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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38899

Milestone Pharmaceuticals Inc.

(Exact Name of Registrant as Specified in its Charter)

Québec		Not applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1111 Dr. Frederik-Philips Boulevard, Suite 420

Montréal, Québec CA H4M 2X6

(514) 336-0444

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Shares		MIST		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 12, 2025, the registrant had 85,169,344 common shares, no par value per share, outstanding.

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		Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		1

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Loss	4
	Condensed Consolidated Statements of Shareholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33

PART II.	OTHER INFORMATION	33

Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	40
Item 6.	Exhibits	41

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“Milestone Pharmaceuticals” and the Milestone logo appearing in this Quarterly Report on Form 10-Q are unregistered trademarks of Milestone Pharmaceuticals Inc. All other trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Quarterly Report on Form 10-Q may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

This Quarterly Report on Form 10-Q contains references to United States dollars and Canadian dollars. All dollar amounts referenced, unless otherwise indicated, are expressed in United States dollars. References to “$” are to United States dollars and references to “C$” are to Canadian dollars.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “positioned,” “potential,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, regarding, among other things:

●

the initiation, timing, progress and results of our current and future clinical trials of etripamil, including our Phase 3 clinical trials of etripamil for the treatment of paroxysmal supraventricular tachycardia, our Phase 2 clinical trial of etripamil for the treatment of atrial fibrillation and rapid ventricular rate, and of our research and development programs;

●

our ability to develop and, if approved by regulatory authorities, commercialize etripamil in China, Hong Kong, Macau and Taiwan through our license agreement with Corxel Pharmaceuticals, or “Corxel,” formerly Ji Xing Pharmaceuticals Limited, JIXING;

●

our plans to develop and commercialize etripamil and any future product candidates;

●

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

●

our ability to establish collaborations or obtain additional funding;

●

our ability to obtain regulatory approval of our current and future product candidates;

●

our expectations regarding the potential market size and the rate and degree of market acceptance of etripamil and any future product candidates;

●

our ability to fund our working capital requirements and expectations regarding the sufficiency of our capital resources;

●

the implementation of our business model and strategic plans for our business, etripamil and any future product candidates;

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●

our intellectual property position and the duration of our patent rights;

●

developments or disputes concerning our intellectual property or other proprietary rights;

●

our expectations regarding government and third-party payor coverage and reimbursement;

●

our ability to compete in the markets we serve;

●

the impact of government laws and regulations;

●

developments relating to our competitors and our industry;

●

the effects of international trade policies, including tariffs, sanctions and trade barriers; and

●

other factors that may impact our financial results.

The foregoing list of risks is not exhaustive. Other sections of this Quarterly Report on Form 10-Q and the section titled “Risk Factors” previously disclosed in Part I, Item 1A. in our Annual Report on Form 10-K may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

In light of significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. You should refer to the section titled "Risk Factors" previously disclosed in Part I, Item 1A. in our Annual Report on Form 10-K, filed with the SEC and under Milestone’s SEDAR+ profile at www.sedarplus.com on March 13, 2025, for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Milestone Pharmaceuticals Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands of US dollars, except share data)



	September 30, 2025		December 31, 2024
Assets

Current assets
Cash and cash equivalents	$	46,685	$	25,314
Short-term investments		35,900		44,381
Research and development tax credits receivable		808		901
Prepaid expenses		2,577		1,840
Other receivables		700		1,490
Total current assets		86,670		73,926
Operating lease right-of-use assets		944		1,376
Property and equipment		136		197
Total assets	$	87,750	$	75,499

Liabilities, and Shareholders' Equity

Current liabilities
Accounts payable and accrued liabilities	$	10,041	$	7,555
Operating lease liabilities		483		571
Total current liabilities		10,524		8,126
Operating lease liabilities, net of current portion		519		874
Senior secured convertible notes		56,206		53,352
Total liabilities		67,249		62,352


Shareholders’ Equity
Common shares, no par value, unlimited shares authorized, 85,169,344 shares issued and outstanding as of September 30, 2025, 53,353,984 shares issued and outstanding as of December 31, 2024		311,776		288,048
Pre-funded warrants - 16,412,925 issued and outstanding as of September 30, 2025 and 12,910,590 as of December 31, 2024		55,649		53,076
Additional paid-in capital		66,270		39,568
Accumulated deficit		(413,194)		(367,545)

Total shareholders’ equity		20,501		13,147

Total liabilities and shareholders’ equity	$	87,750	$	75,499

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

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Milestone Pharmaceuticals Inc.

Condensed Consolidated Statements of Loss (Unaudited)

(in thousands of US dollars, except share and per share data)



	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024

Revenue	$	—	$	—	$	—	$	—

Operating expenses
Research and development, net of tax credits		3,940		3,963		12,587		10,417
General and administrative		3,263		3,742		12,189		12,741
Commercial		4,626		1,911		20,107		6,596

Loss from operations		(11,829)		(9,616)		(44,883)		(29,754)

Interest income		874		1,080		2,087		3,260
Interest expense		(967)		(903)		(2,853)		(2,662)

Net loss and comprehensive loss	$	(11,922)	$	(9,439)	$	(45,649)	$	(29,156)

Weighted average number of shares and pre-funded warrants outstanding, basic and diluted		96,494,588		66,190,302		76,497,361		60,856,495

Net loss per share, basic and diluted	$	(0.12)	$	(0.14)	$	(0.60)	$	(0.48)

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

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Milestone Pharmaceuticals Inc.

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

(in thousands of US dollars, except share data)


	Common Shares			Pre-funded warrants
	Number of shares	Amount		Number of warrants	Amount		Additional paid-in capital		Accumulated deficit		Total
Balance as of June 30, 2024	53,269,565	$	287,932	12,910,590	$	53,076	$	36,713	$	(345,743)	$	31,978
Transactions in three-month period ended September 30, 2024
Net loss	—		—	—		—		—		(9,439)		(9,439)
Exercise of stock options	—		—	—		—		—		—		—
Share-based compensation	—		—	—		—		1,399		—		1,399
Employee stock purchase plan purchases	58,343		74	—		—		—		—		74
Balance as of September 30, 2024	53,327,908	$	288,006	12,910,590	$	53,076	$	38,112	$	(355,182)	$	24,012

Balance as of June 30, 2025	53,494,261	$	288,263	12,910,590	$	53,076	$	42,188	$	(401,272)	$	(17,745)
Transactions in three-month period ended September 30, 2025
Net loss	—		—	—		—		—		(11,922)		(11,922)
Exercise of stock options	79,602		211	—		—		(88)		—		123
Pre-funded warrants, net of issuance costs	—		—	3,502,335		2,573		—		—		2,573
Share-based compensation	—		—	—		—		1,250		—		1,250
Issuance of common shares, net of issuance costs	31,500,000		23,143	—		—		—		—		23,143
Issuance of Series A common stock warrants, net of issuance costs	—		—	—		—		9,504		—		9,504
Issuance of Series B common stock warrants, net of issuance costs	—		—	—		—		13,416		—		13,416
Employee stock purchase plan purchases	95,481		159	—		—		—		—		159
Balance as of September 30, 2025	85,169,344	$	311,776	16,412,925	$	55,649	$	66,270	$	(413,194)	$	20,501

Balance as of December 31, 2023	33,483,111	$	260,504	9,577,257	$	48,459	$	33,834	$	(326,026)	$	16,771
Transactions in nine-month period ended September 30, 2024
Net loss	—		—	—		—		—		(29,156)		(29,156)
Exercise of stock options	24,400		53	—		—		(24)		—		29
Pre-funded warrants, net of issuance costs	—		—	3,333,333		4,617		—		—		4,617
Share-based compensation	—		—	—		—		4,302		—		4,302
Issuance of common shares, net of issuance costs	19,666,667		27,258	—		—		—		—		27,258
Employee stock purchase plan purchases	153,730		191	—		—		—		—		191
Balance as of September 30, 2024	53,327,908	$	288,006	12,910,590	$	53,076	$	38,112	$	(355,182)	$	24,012

Balance as of December 31, 2024	53,353,984	$	288,048	12,910,590	$	53,076	$	39,568	$	(367,545)	$	13,147
Transactions in nine-month period ended September 30, 2025
Net loss	—		—	—		—		—		(45,649)		(45,649)
Exercise of stock options	109,590		285	—		—		(127)		—		158
Pre-funded warrants, net of issuance costs	—		—	3,502,335		2,573		—		—		2,573
Share-based compensation	—		—	—		—		3,909		—		3,909
Issuance of common shares, net of issuance costs	31,500,000		23,143	—		—		—		—		23,143
Issuance of Series A common stock warrants, net of issuance costs	—		—	—		—		9,504		—		9,504
Issuance of Series B common stock warrants, net of issuance costs	—		—	—		—		13,416		—		13,416
Employee stock purchase plan purchases	205,770		300	—		—		—		—		300
Balance as of September 30, 2025	85,169,344	$	311,776	16,412,925	$	55,649	$	66,270	$	(413,194)	$	20,501

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

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Milestone Pharmaceuticals Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands of US dollars)


	Nine months ended September 30,
	2025		2024
Cash flows used in operating activities
Net loss	$	(45,649)	$	(29,156)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		80		79
Amortization of debt costs		317		273
Accretion of investment discount		(81)		(337)
Non-cash interest expense related to debt		2,537		2,389
Share-based compensation expense		3,909		4,302
Loss on disposals of property and equipment		—		8
Changes in operating assets and liabilities:
Other receivables		790		1,997
Research and development tax credits receivable		93		(194)
Prepaid expenses		(737)		655
Operating lease assets and liabilities		(11)		(17)
Accounts payable and accrued liabilities		2,486		(2,004)

Net cash used in operating activities		(36,266)		(22,005)

Cash provided by (used in) investing activities
Acquisition of property and equipment		(19)		(11)
Acquisition of short-term investments		(35,904)		(99,585)
Redemption of short-term investments		44,466		88,545

Net cash provided by (used in) investing activities		8,543		(11,051)

Cash provided by financing activities
Proceeds from exercise of options		158		29
Proceeds from issuance of common shares, net of issuance costs		23,143		27,258
Proceeds from issuance of pre-funded warrants, net of issuance costs		2,573		4,617
Proceeds from issuance of series A common stock warrants, net of issuance costs		9,504		—
Proceeds from issuance of series B common stock warrants, net of issuance costs		13,416		—
Proceeds from employee stock purchase plan		300		191

Cash provided by financing activities		49,094		32,095

Net increase (decrease) in cash and cash equivalents		21,371		(961)

Cash and cash equivalents – Beginning of period		25,314		13,760

Cash and cash equivalents – End of period	$	46,685	$	12,799

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

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

1 Organization and Nature of Operations

Milestone Pharmaceuticals Inc., or “Milestone,” or the “Company,” is a biopharmaceutical company incorporated under the Business Corporations Act (Québec). Milestone’s headquarters is currently located in Montréal (Québec), Canada. Our common shares began trading on The Nasdaq Global Select Market on May 9, 2019. Our common shares trade under the symbol “MIST”. Milestone is focused on the development and commercialization of cardiovascular medicines. Milestone’s lead product candidate, etripamil, is a novel, potent rapid-onset calcium channel blocker that the Company designed and is developing as a rapid-onset nasal spray to be administered by patients. The Company is developing etripamil to treat paroxysmal supraventricular tachycardia, atrial fibrillation, and other cardiovascular indications.

2 Summary of Significant Accounting Policies

a) Basis of Consolidation

The condensed consolidated financial statements include the accounts of the Company and Milestone Pharmaceuticals USA, Inc. All intercompany transactions and balances have been eliminated.

b) Basis of Presentation and Use of Accounting Estimates and Significant Accounting Policies

These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or “U.S. GAAP,” pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC) for interim financial information, and on a basis consistent with those accounting principles followed by the Company and disclosed in Note 2 of its most recent annual consolidated financial statements. Certain information, in particular the accompanying notes normally included in the annual financial statements prepared in accordance with U.S. GAAP have been omitted or condensed. Accordingly, these unaudited interim condensed consolidated financial statements do not include all the information required for full annual financial statements, and therefore, should be read in conjunction with the annual consolidated financial statements and the notes thereto for the year ended December 31, 2024.

In the opinion of the Company's management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its condensed consolidated balance sheet as of September 30, 2025, and its condensed consolidated statements of loss and shareholders’ equity for the three and nine months ended September 30, 2025 and 2024, and its condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024.

The condensed consolidated balance sheet as of December 31, 2024, was derived from the audited annual consolidated financial statements, but does not contain all the footnote disclosures required by accounting principles generally accepted in the United States of America.

These unaudited interim condensed consolidated financial statements are presented in US dollars, which is the Company’s functional currency.

The preparation of unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to,

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

●

Estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with clinical research organizations, or “CROs,” contract manufacturing organizations, or “CMOs,” and clinical trial sites which in turn impact the research and development, or “R&D,” expenses.

●

Estimate of the grant date fair value of share options granted to employees, consultants and directors, and the resulting share-based compensation expense, using the Black-Scholes option-pricing model.

c) Significant Risks and Uncertainties

The Company is subject to challenges and risks specific to its business and its ability to execute on its strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its product candidate; delays or problems in the supply of its study drug or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; and the challenges of protecting and enhancing its intellectual property rights; and complying with applicable regulatory requirements.

Further, the Company may be impacted by general economic, political, and market conditions, including deteriorating market conditions due to investor concerns regarding inflation, tariffs, armed conflicts, and overall fluctuations in the financial markets in the U.S. and abroad.

d) Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or “ASU 2023-09.” The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments also require entities on an annual basis to disclose disaggregated amounts of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating this guidance for impacts on its annual income tax disclosures.

In November 2024, the FASB issued ASU 2024-03 “Income Statement: Reporting Comprehensive Income— Expense Disaggregation Disclosures,” which requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement, as well as disclosures about selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its financial statement disclosures.

e) Sources of Liquidity and Funding Requirements

The Company continues to incur operating losses, has experienced negative operating cash flows since its inception, and anticipates continuing to incur losses for the immediate future. As of September 30, 2025, the Company had cash, cash equivalents and short-term investments of $82.6 million and an accumulated deficit of $413.2 million. As a result of the Complete Response Letter, or the “CRL,” received in March 2025 from the Food and Drug Administration, the Company temporarily paused the ramping up of operational expenditures related to the commercialization of etripamil and is monitoring its cash flows. Management has evaluated the Company’s operating plan and future cash flow requirements

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

against its existing cash and cash equivalents and short-term investments and expects its available liquidity will be sufficient to support its operations for at least the next 12 months from the date of issuance of these unaudited interim condensed consolidated financial statements.

3 Revenues

The Company recorded no revenue for the three and nine months ended September 30, 2025 and 2024, respectively. We earn license revenue when milestones are reached pursuant to our License and Collaboration Agreement, dated May 15, 2021, with Corxel Pharmaceuticals, or “Corxel,” formerly known as Ji Xing Pharmaceuticals Limited (such party “Ji Xing,” and such agreement, the “Ji Xing License Agreement”). During the three and nine months ended September 30, 2025 and 2024, no milestones were achieved under this agreement. For details on the arrangement with Corxel, see Note 3 to our audited consolidated financial statements for the year ended December 31, 2024, filed on Form 10-K.

4 Short-term Investments

Short-term investments are classified as held-to-maturity, are initially recognized at fair value and are subsequently accounted for at amortized cost. They are comprised of guaranteed investment certificates and U.S. treasury bills with a maturity greater than 90 days but less than one year and, as such, are classified as current assets.

As of September 30, 2025, $0.9 million in short-term investments were pledged as collateral for a letter of credit.

5 Debt

On March 29, 2023, we closed the transactions contemplated by a note purchase agreement, or the “Note Purchase Agreement,” with RTW Investments LP and certain of its affiliates, or collectively, “RTW,” and issued and sold $50.0 million principal amount of 6.0% Convertible Senior Notes due 2029, or the “2029 Convertible Notes,” to the holders. For more details on the agreement with RTW, see Note 10 to our audited consolidated financial statements for the year ended December 31, 2024, filed on Form 10-K.

In accounting for the issuance of the 2029 Convertible Notes, the Company determined there were no embedded features, which require bifurcation between debt and equity components. As a result, the 2029 Convertible Notes are accounted for as a liability. As of September 30, 2025, the estimated fair value of the Convertible Notes was approximately $60.3 million based on level 2 inputs.

The net carrying amount of the Convertible Note is as follows:



	September 30, 2025		December 31, 2024
Original principal	$	50,000	$	50,000
Paid in kind (PIK) interest		8,056		5,520
Unamortized debt discount		(399)		(468)
Unamortized debt issuance costs		(1,451)		(1,700)
Total	$	56,206	$	53,352

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

The following table presents the total amount of interest cost recognized relating to the 2029 Convertible Notes:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Contractual interest expense	$	858	$	808	$	2,536	$	2,389
Amortization of debt discount		24		20		68		59
Amortization of debt issuance costs		85		75		249		214
Total interest expense	$	967	$	903	$	2,853	$	2,662

6 Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities are comprised of the following:


	September 30, 2025		December 31, 2024

Trade accounts payable	$	3,183	$	1,932
Accrued compensation and benefits payable		2,411		2,501
Accrued research and development liabilities		1,313		631
Accrued commercial liabilities		2,584		1,935
Accrued legal liabilities		32		76
Other accrued liabilities		518		480
Total	$	10,041	$	7,555

7 Shareholders’ Equity

Authorized Share Capital

The Company has authorized and issued common shares, voting and participating, without par value, of which unlimited shares were authorized, and 85,169,344 shares were issued and outstanding as of September 30, 2025.

As of September 30, 2025, there were 2,332,305 common shares available for issuance under the Employee Stock Purchase Plan, or the “ESPP,” of which 1,830,799 are available for future purchases.

On July 11, 2025, the Company entered into an underwriting agreement, or the “Underwriting Agreement,” related to an underwritten public offering, or the “2025 Offering,” of (i) 31,500,000 of the Company’s common shares, without par value, accompanying Series A common warrants, or the “Series A Common Warrants,” to purchase an aggregate of 31,500,000 common shares and accompanying Series B common warrants, or the “Series B Common Warrants,” to purchase an aggregate of 31,500,000 common shares, at a combined public offering price of $1.50 per share and accompanying Series A Common Warrant and Series B Common Warrant and (ii) in lieu of common shares to certain investors that so choose, pre-funded warrants to purchase 3,502,335 common shares, or the “2025 Pre-Funded Warrants” and, together with the Series A Common Warrants and the Series B Common Warrants, the “Warrants,” accompanying Series A Common Warrants to purchase an aggregate of 3,502,335 common shares and accompanying Series B Common Warrants to purchase an aggregate of 3,502,335 common shares, at a combined public offering price of $1.499 per Pre-Funded Warrant and accompanying Series A Common Warrant and Series B Common Warrant, which represented the combined public offering price for the Shares and accompanying common warrants less the $0.001 per share exercise price for each such Pre-Funded Warrant. All the Securities sold in the 2025 Offering were sold by the Company.

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

The net proceeds to the Company from the 2025 Offering were $48.6 million after deducting underwriting commissions and estimated offering expenses payable by the Company.

On February 28, 2024, we entered into an underwriting agreement related to an underwritten public offering of 16,666,667 of our common shares, without par value, at a public offering price of $1.50 per share and, in lieu of common shares to certain investors, pre-funded warrants to purchase 3,333,333 common shares at a public offering price of $1.499 per pre-funded warrant. Each pre-funded warrant has an exercise price of $0.001 per share. The pre-funded warrants were exercisable immediately upon issuance, subject to certain beneficial ownership limitations. Under the terms of the agreement, we granted the underwriters party an option to purchase up to an additional 3,000,000 common shares at the same price per share as the other common shares sold in this offering, which was exercised by such underwriters in full on February 29, 2024.

The Company determines the accounting classification of warrants that are issued, as either liability or equity, by first assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, and then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. Under ASC 480, warrants are considered liability classified if the warrants are mandatorily redeemable, obligate the issuer to settle the warrants or the underlying shares by paying cash or other assets, or must or may require settlement by issuing a variable number of shares.

If warrants do not meet liability classification under ASC 480-10, the Company assesses the requirements under ASC 815-40, which states that contracts that require or may require the issuer to settle the contract for cash are liabilities recorded at fair value, irrespective of the likelihood of the transaction occurring that triggers the net cash settlement feature. If the warrants do not require liability classification under ASC 815-40, in order to conclude equity classification, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable U.S. GAAP. After all relevant assessments are made, the Company concludes whether the warrants are classified as liability or equity. The Company's outstanding common stock warrants are classified as equity and recorded in APIC, based on an allocation of the proceeds from the 2025 Offering, which was based on the relative fair value of the Series A and B common warrants at the issuance date and is not subject to change after the issuance date. The fair value used for the relative fair value allocation was calculated using the Black-Scholes Model for the Series A warrants and the Monte-Carlo simulation method for the Series B warrants. As of September 30, 2025, 35,002,335 Series A Common Warrants and 35,002,335 Series B Common Warrants remained outstanding.

8 Share-Based Compensation

Stock Options

Under the Company’s 2019 Equity Incentive Plan, or the “2019 Plan,” and the Company’s Stock Option Plan, or the “2011 Plan,” unless otherwise decided by the Board of Directors, options vest and are exercisable as follows: 25% vest and are exercisable on the one year anniversary of the grant date and one thirty-sixth (1/36^th) of the remaining options vest and are exercisable each month thereafter, such that options are vested in full on four-year anniversary of the grant date.

On January 1, 2025, the number of the Company’s common shares reserved for issuance under the 2019 Plan automatically increased by 2,134,159 common shares. Further, on June 10, 2025, the number of the Company’s common shares reserved for issuance under the 2019 Plan increased by an additional 4,000,000 shares, which was approved during the Annual General Meeting of Shareholders. In addition, 125,323 options have been forfeited under the 2011 Plan since the adoption of the 2019 Plan and have become available for issuance under the 2019 Plan. Further, since the adoption of the plan, 561,000 of previously issued options were cancelled and were made available for future grants. As of September 30, 2025, there were 15,656,429 common shares available for issuance under the 2019 Plan, of which 4,730,684 common shares were available for future grants.

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

On November 10, 2021, the Company established a 2021 Inducement Plan, or the “Inducement Plan,” through the granting of awards. This 2021 Inducement Plan is intended to help the Company provide an inducement for certain individuals to enter employment with the Company, incentives for such persons to exert maximum efforts for the success of the Company and a means by which employees may benefit from increases in value of the common shares. As of September 30, 2025, there were 1,000,000 shares available for issuance under the 2021 Inducement Plan, of which 362,000 shares were available for future grants.

The total outstanding and exercisable options from the 2011 Plan, 2019 Plan and Inducement Plan as of and for the nine-month period ending September 30 were as follows:


	2025
								Weighted
	Number							average
	of shares							exercise
	2019 Plan		Inducement Plan		2011 Plan		Total	price
Outstanding at beginning of period - 2011 Plan		—		—		1,632,485	1,632,485	$	2.11
Outstanding at beginning of period - 2019 Plan		7,604,606		—		—	7,604,606		4.97
Outstanding at beginning of period - Inducement Plan		—		496,000		—	496,000		5.99
Granted - 2019 Plan		1,514,400		—		—	1,514,400		1.96
Granted - Inducement Plan		—		244,000		—	244,000		2.01
Exercised - 2011 Plan		—		—		(109,590)	(109,590)		1.43
Forfeited - Inducement Plan		—		(102,000)		—	(102,000)		2.50
Forfeited - 2019 Plan		(101,516)		—		—	(101,516)		2.19
Expired - 2019 Plan		(75,684)		—		—	(75,684)		7.12
Expired - 2011 Plan		—		—		(2,000)	(2,000)		1.12
Expired - Inducement Plan		—		—		—	—		—
Outstanding at end of period		8,941,806		638,000		1,520,895	11,100,701	$	4.19
Outstanding at end of period - Weighted average exercise price	$	4.47	$	5.03	$	2.16
Exercisable at end of period		6,379,509		381,146		1,520,895	8,281,550	$	4.75
Exercisable at end of period - Weighted average exercise price	$	5.27	$	6.45	$	2.16


	2024
								Weighted
	Number							average
	of shares							exercise
	2019 Plan		Inducement Plan		2011 Plan		Total	price
Outstanding at beginning of period - 2011 Plan		—		—		1,694,233	1,694,233	$	2.09
Outstanding at beginning of period - 2019 Plan		6,406,897		—		—	6,406,897		5.82
Outstanding at beginning of period - Inducement Plan		—		625,000		—	625,000		5.74
Granted - 2019 Plan		635,000		—		—	635,000		1.48
Exercised - 2011 Plan		—		—		(24,400)	(24,400)		1.19
Forfeited - Inducement Plan		—		(98,250)		—	(98,250)		4.33
Forfeited - 2019 Plan		(386,053)		—		—	(386,053)		4.42
Expired - 2019 Plan		(68,238)		—		—	(68,238)		7.42
Expired - 2011 Plan		—		—		(11,272)	(11,272)		4.01
Expired - Inducement Plan		—		(30,750)		—	(30,750)		6.22
Outstanding at end of period		6,587,606		496,000		1,658,561	8,742,167	$	4.86
Outstanding at end of period - Weighted average exercise price	$	5.47	$	5.99	$	2.09
Exercisable at end of period		4,430,367		273,396		1,658,561	6,362,324	$	5.20
Exercisable at end of period - Weighted average exercise price	$	6.29	$	6.45	$	2.09

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

The weighted average remaining contractual life was 6.3 and 6.6 years for outstanding options as of September 30, 2025 and 2024, respectively. The weighted average remaining contractual life was 5.5 and 6.0 years for vested options, as of September 30, 2025 and 2024, respectively.

There was $4.4 million and $6.5 million of total unrecognized compensation cost related to non-vested share options as of September 30, 2025 and 2024, respectively. The share options are expected to be recognized over a remaining weighted average vesting period of 1.8 years and 1.6 years as of September 30, 2025 and 2024, respectively.

Options granted are valued using the Black-Scholes option pricing model. This model also requires assumptions, including expected option life, volatility, risk-free interest rate and dividend yield, which greatly affect the calculated values. Amortization of the fair value of the options over vesting years has been expensed and credited to additional paid-in capital in shareholders’ equity.

The non-vested options as of and for the nine-month period ending September 30 were as follows:


	2025
	Number							Weighted
	of options							average
	2019 Plan		Inducement Plan		2011 Plan		Total	fair value
Non-vested share options at beginning of period - 2019 Plan		2,754,054		—		—	2,754,054	$	2.33
Non-vested share options at beginning of period - Inducement Plan		—		176,709		—	176,709		4.19
Granted - 2019 Plan		1,514,400		—		—	1,514,400		1.62
Granted - Inducement Plan		—		244,000		—	244,000		1.62
Vested, outstanding - 2019 Plan		(1,604,641)		—		—	(1,604,641)		2.25
Vested, outstanding - Inducement Plan		—		(88,938)		—	(88,938)		4.63
Forfeited - Inducement Plan		—		(74,917)		—	(74,917)		1.82
Forfeited - 2019 Plan		(101,516)		—		—	(101,516)		1.76
Non-vested share options at end of period		2,562,297		256,854		—	2,819,151	$	2.02
Non-vested share options at end of period - Weighted average fair value	$	1.99	$	2.29	$	—


	2024
	Number							Weighted
	of options							average
	2019 Plan		Inducement Plan		2011 Plan		Total	fair value
Non-vested share options at beginning of period - 2019 Plan		3,178,475		—		—	3,178,475	$	3.64
Non-vested share options at beginning of period - Inducement Plan		—		403,167		—	403,167		4.07
Granted - 2019 Plan		635,000		—		—	635,000		1.10
Vested, outstanding - 2019 Plan		(1,270,183)		—		—	(1,270,183)		3.62
Vested, outstanding - Inducement Plan		—		(82,313)		—	(82,313)		4.86
Forfeited - Inducement Plan		—		(98,250)		—	(98,250)		3.31
Forfeited - 2019 Plan		(386,053)		—		—	(386,053)		3.47
Non-vested share options at end of period		2,157,239		222,604		—	2,379,843	$	3.04
Non-vested share options at end of period - Weighted average fair value	$	2.93	$	4.11	$	—

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

The fair value of options granted for the 2011 Plan, 2019 Plan and Inducement Plan were estimated using the Black-Scholes option pricing model, resulting in the following weighted average assumptions for the options granted:


	Three months ended September 30,						Nine months ended September 30,
	2025			2024			2025			2024
Exercise price	$	1.84		$	1.48		$	1.97		$	1.48
Share price	$	1.84		$	1.48		$	1.97		$	1.48
Volatility		126	%		92	%		106	%		92	%
Risk-free interest rate		3.77	%		3.77	%		4.33	%		3.81	%
Expected life		6.08 years			5.31 years			5.93 years			5.37 years
Dividend		0	%		0	%		0	%		0	%

Expected volatility is determined using the Company’s historical volatility. Prior to establishing sufficient historical volatility, the Company used comparable companies for which the information is publicly available. The risk-free interest rate is determined based on the U.S. sovereign rates benchmark in effect at the time of grant with a remaining term equal to the expected life of the option. Expected option life is determined based on the simplified method as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The simplified method is an average of the contractual term of the options and its ordinary vesting period. Dividend yield is based on the share option’s exercise price and expected annual dividend rate at the time of grant. The total grant date fair value for options granted during the nine months ended September 30, 2025 and 2024 was $2.7 million and $2.0 million, respectively.

Performance Stock Options

On May 6, 2024, the Company, pursuant to the 2019 Plan, awarded 924,000 performance stock options to employees. The performance stock options were granted “at-the-money” and have a term of 10 years.

The original grant-date fair value of each option was estimated on the date of grant using the same option valuation model used for the options outlined above. The original grant-date fair value of $1.3 million was determined using an expected volatility of 98.5%, term of 5.82 years, strike price of $1.74, and risk-free rate of 4.43%. Compensation expense for performance-based stock options is only recognized when management determines it is probable that the awards will vest.

The vesting of the performance-based stock options is conditional upon the U.S. Food and Drug Administration, or “FDA,” approval of etripamil. Subject to the option-holder’s continuous service as of each such date, 50% of the option shares will vest on the six-month anniversary of the approval date and the remaining 50% of the option shares will vest on the one-year anniversary of such approval date. The expense for the performance-based stock options is not recognized until the performance conditions are deemed probable of achievement. The Company did not record any expense related to the performance-based stock options during the three or nine months ended September 30, 2025, as the performance conditions were not deemed probable of being met. The weighted average grant date fair value of the performance stock options awarded was $1.38 per option. No performance stock options were awarded for the three or nine months ended September 30, 2025.

Employee Stock Purchase Plan

On July 15, 2022, the Company offered an ESPP, in which participation is available to our employees in the United States and Canada who meet certain service eligibility requirements. Eligible employees may authorize an amount up to 15% of their salary to purchase common stock at the lower of a 15% discount to the beginning price of the participation period or a 15% discount to the ending price of each six-month purchase interval. The ESPP also provides for an automatic reset

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

feature to start participants on a new twelve-month participation period in the event that the common stock market value on a purchase date is less than the common stock value on the first day of the twelve-month offering period.

On January 1, 2025, the number of common shares reserved for issuance under the ESPP automatically increased by 533,539 shares. As of September 30, 2025, the Company has 2,332,305 common shares available for issuance under the ESPP, of which 501,506 shares of common stock have been issued. Compensation expense for purchase rights under the ESPP related to the purchase discount and the “look-back” option was determined using a Black-Scholes option pricing model.

Performance Share Units

On May 6, 2024, the Company, pursuant to the 2019 Plan, awarded 924,000 Performance Share Units, or “PSUs,” to employees. The PSUs vest subject to the satisfaction of certain performance conditions established by the Company’s Compensation Committee. The FDA approval of etripamil represents the performance condition for the vesting of these PSUs.

The number of PSUs granted represents the total number of common shares that may be earned. However, the actual number of shares earned will be based on the satisfaction of the performance criteria. Upon satisfaction of the performance criteria, 100% of the earned shares will vest. Stock-based compensation costs associated with these PSUs are reassessed each reporting period based on estimated performance achievement. The weighted average grant date fair value of the PSUs granted was $1.74 per share. The Company did not record any expense related to the PSUs during the three and nine months ended September 30, 2025, as the performance conditions were not deemed probable of being met. Further, no additional performance stock units were awarded for the three or nine months ended September 30, 2025.

Restricted Stock Units

Pursuant to the 2019 Plan, the Company issues restricted stock units, or “RSUs,” to employees which vest based on a service criteria. When vested, the RSUs represent the right to be issued a number of shares of the Company’s common stock equal to the number of RSUs granted. The grant date fair value for RSUs is based on the market price of the Company’s common stock on the date of the grant. The fair value is then amortized to compensation expense over the requisite service period or vesting term. The Company issued no RSUs and 988,850 RSUs for the three and nine months ended September 30, 2025, respectively. The weighted average grant date fair value for the RSUs issued during the nine months ended September 30, 2025, was $2.02 per share. No RSUs were issued for the three or nine months ended September 30, 2024.

The total unrecognized compensation cost related to the non-vested RSUs as of September 30, 2025, was $1.7 million and will be recognized over a weighted average period of approximately 3.32 years.

Share-based Compensation Expense

The Company recognized total share-based compensation expense for all plans as follows:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Administration	$	639	$	723	$	2,099	$	2,377
Research and development		388		477		1,185		1,400
Commercial activities		223		199		625		525
Total	$	1,250	$	1,399	$	3,909	$	4,302

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

9 Net Loss Per Share

Basic and diluted net loss per common share is determined by dividing net loss applicable to common shareholders by the weighted average number of common shares and pre-funded warrants outstanding during the period. In addition to the conversion feature on the 2029 Convertible Notes described above and common warrants described above, which the Company reviewed and concluded that if-converted or exercised would be anti-dilutive due to the facts surrounding the instruments, the following potentially dilutive securities have also been excluded from the computation of diluted weighted average shares outstanding as of September 30, as they would be anti-dilutive:


	2025	2024
Stock options, PSUs and RSUs	13,013,551	10,590,167

Amounts above reflect the common share equivalents of the noted instruments.

10	Royalty Purchase Agreement

On March 27, 2023, we entered into a purchase and sale agreement, or, as amended, the “Royalty Purchase Agreement,” with RTW. On July 10, 2025, the Company entered into an amendment, or the “RTW Amendment,” to the Royalty Purchase Agreement. Pursuant to the RTW Amendment, the marketing approval deadline for etripamil has been extended from September 30, 2025 to December 31, 2025.

Pursuant to the Royalty Purchase Agreement, RTW has agreed to purchase, following the FDA approval of etripamil on or prior to December 31, 2025 (subject to certain conditions), in exchange for a purchase price of $75.0 million, the right to receive a tiered quarterly royalty payments, or the “Royalty Interest,” on the annual net product sales of etripamil in the United States in an amount equal to: (i) 7%, or the “Initial Tier Royalty,” of annual net sales up to $500 million, (ii) 4% of annual net sales greater than $500 million and less than or equal to $800 million, and (iii) 1% of annual net sales greater than $800 million. If certain revenue thresholds for aggregate annual net sales are not met, the Initial Tier Royalty will increase to 9.5% beginning on January 1 of the following calendar year until a subsequent sales threshold is attained, at which time the Initial Tier Royalty would revert back to 7%.

Based on the Company’s assessment of the terms and conditions under the Royalty Purchase Agreement, there is no accounting recognition required in these interim financial statements.

11 Other Receivables

Other receivables are comprised of the following:


	September 30, 2025		December 31, 2024
Interest receivable	$	398	$	604
Sales tax receivable		242		210
Clinical receivable		60		674
Other current receivable		—		2
Total	$	700	$	1,490

12 Segment Reporting

The Company manages its operations as a single operating segment for the purpose of assessing performance and making operating decisions while focusing on the development and commercialization of innovative cardiovascular medicines. These operations, which are reported on a consolidated basis, are focused on a single product. The accounting policies of the single operating segment are the same as those described in the summary of significant accounting policies. The chief operating decision maker, or “CODM,” assesses performance of the Company’s single operating segment based on

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Milestone Pharmaceuticals Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands of US dollars, except where noted and for share and per share data)

consolidated net loss. Net loss is used by the CODM to evaluate budget to actual analytics, which are used to monitor expenditures and ensure the Company is meeting established budgets. The CODM is the principal officer group, which includes the Company’s chief executive officer and chief financial officer.

The following table presents information about the Company’s significant expenses, as provided to the Company’s CODM, and includes a reconciliation to consolidated net loss:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2025		2024		2025		2024
Revenue	$	—	$	—	$	—	$	—

Less:
Research and development, net of tax credits, excluding share-based compensation		3,552		3,486		11,402		9,017
General and administrative, excluding share-based compensation		2,624		3,019		10,090		10,364
Commercial, excluding share-based compensation		4,403		1,712		19,482		6,071
Share-based compensation expense		1,250		1,399		3,909		4,302
Interest income		(874)		(1,080)		(2,087)		(3,260)
Interest expense		967		903		2,853		2,662
Net loss	$	(11,922)	$	(9,439)	$	(45,649)	$	(29,156)

The measure of segment assets is reported on the balance sheet as total consolidated assets.

13 Fair value of financial instruments

Pursuant to the accounting guidance for fair value measurement and its subsequent updates, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a hierarchy for inputs used in measuring fair value that minimizes the use of unobservable inputs by requiring the use of observable market data when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on active market data. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.

The fair value hierarchy is broken down into the three input levels summarized below:


Level 1	—	Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by the Company at the reporting date.
Level 2	—	Valuations based on inputs other than the quoted prices in active markets that are observable either directly or indirectly in active markets.
Level 3	—	Valuations based on unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions.

For the three and nine months ended September 30, 2025 and 2024, there were no financial instruments measured at fair value on a recurring or non-recurring basis. The carrying amounts of certain financial instruments, including cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued expenses approximate their fair values due to the short-term nature of such instruments. Refer to Note 5, “Debt,” for disclosure of the fair value of the Convertible Notes.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following information should be read in conjunction with the unaudited interim condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q and the audited annual consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 13, 2025. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in “Risk Factors” and in other parts of this Quarterly Report on Form 10-Q.

Company Overview

We are a biopharmaceutical company focused on the development and commercialization of innovative cardiovascular medicines. Our objective is to commercialize and develop CARDAMYST (also known as etripamil) in the United States as a fast-acting, portable nasal spray treatment for use by patients anywhere, anytime an attack of supraventricular tachycardia, or “SVT” occurs. We are also developing etripamil for the indication of atrial fibrillation with rapid ventricular rate, or “AFib-RVR.”

CARDAMYST^TM (etripamil) nasal spray

We are currently focused on obtaining marketing approval of CARDAMYST for the treatment of paroxysmal supraventricular tachycardia, or “PSVT,” from the U.S. Food and Drug Administration, or “FDA.” In March 2025, we announced that we received a Complete Response Letter, or “CRL,” regarding our New Drug Application, or “NDA,” for CARDAMYST (etripamil) nasal spray for the treatment of PSVT. On June 13, 2025, we submitted our response to the FDA’s CRL, which was accepted. With the acceptance the FDA issued a Prescription Drug User Fee Act, or “PDUFA,” target date of December 13, 2025. See “New Drug Application Status” below for additional details surrounding the status of the NDA.

We are also developing etripamil nasal spray for a subsequent indication to treat patients with AFib-RVR. Similar to our approach for PSVT, we believe that etripamil has the potential to help the person experiencing a symptomatic episode of AFib-RVR to self-treat themselves and to conveniently, reliably, and quickly, reduce their elevated heart rate, with the goal of reducing the need for emergency department utilization. We completed a successful Phase 2 study in patients presenting urgently with AFib-RVR, i.e., to an emergency department. We publicly presented these positive Phase 2 data in November 2023, which demonstrated that patients receiving etripamil nasal spray experienced rapid and statistically superior ventricular rate reduction and improved symptom-relief compared to placebo, with safety and tolerability findings generally consistent with those observed in our PSVT program. These data support the continued development of etripamil, self-administered in the medically unmonitored setting, for the treatment of AFib-RVR.

We are preparing to advance etripamil into a Phase 3 program in atrial fibrillation with rapid ventricular rate (AFib-RVR), following the successful ReVeRA Phase 2 trial. Incorporating FDA’s guidance, we have developed a Phase 3 registrational program to evaluate self-administered etripamil as a potential treatment for patients with AFib-RVR. We will pursue an sNDA regulatory approval pathway for a potential second indication for etripamil in Afib-RVR. As such we will leverage the anticipated PSVT indication and PSVT program data, along with a single pivotal Phase 3 study in patients with AFib-RVR.

PSVT Market Overview

PSVT is a condition that causes a patient’s heart to suddenly start beating faster than normal. It can be life-altering as PSVT is highly symptomatic, characterized by unpredictable attacks of a racing heart, often exceeding 150 beats per minute. Symptoms of PSVT arise suddenly and may include palpitations, sweating, chest pressure or pain, shortness of breath, sudden onset of fatigue, lightheadedness or dizziness, fainting, and anxiety, causing many patients to interrupt their daily activities at the time of symptom-onset. The impact and morbidity from an episode of PSVT can be especially detrimental in patients with underlying cardiovascular or medical conditions, such as heart failure, obstructive coronary

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disease, or dehydration. The uncertainty of when such an attack of PSVT will strike or how long it will persist is often anxiety-provoking, reducing patients’ quality of life and preventing participation in many desired activities. Drugs approved for the treatment of attacks of PSVT include adenosine, verapamil, and diltiazem, with all being administered intravenously under medical supervision, usually in the emergency department. Other oral drugs are sometimes used to treat attacks in a concept called “pill in the pocket.” However, those drugs have never been proven effective or safe and are not approved for this use. Doctors are often frustrated by the lack of effective treatment options besides a prolonged, unpleasant, and costly trip to the emergency department or, for some patients, an invasive ablation procedure. PSVT can be traumatic for patients, frustrating for healthcare providers, and costly for payors. With no pharmaceutical innovation in the treatment of PSVT for more than 30 years and a movement in the healthcare system to enable patient-centered care, we believe there is an opportunity to help patients living with PSVT to take greater control over their PSVT.

We believe that PSVT is a large and under-recognized market which we estimate affects more than two million Americans. From this diagnosed population, we define the immediate target addressable market for CARDAMYST as approximately 70% of patients who are actively managed by clinical cardiologists, interventional cardiologists and electrophysiologists. The remaining patients with PSVT can become addressable over time, as they are inconsistently managed (cycling in and out of the healthcare system) and/or being managed less frequently by primary care healthcare providers. Furthermore, PSVT is expected to increase in diagnosed prevalence in coming years as wearable electrocardiogram, or “ECG,” technology (e.g., smartphone, watches) becomes both more adept at diagnosing PSVT and more widely used by patients and clinical practitioners, in turn shortening the time to diagnosis.

Following the release of data from the RAPID clinical study in market research, cardiologists reported a willingness to prescribe CARDAMYST to approximately 50% of the patients with PSVT in their care, which suggests approximately 500,000 to 800,000 patients can potentially be treated with CARDAMYST in peak years of utilization. Additionally, we believe that this cardiology-identified group of patients may use CARDAMYST to treat a median of three to five episodes per year, based on the projected number of self-reported longer and more intense episodes experienced by patients, as well as the patient utilization experience in our Phase 3 clinical trials. This implies a peak demand potential in the United States for CARDAMYST of 2.5 million to 4 million episodes treated per year.

Current treatment for PSVT also consumes significant healthcare resources. Research published in the American Journal of Cardiology in 2020 shows that total healthcare expenditures in the year following a diagnosis of PSVT ranged from $20,000 to $30,000 per patient which were significantly higher than the expenditures observed for patients without PSVT. These significant increases included increased emergency department visits and hospitalization costs. Of note, catheter ablations following diagnosis represented only 23% of this increased spend, meaning most costs were unrelated to ablations. Recent data from the Healthcare Cost and Utilization Project (HCUP) database indicate that in 2019 there were approximately 140,000 emergency department, or “ED,” visits for PSVT when coded (for billing) in the primary diagnostic position, and a total of approximately 525,000 ED visits when PSVT was coded in any diagnostic position. Of these, approximately 25% of ED admissions for PSVT resulted in a hospital admission. HCUP estimates a total of approximately 40,000 to approximately 120,000 inpatient admissions for PSVT in 2019 (based again if a PSVT billing code was found in the primary v. any diagnostic position). Despite the effectiveness of catheter ablation, claims data suggests that only approximately 15% of patients with PSVT are ablated over a three-year period, leading to a total of approximately 100,000 catheter ablations annually. In total, at least $5 billion is spent annually in the United States on the management of PSVT.

AFib-RVR Market Overview

Atrial Fibrillation, or “AFib,” is a common cardiac arrhythmia with an irregular and often rapid heart rate that is often markedly symptomatic and, without proper treatment, can increase the risk of stroke, heart failure, and other cardiovascular complications. A common complication of AFib is a rapid heart rate, also referred to as AFib-RVR, which is frequently defined as a heart rate ≥ 110 beats per minute. The occurrence of a rapid ventricular rate, or “RVR,” in patients with atrial fibrillation increases the likelihood of marked symptoms including heart palpitations, shortness of breath and weakness. There are two commonly used pharmacological approaches to chronically manage AFib, rhythm control and rate control. Regardless of the chronic approach, break-through episodes of rapid heart rate occur frequently; and when faced with a sudden episode of AFib-RVR, acute rate control is needed, with most treatments being AV-nodal targeted drugs such as a

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beta blocker or calcium channel blocker. These treatments can be given intravenously; however, this requires a burdensome trip to an emergency department which may lead to a hospital admission. Acute treatment can be attempted by administration of an oral rate control drug; however, such drugs do not adequately provide immediate or adequate ventricular rate control due to a 30- to 90-minute delayed onset of action, and, as a result, many patients need faster and more certain rate-reduction and symptom-resolution and so seek acute-medical care by going to the emergency department for treatment utilizing intravenous rate control and/or electrical cardioversion of their atrial fibrillation. Furthermore, the chronic administration of oral rate-control drugs does not broadly prevent episodes of AFib-RVR. Similar to PSVT, patients may feel a loss of control by needing to visit the emergency department for overcoming their AFib-RVR episode and the unpredictable nature of these episodes, which can occur anytime and anywhere. Doctors have expressed frustration at the lack of options for patients to self-manage these acute rate attacks; and payor organizations would prefer to treat the AFib-RVR attacks in a more cost effective and time-efficient manner.

An estimated 10 million Americans suffer from AFib. The prevalence of AFib is expected to grow to greater than 12 million by 2030. A subset of patients with AFib experiences episodes of abnormally high heart rate, most often accompanied by palpitations, shortness of breath, dizziness, and weakness. While these episodes, known as AFib-RVR, may be treated by oral calcium channel blockers and/or beta blockers, patients frequently seek acute care in the ED to address symptoms. In 2019, nearly 1.1 million patients were admitted to the ED due to AFib symptoms. Initial data suggests that approximately 60% of all AFib ED visits were attributable to AFib-RVR, as symptoms driving patients to seek care generally become more pronounced at higher heart rates. Treatment for such symptoms typically includes medically supervised intravenous administration of calcium channel blockers or beta blockers, or electrical cardioversion. With little available data for AFib-RVR, we believe, based on our initial market research, that 30% to 40% of patients with AFib experience one or more symptomatic episodes of RVR per year that require treatment, suggesting a target addressable market of up to approximately four to five million patients by 2030 for etripamil in patients with AFib-RVR.

We believe that etripamil has the potential to be developed such that it can be used by patients to rapidly reduce their heart rate at home, self-administered, to provide a supplemental option to either the acute oral rate or rhythm control strategy their physician would use. When presented with a target product profile reflecting this potential use case, cardiologists and electrophysiologists in a 2021 market research study perceived utility in the product profile and indicated that they would prescribe to approximately 67% of their patients that experience episodes of AFib-RVR. They further indicated that a rapidly-acting intranasal calcium channel blocker could serve as a “bridge” to the longer onset times of acute oral agents. According to physicians, it can take hours for patients to feel an alleviation of symptoms using acute oral rate or rhythm control. During this time, patients may experience concerning symptoms that often prompt them to seek emergency care. We believe that the combination of convenient delivery, potency, rapid onset and short duration of action of etripamil has the potential to move the current treatment setting for some acute episodes of AFib out of the burdensome and costly emergency department.

Current AFib management consumes significant healthcare resources in the United States. The American Heart Association published a report in 2016 summarizing the current and projected cost burden of cardiovascular diseases in the United States. This report suggests atrial fibrillation resulted in $25 billion in direct medical costs in 2016 (approximately 7% of all cardiovascular diseases) and another $7 billion in indirect costs (i.e., up to $32 billion in total costs). Additionally, the forecasted growth in atrial fibrillation prevalence is anticipated to result in healthcare expenditures of $46 billion in direct costs and $10 billion in indirect costs in the United States by 2030.

New Drug Application Status

In March 2025, we announced that we received a CRL regarding our NDA for CARDAMYST (etripamil) nasal spray for the treatment of PSVT. Within the CRL, the FDA did not raise any concerns regarding clinical safety or efficacy. The FDA highlighted two key Chemistry, Manufacturing and Controls, or “CMC,” issues to be addressed. The FDA requested that we submit additional information on nitrosamine impurities based on new draft guidance issued after the NDA submission. Secondly, the FDA stated that an inspection is required at a facility listed in the NDA, to ensure it is in compliance with Current Good Manufacturing Practices. The facility mentioned previously performed a portion of the testing required to release etripamil final product, but changed ownership during the review of the NDA. On June 13,

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2025, we submitted our response to the FDA’s CRL regarding the NDA for CARDAMYST (etripamil) nasal spray. Further, on July 11, 2025, we announced that the FDA accepted for review our response to issues raised in the CRL. The FDA has assigned a new PDUFA target date of December 13, 2025.

PSVT Clinical Development Highlights

In April 2024, we announced new clinical data demonstrating real-world application of etripamil, an investigational new drug, for conversion of recurrent PSVT. Conducted in North and South America, an open label, Phase 3 study of etripamil in PSVT (the NODE-303 study) was presented at The American College of Cardiology Scientific Sessions. NODE-303 evaluated self-administered etripamil (70 mg, nasal spray) in an outpatient setting for up to four episodes of PSVT per patient. Other key characteristics of the NODE-303 study that distinguish the study from earlier Phase 3 studies, include the removal of the in-office test dose as well as the use of a broader inclusion exclusion study entry criteria. For example, NODE-303 did not exclude patients with a history of co-morbid AFib or atrial flutter. The results demonstrated that symptom-prompted treatment with etripamil restored sinus rhythm with a median time-to-conversion of 17 minutes and was generally well tolerated. The conversion of PSVT to sinus rhythm was similar among multiple episodes of PSVT and the frequency of treatment-emergent adverse events within 24 hours decreased with successively treated episodes. Adverse events, or “AEs,” were predominantly localized to the drug’s nasal administration site, consistent with prior trial findings. The protocol was amended during the trial to allow for a repeat dose of drug if symptoms persisted 10 minutes following the first dose, however most of the clinical trial was conducted prior to the amendment and used the 70 mg single dose. Efficacy of etripamil for PSVT conversion (restoration of sinus rhythm) in NODE-303 was 60.0% by 30 minutes after drug self-administration, and 69.9% by 60 minutes after drug self-administration; these rates of conversion are similar to those demonstrated in double-blinded and other open-label etripamil studies. This data supports a potentially significant shift in the management approach for recurrent PSVT.

In October 2022, we announced positive and statistically significant topline efficacy and safety data from the Phase 3 RAPID clinical trial of etripamil in patients with PSVT. These results were further presented shortly thereafter, in November 2022, as a Late-Breaking Clinical Trial Session at the American Heart Association Scientific Sessions 2022 (Chicago, IL) and subsequently published in The Lancet (June 2023). RAPID, our multi-center, randomized, double-blind, placebo-controlled, event-driven Phase 3 trial, enrolled 706 patients across clinical sites in North America and Europe. Patients were randomized 1:1 to a regimen of self-administering a first dose etripamil nasal spray, with a repeat dose 10 minutes later if symptoms persisted, or a matching placebo regimen. Self-administration was prompted by a patient’s customary symptoms and was performed in the at-home setting without medical supervision. The RAPID trial achieved its primary endpoint, with patients taking the regimen with etripamil demonstrating a highly statistically significant and clinically meaningful difference in time to SVT conversion as compared to placebo. A Kaplan Meier analysis demonstrated a significantly greater proportion of patients who took etripamil converted within thirty minutes compared to placebo (64.3% vs. 31.2%; hazard ratio, or “HR,” 2.62; 95% CI 1.66, 4.15; p<0.001). By 90 minutes post-study drug administration, 80.6% of etripamil patients converted versus 60.7% of placebo patients (HR = 1.93; 95% CI 1.349, 2.752; p<0.001) and statistical significance was maintained throughout the 5-hour observation window. Statistically significant reductions in time to conversion in patients who took etripamil were evident early and persisted throughout the observation window of the study compared to placebo. The median time to conversion for patients in RAPID who self-administered etripamil was 17.2 minutes compared to 53.3 minutes for patients on placebo. The safety and tolerability data from the RAPID trial continues to support the potential self-administration use of etripamil, with findings consistent with those observed in prior trials. The most common randomized-treatment emergent adverse events, or “RTEAEs,” and AEs which occurred within 24 hours of administration of etripamil, were related to the nasal local administration site. Overall, the majority of RTEAEs were reported as mild (68%) or moderate (31%). There were no serious AEs related to etripamil.

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The use of additional medical interventions and visits to an emergency department were important secondary measures of efficacy for both the RAPID and NODE-301 studies, although with the understanding that neither study was individually powered to expect statistical differences. In a pre-planned analysis across both studies, patients who self-administered etripamil sought additional medical interventions 43% less frequently (15% vs. 25%; p=0.013) and had 39% fewer emergency department visits (14% vs. 22%; p=0.035) than patients in the placebo arm.

In March 2023, we completed NODE-303, a Phase 3, multi-center, open-label safety trial, evaluating the safety of etripamil when self-administered without medical supervision over multiple, separate episodes of SVT. Data from the completed NODE-303 open-label safety and RAPID extension studies are included in the PSVT NDA submission for etripamil to the FDA.

In September 2024, our licensing partner, Corxel (formerly Ji Xing Pharmaceuticals Limited, JIXING), a clinical-stage biopharmaceutical company, announced positive topline data from the Phase 3 (JX02002) clinical trial of etripamil nasal spray in patients with PSVT in China.

The 500-patient Phase 3 trial (JX02002) met its primary endpoint, with a Kaplan Meier analysis shows a statistically significantly greater proportion of patients who self-administered etripamil converted from PSVT to sinus rhythm within 30 minutes compared to placebo (40.5% vs. 15.9%, respectively; hazard ratio [HR] = 3.00; 95% CI 1.58-5.71; p<0.001). Statistically significant (p<0.05) results were also shown for the secondary efficacy endpoints for percent of patients’ PSVT converted to sinus rhythm by 10, 15, 45 and 60 minutes after self-administration of study drug.

Corxel further reported that, overall, treatment emergent adverse events were comparable between treatment groups, and there were no reported serious adverse events related to etripamil. The safety and tolerability data from the JX02002 trial were consistent with previous clinical studies. This important study further expands the etripamil global development program to more than 2,000 unique patients treated with etripamil.

AFib-RVR Clinical Development Highlights

In November 2023, we presented positive Phase 2 data from the ReVeRA study as a Featured Science Presentation at the American Heart Association Scientific Meetings (Philadelphia, PA) and as simultaneously published in Circulation: Arrhythmia and Electrophysiology. The randomized, double-blinded, placebo-controlled ReVeRA trial of etripamil nasal spray enrolled 87 patients and dosed 56 patients aged 18 years and older with AFib who urgently presented experiencing AFib and a ventricular rate of 110 or more beats per minute, or “bpm.” The trial was designed to assess the magnitude, rapidity, and duration of reduction and the patient satisfaction with treatment using an established patient reported outcome, or “PRO,” tool. Data showed that delivery of etripamil nasal spray (70 mg) significantly and rapidly reduced ventricular rate, in a pattern consistent with the drug’s pharmacologic profile. Etripamil achieved the primary endpoint with a high degree of statistical significance; patients experienced a ventricular rate reduction of 29.91 bpm (95% confidence interval: -40.31, -19.52; p<0.0001) in the etripamil arm relative to placebo. The absolute maximum reduction in rate in the etripamil arm was 34.97 bpm. Using the Treatment Satisfaction Questionnaire 9, or “TSQM-9,” PRO, compared to placebo, patients treated with etripamil demonstrated significant improvements in two satisfaction ratings: effectiveness (p<0.0001) and relief of symptoms (p=0.0002), with the degrees of improvement consistent with those customarily described as clinically meaningful. Treatment-emergent serious adverse events, or “TESAEs,” were rare and the most common (≥ 5%) adverse events were mild or moderate in intensity and included nasal discomfort, rhinorrhea, increased lacrimation, throat irritation and dizziness. Further trial details are below in this document.

During 2024, we met with the FDA on the ReVeRA study, during which the FDA confirmed its guidance from our Pre-IND meeting (2023) regarding the availability of a supplemental new drug application, or “sNDA,” pathway for the marketing approval for etripamil for the indication of AFib-RVR. The sNDA pathway potentially permits a single pivotal efficacy study to be sufficient for filing for marketing approval if etripamil is already approved for PSVT. FDA further concurred with respect to key proposed study elements including powering, inclusion criteria, patient population, and statistical analyses, and offered clarification with respect to the endpoints to guide the design of the Phase 3 study. In our mid-2023 Pre-IND meeting, the FDA provided guidance that our primary endpoint can be the reduction of ventricular rate, and the primary analysis would be performed on the intent to treat, or “ITT,” population. In addition, the study would have to show statistical significance (p<0.05) on the key secondary endpoint of symptom relief as a patient benefit, also in the

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ITT population. The secondary endpoint could use a PRO measure, and the application of a seven-point anchored scale was discussed with the FDA. We have finalized the Phase 3 study protocol following FDA’s review and obtained concurrence with the FDA to proceed; however, we are delaying enrollment of the study due to the CRL received on the NDA for etripamil in PSVT.

The Phase 3 study will be conducted in a medically unmonitored setting (e.g., at-home) in a manner very similar to the conduct of our Phase 3 development program for PSVT. The Phase 3 AFib-RVR study will enroll patients with a history of symptomatic AFib episodes, and will use a self-administered, repeat-dose regimen of 70 mg per dose (the dose and dosing approach that was studied in the RAPID trial in patients with PSVT). The Phase 3 study’s target population will be patients with verified history of AFib-RVR, and the ITT population will be all patients self-administering the study drug for perceived AFib-RVR. The primary endpoint is the mean change from baseline ventricular rate to nadir ventricular rate for patients treated with etripamil versus placebo, as was studied in the ReVeRA trial in AFib-RVR. The key secondary endpoint will be based on a PRO of symptomatic improvement, discussed with the FDA, which is similar to the PRO questions utilized in our PSVT and AFib-RVR programs. The study has been powered and sized based upon approximately 150 events from 150 unique patients with a history of symptomatic episodes of AFib-RVR.

Operations Overview

Since the commencement of our operations in 2003, we have devoted substantially all our resources to performing research and development activities in support of our product development efforts, hiring personnel, raising capital to support and expand such activities, providing general and administrative support for these operations and, more recently, preparing for commercialization. We operate our business using a significant outsourcing model. As such, our team is composed of a relatively smaller core of employees who direct a significantly larger number of team members who are outsourced in the form of vendors and consultants to enable execution of our operational plans. We do not currently have any products approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations.

Since inception, we have incurred significant operating losses. For the three months ended September 30, 2025 and 2024, we recorded net losses of $11.9 million and $9.4 million, respectively. For the nine months ended September 30, 2025 and 2024, we recorded net losses of $45.6 million and $29.2 million, respectively. As of September 30, 2025, we had an accumulated deficit of $413.2 million. We expect to continue to incur significant losses for the foreseeable future. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the necessary development activities required for obtaining regulatory approval and preparing for potential commercialization of our product candidates. We had $46.7 million of cash and cash equivalents and $35.9 million of short-term investments at September 30, 2025.

We expect to continue to incur significant expenses and increased operating losses for at least the next several years. Our net losses may fluctuate significantly from period to period, depending on the timing of our planned clinical trials and expenditures on other research and development activities. We expect our expenses will increase over time as we:

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The Macroeconomic Climate

Inflation rates may materially adversely affect our business and corresponding financial position and cash flows. Inflationary factors, changes to interest rates and overhead costs may adversely affect our operating results. Interest and inflation rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Additionally, geopolitical events such as the Russia-Ukraine war and unrest and/or further escalation in the Middle East, banking instabilities, ongoing changes to U.S. and international tariffs and other trade restrictions and trade barriers, renegotiation of international trade agreements or further escalations of trade tensions, and other U.S. geopolitical issues affecting other territories and employee availability and wage increases, and economic markets all of which may result in additional stress on our working capital resources. The ongoing trade tensions between the U.S. and other jurisdictions have resulted in multiple rounds of tariffs and anticipated tariffs affecting pharmaceuticals and pharmaceutical ingredients, including finished drug products, manufacturing equipment, and related supplies. In any event, the dynamic and unpredictable tariff and trade landscape may create substantial uncertainty and [significant] planning challenges for our operations.

Components of Results of Operations

Revenues

We have not generated any revenues from product sales to date. We would only expect to generate revenues from product sales if the FDA approves the NDA.

We record license revenue when milestones are reached pursuant to our License and Collaboration Agreement, dated May 15, 2021, with Corxel Pharmaceuticals, or “Corxel,” formerly known as Ji Xing Pharmaceuticals Limited (such party “Ji Xing” and, such agreement, the “Ji Xing License Agreement”). During the three and nine months ended September 30, 2025 and 2024, no milestones were achieved, and no revenue was recorded under this agreement.

Research and Development Expenses

Research and development expenses consist primarily of salaries and fees paid to external service providers and include personnel costs, including share-based compensation expense and other related compensation expenses. We expense research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors, collaborators and third-party service providers.

To date, substantially all of our research and development expenses have been related to the preclinical and clinical development of etripamil. As we advance etripamil or other product candidates for other indications, we expect to allocate our direct external research and development costs across each of the indications or product candidates. Further, we expect

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our research and development costs to increase for the development of etripamil in atrial fibrillation with rapid ventricular rate, and we expect our research and development expenses related to the development of etripamil for PSVT decrease as a percentage of our total research and development expenses.

The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming and is subject to uncertainties and delays. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if at all.

We recognize the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits.

General and Administrative Expenses

General and administrative expenses include personnel and related compensation costs, expenses for outside professional services, lease expense, insurance expense and other general administrative expenses. Personnel costs consist of salaries, bonuses, benefits, related payroll taxes and share-based compensation. Outside professional services consist of legal, accounting and audit services and other consulting fees.

We expect to continue to incur expenses as a public company, including expenses related to compliance with the rules and regulations of the SEC, and those of any national securities exchange on which our securities are traded, additional insurance expenses, investor relations activities, and other administrative and professional services.

Commercial Expenses

Commercial expenses consist primarily of personnel and related compensation costs, market and health economic research, and market development activities for PSVT and, to a lesser extent, AFib-RVR. The focus of these expenses is three-fold: first, we want to leverage rigorous primary and secondary research to fully understand our target disease states from the perspective of the patient, healthcare provider, and payor; second, we want to understand and document the burden of disease posed by PSVT and AFib-RVR from an epidemiology, healthcare resource use, and cost perspective; and third, we want to engage our target patient, physician, and payor stakeholders with evidence-based and compliant educational materials that serve to increase the awareness and understanding of the impact of PSVT and AFib-RVR on patients and the overall healthcare system.

If the FDA approves the NDA, we anticipate our commercial expenses will increase as we invest in the infrastructure, personnel, and operational expenses required to launch our first product in the United States.

Interest Income

Interest income primarily consists of interest income from our cash and cash equivalents and short-term investments.

Interest Expense

Interest expense primarily consists of contractual debt interest expense and the amortization of debt costs.

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Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations and changes:



	Three months ended September 30,
(in thousands)	2025		2024		$ Change		% Change

Revenue	$	—	$	—	$	—	0.0%

Operating expenses
Research and development, net of tax credits	$	3,940	$	3,963	$	(23)	(0.6)%
General and administrative		3,263		3,742		(479)	(12.8)%
Commercial		4,626		1,911		2,715	142.1%
Total operating expenses		11,829		9,616		2,213	23.0%
Loss from operations		(11,829)		(9,616)		(2,213)	23.0%
Interest income		874		1,080		(206)	(19.1)%
Interest expense		(967)		(903)		(64)	100.0%
Net loss	$	(11,922)	$	(9,439)	$	(2,483)	26.3%


	Nine months ended September 30,
(in thousands)	2025		2024		$ Change		% Change

Revenue	$	—	$	—	$	—	0.0%

Operating expenses
Research and development, net of tax credits	$	12,587	$	10,417	$	2,170	20.8%
General and administrative		12,189		12,741		(552)	(4.3)%
Commercial		20,107		6,596		13,511	204.8%
Total operating expenses		44,883		29,754		15,129	50.9%
Loss from operations		(44,883)		(29,754)		(15,129)	50.9%
Interest income		2,087		3,260		(1,173)	(36.0)%
Interest expense		(2,853)		(2,662)		(191)	7.2%
Net loss	$	(45,649)	$	(29,156)	$	(16,493)	56.6%

Revenue

We recorded no revenue for the three or nine months ended September 30, 2025 and 2024.

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Research and Development Expenses, Net of Tax Credits

The following table shows our research and development expenses by type of activity for the three and nine months ended September 30, 2025 and 2024, respectively.



	Three months ended September 30,							Nine months ended September 30,
(in thousands)	2025		2024		$ Change		% Change	2025		2024		$ Change		% Change
Clinical	$	1,718	$	1,586	$	132	8.3%	$	4,892	$	5,044	$	(152)	(3.0)%
Drug manufacturing and formulation		990		1,594		(604)	(37.9)%		4,282		3,033		1,249	41.2%
Regulatory and other costs		1,305		844		461	54.6%		3,664		2,534		1,130	44.6%
Less: R&D tax credits		(73)		(61)		(12)	19.7%		(251)		(194)		(57)	29.4%
Total R&D expenses	$	3,940	$	3,963	$	(23)	(0.6)%	$	12,587	$	10,417	$	2,170	20.8%

Research and development expenses, net of tax credits, remained consistent for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Research and development expenses, net of tax credits, increased by $2.2 million, or 20.8%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase was primarily due to higher consulting and outside service costs. These higher costs were partially offset by lower personnel-related costs.

We recognize the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits.

General and Administrative

General and administrative expenses decreased by $0.5 million, or 12.8%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a decrease in professional costs and personnel costs.

General and administrative expenses decreased by $0.6 million, or 4.3%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to a decrease in professional costs and personnel costs.

Commercial

Commercial expenses increased by $2.7 million, or 142.1%, for the three months ended September 30, 2025, compared to the same period in 2024. This increase is primarily a result of additional personnel costs, professional costs and other operational expenses related to preparation for the launch of CARDAMYST.

Commercial expenses increased by $13.5 million, or 204.8%, for the nine months ended September 30, 2025, compared to the same period in 2024. This increase is primarily a result of additional personnel costs, professional costs and other operational expenses related to preparation for the launch of CARDAMYST.

As a result of the CRL, Milestone temporarily paused the ramping up of operational expenditures related to launch. During this period, Milestone has focused on compliantly engaging healthcare providers and payors in profiling and disease state discussions with the goal of optimizing the launch plan for CARDAMYST. Milestone continues to maintain the capability of launching quickly following the potential approval of CARDAMYST by the FDA.

If the FDA approves the NDA, we anticipate our commercial expenses will increase as we invest in the infrastructure, personnel and operational expenses required to launch our first product in the United States.

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Interest Income

Interest income was $0.9 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively. Interest income was $2.1 million and $3.3 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease in interest income was due to decreasing interest rates and less assets invested in 2025 when compared to 2024.

Interest Expense

Interest expense remained consistent for the three and nine months ended September 30, 2025, compared to the same periods in 2024.

Liquidity and Capital Resources

Sources of Liquidity

We have incurred operating losses and experienced negative operating cash flows since our inception, and we anticipate continuing to incur losses for at least the next several years. As of September 30, 2025, we had cash, cash equivalents and short-term investments of $82.6 million and an accumulated deficit of $413.2 million.

On July 11, 2025, we entered into an underwriting agreement, or the “Underwriting Agreement,” related to an underwritten public offering, or the “2025 Offering,” of (i) 31,500,000 of our common shares, without par value, accompanying Series A common warrants, or the “Series A Common Warrants,” to purchase an aggregate of 31,500,000 common shares and accompanying Series B common warrants, or the “Series B Common Warrants,” to purchase an aggregate of 31,500,000 common shares, at a combined public offering price of $1.50 per share and accompanying Series A Common Warrant and Series B Common Warrant and (ii) in lieu of common shares to certain investors that so choose, pre-funded warrants or the “2025 Pre-Funded Warrants” and, together with the Series A Common Warrants and the Series B Common Warrants, the “Warrants,” to purchase 3,502,335 common shares, accompanying Series A Common Warrants to purchase an aggregate of 3,502,335 common shares and accompanying Series B Common Warrants to purchase an aggregate of 3,502,335 common shares, at a combined public offering price of $1.499 per Pre-Funded Warrant and accompanying Series A Common Warrant and Series B Common Warrant, which represented the combined public offering price for the Shares and accompanying common warrants less the $0.001 per share exercise price for each such Pre-Funded Warrant.

The net proceeds to the Company from the 2025 Offering were $48.6 million after deducting underwriting commissions and estimated offering expenses payable by the Company.

On February 28, 2024, we entered into an underwriting agreement related to an underwritten public offering of 16,666,667 of our common shares, without par value, at a public offering price of $1.50 per share and, in lieu of common shares to certain investors, pre-funded warrants to purchase 3,333,333 common shares, or the “2024 Pre-Funded Warrants,” at a public offering price of $1.499 per 2024 Pre-Funded Warrants. Each of the 2024 Pre-Funded Warrants has an exercise price of $0.001 per share. The 2024 Pre-Funded Warrants were exercisable immediately upon issuance, subject to certain beneficial ownership limitations. Under the terms of the agreement, we granted the underwriters party thereto an option to purchase up to an additional 3,000,000 common shares at the same price per share as the other common shares sold in this offering, which was exercised by such underwriters in full on February 29, 2024.

The net proceeds to us from the February 2024 offering, including the proceeds from the exercise by the underwriters of their option to purchase the additional 3,000,000 common shares in full, was $31.9 million after deducting underwriting commissions and offering expenses payable by us.

On July 29, 2020, we entered into an Open Market Sale Agreement^SM, or the “Original Sale Agreement,” with respect to an at-the-market offering program, or the “ATM Program,” under which the Company could issue and sell its common shares having an aggregate offering price of up to $50.0 million through Jefferies LLC, or “Jefferies,” as its sales. On March 18, 2025, we entered into an Amended and Restated Open Market Sale Agreement^SM, or the “Amended Agreement,” with Jefferies. The Amended Agreement amends and restates, in its entirety, the Original Sale Agreement.

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Under the Amended Agreement, the Company may issue and sell its common shares, no par value per share, for an aggregate offering price of up to $77.8 million (which includes the approximately $2.8 million of sales previously made pursuant to the Original Sale Agreement through the date the Amended Agreement was entered into), or the “ATM Shares.” The ATM Shares will be sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-283162). We previously issued 361,236 common shares under the Original Sale Agreement, resulting in net proceeds of approximately $2.7 million (net of issuance costs of approximately $0.1 million). No common shares were sold under the Amended Agreement during the three and nine months ended September 30, 2025.

We expect that our operating plan, existing cash and cash equivalents and short-term investments to be sufficient to fund our operations for at least the next 12 months from the date of issuance of this Form 10-Q for the quarter ending September 30, 2025 and that there are no events or conditions that may cast substantial doubt on our ability to continue as a going concern for at least the next 12 months from the date of this filing.

Contingent future source of funding

On March 27, 2023, we entered into a purchase and sale agreement, as amended, or the “Royalty Purchase Agreement.” Pursuant to the Royalty Purchase Agreement, as amended in July 2025 to extend the marketing approval deadline for etripamil to December 31, 2025, following the FDA approval of etripamil on or prior to December 31, 2025 (subject to certain conditions), in exchange for a purchase price of $75.0 million, the right to receive a tiered quarterly royalty payments, or “royalty interest,” on the annual net product sales of etripamil in the United States.

Funding Requirements

We use our cash primarily to fund research and development and pre-commercial expenditures. We expect our research and development expenses to continue commensurate with the development and commercialization of etripamil. We expect to continue to incur operating losses for the foreseeable future as we continue the clinical development of our product candidate. At this time, due to the inherently unpredictable nature of clinical development, we cannot reasonably estimate the costs we will incur and the timelines that will be required to complete development, obtain marketing approval, and commercialize etripamil or any future product candidates, if at all. For the same reasons, we are also unable to predict when, if ever, we will generate revenue from product sales or whether, or when, if ever, we may achieve profitability. Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations.

In addition, we have exclusive development and commercialization rights for etripamil for all indications that we may pursue and as such have the potential to license development and or commercialization rights for etripamil to a potential partner in regions outside of Greater China. We plan to establish commercialization and marketing capabilities using a direct sales force to commercialize etripamil in the United States. Outside of the United States, we are considering commercialization strategies that may include collaborations with other companies.

For other new product candidates, our efforts are focused on licensing development and/or commercialization rights from potential partners. In the case of either in-licensing or out-licensing, we cannot forecast when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development and commercialization plans and capital requirements.

The timing and amount of our operating expenditures will depend largely on:

●

the timing, progress and results of our ongoing and planned clinical trials, remediation efforts related to the CRL, and other development activities of etripamil in PSVT, AFib-RVR and in other cardiovascular indications;

●

the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials of etripamil for additional indications or any future product candidates that we may pursue;

●

our ability to establish additional collaborations on favorable terms, if at all;

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●

the ability of vendors and third-party service providers to accurately forecast expenses and deliver on expectations;

●

the costs, timing and outcome of regulatory review of etripamil and any future product candidates, including the costs and timing to resubmit the NDA as a result of the CRL;

●

the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for etripamil and any future product candidates for which we receive marketing approval;

●

the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and

●

the extent to which we acquire or in-license other product candidates and technologies.

Until such time, if ever, as we can generate substantial revenue from product sales, we expect to fund our operations and capital funding needs through equity and/or debt financing. We may also consider entering into collaboration arrangements or selectively partnering for clinical development and commercialization. The sale of additional equity would result in additional dilution to our shareholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that restrict our operations or our ability to incur additional indebtedness or pay dividends, among other items. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially and adversely affect our business, financial condition and results of operations.

Cash Flows

The following table summarizes our cash flows for the periods indicated:


	Nine months ended September 30,
(in thousands)	2025		2024		$ Change		% Change
Net cash (used in) provided by:
Operating activities	$	(36,266)	$	(22,005)	$	(14,261)	64.8%
Investing activities		8,543		(11,051)		19,594	(177.3)%
Financing activities		49,094		32,095		16,999	53.0%
Net increase (decrease) in cash and cash equivalents during the period	$	21,371	$	(961)	$	22,332

Operating Activities

Net cash used in operating activities during the nine months ended September 30, 2025 was $36.3 million, which consisted primarily of a net loss of $45.6 million, offset by a net cash increase of $2.6 million related to the change in assets and liabilities, non-cash charges of $3.9 million related to share-based compensation, and non-cash interest charges and debt costs of $2.9 million related to the 2029 Convertible Notes.

Net cash used in operating activities during the nine months ended September 30, 2024 was $22.0 million, which consisted primarily of a net loss of $29.2 million. The net loss was partially offset by a net cash increase of $0.4 million related to the change in assets and liabilities, non-cash charges of $4.3 million related to share based compensation, and non-cash interest charges of $2.4 million related to the convertible notes.

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Investing Activities

In the nine months ended September 30, 2025, we acquired $35.9 million of short-term investments, and we redeemed $44.5 million in short-term investments. In the nine months ended September 30, 2024, we acquired $99.6 million of short-term investments, and we redeemed $88.5 million in short-term investments.

Financing Activities

In the nine months ended September 30, 2025, our financing activities provided cash proceeds of $49.1 million. These proceeds were primarily a result of the $48.6 million received, net of issuance costs, from the issuance of common shares, pre-funded warrants, and common warrants under the 2025 Offering.

In the nine months ended September 30, 2024, our financing activities provided cash proceeds of $32.1 million. These proceeds were primarily a result of the $31.9 million received from the issuance of common shares and pre-funded warrants, net of $2.6 million in issuance costs paid under the 2024 underwriting agreement.

We have not entered into off-balance sheet arrangements.

Contractual Obligations

During the nine months ended September 30, 2025, there were no material changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K, filed with the SEC on March 13, 2025.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited interim condensed consolidated financial statements as of September 30, 2025, which have been prepared in accordance with United States generally accepted accounting principles, or “U.S. GAAP,” and on a basis consistent with those accounting principles followed by us. The preparation of these consolidated financial statements requires our management to make judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to:

●

Estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with CROs, CMOs and clinical trial sites which in turn impact the research and development expenses.

●

Estimate of the grant date fair value share options granted to employees, consultants and directors, and the resulting share-based compensation expense, using the Black-Scholes option-pricing model.

Accordingly, actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

a) Research and Development Expenses — Accruals

Research and development costs are charged against income in the period of expenditure. Our research and development costs consist primarily of salaries and fees paid to CROs and to CMOs.

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Clinical trial expenses include direct costs associated with CROs, direct CMO costs for the formulation and packaging of clinical trial material, as well as investigator and patient related costs at sites at which our trials are being conducted. Direct costs associated with our CROs and CMOs are generally payable on a time and materials basis, or when milestones are achieved. The invoicing from clinical trial sites can lag several months. We record expenses for our clinical trial activities performed by third parties based upon estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with CROs and clinical trial sites. We determine the estimates through discussions with internal clinical personnel, CROs and CMOs as to the progress or stage of completion of trials or services and the agreed upon fee to be paid for such services based on facts and circumstances known to us as of each consolidated balance sheet date. The actual costs and timing of clinical trials are highly uncertain, subject to risks and may change depending upon a number of factors, including our clinical development plan. If the actual timing of the performance of services of the level of effort varies from the estimate, we will adjust the accrual accordingly. Adjustments to prior period estimates have not been material. We recognize the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits and as a reduction of income taxes for investment tax credits that can only be claimed against income taxes payable when there is reasonable assurance that the claim will be recovered.

b) Share-Based Compensation

We recognize compensation costs related to share options granted to employees, consultants and directors based on the estimated fair value of the awards on the date of grant. We estimate the grant date fair value, and the resulting share-based compensation expense, using the Black Scholes option pricing model. This Black Scholes option pricing model uses various inputs to measure fair value, including estimated fair value of our underlying common shares at the grant date, expected term, estimated volatility, risk-free interest rate and expected dividend yields of our common shares. The grant date fair value of the share-based awards is recognized on a straight-line basis over the requisite service periods, which are generally the vesting period of the respective awards. Forfeitures are accounted for as they occur.

Recent Accounting Pronouncements

Refer to Note 2, “Summary of Significant Accounting Policies,” in the accompanying notes to our interim condensed consolidated financial statements for a discussion of recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The primary objective of our investment activities is to preserve principal and liquidity while maximizing income without significantly increasing risk. We are exposed to market risks in the ordinary course of our business. These risks primarily relate to interest rate risks. We had cash, cash equivalents and short-term investments of $82.6 million as of September 30, 2025, which consist primarily of bank deposits and guaranteed investment certificates. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair market value of our portfolio, and accordingly we do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.

We undertake certain transactions in Canadian dollars and as such are subject to risk due to fluctuations in exchange rates. Canadian dollar denominated payables are paid at the converted rate as due. We do not use derivative instruments or have a formal hedging program to hedge exposure to foreign exchange rate risk due to the low volume of transactions denominated in foreign currencies. On September 30, 2025, our net monetary exposure denominated in Canadian dollars was $2.7 million.

Our operating results and financial position are reported in U.S. dollars in our consolidated financial statements. The fluctuation of the Canadian dollar in relation to the U.S. dollar might, consequently, have an impact upon our loss and may also affect the value of our assets and the amount of shareholders’ equity.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the “Exchange Act,” that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.

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Item 1A. Risk Factors

Except as set forth below, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A. in our Annual Report on Form 10-K, filed with the SEC and under Milestone’s SEDAR+ profile at www.sedarplus.com on March 13, 2025.

Risks Related to Our Financial Position and Capital Needs

International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.

We operate in a global economy, which includes utilizing third-party suppliers in several countries outside the United States. There is inherent risk, based on the complex relationships among the United States and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty. The U.S. government has announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry. In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures. These developments have created a dynamic and unpredictable trade landscape, which may adversely impact our business, results of operations, financial condition and prospects.

We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for clinical testing, as well as for manufacture of any products that we may commercialize, if approved. Our etripamil product candidate is manufactured in the United States. However, several of our suppliers for etripamil are currently located outside of the United States, including the active pharmaceutical ingredients, or “APIs,” which are manufactured in China. However, our etripamil product candidate is manufactured in the United States. We also rely on specialized laboratory equipment, supplies, materials, and precursor compounds, all or part of which we believe may be ultimately sourced from multiple countries outside the United States, to advance our research and development efforts.

On May 15, 2021, we entered into a license and collaboration agreement, or the “License Agreement,” with Corxel, which is an entity affiliated with RTW Investments, LP. Under the License Agreement, the Company granted Corxel exclusive development and commercialization rights to any pharmaceutical product that uses a device to deliver etripamil by nasal spray for all prophylactic and therapeutic uses in humans in the following territories: People’s Republic of China, including mainland China, Hong Kong, Macau, and Taiwan.

Current or future tariffs could result in increased research and development expenses, including with respect to increased costs associated with APIs, raw materials, laboratory equipment and research materials and components. In addition, such tariffs could increase our supply chain complexity and could also potentially disrupt our existing supply chain. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our ability to secure additional financing on favorable terms or at all. In addition, as we advance toward commercialization in the future, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities, negatively impacting our growth prospects.

The complexity of announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the United States or foreign jurisdictions related to compliance with trade regulations. Foreign governments may also adopt non-tariff measures, such as procurement preferences or informal disincentives to engage with, purchase from or invest in U.S. entities, which may limit our ability to compete internationally and attract non-U.S. investment, employees, customers and suppliers. Foreign governments may also take other retaliatory actions against U.S. entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks,

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including with regard to the License Agreement. In addition, the United States and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity to our business.

Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition, and prospects. While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Risks Related to the Development of Our Product Candidates

We have only one product candidate, etripamil, for which we are currently pursuing clinical development and regulatory approval. Our future success is substantially dependent on the successful clinical development and regulatory approval of etripamil. If we are not able to obtain required regulatory approvals for etripamil or any future product candidates, we will not be able to commercialize etripamil or any future product candidates and our ability to generate revenue will be adversely affected.

Etripamil is currently our only product candidate. We have not obtained regulatory approval for etripamil or any product candidate, and it is possible that neither etripamil nor any product candidates we may seek to develop in the future will ever obtain regulatory approval. Neither we nor any future collaborator is permitted to market any drug product candidates in the United States or other countries until we receive regulatory approval from the FDA or applicable foreign regulatory agency. The time required to obtain approval or other marketing authorizations by the FDA and comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. Prior to obtaining approval to commercialize etripamil and any other drug product candidate in the United States or elsewhere, we must demonstrate with substantial evidence from well controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses. Results from nonclinical studies and clinical trials can be interpreted in different ways. Even if we believe the nonclinical or clinical data for our product candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. The FDA may also require us to conduct additional nonclinical studies, including human factor studies, or clinical trials for our product candidates either prior to or post-approval, or it may object to elements of our clinical development program. Of the large number of products in development, only a small percentage successfully complete the FDA or comparable foreign regulatory authorities’ approval processes and are commercialized. The lengthy approval or marketing authorization process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval or marketing authorization to market etripamil or any future product candidates, which would significantly harm our business, financial condition, results of operations and prospects.

We have invested a significant portion of our time and financial resources in the development of etripamil. Our business is dependent on our ability to successfully complete development of, obtain regulatory approval for, and, if approved, successfully commercialize etripamil and any future product candidates in a timely manner. In March 2025, we announced that we received a CRL regarding our New Drug Application, or “NDA,” for CARDAMYST (etripamil) nasal spray for the treatment of PSVT. The CRL highlighted two key Chemistry, Manufacturing and Controls (CMC) issues to be addressed. The FDA requested that the company submit additional information on nitrosamine impurities based on new draft guidance issued after the NDA submission. Secondly, the FDA stated that an inspection is required at a facility listed in the NDA, to ensure it is in compliance with Current Good Manufacturing Practices. On June 13, 2025, we

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submitted our response to the FDA’s CRL regarding the NDA for CARDAMYST (etripamil) nasal spray, which was accepted. After review of our response package, there can be no assurance that the FDA will approve our NDA.

Even if we eventually complete clinical testing and receive approval of an NDA, or foreign marketing application for etripamil and any future product candidates, the FDA or the comparable foreign regulatory authorities may grant approval or other marketing authorization contingent on the performance of costly additional clinical trials, including post-market clinical trials. The FDA or the comparable foreign regulatory authorities also may approve or authorize for marketing a product candidate for a more limited indication or patient population that we originally request, and the FDA or comparable foreign regulatory authorities may not approve or authorize the labeling that we believe is necessary or desirable for the successful commercialization of a product candidate. Any delay in obtaining, or inability to obtain, applicable regulatory approval or other marketing authorization would delay or prevent commercialization of that product candidate and would materially adversely impact our business and prospects. In addition, the FDA and comparable foreign regulatory authorities may change their policies, adopt additional regulations or revise existing regulations or take other actions, which may prevent or delay approval of our future products under development on a timely basis. Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain approvals, increase the costs of compliance or restrict our ability to maintain any marketing authorizations we may have obtained.

Disruptions at the FDA and other government agencies caused by layoffs, funding shortages or global health concerns could negatively impact our business.

The ability of the FDA to review proposed clinical trials or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, including executive and congressional priorities, the impacts of which are inherently fluid and unpredictable. Disruptions at the FDA and other agencies may slow the time necessary for new product candidates to be reviewed and/or approved, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. In addition, the current administration has proposed substantial reductions in force at various government agencies including the FDA, which could significantly reduce the FDA’s capacity to perform its functions in a manner consistent with its past practices and could delay reviews and negatively impact our business.

Risks Related to Regulatory Compliance

Healthcare legislative reform measures may have a negative impact on our business and results of operations.

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in March 2010 the PPACA, was passed, which substantially changed the way healthcare is financed by both governmental and private payors in the United States. There have been amendments, as well as executive, judicial and Congressional challenges, to certain aspects of the PPACA. For example, on July 4, 2025, the annual reconciliation bill, the "One Big Beautiful Bill Act" (“OBBBA”) was signed into law which, is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. OBBBA also narrows access to PPACA marketplace exchange enrollment and declines to extend the PPACA enhanced advanced premium tax credits, set to expire at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. On August 16, 2022, the Inflation Reduction Act of 2022, or “IRA,” was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in PPACA marketplaces through plan year 2025. The IRA also eliminates the "donut hole" under the Medicare

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Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program. It is possible that the PPACA will be subject to judicial or Congressional challenges in the future. It is unclear how any additional healthcare reform measures of the second Trump administration will impact the PPACA and our business.

Further, in the United States there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor programs, and review the relationship between pricing and manufacturer patient programs. At the federal level, the IRA, among other things (i) directs the Department of Human Health Services, or “HHS,” to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least seven years and covered under Medicare, or the “Medicare Drug Price Negotiation Program,” and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions began to take effect progressively starting in fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation program is currently subject to legal challenges. On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program, or “SIP”, proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada. Other states have also submitted SIP proposals that are pending review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs. We expect that additional U.S. healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for etripamil or any future product candidates or additional pricing pressures.

In addition, other legislative changes have been proposed and adopted since the PPACA was enacted. On August 2, 2011, the Budget Control Act of 2011 was signed into law, which includes reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect until 2032 unless additional Congressional action is taken Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

We cannot predict the likelihood, nature or extent of health reform initiatives that may arise from future legislation or administrative action in the United States or any other jurisdiction, particularly given the recent change in administration. The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, the Centers for Medicare & Medicaid Services and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. For example, on September 30, 2025, the current administration announced the first agreement with a major pharmaceutical company that requires the drug manufacturer to offer, through a direct to consumer platform, U.S. patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent actions and proposals include, for example, (1) reducing agency workforce; (2) directing program cuts; (3) rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation to consider new payment and healthcare models to limit drug spending and eliminating the Biden

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administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan; (4) directing HHS and other agencies to lower prescription drug costs for Medicare through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products; (5) imposing tariffs of imported pharmaceutical products; (6) directing certain federal agencies to enforce existing law regarding hospital and plan price transparency and by standardizing prices across hospitals and health plans; and (7) as part of the Make America Healthy Again (MAHA) Commission’s recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. These actions and policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks. Additionally, in its June 2024 decision in Loper Bright, the U.S. Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA. If we, or any third parties we may engage, are slow or unable to adapt to changes in existing or new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, we may not achieve or sustain profitability.

Risks Related to Ownership of Our Common Shares

Future changes to tax laws could materially adversely affect our Company and reduce net returns to our shareholders.

Our tax treatment is subject to the enactment of, or changes in, tax laws, regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate, including those related to the Organization for Economic Co-Operation and Development’s, or “OECD,” Base Erosion and Profit Shifting, or “BEPS,” Project, the European Commission’s state aid investigations and other initiatives. Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid. We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our financial position and overall or effective tax rates in the future in countries where we have operations, reduce post-tax returns to our shareholders, and increase the complexity, burden and cost of tax compliance.

For example, legislation commonly referred to as the One Big Beautiful Bill Act, or the “OBBBA,” enacted in 2025, the Inflation Reduction Act enacted in 2022, the Coronavirus Aid, Relief, and Economic Security Act enacted in 2020, and the Tax Cuts and Jobs Act enacted in 2017 made many significant changes to the U.S. Internal Revenue Code of 1986, as amended, or the “Code.” The Tax Cuts and Jobs Act required taxpayers to capitalize and amortize U.S.-based and non-U.S.-based research and experimental, or “R&E,” expenditures over five and fifteen years, respectively. The OBBBA restored the deductibility of domestic R&E expenditures in the year incurred for tax years beginning after December 31, 2024, but retained the capitalization and amortization requirement for foreign R&E expenditures. Future guidance from the Internal Revenue Service and other tax authorities with respect to any legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation or sunset in future years. It is possible that changes in or interpretations under the OBBBA, the Tax Cuts and Jobs Act, or other tax legislation, or the enactment of new tax legislation, could increase our future tax liability, which could in turn adversely impact our business and future profitability.

We continue to evaluate the impact that these and other tax reforms may have on our business. The impact of these and other tax reforms is uncertain and one or more of these or similar measures could seriously harm our business. We urge you to consult with your legal and tax advisors with respect to these tax reforms and the potential tax consequences of investing in or holding our common shares.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable

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Item 3. Defaults Upon Senior Securities.

Not applicable

Item 4. Mine Safety Disclosures.

Not applicable

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Item 5. Other Information.

Rule 10b5-1 Trading Arrangements

During the quarterly period covered by this report, the following directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" (as such terms are defined in Item 408 of Regulation S-K) as set forth in the table below.


			Type of Trading Arrangement
Name and Position	Action	Date	Rule 10b5-1*	Non- Rule 10b5-1**	Total Shares to be Sold	Expiration Date
Joeseph Oliveto President and Chief Executive Officer	Adoption	September 30, 2025	X		2,128,588	January 2, 2027
Amit Hasija Chief Financial Officer	Adoption	September 30, 2025	X		226,496	June 30, 2026

* Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
** “Non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K under the Exchange Act.

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Item 6. Exhibits.

HIDDEN_ROW
Exhibit Number		Description

3.1		Amended Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-38899), filed with the SEC on May 15, 2019).
3.2		Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-38899), filed with the SEC on May 15, 2019).
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in Inline XBRL.

* Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the “Exchange Act (whether made before or after the date of the Form 10-Q)”, irrespective of any general incorporation language contained in such filing.

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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.


	MILESTONE PHARMACEUTICALS INC.

Date: November 12, 2025	By:	/s/ Joseph Oliveto
		Joseph Oliveto
		President and Chief Executive Officer (Principal Executive Officer)




Date: November 12, 2025	By:	/s/ Amit Hasija
		Amit Hasija
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

seek marketing approvals for etripamil for the treatment of PSVT, AFib-RVR and other cardiovascular indications;

establish a sales, marketing, manufacturing and distribution capability, either directly or indirectly through third parties, to commercialize etripamil or any future product candidate for which we may obtain marketing approval;

continue our ongoing and planned development of etripamil, including future Phase 3 clinical trials for the treatment of AFib-RVR and potential Phase 4 clinical trials for treatment of PSVT;
build a portfolio of product candidates through development, or the acquisition or in-license of drugs, product candidates or technologies;

Milestone Pharmaceuticals Inc. 10-Q