Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto found elsewhere in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. You should review our Special Note Regarding Forward-Looking Statements presented at the beginning of this Annual Report on Form 10-K. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed or implied by such forward-looking statements. For a detailed discussion of these risks and uncertainties, see Item 1A, “Risk Factors” of this Annual Report on Form 10-K. We caution readers not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Annual Report on Form 10-K. We undertake no obligation to update forward-looking statements which reflect events or circumstances occurring after the date of this Annual Report on Form 10-K, unless required by applicable securities laws.

Overview

This management’s discussion and analysis (“MD&A”) is presented in order to provide the reader with an overview of the financial results and changes to our financial position as at March 31, 2025 and for the year then ended. This MD&A explains the material variations in our operations, financial position and cash flows for the years ended March 31, 2025 and 2024.

Market data, and certain industry data and forecasts included in this MD&A were obtained from internal surveys and market research conducted by third parties hired by us, publicly available information, reports of governmental agencies and industry publications, and independent third-party surveys. We have relied upon industry publications as our primary sources for third-party industry data and forecasts. Industry surveys, publications and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information are not guaranteed. We have not independently verified any of the data from third-party sources or the underlying economic assumptions they have made. Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable based upon management or contracted third parties’ knowledge of our industry, have not been independently verified. Our estimates involve risks and uncertainties, including assumptions that may prove not to be accurate, and these estimates and certain industry data are subject to change based on various factors, including those discussed in this Annual Report on Form 10-K.

This MD&A should be read in conjunction with our consolidated financial statements for the years ended March 31, 2025 and 2024 included elsewhere in this Annual Report on Form 10-K.

Our annual financial statements, which include the accounts of our wholly owned subsidiary, have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC related to reports filed in Form 10-K. All intercompany transactions and balances are eliminated on consolidation.

All amounts appearing in the MD&A for the period-by-period discussions are in thousands of U.S. dollars, except share and per share amounts or unless otherwise indicated.

Our assets as of March 31, 2025 include cash and cash equivalents of $22,133 and intangible assets and goodwill of $49,266. Our current liabilities were $1,930 as of March 31, 2025 and were comprised primarily of amounts due to or accrued for creditors.

In February 2025, we completed a private placement of Company securities with certain institutional and accredited investors. Net proceeds to the Company were $13,705. Refer to Note 8, 2025 Private Placement, in the accompanying consolidated financial statements elsewhere in this document for additional information. We believe our existing cash and cash equivalents will be sufficient to sustain planned operations through at least 12 months from the issuance date of these consolidated financial statements included with this Annual Report on Form 10-K.

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Results of Operations

Comparison of the years ended March 31, 2025, and 2024

The following table summarizes our results of operations for the years ended March 31, 2025 and 2024:

Year ended

$ $ $

(in thousands)

Operating expenses

Change in fair value of derivative warrant liabilities 3,218 (2,728 ) 5,946

Foreign exchange loss (17 ) (16 ) (1 )

Net Loss

The net loss of $9,568 or $0.79 loss per share for the year ended March 31, 2025, decreased by $3,285 from the net loss of $12,853 or $1.35 loss per share for the year ended March 31, 2024. The decrease in net loss was primarily due to a $5,946 difference in change in fair value of derivative warrant liabilities, a $1,485 decrease in restructuring costs, and a $1,367 increase in income tax benefits, partially offset by a $4,828 increase in research and development expenses, net of government assistance, a $484 increase in general and administrative expenses and a $200 decrease in interest and other income, net.

Research and development expenses

Research and development expenses consist primarily of:

●

fees paid to external service providers such as contract research organizations ("CROs") and contract manufacturing organizations ("CMOs") related to clinical trials, including contractual obligations for clinical development, clinical sites, manufacturing and scale-up, and formulation of clinical drug supplies;

●

fees paid to contract service providers related to drug discovery efforts including chemistry and biology services; and

●

salaries and related expenses for research and development personnel, including expenses related to stock options.

We record research and development expenses as incurred.

Our research and development during the year ended March 31, 2025 was focused primarily on our clinical development program for our GTx-104 drug candidate. Research and development expenses during the year ended March 31, 2024, were focused primarily on our clinical development programs GTx-104, GTx-102, and GTx-101 drug candidates.

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The following table summarizes our research and development expenses:

Research and development expenses

Year ended

$ $ $

(in thousands)

Total third-party research and development expenses1 8,486 3,576 4,910

Government grants & tax credits — 55 (55 )

Depreciation and loss on disposal of equipment — 10 (10 )

1Total third-party research and development expenses are calculated before salaries and benefits, depreciation, write-off of equipment and stock-based compensation.

Total research and development expenses for the year ended March 31, 2025 were $9,511, compared to $4,683 for the year ended March 31, 2024. This increase of $4,828 was primarily due to the increase in research activities for the GTx-104 pivotal Phase 3 safety clinical trial.

There were no government grants and tax credits for the year ended March 31, 2025, compared to $55 for the year ended March 31, 2024. The changes within government grants and tax credits in the prior year were due to adjustments of provisions regarding realizability of credit receivables after assessments and correspondences from tax authorities.

Stock-based compensation of $216 for the year ended March 31, 2025, increased by $18 compared to $198 for the year ended March 31, 2024. The increase was primarily due to the issuance of new stock option awards during the year ended March 31, 2025.

General and administrative expenses

General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, legal, and support functions, including professional fees for auditing, tax, legal, consulting, rent and utilities and insurance.

General and administrative expenses

Year ended

$ $ $

(in thousands)

Depreciation and loss on disposal 7 40 (33 )

1 General and administrative sub-total expenses are calculated before stock-based compensation and depreciation.

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General and administrative expenses were $7,168 for the year ended March 31, 2025, an increase of $484 from $6,684 for the year ended March 31, 2024. The increase was primarily a result of increased legal, tax, accounting and other professional fees primarily related to the Continuance and Domestication, increased salaries and benefits due to merit increases and hiring of a new employee, offset in part by a decrease in other expenses due primarily to adjustments for Canadian goods and services tax and a decrease in miscellaneous expenses as a result of restructuring in the prior year period. Stock-based compensation of $514 for the year ended March 31, 2025, decreased by $201 compared to $715 for the year ended March 31, 2024. The decrease was primarily due to fewer stock option awards granted during the year ended March 31, 2025.

Restructuring Costs

On May 8, 2023, we announced our decision to terminate a substantial amount of our workforce as part of a plan intended to align our organizational and management cost structure to prioritize resources to GTx-104, thereby reducing losses to improve cash flow and extend available cash resources. We incurred $1,485 of related costs primarily consisting of employee severance costs. There were no restructuring costs for the year ended March 31, 2025.

Change in fair value of derivative warrant liabilities

The decrease in the fair value of derivative warrant liabilities for the year ended March 31, 2025 of $5,946 was mainly attributable to the decrease in our stock price.

Interest income

Interest and other income, net was $711 for the year ended March 31, 2025, compared to $911 for the year ended March 31, 2024. The $200 decrease in our interest and other income was due to withdrawals of short-term investments upon their maturity used to fund operations, and a decrease in interest rates.

Income tax benefit

Income tax benefit was $3,199 for the year ended March 31, 2025, an increase of $1,367 compared to $1,832 for the year ended March 31, 2024, due to net losses recognized by our subsidiary, Grace Therapeutics U.S., Inc., which are deemed to be recoverable to us and can be taken as a benefit over time.

Liquidity and Capital Resources

Cash flows and financial condition for the years ended March 31, 2025 and March 31, 2024

Summary

As of March 31, 2025, cash and cash equivalents were $22,133, a net decrease of $872 compared to cash and cash equivalents of $23,005 at March 31, 2024.

In February 2025, we completed a private placement of our securities with certain institutional and accredited investors. Net proceeds to us were $13,705. Refer to Note 8, 2025 Private Placement in the accompanying consolidated financial statements elsewhere in this document for additional information. We believe our existing cash and cash equivalents will be sufficient to sustain planned operations through at least 12 months from the issuance date of the consolidated financial statements included with this Annual Report on Form 10-K.

We will require additional capital to fund our daily operating needs beyond that time. We do not expect to generate revenue from product sales unless and until we successfully complete drug development and obtain regulatory approval, which is subject to significant uncertainty. To date, we have financed our operations primarily through public offerings and private placements of our common equity, warrants and convertible debt and the proceeds from research tax credits. Until such time that we can generate significant revenue from drug product sales, if ever, we will require additional financing, which is expected to be sourced from a combination of public or private equity or debt financing or other non-dilutive sources, including fees, milestone payments and royalties from collaborations with third parties. Arrangements with collaborators or others may require us to relinquish certain rights related to our technologies or drug product candidates. Adequate additional financing may not be available to us on acceptable terms, or at all. Our inability to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategy. We plan to raise additional capital in order to maintain adequate liquidity. Negative results from studies or trials, if any, or depressed prices of our Common Stock could impact our ability to raise additional financing. Raising additional equity capital is subject to market conditions that are not within our control.

Net cash used in operating activities

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Net

cash used in operating activities for the year ended March 31, 2025 was $14,904,

compared to $12,333 for the year ended March 31, 2024, an increase of $2,571.

The increase in net cash used in operating activities was primarily due to a

$4,828 increase in research and development activities for our GTx-104 pivotal

Phase 3 STRIVE-ON trial, a $484 increase in general and administrative expenses

for legal, tax, accounting and other professional fees primarily related to the

Continuance and Domestication, changes in prepaid expenses of $485, offset in

part by a $1,485 decrease in restructuring costs, change in receivables of $516

and change in trade and other payables of $1,568.

Net cash provided by investing activities

Net cash used in investing activities for the year ended March 31, 2025, was from our purchase of short-term investments of $15 and maturity of short-term investments of $15. Net cash used in investing activities for the year ended March 31, 2024, was from the purchase of short-term investments of $6,554, proceeds from the sale of equipment of $111, offset by proceeds from short-term investments of

$6,569 and proceeds from the sale of equipment of $22.

Net cash provided by financing activities

Net cash provided by financing activities for the year ended March 31, 2025, was attributable to the $13,705 net proceeds received from the 2025 private placement. Net cash provided by financing activities of $7,359 for the year ended March 31, 2024, was primarily attributable to the $7,338 net proceeds received from the 2023 private placement.

2025 Private Placement

In February 2025, we 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 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 Warrants”). Each 2025 Pre-Funded Warrant is exercisable for one share of Common Stock at an exercise price of $0.0001 per share, is exercisable immediately and will expire once exercised in full. For each Share and 2025 Pre-Funded Warrant issued, we agreed to issue to each purchaser an accompanying common warrant to purchase shares of Common Stock (or 2025 Pre-Funded Warrants in lieu thereof), exercisable for an aggregate of 4,418,292 shares of Common Stock (or 2025 Pre-Funded Warrants in lieu thereof) (the “2025 Common Warrants”). Each 2025 Common Warrant is exercisable for one share of Common Stock at an exercise price of $3.395 per share, is immediately exercisable and will expire on the earlier of (i) the 60th day after the date the FDA approves the NDA for GTx-104 and (ii) September 25, 2028. The 2025 Private Placement closed on February 11, 2025. The net proceeds to us from the 2025 Private Placement were $13,705, after deducting fees and expenses.

2023 Private Placement

In September 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors in connection with a private placement offering of our securities (the “2023 Private Placement”). Pursuant to the Purchase Agreement, we sold 1,951,371 Common Shares, at a purchase price of $1.848 per Common Share and pre-funded warrants (the “2023 Pre-Funded Warrants”) to purchase up to 2,106,853 Common Shares at a purchase price equal to the purchase price per Common Share less $0.0001. Each 2023 Pre-Funded Warrant is exercisable for one Common Share at an exercise price of $0.0001 per Common Share, is immediately exercisable, and will expire once exercised in full. Pursuant to the Purchase Agreement, we also issued to such institutional and accredited investors common warrants (the “Common Warrants”, and together with the 2023 Pre-Funded Warrants, the “Warrants”) to purchase Common Shares, exercisable for an aggregate of 2,536,391 Common Shares. Under the terms of the Purchase Agreement, for each Common Share and each 2023 Pre-Funded Warrant issued in the 2023 Private Placement, an accompanying five-eighths (0.625) of a Common Warrant was issued to the purchaser thereof. Each whole Common Warrant is exercisable for one Common Share at an exercise price of $3.003 per Common Share, is immediately exercisable, and will expire on the earlier of (i) the 60th day after the date of the acceptance by the FDA of an NDA for our product candidate GTx-104 and (ii) five years from the date of issuance. The 2023 Private Placement closed on September 25, 2023. The net proceeds to us from the 2023 Private Placement were $7,338, after deducting fees and expenses.

Contractual Obligations and Commitments

Our contractual obligations and commitments primarily include trade payables, CMO and CRO agreements.

Research and development contracts and contract research organizations agreements

We utilize CMOs, for the development and production of clinical materials and CROs to perform services related to our clinical trials. Pursuant to the agreements with CMOs and CROs, we have either the right to terminate the agreements without penalties or under certain penalty conditions. As of March 31, 2025, we had $300 of commitments to CMOs and $100 of commitments to CROs for the next twelve months.

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Contingencies

We evaluate contingencies on an ongoing basis and establish loss provisions for matters in which losses are probable, and the amount of the loss can be reasonably estimated.

Use of Estimates and Measurement of Uncertainty

The preparation of these 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 management’s 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 which research and development expenses qualify for research and development tax credits and in what amounts. We recognize the tax credits once we have reasonable assurance that they will be realized.

While

our significant accounting policies are described in the notes to our financial

statements, we believe that the following critical accounting policies are most

important for understanding and evaluating our reported financial results, as

these policies relate to the more significant areas involving management’s

judgments and estimates.

Critical Accounting Policies

Research and development costs

Research and developments expenditures are expensed as incurred. These costs consist of employees’ salaries and benefits related to research and development activities, contractors and consultants that conduct the Company’s clinical trials, laboratory material and small equipment, clinical trial materials, stock-based compensation expense, and other non-clinical costs and regulatory fees. The Company accrues research

and development expenses based on work performed, which relies on estimates of

total costs incurred based on patient enrollment and completion of patient

studies, invoices received and contracted costs. Advance payments for goods and services that will be used in future research and development are recognized in prepaids or other assets and are expensed when the services are performed, or the goods are used.

Valuation of Intangible Assets and Goodwill

In a business combination, the fair value of in-process research and development ("IPR&D") assets acquired is capitalized and accounted for as indefinite-lived intangible assets, and not amortized until the underlying project receives regulatory approval, at which point the intangible assets will be accounted for as definite-lived intangible assets or discontinued. If discontinued, the intangible assets will be written off. R&D costs incurred after the acquisition are expensed as incurred.

Our IPR&D and goodwill was $49,300 as of March 31, 2025, which represents 68% of total assets. Goodwill and indefinite lived assets are not amortized but are subject to an impairment review annually and more frequently when indicators of impairment exist. An impairment of goodwill could occur if the carrying amount of a reporting unit exceeds the fair value of that reporting unit. An impairment of indefinite-lived intangible assets would occur if the fair value of the intangible asset is less than the carrying value.

The nature of the assumptions in the intangible assets’ impairment tests are considered critical due to a high level of subjectivity and judgment necessary to account for highly uncertain matters, and the impact of the assumptions on our financial condition and our operating performance could be material.

We test goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If we conclude it is more likely than not that fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed. We test indefinite lived intangible assets for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. Events that could result in an impairment, or trigger an interim impairment assessment, include the decision to discontinue the development of a drug, the receipt of additional clinical or nonclinical data regarding our drug candidates or a potentially competitive drug candidates, changes in the clinical development program for a drug candidate, or new information regarding potential sales for the drug candidates and increases in our weighted average cost of capital.

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. No impairment of the identified intangible assets was recognized for the years ended March 31, 2025 and 2024.

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Financial Instruments

Credit Risk

Financial instruments that potentially subject us to a concentration of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are all invested in accordance with our investment policy with the primary objective being the preservation of capital and the maintenance of liquidity, which risk is managed by dealing only with highly rated U.S. and Canadian institutions. We maintain our cash and cash equivalents at accredited financial institutions in amounts that exceed federally insured limits. We do not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market rates. Our exposure to interest rate risk as of March 31, 2025 was as follows:

Cash and cash equivalents Short-term fixed interest rate

Our capacity to reinvest the short-term amounts with equivalent return will be impacted by variations in short-term fixed interest rates available on the market. Management believes the risk we will realize a loss as a result of the decline in the fair value of our short-term investments is limited because these investments have short-term maturities and are held to maturity.

Our contractual obligations related to financial instruments and other obligations and liquidity resources are presented in the liquidity and capital resources of this MD&A.

We expect to incur significant expenses and continued operating losses for the foreseeable future. We expect our expenses will increase substantially in connection with our ongoing activities, particularly as we advance clinical development for our drug candidates in our pipeline; continue to engage contract manufacturing organizations to manufacture our clinical study materials and to ultimately develop large-scale manufacturing capabilities in preparation for commercial launch; seek regulatory approval for our drug candidates; and add personnel to support our drug product development and future drug product launch and commercialization.

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We expect to have sufficient cash resources to satisfy our objectives into the third calendar quarter of 2026, which is 13 months from the issuance date of the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We require additional capital to fund our daily operating needs beyond that time. We plan to raise additional capital prior to that time in order to maintain adequate liquidity. Negative results from studies, if any, and depressed prices of our common stock could impact our ability to raise additional financing. Raising additional equity capital is subject to market conditions not within our control. If we do not raise additional funds in this time period, we may not be able to realize our assets and discharge our liabilities in the normal course of business.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). The ASU includes enhanced disclosure requirements, primarily related to significant segment expenses that are regularly provided to and used by the chief operating decision maker ("CODM"). The amendments are to be applied retrospectively to all prior periods presented in the financial statements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Our adoption of the requirements of ASU 2023-07 at March 31, 2025 did not result in a material impact on our consolidated financial statements and disclosures.

We haveconsidered recent accounting pronouncements and concluded that they are either not applicable to our business or that the effect is not expected to be material to our consolidated financial statements as a result of future adoption.

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Item 7A.

Quantitative and Qualitative Disclosure About Market Risk

As a smaller reporting company, we are not required to provide this information.

Item 8.

Financial Statements and Supplementary Data

See our consolidated financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

As of the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of our chief executive officer (“CEO”) and principal financial officer (“PFO”), has performed an evaluation of the effectiveness of our disclosure controls and procedures within the meaning of Rules 13a-15 (e) and 15d-15(e) of the Exchange Act. Based upon this evaluation, our management has concluded that, as of March 31, 2025, our existing disclosure controls and procedures were effective. It should be noted that while the CEO and PFO believe that our disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect the disclosure controls and procedures to be capable of preventing all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Management’s Report on Internal Controls over Financial Reporting

Our management, with the participation of our CEO and PFO, is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of our consolidated financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management conducted an assessment of the design and operation effectiveness of our internal control over financial reporting as of March 31, 2025. In making this assessment, we used the criteria established within the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, our management has concluded that, as of March 31, 2025, our internal control over financial reporting was effective.

Changes in Internal Control over Financial Reporting

No changes were made to our internal controls over financial reporting that occurred during the fiscal quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

We are a non-accelerated filer under the Exchange Act and not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. Therefore, this Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding our management’s assessment of internal control over financial reporting.

Item 9B.

Other Information

(b)

During the fiscal quarter ended March 31, 2025, none of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

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PART III

Item 10.

Directors, Executive Officers and Corporate Governance

Code of Conduct and Ethics

The Board has adopted a written Code of Business Conduct and Ethics for Directors, Officers and Employees (the “Code of Conduct”) within the meaning of Item 406(b) of Regulation S-K. This Code of Conduct applies to our directors, officers and employees. A current copy of the Code of Conduct is posted on the Governance Documents section of the Investors page of our website, which is located at www.gracetx.com. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any substantive amendment to, or waiver from, a provision of the Code of Conduct by posting such information on the website address and location specified above.

The

additional information required by this Item will be set forth under the sections

entitled “Information Regarding the Board of Directors and Corporate Governance”

and “Executive Officers” in our 2025 Proxy Statement to be filed with the SEC

within 120 days of March 31, 2025 and is incorporated by reference into this

Annual Report on Form 10-K.

Item 11.

Executive Compensation.

The

information required by this Item will be set forth under the sections entitled

“Executive Compensation” and “Director Compensation” in our 2025 Proxy

Statement to be filed with the SEC within 120 days of March 31, 2025 and is

incorporated by reference into this Annual Report on Form 10-K.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Equity Compensation Plan Information

The

information required by this Item will be set forth under the sections entitled

“Securities Authorized for Issuance under Equity Compensation Plans” and “Security

Ownership of Certain Beneficial Owners and Management” in our 2025 Proxy

Statement to be filed with the SEC within 120 days of March 31, 2025 and is

incorporated by reference into this Annual Report on Form 10-K.

Item 13.

Certain Relationships and Related Transactions and Director Independence.

The

information required by this Item will be set forth under the sections entitled

“Transactions with Related Persons and Indemnification” and “Information

Regarding the Board of Directors and Corporate Governance” in our 2025 Proxy

Statement to be filed with the SEC within 120 days of March 31, 2025 and is

incorporated by reference into this Annual Report on Form 10-K.

Item 14.

Principal Accountant Fees and Services.

The

information required by this Item will be set forth under the section entitled “Proposal

No. 3 - Ratification of Appointment of Independent Registered Public Accounting

Firm” in our 2025 Proxy Statement to be filed with the SEC within 120 days of

March 31, 2025 and is incorporated by reference into this Annual Report on Form

10-K.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)(1) Financial Statements—The consolidated financial statements included in Item 8 are filed as part of this Annual Report on Form 10-K.

(a)(2) Financial Statement Schedules—All schedules have been omitted because they are not applicable or required, or the information required to be set forth therein is included in the consolidated financial statements or notes thereto included in Item 8 of this Annual Report on Form 10-K.

(a)(3) Exhibits—The exhibits required by Item 601 of Regulation S-K are listed in paragraph (b) below.

(b) Exhibits—The exhibits listed on the Exhibit Index below are filed herewith or are incorporated by reference to exhibits previously filed with the SEC.

EXHIBITS INDEX

Exhibit No. Description

4.2* Description of Securities

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19.1* Grace Therapeutics, Inc. Insider Trading Policy

21.1* List of Subsidiaries

23.1* Consent of KPMG LLP, an Independent Registered Public Accounting Firm

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97.1* Grace Therapeutics, Inc. Incentive Compensation Recoupment Policy

101.INS* Inline XBRL Instance Document

101.SCH* Inline XBRL Taxonomy Extension Schema Document

101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document

* Filed or furnished herewith.

+ Management contract, compensatory plan or arrangement.

Item 16.

Form 10-K Summary

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GRACE THERAPEUTICS, INC.

By: /s/ Prashant Kohli

Name: Prashant Kohli

Title: Chief Executive Officer and

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Prashant Kohli Chief Executive Officer June 23, 2025

Prashant Kohli (Principal Executive Officer)

/s/ Robert DelAversano Principal Financial Officer June 23, 2025

/s/ Brian Davis Director June 23, 2025

Brian Davis

/s/ Vimal Kavuru Director June 23, 2025

Vimal Kavuru

/s/ Edward Neugeboren Director June 23, 2025

Edward Neugeboren

/s/ George Kottayil Director June 23, 2025

George Kottayil

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GRACE THERAPEUTICS, INC.

(Formerly ACASTI PHARMA INC.)

Consolidated Financial Statements

For the years ended March 31, 2025 and 2024

Report of Independent Registered Public Accounting Firm (PCAOB 185) F-1

Consolidated Balance Sheets F-2

Consolidated Statements of Loss and Comprehensive Loss F-3

Consolidated Statements of Stockholders’ Equity F-4

Consolidated Statements of Cash Flows F-5

Notes to the Consolidated Financial Statements F-6

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Grace Therapeutics, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Grace

Therapeutics, Inc. and subsidiary (the Company) as of March 31, 2025 and 2024,

the related consolidated statements of loss and comprehensive loss,

stockholders’ equity, and cash flows for the years then ended, and the related

notes (collectively, the consolidated financial statements). In our opinion,

the consolidated financial statements present fairly, in all material respects,

the financial position of the Company as of March 31, 2025 and 2024, and the

results of its operations and its cash flows for the years then ended, in

conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the

Company’s management. Our responsibility is to express an opinion on these

consolidated financial statements based on our audits. We are a public

accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the

Company in accordance with the U.S. federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the consolidated financial statements are free of

material misstatement, whether due to error or fraud. The Company is not

required to have, nor were we engaged to perform, an audit of its internal

control over financial reporting. As part of our audits, we are required to

obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting. Accordingly, we express no such

opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Going concern analysis

As discussed in Note 1 to the consolidated financial statements, the Company has incurred operating losses and negative cash flows from operations in each period since its inception. As of March 31, 2025, the Company had an accumulated deficit of $220.7 million. To date, the Company has financed its operations primarily through public offerings and private placements of its common equity, warrants and convertible debt and the proceeds from research tax credits. The Company believes its existing cash and cash equivalents will be sufficient to sustain planned operations through at least one year from the issuance of the consolidated financial statements. Until such time that the Company can generate significant revenue from drug product sales, if ever, it will require additional financing, which is expected to be sourced from a combination of public or private equity or debt financing or other non-dilutive sources, which may include fees, milestone payments and royalties from collaborations with third parties. Arrangements with collaborators or others may require the Company to relinquish certain rights related to its technologies or drug candidates. Adequate additional financing may not be available to the Company on acceptable terms, or at all. The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strategy. The Company plans to raise additional capital in order to maintain adequate liquidity.

We identified the assessment of liquidity and the Company’s ability to continue as a going concern as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate the Company’s forecasted cash flows used in its liquidity analysis due to uncertainty in certain assumptions used to estimate the cash flows. Specifically, auditor judgment was required to evaluate management’s estimated expenses associated with its plans to develop, obtain regulatory approval for, and commercialize a certain drug candidate.

The following are the primary procedures we performed to address this critical audit matter. We evaluated management’s assessment and assessed the reasonableness of certain assumptions underlying management’s conclusion. We compared the Company’s historical forecasted cash flows to actual results to assess the Company’s ability to accurately forecast. We evaluated management’s estimated expenses associated with its plans to develop, obtain regulatory approval for, and commercialize a certain drug candidate by (1) conducting interviews with management to gain an understanding of the Company’s strategy, research and development, commercialization, and selling and marketing activities required to execute their plan, (2) evaluating the consistency of information used in management’s analysis with management’s plans for expense and working capital management activities presented to the Board of Directors and other public information disseminated by the Company, and (3) comparing the information used in management’s analysis with evidence obtained in other areas of the audit to evaluate whether it supported or contradicted the conclusions reached by management. We performed sensitivity analyses on forecasted expenses by evaluating the impact of changes in forecasted expenses on the Company’s going concern assessment.

/s/ KPMG LLP

We have served as the Company’s auditor since 2023.

Philadelphia, Pennsylvania

June 23, 2025

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GRACE THERAPEUTICS, INC.

(Formerly ACASTI PHARMA INC.)

Consolidated Balance Sheets

(Expressed in thousands except share data) $ $

Assets

Current assets:

Liabilities and stockholders’ equity

Current liabilities:

Derivative warrant liabilities 1,141 4,359

Commitments and contingencies (Note 13)

Stockholders’ equity:

Accumulated other comprehensive loss (6,038 ) (6,038 )

Total liabilities and stockholders’ equity 71,993 73,300

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

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GRACE THERAPEUTICS, INC.

(Formerly ACASTI PHARMA INC.)

Consolidated Statements of Loss and Comprehensive Loss

(Expressed in thousands, except share and per share data) $ $

Operating expenses

General and administrative expenses (7,168 ) (6,684 )

Restructuring cost — (1,485 )

Foreign exchange (loss) gain (17 ) (16 )

Change in fair value of derivative warrant liabilities 3,218 (2,728 )

Interest and other income, net 711 911

Net loss and total comprehensive loss (9,568 ) (12,853 )

Basic and diluted loss per share (0.79 ) (1.35 )

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

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GRACE THERAPEUTICS, INC.

(Formerly ACASTI PHARMA INC.)

Consolidated Statements of Stockholders’ Equity

Common stock

$ $ $ $ $

Stock-based compensation — — 730 — — 730

Issuance of common stock in exercise of pre-funded warrants 326,113 — — — — —

Common stock

$ $ $ $ $

Stock-based compensation — — 913 — — 913

Issuance of common stock upon the exercise of stock options 12,500 — 21 — — 21

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

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GRACE THERAPEUTICS, INC.

(Formerly ACASTI PHARMA INC.)

Consolidated Statements of Cash Flows

(Expressed in thousands) $ $

Cash flows from operating activities:

Adjustments:

Depreciation expense 7 11

Gain on sale of equipment — (59)

Loss on disposal 2 39

Stock-based compensation 730 913

Change in fair value of derivative warrant liabilities (3,218) 2,728

Deferred income tax benefit (3,199) (1,832)

Changes in operating assets and liabilities:

Trade and other payables (84) (1,652)

Operating lease right of use asset — (23)

Net cash used in operating activities (14,904) (12,333)

Cash flows from investing activities:

Maturity of short-term investments 15 6,569

Purchase of short-term investments (15) (6,554)

Purchase of equipment — (22)

Sale of equipment — 111

Net cash provided by investing activities — 104

Cash flows from financing activities:

Stock issuance costs (967) (162)

Proceeds from issuance of common stock from exercise of stock options — 21

Net cash provided by financing activities 14,032 7,359

Net decrease in cash and cash equivalents (872) (4,870)

Cash and cash equivalents, beginning of year 23,005 27,875

Cash and cash equivalents, end of year 22,133 23,005

Cash and cash equivalents are comprised of:

Supplemental schedule of non-cash financing activities are comprised of:

Issuance costs in accounts payable 327 —

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GRACE THERAPEUTICS, INC.

(Formerly ACASTI PHARMA, INC.)

Notes to the Consolidated Financial Statements

(Expressed in thousands except share and per share data)

1. Nature of Operations

General

Grace Therapeutics, Inc. (formerly known as Acasti Pharma Inc.) (“Acasti Delaware” or “the Company”), is a Delaware corporation that, as further described below, previously existed under the laws of the Province of Québec, Canada (“Acasti Québec”), before changing its jurisdiction on October 1, 2024 to the Province of British Columbia, Canada (“Acasti British Columbia”). On October 7, 2024, Acasti British Columbia changed its jurisdiction to the State of Delaware. Effective October 28, 2024, the Company changed its corporate name to Grace Therapeutics, Inc.

Continuance and Domestication

On October 1, 2024, Acasti Québec changed its jurisdiction of incorporation from the Province of Québec in Canada to the Province of British Columbia in Canada pursuant to a “continuance” effected in accordance with Chapter XII of the Business Corporations Act (Québec) (the “Continuance”). Subsequently on October 7, 2024 (the “Effective Date”), Acasti British Columbia changed its jurisdiction of incorporation from the Province of British Columbia in Canada to the State of Delaware in the United States of America pursuant to a “continuance” effected in accordance with Section 308 of the Business Corporations Act (British Columbia) and a “domestication” (the “Domestication”) under Section 388 of the General Corporation Law of the State of Delaware. Both the Continuance and the Domestication were approved by the Company’s shareholders at the Company’s Annual and Special Meeting of Shareholders held on September 30, 2024.

Prior to the Continuance and Domestication, the Company’s Class A common shares, without par value per share (“Common Shares”), were listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “ACST.” Upon the effectiveness of the Continuance, each outstanding Class A common share of Acasti Québec at the time of the Continuance remained issued and outstanding as a common share, without par value per share, of Acasti British Columbia. Upon effectiveness of the Domestication, each outstanding common share of Acasti British Columbia at the time of the Domestication automatically became one outstanding share of common stock, par value $0.0001 per share, of Acasti Delaware (“Common Stock”). The Common Stock continues to be listed for trading on Nasdaq and in connection with its corporate name change to Grace Therapeutics, Inc., commenced trading under the symbol “GRCE” on October 28, 2024.

The Continuance and Domestication has been accounted for as an exchange of equity interest among entities under common control resulting in a change in reporting entity, and has been retroactively reflected in the accompanying consolidated financial statements and notes thereto. All assets and liabilities of Acasti British Columbia were deemed assumed by the Company at the Effective Date, resulting in the retention of the historical basis of accounting as if they had always been combined for accounting and financial reporting purposes. Any excess resulting from the automatic conversion of each outstanding Common Share of Acasti British Columbia into one outstanding share of Common Stock of Acasti Delaware, is presented as Additional Paid-in Capital in the equity section of the accompanying consolidated financial statements and notes thereto. All per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the change in par value.

Liquidity and Financial Condition

The Company has incurred operating losses and negative cash flows from operations in each period since its inception. The Company expects to incur significant expenses and continued operating losses for the foreseeable future.

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In May 2023, the Company implemented a strategic realignment plan to enhance shareholder value that resulted in the Company engaging a new management team, streamlining its research and development activities, and greatly reducing its workforce. Following the realignment, the Company is a smaller, more focused organization, based in the United States, and concentrated on its development of its lead product candidate GTx-104. Further development of GTx-102 and GTx-101 will occur at such a time when the Company is able to secure additional funding or enters into strategic partnerships for license or sale with third parties.

In February 2025, the Company completed a private placement of Company securities with certain institutional and accredited investors. Net proceeds to the Company were $13,705. Refer to Note 8, 2025 Private Placement, for additional information.

The Company plans to use its current cash to further the regulatory review process for GTx-104, pre-commercial planning, commercial team buildout, and product launch if GTx-104 is approved, working capital and other general corporate purposes. The Company believes its existing cash and cash equivalents will be sufficient to sustain planned operations through at least 12 months from the issuance date of these consolidated financial statements included in the Company’s Annual Report on Form 10-K.

The Company will require additional capital to fund its daily operating needs. The Company does not expect to generate revenue from product sales unless and until it successfully completes drug development and obtains regulatory approval, which is subject to significant uncertainty. To date, the Company has financed its operations primarily through public offerings and private placements of its common equity, warrants and convertible debt and the proceeds from research tax credits. Until such time that the Company can generate significant revenue from drug product sales, if ever, it will require additional financing, which is expected to be sourced from a combination of public or private equity or debt financing or other non-dilutive sources, which may include fees, milestone payments and royalties from collaborations with third parties. Arrangements with collaborators or others may require the Company to relinquish certain rights related to its technologies or drug product candidates. Adequate additional financing may not be available to the Company on acceptable terms, or at all. The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strategy. The Company plans to raise additional capital in order to maintain adequate liquidity. Negative results from studies or trials, if any, the timing and ability to receive U.S. Food and Drug Administration (“FDA”) approval for marketing our drug candidates or depressed prices of the Company’s stock could impact the Company’s ability to raise additional financing. Raising additional equity capital is subject to market conditions that are not within the Company’s control. If the Company is unable to raise additional funds, the Company may not be able to realize its assets and discharge its liabilities in the normal course of business.

The Company remains subject to risks similar to other development stage companies in the biopharmaceutical industry, including compliance with government regulations, protection of proprietary technology, dependence on third-party contractors and consultants and potential product liability, among others. Please refer to the risk factors included in Part 1, “Item 1A – Risk Factors” of this Annual Report on Form 10-K.

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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 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.

Reclassifications

The Company reclassified sales and marketing expenses to general and administrative expenses to conform to the current period reporting classifications. This reclassification did not have an impact on previously reported results of operations.

Cash equivalents

Cash equivalents comprise of highly liquid investments purchased with original maturities of 90 days or less. Cash equivalents consist of United

States Treasury bills.

Equipment

Equipment is measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset, including all costs incurred in bringing the asset to its present location and condition. Gains and losses on disposal of equipment are determined by comparing the proceeds from disposal with the carrying amount of the equipment.

Depreciation is recognized on a declining basis over the estimated useful lives of equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Items of equipment are depreciated from the date that they are available for use or, in respect of assets not yet in service, from the date they are ready for their intended use.

Intangible assets - acquired in-process research and development

In a business combination, the fair value of in-process research and development (“IPR&D”) acquired is capitalized and accounted for as indefinite-lived intangible assets, and not amortized until the underlying project receives regulatory approval, at which point the intangible assets will be accounted for as definite-lived intangible assets and amortized over the remaining useful life or discontinued. If discontinued, the intangible asset will be written off. Research and development (“R&D”) costs incurred after the acquisition are expensed as incurred.

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Impairment of long-lived assets

The Company reviews the recoverability of its finite long-lived assets whenever events or changes in circumstances indicate that it is carrying amount may not be recoverable. The carrying amount is first compared with the undiscounted cash flows. If the carrying amount is higher than the sum of undiscounted cash flows, then the Company determines the fair value of the underlying asset group. Any impairment loss to be recognized is measured as the difference by which the carrying amount of the asset group exceeds the estimated fair value of the asset group.

Goodwill and indefinite-lived assets are not amortized but are subject to an impairment review annually and more frequently when indicators of impairment exist. An impairment of goodwill could occur if the carrying amount of a reporting unit exceeds the fair value of that reporting unit. An impairment of indefinite-lived intangible assets would occur if the fair value of the intangible asset is less than the carrying value.

The Company tests its goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If the Company concludes it is more likely than not that fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed.

The Company tests indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If the Company concludes it is more likely than not that the fair value is less than it's carrying amount, a quantitative impairment test is performed. The Company's annual impairment test is performed in the fourth quarter of the fiscal year.

Research and development costs

Stock-based compensation

The

Company has in place a stock option plan for directors, officers, employees,

and consultants of the Company, with grants under the stock option plan

approved by the Company’s Board of Directors. The plan provides for the

granting of options to purchase Common Stock and the exercise price of each

option equals the closing trading price of Common Stock on the day prior to the

grant. The Company accounts for stock-based compensation

arrangements in accordance with provisions of Accounting Standards Codification

(“ASC”) 718, Compensation—Stock Compensation (“ASC 718”). ASC 718

requires the recognition of compensation expense, using a fair-value based

method, for costs related to all share-based payments including stock options.

ASC 718 requires companies to estimate the fair value of share-based payment awards

on the date of grant using an option-pricing model. The Company measures the

cost of such awards based on the fair value of the award at grant date and

recognizes stock-based compensation expense in the consolidated statements of

operations and comprehensive loss on a tranche by tranche basis. The fair value

of options is estimated for each tranche of an award that vests on a graded

basis. The fair value of options is estimated using the Black-Scholes option

pricing model, which uses various inputs including fair value of the Common Stock

at the grant date, expected term, historical volatility, risk-free interest

rate and expected dividend yields of the Common Stock. The Company applies an

estimated forfeiture rate derived from historical employee termination behavior

in determining compensation expense. If the actual forfeitures differ from

those estimated by management, adjustment to compensation expense may be required

in future periods.

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Government grants

Government grants are recorded as a reduction of the related expenses or costs of the asset acquired. Government grants are recognized when there is reasonable assurance that the Company has met the requirements of the approved grant program and there is reasonable assurance that the grant will be received.

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. 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. 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. The Company has elected not to recognize leases with an original term of one year or less on the consolidated 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. The Company’s lease expense is recognized in research and development expenses. The Company does not have financing leases.

In accordance with FASB ASC 842—Leases (“Topic 842”), components of a lease should be split into three categories: lease components, non-lease components and non-components. The fixed and in-substance fixed contract consideration (including any consideration related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Entities may elect not to separate lease and non-lease components. The Company has elected to account for lease and non-lease components together as a single lease component for all underlying assets and allocate all of the contract consideration to the lease component only.

Income taxes

Income taxes comprise of current and deferred taxes. The provision for income taxes is computed using the asset and liability method.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts (tax base) of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rate expected to apply when the underlying asset or liability is realized (settled) based on the rates that are enacted at the reporting date. Deferred tax assets and liabilities are offset if the Company has the right to set off the amount owed by with the amount owed by the other party, the Company intends to set off and the offset right is enforceable at law. A deferred tax asset is recognized for unused tax losses, and tax credits, reduced by a valuation allowance. A valuation allowance is recorded to reduce the carrying amount of deferred income tax assets when it is more likely than not that these assets will not 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.

Additionally, the Company accrues

interest and penalties, if any, related to unrecognized tax benefits as a

component of income tax expense. The unrecognized tax benefits, including

accrued interest and penalties, if any, are included in income taxes payable in

the accompanying Consolidated Balance Sheets.

Earnings per share

The Company presents basic and diluted earnings per share ("EPS") data for its Common Stock. Basic EPS is calculated by dividing the net income or loss attributable to the holders of Common Stock by the weighted average number of Common Stock outstanding during the year. Diluted EPS is determined by adjusting the net income or loss attributable to the holders of Common Stock and the weighted average number of Common Stock outstanding adjusted for the effects of all dilutive potential Common Stock, which comprise warrants and share options granted to employees. The basic and diluted EPS are the same due to loss position.

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Segment reporting

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The ASU includes enhanced disclosure requirements, primarily related to significant segment expenses that are regularly provided to and used by the chief operating decision maker ("CODM"). The amendments are to be applied retrospectively to all prior periods presented in the financial statements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. As discussed further in Note 12, the Company’s adoption of the requirements of ASU 2023-07 at March 31, 2025 annual financial reporting did not result in material impact on its consolidated financial statements and disclosures. Refer to Note 12 for detailed discussions.

Derivative warrant liabilities

Derivative warrant liabilities are recognized initially at fair value. Subsequent to initial recognition, derivative warrant liabilities are measured at fair value, with changes in fair value recognized in the consolidated statement of operations and comprehensive loss.

Fair value measurements

Certain of the Company’s accounting policies and disclosures require the determination of fair value, for both financial assets and liabilities.

In establishing fair value, the Company uses a fair value hierarchy based on levels as defined below:

●

Level 1: defined as observable inputs such as quoted prices in active markets.

●

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable.

●

Level 3: defined as inputs that are based on little or no observable market data, therefore requiring entities to develop their own assumptions.

The Company has determined that the carrying values of its short-term financial assets and liabilities (cash and cash equivalents and trade and other payables) approximate their fair value given the short-term nature of these instruments. The Company measured its derivative warrant liabilities at fair value on a recurring basis using level 3 inputs.

Financial Instruments

Concentration of credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are all invested in accordance with the Company’s Investment Policy with the primary objective being the preservation of capital and the maintenance of liquidity, which risk is managed by dealing only with highly rated U.S. and Canadian institutions. The Company maintains its cash and cash equivalents at accredited financial institutions in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Recent accounting pronouncements

On November 4, 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), to

improve the disclosures about a public business entity’s 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 does not expect that the adoption of ASU 2024-03 will have a material impact on its consolidated financial statements and disclosures.

The Company has considered all other recent accounting pronouncements and concluded that they are either not applicable to the Company’s business or that the effect is not expected to be material to the consolidated financial statements as a result of future adoption.

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3. Fair value measurements

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 are as follows:

$ $ $ $

Assets

Treasury bills classified as cash equivalents 21,304 21,304 — —

Liabilities

Derivative warrant liabilities 1,141 — — 1,141

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 are as follows:

$ $ $ $

Assets

Liabilities

Derivative warrant liabilities 4,359 — — 4,359

There were no changes in valuation techniques or transfers between Levels 1, 2 or 3 during the years ended March 31, 2025 and 2024. The Company’s 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 8, Stockholders’ Equity, for the valuation techniques and assumptions used in estimating the fair value of the derivative warrant liabilities.

4. Receivables

$ $

Government assistance — 356

Interest receivable — 15

Other receivables 20 35

Government assistance is comprised of research and development investment tax credits from the Québec provincial government, which relate to quantifiable research and development expenditures under the applicable tax laws. The amounts recorded as receivables are subject to a government tax audit and the final amounts received may differ from those recorded.

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5. Equipment

The following is a summary of equipment, net:

March 31, 2025 Cost Accumulated depreciation Write-off Net book value

$ $ $ $

Furniture and office equipment 2 (1 ) (1 ) —

Computer equipment 5 (2 ) (1 ) 2

March 31, 2024 Cost Accumulated depreciation Write-off Net book value

$ $ $

Furniture and office equipment 18 (13 ) (4 ) 1

Depreciation expense was $7 and $11 for the years ended March 31, 2025 and 2024, respectively.

6. 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, 2025 and 2024:

$ $ $ $

Intangible assets – in-process research and development

Impairment — — — —

Goodwill

Impairment —

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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, the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans as well as competitive product launches, affect the revenues a product can generate. Consequently, the eventual realized values, if any, of acquired IPR&D projects may vary from their estimated fair values.

7. Trade and other payables

$ $

Accrued research and development expenses 565 133

Accrued liabilities and other payables 103 43

Employee salaries and benefits payable 661 501

Total trade and other payables 1,930 1,684

8. 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 Company’s 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 Company’s 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 the Company 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.

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Pursuant

to the 2025 Purchase Agreement, for each Share and each 2025 Pre-Funded Warrant

issued, the Company agreed to issue to each purchaser an accompanying common

warrant (the “2025 Common Warrants” and, together with the 2025 Pre-Funded

Warrants, the “2025 Warrants”) to purchase shares of Common Stock (or 2025

Pre-Funded Warrants in lieu thereof), exercisable for an aggregate of 4,418,292

shares of Common Stock (or 2025 Pre-Funded Warrants in lieu thereof). Each 2025

Common Warrant is exercisable for one share of Common Stock at an exercise

price of $3.395 per share (or one 2025 Pre-Funded Warrant at an exercise price

of $3.3949 per share in lieu thereof), will be immediately exercisable and will

expire on the earlier of (i) the 60th day after the date the FDA approves the new drug application (“NDA”) for GTx-104 and (ii)

September 25, 2028. The 2025 Common Warrants were offered and sold at a

purchase price of $0.125 per 2025 Common Warrant, which purchase price is

included in the offering price per Share and 2025 Pre-Funded Warrant issued in

the 2025 Private Placement.

The

2025 Private Placement included the issuance of Common Stock, 2025 Pre-Funded

Warrants, and 2025 Common Warrants to related parties namely (i) Shore Pharma

GRCE US Equity

GRCE · 10-K · period ended 2025-03-31

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Item 15. Exhibits, Financial Statement Schedules

Item 16.

GRCE US Equity☆

GRCE · 10-K · period ended 2025-03-31

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Item 7A.

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Item 9B.

Item 9C.

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Item 15. Exhibits, Financial Statement Schedules

Item 16.

GRCE US Equity