Milestone Pharmaceuticals Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS ​ INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ Report of Independent Registered Public Accounting Firm (PCAOB ID: 271 ) 95 Consolidated Balance Sheets 96 Consolidated Statements of Loss 97 Consolidated Statements of Shareholders’ Equity 98 Consolidated Statements of Cash Flows 99 Notes to Consolidated Financial Statements 100 ​ ​ ​ 94 Table of Contents Report of Independent Registered Public Accounting Firm ​ To the Board of Directors and Shareholders of Milestone Pharmaceuticals Inc. ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of Milestone Pharmaceuticals Inc. and its subsidiary (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of loss, of shareholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matters ​ Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. We determined there are no critical audit matters. ​ ​ /s/ PricewaterhouseCoopers LLP Montreal, Canada March 20, 2026 ​ We have served as the Company's auditor since 2016 ​ ​ ​ 95 Table of Contents Milestone Pharmaceuticals Inc. Consolidated Balance Sheets (in thousands of US dollars, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 73,046 $ 25,314 Short-term investments ​ ​ 32,914 ​ ​ 44,381 License receivable ​ ​ 1,546 ​ ​ — Research and development tax credits receivable ​ ​ 316 ​ 901 Prepaid expenses ​ ​ 1,805 ​ 1,840 Inventory, net ​ ​ 648 ​ ​ — Other receivables ​ ​ 1,646 ​ 1,490 Total current assets ​ ​ 111,921 ​ 73,926 Operating lease right-of-use assets ​ ​ 1,129 ​ ​ 1,376 Property and equipment, net ​ ​ 511 ​ 197 Total assets ​ $ 113,561 $ 75,499 ​ ​ ​ ​ ​ ​ ​ Liabilities, and Shareholders' Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ Accounts payable and accrued liabilities ​ $ 13,289 $ 7,555 Operating lease liabilities ​ ​ 647 ​ 571 Other current liabilities ​ ​ 43 ​ ​ — Total current liabilities ​ ​ 13,979 ​ 8,126 Operating lease liabilities, net of current portion ​ ​ 539 ​ 874 Senior secured convertible notes ​ ​ 57,191 ​ ​ 53,352 Other long-term liabilities ​ ​ 83 ​ ​ — Total liabilities ​ ​ 71,792 ​ 62,352 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shareholders’ Equity ​ ​ ​ ​ ​ Common shares, no par value, unlimited shares authorized, 106,236,344 shares issued and outstanding as of December 31, 2025, 53,353,984 shares issued and outstanding as of December 31, 2024 ​ ​ 352,619 ​ 288,048 Pre-funded warrants - 16,412,925 issued and outstanding as of December 31, 2025 and 12,910,590 as of December 31, 2024 ​ ​ 55,649 ​ ​ 53,076 Additional paid-in capital ​ ​ 64,104 ​ 39,568 Accumulated deficit ​ ​ ( 430,603 ) ​ ( 367,545 ) ​ ​ ​ ​ ​ ​ ​ Total shareholders’ equity ​ ​ 41,769 ​ 13,147 ​ ​ ​ ​ ​ ​ ​ Total liabilities and shareholders’ equity ​ $ 113,561 $ 75,499 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 96 Table of Contents Milestone Pharmaceuticals Inc. Consolidated Statements of Loss (in thousands of US dollars, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ ​ $ 1,546 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ Research and development, net of tax credits ​ ​ $ 18,108 $ 14,357 General and administrative ​ ​ ​ 17,274 ​ 16,742 Commercial ​ ​ ​ 28,304 ​ 11,003 ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations ​ ​ ​ ( 62,140 ) ​ ( 42,102 ) ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ ​ 2,920 ​ 4,164 Interest expense ​ ​ ​ ( 3,838 ) ​ ​ ( 3,581 ) ​ ​ ​ ​ ​ ​ ​ ​ Net loss and comprehensive loss ​ ​ $ ( 63,058 ) $ ( 41,519 ) ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares and pre-funded warrants outstanding, basic and diluted ​ ​ ​ 83,882,800 ​ ​ 62,210,702 ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share, basic and diluted ​ ​ $ ( 0.75 ) $ ( 0.67 ) ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 97 Table of Contents ​ Milestone Pharmaceuticals Inc. Consolidated Statements of Shareholders’ Equity (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 December 31, 2023 ​ 33,483,111 ​ $ 260,504 ​ 9,577,257 ​ $ 48,459 ​ $ 33,834 ​ $ ( 326,026 ) ​ $ 16,771 Transactions during 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 41,519 ) ​ ​ ( 41,519 ) Exercise of stock options ​ 50,476 ​ ​ 95 ​ — ​ ​ — ​ ​ ( 42 ) ​ ​ — ​ ​ 53 Pre-funded warrants, net of issuance costs ​ — ​ ​ — ​ 3,333,333 ​ ​ 4,617 ​ ​ — ​ ​ — ​ ​ 4,617 Share-based compensation ​ — ​ ​ — ​ — ​ ​ — ​ ​ 5,776 ​ ​ — ​ ​ 5,776 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 December 31, 2024 ​ 53,353,984 ​ $ 288,048 ​ 12,910,590 ​ $ 53,076 ​ $ 39,568 ​ $ ( 367,545 ) ​ $ 13,147 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2024 ​ 53,353,984 ​ $ 288,048 ​ 12,910,590 ​ $ 53,076 ​ $ 39,568 ​ $ ( 367,545 ) ​ $ 13,147 Transactions during 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 63,058 ) ​ ​ ( 63,058 ) Exercise of stock options ​ 293,497 ​ ​ 776 ​ — ​ ​ — ​ ​ ( 332 ) ​ ​ — ​ ​ 444 Pre-funded warrants, net of issuance costs ​ — ​ ​ — ​ 3,502,335 ​ ​ 2,573 ​ ​ — ​ ​ — ​ ​ 2,573 Share-based compensation ​ — ​ ​ — ​ — ​ ​ — ​ ​ 7,461 ​ ​ — ​ ​ 7,461 Issuance of common shares, vesting of performance stock units ​ 895,500 ​ ​ 1,558 ​ — ​ ​ — ​ ​ ( 1,558 ) ​ ​ — ​ ​ — Issuance of common shares, net of issuance costs ​ 37,190,920 ​ ​ 37,587 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 37,587 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 Exercise of Series A common stock warrants, net of issuance costs ​ 13,630,007 ​ ​ 22,919 ​ — ​ ​ — ​ ​ ( 3,700 ) ​ ​ — ​ ​ 19,219 Exercise of Series B common stock warrants, net of issuance costs ​ 666,666 ​ ​ 1,431 ​ — ​ ​ — ​ ​ ( 255 ) ​ ​ — ​ ​ 1,176 Employee stock purchase plan purchases ​ 205,770 ​ ​ 300 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 300 Balance as of December 31, 2025 ​ 106,236,344 ​ $ 352,619 ​ 16,412,925 ​ $ 55,649 ​ $ 64,104 ​ $ ( 430,603 ) ​ $ 41,769 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 98 Table of Contents Milestone Pharmaceuticals Inc. Consolidated Statements of Cash Flows (in thousands of US dollars) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 Cash flows used in operating activities ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 63,058 ) ​ $ ( 41,519 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation of property and equipment ​ ​ 114 ​ ​ 105 Amortization of debt costs ​ ​ 432 ​ ​ 370 Accretion of investment discount ​ ​ ( 81 ) ​ ​ ( 454 ) Non-cash interest expense related to Senior Secured Convertible Note ​ ​ 3,407 ​ ​ 3,210 Share-based compensation expense ​ ​ 7,461 ​ ​ 5,776 Loss on disposals of property and equipment ​ ​ — ​ ​ 8 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ License receivable ​ ​ ( 1,546 ) ​ ​ — Other receivables ​ ​ ( 156 ) ​ ​ 1,718 Research and development tax credits receivable ​ ​ 585 ​ ​ ( 258 ) Prepaid expenses ​ ​ 29 ​ ​ 1,338 Inventory ​ ​ ( 648 ) ​ ​ — Operating lease assets and liabilities ​ ​ ( 12 ) ​ ​ ( 17 ) Accounts payable and accrued liabilities ​ ​ 4,432 ​ ​ 875 ​ ​ ​ ​ ​ ​ ​ Net cash used in operating activities ​ ​ ( 49,041 ) ​ ​ ( 28,848 ) ​ ​ ​ ​ ​ ​ ​ Cash provided by investing activities ​ ​ ​ ​ ​ ​ Acquisition of property and equipment ​ ​ ( 302 ) ​ ​ ( 33 ) Acquisition of short-term investments ​ ​ ( 82,918 ) ​ ​ ( 113,554 ) Redemption of short-term investments ​ ​ 94,466 ​ ​ 121,870 ​ ​ ​ ​ ​ ​ ​ Net cash provided by investing activities ​ ​ 11,246 ​ ​ 8,283 ​ ​ ​ ​ ​ ​ ​ Cash provided by financing activities ​ ​ ​ ​ ​ ​ Proceeds from exercise of options ​ ​ 444 ​ ​ 53 Proceeds from issuance of common shares, net of issuance costs ​ ​ 37,593 ​ ​ 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 exercise of series A warrants, net of issuance costs ​ ​ 20,446 ​ ​ — Proceeds from exercise of series B warrants, net of issuance costs ​ ​ 1,251 ​ ​ — Proceeds from employee stock purchase plan ​ ​ 300 ​ ​ 191 ​ ​ ​ ​ ​ ​ ​ Cash provided by financing activities ​ ​ 85,527 ​ ​ 32,119 ​ ​ ​ ​ ​ ​ ​ Net increase in cash and cash equivalents ​ ​ 47,732 ​ ​ 11,554 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents – Beginning of period ​ ​ 25,314 ​ ​ 13,760 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents – End of period ​ $ 73,046 ​ $ 25,314 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 99 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except 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. The Company’s common shares began trading on The Nasdaq Global Select Market on May 9, 2019, and 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. On December 12, 2025, CARDAMYST™ (etripamil) was approved by the U.S. Food and Drug Administration, or “FDA,” to treat paroxysmal supraventricular tachycardia, or “PSVT.” The Company is also developing etripamil for the treatment of atrial fibrillation, or “AFib,” and other cardiovascular indications. ​ 2. Summary of Significant Accounting Policies a) Basis of consolidation The 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 These consolidated financial statements of the Company have been presented in United States dollars (USD) and have been prepared in accordance with accounting principles generally accepted in the United States of America, or “U.S. GAAP,” including the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding financial reporting. ​ The preparation of 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 year. 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, • 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 & development 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. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s consolidated financial statements. c) Segment Information The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. See Note 20, “Segment Reporting.” ​ 100 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ d) Revenue Recognition Collaborative Arrangements The Company considers the nature and contractual terms of arrangements and assesses whether an arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity. If the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity, the Company accounts for such an arrangement as a collaborative arrangement under Accounting Standards Codification, or “ASC” 808, Collaborative Arrangements , or “ASC 808,” which requires that certain transactions between the Company and collaborators be recorded in its consolidated statements of loss on either a gross basis or net basis, depending on the characteristics of the collaborative relationship, and requires enhanced disclosure of collaborative relationships. The Company evaluates its collaboration agreements for proper classification in its consolidated statements of loss based on the nature of the underlying activity. If payments to and from collaborative partners are not within the scope of other authoritative accounting literature, the consolidated statements of loss classification for the payments is based on a reasonable, rational analogy to authoritative accounting literature that is applied in a consistent manner. If the Company concludes that it has a customer relationship with one of its collaborators, the Company follows the guidance in ASC Topic 606, Revenue From Contracts With Customers , or “ASC 606.” Revenue from Contracts with Customers In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for these goods and services. To achieve this core principle, the Company applies the following five steps: 1) identify the customer contract; 2) identify the contract’s performance obligations; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when or as a performance obligation is satisfied. The Company evaluates all promised goods and services within a customer contract and determines which of such goods and services are separate performance obligations. This evaluation includes an assessment of whether the good or service is capable of being distinct and whether the good or service is separable from other promises in the contract. In assessing whether promised goods or services in licensing arrangements are distinct, the Company considers factors such as the stage of development of the underlying intellectual property and the capabilities of the customer to develop the intellectual property on their own or whether the required expertise is readily available. Licensing arrangements are analyzed to determine whether the promised goods or services, which often include licenses, research and development services and governance committee services, are distinct or whether they must be accounted for as part of a combined performance obligation. If the license is considered not to be distinct, the license would then be combined with other promised goods or services as a combined performance obligation. If the Company is involved in a governance committee, it assesses whether its involvement constitutes a separate performance obligation. When governance committee services are determined to be separate performance obligations, the Company determines the fair value to be allocated to this promised service. Certain contracts contain optional and additional items, which are considered marketing offers and are accounted for as separate contracts with the customer if such option is elected by the customer, unless the option provides a material right which would not be provided without entering into the contract. An option that is considered a material right is accounted for as a separate performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. A contract may contain variable consideration, including potential payments for both milestone and research and development services. For certain potential milestone payments, the Company estimates the amount of variable consideration by using the most likely amount method. In making this assessment, the Company evaluates factors such as the clinical, regulatory, commercial and other risks that must be overcome to achieve the milestone. Each reporting period the Company re-evaluates the probability of achievement of such variable consideration and any related constraints. Milestone will include variable consideration, without constraint, in the transaction price to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. 101 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price among the performance obligations on a relative standalone selling price basis unless a portion of the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. The Company allocates the transaction price based on the estimated standalone selling price of the underlying performance obligations or in the case of certain variable consideration to one or more performance obligations. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs to complete the respective performance obligation. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amount the Company would expect to receive for each performance obligation. When a performance obligation is satisfied, revenue is recognized for the amount of the transaction price, excluding estimates of variable consideration that are constrained, that is allocated to that performance obligation on a relative standalone selling price basis. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. For performance obligations consisting of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non- refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenue from non-refundable, up-front fees allocated to the license at the point in time when the license is transferred to the customer and the customer is able to use and benefit from the license. e) Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments that are readily convertible into cash with original maturities of 90 days or less at acquisition date. f) 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 with a maturity greater than 90 days but less than one year and, as such, are classified as current assets. ​ g) Concentration Risks Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and investment securities classified as held-to-maturity. The Company maintains deposits at major financial institutions and such amounts may exceed those amounts insured by the Federal Deposit Insurance Corporation, or the “FDIC.” The Company has not experienced any losses on its deposits since inception, and the Company believes 102 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ that minimal credit risk exists with respect to these financial institutions. Additionally, the Company has adopted an investment policy that includes guidelines relative to credit quality, diversification of maturities and liquidity. Concentration of Supplier Risk The Company relies on a single source manufacturer for starting materials and active pharmaceutical ingredient, or “API,” packaging components, and packaged pharmaceutical product ready for commercial sale. h) Currency Risk The Company is exposed to currency risk due to financial instruments denominated in foreign currencies. The Company is exposed to the Canadian dollar currency risk and does not enter into arrangements to hedge its currency risk exposure. i) Inventory Inventory is stated at the lower of cost or net realizable value, with cost determined on a first‑in, first‑out, or “FIFO,” basis. Inventory costs include raw materials, work‑in‑process, finished goods, and applicable manufacturing overhead. Raw materials include starting materials used to manufacture the API. Work‑in‑process includes API, intermediate compounding steps, and bulk drug product. Finished goods include packaging components and the packaged pharmaceutical product ready for commercial sale. Prior to the FDA’s approval of CARDAMYST on December 12, 2025, costs associated with manufacturing pre‑approval commercial batches and clinical materials were expensed as research and development expenses in accordance with our accounting policy and SAB Topic 5A, as the product had not yet received regulatory approval and therefore did not meet the criteria for capitalization. Following FDA approval, we began capitalizing inventory related to CARDAMYST manufactured after the approval date. Inventory produced prior to approval and previously expensed as research and development remains recorded at a zero‑cost basis and is excluded from the inventory balance. Because our inventory is subject to expiration, the Company evaluates its carrying value each reporting period and records allowances for any estimated excess, obsolete, short‑dated, or otherwise unmarketable inventory. In accordance with regulatory requirements and current Good Manufacturing Practices, or “cGMP,” our inventory is also subject to strict quality control and monitoring throughout the manufacturing process. If certain batches or units do not meet quality specifications, we would write down the related inventory to its estimated net realizable value and record the expense as a cost of production in the Consolidated Statement of Loss. Inventory valuation adjustments require judgment and consideration of various factors, including forecasted demand, remaining shelf life, and quality assessments, among others. j) Property and Equipment Property and equipment is stated at historical cost less accumulated depreciation. Expenditures for maintenance and repairs are recorded to expense as incurred. The Company reviews its property and equipment whenever events or changes in circumstances indicate that the carrying value of certain assets might not be recoverable and recognizes an impairment loss when it is probable that an asset’s realizable value is less than the carrying value. To date, no such impairment losses 103 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ have been recorded. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets: ​ ​ ​ ​ Computer hardware and software ​ ​ ​ 3 years Office equipment 5 years Furniture and fixtures 5 years Leasehold improvements over the lease term ​ k) Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable. The Company does not have financing leases. Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. Right-out-use assets are subsequently accounted for as long-lived assets, including evaluating for indicators of impairment. Certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Prospectively, the Company will adjust the right-of-use assets for straight-line rent expense, or any incentives received, and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date. ​ The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew. ​ l) Pre-funded Warrants ​ Pre-funded warrants allow the holder to pay little or no consideration to receive the shares upon exercise of the warrant. The pre-funded warrants do not meet the definition of a derivative under ASC 815, Derivatives and Hedging, because their fair value at issuance is equal to the fair value of the shares underlying the warrant. As such, they have the characteristics of a prepaid forward sale of equity. As a result, the pre-funded warrants are accounted for as equity instruments. ​ m) Share and Debt Issuance Costs Share issuance costs include legal fees, accounting fees, sales agent commissions, broker and underwriting fees, and other direct costs incurred in connection with the issuance of equity instruments. Share issuance costs are recorded as a reduction of the financing equity proceeds. Debt issuance costs include legal fees, accounting fees, and other direct costs incurred in connection with the execution of our debt financing. Debt discounts represent costs paid to the lenders. Debt issuance costs and debt discounts are deducted from the carrying amount of the debt liability and are amortized to interest expense over the term of the related debt using the effective interest method. 104 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ n) Research and Development and Investment Tax Credits Research and development costs are charged to expense as costs are incurred in performing research and development activities. The Company’s research and development costs consist primarily of salaries and fees paid to contract research organizations, or “CROs” and non-capitalizable costs paid to contract manufacturing organizations, or “CMOs.” 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 the Company’s trials are being conducted. Direct costs associated with the Company’s 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. The Company records expenses for its 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 study in accordance with agreements established with CROs and clinical trial sites. The Company determines 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 the Company 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 the Company’s clinical development plan. If the actual timing of the performance of services of the level of effort varies from the estimate, the Company will adjust the accrual accordingly. The Company recognizes 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. o) Income Taxes The provision for income taxes is computed using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recorded to reduce the carrying amount of deferred income tax assets until when it is more likely than not that these assets will be realized. Tax benefits related to tax positions not deemed to meet the “more likely than not” threshold are not permitted to be recognized in the consolidated financial statements. p) Foreign Currency Translation and Transactions The functional currency of the Company is the U.S. dollar. Accordingly, transactions denominated in currencies other than the functional currency are measured and recorded in the functional currency at the exchange rate in effect on the date of the transactions. At each consolidated balance sheet date, monetary assets and liabilities denominated in currencies other than the functional currency are remeasured using the exchange rate in effect at that date. Non-monetary assets and liabilities and revenue and expense items denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions. Any gains or losses arising on remeasurement are included in the consolidated statement of loss. q) Share-Based Compensation The Company has a share-based compensation plan which is described in detail in Note 9, “Shareholders’ Equity,” and records all share-based payments, including grants of employee share options, performance stock options, or “PSOs,” restricted stock units, or “RSUs,” and performance stock units, or “PSUs, based on the fair value of the awards as of the grant date. The fair value of share options granted to employees and non-employees is estimated at the date of grant using the Black-Scholes option pricing model. The fair value of RSUs and PSUs with performance-based vesting conditions is calculated using the closing price of the Company’s common stock on the date of grant. 105 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ The Company recognizes share-based compensation expense over the requisite service period of the award, which equals the vesting period, using the straight-line method, with expense for PSUs and PSOs with performance-based vesting conditions, adjusted based on the likelihood of future achievement of the performance metrics. Forfeitures, if any, are recorded as they occur. Any consideration paid by employees on exercising share options and the corresponding portion previously credited to contributed surplus are credited to share capital. The Black-Scholes option pricing model used by the Company to calculate option values was developed to estimate fair value. The Company approved an employee share purchase plan in April 2019, which became effective on May 8, 2019, and is described in Note 10, “Share-Based Compensation.” The plan provides a means by which eligible employees of the Company may be given an opportunity to purchase common shares. The plan permits the Company to grant a series of purchase rights to eligible employees under an employee stock purchase plan. ​ r) Recent Accounting Pronouncements New Accounting Pronouncements - Issued and Adopted 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 adopted ASU 2023-09 for the year ended December 31, 2025, as documented in Note 13, “Income Taxes.” ​ New Accounting Pronouncements - Issued but Not Yet Adopted 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. ​ s) 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: commercializing CARDAMYST; procuring inventory given our reliance on a concentrated supplier base, 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, armed conflicts, and overall fluctuations in the financial markets in the U.S. and abroad. ​ 106 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ t) Sources of Liquidity and Funding Requirements The Company has incurred operating losses and experienced negative operating cash flows since its inception and expect to incur additional costs in connection with commercialization in 2026. The Company intends to finance its commercialization and working capital needs from existing cash, potential proceeds from the commercialization of CARDAMYST, royalty revenue, the exercise of outstanding common stock options and warrants to purchase common stock, and existing and future licensing and commercial partnership agreements. As of December 31, 2025, the Company had cash and cash equivalents and short-term investments of $ 106.0 million and an accumulated deficit of $ 430.6 million. The Company believes that its cash, cash equivalents and short-term investments as of December 31, 2025, will be sufficient to allow the Company to fund its planned operations for at least the next 12 months from the date of this Annual Report on Form 10-K. ​ The Company has historically financed its operations primarily through the sale of equity securities, convertible notes, short-term investments, and from cash received pursuant to its license agreement. To date, the Company has not generated any revenue from product sales. Management expects operating losses and negative cash flows from operations to continue for the foreseeable future. There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending should additional capital not become available could have a material adverse effect on the Company’s ability to achieve its business objectives. 3. Revenue The Company recorded license revenue of $ 1.5 million for the year ended December 31, 2025, and no revenue for the year ended December 31, 2024. The license revenue for the year ended December 31, 2025 was the result of having reached a milestone 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”) due upon approval of the NDA for CARDAMYST by the FDA in the United States. Strategic Partnerships ​ Corxel Pharmaceuticals ​ On May 15, 2021, the Company entered into the License Agreement with Corxel, which is an entity affiliated with RTW Investments, LP, or “RTW,” a beneficial owner of approximately 2.9 % of the Company’s common shares, as of December 31, 2025. 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 People’s Republic of China, or the “Territory,” including mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region, and Taiwan. Corxel will be responsible for development and regulatory activities in the Territory, and the Company will remain responsible for certain manufacturing activities in the Territory, subject to the supply agreement subsequently entered into by the Company and Corxel as contemplated by the License Agreement (the Supply Agreement). The Company received a non-refundable upfront cash payment of $ 15 million and the right to future payments of up to $ 107.5 million in total development and sales milestone payments. In addition, the Company is entitled to receive tiered royalty payments ranging from a percentage in the low double digits to the high double digits of Net Sales (as defined in the License Agreement) of all products sold in the Territory. ​ Management evaluated all of the promised goods or services within the contract and determined that such goods and services were separate performance obligations. The Company determined that the license granted was a separate performance obligation as Corxel can benefit from the license granted on its own after the transfer of the license, as it does not require any significant development, regulatory or commercialization activities from Milestone. Corxel is responsible for all development, regulatory and commercialization activities in the Territory, including the performance of clinical trials necessary for regulatory approval, and is responsible for all such related costs. Supply of the product can be provided by another entity, as the Company currently uses a CMO for the production of etripamil without subsequent significant 107 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ modification or customization by the Company, therefore the Company determined the obligation to supply product is a separate and distinct obligation. The Company concluded that the obligation for participation on the various governance committees was distinct as the services could be performed by an outside party, however it was determined to be immaterial after estimating the stand-alone cost compared to the License Agreement as a whole. As a result, the Company concluded there were two material and distinct performance obligations to account for under ASC 606 at the inception of the License Agreement. ​ 4. Short-term Investments As of December 31, 2025, short-term investments of $ 32.9 million were comprised of term deposits issued in US currency, earning interest between 2.75 % and 4.48 %, maturing between March 10, 2026 and April 21, 2026. These short-term investments were in scope of ASC 320, Investments-Debt Securities . The short-term investments maturity is greater than 90 days but less than one year, and they were classified as held to maturity, recorded as current assets and were accounted for at amortized cost. Interest income earned on short-term investments is reported in interest income. The Company had short-term investments of $ 44.4 million as of December 31, 2024. ​ As of December 31, 2025, $ 0.9 million in short-term investments were pledged as collateral for a letter of credit. ​ ​ 5. Inventory Following FDA approval in December 2025, the Company began capitalizing inventory costs related to CARDAMYST manufactured after the approval date. The components of inventory are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Raw materials $ — ​ $ — Work-in-process 521 ​ — Finished goods ​ ​ 127 ​ ​ — Total inventory ​ ​ 648 ​ ​ — ​ ​ Inventory manufactured prior to FDA approval was expensed through research and development costs, and therefore, this inventory has a zero-cost basis and is not included in the inventory balance. ​ ​ ​ ​ ​ ​ ​ ​ 6. Leases On May 20, 2022, the Company entered into a lease arrangement for a 62-month term for new office space located in Charlotte, NC. The Company recognized the operating lease right-of-use asset and operating lease liabilities at the lease commencement date on August 1, 2022. The interest rate implicit in lease contracts is not readily determinable and the Company does not have a public credit rating and carries no debt. As such, several factors were considered in the determination of the Company’s incremental borrowing rate used in determining the present value of lease payments. The Company’s examined credit ratings for similar companies, assumed equivalency between the Canadian and U.S. markets for collateralized debt and used rates near the 62-month period. This resulted in an incremental borrowing rate of 7.55 %. Lease expenses are recognized on a straight-line basis over the lease term, which is accomplished by increasing the amortization of the right-of-use asset as interest expense on the lease liability declines over the lease term. On August 12, 2025, the Company entered into an arrangement for the lease renewal for its headquarters located in Ville Saint-Laurent, Quebec. The 2-year lease term is from December 1, 2025, expiring on November 30, 2027. The Company recorded the operating lease right-of-use asset and operating lease liabilities at the effective lease arrangement date of August 12, 2025. The Company’s examined credit ratings for similar companies, assumed equivalency between the Canadian and U.S. markets for collateralized debt and used rates for the remaining lease term of 28 months . This resulted 108 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ in an incremental borrowing rate of 5.2 %. Lease expenses are recognized on a straight-line basis over the lease term, which is accomplished by increasing the amortization of the right-of-use asset as interest expense on the lease liability declines over the lease term. The Company is not reasonably certain of renewing the lease following the current renewal option and recognized the right-of-use asset and operating lease liabilities to November 30, 2027. The Company's operating office leases right-of-use assets as at December 31 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Opening balance ​ ​ ​ $ 1,376 ​ $ 1,917 Right-of-use adjustment, renewal August 2025 ​ ​ 334 ​ ​ — Amortization of right-of-use asset ​ ​ ( 581 ) ​ ​ ( 541 ) Closing balance ​ $ 1,129 ​ $ 1,376 ​ Operating lease expenses of $ 668 and $ 697 are included in general and administrative operating expenses in the consolidated statement of loss, and within operating activities in the statement of cash flows for the years ended December 31, 2025 and 2024, respectively and are comprised of two operating lease right-of-use assets and one operating lease of less than 12 months. The following table summarizes the future minimum lease payments of right-of-use assets operating leases as of December 31, 2025: ​ ​ ​ ​ January 1, 2026 to December 31, 2026 ​ $ 709 January 1, 2027 to November 30, 2027 ​ ​ 555 Total ​ ​ 1,264 Less interest ​ ​ ( 78 ) Total net of interest ​ $ 1,186 ​ ​ 7. Property and equipment Property and equipment consist of the following at December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Computer hardware and software ​ $ 660 ​ $ 238 Office equipment ​ 165 ​ 165 Leasehold improvements ​ 92 ​ 85 Total ​ $ 917 ​ $ 488 Less accumulated depreciation ​ ( 406 ) ​ ( 291 ) Property and equipment, net ​ $ 511 ​ $ 197 ​ No disposal was recorded for the year ended December 31, 2025, and an immaterial amount of disposals and losses on disposals was recorded for the year ended December 31, 2024. For the years ended December 31, 2025 and 2024, depreciation expense was $ 114 and $ 105 , respectively. ​ 109 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ 8. Accounts payable and accrued liabilities Accounts payable and accrued liabilities comprised the following as of December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ Trade accounts payable $ 5,645 ​ $ 1,932 Accrued compensation and benefits payable ​ 2,458 ​ ​ 2,501 Accrued research and development liabilities ​ 384 ​ ​ 631 Accrued commercial liabilities ​ ​ 2,709 ​ ​ 1,935 Accrued underwriting fees ​ ​ 1,302 ​ ​ — Accrued legal liabilities ​ ​ 296 ​ ​ 76 Other accrued liabilities ​ 495 ​ ​ 480 Total $ 13,289 ​ $ 7,555 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9. 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 106,236,344 shares were issued and outstanding as of December 31, 2025. ​ As of December 31, 2025, there were 2,286,603 common shares available for issuance under the Employee Stock Purchase Plan, or the “ESPP,” of which 1,785,097 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 chose, 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. The net proceeds to the Company from the 2025 Offering were $ 48.6 million after deducting underwriting commissions and other offering expenses payable by the Company, in the amount of $ 3.9 million. ​ On February 28, 2024, the Company entered into an underwriting agreement, or the “Underwriting Agreement,” related to an underwritten public offering, or the “February 2024 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 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 Underwriting Agreement, the Company granted the underwriters party thereto, or the “Underwriters,” 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 the February 2024 Offering, which was exercised by the Underwriters in full on February 29, 2024. ​ 110 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ On July 29, 2020, the Company 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. On March 18, 2025, the Company entered into an Amended and Restated Open Market Sale Agreement SM , or the “Amended Agreement.” 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 Company issued 5,690,920 shares under the amended agreement resulting in net proceeds of $ 14.5 million, after deducting sales agent commissions payable by the Company of $ 0.4 million during the year ended December 31, 2025. ​ 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 additional paid-in capital, or “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. ​ During the year ended December 31, 2025, 13,630,007 Series A and 666,666 Series B Warrants were exercised for net proceeds of $ 19.2 million and $ 1.2 million, respectively, after deducting underwriting commissions payable by the Company of $ 1.2 million and $ 0.01 million, respectively. As of December 31, 2025, 21,372,328 Series A Common Warrants and 34,335,669 Series B Common Warrants remained outstanding. ​ ​ 10. 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 at the Company’s 2025 annual meeting of shareholders, the Company’s shareholders approved an amendment to the 2019 Plan to (i) remove the evergreen provision, which previously triggered an automatic annual increase to the option pool equal to four percent of outstanding common shares at year-end, and (ii) increase the number of common shares authorized for issuance by 4,000,000 shares. In addition, 183,349 options have been forfeited or expired 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 111 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ were cancelled and were made available for future grants. As of December 31, 2025, there were 15,714,455 common shares available for issuance under the 2019 Plan, of which 5,205,860 common shares were available for future grants. On November 10, 2021, the Company established a 2021 Inducement Plan, or the “Inducement Plan.” The 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 December 31, 2025, there were 1,000,000 shares available for issuance under the 2021 Inducement Plan, of which 290,000 shares were available for future grants. ​ 112 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ The total outstanding and exercisable options from the 2011 Plan, 2019 Plan, and Inducement Plan as of December 31 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Number ​ ​ ​ average ​ ​ of shares ​ ​ ​ exercise ​ ​ ​ ​ 2019 Plan ​ Inducement Plan ​ 2011 Plan ​ ​ Total ​ ​ price Outstanding at beginning of year - 2011 Plan ​ — ​ ​ — ​ ​ ​ ​ 1,632,485 ​ ​ ​ 1,632,485 ​ ​ ​ $ 2.11 Outstanding at beginning of year - 2019 Plan ​ ​ 7,604,606 ​ ​ — ​ ​ — ​ 7,604,606 ​ ​ 4.97 Outstanding at beginning of year - Inducement Plan ​ ​ — ​ ​ 496,000 ​ ​ — ​ 496,000 ​ ​ 5.99 Granted - 2019 Plan ​ ​ 1,526,900 ​ ​ — ​ ​ — ​ 1,526,900 ​ ​ 1.96 Granted - Inducement Plan ​ ​ — ​ ​ 339,000 ​ ​ — ​ 339,000 ​ ​ 2.06 Exercised - 2011 Plan ​ ​ — ​ ​ — ​ ​ ( 293,497 ) ​ ( 293,497 ) ​ ​ 1.50 Forfeited - Inducement Plan ​ ​ — ​ ​ ( 125,000 ) ​ ​ — ​ ( 125,000 ) ​ ​ 2.34 Forfeited - 2019 Plan ​ ​ ( 101,516 ) ​ ​ — ​ ​ — ​ ( 101,516 ) ​ ​ 2.19 Expired - 2019 Plan ​ ​ ( 438,684 ) ​ ​ — ​ ​ — ​ ( 438,684 ) ​ ​ 10.07 Expired - 2011 Plan ​ ​ — ​ ​ — ​ ​ ( 44,297 ) ​ ( 44,297 ) ​ ​ 2.59 Outstanding at end of year ​ 8,591,306 ​ ​ 710,000 ​ ​ 1,294,691 ​ 10,595,997 ​ $ 4.00 Outstanding at end of year - Weighted average exercise price ​ $ 4.21 ​ $ 4.76 ​ $ 2.23 ​ ​ ​ ​ ​ Exercisable at end of year ​ ​ 5,759,369 ​ ​ 408,083 ​ ​ 1,294,691 ​ 7,462,143 ​ $ 4.73 Exercisable at end of year - Weighted average exercise price $ 5.17 ​ $ 6.45 ​ $ 2.23 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Number ​ ​ ​ average ​ ​ of shares ​ ​ ​ exercise ​ ​ 2019 Plan ​ Inducement Plan ​ 2011 Plan ​ ​ Total ​ ​ price Outstanding at beginning of year - 2011 Plan ​ ​ ​ ​ — ​ ​ — ​ ​ 1,694,233 ​ 1,694,233 ​ $ 2.09 Outstanding at beginning of year - 2019 Plan ​ 6,406,897 ​ ​ — ​ ​ — ​ 6,406,897 ​ ​ 5.82 Outstanding at beginning of year - Inducement Plan ​ ​ — ​ ​ 625,000 ​ ​ — ​ 625,000 ​ ​ 5.74 Granted - 2019 Plan ​ ​ 1,652,000 ​ ​ — ​ ​ — ​ 1,652,000 ​ ​ 1.62 Exercised - 2011 Plan ​ ​ — ​ ​ — ​ ​ ( 50,476 ) ​ ( 50,476 ) ​ ​ 1.04 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 ​ ​ 7,604,606 ​ ​ 496,000 ​ ​ 1,632,485 ​ 9,733,091 ​ $ 4.54 Outstanding at end of year - Weighted average exercise price ​ $ 4.97 ​ $ 5.99 ​ $ 2.11 ​ ​ ​ ​ ​ Exercisable at end of year ​ ​ 4,850,552 ​ ​ 319,291 ​ ​ 1,632,485 ​ 6,802,328 ​ $ 5.14 Exercisable at end of year - Weighted average exercise price ​ $ 6.09 ​ $ 6.24 ​ $ 2.11 ​ ​ ​ ​ ​ ​ The weighted average remaining contractual life was 6.43 and 6.71 years for outstanding options as of December 31, 2025 and 2024, respectively. The weighted average remaining contractual life was 5.54 and 5.92 years for vested options, as of December 31, 2025 and 2024, respectively. There was $ 3.8 million and $ 5.1 million of total unrecognized compensation cost related to non-vested share options as of December 31, 2025 and 2024, respectively. The share options are expected to be recognized over a remaining weighted average vesting period of 1.88 years and 1.48 years as of December 31, 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. 113 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ 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 December 31 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 year - 2019 Plan ​ ​ 2,754,054 ​ ​ — ​ ​ — ​ 2,754,054 $ 2.33 Non-vested share options at beginning of year - Inducement Plan ​ ​ — ​ ​ 176,709 ​ ​ — ​ 176,709 ​ ​ 4.19 Granted - 2019 Plan ​ 1,526,900 ​ ​ — ​ ​ — ​ 1,526,900 ​ ​ 1.62 Granted - Inducement Plan ​ ​ — ​ ​ 339,000 ​ ​ — ​ 339,000 ​ ​ 1.72 Vested, outstanding - 2019 Plan ​ ​ ( 1,347,501 ) ​ ​ — ​ ​ — ​ ( 1,347,501 ) ​ ​ 2.69 Vested, outstanding - Inducement Plan ​ ​ — ​ ​ ( 115,875 ) ​ ​ — ​ ( 115,875 ) ​ ​ 4.68 Forfeited - Inducement Plan ​ ​ — ​ ​ ( 97,917 ) ​ ​ — ​ ( 97,917 ) ​ ​ 1.71 Forfeited - 2019 Plan ​ ​ ( 101,516 ) ​ ​ — ​ ​ — ​ ( 101,516 ) ​ ​ 1.76 Non-vested share options at end of year ​ 2,831,937 ​ ​ 301,917 ​ ​ — ​ 3,133,854 $ 1.82 Non-vested share options at end of period - Weighted average fair value ​ $ 1.80 ​ $ 2.03 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ Number ​ ​ ​ Weighted ​ ​ of options ​ ​ ​ average ​ ​ ​ ​ 2019 Plan ​ ​ ​ Inducement Plan ​ ​ ​ 2011 Plan ​ ​ ​ Total ​ ​ ​ fair value Non-vested share options at beginning of year - 2019 Plan ​ ​ 3,178,475 ​ ​ — ​ ​ — ​ 3,178,475 $ 3.64 Non-vested share options at beginning of year - Inducement Plan ​ ​ — ​ ​ 403,167 ​ ​ — ​ 403,167 ​ ​ 4.07 Granted - 2019 Plan ​ 1,652,000 ​ ​ — ​ ​ — ​ 1,652,000 ​ ​ 1.26 Vested, outstanding - 2019 Plan ​ ​ ( 1,690,368 ) ​ ​ — ​ ​ — ​ ( 1,690,368 ) ​ ​ 3.48 Vested, outstanding - Inducement Plan ​ ​ — ​ ​ ( 128,208 ) ​ ​ — ​ ( 128,208 ) ​ ​ 4.48 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 year ​ 2,754,054 ​ ​ 176,709 ​ ​ — ​ 2,930,763 $ 2.45 Non-vested share options at end of year - Weighted average fair value ​ $ 2.33 ​ $ 4.19 ​ $ — ​ ​ ​ ​ ​ ​ The following table summarizes information with respect to share options outstanding as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options outstanding ​ Options exercisable ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ average ​ Weighted ​ ​ ​ average ​ Weighted ​ ​ ​ ​ remaining ​ average ​ ​ ​ remaining ​ average ​ ​ Number ​ contractual ​ exercise ​ Number ​ contractual ​ exercise Exercise price ​ of options ​ life (years) ​ price ​ of options ​ life (years) ​ price $ 1.12 -$ 1.98 2,677,321 ​ 6.92 ​ ​ 1.61 ​ 1,417,226 ​ 5.44 ​ ​ 1.51 $ 1.99 -$ 2.53 1,341,100 ​ 9.12 ​ ​ 2.05 ​ - ​ - ​ ​ - $ 2.54 -$ 3.61 1,853,234 ​ 5.79 ​ ​ 3.27 ​ 1,471,420 ​ 5.41 ​ ​ 3.20 $ 3.62 -$ 5.47 2,050,846 ​ 5.94 ​ ​ 4.79 ​ 1,938,335 ​ 5.90 ​ ​ 4.78 $ 5.48 -$ 8.92 2,463,060 ​ 5.54 ​ ​ 6.31 ​ 2,424,726 ​ 5.53 ​ ​ 6.30 $ 8.93 -$ 15.42 ​ 33,086 ​ 3.17 ​ ​ 9.42 ​ 33,086 ​ 3.17 ​ ​ 9.42 $ 15.43 -$ 17.01 ​ 14,100 ​ 3.60 ​ ​ 15.87 ​ 14,100 ​ 3.60 ​ ​ 15.87 $ 17.02 -$ 21.48 ​ 163,250 ​ 4.02 ​ ​ 20.62 ​ 163,250 ​ 4.02 ​ ​ 20.62 Total 10,595,997 6.43 ​ $ 4.00 7,462,143 5.54 ​ $ 4.73 ​ 114 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ The fair value of options granted for the 2011 Plan, 2019 Plan, and Inducement Plan were estimated using Black-Scholes option pricing model, resulting in the following weighted average assumptions for the options granted: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ 2025 ​ ​ ​ 2024 Exercise price ​ $ 1.98 $ 1.62 ​ Share price ​ $ 1.98 $ 1.62 ​ Volatility ​ 107 % ​ 96 % Risk-free interest rate ​ 4.30 % ​ 4.17 % Expected life ​ 5.94 years ​ 5.66 years ​ Dividend ​ 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 year ended December 31, 2025 and 2024 was $ 3.1 million and $ 2.1 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 FDA approval of etripamil for the treatment of PSVT. Subject to the option holders 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 Company recorded $ 0.8 million of expense related to the performance-based stock options during the year ended December 31, 2025, as the performance conditions were met with FDA approval of etripamil for the treatment of PSVT on December 12, 2025. The weighted average grant date fair value of the performance stock options awarded during the year ended December 31, 2025, was $ 1.38 per option. Employee Stock Purchase Plan On July 15, 2022, the Company offered an employee stock purchase plan, or “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 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 December 31, 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 115 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ 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 Stock 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. As a result of the FDA approval on December 12, 2025, 100 % of the outstanding PSUs vested at a grant date fair value of $ 1.74 per share. The Company recorded $ 1.6 million of expense related to the PSUs during the year ended December 31, 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 988,850 RSUs for the year ended December 31, 2025. The weighted average grant date fair value for the RSUs issued during the year ended December 31, 2025, was $ 2.02 per share. No RSUs were issued for the year ended December 31, 2024. The total unrecognized compensation cost related to the non-vested RSUs as of December 31, 2025, was $ 1.5 million and will be recognized over a weighted average period of approximately 3.07 years. ​ Share-Based Compensation Expense ​ The Company recognized share-based compensation expense for all plans as follows for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Administration ​ $ 3,833 $ 3,171 Research and development ​ ​ 2,364 ​ 1,874 Commercial activities ​ ​ 1,264 ​ 731 Total ​ $ 7,461 $ 5,776 ​ ​ 11. Debt ​ On March 27, 2023, the Company entered into a note purchase agreement, or the “Note Purchase Agreement,” with RTW Investments LP and certain of its affiliates, or collectively, “RTW.” On March 29, 2023, the Company closed the transactions contemplated by the Note Purchase Agreement, 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. The 2029 Convertible Notes are senior secured obligations and are guaranteed on a senior secured basis by the Company’s wholly owned subsidiary, Milestone Pharmaceuticals USA, Inc. Interest at the annual rate of 6.0 % is payable quarterly in 116 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ cash or, at our option, payable in kind for the first three years . The maturity date for the 2029 Convertible Notes is March 31, 2029, the “Maturity Date”. The obligations under the 2029 Convertible Notes are secured by substantially all of the Company’s and the Company’s subsidiary guarantor’s assets. Each $ 1,000 of principal of the 2029 Convertible Notes (including any interest added thereto as payment in kind) is convertible into 191.0548 common shares, equivalent to an initial conversion price of approximately $ 5.23 per share, subject to customary anti-dilution and other adjustments. In addition, following a notice of redemption or certain corporate events that occur prior to the Maturity Date, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2029 Convertible Notes in connection with such notice of redemption or corporate event. On or after March 27, 2027, the 2029 Convertible Notes are redeemable by the Company, subject to certain conditions, if the closing sale price of the common shares exceeds 150 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100 % of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. 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 December 31, 2025, the estimated fair value of the 2029 Convertible Notes was approximately $ 62.3 million based on level 2 inputs, including volatility and credit spread. ​ The net carrying amount of the 2029 Convertible Note were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 Original principal $ 50,000 ​ $ 50,000 Paid in kind (PIK) interest ​ ​ 8,927 ​ ​ 5,520 Unamortized debt discount ​ ​ ( 374 ) ​ ​ ( 468 ) Unamortized debt issuance costs ​ ( 1,362 ) ​ ​ ( 1,700 ) Total $ 57,191 ​ $ 53,352 ​ The following table presents the total amount of interest cost recognized relating to the 2029 Convertible Notes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ Contractual interest expense ​ ​ $ 3,407 $ 3,210 ​ Amortization of debt discount ​ ​ ​ 93 ​ ​ 80 ​ Amortization of debt issuance costs ​ ​ ​ 338 ​ 291 ​ Total interest expense ​ ​ $ 3,838 $ 3,581 ​ 117 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ ​ ​ 12. 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, which the Company reviewed and concluded that if-converted would be anti-dilutive due to the facts surrounding the feature, the following potentially dilutive securities have also been excluded from the computation of diluted weighted average shares outstanding as of December 31, as they would be anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Stock options and RSUs 11,546,697 10,657,091 ​ Amounts in the table above reflect the common share equivalents of the noted instruments. ​ 13. Income taxes Upon adoption of ASU No. 2023-09, for the year ended December 31, 2025, the provision for income taxes differs from the expense that would be obtained by applying the Canadian federal statutory income tax rate as a result of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ Amount ​ Percent Loss before income taxes ​ $ ( 63,058 ) ​ ​ ​ Canadian federal statutory tax rate (1) ​ ( 9,459 ) 15.0 % Provincial and local taxes (2) ​ ( 2,344 ) 3.7 % Foreign tax effects ​ ​ ​ ​ ​ ​ United States ​ ​ ​ ​ ​ ​ Statutory tax rate difference ​ ​ ( 2,560 ) ​ 4.1 % Non-taxable item: share based compensation ​ ​ 260 ​ ( 0.4 ) % Other ​ ​ 20 ​ ( 0.0 ) % Changes in Valuation Allowances ​ ​ 25 ​ ( 0.0 ) % Changes in unrecognized tax benefits ​ ​ 12,093 ​ ( 19.2 ) % Non-taxable or non-deductible items ​ ​ ​ ​ ​ ​ Share-based compensation ​ ​ 1,977 ​ ( 3.1 ) % Other ​ ​ ( 12 ) ​ 0.0 % Effective Tax Rate ​ $ — ​ - % (1) We apply the federal tax rate of 15 % which is the federal statutory rate of Canada of 38 %, net of the general rate reduction of 10 % and tax abatement of 13 %. (2) We apply the provincial tax rate in Quebec of 11.5 % to the net loss before income taxes attributable to the Canadian entity. Our provincial tax is Quebec only. ​ For the year ended December 31, 2025, loss before income taxes was $ 20.4 million and $ 42.7 million for the Canadian and United States entities, respectively. For the year ended December 31, 2024, loss before income taxes was $ 20.8 million and $ 20.7 million for the Canadian and United States entities, respectively. 118 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ Prior to the adoption of ASU No. 2023-09, for the year ended December 31, 2024, the provision for income taxes differs from the expense that would be obtained by apply the Canadian statutory income tax rate as result of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ Amount ​ Percent Loss before income taxes ​ $ ( 41,519 ) ​ ​ ​ Canadian statutory rate (1) ​ 26.50 % ​ ​ Computed income tax recovery ​ ( 11,003 ) ​ Effect on income tax rate resulting from ​ ​ ​ Non‑deductible share‑based compensation ​ ​ 1,637 ​ ( 3.9 ) % Other permanent differences ​ ​ 21 ​ ( 0.1 ) % Tax benefits of current period losses and other tax assets, subject to full valuation allowance ​ ​ 8,074 ​ ( 19.4 ) % Valuation allowance for prior year adjustment ​ ​ 136 ​ ( 0.3 ) % Foreign income tax rate difference ​ ​ 1,114 ​ ( 2.7 ) % Other ​ ​ 21 ​ ( 0.1 ) % Income tax expense (recovery) reported in the consolidated statements of loss ​ $ — ​ - % ​ (1) Our Canadian corporate tax rate is comprised of a basic Part I federal tax rate of 38 %, net 15 % after federal tax abatement and general tax reduction, plus the additional provincial tax of 11.5 %. ​ The Company has incurred Canadian federal and provincial net operating losses, or “NOLs,” from inception. As of December 31, 2025, the Company has NOL carry-forwards of approximately $ 230.7 million and $ 226.6 million, respectively, for Canadian federal and Québec purposes, available to reduce future taxable income, which expire beginning in 2026 through 2045. The Company also has scientific research and experimental development expenditures of approximately $ 32.7 million and $ 38.8 million, respectively, for Canadian federal and Québec income tax purposes, which have not been deducted. These expenditures are available to reduce future taxable income and have an unlimited carry-forward period. Research and development tax credits and expenditures are subject to verification by the tax authorities, and, accordingly, these amounts may vary. The Company has incurred NOLs for U.S. tax purposes. As of December 31, 2025, the Company has carry-forwards of approximately $ 103.2 million related to U.S. NOLs that may be carried forward indefinitely and are available to reduce future taxable income. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The net deferred tax assets have not been recognized in these financial statements because the criteria for recognition of these assets were not met. 119 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ The Company’s net deferred tax assets consist of the following for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Net operating loss carry‑forwards $ 83,305 $ 72,775 Tax basis of property and equipment in excess of carrying values 13 ​ 78 Tax basis of right of use assets ​ ( 255 ) ​ ( 298 ) Tax basis of lease liability ​ 267 ​ 311 Tax basis of reserves ​ 10 ​ 5 Federal SR&ED investment tax credits 4,663 ​ 4,170 Taxation of federal SR&ED investment tax credits ( 1,236 ) ​ ( 1,105 ) Research and development expenditures 10,292 ​ 8,472 Financing costs 1,034 ​ 447 Stock based compensation ​ 4,600 ​ 3,752 Others 114 ​ 745 Total Net deferred tax assets 102,807 ​ 89,353 Less Valuation allowance ​ ( 102,807 ) ​ ( 89,353 ) Net deferred tax assets $ — $ — ​ The Company files income tax returns in Canada and in the United States. The Company is subject to Canada Revenue Agency and Revenu Québec examination for fiscal years 2020 to 2025 due to unexpired statute of limitation periods and is subject to US Federal and state income tax examination for fiscal years 2022 to 2025. On July 4, 2025, the President of the United States signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. These changes were reflected in the income tax provision for the period ended December 31, 2025, as enactment occurred after the balance sheet date. The Company has elected to continue capitalizing domestic R&D expenditures and will continue to amortize prior year R&D expenditures that were capitalized. 14. Government assistance The Company incurs research and development expenditures that are eligible for investment tax credits. The investment tax credits recorded are based on management’s estimates of amounts expected to be recovered and are subject to audit by the taxation authorities. These amounts have been recorded as a reduction of research and development expenditures in the years ended December 31, 2025 and 2024 for an amount of $ 316 and $ 259 , respectively. 15. Commitments In the normal course of business, the Company enters into contracts with clinical research organizations, drug manufacturers and other vendors for preclinical and clinical research studies, research and development supplies and other services and products for operating purposes. These contracts generally provide for termination with reasonable notice or upon certain circumstances, and therefore are cancellable contracts. Therefore, as of December 31, 2025, there are no contractual commitments, except for office leases (see Note 6, “Leases”). 16. Currency risk The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates and the degree of volatility of those rates. The foreign currency risk is limited to the portion of the Company’s business transactions denominated in 120 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ currency other than US dollars. The following table provides an indication of the Company’s exposure to the Canadian dollar, which is expressed in US dollars as of December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Cash and cash equivalents ​ $ 2,041 ​ $ 1,222 Short-term investments ​ ​ 914 ​ ​ 487 Other receivables ​ ​ 168 ​ ​ 210 Operating lease assets ​ ​ 320 ​ ​ 153 Accounts payable and accrued liabilities ​ ​ ( 314 ) ​ ​ ( 280 ) Operating lease liabilities ​ ​ ( 312 ) ​ ​ ( 138 ) Net financial position exposure ​ $ 2,817 ​ $ 1,654 ​ The Company does not enter into arrangements to hedge its currency risk exposure. ​ 17. 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 years ending December 31, 2025 and December 31, 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 11, “Debt,” for details surrounding the fair value disclosures of the Convertible Notes. 18. Royalty Purchase Agreement On March 27, 2023, the Company entered into a purchase and sale agreement, or the “Royalty Purchase Agreement,” with RTW and certain of its affiliates. Pursuant to the Royalty Purchase Agreement, RTW agreed to purchase, following the U.S. Food and Drug Administration approval of etripamil (subject to certain conditions), at a purchase price of $ 75.0 million, the right to receive a tiered quarterly royalty payments, or the “Royalty Interest,” on the 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 %. R efer to Note 21, “Subsequent Events.” 121 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ ​ ​ 19. Other receivables Other receivables comprised the following as of December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Interest receivable $ 196 ​ $ 604 Sales tax receivable 168 ​ 210 Clinical receivable ​ ​ — ​ ​ 674 Employee withholding taxes receivable ​ ​ 1,115 ​ ​ — Other current receivable ​ ​ 167 ​ ​ 2 Total $ 1,646 ​ $ 1,490 ​ ​ ​ ​ 20. 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 are focused on a single product, which are reported on a consolidated basis. 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 consolidated net loss. Net loss is used by the CODM to evaluate budget to actual analytics, which are used to monitor the single segment spend and confirm the Company is meeting established budgetary goals. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ (in thousands) ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ Revenue ​ ​ $ 1,546 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ Research and development, net of tax credits, excluding share-based compensation ​ ​ ​ 15,744 ​ ​ 12,483 ​ General and administrative, excluding share-based compensation ​ ​ 13,441 ​ 13,571 ​ Commercial, excluding share-based compensation ​ ​ 27,040 ​ 10,272 ​ Share-based compensation expense ​ ​ ​ 7,461 ​ ​ 5,776 ​ Interest income ​ ​ ( 2,920 ) ​ ​ ( 4,164 ) ​ Interest expense ​ ​ ​ 3,838 ​ ​ 3,581 ​ Net loss ​ ​ $ ( 63,058 ) ​ $ ( 41,519 ) ​ ​ The measure of segment assets is reported on the balance sheet as total consolidated assets. ​ ​ ​ ​ 122 Table of Contents Milestone Pharmaceuticals Inc. Notes to Consolidated Financial Statements (in thousands of US dollars, except share and per share data) ​ 21. Subsequent Events Closing of sale of royalty interest ​ As previously disclosed, on March 27, 2023, the Company entered into the Royalty Purchase Agreement with RTW, pursuant to which RTW agreed to purchase, following FDA approval of etripamil (subject to certain conditions) for the treatment of PSVT, at a purchase price of $ 75.0 million, the right to receive tiered quarterly royalty payments on net product sales of etripamil in the United States. ​ On January 12, 2026, the Company closed the sale of Royalty interest under the Royalty Purchase Agreement and received cash of $ 75.0 million from RTW. ​ Sale of common shares under 2025 Offering and Open Market Sale Agreement SM ​ Subsequent to the year ended December 31, 2025, through to the date of issuance of the financial statements, the Company raised aggregate gross proceeds of $ 19.7 million from the sale of common shares through Milestone’s Open Market Sale Agreement SM and the exercise of Warrants issued in connection with the 2025 Offering. ​ Specifically, 5,526,590 shares were sold through the Open Market Sale Agreement SM for net proceeds of $ 10.9 million, after deducting sales agent commissions payable by the Company of $ 0.3 million. In addition, 5,666,666 Series A Warrants were exercised for net proceeds of $ 8.0 million, after deducting underwriting commissions payable by the Company of $ 0.5 million. ​ ​ ​ ​ ​ ​ ​ ​ ​ 123 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.