What changed in this filing

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Item 9A. Controls and Procedures

2023-03-23 compared with 2022-03-25 · 81 added, 58 removed, 80 unchanged (63% of the section changed)

1 unchanged sentence

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.

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022.

Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

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.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term as defined in Exchange Act Rule 13a-15(f) and 15d-15(f).

Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

As of December 31, 2022, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).

Based on this assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was effective.

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.

This Annual Report 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.

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.

As previously disclosed, in connection with the audit of our financial statements as of and for the year ended December 31, 2021, we identified a material weakness in our internal control over financial reporting related to lack of adequate procedures and controls to ensure that accurate financial statements can be prepared and reviewed on a timely basis.

The material weakness did not result in any material misstatements to the Company’s previously issued financial statements, nor the financial statements in this Form 10-K.

The Company’s management is committed to maintaining a strong internal control environment.

In response to the identified material weakness, management, with the oversight of the Audit Committee of the Board of Directors, took comprehensive actions to improve our internal control over financial reporting and remediate the material weakness such as:

● Increased and hired additional personnel in the accounting function with the appropriate technical knowledge and expertise for financial reporting purposes;

● Implemented a more streamlined process for the preparation and review of financial information;

● Implemented strengthened, formalized and documented policies and internal control procedures which have been assessed as effective based on management’s testing;

● Successfully implemented an ERP system to automate certain processes, including a purchase requisition system, budgeting and reporting.

In connection with its review of disclosure and procedures as of December 31, 2022, management concluded that the previously identified material weakness has been remediated.

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.

Except for the changes in connection with the remediation of the previously identified material weakness discussed above, there have been no other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

1 unchanged sentence

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.

Information required by this item is incorporated by reference to the information set forth in the sections titled “Information about Our Board of Directors” and “Information about Our Executive Officers”, “Corporate Governance, “Delinquent Section 16(a) Reports”, and “Corporate Governance – Committees of the Board of Directors” in our definitive proxy statement to be filed with the SEC on Schedule 14A in connection with our 2023 Annual Meeting of Shareholders, or the Proxy Statement, which is expected to be filed no later than 120 days after December 31, 2022.

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.

Our board of directors has adopted the Gain Therapeutics, Inc.

Code of Business Conduct and Ethics, or Code of Ethics, that applies to all officers, directors and employees.

This includes our principal executive officer, principal financial officer and principal accounting officer or controller or persons performing similar functions.

The nominating and corporate governance committee is responsible for overseeing the Code of Ethics and must approve any waivers of the Code of Ethics for our employees, executive officers and directors.

The Code of Business Conduct and Ethics is available on our website at www.gaintherapeutics.com.

If we make any substantive amendments to the Code of Ethics or grant any waiver from a provision of the Code of Ethics to the principal executive officer, principal financial officer and principal accounting officer or controller or persons performing similar functions, we will promptly disclose the nature of the amendment or waiver on our website.

Information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report, and you should not consider information on our website to be part of this Annual Report.

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.

Information required by the items is incorporated by reference to the information set forth in the sections titled “Executive Compensation” and “Director Compensation” in the Proxy Statement.

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.

Information required by this item is incorporated by reference to the information set forth in the sections titled “Securities Authorized for Issuance Under Equity Compensation Plans” and “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.

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.

Information required by this item is incorporated by reference to the information set forth in the sections titled “Information Regarding the Board of Directors and Corporate Governance – Independence of the Board of Directors” and “Transactions with Related Persons” in the Proxy Statement.

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.

Information required by this item is incorporated by reference to the information set forth in the section titled “Independent Registered Public Accounting Firm Fees and Services” in the Proxy Statement .

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1 unchanged sentence

(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.”

The financial statements required by Item 15(a) are filed as part of this Annual Report 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.

All financial statement 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

Incorporated by Reference

Amended and Restated Certificate of Incorporation of Gain Therapeutics, Inc.

2 unchanged sentences

Investors’ Rights Agreement, dated as of July 20, 2020, by and among Gain Therapeutics, Inc.

and certain holders of its capital stock (a)

Form of Indemnification Agreement for Officers and Directors(a)

2020 Omnibus Incentive Plan(a)

and certain holders of its capital stock .

Form of Indemnification Agreement for Officers and Directors .

2020 Omnibus Incentive Plan .

Gain Therapeutics, Inc.

4 unchanged sentences

Executive Employment Agreement, effective as of July 20, 2020, between Gain Therapeutics, Inc.

Executive Employment Agreement, effective as of August 13, 2020, between Gain Therapeutics, Inc.

and Manolo Bellotto (a)

Consulting Agreement effective as of September 1, 2019, between GT Gain Therapeutics S.A.

and Sal Calabrese

Executive Employment Agreement, effective as of November 2, 2020, between Gain Therapeutics, Inc.

and Salvatore Calabrese(a)

and Salvatore Calabrese .

Executive Employment Agreement, effective as of October 15, 2021, between Gain Therapeutics, Inc.

2 unchanged sentences

Form of Placement Agent Warrant .

Controlled Equity Offering SM Sales Agreement, dated May 18, 2022, between Gain Therapeutics, Inc.

and Cantor Fitzgerald & Co.

Gain Therapeutics Inc.

2021 Inducement Equity Incentive Plan Restricted Stock Unit Award Agreement.

Gain Therapeutics Inc.

2022 Equity Incentive Plan.

Gain Therapeutics Inc.

RSU Award Grant Notice and Award Agreement (2022 Equity Incentive Plan).

Gain Therapeutics Inc.

Stock Option Grant Notice and Award Agreement (2022 Equity Incentive Plan).

Transition Agreement, between Gain Therapeutics, Inc.

and Eric Richman, dated September 19, 2022.

Consulting Agreement, between Gain Therapeutics, Inc.

and Eric Richman, dated September 20, 2022 (included as Exhibit A to the Transition Agreement).

Amended and Restated Employment Agreement, between Gain Therapeutics, Inc.

and Matthias Alder, dated September 20, 2022.

Subsidiaries of Registrant .

12 unchanged sentences

Filed herewith.

(a) Management contract or compensatory plan or arrangement.

+ Management contract or compensatory plan or arrangement.

* 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.

** This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

FORM 10-K SUMMARY

2 unchanged sentences

March 23, 2023

/s/ Eric I Richman

/s/ Matthias Alder

Matthias Alder

Chief Executive Officer

4 unchanged sentences

Chief Financial Officer

( Principal Financial and Accounting Officer )

( Principal Financial Officer )

March 23, 2023

/s/ Gianluca Fuggetta

Gianluca Fuggetta

Senior Director, Corporate Reporting

( Principal Accounting Officer )

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.

We, the undersigned directors and officers of Gain Therapeutics, Inc., hereby severally constitute and appoint Matthias Alder and Salvatore Calabrese, 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, 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.

March 23, 2023

/s/ Eric Richman

/s/ Matthias Alder

Matthias Alder

Chief Executive Officer and Director

4 unchanged sentences

Chief Financial Officer

(Principal Financial and Accounting Officer)

(Principal Financial Officer)

March 23, 2023

/s/ Gianluca Fuggetta

Gianluca Fuggetta

Senior Director, Corporate Reporting

(Principal Accounting Officer)

March 23, 2023

/s/ Khalid Islam

Chairman of the Board of Directors

March 23, 2023

Chairman of the Board of Director

/s/ Dov Goldstein

March 25, 2023

Dov Goldstein

/s/ Han Peter Hasler

March 23, 2023

/s/ Han Peter Hasler

Hans Peter Hasler

/s/ Gwen Melincoff

March 23, 2023

/s/ Gwen Melincoff

Gwen Melincoff

/s/ Claude Nicaise

March 23, 2023

/s/ Claude Nicaise

Claude Nicaise

/s/ Jeff Riley

March 23, 2023

/s/ Jeffrey Riley

Jeffrey Riley

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures