0001558370-24-003666 | 10-K | XBRL Viewer | Milestone Pharmaceuticals INC

Income taxes

12 Months Ended

Dec. 31, 2023

12 Income taxes

A reconciliation between tax expense and the product of accounting income multiplied by the basic income tax rate for the years ended December 31, 2023 and 2022 is as follows:


	2023			2022
Loss before income taxes	$	(59,685)		$	(58,388)
Basic income tax rate		26.50	%		26.50	%
Computed income tax recovery		(15,817)			(15,473)
Effect on income tax rate resulting from
Accounting charges not deductible for tax purposes		4			13
Non‑deductible share‑based compensation		4,663			2,704
Share issue costs		—			32
Accretion of investments		—			(26)
Tax benefits of current period losses and other tax assets		10,945			12,387
Valuation allowance for prior year adjustment		—			112
Other		205			251
Income tax expense (recovery) reported in the consolidated statements of loss	$	—		$	—

The Company has incurred Canadian federal and provincial net operating losses (NOLs) from inception. As of December 31, 2023, the Company has NOL carry-forwards of approximately $206.5 million and $203.4 million, respectively, for Canadian federal and Québec purposes, available to reduce future taxable income, which expire beginning in 2026 through 2043. The Company also has scientific research and experimental development expenditures of approximately $26.5 million and $31.8 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, 2023, the Company has carry-forwards of approximately $54.0 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.

The Company’s deferred tax assets consist of the following for the years ended December 31, 2023 and 2022:


		2023		2022
Net operating loss carry‑forwards	$	66,656	$	57,952
Tax basis of property and equipment in excess of carrying values		67		97
Tax basis of right of use assets		(421)		—
Tax basis of lease liability		438		—
Tax basis of reserves		6		—
Federal SR&ED investment tax credits		3,735		545
Taxation of federal SR&ED investment tax credits		(990)		(82)
Research and development expenditures		7,643		6,323
Financing costs		186		1,008
Stock based compensation		2,850		—
Change in tax rates		—		51
Others		45		15
Total Net deferred tax assets		80,215		65,909
Less Valuation allowance		(80,215)		(65,909)
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 2018 to 2023 due to unexpired statute of limitation periods and is subject to US Federal and state income tax examination for fiscal years 2020 to 2023.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
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-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Mar. 04, 2024	Feb. 28, 2024	Dec. 31, 2022
Subsequent events
Net proceeds			$ 2,630
Subsequent Event [Member] \| Pre-funded warrants \| Strategic Financing Agreements
Subsequent events
Share price (in dollar per share)		$ 1.499
Warrants issued to purchase shares		3,333,333
Warrants exercise price		$ 0.001
Subsequent Event [Member] \| Pre-funded warrants \| Strategic Financing Agreements \| Maximum [Member]
Subsequent events
Number of shares issued during the period		3,000,000
Subsequent Event [Member] \| Underwriters \| Strategic Financing Agreements
Subsequent events
Number of shares issued during the period	3,000,000	16,666,667
Share price (in dollar per share)		$ 1.50
Net proceeds	$ 32,400

Debt (Tables)

12 Months Ended

Dec. 31, 2023

Debt

Schedule of Convertible Note


	As of December 31,
	2023		2022
Original principal	$	50,000	$	—
Paid in kind (PIK) interest		2,310		—
Unamortized debt discount		(547)		—
Unamortized debt issuance costs		(1,991)		—
Total	$	49,772	$	—

Schedule of total amount of interest cost


	Year ended December 31,
	2023		2022
Contractual interest expense	$	2,310	$	—
Amortization of debt discount		53		—
Amortization of debt issuance costs		191		—
Total interest expense	$	2,554	$	—

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 13,760	$ 7,636
Short-term investments	52,243	56,949
Research and development tax credits receivable	643	331
Prepaid expenses	3,178	6,005
Other receivables	3,208	882
Total current assets	73,032	71,803
Operating lease right-of-use assets	1,917	2,423
Property and equipment	277	257
Total assets	75,226	74,483
Current liabilities
Accounts payable and accrued liabilities	6,680	5,644
Operating lease liabilities	546	495
Total current liabilities	7,226	6,139
Operating lease liabilities, net of current portion	1,457	1,996
Senior secured convertible notes	49,772
Total liabilities	58,455	8,135
Shareholders' Equity
Common shares, no par value, unlimited shares authorized 33,483,111 shares issued and outstanding as of December 31, 2023, 34,286,002 shares issued and outstanding as of December 31, 2022	260,504	273,900
Pre-funded warrants - 9,577,257 issued and outstanding as of December 31, 2023 and 8,518,257 as of December 31, 2022	48,459	34,352
Additional paid-in capital	33,834	24,437
Accumulated deficit	(326,026)	(266,341)
Total shareholders' equity	16,771	66,348
Total liabilities and shareholders' equity	$ 75,226	$ 74,483

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows used in operating activities
Net loss	$ (59,685)	$ (58,388)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	92	89
Amortization of debt costs	244
Accretion of investment discount	(162)	(97)
Non-cash interest expense related to debt	2,310
Share-based compensation expense	9,534	9,048
Loss on disposals of property and equipment		141
Changes in operating assets and liabilities:
Other receivables	(2,326)	(755)
Research and development tax credits receivable	(312)	25
Prepaid expenses	2,827	(1,706)
Operating lease assets and liabilities	18	81
Accounts payable and accrued liabilities	1,036	(907)
Net cash used in operating activities	(46,424)	(52,469)
Cash provided by (used in) investing activities
Acquisition of property and equipment	(112)	(272)
Acquisition of short-term investments	(137,132)	(85,852)
Redemption of short-term investments	142,000	29,000
Net cash used in investing activities	4,756	(57,124)
Cash provided by financing activities
Proceeds from exercise of options	189	420
Proceeds from exercise of warrants		38
Proceeds from issuance of senior secured convertible debt	50,000
Issuance of common shares, net of issuance costs		2,630
Pre-funded warrant issuance costs	(8)
Proceeds from employee stock purchase plan	393
Payment of debt issuance costs	(2,782)
Cash provided by financing activities	47,792	3,088
Net increase (decrease) in cash and cash equivalents	6,124	(106,505)
Cash and cash equivalents - Beginning of year	7,636	114,141
Cash and cash equivalents - End of year	$ 13,760	$ 7,636

Shareholders' Equity - Open Market Sale Agreement and Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	12 Months Ended
	Mar. 22, 2023	Nov. 12, 2021	Jul. 29, 2020	Aug. 31, 2022	Dec. 31, 2022
Class of Warrant or Right
Net proceeds					$ 2,630
Proceeds from exercise of warrants					38
Offering price					2,630
RTW Investments, LP
Class of Warrant or Right
Common shares exchanged for pre-funded warrants	1,059,000
Purchase price	$ 0.001
Proceeds from exercise of warrants	$ 0
Maximum ownership after exercise of exchange agreement	9.99%
Required notice (in days)	61 days
ATM Program
Class of Warrant or Right
Net proceeds				$ 2,600
Number of shares issued during the period			361,236	361,236
ATM Program \| Maximum
Class of Warrant or Right
Offering price			$ 50,000
Shelf Registration
Class of Warrant or Right
Net proceeds		$ 250,000
Common Shares
Class of Warrant or Right
Offering price					$ 2,630
Number of shares issued during the period					361,236

Government assistance

12 Months Ended

Dec. 31, 2023

Government assistance

Government assistance

13 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 the years ended December 31, 2023 and 2022 for an amount of $312 and $456, respectively.

Royalty Purchase Agreement (Details) - RTW Investments, LP - Strategic Financing Agreements $ in Millions	Mar. 27, 2023 USD ($)
Royalty Purchase Agreement
Funding received from sale of product rights	$ 75.0
Up to $500 million
Royalty Purchase Agreement
Future payment as a percentage of aggregate net sales	7.00%
Threshold amount of annual aggregate net sales	$ 500.0
Additional future payment as a percentage of aggregate net sales	9.50%
Above $800 million
Royalty Purchase Agreement
Future payment as a percentage of aggregate net sales	1.00%
Threshold amount of annual aggregate net sales	$ 800.0
Minimum \| Above $500 million
Royalty Purchase Agreement
Future payment as a percentage of aggregate net sales	4.00%
Threshold amount of annual aggregate net sales	$ 500.0
Maximum \| Up to $800 million
Royalty Purchase Agreement
Future payment as a percentage of aggregate net sales	4.00%
Threshold amount of annual aggregate net sales	$ 800.0

Commitments (Details)	Dec. 31, 2023 USD ($)
Commitments
Contractual commitments	$ 0

Revenue

12 Months Ended

Dec. 31, 2023

Revenue

Revenue

3 Revenue

The Company recorded revenue of $1.0 million for the year ended December 31, 2023. This revenue was the result of having reached a milestone pursuant to our License and Collaboration Agreement, dated May 15, 2021, with Ji Xing Pharmaceuticals Limited (such party “Ji Xing” and , such agreement, the “Ji Xing License Agreement”) due upon the successful initiation of a Phase 1 Clinical Trial of a pharmaceutical product that uses a device to deliver etripamil by nasal spray by or on behalf of Ji Xing for the treatment of PSVT in the People’s Republic of China (the “Territory”), including mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan.

The Company recorded revenue of $5.0 million for the year ended December 31, 2022. This revenue was related to two milestones reached as a result of the first patient dosed in a Phase 3 Clinical Trial for the treatment of PSVT in the Territory pursuant to the Ji Xing License Agreement and the successful completion of a Phase 3 clinical trial for the treatment of PSVT in the United States.

Strategic Partnerships

Ji Xing

On May 15, 2021, the Company entered into the License Agreement with Ji Xing, which is an entity affiliated with RTW Investments, LP, or RTW, a beneficial owner of approximately 9.7% of the Company’s common shares, as of December 31, 2023. Under the License Agreement, the Company granted Ji Xing exclusive development and commercialization rights to any pharmaceutical product that uses a device to deliver the Company’s proprietary calcium channel blocker known as etripamil by nasal spray for all prophylactic and therapeutic uses in humans in the Territory. Ji Xing 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 Ji Xing 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 Ji Xing 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. Ji Xing 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 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.

Share Based Compensation - Outstanding and exercisable options (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Outstanding and exercisable options, number of shares
Outstanding at end of period	8,726,130
Exercisable at end of period	5,144,488
Outstanding and exercisable options, weighted average exercise price
Outstanding at beginning of period	$ 6.73
Outstanding at end of period	5.09	$ 6.73
Exercisable at end of period	$ 5.32
Weighted average remaining contractual life (in years)	6 years 6 months 18 days	7 years 5 months 19 days
Weighted average remaining contractual life for vested options (in years)	5 years 11 months 4 days	6 years 4 months 13 days
Unrecognized compensation cost	$ 11,400	$ 15,700
Expected period for recognition	2 years 3 months 7 days	2 years 4 months 9 days
Share-based compensation expense	$ 9,534	$ 9,048
Plans 2011 and 2019 and 2021 Inducement [Member]
Outstanding and exercisable options, number of shares
Outstanding at beginning of period	7,619,984
Outstanding at end of period	8,726,130	7,619,984
Exercisable at end of period	5,144,488	4,191,095
Outstanding and exercisable options, weighted average exercise price
Exercisable at end of period		$ 6.52
2011 Plan
Outstanding and exercisable options, number of shares
Outstanding at beginning of period	1,802,672	1,995,971
Expired	(1,336)	(1,121)
Exercised	(107,103)	(172,595)
Forfeited		(19,583)
Outstanding at end of period	1,694,233	1,802,672
Exercisable at end of period	1,694,233	1,800,546
Outstanding and exercisable options, weighted average exercise price
Outstanding at beginning of period	$ 2.05	$ 2.07
Exercised	1.52	1.43
Forfeited		9.35
Expired	0.91	0.96
Outstanding at end of period	2.09	2.05
Exercisable at end of period	$ 2.09	$ 2.04
2019 Plan
Outstanding and exercisable options, number of shares
Outstanding at beginning of period	5,314,312	3,749,834
Granted	1,875,400	1,790,700
Expired	(58,617)
Exercised	(7,000)	(45,089)
Forfeited	(156,198)	(181,133)
Cancelled	(561,000)
Outstanding at end of period	6,406,897	5,314,312
Exercisable at end of period	3,228,422	2,390,549
Outstanding and exercisable options, weighted average exercise price
Outstanding at beginning of period	$ 8.35	$ 9.52
Granted	3.61	5.76
Exercised	3.74	3.83
Forfeited	6.13	8.00
Cancelled	21.73
Expired	11.52
Outstanding at end of period	5.82	8.35
Exercisable at end of period	$ 6.93	$ 9.90
Additional share-based compensation expense	$ 600
2021 Inducement Plan
Outstanding and exercisable options, number of shares
Outstanding at beginning of period	503,000
Granted	122,000	523,000
Forfeited		(20,000)
Outstanding at end of period	625,000	503,000
Exercisable at end of period	221,833
Outstanding and exercisable options, weighted average exercise price
Outstanding at beginning of period	$ 6.41
Granted	2.98
Exercised		$ 6.37
Forfeited		5.48
Outstanding at end of period	5.74	$ 6.41
Exercisable at end of period	$ 6.42

Share Based Compensation - Recognized share-based compensation expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-based compensation
Share-based compensation expense	$ 9,534	$ 9,048
Administration
Share-based compensation
Share-based compensation expense	4,849	4,229
Research and development
Share-based compensation
Share-based compensation expense	3,281	3,483
Commercial activities
Share-based compensation
Share-based compensation expense	$ 1,404	$ 1,336

Other receivables (Tables)

12 Months Ended

Dec. 31, 2023

Other receivables

Schedule of other receivables


	2023		2022
Interest receivable	$	528	$	615
Sales tax receivable		264		261
Clinical receivable		2,400		—
Other current receivable		16		6
	$	3,208	$	882

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies

Schedule of estimated useful lives


Computer hardware and software		3 years
Office equipment		5 years
Furniture and fixtures		5 years
Leasehold improvements		over the lease term

Leases - Future minimum lease payments (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Future minimum lease payments
January 1, 2024 to December 31, 2024	$ 673
January 1, 2025 to December 31, 2025	670
January 1, 2026 to December 31, 2026	530
January 1, 2027 to September 30, 2027	406
Total future minimum lease payments	2,279
Less interest	(276)
Operating lease liabilities	$ 2,003
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Operating Lease, Liability, Current, Operating Lease, Liability, Noncurrent

Other receivables

12 Months Ended

Dec. 31, 2023

Other receivables

Other receivables

18 Other receivables

Other receivables comprised the following as of December 31:


	2023		2022
Interest receivable	$	528	$	615
Sales tax receivable		264		261
Clinical receivable		2,400		—
Other current receivable		16		6
	$	3,208	$	882

For the year ended December 31, 2023, the Company recognized a clinical receivable of $2.4 million for clinical upfront payments made to the CRO that completed the NODE-303 trial. The Company recognized no clinical receivables for the year ended December 31, 2022.

Short-term Investments

12 Months Ended

Dec. 31, 2023

Short-term Investments

Short-term Investments

4 Short-term Investments

As of December 31, 2023, short-term investments of $52.2 million were comprised of term deposits issued in US currency, earning interest between 5.53% and 5.95%, maturing between January 16, 2024 and June 19, 2024. 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 $56.9 million as of December 31, 2022.

Short-term Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Net Investment Income
Short-term investments	$ 52,243	$ 56,949
Minimum
Net Investment Income
Interest rate earned from short-term investments	5.53%
Maximum
Net Investment Income
Interest rate earned from short-term investments	5.95%

- Definition

Rate of interest on investment.

+ References

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-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-6

+ Details

Share Based Compensation - Weighted average assumptions for the options granted (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share Based Compensation
Exercise price (in dollars per share)	$ 3.58	$ 5.90
Share price (in dollars per share)	$ 3.58	$ 5.90
Volatility (as a percent)	97.00%	92.00%
Risk-free interest rate (as a percent)	3.97%	2.43%
Expected life (in years)	6 years 3 days	6 years 10 days
Dividend (as a percent)	0.00%	0.00%

Accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts payable and accrued liabilities
Trade accounts payable	$ 3,981	$ 2,263
Accrued compensation and benefits payable	712	2,573
Accrued research and development liabilities	894	404
Accrued commercial liabilities	710	149
Other accrued liabilities	383	255
Total	$ 6,680	$ 5,644

Share Based Compensation - Outstanding and exercisable options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-based compensation
Exercise price (in dollars per share)	$ 3.58	$ 5.90
Number of options, Options outstanding	8,726,130
Weighted average remaining contractual life (years), Options outstanding	6 years 6 months 18 days	7 years 5 months 19 days
Weighted average exercise price, Options outstanding	$ 5.09	$ 6.73
Number of options, Options exercisable	5,144,488
Weighted average remaining contractual life (years), Options exercisable	5 years 11 months 4 days
Weighted average exercise price, Options exercisable	$ 5.32
$0.84-$1.73
Share-based compensation
Minimum exercise price	0.84
Maximum exercise price	$ 1.73
Number of options, Options outstanding	949,136
Weighted average remaining contractual life (years), Options outstanding	3 years 1 month 9 days
Weighted average exercise price, Options outstanding	$ 1.43
Number of options, Options exercisable	949,136
Weighted average remaining contractual life (years), Options exercisable	3 years 1 month 9 days
Weighted average exercise price, Options exercisable	$ 1.43
$1.74-$3.2
Share-based compensation
Minimum exercise price	1.74
Maximum exercise price	$ 3.2
Number of options, Options outstanding	915,192
Weighted average remaining contractual life (years), Options outstanding	4 years 9 months 7 days
Weighted average exercise price, Options outstanding	$ 2.69
Number of options, Options exercisable	709,192
Weighted average remaining contractual life (years), Options exercisable	4 years 9 months 3 days
Weighted average exercise price, Options exercisable	$ 2.59
$3.21-$5.25
Share-based compensation
Minimum exercise price	3.21
Maximum exercise price	$ 5.25
Number of options, Options outstanding	2,351,850
Weighted average remaining contractual life (years), Options outstanding	7 years 7 months 13 days
Weighted average exercise price, Options outstanding	$ 3.67
Number of options, Options exercisable	688,000
Weighted average remaining contractual life (years), Options exercisable	6 years 7 months 17 days
Weighted average exercise price, Options exercisable	$ 3.76
$5.26-$6.36
Share-based compensation
Minimum exercise price	5.26
Maximum exercise price	$ 6.36
Number of options, Options outstanding	3,473,464
Weighted average remaining contractual life (years), Options outstanding	7 years 4 months 13 days
Weighted average exercise price, Options outstanding	$ 5.90
Number of options, Options exercisable	2,133,496
Weighted average remaining contractual life (years), Options exercisable	7 years 4 months 2 days
Weighted average exercise price, Options exercisable	$ 5.96
$6.37-$8.5
Share-based compensation
Minimum exercise price	6.37
Maximum exercise price	$ 8.5
Number of options, Options outstanding	667,833
Weighted average remaining contractual life (years), Options outstanding	6 years 5 months 4 days
Weighted average exercise price, Options outstanding	$ 6.85
Number of options, Options exercisable	316,521
Weighted average remaining contractual life (years), Options exercisable	6 years 6 months 29 days
Weighted average exercise price, Options exercisable	$ 6.84
$8.51-$15.5
Share-based compensation
Minimum exercise price	8.51
Maximum exercise price	$ 15.5
Number of options, Options outstanding	57,905
Weighted average remaining contractual life (years), Options outstanding	6 years 3 months 7 days
Weighted average exercise price, Options outstanding	$ 9.08
Number of options, Options exercisable	42,780
Weighted average remaining contractual life (years), Options exercisable	5 years 5 months 1 day
Weighted average exercise price, Options exercisable	$ 9.27
$15.51-$20.5
Share-based compensation
Minimum exercise price	15.51
Maximum exercise price	$ 20.5
Number of options, Options outstanding	65,100
Weighted average remaining contractual life (years), Options outstanding	5 years 10 months 2 days
Weighted average exercise price, Options outstanding	$ 17.21
Number of options, Options exercisable	64,829
Weighted average remaining contractual life (years), Options exercisable	5 years 10 months 2 days
Weighted average exercise price, Options exercisable	$ 17.21
$20.51-$22.45
Share-based compensation
Minimum exercise price	20.51
Maximum exercise price	$ 22.45
Number of options, Options outstanding	245,650
Weighted average remaining contractual life (years), Options outstanding	5 years 2 months 15 days
Weighted average exercise price, Options outstanding	$ 21.48
Number of options, Options exercisable	240,534
Weighted average remaining contractual life (years), Options exercisable	5 years 2 months 15 days
Weighted average exercise price, Options exercisable	$ 21.48

Royalty Purchase Agreement

12 Months Ended

Dec. 31, 2023

Royalty Purchase Agreement

Royalty Purchase Agreement

17 Royalty Purchase Agreement

On March 27, 2023, we 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), in exchange for a purchase price of $75.0 million, the right to receive a tiered quarterly royalty payments, or the “Royalty Interest”, on the annual net product sales of etripamil in the United States in an amount equal to: (i) 7%, or the “Initial Tier Royalty”, of annual net sales up to $500 million, (ii) 4% of annual net sales greater than $500 million and less than or equal to $800 million, and (iii) 1% of annual net sales greater than $800 million. If certain revenue thresholds for aggregate annual net sales are not met, the Initial Tier Royalty will increase to 9.5% beginning on January 1 of the following calendar year until a subsequent sales threshold is attained, at which time the Initial Tier Royalty would revert back to 7%.

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

Government assistance (Details) - USD ($) $ in Thousands	12 Months Ended
Government assistance (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Government assistance
Research and development expenditures eligible for investment tax credits	$ 312	$ 456

Organization and Nature of Operations

12 Months Ended

Dec. 31, 2023

Organization and Nature of Operations

Organization and Nature of Operations

1 Organization and Nature of Operations

Milestone Pharmaceuticals Inc. (Milestone or the Company) is a biopharmaceutical company incorporated under the Business Corporations Act of Québec. Milestone is focused on the development and commercialization of innovative cardiovascular medicines. Milestone’s lead product candidate, etripamil, is a novel, potent short-acting calcium channel blocker that the Company designed and is developing as a rapid-onset nasal spray to be administered by patients. The Company is developing etripamil to treat paroxysmal supraventricular tachycardia, atrial fibrillation, and other cardiovascular indications.

Property and equipment - Impairment losses and Amortization expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Property and equipment
Disposal of property plant and equipment	$ 0	$ 348
Loss on disposals of property and equipment		141
Depreciation expense	$ 92	$ 89

Debt - Total amount of interest cost (Details) - Senior Secured Convertible Notes - RTW Investments, LP - Strategic Financing Agreements $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Debt Instruments
Contractual interest expense	$ 2,310
Amortization of debt discount	53
Amortization of debt issuance costs	191
Total interest expense	$ 2,554

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(f))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69B

Reference 6: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
-Section 55
-Paragraph 69C
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69C

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69E

Reference 8: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69F

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1D
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Publisher FASB
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
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-Paragraph 1D
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Debt (Details) - USD ($)		12 Months Ended
Debt (Details) - USD ($)	Mar. 29, 2023	Dec. 31, 2023
Debt Instruments
Proceeds from convertible notes		$ 50,000,000
Debt issuance costs paid		2,782,000
RTW Investments, LP \| Senior Secured Convertible Notes \| Strategic Financing Agreements
Debt Instruments
Proceeds from convertible notes	$ 50,000,000.0
Coupon rate (as a percent)	6.00%
Paid in kind, term	3 years
Principal amount denomination for conversion	$ 1,000
Convertible shares issuable	191.0548
Conversion price	$ 5.23
Threshold Percentage of stock price	150.00%
Threshold trading days	20
Threshold consecutive trading days	30
Redemption price percentage	100.00%
Estimated Fair Value		$ 44,300,000

Leases

12 Months Ended

Dec. 31, 2023

Leases

Leases

5 Leases

On May 20, 2022, the Company entered into a new 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 July 1, 2020, the Company entered into an arrangement for the lease renewal for its headquarters located in Ville Saint-Laurent, Quebec. The 5-year lease term is from December 1, 2020 expiring on November 30, 2025. The Company recorded the operating lease right-of-use asset and operating lease liabilities at the effective lease arrangement date of July 1, 2020. 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 65 months. This resulted in an incremental borrowing rate of 5.26%. 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, 2025.

The Company's operating office leases right-of-use assets as at December 31 were as follows:


	2023		2022
Opening balance	$	2,423	$	711
New operating lease right-of-use asset		—		2,103
Amortization of right-of-use asset		(506)		(391)
Closing balance	$	1,917	$	2,423

Operating lease expenses of $681 and $490 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, 2023 and 2022, 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 at December 31, 2023:


January 1, 2024 to December 31, 2024		673
January 1, 2025 to December 31, 2025		670
January 1, 2026 to December 31, 2026		530
January 1, 2027 to September 30, 2027		406
		2,279
Less interest		(276)
	$	2,003

Income taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income taxes

Reconciliation of differences between taxes on income (loss) before income taxes

A reconciliation between tax expense and the product of accounting income multiplied by the basic income tax rate for the years ended December 31, 2023 and 2022 is as follows:


	2023			2022
Loss before income taxes	$	(59,685)		$	(58,388)
Basic income tax rate		26.50	%		26.50	%
Computed income tax recovery		(15,817)			(15,473)
Effect on income tax rate resulting from
Accounting charges not deductible for tax purposes		4			13
Non‑deductible share‑based compensation		4,663			2,704
Share issue costs		—			32
Accretion of investments		—			(26)
Tax benefits of current period losses and other tax assets		10,945			12,387
Valuation allowance for prior year adjustment		—			112
Other		205			251
Income tax expense (recovery) reported in the consolidated statements of loss	$	—		$	—

Schedule of deferred tax assets

The Company’s deferred tax assets consist of the following for the years ended December 31, 2023 and 2022:


		2023		2022
Net operating loss carry‑forwards	$	66,656	$	57,952
Tax basis of property and equipment in excess of carrying values		67		97
Tax basis of right of use assets		(421)		—
Tax basis of lease liability		438		—
Tax basis of reserves		6		—
Federal SR&ED investment tax credits		3,735		545
Taxation of federal SR&ED investment tax credits		(990)		(82)
Research and development expenditures		7,643		6,323
Financing costs		186		1,008
Stock based compensation		2,850		—
Change in tax rates		—		51
Others		45		15
Total Net deferred tax assets		80,215		65,909
Less Valuation allowance		(80,215)		(65,909)
Net deferred tax assets	$	—	$	—

Share Based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

Share Based Compensation

Schedule of outstanding and exercisable options


	2023
								Weighted
	Number							average
	of shares							exercise
	2019 Plan			Inducement Plan	2011 Plan		Total	price
Outstanding at beginning of year - 2011 Plan		—		—		1,802,672	1,802,672	$	2.05
Outstanding at beginning of year - 2019 Plan		5,314,312		—		—	5,314,312		8.35
Outstanding at beginning of year - Inducement Plan		—		503,000		—	503,000		6.41
Granted - 2019 Plan		1,875,400		—		—	1,875,400		3.61
Granted - Inducement Plan		—		122,000		—	122,000		2.98
Exercised - 2019 Plan		(7,000)		—		—	(7,000)		3.74
Exercised - 2011 Plan		—		—		(107,103)	(107,103)		1.52
Forfeited - 2019 Plan		(156,198)		—		—	(156,198)		6.13
Expired - 2019 Plan		(58,617)		—		—	(58,617)		11.52
Expired - 2011 Plan		—		—		(1,336)	(1,336)		0.91
Cancelled - 2019 Plan		(561,000)		—		—	(561,000)		21.73
Outstanding at end of period		6,406,897		625,000		1,694,233	8,726,130	$	5.09
Outstanding at end of period - Weighted average exercise price	$	5.82	$	5.74	$	2.09
Exercisable at end of period		3,228,422		221,833		1,694,233	5,144,488	$	5.32
Exercisable at end of period - Weighted average exercise price	$	6.93	$	6.42	$	2.09


	2022
								Weighted
	Number							average
	of shares							exercise
	2019 Plan			Inducement Plan	2011 Plan		Total	price
Outstanding at beginning of year - 2011 Plan		—		—		1,995,971	1,995,971	$	2.07
Outstanding at beginning of year - 2019 Plan		3,749,834		—		—	3,749,834		9.52
Granted - 2019 Plan		1,790,700		—		—	1,790,700		5.76
Granted - Inducement Plan		—		523,000			523,000		6.37
Exercised - 2019 Plan		(45,089)		—		—	(45,089)		3.83
Exercised - 2011 Plan		—		—		(172,595)	(172,595)		1.43
Forfeited - Inducement Plan		—		(20,000)		—	(20,000)		5.48
Forfeited - 2019 Plan		(181,133)		—		—	(181,133)		8.00
Forfeited - 2011 Plan		—		—		(19,583)	(19,583)		9.35
Expired - 2011 Plan		—		—		(1,121)	(1,121)		0.96
Outstanding at end of period		5,314,312		503,000		1,802,672	7,619,984	$	6.73
Outstanding at end of period - Weighted average exercise price	$	8.35	$	6.41	$	2.05
Exercisable at end of period		2,390,549		—		1,800,546	4,191,095	$	6.52
Exercisable at end of period - Weighted average exercise price	$	9.90		—	$	2.04

Schedule of non-vested share options activity


	2023
	Number							Weighted
	of options							average
	2019 Plan		Inducement Plan		2011 Plan		Total	fair value
Non-vested share options at beginning of year - 2011 Plan		—		—		2,126	2,126	$	6.64
Non-vested share options at beginning of year - 2019 Plan		2,923,763		—		—	2,923,763		5.30
Non-vested share options at beginning of year - Inducement Plan		—		503,000		—	503,000		4.84
Granted - 2019 Plan		1,875,400		—		—	1,875,400		2.87
Granted - Inducement Plan		—		122,000		—	122,000		2.30
Vested, outstanding 2011 Plan		—		—		(2,126)	(2,126)		6.64
Vested, outstanding 2019 Plan		(1,504,329)		—		—	(1,504,329)		5.88
Vested, outstanding Inducement Plan		—		(221,833)		—	(221,833)		4.85
Forfeited - 2019 Plan		(116,359)		—		—	(116,359)		3.96
Non-vested share options at end of period		3,178,475		403,167		—	3,581,642	$	3.69
Non-vested share options at end of period - Weighted average fair value	$	3.64	$	4.07	$	—


	2022
	Number							Weighted
	of options							average
	2019 Plan		Inducement Plan		2011 Plan		Total	fair value
Non-vested share options at beginning of year - 2011 Plan		—		—		200,639	200,639	$	1.86
Non-vested share options at beginning of year - 2019 Plan		2,655,518		—		—	2,655,518		6.40
Granted - 2019 Plan		1,790,700		—		—	1,790,700		4.37
Granted - Inducement Plan		—		523,000		—	523,000		4.81
Vested, outstanding 2011 Plan		—		—		(198,317)	(198,317)		1.81
Forfeited - 2011 Plan		—		—		(196)	(196)		1.91
Forfeited - Inducement Plan		—		(20,000)		—	(20,000)		4.18
Forfeited - 2019 Plan		(145,664)		—		—	(145,664)		5.49
Vested, outstanding 2019 Plan		(1,376,791)		—		—	(1,376,791)		6.19
Non-vested share options at end of period		2,923,763		503,000		2,126	3,428,889	$	5.24
Non-vested share options at end of period - Weighted average fair value	$	5.30	$	4.84	$	6.64

Schedule of share option outstanding


	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
$0.84-$1.73	949,136	3.11	$	1.43	949,136	3.11	$	1.43
$1.74-$3.2	915,192	4.77	$	2.69	709,192	4.76	$	2.59
$3.21-$5.25	2,351,850	7.62	$	3.67	688,000	6.63	$	3.76
$5.26-$6.36	3,473,464	7.37	$	5.90	2,133,496	7.34	$	5.96
$6.37-$8.5	667,833	6.43	$	6.85	316,521	6.58	$	6.84
$8.51-$15.5	57,905	6.27	$	9.08	42,780	5.42	$	9.27
$15.51-$20.5	65,100	5.84	$	17.21	64,829	5.84	$	17.21
$20.51-$22.45	245,650	5.21	$	21.48	240,534	5.21	$	21.48
Total	8,726,130	6.55	$	5.09	5,144,488	5.93	$	5.32

Schedule of weighted average assumptions for the options granted


	Year ended December 31,
	2023			2022
Exercise price	$	3.58		$	5.90
Share price	$	3.58		$	5.90
Volatility		97	%		92	%
Risk-free interest rate		3.97	%		2.43	%
Expected life		6.01 years			6.03 years
Dividend		0	%		0	%

Schedule of share-based compensation expense



	2023		2022
Administration	$	4,849	$	4,229
Research and development		3,281		3,483
Commercial activities		1,404		1,336
Total	$	9,534	$	9,048

Shareholders' Equity - Authorized share capital (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Jul. 29, 2020	Aug. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Authorized share capital
Common shares, Shares issued (in shares)			33,483,111	34,286,002
Common shares, Shares outstanding (in shares)			33,483,111	34,286,002
Issuance of common shares, net of issuance costs				$ 2,630
Employee Stock Purchase Plan
Authorized share capital
Number of common shares available for issuance			1,463,936
Number of shares issued under the ESPP			142,006
ATM Program
Authorized share capital
Number of shares issued during the period	361,236	361,236
Issuance of common shares, net of issuance costs		$ 2,600
Stock issuance cost		$ 100

Net loss per share (Tables)

12 Months Ended

Dec. 31, 2023

Net loss per share

Schedule of potentially dilutive securities excluded from the computation of diluted weighted average shares


	2023	2022
Share options	8,726,130	7,619,984

Net loss per share

12 Months Ended

Dec. 31, 2023

Net loss per share

Net loss per share

11 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:


	2023	2022
Share options	8,726,130	7,619,984

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

Income taxes - Income Tax Expense Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income taxes
Loss before income taxes	$ (59,685)	$ (58,388)
Basic income tax rate	26.50%	26.50%
Computed income tax recovery	$ (15,817)	$ (15,473)
Accounting charges not deductible for tax purposes	4	13
Non-deductible share-based compensation	4,663	2,704
Share issue costs		32
Accretion of investments		(26)
Tax benefits of current period losses and other tax assets	10,945	12,387
Valuation allowance for prior year adjustment		112
Other	205	251
Scientific research and experimental development expenditures	$ 31,052	$ 39,829

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Common Shares	Pre-funded warrants	Additional paid-in capital	Accumulated deficit	Total
Opening balance at Dec. 31, 2021	$ 251,901	$ 52,941	$ 15,711	$ (207,953)	$ 112,600
Beginning Balance (in shares) at Dec. 31, 2021	29,897,559
Beginning Balance, warrants (in shares) at Dec. 31, 2021		12,327,780
Increase (Decrease) in Stockholders' Equity
Net loss				(58,388)	(58,388)
Exercise of stock options	$ 742		(322)		420
Exercise of stock options (in shares)	217,684
Exercise of prefunded warrants, net of issuance costs	$ 18,627	$ (18,589)			38
Exercise of prefunded warrants, net of issuance costs (in shares)	3,809,523	(3,809,523)
Share-based compensation			9,048		9,048
Issuance of common shares, net of issuance costs	$ 2,630				2,630
Issuance of common shares, net of issuance costs (shares)	361,236
Closing balance at Dec. 31, 2022	$ 273,900	$ 34,352	24,437	(266,341)	$ 66,348
Ending Balance (in shares) at Dec. 31, 2022	34,286,002				34,286,002
Ending Balance, warrants (in shares) at Dec. 31, 2022		8,518,257			8,518,257
Increase (Decrease) in Stockholders' Equity
Net loss				(59,685)	$ (59,685)
Exercise of stock options	$ 326		(137)		189
Exercise of stock options (in shares)	114,103
Share-based compensation			9,534		9,534
Pre-funded warrants - Private Placement, net of issuance costs		$ 14,107			14,107
Pre-funded warrants - Private Placement, net of issuance costs (in shares)		1,059,000
Cancellation of common shares	$ (14,115)				(14,115)
Cancellation of common shares (in shares)	(1,059,000)
Employee stock purchase plan purchases	$ 393				393
Employee stock purchase plan purchases (in shares)	142,006
Closing balance at Dec. 31, 2023	$ 260,504	$ 48,459	$ 33,834	$ (326,026)	$ 16,771
Ending Balance (in shares) at Dec. 31, 2023	33,483,111				33,483,111
Ending Balance, warrants (in shares) at Dec. 31, 2023		9,577,257			9,577,257

Net loss per share (Details) - shares	12 Months Ended
Net loss per share (Details) - shares	Dec. 31, 2023	Dec. 31, 2022
Share options
Net income (loss) per share
Share options	8,726,130	7,619,984

Leases - Changes in ROU assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Changes in operating lease right-of-use asset
Opening balance	$ 2,423	$ 711
New operating lease right-of-use asset		2,103
Amortization of right-of-use asset	(506)	(391)
Closing balance	1,917	2,423
Operating lease expenses	$ 681	$ 490

Accounts payable and accrued liabilities (Tables)

12 Months Ended

Dec. 31, 2023

Accounts payable and accrued liabilities

Schedule of accounts payable and accrued liabilities


	2023		2022

Trade accounts payable	$	3,981	$	2,263
Accrued compensation and benefits payable		712		2,573
Accrued research and development liabilities		894		404
Accrued commercial liabilities		710		149
Other accrued liabilities		383		255
Total	$	6,680	$	5,644

Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases

Schedule of operating lease right-of-use asset


	2023		2022
Opening balance	$	2,423	$	711
New operating lease right-of-use asset		—		2,103
Amortization of right-of-use asset		(506)		(391)
Closing balance	$	1,917	$	2,423

Schedule of future minimum lease payments of right-of-use assets

The following table summarizes the future minimum lease payments of right-of-use assets operating leases as at December 31, 2023:


January 1, 2024 to December 31, 2024		673
January 1, 2025 to December 31, 2025		670
January 1, 2026 to December 31, 2026		530
January 1, 2027 to September 30, 2027		406
		2,279
Less interest		(276)
	$	2,003

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

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 (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 while focusing on the development and commercialization of innovative cardiovascular medicines.

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 (ASC) 808, Collaborative Arrangements (ASC 808), which requires that certain transactions between the Company and collaborators be recorded in its consolidated statements of comprehensive 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 comprehensive 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 Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers (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.

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 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. Additionally, the Company has adopted an investment policy that includes guidelines relative to credit quality, diversification of maturities and liquidity.

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) Property and Equipment

Property and equipment is stated at historical cost less accumulated amortization. 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 have been recorded. Amortization 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

j) 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.

k) 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 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.

l) Share Issuance Costs

Share issuance costs applicable to the issuance of equity instruments are recorded as a reduction of the financing equity proceeds.

m) 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 (CROs) and to contract manufacturing organizations (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.

n) 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.

o) Foreign Currency Translation and Transactions

The functional currency of the Company is the US 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.

p) Share Based Compensation

The Company has a share based compensation plan which is described in detail in note 8 and records all share-based payments, including grants of employee share options, at their fair values. 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 Company recognizes share based compensation expense over the requisite service period of the individual grants, which equals the vesting period, using the straight-line method. 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 9. 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.

q) Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“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. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt.

r) Significant Risks and Uncertainties

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

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

s) Sources of Liquidity and Funding Requirements

The Company has incurred operating losses and experienced negative operating cash flows since its inception and anticipates to continue to incur losses for at least the next several years. As of December 31, 2023, the Company had cash and cash equivalents and short-term investments of $66.0 million and an accumulated deficit of $326.0 million.

Management has evaluated the Company’s operating plan against its existing cash and cash equivalents and determined that the Company expects to be able to support its operations for at least the next 12 months from the date of issuance of these consolidated financial statements. The Company has historically financed its operations primarily through the sale of equity securities, convertible notes and, to a lesser extent 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. The Company currently plans to raise additional funding as required based on the status of its clinical trials, progress of New Drug Application, or NDA, filing, and projected cash flows. 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.

Income taxes (Details) $ in Millions	12 Months Ended
Income taxes (Details) $ in Millions	Dec. 31, 2023 USD ($)
Canadian federal
NOL Carry Forwards	$ 206.5
Scientific research and experimental development expenditures available to reduce future taxable income	26.5
Canadian provincial
NOL Carry Forwards	203.4
Scientific research and experimental development expenditures available to reduce future taxable income	31.8
United States
NOL Carry Forwards	$ 54.0

Property and equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property and equipment

Schedule of property and equipment


	2023		2022
Computer hardware and software	$	226	$	120
Office equipment		157		155
Leasehold improvements		85		102
Total	$	468	$	377
Less accumulated depreciation		(191)		(120)
Property and equipment, net	$	277	$	257

Currency risk

12 Months Ended

Dec. 31, 2023

Currency risk

Currency risk

15 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 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:


	2023		2022
Cash	$	2,441	$	262
Other receivables		263		262
Operating lease assets		311		462
Accounts payable and accrued liabilities		(52)		(484)
Operating lease liabilities		(306)		(444)
Net financial position exposure	$	2,657	$	58

The Company does not enter into arrangements to hedge its currency risk exposure.

- Definition

The entire disclosure for foreign currency transactions and translation. This may include description of foreign currency transactions, foreign currency gains and losses, explanation of change in cumulative translation adjustment, description of effect of subsequent foreign currency exchange rate change, cumulative translation adjustment movement, foreign currency translation adjustment by component movement, translation adjustment for net investment hedge movement, adjustment for long-term intercompany transactions, schedule of long-term intercompany balances and any other foreign currency transactions and translation related items.

+ References + Details

Commitments

12 Months Ended

Dec. 31, 2023

Commitments

Commitments

14 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 on notice, and therefore are cancellable contracts. Therefore, as at December 31, 2023 there are no contractual commitments, except for office leases (see note 5).

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (59,685)	$ (58,388)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Other receivables (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Other receivables
Interest receivable	$ 528	$ 615
Sales tax receivable	264	261
Clinical receivable	2,400
Other current receivable	16	6
Other receivables	$ 3,208	$ 882

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2023	Mar. 21, 2024	Jun. 30, 2023
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-38899
Entity Registrant Name	Milestone Pharmaceuticals Inc.
Entity Incorporation, State or Country Code	A8
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	1111 Dr. Frederik-Phillips Boulevard
Entity Address, Address Line Two	Suite 420
Entity Address, City or Town	Montréal
Entity Address, State or Province	QC
Entity Address, Country	CA
Entity Address, Postal Zip Code	H4M 2X6
City Area Code	514
Local Phone Number	336-0444
Title of 12(b) Security	Common Shares
Trading Symbol	MIST
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 95.9
Entity Common Stock, Shares Outstanding		53,149,778
Auditor Firm ID	271
Auditor Name	PricewaterhouseCoopers LLP
Auditor Location	Montreal, Canada
Entity Central Index Key	0001408443
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false

Revenue (Details) $ in Thousands		12 Months Ended
Revenue (Details) $ in Thousands	May 15, 2021 USD ($)	Dec. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item
Collaboration revenue
Revenue		$ 1,000	$ 5,000
Number of milestones \| item			2
Upfront cash payment	$ 15,000
Potential milestone payments		$ 107,500
Number of performance obligations \| item		2
Warrants		$ 48,459	$ 34,352
Ji Xing
Collaboration revenue
Percentage of beneficial owner	9.70%

Consolidated Balance Sheets (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Consolidated Balance Sheets
Common shares, par value (in dollars per share)	$ 0	$ 0
Common shares, Shares issued (in shares)	33,483,111	34,286,002
Common shares, Shares outstanding (in shares)	33,483,111	34,286,002
Pre-funded warrants, Warrants issued (in shares)	9,577,257	8,518,257
Pre-funded warrants, Warrants outstanding (in shares)	9,577,257	8,518,257

Property and equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment
Total	$ 468	$ 377
Less accumulated depreciation	(191)	(120)
Property and equipment, net	277	257
Computer hardware and software
Property, Plant and Equipment
Total	226	120
Office equipment
Property, Plant and Equipment
Total	157	155
Leasehold improvements
Property, Plant and Equipment
Total	$ 85	$ 102

Consolidated Statements of Loss - USD ($) $ in Thousands	12 Months Ended
Consolidated Statements of Loss - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Consolidated Statements of Loss
Revenue	$ 1,000	$ 5,000
Operating expenses
Research and development, net of tax credits	31,052	39,829
General and administrative	15,932	15,718
Commercial	15,114	9,095
Loss from operations	(61,098)	(59,642)
Interest income	3,967	1,254
Interest expense	(2,554)
Net loss and comprehensive loss	$ (59,685)	$ (58,388)
Weighted average number of shares and pre-funded warrants outstanding, basic (in shares)	42,955,779	42,450,316
Weighted average number of shares and pre-funded warrants outstanding, diluted (in shares)	42,955,779	42,450,316
Net loss per share, basic (in dollars per share)	$ (1.39)	$ (1.38)
Net loss per share, diluted (in dollars per share)	$ (1.39)	$ (1.38)

Share Based Compensation (Details) - $ / shares		12 Months Ended
Share Based Compensation (Details) - $ / shares	Jan. 01, 2022	Dec. 31, 2023	Dec. 31, 2022	Jan. 01, 2023	Jul. 05, 2022	Dec. 31, 2021
Share-based compensation
Number of options, Options outstanding		8,726,130
2011 Plan
Share-based compensation
Number of options forfeited after termination of one plan	125,323
Number of options, Options outstanding		1,694,233	1,802,672			1,995,971
2019 Plan
Share-based compensation
Shares reserved for issuance	1,195,902	8,182,946		1,371,440	1,000,000
Aggregate number of shares cancelled/forfeited		561,000
Shares available for future grants		1,704,960
Options granted		1,875,400	1,790,700
Cancelled		561,000
Number of options, Options outstanding		6,406,897	5,314,312			3,749,834
Weighted average exercise price		$ 3.61	$ 5.76
2021 Inducement Plan
Share-based compensation
Shares reserved for issuance		1,000,000
Shares available for future grants		375,000
Options granted		122,000	523,000
Number of options, Options outstanding		625,000	503,000
Weighted average exercise price		$ 2.98
ESPP
Share-based compensation
Shares reserved for issuance		1,463,936
Shares issued		142,006
Employee Stock Option \| 2011 Plan
Share-based compensation
Vesting period		4 years
Employee Stock Option \| 2011 Plan \| Share-based Compensation Award, Tranche One
Share-based compensation
Percentage of shares to vest		25.00%
Employee Stock Option \| 2011 Plan \| Share-based Compensation Award, Tranche Two
Share-based compensation
Percentage of shares to vest		2.78%
Employee Stock Option \| 2019 Plan
Share-based compensation
Vesting period		4 years
Employee Stock Option \| 2019 Plan \| Share-based Compensation Award, Tranche One
Share-based compensation
Percentage of shares to vest		25.00%
Employee Stock Option \| 2019 Plan \| Share-based Compensation Award, Tranche Two
Share-based compensation
Percentage of shares to vest		2.78%

Insider Trading Arrangements - Lorenz Muller

3 Months Ended

Dec. 31, 2023

Trading Arrangements, by Individual

Material Terms of Trading Arrangement


			Type of Trading Arrangement
Name and Position	Action	Date	Rule 10b5-1*	Non- Rule 10b5-1**	Total Shares to be Sold	Expiration Date
Lorenz Muller, Chief Commercial Officer	Termination¹	January 10, 2024	X		100,000	1/30/2026

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

¹ Represents the termination of a written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) adopted on October 12, 2023.

Name

Lorenz Muller

Title

Chief Commercial Officer

Adoption Date

October 12, 2023

Rule 10b5-1 Arrangement Terminated

true

Property and equipment

12 Months Ended

Dec. 31, 2023

Property and equipment

Property and equipment

6 Property and equipment

Property and equipment consist of the following at December 31:


	2023		2022
Computer hardware and software	$	226	$	120
Office equipment		157		155
Leasehold improvements		85		102
Total	$	468	$	377
Less accumulated depreciation		(191)		(120)
Property and equipment, net	$	277	$	257

No disposal was recorded for the year ended December 31, 2023. During the year ended December 31, 2022, the Company recorded a disposal of $348, which resulted in a loss of $141. For the years ended December 31, 2023 and 2022, depreciation expense was $92 and $89, respectively.

Share Based Compensation - Non-vested share options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Plans 2011 and 2019 and 2021 Inducement
Number of options
Non-vested at beginning of period	3,428,889
Non-vested share options at end of period	3,581,642	3,428,889
Weighted average fair value
Non-vested at beginning of period	$ 5.24
Non-vested at end of period	$ 3.69	$ 5.24
2011 Plan
Number of options
Non-vested at beginning of period	2,126	200,639
Vested, outstanding	(2,126)	(198,317)
Forfeited		(196)
Non-vested share options at end of period		2,126
Weighted average fair value
Non-vested at beginning of period	$ 6.64	$ 1.86
Vested, outstanding	$ 6.64	1.81
Forfeited		1.91
Non-vested at end of period		$ 6.64
2019 Plan
Number of options
Non-vested at beginning of period	2,923,763	2,655,518
Granted	1,875,400	1,790,700
Vested, outstanding	(1,504,329)	(1,376,791)
Forfeited	(116,359)	(145,664)
Non-vested share options at end of period	3,178,475	2,923,763
Weighted average fair value
Non-vested at beginning of period	$ 5.30	$ 6.40
Granted	2.87	4.37
Vested, outstanding	5.88	6.19
Forfeited	3.96	5.49
Non-vested at end of period	$ 3.64	$ 5.30
2021 Inducement Plan
Number of options
Non-vested at beginning of period	503,000
Granted		523,000
Vested, outstanding	(221,833)
Forfeited		(20,000)
Non-vested share options at end of period	403,167	503,000
Weighted average fair value
Non-vested at beginning of period	$ 4.84
Granted		$ 4.81
Vested, outstanding	4.85
Forfeited		4.18
Non-vested at end of period	$ 4.07	$ 4.84

Fair value of financial instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of financial instruments	$ 0	$ 0

Debt

12 Months Ended

Dec. 31, 2023

Debt

Debt

10 Debt

On March 27, 2023, we 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, we 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 our wholly owned subsidiary, Milestone Pharmaceuticals USA, Inc. Interest at the annual rate of 6.0% is payable quarterly in 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 our and our 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 shares of our 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, we 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 us, 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 we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on

which we provide 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 Convertible Notes, the Company determined there were no embedded features, which require bifurcation between debt and equity components. As a result, the Convertible Notes are accounted for as a liability. As of December 31, 2023, the estimated fair value of the Convertible Notes was approximately $44.3 million based on level 2 inputs.

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


	As of December 31,
	2023		2022
Original principal	$	50,000	$	—
Paid in kind (PIK) interest		2,310		—
Unamortized debt discount		(547)		—
Unamortized debt issuance costs		(1,991)		—
Total	$	49,772	$	—

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


	Year ended December 31,
	2023		2022
Contractual interest expense	$	2,310	$	—
Amortization of debt discount		53		—
Amortization of debt issuance costs		191		—
Total interest expense	$	2,554	$	—

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
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-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Debt - Convertible Note (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Debt Instruments
Total	$ 49,772
Senior Secured Convertible Notes \| RTW Investments, LP \| Strategic Financing Agreements
Debt Instruments
Original principal	50,000
Paid in kind (PIK) interest	2,310
Unamortized debt discount	(547)
Unamortized debt issuance costs	(1,991)
Total	$ 49,772

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Income taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Income taxes
Net operating loss carry-forwards	$ 66,656	$ 57,952
Tax basis of property and equipment in excess of carrying values	67	97
Tax basis of right of use assets	(421)
Tax basis of lease liability	438
Tax basis of reserves	6
Federal SR&ED investment tax credits	3,735	545
Taxation of federal SR&ED investment tax credits	(990)	(82)
Research and development expenditures	7,643	6,323
Financing costs	186	1,008
Stock based compensation	2,850
Change in tax rates		51
Others	45	15
Total Net deferred tax assets	80,215	65,909
Less Valuation allowance	$ (80,215)	$ (65,909)

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies

Basis of Consolidation

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.

Basis of Presentation and Use of Accounting Estimates

b) Basis of Presentation and Use of Accounting Estimates

●

Segment Information

c) Segment Information

Revenue Recognition

d) Revenue Recognition

Collaborative Arrangements

Revenue from Contracts with Customers

Cash and Cash Equivalents

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.

Short-Term Investments

f) Short-Term Investments

Concentration of Credit Risk

g) Concentration of Credit Risk

Currency Risk

h) Currency Risk

Property and Equipment

i) Property and Equipment


Computer hardware and software		3 years
Office equipment		5 years
Furniture and fixtures		5 years
Leasehold improvements		over the lease term

Leases

j) Leases

Pre-funded Warrants

k) Pre-funded Warrants

Share Issuance Costs

l) Share Issuance Costs

Share issuance costs applicable to the issuance of equity instruments are recorded as a reduction of the financing equity proceeds.

Research and Development and Investment Tax Credits

m) Research and Development and Investment Tax Credits

Income Taxes

n) Income Taxes

Foreign Currency Translation and Transactions

o) Foreign Currency Translation and Transactions

Share Based Compensation

p) Share Based Compensation

Recently Adopted Accounting Pronouncements

q) Recently Adopted Accounting Pronouncements

Significant Risks and Uncertainties

r) Significant Risks and Uncertainties

Sources of Liquidity and Funding Requirements

s) Sources of Liquidity and Funding Requirements

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.

Summary of Significant Accounting Policies - Property and Equipment (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Property, Plant and Equipment
Impairment losses	$ 0
Computer hardware and software
Property, Plant and Equipment
Useful lives	3 years
Office equipment
Property, Plant and Equipment
Useful lives	5 years
Furniture and fixtures
Property, Plant and Equipment
Useful lives	5 years

Accounts payable and accrued liabilities

12 Months Ended

Dec. 31, 2023

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities

7 Accounts payable and accrued liabilities

Accounts payable and accrued liabilities comprised the following as of December 31:


	2023		2022

Trade accounts payable	$	3,981	$	2,263
Accrued compensation and benefits payable		712		2,573
Accrued research and development liabilities		894		404
Accrued commercial liabilities		710		149
Other accrued liabilities		383		255
Total	$	6,680	$	5,644

Shareholders' Equity

12 Months Ended

Dec. 31, 2023

Shareholders' Equity

Shareholders' Equity

8 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 33,483,111 shares were issued and outstanding as of December 31, 2023.

As of December 31, 2023, there were 1,463,936 common shares available for issuance under the Employee Stock Purchase Plan, or the “ESPP”. The Company has issued 142,006 shares of common stock pursuant to the ESPP as of December 31, 2023.

In August 2022, the Company issued and sold 361,236 common shares under the Open Market Sale Agreement^SM , or the Sales Agreement, with Jefferies LLC with respect to an at-the-market offering program, or the ATM Program, for proceeds of $2.6 million (net of issuance costs of $0.1 million).

Shelf Registration

On November 12, 2021, the Company entered into an agreement and the Company may sell any combination of the securities described in this prospectus in one or more offerings up to a total aggregate offering price of $250,000,000.

Pre-funded Warrants – Exchange Agreement

On March 22, 2023, the Company entered into an exchange agreement, or the “Exchange Agreement”, with entities affiliated with RTW, or the “Exchanging Stockholders”, pursuant to which the Company exchanged an aggregate of 1,059,000 shares of the Company’s common shares owned by the Exchanging Stockholders for pre-funded warrants, or the Exchange Warrants, to purchase an aggregate of 1,059,000 common shares, with an exercise price of $0.001 per share and no expiration date. The Exchange Warrants are exercisable immediately and no additional cash consideration was rendered in exchange for the warrants. A holder of the Exchange Warrants (together with its affiliates and other attribution parties) may not exercise any portion of an Exchange Warrant to the extent that immediately prior to or after giving effect to such exercise the holder, together with its affiliates, would beneficially own more than 9.99% of the Company’s outstanding common shares immediately after exercise, which percentage may be increased or decreased to any other percentage specified not in excess of 9.99% at the holder's election upon 61 days' notice to the Company subject to the terms of the Exchange Warrants.

Open Market Sale Agreement

On July 29, 2020, the Company entered into an Open Market Sale Agreement℠ with respect to an at-the-market offering program (ATM Program) under which the Company may issue and sell its common shares having an aggregate offering price of up to $50 million. The Company has sold 361,236 shares under the ATM program as of the date of this filing.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
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-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (i)
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

Fair value of financial instruments

12 Months Ended

Dec. 31, 2023

Fair value of financial instruments

Fair value of financial instruments

16 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, 2023 and December 31, 2022, there were no financial instruments measured at fair value on a recurring or non-recurring basis.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Shareholders' Equity - Additional paid-in capital (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Additional paid-in capital
Opening balance	$ 66,348	$ 112,600
Share-based compensation expense	9,534	9,048
Exercise of stock options	189	420
Closing balance	16,771	66,348
Additional paid-in capital
Additional paid-in capital
Opening balance	24,437	15,711
Share-based compensation expense	9,534	9,048
Exercise of stock options	(137)	(322)
Closing balance	$ 33,834	$ 24,437

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

Currency risk (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Net financial position exposure	$ 2,657	$ 58
Cash
Net financial position exposure	2,441	262
Other receivables
Net financial position exposure	263	262
Operating lease assets
Net financial position exposure	311	462
Accounts payable and accrued liabilities
Net financial position exposure	(52)	(484)
Operating lease liabilities
Net financial position exposure	$ (306)	$ (444)

Subsequent Events

12 Months Ended

Dec. 31, 2023

Subsequent Events.

Subsequent Events

19 Subsequent Events

Financing Transaction

On February 28, 2024, we entered into an underwriting agreement, or the Underwriting Agreement, related to an underwritten public offering, or the 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. Under the terms of the Underwriting Agreement, we granted 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 Offering, which was exercised by the Underwriters in full on February 29, 2024.

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.

The net proceeds to the Company from the Offering, including the proceeds from the exercise by the Underwriters of their option to purchase the additional 3,000,000 common shares in full, was approximately $32.4 million after deducting underwriting commissions and offering expenses payable by the Company.

The Offering closed on March 4, 2024.

Leases (Details) - lease	Dec. 31, 2023	Dec. 31, 2022	May 20, 2022	Jul. 01, 2020
Operating lease
Number of operating leases right-of-use assets	2	2
Number of short-term operating leases	1	1
Ville Saint-Laurent, Quebec
Operating lease
Operating lease, term				5 years
Incremental borrowing rate				5.26%
Remaining lease term				65 months
Charlotte, NC
Operating lease
Operating lease, term			62 months
Incremental borrowing rate			7.55%

Currency risk (Tables)

12 Months Ended

Dec. 31, 2023

Currency risk

Schedule of Company's net financial position exposure


	2023		2022
Cash	$	2,441	$	262
Other receivables		263		262
Operating lease assets		311		462
Accounts payable and accrued liabilities		(52)		(484)
Operating lease liabilities		(306)		(444)
Net financial position exposure	$	2,657	$	58

Summary of Significant Accounting Policies - Sources of Liquidity and Funding Requirements (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Summary of Significant Accounting Policies
Cash, cash equivalents and short-term investments	$ 66,000
Accumulated deficit	$ (326,026)	$ (266,341)

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Share Based Compensation

12 Months Ended

Dec. 31, 2023

Share Based Compensation

Share Based Compensation

9 Share Based Compensation

Under the Company’s 2019 Equity Incentive Plan (the 2019 Plan) and the Company’s Stock Option Plan (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 November 10, 2021, the Company established a 2021 Inducement Plan under Nasdaq Marketplace Rules through the granting of awards. This 2021 Inducement Plan is intended to help the Company provide an inducement material for certain individuals to enter into employment with the Company, incentives for such persons to exert maximum efforts for the success of the Company and provide a means by which employees may benefit from increases in value of the common shares. As of December 31, 2023, there were 1,000,000 shares available for issuance under the 2021 Inducement Plan, of which 375,000 shares were available for future grants.

On January 1, 2023 and on January 1, 2022, the number of the Company’s common shares reserved for issuance under the 2019 Plan increased by 1,371,440 and 1,195,902 common shares, respectively. Further, on July 5, 2022, the number of the Company’s common shares reserved for issuance under the 2019 Plan increased by 1,000,000 common shares. In addition, 125,323 options have been forfeited under the 2011 Plan since the adoption of the 2019 Plan and have become available for issuance under the 2019 Plan. As of December 31, 2023, 561,000 of previously issued options had been cancelled under the 2019 Plan and were available for future grants. As of December 31, 2023, there were 8,182,946 common shares available for issuance under the 2019 Plan, of which 1,704,960 common shares were available for future grants.

On July 15, 2022, the Company offered an Employee Share Purchase Plan, or ESPP, in which participation is available to substantially all of our employees in the United States and Canada who meet certain service eligibility requirements. As of December 31, 2023, the Company has 1,463,936 common shares available under the ESPP. As of December 31, 2023, the Company has issued 142,006 shares of common stock pursuant to the ESPP.

The total outstanding and exercisable options from the 2011 Plan, 2019 Plan and Inducement Plan as of December 31 were as follows:


	2023
								Weighted
	Number							average
	of shares							exercise
	2019 Plan			Inducement Plan	2011 Plan		Total	price
Outstanding at beginning of year - 2011 Plan		—		—		1,802,672	1,802,672	$	2.05
Outstanding at beginning of year - 2019 Plan		5,314,312		—		—	5,314,312		8.35
Outstanding at beginning of year - Inducement Plan		—		503,000		—	503,000		6.41
Granted - 2019 Plan		1,875,400		—		—	1,875,400		3.61
Granted - Inducement Plan		—		122,000		—	122,000		2.98
Exercised - 2019 Plan		(7,000)		—		—	(7,000)		3.74
Exercised - 2011 Plan		—		—		(107,103)	(107,103)		1.52
Forfeited - 2019 Plan		(156,198)		—		—	(156,198)		6.13
Expired - 2019 Plan		(58,617)		—		—	(58,617)		11.52
Expired - 2011 Plan		—		—		(1,336)	(1,336)		0.91
Cancelled - 2019 Plan		(561,000)		—		—	(561,000)		21.73
Outstanding at end of period		6,406,897		625,000		1,694,233	8,726,130	$	5.09
Outstanding at end of period - Weighted average exercise price	$	5.82	$	5.74	$	2.09
Exercisable at end of period		3,228,422		221,833		1,694,233	5,144,488	$	5.32
Exercisable at end of period - Weighted average exercise price	$	6.93	$	6.42	$	2.09


	2022
								Weighted
	Number							average
	of shares							exercise
	2019 Plan			Inducement Plan	2011 Plan		Total	price
Outstanding at beginning of year - 2011 Plan		—		—		1,995,971	1,995,971	$	2.07
Outstanding at beginning of year - 2019 Plan		3,749,834		—		—	3,749,834		9.52
Granted - 2019 Plan		1,790,700		—		—	1,790,700		5.76
Granted - Inducement Plan		—		523,000			523,000		6.37
Exercised - 2019 Plan		(45,089)		—		—	(45,089)		3.83
Exercised - 2011 Plan		—		—		(172,595)	(172,595)		1.43
Forfeited - Inducement Plan		—		(20,000)		—	(20,000)		5.48
Forfeited - 2019 Plan		(181,133)		—		—	(181,133)		8.00
Forfeited - 2011 Plan		—		—		(19,583)	(19,583)		9.35
Expired - 2011 Plan		—		—		(1,121)	(1,121)		0.96
Outstanding at end of period		5,314,312		503,000		1,802,672	7,619,984	$	6.73
Outstanding at end of period - Weighted average exercise price	$	8.35	$	6.41	$	2.05
Exercisable at end of period		2,390,549		—		1,800,546	4,191,095	$	6.52
Exercisable at end of period - Weighted average exercise price	$	9.90		—	$	2.04

The weighted average remaining contractual life was 6.55 and 7.47 years for outstanding options as of December 31, 2023 and 2022, respectively. The weighted average remaining contractual life was 5.93 and 6.37 years for vested options, as of December 31, 2023 and 2022, respectively.

There was $11.4 million and $15.7 million total unrecognized compensation cost related to non-vested share options as of December 31, 2023 and 2022, respectively. The share options are expected to be recognized over a remaining weighted average vesting period of 2.27 years and 2.36 years as of December 31, 2023 and 2022, respectively. For the year ending December 31, 2023, there were 561,000 shares cancelled under the 2019 plan, which resulted in additional share-based compensation expense of $0.6 million.

Options granted are valued using the Black-Scholes option pricing model. 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:


	2023
	Number							Weighted
	of options							average
	2019 Plan		Inducement Plan		2011 Plan		Total	fair value
Non-vested share options at beginning of year - 2011 Plan		—		—		2,126	2,126	$	6.64
Non-vested share options at beginning of year - 2019 Plan		2,923,763		—		—	2,923,763		5.30
Non-vested share options at beginning of year - Inducement Plan		—		503,000		—	503,000		4.84
Granted - 2019 Plan		1,875,400		—		—	1,875,400		2.87
Granted - Inducement Plan		—		122,000		—	122,000		2.30
Vested, outstanding 2011 Plan		—		—		(2,126)	(2,126)		6.64
Vested, outstanding 2019 Plan		(1,504,329)		—		—	(1,504,329)		5.88
Vested, outstanding Inducement Plan		—		(221,833)		—	(221,833)		4.85
Forfeited - 2019 Plan		(116,359)		—		—	(116,359)		3.96
Non-vested share options at end of period		3,178,475		403,167		—	3,581,642	$	3.69
Non-vested share options at end of period - Weighted average fair value	$	3.64	$	4.07	$	—


	2022
	Number							Weighted
	of options							average
	2019 Plan		Inducement Plan		2011 Plan		Total	fair value
Non-vested share options at beginning of year - 2011 Plan		—		—		200,639	200,639	$	1.86
Non-vested share options at beginning of year - 2019 Plan		2,655,518		—		—	2,655,518		6.40
Granted - 2019 Plan		1,790,700		—		—	1,790,700		4.37
Granted - Inducement Plan		—		523,000		—	523,000		4.81
Vested, outstanding 2011 Plan		—		—		(198,317)	(198,317)		1.81
Forfeited - 2011 Plan		—		—		(196)	(196)		1.91
Forfeited - Inducement Plan		—		(20,000)		—	(20,000)		4.18
Forfeited - 2019 Plan		(145,664)		—		—	(145,664)		5.49
Vested, outstanding 2019 Plan		(1,376,791)		—		—	(1,376,791)		6.19
Non-vested share options at end of period		2,923,763		503,000		2,126	3,428,889	$	5.24
Non-vested share options at end of period - Weighted average fair value	$	5.30	$	4.84	$	6.64

The following table summarizes information with respect to share options outstanding as of December 31, 2023:


	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
$0.84-$1.73	949,136	3.11	$	1.43	949,136	3.11	$	1.43
$1.74-$3.2	915,192	4.77	$	2.69	709,192	4.76	$	2.59
$3.21-$5.25	2,351,850	7.62	$	3.67	688,000	6.63	$	3.76
$5.26-$6.36	3,473,464	7.37	$	5.90	2,133,496	7.34	$	5.96
$6.37-$8.5	667,833	6.43	$	6.85	316,521	6.58	$	6.84
$8.51-$15.5	57,905	6.27	$	9.08	42,780	5.42	$	9.27
$15.51-$20.5	65,100	5.84	$	17.21	64,829	5.84	$	17.21
$20.51-$22.45	245,650	5.21	$	21.48	240,534	5.21	$	21.48
Total	8,726,130	6.55	$	5.09	5,144,488	5.93	$	5.32

The fair value of options is measured using Black-Scholes valuation model. This model also requires assumptions, including expected option life, volatility, risk-free interest rate and dividend yield, which greatly affect the calculated values:


	Year ended December 31,
	2023			2022
Exercise price	$	3.58		$	5.90
Share price	$	3.58		$	5.90
Volatility		97	%		92	%
Risk-free interest rate		3.97	%		2.43	%
Expected life		6.01 years			6.03 years
Dividend		0	%		0	%

Expected volatility is determined using 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 Company recognized share-based compensation expense as follows for the years ended December 31:



	2023		2022
Administration	$	4,849	$	4,229
Research and development		3,281		3,483
Commercial activities		1,404		1,336
Total	$	9,534	$	9,048