What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-06-21 compared with 2023-06-23 · 929 added, 994 removed, 541 unchanged (78% of the section changed)

Controls and Procedures Disclosure Controls and Procedures

As of the end of the period covered by this annual report, our management, with the participation of our chief executive officer (“CEO”) and chief financial officer (“CFO”), 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.

As of the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of our chief executive officer (“CEO”) and principal financial officer (“PFO”), 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 March 31, 2024, our existing disclosure controls and procedures were effective.

It should be noted that while the CEO and CFO 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.

It should be noted that while the CEO and PFO 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, not absolute, assurance that the objectives of the control system are met.

Management’s Report on Internal Controls over Financial Reporting

Our management, with the participation of our CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of our financial statements.

Management’s Report on Internal Controls over Financial Reporting

Our management, with the participation of our CEO and PFO, is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of our consolidated financial statements.

All internal control systems, no matter how well designed, have inherent limitations.

2 unchanged sentences

Our management conducted an assessment of the design and operation effectiveness of our internal control over financial reporting as of March 31, 2024.

In making this assessment, we used the criteria established within the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, our management has concluded that, as of March 31, 2024, our internal control over financial reporting was effective.

Changes in Internal Control over Financial Reporting

No changes were made to our internal controls over financial reporting that occurred during the year ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

No changes were made to our internal controls over financial reporting that occurred during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

We are a non-accelerated filer under the Exchange Act and not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

Therefore, this annual report does not include an attestation report of our registered public accounting firm regarding our management’s assessment of internal control over financial reporting.

Therefore, this Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding our management’s assessment of internal control over financial reporting.

Other Information

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

5 unchanged sentences

Chairman of the Board

September 2023

Director, Chairman of Audit Commitee and Chairman of Governance and Human Resources Committee

September 2023

Director, Chairman of Audit Committee and Chairman of Governance and Human Resources Committee

George Kottayil

Edward Neugeboren

Executive Officers

Prashant Kohli

Chief Executive Officer

Chief Financial Officer

September 2020

Chief Executive Officer and Director

CEO since April 2023, director since October 2023

Vice President, Finance, Principal Financial Officer and Principal Accounting Officer

Loch Macdonald

6 unchanged sentences

Kavuru brings, in his vision and management, a broad-based understanding of the global pharmaceutical industry with expertise in strategic planning, product and business development, and operations.

In addition to previously serving as the Chairman of the Grace Therapeutics board of directors, Mr.

In addition to previously serving as the Chairman of the Grace Therapeutics Inc.

(“Grace Therapeutics”) board of directors, Mr.

Kavuru is the Founder, Chairman and Chief Executive Officer of Rising Pharma Holdings, Inc., a U.S.

generic pharmaceutical company, and Acetris Pharma Holdings, LLC, a generic pharmaceutical company serving U.S.

government agencies.

government agencies, positions Mr.

Kavuru has held since January 2013 and January 2016, respectively.

Previously, Mr.

Kavuru founded Citron Pharma & Lucid Pharma, which were sold to Aceto Corporation in 2016, Casper Pharma LLC, an emerging specialty brand pharmaceutical company, and Gen-Source RX, a national distributor of generic pharmaceuticals that was acquired by Cardinal Health in 2014.

Kavuru founded Citron Pharma and Lucid Pharma, each of which were sold to Aceto Corporation in 2016, Casper Pharma LLC, an emerging specialty brand pharmaceutical company, and Gen-Source RX, a national distributor of generic pharmaceuticals that was acquired by Cardinal Health in 2014.

Kavuru also co-founded Celon Labs, a specialty oncology and critical care pharmaceutical company that was acquired by Zanzibar Pharma Limited, a portfolio company of CDC Group.

Kavuru was initially elected to the Board as a nominee of former shareholders of Grace Therapeutics in connection with Acasti’s acquisition of Grace Therapeutics.

He is a registered pharmacist in the state of New York, holds a B.S.

in Pharmacy from HKE College of Pharmacy, Bulgarga, India, and attended Long Island University, Brooklyn, New York with specialization in industrial pharmacy.

Kuvaru was elected to the Acasti board as a nominee of former shareholders of Grace Therapeutics pursuant to the terms of Acasti’s acquisition of Grace Therapeutics.

Our board of directors believes that Mr.

Kuvaru’s management experience in the pharmaceutical industry, as well as his operational expertise, qualify him to serve on our board of directors.

Until May 2019, Mr.

Olds was the President and Chief Executive Officer of the NEOMED Institute, a research and development organization dedicated to advancing Canadian research discoveries to commercial success.

Prior to NEOMED, he was the Chief Operating Officer of Telesta Therapeutics Inc., a TSX-listed biotechnology company, where he was responsible for finance and investor relations, manufacturing operations, business development, human resources, and strategy.

In 2016, he led the successful sale of Telesta to a larger public biotechnology company.

Prior to Telesta, he was President and Chief Executive Officer of Presagia Corp., and Chief Financial Officer and Chief Operating Officer of Aegera Therapeutics Inc., where he was responsible for clinical operations, business development, finance, and mergers and acquisitions.

At both Telesta and Aegera, Mr.

Olds was responsible for raising equity financing and leading regional and global licensing transactions with life sciences companies.

Olds is currently lead director of Goodfood Market Corp, Chair of Aifred Health, lead director of Cannara Biotech Inc, and director of Presagia Corp.

He has extensive past corporate governance experience serving on the boards of private and public for-profit and not-for-profit organizations.

He holds an M.B.A.

(Finance & Strategy) and M..Sc.

(Renewable Resources) from McGill University.

Our board believes that Mr.

Old’s extensive industry experience and his strong financial background, as well as his service on the board of directors of public and private companies, qualifies him to serve on our board of directors.

Derby has more than two decades of experience and a proven track record within the biopharmaceutical industry, with particular expertise in strategic drug repurposing.

Having founded or co-founded seven biopharmaceutical companies, he most recently launched TardiMed Sciences LLC, a company creation and investment firm in the life sciences.

TardiMed has formed, capitalized and advanced multiple biopharmaceutical companies through development, including Timber Pharmaceuticals, Inc.

TMBR), PaxMedica, Inc.

and Visiox Pharma LLC.

Derby has served as Executive Chairman of the Board of Directors for each of these companies.

Prior to TardiMed, Mr.

Derby co-founded Castle Creek Pharmaceuticals, which he built into a multi-product, late clinical stage company focused on treating rare and debilitating dermatologic conditions.

He also founded Norphan Pharmaceuticals, a biopharmaceutical company focused on the development of drugs for orphan neurologic disease, which he led through its early stages prior to selling the company to Marathon Pharmaceuticals LLC in 2013.

Prior to founding and managing life sciences companies, Mr.

Derby was a private equity investor and venture capitalist, and also worked in management roles at Merck & Co.

and Forest Laboratories Inc.

Derby holds an M.B.A.

from New York University’s Stern School of Business, a M.S.

from the University of Rochester, and a B.S.

from Johns Hopkins University.

Derby was appointed to the Acasti board as a nominee of former shareholders of Grace Therapeutics pursuant to the terms of Acasti’s acquisition of Grace Therapeutics.

Our board of directors believes that Mr.

Derby’s extensive industry and management experience, including his experience in drug repositioning and his strong financial background, qualify him to serve on our board of directors.

Davis has nearly three decades of experience as a Chief Financial Officer and other executive financial positions in commercial and development-stage publicly traded life science companies.

Davis has extensive knowledge and background related to public company accounting and financial reporting rules and regulations as well as the evaluation of financial results, internal controls and business processes.

Since December 2021, Mr.

Davis has been the Chief Financial Officer of XyloCor Therapeutics, Inc., a clinical-stage gene therapy company developing potential therapies for patients with cardiovascular disease.

Davis was the Chief Financial Officer of Verrica Pharmaceuticals Inc., a publicly traded, NDA-stage dermatology therapeutics company, from October 2019 to July 2021.

Prior to joining Verrica, Mr.

Davis was the Chief Financial Officer of Strongbridge Biopharma plc, a public commercial-stage biopharmaceutical company, from March 2015 to September 2019.

Davis was previously the Chief Financial Officer at Tengion, Inc., a publicly traded regenerative medicine company until Tengion, Inc.

filed for bankruptcy in December 2014, and Neose Technologies, Inc., a publicly traded biopharmaceutical company.

Davis is licensed as a certified public accountant, and received a B.S.

in accounting from Trenton State College and an M.B.A.

from The Wharton School at the University of Pennsylvania.

George Kottayil

Kottayil has over two decades of experience in the pharmaceutical industry with specific expertise in product development and drug delivery.

He has several approved patents to his credit and is an inventor on multiple FDA approved drug products, a few that have achieved significant success.

He co-founded two pharmaceutical drug development and drug delivery technology companies and was CEO and a member of each of their boards of directors.

Most recently, from October 2014, he co-founded and was CEO and director of Grace Therapeutics, a drug delivery company with a focus on rare and orphan disease which was acquired by Acasti in August 2021.

Kottayil served as Acasti’s Chief Operating Officer from September 2021 to May 2023.

Kottayil has held senior positions in product development, business operations and general management at small to medium life science companies, successfully advancing drug products from bench to FDA approval and launch.

He directed business operations at Unimed Pharmaceuticals Inc., a division of Solvay Pharmaceuticals, now Abbvie, from January 1993 to June 2002, and played a key role in product development and obtaining FDA approval for the company’s NDA products.

Kottayil graduated with a Ph.D.

in Organic and Medicinal Chemistry from the University of Kentucky.

Edward Neugeboren

Neugeboren has over three decades of healthcare experience in pharmaceutical operations, business development, corporate management, investment banking, asset management and institutional equity research.

Since January of 2016, Mr.

Neugeboren has served as the Chief Strategy Officer of Cronus Pharma, LLC, a fully integrated research and development, manufacturing and sales, and marketing pharmaceutical company.

Neugebroren leads Cronus Pharma’s commercial operations, strategic planning and acquisitions and is also responsible for developing and executing overall corporate strategy as well as corporate and portfolio acquisitions and licensing.

Previously, Mr.

Neugeboren was the Chief Strategy Officer for the parent pharmaceutical group comprised of Rising Pharma Holdings, Inc., a generic pharmaceutical company and Casper Pharma, LLC, a specialty pharmaceutical company.

Additionally, Mr.

Neugeboren is Founder and Managing Partner of QuadView Healthcare Advisors, previously named ArcLight Advisors, LLC, a healthcare investment banking and business development firm.

Neugeboren was previously a Managing Director of Ledgemont Capital Group, LLC, an investment banking firm providing strategic and financial advisory services to emerging healthcare and technology companies.

Neugeboren was also a Managing Partner of Third Ridge Capital Management, LLC, a long/short U.S.

equity hedge fund.

Neugeboren holds Series 24, 7 and 63 FINRA security licenses and has graduated with a BA in Economics from Union College.

Prashant Kohli

9 unchanged sentences

He has a BA in Computer Science and Math from Augustana College and an MBA from The Wharton School.

Ford brings over three decades of financial, project management and M&A experience within the healthcare and financial industries.

Ford is an accomplished CPA-CA having served both publicly traded as well as privately owned organizations.

Ford has been responsible for developing business recovery strategies, negotiating M&A transactions, as well as managing quarterly and yearly accounting reports.

Most recently, Mr.

Ford served as Chief Financial Officer and Senior Business Advisor at a private group of Ontario based medical clinics, including the largest chronic pain management practice in Canada.

Prior to that, Mr.

Ford served as Chief Financial Officer at Telesta Therapeutics Inc.

At Telesta Therapeutics, Mr.

Ford helped develop a new business plan and was heavily involved in all capital transactions.

Previously, Mr.

Ford started his own consulting firm, Petersford Consulting, where he provided clients with finance and business risk services.

Ford began his career at Ernst & Young, eventually becoming a Principal, Business Risk Services, developing essential business plans that evaluated revenue and cost profiles supporting budget planning and understanding drivers of growth, specifically with healthcare companies.

Additionally, at Ernst & Young, Mr.

Ford participated in and often led teams in due diligence assignments in relation to M&A or the sale of a business, having extensive experience in developing financial forecasts, product and market valuation, and audits of critical accounting and processes.

Ford holds a B.A.

in Economics, History, and English from the University of Guelph and has a Graduate Diploma in Accounting from the University of McGill.

Ford is a member of the Ontario Institute of Chartered Accountants.

DelAversano, is a certified public accountant and has over twenty-five years of experience in accounting including thirteen years in public accounting.

DelAversano joined the Company in November 2023 as Vice President, Finance.

From 2018 to July 2023, Mr.

DelAversano worked in roles of increasing seniority at OncoSec Medical Incorporated (“OncoSec”), a clinical-stage immuno-oncology company, which positions included Vice President of Finance, Principal Accounting Officer and Controller, and Executive Director of Finance, where he had global responsibility for accounting, external financial reporting, and financial controls covering all aspects of OncoSec’s business.

Prior to joining OncoSec, Mr.

DelAversano was the Director of Financial Reporting and Taxation at Brio Financial Group (“Brio”), where he served as the firm’s Director of Financial Reporting and Taxation, consulting with various public companies in financial reporting, internal control development and evaluation, budgeting and forecasting.

Prior to joining Brio, Mr.

DelAversano was a manager at Bartolomei Pucciarelli, LLC and oversaw its accounting and tax practice with industry focuses in manufacturing, wholesalers and medical devices services.

DelAversano received a B.S.

in Accounting from Rider University.

Loch Macdonald

Macdonald is a world-renowned practicing neurosurgeon-scientist and respected authority in subarachnoid hemorrage.

Macdonald acted as Professor, Department of Surgery, Division of Neurosurgery at the University of Toronto from January 2007 until December 2019, and was Head, Division of Neurosurgery, St.

Michael's Hospital, University of Toronto from January 2007 until December 2015.

He was Professor, Department of Neuorological Surgery, Barrow Neurological Surgery, Barrow Neurological Institute, Phoenix, Arizona, from April 2018 until August 2018;

Macdonald is a world-renowned practicing neurosurgeon-scientist and respected authority in subarachnoid hemorrhage.

Macdonald was as Professor, Department of Surgery, Division of Neurosurgery at the University of Toronto from January 2007 until December 2019, and was Head, Division of Neurosurgery, St.

Michael's Hospital, University of Toronto from January 2007 until

December 2015.

He was Professor, Department of Neurological Surgery, Barrow Neurological Surgery, Barrow Neurological Institute, Phoenix, Arizona, from April 2018 until August 2018;

Fellow, Department of Neurosurgery, University of Illinois Hospitals in Chicago, Illinois from December 2018 until June 2019;

Clinical Professor, Department of Neurological Surgery, University of California San Franciso Fresno, in Fresno, California from July 2019 until September 2021;

Clinical Professor, Department of Neurological Surgery, University of California San Francisco Fresno, in Fresno, California from July 2019 until September 2021;

and from October 2021 to the present has been Neurosurgeon, Community Physicians Group, Community Neurosciences Institute, Community Regional Medical Center and Medical Director of Neurosciences Research, Community Health Partners.

3 unchanged sentences

He completed his Neurosurgery residency at the University of Toronto.

Carrie D’Andrea

D’Andrea is a highly experienced professional with 25 years of experience in the pharmaceutical and biotechnology industry who has built and led the planning, implementation, management, and execution of global Phase 2 and Phase 3 trials for a drug candidate for subarachnoid hemorrhage.

Carrie D’Andrea

D'Andrea was the Vice President of Clinical Operations for Edge Therapeutics Inc.

from October 2014 until March 2019 and for EryDel SpA from October 2020 until April 2021.

D’Andrea was a clinical operations consultant at Aegle Research from July 2021-August 2022 and Praxis Precisions Medicines from September 2022-May 2023.

D’Andrea was named a Healthcare Businesswomen’s Association Rising Star in 2009 and Ms.

D’Andrea was a clinical operations consultant at Aegle Research from July 2021-August 2022 and Praxis Precisions Medicines from September 2022-May 2023.

D’Andrea was named a Healthcare Businesswomen’s Association Rising Star in 2009 and Ms.

D'Andrea received her master's degree in Pharmaceutical Quality and Regulatory Affairs from Temple University and teaches Clinical Trial Design and Operations at Rutgers University in the Master of Business and Science Program.

Kumar is an experienced drug development, CMC, and program management expert supporting investigational and marketed products for rare diseases and neurology.

Kumar is the former product leader of GTX-104 while at Grace Therapeutics Inc.

(which was acquired by the Company in August 2021).

Kumar is the former product leader of GTX-104 while at Grace Therapeutics (which was acquired by the Company in August 2021).

Kumar acted as the Sr.

Director of Program Management at Foresee Pharmaceuticals Inc.

from April 2022 until May 2023 and as Program Leader and Associate Director - R&D at Grace Therapeutics Inc.

between March 2015 and January 2022.

Kumar received a PhD in Pharmaceutical Science from Sunrise University, India, focusing on complex injectable drug delivery systems of highly soluable oncology drugs.

from April 2022 until May 2023 and as Program Leader and Associate Director - R&D at Grace Therapeutics between March 2015 and January 2022.

Kumar received a PhD in Pharmaceutical Science from Sunrise University, India, focusing on complex injectable drug delivery systems of highly soluble oncology drugs.

He has published many research articles and has more than 10 granted patents and many patent applications worldwide to his credit.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the knowledge of Acasti, none of our current directors or executive officers are, or have been, as at the date of this Annual Report on Form 10-K or within the 10 years prior to the date of this Annual Report on Form 10-K, a director, or executive officer of any Company (including Acasti) that:

(a) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant Company access to any exemption under applicable securities legislation, that was in effect for a period of more than 30 consecutive days that was issued while the director or executive officer was acting in the capacity as director or executive officer;

(b) was subject to an order that was issued after the director or executive officer ceased to be a director, CEO or CFO and which resulted from an event that occurred while that person was acting in the capacity as director, CEO or CFO.

To the knowledge of Acasti, other than Mr.

Davis, who was previously the CFO at Tengion, Inc., a publicly traded regenerative medicine company, when it filed for bankruptcy in December 2014, none of Acasti’s current directors or executive officers:

(a) are, or have been, as at the date of this Annual Report on Form 10-K or within the 10 years prior to the date of this Annual Report on Form 10-K, a director or executive officer of any Company (including Acasti) that, while that person was acting in that capacity, or within two years of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;

(b) have, within the 10 years prior to the date of this Proxy Statement/Prospectus, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or

compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or director nominee.

To the knowledge of Acasti, no current director or executive officer has been subject to:

(a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority;

(b) any other penalties or sanctions imposed by a court or regulatory body.

Family Relationships

There are no family relationships between any directors or officers of the Company.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and greater-than-10% stockholders to file forms with the SEC to report their ownership of Company securities and any changes in ownership.

We have reviewed all forms filed electronically with the SEC.

Based on that review and on written information given to us by our officers and directors, we believe that all of our directors, officers and greater-than-10% stockholders filed the required reports on a timely basis under Section 16(a) during 2022, except for Mr.

Macdonald, who on May 26, 2023 filed a Form 3 that was due May 18, 2023.

Code of Business Conduct and Ethics

Please see the section entitled “Code of Business Conduct and Ethics”

in “Item 13.

Certain Relationships and Related Transactions and Director Independence.”

The Board adopted a Code of Business Conduct and Ethics (“Code of Conduct”), for our directors, officers and employees on May 31, 2007, as amended from time to time.

Our Code of Conduct can be found on SEDAR at www.sedar.com and on our website on www.acasti.com.

A copy of the Code of Conduct can also be obtained by contacting our corporate secretary.

We intend to disclose future amendments to or waivers from certain provisions of our Code of Conduct provisions on our website.

Since its adoption by the Board, any breach of the Code of Conduct must be brought to the attention of the Board by our CEO or other senior executives.

No report has ever been filed which pertains to any conduct of a director or executive officer that constitutes a breach to our Code of Conduct.

The Board actively monitors compliance with the Code Conduct and promotes a business environment where employees are encouraged to report malfeasance, irregularities, and other concerns.

The Code of Conduct provides for specific procedures for reporting non-compliant practices in a manner which, in the opinion of the Board, encourages and promotes a culture of ethical business conduct.

The Board has also adopted a disclosure policy, insider trading policy, majority voting policy, management and board compensation policies, and a whistle blower policy.

In addition, under the Civil Code of Québec, to which we are subject as a legal person incorporated under the Business Corporations Act (Québec) (L.R.Q., c.

S-31), a director must immediately disclose to the board any situation that may place him or her in a conflict of interest.

Any such declaration of interest is recorded in the minutes of proceedings of the Board.

In such instances, the director abstains, except if otherwise required, from the discussion and voting on the question.

In addition, it is our policy that an interested director recuse himself or herself from the decision-making process pertaining to a contract or transaction in which he or she has an interest.

Audit Committee

Our audit committee is responsible for assisting the board of directors in fulfilling its oversight responsibilities with respect to financial reporting, including:

The audit committee of the Board (the "Audit Committee") is responsible for assisting the Board in fulfilling its oversight responsibilities with respect to financial reporting, including:

• reviewing our procedures on overall financial reporting and internal control framework;

7 unchanged sentences

The Audit Committee is composed of Mr.

Olds, as Chairperson, Mr.Kavuru and Mr.

Davis, as Chairperson, Mr.

Kavuru and Mr.

Derby is “financially literate”

and “independent”

within the meaning of the Exchange Act.

Kavuru and Mr.

Neugeboren is “financially literate” and “independent” within the meaning of the Exchange Act and applicable Nasdaq rules concerning director independence.

The Audit Committee’s charter can be found on the Company’s website at https://www.acasti.com/en/investors/corporate-governance/governance-documents.

Audit Committee Financial Expert

Our board of directors has determined that Mr.

Olds is an “audit committee financial expert”, as defined by applicable regulations of the SEC.

Our Board has determined that Mr.

Davis is an “audit committee financial expert,” as defined by applicable regulations of the Securities and Exchange Commission (“SEC”).

The SEC has indicated that the designation of Mr.

Olds as an audit committee financial expert does not make him an “expert”

for any purpose, impose any duties, obligations or liability on Mr.

Olds that are greater than those imposed on members of the audit committee and board of directors who do not carry this designation, or affect the duties, obligations or liability of any other member of the audit committee or board of directors.

Davis as an audit committee financial expert does not make him an “expert” for any purpose, impose any duties, obligations or liability on Mr.

Davis that are greater than those imposed on members of the Audit Committee and Board who do not carry this designation, or affect the duties, obligations or liability of any other member of the Audit Committee or Board.

Executive Compensation

Our executive compensation program is intended to attract, motivate and retain high-performing senior executives, encourage and reward superior performance, and align the executives’

interests with ours as well as our shareholders by providing compensation that is competitive with the compensation received by executives employed by comparable companies, and ensuring that the achievement of annual objectives is rewarded through the payment of bonuses, and providing executives with long-term incentives through the grant of stock options.

Our governance and human resources committee, or GHR committee, has authority to retain the services of independent compensation consultants to advise its members on executive and board compensation and related matters, and to determine the fees and the terms and conditions of the engagement of those consultants.

Our executive compensation program is intended to attract, motivate and retain high-performing senior executives, encourage and reward superior performance, and align the executives’ interests with ours as well as those of our shareholders by providing compensation that is competitive with the compensation received by executives employed by comparable companies, and ensuring that the achievement of annual objectives is rewarded through the payment of bonuses, and providing executives with long-term incentives through the grant of stock options.

Our governance and human resources committee (“GHR”) committee, has authority to retain the services of independent compensation consultants to advise its members on executive and Board compensation and related matters, and to determine the fees and the terms and conditions of the engagement of those consultants.

During our fiscal year ended March 31, 2022, the GHR committee retained compensation consulting services from FW Cook to review our executive compensation programs, including base salary, short-term and long-term incentives, total cash compensation levels and total direct compensation of certain senior positions, against those of a peer group of 20 broadly similar size, as measured by market capitalization (peer market cap all averaged less than $500M in 2021), biotechnology and pharmaceutical companies listed or headquartered in North America.

2 unchanged sentences

The GHR committee assessed the independence of the consultants and concluded that its engagement of the consultants did not raise any conflict of interest with us or any of our directors or executive officers.

Compensation for our CEO was below the peer company median based on FW Cook’s review during the fiscal year ended March 31, 2023.

The GHR committee continued to rely on the review of FW Cook performed during the fiscal year ended March 31, 2022 and did not retain the services of FW Cook during the fiscal year ended March 31, 2023 and, during the fiscal year ended March 31, 2024, retained the services of Pearl Meyer to review our executive compensation programs for the current fiscal year.

Compensation for our Chief Executive Officer (“CEO”) paid during the fiscal year ended March 31, 2024 was below the peer company median based on FW Cook’s review conducted during the fiscal year ended March 31, 2022.

Use of Fixed and Variable Pay Components

Compensation of our named executive officers, or NEOs, is revised each year and has been structured to encourage and reward executive officers on the basis of short-term and long-term corporate performance.

Compensation of our named executive officers (“NEOs"), is revised each year and has been structured to encourage and reward executive officers on the basis of short-term and long-term corporate performance.

For the year ended March 31, 2024, our NEOs consisted of Prashant Kohli, our current CEO, Jan D’Alvise, our former CEO, Amresh Kumar, Vice President – Program Management, Carrie D’Andrea, Vice President – Clinical Operations, Pierre Lemieux, our former Chief Operations Officer (Canada), and Brian Ford, our former interim Chief Financial Officer.

In the context of its analysis of compensation for our fiscal year ended March 31, 2024, the following components were examined by the GHR committee:

• base salary;

• short term incentive plan, consisting of a cash bonus;

1 unchanged sentence

• other elements of compensation, consisting of group benefits and perquisites.

For executives, more than half of their target compensation (base salary + target STIP awards + target LTIP awards) is considered “at risk”.

We believe this mix results in a strong pay-for-performance relationship and alignment with shareholders and is competitive with other firms of comparable size in similar fields.

The CEO (or any person acting in that capacity) makes recommendations to the GHR committee as to the compensation of our executive officers, other than the CEO for review and approval by the board of directors.

The GHR committee makes recommendations to the board of directors as to the compensation of the CEO, for approval.

The CEO’s salary is based on comparable market consideration, and the GHR committee’s assessment of the CEO's performance, with regard to our financial performance, and progress in achieving key strategic business goals.

For executives, more than half of their target compensation (base salary + target STIP awards + target LTIP awards) is considered “at risk.” We believe this mix results in a strong pay-for-performance relationship and alignment with shareholders and is competitive with other firms of comparable size in similar fields.

The CEO (or any person acting in that capacity) makes recommendations to the GHR committee as to the compensation of our executive officers, other than the CEO, for review and approval by the Board.

The GHR committee makes recommendations to the Board as to the compensation of the CEO, for approval.

Qualitative factors beyond the quantitative financial metrics are also a key consideration in determination of individual executive compensation payments.

2 unchanged sentences

The GHR committee reviews compensation matters periodically to help ensure that it meets this strategic imperative.

Base salary is set to reflect an individual’s skills, experience, and contributions within a salary structure consistent with peer group data.

Base salary structure is revised annually by the GHR committee as financial and market conditions evolve.

Short Term Incentive Plan (STIP)

Our Short-Term Incentive Plan, or STIP, provides for potential rewards when a threshold of corporate performance is met compared to the board of director's primary stated objectives for the fiscal year.

Our Short-Term Incentive Plan (“STIP"), provides for potential rewards when a threshold of corporate performance is met compared to the Board’s primary stated objectives for the fiscal year.

Corporate performance is assessed against a table of weighted performance categories and sub-goals within each weighted category, which assessment of goal achievement funds the corporate bonus pool.

These performance goals take into account the achievement of corporate milestones within timelines and budget and individual objectives determined annually by the board of directors according to short-term priorities.

These performance goals take into account the achievement of corporate milestones within timelines and budget and individual objectives determined annually by the Board according to short-term priorities.

The corporate bonus pool is allocated based on achievement of personal objectives assessed through a performance grid, with pre-specified, objective performance criteria.

2 unchanged sentences

Annual salary for STIP purposes is the annual salary in effect at the end of the plan year (i.e., prior to any annual salary increases awarded for the subsequent year).

The STIP is a variable compensation plan, and all STIP payments are subject to board of directors approval.

The STIP is a variable compensation plan, and all STIP payments are subject to Board approval.

Participants must be employed by us at the end of the fiscal year to qualify.

Long Term Incentive Plan (LTIP)

The LTIP has been adopted as a reward and retention mechanism.

Participation is determined annually at the discretion of the board of directors.

The stock option plan is intended to align the long-term interests of participants with those of shareholders, in order to promote creation of shareholder value.

The GHR committee determines the number of stock options to be granted to a participant based on peer group data and taking into account corporate performance and the employee’s level in the organization.

The LTIP calculation for NEOs is determined by both reviewing grant values and a dilution- based methodology that considers

the annual grant rate as a percent of shares outstanding.

All fiscal 2023 grants to named executive officers had a grant value that was below the median of the peer data reviewed at the end of the year.

Our Long Term Incentive Plan (“LTIP”) has been adopted as a reward and retention mechanism.

Participation is determined annually at the discretion of the Board.

The Acasti Pharma Inc.

Stock Option Plan (the “Stock Option Plan”) is intended to align the long-term interests of participants with those of shareholders, in order to promote creation of shareholder value.

The LTIP calculation for NEOs is determined by both reviewing grant values and a dilution- based methodology that considers the annual grant rate as a percent of shares outstanding.

All grants to NEOs during the fiscal year ended March 31, 2024, had a grant value that was below the median of the peer data prepared by FW Cook during the fiscal year ended March 31, 2022.

Our directors and executive officers are not permitted to purchase financial instruments, such as prepaid variable forward contracts, equity swaps, collars or units of exchange funds that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the director or officer.

Stock Option Plan

Our stock option plan was adopted by our board of directors on October 8, 2008, and has been amended from time to time, as most recently amended on August 4, 2022, and approved by our shareholders on September 28, 2022.

The grant of options is part of the long-term incentive component of executive and director compensation and an essential part of our compensation framework.

Qualified directors, employees and consultants may participate in our stock option plan, which is designed to encourage option holders to link their interests with those of our shareholders, in order to promote an increase in shareholder value.

Awards and the determination of any exercise price are made by our board of directors, after recommendation by the GHR committee.

Awards are established, among other things, according to the role and responsibilities associated with the participant’s position and his or her influence over appreciation in shareholder value.

Any award grants a participant the right to purchase a certain number of common shares during a specified term in the future, after a vesting period and/or specific performance conditions, at an exercise price equal to at least 100% of the market price (as defined below) of our common shares on the grant date.

The “market price”

of common shares as of a particular date generally means the highest closing price per common share on the Nasdaq, or any other exchange on which the common shares are listed from time to time, for the last preceding date on which there was a sale of common shares on that exchange (subject to certain exceptions set forth in the stock option plan in the event that our common shares are no longer traded on any stock exchange).

Our Stock Option Plan was adopted by the Board on October 8, 2008, and has been amended from time to time, as most recently amended on September 28, 2022.

The amendment provided for a change to the existing limits for common shares reserved for issuance under the Stock Option Plan.

The Stock Option Plan continues to provide for the granting of options to purchase common shares.

The exercise price of the stock options granted under the Stock Option Plan may not be lower than the closing price of the common shares on the Nasdaq Stock Market LLC ("Nasdaq”) at the close on the day preceding the grant.

The maximum number of common shares that may be issued upon exercise of options granted under the amended Stock Option Plan shall not exceed 20% of the aggregate number of issued and outstanding shares

of the Company as of July 28, 2022.

The terms and conditions for acquiring and exercising options are set by the Board, subject among others, to the following limitations:

the term of the options cannot exceed ten years and (i) all options granted to a director will be vested evenly on a monthly basis over a period of at least 12 months, and (ii) all options granted to an employee will be vested evenly on a quarterly basis over a period of at least 36 months.

The total number of shares issued to any one consultant within any twelve-month period cannot exceed 2% of the Company’s total issued and outstanding shares (on a non-diluted basis).

The Company is not authorized to grant within any twelve-month period such number of options under the Stock Option Plan that could result in a number of common shares issuable pursuant to options granted to (a) related persons exceeding 2% of the Company’s issued and outstanding common shares (on a non-diluted basis) on the date an option is granted, or (b) any one eligible person in a twelve-month period exceeding 2% of the Company’s issued and outstanding common shares (on a non-diluted basis) on the date an option is granted.

The grant of options is part of the long-term incentive component of executive and director compensation and an essential part of the Company’s compensation framework.

Qualified directors, employees and consultants may participate in the Stock Option Plan, which is designed to encourage option holders to link their interests with those of the Company’s shareholders, in order to promote an increase in shareholder value.

As of March 31, 2024, four employees and three non-employee directors were eligible to receive awards under the Stock Option Plan.

Awards and the determination of any exercise price are made by the Board, after recommendation by the GHR committee.

Awards are established, among other things, according to the role and responsibilities associated with the participant’s position and his or her influence over appreciation in shareholder value.

The “market price” of common shares as of a particular date generally means the closing price per common share on Nasdaq.

Previous awards may sometimes be taken into account when new awards are considered.

In accordance with the stock option plan, all of an option holder’s options will immediately fully vest on the date of a Change of Control event (as defined in the stock option plan), subject to the terms of any employment agreement or other contractual arrangement between the option holder and us.

However, in no case will the grant of options under the stock option plan, together with any proposed or previously existing security-based compensation arrangement, result in (in each case, as determined on the grant date):

the grant to any one consultant within any 12-month period, of options reserving for issuance a number of common shares exceeding in the aggregate 2% of our issued and outstanding common shares (on a non-diluted basis);

or the grant to any one employee, director and/or consultant, which provides investor relations services, within any 12-month period, of options reserving for issuance a number of common shares exceeding in the aggregate 2% of our issued and outstanding common shares (on a non-diluted basis).

In accordance with the Stock Option Plan, all of an option holder’s options will immediately fully vest on the date of a Change of Control event (as defined in the Stock Option Plan), subject to the terms of any employment agreement or other contractual arrangement between the option holder and the Company.

However, in no case will the grant of options under the Stock Option Plan, together with any proposed or previously existing security-based compensation arrangement, result in (in each case, as determined on the grant date) the grant to any one consultant within any 12-month period, of options reserving for issuance a number of common shares exceeding in the aggregate 2% of the Company’s issued and outstanding common shares (on a non-diluted basis);

or the grant to any one employee, director and/or consultant that provides investor relations services, within any 12-month period, of options reserving for issuance a number of Common shares exceeding in the aggregate 2% of the Company’s issued and outstanding common shares (on a non-diluted basis).

Options granted under the Stock Option Plan are non-transferable and are subject to a minimum vesting period of 36 months for management, and 12 months for non-executive Board members, in each case with gradual and equal vesting on no less than a quarterly basis, in the case of management, and monthly in the case of non-executive Board members.

They are exercisable, subject to vesting and/or performance conditions, at a price equal to the highest closing price of the common shares on the Nasdaq, or any other exchange on which the common shares are listed from time to time, on the day prior to the grant of such options.

In addition, and unless otherwise provided for in the relevant agreement between us and the holder, options will also lapse upon termination of employment or the end of the business relationship with us except that they may be exercised for 90 days after termination, ceasing to hold office or the end of the business relationship (30 days for investor relations services employees), in each case to the extent that they will have vested on such date of termination of employment, end of the business relationship or ceasing to hold office, as applicable, except in the case of death, disability or retirement where this period is extended to 12 months.

Subject to the approval of relevant regulatory authorities, including the Nasdaq, if applicable, and compliance with any conditions attached to that approval (including, in certain circumstances, approval by disinterested shareholders) if applicable, the board of directors has the right to amend or terminate the stock option plan.

However, unless option holders’

consent to the amendment or termination of the stock option plan in writing, any such amendment or termination of the stock option plan cannot affect the conditions of options that have already been granted and that have not been exercised under the stock option plan.

Options for common shares representing 20% of our issued and outstanding common shares as of July 28, 2022, from time to time may be granted by the board under the stock option plan, which number shall include common shares issuable pursuant to awards issued under the equity incentive.

As of the date of this annual report, there were 8,898,839 common shares reserved for issuance under the stock option plan and 4,445,492 options outstanding under the stock option plan.

Options are exercisable, subject to vesting and/or performance conditions, at a price equal to the closing price of the common shares on Nasdaq, on the day prior to the grant of such options.

In addition, and unless otherwise provided for in the relevant agreement between the Company and the holder, options will also lapse upon termination of employment or the end of the business relationship with the Company except that they may be exercised for 90 days after termination, ceasing to hold office or the end of the business relationship (30 days for investor relations services employees), in each case to the extent that they will have vested on such date of termination of employment, end of the business relationship or ceasing to hold office, as applicable, except in the case of death, disability or retirement, in which case this period is extended to 12 months.

Subject to the approval of relevant regulatory authorities, including Nasdaq, if applicable, and compliance with any conditions attached to that approval (including, in certain circumstances, approval by disinterested shareholders), if applicable, the Board has the right to amend or terminate the Stock Option Plan.

However, unless option holders’ consent to the amendment or termination of the Stock Option Plan in writing, any such amendment or termination of the Stock Option Plan cannot affect the conditions of options that have already been granted and that have not been exercised under the Stock Option Plan.

As of March 31, 2024, there were 1,483,140 common shares reserved for issuance under the Stock Option Plan and Equity Incentive Plan (as defined below) and 721,793 options outstanding under the Stock Option Plan.

Equity Incentive Plan

On May 22, 2013, our equity incentive plan was adopted by the board of directors in order to, among other things, provide us with a share-related mechanism to attract, retain and motivate qualified directors, employees and consultants.

On May 22, 2013, the Acasti Pharma Inc.

Equity Incentive Plan (the “Equity Incentive Plan”) was adopted by the Board in order to, among other things, provide us with a share-related mechanism to attract, retain and motivate qualified directors, employees and consultants.

The adoption of the Equity Incentive Plan was initially approved by shareholders on June 27, 2013, and has been amended from time to time, as most recently amended on August 4, 2022, and approved by shareholders on September 28, 2022.

Eligible persons may participate in the Equity Incentive Plan.

“Eligible persons”

under the equity incentive plan consist of any director, officer, employee, or consultant (as defined in the equity incentive plan) of our Company or a subsidiary.

“Eligible persons” under the Equity Incentive Plan consist of any director, officer, employee, or consultant (as defined in the Equity Incentive Plan) of our Company or a subsidiary.

A participant is an eligible person to whom an award has been granted under the Equity Incentive Plan.

The Equity Incentive Plan provides us with the option to grant to eligible persons bonus shares, restricted shares, restricted share units, performance share units, deferred share units and other share-based awards.

The board of directors has the discretion to determine that any unvested or unearned restricted share units, deferred share units, performance share units or other share-based awards or restricted shares subject to a restricted period outstanding immediately prior to the occurrence of a change in control will become fully vested or earned or free of restriction upon the occurrence of a change in control.

The board of directors may also determine that any vested or earned restricted share units, deferred share units, performance share units or other share-based awards will be cashed out based on the market price of our common shares as of the date a change in control is deemed to have occurred, or as of such other date as the board of directors may determine prior to the change in control.

The Board has the discretion to determine that any unvested or unearned restricted share units, deferred share units, performance share units or other share-based awards or restricted shares subject to a restricted period outstanding immediately prior to the occurrence of a change in control will become fully vested or earned or free of restriction upon the occurrence of a change in control.

The Board may also determine that any vested or earned restricted share units, deferred share units, performance share units or other share-based awards will be cashed out based on the market price of our common shares as of the date a change in control is deemed to have occurred, or as of such other date as the Board may determine prior to the change in control.

Further, the Board has the right to provide for the conversion or exchange of any restricted share unit, deferred share unit, performance share unit or other share-based award into or for rights or other securities in any entity participating in or resulting from the change in control.

The equity incentive plan is administered by the board of directors and the board of directors has sole and complete authority, in its discretion, to determine the type of awards under the equity incentive plan relating to the issuance of common shares (including any combination of bonus shares, restricted share units, performance share units, deferred share units, restricted shares or other share-based awards) in such amounts, to such persons and under such terms and conditions as the board of directors may determine, in accordance with the provisions of the equity incentive plan and the recommendations made by the GHR committee.

Subject to the adjustment provisions provided for in the equity incentive plan and the applicable rules and regulations of all regulatory authorities to which we are subject (including any stock exchange), the total number of common shares reserved for issuance pursuant to awards granted under the equity incentive plan will be equal to a

number that will not exceed 20% of the issued and outstanding common shares as of July 28, 2022, which number shall include common shares issuable pursuant to options issued under the stock option plan.

The Equity Incentive Plan is administered by the Board and the Board has sole and complete authority, in its discretion, to determine the type of awards under the Equity Incentive Plan relating to the issuance of common shares (including any combination of bonus shares, restricted share units, performance share units, deferred share units, restricted shares or other share-based awards) in such amounts, to such persons and under such terms and conditions as the Board may determine, in accordance with the provisions of the Equity Incentive Plan and the recommendations made by the GHR committee.

Subject to the adjustment provisions provided for in the Equity Incentive Plan and the applicable rules and regulations of all regulatory authorities to which we are subject (including any stock exchange), the total number of common shares reserved for issuance pursuant to awards granted under the Equity Incentive Plan will be equal to a number that will not exceed 20% of the issued and outstanding common shares as of July 28, 2022, which number shall include common shares issuable pursuant to options issued under the stock option plan.

As of March 31, 2024, there were 1,483,140 common shares reserved for issuance under the Equity Incentive Plan and Stock Option Plan and no awards outstanding under the Equity Incentive Plan.

Other Forms of Compensation

Retirement Plans .

We sponsor a voluntary Registered Retirement Savings Plan, or RRSP, matching program, which is open to all eligible employees, including NEOs, who reside in Canada.

The RRSP matching program matches employees’

contributions up to a maximum of $1,500 per fiscal year for eligible employees who participate in the program.

We sponsor a voluntary Registered Retirement Savings Plan ("RRSP"), matching program, which is open to all eligible employees, including NEOs, who reside in Canada.

The RRSP matching program matches employees’ contributions up to a maximum of $1,500 per fiscal year for eligible employees who participate in the program.

We currently have no eligible employees who reside in Canada.

We have also implemented a 401K plan for US employees.

Because of the small size of our current employee population in the US and to assure passage of anti-discrimination testing, the 401K plan has a “safe harbor”

provision which provides a contribution of 3% of salary to the 401K accounts of all eligible US employees, including NEOs who reside in the US.

Because of the size of our current employee population in the US and to assure passage of anti-discrimination testing, the 401K plan has a “safe harbor” provision which provides a contribution of 3% of salary to the 401K accounts of all eligible US employees, including NEOs who reside in the US.

Other Benefits and Perquisites.

3 unchanged sentences

Compensation Governance

Compensation of our executive officers and directors is recommended to the board of directors by the GHR committee.

Compensation of our executive officers and directors is recommended to the Board by the GHR committee.

In its review process, the GHR committee informally reviews executive and corporate performance on a quarterly basis, with input from management.

1 unchanged sentence

The GHR committee is composed of the following members:

Olds (Chairman), Mr.

Kavuru and Mr.

Derby, each of whom is independent within the meaning of applicable Nasdaq rules.

Kavuru (Chairman), Mr.

Davis and Mr.

Neugeboren, each of whom is independent within the meaning of applicable Nasdaq rules.

The GHR committee establishes management compensation policies and oversees their general implementation.

1 unchanged sentence

All GHR committee members are or have held senior executive or director roles within significant businesses in our industry, some also having public companies experience, and have a level of financial understanding which allows them to assess the costs versus benefits of compensation plans.

The GHR committee’s members’

combined experience in our sector provides them with a good understanding of our success factors and risks, which are highly relevant to determining metrics for measuring success.

The GHR committee’s members’ combined experience in our sector provides them with a good understanding of our success factors and risks, which are highly relevant to determining metrics for measuring success.

We do not believe that our compensation program results in unnecessary or inappropriate risk taking, including risks that are likely to have a material adverse effect on us.

Payments of bonuses, if any, are not made unless performance goals are met.

Compensation Paid to Named Executive Officers

The following table sets forth the compensation information for our principal executive officer, and our two most highly compensated executive officers other than our principal executive officer (NEOs), who were serving as executive officers as of March 31, 2023, during the fiscal years ended March 31, 2023, and 2022 respectively.

Stock Awards ($)

2024 Summary Compensation Table

The following table sets forth the compensation information for NEOs, which includes all persons who served as our principal executive officer during the fiscal year ended March 31, 2024, our two most highly compensated executive officers other than our principal executive officer, who were serving as executive officers as of March 31, 2024, and two individuals who would have been our most highly compensated executive officers but for the fact that they were no longer serving as executive officers as of March 31, 2024.

Option Awards ($) (1) (2)

Nonequity Incentive Plans

All Other Compensation ($)(3)

3 unchanged sentences

Former President and CEO

George Kottayil (5)

March 31, 2023

Former COO, US

Prashant Kohli (5)

March 31, 2024

CEO and former CCO

(1) The fair value of stock options is estimated at the grant date using the Black-Scholes option pricing model.

This model requires the input of a number of parameters, including share price, share exercise price, expected share price volatility, expected time until exercise and risk-free interest rates.

Although the assumptions used reflect management’s best estimates, they involve inherent uncertainties based on market conditions generally outside of our control.

(2) The fair value of the option-based awards granted on June 22, 2022, was $0.76.

(3) The fair value of the option-based awards granted on November 11, 2021, was $1.40.

D’Alvise ceased to be the Company’s President and CEO effective April 4, 2023.

Kottayil ceased to be the Company’s Chief Operating Officer (US) effective May 8, 2023.

Kohli, the Company’s former Chief Commercial Officer, was appointed CEO effective April 4, 2023.

(7) Whether the earnings were paid during the fiscal year, payable during the period but deferred at the election of the named executive officer, or payable by their terms at a later date.

March 31, 2023

Amresh Kumar (6)

March 31, 2024

VP Program Management

March 31, 2023

Carrie D'Andrea (7)

March 31, 2024

VP Clinical Operations

March 31, 2023

Pierre Lemieux (8)

March 31, 2024

Former COO, Canada and CSO

March 31, 2023

Brian Ford (9)

March 31, 2024

Former Interim CFO

March 31, 2023

(1) Calculated in accordance with Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation — Stock Compensation.” The fair value of stock options is estimated at the grant date using the Black-Scholes option pricing model.

This model requires the input of a number of parameters, including share price, share exercise price, historical volatility, expected term risk-free interest rates and expected dividend yields.

Although the assumptions used reflect management’s best estimates, they involve inherent uncertainties based on market conditions generally outside of the Company's control.

(2) The fair value of the option-based awards granted on June 22, 2022, was $4.56 (after accounting for the Company’s 1-for-6 reverse stock split, which was effective on July 10, 2023 (the “Reverse Stock Split”)).

(3) Other compensation consist of severance payments made.

D’Alvise ceased to be the Company’s President and CEO effective April 4, 2023.

Kohli, the Company’s former Chief Commercial Officer, was appointed CEO effective April 4, 2023.

Kumar was appointed VP of Program Management effective May 8, 2023.

D'Andrea was appointed VP of Clinical Operations effective May 8, 2023.

Lemieux ceased to be the Company's Chief Operating Officer (Canada) effective May 8, 2023.

Ford ceased to be the Company’s Chief Financial Officer on May 8, 2023, and was appointed as the Company’s interim Chief Financial Officer.

On January 5, 2024, we announced the appointment of Robert J.

DelAversano as the Company's new Principal Financial Officer, succeeding Mr.

Ford continues to serve as a financial consultant on an as-needed basis.

Outstanding Equity Awards at March 31, 2024

8 unchanged sentences

Option expiration date

Jan D’Alvise, Former President and CEO

Friday, May 12, 2023

Monday, June 14, 2027

Sunday, July 02, 2028

Sunday, April 15, 2029

Sunday, March 31, 2030

Tuesday, November 11, 2031

Tuesday, June 22, 2032

George Kottayil, Former COO, US

Tuesday, November 11, 2031

Tuesday, June 22, 2032

Prashant Kohli, CEO and former CCO

Tuesday, November 11, 2031

Tuesday, June 22, 2032

(1) The option awards listed in the table above vest with respect to 1/12 on each quarterly anniversary thereafter over the following three years, subject to the executive officer’s continuous service with us through the vesting date.

Jan D'Alvise, Former President and CEO

Prashant Kohli, CEO

November 12, 2031

June 22, 2032

July 14, 2033

December 19, 2033

Amresh Kumar, VP Program Management

July 14, 2033

Carrie D'Andrea, VP Clinical Operations

July 14, 2033

Pierre Lemieux, Former COO, Canada

Brian Ford, Former Interim CFO

November 12, 2031

June 22, 2032

The option awards and exercise prices listed above have been adjusted to account for the Reverse Stock Split.

The option awards listed in the table above vest with respect to 1/12 on each quarterly anniversary thereafter over the following three years, subject to the executive officer’s continuous service with the Company through the vesting date.

The option awards listed above will be cancelled 90 days after termination date, as per the Stock Option Plan.

Employment Agreements with Named Executive Officers

Jan D’Alvise, Former CEO

On June 1, 2016, we entered into an executive employment agreement with Ms.

D’Alvise.

Jan D’Alvise, Former President and CEO

On June 1, 2016, the Company entered into an executive employment agreement with Ms.

Pursuant to her executive employment agreement, Ms.

D’Alvise’s annual base salary was set at $330,000 and she is eligible to receive annual performance bonuses based on a target amount of 50% of her annual base salary with a maximum of up to 80% of her annual base salary.

In accordance with the terms and provisions of the executive employment agreement we entered into with Ms.

D’Alvise, we may terminate the executive’s employment at any time for “good and sufficient cause”, as defined in the employment agreement, without notice or severance.

We may terminate the executive’s employment at any time without cause or upon a change of control, as defined in our stock option plan, by providing the executive with sixty days’

notice of termination and payment equal to twelve months’

base salary plus any bonus payable.

The executive may decide to resign from employment and must provide us with at least sixty days' advance written notice.

The executive may decide to terminate employment with “good reason”, as defined in the executive employment agreement, and we are required to make payment equal to twelve months’

base salary plus any bonus payable.

Effective April 4, 2023, Jan D'Alvise employment was terminated as both parties mutually agreed to part ways and she is entitled to a severance payment in accordance with the terms of her executive employment agreement.

D’Alvise’s annual base salary was set at $330,000 and she was eligible to receive annual performance bonuses based on a target amount of 50% of her annual base salary with a maximum of up to 80% of her annual base salary.

In accordance with the terms and provisions of the executive employment agreement the Company entered into with Ms.

D’Alvise, the Company had the right to terminate the executive’s employment at any time for “good and sufficient cause”, as defined in the employment agreement, without notice or severance.

The Company had the right to terminate the executive’s employment at any time without cause or upon a Change of Control, as defined in the Stock Option Plan, by providing the executive with sixty days’ notice of termination and payment equal to twelve months’ base salary plus any bonus payable.

The executive was able to resign from employment upon providing the Company with at least sixty days’ advance written notice.

The executive was able to terminate employment with “good reason”, as defined in the executive employment agreement, in which case the Company would be required to make payment equal to twelve months’ base salary plus any bonus payable.

D’Alvise ceased to be the Company’s President and CEO effective April 4, 2023.

Prashant Kohli, Chief Executive Officer

Kohli became Chief Executive Officer of Acasti on April 4, 2023.

Pursuant to his employment arrangement, Mr.

Kohli’s annual base salary is set at $400,000 and he is eligible to receive annual performance bonuses of up to 50% of his annual base salary.

In accordance with the terms of Mr.

Kohli’s employment arrangement, his employment could be terminated by the Company or by Mr.

Kohli at any time with or without cause.

Amresh Kumar, VP Program Management

On May 8, 2023 we entered into a employee agreement with Amresh Kumar, pursuant to which he is entitled to an annual salary of $275,000 and he is eligible to receive annual performance bonuses of up to 30% of his annual base salary.

Carrie D’Andrea, VP Clinical Operations

On May 8, 2023 we entered into a consulting agreement with Carrie D'Andrea (“Ms.

D’Andrea's Consulting Agreement”).

D’Andrea’s Consulting Agreement provides, among other things, that Ms.

D'Andrea will serve as a non-employee vice-president of clinical operations on a full-time basis, in exchange for a fee of $18,000 per month.

There is no arrangement or understanding between Ms.

D’Andrea and any other persons pursuant to which Ms.

D’Andrea was selected as an officer.

On July 1, 2023, we entered into an employment agreement with Ms.

D'Andrea, pursuant to which she is entitled to an annual salary of $275,000 and she is eligible to receive annual performance bonuses of up to 30% of her annual base salary.

Pierre Lemieux, Former COO (Canada)

On September 26, 2017, we entered into an executive employment agreement with Dr.

On September 26, 2017, the Company entered into an executive employment agreement with Dr.

Pierre Lemieux.

Pursuant to his executive employment agreement, Dr.

Lemieux’s annual base salary was set at CAD$253,700 and he was eligible to receive annual performance bonuses of up to 40% of his annual base salary.

In accordance with the terms and provisions of the executive employment agreement we entered into with Dr.

Lemieux, we were entitled to terminate the executive’s employment at any time for “good and sufficient cause”, as defined in the employment agreement, without notice or severance.

We were entitled to terminate the executive’s employment at any time without cause or upon a change of control, as defined in our stock option plan, by providing the executive with thirty days’

notice of termination and payment equal to twelve months’

base salary plus any bonus payable.

Lemieux’s annual base salary was set at CAD$253,700 and he was eligible to receive annual performance bonuses of up to 40% of his annual base salary.

In accordance with the terms and provisions of Dr.

Lemieux’s executive employment agreement, the Company had the right to terminate the executive’s employment at any time for “good and sufficient cause”, as defined in the employment agreement, without notice or severance.

The Company had the right to terminate the executive’s employment at any time without cause or upon a Change of Control, as defined in the Stock Option Plan, by providing the executive with thirty days’ notice of termination and payment equal to twelve months’ base salary plus any bonus payable.

The executive was entitled to resign from employment upon providing us with at least sixty days' advance written notice.

The executive was entitled to terminate employment with “good reason”, as defined in the executive employment agreement, and we were required to make payment equal to twelve months of base salary.

Effective May 8, 2023, Dr.

Lemieux’s employment was terminated by the Company and he is entitled to severance payment in accordance with the terms of his executive employment agreement.

The executive was able to resign from employment upon providing the Company with at least sixty days’ advance written notice.

Lemieux ceased to be the Company's Chief Operating Officer (Canada) effective May 8, 2023.

Lemieux received total payments of $431,874 upon termination, that included a one-time separation payment of $347,316.

Brian Ford, Interim CFO

1 unchanged sentence

Pursuant to his executive employment agreement, Mr.

Ford’s annual base salary was set at CAD$350,000 and he was eligible to receive annual performance bonuses of up to 40% of his annual base salary.

In accordance with the terms and provisions of the executive employment agreement we entered into with Mr.

Ford, we were entitled to terminate his employment at any time with cause.

We were entitled to terminate the executive’s employment without cause by providing the executive employee, with either a payment equal to six months of base salary, plus two months of base salary for each completed year of service, to a maximum of twelve months in total, or a payment equal to twelve months of base salary in the event that such a termination occurs within three months following a change of control, as defined in our stock option plan.

The executive was entitled to resign from employment and upon providing us with at least eight weeks of advance written notice.

Effective May 8, 2023, Mr.

Ford employment as the Company’s Chief Financial Officer was terminated and he is entitled to severance payment in accordance with the terms of his executive employment agreement.

Ford has agreed to serve as the Company’s Interim Chief Financial Officer until June 30, 2023, subject to potential extension of that term by the Company.

Loch Macdonald, Chief Medical Officer

On May 8, 2023 we entered into a consulting agreement with R.

Loch Macdonald.

The Consulting Agreement provides, among other things, that Dr.Macdonald will serve as a non-employee Chief Medical Officer on a part-time basis, in exchange for a fee of $100,000 per month.

There is no arrangement or understanding between Dr.

Macdonald and any other persons pursuant to which Dr.

Macdonald was selected as an officer.

Carrie D’Andrea, VP Climical

On May 8, 2023 we entered into a consulting agreement with Carrie D'Andrea.

The Consulting Agreement provides, among other things, that Ms.

D'Andrea will serve as a non-employee vice-president of clinical operations on a full-time basis, in exchange for a fee of $18,000 per month.

There is no arrangement or understanding between Ms.

D’Andrea and any other persons pursuant to which Ms.

D’Andrea was selected as an officer.

Ford employment as the Company’s Chief Financial Officer was terminated and he is entitled to severance payment in accordance with the terms of his executive employment agreement.

Clawback Policy

We have a compensation recoupment, or clawback, policy, which we adopted to comply with Nasdaq listing standards implementing Exchange Act Rule 10D-1.

The clawback policy includes mandatory recoupment of excess incentive-based compensation received by a covered executive (including the Named Executive Officers) on or after October 2, 2023 in the event of a restatement of the Company’s consolidated financial statements due to material non-compliance with any financial reporting requirement under federal securities laws, as required by Exchange Act Rule 10D-1.

Non-Executive Director Compensation

Our directors’

compensation consists of an annual fixed compensation of $65,000 for the chairman of the board and $35,000 for the other non-executive board members.

Our non-executive directors’ compensation consists of an annual fixed compensation of $60,000 for the chairman of the Board and $35,000 for the other non-executive Board members.

In addition, the chairperson of the Audit Committee and the chairperson of the GHR committee receive additional compensation of $15,000 and $12,000, respectively, while members of the Audit Committee and the GHR committee receive additional compensation of $7,500 and $6,000, respectively.

The directors are also entitled to a fee of $1,000 per non-regularly scheduled Board meeting as well as a reimbursement for traveling and other reasonable expenses properly incurred by them in attending meetings of the Board or any committee or in otherwise serving us, in accordance with our policy on travel and expenses.

Following their first election to our board of directors, non-executive directors are eligible to receive an initial equity grant of up to 150% of their annual cash retainer worth of stock options vesting monthly in equal installments over a 12-month period, subject to the other terms and conditions set forth under the heading “Stock Option Plan”.

In addition to their initial grant, non-executive directors are eligible to receive an annual equity-based award equal to 100% of their total annual cash retainer vesting monthly in equal installments over a 12-month period.

These awards will be granted at the same time that we are performing our annual performance review for our employees, subject to availability of common shares and subject to the terms and conditions described under the headings “Stock Option Plan”

and “Equity Incentive Plan”.

The level of these awards are intended to be consistent with equivalent awards by comparable companies obtained from our benchmarking exercise and in accordance with the recommendations obtained from our independent compensation consultant.

Following their first election to our Board, non-executive directors are eligible to receive an initial equity grant of up to 150% of their annual cash retainer worth of stock options vesting monthly in equal installments over a 12-month period, subject to the other terms and conditions set forth under the heading “Stock Option Plan.” In addition to their initial grant, non-executive directors are eligible to receive an annual equity-based award equal to 100% of their total annual cash retainer vesting monthly in equal installments over a 12-month period.

“Equity Incentive Plan.” The level of these awards are intended to be consistent with equivalent awards by comparable companies obtained from our benchmarking exercise and in accordance with the recommendations obtained from our independent compensation consultant.

The following table sets forth compensation for each non-executive director for the fiscal year ended March 31, 2024.

Kohli does not receive any additional compensation for his service as a director.

Information regarding the compensation for Mr.

Kohli is reflected in the “2024 Summary Compensation Table” set forth above.

The total compensation for our non-executive directors during fiscal year ended March 31, 2024, was as follows:

4 unchanged sentences

All other compensation

Vimal Kavuru (2)

Donald Olds (3)

Michael Derby (3)

Jean-Marie (John) Canan (2)

Carter did not stand for reelection at the 2022 Annual Meeting of Stockholders and his service as a director ended as of that date.

Canan resigned from the board of directors, effective March 30, 2023.

Haseltine did not stand for reelection at the 2022 Annual Meeting of Stockholders and his service as a director ended as of that date.

Brian Davis (4)

George Kottayil (4)

Edward Neugeboren (4)

(1) Calculated in accordance with FASB ASC Topic 718, “Compensation — Stock Compensation.” The fair value of stock options is estimated at the grant date using the Black-Scholes option pricing model.

This model requires the input of a number of parameters, including share price, share exercise price, expected share price volatility, expected time until exercise and risk-free interest rates.

Although the assumptions used reflect management’s best estimates, they involve inherent uncertainties based on market conditions generally outside of the Company's control.

Kavuru had 37,017 option awards outstanding at March 31, 2024.

Derby did not stand for re-election at the Company's 2023 Annual General Meeting held on October 10, 2023.

Derby had 30,939 and 26,667 option awards outstanding at March 31, 2024, respectively.

Kottayil, and Mr.

Neugeboren each had 22,500 option awards outstanding at March 31, 2024.

Item 402(v) Pay Versus Performance

The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the GHR committee view the link between the Company’s performance and named executive officer pay.

This disclosure is intended to comply with the requirements of Item 402(v) of Regulation S-K applicable to “smaller reporting companies.”

Required Tabular Disclosure of Pay Versus Performance

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company.

The following table sets forth information concerning Compensation Actually Paid (“CAP”) to our Principal Executive Officer (“PEO”) NEOs versus our total shareholder return (“TSR”) and net income (loss) performance results for the fiscal years ended March 31, 2023 and 2022.

The amounts set forth below under the headings “Compensation Actually Paid to PEO”

and “Average Compensation Actually Paid to Non-PEO NEOs”

have been calculated in a manner consistent with Item 402(v) of Regulation S-K.

Use of the term

CAP is required by the SEC’s rules and as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by the individuals and the compensation decisions described in the “Executive Compensation Summary”

section above.

The 2023 CAP to our PEO and the average CAP to our non-PEO NEOs reflects the following adjustments required by the applicable SEC rules from the total compensation reported in the Summary Compensation Table (“SCT”):

The following table sets forth information concerning Compensation Actually Paid (“CAP”) to our Principal Executive Officers (“PEO”) and non-PEO NEOs versus our total shareholder return (“TSR”) and net income (loss) performance results for the fiscal years ended March 31, 2024, 2023, and 2022.

The amounts set forth below under the headings “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K.

Use of the term CAP is required by the SEC’s rules and as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by the individuals and the compensation decisions described in the “Executive Compensation Summary” section above.

Summary compensation table total for PEO 1 ($)

Compensation actually paid to PEO 1 ($)

Summary compensation table total for PEO 2 ($)

Compensation actually paid to PEO 2 ($)

Average summary compensation table total for non-PEO NEOs ($)

5 unchanged sentences

March 31, 2023

(1) Our Total Shareholder Return (“TSR”) for each of the applicable fiscal years is calculated based on a fixed investment of $100 at the applicable measurement point (March 31, 2021) on the same cumulative basis as is used in Item 201(e) of Regulation S-K.

March 31, 2022

(2) Net loss is as reported in our consolidated financial statements.

The 2023 CAP to our PEO and the average CAP to our non-PEO NEOs reflects the following adjustments required by the applicable SEC rules from the total compensation reported in the SCT:

Average of Non-PEO NEOs

Total Reported in 2023 SCT

value of equity award reported in the SCT

year-end value of equity awards granted in 2023 that are unvested and outstanding

change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding

fair market value of equity awards granted in 2023 and that vested in 2023

change in fair value (from prior year-end) of prior year equity awards that vested in 2023

Compensation Actually Paid for 2023

The 2022 CAP to our PEO and the average CAP to our non-PEO NEOs reflects the following adjustments required by the applicable SEC rules from the total compensation reported in the SCT:

Required Disclosure of the Relationship between Compensation Actually Paid and Financial Performance Measures

The 2024 CAP to our PEOs and the average CAP to our non-PEO NEOs reflects the following adjustments required by the applicable SEC rules from the total compensation reported in the SCT:

Average of Non-PEO NEOs

8 unchanged sentences

Compensation Actually Paid and Net Income (Loss)

Due to the nature of our Company’s consolidated financial's and primary focus on research and development of novel therapies, our company has not historically utilized net income (loss) as a performance measure for our executive compensation program.

Due to the nature of our consolidated financial statements and primary focus on research and development of novel therapies, we have not historically utilized net income (loss) as a performance measure for our executive compensation program.

As a result, we do not believe there is any meaningful relationship between our net loss and compensation actually paid to our NEOs during the periods presented.

Compensation Actually Paid and TSR

The following graph sets forth the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and the Company's TSR over the period covering 2023 and 2022.

We do not utilize TSR in our executive compensation program.

However, we do utilize several other performance measures to align executive compensation with performance.

As described in more detail above, part of the compensation NEOs are eligible to receive consists of annual performance-based cash bonuses that are designed to provide appropriate incentives to the Company’s executives to achieve defined annual corporate goals and to reward executives for individual achievement towards these goals, subject to certain employment criteria.

Additionally, the Board views stock options, which are an integral part of our executive compensation program, as related to company performance although not directly tied to TSR, because they provide value only if the market price of our common shares increase, and if the executive officer continues in the Company’s employment over the vesting period.

These stock option awards align the Company’s executive officers’ interests with those of its shareholders by providing a continuing financial incentive to maximize long-term value for Shareholders and by encouraging the Company’s executive officers to continue in employment for the long-term.

The following graphs sets forth the relationship between CAP to our PEO 1, CAP to our PEO 2, the average of CAP to our Non-PEO NEOs, and the Company's net loss TSR over the period covering 2024, 2023, and 2022.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters Equity Compensation Plan Information

The following table sets forth certain information regarding the Company’s equity compensation plans as of March 31, 2023:

The following table sets forth certain information regarding the Company’s equity compensation plans as of March 31, 2024:

Plan category

16 unchanged sentences

Equity compensation plans not approved by security holders:

(1) A summary of certain material provisions of the Company’s stock option plan is available under “Item 11.

Executive Compensation –

Summary of our Compensation Programs –

Stock Option Plan”.

(2) The total number of common shares reserved for issuance under the Company’s equity incentive plan is limited by the number of options that are outstanding under the stock option plan such that the total number of common shares available for issuance under both stock-based compensation plans shall not exceed 8,898,839.

A summary of certain material provisions of the Company’s equity incentive plan is available under “Item 11.

Executive Compensation –

Summary of our Compensation Programs –

Equity Incentive Plan”.

(1) The total number of common shares reserved for issuance under the Company’s Stock Option Plan is limited by the number of awards that are outstanding under the Company’s Equity Incentive Plan such that the total number of common shares available for issuance under both stock-based compensation plans shall not exceed 1,483,140.

A summary of certain material provisions of the Company’s stock option plan is available under “Item 11.

Executive Compensation – Summary of our Compensation Programs – Stock Option Plan.”

(2) The total number of common shares reserved for issuance under the Company’s Equity Incentive Plan is limited by the number of options that are outstanding under the Stock Option Plan such that the total number of common shares available for issuance under both stock-based compensation plans shall not exceed 1,483,140.

A summary of certain material provisions of the Equity Incentive Plan is available under “Item 11.

Executive Compensation – Summary of our Compensation Programs – Equity Incentive Plan.”

Security Ownership of Certain Beneficial Owners

The following table sets forth certain information regarding beneficial ownership of our common shares as of May 31, 2023 by each director and the executive officer identified above, and all directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

The following table sets forth certain information regarding beneficial ownership of our common shares as of May 31, 2024 by each director and the named executive officers identified above, and all directors and executive officers as a group.

Beneficial ownership is

determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

All common shares have the same voting rights.

7 unchanged sentences

Prashant Kohli (2)

Amresh Kumar (3)

Carrie D'Andrea (4)

Brian Davis (5)

Vimal Kavuru (6)

George Kottayil (7)

Michael Derby

Edward Neugeboren (8)

Brian Ford (9)

Pierre Lemieux

SS Pharma LLC (10)

Shore Pharma LLC (11)

AIGH Capital Management, LLC, AIGH Investment Partners LLC, and Orin Hirschman (12)

Bank of America Corporation (13)

Rajitha Grace 2018 Irrevocable Trust (14)

Directors and officers as a group (9 persons)

* Less than 1%.

Unless otherwise indicated, the address of each of the executive officers and directors named above is 3009 boul.

de la Concorde East, Suite 102, Laval, Québec, Canada H7E 2B5

Includes 70,458 common shares that Prahsant Kohli may acquire through the exercise of share options within 60 days hereof, with exercise prices ranging between $0.89 and $1.65.

Includes 88,125 common shares that Donald Olds may acquire through the exercise of share options within 60 days hereof, with exercise prices ranging between $0.59 and 7.71.

Includes 4,750 common shares held and controlled by Mr.

spouse, Ofra Aslan.

Includes 42,500 common shares that Michael Derby may acquire through the exercise of share options within 60 days hereof, with exercise price of $.059

Includes 3,070,229 common shares owned by Shore Pharma LLC, of which Mr.

Kavuru is the sole member, 746,064 common shares owned indirectly Kottayil Grace Pharma LLC, of which Mr.

Kavuru is a manager, and 64,600common shares that Vimal Kavuru may acquire through the exercise of share options within 60 days hereof, with exercise price of $0.89 and $1.65.

To the best of our knowledge, other than as disclosed above, the only other beneficial owner of 5% or more of our outstanding common shares is Rajitha Grace Irrevocable Trust, 40 Bey Lea Road, Suite C202, Tom’s River, NJ, 08753, which beneficially owns 4,689,547 common shares, representing 10.51% of our issued and outstanding common shares.

Unless otherwise indicated, the address of each of the executive officers and directors named above is 103 Carnegie Center Suite 300 Princeton, New Jersey 08540

Includes 147,418 common shares that Prashant Kohli may acquire through the exercise of share options within 60 days hereof, with exercise prices ranging between $2.13 and $9.90.

Includes 15,645 common shares that Amresh Kumar may acquire through the exercise of share options within 60 days hereof, with exercise price of $2.64.

Includes 15,645 common shares that Carrie D'Andrea may acquire through the exercise of share options within 60 days hereof, with exercise price of $2.64.

Includes 12,430 common shares that Brian Davis may acquire through the exercise of share options within 60 days hereof, with exercise price of $2.13.

Includes 426,323 common shares held by Kavuru 2017 Grace Therapeutics for which Vimal is trustee, and 33,892 common shares that Vimal Kavuru may acquire through the exercise of share options within 60 days hereof, with exercise prices ranging between $2.13 and $9.90.

Includes 494,698 common shares, of which 124,344 shares are held directly by Kottayil Grace Pharma LLC by which Mr.

Kottayil is a Manager and Member of, and 12,430 common shares that George Kottayil may acquire through the exercise of share options within 60 days hereof, with exercise price of $2.13.

Includes 37,895 common shares and 12,430 common shares that Edward Neugeboren may acquire through the exercise of share options within 60 days hereof, with exercise price of $2.13.

Includes 58,324 common shares that Brian Ford may acquire through the exercise of share options within 60 days hereof, with exercise prices ranging between $5.05 and $9.90.

The principal office and business address of SS Pharma LLC is 330 S Poplar Ave, Suite 103-I, Pierre, SD 57501.

SS Pharma LLC is a holding company owned by Rajitha Grace 2023 Grantor Trust.

Information was provided by our transfer agent, Computershare Investor Services Inc.

The principal office and business address of Shore Pharma LLC is 330 S Poplar Ave, Suite 103-I, Pierre, SD 57501.

Shore Pharma LLC is a holding company owned by The ANSUSHRA 2023 Grantor Trust.

Information was provided by our transfer agent, Computershare Investor Services Inc.

The principal office and business address of AIGH Capital Management, LLC, AIGH Investment Partners LLC, and Orin Hirschman is 6006 Berkeley Avenue Baltimore, MD 21209.

Hirschman, is the Managing Member of AIGH Capital Management, LLC and president of AIGH LLC, with respect to shares of Common Stock indirectly held through AIGH CM,

directly by AIGH LLC and Mr.

Hirschman and his family directly.

Information obtained from Schedule 13-G filed on March 27, 2024.

The principal office and business address of Bank of America Corporate Center is 100 N Tryon Street Charlotte, NC 28255.

Information obtained from Schedule 13-G filed on December 31, 2023.

The principal office and business address of Rajitha Grace 2018 Irrevocable Trust is 330 S Poplar Ave, Suite 103-I, Pierre, SD 57501.

Information was provided by our transfer agent, Computershare Investor Services Inc.

Changes in Control

There existed no change in control arrangements at March 31, 2024

Certain Relationships and Related Transactions and Director Independence Related Transactions

Since April 1, 2022, there were no transactions or any currently proposed transactions in which the Company was or is to be a participant and the amounts exceeds $120,000, and in which any related person had or will have a direct or indirect interest.

Certain Relationships and Related Transactions and Director Independence .

Related Party Transaction

As set forth in its charter, the Audit Committee is tasked with the review and approval of any proposed transactions with related persons of the Company.

After initial review and approval of any proposed transaction with a related person, the Audit Committee continues to oversee and review any such transactions on a quarterly basis to ensure that such transaction continues to fall within the parameters of such initial approval.

Other than as set forth below, since April 1, 2022, there were no transactions or any currently proposed transactions in which the Company was or is to be a participant and the amounts exceeds $120,000, and in which any related person had or will have a direct or indirect interest.

Private Placement Offering

On September 24, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors in connection with a private placement offering of our securities (the “Offering”).

Pursuant to the Purchase Agreement, sold 1,951,371 Class A common shares, no par value per share (the “Common Shares”), at a purchase price of $1.848 per Common Share and pre-funded warrants (the “Pre-funded Warrants”) to purchase up to 2,106,853 Common Shares at a purchase price equal to the purchase price per Common Share less $0.0001.

Each Pre-funded Warrant is exercisable for one Common Share at an exercise price of $0.0001 per Common Share, was immediately exercisable, and will expire once exercised in full.

Pursuant to the Purchase Agreement, we also issued to such institutional and accredited investors common warrants (the “Common Warrants”) to purchase Common Shares, exercisable for an aggregate of 2,536,391 Common Shares.

Under the terms of the Purchase Agreement, for each Common Share and each Pre-funded Warrant issued in the Offering, an accompanying five-eighths (0.625) of a Common Warrant was issued to the purchaser thereof.

Each whole Common Warrant is exercisable for one Common Share at an exercise price of $3.003 per Common Share, was immediately exercisable, and will expire on the earlier of (i) the 60th day after the date of the acceptance by the U.S.

Food and Drug Administration (the “FDA”) of a New Drug Application for our product candidate GTX-104 or (ii) five years from the date of issuance.

The Offering closed on September 25, 2023.

The net proceeds to us from the Offering were approximately $7.3 million, after deducting fees and expenses.

Shore Pharma LLC, an entity controlled by Vimal Kavuru, the Chair of our Board, and SS Pharma LLC, the beneficial owners of 6.9% and 5.5%, respectively, of the Common Shares prior to the Offering, each a related party of Acasti, participated in the Offering.

Each of Shore Pharma LLC and SS Pharma LLC purchased $1,250,000 of securities from us in the Offering.

Director Independence

Our board of directors believes that, in order to maximize its effectiveness, the board of director must be able to operate independently.

A majority of directors must satisfy the applicable tests of independence, such that the board of directors complies with all independence requirements under applicable corporate and securities laws and stock exchange requirements applicable to us.

No director will be independent unless the board of directors has affirmatively determined that the director has no material relationship with us or any of our affiliates, either directly or indirectly or as a partner, shareholder or officer of an organization that has a relationship with us or our affiliates.

Our board of directors (the "Board") believes that, in order to maximize its effectiveness, the Board must be able to operate independently.

A majority of directors must satisfy the applicable tests of independence set forth in the Nasdaq rules and promulgated by the SEC, such that the Board complies with all independence requirements under applicable corporate and securities laws and stock exchange requirements applicable to us.

No director will be independent unless the Board has affirmatively determined that the director has no material relationship with us or any of our affiliates, either directly or indirectly or as a partner, shareholder or officer of an organization that has a relationship with us or our affiliates.

Such determinations will be made on an annual basis and, if a director joins the board of directors between annual meetings, at such time.

Independent Directors

The board of directors determined that Mr.

Derby are independent within the meaning of Nasdaq Stock Market rules.

The Board determined that Mr.

Davis and Mr.

Neugeboren are independent within the meaning of the Nasdaq rules.

In making its independence determination, the Board considered Mr.

Kavuru’s participation in the Offering, as described above.

Chairman of the Board

Kavuru acts as chairman of the Board.

His duties and responsibilities consist of the oversight of the quality and integrity of the board of directors’

His duties and responsibilities consist of the oversight of the quality and integrity of the Board’ practices.

Board Mandate

The board of directors is responsible for overseeing management in carrying out the business and affairs of the Company.

The Board is responsible for overseeing management in carrying out the business and affairs of the Company.

Directors are required to act and exercise their powers with reasonable prudence in the best interests of the Company.

The Board agrees with and confirms its responsibility for overseeing management's performance in the following particular areas:

approving and monitoring the Company’s compliance procedures;

establishing and developing the Company’s corporate governance principles and committees;

• approving and monitoring the Company’s compliance procedures;

• establishing and developing the Company’s corporate governance principles and committees;

• evaluating the strategic plan of the Company;

5 unchanged sentences

The Board reviews and assesses these reports and other information provided to it at meetings of the Board and/or of its committees.

At least annually, the board approves a strategic plan for the Company, taking into account, among other things, the opportunities and risks of the Company’s business, its risk appetite, emerging trends, and the competitive environment in the industry.

At least annually, the Board approves a strategic plan for the Company, taking into account, among other things, the opportunities and risks of the Company’s business, its risk appetite, emerging trends, and the competitive environment in the industry.

Position Descriptions

A written position description has been approved for the chairs of each committee of the board of directors.

The primary role and responsibility of the chair of each committee of the board of directors is to:

(i) in general, ensure that the committee fulfills its mandate, as determined by the board of directors and in accordance with the committee’s charter;

A written position description has been approved for the chairs of each committee of the Board.

The primary role and responsibility of the chair of each committee of the Board is to:

(i) in general, ensure that the committee fulfills its mandate, as determined by the Board and in accordance with the committee’s charter;

(ii) chair meetings of the committee;

(iii) report to the board of directors;

and (iv) act as liaison between the committee and the board of directors and our management.

The board of directors has adopted a written position description for the chairman of the board of directors.

The chairman of the board of directors is responsible for leading the board to fulfill its duties under the board’s mandate as independent of management and acting as an advisor to the chief executive officer.

The chairman’s duties include, but are not limited to, setting meeting agendas, approving and supervising management’s progress towards achieving strategic goals, chairing meetings and working with the respective committee and management to ensure, to the greatest extent possible, the effective functioning of the committee and the board of directors.

The chairman must oversee that the relationship between the board of directors, management of the Company, the Company’s shareholders and other stakeholders are effective, efficient, and further to the best interests of the Company.

(iii) report to the Board;

and (iv) act as liaison between the committee and the Board and our management.

The Board has adopted a written position description for the chairman of the Board.

The chairman of the Board is responsible for leading the board to fulfill its duties under the Board’s mandate as independent of management and acting as an advisor to the chief executive officer.

The chairman must oversee that the relationship between the Board, management of the Company, the Company’s shareholders and other stakeholders are effective, efficient, and further to the best interests of the Company.

Orientation and Continuing Education

We provide orientation for new appointees to the board of directors and committees in the form of informal meetings with members of the board and senior management, complemented by presentations on the main areas of our business.

We provide orientation for new appointees to the Board and committees in the form of informal meetings with members of the Board and senior management, complemented by presentations on the main areas of our business.

The Board does not formally provide continuing education to its directors, as directors are experienced members.

The board of directors relies on third-party professional assistance, when judged necessary, in order to be educated/updated on a particular topic.

Code of Business Conduct and Ethics

The board of directors adopted a Code of Business Conduct and Ethics, or Code of Conduct, for our directors, officers and employees on May 31, 2007, as amended from time to time.

Our Code of Conduct can be found on SEDAR at www.sedar.com and on our website on www.acastipharma.com.

A copy of the Code of Conduct can also be obtained by contacting our corporate secretary.

We intend to disclose future amendments to or waivers from certain provisions of our Code of Conduct provisions on our website.

Since its adoption by the board of directors, any breach of the Code of Conduct must be brought to the attention of the board of directors by our CEO or other senior executives.

No report has ever been filed which pertains to any conduct of a director or executive officer that constitutes a breach to our Code of Conduct.

The board of directors actively monitors compliance with the Code Conduct and promotes a business environment where employees are encouraged to report malfeasance, irregularities, and other concerns.

The Code of Conduct provides for specific procedures for reporting non-compliant practices in a manner which, in the opinion of the board of directors, encourages and promotes a culture of ethical business conduct.

The board of directors has also adopted a disclosure policy, insider trading policy, majority voting policy, management and board compensation policies, and a whistle blower policy.

In addition, under the Civil Code of Québec, to which we are subject as a legal person incorporated under the Business Corporations Act (Québec) (L.R.Q., c.

S-31), a director must immediately disclose to the board any situation that may place him or her in a conflict of interest.

Any such declaration of interest is recorded in the minutes of proceedings of the board of directors.

In such instances, the director abstains, except if otherwise required, from the discussion and voting on the question.

In addition, it is our policy that an interested director recuse himself or herself from the decision-making process pertaining to a contract or transaction in which he or she has an interest.

The Board relies on third-party professional assistance, when judged necessary, in order to be educated/updated on a particular topic.

Nomination of Directors

The board of directors receives recommendations from the GHR committee, but retains responsibility for managing its own affairs by, among other things, giving its approval for the composition and size of the board of directors, and the selection of candidates nominated for election to the board of directors.

The Board receives recommendations from the GHR committee, but retains responsibility for managing its own affairs by, among other things, giving its approval for the composition and size of the Board, and the selection of candidates nominated for election to the Board.

The GHR committee initially evaluates candidates for nomination for election as directors, having regard to the background, diversity, employment, and qualifications of possible candidates.

The selection of the nominees for the board of directors is made by the other members of the board, based on our needs and the qualities required for the board of directors, including ethical character, integrity and maturity of judgment of the candidates;

The selection of the nominees for the Board is made by the other members of the Board, based on our needs and the qualities required for the Board, including ethical character, integrity and maturity of judgment of the candidates;

the level of experience of the candidates;

their ideas regarding the material aspects of our business;

the expertise of the candidates in fields relevant to us while complementing the training and experience of the other members of the board of directors;

the will and ability of the candidates to devote the necessary time to their duties to the board of directors and its committees;

the will of the candidates to serve on the board of directors for numerous consecutive financial periods;

the expertise of the candidates in fields relevant to us while complementing the training and experience of the other members of the Board;

the will and ability of the candidates to devote the necessary time to their duties to the Board and its committees;

the will of the candidates to serve on the Board for numerous consecutive financial periods;

and the will of the candidates to refrain from engaging in activities which conflict with the responsibilities and duties of a director.

The board researches the training and qualifications of potential new directors which seem to correspond to the selection criteria of the board of directors and, depending on the results of said research, organizes meetings with the potential candidates.

In the case of incumbent directors whose terms of office are set to expire, the board will review such directors’

overall service to us during their term of office, including the number of meetings attended, level of participation, quality of performance and any transactions of such directors with us during their term of office.

We may use various sources in order to identify the candidates for the board of directors, including our own contacts and the references of other directors, officers, advisors and executive placement agencies.

The Board researches the training and qualifications of potential new directors which seem to correspond to the selection criteria of the Board and, depending on the results of said research, organizes meetings with the potential candidates.

In the case of incumbent directors whose terms of office are set to expire, the Board will review such directors’ overall service to us during their term of office, including the number of meetings attended, level of participation, quality of performance and any transactions of such directors with us during their term of office.

We may use various sources in order to identify the candidates for the Board, including our own contacts and the references of other directors, officers, advisors and executive placement agencies.

We will consider director candidates recommended by shareholders and will evaluate those director candidates in the same manner in which we evaluate candidates recommended by other sources.

In making recommendations for director nominees for the annual meeting of shareholders, we will consider any written recommendations of director candidates by shareholders received by our corporate secretary not later than 120 days before the anniversary of the previous year’s annual meeting of shareholders.

Recommendations must include the candidate’s name, contact information and a statement of the candidate’s

background and qualifications, and must be mailed to us.

Recommendations must include the candidate’s name, contact information and a statement of the candidate’s background and qualifications, and must be mailed to us.

Following the selection of the candidates by the board of directors, we will propose a list of candidates to the shareholders, for our annual meeting of shareholders.

The board of directors does not have a separate nominating committee and has not adopted any formal written director term limit policy.

The Board does not have a separate nominating committee and has not adopted any formal written director term limit policy.

Proposed nominations of director candidates are evaluated by our GHR committee.

GHR Committee

The mandate of the GHR committee consists of the evaluation of the proposed nominations of senior executives and director candidates to our board of directors;

The mandate of the GHR committee consists of the evaluation of the proposed nominations of senior executives and director candidates to our Board;

recommending for board approval, if appropriate;

revisions of our corporate governance practices and procedures;

developing new charters for any new committees established by the board of directors;

monitoring relationships and communication between management and the board of directors;

developing new charters for any new committees established by the Board;

monitoring relationships and communication between management and the Board;

monitoring emerging best practices in corporate governance and oversight of governance matters;

and assessing the board of directors and its committees.

The GHR committee is also in charge of establishing the procedures which must be followed by us to comply with applicable requirements of the Nasdaq Stock Market regarding corporate governance.

The GHR committee has the responsibility of evaluating the compensation, performance incentives as well as the benefits granted to our management in accordance with their responsibilities and performance as well as to recommend the necessary adjustments to our board of directors.

and assessing the Board and its committees.

The GHR committee is also in charge of establishing the procedures which must be followed by us to comply with applicable requirements of Nasdaq regarding corporate governance.

The GHR committee also reviews the amount and method of compensation granted to the directors.

1 unchanged sentence

The GHR committee considers time commitment, comparative fees, and responsibilities in determining compensation.

The GHR committee’s charter can be found on the Company’s website at https://www.acasti.com/en/investors/corporate-governance/governance-documents.

Periodic Assessments

The board of directors, its committees and each director are subject to periodic evaluations of their efficacy and contribution.

The evaluation procedure consists of identifying any shortcomings and implementing adjustments proposed by directors at the beginning and during meetings of the board of directors and of each of its committees.

The Board, its committees and each director are subject to periodic evaluations of their efficacy and contribution.

The evaluation procedure consists of identifying any shortcomings and implementing adjustments proposed by directors at the beginning and during meetings of the Board and of each of its committees.

Among other things, these adjustments deal with the level of preparation of directors, management and consultants employed by us, the relevance and sufficiency of the documentation provided to directors and the time allowed to directors for discussion and debate of items on the agenda.

2 unchanged sentences

At this time, the Board does not believe that it is in our best interests to establish a limit on the number of times a director may stand for election.

While such a limit could help create an environment where fresh ideas and viewpoints are available to the board, a director term limit could also disadvantage us through the loss of the beneficial contribution of directors who have developed increasing knowledge of, and insight into, us and our operations over a period of time.

While such a limit could help create an environment where fresh ideas and viewpoints are available to the Board, a director term limit could also disadvantage us through the loss of the beneficial contribution of directors who have developed increasing knowledge of, and insight into, us and our operations over a period

As we operate in a unique industry, it is difficult to find qualified directors with the appropriate background and experience and the introduction of a director term limit would impose further difficulty.

Policies Regarding the Representation of Women on the Board and Among Executive Officers

We have not adopted a formal written policy regarding diversity amongst executive officers and members of the board of directors, including mechanisms for board renewal, in connection with, among other things, the identification and nomination of women directors.

Nevertheless, we recognize that gender diversity is a significant aspect of diversity and acknowledge the important role that women with appropriate and relevant skills and experience can play in contributing to the diversity of perspective on the board of directors.

We have not adopted a formal written policy regarding diversity amongst executive officers and members of the Board, including mechanisms for Board renewal, in connection with, among other things, the identification and nomination of women directors.

Rather than considering the level of representation of women for directorship and executive officer positions when making Board or executive officer appointments, we consider all candidates based on their merit and qualifications relevant to the specific role.

While we recognize the benefits of diversity at all levels within our organization, we do not currently have any targets, rules or formal policies that specifically require the identification, consideration, nomination, or appointment of candidates for directorship or executive management positions or that would otherwise force the composition of our board of directors and executive management team.

Principal Accounting Fees and Services Audit Fees

Our independent registered public accounting firm is Ernst & Young LLP, Montréal, Québec, Canada, “Audit fees”

consist of fees for professional services for the audit of our annual financial statements and fees related to securities filings.

Audit fees for Ernst & Young LLP were CAD $385,000 for the fiscal year ended March 31, 2023.

Our previous independent registered public accounting firm was KPMG LLP, Montreal, Quebec, Canada, which audited our annual financial statements for our fiscal year ended March 31, 2022.

Audit fees for KPMG LLP were CAD $538,400 for the fiscal year ended March 31, 2022.

Our current independent registered public accounting firm is KPMG LLP, U.S.

Change in Accountant

On December 11, 2023, the Audit Committee (the “Audit Committee”) of the Company's Board of Directors (the "Board") recommended to the Board and the Board approved the dismissal of Ernst & Young LLP (Canada) ("E&Y") who had been serving as the Company’s independent registered public accounting firm since February 22, 2023.

The report of E&Y on the consolidated financial statements of the Company as of and for the fiscal year ended March 31, 2023 did not contain any adverse opinion or a disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.

On December 11, 2023, in connection with the Company’s dismissal of E&Y, the Audit Committee recommended to the Board and the Board approved the engagement of KPMG as its new independent registered public accounting firm to audit the Company’s consolidated financial statements for the fiscal year ending March 31, 2024.

The decision to engage KPMG was recommended by the Audit Committee, and approved by the Board, after taking into account KPMG’s location in the United States, the results of a competitive review process and other business factors.

Prior to our engagement of E&Y on February 22, 2023, KPMG LLP, Montreal, Quebec, Canada (“KPMG Canada”) was previously our independent registered public accounting firm.

On February 22, 2023, the Audit Committee and Board approved the dismissal of KPMG Canada as our independent registered public accounting firm.

Independent Registered Public Accounting Firm Fees and Services

“Audit fees” consist of fees for professional services for the audit of our annual financial statements and fees related to securities filings.

Audit fees for KPMG were $300 thousand for the fiscal year ended March 31, 2024.

Our previous independent registered public accounting firms were E&Y, which audited our annual financial statements for our fiscal year ended March 31, 2023, and KPMG Canada, which audited our annual financial statements for our fiscal year ended March 31, 2022.

Audit fees for E&Y were CAD $143 thousand and CAD $425 thousand for the fiscal years ended March 31, 2024 and March 31, 2023, respectively.

Audit fees for KPMG Canada, were nil and CAD $64 thousand for the fiscal years ended March 31, 2024 and March 31, 2023, respectively.

Audit-Related Fees

“Audit-related fees”

consist of fees for professional services that are reasonably related to the performance of the audit or review of our financial statements, and which are not reported under “Audit Fees”

Ernst & Young LLP billed CAD nil for audit-related fees for the fiscal year ended March 31, 2023.

KPMG LLP billed CAD nil for audit related fees for the fiscal year ended March 31, 2022.

“Tax fees”

consist of fees for professional services for tax compliance, tax advice and tax planning.

Ernst & Young LLP billed CAD nil for tax fees for the fiscal year ended March 31, 2023.

KPMG LLP billed CAD $28,595 for tax fees for the fiscal year ended March 31, 2022.

Tax fees include, but are not limited to, preparation of tax returns.

“Audit-related fees” consist of fees for professional services that are reasonably related to the performance of the audit or review of our financial statements, and which are not reported under “Audit Fees” above.

KPMG Canada, billed nil and CAD $52 thousand for audit related fees for the fiscal years ended March 31, 2024, and March 31, 2023, respectively.

“Tax fees” consist of fees for professional services for tax compliance, tax advice and tax planning.

E&Y billed CAD $47 thousand and nil for tax fees for the fiscal years ended March 31, 2024, and March 31, 2023, respectively.

All Other Fees

“Other fees”

include all other fees billed for professional services other than those mentioned hereinabove.

Ernest & Young LLP billed no fees under this category for the fiscal year ended March 31, 2023, and KPMG LLP billed no fees under this category for the fiscal year ended March 31, 2022.

Change in Accountant

KPMG LLP was previously our principal independent accountants.

On February 22, 2023, the audit committee and board of directors approved the dismissal of KPMG LLP as the Company’s independent registered public accounting firm.

The report of KPMG LLP on the consolidated financial statements of the Company as of and for

the fiscal years ended March 31, 2022 and 2021 did not contain any adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

During the fiscal years ended March 31, 2022 and 2021 and the subsequent interim period through the date of the engagement of Ernst & Young LLP as the Company’s registered independent public accounting firm, there were no (1) disagreements between the Company and KPMG LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of KPMG LLP, would have caused KPMG LLP to make reference in connection with their opinion to the subject matter of the disagreements, or (2) reportable events.

The Company provided KPMG LLP with a copy of the disclosures in the Company’s related Current Report on Form 8-K prior to its filing with the Securities and Exchange Commission (the “

SEC ”) and requested KPMG LLP furnish it a letter addressed to the SEC stating whether it agrees with the above statements.

A copy of that letter, dated February 22, 2023, was filed as Exhibit 16.1 to the related Current Report on Form 8-K.

On February 22, 2023, in connection with the Company’s dismissal of KPMG LLP, the board of directors approved the engagement of Ernst & Young LLP as its new independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending March 31, 2023.

The decision to retain Ernst & Young LLP was recommended by the audit committee, and approved by the board of directors, after taking into account the results of a competitive review process and other business factors.

During the fiscal years ended March 31, 2022 and 2021 and the subsequent interim period through February 22, 2023, neither the Company nor anyone on its behalf consulted with Ernst & Young LLP regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, (ii) the type of audit opinion that might be rendered on the Company’s financial statements and neither a written report nor oral advice was provided to the Company that Ernst & Young LLP concluded was an important factor considered by the Company in reaching a decision as to accounting, auditing or financial reporting issues, (iii) any matter that was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions), or (iv) any reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

“Other fees” include all other fees billed for professional services other than those mentioned hereinabove.

We incurred no other fees for the fiscal years ended March 31, 2024 and March 31, 2023.

Pre-Approval Policies and Procedures

5 unchanged sentences

• the services are promptly brought to the attention of the audit committee and approved, prior to the completion of the audit, by the audit committee or by one or more of its members to whom authority to grant such approvals had been delegated by the audit committee.

None of the services described above under “Principal Accounting Fees and Services”

were approved by the audit committee pursuant to the de minimus exception.

None of the services described above under “Principal Accounting Fees and Services” were approved by the Audit Committee pursuant to the de minimus exception.

Exhibits, Financial Statement Schedules

(a)(1) Financial Statements—The financial statements included in Item 8 are filed as part of this annual report on Form 10-K.

(a)(2) Financial Statement Schedules—All schedules have been omitted because they are not applicable or required, or the information required to be set forth therein is included in the consolidated Financial Statements or notes thereto included in Item 8 of this annual report on Form 10-K.

(a)(3) Exhibits—The exhibits required by Item 601 of Regulation S-K are listed in paragraph (b) below.

(b) Exhibits—The exhibits listed on the Exhibit Index below are filed herewith or are incorporated by reference to exhibits previously filed with the SEC.

Form 10-K Summary

(a)(1) Financial Statements—The consolidated financial statements included in Item 8 are filed as part of this Annual Report on Form 10-K.

(a)(2) Financial Statement Schedules—All schedules have been omitted because they are not applicable or required, or the information required to be set forth therein is included in the consolidated financial statements or notes thereto included in Item 8 of this Annual Report on Form 10-K.

(a)(3) Exhibits—The exhibits required by Item 601 of Regulation S-K are listed in paragraph (b) below.

(b) Exhibits—The exhibits listed on the Exhibit Index below are filed herewith or are incorporated by reference to exhibits previously filed with the SEC.

EXHIBITS INDEX

2 unchanged sentences

(incorporated by reference to Exhibit 2.1 from Form 8-K filed with the SEC on May 7, 2021)

Articles of Incorporation (incorporated by reference to Exhibit 4.1 from Form S-8 (File No.

333-191383) filed with the Commission on September 25, 2013)

Articles of Amendment (incorporated by reference to Exhibit 3.1 from Form 8-K filed with the SEC on August 27, 2021)

Amended and Restated General By-Law (incorporated by reference to Exhibit 99.1 from Form 6-K (File No.

001-35776) filed with the Commission on February 21, 2017)

Articles of Incorporation, as amended (incorporated by reference to Exhibit 4.1 from Form S-3 (File No.

333-274899) filed with the SEC on October 6, 2023)

Amended and Restated General By-Law (incorporated by reference to Exhibit 3.4 from Form 10-Q (File No.

001-35776) filed with the SEC on August 11, 2023)

Advance Notice bylaw No.

4 unchanged sentences

001-35776) filed with the Commission on June 6, 2014)

Amended and Restated Warrant Indenture dated May 10, 2018 between Acasti Pharma Inc.

and Computershare Trust Company of Canada (incorporated by reference to Exhibit 2.5 from Form 20-F (File No.

001-35776) filed with the Commission on June 29, 2018)

Description of Securities (incorporated by reference to exhibit 4.6 from form 10K filed with the commission on June 21, 2022).

Acasti Pharma Inc., Equity Incentive Plan, as amended August 4, 2022(incorporated by reference from Schedule A to proxy statement filed with the Commission on August 31, 2022).

Acasti Pharma Inc., Stock Option Plan, as amended August 4, 2022.(incorporated by reference from Schedule A to proxy statement filed with the Commission on August 31, 2022).

Consent of Ernst & Young LLP, an Independent Registered Public Accounting Firm.

Description of Securities (incorporated by reference to Exhibit 4.6 from Form 10-K (File No.

001-35776) filed with the SEC on June 21, 2022)

Form of Common Warrant, dated September 25, 2023 (incorporated by reference to Exhibit 4.1 from Form 8-K (File No.

001-35776) filed with the SEC on September 26, 2023)

Form of Pre-Funded Warrant, dated September 25, 2023 (incorporated by reference to Exhibit 4.2 from Form 8-K (File No.

001-35776) filed with the SEC on September 26, 2023)

Acasti Pharma Inc.

Stock Option Plan, as amended August 4, 2022 (incorporated by reference from Schedule A to the definitive proxy statement filed with the SEC on August 31, 2022)

Form of Stock Option Agreement for Employees under the Acasti Pharma Inc.

Stock Option Plan (incorporated by reference to Exhibit 10.1 from Form 10-Q (File No.

001-35776) filed with the SEC on August 11, 2023)

Form of Stock Option Agreement for Non-Employee Directors under the Acasti Pharma Inc.

Stock Option Plan (incorporated by reference to Exhibit 10.2 from Form 10-Q (File No.

001-35776) filed with the SEC on August 11, 2023)

Acasti Pharma Inc.

Equity Incentive Plan, as amended August 4, 2022 (incorporated by reference from Schedule B to the definitive proxy statement filed with the SEC on August 31, 2022)

Offer Letter by and between Robert J.

DelAversano and the Company, dated November 21, 2023 (incorporated by reference to Exhibit 10.1 from Form 8-K (File No.

001-35776) filed with the Commission on January 8, 2024)

Settlement Agreement, dated October 18, 2023, by and between the Company and Aker BioMarine Antarctic AS (incorporated by reference to Exhibit 10.1 from Form 8-K (File No.

001-35776) filed with the SEC on October 23, 2023)

Form of Securities Purchase Agreement, dated September 24, 2023, by and between Acasti Pharma Inc.

and each of the Purchasers signatory thereto (incorporated by reference to Exhibit 10.1 from Form 8-K (File No.

001-35776) filed with the SEC on September 26, 2023)

Letter from KPMG LLP (Canada), dated February 22, 2023 (incorporated by reference to Exhibit 16.1 from Form 8-K (File No.

001-35776) filed with the SEC on February 22, 2023)

Letter from Ernst & Young LLP (Canada), dated December 15, 2023 (incorporated by reference to Exhibit 16.1 from Form 8-K (File No.

001-35776) filed with the SEC on December 15, 2023)

List of Subsidiaries

Consent of KPMG LLP, an Independent Registered Public Accounting Firm.

Consent of Ernst & Young LLP, an Independent Registered Public Accounting Firm.

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Acasti Pharma Inc.

Incentive Compensation Recoupment Policy

Inline XBRL Instance Document

5 unchanged sentences

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed or furnished herewith.

+ Management contract, compensatory plan or arrangement.

Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

11 unchanged sentences

(Principal Executive Officer)

/s/ Brian Ford

Interim Chief Financial Officer

/s/ Robert DelAversano

Principal Financial Officer

June 21, 2024

Robert DelAversano

(Principal Financial Officer and Principal Accounting Officer)

/s/ Donald Olds

/s/ Brian Davis

June 21, 2024

1 unchanged sentence

June 21, 2024

/s/Michael L.Derby

/s/Edward Neugeboren

June 21, 2024

Michael L.Derby

Edward Neugeboren

/s/George Kottayil

June 21, 2024

George Kottayil

ACASTI PHARMA INC.

1 unchanged sentence

For the years ended March 31, 2024 and 2023

Reports of Independent Registered Public Accounting Firms

Consolidated Balance Sheets

Consolidated Statements of Loss and Comprehensive Loss

Consolidated Statements of Shareholders’

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Acasti Pharma Inc.

Opinion on the Financial Statements

To the Shareholders and Board of Directors

Acasti Pharma Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Acasti Pharma Inc.

(the “Corporation”) as of March 31, 2023, the related consolidated statements of loss and comprehensive loss, shareholders’

equity, and cash flows for the year ended March 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation at March 31, 2023 and the results of its operations and its cash flows for the year ended March 31, 2023, in conformity with U.S.

and subsidiaries (the Company) as of March 31, 2024, the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Corporation’s management.

Our responsibility is to express an opinion on the Corporation’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Corporation in accordance with the U.S.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Corporation's internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of goodwill and in-process research and development intangibles (“IPR&D”)

Description of the matter

As discussed in Notes 2 and 5 of the consolidated financial statements, goodwill and IPR&D intangible assets are tested for impairment at least annually and more frequently when indicators of impairment exist.

The Corporation recorded an impairment charge of $28.7 million and $4.8 million related to IPR&D intangible assets and goodwill, respectively, for the year ended March 31, 2023, and as of March 31, 2023 there is a remaining carrying value of $41.1 million and $8.1 million related to IPR&D intangibles and goodwill, respectively.

Management estimated the fair value of the IPR&D intangible assets on an individual project basis and estimated the fair value of the reporting unit for purposes of testing goodwill.

Auditing the Corporation's impairment tests was complex and required a high degree of auditor judgment when performing procedures due to the significant estimation uncertainty in determining the fair value of the IPR&D and goodwill.

Significant assumptions used in the Corporation's fair value estimate of the IPR&D assets and goodwill are the discount rates, forecasted net sales, and the probability of clinical success of research and development programs and obtaining regulatory approval.

How we addressed the matter in our audit

To test the estimated fair value of the IPR&D and goodwill, our audit procedures included, among others, assessing the fair value methodologies applied and the prospective financial information used by the Corporation in its valuation analysis.

We involved our valuation specialists to assist in evaluating the valuation methodologies used, and also in testing the discount rates by developing an independent range of discount rates and comparing them to the discount rates selected by management.

We assessed forecasted net sales used by management by comparing to recent transactions for certain peer companies or market data.

We compared management's assumptions related to probability of success with data from third party studies and the stage of product development.

We performed sensitivity analyses of the significant assumptions to evaluate the change in the fair value resulting from changes in the assumptions.

/s/ Ernst & Young LLP

We have served as the Corporation’s auditor since 2023.

Montréal, Canada

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

We have served as the Company’s auditor since 2023.

Philadelphia, Pennsylvania

June 21, 2024

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Acasti Pharma Inc.:

Opinion on the Consolidated Financial Statements

To the Shareholders and the Board of Directors of Acasti Pharma Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Acasti Pharma Inc.

(the "Company") as of March 31, 2022, the related consolidated statements of loss and comprehensive loss, shareholders’

equity, and cash flows for the year ended March 31, 2022, and the related notes (collectively, the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2022, and the results of its operations and its cash flows for the year ended March 31, 2022, in conformity with U.S.

(the “Company”) as of March 31, 2023, the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for the year ended March 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, 2023 and the results of its operations and its cash flows for the year ended March 31, 2023, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

1 unchanged sentence

We conducted our audit in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

KPMG Canada provides services to KPMG LLP.

We served as the Company’s auditor from 2009 to 2023.

Montréal, Québec

June 21, 2022

/s/ Ernst & Young LLP

We served as the Company’s auditor in 2023.

Montréal, Canada

June 23, 2023, except for the effects of the reverse stock split described in Note 1, as to which the date is June 21, 2024

ACASTI PHARMA INC.

2 unchanged sentences

March 31, 2023

(Expressed in thousands of U.S.

dollars except share data)

(Expressed in thousands except share data)

Current assets:

1 unchanged sentence

Short-term investments

Assets held for sale

Prepaid expenses

1 unchanged sentence

Operating lease right of use asset

Equipment, net

Intangible assets

Liabilities and Shareholders’

Liabilities and Shareholders’ equity

Current liabilities:

6 unchanged sentences

Total liabilities

Shareholders’

Common shares, no par value per share;

unlimited shares authorized as

of March 31, 2023 and March 31, 2022;

44,612,831 and 44,288,183

shares issued and outstanding as of March 31, 2023 and March 31, 2022,

Commitments and contingencies (Note 13)

Shareholders’ equity:

Class A common shares, no par value per share;

unlimited shares authorized;

9,399,404 and 7,435,533 shares issued and outstanding as of March 31, 2024 and 2023,

Class B, C, D and E common shares, no par value per share;

unlimited shares authorized;

none issued and outstanding

Additional paid-in capital

1 unchanged sentence

Accumulated deficit

Total shareholder’s equity

Commitments and contingencies

Total liabilities and shareholders’

Total shareholders' equity

Total liabilities and shareholders’ equity

The accompanying notes are an integral part of these consolidated financial statements

ACASTI PHARMA INC.

Consolidated Statements of Loss and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Loss

Year ended March 31, 2024

Year ended March 31, 2023

(Expressed in thousands of U.S.

dollars except share and per data)

(Expressed in thousands, except share and per data)

Operating expenses

2 unchanged sentences

Sales and marketing

Restructuring cost

Impairment of intangible assets

2 unchanged sentences

Loss from operating activities

Loss before income tax recovery

Income tax recovery

Foreign exchange loss

Change in fair value of derivative warrant liabilities

Interest income and other expense, net

Total other income (expense), net

Loss before income tax benefit

Income tax benefit

Net loss and total comprehensive loss

3 unchanged sentences

ACASTI PHARMA INC.

Consolidated Statements of Shareholders’

(Expressed in thousands of U.S.

dollars except share data)

Common Shares

comprehensive

Consolidated Statements of Shareholders’ Equity

Class A common shares

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total shareholders' equity

(Expressed in thousands expect share data)

Balance, March 31, 2023

Net loss and total comprehensive loss for the period

Cumulative translation adjustment

Stock-based compensation

Net proceeds from shares issued under the at-the -market (ATM) program

Issuance of common shares and pre-funded warrants through private placement, net of offering costs

Issuance of common shares upon the exercise of stock options

Balance at March 31, 2024

Common Shares

comprehensive

Class A common shares

Additional paid-in capital

Accumulated other

comprehensive loss

Accumulated deficit

Total shareholders' equity

(Expressed in thousands expect share data)

Balance, March 31, 2022

2 unchanged sentences

Stock-based compensation

Common shares issued in relation to merger with Grace via share-for-share, net

Net proceeds from shares issued under the at-the-market (ATM) program

Balance at March 31, 2023

4 unchanged sentences

Year ended March 31, 2023

(Expressed in thousands of U.S.

(Expressed in thousands)

Cash flows used in operating activities:

Net loss for the year

Depreciation of equipment

Gain on sale of equipment

Impairment of intangible assets

1 unchanged sentence

Impairment of assets held for sale

Stock-based compensation expense

Stock-based compensation

Change in fair value of warrant liabilities

Income tax recovery

Unrealized foreign exchange loss

Write-off of equipment

Deferred income tax benefit

Unrealized foreign exchange (gain) loss

Loss on disposal

Changes in operating assets and liabilities:

Prepaid expenses

Trade and other payables

Operating lease right of use asset

Net cash used in operating activities

Cash flows from (used in) investing activities:

Acquisition of equipment

Acquisition of short-term investments

Cash flows from investing activities:

Purchase of equipment

Proceeds from sale of equipment

Purchase of short-term investments

Maturity of short-term investments

Net cash from (used in) investing activities

Cash flows from (used in) financing activities:

Net cash provided by investing activities

Cash flows from financing activities:

Net proceeds from issuance of common shares and warrants from private placement

Proceeds from issuance of common shares from exercise of stock options

Net proceeds from shares issued under the at-the-market (ATM) program

Net cash from financing activities

Net cash provided by financing activities

Effect of exchange rate fluctuations on cash and cash equivalents

Translation effect on cash and cash equivalents related to reporting currency

Net decrease in cash and cash equivalents

3 unchanged sentences

Cash equivalents

Cash interest received

Right-of-use assets obtained in exchange for new operating lease liability

ACASTI PHARMA INC.

Notes to the Consolidated Financial Statements

(Expressed in thousands of U.S.

dollars except share and per share data)

(Expressed in thousands except share and per share data)

Nature of Operations

Acasti Pharma Inc.

(“Acasti”

or the “Corporation”) is incorporated under the Business Corporations Act (Québec) (formerly Part 1A of the Companies Act (Québec)).

The Corporation is domiciled in Canada and its registered office is located at 3009 boul.

de la Concorde East, Suite 102, Laval, Québec, Canada H7E 2B5.

The Corporation’s shares are listed on the Nasdaq Capital Market (the "Nasdaq"), and from April 1, 2022 through March 27, 2023 the Corporation's shares were also listed on the TSX Venture Exchange ("TSXV"), in each case, under the symbol "ACST".

On March 13, 2023 the Corporation received approval to voluntarily delist from the TSXV.

Effective as at the close of trading on March 27, 2023, the Corporation's common shares are no longer listed and posted for trading on the TSXV.

In August 2021, the Corporation completed the acquisition via a share-for-share merger of Grace Therapeutics, Inc.

(“Grace”), a privately held emerging biopharmaceutical company focused on developing innovative drug delivery technologies for the treatment of rare and orphan diseases.

The post-merger Corporation is focused on building a late-stage specialty pharmaceutical company specializing in rare and orphan diseases and developing and commercializing products that improve clinical outcomes using our novel drug delivery technologies.

The Corporation seeks to apply new proprietary formulations to existing pharmaceutical compounds to achieve enhanced efficacy, faster onset of action, reduced side effects, more convenient delivery and increased patient compliance;

(“Acasti” or the “Company”) is incorporated under the Business Companies Act (Québec) (formerly Part 1A of the Companies Act (Québec)).

The Company is domiciled in Canada and its principal executive office is located at 103 Carnegie Center Suite 300 Princeton, New Jersey 08540.

The Company’s Class A common shares, no par value per share (“Common Shares”), are listed on the Nasdaq Capital Market (“Nasdaq”) and, through March 27, 2023, the Company's Common Shares were also listed on the TSX Venture Exchange (“TSXV”), in each case, under the symbol “ACST”.

On March 13, 2023, the Company received approval to voluntarily delist from the TSXV.

Effective as at the close of trading on March 27, 2023, the Company's Common Shares are no longer listed and posted for trading on the TSXV.

In August 2021, the Company completed the acquisition via a share-for-share merger of Grace Therapeutics, Inc.

(“Grace Therapeutics”), a privately held emerging biopharmaceutical company focused on developing innovative drug delivery technologies for the treatment of rare and orphan diseases.

The post-merger Company is focused on building a late-stage specialty pharmaceutical company specializing in rare and orphan diseases and developing and commercializing products that improve clinical outcomes using its novel drug delivery technologies.

The Company seeks to apply new proprietary formulations to existing pharmaceutical compounds to achieve enhanced efficacy, faster onset of action, reduced side effects, more convenient delivery and increased patient compliance;

all of which could result in improved patient outcomes.

The active pharmaceutical ingredients chosen by the Corporation for further development may be already approved in the target indication or could be repurposed for use in new indications.

In May 2023, the Corporation implemented a strategic realignment plan to enhance shareholder value that resulted in the Corporation engaging a new management team and greatly reducing its research and development activities including a reduction in workforce.

Moving forward part of this strategic realignment plan includes the Corporation rebuilding a smaller organization in the United States.

The Corporation has incurred operating losses and negative cash flows from operations in each year since its inception.

The Corporation expects to incur significant expenses and continued operating losses for the foreseeable future.

The Corporation expects its expenses will increase substantially in connection with its ongoing activities, particularly as it advances clinical development for the first three drug candidates in the Corporation’s pipeline;

continues to engage contract manufacturing organizations (“CMO's”) to manufacture its clinical study materials and to ultimately develop large-scale manufacturing capabilities in preparation for commercial launch;

seeks regulatory approval for its drug candidates;

and adds personnel to support its drug product development and future drug product launch and commercialization.

The Corporation does not expect to generate revenue from product sales unless and until it successfully completes drug development and obtains regulatory approval, which the Corporation expects will take several years and is subject to significant uncertainty.

To date, the Corporation has financed its operations primarily through public offerings and private placements of its common shares, warrants and convertible debt and the proceeds from research tax credits.

Until such time that the Corporation can generate significant revenue from drug product sales, if ever, it 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, which may include fees, milestone payments and royalties from collaborations with third parties.

Arrangements with collaborators or others may require the Corporation to relinquish certain rights related to its technologies or drug product candidates.

Adequate additional financing may not be available to the Corporation on acceptable terms, or at all.

The Corporation’s inability to raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strategy.

Management expects the Corporation to have sufficient cash resources to satisfy its objectives into the second quarter of calendar 2025, which is 21 to 24 months from the issuance date of these Financial Statements based on current plans or forecasts.

Part of the strategic realignment plan includes the decision to prioritize the development pf GTX-104 with a goal to advance to commercialization, while conserving resources as much as possible to complete development efficiently.

Further development of GTX-102 and GTX-101 will occur at such time as additional funding is obtained or strategic partnerships are entered.

The Corporation will require additional capital to fund our daily operating needs beyond that time.

The Corporation plans to raise additional capital prior to that time in order to maintain adequate liquidity.

Negative results from studies, if any, and depressed prices of the Corporation’s stock could impact the Corporation’s ability to raise additional financing.

Raising additional equity capital is subject to market conditions not within the Corporation’s control.

If the Corporation does not raise additional funds in this time period, the Corporation may not be able to realize our assets and discharge our liabilities in the normal course of business.

The Corporation remains subject to risks similar to other development stage companies in the biopharmaceutical industry, including compliance with government regulations, protection of proprietary technology, dependence on third-party contractors and consultants and potential product liability, among others.

The active pharmaceutical ingredients chosen by the Company for further development may be already approved in the target indication or could be repurposed for use in new indications.

The Company has incurred operating losses and negative cash flows from operations in each year since its inception.

The Company expects to incur significant expenses and continued operating losses for the foreseeable future.

In May 2023, the Company implemented a strategic realignment plan to enhance shareholder value that resulted in the Company engaging a new management team, streamlining its research and development activities and greatly reducing its workforce.

Following the realignment, the Company is a smaller, more focused organization, based in the United States, and concentrated on its development of its lead product GTX-104.

Further development of GTX-102 and GTX-101 will occur at such time when the Company is able to secure additional funding, or enters into strategic partnerships for license or sale with third parties.

On September 24, 2023, the Company entered into a securities purchase agreement with certain institutional and accredited investors.

Gross proceeds to the Company from this private placement were approximately $ 7,500 , before deducting fees and expenses.

The Company issued and sold an aggregate of 1,951,371 Common Shares, pre-funded warrants (the "Pre-funded Warrants") to purchase up to an aggregate of 2,106,853 Common Shares, each at a purchase price of $ 1.8481 per Common Share and accompanying common warrants (the "Common Warrants" and, together with the Pre-funded Warrants, the "Warrants") to purchase up to an aggregate of 2,536,391 Common Shares.

The Company currently intends to use the net proceeds from the private placement for clinical trial expenses to further the Phase 3 clinical trial for GTX-104, pre-commercial planning, working capital and other general corporate purposes.

The Company believes its existing cash and cash equivalents, will be sufficient to fund the Company’s operations into the second calendar quarter of 2026.

The Company will require additional capital to fund its daily operating needs beyond that time.

The Company does not expect to generate revenue from product sales unless and until it successfully completes drug development and obtains regulatory approval, which the Company expects will take several years and is subject to significant uncertainty.

To date, the Company has financed its operations primarily through public offerings and private placements of its Common Shares, warrants and convertible debt and the proceeds from research tax credits.

Until such time that the Company can generate significant revenue from drug product sales, if ever, it 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, which may include fees, milestone payments and royalties from collaborations with third parties.

Arrangements with collaborators or others may require the Company to relinquish certain rights related to its technologies or drug product candidates.

Adequate additional financing may not be available to the Company on acceptable terms, or at all.

The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strategy.

The Company plans to raise additional capital in order to maintain adequate liquidity.

Negative results from studies or trials, if any, or depressed prices of the Company’s stock could impact the Company’s ability to raise additional financing.

Raising additional equity capital is subject to market conditions that are not within the Company’s control.

If the Company is unable to raise additional funds, the Company may not be able to realize its assets and discharge its liabilities in the normal course of business.

The Company remains subject to risks similar to other development stage companies in the biopharmaceutical industry, including

compliance with government regulations, protection of proprietary technology, dependence on third-party contractors and consultants and potential product liability, among others.

Reverse stock split

On August 26, 2021, the shareholders of the Corporation approved a resolution to undertake a reverse split of the common stock within a range of 1-6 to 1-8 with such specific ratio to be approved by the Acasti Board.

All references in these financial statements to number of common shares, warrants and options, price per share and weighted average number of shares outstanding prior to the reverse split have been adjusted to reflect the approved reverse stock split of 1- 8 , which was made effective on August 31, 2021, on a retrospective basis as of the earliest period presented.

On June 29, 2023, the Board of Directors of the Company approved an amendment to the Company's Articles of Incorporation to implement a reverse stock split of the Company's Common Shares, at a ratio of 1-for-6 (the “Reverse Stock Split”).

On July 4, 2023, the Company filed Articles of Amendment to its Articles of Incorporation with the Registraire des entreprises du Québec , to implement the Reverse Stock Split.

All references in these financial statements to number of Common Shares, warrants and options, price per share and weighted-average number of shares outstanding have been adjusted to reflect the Reverse Stock Split, which became effective on July 10, 2023.

Summary of significant accounting policies

2 unchanged sentences

All intercompany transactions and balances are eliminated on consolidation.

Smaller Reporting Company

The Corporation qualifies as a “smaller reporting company”

under the Exchange Act as of March 31, 2023 because the market value of its common shares held by non-affiliates was less than $ 560 million as of September 30, 2022 and its revenue for the year ended March 31, 2022 was less than $ 100 million.

As a smaller reporting company, the Corporation may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

For so long as the Corporation remains a smaller reporting company, it is permitted and the Corporation intends to rely on such exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies.

Use of estimates

The preparation of the financial statements in conformity with U.S.

The preparation of the 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 derivative warrant liabilities (note 12), stock-based compensation ( note 14 )), assets held for sale (notes 8), the supply contract (note 19(a)) and valuation of intangibles and goodwill (note 5).

Estimates and assumptions are also involved in measuring the accrual of services rendered with respect to research and developments expenditures at each reporting date, and determining which research and development expenses qualify for research and development tax credits and in what amounts.

The Corporation recognizes the tax credits once it has reasonable assurance that they will be realized.

Functional and foreign currency

On April 1, 2022, the Corporation’s functional currency was changed from the Canadian dollar to the US dollar.

This change is reflected prospectively in the Corporation’s financial statements.

FASB ASC Topic 830, “Functional Currency Matters,”

requires a change in functional currency to be reported as of the date it is determined there has been a change, and it is generally accepted practice that the change is made at the start of the most recent period that approximates the date of the change.

Management determined it would enact this change effective on April 1, 2022.

While the change was based on a factual assessment, the determination of the date of the change required management’s judgment given the change in the Corporation's primary economic and business environment, which has evolved over time.

As part of management’s functional currency assessment, changes in economic facts and circumstances were considered.

This included analysis of changes in:

impact of the merger with Grace Therapeutics, management of operations, and in the composition of cash and short term investment balances.

Additionally, budgeting is in USD, whereas this was previously performed in CAD.

The Corporation's cash outflows consist primarily of USD cash balances and less of CAD, as also reflected in the budget.

Transactions denominated in currencies other than the functional currency are measured and recorded in the functional currency at the exchange rate in effect on the date of the transactions.

At each consolidated balance sheet date, monetary assets and liabilities denominated in currencies other than the functional currency are remeasured using the exchange rate in effect at that date.

Non-monetary assets and liabilities and revenue and expense items denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions.

Any gains or losses arising on remeasurement are included in the consolidated statement of loss.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash balances and highly liquid investments purchased with original maturities of three months or less.

Cash and cash equivalents consist of term deposits held at the bank and recorded at cost, which approximates fair value.

The Corporation’s investments consist of term deposits and are classified as held-to-maturity securities.

These investments are recorded at amortized cost.

Investments with original maturities exceeding three months and less than one year are categorized as short-term.

The Corporation has the intent and ability to hold these securities for at least the next 12 months.

Assets held for sale

Assets that are classified as held for sale are measured at the lower of their carrying amount or fair value less expected selling costs (“estimated selling price”) with a loss recognized to the extent that the carrying amount exceeds the estimated selling price.

The classification is applicable at the date upon which the sale of assets is probable, and the assets are available for immediate sale in their present condition.

Assets once classified as held for sale, are not subject to depreciation or amortization and both the assets and any liabilities directly associated with the assets held for sale are classified as current in the Corporation’s Consolidated Balance Sheets.

Subsequent changes to the estimated selling price of assets held for sale are recorded as gains or losses to the Consolidated Statements of Income wherein the recognition of subsequent gains is limited to the cumulative loss previously recognized.

(i) Recognition and measurement

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 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.

Cash equivalents

Cash equivalents comprise of highly liquid investments purchased with original maturities of 90 days or less.

Cash equivalents consist of guaranteed investment certificates.

Equipment is measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Cost includes expenditures that are directly attributable to the acquisition of the asset, including all costs incurred in bringing the asset to its present location and condition.

Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment.

Gains and losses on disposal of equipment are determined by comparing the proceeds from disposal with the carrying amount of equipment and are recognized net within operating expenses in the Consolidated Statement of Loss and Comprehensive Loss.

(ii) Subsequent costs

The costs of the day-to-day servicing of equipment are recognized in profit or loss as incurred.

(iii) Depreciation

Depreciation is recognized in profit or loss on either a straight-line basis or a declining basis over the estimated useful lives of each part of an item of equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Gains and losses on disposal of equipment are determined by comparing the proceeds from disposal with the carrying amount of equipment.

Depreciation is recognized on a declining basis over the estimated useful lives of equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Items of equipment are depreciated from the date that they are available for use or, in respect of assets not yet in service, from the date they are ready for their intended use.

The estimated useful lives and rates for the current and comparative periods are as follows:

Furniture and office equipment

Declining balance

Computer equipment

Declining balance

Laboratory equipment

Declining balance

Production equipment

Declining balance

Depreciation methods, useful lives and residual values are reviewed periodically and adjusted prospectively if appropriate.

Intangible assets - acquired in-process research and development

In a business combination, the fair value of in-process research and development (“IPR&D”) acquired is capitalized and accounted for as indefinite-lived intangible assets, and not amortized until the underlying project receives regulatory approval, at which point the intangible assets will be accounted for as definite-lived intangible assets and amortized over the remaining useful life or discontinued.

If discontinued, the intangible asset will be written off.

Research and development (“R&D”) costs incurred after the acquisition are expensed as incurred.

The estimated fair values of identifiable intangible assets were determined using the multi-period excess earnings method, which is a valuation methodology that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life.

1 unchanged sentence

Impairment of long-lived assets

The Corporation reviews the recoverability of its finite long-lived assets whenever events or changes in circumstances indicate that it is carrying amount may not be recoverable.

The Company reviews the recoverability of its finite long-lived assets whenever events or changes in circumstances indicate that it is carrying amount may not be recoverable.

The carrying amount is first compared with the undiscounted cash flows.

If the carrying amount is higher than the sum of undiscounted cash flows, then the Corporation determines the fair value of the underlying asset group.

If the carrying amount is higher than the sum of undiscounted cash flows, then the Company determines the fair value of the underlying asset group.

Any impairment loss to be recognized is measured as the difference by which the carrying amount of the asset group exceeds the estimated fair value of the asset group.

2 unchanged sentences

An impairment of indefinite-lived intangible assets would occur if the fair value of the intangible asset is less than the carrying value.

The Corporation tests its goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount.

If the Corporation concludes it is more likely than not that fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed.

The Corporation tests indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount.

If the Corporation concludes it is more likely than not that the fair value is less than it's carrying amount, a quantitative impairment test is performed.

The Corporation's annual impairment test is performed in the fourth quarter of the fiscal year.

The Company tests its goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount.

If the Company concludes it is more likely than not that fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed.

The Company tests indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount.

If the Company concludes it is more likely than not that the fair value is less than it's carrying amount, a quantitative impairment test is performed.

The Company's annual impairment test is performed in the fourth quarter of the fiscal year.

Research and development costs

Research and developments expenditures are expensed as incurred.

These costs primarily consist of employees’

salaries and benefits related to research and development activities, contractors and consultants that conduct the Corporation’s clinical trials, independent auditors and consultants to perform investigation activities on behalf of the Corporation, laboratory material and small equipment, clinical trial materials, stock-based compensation expense, and other non-clinical costs and regulatory fees.

These costs consist of employees’ salaries and benefits related to research and development activities, contractors and consultants that conduct the Company’s clinical trials, laboratory material and small equipment, clinical trial materials, stock-based compensation expense, and other non-clinical costs and regulatory fees.

Advance payments for goods and services that will be used in future research and development are recognized in prepaids or other assets and are expensed when the services are performed, or the goods are used.

Stock-based compensation

The Corporation has in place a stock option plan for directors, officers, employees, and consultants of the Corporation, with grants under the stock option plan approved by the Corporation’s Board of Directors.

The Company has in place a stock option plan for directors, officers, employees, and consultants of the Company, with grants under the stock option plan approved by the Company’s Board of Directors.

The plan provides for the granting of options to purchase Common Shares and the exercise price of each option equals the closing trading price of Common Shares on the day prior to the grant.

The terms and conditions for acquiring and exercising options are set by the Corporation’s Board of Directors in accordance with and subject to the terms and conditions of the stock option plan.

The Corporation measures the cost of such awards based on the fair value of the award at grant date, net of estimated forfeiture, and recognizes stock-based compensation expense in the Consolidated Statements of Loss and Comprehensive Loss on a graded vesting basis over the requisite service period.

The requisite service period equals the vesting periods of the awards.

The Company accounts for stock-based compensation arrangements in accordance with provisions of Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation .

ASC 718 requires the recognition of compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options.

ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.

The Company measures the cost of such awards based on the fair value of the award at grant date and recognizes stock-based compensation expense in the Consolidated Statements of Operations and Comprehensive Loss on a tranche by tranche basis.

The fair value of options is estimated for each tranche of an award that vests on a graded basis.

The fair value of options is estimated using the Black-Scholes option pricing model, which uses various inputs including fair value of the Common Shares at the grant date, expected term, estimated volatility, risk-free interest rate and expected dividend yields of the Common Shares.

The Corporation applies an estimated forfeiture rate derived from historical employee termination behaviour.

The fair value of options is estimated using the Black-Scholes option pricing model, which uses various inputs including fair value of the Common Shares at the grant date, expected term, historical volatility, risk-free interest rate and expected dividend yields of the Common Shares.

The Company applies an estimated forfeiture rate derived from historical employee termination behavior in determining compensation expense.

If the actual forfeitures differ from those estimated by management, adjustment to compensation expense may be required in future periods.

Non-employee stock-based compensation transactions in which the Corporation receives goods or services as consideration for its own equity instruments are accounted for as stock-based compensation transactions.

The Corporation establishes the fair value at the grant date for non-employee awards and measures the fair value based on the fair value of equity instruments issued.

The fair value of a non-employee award is estimated using the Black-Scholes option pricing model, which uses various inputs including fair value of the Common Shares at the grant date, contractual term, estimated volatility, risk-free interest rate and expected dividend yields of the Common Shares.

Government grants

Government grants are recorded as a reduction of the related expense or cost of the asset acquired.

Government grants are recognized when there is reasonable assurance that the Corporation has met the requirements of the approved grant program and there is reasonable assurance that the grant will be received.

Grants that compensate the Corporation for expenses incurred are recognized in profit or loss in reduction thereof on a systematic basis in the same years in which the expenses are recognized.

Grants that compensate the Corporation for the cost of an asset are recognized in profit or loss on a systematic basis over the useful life of the asset.

At the inception of an arrangement, the Corporation determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement.

Government grants are recognized when there is reasonable assurance that the Company has met the requirements of the approved grant program and there is reasonable assurance that the grant will be received.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement.

Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term.

1 unchanged sentence

The interest rate implicit in lease contracts is typically not readily determinable.

As a result, the Corporation utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Corporation could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

The Corporation has elected not to recognize leases with an original term of one year or less on the balance sheet.

The Corporation typically only includes an initial lease term in its assessment of a lease arrangement.

Options to renew a lease are not included in the Corporation’s assessment unless there is reasonable certainty that the Corporation will renew.

The Corporation’s lease expense is recognized in research and development expenses.

The Corporation does not have financing leases.

In accordance with ASC 842, components of a lease should be split into three categories:

As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar

economic environment.

The Company has elected not to recognize leases with an original term of one year or less on the balance sheet.

The Company typically only includes an initial lease term in its assessment of a lease arrangement.

Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew.

The Company’s lease expense is recognized in research and development expenses.

The Company does not have financing leases.

In accordance with FASB ASC 842— Leases (“Topic 842”), components of a lease should be split into three categories:

lease components, non-lease components and non-components.

1 unchanged sentence

Entities may elect not to separate lease and non-lease components.

The Corporation has elected to account for lease and non-lease components together as a single lease component for all underlying assets and allocate all of the contract consideration to the lease component only.

Income tax expense comprises current and deferred taxes.

Current and deferred taxes are recognized in profit or loss except to the extent that they relate to items recognized directly in equity or in other comprehensive income.

The Company has elected to account for lease and non-lease components together as a single lease component for all underlying assets and allocate all of the contract consideration to the lease component only.

Income taxes comprises current and deferred taxes.

The provision for income taxes is computed using the asset and liability method.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts (tax base) of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax assets and liabilities are measured at the tax rate expected to apply when the underlying asset or liability is realised (settled) based on the rates that are enacted at the reporting date.

Deferred tax assets and liabilities are offset if the Corporation has the right to set off the amount owed by with the amount owed by the other party, the Corporation intends to set off and the offset right is enforceable at law.

A deferred tax asset is recognized for unused tax losses and tax credits, reduced by a valuation allowance to the extent that it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Deferred tax assets and liabilities are measured at the tax rate expected to apply when the underlying asset or liability is realized (settled) based on the rates that are enacted at the reporting date.

Deferred tax assets and liabilities are offset if the Company has the right to set off the amount owed by with the amount owed by the other party, the Company intends to set off and the offset right is enforceable at law.

A deferred tax asset is recognized for unused tax losses, and tax credits, reduced by a valuation allowance.

A valuation allowance is recorded to reduce the carrying amount of deferred income tax assets when it is more likely than not that these assets will not be realized.

tax benefits related to tax positions not deemed to meet the “more-likely-than-not” threshold are not permitted to be recognized in the consolidated financial statements.

Earnings per share

The Corporation presents basic and diluted earnings per share ( EPS ) data for its Common Shares.

Basic EPS is calculated by dividing the profit or loss attributable to the holders of Common Shares by the weighted average number of Common Shares outstanding during the year.

Diluted EPS is determined by adjusting the profit or loss attributable to the holders of Common Shares and the weighted average number of Common Shares outstanding adjusted for the effects of all dilutive potential Common Shares, which comprise warrants and share options granted to employees.

The Company presents basic and diluted earnings per share ("EPS") data for its Common Shares.

Basic EPS is calculated by dividing the net income or loss attributable to the holders of Common Shares by the weighted average number of Common Shares outstanding during the year.

Diluted EPS is determined by adjusting the net income or loss attributable to the holders of Common Shares and the weighted average number of Common Shares outstanding adjusted for the effects of all dilutive potential Common Shares, which comprise warrants and share options granted to employees.

The basic and diluted EPS are the same due to loss position.

Segment reporting

An operating segment is a component of the Corporation that engages in business activities from which it may earn revenues and incur expenses.

The Corporation has one reportable operating segment:

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses.

The Company has one reportable operating segment:

the development and commercialization of pharmaceutical applications of its patent portfolio and licensed rights.

The majority of the Corporation’s assets are located in Canada and the United States, while one production unit, which is classified as an asset held for sale, with a carrying value of nil ( March 31, 2022 - $ 157 ), is located in France at a third-party contract manufacturing facility.

Derivative financial instruments

The Corporation has issued warrants of which some are accounted for as liability-classified derivatives over its own equity.

Derivatives are recognized initially at fair value;

attributable transaction costs are recognized in profit and loss as incurred.

Subsequent to initial recognition, derivatives are measured at fair value, and all changes in their fair value are recognized immediately in profit or loss as a component of financial expenses.

Other equity instruments

Warrants that do not meet the definition of a liability instrument are recognized in equity as additional paid in capital.

The majority of the Company’s assets are located in Canada and the United States.

Derivative warrant liabilities

Derivative warrant liabilities are recognized initially at fair value.

Subsequent to initial recognition, derivative warrant liabilities are measured at fair value, with changes in fair value are recognized in the Consolidated Statement of Operations and Comprehensive Loss .

Fair value measurements

Certain of the Corporation’s accounting policies and disclosures require the determination of fair value, for both financial assets and liabilities.

In establishing fair value, the Corporation uses a fair value hierarchy based on levels as defined below:

Certain of the Company’s accounting policies and disclosures require the determination of fair value, for both financial assets and liabilities.

In establishing fair value, the Company uses a fair value hierarchy based on levels as defined below:

defined as observable inputs such as quoted prices in active markets.

1 unchanged sentence

defined as inputs that are based on little or no observable market data, therefore requiring entities to develop their own assumptions.

The Corporation has determined that the carrying values of its short-term financial assets and liabilities (cash and cash equivalents, short-term investments and trade and other payables) approximate their fair value given the short-term nature of these instruments.

The Corporation measured its derivative warrant liabilities at fair value on a recurring basis using level 3 inputs .

The Company has determined that the carrying values of its short-term financial assets and liabilities (cash and cash equivalents, short-term investments and trade and other payables) approximate their fair value given the short-term nature of these instruments.

The Company measured its derivative warrant liabilities at fair value on a recurring basis using level 3 inputs .

Financial Instruments

Concentration of credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents.

Cash and cash equivalents are all invested in accordance with the Company’s Investment Policy with the primary objective being the preservation of capital and the maintenance of liquidity, which risk is managed by dealing only with highly rated Canadian and U.S.

institutions.

The Company maintains its cash and cash equivalents at accredited financial institutions in amounts that exceed federally insured limits.

The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Recent accounting pronouncements

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

Acquisition of Grace

On August 27, 2021, the Corporation completed its acquisition of all outstanding equity interests in Grace Therapeutics Inc, via a merger.

Grace, based in New Jersey and organized under the laws of Delaware, was a rare and orphan disease specialty pharmaceutical company.

In connection with the share-for-share noncash transaction, Grace was merged with a new wholly owned subsidiary of Acasti and became a subsidiary of Acasti.

As a result, Acasti acquired Grace’s entire therapeutic pipeline consisting of three unique clinical stage and multiple pre-clinical stage assets supported by an intellectual property portfolio consisting of various granted and pending patents in various jurisdictions worldwide.

Under the terms of the acquisition, each issued and outstanding share of Grace common stock was automatically converted into the right to receive Acasti common shares equal to the equity exchange ratio set forth in the merger agreement.

Consideration for acquisition

A total of 18,241,233 common shares of Acasti have been issued to Grace stockholders as consideration for the acquisition.

Total common shares issued

Acasti share price (closing share price on August 27, 2021)

Fair value of common shares issued

The acquisition of Grace has been accounted for as a business combination using the acquisition method of accounting.

The fair value of the purchase price was allocated to the assets acquired and liabilities assumed at their respective fair values.

This acquisition method requires, among other things, that assets acquired, and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.

The valuation of assets acquired, and liabilities assumed has been finalized during the fourth quarter of 2022.

Measurement period adjustments to the preliminary purchase price allocation during 2022 included (i) an increase to intangible assets of $ 4,602 ;

(ii) an increase to goodwill of $ 12,964 ;

(iii) an increase to deferred tax liability of $ 17,536 ;

and (iv) other individually insignificant adjustments to identifiable net assets of $ 30 .

The measurement period of adjustments primarily resulted from the completion of the valuation of the intangible assets based on facts and circumstances that existed as of the acquisition date and did not result from intervening events subsequent to such date.

The following table summarizes the final fair value of assets acquired and liabilities assumed as of the acquisition date:

Assets acquired and liabilities assumed

Cash and equivalents

Prepaid expenses and other current assets

Intangible assets –

in-process research and development

Accounts payable and accrued expenses

Deferred tax liability

Total assets acquired and liabilities assumed

Intangible assets of $ 69,810 relate to the value of IPR&D of Grace's therapeutic pipeline, consisting of three unique clinical stage programs/assets supported by intellectual property.

Management estimated the fair value of the IPR&D intangible assets using a multi-period excess earnings method.

The significant assumptions used in the valuation are the discount rate, the probability of clinical success of research and development programs, obtaining regulatory approval and forecasted net sales.

Goodwill of $ 12,964 was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized.

A deferred tax liability of $ 17,536 related to the identified intangible assets resulted.

Acquisition-related expenses, which were comprised primarily of regulatory, financial advisory and legal fees, totalled $ 3.2 million for the year ended March 31, 2022 and were included in general and administrative expenses in the consolidated statements of loss and comprehensive loss.

The net loss during the year ended March 31, 2022 attributed to Grace in the consolidated statement of income (loss), since the date of acquisition is $ 1,505 .

Pro forma financial information

The following table presents the unaudited pro forma combined results of Acasti and Grace for the year ended March 31, 2022, as if the acquisition of Grace had occurred on April 1, 2020:

Year ended March 31, 2022

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of Acasti and Grace.

The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on April 1, 2020.

In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company, nor does it reflect the realization of any synergies or cost savings associated with the acquisition.

Intangible assets and Goodwill

Intangible assets and goodwill resulted from the acquisition of Grace (note 4), related to Grace’s therapeutic pipeline, consisting of three unique clinical stage programs/assets supported by intellectual property.

Individual IPR&D projects and goodwill is tested for impairment on an annual basis in the fourth quarter, and in between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of each technology or our reporting unit below its carrying value.

The Corporation has one reporting unit which we have determined to be the Company.

The strategic realignment plan announced April 4, 2023, to prioritize resources to GTX-104, from GTX-101 and GTX-102 triggered a comprehensive review and have been considered in our annual impairment test.

The estimated fair values of identifiable intangible assets were determined using the multi-period excess earnings method.

The estimated fair value of the reporting unit was determined using the projected discounted cash flow model.

The impairment assessments resulted in the following activity between March 31, 2022 and March 31, 2023:

Intangible assets –

in-process research and development

Balance, beginning of the year

Balance, end of the year

The impairment of $ 28,682 of the intangible assets resulted in a recovery of $ 8,633 of the related deferred tax liability.

Balance, beginning of the year

Balance, end of the year

The multi-period excess earnings method models used to estimate the fair value of assets of our IPR&D reflect significant assumptions and are level 3 un-observable data regarding the estimates a market participant would make in order to evaluate a drug development asset, including the following:

Probability of clinical success of research and development and obtaining regulatory approval;

Forecasted net sales from up-front and milestone payments, royalties and product sales;

A discount rate reflecting our weighted average cost of capital and specific risk inherent in the underlying assets.

Our IPR&D projects, consistent with others in our industry, have risks and uncertainties associated with the timely and successful completion of the development and commercialization of product candidates, including our ability to confirm safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs.

It is not permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require the completion of clinical trials that demonstrate that a product candidate is safe and effective.

In addition, the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans as well as competitive product launches, affect the revenues a product can generate.

Consequently, the eventual realized values, if any, of acquired IPR&D projects may vary from their estimated fair values.

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

Fair value measurements

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 are as follows:

Quoted prices in active markets (Level 1)

Significant other observable inputs (Level 2)

Significant unobservable inputs (Level 3)

Guaranteed investment certificates and term deposits

classified as cash equivalents

Derivative warrant liabilities

Total liabilities

Assets measured at fair value on a recurring basis as of March 31, 2023 are as follows:

Quoted prices in active markets (Level 1)

Significant other observable inputs (Level 2)

Significant unobservable inputs (Level 3)

Term deposits classified as cash equivalents

Guaranteed investment certificate classified as a

short-term investment

There were no changes in valuation techniques or transfers between Levels 1, 2 or 3 during the years ended March 31, 2024 and 2023.

The Company’s derivative warrant liabilities are measured at fair value on a recurring basis using unobservable inputs that are classified as Level 3 inputs.

Refer to Note 10(b) for the valuation techniques and assumptions used in estimating the fair value of the derivative warrant liabilities.

March 31, 2024

3 unchanged sentences

Interest receivable

Other receivable

Total receivables

Short-term Investments

The Corporation holds various short term investments with maturities greater than 3 months at the time of purchase as follows:

March 31, 2023

March 31, 2022

Term deposits issued in CAD currency earning interest at 3 % and maturing on March 29, 2024

Term deposits issued in USD currency earning interest at 0.2 % and maturing on April 1, 2022

Term deposits issued in CAD currency earning interest at ranges between 0.50 % and 0.58 % and maturing on various dates from April 1, 2022 to March 30,2023

Total short-term investments

Assets held for sale

In January 2020 and August 2020, the Corporation released Phase 3 TRILOGY clinical study results for the Corporation’s lead drug candidate, CaPre.

studies did not meet the primary endpoint which resulted in the Corporation’s Board of Directors deciding not to proceed with a filing of an NDA with the FDA.

the completion of the TRILOGY studies beginning in the second half of fiscal 2021, the Corporation committed to a plan and was actively marketing for the sale Other assets and Production Equipment which met the criteria for classification of assets held for sale:

March 31, 2023

March 31, 2022

Reclassed as explained in note 9

Other assets (a)

Production equipment (b)

Other assets represent krill oil (RKO) held by the Corporation that was expected to be used in the conduct of R&D activities and commercial inventory scale up related to the development and commercialization of the CaPre drug.

Given that the development of CaPre will no longer be pursued, the Corporation expected to sell this reserve.

The other asset is being recorded at the fair value less costs to sell, which has resulted in an impairment los s of $ 195 (2022 - $ 249 ).

Management’s estimate of the fair value of the RKO less cost -to sell, is based current market conditions for the age of the krill oil and the inability to sell it.

These projections are based on Level 3 inputs of the fair value hierarchy and reflect management’s best estimate of market participants’

pricing of the assets as well as the g eneral condition of the asset.

The total impairment loss recognized, includes amounts paid for krill oil in advance, but not yet received and previously recorded as a prepaid.

Production equipment

Similarly, to the Other assets, the announcement of the outcomes of the TRILOGY clinical trials resulted in an impairment trigger for the production equipment.

The impairment loss is based on management’s estimate of the fair value of the equipment less cost -to sell, which is based primarily on estimated market conditions for selling used equipment and the inability to sell.

These projections are based on Level 3 inputs of the fair value hierarchy and reflect the Corporations best estimate of market participants’

pricing of the assets as well as the general condition of the assets.

This resulted in an impairment loss of $ 157 in fiscal 2023 resulting in a nil carrying value at March 31, 2023.

March 31, 2022

Cost, net of previous impairment

Production equipment

In June 2022, the Corporation reclassed the following assets from assets held for sale as they no longer met the criteria of such classification.

value reclassed from held for sale

Furniture and office equipment

Computer equipment

Laboratory equipment

Furthermore, depreciation expense of $ 94 was recognized related to the period from the date that the assets were classified as held for sale until June 30, 2022.

The reclassification from held for sale to equipment was reflected on the comparative balance sheet.

Government assistance is comprised of research and development investment tax credits from the Québec provincial government, which relate to quantifiable research and development expenditures under the applicable tax laws.

The amounts recorded as receivables are subject to a government tax audit and the final amounts received may differ from those recorded.

The following is a summary of equipment, net:

March 31, 2024

Cost, net of impairment

Furniture and office equipment

2 unchanged sentences

March 31, 2023

Cost, net of impairment

Furniture and office equipment

1 unchanged sentence

Laboratory equipment

Government assistance

March 31, 2023

March 31, 2022

Investment tax credit

Government assistance is comprised of research and development investment tax credits receivable from the Quebec provincial government which relate to qualifiable research and development expenditures under the applicable tax laws.

The amounts recorded as receivables are subject to a government tax audit and the final amounts received may differ from those recorded.

For the years ended March 31, 2023 and 2022 , the Corporation recorded $ 165 and $ 577 , respectively, as a reduction of research and development expenses in the Consolidated Statements of Loss and Comprehensive Loss.

Unrecognized Canadian federal tax credits may be used to reduce future Canadian federal income tax and expire as follows:

Depreciation expense was $ 11 and $ 124 for the years ended March 31, 2024 and 2023, respectively.

Intangible assets and goodwill

Individual IPR&D projects and goodwill are tested for impairment on an annual basis in the fourth quarter, and in between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of each technology or our reporting unit below its carrying value.

In April 2023, the Company announced its strategic realignment plan to prioritize resources to GTX-104, from GTX-101 and GTX-102 triggering a comprehensive review as of March 31, 2023.

The estimated fair values of identifiable intangible assets were determined using the multi-period excess earnings method.

The estimated fair value of the reporting unit was determined using the projected discounted cash flow model.

The impairment assessments resulted in the following activity during the years ended March 31, 2024 and 2023:

Intangible assets – in-process research and development

Balance, March 31, 2022

Balance, March 31, 2023

Balance, March 31, 2024

During 2023, the impairment of $ 28,682 of the intangible assets resulted in a recovery of $ 8,633 of the related deferred tax liability.

Balance, March 31, 2022

Balance, March 31, 2023

Balance, March 31, 2024

The multi-period excess earnings method models used to estimate the fair value of assets of our IPR&D reflect significant assumptions and are level 3 unobservable data regarding the estimates a market participant would make in order to evaluate a drug development asset, including the following:

• Probability of clinical success of research and development and obtaining regulatory approval;

• Forecasted net sales from up-front and milestone payments, royalties and product sales;

• A discount rate reflecting our weighted average cost of capital and specific risk inherent in the underlying assets.

The Company's IPR&D projects, consistent with others in our industry, have risks and uncertainties associated with the timely and successful completion of the development and commercialization of product candidates, including our ability to confirm safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs.

Consequently, the eventual realized values, if any, of acquired IPR&D projects may vary from their estimated fair values.

Trade and other payables

5 unchanged sentences

Total trade and other payables

The Corporation has historically entered into lease arrangements for its research and development and quality control laboratory facility located in Sherbrooke, Québec.

As of March 31, 2023, the Corporation had one operating lease with required future minimum payments.

On March 14, 2022, the Corporation renewed the lease agreement effective April 1, 2022, resulting in a commitment of $ 556 over a 24 months base lease term and 48 months additional lease renewal term.

As of March 31, 2022, the Corporation had one operating lease with required future minimum payments for its research and development facility located in New Jersey, which was cancelled during the year ended March 31, 2023.

The following tables contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the year ended March 31, 2023:

The Company has historically entered into lease arrangements for its research and development and quality control laboratory facility located in Sherbrooke, Québec.

In March 2022, the Company renewed the lease agreement effective April 1, 2022, resulting in a commitment of $ 556 over a 24 -month base lease term with an option to renew for an additional 48 -month term.

In April 2023, the Company elected not to renew the additional 48-month option to renew, and terminated the lease on March 31, 2024.

Supplemental balance sheet information related to leases was as follows:

March 31, 2024

Operating cash flows for operating leases

Right-of-use assets obtained in exchange for lease obligations

March 31, 2023

Operating lease right of use asset

Operating lease liability, current

Operating lease liability, long-term

Total operating lease liability

Supplemental lease expense related to leases is as follows:

Year ended March 31, 2024

Year ended March 31, 2023

Operating lease cost

Total lease expense

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating lease for the year ended March 31, 2024:

Operating cash flows for operating lease

Weighted-average remaining lease term (in years)

Weighted-average discount rate

As the Corporation's leases do not provide an implicit rate, the Corporation utilized its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Corporation could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

Future minimum lease payments under the Corporation’s operating leases as of March 31, 2023 were as follows:

March 31, 2023

Total lease payments

Total lease liabilities

Derivative warrant liabilities

In connection with the Canadian public offering of units consisting of common shares and warrants that closed on May 9, 2018, the Corporation issued a total of 1,369,937 warrants.

Each warrant entitles the holder thereof to acquire one common share at an exercise price of CAD $ 10.48 at any time until May 9, 2023.

The warrants issued are derivative warrant liabilities given the warrant indenture contains certain contingent provisions that allow for cash settlement.

In connection with the U.S.

public offering units consisting of common shares and warrants that closed on December 27, 2017, the Corporation issued a total of 1,225,366 warrants.

Each warrant entitles the holder thereof to acquire one common share at an exercise price of $ 10.08 at any time until December 27, 2022.

The warrants issued are derivative warrant liabilities given the currency of the exercise price is different from the Corporation’s functional currency.

The derivative warrant liabilities are measured at fair value at each reporting period and the reconciliation of changes in fair value is presented in the following tables:

Warrants issued May 2018

Warrants issued December 27, 2017

March 31, 2023

Balance –

beginning of year

Change in fair value

Translation effect

Balance –

Fair value per warrant issuable

As at March 31, 2022, the fair value of the derivative warrant liabilities was estimated using the Black-Scholes option pricing model and based on the following assumptions:

Warrant liabilities issued

December 27, 2017

Exercise price

Risk-free interest

Contractual life (years)

Expected volatility

The Corporation measured its derivative warrant liabilities at fair value on a recurring basis.

These financial liabilities were measured using level 3 inputs (see Note 19) .

As at March 31, 2023 , the effect of an increase or a decrease of 5 % of the volatility used, which is the significant unobservable input in the fair value estimate, would have a nominal impact.

Capital and other components of equity

As the Company's lease does not provide an implicit rate, the Company utilized its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

As of March 31, 2024, there were no future minimum lease payments.

Shareholders' equity

Common Shares

Authorized capital stock

Unlimited number of shares

Class A shares (Common Shares), voting ( one vote per share), participating and without par value.

Class B shares, voting ( ten votes per share), non-participating, without par value and maximum annual non-cumulative dividend of 5 % on the amount paid per share.

Class B shares are convertible, at the holder’s discretion, into Class A shares (Common Shares), on a one-for-one basis, and Class B shares are redeemable at the holder’s discretion for CAD $ 0.80 per share, subject to certain conditions.

There are no ne issued and outstanding.

Class C shares, non-voting, non-participating, without par value and maximum annual non-cumulative dividend of 5 % on the amount paid per share.

Class C shares are convertible, at the holder’s discretion, into Class A shares (Common Shares), on a one-for-one basis, and Class C shares are redeemable at the holder’s discretion for CAD $ 0.20 per share, subject to certain conditions.

There are no ne issued and outstanding.

Class D and E shares, they are non-voting, non-participating, without par value and maximum monthly non-cumulative dividend between 0.5 % and 2 % on the amount paid per share.

Class D and E shares are convertible, at the holder’s discretion, into Class A shares (Common Shares), on a one-for-one basis, and Class D and E shares are redeemable at the holder’s discretion, subject to certain conditions.

There are no ne issued and outstanding.

“At-the-market”

sales agreement

On June 29, 2020, the Corporation entered into an amended and restated sales agreement (the Sales Agreement) with B.

Riley, Oppenheimer& Co.

Wainwright & Co., LLC (collectively, the “Agents”) to amend the existing ATM program.

Under the terms of the Sales Agreement, which has a three-year term, the Corporation may issue and sell from time to time its common shares (the Shares) having an aggregate offering price of up to US $ 75,000,000 through the Agents.

Subject to the terms and conditions of the Sales Agreement, the Agents will use their commercially reasonable efforts to sell the Shares from time to time, based upon the Corporation’s instructions.

The Corporation has no obligation to sell any of the Shares and may at any time suspend sales under the Sales Agreement.

The Corporation and the Agents may terminate the Sales Agreement in accordance with its terms.

Under the terms of the Sales Agreement, the Corporation has provided the Agents with customary indemnification rights and the Agents will be entitled to compensation, at a commission rate equal to 3.0 % of the gross proceeds from each sale of the common shares.

On November 10, 2021, the Corporation filed a prospectus supplement relating to its at-the-market program, expiring July 7, 2023, with B.

Riley, Oppenheimer& Co.

Wainwright & Co., LLC acting as agents.

Under the terms of the ATM Sales Agreement and the prospectus supplement, the Corporation may issue and sell from time-to-time common shares having an aggregate offering price of up to $ 75,000,000 through the agents;

however, our use of the shelf registration statement on Form S-3 will be limited for so long as we are subject to General Instruction I.B.6 of Form S-3, which limits the amounts that we may sell under the registration statement and in accordance with the ATM agreement.

The common shares will be distributed at market prices prevailing at the time of the sale and, as a result, prices may vary between purchasers and during the period of distribution.

The volume and timing of sales under the ATM program, if any, will be determined at the sole discretion of the Corporation’s board of directors and management.

During the year ended March 31, 2023, 324,648 common shares were sold under the ATM Program for total gross proceeds of approximately $ 314 .

The common shares were sold at the prevailing market prices, which resulted in an average price of approximately $ 0.95 per share.

➣ Class A common shares ("Common Shares"), voting ( one vote per share), participating and without par value.

As of March 31, 2024, there were 9,399,404 Common Shares issued and outstanding.

➣ Class B common shares, voting ( ten votes per share), non-participating, without par value and maximum annual non-cumulative dividend of 5 % on the amount paid per share.

Class B common shares are convertible, at the holder’s discretion, into Common Shares, on a one-for-one basis, and Class B common shares are redeemable at the holder’s discretion for CAD $ 4.80 per share, subject to certain conditions.

As of March 31, 2024, there were no Class B common shares issued and outstanding.

➣ Class C common shares, non-voting, non-participating, without par value and maximum annual non-cumulative dividend of 5 % on the amount paid per share.

Class C common shares are convertible, at the holder’s discretion, into Common Shares, on a one-for-one basis, and Class C common shares are redeemable at the holder’s discretion for CAD $ 1.20 per share, subject to certain conditions.

As of March 31, 2024, there were no Class C common shares issued and outstanding.

➣ Class D and E common shares, non-voting, non-participating, without par value and maximum monthly non-cumulative dividend between 0.5 % and 2 % on the amount paid per share.

Class D and E common shares are convertible, at the holder’s discretion, into Common Shares, on a one-for-one basis, and Class D and E common shares are redeemable for the price paid for such shares, plus a redemption premium described in the Company's Articles of Incorporation, as amended, at the holder’s discretion, subject to certain conditions.

As of March 31, 2024, there were no Class D or E common shares issued and outstanding.

Private Placement

In September 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors in connection with a private placement of the Company's securities (the “Offering”).

Pursuant to the Purchase Agreement, the Company agreed to offer and sell 1,951,371 Common Shares, at a purchase price of $ 1.848 per Common Share and Pre-funded Warrants to purchase up to 2,106,853 Common Shares at a purchase price equal to the purchase price per Common Share less $0.0001.

Each Pre-funded Warrant is exercisable for one Common Share at an exercise price of $ 0.0001 per Common Share, is immediately exercisable, and will expire once exercised in full.

Pursuant to the Purchase Agreement, the Company also issued to such institutional and accredited investors Common Warrants to purchase Common Shares, exercisable for an aggregate of 2,536,391 Common Shares.

Each whole Common Warrant is exercisable for one Common Share at an exercise price of $ 3.003 per Common Share, is immediately exercisable, and will expire on the earlier of (i) the 60th day after the date of the acceptance by the U.S.

Food and Drug Administration of a New Drug Application for the Company’s product candidate GTX-104 or (ii) five years from the date of issuance.

The Offering closed on September 25, 2023.

The Offering included the issuance of Common Shares, Pre-funded Warrants, and Common Warrants to related parties Shore Pharma LLC, an entity that was controlled by Vimal Kavuru, the Chair of our Board of Directors, at the time of the Offering and SS Pharma LLC, resulting in proceeds of $ 2,500 .

The net proceeds to the Company from the Offering were $ 7,338 , after deducting fees and expenses.

At-the-Market (“ATM”) Program

In June 2020, the Company entered into an amended and restated sales agreement (the “Sales Agreement”) with B.

Riley FBR, Inc.

(“B.Riley”), Oppenheimer & Co.

Wainwright & Co., LLC (collectively, the “Agents”) to amend the Company’s existing ATM program.

Under the terms of the Sales Agreement, which had a three-year term, the Company could issue and sell from time to time, Common Shares having aggregate gross proceeds of up to $ 75,000 through the Agents.

Subject to the terms and conditions of the Sales Agreement, the Agents would use their commercially reasonable efforts to sell the Common Shares from time to time, based upon the Company’s instructions.

The Company had no obligation to sell any of the Common Shares and could, at any time, suspend sales under the Sales Agreement.

The Company and the Agents could terminate the Sales Agreement in accordance with its terms.

Under the terms of the Sales Agreement, the Company provided the Agents with customary indemnification rights and the Agents were entitled to compensation at a commission rate equal to 3.0 % of the gross proceeds from each sale of the Common Shares.

The Sales Agreement expired pursuant to its terms on June 29, 2023.

During the year ended March 31, 2024, no Common Shares were sold under the ATM program.

The warrants of the Corporation are composed of the following:

March 31, 2023

During the year ended March 31, 2023, 54,108 Common Shares were sold for total net proceeds of $ 304 with commissions, legal expenses and costs related to the share sale amounting to $ 10 .

The Common Shares were sold at the prevailing market prices, which resulted in an average price of approximately $ 5.70 per share.

On May 9, 2023, warrants issued pursuant to the Company’s May 2018 Canadian public offering to acquire 137,370 Common Shares at an exercise price of CAD $ 62.88 expired.

As further discussed above, on September 25, 2023, the Company issued Warrants exercisable for 4,643,244 Common Shares in the Offering pursuant to the terms of the Purchase Agreement entered into with certain institutional and accredited investors.

The Common Warrants issued as a part of the Offering are derivative warrant liabilities given the warrant indenture did not meet the fixed-for-fixed criterion and that the Common Warrants are not indexed to the Company’s own stock.

Proceeds were allocated amongst Common Shares, Pre-funded Warrants, and Common Warrants by applying the residual method, with fair value of the Common Warrants determined using the Black-Scholes model, resulting in an initial warrant liability of $ 1,631 and $ 45 of issuance costs allocated to Common Warrants.

Accordingly, $ 2,822 and $ 3,047 of gross proceeds were allocated to Common Shares and Pre-funded Warrants, respectively;

and $ 78 and $ 84 of issuance costs were allocated to Common Shares and Pre-funded Warrants, respectively.

The derivative warrant liabilities are measured at fair value at each reporting period and the reconciliation of changes in fair value is presented in the following table:

March 31, 2024

May 2018 public offering warrants 2018 (i)

December 2017 U.S.

public offering warrants (ii)

Public offering warrants

Public offering U.S.

broker warrants December 2017 (iii)

(i) Warrants to acquire one common share at an exercise price of CAD $ 10.48 , expiring on May 9, 2023.

(ii) Warrants to acquire one common share at an exercise price of $ 10.08 , expired on December 27, 2022 .

(iii) Warrants to acquire one common share at an exercise price of $ 10.10 , expired on December 19, 2022.

During the years ended March 31, 2023 and 2022 no warrants were exercised.

Other income (expenses)

March 31, 2023

Beginning balance

Issued during the year

Change in fair value

Ending balance

The warrant liability was determined based on the fair value of warrants at the issue date and the reporting dates using the Black-Scholes model with the following weighted-average assumptions will expire on the earlier of (i) the 60th day after the date of the acceptance by the U.S.

Food and Drug Administration of a New Drug Application for the Company's product candidate GTX-104 or (ii) five years from the date on issuance.

September 25, 2023

March 31, 2024

Foreign exchange gain (loss)

Interest income

Change in fair value of warrant liabilities

Other income (expenses)

Risk-free interest rate

Expected warrant life

Dividend yield

Expected volatility

The weighted-average assumptions were prorated based on the probability of the warrant liability expiring on the 60th day after the date of the acceptance by the U.S.

Food and Drug Administration of a New Drug Application for the Company's product candidate GTX-104 and of it expiring on five years from the date of issuance.

The weighted-average fair values of the Common Warrants were determined to be $ 0.64 and $ 1.72 per Common Warrant, as of September 25, 2023 and March 31, 2024, respectively.

The risk-free interest rate at the issue date and on the reporting date of March 31, 2024 was based on the interest rate corresponding to the U.S.

Treasury rate issue with a remaining term equal to the expected term of the warrants.

The expected volatility was based on the historical volatility for the Company.

At March 31, 2024, the Company had outstanding Common Warrants to purchase 2,536,391 Common Shares, with an exercise price of $ 3.003 , all of which were classified as derivative warrant liability.

At March 31, 2024, the Company had outstanding Pre-funded Warrants to purchase 2,106,853 Common Shares, with an exercise price of $ 0.0001 , all of which were classified within shareholders' equity.

During the years ended March 31, 2024 and 2023, no warrants were exercised.

Stock-based compensation

At March 31, 2021, the Corporation has the following stock-based compensation arrangement:

Corporation stock option plan

The Corporation has in place a stock option plan for directors, officers, employees, and consultants of the Corporation.

An amendment of the stock option plan was approved by shareholders on September 28, 2022.

The amendment provides for a change to the existing limits for Common Shares reserved for issuance under the Stock Option Plan.

The Stock Option Plan continues to provide for the granting of options to purchase common shares.

The exercise price of the stock options granted under this amended plan is not lower than the closing price of the common shares on the Nasdaq at the close of markets the day preceding the grant.

The terms and conditions for acquiring and exercising options are set by the Corporation’s Board of Directors, subject among others, to the following limitations:

the term of the options cannot exceed ten years and (i) all options granted to a director will be vested evenly on a monthly basis over a period of at least twelve (12) months, and (ii) all options granted to an employee will be vested evenly on a quarterly basis over a period of at least

thirty-six (36) months.

The total number of shares issued to any one consultant within any twelve-month period cannot exceed 2 % of the Corporation’s total issued and outstanding shares (on a non-diluted basis).

The Corporation is not authorized to grant within any twelve-month period such number of options under the Stock Option Plan that could result in a number of common shares issuable pursuant to options granted to (a) related persons exceeding 2 % of the Corporation’s issued and outstanding common shares (on a non-diluted basis) on the date an option is granted, or (b) any one eligible person in a twelve-month period exceeding 2 % of the Corporation’s issued and outstanding common shares (on a non-diluted basis) on the date an option is granted.

In connection to the voluntary delisting from the TSXV, and as permissible under the stock option plan the Corporation communicated to each holder of stock options, that the exercise price of all existing option grants will be redesignated in US dollars on the basis of the equivalent price in US dollar at the applicable date of grant.

This does not constitute a repricing of the existing exercise price of stock options and has no impact on the compensation expense recognized under the stock option plan.

The following tables summarize information about activities within the stock option plan:

Weighted average

exercise price

Weighted average

Outstanding, March 31, 2022

Outstanding, March 31, 2023

Exercisable at end of year

At March 31, 2024, the Company had in place a stock option plan for directors, officers, employees, and consultants of the Company (“Stock Option Plan”).

As of March 31, 2024, there were 738,725 awards available under the plan for issuance.

The Stock Option Plan provides for the granting of options to purchase Common Shares.

Under the terms of the Stock Option Plan, the exercise price of the stock options granted under the Stock Option Plan may not be lower than the closing price of the Company’s Common Shares on the Nasdaq Capital Market at the close of such market the day preceding the grant.

The maximum number of Common Shares that may be issued upon exercise of options granted under the amended Stock Option Plan shall not exceed 20% of the aggregate number of issued and outstanding shares of the Company as of July 28, 2022.

The terms and conditions for acquiring and exercising options are set by the Company’s Board of Directors, subject to, among others, the following limitations:

The total number of options issued to any one consultant within any twelve-month period cannot exceed 2 % of the Company’s total issued and outstanding Common Shares (on a non-diluted basis).

The total number of options issued within any twelve-month period to all directors, employees and/or consultants of the Company (or any subsidiary of the Company) conducting investor relations services, cannot exceed in the aggregate 2 % of the Company’s issued and outstanding Common Shares (on a non-diluted basis), calculated at the date an option is granted to any such person.

The following table summarizes information about activities within the Stock Option Plan for the year ended March 31, 2024:

Weighted average

exercise price

Weighted average

Remaining Contractual Term (years)

Aggregate Intrinsic Value (in thousands)

Outstanding, March 31, 2023

Forfeited/Cancelled

Outstanding, March 31, 2024

March 31, 2023

Weighted average fair value of the options granted to employees and directors of the Corporation-

Year ended March 31, 2022

Weighted average fair value of the options granted to employees and directors of the Corporation-

Compensation expense recognized under the stock option plan is summarized as follows:

Exercisable, March 31, 2024

Forfeited and cancelled options were as a result of the Company's restructuring that occurred during the year ended March 31, 2024.

On July 14, 2023, the Company's Board of Directors approved the grant of options to purchase 446,502 Common Shares at an exercise price of $ 2.64 per Common Share under the Company's Stock Option Plan.

On December 19, 2023, the Company's Board of Directors approved the grant of options to purchase 161,168 Common Shares at an exercise price of $ 2.125 per Common Share under the Company's Stock Option Plan.

The weighted-average grant date fair value of awards for options granted during the years ended March 31, 2024 and 2023 was $ 2.13 and $ 4.32 , respectively.

The fair value of options granted was estimated using the Black-Scholes option pricing model, resulting in the following weighted-average assumptions for the options granted:

March 31, 2024

March 31, 2023

Research and development expenses

General and administrative expenses

Sales and marketing expenses

As of March 31, 2023 , there was USD $ 718 ( March 31, 2022 –

CAD $ 1,794 ) of total unrecognized compensation cost, related to non-vested share options, which is expected to be recognized over a remaining weighted average vesting period of 1.12 years ( March 31, 2022 - 1.36 years).

A summary of the non-vested stock option activity and related information for the Corporation’s stock options granted is as follows:

Weighted-average

grant date fair value

Non- vested, March 31, 2022

Options granted

Options vested

Non- vested, March 31, 2023

The fair value of options granted was estimated using the Black-Scholes option pricing model, resulting in the following weighted average assumptions for options granted during the periods ended:

March 31, 2023

Weighted-average

3 unchanged sentences

Expected volatility

Stock-based compensation expense recognized under ASC 718 related to the stock option plan is summarized as follows:

March 31, 2024

Weighted average- CAD

Exercise price

Risk-free interest

Estimated life (years)

Expected volatility

The following tables summarize information about activities within the stock option plan:

March 31, 2023

Weighted average

remaining contractual

Number of options

Stock-based compensation payment transactions

The fair value of stock-based compensation transactions is measured using the Black-Scholes option pricing model.

Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility for a duration equal to the weighted average life of the instruments, life based on the average of the vesting and contractual periods for employee awards as minimal prior exercises of options in which to establish historical exercise experience), and the risk-free interest rate (based on government bonds).

Service and performance conditions attached to the transactions, if any, are not considered in determining fair value.

The expected life of the stock options is not necessarily indicative of exercise patterns that may occur.

The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

Corporation equity incentive plan

The Corporation established an equity incentive plan for employees, directors and consultants.

The plan provides for the issuance of restricted share units ( RSUs ), performance share units, restricted shares, deferred share units and other stock-based awards, subject to restricted conditions as may be determined by the Board of Directors.

There were no such awards outstanding as of March 31, 2023, and March 31, 2022 , and no stock-based compensation was recognized for the period ended March 31, 2023 and March 31, 2022 .

Research and development expenses

General and administrative expenses

Sales and marketing expenses

As of March 31, 2024, there was $ 467 of total unrecognized compensation cost, related to non-vested stock options, which is expected to be recognized over a remaining weighted-average vesting period of 1.24 years.

Equity incentive plan

The Company established an equity incentive plan (the “Equity Incentive Plan”) for employees, directors, and consultants.

The Equity Incentive Plan provides for the issuance of 1,483,140 restricted share units, performance share units, restricted shares, deferred share units and other stock-based awards, subject to restricted conditions as may be determined by the Board of Directors.

There were no such awards outstanding as of March 31, 2024 , and no stock-based compensation was recognized for the year ended March 31, 2024 .

Loss per share

Diluted loss per share was the same amount as basic loss per share, as the effect of options, and warrants would have been anti-dilutive, as the Corporation has incurred losses in each of the periods presented.

All outstanding options, and warrants could potentially be dilutive in the future.

Supplemental cash flow disclosure

Changes in operating assets and liabilities:

March 31, 2023

March 31, 2022

Prepaid expenses

Trade and other payables

Total changes in working capital items

Income tax (recovery) expense:

March 31, 2023

March 31, 2022

Current tax (recovery) expense

Deferred tax (recovery) expense

Income tax (recovery) expense

Reconciliation of effective tax rate:

The Company has generated a net loss for all periods presented, therefore diluted loss per share is the same as basic loss per share since the inclusion of potentially dilutive securities would have had an anti-dilutive effect.

All currently outstanding options and warrants could potentially be dilutive in the future.

The Company excluded the following potential Common Shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:

March 31, 2024

March 31, 2023

Loss before income taxes

Basic combined Canadian statutory income tax rate 1

Computed income tax recovery

Increase resulting from:

Options outstanding

September 2023 Common Warrants

May 2018 public offering warrants

Basic and diluted net loss per share is calculated based upon the weighted-average number of Common Shares outstanding during the period.

Common Shares underlying the Pre-funded Warrants are included in the calculation of basic and diluted earnings per share.

Income tax (benefit) expense:

Year ended March 31, 2024

Year ended March 31, 2023

Current tax (benefit) expense

Deferred tax (benefit) expense

Income tax (benefit) expense

A reconciliation between tax expense and the product of accounting income multiplied by the basic income tax rate for the years ended March 31, 2024 and 2023 is as follows:

Year ended March 31, 2024

Year ended March 31, 2023

Tax at Canadian Rate

Difference in foreign tax rates

3 unchanged sentences

Non-deductible goodwill impairment

Non-refundable federal ITC

Other non-deductible items

Non-refundable federal investment tax credit

State non income taxes

Change in tax rates

Change in valuation allowance

Other –

foreign exchange

Total tax (recovery) expense

Total tax (benefit) expense

Net deferred income tax assets as of March 31, 2024, and 2023 were comprised of the following:

1 unchanged sentence

March 31, 2023

Deferred tax assets

Deferred income tax assets

Tax losses carried forward

Research and development expenses

Property, plant and equipment

Intangible assets

Operating lease right of use liability

Financing expenses

Tax credit carry forwards

Operating lease right of use asset

Other temporary differences

Deferred tax assets

Deferred tax liabilities

Equipment and intangible assets

Operating lease liability

Net federal investment tax credits

Other deductible temporary differences

Total deferred income tax assets

Valuation allowance

Deferred income tax liabilities

Intangible assets

Operating lease asset

Other taxable temporary differences

Deferred tax liabilities

Valuation allowance

Net deferred tax liabilities

As at March 31, 2023, the amounts and expiry dates of tax attributes and temporary differences, which are available to reduce future years’

taxable income, were as

As at March 31, 2024, the amounts and expiry dates of tax attributes and temporary differences, which are available to reduce future

years’ taxable income, were as follows:

March 31, 2024

2 unchanged sentences

Research and development expenses, without time limitation

Scientific Research & Experimental Development Expenditures investment tax credit carryforwards

Unrecognized tax benefits

The Corporation does not expect a significant change to the amount of unrecognized tax benefits over the next 12 months.

The Company does not expect a significant change to the amount of unrecognized tax benefits over the next 12 months.

However, any adjustments arising from certain ongoing examinations by tax authorities could alter the timing or amount of taxable income or deductions, of the allocation of income among tax jurisdictions, and these adjustments could differ from the amount accrued.

The Corporation’s federal and provincial income tax returns filed for all years remain subject to examination by the taxation authorities.

Financial instruments

Concentration of credit risk

Financial instruments that potentially subject the Corporation to a concentration of credit risk consist primarily of cash and cash equivalents and investments.

Cash and cash equivalents and investments are all invested in accordance with the Corporation’s Investment Policy with the primary objective being the preservation of capital and the maintenance of liquidity, which is managed by dealing only with highly rated Canadian institutions.

The carrying amount of financial assets, as disclosed in the consolidated balance sheets, represents the Corporation’s credit exposure at the reporting date.

Foreign currency risk

The Corporation is exposed to the financial risk related to the fluctuation of foreign exchange rates and the degrees of volatility of those rates.

Foreign currency risk is limited to the portion of the Corporation's business transactions denominated in currencies other than the Corporation's functional currency of the U.S.

Fluctuations related to foreign exchange rates could cause unforeseen fluctuations in the Corporation's operating results.

The Corporation does not use derivative instruments to hedge exposure to foreign exchange risk.

The fluctuation of the Canadian dollar in relation to the U.S.

dollar and other foreign currencies will consequently have an impact upon the Corporation’s net loss.

Liquidity risk

Liquidity risk is the risk that the Corporation will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

The Corporation manages liquidity risk through the management of its capital structure and financial leverage.

It also manages liquidity risk by continuously monitoring actual and projected cash flows.

The Board of Directors reviews and approves the Corporation's operating budgets, and reviews material transactions outside the normal course of business.

The Corporation currently does not have long-term debt nor arranged committed sources of financing and is operating via use of existing cash and short-term investment balances.

Refer to Note 1 –

Nature of Operations.

The Corporation’s financial liabilities obligations include trade and other payables, which fall due within the next 12 months.

The Company’s federal and provincial income tax returns filed for all years remain subject to examination by the taxation authorities.

Government assistance

The amounts recorded as receivables are subject to a government tax audit and the final amounts received may differ from those recorded.

For the years ended March 31, 2024 and 2023, the Company recorded ($ 55 ) and $ 165 , respectively, as a reduction of research and development expenses in the Consolidated Statements of Operations and Comprehensive Loss.

March 31, 2024

March 31, 2023

Investment tax credit

Unrecognized Canadian federal investment tax credits may be used to reduce future Canadian federal income tax and expire as follows:

Commitments and contingencies

Research and development contracts and contract research organizations agreements

We utilize contract manufacturing organizations, for the development and production of clinical materials and contract research organizations to perform services related to our clinical trials.

Pursuant to the agreements with these contract manufacturing organizations and contract research organizations, we have either the right to terminate the agreements without penalties or under certain penalty conditions.

Supply contract

On October 25, 2019, the Corporation signed a supply agreement with Aker Biomarine Antarctic.

(“Aker”) to purchase raw krill oil product for a committed volume of commercial starting material for CaPre for a total fixed value of $ 3.1 million.

As at March 31, 2023 , the remaining balance of the commitment with Aker amounts to $ 2.8 million.

During the second calendar quarter of 2022, Aker informed the Corporation that Aker believed it had satisfied the terms of the supply agreement as to their ability to deliver the remaining balance of krill oil product, and that the Corporation was therefore required to accept the remaining product commitment and to pay Aker the $ 2.8 million balance.

The Corporation disagrees with Aker’s position and believes that Aker is not entitled to further payment under the supply agreement.

Accordingly, no liability has been recorded.

The dispute was unresolved as of March 31, 2023, and remains unresolved.

There is uncertainty as to whether the Corporation will be required to make further payment to Aker in connection with the dispute.

Additionally, in the event the Corporation is required to accept delivery from Aker of the remaining balance of krill oil product under the supply agreement, there is uncertainty as to whether the Corporation can recover value from the product, which may result in the Corporation incurring a loss on the supply agreement in the near term.

The Company utilizes contract manufacturing organizations (“CMOs”) for the development and production of clinical materials and contract research organizations (“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 March 31, 2024, the Company has no commitments from CMOs and $ 6,020 of c ommitments for the next twelve months to CROs.

Raw krill oil supply contract

On October 25, 2019, the Company signed a supply agreement with Aker BioMarine Antarctic AS.

(“AKBM”) to purchase raw krill oil product for a committed volume of commercial starting material for CaPre, one of the Company’s former drug candidates, for a total fixed value of $ 3,100 based on the value of krill oil at that time.

As of March 31, 2022, the remaining balance of commitment amounted to $ 2,800 .

During the second calendar quarter of 2022, AKBM informed the Company that AKBM believed it had satisfied the terms of the supply agreement as to their obligation to deliver the remaining balance of raw krill oil product, and that the Company was therefore required to accept the remaining product commitment.

The Company disagreed with AKBM’s position and believed that AKBM was not entitled to further payment under the supply agreement.

Accordingly, no liability was recorded by the Company.

The dispute remained unresolved as of both March 31, 2023 and 2022.

On October 18, 2023, the Company entered into an agreement with AKBM to settle any and all potential claims regarding amounts due under the supply agreement (“Settlement Agreement”).

Pursuant to the terms of the Settlement Agreement, in exchange for a release and waiver of claims arising out of the supply agreement by AKBM and any of AKBM’s affiliates, the Company and AKBM agreed to the following:

(a) AKBM retained ownership of all raw krill oil product, including amounts previously delivered to the Company, (b) AKBM acquired and took ownership of all production equipment related to the production of CaPre, (c) AKBM acquired and took ownership of all data from research, clinical trials and pre-clinical studies with respect to CaPre, and (d) AKBM acquired and took ownership over all rights, title and interest in and to all intellectual property rights, including all patents and trademarks, related to CaPre owned by the Company.

Pursuant to the terms of the Settlement Agreement, AKBM acknowledged that the CaPre assets were transferred on an “as is” basis, and in connection therewith the Company disclaimed all representations and warranties in connection with the CaPre assets, including any representations with respect to performance or sufficiency.

The value of the raw krill oil previously delivered to the Company, the production equipment, and the intellectual property rights related to CaPre were fully impaired in prior reporting periods and had a carrying value of nil as of March 31, 2023.

As of March 31, 2024, no liability was recorded by the Company.

Legal proceedings and disputes

In the ordinary course of business, the Corporation is at times subject to various legal proceedings and disputes.

The Corporation assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available.

Where it is probable that the Corporation will incur a loss and the amount of the loss can be reasonably estimated, the Corporation records a liability in its consolidated financial statements.

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 consolidated financial statements.

These legal contingencies may be adjusted to reflect any relevant developments.

Where a loss is not probable or the amount of loss is not estimable, the C orporation does not accrue legal contingencies.

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.

Any incremental liabilities arising from pending legal proceedings are not expected to have a material adverse effect on the Corporation’s financial position, results of operations, or cash flows.

However, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the Corporation’s financial position, results of operations, or cash flows.

Any incremental liabilities arising from pending legal proceedings are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

However, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the Company’s financial position, results of operations, or cash flows.

No reserves or liabilities have been accrued as at March 31, 2024 .

Subsequent events

In May 2023, the Corporation communicated the decision to terminate its Canadian employees as part of discontinuing its operations in Canada and the rebuilding of a leaner organization in the United States, which resulted in $ 1.3 million of severances to be paid.

Restructuring Costs

On May 8, 2023, the Company communicated its decision to terminate a substantial amount of its workforce as part of a plan that intended to align the Company’s organizational and management cost structure to prioritize resources to GTX-104, thereby reducing losses to improve cash flow and extend available cash resources.

The Company incurred $ 1,485 of costs primarily consisting of employee severance costs and legal fees.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures