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EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026
(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 | 3 | |||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | 4 | |||
| CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | 5 | |||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | 7 | |||
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 8-28 |
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited and Expressed in U.S.
Dollars, except share amounts)
| March 31, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 58,500,024 | $ | 80,563,482 | ||||
| Amounts receivable (Note 4) | 663,235 | 674,226 | ||||||
| Short-term investments (Note 5) | 80,378,789 | - | ||||||
| Prepaid expenses and deposits | 2,583,022 | 3,860,842 | ||||||
| Total current assets | 142,125,070 | 85,098,550 | ||||||
| Non-current assets | ||||||||
| Prepaid expenses | 61,754 | 64,332 | ||||||
| Property and equipment, net (Note 6) | 1,161,560 | 834,429 | ||||||
| Right-of-use asset, net (Note 7) | 2,004,958 | 152,697 | ||||||
| Total assets | $ | 145,353,342 | $ | 86,150,008 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (Note 8) | $ | 7,158,879 | $ | 5,549,553 | ||||
| Lease liability - current portion (Note 9) | 203,510 | 78,452 | ||||||
| Total current liabilities | 7,362,389 | 5,628,005 | ||||||
| Non-current liabilities | ||||||||
| Lease liability (Note 9) | 1,803,292 | 75,910 | ||||||
| Total liabilities | 9,165,681 | 5,703,915 | ||||||
| Shareholders' equity | ||||||||
| Preferred shares, without par value; unlimited shares authorized; issued and outstanding: 8,355,638 (December 31, 2025: 8,355,638 (Notes 11(c)) | 29,738,321 | 29,738,321 | ||||||
| Common shares, without par value; unlimited shares authorized; issued and outstanding: 61,808,630 (December 31, 2025 - 51,939,206 (Note 11(b)) | 255,497,022 | 195,406,895 | ||||||
| Additional paid-in capital (Notes 11(b), 11(d) and 11(e)) | 39,266,042 | 28,520,331 | ||||||
| Deficit | (182,233,405 | ) | (169,579,974 | ) | ||||
| Accumulated other comprehensive loss | (4,483,561 | ) | (2,044,137 | ) | ||||
| Equity attributable to the owners of the Company | 137,784,419 | 82,041,436 | ||||||
| Non-controlling interest | (1,596,758 | ) | (1,595,343 | ) | ||||
| Total shareholders' equity | 136,187,661 | 80,446,093 | ||||||
| Total liabilities and shareholders' equity | $ | 145,353,342 | $ | 86,150,008 |
Nature of business and going concern (Note 1)
Commitments and Contingencies (Note 14)
Subsequent event (Note
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 March 31, 2026 | Three Months ended March 31, 2025 | |||||||
| Expenses | ||||||||
| General and administrative (Note 12) | $ | 4,783,089 | $ | 3,274,394 | ||||
| Research and development (Note 13) | 11,173,956 | 3,849,826 | ||||||
| Total expenses | 15,957,045 | 7,124,220 | ||||||
| Other income/(expenses) | ||||||||
| Interest income | 1,074,072 | 309,452 | ||||||
| Loss on sale of equipment (Note 6) | - | (1,075 | ) | |||||
| Foreign exchange gain | 2,242,032 | 51,362 | ||||||
| Total other income | 3,316,104 | 359,739 | ||||||
| Loss before tax expense | (12,640,941 | ) | (6,764,481 | ) | ||||
| Tax expense | (13,905 | ) | (2,794 | ) | ||||
| Net loss for the period | $ | (12,654,846 | ) | $ | (6,767,275 | ) | ||
| Loss attributable to: | ||||||||
| Owners of the Company | $ | (12,653,431 | ) | $ | (6,762,608 | ) | ||
| Non-controlling interest | (1,415 | ) | (4,667 | ) | ||||
| (12,654,846 | ) | (6,767,275 | ) | |||||
| Foreign currency translation adjustment | (2,439,424 | ) | 38,164 | |||||
| Comprehensive loss for the period | $ | (15,094,270 | ) | $ | (6,729,111 | ) | ||
| Loss per share - basic and diluted (Owners of the Company (Note 11(h)) | $ | (0.23 | ) | $ | (0.21 | ) | ||
| Weighted average shares outstanding - basic and diluted | 56,712,624 | 35,686,256 |
The accompanying notes are an integral part of these consolidated financial statements.
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited and Expressed in U.S. Dollars, except share amounts)
| Preferred Shares | Amount | Common Shares | Amount | Additional Paid-in Capital | Deficit | Accumulated Other Comprehensive Loss | Non-Controlling Interest | Total-Shareholders' Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | 8,905,638 | $ | 31,705,219 | 35,641,603 | $ | 116,360,066 | $ | 20,503,904 | $ | (131,003,831 | ) | $ | (4,160,555 | ) | $ | (1,565,834 | ) | $ | 31,838,969 | |||||||||||||||||
| Share-based payments (Note 11(d)) | - | - | - | - | 1,493,407 | - | - | - | 1,493,407 | |||||||||||||||||||||||||||
| Exercise of warrants (Notes 11(b)(i) and 11(e)) | - | - | 200,000 | 458,047 | (41,641 | ) | - | - | - | 416,406 | ||||||||||||||||||||||||||
| Exercise of options (Notes 11(b)(ii) and 11(d)) | - | - | 7,750 | 22,175 | (8,658 | ) | - | - | - | 13,517 | ||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | (6,762,608 | ) | - | (4,667 | ) | (6,767,275 | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | 38,164 | - | 38,164 | |||||||||||||||||||||||||||
| Balance, March 31, 2025 | 8,905,638 | $ | 31,705,219 | 35,849,353 | $ | 116,840,288 | $ | 21,947,012 | $ | (137,766,439 | ) | $ | (4,122,391 | ) | $ | (1,570,501 | ) | $ | 27,033,188 |
The accompanying notes are an integral part of these consolidated financial statements.
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited and Expressed in U.S. Dollars, except share amounts)
| Preferred Shares | Amount | Common Shares | Amount | Additional Paid-in Capital | Deficit | Accumulated Other Comprehensive Loss | Non-Controlling Interest | Total-Shareholders' Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2025 | 8,355,638 | $ | 29,738,321 | 51,939,206 | $ | 195,406,895 | $ | 28,520,331 | $ | (169,579,974 | ) | $ | (2,044,137 | ) | $ | (1,595,343 | ) | $ | 80,446,093 | |||||||||||||||||
| Issuance of common shares and pre-funded warrants, net of transaction costs (Note 11(b)(v) and 11(f)) | - | - | 7,607,145 | 49,364,657 | 9,270,238 | - | - | - | 58,634,895 | |||||||||||||||||||||||||||
| Share-based payments (Note 11(d)(iii) and 11(d)(v)) | - | - | - | - | 2,252,856 | - | - | - | 2,252,856 | |||||||||||||||||||||||||||
| Exercise of warrants (Notes 11(b)(iv) and 11(e)) | - | - | 2,226,279 | 10,535,670 | (701,438 | ) | - | - | - | 9,834,232 | ||||||||||||||||||||||||||
| Exercise of options (Notes 11(b)(iii) and 11(d)(iii)) | - | - | 36,000 | 189,800 | (75,945 | ) | - | - | - | 113,855 | ||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | (12,653,431 | ) | - | (1,415 | ) | (12,654,846 | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | (2,439,424 | ) | - | (2,439,424 | ) | |||||||||||||||||||||||||
| Balance, March 31, 2026 | 8,355,638 | $ | 29,738,321 | 61,808,630 | $ | 255,497,022 | $ | 39,266,042 | $ | (182,233,405 | ) | $ | (4,483,561 | ) | $ | (1,596,758 | ) | $ | 136,187,661 |
The accompanying notes are an integral part of these consolidated financial statements.
EUPRAXIA PHARMACEUTICALS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and Expressed
| Three Months ended March 31, 2026 | Three Months ended March 31, 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (12,654,846 | ) | $ | (6,767,275 | ) | ||
| Items not affecting cash | ||||||||
| Accrued interest on short-term investments Depreciation (Note 6 and 7) | (378,988 90,146 | ) | - 46,487 | |||||
| Interest - lease liability | 12,059 | 1,187 | ||||||
| Loss on sale of equipment (Note 6) | - | 1,075 | ||||||
| Share-based payments (Note 11(d)) | 2,252,856 | 1,493,407 | ||||||
| Lease payments (Note 9) | (41,783 | ) | (20,371 | ) | ||||
| Unrealized foreign exchange | (2,229,297 | ) | (50,182 | ) | ||||
| Changes in operating assets and liabilities | ||||||||
| Accounts payable and accrued liabilities | 1,539,474 | (894,360 | ) | |||||
| Prepaid expenses | 1,239,668 | 195,636 | ||||||
| Amounts receivable | 23,964 | (8,675 | ) | |||||
| Cash used in operating activities | (10,146,747 | ) | (6,003,071 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Acquisition of equipment (Note 6) | (326,953 | ) | (169,044 | ) | ||||
| Purchase of short-term investments (Note 5) | (79,724,564 | ) | - | |||||
| Cash used in investing activities | (80,051,517 | ) | (169,044 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Issuance of common shares and prefunded warrants (net of transaction costs) (Note 11(b)(v) and (11(f)) | 58,634,895 | - | ||||||
| Exercise of warrants (Note 11(e)) | 9,834,232 | 416,406 | ||||||
| Exercise of options (Note 11(d)) | 113,855 | 13,517 | ||||||
| Cash provided by financing activities | 68,582,982 | 429,923 | ||||||
| Increase (decrease) in cash | (21,615,282 | ) | (5,742,192 | ) | ||||
| Foreign exchange effect on cash | (448,176 | ) | 95,496 | |||||
| Cash and cash equivalents, beginning of period | 80,563,482 | 33,101,294 | ||||||
| Cash and cash equivalents, end of period | $ | 58,500,024 | $ | 27,454,598 |
Supplemental disclosure with respect to cash flows (Note 17)
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.
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
2198 Yukon Street, Vancouver, British Columbia, Canada.
These consolidated financial statements of the Company have been prepared on a
going concern basis with the assumption that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. At March 31, 2026, the Company had cash and cash equivalents of
$58,500,024 as well as short-term investments of $80,378,789. The Company has not yet generated revenue from operations. The Company incurred a net loss of $12,654,846 during the three months ended March 31, 2026, and as of that date, the
Company's accumulated deficit was $182,233,405. As the Company is in the research and development stage, the recoverability of the costs incurred to date is dependent upon the ability of the Company to obtain the necessary funding to complete
the research and development of its projects and upon future commercialization or proceeds from the monetization of research activities.
The Company will periodically have to raise funds to continue operations and recently raised proceeds of approximately $58.6 million (net
of underwriting commissions and estimated expenses) through a public offering of 7,607,145 common shares of the Company and pre-funded warrants to purchase up to 1,428,571 common shares on February 20,
2026. Although it has been successful in doing so in the past, there is no assurance it will be able to do so in the future, especially with the ongoing geopolitical uncertainty affecting the global capital markets. The Company is active in its
pursuit of additional funding through potential partnering and other strategic activities as well as grants to fund future research and development activities, and additional equity financing.
The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional funding. There is a
risk that in the future, additional financing will not be available on a timely basis or on terms acceptable to the Company.
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"). 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, 2025 included in the
Company's 2025 40-F filed with the SEC and on SEDAR+ on March 13, 2026.
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 three months ended March 31, 2026, and 2025 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 2025 Form 40-F for the year ended December 31, 2025.
Basis of Measurement
unaudited interim consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at fair value. The unaudited interim consolidated financial statements are presented in
U.S. dollars, which is the Company's reporting currency. The Company's functional currency is the Canadian dollar.
preparation of unaudited interim consolidated financial statements in accordance with U.S. GAAP requires the Company to make estimates and judgments in certain circumstances that affect the reported amounts of assets, liabilities, expenses, and
related disclosure. On an ongoing basis, the Company evaluates its estimates, most notably those related to accrual of expenses including clinical and preclinical study expense accruals, stock-based compensation and the valuation allowance for
deferred taxes. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from these estimates.
unaudited interim consolidated financial statements include the accounts of the Company and the accounts of its subsidiaries. The financial statements of subsidiaries are included in the unaudited interim consolidated financial statements from the
date that control commences until the date that control ceases. Control exists when an entity is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect these returns through its power over the
entity. All significant intercompany transactions and balances have been eliminated.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting
Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). This standard requires public business entities to disclose, in the footnotes, a tabular disaggregation of certain expense
captions into specific natural categories. The standard is effective for the Company's annual reporting periods beginning after December 15, 2026 (fiscal year 2027). The Company does not intend to early adopt this guidance and is
currently evaluating the impact that the adoption will have on its financial statement disclosures.
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited and Expressed in U.S. Dollars, except share amounts)
| March 31, 2026 | December 31, 2025 | |||||||
| GST/HST recoverable | $ | 186,568 | $ | 210,302 | ||||
| Other refundable tax credits (1) | 476,667 | 463,924 | ||||||
| Total | $ | 663,235 | $ | 674,226 |
As of March 31, 2026, the Company had short-term investments of $80,378,789. The following table presents details of movement in the
carrying value of the short-term investments:
| March 31, 2026 | December 31, 2025 | |||||||
| Balance, beginning | - | - | ||||||
| Additions | $ | 79,724,564 | - | |||||
| Interest income | 378,988 | - | ||||||
| Foreign Exchange | 275,237 | - | ||||||
| Balance, ending | $ | 80,378,789 | - |
EUPRAXIA PHARMACEUTICALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS