCE Eupraxia Pharmaceuticals Inc.

EX-99.4

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<br>“interim filings”) of Eupraxia Pharmaceuticals Inc.** (the “issuer”) for the interim period ended September 30, 2024.
2.	No misrepresentations: **** Based on my knowledge, having exercised reasonable diligence, the<br>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<br>to the period covered by the interim filings.
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3.	Fair presentation: **** Based on my knowledge, having exercised reasonable diligence, the<br>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<br>periods presented in the interim filings.
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4.	Responsibility: The issuer’s other certifying officer(s) and I are responsible for<br>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 ofDisclosure in Issuers’ Annual and Interim Filings, for the issuer.
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5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the<br>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<br>
---	---
(i)	material information relating to the issuer is made known to us by others, particularly during the period in<br>which the interim filings are being prepared; and
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(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports<br>filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
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(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the<br>reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
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5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used<br>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<br>the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on September 30, 2024 ** that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.<br>
Date: November 7, 2024
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/s/ James Helliwell
James Helliwell
Chief Executive Officer

EX-99.5

Exhibit 99.5

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, Bruce Cousins, 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<br>“interim filings”) of Eupraxia Pharmaceuticals Inc.** (the “issuer”) for the interim period ended September 30, 2024.
2.	No misrepresentations: **** Based on my knowledge, having exercised reasonable diligence, the<br>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<br>to the period covered by the interim filings.
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3.	Fair presentation: **** Based on my knowledge, having exercised reasonable diligence, the<br>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<br>periods presented in the interim filings.
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4.	Responsibility: The issuer’s other certifying officer(s) and I are responsible for<br>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 ofDisclosure in Issuers’ Annual and Interim Filings, for the issuer.
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5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the<br>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<br>
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(i)	material information relating to the issuer is made known to us by others, particularly during the period in<br>which the interim filings are being prepared; and
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(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports<br>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<br>reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
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5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used<br>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<br>the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on September 30, 2024 ** that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.<br>
Date: November 7, 2024
---
/s/ Bruce Cousins
Bruce Cousins
Chief Financial Officer