Milestone Pharmaceuticals Inc. Debt Disclosure
11. Debt
On March 27, 2023, the Company entered into a note purchase agreement, or the “Note Purchase Agreement,” with RTW Investments LP and certain of its affiliates, or collectively, “RTW.”
On March 29, 2023, the Company closed the transactions contemplated by the Note Purchase Agreement, and issued and sold $50.0 million principal amount of 6.0% Convertible Senior Notes due 2029, or the “2029 Convertible Notes,” to the holders.
The 2029 Convertible Notes are senior secured obligations and are guaranteed on a senior secured basis by the Company’s wholly owned subsidiary, Milestone Pharmaceuticals USA, Inc. Interest at the annual rate of 6.0% is payable quarterly in
cash or, at our option, payable in kind for the first three years. The maturity date for the 2029 Convertible Notes is March 31, 2029, the “Maturity Date”. The obligations under the 2029 Convertible Notes are secured by substantially all of the Company’s and the Company’s subsidiary guarantor’s assets.
Each $1,000 of principal of the 2029 Convertible Notes (including any interest added thereto as payment in kind) is convertible into 191.0548 common shares, equivalent to an initial conversion price of approximately $5.23 per share, subject to customary anti-dilution and other adjustments. In addition, following a notice of redemption or certain corporate events that occur prior to the Maturity Date, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2029 Convertible Notes in connection with such notice of redemption or corporate event.
On or after March 27, 2027, the 2029 Convertible Notes are redeemable by the Company, subject to certain conditions, if the closing sale price of the common shares exceeds 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
In accounting for the issuance of the 2029 Convertible Notes, the Company determined there were no embedded features, which require bifurcation between debt and equity components. As a result, the 2029 Convertible Notes are accounted for as a liability. As of December 31, 2025, the estimated fair value of the 2029 Convertible Notes was approximately $62.3 million based on level 2 inputs, including volatility and credit spread.
The net carrying amount of the 2029 Convertible Note were as follows:
| December 31, 2025 | December 31, 2024 | ||||
Original principal |
| $ | 50,000 | $ | 50,000 | |
Paid in kind (PIK) interest | 8,927 | 5,520 | ||||
Unamortized debt discount | (374) | (468) | ||||
Unamortized debt issuance costs |
| (1,362) | (1,700) | |||
Total |
| $ | 57,191 | $ | 53,352 | |
The following table presents the total amount of interest cost recognized relating to the 2029 Convertible Notes:
Year ended December 31, | ||||||||
2025 | | 2024 | ||||||
Contractual interest expense | $ | 3,407 |
| $ | 3,210 | |||
Amortization of debt discount | 93 | 80 | ||||||
Amortization of debt issuance costs | 338 |
| 291 | |||||
Total interest expense | $ | 3,838 |
| $ | 3,581 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 20, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 21, 2024 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.