Company: GRCE
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001140361-25-041804
Chunk: 3

Company: Grace Therapeutics, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 8
Chunk 3
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 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 research organization agreements, and valuation of intangibles and goodwill. Estimates and assumptions are also involved in determining the extent to which research and development expenses qualify for research and development tax credits. The Company recognizes tax credits once it has reasonable assurance that they will be realized.
   
   Recent accounting pronouncements 

   In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization and depletion) in commonly presented expense captions (such as cost of sales, SG&A and research and development).

   ASU 2024-03 applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the effect of adopting this new guidance on its consolidated financial statements and disclosures. The Company is currently assessing the impact of the new
guidance on its financial statement disclosures.

   The Company has considered all other recent accounting pronouncements and concluded that they are either not applicable to the Company’s business or that the effect is not expected to be material to the consolidated financial statements as a result of future adoption.

  12
  

   3. Fair value measurements
   
   Assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 are as follows:  

      Total

      Quoted prices

      in active markets

      (Level 1)

      Significant other

      observable inputs

      (Level 2)

      Significant

      unobservable inputs