Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this Annual Report. Based upon that evaluation, as a result of the material weakness in internal control over financial reporting described below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2021.
Management’s Report on Internal Control Over Financial Reporting
This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting as permitted in this transition period under the rules of the SEC for newly public companies.
Attestation Report of Independent Registered Public Accounting Firm
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting. We are not required to engage our independent audit firm to perform an audit of the effectiveness of our internal controls over financial reporting for as long as we are an “emerging growth company” pursuant to the provisions of the JOBS Act.
Previously Reported Material Weakness
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. As previously reported, in connection with the preparation of our consolidated financial statements as of and for the year ended December 31, 2020, we identified material weaknesses in our internal control over financial reporting. The material weaknesses we identified were as follows: (i) lack of sufficient accounting and supervisory personnel who have the appropriate level of technical accounting experience and training, and (ii) lack of adequate procedures and controls to ensure that accurate financial statements can be prepared and reviewed on a timely basis for reporting purposes.
We have initiated a remediation plan designed to improve our internal control over financial reporting. This includes:
● hiring additional resources with appropriate technical knowledge and expertise for financial reporting purposes, and provided training;
● implementing a more streamlined process for the preparation and review of financial information;
● initiating a process aimed at strengthening, formalizing, documenting accounting processes, policies and internal controls procedures with the assistance of a professional accounting service firm;
● engaging of consultants to provide additional US GAAP technical accounting expertise;
● commencing the implementation of a new ERP system to automate certain processes, including a purchase requisition system, expense reporting system, consolidation, budgeting and reporting.
As result of these actions we believe that as of December 31, 2021, there is no longer a material weakness related to lack of sufficient accounting and supervisory personnel who have the appropriate level of technical accounting experience and training; however, the material weakness related to lack of adequate procedures and controls to ensure that accurate financial statements can be prepared and reviewed on a timely basis for reporting purposes is unremediated.
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We believe progress was made in 2021 to enhance and strengthen our internal control over financial reporting. Management remains committed to improving the Company’s control environment, although the Company will require additional time to demonstrate the effectiveness of its remediation efforts.
Changes in Internal Control Over Financial Reporting
Other than as noted above there have been no changes in internal control over financial reporting during 2021.
ITEM 9B. OTHER INFORMATION
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2022 Meeting of Stockholders. The Proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of the fiscal year ended December 31, 2021.
Code of Ethics
We have a code of ethics that applies to all of our employees, including our principal executive officer, principal financial officer and principal accounting officer. This code of ethics is posted on our Internet website.
The Internet address for our website is www.gaintherapeutics.com, and the code of ethics may be found on the “Corporate Governance” section of our “Investors & Media” webpage.
We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address and location specified above, or as otherwise required by the Nasdaq Global Market.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2022 Meeting of Stockholders. The Proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of the fiscal year ended December 31, 2021.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2022 Meeting of Stockholders. The Proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of the fiscal year ended December 31, 2021.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2022 Meeting of Stockholders. The Proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of the fiscal year ended December 31, 2021.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2022 Meeting of Stockholders. The Proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of the fiscal year ended December 31, 2021.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements, Financial Statement Schedules and Exhibits.
(1) Financial Statements.
The financial statements required by Item 15(a) are filed as part of this Annual Report on Form 10-K under Item 8 “Financial Statements and Supplementary Data.”
(2) Financial Statement Schedules.
All schedules are omitted as the required information is not applicable or the information is presented in the Consolidated financial statements or related notes.
(3) Exhibits.
Incorported by Reference
Exhibit
Number
Exhibit
Form
File No.
Exhibit
Filing Date
3.1
Amended and Restated Certificate of Incorporation of Gain Therapeutics, Inc.
8-K
001-40237
3.1
3/17.2021
3.2
Amended and Restated Bylaws of Gain Therapeutics, Inc.
8-K
001-40237
3.2
3/17/2021
4.1*
Description of Securities
4.2
Investors’ Rights Agreement, dated as of July 20, 2020, by and among Gain Therapeutics, Inc. and certain holders of its capital stock (a)
S-1
333-253303
4.2
2/19/2021
10.1
Form of Indemnification Agreement for Officers and Directors(a)
S-1/A
333-253303
10.3
3/10/2021
10.2
2020 Omnibus Incentive Plan(a)
S-1/A
333-253303
10.2
3/10/2021
Gain Therapeutics, Inc. 2021 Inducement Equity Incentive Plan
8-K
001-40237
10.1
12/28/2021
Form of Stock Option Agreement under the 2021 Inducement Plan
8-K
001-40237
10.2
12/28/2021
10.3
Minoryx Agreement between Minoryx Therapeutics, S.L. and GT Gain Therapeutics SA
S-1
333-253303
10.3
2/19/2021
10.4
Executive Employment Agreement, effective as of July 20, 2020, between Gain Therapeutics, Inc. and Eric I. Richman(a)
S-1
333-253303
10.4
2/19/2021
10.5
Executive Employment Agreement, effective as of August 13, 2020, between Gain Therapeutics, Inc. and Manolo Bellotto (a)
S-1
333-253303
10.5
2/19/2021
10.6
Consulting Agreement effective as of September 1, 2019, between GT Gain Therapeutics S.A. and Sal Calabrese
S-1
333-253303
10.6
2/19/2021
10.7
Executive Employment Agreement, effective as of November 2, 2020, between Gain Therapeutics, Inc. and Salvatore Calabrese(a)
S-1
333-253303
10.8
2/19/2021
10.8*
Executive Employment Agreement, effective as of October 15, 2021, between Gain Therapeutics, Inc. and Matthias Alder
10.9
Form of Exchange Agreement
S-1
333-253303
10.10
2/19/2021
10.10
Form of Placement Agent Warrant
S-1
333-253303
10.11
2/19/2021
21.1*
Subsidiaries of Registrant
23.1*
Consent of Independent Registered Public Accounting Firm.
24.1*
Power of Attorney (included in the signature pages attached to this Annual Report on Form 10-K).
31.1*
Section 302 Certification of Chief Executive Officer.
31.2*
Section 302 Certification of Chief Financial Officer.
32.1#
Section 906 Certification of Chief Executive Officer and Chief Financial Officer.
101.INS*
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
Filed herewith.
(a) Management contract or compensatory plan or arrangement.
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* Filed herewith
# The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Annual Report on Form 10-K are not deemed filed with the SEC and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Annual Report on Form 10-K.
ITEM 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
GAIN THERAPEUTICS, INC.
(Registrant)
March 25, 2022
By:
/s/ Eric I Richman
Date
Eric I. Richman
Chief Executive Officer
( Principal Executive Officer )
March 25, 2022
By:
/s/ Salvatore Calabrese
Date
Salvatore Calabrese
Chief Financial Officer
( Principal Financial and Accounting Officer )
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POWER OF ATTORNEY
We, the undersigned directors and officers of Gain Therapeutics, Inc., hereby severally constitute and appoint Eric Richman, Salvatore Calabrese and Matthias Alder, and each of them singly, our true and lawful attorneys, with full power to them, and to each of them singly, to sign for us and in our names in the capacities indicated below, all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as each of us might or could do in person, and hereby ratifying and confirming all that said attorneys, and each of them, or their substitute or substitutes, shall do or cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Dated: March 25, 2022
/s/ Eric Richman
Eric Richman
Chief Executive Officer and Director
(Principal Executive Officer)
Dated: March 25, 2022
/s/ Salvatore Calabrese
Salvatore Calabrese
Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Khalid Islam
Dated: March 25, 2022
Khalid Islam
Chairman of the Board of Director
/s/ Dov Goldstein
Dated: March 25, 2023
Dov Goldstein
Director
/s/ Han Peter Hasler
Dated: March 25, 2022
Hans Peter Hasler
Director
/s/ Gwen Melincoff
Dated: March 25, 2022
Gwen Melincoff
Director
/s/ Claude Nicaise
Dated: March 25, 2022
Claude Nicaise
Director
/s/ Jeff Riley
Dated: March 25, 2022
Jeff Riley
Director
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