Vistagen Therapeutics, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

Vistagen Therapeutics, Inc., a Nevada corporation (Vistagen or the Company), is a late clinical-stage biopharmaceutical company leveraging a deep understanding of nose-to-brain neurocircuitry to develop and potentially commercialize a new class of non-systemic intranasal product candidates called pherines. The Company's clinical-stage neuroscience pipeline currently consists of five clinical-stage pherine product candidates, each with a novel proposed mechanism of action (MOA) and at least one positive clinical study involving the Company's targeted patient population. Pherines rapidly, specifically and selectively bind to peripheral receptors in human nasal chemosensory neurons, and are designed to rapidly activate nose-to-brain neurocircuits believed to regulate brain areas without requiring systemic absorption or uptake into the brain to achieve desired therapeutic benefits.

2. Basis of Presentation, Principles of Consolidation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) applicable to interim financial information and pursuant to the instructions of the Securities and Exchange Commission (SEC) on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Further, the results of the Company's operations for any interim periods are not necessarily indicative of the results that may be expected for any other interim period or the full fiscal year. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation have been included. The condensed consolidated balance sheet at March 31, 2026, has been derived from the Company's audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. Because all of the disclosures required by U.S. GAAP for complete financial statements are not included herein, these unaudited condensed consolidated financial statements and the accompanying notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended March 31, 2026 (Annual Report), filed with the SEC on June 15, 2026.

Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) promulgated by the Financial Accounting Standards Board (FASB).

The accompanying unaudited condensed consolidated financial statements include the accounts of Vistagen and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Liquidity and Going Concern

In order to complete the development of the Company's neuroscience product candidates and to expand its infrastructure and operations in a manner the Company believes will be necessary to commercialize its product candidates, if approved, on its own or with one or more collaborators, the Company will require substantial additional capital. Until the Company can generate a sufficient amount of revenue from the commercialization of its product candidates, the Company will seek to raise any necessary additional capital through equity and/or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties. Because of the numerous risks and uncertainties associated with research, development and commercialization of the Company's product candidates, the Company is unable to estimate the exact amount and timing of its capital requirements. The Company does not expect to generate any meaningful revenue unless and until the Company obtains regulatory approval of and commercializes any of the Company's product candidates, and the Company does not know when, or if, that will occur.

The Company has incurred significant losses and negative cash flows from operations since inception. As of June 30, 2026, the Company had an accumulated deficit of $490.3 million, and cash used in operations for the three months ended June 30, 2026 was $14.7 million. The Company expects that its operating losses and negative cash flows will continue for the foreseeable future as the Company continues to develop and, if approved, commercialize its product candidates.

In accordance with Accounting Standards Codification (ASC) 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year from the date these consolidated financial statements in this Quarterly Report on Form 10-Q (Report) are issued. This evaluation initially does not take into consideration the potential mitigating effects of management’s plans that have not yet been fully implemented as of the date the consolidated financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effects of its plans sufficiently alleviate substantial doubt about the Company's ability to continue as a going concern. The mitigating effects of management’s plans, however, are only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the consolidated financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. In performing its analysis, management excluded certain elements of its operating plan that cannot be considered probable. Under ASC 205-40, the future receipt of potential funding from future equity and/or debt issuances and other potential sources such as partnerships cannot be considered probable at this time because these plans are not entirely within the Company's control nor have these plans been approved by the Board as of the date of these consolidated financial statements.

As of June 30, 2026, the Company had cash, cash equivalents, and marketable securities of $31.7 million. As of August 14, 2026, the issuance date of the condensed consolidated financial statements as of and for the three months ended June 30, 2026 in this Report, there is uncertainty about whether the Company's combined cash, cash equivalents, and marketable securities will be sufficient to fund operations beyond twelve months from the issuance date of these condensed consolidated financial statements and therefore the Company concluded that substantial doubt exists about its ability to continue as a going concern.

When necessary and/or advantageous, the Company will seek additional capital to fund the Company's planned operations through (i) sales of its equity and/or debt securities in one or more public offerings and/or private placements, including, but not limited to sales of its securities under its Open Market Sale Agreement with Jefferies LLC, (ii) non-dilutive government grants and research awards and/or (iii) non-dilutive strategic partnering collaborations to advance development and commercialization of one or more of its product candidates. However, no assurance can be provided that any such sales of the Company's securities, awards, agreements or collaborations will occur in the future. While the Company may make additional sales of its equity and/or debt securities, the Company does not have an obligation to do so.

The Company's future working capital requirements will depend on many factors, including, without limitation, potential impacts related to adjustments in the size of the Company's staff or other actual and/or planned adjustments to its operations, the scope and nature of opportunities related to the Company's success or failure in nonclinical and clinical trials, including the development and commercialization of the Company's current product candidates, and the availability of, and its ability to enter into financing transactions and research, development and commercialization collaborations on terms acceptable to the Company. In the future, to further advance the nonclinical and clinical development of the Company's product candidates, as well as support the Company's operating activities, the Company plans to seek additional financing, including both equity-based and/or debt-based capital and potentially from non-dilutive sources other than debt-based capital, and continue to carefully manage its operating costs, including, but not limited to, the Company's clinical and nonclinical programs.

There can be no assurance that future financings will be available to the Company in sufficient amounts, in a timely manner, or on terms acceptable to the Company, if at all, or that any current or future development and commercialization collaborations will generate revenue from future potential milestone payments or otherwise. Further, on August 4, 2026, the Company received a notification from the Listing Qualifications Staff of The Nasdaq Stock Market LLC granting the Company an additional 180 calendar day compliance period, until February 1, 2027, to regain compliance with the requirement that the Company's common stock maintain a minimum closing bid price of $1.00 per share for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2).

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates made in the accompanying condensed consolidated financial statements include, but are not limited to, those relating to stock-based compensation, revenue recognition, research and development expense, and determination of right-of-use assets under lease transactions and related lease obligations. Although these estimates are based on the Company's knowledge of current events, historical experiences, actions the Company may undertake in the future and on various other assumptions the Company believes are reasonable, actual results may materially differ from these estimates and assumptions.

Fair Value Measurements

The Company measures cash equivalents and available-for-sale debt securities at fair value. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A framework is used for measuring fair value utilizing a three-tier hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2—Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3—Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).

Money market funds are highly liquid investments and are classified as Level 1. The pricing information for these assets is readily available and can be independently validated as of the measurement date. Available-for-sale debt securities are valued using observable inputs from similar assets, or from observable data in markets that are not active. These assets are classified as Level 2.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company manages its operations as a single reportable segment for the purposes of assessing performance and making operating decisions.

Marketable Securities

Marketable securities consist of U.S. treasury securities. These securities are classified as available-for-sale, as the sale of such securities may be required prior to their maturity. Available-for-sale securities are recorded at fair value, with the related unrealized gains and losses included in accumulated other comprehensive income or loss and included as a separate component of stockholders' equity. The Company's marketable debt securities are classified as cash equivalents if the original maturity, from the date of purchase, is 90 days or less, and as marketable securities if the original maturity, from the date of purchase, is in excess of 90 days. The Company's cash equivalents are generally composed of U.S. treasury securities and money market funds. The amortized cost of available-for-sale securities reflects amortization of premiums and accretion of discounts to maturity. Premiums and discounts on debt securities are amortized into interest and other income, net. The Company classifies investments in marketable debt securities as current assets, regardless of the stated maturity date, which may be beyond one year from the current balance sheet date. Short-term classification reflects management's view that the entire portfolio is available, and the Company may use the proceeds from sale of these investments to fund current operations, as necessary.

Recently Issued Accounting Pronouncements

There were no significant updates not already disclosed in the Company’s audited consolidated financial statements for the years ended March 31, 2026, and 2025 to the recently issued accounting standards, for the three months ended June 30, 2026.

Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), which requires disaggregated disclosure of certain expenses to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. For the Company, ASU 2024-03 will be effective for the fiscal year beginning April 1, 2027, the Company's fiscal year ending March 31, 2028, and for interim periods beginning with the quarter ending June 30, 2028. ASU 2024-03 may be adopted on a prospective or retrospective basis. The Company does not believe the adoption of ASU 2024-03 will have a material impact on the Company's consolidated financial statements, but it will increase the amount of expense information the Company provides. The Company anticipates providing further disclosures in accordance with ASU 2024-03 in its financial statements for the fiscal year ending March 31, 2028.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This guidance modernizes the accounting framework for internal-use software by providing clearer criteria for capitalization, including the requirement to assess whether significant development uncertainty exists. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. For the Company, ASU 2025-06 will be effective for the fiscal year beginning April 1, 2028, the Company's fiscal year ending March 31, 2029, including interim periods within that fiscal year beginning with the quarter ending June 30, 2028. The Company is currently evaluating the impact of this guidance on its financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements, which provides clarity on the required interim disclosures under Topic 270 by providing a comprehensive list of required interim disclosures, and clarifies the applicability of Topic 270. ASU 2025-11 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within annual reporting periods beginning after December 15, 2028, with early adoption permitted. ASU 2025-11 may be adopted on a prospective or retrospective basis. For the Company, ASU 2025-11 will be effective for the fiscal year beginning April 1, 2028, the Company's fiscal year ending March 31, 2029, and for interim periods beginning with the quarter ending June 30, 2029. ASU 2025-11 may be adopted on a prospective or retrospective basis. The Company is currently evaluating the impact of this guidance on its financial statements.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which includes 33 amendments to the Accounting Standards Codification intended to clarify existing guidance, correct technical errors, and address minor inconsistencies across a broad range of topics. ASU 2025-12 is effective for the Company for annual reporting periods beginning after December 15, 2026. For the Company, this means the standard will first apply to the Company's annual financial statements for the year ending March 31, 2028. Early adoption is permitted. For the Company, ASU 2025-12 will be effective for the fiscal year beginning April 1, 2027, the Company's fiscal year ending March 31, 2028, and for interim periods beginning with the quarter ending June 30, 2027. Other than the amendments related to earnings per share, ASU 2025-12 may be adopted on a prospective or retrospective basis, and the transition method may be elected on an issue-by-issue basis. The Company has evaluated the amendments in ASU 2025-12 and do not expect adoption to have a material impact on its consolidated financial statements or disclosures.

3. Fair Value Measurements

The following tables show the Company's cash, cash equivalents and marketable securities at fair value as of June 30, 2026 and March 31, 2026 (in thousands):

The carrying amounts of the Company's prepaid expenses and other current assets, accounts payable, accrued expenses, and the note payable approximate fair value due to their short maturities. The Company hasno financial liabilities measured at fair value on a recurring basis at June 30, 2026 or March 31, 2026. There were no transfers between Levels 1, 2 or 3 for any of the periods presented.

The Company did not record any impairment charges related to the Company's marketable debt securities during the three months ended June 30, 2026 or 2025.

The following tables summarize the Company's marketable securities as of June 30, 2026 and March 31, 2026 (in thousands):

4. Notes Payable

In May 2025, the Company executed a 6.54% promissory note in the principal amount of $1.0 million in connection with certain insurance policy premiums. The note was payable in monthly installments of approximately $0.1 million, including principal and interest, through April 2026. As of June 30, 2026, the note was repaid in full and no balance remained outstanding.

5. Capital Stock

Common Stock

October 2023 Public Offering

On October 2, 2023, the Company completed an underwritten public offering (the October 2023 Public Offering), whereby the Company offered and sold, for gross proceeds of approximately $100 million, a total of 15,010,810 shares of the Company's common stock and a total of 3,577,240 pre-funded warrants to purchase up to 3,577,240 shares of common stock (the Pre-Funded Warrants). Each share of common stock and each Pre-Funded Warrant was issued together with a ratably allocated portion of warrants to purchase up to 9,294,022 shares of common stock with an exercise price of $5.38 per share (the T1 Warrants) and warrants to purchase 11,265,086 shares of common stock with an exercise price of $8.877 per share (the T2 Warrants). The net proceeds to the Company from the October 2023 Public Offering were approximately $93.5 million, after deducting related expenses, including commissions, legal expenses and other offering costs.

The Pre-Funded Warrants, T1 Warrants and T2 Warrants (collectively, the Warrants) are fully exercisable, only at the option of the holder. Holders may also exercise the T1 Warrants and T2 Warrants for Pre-Funded Warrants at their option. The Company may not effect the exercise of any Warrants, and a holder will not be entitled to exercise any portion of any of the Warrants, which, upon giving effect to such exercise, would cause the aggregate number of shares of common stock beneficially owned by the holder of such Warrant (together with its affiliates) to exceed 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise. However, any holder may increase or decrease such percentage to any other percentage (not to exceed 19.99% if exceeding such percentage would result in a change of control under Nasdaq Listing Rule 5635(b) or any successor rule) upon at least 61 days’ prior notice from the holder to the Company subject to the terms of the respective Warrant agreement.

The Company evaluated the terms of the Warrants issued and determined that they should be classified as equity instruments within additional paid-in capital. The Warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the other equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such Warrants do not provide any guarantee of value or return.

Open Market Sale Agreement

In May 2021, the Company entered into an Open Market Sale Agreement (the Sales Agreement) with Jefferies LLC (Jefferies) as sales agent, with respect to an at-the-market offering program under which the Company was permitted, at the Company's option, to offer and sell, from time to time, shares of the Company's common stock having an aggregate offering price of up to $175 million. As of June 30, 2026, shares of common stock with an aggregate offering price of approximately $139.5 million remained available for offer and sale under the Sales Agreement.

During the three months ended June 30, 2026, the Company sold 1,580,176 shares of the Company's common stock in at-the-market transactions under the Sales Agreement, resulting in net cash proceeds of approximately $0.9 million after sales agent commissions. During the three months ended June 30, 2025, the Company sold 190,067 shares under the Sales Agreement, resulting in net cash proceeds of approximately $0.4 million after sales agent commissions. The Company pays Jefferies a commission of up to three percent (3.0%) of the aggregate gross proceeds from any sales under the Sales Agreement.

Common Stock Warrants

At June 30, 2026, the following common stock warrants were outstanding:

The weighted average exercise price of all outstanding warrants at June 30, 2026 is $7.30 per share. No outstanding warrant is subject to any down-round anti-dilution protection feature. All outstanding warrants are exercisable by the holders only by payment in cash of the stated exercise price per share, except the T2 Warrants issued in connection with the October 2023 Public Offering, which may be exercised through a cashless exercise, via exchange of a portion of warrants to cover the exercise price.

In June 2026, Pre-Funded Warrants to purchase 2,788,620 shares of common stock with an exercise price of $0.001 per share were exercised resulting in the issuance of 2,788,620 shares of common stock.

6. Stock-Based Compensation

A summary of the Company's stock option activity for the period ended June 30, 2026 is as follows (in thousands, except share and per share data and years):

Stock-Based Compensation Expense

The fair value of stock options granted was estimated using the following assumptions:

Stock-based compensation expense recognized for all equity awards has been included in the consolidated statements of operations and comprehensive loss as follows (in thousands):

The weighted-average grant date fair value of options granted during the three months ended June 30, 2026 and 2025 was $0.52 and $1.87 per share, respectively. No options were exercised during the three months ended June 30, 2026 and 2025. As of June 30, 2026, total compensation cost not yet recognized related to unvested stock options was $4.8 million, which is expected to be recognized over a weighted-average period of 1.7 years.

As an inducement to accepting new employment with the Company, upon approval by the Board or an authorized committee thereof, the Company has granted options to purchase shares of common stock in accordance with Nasdaq Listing Rule 5635(c)(4). To date, all options to purchase shares of common stock granted as inducement awards were granted outside of an existing equity incentive plan. These options are subject to terms substantially the same as those granted from the 2019 Omnibus Equity Incentive Plan. During the three months ended June 30, 2026, the Company granted an option to purchase an aggregate of 150,000 options to purchase shares of common stock as an inducement to employment for newly hired executive officers.

7. Net Loss per Common Share

Basic net loss per common share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. The Pre-Funded Warrants associated with the October 2023 Public Offering (see Note 5 above) are considered outstanding shares in the basic earnings per share calculation given their nominal exercise price. Dilutive common stock equivalents for the periods presented include warrants for the purchase of common stock and common stock options outstanding under the Company’s equity compensation plans. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

The following table summarizes the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because their inclusion would be anti-dilutive:

8. Sublicensing and Collaborative Agreements

The following table presents changes in contract assets and liabilities during the three months ended June 30, 2026. Contract acquisition costs are included as a component of other assets on the Company's condensed consolidated balance sheets.

AffaMed Agreement

In June 2020, the Company entered into a license and collaboration agreement (the AffaMed Agreement) with EverInsight Therapeutics Inc., a company incorporated under the laws of the British Virgin Islands, now AffaMed Therapeutics, Inc. (AffaMed), pursuant to which the Company granted AffaMed an exclusive license to develop and commercialize fasedienol for social anxiety disorder (SAD) and potentially other anxiety-related disorders in Greater China, South Korea and Southeast Asia (which includes Indonesia, Malaysia, Philippines, Thailand and Vietnam) (collectively, the Territory). The Company retains exclusive development and commercialization rights for fasedienol in the U.S. and throughout the rest of the world outside the Territory.

The Company is responsible for pursuing clinical development and regulatory submissions of fasedienol for acute treatment of anxiety in adults with SAD, and potentially other anxiety-related indications, in the United States on a ‘‘best efforts’’ basis, with no guarantee of success. If conducted, AffaMed may participate in a Phase 3 global clinical trial of fasedienol and would assume all direct costs and expenses of conducting such clinical trial in the Territory and a portion of the indirect costs of a global trial in which they participate. The Company will transfer all development data (nonclinical and clinical data) and the Company's regulatory documentation related to fasedienol throughout the term as it is developed or generated or otherwise comes into its control. The Company will grant to AffaMed a Right of Reference to its regulatory documentation and its development data, but retain exclusive development and commercialization rights for fasedienol in the U.S. and throughout the rest of the world outside the Territory.

Under the terms of the AffaMed Agreement, AffaMed paid to the Company a non-refundable upfront license payment of $5.0 million in August 2020. Additionally, upon successful development and commercialization of fasedienol in the Territory, the Company is eligible to receive milestone payments of up to $172.0 million. Further, the Company is eligible to receive royalty payments on a country-by-country basis on net sales for the later of ten years or the expiration of market or regulatory exclusivity in the jurisdiction, except that payments will be reduced on a country-by-country basis in the event there is no market exclusivity in the period. Royalty payments may also be reduced if there is a generic competitive product in the Territory in the period.

The Company has determined that it has one combined performance obligation for the license to develop and commercialize fasedienol in the Territory and related development and regulatory services. In addition, AffaMed has an option that, if exercised by AffaMed, could create manufacturing obligations for the Company during development upon exercise. This option for manufacturing services was evaluated and determined not to include a material right.

Development and commercialization milestones were not considered probable at inception and therefore were excluded from the initial transaction price. The royalties were excluded from the initial transaction price because they relate to a license of intellectual property and are subject to a royalty constraint.

The Company recognizes revenue as the combined performance obligation is satisfied over time using an input method. Significant management judgment is required to determine the level of effort attributable to the performance obligation included in the AffaMed Agreement and the period over which the Company expects to complete its performance obligation. The performance period or measure of progress was estimated at the inception of the AffaMed Agreement and is re-evaluated in subsequent reporting periods. This re-evaluation may shorten or lengthen the period over which the Company recognizes revenue.

As of June 30, 2026 and March 31, 2026, the Company had short-term deferred revenue of $0.2 million and $0.4 million, respectively, andno long-term deferred revenue related to the AffaMed Agreement. During the three months ended June 30, 2026, the Company recognized revenue of $0.2 million, as compared to $0.2 million during the three months ended June 30, 2025, under the AffaMed Agreement, which was included in the deferred revenue balance at the beginning of each period. The remaining deferred revenue under the AffaMed Agreement will be recognized over the expected remaining contractual term.

Fuji Pharma Agreement

On September 1, 2023, the Company entered into an Exclusive Negotiation Agreement (the Negotiation Agreement) with Fuji Pharma Co., Ltd. (Fuji Pharma), a Tokyo Stock Exchange-listed, Japan-based pharmaceutical company with a significant research, development, and commercial focus on pharmacological therapies for women’s health conditions. Pursuant to the terms and conditions of the Negotiation Agreement, the Company agreed, for a limited period of time, to negotiate exclusively with Fuji Pharma for a potential exclusive license agreement to develop and commercialize refisolone (formerly PH80) in Japan. Refisolone, the Company's clinical-stage pherine product candidate focused on women's health conditions, primarily the treatment of vasomotor symptoms (hot flashes) associated with menopause (the Potential

Definitive Agreement). The Negotiation Agreement provides for an exclusive negotiation period beginning on the date of formal written notice being received by Fuji Pharma that the Company has selected a contract development and manufacturing organization to conduct preclinical toxicology studies for refisolone (the Payment Event), and terminating on the later to occur of (i) fourteen (14) months from the date of the Payment Event or (ii) ninety (90) days from the date that the U.S. Food and Drug Administration (FDA) accepts the Company's refisolone Investigational New Drug (IND) application for clinical development of refisolone in the U.S. for the treatment of vasomotor symptoms (hot flashes) due to menopause (the Exclusive Negotiation Period).

As consideration for the Exclusive Negotiation Period, Fuji Pharma agreed to make a payment to the Company of $1.5 million (Purchase Price), payable upon occurrence of the Payment Event. The Payment Event occurred in October 2023, and the Company received payment of the Purchase Price in full in November 2023. The Purchase Price is non-refundable, except upon a material breach of the Negotiation Agreement by the Company; however, should the Company and Fuji Pharma enter into the Potential Definitive Agreement, the Purchase Price will be credited against any upfront fee due in connection with the execution of such Potential Definitive Agreement. Neither the Company nor Fuji Pharma is obligated to enter into the Potential Definitive Agreement, and if the Company and Fuji Pharma have not entered into the Potential Definitive Agreement on or before the end of the Exclusive Negotiation Period, either the Company or Fuji Pharma may terminate any further negotiations.

As of June 30, 2026 and March 31, 2026, the Company had $0 and $1.3 million short term deferred revenue on the condensed consolidated balance sheets. During the three months ended June 30, 2026 and 2025, the Company recognized $1.3 million and $0 of revenue under the Negotiation Agreement. The Company's performance obligation under the Negotiation Agreement was fully satisfied upon termination of the Exclusive Negotiation Period, no transaction price remains allocated to unsatisfied performance obligations, and the Company expects no further revenue under the Negotiation Agreement.

9. Related Party Transactions

In August 2023, in connection with his retirement, the Company entered into a consulting agreement, as subsequently amended, with the Company's former Chief Financial Officer, Jerrold D. Dotson, to assist in transition matters related to the employment of the Company's new Chief Financial Officer. The agreement currently expires December 31, 2026. During the three months ended June 30, 2026 and 2025, the Company recorded expense under the consulting agreement of $30,000 in each period.

10. Commitments and Contingencies

From time to time, the Company may be party to litigation, arbitration or other legal proceedings in the course of its business, such as (i) the civil action filed against the Company and its Board of Directors, certain of its executive officers, professional services and financial advisors, and industry analysts in the United States District Court for the Northern District of California (Case No. 4:25-cv-01510) on February 13, 2025, by two purported stockholders seeking compensatory and punitive damages, as well as fees and costs, which case was recently dismissed by the Court, with prejudice, (ii) the stockholder derivative action filed by the same purported stockholders in the District of Nevada (Case No. 2:26-cv-01128) on April 10, 2026, (iii) the putative class action filed in the Northern District of California (Case No. 3:26-cv-00427) on January 15, 2026, and (iv) the stockholder derivative actions filed in the Northern District of California (Case Nos. 4:26-cv-02656 and 3:26-cv-04480) on March 26, 2026 and May 13, 2026, respectively. The Company believes all allegations in these legal proceedings are wholly without merit, and intends to vigorously defend itself.

The outcome of any such legal proceedings, regardless of the merits, is inherently uncertain. In addition, litigation and related matters are costly and may divert the attention of the Company's management and other resources that would otherwise be engaged in other activities. If the Company was unable to prevail in any such legal proceedings, the Company's business, results of operations, liquidity, and financial condition could be adversely affected.

11. Segment Information

The Company operates asone operating segment, which includes all activities related to the discovery and development of its clinical and preclinical product candidates, for the purposes of assessing performance, making operating decisions, and allocating resources. The Company's chief operating decision maker (CODM) is its President and Chief Executive Officer.

The CODM regularly reviews total operating expenses, disaggregated into research and development expense and general and administrative expense, against budget and prior periods. The CODM also monitors cash, cash equivalents, and marketable securities and internal cash forecasts to assess the sufficiency of cash resources to support the Company's research and development activities. The categories of significant expenses regularly provided to the CODM are reflected in the condensed consolidated statements of operations and comprehensive loss. Other segment items included in net loss consist of interest income, net, and other income (expense).

There has been no change in the basis of segmentation or in the measurement of segment profit or loss from that disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026. Total assets for the reportable segment are reported on the condensed consolidated balance sheets.