Gain Therapeutics, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 1460 ) ​ 76 Consolidated Balance Sheets ​ 77 Consolidated Statement of Operations ​ 78 Consolidated Statement of Comprehensive Loss ​ 79 Consolidated Statement of Changes in Stockholders’ Equity ​ 80 Consolidated Statement of Cash Flows ​ 81 Notes to Consolidated Financial Statements ​ 82 ​ ​ 75 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Gain Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Gain Therapeutics, Inc. (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2021, 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 December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. Basis for Opinion 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 audits. 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 audits 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 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 audits, 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 audits 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 audits 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 audits provide a reasonable basis for our opinion. /s/ Ernst & Young AG We have served as the Company’s auditor since 2020. Lugano, Switzerland March 25, 2022 ​ 76 Table of Contents Gain Therapeutics, Inc Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ ​ 2021 ​ 2020 Assets ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 36,880,673 ​ $ 7,492,910 Restricted cash ​ — ​ 11,371 Accounts receivable ​ — ​ 8,548 Tax credits ​ ​ ​ 113,586 ​ ​ 58,017 Prepaid expenses and other current assets ​ 727,785 ​ 198,994 Deferred offering costs ​ ​ — ​ ​ 1,217,988 Total current assets ​ $ 37,722,044 ​ $ 8,987,828 ​ ​ ​ ​ ​ ​ ​ ​ Non-current assets: ​ ​ Property and equipment, net ​ 105,986 ​ 29,633 Internal-use software ​ ​ ​ 202,609 ​ ​ — Operating lease - right of use assets ​ 901,042 ​ 523,080 Restricted cash ​ 31,279 ​ — Long-term deposits and other non-current assets ​ 22,111 ​ 63,817 Total non-current assets ​ ​ 1,263,027 ​ ​ 616,530 Total assets ​ $ 38,985,071 ​ $ 9,604,358 ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholder's equity ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 560,479 ​ $ 961,516 Operating lease liability - current ​ 219,137 ​ 122,756 Other current liabilities ​ 1,402,600 ​ 768,450 Deferred income ​ 266,504 ​ 239,483 Loans - short term ​ ​ 103,826 ​ ​ 22,626 Total current liabilities ​ ​ 2,552,546 ​ ​ 2,114,831 ​ ​ ​ ​ ​ ​ ​ ​ Non-current liabilities: ​ ​ Defined benefit pension plan ​ 329,458 ​ 171,558 Operating lease liability - non-current ​ 695,053 ​ 400,324 Loans - long term ​ ​ 590,468 ​ ​ 715,656 Total non-current liabilities ​ ​ ​ 1,614,979 ​ ​ 1,287,538 Total liabilities ​ $ 4,167,525 ​ $ 3,402,369 ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ Series A Preferred Stock, $ 0.0001 par value: nil and 1,185,879 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively ​ ​ ​ — ​ ​ 118 Series B Preferred Stock, $ 0.0001 par value: nil and 2,965,600 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively ​ ​ ​ — ​ ​ 297 Common Stock, $ 0.0001 par value: 50,000,000 shares authorized; 11,883,368 and 3,543,163 issued and outstanding as of December 31, 2021 and December 31, 2020, respectively ​ 1,189 ​ 354 Additional paid-in capital ​ 55,832,461 ​ 13,388,771 Accumulated other comprehensive loss ​ ( 90,645 ) ​ ( 152,698 ) Accumulated deficit ​ ( 7,034,853 ) ​ ( 3,457,171 ) Loss of the period ​ ( 13,890,606 ) ​ ( 3,577,682 ) Total stockholders’ equity ​ ​ 34,817,546 ​ ​ 6,201,989 Total liabilities and stockholders’ equity ​ $ 38,985,071 ​ $ 9,604,358 ​ ​ ​ 77 Table of Contents Gain Therapeutics, Inc Consolidated Statement of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 2020 Revenues: ​ ​ ​ Collaboration revenues ​ $ 133,928 ​ $ ​ Other income ​ ​ 31,066 ​ 28,881 Total revenues ​ ​ 164,994 ​ ​ 28,881 ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ Research and development ​ ( 7,164,229 ) ​ ( 2,259,204 ) General and administrative ​ ( 6,826,938 ) ​ ( 1,249,126 ) Total operating expenses ​ ​ ( 13,991,167 ) ​ ​ ( 3,508,330 ) ​ ​ ​ ​ ​ ​ ​ Loss from operations ​ ​ ( 13,826,173 ) ​ ​ ( 3,479,449 ) ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ Interest income, net ​ 12,495 ​ 3,637 Foreign exchange loss, net ​ ( 72,920 ) ​ ( 96,484 ) Loss before income tax ​ $ ( 13,886,598 ) ​ $ ( 3,572,296 ) ​ ​ ​ ​ ​ ​ ​ Income tax ​ ( 4,008 ) ​ ( 5,386 ) ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 13,890,606 ) ​ $ ( 3,577,682 ) ​ ​ ​ ​ ​ ​ ​ Net loss per shares: ​ ​ Net loss per share attributable to common stockholders - basic and diluted ​ $ ( 1.37 ) ​ $ ( 1.33 ) Weighted average common shares - basic and diluted ​ 10,165,404 ​ 2,681,408 ​ ​ ​ 78 Table of Contents Gain Therapeutics, Inc Consolidated Statement of Comprehensive Loss ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 2020 Net loss ​ $ ( 13,890,606 ) ​ $ ( 3,577,682 ) Defined benefit pension plan ​ ​ ( 101,780 ) ​ ​ ( 36,218 ) Foreign currency translation ​ 163,833 ​ ( 35,317 ) Other comprehensive gain/(loss): ​ $ 62,053 ​ $ ( 71,535 ) Comprehensive loss ​ $ ( 13,828,553 ) ​ $ ( 3,649,217 ) ​ ​ 79 Table of Contents ​ Gain Therapeutics, Inc Consolidated Statement of Changes in Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series A Preferred Stock ​ Series B Preferred Stock ​ Common Stock ​ APIC AOCI ​ Accumulated ​ Total ​ Shares Amounts Shares Amounts Shares Amounts ​ ​ Deficit ​ Balance as of December 31, 2020 1,185,879 118 2,965,600 297 3,543,163 354 13,388,771 ( 152,698 ) ( 7,034,853 ) 6,201,989 Conversion of Series A Preferred Stock into Common Stock ( 1,185,879 ) ( 118 ) ​ ​ 1,185,879 118 — Conversion of Series B Preferred Stock into Common Stock ​ ​ ( 2,965,600 ) ( 297 ) 2,965,600 297 — Issuance of Common Stock in IPO, net of issuance costs ​ ​ ​ ​ 4,181,818 419 40,558,103 40,558,522 Issuance of Common Stock due to warrants cashless exercise ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,283 ​ ​ ​ ​ ​ ​ ​ ​ ​ — Issuance of Common Share due to stock option exercise ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,625 ​ 1 ​ 12,216 ​ ​ ​ ​ ​ 12,217 Stock-based compensation expense ​ ​ 839,371 839,371 Issuance of warrants ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,034,000 ​ ​ ​ ​ ​ 1,034,000 Defined benefit pension plan ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 101,780 ) ​ ​ ​ ( 101,780 ) Foreign currency translation ​ ​ 163,833 163,833 Net loss ​ ​ ( 13,890,606 ) ( 13,890,606 ) Balance as of December 31, 2021 — — — — 11,883,368 1,189 55,832,461 ( 90,645 ) ( 20,925,459 ) 34,817,546 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series A Preferred Stock ​ Series B Preferred Stock ​ Common Stock ​ APIC ​ AOCI ​ Accumulated ​ Total ​ Shares Amounts Shares Amounts Shares Amounts ​ ​ Deficit ​ Balance as of December 31, 2019 ​ 875,006 ​ 87 ​ ​ ​ ​ ​ 1,981,765 ​ 198 ​ 3,088,193 ​ ( 81,163 ) ​ ( 3,457,171 ) ​ ( 449,856 ) Issuance of Series A Preferred Stock, net of issuance cost ​ 310,873 ​ 31 ​ ​ ​ ​ ​ — ​ — ​ 1,091,314 ​ — ​ — ​ 1,091,345 Issuance of Series B Preferred Stock, net of issuance cost ​ ​ ​ ​ ​ 2,965,600 ​ 297 ​ ​ ​ ​ ​ 8,713,716 ​ ​ ​ ​ ​ 8,714,013 Issuance of Common Stock, net of issuance costs ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,561,398 ​ 156 ​ 21 ​ ​ ​ ​ ​ 177 Issuance of warrants ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 413,887 ​ ​ ​ ​ ​ 413,887 Stock-based compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 81,640 ​ ​ ​ ​ ​ 81,640 Defined benefit pension plan ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 36,218 ) ​ ​ ​ ( 36,218 ) Foreign currency translation ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 35,317 ) ​ ​ ( 35,317 ) Net loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 3,577,682 ) ​ ( 3,577,682 ) Balance as of December 31, 2020 ​ 1,185,879 ​ 118 ​ 2,965,600 ​ 297 ​ 3,543,163 ​ 354 ​ 13,388,771 ​ ( 152,698 ) ​ ( 7,034,853 ) ​ 6,201,989 ​ ​ ​ 80 Table of Contents Gain Therapeutics, Inc Consolidated Statement of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 2020 ​ ​ ​ ​ ​ Operating activities: ​ ​ Net loss ​ $ ( 13,890,606 ) ​ $ ( 3,577,682 ) ​ ​ ​ ​ ​ ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Depreciation ​ 15,484 ​ 9,592 Stock based compensation expense ​ 839,371 ​ 81,640 Issuance of warrants ​ ​ 1,034,000 ​ ​ — Internal-use software ​ ​ ( 34,135 ) ​ ​ — Changes in operating assets and liabilities: ​ ​ ​ Account receivables ​ 8,264 ​ ( 196 ) Prepaid expenses and other currents assets ​ ​ ( 534,502 ) ​ ​ ( 117,704 ) VAT credits ​ ​ ( 71,618 ) ​ ​ ( 21,454 ) Long term deposit and other non current assets ​ 33,979 ​ ( 63,095 ) Accounts payable ​ ( 521,394 ) ​ 395,543 Other current liabilities ​ ​ 665,460 ​ ​ 173,725 Defined benefit pension plan ​ ​ 55,326 ​ ​ 8,709 Deferred income ​ 34,701 ​ ( 129,315 ) Total changes in operating assets and liabilities ​ ( 329,784 ) ​ 246,213 Net cash used in operating activities ​ ​ ( 12,365,670 ) ​ ​ ( 3,240,237 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ Purchase of property and equipment ​ ( 94,212 ) ​ ( 20,826 ) Net cash used in investing activities ​ ​ ( 94,212 ) ​ ​ ( 20,826 ) ​ ​ ​ ​ ​ ​ ​ Cash flow from financing activities: ​ ​ ​ Proceeds from long-term debts ​ — ​ 738,282 Proceeds from issuance of Series A Preferred Stock, net of issuance costs ​ — ​ 1,091,345 Proceeds from issuance of Series B Preferred Stock, net of issuance costs ​ ​ — ​ ​ 9,127,902 Proceeds from issuance of common shares upon completion of initial public offering, net of underwriter discounts ​ 42,629,998 ​ 177 Payments of deferred offering costs ​ ( 853,488 ) ​ ( 470,745 ) Payments of current portion of long-term debt ​ ​ ( 21,951 ) ​ ​ — Proceeds from stock option exercise ​ ​ 12,216 ​ ​ — Net cash provided by financing activities ​ $ 41,766,775 ​ $ 10,486,961 Effect of exchange rate changes ​ 100,778 ​ ( 35,317 ) Net increase in cash, cash equivalents and restricted cash ​ $ 29,407,671 ​ $ 7,190,581 Cash, cash equivalents and restricted cash at beginning of period ​ 7,504,281 ​ 313,700 Cash, cash equivalents and restricted cash at end of period ​ $ 36,911,952 ​ $ 7,504,281 ​ ​ ​ 81 Table of Contents Notes to the Consolidated Financial Statements 1. Nature of the business and basis of presentation Operations and business Gain Therapeutics, Inc. (and together with its subsidiary, the “Company”), was incorporated under the laws of the state of Delaware (U.S.) on June 26, 2020. On July 20, 2020, the Company consummated a corporate reorganization, pursuant to which all of the issued and outstanding common and preferred stock of GT Gain Therapeutics SA, a Swiss company formed in 2017, were exchanged for common stock or preferred stock, as applicable, of Gain Therapeutics, Inc., reflecting a 10 :1 stock split. The corporate reorganization was accounted for as a recapitalization for accounting purposes, with GT Gain Therapeutics SA resulting in the predecessor entity of the Company. As a result of the corporate reorganization, GT Gain Therapeutics SA became a wholly-owned subsidiary of Gain Therapeutics, Inc. For periods and at dates prior to the corporate reorganization, the consolidated financial statements presented were prepared based on the historical financial statements of GT Gain Therapeutics SA, adjusted to give retroactive effect to the share exchange transactions. On March 17, 2021, the Company’s registration statement on Form S-1 related to its Initial Public Offering (“IPO”) was declared effective by the Securities and Exchange Commission (“SEC”). The IPO closed on March 17, 2021 at the Nasdaq. In conjunction with the IPO the Company completed a reverse stock split of the Company’s outstanding equity instruments. The reverse stock split was approved by the stockholders on March 4, 2021 and became effective on March 17, 2021. Upon closing of the IPO, the Series A and the Series B Preferred Stock, as resulting form the reverse stock split, were converted to common stock at a ratio of 1 -for-1. The Company is a biotechnology company developing novel therapies to treat diseases caused by protein misfolding, with an initial focus on rare genetic diseases and neurological disorders. We use our licensed platform, SEE-Tx®, to discover novel allosteric sites on misfolded proteins and identify proprietary small molecules that bind these sites, potentially restoring protein folding and treating disease. These small molecule binding sites, away from the protein’s active areas, are called allosteric sites. Targeting the allosteric binding site instead of the active binding site provides superior regulation of misfolded enzymes implicated by disease, is non-competitive with the natural substrate, provides superior drug-like properties and ultimately enhances both safety and efficacy. Risks and uncertainties The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, risks associated with completion and success of preclinical studies and clinical testing, dependence on key personnel, protection of proprietary technology, compliance with applicable governmental regulations, development by competitors of new technological innovations, protection of proprietary technology and the ability to secure additional capital to fund operations. Drug candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and prior to regulatory approval and commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales. Going concern The Company has incurred recurring losses and negative cash flows from operations since its inception and has primarily funded these losses through proceeds from capital contributions. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development. Substantial additional capital will be needed by the Company to fund its operations and to develop its product candidates. In March 2021, the Company closed its initial public offering, or IPO, in which the Company issued and sold 4,181,818 shares of its common stock, which included shares sold pursuant to an option granted to the underwriters to purchase additional shares, at a public offering price of $ 11.00 per share for net proceeds of $ 40.5 million after deducting underwriting discounts, commissions and other offering expenses. 82 Table of Contents The Company’s operations have consisted primarily of organizing the Company, securing financing, developing licensed technology, performing research and conducting preclinical studies. The Company faces risks associated with early-stage biotechnology companies whose product candidates are in development. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing, establishing manufacturing capacity and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital for the Company to complete its research and development, achieve its research and development objectives, defend its intellectual property rights, and recruit and retain skilled personnel, and key members of management. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales. The Company plans to seek additional funding through public or private equity offerings, debt financings, other collaborations,strategic alliances and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all,and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects. In accordance with Accounting Standards Update, or “ASU”, No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. As of the issuance date of these financial statements, the Company expects that its cash and cash equivalents will be sufficient to fund its forecasted operating expenses and capital expenditure requirements for at least the next twelve months from the issuance date of these financialstatements. Accordingly, the consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Basis of presentation The consolidated financial statements reflect the accounts of the Gain Therapeutics, Inc., GT Gain Therapeutics SA and its wholly owned branch, Gain Therapeutics Sucursal en España. All intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. The consolidated financial statements as of December 31, 2021, represented by the Consolidated Balance Sheet, the Consolidated Statement of Operations, the Consolidated Statements of Changes in Shareholders’ Equity, the Consolidated Statement of Comprehensive Loss, the Consolidated Statements of Cash Flows and the accompanying Notes, have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The financial statements as of December 31, 2021 reflect, for all periods presented, the retroactive application of the reverse stock split that occurred on March 17, 2021. All amounts in the consolidated financial statements are expressed in United States Dollars (USD/$) and disclosed within these explanatory notes in United States Dollars (USD/$) or Swiss Franc (CHF), which are the functional currencies of the Company and its operating subsidiary, GT Gain Therapeutics SA, respectively. The consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended December 31, 2020, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of December 31, 2021, and the results of its operations for the years ended December 31, 2021 and 2020, its statements of stockholders’ equity and its statements of cash flows for the years then ended. Reverse Stock Split On March 3, 2021, the Board approved a 1-for- 0.880784 reverse stock split of the Company’s outstanding equity instruments. The reverse stock split was approved by the stockholders on March 4, 2021 and became effective in conjunction with the IPO on March 17, 2021. Stockholders were no entitled to fractional shares as a result of the reverse stock split. All share and per share data shown in the accompanying consolidated financial statements and 83 Table of Contents related notes have been retroactively revised to reflect the reverse stock split. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. Initial Public Offering On March 17, 2021, the Company’s registration statement on Form S-1 relating to its IPO was declared effective by the Securities and Exchange Commission (“SEC”). The IPO closed on March 17, 2021 and the Company issued and sold 3,636,364 common shares at a public offering price of $ 11.00 per share for net proceeds of $ 34,978 thousand after deducting underwriting discounts and commissions of $ 2,950 thousand and other offering expenses of $ 2,071 thousand. On March 22, 2021, the Company issued and sold 545,454 additional common shares, pursuant to the full exercise of the underwriters’ option to purchase additional shares, for net proceeds of $ 5,580 thousand after deducting underwriting discounts and commissions of $ 420 thousand. Thus, the aggregate net proceeds to the Company from the IPO, after deducting underwriting discounts commissions, were $ 42,630 thousand. After deducting other IPO offering expenses amounting to $ 2,071 thousand, the net cash proceeds resulting from the IPO were $ 40,558 thousand, which are reflected in the statement of stockholders’ equity as Issuance of Common Stock in IPO, net of issuance costs. Upon the closing of the IPO, series A convertible preferred stock (the “Series A Preferred Stock”) and series B convertible preferred stock (the “Series B Preferred Stock”, and together with the Series A Preferred Stock, are collectively referred to as the “Preferred Stock”) were converted into shares of common stock at ratio of 1 -for-1. Segment information Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company’s chief operating decision-maker, the Chief Executive Officer, oversees the Company’s operations and manages the business as a single operating segment, which is research and development in the pharmaceutical sector with a focus on developing novel therapeutics to treat diseases caused by protein misfolding, such as rare genetic diseases and neurological disorders. Geographically, the research and development activities are mainly performed in Switzerland and Spain. The Company does not consider these geographies to be separate segments. ​ 2. Summary of significant accounting policies Foreign currency translation The Company is incorporated in the United States of America and has operations in Switzerland and Spain. The Company’s functional currency is USD. The functional currencies of the Company’s foreign operations are the local currencies (Swiss Franc in Switzerland and Euro in Spain). Assets and liabilities reported in the consolidated balance sheets are translated into U.S. dollars (the currency in which these financial statements are presented) at the exchange rates applicable at the balance sheet dates and for the consolidated statement of operations at the average exchange rates for the periods presented. Items representing the share capital and additional paid-in capital are presented at the historical exchange rates. Adjustments resulting from the translation of the financial statements of the Company’s foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income/(loss), a separate component of shareholders’ equity. The Company has not utilized any foreign currency hedging strategies to mitigate the effect of its foreign currency exposure. As of December 31, 2021 and 2020, accumulated currency translation adjustment recorded in the accumulated other comprehensive loss amounted to $ 165,156 and $ 1,323 , respectively. Use of Estimates The preparation of our consolidated financial statements in conformity with US GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates judgments and, assumptions including those related to recognition of grant funds, accrued expenses, defined benefit pension liability, warrants and stock-based compensation. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the 84 Table of Contents basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. Changes in estimates are recorded in the period in which they become known. To the extent that material differences arise between the estimates and actual results, the Company’s future results of operations will be affected. The COVID-19 pandemic did not have a significant impact on the Company’s estimates. Cash and cash equivalents The Company reports cash on hand and held at banks, and all highly liquid investments in money market, certificates of deposit, time deposit, and other short-term liquid securities with original maturities of less than 90 day, as cash and cash equivalents. Concentrations of credit risk The Company has no significant off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that may expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents which are deposited in accredited financial institutions in excess of federally insured limits. The Company deposits its cash and cash equivalents in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Deferred Issuance Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred issuance costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds generated as a result of the offering. Should the planned equity financing be abandoned, the deferred issuance costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations. There were nil and $ 1,217,988 deferred issuance costs as of December 31, 2021 and 2020, respectively. Property and equipment Property and equipment are stated at cost, including any accessory and direct costs that are necessary to make the assets fit for use, and adjusted by the corresponding accumulated depreciation. The depreciation rates recorded in the consolidated financial statements of operations have been calculated by taking into consideration the use, purpose and financial-technical duration of the assets, on the basis of their estimated useful economic lives. The Company believes the above criteria to be represented by the following depreciation rates: ​ ​ ​ ​ ​ -  Equipment & Furniture 12.5 % -  Electronic office equipment: ​ 20 % -  Leasehold Improvements ​ based on the terms of the lease ​ -  Laboratory equipment: ​ 15 % ​ Ordinary maintenance costs are entirely attributed to the consolidated statements of operations in the year in which they are incurred. Extraordinary maintenance costs, the purpose of which is to extend the useful economic life of the asset, to technologically upgrade it and/or to increase its productivity or safety for the purposes of the economic productivity of the Company, are attributed to the asset to which they refer and depreciated on the basis of its estimated useful economic lives. Amortization of leasehold improvements is computed using the straight-line method based upon the terms of the applicable lease or estimated useful life of the improvements, whichever is lower. Capitalized Software Development Costs The Company capitalizes the costs of software obtained for internal use in accordance with ASC 350-40, Internal-Use Software. Capitalized software development costs consist of costs incurred during the development stage and include purchased software licenses, implementation costs, consulting costs, and payroll-related costs for projects that qualify for capitalization. All other costs, primarily related to maintenance and minor software fixes, are expensed as incurred. As of December 31, 2021 and 2020, internal-use software amount to $ 202,609 and nil , and refer to the 85 Table of Contents external and internal labor costs incurred in the development of the Company ERP, amounting respectively to $ 168,474 and $ 34,135 . The Company amortizes the capitalized software development costs on a straight-line basis over the estimated useful life of the software, which is generally six years , beginning when the asset is substantially ready for use. The amortization of capitalized software development costs is reflected in general and administrative expenses. Impairment of long-lived assets In accordance with ASC Topic 360-10-20, “Property, Plant and Equipment,” the Company performs an impairment test whenever events or circumstances indicate that the carrying value of long-lived assets with finite lives may be impaired. Impairment is measured by comparing the carrying value of the long-lived assets to the estimated undiscounted pre-tax cash flows expected to result from the use of such assets and their ultimate disposition. In circumstances where impairment is determined to exist, the Company will write down the asset to its fair value based on the present value of estimated cash flows. No impairments have been identified by management as of and for any periods presented. Patents Patent-related costs, refer to legal fees incurred in connection with filing and prosecuting patent applications and are expensed as incurred due to uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. Leases Effective January 1, 2018, the Company adopted ASC 842, using the additional transition method option provided by ASU 2018-11. Under this transition method, we applied the new accounting guidance as of the date of adoption. Upon adoption, a cumulative effect adjustment was not required. Subsequent to the adoption, the Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances. The Company is the lessee in a lease contract when it obtains the right to control the asset. Operating lease right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a term of 12 months or less at inception are expensed on a straight-line basis over the lease term in the statement of operations. The Company determines the lease term by assuming the exercise of renewal options that are reasonably certain. In addition, the Company subleases portions of its office premises in Lugano. The Company recognizes sublease income on a straight-line basis over the sublease terms, reported within other income. Accounts Payable Accounts payable are reported at their nominal amounts due to their short-term maturities. Trade accounts payable are recorded net of trade discounts; cash discounts are recorded at the time of payment. Payables for Social Securities Social Security charges are reported in compliance with rules and laws applicable in the countries where our employees work. Charges are accrued in accordance with the policies stipulated and in connection with salaries due for the period. Accrued expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued expenses as of each balance sheet date. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level 86 Table of Contents of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time at the date of the preparation of the consolidated financial statements. There may be instances in which payments made to our vendors exceed the level of services provided, and result in prepayment reported under other current assets, which are subsequently expenses in the consolidated statement of operations when the related activity has been performed rather than when the payment is made. To date, there have been no material differences between our estimates of accrued expenses reported at each balance sheet date and the amounts actually incurred. Pension obligations We operate defined benefit pension plan and defined contribution pension plans in accordance with local regulations and practices in the countries in which the Company operates. These plans are funded by regular contribution made by the employer and the employees. For defined benefit pension plan, the liability recognized in the consolidated balance sheets is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The overfunded or underfunded status of the defined benefit plan is calculated as the difference between plan assets and the projected benefit obligations. Estimates are used in determining the assumptions incorporated in the calculation of the pension obligations, which is supported by input from independent actuaries. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in “Accumulated other comprehensive income (loss)” in the consolidated statements of equity and are charged or credited to income over the employees’ expected average remaining working lives. The measurement date used for our employee benefit plan is December 31. For defined contribution pension plans, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or volutanry basis. The Company has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Equity-based Compensation and Warrants The Company applies the fair value method of measuring equity-based compensation and warrants, which requires an entity to measure the cost of services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The Company issues equity-based compensation with only service-based vesting conditions and record the expense for these awards using the straight-line method. The Company has not issued any stock-based awards with performance- or market-based vesting conditions.The Company recognizes the related costs in the consolidated statement of operations and as additional paid-in capital in the consolidated statement of shareholders’ equity, in accordance with the vesting period during which the award recipients are required to provide services in exchange for the award. The Company accounts for forfeitures as they occur. Before being a public company, given the absence of an active market for the Company’s common stock, the Company and the Board of Directors estimated the fair value of the Company’s common stock at the grant date determining the estimated fair value of the Company’s equity instruments based on a number of factors, including prices paid for the Company’s convertible preferred stock sold to outside investors in arm’s-length transactions; the Company’s stage of development; the fact that the grants of stock-based awards involved illiquid securities in a private company. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. Given the absence of an active public market for the Company’s common stock prior to March 19, 2021, which was the first day of trading, the Company determined the volatility and the expected term for awards granted based on an analysis of reported data for a peer group of similar biopharmaceuticals companies that issued options with substantially similar terms. After the IPO, we continued to do so, and we expect not to change our methodology until such time as we will have reliable historical data regarding the volatility of our traded stock price and expected term of exercise patterns. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The Company has not paid, and does not anticipate paying, cash dividends on our common stock; therefore, the expected dividend yield is assumed to be zero . 87 Table of Contents The Black-Scholes option pricing model is also used for warrants issued, using consistent inputs and methodology to quantify such inputs, as described above in relation to equity-based compensation. The assumptions used in calculating the fair value of share-based awards and warrants represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Revenue Recognition The Company derives revenues from collaboration and licensing agreements. The Company recognize revenue related to these agreements in accordance with ASC 606, Revenues from contracts with customers and ASC 808, Collaborative arrangements . The terms of these arrangements typically include payment from third parties customers of one or more of the following: non-refundable initiation fee, reimbursement of development costs, development and regulatory milestone payments and royalties on net sales of the licensed product. In determining the appropriate amount of revenue to be recognized as we fulfill our obligations, the Company applies the five steps model of ASC606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. The Company only apply the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. If a contract is determined to be within the scope of ASC 606 at inception, the Company assesses the goods or services promised within such contract, determines which of those goods and services are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Costs and revenues associated with collaborative arrangements are reported in the consolidated statements of operations on a gross basis when the counterpart is identified as being a customer, when the performance obligations incurred and rendered to fulfil the agreements are deemed to be in the ordinary course of the Company’s business, or when there is an expectation that the collaborative arrangement will result in a future constant flow of revenues in the form of sale of products, royalties or licenses. Research grants Under the terms of the research and development grants awarded (such as those awarded by the The Michael J. Fox Foundation for Parkinson’s Research (MJFF) and The Silverstein Foundation for Parkinson’s Disease and from Innosuisse – Swiss Innovation Agency), we are entitled to receive reimbursement of our allowable direct expenses and payroll costs. Contributions from research and development activities under the grants are recorded based on management’s best estimate of the periods in which the related expenditures are incurred and activities performed and are classified in the statement of operations as a reduction to research and development expenses, measuring according to the time periods during which the research and development activities are carried out and related costs sustained. Research and development expenses The Company expenses all costs incurred in performing research and development activities. Research and development expenses include salaries and other related costs, materials and supplies, preclinical expenses, manufacturing expenses, contract services and other third-party expenses. General and administrative expenses General and administrative expenses consist primarily of salaries, benefits and other related costs, for personnel and consultants in the Company’s executive and finance functions. General and administrative expenses also include professional fees for legal, finance, accounting, intellectual property, auditing, tax and consulting services, travel expenses and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs not otherwise included in research and development expenses. 88 Table of Contents Income taxes The Company accounts for income taxes under the liability method. Under this method deferred income tax liabilities and assets are determined based on the difference between the financial statement carrying amounts of assets and liabilities and the related tax basis using enacted tax rates in effect in the years in which the associated deferred taxes are expected to reverse. A valuation allowance is recorded if it is “more likely than not” that a portion or all of a deferred tax asset will not be realized. As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact its view with regards to future realization of deferred tax assets. In consideration of the start-up status of the Company, a full valuation allowance has been established to offset the deferred tax assets, as the related realization is currently uncertain. In the future, should management conclude that it is more likely than not that the deferred tax assets are partially or fully realizable, the valuation allowance will be reduced to the extent of such expected realization, and the corresponding amount will be recognized as income tax benefit in the Company’s consolidated statement of operations. The Company recognizes tax liabilities from an uncertain tax position if it is more likely than not that the tax position will not be sustained upon examination by the taxing authorities, based on the technical merits of the tax position. There are no uncertain tax positions that have been recognized in the accompanying consolidated financial statements. Fair value measurements The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels based on their observability in the market and degree of judgment involved: ● Level 1 – Quoted prices in active markets for identical assets or liabilities. ● Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 – Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty credit risk in their assessment of fair value. Comprehensive income/(loss) Comprehensive income/(loss) is composed of net income(loss) and certain changes in stockholder’s equity that are excluded from the net income(loss), primarily foreign currency translation adjustments and defined benefit obligation adjustments. Net loss per share Basic net loss per share is computed by dividing the reported net loss by the weighted average number of shares of common stock outstanding during the period. The Company gives consideration to all potentially dilutive impacts, except where the effect of including such securities would be antidilutive. As of December 31, 2021, common stock equivalents consisted of stock options and warrants, while as of December 31, 2020, common stock equivalents consisted of the Series A preferred stock, Series B preferred stock, stock options and warrants. Because the Company has reported net losses since inception, these potential impacts would be anti-dilutive, and therefore common stock equivalents have been excluded from the computation, resulting in basic and diluted net loss per share being the same for all periods presented. 89 Table of Contents Recently issued accounting pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that we adopt as of the specified effective date. We do not believe that the adoption of any recently issued standards have or may have a material impact on our consolidated financial statements or disclosures. 3. Research Grants In December 2018 and in February 2019, our wholly owned subsidiary, GT Gain Therapeutics SA, obtained a research grants for a total amount of USD 186,956 from The Michael J. Fox Foundation for Parkinson's Research (MJFF) and The Silverstein Foundation for Parkinson's disease with GBA to advance its proprietary non-competitive molecular chaperones for Parkinson's disease and research project "therapeutic target of GCase enzyme in Parkinson's disease with novel pharmacological chaperones". Under the terms of the research and development grants awarded, we are entitled to receive reimbursement of our allowable direct expenses. As of December 31, 2021 and 2020, we recorded as reductions to research and development expenses of nil , since the grant term terminated in 2020, and USD 98,318 , respectively. In July 2019, our wholly owned subsidiary, GT Gain Therapeutics SA, announced that, in a consortium with the Institute for Research in Biomedicine, Bellinzone (Switzerland) and Neuro-Sys SAS in Gardanne (France), it obtained a research grant of approximately USD 1,500,000 from Eurostars-2 joint programme, with co-funding from the European Union Horizon 2020 research and Innosuisse – Swiss Innovation Agency. The contribution attributed to our subsidiary was CHF 386,218 , of which CHF 286,787 was already received as of December 31, 2019. The funding will support the development of the drugs portfolio for the treatment of Gaucher Disease, GM1 Gangliosidosis, Mucopolysaccharidosis type 1 and Krabbe. Under the terms of the research and development grants awarded, we are entitled to receive reimbursement of our allowable direct expenses. As of December 31, 2021 and 2020, we recorded as reductions to research and development expenses USD 136,177 and USD 151,230 , respectively and receivables of USD 81,862 and USD 51,665 , respectively. The unrecognized portions of the grants are reported as deferred income on the consolidated balance sheet. ​ 4. Cash, cash equivalents and restricted cash The Company considers all short-term, highly liquid investments, with an original maturity of three months or less, to be cash equivalents. The Company’s cash and cash equivalents include short-term highly liquid investments which are readily convertible into cash. These investments relate to money market securities with maturities of three months or less when acquired. The Company’s institutional money market accounts permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions, which are considered Level 1 inputs in the fair value hierarchy (see note 12). Given their short-term maturities and the underlying being represented by cash equivalents, their face value amount approximate the related fair market value. The Company has not experienced any losses in these accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents. Cash, cash equivalents and restricted cash are broken down as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 Cash ​ ​ 3,262,977 ​ ​ 907,255 Money Market ​ ​ 33,617,696 ​ ​ 6,585,655 Total cash and cash equivalents ​ $ 36,880,673 ​ $ 7,492,910 Restricted cash ​ $ 31,279 ​ $ 11,371 ​ Restricted cash refers to an amount required under our Lugano new office lease agreement and deposited into a restricted bank account as a guarantee for expenses to be incurred in case of damage to the premises noted at the termination of the lease. 90 Table of Contents Details of the cash and cash equivalents balances as of December 31, 2021 and 2020, broken down by currency in which the funds are denominated, are reported in the following table: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 Cash in CHF 157,310 128,074 Cash in EUR 338,766 145,726 Cash in USD 36,322,777 7,149,386 ​ 5. Other Current Assets Other current assets consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 Tax Credits ​ 113,586 ​ 58,017 ​ ​ ​ ​ ​ ​ ​ Prepaid and deferred expenses ​ 498,252 ​ 198,994 Other receivable ​ ​ 81,862 ​ ​ ​ Prepaid D&O Insurance ​ ​ 147,671 ​ ​ — Total Prepaid expenses and other current assets ​ $ 727,785 ​ $ 198,994 ​ Tax credit consist of a value added tax credit (“VAT”). It is an indirect tax receivables from Switzerland and Spain tax authorities on purchases of goods and services executed on those countries. Prepaid expenses refers to pre-payments made to vendors for future services. Deferred expenses mainly refer to research agreements entered into with third parties for research projects that will be recognized as expenses throughout the research period. Prepaid D&O insurance costs relate to insurance premium which will be recognized in the statement of operations on a monthly basis through the twelve months insurance period. 6. Property and Equipment, net Property and equipment, net, consists of the following : ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2021 ​ 2020 Computer ​ $ 55,141 ​ $ 25,436 Furniture and fixtures ​ 42,148 ​ 4,865 Leasehold improvements ​ 17,327 ​ 8,889 Laboratory instruments ​ 19,759 ​ 3,348 Total property and equipment ​ $ 134,375 ​ $ 42,538 Less: accumulated depreciation ​ ( 28,389 ) ​ ( 12,905 ) Property and equipment, net ​ $ 105,986 ​ $ 29,633 ​ Property and equipment mainly consist of computers and set-up of a conference room in our Spanish and Lugano offices. No disposals, nor impairments occurred during the periods. Depreciation has been calculated by taking into consideration the use, purpose and financial-technical duration of the assets, based on their estimated economic lives. Depreciation expense for the year ended December 31, 2021, and 2020 was USD 15,484 and USD 9,592 , respectively. 7. Operating lease. Right of use (“ROU”) assets Our leased assets include offices in Bethesda, Lugano and Barcelona and a lab in Barcelona. Our current lease portfolio consists of leases with remaining terms ranging from three to five years . Renewal options are excluded 91 Table of Contents from our calculation of lease liabilities unless we are reasonably certain that we will exercise the renewal option. Our lease agreements do not contain residual value guarantees or material restrictive covenants. On June 1, 2021, the Company entered into a five year operating lease agreement to lease office space in Via Soave, n.6 in Lugano, Switzerland. The lease agreement is renewable for additional five years . The Company is required to pay for operating costs, including heating and water, which are adjusted and billed yearly based on usage. These additional charges are considered variable lease costs and are recognized in the period in which the costs are incurred. In connection with the lease, as guarantee for any damages claimed by the lessor, the Company deposited into a restricted bank account CHF 28,500 or USD 31,279 classified as restricted cash. On August 31, 2021, the three year operating lease agreement to lease office space in Via Pietro Peri, 9D Lugano, Switzerland terminated and CHF 10,500 or USD 11,371 deposited into a restricted bank account were remitted to the Company. On October 1, 2021, the Company entered into a three year operating lease agreement to lease office space in Bethesda, Maryland. In connection with the lease, the Company paid a security deposit of USD 5,227 , classified as deposit in non-current assets, for the performance of all obligations, covenants and conditions and agreements under the lease. On November 1, 2021, the Company entered into a five-years new operating lease agreement in Torre D Building with Parc Cientific de Barcelona for larger office space of 1,417 square feet to accommodate the Company’s continued continuos growth and contemporaneosly terminated a lease, entered in October 2020, in Torre I Building for 830 square feet. In connection with the Torre D Building lease, the Company paid a security deposit of EUR 4,325 or USD 4,918 classified as deposit in non-current assets. The Company is required to pay for operating costs, including general services, scientific services, utilities, waste management services and taxes, which are billed monthly based on the Company's share of the total rentable square footage. These additional charges are considered variable lease costs and are recognized in the period in which the costs are incurred. Operating leases are reflected on our balance sheet as operating lease ROU assets and the related current and non-current operating lease liabilities. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease agreement. Operating lease ROU assets and liabilities are recognized at the commencement date, or the date on which the lessor makes the underlying asset available for use, based upon the present value of the lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term. Variable lease costs such as common area maintenance, property taxes and insurance are expensed as incurred. The breakdown of the significant components of ROU assets and lease liabilities as of December 31, 2021 and 2020 is reported in the table below, together with the discount rate used in order to calculate the net present value of the lease liabilities as of those periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2021 ​ 2020 Operating Lease ​ ​ ​ Operating lease- right of use assets ​ $ 901,042 ​ $ 523,080 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease liability - current ​ $ 219,137 ​ $ 122,756 ​ Operating lease liability - non current ​ $ 695,053 ​ $ 400,324 ​ Weighted average remaining lease term - years ​ 4 ​ 5 ​ Weighted average discount rate ​ 1.86 ​ 3.61 ​ ​ The components of the lease costs which are included in the consolidated statements of operations and comprehensive loss were as follows: ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2021 ​ 2020 Operating lease costs $ 191,329 $ 121,800 ​ 92 Table of Contents The future minimum lease payments for the Company’s operating leases as of December 31, 2021, were as follows: ​ ​ ​ ​ Fiscal Year ​ Operating Leases 2022 $ 237,926 2023 ​ 245,685 2024 ​ 227,115 2025 ​ 167,526 2026 ​ 58,738 Thereafter ​ - Total future minimum lease payments ​ 936,990 Less amount representing interest or imputed interest ​ 22,800 Present value of lease liabilities $ 914,190 ​ ​ 8. Accounts Payable Accounts payable are reported at their nominal value. Accounts payable refer to amounts due to third parties on outstanding invoices received before year-end for services already provided. As of December 31, 2021 and 2020, accounts payable amounted to USD 560,479 and USD 961,516 , respectively. All accounts payable are due in less than 12 months. Details of the vendor outstanding payables as of December 31, 2021 and 2020, broken down by currencies in which they are denominated, are reported in the following table: ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2021 ​ 2020 Vendors Payables in CHF 13,166 29,423 Vendors Payables in EUR 309,378 202,223 Vendors Payables in USD 197,045 673,600 ​ 9. Other current liabilities and deferred income Other current liabilities and deferred income consist of the following as of December 31, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 Payable for social securities ​ $ 255,068 ​ $ 88,334 Accrued payroll ​ 465,382 ​ 294,469 Accrued expenses ​ 681,770 ​ 379,270 Tax provision ​ ​ 380 ​ ​ 1,070 Deposit ​ — ​ 5,307 Total Other Current Liabilities ​ $ 1,402,600 ​ $ 768,450 Deferred income ​ 266,504 ​ 239,483 Total Other Current Liabilities and Deferred Income ​ $ 1,669,104 ​ $ 1,007,933 ​ Payables for social securities refer to amounts due to social securities and employees withholding tax. Accrued payroll refers to accruals for year-end bonuses, accrued vacations and extra-hours including social security charges, to be paid to employees. Accrued expenses refer to invoices to be received from vendors for services performed and not yet billed. Deferred income mainly refers to research grants received and, as of December 31, 2021, to a collaboration agreement entered into with Zentalis. Deferred income will be recognized in the consolidated statement of operations in accordance with the costs sustained. 93 Table of Contents 10. Pension obligations Net pension obligations related to the Company’s defined pension plan refer only to Swiss employees and as of December 31, 2021 and 2020, can be summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 End of year funed status: ​ ​ ​ ​ ​ ​ Fair value of plan assets ​ $ 943,025 ​ $ 477,288 (Projected benefit obligation) ​ ​ ( 1,272,483 ) ​ ​ ( 648,846 ) Funded status ​ $ ( 329,458 ) ​ $ ( 171,558 ) ​ ​ ​ ​ ​ ​ ​ Accumululated benefit obligation ​ ​ 1,233,053 ​ ​ 652,445 ​ ​ ​ ​ ​ ​ ​ Reconciliation of funded status: ​ ​ ​ ​ ​ ​ Funded status beginning of year ​ $ ( 171,558 ) ​ $ ( 126,629 ) Expense ​ ​ ( 144,146 ) ​ ​ ( 44,474 ) Employer contribution ​ ​ 88,819 ​ ​ 36,264 Translation differences ​ ​ ( 1,437 ) ​ ​ ( 501 ) Change in AOCI over the year ​ ​ ( 101,136 ) ​ ​ ( 36,218 ) Funded status at end of year ​ $ ( 329,458 ) ​ $ ( 171,558 ) ​ ​ ​ ​ ​ ​ ​ Component of net periodic pension costs: ​ ​ ​ ​ ​ ​ Service cost ​ $ 132,809 ​ $ 36,597 Interest cost ​ ​ 1,318 ​ ​ 947 Expected return on plan assets ​ ​ ( 5,558 ) ​ ​ ( 3,564 ) Amortization of (gain)/losses ​ ​ 16,212 ​ ​ 10,494 Amortization of prior service cost ​ ​ ( 635 ) ​ ​ — Total ​ $ 144,146 ​ $ 44,474 ​ ​ ​ ​ ​ ​ ​ Service cost is reported in research and development and general and administrative expenses. All other components of net period costs are reported in interest income, net in the consolidated statement of operations ​ ​ ​ ​ ​ ​ ​ Reconciliation of projected benefit obligation: ​ ​ ​ ​ ​ ​ Projected benefit obligation at January 1 ​ $ 648,846 ​ $ 496,819 Services cost ​ ​ 132,809 ​ ​ 36,597 Employee contribution ​ ​ 59,208 ​ ​ 25,770 Interest Cost ​ ​ 1,318 ​ ​ 947 Benefit payments ​ ​ 315,300 ​ ​ 48,602 (Gain)/loss on financial assumption ​ ​ ( 27,799 ) ​ ​ 4,379 (Gain)/loss on demographic assumption ​ ​ ( 43,123 ) ​ ​ — (Gain)/loss on experience ​ ​ 193,984 ​ ​ 35,732 Plan Amendement ​ ​ ( 8,060 ) ​ ​ — ​ ​ $ 1,272,483 ​ $ 648,846 ​ ​ ​ ​ ​ ​ ​ ​ 94 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 Reconciliation of fair value of plan assets: ​ ​ ​ ​ ​ ​ Fair value at January 1 ​ $ 477,288 ​ $ 370,190 Expected return on plan assets ​ ​ 5,558 ​ ​ 3,564 Gain/(loss) on plan assets ​ ​ ( 3,148 ) ​ ​ ( 9,454 ) Employer contributions ​ ​ 88,819 ​ ​ 36,264 Employee contributions ​ ​ 59,208 ​ ​ 25,770 Benefit payments ​ ​ 315,300 ​ ​ 48,602 Others ​ ​ — ​ ​ 2,352 Fair value at December 31 ​ $ 943,025 ​ $ 477,288 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 Change in net (gain)/loss: ​ ​ ​ ​ ​ ​ (Gain)/loss at beginning of year ​ $ 154,665 ​ $ 117,803 (Gain)/loss on PBO during year ​ ​ 122,895 ​ ​ 37,902 (Gain)/loss on assets during year ​ ​ 3,148 ​ ​ 9,454 Amortization of gain/(loss) ​ ​ ( 16,212 ) ​ ​ ( 10,494 ) (Gain)/loss at end of year ​ $ 264,496 ​ $ 154,665 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 Change in accumulated other comprehensive income (AOCI): ​ ​ ​ ​ ​ ​ AOCI at beginning of year ​ $ 154,665 ​ $ 117,803 Net gain/(loss) amortized ​ ​ ( 16,212 ) ​ ​ ( 10,494 ) (Gain)/loss on PBO during the year ​ ​ 122,895 ​ ​ 37,902 (Gain)/loss on assets during the year ​ ​ 3,148 ​ ​ 9,454 Prior Service Cost/(credit) occurring over the year ​ ​ ( 8,060 ) ​ ​ — Net prior service (cost)/credit amortized ​ ​ ( 635 ) ​ ​ — Total AOCI at end of year ​ $ 255,801 ​ $ 154,665 ​ The assumptions used in the determination of the benefit obligation and the plan assets for the pension plans and the pension obligation were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2021 2020 Actuarial Assumptions (%pa): ​ ​ ​ ​ Discount rate ​ ​ 0.30 % ​ ​ 0.15 % Interest credit rate / ERoA ​ ​ 1.00 % ​ ​ 1.00 % Salary increases ​ ​ 1.00 % ​ ​ 1.00 % Pension increases ​ ​ 0.00 % ​ ​ 0.00 % Demographic Assumptions: ​ ​ ​ ​ ​ ​ Lump-sum option ​ ​ 25 % ​ ​ 25 % Retirement age ​ ​ 65/64 ​ ​ 65/64 Proportion married ​ ​ .BVG 2020 ​ ​ .80 % Allowance for child pensions ​ ​ 5 % loading on risk benefits ​ ​ 5 % loading on risk benefits Mortality base table ​ ​ .BVG 2020 ​ ​ .BVG 2015 Longevity improvement ​ ​ CMI 2018 ( 1.25 %) ​ ​ CMI 2016 ( 1.25 %) Turnover ​ ​ .BVG 2020 ​ ​ .BVG 2015 Disability ​ ​ 80 %.BVG 2020 ​ ​ 80 % BVG 2015 ​ ​ 95 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ December 31, ​ ​ ​ 2021 ​ 2020 Expected benefit payments: ​ ​ ​ ​ ​ ​ Year 1 ​ $ 162,208 ​ $ 11,363 Year 2 ​ ​ 54,723 ​ ​ 141,225 Year 3 ​ ​ 58,224 ​ ​ 29,330 Year 4 ​ ​ 60,869 ​ ​ 30,793 Year 5 ​ ​ 63,281 ​ ​ 31,963 Next 5 years ​ $ 428,371 ​ $ 169,658 ​ ​ ​ ​ ​ ​ ​ Other disclosure items: ​ ​ ​ ​ ​ ​ Next year's expected employer contribution ​ $ 112,396 ​ $ 38,873 ​ The Company’s investment strategy for its pension plans is to optimize the long-term investment return on plan assets in relation to the liability structure to maintain an acceptable level of risk while minimizing the cost of providing pension benefits and maintaining adequate funding levels in accordance with applicable rules in each jurisdiction. The Company does not manage any assets internally. The plan assest relates to mandatory and discretionary contributions made in accordance with Swiss Law to a leading pension provider. The capital is fully insured and provides for a fixed rate of return. The fair value is based on the value of the assets held by the provider and as such has been classified within Level 3 of the fair value hierarchy. We maintain a 401(k) saving Plan, which is available to all U.S. employees. Participants may make voluntary contributions. We make matching contributions according to the 401(k) Saving Plan’s matching formula. All matching contributions and participant contribution vest immediately. The expense related to our 401(k) Savings Pan consist of our matching contributions. Expenses related to our 401(k) Savings Plan totaled USD 3,243 and nil for the years ended December 31, 2021 and 2020. ​ 11 . Loans In March 2020, the Company obtained a CHF 14,600 (USD 16,024 ) five-year loan. The loan had zero interest and original maturity on March 31, 2025. The loan was guaranteed through joint and several sureties by the Swiss government. The loan is part of the infrastructure put in place by the Federal Council and Swiss Parliament in view of the economic consequences of the coronavirus. As of December 31, 2021, the outstanding balance has been reclassified as current as the Company decided to estinguish the loan. No expenses or charges were due for the early extinguishment. In August 2020, the Company obtained a CHF 638,000 (USD 700,221 at the historical forex exchange rate) nine-year loan. The loan has zero interest. The loan is due in quarterly installments of CHF 20,000 , with payments commencing on December 31, 2021 and ending on September 30, 2029. The loan is part of the infrastructure put in place by the Federal Council and Swiss Parliament in view of the economic consequences of the coronavirus. Loans granted do not bear interest and no issuance costs have been borne. As such they have been accounted for at face value, which is deemed to approximate the related fair value. The future loan payments are reported in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total 2022 2023 2024 2025 2026 Thereafter Loan $ 694,294 ​ 103,826 ​ 87,806 ​ 87,806 ​ 87,806 ​ 87,806 ​ 239,244 ​ ​ 12. Fair value measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. 96 Table of Contents The carrying amounts of the Company’s cash and cash equivalents, including money market funds, restricted cash and financial liabilities are considered to be representative of their respective fair values because of the short-term nature and the contractual terms of those instruments. The fair values of money market funds are based upon the quoted prices in active markets provided by the holding financial institution, which are considered Level 1 inputs in the fair value hierarchy according to ASC820. There have been no changes to the valuation methods utilized by the Company, nor were there transfers between levels of the fair value hierarchy. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value measurement at reporting date using ​ ​ Quoted prices in active market for identical assets ​ Significant other observable inputs ​ Significant unobservable inputs ​ (level 1) (level 2) (level 3) December 31, 2021: ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents: ​ ​ ​ ​ ​ ​ ​ Money market funds ​ ​ 33,617,696 ​ — ​ — Total cash and cash equivalents ​ $ 33,617,696 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Total financial assets ​ ​ 33,617,696 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020: ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents: ​ ​ ​ ​ ​ ​ ​ Money market funds ​ ​ 6,585,655 ​ — ​ — Total cash and cash equivalents ​ $ 6,585,655 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Total financial assets ​ ​ 6,585,655 ​ — ​ — ​ The carrying amounts of prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value due to their short-term maturities. 13. Common and Preferred Stock As of December 31, 2021 and 2020, the authorized capital stock of the Company included 50,000,000 shares of common stock, $ 0.0001 par value and 10,000,000 shares of preferred stock, $ 0.0001 par value. As of December 31, 2021 and 2020, 11,883,368 and 3,543,163 ( 4,022,736 before the reverse stock split) shares of common stock, $ 0.0001 par value, were issued and outstanding . No preferred stocks were outstanding as of December 31, 2021. There were 1,185,879 ( 1,346,390 before the reverse stock split) shares of Series A Preferred Stock, par value $ 0.0001 and 2,965,600 ( 3,366,999 before the reverse stock split) shares of Series B Preferred Stock, par value $ 0.0001 , issued and outstanding as of December 31, 2020. The reverse stock split did not result in any change of the original par value of the Company common and preferred stock. Upon closing of the IPO, the Preferred Stock, as resulting from the reverse stock split, were converted to common stock at a ratio of 1 -for- 1 .The holders of the Company’s Preferred Stock had certain voting, dividend, and redemption rights, as well as liquidation preferences and conversion privileges. All rights, preferences, and privileges associated with the preferred stock were terminated at the time of the Company’s IPO in conjunction with the conversion of all outstanding shares of Preferred Stock into shares of common stock. 14. Warrants In July, 2020, in connection with the issuance of the Series B Preferred Stock through a private placement, the Company issued equity-classified warrants to designees of the placement agent to purchase an aggregate of 269,360 shares of our common stock at an exercise price of $ 4.46 per share, valued in the aggregate at USD 413,887 and included in the issuance costs of the Series B Preferred Stock. The warrants vested immediately upon issuance, 97 Table of Contents provide for a cashless exercise right and are exercisable for a period of five years from July 20, 2020. On March 3, 2021, the Board approved a 1-for- 0.880784 reverse stock split of the Company’s outstanding equity instruments. The reverse stock split was approved by the stockholders on March 4, 2021 and became effective on March 17, 2021. Shares of common stock underlying outstanding warrants were proportionately reduced from 269,360 to 237,249 and the respective exercise prices, were proportionately increased from $ 4.46 to $ 5.07 in accordance with the terms of the agreements governing such securities. As of December 31, 2021, 11,862 warrants were exercised resulting in 3,283 shares having been issued following the cashless mechanism as per the terms of the agreement. On May 6, 2021, the Company entered into nine months investing banking services and financial advisory agreement and issued equity-classified warrants to designees of the investment bank to purchase an aggregate of 200,000 shares of the Company common stock at an exercise price of $ 13.75 per share, valued in the aggregate at USD 1,034 thousand. The warrants vested immediately upon issuance, do not provide cashless exercise right and are exercisable for a period of four years from May 6, 2021. The fair value of the warrants is recognized on a straight-line basis over the nine months service period as general and administrative expense. As of December 30, 2021, no warrants were exercised or exchanged. The fair value of the warrants issued in 2020 and 2021 is estimated using the Black-Scholes option pricing model with the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 2020 ​ Grant date fair value $ 5.17 $ 1.54 ​ Volatility ​ 70 % 75 % Expected term (years) 4.00 ​ 5.00 ​ Risk-free interest rate 0.81 ​ 0.28 ​ Expected dividend yield - - ​ - ​ ​ 15. Equity Incentive Plan On September 24, 2020, the Board of Directors adopted the 2020 Omnibus Incentive Plan (the “2020 Omnibus Plan”). The 2020 Omnibus Plan provides for the granting of equity-based awards to our named executive officers, other employees, consultants and non-employee directors at a price to be determined by the Board of Directors. The 2020 Omnibus Plan is intended to encourage ownership of stock by employees and consultants of the Company and to provide additional incentives for them to promote the success of the Company’s business. The maximum number of shares to be issued under the 2020 Omnibus Plan is 1,310,000 . The 2020 Omnibus Plan expires after ten years , unless terminated prior to that date by the Board of Directors. The Board of Directors is responsible for determining the individuals to be granted options, the number of options each individual will receive, the option price per share, and the exercise period of each option. No option will have a term in excess of 10 years . The exercise price for a stock option awarded under the 2020 Omnibus Plan shall not be less than the fair market value of the Company’s common stock on the date of the grant. On December 23, 2021, the Board of Directors, has determined that it is advisable and in the best interests of the Company to adopt an Inducement Equity Incentive Plan (the “2021 Inducement Equity Incentive Plan”) intended to induce new employees to join the Company for the benefit of individuals who satisfy the standards for inducement grants under Rule 5635(c)(4) of the NASDAQ Listing Rules and the related guidance issued thereunder with respect to the Company and its affiliates. The maximum number of shares reserved for issuance pursuant to awards to be granted under the 2021 Inducement Equity Incentive Plan is to 1,000,000 . 98 Table of Contents Stock Option Grants The following tables summarize stock option activity for the year ended December 31, 2021 : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ Aggregate ​ ​ ​ ​ Weighted Average ​ Weighted Average ​ Remaining Contractual ​ Intrinsic ​ Shares Grant Date Fair Value ​ Exercise Price Terms (Years) Value Outstanding as of December 31, 2020 488,000 ​ ​ 2.97 9.70 — Options outstanding after stock splits 429,822 2.42 ​ 3.38 9.01 — Options granted 535,780 4.27 ​ 6.53 5.66 — Options exercised ( 3,625 ) 2.42 ​ 3.38 — — Options cancelled/forfeited ( 1,761 ) 2.42 ​ 3.38 — — Options outstanding as of December 31, 2021 960,216 3.46 ​ 5.13 ​ 6.25 ​ 163,237 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options Outstanding ​ ​ ​ ​ Options Exercisable ​ ​ ​ ​ ​ ​ Weighted ​ Weighted Average ​ ​ ​ Weighted ​ ​ ​ ​ Weighted- Average Years ​ Average ​ Grant Date ​ ​ ​ Average Exercise ​ Number ​ Remaining on Contractual ​ Exercise ​ Fair Value ​ Number ​ Exercise Price Outstanding Life Price ​ ​ ​ Exercisable Price $ 3.38 512,516 8.91 ​ $ 3.38 ​ $ 2.42 174,621 ​ $ 3.38 $ 5.86 ​ 210,000 ​ 9.98 ​ $ 5.86 ​ $ 4.00 ​ — ​ ​ — $ 5.99 ​ 45,500 ​ 9.94 ​ $ 5.99 ​ $ 4.34 ​ — ​ ​ — $ 7.80 ​ 104,000 ​ 9.61 ​ $ $ 780 ​ $ 5.63 ​ 2,664 ​ ​ $ 780 $ 10.03 ​ 88,200 ​ 9.36 ​ $ 10.03 ​ $ 5.15 ​ — ​ ​ — ​ On March 3, 2021, the Board approved a 1-for- 0.880784 reverse stock split of the Company’s outstanding equity instruments. The reverse stock split was approved by the stockholders on March 4, 2021 and became effective on March 17, 2021. Shares of common stock underlying outstanding stock options were proportionately reduced from 588,000 to 517,902 and the respective exercise prices, were proportionately increased from $ 2.97 to $ 3.38 in accordance with the terms of the agreements governing such securities. The reverse stock split did not impact the fair value of the stock option previously recorded and no modification accounting is required because all the three following conditions were met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and (iii) the classification of the modified award as an equity instrument is the same as the classification of the original award immediately before modification. The aggregate intrinsic value of stock options is calculated as the difference between the weighted average exercise price of the underlying stock options and the market price of the Company’s common stock on December 31, 2021. As of December 31, 2021, the total unrecognized compensation cost related to non-vested stock options granted was USD 2,403 thousand and is expected to be recognized over 4 years . The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options on the date of grant. The Black-Scholes option pricing model takes into account variables such as volatility, dividend yield rate, and risk-free interest rate. The computation of expected volatility and expected term of exercise is based on a representative group of companies with similar characteristics, including stage of product development and life science industry focus, since we do not have a reliable history. The risk-free interest rate is based on US treasury bonds whose term is consistent with the expected term of exercise of the stock options. The expected dividend yield is assumed to be zero as we have never paid dividends and have no current plans to pay any dividends on our common stock. The Company’s policy is to account for forfeitures when they occur. 99 Table of Contents The assumptions that the Company used to determine the grant-date fair value of stock options granted were as follows, presented on a weighted-average basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2021 ​ 2020 ​ Grant date fair value $ 4.27 $ 2.13 ​ Volatility 80 % 80 % Expected term (years) 5.66 ​ 7.00 ​ Risk-free interest rate 0.98 ​ 0.67 ​ Expected dividend yield — ​ — ​ ​ Each of these inputs is subjective and generally requires significant judgment to determine. The weighted average grant-date fair value of the Company’s stock options granted as of December 31, 2021 and 2020 was $ 4.27 and $ 2.13 , respectively. Total stock-based compensation expense is recognized for stock options granted to employees and non-employees and has been reported in the Company’s condensed consolidated statements of operations and comprehensive loss as follows: Total stock-based compensation expense is recognized for stock options granted to employees and non-employees and has been reported in the Company’s consolidated statements of operations as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ 2021 2020 Research and development 344,304 ​ 57,049 General and administrative 495,067 ​ 24,591 Total stock-based compensation $ 839,371 $ 81,640 ​ 16. Collaboration Agreement On April 20, 2021, the Company entered into a multi-target collaboration agreement with Zentalis Pharmaceuticals, Inc. (“Zentalis”) to discover new product candidates for the treatment of cancer. Under the terms of the agreement, the Company will use its in-licensed SEE-Tx® computational platform technology to identify binding sites on target proteins and determine the potential suitability of these sites as drug targets, as well as their prospective therapeutic use in oncology. Pursuant the terms of the agreement, Zentalis agreed to pay the Company, on a program-by-program basis, a non-creditable, non-refundable, program initiation fee and reimbursement of expenses incurred by the Company in accordance with the agreed-upon research budget for each target in a multi-target agreement with a maximum of five mutually agreed to targets at the option of Zentalis. With respect to any development program, and subject the delivery of the data package, the Company granted to Zentalis an option to obtain an exclusive, transferable worldwide license, with the right to sublicense, under relevant intellectual property rights and know-how of the Company arising from the collaboration to develop, manufacture and commercialize any products resulting from the development program. Zentalis may exercise the option, at its reasonable discretion, and shall use commercially reasonable efforts to develop and obtain market approval for products developed from the applicable programs. Unless terminated earlier, the agreement expires at the expiration of the last valid claim of the licensed patents, subject to certain surviving rights and obligations. Zentalis and the Company can each terminate the agreement in the event of the bankruptcy or insolvency of the other party, or a material breach by the other party and failure to cure such breach within a certain period of time. Zentalis shall have the right, at its sole discretion, exercisable at any time to terminate the agreement on a program-by-program basis, upon ninety ( 90 ) days’ prior written notice to the Company or, at any time, if a safety concerns arises with respect to any development program or product. In May 2021, the first target development program was identified, and the estimated development cost were approved and collected in July 2021. The transaction price of this first target development program includes (i) $ 50 thousand of fixed consideration as program initiation fee, (ii) up to $ 272 thousand as reimbursement for employee and external research and development cost, (iii) $ 250 thousand subject to the exercise of a research program option, (iv) up to $ 41.5 million of variable consideration in the form of event-based milestone payments, if goals will be met in the future, and (v) other royalty-based payments based on future net sales. 100 Table of Contents The Company analyzed the Zentalis Collaboration Agreement and concluded that it represents a contract with a customer within the scope of ASC 606 and ASC 808. Based on that evaluation, (i) the program initiation fee was recognized as revenue in full as of June 30, 2021 at a point in time, at program inception as there is no unsatisfied performance obligation; (ii) the performance obligation to provide development services, is satisfied over a period of time as services are performed and Zentalis receives the benefit for the services. The Company will recognize revenue associated with the performance obligation as the research and development services are provided using an input method, according to the costs incurred. As of December 31, 2021, the Company recognized $ 167 thousand of revenues and reported current portion of deferred revenues for $ 155 thousand. ​ 17. Income taxes The Company is subject to taxation in the U.S., Switzerland and in Spain. Taxes are recorded on an accrual basis and represent the allowances for taxes paid or to be paid for the year, calculated according to the current enacted rates and applicable laws. The Company has accumulated net tax losses since inception in Switzerland and in the U.S. The Company report a provision for income taxes due to the Spanish tax authorities pertaining to our branch Gain Therapeutics Sucursal en España. Spanish corporate income taxes have been computed based on an effective tax rate of 25 %, which represents the statutory tax rate, as no discrete items were noted in the computation of income taxes. For financial reporting purposes, loss before income taxes provision includes the following components: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2021 2020 Domestic ​ $ ( 7,601,640 ) ​ $ ( 623,667 ) Foreign ​ ( 6,284,958 ) ​ ​ ( 2,948,629 ) Total ​ $ ( 13,886,598 ) ​ $ ( 3,572,296 ) ​ Following is the breakdown of the components of income tax expense provision for the years ended December 31, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2021 ​ 2020 Current: ​ ​ ​ ​ ​ ​ Federal ​ ​ — ​ ​ — State ​ ​ — ​ ​ — Foreign ​ ​ 4,008 ​ ​ 5,386 Total ​ $ 4,008 ​ $ 5,386 Deferred: ​ ​ ​ ​ ​ ​ Federal ​ ​ — ​ ​ — State ​ ​ — ​ ​ — Foreign ​ ​ — ​ ​ — Total ​ ​ — ​ ​ — Total income tax expense ​ $ 4,008 ​ $ 5,386 ​ 101 Table of Contents The breakdown of domestic and foreign NOLs and related DTAs are reported in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2021 2020 NOLs (foreign) ​ $ ( 12,021,483 ) ​ $ ( 6,076,187 ) NOLs (domestic) ​ ​ ( 6,218,309 ) ​ ​ ( 532,209 ) Total NOLs ​ $ ( 18,239,792 ) ​ $ ( 6,608,396 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets related to: ​ ​ ​ ​ ​ ​ Net operating loss (foreign) ​ ​ 2,243,668 ​ ​ 1,111,942 Net operating loss (domestic) ​ ​ 1,677,610 ​ ​ 146,451 Stock based compensation ​ ​ 253,439 ​ ​ 22,465 Warrant expense ​ ​ 284,531 ​ ​ — Other temporary differences ​ ​ 4,010 ​ ​ — Total deferred tax assets ​ $ 4,463,258 ​ $ 1,280,858 Deferred tax liabilities ​ ​ ​ ​ ​ ​ Depreciation and other ​ ​ ( 1,137 ) ​ ​ ( 2,682 ) Total deferred tax liabilities ​ $ ( 1,137 ) ​ $ ( 2,682 ) ​ ​ ​ ​ ​ ​ ​ Valuation allowance ​ ​ 4,462,121 ​ ​ 1,278,176 Net deferred tax assets ​ ​ — ​ ​ — ​ According to Swiss tax law, the NOLs can be carried forward for seven years and will begin to expire commencing from 2025 for the NOLs generated in 2017. According to the U.S. Tax Cuts and Jobs Act (“TCJA”) that was signed into law on December 22, 2017, federal net operating losses (“NOLs”) incurred after December 31, 2017 can be carried forward indefinitely and are limited to 80% of taxable income in any tax period. The NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOLs and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not done an analysis to determine whether or not ownership changes have occurred since inception. Deferred tax assets require an assessment of both positive and negative evidence when determining whether it is more likely than not that they can be recovered. Such assessment is made on a jurisdiction-by-jurisdiction basis. The Company’s assessment includes an evaluation of cumulative losses, future sources of taxable income, exclusive of reversing temporary differences, and risks and uncertainties related to our business. As of December 31, 2021 and 2020, the Company has determined that there is not sufficient evidence that the Company will be able to realize the benefits of the domestic and foreign deferred tax assets. Accordingly, due to uncertainty regarding the realization of our deferred tax assets, the Company continues to maintain a full valuation allowance on the Company’s domestic and foreign deferred tax assets as of December 31, 2021 and 2020 and until sufficient positive evidence will exist to support the reversal of the valuation allowance. 102 Table of Contents A reconciliation of income tax expense (benefit) computed at the statuory federal income tax rate to the Compan’s effective tax rate as reflected in the consolidated financial statements is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, ​ ​ ​ 2021 ​ 2020 Federal income tax at US statutory rate ​ ​ 21.00 % ​ ​ 21.00 % ​ State income taxes, net of federal benefit ​ ​ 6.52 % ​ ​ 6.52 % ​ Permanent differences ​ ​ ( 0.10 )% ​ ​ 0.00 % ​ Provision to return ​ ​ 0.13 % ​ ​ 0.00 % ​ Foreign tax ​ ​ ( 0.03 )% ​ ​ ( 0.15 )% ​ Valuation allowance ​ ​ ( 27.52 )% ​ ​ ( 27.37 )% ​ Effective income tax rate ​ ​ 0.00 % ​ ​ 0.00 % ​ ​ As of December 31, 2021 and 2020, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations.There are no changes expected to occur in the next 12 months with respect to the status of the Company’s uncertain tax positions. The Company files income tax returns in Switzerland, Spain and in the United States. Tax years from 2018 and after remain subject to examination by the taxing jurisdictions. The NOL and tax carryforwards remain subject to review until utilized. The Company is currently not under examination by any tax authorities. 18. Net loss per common share Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding during the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, preferred stock, warrants and stock options are considered to be potentially dilutive securities, but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore basic and diluted net loss per share are the same for all periods presented. The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would have resulted in anti-dilutive impacts: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ 2021 ​ 2020 Series A Preferred Stock ​ — ​ 1,185,879 Series B Preferred Stock ​ — ​ 2,695,600 Options to purchase common stock 960,216 ​ 429,822 Warrants to purchase common stock 425,387 ​ 237,249 ​ The net loss per share for the comparative period ending December 31, 2020 of $ 1.17 has been recomputed to take into account the reverse stock split, resulting in $ 1.33 net loss per share. ​ 19. Related Parties Dr. Khalid Islam, the Chairman of our Board of Directors, shareholders and founder of the Company, is currently the Chairman of the board of directors of Minoryx, and therefore Minoryx is considered a related party. In December 2017, the Company entered into an exclusive worldwide, royalty-bearing, assignable, transferable license agreement with Minoryx Therapeutics SL to use and exploit Minoryx’s IP and into an exclusive worldwide, royalty-bearing, assignable, transferable sublicense agreement with Universitat de Barcelona and Institucio Catalana Recerca Estudis Avancats in order to be able to develop its business, directly or indirectly, through sub-licensing to third parties 103 Table of Contents or any other way of operation. According to the Minoryx License Agreement, the Company shall pay to Minoryx as royalties: ● an amount equal to 8 % of (i) net revenues with regard to products that would infringe (a) at least one composition of matter claim or (b) Minoryx molecules and (ii) sublicensing revenues; ● an amount equal to 3 % of net revenues with regard to products that would infringe at least (a) one method of claim or (b) Minoryx know-how. In addition to royalties, the Company shall pay Minoryx certain milestones payments of 1.25 % of any consideration received in the event of a sale of the Company or substantially all of the assets, including by merger, change of control, or reorganization. ​ As of December 31, 2021 and 2020, there were no receivables and payables, revenues or expenses with Minoryx. ​ ​ 20. Other Information Own Shares The Company does not hold, either directly or indirectly, its own shares and in these periods has not purchased or alienated its own shares. Commitments As of December 31,2021, the Company had research commitments with contractual maturity date in 2022 for $ 453,305 . ​ ​ 21. Significant events after the balance sheet date None. ​ 104 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.