Grace Therapeutics, lnc.(GRCE) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents the company's financial performance and position, including statements and management's analysis Financial Statements Presents the unaudited condensed consolidated financial statements, detailing the company's financial position, operational results, and cash flows Condensed Consolidated Balance Sheets Details the company's assets, liabilities, and equity as of June 30, 2025, and March 31, 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $20,005 | $22,133 | | Total current assets | $20,525 | $22,712 | | Intangible assets | $41,128 | $41,128 | | Goodwill | $8,138 | $8,138 | | Total assets | $69,805 | $71,993 | | Liabilities & Equity | | | | Trade and other payables | $2,315 | $1,930 | | Derivative warrant liabilities | $1,628 | $1,141 | | Total liabilities | $6,255 | $5,383 | | Total stockholders' equity | $63,550 | $66,610 | | Total liabilities and stockholders' equity | $69,805 | $71,993 | Condensed Consolidated Statements of Loss and Comprehensive Loss Presents the company's net loss and comprehensive loss for the three months ended June 30, 2025 and 2024 Condensed Consolidated Statement of Loss (in thousands, except per share data) | Account | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Research and development expenses | $(955) | $(2,708) | | General and administrative expenses | $(2,135) | $(2,255) | | Loss from operating activities | $(3,090) | $(4,963) | | Change in fair value of derivative warrant liabilities | $(487) | $1,395 | | Interest and other income, net | $205 | $235 | | Net loss and total comprehensive loss | $(3,362) | $(2,617) | | Basic and diluted loss per share | $(0.21) | $(0.24) | Condensed Consolidated Statements of Cash Flows Outlines the cash inflows and outflows from operating, investing, and financing activities for the quarter Condensed Consolidated Statement of Cash Flows (in thousands) | Account | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,801) | $(3,596) | | Net cash used in investing activities | $— | $(15) | | Net cash used in financing activities | $(327) | $— | | Net decrease in cash and cash equivalents | $(2,128) | $(3,611) | | Cash and cash equivalents, beginning of period | $22,133 | $23,005 | | Cash and cash equivalents, end of period | $20,005 | $19,394 | Notes to the Unaudited Condensed Consolidated Financial Statements Provides additional details and explanations for the figures presented in the financial statements - The company changed its jurisdiction from British Columbia, Canada to Delaware, USA, and changed its name from Acasti Pharma Inc. to Grace Therapeutics, Inc. in October 2024[25][26][27] - Management believes existing cash and cash equivalents of $20.0 million are sufficient to sustain planned operations for at least 12 months from the issuance date of the financial statements, but additional capital will be required beyond that period[33][34] - In February 2025, the company completed a private placement, raising net proceeds of $13.7 million[32][56] - Derivative warrant liabilities, related to the 2023 Common Warrants, are measured at fair value on a recurring basis and increased from $1.14 million to $1.63 million during the quarter, resulting in a charge of $487 thousand to the statement of loss[60][62] Management's Discussion and Analysis of Financial Condition and Results of Operations Discusses the company's strategic focus on rare diseases, lead product development, and analysis of financial performance and liquidity Business Overview and Pipeline Provides an overview of the company's therapeutic focus, drug delivery technologies, and clinical-stage pipeline candidates - The company focuses on developing and commercializing products for rare and orphan diseases using novel drug delivery technologies to improve existing pharmaceutical compounds[88] - The therapeutic pipeline consists of three clinical-stage drug candidates: GTx-104 (for aSAH), GTx-102 (for Ataxia-Telangiectasia), and GTx-101 (for Postherpetic Neuralgia)[89][95] - The company utilizes the Section 505(b)(2) regulatory pathway, which may provide a shorter path to approval by leveraging existing data on approved compounds[90] - Following a strategic realignment in May 2023, the company is prioritizing the development of its lead product candidate, GTx-104, while development of GTx-102 and GTx-101 is contingent on additional funding or partnerships[96] GTx-104 Program Details the development status of GTx-104, including NDA submission, Phase 3 trial results, and market potential - On June 25, 2025, the company submitted a New Drug Application (NDA) to the FDA for GTx-104, a novel injectable formulation of nimodipine for patients with aneurysmal subarachnoid hemorrhage (aSAH)[94] - The pivotal Phase 3 STRIVE-ON trial met its primary endpoint, with patients receiving GTx-104 showing a 19% reduction in clinically significant hypotension compared to oral nimodipine (28% vs. 35%)[108] - Additional positive outcomes for GTx-104 included a higher dose intensity (54% vs. 8% achieving ≥95% of prescribed dose), a 29% relative increase in favorable outcomes on the modified Rankin scale, and fewer ICU days and readmissions[111] - The U.S. market for aSAH affects approximately 42,500 patients annually, with potential for up to 70,000, and market research indicates an 80% likelihood of adoption for an IV nimodipine formulation like GTx-104 among key hospital decision-makers[104][105] GTx-102 and GTx-101 Programs Outlines the development status and future plans for GTx-102 and GTx-101, contingent on funding or partnerships - GTx-102 (Ataxia Telangiectasia): This is a novel oral-mucosal spray of betamethasone; the FDA has provided guidance on a single pivotal efficacy trial, with further development contingent on additional funding or a strategic partnership[119][131] - GTx-101 (Postherpetic Neuralgia): This is a topical bio-adhesive film-forming bupivacaine spray; development has been deprioritized in favor of GTx-104, with future steps dependent on new funding or a partnership[132][144] Results of Operations Compares key financial results for the three months ended June 30, highlighting changes in expenses and net loss Comparison of Results for the Three Months Ended June 30 (in thousands) | Account | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development expenses | $955 | $2,708 | $(1,753) | | General and administrative expenses | $2,135 | $2,255 | $(120) | | Change in fair value of derivative warrant liabilities | $(487) | $1,395 | $(1,882) | | Income tax benefit | $— | $724 | $(724) | | Net loss | $(3,362) | $(2,617) | $745 | - The net loss increased by $745 thousand year-over-year, primarily due to a $1.88 million negative change in the fair value of derivative warrant liabilities and the absence of a $724 thousand income tax benefit recorded in the prior year[150] - Research and development expenses decreased by $1.75 million, mainly due to the completion of the GTx-104 pivotal Phase 3 STRIVE-ON clinical trial[153] - General and administrative expenses decreased by $120 thousand, primarily due to lower professional fees related to the company's Continuance and Domestication, partially offset by higher salaries and commercial assessment costs for GTx-104[158] Liquidity and Capital Resources Assesses the company's cash position, cash flow activities, and future capital requirements - As of June 30, 2025, the company had cash and cash equivalents of $20.0 million, a decrease of $2.1 million during the quarter[23][163] - Net cash used in operating activities was $1.8 million for the quarter, a decrease from $3.6 million in the prior-year quarter, primarily due to lower R&D spending after the completion of the GTx-104 trial[166] - The company raised net proceeds of $13.7 million from a private placement in February 2025[169] - Management believes existing cash is sufficient to sustain planned operations for at least the next 12 months, but additional capital will be required beyond that timeframe[164][165] Quantitative and Qualitative Disclosures About Market Risk The company is a smaller reporting company and is therefore not required to provide the information for this item - As a smaller reporting company, Grace Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[178] Controls and Procedures Management, including the CEO and Principal Financial Officer, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025 - Based on an evaluation as of June 30, 2025, management concluded that the company's disclosure controls and procedures were effective[179] - No changes were made to internal controls over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[180] PART II. OTHER INFORMATION Provides additional required disclosures not covered in the financial information section Legal Proceedings The company is not currently a party to any legal proceedings that management believes are likely to have a material adverse effect on its business - The company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business[182] Risk Factors There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes have occurred in the risk factors since the filing of the company's Annual Report[184] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[185] Other Items (Defaults, Mine Safety, Other Information, Exhibits) The company reports no defaults upon senior securities, mine safety disclosures are not applicable, and no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter - The company reports no defaults upon senior securities[186] - Mine safety disclosures are not applicable to the company[187] - A list of exhibits filed with the report is provided, including certifications and XBRL data files[189]