MIRA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

Note 1. Description of business and summary of significant accounting policies:

Overview

MIRA Pharmaceuticals, Inc. (NASDAQ: MIRA, the “Company”) is a clinical-stage pharmaceutical development company advancing a diversified pipeline across neuroscience and metabolic-behavioral disorders. The Company holds exclusive rights in the United States, Canada, and Mexico for Ketamir-2 and MIRA-55, two novel drug candidates designed to address unmet medical needs in neuropathic and inflammatory pain, as well as neuropsychiatric and neurocognitive disorders.

Ketamir-2 is a next-generation oral NMDA-receptor antagonist currently being evaluated in an ongoing Phase 1 clinical trial in healthy volunteers. The single-ascending-dose (SAD) portion of the study has been completed, and data remain blinded pending full analysis. The multiple-ascending-dose (MAD) portion is underway, and a Phase 2a study in chemotherapy-induced peripheral neuropathy (CIPN) is planned to begin in the first half of 2026, subject to regulatory feedback and site readiness.

MIRA-55 is a novel oral, non-psychoactive pharmaceutical-marijuana analog under preclinical investigation for anxiety, cognitive decline, and inflammatory pain. Recent animal studies demonstrated that MIRA-55 produced analgesic and anti-inflammatory effects in validated preclinical pain models without evidence of local irritation or psychoactive side effects. These findings support continued advancement toward IND-enabling studies.

The U.S. Drug Enforcement Administration (DEA) has completed its scientific review of both Ketamir-2 and MIRA-55 and concluded that neither compound would be considered a controlled substance or listed chemical under the Controlled Substances Act (CSA) and its governing regulations.

On September 29, 2025, MIRA acquired SKNY Pharmaceuticals (“SKNY”), a related party private company developing SKNY-1, a preclinical-stage oral therapeutic designed to modulate CB1, CB2, and MAO-B pathways to influence energy balance, lipid metabolism, appetite, cravings, and reward—without the psychiatric side effects that limited earlier CB1-targeting drugs (see Note 5, Asset Acquisition).

SKNY-1 has been evaluated in preclinical behavioral and metabolic models. In zebrafish models that mimic human obesity and craving behaviors, oral SKNY-1 administration was associated with reductions in food consumption, body-weight gain, and nicotine-seeking behavior compared with controls. These findings support continued preclinical development of SKNY-1 in models of metabolic and behavioral modulation.

As used herein, the Company’s Common Stock, par value $0.0001 per share, is referred to as the “Common Stock” and the Company’s preferred stock, par value $0.0001 per share, is referred to as the “Preferred Stock”.

Basis of presentation

The accompanying unaudited condensed financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Regulation S-X. These financial statements do not include all information and notes required by GAAP for annual financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in our Form 10-K for the year ended December 31, 2024. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. Operating results for the periods presented are not necessarily indicative of expected results for the full year. Additionally, certain prior period amounts have been reclassified to conform to current period presentation in the accompanying unaudited condensed consolidated financial statements. In the financial statements included in our Form 10-K for the year ended December 31, 2024, accounts payable and accrued liabilities were combined. In these current periods, accounts payable and accrued liabilities have been retrospectively separated on the balance sheet.

Research and development expenses

Research and development costs are expensed in the period in which they are incurred and include the expenses paid to third parties, such as contract research organizations and consultants, who conduct research and development activities on behalf of the Company. Patent-related costs, including registration costs, documentation costs and other legal fees associated with the application, are expensed in the period in which they are incurred.

General and administrative expenses

General and administrative expenses are primarily comprised of personnel costs, marketing expenses, amortization, insurance expenses, professional services fees, travel and office expenses, and stock-based compensation.

Use of estimates

The preparation of financial statements in accordance with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results may differ from such estimates and such differences could be material. Significant estimates during the reporting periods include the value of equity investments held, stock issued for an acquisition, stock-based compensation and the deferred tax asset valuation allowance.

Cash and cash equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at two financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company’s account at these institutions is insured by the FDIC up to $250,000. On September 30, 2025, the Company had cash in excess of FDIC limits of approximately $2.3 million. Any material loss that the Company may experience in the future could have an adverse effect on its ability to pay its operational expenses or make other payments and may require the Company to move its cash to other high quality financial institutions. The Company deems these institutions to be of high caliber and, to date, has not experienced any losses related to these holdings.

Investments in Equity Securities, at Fair Value

Equity investments are carried at fair value with unrealized gains or losses recorded as net unrealized gain (loss) on equity investments, a component of other income, in the accompanying unaudited condensed consolidated statements of operations. Realized gains and losses are determined on a specific identification basis which is recorded in earnings or loss as a net realized gain (loss) on equity investments in the condensed consolidated statement of operations and comprehensive loss. The Company reviews investments in equity securities, at fair value, for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

Fair value of financial instruments

The Company measures the fair value of financial instruments in accordance with GAAP which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company considers the carrying amount of deferred offering costs to approximate fair value due to short-term nature of this instrument. GAAP describes three levels of inputs that may be used to measure fair value:

Level 1 - quoted prices in active markets for identical assets or liabilities.

Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions).

The shares of common stock in Telomir Pharmaceuticals, (Nasdaq: TELO), a related party through certain common shareholders and officers, received in the SKNY acquisition were classified as a Level 1 financial instrument, as TELO is a marketable equity security. On September 30, 2025, the value of these shares was adjusted according to fair value accounting standards, with an increase in the recorded value of $176,056 and a corresponding credit to unrealized gain on short-term investments, a component of other income.

Stock-based compensation

The Company accounts for stock-based compensation under the provisions of FASB ASC 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, directors and consultants based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. The Company has elected to account for forfeiture of stock-based awards as they occur.

Earnings (loss) per Share

Earnings (loss) per share is computed in accordance with ASC Topic 260, “Earnings per Share” Basic weighted-average number of shares of common stock outstanding for the periods ended September 30, 2025 and 2024 include the shares of the Company issued and outstanding during such period, on a weighted average basis. The basic weighted average number of shares of common stock outstanding excludes common stock equivalents such as stock options and warrants, while diluted weighted average number of shares outstanding includes such stock options and warrants. During the nine months ended September 30, 2025 and 2024, outstanding aggregate stock options and warrants of 5,354,237 and 3,635,904, respectively, were not included in the computation of diluted earnings per share, because to do so would have had an antidilutive effect.

Recent accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU 2024-03,Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard will be effective beginning in fiscal year 2025, with early adoption permitted. The new standard is expected to be applied prospectively, but retrospective application is permitted. We are currently evaluating the impact of ASU 2023-09 on the financial statements and related disclosures. The Company does not expect the adoption of this new guidance to have a material impact on the consolidated financial statements.

Management has considered all other recent accounting pronouncements that are issued, but not effective, and it does not believe that they will have a significant impact on the Company’s results of operations or financial position.

Note 2. Going concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business.

As of September 30, 2025, the Company had cash of approximately $2.7 million, and historically the Company has had no revenues. The Company has used approximately $3.5 million of cash in operations during the nine months ended September 30, 2025, had a net loss of approximately $4.5 million in the nine months ended September 30, 2025 and had stockholders’ equity of approximately $7.5 million at September 30, 2025. As partial consideration in the SKNY asset acquisition, the Company received $4,718,310 in marketable equity securities which have been classified on the September 30, 2025 balance sheet as short-term investments. On September 30, 2025, the value of these shares was adjusted according to fair value accounting standards, with an unrealized increase in the recorded value of $176,056 and a corresponding credit to unrealized gain on short-term investments, a component of other income.

Historically, the Company has been primarily engaged in developing Ketamir-2 and MIRA-55. During these activities, the Company sustained substantial losses. As of September 29, 2025, the Company acquired the rights to develop SKNY-1. The Company’s ability to fund ongoing operations and future clinical trials required for FDA approval is dependent on the Company’s ability to obtain significant additional external funding in the near term. The Company maintains an effective shelf registration statement with the Securities and Exchange Commission (SEC) for the issuance of shares of common stock under various types of equity offerings, including the shares of common stock under our At-the-Market (ATM) equity program (Note 6).

As of the date of filing this Report, the Company will continue to generate losses and have insufficient cash and cash equivalents on hand to support its operations for at least the 12 months following the date the financial statements are issued. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund our operations in the future. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3. License agreement, related party:

MIRALOGX

On November 15, 2023, the Company and MIRALOGX, LLC, a Florida limited liability company (“MIRALOGX”) entered into an exclusive license agreement (the “License Agreement”) to develop and commercialize Ketamir-2, a drug product containing 2-(2- chlorophenyl)-2-(methylamino) cyclopentan-1-one as an active agent in the United States, Canada and Mexico (the “Territory”). The exclusive license in the License Agreement includes the right of the Company to sublicense the licensed intellectual property. The Company and MIRALOGX have the same founder, who is also related to our largest shareholder and thus MIRALOGX is considered a related party.

Pursuant to the terms of the License Agreement, and subject to the conditions set forth therein, the Company paid MIRALOGX a one-time, nonrefundable payment of $0.1 million upon the signing of the Agreement and will be obligated to pay quarterly royalty payments on sales of the Ketamir-2 in the Territory of 8% of net sales and 8% of other revenue (such as milestone or sublicense payments) from licensed products.

Also, in consideration of the License Agreement, the Company issued to MIRALOGX a Common Stock Purchase Warrant to purchase up to 700,000 shares of the Company’s common stock (the “MIRALOGX Warrant”). The MIRALOGX Warrant is exercisable, in whole or in part, any time prior to November 15, 2028 at a cash exercise price of $2.00 per share.

The Company and MIRALOGX have made customary representations and warranties in the License Agreement and have agreed to certain other customary covenants, including confidentiality, cooperation, and indemnity provisions. Either party may terminate the License Agreement for cause if the other party materially breaches or defaults in the performance of its obligations, and, if curable, such material breach remains uncured for 120 days. Unless earlier terminated, the License Agreement will continue in effect until the last to expire of the patent rights licensed pursuant to the License Agreement.

In the SKNY asset acquisition (See Note 5), the Company acquired the license to SKNY-1, a preclinical drug candidate (the “SKNY License”) originally licensed from MIRALOGX by SKNY. In acquiring the rights to the SKNY License, the Company gained the rights to commercialize SKNY-1 in the United States, Canada, and Mexico. Pursuant to the terms of the SKNY License, and subject to the conditions set forth therein, the Company will be obligated to pay a royalty payment of 8% of net sales, with a minimum annual royalty of $250,000. Unless earlier terminated, the SKNY License Agreement will continue in effect until the last to expire of the patent rights licensed pursuant to the SKNY License (see Note 5, Asset Acquisition).

Note 4. Related party transactions:

Due from related parties– Amounts due from MIRALOGX as of September 30, 2025 and December 31, 2024, which are presented as a related party receivable, in the accompanying condensed balance sheets, totaled $0.04 million. These aforementioned amounts are composed of accounts payable paid on behalf of a related party, specifically, research and development payables. There has been no related party activity since December 31, 2024.

License agreement - See Note 3.

Asset acquisition – See Note 5.

Note 5. Asset Acquisition:

Acquisition of SKNY Pharmaceuticals, Inc.

On March 19, 2025, we entered into a binding letter of intent (the “LOI”) with SKNY Pharmaceuticals, Inc. (“SKNY”), a privately held Delaware corporation, which is a related party due to certain common shareholders and licensor, to acquire SKNY through a stock-for-stock merger with our merger subsidiary, which we formed on June 13, 2025 (the “Merger”). On September 29, 2025 (the “Closing Date”), we closed this merger. SKNY was the survivor of this merger and became our wholly owned subsidiary. SKNY’s preclinical drug candidate, SKNY-1, is designed to modulate CB1, CB2, and MAO-B pathways to address energy storage, lipid metabolism, appetite, cravings, and reward - without the psychiatric side effects that limited earlier CB1-targeting drugs. SKNY holds exclusive rights in the United States to its drug candidate under license from Miralogx, a related party of the Company, see Note 3, License Agreement, Related Party. The transaction was recorded as an asset acquisition from a related party at acquired cost basis with two assets acquired, a license agreement and 3,521,127 shares in common stock of Telomir Pharmaceuticals, Inc. (NASDAQ: TELO), a publicly traded preclinical stage biotechnology company, which is a related party to MIRA due to certain common ownership, officers and directors. The 3,521,127 shares of TELO common stock were contributed to the Company on behalf of SKNY by SKNY’s largest shareholder. The 3,521,127 shares in TELO represented $5,000,000 based on the 10-day average of the closing share price of TELO stock, $1.42, for the ten trading days prior to September 25, 2025, (the “Measurement Date”). On September 29, 2025 (the “Closing Date”), MIRA Pharmaceuticals, Inc. received the SKNY License with Miralogx which was recorded at its carryover basis of zero and received the TELO shares and recorded their value as of the Closing Date as $4,718,310 based on the TELO closing price on September 29, 2025 of $1.34 per share. The 3,521,127 shares in TELO were recorded on the MIRA balance sheet as a Short-term equity investment. On September 30, 2025, the value of these shares was adjusted to $4,894,366 based on the TELO closing price on September 30, 2025, with a corresponding $176,056 unrealized gain recognized in other income.

Also on the Closing date, MIRA issued 19,755,738 new shares in MIRA common stock to the SKNY shareholders (See Note 6). The common shares were valued at $26,275,132 based on the quoted trading price of the Company’s stock on September 29, 2025 of $1.33 per share. The excess fair value of the MIRA common shares issued over the $4,718,310 net assets received in SKNY of $21,556,821 has been reflected as a deemed dividend with a charge to additional paid-in capital of $21,556,821. The net increase to equity of the common shares was $4,718,311.

Note 6. Stockholders’ equity:

Capital stock

The Company has the authority to issue 110,000,000 shares of capital stock, consisting of 100,000,000 shares of Common Stock and 10,000,000 shares of undesignated Preferred Stock, whose rights and privileges will be defined by the Board of Directors when a series of Preferred Stock is designated.

On August 12, 2024, the Company filed a shelf registration statement with the SEC to facilitate the issuance of our common stock and entered into an At-the-Market Offering Agreement (the “ATM Agreement”) with Rodman & Renshaw LLC, under which the Company may offer and sell shares of its Common Stock, with an aggregate offering amount sold of up to $19,268,571. On September 24, 2024, the Company filed a prospectus supplement to amend the shelf registration statement to update the maximum amount eligible to be sold under the ATM Agreement to $75 million.

For the nine months ended September 30, 2025, under the ATM Agreement, the Company sold and issued 2,382,402 shares of Common Stock at an average price per share of $1.33 and received net proceeds of approximately $3.0 million after deducting commissions and other fees of $0.13 million.

Stock-based compensation

The fair value of each option award is estimated on the grant date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Historically, the Company estimated expected price volatility based on the historical volatilities of a peer group as the Company did not have a multi-year trading history for its shares. Industry peers consist of several public companies in the biotech industry similar to the Company in size, stage of life cycle and product indications. In September 2025, the Company commenced using the historical volatility of its shares as an estimate of expected share price volatility.

Expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus contract term. The risk-free rate is based on the 5-year U.S. Treasury yield curve in effect at the time of grant. The Company recognizes forfeitures as they occur.

During the nine months ended September 30, 2025, a total of 75,000 options to purchase Common Stock, with an aggregate fair market value of approximately $87,000 for a weighted average fair value of $1.16 per option, were granted to the members of the Company’s Board of Directors, executive officers and consultants of the Company. The options have a term of 10 years from the grant date. These options vest over various terms ranging from immediate vesting upon grant to the one-year anniversary of the grant date.

During the nine months ended September 30, 2024, a total of 1,204,000 options to purchase Common Stock, with an aggregate fair market value of approximately $1.2 million were granted to the members of the Company’s Board of Directors, executive officers and consultants of the Company. The options have exercise prices ranging from $0.71 to $1.57 and a term of 10 years from the grant date. These options vest over various terms ranging from immediate vesting upon grant to the one-year anniversary of the grant date.

The fair value of the options granted in 2025 was estimated on the grant date using the Black-Sholes valuation method and level 3 inputs based on assumptions for expected volatility, expected dividends, expected term and the risk-free interest rate which resulted in $0.09 million in value.

Key assumptions used to value options in the nine months ended September 30, 2025 and 2024 were as follows:

On September 15, 2025, the compensation committee of the Company voted to reprice the exercise price of certain stock options previously granted to the Chief Executive Officer, Erez Aminov. In total,300,000 stock options were repriced, to use the closing price of $1.38, MIRA’s common stock on September 15, 2025, as the exercise price. As a result of this stock option repricing, an additional expense of $124,972 was included in stock-based compensation for the three months ended September 30, 2025.

On July 15, 2025, Michelle Yanez, the Company’s former Chief Financial Officer, exercised options to purchase 126,061 shares of the Company’s common stock. The Company received $151,023 in net proceeds from this transaction.

On September 12, 2025, Michelle Yanez exercised options to purchase 98,939 shares of the Company’s common stock. The Company received $117,019 in net proceeds from this transaction.

On September 22, 2025, a former company employee exercised options to purchase 25,000 shares of the Company’s common stock. The Company received $29,750 in net proceeds from this transaction.

On March 26, 2025, the compensation committee of the Company adopted the Company’s Executive Incentive Compensation Plan (the “EICP”) for Erez Aminov, its Chairman and Chief Executive Officer. Under the EICP, Mr. Aminov will be eligible for certain long-term awards of up to 500,000 performance-based restricted stock units of the Company’s common stock, par value $0.001 upon the Company achieving specified milestones based upon the Company reaching certain market capitalization values and the progress of the Company’s drug candidates. All awards under the EICP are subject to the approval of the Board and the Committee. Furthermore, the Board and the Committee, each in its sole discretion, generally retain the right to amend, supplement, supersede or cancel any awards under the EICP for any reason, and reserve the right to determine whether and when to pay out any bonus amounts pursuant to or outside of the EICP, regardless of the achievement of the performance targets.

On July 18, 2025, the Board and the Committee determined the Market capitalization threshold of $25 million had been achieved. As a result, on August 15, 2025, the Company issued Erez Aminov $50,000 in cash and 62,500 vested restricted stock units, with the restricted stock units having an aggregate fair market value of $93,750.

The following is RSU activity during the nine months ended September 30, 2025:

During the year ended December 31, 2024, a total of 500,000 restricted stock units (“RSU”), with an aggregate fair market value of approximately $0.6 million were granted to the Company’s Chief Executive Officer under the 2022 Omnibus Incentive Plan. These RSU’s vested as follows: (i) 50% on February 12, 2025 (ii) 50% at 6-month anniversary of the date of grant. The awards were fair valued using the closing price of the stock of $1.19 on December 6, 2024.

The Company recognized $1.8 million in stock compensation expense related to stock options and RSUs in 2025. This expense was recorded in operating expenses on the accompanying statement of operations and additional paid-in capital on the accompanying balance sheet as of September 30, 2025.

Warrants

The Company has granted warrants to purchase shares of Common Stock. Warrants may be granted to affiliates in connection with certain agreements.

Warrant activity for the nine months ended September 30, 2025 and 2024 is summarized below:

Note 7. Segment Information

The Company operates in one reportable segment related to the development and commercialization of pharmaceuticals targeting neurologic and neuropsychiatric disorders. The Chief Operating Decision Maker for the Company is the CEO. The Company’s CEO reviews operating results on an aggregate basis and manages the Company’s operations as a whole for the purpose of evaluating financial performance and allocating resources. Accordingly, the Company has determined that it has a single reportable and operating segment structure. The CEO uses aggregate net loss to allocate resources in the annual budgeting and forecasting process and also uses that measure as a basis for evaluating financial performance regularly by comparing actual results with established budgets and forecasts.

The accounting policies of the Company’s single segment are the same as those described in the summary of significant accounting policies within Note 1 herein and in the 2024 Annual Report. The CEO assesses performance for the Company and decides how to allocate resources based on the aggregate net loss that is also reported on the income statement as net loss. The measure of segment assets is reported on the balance sheets as total assets.

The table below provides information about the Company’s revenue, significant segment expenses and other segment expenses.

Note 8. Subsequent Events

ATM Offering

On October 15, 2025, under the ATM Agreement, the Company sold 500,000 shares at an average price of $2.55 and received net proceeds of $1.2 million after deducting fees and expenses. On October 16, 2025, under the ATM Agreement, the Company sold 1,251,000 shares at an average price of $2.05 and received net proceeds of $2.5 million after deducting fees and expenses.

Exercise of Options

On October 16, 2025, Erez Aminov, the Company’s Chairman and Chief Executive Officer, exercised options to purchase 613,595 shares of the Company’s common stock. The Company received $590,490 in net proceeds from this transaction.