Grace Therapeutics, Inc.: Form 10-Q for the period ended Jun 30, 2026

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

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 June 30, 2026 and for the three months then ended. This MD&A also explains the material variations in our operations, financial positions and cash flows for the three months ended June 30, 2026 and 2025.

Market data, and certain industry data and forecasts included in this MD&A were obtained from internal Company 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 our management’s 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 quarterly report and in our most recently filed Annual Report on Form 10-K for the year ended March 31, 2026, filed with the Securities and Exchange Commission (the “SEC”) on June 18, 2026 (the “Annual Report”). This MD&A contains forward-looking information. You should review our Special Note Regarding Forward-Looking Statements presented at the beginning of this quarterly report.

This MD&A should be read in conjunction with our unaudited condensed consolidated interim financial statements for the three months ended June 30, 2026 and 2025 included elsewhere in this quarterly report. Our unaudited condensed consolidated financial statements were prepared in accordance with U.S. GAAP.

All amounts appearing in this 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.

Business Overview

We are focused on developing and commercializing products for rare and orphan diseases that have the potential to improve clinical outcomes by using our novel drug delivery technologies. We seek to apply new proprietary formulations to approved and marketed pharmaceutical compounds to achieve enhanced efficacy, faster onset of action, reduced side effects, more convenient drug delivery and increased patient compliance; all of which could result in improved patient outcomes. The active pharmaceutical ingredients used in the drug candidates under development by us may be already approved in a target indication or could be repurposed for use in new indications.

Our therapeutic pipeline consists of three unique clinical-stage drug candidates supported by an intellectual property portfolio of more than 79 granted and pending patents in various jurisdictions worldwide. These drug candidates aim to improve clinical outcomes in the treatment of rare and orphan diseases by applying proprietary formulation and drug delivery technologies to existing pharmaceutical compounds to achieve improvements over the current standard of care, or to provide treatment for diseases with no currently approved therapies.

The existing well understood efficacy and safety profiles of these marketed compounds provide the opportunity for us to utilize the Section 505(b)(2) regulatory pathway under the Federal Food, Drug and Cosmetic Act (“FDCA”) for the development of our reformulated versions of these drugs, and therefore may provide a potentially shorter path to regulatory approval. Under Section 505(b)(2), if sufficient support of a product’s safety and efficacy either through previous U.S. Food and Drug Administration (“FDA”) experience or sufficiently within the existing and accepted scientific literature, can be established, it may eliminate the need to conduct some of the pre-clinical studies and clinical trials that new drug candidates might otherwise require.

We believe rare disorders represent an attractive area for drug development, and there remains an opportunity for us to utilize already approved drugs that have established safety profiles and clinical experience to potentially address significant unmet medical needs. A key advantage of pursuing therapies for rare disorders is the potential to receive orphan drug designation (“ODD”) from the FDA. Our three drug candidates have received ODD status and, provided certain conditions are met at new drug application approval, those candidates, if approved, will be entitled to orphan drug exclusivity (“ODE”), which blocks FDA from approving for seven years any other application for a product that is the same drug for the same orphan indication, except in limited circumstances, such as a showing of clinical superiority to the product with ODE. ODD status can also result in tax credits of up to 25% of clinical development costs conducted in the United States upon marketing approval and a waiver of the New Drug Application (“NDA”) fees, which we estimate can translate into savings of approximately $4.3 million for our lead drug candidate, GTx-104. Developing drugs for rare diseases can often allow for clinical trials that are more manageably scaled and may require a smaller, more targeted commercial infrastructure.

The specific diseases targeted for drug development by us are well understood, although the patient populations suffering from such diseases may remain poorly served by available therapies or, in some cases, approved therapies do not yet exist. We aim to effectively treat debilitating symptoms that result from these underlying diseases.

Our management team possesses significant experience in drug formulation, drug delivery research and development, clinical and pharmaceutical development, manufacturing, regulatory affairs, business development, as well as late-stage drug development and commercialization. Importantly, our team is comprised of industry professionals with deep expertise and knowledge, including a world-renowned practicing neurosurgeon-scientist and respected authority in aneurysmal subarachnoid hemorrhage, as well as product development, chemistry, manufacturing and controls (“CMC”), planning, implementation, management, and execution of global Phase 2 and Phase 3 trials for GTx-104, and drug commercialization.

Recent Developments

GTx-104

GTx-104 is a clinical stage, novel, injectable formulation of nimodipine being developed for IV infusion in aSAH patients to address significant unmet medical needs. The unique nanoparticle technology of GTx-104 facilitates aqueous formulation of insoluble nimodipine for a standard peripheral IV infusion.

In April 2026, the FDA issued a Complete Response Letter (“CRL”) in response to our NDA submission for GTx-104. The CRL referenced certain items in the CMC and non-clinical sections of the application, which we believe can be addressed in a resubmission of the NDA. The items cited by the FDA include the current good manufacturing practice (“cGMP”) compliance status of our contract manufacturer. This is a facility-level matter, and not a GTx-104 product-specific quality finding. The CRL also cited additional leachables data time points and excipient toxicology risk assessments. The CRL did not identify any clinical safety or efficacy deficiencies and did not request additional clinical data. We intend to address each of the CRL items in our planned resubmission, including completing the required non-clinical studies.

Following a Type A meeting with the FDA regarding the CRL, we received the FDA’s official meeting minutes constituting the official record of the meeting. The plan described below reflect our planned approach to addressing the items cited in the CRL following the Type A meeting and our review of the official minutes.

We have initiated a dual-source manufacturing strategy for GTx-104 to mitigate potential remediation issues from our current contract manufacturer and provide flexibility, while continuing to address the remaining CMC and nonclinical items identified in the CRL. As such, a technology transfer to a second, U.S.-based contract manufacturer is already underway. The timing of NDA resubmission will reflect the manufacturing pathway that reaches readiness first: either (i) the U.S.-based facility, which would require completion of a full CMC package supported by 12 months of stability data following the technology transfer; or (ii) our current contract manufacturer, if it successfully remediates its FDA compliance issues and is able to support the NDA sooner. Additional information regarding the CRL and the Company's regulatory activities is provided below.

2026 Private Placement

In August 2026, we entered into a securities purchase agreement (the “2026 Purchase Agreement”) with certain institutional and accredited investors in connection with a private placement of shares of our Common Stock (the “2026 Private Placement”). Pursuant to the 2026 Purchase Agreement, we offered and sold in the 2026 Private Placement an aggregate of 4,761,904 shares of Common Stock at a purchase price of $2.10 per share. The net proceeds to us from the 2026 Private Placement were approximately $9,100, after deducting fees and expenses.

Our Pipeline

GTx-104 is a clinical stage, novel, injectable formulation of nimodipine being developed for IV infusion in aSAH patients to address significant unmet medical needs. The unique nanoparticle technology of GTx-104 facilitates aqueous formulation of insoluble nimodipine for a standard peripheral IV infusion. GTx-104 provides a convenient IV delivery of nimodipine in the Intensive Care Unit potentially eliminating the need for nasogastric tube administration in unconscious or dysphagic patients. Intravenous delivery of GTx-104 also has the potential to lower food effects, drug-to-drug interactions, and eliminate potential dosing errors. Further, GTx-104 has the potential to better manage hypotension in aSAH patients. GTx-104 has been administered in over 200 patients and healthy volunteers and was well tolerated with significantly lower inter- and intra-subject pharmacokinetic variability compared to nimodipine oral capsules.

GTx-102 is targeted for the treatment of ataxia-telangiectasia (“A-T”) in a pediatric population. A-T is caused by mutations in the ataxia telangiectasia mutated gene. Children with A-T experience cerebellar ataxia and other motor dysfunctions, oculomotor apraxia, dysarthria, and dysphagia. A Phase-1 pharmacokinetic study was successfully completed and GTx-102 was well tolerated with no serious events reported.

GTx-101 is a topical bio adhesive film-forming bupivacaine spray for Postherpetic Neuralgia (“PHN”), which can be persistent and often causes debilitating pain following infection by the shingles virus. Four single-dose Phase 1 trials to evaluate the PK, safety, dose proportionality and tolerability of GTx-101 have been performed. In these trials, no serious adverse events were reported and GTx-101 was well tolerated. We believe that GTx-101 could be administered to patients with PHN to treat pain associated with the disease.

In May 2023, we implemented a strategic realignment plan that resulted in engaging a new management team, streamlining our research and development activities, and greatly reducing our workforce. Following the realignment, we are concentrating on the development of our lead product candidate GTx-104. In June 2026, we decided to not resume internal development funding for GTx-102 or GTx-101 under our current operating plan.

GTx-104 Overview

About aneurysmal Subarachnoid Hemorrhage (aSAH)

aSAH is bleeding over the surface of the brain in the subarachnoid space between the brain and the skull, which contains blood vessels that supply the brain. A primary cause of such bleeding is the rupture of an aneurysm in the brain. aSAH is characterized by high mortality (up to 25% early mortality) and significant potential of neurological decline (approximately 40%). The result is a relatively uncommon type of stroke that accounts for about 5% of all strokes and an estimated 42,500 U.S. hospital treated patients per year. Patients are typically hospitalized for two to four weeks following aSAH, with the most severe cases extending to a month or more. Due to the length of hospital stay and disproportionately high mortality and morbidity, aSAH has significant cost of care impact.

In contrast to more common types of ischemic stroke in elderly individuals, aSAH often occurs at a relatively young age, with approximately half the affected patients younger than 60 years old. Approximately 10% to 15% of aSAH patients die before reaching the hospital, and those who survive the initial hours post hemorrhage are admitted or transferred to tertiary care centers with high risk of complications, including rebleeding and systemic manifestations affecting cardiovascular, pulmonary, and renal function.

Unmet Needs with Nimodipine Oral Capsules

Nimodipine was granted FDA approval in 1988 and is the only approved drug that has been clinically shown to improve neurological outcomes in aSAH patients. It is only available in the United States as a generic oral capsule, generic oral liquid solution and as a branded oral liquid solution called NYMALIZE™, which is manufactured and sold by Arbor Pharmaceuticals (acquired in September 2021 by Azurity Pharmaceuticals). Nimodipine has poor water solubility and high permeability characteristics because of its high lipophilicity. Additionally, orally administered nimodipine has dose-limiting side-effects such as hypotension, poor absorption and low bioavailability resulting from high first-pass metabolism, and a narrow administration window as food effects lower bioavailability significantly. Due to these issues, blood levels of orally administered nimodipine can be highly variable, making it difficult to manage blood pressure in aSAH patients, often leading to frequent dose interruptions. Nimodipine capsules are also difficult to administer, particularly to unconscious patients or those with impaired ability to swallow, while the oral liquid solution has tolerability challenges due to solubility limitations of nimodipine.

GTx-104 Technology

Our lead drug candidate, GTx-104, is a novel injectable formulation of nimodipine for the treatment of aSAH. This formulation offers several potential advantages over oral administration of nimodipine that is the current Standard of Care (SoC) in the United States.

Novel injectable formulation of nimodipine

Overcomes solubility limitations of nimodipine

A patented formulation that uses non-ionic surfactant micelles as the drug carrier to solubilize nimodipine

Simple to prepare in a pharmacy and stable at room temperature

Value Proposition

GTx-104 provides a convenient IV delivery of nimodipine in the Intensive Care Unit potentially eliminating the need for nasogastric tube administration in unconscious or dysphagic patients. Intravenous delivery of GTx-104 also has the potential to lower food effects, drug-to-drug interactions, and eliminate potential dosing errors. Further, GTx-104 has the potential to better manage hypotension in aSAH patients. GTx-104 has been administered in over 200 patients and healthy volunteers and was well tolerated with significantly lower inter- and intra-subject pharmacokinetic variability compared to nimodipine oral capsules.

GTx-104 is designed to address significant unmet medical needs for patients with aSAH. We believe that this novel nimodipine IV formulation may offer a potential value to physicians, hospitals, and their patients.

GTx-104 Market Opportunity

Approximately 42,500 patients in the United States are affected by aSAH per year. Company sponsored third party market research including claims analysis suggests that aSAH incidence may be as high as approximately 70,000 per year in the United States. Outside of the United States, annual cases of aSAH are estimated at approximately 60,000 in the European Union, and approximately 150,000 in China.

The unmet needs in the treatment of aSAH patients and the potential of GTx-104 to address the limitations of the current standard of care were the subject of a Key Opinion Leader event we hosted in November 2024. In an independent market research survey we conducted of hospital administrators and critical and neuro intensive care physicians at institutions with Comprehensive or Advanced Stroke Center certification who are involved in purchasing decisions for their institutions/units, respondents reported 80% likelihood of adopting an IV formulation of nimodipine, assuming 100% bioavailability, better safety, no food effects, effective hypotension management, potential hospital value and patient value.

Clinical Data

Pivotal Phase 3 STRIVE-ON Randomized Safety Trial

The STRIVE-ON trial was a prospective, randomized open-label Phase 3 trial of GTx-104 compared with nimodipine oral capsules in patients hospitalized with aSAH. 50 patients were administered GTx-104 and 52 patients received nimodipine oral capsules. The primary endpoint was the number of patients with at least one episode of clinically significant hypotension reasonably considered to be caused by the drug, and additional endpoints included safety, clinical, and pharmacoeconomic outcomes. Each patient was evaluated for up to 90 days inclusive of the 21-day treatment period. There was a higher proportion of the most severe cases of aSAH (Hunt & Hess Grade V) with the worst prognosis in the GTx-104 arm (8%) compared to the nimodipine oral capsule arm (2%).

On September 25, 2024, we announced the completion of enrollment in our Phase 3 STRIVE-ON trial for GTx-104. On February 10, 2025, we announced the trial met its primary endpoint and provided evidence of clinical benefit for GTx-104 compared to nimodipine oral capsules. Patients receiving GTx-104 were observed to have a 19% reduction in at least one incidence of clinically significant hypotension compared to nimodipine oral capsules (28% versus 35%). Other measures also favored or were comparable to GTx-104, including:

54% of patients who received GTx-104 had a relative dose intensity of 95% or higher of the prescribed dose compared to only 8% on nimodipine oral capsules .

29% relative increase in the number of patients receiving GTx-104 compared to nimodipine oral capsules with favorable outcomes at 90 days follow up on the modified Rankin scale. Quality of life as measured by EQ-5D-3L also favored patients receiving GTx-104 versus nimodipine oral capsules .

Fewer intensive care unit (ICU) readmissions, ICU days, and ventilator days for patients receiving GTx-104 versus nimodipine oral capsules .

Adverse events were comparable between the two arms and no new safety issues were identified with patients receiving GTx-104. All deaths in both arms of the trial were due to severity of the patient’s underlying disease. There were eight deaths on the GTx-104 arm compared to four deaths on the nimodipine oral capsule arm. The survival status of one patient on the nimodipine oral capsule arm was unknown. No deaths were determined to be related to GTx-104 or nimodipine oral capsules.

Furthermore, pharmacoeconomic measures favored the use of GTx-104 for patients with aSAH.

We believe these data validate the GTx-104 value proposition. If approved, GTx-104 has the potential to address significant challenges with nimodipine oral capsule administration and may transform the standard of care for patients with aSAH.

GTx-104 Phase 1 PK Trial

In September 2021, we initiated our pharmacokinetic (“PK”) bridging trial to evaluate the relative bioavailability of GTx-104 compared to currently marketed nimodipine oral capsules in approximately 50 healthy subjects. This PK trial established the 505(b)(2) regulatory pathway for GTx-104.

Final results from this PK trial were reported in May 2022, and showed that the bioavailability of GTx-104 compared favorably with nimodipine oral capsules in all subjects, and no serious adverse events were observed for GTx-104.

All endpoints indicated that statistically there was no difference in exposures between GTx-104 and nimodipine oral capsules over the defined time periods for both maximum exposure and total exposure. Plasma concentrations obtained following IV administration showed significantly less variability between subjects as compared to nimodipine oral capsules because IV administration is not as sensitive to some of the physiological processes that affect oral administration, such as taking the drug with and without meals, variable gastrointestinal transit time, variable drug uptake from the gastrointestinal tract into the systemic circulation, and variable hepatic blood flow and hepatic first pass metabolism. Previous studies have shown these processes significantly affect the oral bioavailability of nimodipine, and therefore cause oral administration to be prone to larger inter- and intra-subject variability.

The bioavailability of nimodipine oral capsules observed was only approximately 7% compared to 100% for GTx-104. Consequently, about one-twelfth the amount of nimodipine is delivered with GTx-104 to achieve comparable PKs as with nimodipine oral capsules. These data are presented in the chart below.

Regulatory

In April 2025, we announced details of a Type C written meeting response with the FDA. The purpose of this meeting was to obtain feedback on the completed Phase 3 STRIVE-ON safety trial of GTx-104 and our NDA submission, including clinical, non-clinical, and CMC requirements.

In June 2025, we submitted to the FDA an NDA for GTx-104 for the treatment of aSAH, which was accepted for review by the FDA in August 2025 with an April 23, 2026, Prescription Drug User Fee Act (“PDUFA”) target date for completing FDA’s review of our submission. The NDA included clinical results from our STRIVE-ON trial for GTx-104.

As previously noted, in April 2026, the FDA issued a CRL in response to our NDA submission for GTx-104. The CRL referenced certain items in the CMC and non-clinical sections of the application, which we believe can be addressed in a resubmission of the NDA. The items cited by the FDA include the cGMP compliance status of our contract manufacturer. This is a facility-level matter, and not a GTx-104 product-specific quality finding. The CRL also cited additional leachables data time points and excipient toxicology risk assessments. The CRL did not identify any clinical safety or efficacy deficiencies and did not request additional clinical data. We intend to address each of the CRL items in our planned resubmission, including completing the required non-clinical studies.

Following a Type A meeting with the FDA regarding the CRL, we received the FDA’s official meeting minutes constituting the official record of the meeting. The plan described below reflect our planned approach to addressing the items cited in the CRL following the Type A meeting and our review of the official minutes.

We have initiated a dual-source manufacturing strategy for GTx-104 to mitigate potential remediation issues from our current contract manufacturer and provide flexibility, while continuing to address the remaining CMC and nonclinical items identified in the CRL. As such, a technology transfer to a second, U.S.-based contract manufacturer is already underway. The timing of NDA resubmission will reflect the manufacturing pathway that reaches readiness first: either (i) the U.S.-based facility, which would require completion of a full CMC package supported by 12 months of stability data following the technology transfer; or (ii) our current contract manufacturer, if it successfully remediates its FDA compliance issues and is able to support the NDA sooner.

We intend to resubmit our NDA for GTx-104 for the treatment of aSAH once we have fully addressed the items cited in the CRL, and plan to report progress as key milestones are achieved. The timing of any FDA reinspection of the current contract manufacturer is determined by the FDA and is outside our control.

GTx-102 Overview

GTx-102 is a novel, concentrated oral-mucosal spray of betamethasone intended to improve neurological symptoms of A-T, a rare genetic progressive autosomal recessive neurodegenerative disorder that affects children, for which there are currently no FDA-approved therapies. GTx-102 is a stable, concentrated oral spray formulation comprised of the gluco-corticosteroid betamethasone that, together with other excipients, can be sprayed conveniently over the tongue of the A-T patient and is rapidly absorbed.

We have licensed the data from the multicenter, double-blinded, randomized, placebo-controlled crossover trial from Azienda Ospedaliera Universitaria Senese, Siena, Italy, where Dr. Zannolli et. al. studied the effect of oral liquid solution of betamethasone to reduce ataxia symptoms in patients with A-T. This oral liquid solution is not marketed in the United States and therefore is not available for clinical use. Currently, betamethasone is only available in the United States as an injectable or as a topical cream. This license gives us the right to reference the trial’s data in our NDA filing. On November 12, 2015, we submitted the data from the Zannolli trial to the FDA’s Division of Neurology at a pre-Investigational New Drug (“IND”) meeting and received guidance from the agency on the regulatory requirements to seek approval.

GTx-102 update

As previously disclosed, in May 2023 we made a strategic decision to defer clinical development of GTx-102 to prioritize resources toward GTx-104 and its advancement toward an NDA filing.

In June 2026, following continued evaluation of strategic priorities and focus on GTx-104, we determined we will not resume internal development funding for GTx-102 under our current operating plan. Accordingly, we determined that the remaining carrying value of the GTx-102 IPR&D asset is no longer recoverable on an internal-development basis.

As of March 31, 2026, the remaining capitalized carrying value of GTx-102 IPR&D was $9.2 million. We recognized an impairment charge for the full remaining capitalized carrying value in the first quarter of fiscal year 2027.

Consistent with our stated position since 2023, we retain all intellectual property and patent rights associated with GTx-102 and continue to evaluate business development opportunities, including out-licensing, partnerships, or non-dilutive arrangements, that would enable advancement of the program without requiring our direct capital investment. GTx-102 may provide value through such a transaction. There can be no assurance that any such transaction will be completed on favorable terms or at all.

GTx-101 Overview

GTx-101 is a non-narcotic, topical bio-adhesive film-forming bupivacaine spray designed to ease the symptoms of patients suffering with Postherapetic Neuralgia (PHN), which is neuropathic pain due to damage caused by the varicella zoster virus. GTx-101 is administered via a metered-dose of bupivacaine spray and forms a thin bio-adhesive topical film on the surface of the patient’s skin, which enables a touch-free, non-greasy application. It also comes in convenient, portable 30 ml plastic bottles. Unlike oral gabapentin and lidocaine patches which are used for the treatment of PHN, we believe that the biphasic delivery mechanism of GTx-101 has the potential for rapid onset of action and continuous pain relief for up to eight hours. No skin sensitivity was reported in a Phase 1 trial.

GTx-101 update

As previously disclosed, in May 2023 we made a strategic decision to defer clinical development of GTx-101 to prioritize resources toward GTx-104 and our advancement toward an NDA filing.

In June 2026, following continued evaluation of strategic priorities and focus on GTx-104, we determined we will not resume internal development funding for GTx-101 under our current operating plan. Accordingly, we determined that the remaining carrying value of the GTx-101 IPR&D asset is no longer recoverable on an internal-development basis.

As of March 31, 2026, the remaining capitalized carrying value of GTx-101 IPR&D was $4.3 million. We recognized an impairment charge for the full remaining capitalized carrying value in the first quarter of fiscal year 2027.

Consistent with our stated position since 2023, we retain all intellectual property and patent rights associated with GTx-101 and continue to evaluate business development opportunities, including out-licensing, partnerships, or non-dilutive arrangements, that would enable advancement of the program without requiring our direct capital investment. GTx-101 may provide value through such a transaction. There can be no assurance that any such transaction will be completed on favorable terms or at all.

Commercialization Strategy

We have worldwide commercialization rights for all our pipeline drug candidates and plan to maximize the value of each of our drug candidates over time. Currently, we have prioritized the development of GTx-104 over that of GTx-102 and GTx-101. If we receive regulatory approval for GTx-104 in the U.S., we plan to commercialize GTx-104 with a highly experienced and targeted hospital-based sales force. We may seek commercial partnerships to fully exploit the market potential of GTx-104 in the U.S. and in territories outside the U.S. It is possible that we out-license or sell GTx-102 and/or GTx-101 for the U.S. and/or global markets.

Basis of Presentation of the Financial Statements

Our unaudited condensed consolidated 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 quarterly reports filed on Form 10-Q. All intercompany transactions and balances are eliminated on consolidation.

Our assets as of June 30, 2026 include cash and cash equivalents of $13,756 and intangible assets and goodwill of $35,733. Our current liabilities of $1,250 as of June 30, 2026 were comprised primarily of amounts due to or accrued for creditors.

Results of Operations

Comparison of the three months ended June 30, 2026 and 2025

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025:

(expressed in thousands)

31

Net Loss

The net loss of $15,790 or $0.91 per share, for the three months ended June 30, 2026, increased by $12,428 from the net loss of $3,362, or $0.21 per share, for the three months ended June 30, 2025. The increase in net loss was primarily due to the $13,533 impairment of IPR&D related to GTx-101 and GTx-102 as further described below. This increase was partially offset by a $487 favorable change in the change in fair value of derivative warrant liabilities, and a $448 decrease in general and administrative expenses.

Consistent with our previously announced 2023 decision to deprioritize these two programs in favor of GTx-104, and following reevaluation of strategic priorities during the quarter, we recorded a full impairment of the remaining IPR&D carrying value associated with GTx-101 and GTx-102. We also evaluated the carrying value of our IPR&D related to GTx-104 following the receipt of the CRL. Based on the assessment, we determined that the fair value exceeds the carrying amount, and no impairment charge was required for the quarter ended June 30, 2026.

Research and development expenses

Research and development expenses consist primarily of:

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

salaries and related expenses for research and development personnel, including expenses related to equity compensation.

We record research and development expenses as incurred.

Our research and development during the three months ended June 30, 2026 were focused primarily on addressing certain items cited in the CRL from the FDA for our GTx-104 drug candidate. Our research and development during the three months ended June 30, 2025 were focused primarily on our clinical development program for our GTx-104 drug candidate and submission of our NDA to the FDA.

The following table summarizes our research and development expenses:

(expressed in thousands)

1 Total third-party research and development expenses are calculated before salaries and benefits and stock-based compensation.

Total research and development expenses for the three months ended June 30, 2026 were $697, compared to $955 for the three months ended June 30, 2025. The decrease of $258 was primarily due to a $155 decrease in research activities mainly due to the completion of our GTx-104 pivotal Phase 3 STRIVE-ON safety clinical trial and submission of our NDA to the FDA during the prior period whereas the current period we were only focused on addressing certain items identified in the CRL from the FDA.

Stock-based compensation of $31 for the three months ended June 30, 2026, decreased by $38 compared to $69 for the three months ended June 30, 2025. The decrease was primarily due to the issuance of new stock option awards during the three months ended June 30, 2025. There were no stock option awards granted during the three months ended June 30, 2026.

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, consulting, rent and utilities and insurance.

(expressed in thousands)

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

General and administrative expenses were $1,687 for the three months ended June 30, 2026, a decrease of $448 from $2,135 for the three months ended June 30, 2025. The decrease was primarily a result of a decrease in pre-commercial planning activities for GTx-104 offset in part by increased legal costs related to the Type A meeting with the FDA, and a decrease in stock-based compensation of $160 due to the issuance of new stock option awards for the three months ended June 30, 2025 with no such issuance occurring for the three months ended June 30, 2026.

Impairment of intangible assets

The increase in impairment of intangible assets was attributable to our strategic decision in June 2026 to discontinue development of GTx-101 and GTx-102. As a result of this decision, we determined that the related capitalized carrying value of GTx-101 and GTx-102 IPR&D was no longer recoverable and recorded an impairment charge of $13,533, representing the full capitalized carrying value of GTx-101 and GTx-102 IPR&D. The impairment charge was recognized within operating expenses in the condensed consolidated statements of loss and comprehensive loss for the three months ended June 30, 2026.

Change in fair value of derivative warrant liabilities

The decrease in the fair value of derivative warrant liabilities for the three months ended June 30, 2026 of $487 was attributable to the cancellation of the warrant liability as the September 2023 private placement common warrants expired on October 21, 2025, which was the 60th day after the date of the acceptance by the FDA of the NDA for our product candidate GTx-104.

Interest and other income, net

Interest and other income, net was $141 for the three months ended June 30, 2026, compared to $205 for the three months ended June 30, 2025. The $64 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.

Liquidity and Capital Resources

Cash flows and financial condition for the three months ended June 30, 2026 and 2025

Summary

As of June 30, 2026, cash and cash equivalents were $13,756, a net decrease of $3,221 compared to cash and cash equivalents of $16,977 at March 31, 2026.

As described below, in August 2026, we completed a private placement of our Common Stock with certain institutional and accredited investors. Net proceeds to us were approximately $9,100. As of August 11, 2026, cash and cash equivalents were $22,231. We plan to use our cash and cash equivalents towards resolving the items cited in the FDA’s CRL, working capital and other general corporate purposes. We believe our existing cash and cash equivalents will be sufficient to sustain planned operations, including the activities to address the items cited in the CRL, through the end of calendar 2028.

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 we 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 warrant exercises and 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

Net cash used in operating activities for the three months ended June 30, 2026 was $3,221, compared to $1,801 for the three months ended June 30, 2025, an increase of $1,420. The increase in net cash used in operating activities was primarily due to changes in trade and other payables of $1,608, prepaid expenses of $127, offset by changes in fair value of derivative warrant liability of $487.

Net cash used in investing activities

There were no investing activities for the three months ended June 30, 2026 and 2025.

Net cash used in financing activities

Net cash used in financing activities for the three months ended June 30, 2025 consisted of payment of stock issuance costs of $327. There were no financing activities for the three months ended June 30, 2026.

2026 Private Placement

In August 2026, we entered into a securities purchase agreement (the “2026 Purchase Agreement”) with certain institutional and accredited investors in connection with a private placement of shares of our Common Stock (the “2026 Private Placement”). Pursuant to the 2026 Purchase Agreement, we offered and sold in the 2026 Private Placement an aggregate of 4,761,904 shares of Common Stock at a purchase price of $2.10 per share. The net proceeds to us from the 2026 Private Placement were approximately $9,100, after deducting fees and expenses.

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, 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.

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 June 30, 2026, we had $95 of commitments to CMOs and $0 of commitments to CROs for the next twelve months.

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 unaudited condensed 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.

Critical Accounting Policies

During the three months ended June 30, 2026, there were no material changes to our critical accounting policies from those described in our Annual Report for the year ended March 31, 2026.

Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, our management, with the participation of our Chief Executive Officer and Principal Financial Officer, 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 June 30, 2026, our existing disclosure controls and procedures were effective. It should be noted that while our Chief Executive Officer and Principal Financial Officer 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, but not absolute, assurance that the objectives of the control system are met.

Changes in Internal Control over Financial Reporting

No changes were made to our internal controls over financial reporting that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.