What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-27 · 220 added, 187 removed, 486 unchanged (46% of the section changed)

2 unchanged sentences

Index to Consolidated Financial Statements

Year ended December 31, 2024

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022

Reports of Independent Registered Public Accounting Firm (PwC PCAOB ID 238)

Reports of Independent Registered Public Accounting Firm (KPMG PCAOB ID 85 )

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Xenon Pharmaceuticals Inc.:

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Xenon Pharmaceuticals Inc.

and its subsidiary (the “Company”) as of December 31, 2025, and the related consolidated statements of operations and comprehensive loss, of shareholders’ equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audit.

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 audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements 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 audit 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.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

External Research and Development Costs

As described in Note 3 to the consolidated financial statements, research and development costs are expensed in the period incurred.

Management recognizes research and development expenses using information and data provided by the vendors and third-party service providers.

This process involves reviewing open contracts, communicating with applicable vendors and third-party service providers to identify services that have been performed, estimating the level of service performed, and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual costs.

The Company’s research and development expense for the year ended December 31, 2025 was $300.9 million, a majority of which relates to external research and development costs.

The principal consideration for our determination that performing procedures relating to external research and development costs is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s external research and development costs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the Company’s research and development costs, including controls over external research and development costs.

These procedures also included, among others testing external research and development costs on a sample basis by obtaining and inspecting source documents, such as the underlying contract research organization and contract manufacturing organization agreements, invoices received, and information received from vendors and third-party service providers, where applicable.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

February 26, 2026

We have served as the Company’s auditor since 2025.

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

1 unchanged sentence

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Xenon Pharmaceuticals Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024 and the related notes (collectively, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S.

We have audited the accompanying consolidated balance sheet of Xenon Pharmaceuticals Inc.

(the Company) as of December 31, 2024, the related consolidated statements of operations and comprehensive loss, shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively, 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, 2024, and the results of operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the 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.

5 unchanged sentences

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:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

Chartered Professional Accountants

We have served as the Company’s auditor since 1999.

Vancouver, Canada

February 27, 2025

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Xenon Pharmaceuticals Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Xenon Pharmaceuticals Inc.’s (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2025 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the 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 audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Chartered Professional Accountants

We served as the Company’s auditor from 1999 to 2025.

Vancouver, Canada

7 unchanged sentences

Marketable securities (note 5)

Accounts receivable

Other receivables

Prepaid expenses and other current assets

Total current assets

Marketable securities, long-term (note 5)

7 unchanged sentences

Operating lease liability (note 7)

Total current liabilities

Operating lease liability, long-term (note 7)

Other liabilities, long-term

Total liabilities

5 unchanged sentences

Accumulated deficit

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Total shareholders' equity

8 unchanged sentences

Year Ended December 31,

Revenue (note 10)

Collaboration revenue (note 10)

Operating expenses:

1 unchanged sentence

General and administrative

Total operating expenses

Loss from operations

1 unchanged sentence

Interest income

Unrealized fair value gain (loss) on trading securities

Unrealized fair value gain on trading securities

Foreign exchange gain (loss)

Total other income

Loss before income taxes

Income tax recovery (expense) (note 14)

Net loss attributable to preferred shareholders

Net loss attributable to common shareholders

Other comprehensive income (loss):

10 unchanged sentences

dollars except share amounts)

preferred shares

Common shares

1 unchanged sentence

comprehensive

income (loss)

shareholders'

2 unchanged sentences

Issuance of common shares and pre-funded

warrants, net (note 9a and note 9e)

Conversion of preferred shares (note 9d)

Stock-based compensation expense (note 9c)

Exercise of stock options

Other comprehensive loss

Balance as of December 31, 2022

Net loss for the year

Issuance of common shares and pre-funded

warrants, net (note 9a and note 9e)

Conversion of pre-funded warrants (note 9e)

Stock-based compensation expense (note 9c)

Exercise of stock options

warrants, net

Exercise of pre-funded warrants

Stock-based compensation expense

Issuance of common shares pursuant to equity

incentive plans

Other comprehensive income

1 unchanged sentence

Net loss for the year

Issuance of common shares, net (note 9a)

Stock-based compensation expense (note 9c)

Exercise of stock options

Issuance of common shares, net

Stock-based compensation expense

Issuance of common shares pursuant to equity

incentive plans

Other comprehensive loss

Balance as of December 31, 2024

Net loss for the year

Issuance of common shares, net

Exercise of warrant

Stock-based compensation expense

Issuance of common shares pursuant to equity

incentive plans

Other comprehensive income

Balance as of December 31, 2025

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

10 unchanged sentences

Stock-based compensation

Realized loss on marketable securities

Unrealized foreign exchange (gain) loss

Unrealized fair value (gain) loss on trading securities

Unrealized fair value gain on trading securities

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

Other receivables

Prepaid expenses and other assets

Accounts payable and accrued liabilities

Operating lease liability

Other liabilities

Net cash used in operating activities

5 unchanged sentences

Financing activities:

Proceeds from public offerings, net

Proceeds from offerings, net

Proceeds from exercise of stock options

4 unchanged sentences

Cash and cash equivalents, end of year

Supplemental disclosures:

Supplemental cash flow disclosure:

Cash paid for operating lease

Cash received for lease incentives

Supplemental disclosures of non-cash transactions:

Fair value of stock options exercised on a cashless basis

Fair value of pre-funded warrants exercised

Purchases of property, plant and equipment included in

accounts payable and accrued liabilities

Right-of-use asset obtained in exchange for new operating

lease liability

Supplemental disclosure of non-cash transactions:

Fair value of stock options and warrants exercised on a cashless basis

Fair value of warrant and pre-funded warrants exercised

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

5 unchanged sentences

Xenon Pharmaceuticals Inc.

(the “Company”), incorporated in 1996 under the predecessor to the Business Corporations Act (British Columbia) and continued federally in 2000 under the Canada Business Corporations Act, is a neuroscience-focused biopharmaceutical company dedicated to discovering, developing, and delivering life-changing ion channel therapeutics for patients in need.

(the “Company”), incorporated in 1996 under the predecessor to the Business Corporations Act (British Columbia) and continued federally in 2000 under the Canada Business Corporations Act, is a neuroscience-focused biopharmaceutical company dedicated to drug discovery, clinical development, and commercialization of life-changing therapeutics for patients in need.

The Company has incurred significant operating losses since inception.

5 unchanged sentences

It is not possible to predict either the outcome of future research and development programs or the Company’s ability to continue to fund these programs in the future.

As of December 31, 2025, the Company had cash, cash equivalents and marketable securities of $ 586,038 .

Although the Company has incurred recurring losses and expects to continue to incur losses for the foreseeable future, the Company expects the cash, cash equivalents and marketable securities to be sufficient to fund current operations for at least the next 12 months from the issuance of the financial statements.

Basis of presentation:

These consolidated financial statements are presented in U.S.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Xenon Pharmaceuticals USA Inc., which was incorporated in Delaware on December 2, 2016 .

All intercompany transactions and balances have been eliminated in consolidation.

The consolidated financial statements are presented in U.S.

dollars and have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP").

The Company has one wholly-owned subsidiary as of December 31, 2024 , Xenon Pharmaceuticals USA Inc., which was incorporated in Delaware on December 2, 2016 .

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.

All intercompany transactions and balances have been eliminated on consolidation.

Certain information has been reclassified to conform with the financial presentation adopted for the current year.

Correction of prior period error

During the year ended December 31, 2024, the Company identified a presentation error related to the accretion of discounts on marketable securities, which was incorrectly presented within proceeds from marketable securities as part of net cash provided by (used in) investing activities in the consolidated statements of cash flows.

As a result, a correction was made to the prior periods to reclassify the amount of accretion of discounts on marketable securities within net cash used in operating activities, resulting in an increase in net cash used in operating activities and a corresponding decrease in net cash used in investing activities for the years ended December 31, 2023 and 2022 of $ 5,785 and $ 2,598 , respectively, from the previously reported amounts.

The Company evaluated the materiality of the presentation error, both quantitatively and qualitatively, and concluded it was not material to the consolidated financial statements for any prior period.

These presentation changes had no effect on the previously reported consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of shareholders’ equity.

Significant accounting policies:

1 unchanged sentence

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Significant areas of estimates include, but are not limited to, revenue recognition including estimated timing of completion of performance obligations and the determination of stock-based compensation.

These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable.

Estimates and assumptions are reviewed quarterly.

On an ongoing basis, the Company evaluate its estimates, judgments and assumptions.

All revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

4 unchanged sentences

Marketable securities are debt securities with original maturities exceeding three months and accrue interest based on a fixed interest rate for the term.

Effective July 1, 2022, the Company classifies its marketable securities as either trading securities or available-for-sale securities.

The Company classifies its marketable securities as either trading securities or available-for-sale securities at the time of acquisition and evaluates the appropriateness of these classifications at each balance sheet date.

Marketable securities are carried at fair value.

8 unchanged sentences

Available-for-sale securities are also adjusted for amortization of premiums and accretion of discounts to maturity, with such amortization and accretion included within interest income.

Available-for-sale securities with a remaining maturity date greater than one year are classified as non-current assets.

Available-for-sale securities with a remaining maturity date greater than one year are classified as non-current assets, unless they are expected to be liquidated within the next 12 months.

(d) Intellectual property:

9 unchanged sentences

Leasehold improvements

Over the lesser of lease term or

estimated useful life

Over the lesser of lease term or estimated useful life

(f) Impairment of long-lived assets:

10 unchanged sentences

Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset, adjusted for changes in index-based variable lease payments in the period of change.

Lease payments on short-term operating leases with lease terms twelve months or less are expensed on a straight-line basis over the lease term.

Variable lease payments not based on an index or rate are expensed as incurred.

Lease payments on short-term operating leases with lease terms t welve months or less are expensed on a straight-line basis over the lease term.

The Company has elected to not separate non-lease elements embedded in its lease agreements.

16 unchanged sentences

Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

The carrying amount of accounts receivable, accounts payable and accrued liabilities approximates fair value due to the nature and short-term of those instruments.

The Company’s cash and cash equivalents and marketable securities are measured at fair value on a recurring basis and the level of fair value hierarchy utilized is described in note 4.

The carrying amount of cash and cash equivalents, other receivables, accounts payable and accrued liabilities approximates fair value due to the nature and short-term of those instruments.

(j) Revenue recognition:

21 unchanged sentences

Research and development costs are expensed in the period incurred.

Research and development expenses consist of costs incurred in performing research and development activities, including personnel-related expenses, consisting of salaries, benefits and stock-based compensation for employees engaged in scientific research and development, third-party expenses incurred in connection with the pre-clinical and clinical development of product candidates including under agreements with clinical research organizations, third-party expenses relating to formulation, process development and manufacture of drug substance and drug product for use in pre-clinical testing, clinical trials and potential commercial supply, third-party acquisition, license and collaboration fees, laboratory consumables and certain indirect costs incurred in support of overall research and development activities, including facilities, depreciation and information technology costs.

The amount of expenses recognized in a period related to service agreements is based on the work performed using the accrual basis of accounting.

Third-party service providers generally provide estimates of proportionate performance to allow the Company to determine an appropriate accrual.

When determining the adequacy of an accrual, the Company analyzes progress based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs.

The Company recognizes external research and development costs for research and development activities conducted by third-party service providers, in connection with the pre-clinical and clinical development of product candidates including under agreements with clinical research organizations, third-party expenses relating to formulation, process development and manufacture of drug substance and drug product for use in pre-clinical testing, clinical studies and potential commercial supply.

When determining the research and development expenses, the Company uses information and data provided by the vendors and third-party service providers.

This process involves reviewing open contracts, communicating with applicable vendors and third-party service providers to identify services that have been performed, estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual costs.

Payments made to third parties under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered.

2 unchanged sentences

Stock-based compensation expense is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense, net of actual forfeitures, over the requisite service period with a corresponding increase in additional paid-in capital.

The Company grants stock options to employees, consultants, directors and officers pursuant to equity incentive plans described in note 9c.

The Company grants stock options, restricted share units (“RSUs”) and performance share units (“PSUs”) to certain employees, consultants, directors and officers pursuant to equity incentive plans described in note 9c.

The fair value of stock options at the date of grant is estimated using the Black-Scholes option-pricing model.

Stock-based compensation expense for stock options is amortized on a straight-line basis over the requisite service period for the entire award, which is generally the vesting period of the award.

Any consideration received on exercise of stock options is credited to share capital.

The Company grants performance share units (“PSUs”) to certain employees and officers pursuant to equity incentive plans described in note 9c.

RSUs are measured at the closing market price of the Company’s common shares on the date of grant.

Stock-based compensation expense for RSUs is amortized on a straight-line basis over the requisite service period, which is generally the vesting period.

PSUs vest upon the achievement of certain predefined company-specific performance-based criteria.

7 unchanged sentences

Non-monetary assets and liabilities acquired in a currency other than U.S.

dollars are translated at historical exchange rates prevailing at each transaction date.

Revenue and expense transactions ar e translated at the approximate exchange rate prevailing on the date of transaction.

dollars are translated at the approximate historical exchange rates prevailing at each transaction date.

Revenue and expense transactions ar e translated at the average exchange rate prevailing on the date of transaction.

Exchange gains and losses on translation are included in the consolidated statements of operations and comprehensive income (loss) as foreign exchange gain (loss).

10 unchanged sentences

Undistributed earnings (losses) are allocated to common shares and participating securities based on the weighted average shares of each class outstanding during the period.

The treasury stock method is used to compute the dilutive effect of the Company’s stock options, PSUs and warrants.

The treasury stock method is used to compute the dilutive effect of the Company’s stock options, RSUs, PSUs and warrants.

Under this method, the incremental number of common shares used in computing diluted net income (loss) per common share is the difference between the number of common shares assumed issued and purchased using assumed proceeds.

The if-converted method is used to compute the dilutive effect of the Company’s convertible preferred shares.

Under the if-converted method, dividends on the preferred shares, if applicable, are added back to earnings attributable to common shareholders, and the preferred shares and paid-in kind dividends are assumed to have been converted at the share price applicable at the end of the period.

The if-converted method is applied only if the effect is dilutive.

(p) Segment and geographic information:

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance.

The Company views its operations and manages its business in one operating segment discovering and developing a portfolio of treatments in neurological and psychiatric disorders.

The Company views its operations and manages its business in one operating segment discovering, developing and delivering life-changing therapeutics for patients in need.

(q) Recently adopted accounting pronouncements:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments on an interim and annual basis.

The Company adopted this ASU in the fourth quarter of 2024 retrospectively to all prior periods presented in the consolidated financial statements.

While the Company continues to operate as a single reportable segment, additional disclosures have been incorporated in note 14.

(i) In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topics 740):

Improvements to Income Tax Disclosures , which requires public entities to disclose specific categories in the effective tax rate reconciliation, as well as expanded disclosures on income taxes paid by jurisdictions.

The Company adopted this ASU in the fourth quarter of 2025, prospectively for the current year presented in the consolidated financial statements.

The adoption of this ASU did not have a material effect on the Company’s consolidated financial statements.

(ii) In September 2025, the FASB issued ASU 2025‑07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification for Share‑Based Noncash Consideration from a Customer in a Revenue Contract , which refines the scope of derivative accounting and clarifies the treatment of certain share‑based noncash consideration in revenue contracts.

The Company adopted this ASU in the fourth quarter of 2025, prospectively.

The adoption of this ASU did not have a material effect on the Company’s consolidated financial statements.

(r) Accounting pronouncements not yet adopted:

Accounting standards that have been issued by the Financial Accounting Standards Board or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

(i) In November 2024, the FASB issued ASU 2024‑03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220‑40) , which requires disclosure in the notes to financial statements about specific types of expenses included in the expense captions presented on the face of the statement of operations.

This ASU is effective for public entities for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted, and can be applied either prospectively or retrospectively.

The Company is currently evaluating the impact related to the adoption of this ASU on its financial statement disclosures.

(ii) In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which updates the accounting for internal-use software costs by replacing prescriptive development-stage guidance with a principles-based capitalization model and incorporating website development guidance into Subtopic 350-40.

This ASU is effective for public entities for annual and interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting this ASU on its financial statements and related disclosures.

Fair value of financial instruments:

The level of the fair value hierarchy utilized to determine the fair va lue of cash and cash equivalents and marketable securities consisted of the following:

The following table summarizes the fair value hierarchy used to determine the fair va lues of the Company's cash and cash equivalents and marketable securities:

December 31, 2025

1 unchanged sentence

Cash and cash equivalents

Cash and money market fund

Cash, money market fund, mutual funds,

commercial paper and U.S.

Marketable securities

Guaranteed investment certificates

government securities

Commercial paper

Corporate debt securities

The fair values of the Company’s U.S.

government securities, commercial paper and corporate debt securities are based on prices obtained from independent pricing sources.

Total marketable securities

The fair values of the Company’s commercial paper and corporate debt securities are based on prices obtained from independent pricing sources.

Securities with validated quotes from pricing services are reflected within Level 2, as they are primarily based on observable pricing for similar assets or other market observable inputs.

Typical inputs used by these pricing services include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers or estimates of cash flow, prepayment spreads and default rates.

As of December 31, 2024 and December 31, 2023, the Company does not hold any securities classified as Level 3 and there were no securities transferred between Level 1 and 2.

As of December 31, 2025 and 2024, the Company does not hold any securities classified as Level 3 and there were no securities transferred between Level 1 and 2.

Marketable securities:

As of December 31, 2024 , the Company had $ 611,689 of available-for-sale securities ( December 31, 2023 – trading securities of $ 13,867 and available-for-sale-securities of $ 768,364 , respectively).

Amortized cost, unrealized gain (loss) recognized in accumulated other comprehensive loss and fair value of available-for-sale securities consisted of the following:

1 unchanged sentence

December 31, 2024

Unrealized Gain (Loss)

Contractual maturity of 0 to 1 years:

Guaranteed investment certificates

government securities

Commercial paper

Corporate debt securities

Contractual maturity of 1 to 3 years:

Corporate debt securities

Allowance for credit losses or impairment on these marketable securities have not been recognized as these securities are high credit quality, investment grade securities that the Company does not intend to sell and will not be required to sell prior to their anticipated recovery, and the decline in fair value is primarily due to changes in interest rates.

Property, plant and equipment:

4 unchanged sentences

Leasehold improvements

accumulated depreciation and amortization

accumulated depreciation

Net book value

30 unchanged sentences

In August 2024, a new prospectus supplement was filed replacing the March 2022 Prospectus, pursuant to which the Company refreshed the ATM Program and may sell common shares having gross proceeds of up to $ 350,000 , from time to time.

As of December 31, 2024, the Company has sold an aggregate of 310,000 common shares for proceeds of $ 12,083 , net of commissions and transaction expenses under the ATM Program.

In January 2022, in connection with the License and Collaboration Agreement with Neurocrine Biosciences entered in December 2019 and amended in January 2021 (the “Neurocrine Collaboration Agreement”), the Company executed a Share Purchase Agreement (“SPA”) pursuant to which the Company issued 258,986 common shares for an aggregate purchase price of $ 8,250 , or $ 31.855 per common share, which represents a premium of $ 374 when compared to the fair value of common shares on the date of issuance.

The SPA contain certain other customary terms and conditions, including mutual representations, warranties and covenants.

For additional information regarding the Neurocrine Collaboration Agreement, refer to note 10.

In June 2022, the Company completed an underwritten public offering of 9,098,362 common shares, including 1,229,508 shares sold upon the full exercise of the underwriters’ over-allotment option, at a public offering price of $ 30.50 per common share and pre-funded warrants to purchase 327,868 common shares at $ 30.4999 per pre-funded warrant (note 9e), with each pre-funded warrant having an exercise price of $ 0.0001 .

The public offering was completed in June 2022, and the Company received proceeds of $ 269,890 , net of underwriting discounts, commissions and offering expenses.

In November 2023, the Company completed an underwritten public offering of 9,846,157 common shares, including 1,384,615 shares sold upon the full exercise of the underwriters' over-allotment option, at a public offering price of $ 32.50 per common share and pre-funded warrants to purchase 769,230 common shares at $ 32.4999 per pre-funded warrant (note 9e), with each pre-funded warrant having an exercise price of $ 0.0001 .

As of December 31, 2025, the Company had sold an aggregate of 2,651,023 common shares for proceeds of $ 112,151 , net of commissions and transaction expenses under the ATM Program (2024 – 310,000 common shares for net proceeds of $ 12,083 ) .

As of February 23, 2026, we sold an additional 3,134,119 common shares for proceeds of $ 129,975 , net of commissions and transaction expenses.

In November 2023, the Company completed an underwritten public offering of 9,846,157 common shares, including 1,384,615 shares sold upon the full exercise of the underwriters' over-allotment option, at a public offering price of $ 32.50 per common share and pre-funded warrants to purchase 769,230 common shares at $ 32.4999 per pre-funded warrant (note 9d), with each pre-funded warrant having an exercise price of $ 0.0001 .

The public offering was completed in December 2023, and the Company received proceeds of $ 323,979 , net of underwriting discounts, commissions and offering expenses.

3 unchanged sentences

The Company has two equity incentive plans:

(i) the 2014 Equity Incentive Plan which was amended and restated in June 2020, June 2022 and June 2024 (the “Amended and Restated 2014 Plan”), and (ii) the 2019 Inducement Equity Incentive Plan (the “2019 Inducement Plan”).

In September 2019, the board of directors of the Company adopted the 2019 Inducement Plan and, subject to the adjustment provisions of the 2019 Inducement Plan, reserved 400,000 of the Company’s common shares for issuance pursuant to equity awards granted under the 2019 Inducement Plan.

The 2019 Inducement Plan was adopted without shareholder approval in accordance with the applicable Nasdaq Listing Rules.

The 2019 Inducement Plan provided for the grant of equity-based awards, including share options, share appreciation rights, restricted share awards, restricted share unit awards and performance share awards, and its terms are substantially similar to the Company’s Amended and Restated 2014 Plan, including with respect to treatment of equity awards in the event of a “merger” or “change of control” as defined under the 2019 Inducement Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award exception or to comply with the Nasdaq acquisition and merger exception.

The 2019 Inducement Plan was terminated in June 2020.

No further options will be granted under the 2019 Inducement Plan, and the 2019 Inducement Plan will continue to govern the options granted thereunder.

(i) the 2014 Equity Incentive Plan, which was amended and restated in June 2020, June 2022 and June 2024 (the “Amended and Restated 2014 Plan”), and (ii) the 2025 Inducement Equity Incentive Plan, which was amended and restated in November 2025 (the “Amended and Restated 2025 Inducement Plan”).

The shareholders of the Company approved the Amended and Restated 2014 Plan amended in June 2020, June 2022 and June 2024, amending certain provisions of the Company’s 2014 Plan.

The Amended and Restated 2014 Plan permits the grant of stock-based compensation awards to directors, officers, employees and consultants of the Company and the issuance of restricted shares, restricted share units, share appreciation rights and PSUs.

The Amended and Restated 2014 Plan permits the grant of stock-based compensation awards to directors, officers, employees and consultants of the Company, including the issuance of options, share appreciation rights, restricted shares, RSUs, and PSUs.

Under the Amended and Restated 2014 Plan, options granted generally vest on a graduated basis over a four-year periods.

1 unchanged sentence

Options may be exercised over a maximum term of ten years .

The vesting conditions, vesting period and expiry terms of the PSUs are determined by the board of directors.

The vesting conditions, vesting period and expiry terms of the RSUs and PSUs are determined by the board of directors.

As of December 31, 2025, a total of 5,004,392 common shares remain available for issuance pursuant to the Amended and Restated 2014 Plan.

Of this total, the number of common shares that can be issued through restricted share awards, restricted share unit awards, or performance share awards is limited to the aggregate of 1,000,000 common shares.

O f this total, the aggregate number of common shares that can be issued through restricted share awards, RSU awards, or PSU awards is limited to 1,000,000 common shares, of which 431,556 common shares remain available as of December 31, 2025.

The board of directors of the Company adopted Amended and Restated 2025 Inducement Plan amended in November 2025.

Pursuant to the terms of the Amended and Restated 2025 Inducement Plan, the Company may grant nonstatutory stock options, stock appreciation rights, RSUs, restricted stock, and PSUs as an inducement material to individuals being hired, or rehired following a bona fide period of interruption of employment, as an employee of the Company or any of its subsidiaries, and its terms are substantially similar to the Company’s Amended and Restated 2014 Equity Incentive Plan, including with respect to treatment of equity awards in the event of a “merger” or “change of control” as defined under the 2025 Inducement Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award exception or to comply with the Nasdaq acquisition and merger exception.

The Company has reserved 900,000 common shares for issuance under the Amended and Restated 2025 Inducement Plan.

In accordance with Nasdaq Listing Rule 5635(c)(4), the Company did not seek approval of the Amended and Restated 2025 Inducement Plan by its shareholders.

The following table presents the components and classification of stock-based compensation expense for the years ended December 31, 2025, 2024 and 2023:

45 unchanged sentences

As of December 31, 2025 , the unrecognized stock-based compensation expense related to the unvested stock options was $ 97,452, which is expected to be recognized over a weighted average period of 2.60 years.

Restricted share units

RSUs generally vest annually over a one-year period for directors and a four-year period for employees and officers, subject to continued service on each vesting date.

Upon vesting, each RSU entitles the holder to receive one common share.

The following table presents the summary of RSU activity for the year ended December 31, 2025:

Weighted Average

Fair Value ($)

Outstanding, December 31, 2024

Outstanding, December 31, 2025

As of December 31, 2025, the unrecognized stock-based compensation expense related to unvested RSUs was $ 10,014 , which is expected to be recognized over a weighted average period of 3.21 years.

Performance share units

During the year ended December 31, 2024 , the Company granted 210,000 PSUs to officers and certain employees with a weighted average grant date fair value of $ 43.90 per unit.

PSUs vest upon the achievement of certain predefined company-specific performance-based criteria on or before December 31, 2027, subject to continued employment to each performance objective achievement date.

No PSUs vested during the year ended December 31, 2024.

At the achievement of the vesting criteria, each PSU entitles the holder to receive one common share.

The following table presents the summary of PSU activity for the period:

Weighted Average

Fair Value ($)

Outstanding, December 31, 2023

Outstanding, December 31, 2024

Outstanding, December 31, 2025

As of December 31, 2025 , the unrecognized stock-based compensation expense related to the unvested PSUs that is probable to be achieved was $ 361 .

1 unchanged sentence

There is $ 6,912 of unrecognized stock-based compensation expense related to the PSUs that is not probable to be achieved.

(d) Exchange agreement with certain funds affiliated with BVF Partners L.P.

(collectively, “BVF”):

In March 2018, the Company and BVF entered into an exchange agreement pursuant to which the Company issued to BVF 2,868,000 Series 1 Preferred Shares in exchange for 2,868,000 common shares which were subsequently cancelled by the Company.

The Series 1 Preferred Shares were convertible into common shares on a one-for-one basis, subject to certain restrictions.

The Series 1 Preferred Shares ranked equally to the common shares in the event of liquidation, dissolution or winding up or other distribution of the assets of the Company among its shareholders and the holders of the Series 1 Preferred Shares were entitled to vote together with the common shares on an as-converted basis and as a single class, subject to certain restrictions.

The Series 1 Preferred Shares were recorded wholly as equity under ASC 480, with no bifurcation of conversion feature from the host contract, given that the Series 1 Preferred Shares cannot be cash settled and have no redemption features.

During the year ended December 31, 2018, BVF converted 1,852,000 Series 1 Preferred Shares in exchange for an equal number of common shares.

In March 2022, the remaining outstanding 1,016,000 Series 1 Preferred Shares were exchanged for an equal number of common shares.

(e) Pre-funded warrants:

(d) Pre-funded warrants:

The following table summarizes the pre-funded warrants activity for the years ended December 31, 2025, 2024, and 2023:

2 unchanged sentences

Outstanding, December 31, 2022

Exercised (1)

Outstanding, December 31, 2023

Outstanding, December 31, 2024

Outstanding, December 31, 2024 and 2025

(1) During the year ended December 31, 2023, the Company issued 1,700,000 common shares upon the exercise of 1,700,013 pre-funded warrants pursuant to a net exercise mechanism under the warrants.

7 unchanged sentences

In August 2018, a warrant to purchase 40,000 common shares at a price per common share of $ 9.79 was issued.

The warrant is immediately exercisable, contains a cashless exercise provision and expires in August 2028.

In October 2025, the Company issued 30,792 common shares upon the cashless exercise of the warrant.

Collaboration agreements:

Neurocrine Biosciences license and collaboration agreement

Revenue was as follows for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31,

Recognition of the transaction price

Research and development services

Milestone payments

Total revenue

In December 2019, the Company entered into the Neurocrine Collaboration Agreement with Neurocrine Biosciences granting the Company an exclusive license to NBI-921352 (formerly XEN901) and certain pre-clinical compounds for development (the “DTCs”).

10 unchanged sentences

The Company has not exercised this option as of December 31, 2025.

In January 2022, based on the receipt of the U.S.

Food and Drug Administration’s (“FDA”) full IND acceptance for NBI-921352, the Company received an aggregate milestone payment of $ 15,000 in the form of $ 6,750 in cash and a $ 8,250 equity investment in the Company (note 9a).

The equity investment was measured at fair value of $ 7,876 on the date of issuance and the resulting premium of $ 374 , with the cash payment of $ 6,750 , was recognized as revenue in the period as the Company did no t have any remaining performance obligations in relation to this milestone on the date it was achieved.

In February 2025, NBI-921355, a Nav1.2 and Nav1.6 sodium channel inhibitor in development for the potential treatment for certain types of epilepsy, has progressed into a Phase 1 clinical study in healthy adult participants, triggering an anticipated $ 7,500 milestone payment to the Company.

In February 2025, NBI-921355, a Nav1.2 and Nav1.6 sodium channel inhibitor in development for the potential treatment for certain types of epilepsy, progressed into a Phase 1 clinical study in healthy adult participants, triggering a $ 7,500 milestone payment to the Company, which was recognized as revenue for the year ended December 31, 2025 .

Net loss per common share :

1 unchanged sentence

Year Ended December 31,

Net loss attributable to preferred shareholders

Net loss attributable to common shareholders

Common shares (weighted average)

3 unchanged sentences

Net loss per common share – basic and diluted

The weighted average number of common shares used in the basic and diluted net loss per common share calculations includes the weighted average pre-funded warrants outstanding during the period as they are exercisable at any time for nominal cash consideration (note 9e).

The Company reported net losses for each of the years ended December 31, 2025, 2024 and 2023, and therefore excluded all potentially dilutive outstanding securities from the computation of diluted net loss per common share as their inclusion would have had an anti-dilutive effect.

The following table summarizes these potentially dilutive securities:

Year Ended December 31,

Stock options

Commitments and contingencies:

6 unchanged sentences

There are no royalty obligations to 1st Order.

(b) Guarantees and indemnifications:

(b) Legal contingencies:

From time to time, the Company is subject to claims and legal proceedings arising in the ordinary course of business, and such claims, individually or in the aggregate, are not likely to have a material adverse effect on the Company’s consolidated financial statements.

The Company has entered into license and research agreements with third parties that include indemnification provisions that are customary in the industry.

5 unchanged sentences

Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented.

Defined contribution benefit plan:

The Company sponsors retirement savings plans for Canadian and United States employees, under which eligible employees may elect to contribute a percentage of their annual compensation to the plans, subject to statutory limitations.

The Company matches 100 % of the employee's contributions, subject to a maximum of 5 % of eligible compensation.

Income taxes:

9 unchanged sentences

The Company’s wholly-owned subsidiary, Xenon Pharmaceuticals USA Inc., generates taxable income due to an intercompany service agreement with the Company.

All current tax expense and deferred income tax recovery recognized for the years ended December 31, 2024, 2023 and 2022 were attributable to the United States.

For the year ended December 31, 2024, the deferred income tax recovery recorded by Xenon Pharmaceuticals USA Inc.

is related to the re-assessment of the realizability of its deferred tax assets.

A reconciliation of the expected Canadian statutory income tax rate to the effective income tax rate is as follows:

A reconciliation of the expected Canadian statutory income tax rate to the effective income tax rate for the year ended December 31, 2025 is as follows:

Year Ended December 31, 2025

Canadian federal statutory tax rate

Foreign tax effects

United States

Effects of cross-border tax laws

Foreign accrual property income

Change in valuation allowance

Non-taxable or non-deductible items

Stock-based compensation

Effective income tax rate

A reconciliation of the expected Canadian statutory income tax rate to the effective income tax rate for the years ended December 31, 2024 and 2023 is as follows:

Year Ended December 31,

Tax at statutory income tax rate

16 unchanged sentences

Total deferred income tax assets

Deferred income tax liability:

Operating lease right-of-use asset

Less - valuation allowance

Total deferred income tax assets, net of valuation allowance

Deferred tax liability:

Operating lease right-of-use asset

Net deferred income tax assets

At December 31, 2025, a valuation allowance of $ 346,794 (2024 – $ 266,856 ) has been recognized to offset deferred tax assets where realization of such assets is uncertain.

The valuation allowance increased by $ 79,938 in 2025, which primarily relates to increases in Canadian non-capital loss carryforward deferred tax assets as of December 31, 2025.

The realization of deferred income tax assets is dependent upon the generation of sufficient taxable income during future periods in which the temporary differences are expected to reverse.

3 unchanged sentences

At December 31, 2025, the Company has unclaimed tax deductions for scientific research and experimental development expenditures of $ 172,351 with no expiry.

At December 31, 2024 , the Company has $ 29,284 ( 2023 – $ 29,074 ) of investment tax credits available to offset federal taxes payable and $ 8,518 ( 2023 – $ 8,099 ) of provincial tax credits available to offset provincial taxes payable in the future.

At December 31, 2024 , the Company has non-capital losses, net of uncertain tax positions, carried forward for tax purposes, which are available to reduce taxable income of future years of approximately $ 642,043 ( 2023 – $ 422,822 ).

The investment tax credits and loss carry forwards expire over various years to 2045 .

At December 31, 2024 , the total amount of the Company’s unrecognized tax benefits of uncertain tax positions were $ 10,850 (2023 – $ 10,850 ).

If recognized in future periods, the unrecognized tax benefits would not affect the Company’s effective tax rate.

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within the income tax provision.

Interest and penalties on the unrecognized tax benefits have not been accrued at December 31, 2024 and 2023 as none would be owing due to the availability of non-capital losses to shelter any potential taxable income arising thereon.

The Company does not currently expect any significant increases or decreases to these unrecognized tax benefits within 12 months of the reporting date.

At December 31, 2025 , the Company has $ 30,202 of investment tax credits available to offset federal taxes payable and $ 8,798 of investment tax credits available to offset provincial taxes payable in the future.

At December 31, 2025 , the Company has gross non-capital losses, net of uncertain tax positions, carried forward for tax purposes, which are available to reduce taxable income of future years of approximately $ 932,225 .

The investment tax credits and loss carry forwards expire over various years from 2026 to 2046 .

Income taxes paid, net of refunds, for the year ended December 31, 2025 is as follows:

December 31, 2025

United States

Unrecognized tax benefits arise when the estimated benefit recorded in the financial statements differs from the amounts taken or expected to be taken in a tax return because of uncertainties.

Interest and penalties related to uncertain tax positions, if any, will be recognized as a component of income tax expense.

A reconciliation of unrecognized tax benefits is as follows:

Outstanding, December 31, 2024

Increase related to prior year tax positions

Increase related to current tax positions

Lapses of statute of limitations

Outstanding, December 31, 2025

If recognized in future periods, $ 2,451 of the unrecognized tax benefits would affect the Company ’ s effective tax rate.

As of December 31, 2025, the Company had accrued interest and penalties related to tax contingencies of $ 747 (2024 – $ 158 ).

For the year ended December 31, 2025, the Company recognized interest and penalties, net of federal income tax benefit, of $ 588 (2024 – $ 158 ).

The Company files income tax returns in Canada and the United States, the jurisdictions in which the Company believes that it is subject to tax.

2 unchanged sentences

Other than routine audits by tax authorities for tax credits and tax refunds that the Company claims, the Company is not aware of any other material income tax examination currently in progress by any taxing jurisdiction.

Tax years ranging from 2004 to 2023 remain subject to examinations in Canada and the United States.

Tax years ranging from 2005 to 2025 remain subject to examinations in Canada and from 2022 to 2025 remain subject to examinations in the United States.

Segment disclosure:

The Company operates as a single reportable segment dedicated to discovering, developing, and delivering life-changing ion channel therapeutics for patients in need.

The Company operates as a single reportable segment dedicated to discovering, developing, and delivering life-changing therapeutics for patients in need.

The Company has no products approved for sale and has not generated any revenue from product sales.

7 unchanged sentences

Year Ended December 31,

Collaboration revenue

Direct external research and development costs

Pain programs (XEN1701, XEN1120)

Pre-clinical, discovery and other programs

5 unchanged sentences

Other segment items (1)

(1) Other segment items include foreign exchange gain (loss), unrealized fair value gain (loss) on trading securities, and income tax recovery (expense).

(1) Other segment items include foreign exchange gain (loss), unrealized fair value gain on trading securities, and income tax recovery (expense).

Changes in and Disagreements With Accou ntants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data