Grace Therapeutics, Inc.

Previous wording

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.

Current wording

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 of March 31, 2026 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, 2026 and 2025.

Previous wording

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.

Current wording

Our assets as of March 31, 2026 include cash and cash equivalents of $16,977 and intangible assets and goodwill of $49,266. Our current liabilities were $2,146 as of March 31, 2026 and were comprised primarily of amounts due to or accrued for creditors.

Previous wording

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.

Current wording

In February 2025, we completed a private placement of Company securities with certain institutional and accredited investors. Net proceeds were $13,705. Refer to Note 7,Stockholders’ Equity - 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.

Previous wording

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.

Current wording

The net loss of $7,793 or $0.47 loss per share for the year ended March 31, 2026, decreased by $1,775 from the net loss of $9,568 or $0.79 loss per share for the year ended March 31, 2025. The decrease in net loss was primarily due to a $2,318 decrease in change in fair value of derivative warrant liabilities, a $7,106 decrease in research and development expenses, and a $1,499 decrease in income tax benefit, partially offset by a $1,504 increase in general and administrative expenses.

Previous wording

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;

Current wording

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

Previous wording

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.

Current wording

Our research and development during the years ended March 31, 2026 and 2025 were focused primarily on our clinical development program for our GTx-104 drug candidate.

Previous wording

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.

Current wording

Total research and development expenses for the year ended March 31, 2026 were $2,405, compared to $9,511 for the year ended March 31, 2025. This decrease of $7,106 was primarily due to the decrease in research activities for GTx-104 of $7,542 driven by the close-out of the GTx-104 pivotal Phase 3 safety clinical trial during the first calendar quarter of 2026 offset by a $436 increase in external consulting and data management costs incurred in support of the NDA of GTx-104 which was submitted to the FDA in June 2025.

Previous wording

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.

Current wording

Stock-based compensation of $218 for the year ended March 31, 2026, increased by $2 compared to $216 for the year ended March 31, 2025.

Previous wording

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.

Current wording

General and administrative expenses were $8,672 for the year ended March 31, 2026, an increase of $1,504 from $7,168 for the year ended March 31, 2025. The increase was primarily driven by $799 in non-recurring legal and due diligence costs incurred in connection with strategic initiatives evaluated during the period, as well as increased professional fees and other general and administrative costs of $890 primarily related to pre-commercial planning for GTx-104, offset in part by a decrease in salaries and benefits of $251 primarily a result of decreased headcount. Stock-based compensation of $580 for the year ended March 31, 2026, decreased by $66 compared to $514 for the year ended March 31, 2025. The increase was primarily due to more stock option awards granted during the year ended March 31, 2026.

Previous wording

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.

Current wording

The decrease in the fair value of derivative warrant liabilities for the year ended March 31, 2026 of $2,318 was mainly attributable to the settlement of the warrant liability as the 2023 Common Warrants (defined below) expired on October 21, 2025, which was the 60 th day after the date of the acceptance by the FDA of the NDA for our product candidate GTx-104.

Previous wording

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.

Current wording

Interest and other income, net was $685 for the year ended March 31, 2026, compared to $711 for the year ended March 31, 2025. The $26 decrease in our interest and other income was due to a decrease in interest rates.

Previous wording

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.

Current wording

As of March 31, 2026, cash and cash equivalents were $16,977, a net decrease of $5,156 compared to cash and cash equivalents of $22,133 at March 31, 2025.

Previous wording

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.

Current wording

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 7, Stockholders’ Equity - 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.

Previous wording

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.

Current wording

Net cash used in operating activities for the year ended March 31, 2026 was $8,869, compared to $14,904 for the year ended March 31, 2025, a decrease of $6,035. The decrease in net cash used in operating activities was primarily due to a $7,106 decrease in research and development activities due to the completion of our GTx-104 pivotal Phase 3 STRIVE-ON trial in the first fiscal quarter of 2026, partially offset by a $1,504 increase in general and administrative expenses for legal, consulting and other professional fees.

Previous wording

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.

Current wording

Net cash used in investing activities for the year ended March 31, 2025, was $0 due to our purchase of short-term investments of $15 and maturity of short-term investments of $15. There were no investing activities for the year ended March 31, 2026.

Previous wording

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.

Current wording

Net cash provided by financing activities for the year ended March 31, 2026 was $3,713, compared to $14,032 for the year ended March 31, 2025, a decrease of $10,319. The net cash provided by financing activities for the year ended March 31, 2026, was attributable to the $4,040 net proceeds received from the exercise of the 2023 Common Warrants offset by payment of stock issuance costs $327 from the 2023 Private Placement (defined below) which occurred in September 2023. Net cash provided by financing activities of $14,032 for the year ended March 31, 2025, was primarily attributable to the $14,999 gross proceeds received from the 2025 Private Placement (defined below) which occurred in February 2025, offset by stock issuance costs of $967.

Previous wording

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.

Current wording

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 “2025 Private Placement 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 2025 Private Placement 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 2025 Private Placement Share and 2025 Pre-Funded Warrant issued, we agreed to issue to each purchaser an accompanying 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.

Previous wording

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.

Current wording

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 “2023 Common 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 was exercisable for one Common Share at an exercise price of $3.003 per Common Share, was immediately exercisable, and would 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. In October 2025, we received $4,040 in net proceeds from exercises of 1,345,464 2023 Common Warrants that were issued in the 2023 Private Placement. for 1,345,464 shares of Common Stock. The remaining 1,190,927 2023 Common Warrants issued in the 2023 Private Placement expired on October 21, 2025, in accordance with their terms as the 60th day after the FDA’s acceptance for review of our NDA for GTx-104 had passed.

Previous wording

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.

Current wording

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, 2026, we had $95 of commitments to CMOs and $28 of commitments to CROs for the next twelve months.

Previous wording

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.

Current wording

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 our clinical trials, laboratory material and small equipment, clinical trial materials, stock-based compensation expense, and other non-clinical costs and regulatory fees. We accrue 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.

Previous wording

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.

Current wording

Our IPR&D and goodwill was $49,300 as of March 31, 2026, which represents 74% 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.

Previous wording

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.

Current wording

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 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. The deficiencies identified in the CRL, 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.