Financial Analysis

12. Commitments and contingencies Research and development contracts and contract research organizations agreements The Company utilizes contract manufacturing organizations (CMOs) for the development and production of clinical materials and contract research organizations (CROs) to perform services related to its clinical trials. Pursuant to the agreements with these CMOs and CROs, the Company has either the right to terminate the agreements without penalties or under certain penalty conditions. As of March 31, 2026, the Company has $95 of commitments to CMOs and $30 of commitments to CROs for the next twelve months. Legal proceedings and disputes In the ordinary course of business, the Company is at times subject to various legal proceedings and disputes. The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that the Company will incur a loss and the amount of the loss can be reasonably estimated, the Company records a liability in its consolidated financial statements. These legal contingencies may be adjusted to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of loss is not estimable, the Company does not accrue legal contingencies. While the outcome of legal proceedings is inherently uncertain, based on information currently available, management believes that it has established appropriate legal reserves. N …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

8. Stock-based compensation 2024 Equity Incentive Plan At the Annual and Special Meeting of Shareholders on September 30, 2024, the Companys shareholders approved the Grace Therapeutics, Inc. 2024 Equity Incentive Plan (the 2024 Plan) which became effective on the date of the Domestication. The 2024 Plan replaced the Acasti Pharma Inc. Stock Option Plan and the Acasti Pharma Inc. Equity Incentive Plan (the Prior Plans). The 2024 Plan provides for the grant of awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, performance-based awards and other equity-based awards to eligible persons as defined under the 2024 Plan. Any of these awards may, but need not, be made as performance incentives to reward the holders of such awards for the achievement of performance goals in accordance with the terms of the 2024 Plan. Stock options granted under the 2024 Plan may be non-qualified stock options or incentive stock options, as provided in the 2024 Plan. In connection with the Continuance and the Domestication, the Company continues its obligations under the Prior Plans and all of the outstanding equity awards under the Prior Plans. Upon effectiveness of the Continuance, each outstanding option exercisable for and restricted share unit settleable into Common Shares remained exercisable for or able to be settled into, as applicable, an equivalent number of common shares of Acasti …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

3. Fair value measurements Assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 are as follows: Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) $ $ $ $ Assets Treasury bills classified as cash equivalents 15,670 15,670 Total assets 15,670 15,670 Total liabilities Assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 are as follows: Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) $ $ $ $ Assets Treasury bills classified as cash equivalents 21,304 21,304 Total assets 21,304 21,304 Liabilities Derivative warrant liabilities 1,141 1,141 Total liabilities 1,141 1,141 There were no changes in valuation techniques or transfers between Levels 1, 2 or 3 during the years ended March 31, 2026 and 2025. The Companys derivative warrant liabilities are measured at fair value on a recurring basis using unobservable inputs that are classified as Level 3 inputs. Refer to Note 7, Stockholders Equity , for the valuation techniques and assumptions used in estimating the fair value of the derivative warrant liabilities. …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

5. Intangible assets and goodwill Individual IPR&D projects and goodwill are tested for impairment on an annual basis in the fourth quarter, and in between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of each technology or our reporting unit below its carrying value. The impairment assessments resulted in the following activity during the years ended March 31, 2026 and 2025: GTx-104 GTx-102 GTx-101 Total $ $ $ $ Intangible assets in-process research and development Balance, March 31, 2024 27,595 9,196 4,337 41,128 Impairment Balance, March 31, 2025 27,595 9,196 4,337 41,128 Impairment Balance, March 31, 2026 27,595 9,196 4,337 41,128 $ Goodwill Balance, March 31, 2024 8,138 Impairment Balance, March 31, 2025 8,138 Impairment Balance, March 31, 2026 8,138 The Company's IPR&D projects, consistent with others in our industry, have risks and uncertainties associated with the timely and successful completion of the development and commercialization of product candidates, including our ability to confirm safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs. It is not permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require the completion of clinical trials that demonstrate that a product candidate is safe and effective. In addition, …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

10. Income taxes Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due. Deferred taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable or deductible when the assets or liabilities are recovered or settled. For the years ended March 31, 2026 and 2025, the loss before income tax benefit was $9,493 and $12,767, respectively The provision for income taxes consisted of the following: March 31, 2026 March 31, 2025 $ $ Current Provision Federal State 3 Total Current Provision 3 Deferred Provision Federal (1,492 ) (2,392 ) State (208 ) (810 ) Total Deferred Provision (1,700 ) (3,202 ) Total Provision for Income Taxes (1,700 ) (3,199 ) The Company had an effective tax rate of 17.92% and 25.06% for the years ended March 31, 2026 and 2025, respectively. During the current fiscal year the Company adopted ASU 2023-09 prospectively. See Note 2 for additional details on the adoption of ASU 2023-09. A reconciliation of the U.S. federal statutory income tax rate to the Companys effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended March 31, 2026 is as follows (in thousands, except for percentages): For the year ended March 31, 2026 March 31, 2026 March 31, 2025 March 31, 2025 $ $ U.S. federal statutory rate (1,993 ) 21.00 % (2,681 ) 21.00 % State taxes and local tax 1 , net of federal income …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent accounting pronouncements On November 4, 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03), to improve the disclosures about a public business entitys expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization and depletion) in commonly presented expense captions (such as cost of sales, SG&A and research and development). ASU 2024-03 applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company does not expect that the adoption of ASU 2024-03 will have a material impact on its consolidated financial statements and disclosures In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740) (ASU 2023-09). The ASC 2023-09 requires disaggregated information about a reporting entitys effective tax rate reconciliation as well as additional information on income taxes paid. The ASC 2023-09 is effective on a prospective basis for annual periods beginning after December 15, 2024 and allows for adoption on a prospective or retrosp …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

11. Segment Information An operating segment is a component of an entity whose operating results are regularly reviewed by its chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance. Factors used by the Company in determining the reportable segment include the nature of the Company's operating activities, the organizational and reporting structure and the type of information reviewed by the CODM to allocate resources and evaluate financial performance. The Company has one reportable operating segment: the development and commercialization of pharmaceutical applications of its patents and licensed rights. The Companys CODM is its Chief Executive Officer. The accounting policies of the segment are those described in the summary of significant accounting policies within Note 2. The CODM assesses the performance of the segment based on net loss, which is reported on the income statement as consolidated net loss. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. The Company has not generated any revenue and expects to continue to incur significant expenses and operating losses as it advances product candidates through all stages of development, and ultimately, receive regulatory approval. Accordingly, the CODM utilizes the cash budget and forecasts in assessing the entity-wide operating results and performance, and in deciding how to allocate resources …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"2. Summary of significant accounting policies Basis of presentation These consolidated financial statements of Grace Therapeutics, Inc., which include the accounts of its subsidiary, have been prepared in accordance with generally accepted accounting principles in the United States of America (""U.S. GAAP""). All intercompany transactions and balances are eliminated on consolidation. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates. Estimates are based on managements best knowledge of current events and actions that management may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Estimates and assumptions include the measurement of stock-based compensation, derivative warrant liabilities, accruals for research and development contracts and contract organization agreements, and valuation of intangibles and goodwill. Estimates and assumptions are also involved in determining the extent to which research and development expenses qualify for research and development tax credits. The Company recognizes tax credits once it has reasonable assurance that they will be realized. …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

7. Stockholders' equity Preferred Stock The Company is authorized to issue up to 10,000,000 shares of preferred stock, par value $0.0001 per share. No shares of the Companys preferred stock are issued or outstanding. Common Stock In connection with the consummation of the Domestication, on October 7, 2024, the Company adopted a Certificate of Incorporation (as amended, the Charter) and Bylaws (as amended, the Bylaws). The rights of holders of the Companys Common Stock are now governed by the Charter, the Bylaws, and the General Corporation Law of the State of Delaware. The Company is authorized to issue up to 100,000,000 shares of Common Stock, par value $0.0001 per share. 2025 Private Placement In February 2025, the Company agreed to offer and sell in a private placement (the 2025 Private Placement) an aggregate of 3,252,132 shares of Common Stock at a purchase price of $3.395 per share of Common Stock (the 2025 Private Placement Shares) and pre-funded warrants (the 2025 Pre-Funded Warrants) to purchase up to 1,166,160 shares of Common Stock at a purchase price equal to the purchase price per 2025 Private Placement Share less $0.0001 (the 2025 Pre-Funded Warrant Shares). Each 2025 Pre-Funded Warrant is exercisable for one share of Common Stock at an exercise price of $0.0001 per share, exercisable immediately and will expire once exercised in full. Pursuant to the purchase agreement related to the 2025 Private Placement, for each 2025 Private Placement Share and each 2025 Pr …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

13. Subsequent Events On April 23, 2026, the Company received a CRL from the FDA in response to their NDA for GTx-104. The CRL referenced certain items related to the chemistry, manufacturing, and controls (CMC) and other non-clinical sections of the application, including items related to additional leachable data time points for commercial product, non-clinical product toxicology risk assessments, and cGMP deficiencies at their CMO. A Type A meeting with the FDA has been scheduled to potentially clarify the path forward and determine the appropriate next steps. In order to prioritize resolving the items cited in the FDAs CRL, the Company does not plan to resume internal development funding for GTx-102 or GTx-101 under its current operating plan. Accordingly, the Company determined that the remaining carrying value of the GTx-102 and GTx-101 IPR&D assets of $9,196 and $4,337, respectively, are no longer recoverable on an internal-development basis. The Company expects to recognize an impairment charge for the full remaining carrying value in the first quarter of fiscal year 2027. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

10. Commitments and contingencies Research and development contracts and contract research organizations agreements The Company utilizes CMOs for the development and production of clinical materials and CROs to perform services related to its clinical trials. Pursuant to the agreements with these CMOs and CROs, the Company has either the right to terminate the agreements without penalties or under certain penalty conditions. As of December 31, 2025, the Company has $185 of commitments to CMOs and no commitments to CROs for the next twelve months. Legal proceedings and disputes In the ordinary course of business, the Company is at times subject to various legal proceedings and disputes. The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that the Company will incur a loss and the amount of the loss can be reasonably estimated, the Company records a liability in its unaudited condensed consolidated financial statements. These legal contingencies may be adjusted to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of loss is not estimable, the Company does not accrue legal contingencies. While the outcome of legal proceedings is inherently uncertain, based on information currently available, no reserves or liabilities have been accrued at December 31, 2025.

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6. Stock-based compensation 2024 Equity Incentive Plan At the Annual and Special Meeting of Shareholders on September 30, 2024, the Companys shareholders approved the Acasti Pharma Inc. 2024 Equity Incentive Plan (the 2024 Plan) which became effective on the date of the Domestication. The 2024 Plan replaced the Acasti Pharma Inc. Stock Option Plan and the Acasti Pharma Inc. Equity Incentive Plan (the Prior Plans). The 2024 Plan provides for the grant of awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, performance-based awards and other equity-based awards to eligible persons as defined under the 2024 Plan. Any of these awards may, but need not, be made as performance incentives to reward the holders of such awards for the achievement of performance goals in accordance with the terms of the 2024 Plan. Stock options granted under the 2024 Plan may be non-qualified stock options or incentive stock options, as provided in the 2024 Plan. In connection with the Continuance and the Domestication, the Company continues its obligations under the Prior Plans and all of the outstanding equity awards under the Prior Plans. Upon effectiveness of the Continuance, each outstanding option exercisable for and restricted share unit settleable into Common Shares remained exercisable for or able to be settled into an equivalent number of common shares of Acasti British Columbia for …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

3. Fair value measurements Assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 are as follows: Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) $ $ $ $ Assets Treasury bills classified as cash equivalents 17,485 17,485 Total assets 17,485 17,485 Total liabilities Assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 are as follows: Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) $ $ $ $ Assets Treasury bills classified as cash equivalents 21,304 21,304 Total assets 21,304 21,304 Liabilities Derivative warrant liabilities 1,141 1,141 Total liabilities 1,141 1,141 There were no changes in valuation techniques or transfers between Levels 1, 2 or 3 during the nine months ended December 31, 2025.The Companys derivative warrant liabilities are measured at fair value on a recurring basis using unobservable inputs that are classified as Level 3 inputs. The Company does not have derivative warrant liabilities on its consolidated balance sheet as of December 31, 2025, as the derivative warrant liabilities were settled on October 21, 2025. Refer to Note 5, Stockholders Equity , for the valuation techniques and assumptions used in estimating the fair value of the derivative warrant liabilities. …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

9. Income taxes The provision for income taxes and the effective income tax rates were as follows: Three months ended Nine months ended December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Provision for income taxes (605 ) (2,181 ) Effective income tax rate 0.0 % 12.7 % 0.0 % 17.6 % The variance in effective tax rates for the three and nine months ended December 31, 2025 and 2024 is primarily attributable to the Companys partial valuation allowance applied to its net domestic deferred tax assets. As of December 31, 2025, the Company had a partial valuation allowance against its net domestic deferred tax assets, for which realization cannot be considered more likely than not at this time. Management assesses the need for the valuation allowance on a quarterly basis. In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and past financial performance. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which requires incremental annual disclosures on income taxes, including rate reconciliations, income taxes paid, and other disclosures. The Company will prospectively adopt this guidance beginning March 31, 2026. The Company does not anticipate a material impact on its consolidated financial statements. On July 4, 2025, the One Big Beautiful Bill …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent accounting pronouncements In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03 ), to improve the disclosures about a public business entitys expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization and depletion) in commonly presented expense captions (such as cost of sales, SG&A and research and development). ASU 2024-03 applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the effect of adopting this new guidance on its consolidated financial statements and disclosures. The Company is currently assessing the impact of the new guidance on its financial statement disclosures. The Company has considered all other recent accounting pronouncements and concluded that they are either not applicable to the Companys business or that the effect is not expected to be material to the consolidated financial statements as a result of future adoption. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

8. Segment Information An operating segment is a component of an entity whose operating results are regularly reviewed by its chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance. Factors used by the Company in determining the reportable segment include the nature of the Company's operating activities, the organizational and reporting structure and the type of information reviewed by the CODM to allocate resources and evaluate financial performance. The Company has one reportable operating segment: the development and commercialization of pharmaceutical applications of its patents and licensed rights. The Companys CODM is its Chief Executive Officer. The accounting policies of the segment are those described in the summary of significant accounting policies. The CODM assesses the performance of the segment based on net loss, which is reported on the unaudited condensed consolidated statement of net loss and comprehensive loss as Net loss and total comprehensive loss. The measure of segment assets is reported on the unaudited condensed consolidated balance sheet as Total assets. The Company has not generated any revenue and expects to continue to incur significant expenses and operating losses as it advances product candidates through all stages of development, and ultimately, receive regulatory approval. Accordingly, the CODM utilizes the cash budget and forecasts in assessing the entity-wide operati …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

2. Summary of significant accounting policies: Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X under the Securities Exchange Act of 1934. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and as amended by Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended March 31, 2025, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Companys consolidated financial position as of December 31, 2025, the consolidated results of its operations for the three and nine months ended December 31, 2025 and 2024, its statements of stockholders equity for the three and nine months ended December 31, 2025 and 2024, and its consolidated cash flows for the nine months ended December 31, 2025 and 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the Companys audited consoli …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

5. Stockholders equity Preferred Stock The Company is authorized to issue up to 10,000,000 shares of preferred stock, par value $0.0001 per share. No shares of the Companys preferred stock are issued or outstanding. Common Stock In connection with the consummation of the Domestication, on October 7, 2024, the Company adopted a Certificate of Incorporation (as amended, the Charter) and Bylaws (as amended, the Bylaws). The rights of holders of the Companys Common Stock, par value $0.0001 per share (Common Stock) are governed by the Charter, the Bylaws, and the General Corporation Law of the State of Delaware. The Company is authorized to issue up to 100,000,000 shares of Common Stock. 2025 Private Placement In February 2025, the Company agreed to offer and sell in a private placement (the 2025 Private Placement) an aggregate of 3,252,132 shares of Common Stock at a purchase price of $3.395 per share of Common Stock (the Shares) and pre-funded warrants (the 2025 Pre-Funded Warrants) to purchase up to 1,166,160 shares of Common Stock at a purchase price equal to the purchase price per Share less $0.0001 (the 2025 Pre-Funded Warrant Shares). Each 2025 Pre-Funded Warrant is exercisable for one share of Common Stock at an exercise price of $0.0001 per share, exercisable immediately and will expire once exercised in full. Pursuant to the securities purchase agreement with certain institutional and accredited investors in connection with the 2025 Private Placement (the 2025 Purchase A …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing