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EUPRAXIA PHARMACEUTICALS INC. CONSOLIDATED FINANCIAL STATEMENTS For the Three and Nine Months ended

Key Takeaway: Eupraxia Pharmaceuticals Inc. released its consolidated financial statements for the three and nine months ended September 30, 2024. The company reported a net loss of $5,991,320 for Q3 2024, which is an increase compared to the $4,896,082 loss in Q3 2023. Total current assets have declined significantly, and liabilities remain a concern as they have decreased but are still substantial. Shareholders' equity has increased notably due to recent capital raises, but ongoing losses cast uncertainty on financial health.

Market Sentiment Analysis

CONCERNS & RISKS

  • Eupraxia reported a significant net loss for the period, amounting to $5,991,320 for Q3 2024.
  • The company's total liabilities have decreased but still stand at $2,387,005 compared to $19,373,903 previously.
  • Total current assets have dropped to $9,889,979 from $19,803,078, indicating potential liquidity issues.

Full Press Release Details

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
(Unaudited and Expressed in U.S. Dollars)
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, 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 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 (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 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 months ended September 30, 2024 Three months ended September 30, 2023 Nine months ended September 30, 2024 Nine months ended 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)
Number of shares Amount Additional paid-in capital Deficit Accumulated other comprehensive loss Non-controlling interest 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 (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)
Number of shares Amount Additional paid-in capital Deficit Accumulated other comprehensive loss Non-controlling interest 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
Nine months ended September 30, 2024 Nine months 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 (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
(Unaudited and Expressed in U.S. Dollars, except share amounts)
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.
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
(Unaudited and Expressed in U.S. Dollars, except share amounts)
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 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.
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
(Unaudited and Expressed in U.S. Dollars, except share amounts)
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
Property and equipment consisted of the following:
Computers Office furniture and equipment Leasehold Improvements Lab 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.

Frequently Asked Questions

What were Eupraxia's total current assets by September 30, 2024?

Eupraxia's total current assets were $9,889,979.

What was Eupraxia's net loss for Q3 2024?

Eupraxia reported a net loss of $5,991,320 for Q3 2024.

How much cash did Eupraxia have by September 30, 2024?

Eupraxia had $8,661,796 in cash by September 30, 2024.

What was Eupraxia's shareholders' equity at the end of Q3 2024?

The shareholders' equity was $7,977,897 at the end of Q3 2024.

What were Eupraxia's total liabilities by September 30, 2024?

Eupraxia's total liabilities were $2,387,005 as of September 30, 2024.

Last updated: Nov 7, 2024