Company: GRCE
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001140361-25-030398
Chunk: 16

Company: Grace Therapeutics, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Item 8
Chunk 16
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 its net domestic deferred tax assets, for which realization cannot be considered more likely than not at this time. Management assesses the need for the valuation allowance on a quarterly basis. In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and past financial performance.

   On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provision of the Tax Cuts and Jobs Act, modification to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and other implemented through 2027. We are currently assessing the impact of this legislation on our unaudited condensed consolidated financial statements.

   11. Commitments and contingencies

   Research and development contracts and contract research organizations agreements
   
   The Company utilizes CMOs for the development and production of clinical materials and CROs to perform services related to its clinical trials. Pursuant to the agreements with these CMOs and CROs, the Company has either the right to terminate the agreements without penalties or under certain penalty conditions. As of June 30, 2025, the Company has $185 of commitments to CMOs for the next twelve months.  
  
   Legal proceedings and disputes
   
   In the ordinary course of business, the Company is at times subject to various legal proceedings and disputes. The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that the Company will incur a loss and the amount of the loss can be reasonably estimated, the Company records a liability in its unaudited condensed consolidated financial statements. These legal contingencies may be adjusted to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of loss is not estimable, the Company does not accrue legal contingencies. While the outcome of legal proceedings is inherently uncertain, based on information currently available, management believes that it has established appropriate legal reserves. No reserves or liabilities have been accrued at June 30, 2025.

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     Item 2.

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

   This management’s discussion and analysis (“MD&A”) is