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 ) ​ 83 Consolidated Balance Sheets ​ 84 Consolidated Statement of Operations ​ 85 Consolidated Statement of Comprehensive Loss ​ 86 Consolidated Statement of Changes in Stockholders’ Equity ​ 87 Consolidated Statement of Cash Flows ​ 88 Notes to Consolidated Financial Statements ​ 89 ​ ​ 82 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, 2022 and 2021, 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, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our 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 consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our 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 23, 2023 ​ 83 Table of Contents Gain Therapeutics, Inc Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ ​ 2022 ​ 2021 Assets ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 7,311,611 ​ $ 36,880,673 Marketable securities - current ​ ​ ​ 12,826,954 ​ ​ — Tax credits ​ ​ ​ 103,877 ​ ​ 113,586 Prepaid expenses and other current assets ​ 848,854 ​ 727,785 Total current assets ​ $ 21,091,296 ​ $ 37,722,044 ​ ​ ​ ​ ​ ​ ​ ​ Non-current assets: ​ ​ Marketable securities - non current ​ ​ $ 1,941,488 ​ $ — Property and equipment, net ​ 144,379 ​ 105,986 Internal-use software ​ ​ ​ 213,967 ​ ​ 202,609 Operating lease - right of use assets ​ 659,933 ​ 901,042 Restricted cash ​ 30,818 ​ 31,279 Long-term deposits and other non-current assets ​ 17,506 ​ 22,111 Total non-current assets ​ ​ 3,008,091 ​ ​ 1,263,027 Total assets ​ $ 24,099,387 ​ $ 38,985,071 ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholder's equity ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 1,626,100 ​ $ 560,479 Operating lease liability - current ​ 229,080 ​ 219,137 Other current liabilities ​ 2,106,756 ​ 1,402,600 Deferred income ​ 55,180 ​ 266,504 Loans - current ​ ​ 108,135 ​ ​ 103,826 Total current liabilities ​ $ 4,125,251 ​ $ 2,552,546 ​ ​ ​ ​ ​ ​ ​ ​ Non-current liabilities: ​ ​ Defined benefit pension plan ​ $ 157,580 ​ $ 329,458 Operating lease liability - non-current ​ 441,784 ​ 695,053 Loans - non-current ​ ​ 495,258 ​ ​ 590,468 Total non-current liabilities ​ ​ ​ 1,094,622 ​ ​ 1,614,979 Total liabilities ​ $ 5,219,873 ​ $ 4,167,525 ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized; nil shares issued and outstanding as of December 31, 2022 and 2021 ​ ​ $ — ​ $ — Common stock, $ 0.0001 par value: 50,000,000 shares authorized; 11,883,368 issued and outstanding as of December 31, 2022 and December 31, 2021 ​ 1,189 ​ 1,189 Additional paid-in capital ​ 57,358,895 ​ 55,832,461 Accumulated other comprehensive income / (loss) ​ 35,627 ​ ( 90,645 ) Accumulated deficit ​ ( 20,925,459 ) ​ ( 7,034,853 ) Loss of the period ​ ( 17,590,738 ) ​ ( 13,890,606 ) Total stockholders’ equity ​ ​ 18,879,514 ​ ​ 34,817,546 Total liabilities and stockholders’ equity ​ $ 24,099,387 ​ $ 38,985,071 ​ ​ ​ 84 Table of Contents Gain Therapeutics, Inc Consolidated Statement of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Revenues: ​ ​ ​ Collaboration revenues ​ $ 132,640 ​ $ 133,928 Other income ​ ​ 7,468 ​ 31,066 Total revenues ​ ​ 140,108 ​ ​ 164,994 ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ Research and development ​ ( 8,377,290 ) ​ ( 7,164,229 ) General and administrative ​ ( 9,539,863 ) ​ ( 6,826,938 ) Total operating expenses ​ ​ ( 17,917,153 ) ​ ​ ( 13,991,167 ) ​ ​ ​ ​ ​ ​ ​ Loss from operations ​ ​ ( 17,777,045 ) ​ ​ ( 13,826,173 ) ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ Interest income, net ​ 375,357 ​ 12,495 Foreign exchange loss, net ​ ( 96,074 ) ​ ( 72,920 ) Loss before income tax ​ $ ( 17,497,762 ) ​ $ ( 13,886,598 ) ​ ​ ​ ​ ​ ​ ​ Income tax ​ ( 92,976 ) ​ ( 4,008 ) ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 17,590,738 ) ​ $ ( 13,890,606 ) ​ ​ ​ ​ ​ ​ ​ Net loss per shares: ​ ​ Net loss per share attributable to common stockholders - basic and diluted ​ $ ( 1.48 ) ​ $ ( 1.37 ) Weighted average common stock - basic and diluted ​ 11,883,368 ​ 10,165,404 ​ ​ ​ 85 Table of Contents Gain Therapeutics, Inc Consolidated Statement of Comprehensive Loss ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Net loss ​ $ ( 17,590,738 ) ​ $ ( 13,890,606 ) Unrealized loss on available-for-sale marketable securities ​ ​ ( 94,279 ) ​ ​ — Defined benefit pension plan ​ ​ 227,131 ​ ​ ( 101,780 ) Foreign currency translation ​ ( 6,580 ) ​ 163,833 Other comprehensive gain: ​ $ 126,272 ​ $ 62,053 Comprehensive loss ​ $ ( 17,464,466 ) ​ $ ( 13,828,553 ) ​ ​ 86 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, 2021 ​ $ — ​ $ — 11,883,368 $ 1,189 $ 55,832,461 $ ( 90,645 ) $ ( 20,925,459 ) $ 34,817,546 Stock-based compensation expense ​ — ​ — ​ — 1,526,434 — — 1,526,434 Defined benefit pension plan ​ — ​ — ​ — — 227,131 — 227,131 Foreign currency translation ​ — ​ — ​ — — ( 6,580 ) — ( 6,580 ) Net unrealized gain on available for sale securities ​ ​ ​ — ​ ​ ​ — ​ ​ ​ — ​ — ​ ( 94,279 ) ​ — ​ ( 94,279 ) Net loss ​ ​ ​ — ​ ​ ​ — ​ ​ ​ — ​ — ​ — ​ ( 17,590,738 ) ​ ( 17,590,738 ) Balance as of December 31, 2022 — — — — 11,883,368 1,189 57,358,895 35,627 ( 38,516,197 ) 18,879,514 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Stock 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 ​ ​ ​ 87 Table of Contents Gain Therapeutics, Inc Consolidated Statement of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 ​ ​ ​ ​ ​ Operating activities: ​ ​ Net loss ​ $ ( 17,590,738 ) ​ $ ( 13,890,606 ) ​ ​ ​ ​ ​ ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Depreciation and amortization ​ 64,168 ​ 15,484 Stock based compensation expense ​ 1,526,434 ​ 839,371 Other non cash items ​ ​ ( 206,861 ) ​ ​ — Issuance of warrants ​ ​ — ​ ​ 1,034,000 Internal-use software ​ ​ — ​ ​ ( 34,135 ) ​ ​ ​ ​ ​ ​ ​ Changes in operating assets and liabilities: ​ ​ ​ ​ Account receivables ​ — ​ 8,264 Prepaid expenses and other currents assets ​ ​ ( 114,005 ) ​ ​ ( 534,502 ) VAT credits ​ ​ 3,631 ​ ​ ( 71,618 ) Long term deposit and other non current assets ​ ( 2,901 ) ​ 33,979 Accounts payable ​ 1,066,707 ​ ( 521,394 ) Other current liabilities ​ ​ 711,073 ​ ​ 665,460 Defined benefit pension plan ​ ​ 58,696 ​ ​ 55,326 Deferred income ​ ( 208,343 ) ​ 34,701 Total changes in operating assets and liabilities ​ 1,514,858 ​ ( 329,784 ) Net cash used in operating activities ​ ​ ( 14,692,139 ) ​ ​ ( 12,365,670 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ Purchase of property and equipment and internal-use of software ​ ( 118,953 ) ​ ( 94,212 ) Purchases of marketable securities ​ ​ ( 17,735,355 ) ​ ​ — Maturities of marketable securities ​ ​ 3,079,495 ​ ​ — Net cash used in investing activities ​ ​ ( 14,774,813 ) ​ ​ ( 94,212 ) ​ ​ ​ ​ ​ ​ ​ Cash flow from financing activities: ​ ​ ​ Proceeds from issuance of common shares upon completion of initial public offering, net of underwriter discounts ​ — ​ 42,629,998 Payments of deferred offering costs ​ — ​ ( 853,488 ) Payments of current portion of long-term debt ​ ​ ( 78,774 ) ​ ​ ( 21,951 ) Proceeds from stock option exercise ​ ​ — ​ ​ 12,216 Net cash (used) / provided by financing activities ​ $ ( 78,774 ) ​ $ 41,766,775 Effect of exchange rate changes ​ ( 23,797 ) ​ 100,778 Net (decrease) / increase in cash, cash equivalents and restricted cash ​ $ ( 29,569,523 ) ​ $ 29,407,671 Cash, cash equivalents and restricted cash at beginning of period ​ 36,911,952 ​ 7,504,281 Cash, cash equivalents and restricted cash at end of period ​ $ 7,342,429 ​ $ 36,911,952 ​ ​ ​ ​ ​ ​ ​ Supplemental Data: ​ ​ ​ ​ ​ ​ Income taxes paid ​ ​ 2,740 ​ ​ 4,469 ​ ​ ​ 88 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. 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”). 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 from the reverse stock split, were converted to common stock at a ratio of 1 -for-1. The Company is a biotechnology company developing novel small molecule therapeutics to treat diseases across several therapeutic areas, including central nervous system (“CNS”) disorders, lysosomal storage disorders (“LSDs”), metabolic disorders, and other diseases that can be targeted through protein degradation, such as oncology. The Company uses its exclusively in-licensed computational target and drug discovery platform, Site-Directed Enzyme Enhancement Therapy (“SEE-Tx®”), to discover novel allosteric binding sites on proteins implicated in a disease and to identify proprietary small molecules that bind these sites to modulate protein function and treat the underlying cause of the disease. 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 and from its initial public offering. 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. 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 89 Table of Contents 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 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. 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, 2022, 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, 2022 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, 2021, 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, 2022 and 2021, and the results of its operations, 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 not 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 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. 90 Table of Contents 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. Also 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, 2022 and 2021, accumulated currency translation adjustment recorded in the accumulated other comprehensive loss amounted to $ 158,576 and $ 165,156 , 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 accrued expenses, defined benefit pension liability, share-based compensation, and recognition of research grants. 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 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. 91 Table of Contents 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. Marketable Securities The Company classifies marketable securities as held-to-maturity or available-for-sale at the time these instruments are purchased, based on the requirements of ASC 320. Marketable securities are classified as held-to-maturity when the Company has the positive intent and the capacity to hold the marketable securities until the maturity date. Held-to-maturity marketable securities are carried out at amortized cost, with the accretion of discount (or amortization of premiums) included within the calculation of the effective interest method. The effective interest of the period is accounted for in the Company’s statements of operations as financial income (or expense). Marketable securities are classified as available-for-sale when the Company does not have the positive intent and the capacity to hold the marketable securities until the maturity date. Available-for-sale marketable securities are carried out at fair value with the “unrealized gains/loss” excluded from the computation of the earnings of the period and accounted for in other comprehensive income. The accretion of discounts (or amortization of premiums) are accounted for in the Company’s statements of operations as financial income (or expense). Marketable securities are classified in the Company’s balance sheet based on their maturities and the Company’s reasonable expectation with regard to those securities. Marketable securities with a maturity date within 12 months from reporting date are classified as “current assets”. Marketable securities with a maturity date over 12 months from reporting date are classified as “non-current assets”. 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 and 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. 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 expenses are recorded using the straight-line method in the consolidated financial statements of operations and 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. 92 Table of Contents 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, 2022 and 2021, internal-use software amount to $ 213,967 and $ 202,609 , respectively, and refer to the external and internal labor costs incurred in the development of the Company’s enterprise resource planning system. The additions of capitalized software for the current year amount to $ 46,382 . 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. Amortization expense for the years ended December 31, 2022 and 2021 was $ 37,536 and nil , respectively. 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 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 as per ASC 842. 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 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 consolidated statement of operations. The Company determines the lease term by assuming the exercise of renewal options that are reasonably certain. 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 Security Charges 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 the Company’s consolidated financial statements, the Company is required to estimate its accrued expenses as of each balance sheet date. This process involves reviewing open contracts and purchase orders, communicating with the Company personnel to identify services that have been performed on its 93 Table of Contents behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The Company makes estimates of its accrued expenses as of each balance sheet date based on facts and circumstances known at the time of the preparation of its consolidated financial statements. There may be instances in which payments made to the Company’s vendors exceed the level of services provided, and result in a prepayment reported under other current assets, which is subsequently expensed in the consolidated statement of operations when the related activity has been performed. To date, there have been no material differences between the Company’s estimates of accrued expenses reported at each balance sheet date and the amounts actually incurred. Pension obligations The Company operates 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 contributions made by the Company and its employees. For the 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 the consolidated statements of equity under accumulated other comprehensive income (loss), and are charged or credited to income over the employees’ expected average remaining working lives. The measurement date used for the Company’s employees defined 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 voluntary 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 service-based vesting conditions and records the expense for these awards using the straight-line method. 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 becoming a public company, given the absence of an active market for the Company’s common stock, the Company and its Board of Directors estimated the fair value of the Company’s common stock at the grant date for 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 and 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 18, 2021, which was the first day the Company’s common stock began trading on the Nasdaq Global Market (“Nasdaq”), 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 biopharmaceutical companies that issued options with substantially similar terms. After the IPO, the Company continues to determine its volatility in the same manner, and it expects not to change its methodology until such time as the Company has reliable historical data regarding the volatility of the Company’s 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 its common stock; therefore, the expected dividend yield is assumed to be zero . 94 Table of Contents The Black-Scholes option pricing model is also used for the 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. The fair market value for RSUs is based on the closing price of our stock on the grant date. We recognize expenses related to RSUs based on the fair market value, as determined on the grant date, on a straight line basis over the requisite service period for the entire award. Forfeitures are recognized as they occur. Revenue Recognition The Company derives limited revenue from its collaboration and licensing agreements. The Company recognizes 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-party customers of one or more of the following: non-refundable initiation fee, reimbursement of development costs, future 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-step 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) it satisfies a performance obligation. The Company only applies 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 sales of products, royalties or licenses. Research grants Under the terms of the research and development grants awarded, the Company is entitled to receive reimbursement of its 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 consolidated statement of operations as a reduction to research and development expenses. 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. 95 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 statements 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 regard 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. 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, defined benefit obligation adjustments and unrealized income/(loss) on available for sale securities. 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, 2022, common stock equivalents consisted of stock options, RSUs, PRSUs and warrants, while as of December 31, 2021, common stock equivalents consisted of 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. COVID-19 Pandemic In regard to the ongoing COVID-19 global pandemic, the Company has taken measures to secure its research and development activities, while work in its laboratories and facilities has been re-organized to reduce risks of COVID-19 transmission. Given the global impact and the other risks and uncertainties associated with the COVID-19 pandemic, the Company’s business, financial condition and results of operations could be materially adversely 96 Table of Contents affected. The Company continues to closely monitor the COVID-19 pandemic and evolve its business continuity plans, clinical development plans and response strategy to mitigate any potential impact. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from those estimates, and any such differences may be material to the Company’s financial statements. Recently issued accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that the Company adopts as of the specified effective date. There were no new material accounting pronouncements issued in fiscal year 2022 with a material impact on the Company’s consolidated financial statements. 3. Research Grants During the course of its business, the Company applies for research grants with public or private organization to funds is research projects. Under the terms of these grants , the Company is entitled to receive reimbursement of its allowable direct research expenses. In July 2019, the Company’s 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 three-years research grant to support the development of the drugs portfolio for the treatment of Gaucher Disease, GM1 Gangliosidosis, Mucopolysaccharidosis type 1 and Krabbe.The grant was approved by the Eurostars-2 joint programme, with co-funding from the European Union Horizon 2020 research and Innosuisse – Swiss Innovation Agency. As of December 31, 2022 and 2021, the Company recorded as reductions to research and development expenses USD 82,133 and USD 184,748 , respectively and receivables of USD 87,430 and USD 81,862 , respectively. ​ 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 13). 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, ​ 2022 2021 Cash ​ ​ 2,910,446 ​ ​ 3,262,977 Money Market ​ ​ 4,401,165 ​ ​ 33,617,696 Total cash and cash equivalents ​ $ 7,311,611 ​ $ 36,880,673 Restricted cash ​ $ 30,818 ​ $ 31,279 ​ 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. 97 Table of Contents Details of the cash and cash equivalents balances as of December 31, 2022 and 2021, broken down by currency in which the funds are denominated, are reported in the following table: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Cash in CHF 363,948 157,310 Cash in EUR 781,363 338,766 Cash in GBP ​ 79,844 ​ - Cash in USD 5,985,858 36,322,777 ​ ​ ​ ​ 5. Marketable Securities As of December 31, 2022 the Company reports $ 14,768 thousand of marketable securities, related to United States Treasury Securities (“USTS”), within current and non-current assets. The USTS purchased have maturity dates going from January 2023 to February 2024, on a monthly basis, in tranches of USD 1,000 thousand each month. The Company classifies the USTS, which are accounted for as available-for-sale, within the Level 1 fair value hierarchy category as the fair value is based on quoted market prices in active markets with a high level of daily trading volume. ​ The following table summarizes the Company’s investment in available-for-sale marketable securities with the detail of the unrealized gains / (losses) and the estimated fair value as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Allowance for ​ Unrealized ​ Unrealized ​ Estimated Fair ​ Amortized Cost Credit Losses Gains Losses Value Marketable securities available for sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt Securities - U.S. government treasury securities, current ​ ​ 12,919,792 ​ ​ — ​ ​ — ​ ​ ( 92,838 ) ​ ​ 12,826,954 Debt Securities - U.S. government treasury securities, non current ​ ​ 1,942,929 ​ ​ — ​ ​ — ​ ​ ( 1,441 ) ​ ​ 1,941,488 Totals ​ $ 14,862,721 ​ $ — ​ $ — ​ $ ( 94,279 ) ​ $ 14,768,442 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company regularly reviews the securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such historical experience, market data, the financial condition and near term prospects of the investee, the extent of the loss related to credit of the issuer, the expected cash flows from the security, the Company’s intent to sell the security, and whether or not the Company will be required to sell the security before the recovery of its amortized cost. ​ As of December 31, 2022 the Company did not intend to sell any of the debt securities included in the table above, and it is not “more likely than not” that the Company will be required to sell any of these securities before the recovery of the unrealized losses, which will be at maturity. Unrealized losses on available-for-sale debt securities as of December 31, 2022 were primarily due to changes in interest rates, and not due to increased credit risks associated with specific securities. Accordingly, as of December 31, 2022, the Company has not recorded an allowance for credit losses related to its available-for-sale debt securities. ​ ​ ​ ​ ​ ​ ​ 6. Prepaid Expenses and Other Current Assets ​ Prepaid expenses and other current assets consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Tax Credits ​ 103,877 ​ 113,586 ​ ​ ​ ​ ​ ​ ​ Prepaid and deferred expenses ​ 552,882 ​ 498,252 Other receivable ​ ​ 87,430 ​ ​ 81,862 Prepaid D&O Insurance ​ ​ 208,542 ​ ​ 147,671 Total Prepaid expenses and other current assets ​ $ 848,854 ​ $ 727,785 ​ 98 Table of Contents 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 in those countries. Prepaid expenses refers to pre-payments made to the Company’s 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. Other receivables refers to the Eurostars-2 grant, with co-funding from the European Union Horizon 2020 and Innosuisse – Swiss Innovation Agency, that contractually will be collected in March 2023. Prepaid D&O insurance costs relate to an annual insurance premium which will be recognized in the statement of operations on a monthly basis throughout the one-year insurance period. 7. Property and Equipment, net Property and equipment, net, consists of the following : ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2022 ​ 2021 Computer ​ $ 71,774 ​ $ 55,141 Furniture and fixtures ​ 57,603 ​ 42,148 Leasehold improvements ​ 31,437 ​ 17,327 Laboratory instruments ​ 36,894 ​ 19,759 Total property and equipment ​ $ 197,708 ​ $ 134,375 Less: accumulated depreciation ​ ( 53,329 ) ​ ( 28,389 ) Property and equipment, net ​ $ 144,379 ​ $ 105,986 ​ Property and equipment consist of computers, furniture and fixtures, lab instruments. 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 years ended December 31, 2022 and 2021 was $ 26,632 and $ 15,484 , respectively. 8. Operating lease; Right of use (“ROU”) assets The Company’s leased assets include offices in Bethesda, Maryland, Lugano, Switzerland and Barcelona, Spain and a lab in Barcelona, Spain. Its current lease portfolio consists of leases with remaining terms ranging from three to five years . Renewal options are excluded from the calculation of lease liabilities since the Company is not reasonably certain that we will exercise the renewal option. The Company’s lease agreements do not contain residual value guarantees or material restrictive covenants. On December 24, 2020, the Company renewed a five-year operating lease term in Cluster II Building with Parc Scientific de Barcelona to lease lab and office space of 1,042 square feet. In connection with the lease, the Company paid a security deposit of EUR 6,469 classified as deposit in non-current assets. The Company is required to pay for operating costs, 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. The Company accounted for the renewal as a modification of the original agreement and recorded an additional right-of-use asset and corresponding lease liability based on the incremental borrowing rate determined as of the effective date of the modified lease. 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, which 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 CHF 28,500 into a restricted bank account, which is classified in the financial statements as restricted cash. 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 99 Table of Contents 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-year operating lease agreement in Torre D Building with Parc Scientific de Barcelona for larger office space of 1,417 square feet to accommodate the Company’s continued growth and contemporaneously 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 classified as deposit in non-current assets. The Company is required to pay for operating costs, 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. On July 10, 2022, the Company entered into a new three-year operating lease agreement in Cluster II Building with Parc Scientific de Barcelona for a warehouse space of 245 square feet. In connection with the lease, the Company paid a security deposit of EUR 685 classified as deposit in non-current assets. The Company is required to pay for operating costs, 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, lease liabilities and operating lease expense 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, ​ ​ 2022 ​ 2021 ​ ​ ​ ​ Operating lease- right of use assets ​ $ 659,933 ​ $ 901,042 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease liability - current ​ $ 229,080 ​ $ 219,137 ​ Operating lease liability - non current ​ $ 441,784 ​ $ 695,053 ​ Weighted average remaining lease term - years ​ 3.05 ​ 4.00 ​ Weighted average discount rate ​ 1.53 ​ 1.86 ​ ​ The amounts related to lease costs included in the consolidated statements of operations were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2022 ​ 2021 Operating lease costs ​ $ 228,739 ​ $ 191,329 ​ The future minimum lease payments for the Company’s operating leases as of December 31, 2022, are as follows: ​ ​ ​ ​ ​ Fiscal Year ​ Operating Leases 2023 ​ $ 242,837 2024 ​ ​ 224,325 2025 ​ ​ 164,775 2026 ​ ​ 54,251 Total future minimum lease payments ​ ​ 686,188 Less amount representing interest or imputed interest ​ ​ 15,324 Present value of lease liabilities ​ $ 670,864 ​ ​ 100 Table of Contents 9. Accounts Payable Accounts payable are reported at their nominal value. Accounts payable refer to amounts due to third parties on outstanding invoices received for services already provided. As of December 31, 2022 and December 31, 2021, accounts payable amounted to $ 1,626,100 and $ 560,479 , respectively. All accounts payable are due in less than 12 months. ​ ​ 10. Other current liabilities and deferred income Other current liabilities and deferred income consist of the following as of December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Payable for social security ​ $ 256,798 ​ $ 255,068 Accrued payroll ​ 660,556 ​ 465,382 Accrued expenses ​ 1,082,091 ​ 681,770 Tax provision ​ ​ 107,311 ​ ​ 380 Total Other Current Liabilities ​ $ 2,106,756 ​ $ 1,402,600 Deferred income ​ 55,180 ​ 266,504 Total Other Current Liabilities and Deferred Income ​ $ 2,161,936 ​ $ 1,669,104 ​ Payables for social security refer to amounts due to social security 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. Tax provision refers to a tax payable due to the Spanish Tax Authorities related to taxable income generated in Spain. Increase versus prior year is attributable to the allocation of stock based compensation expenses on stock options granted to our Spanish employees whose costs, for tax purposes, will be deductible at the time of the exercise. Deferred income refers to income from the Company’s collaboration agreement with Zentalis Pharmaceuticals, Inc. It will be recognized in the statement of operations in accordance with the costs sustained. 101 Table of Contents 11. Pension obligations Net pension obligations related to the Company’s defined pension plan refer only to Swiss employees and as of December 31, 2022 and 2021 can be summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 End of year funded status: ​ ​ ​ ​ ​ ​ Fair value of plan assets ​ $ 675,127 ​ $ 943,025 (Projected benefit obligation) ​ ​ ( 832,707 ) ​ ​ ( 1,272,483 ) Funded status ​ $ ( 157,580 ) ​ $ ( 329,458 ) ​ ​ ​ ​ ​ ​ ​ Accumulated benefit obligation ​ ​ 785,478 ​ ​ 1,233,053 ​ ​ ​ ​ ​ ​ ​ Reconciliation of funded status: ​ ​ ​ ​ ​ ​ Funded status beginning of year ​ $ ( 329,458 ) ​ $ ( 171,558 ) Expense ​ ​ ( 179,924 ) ​ ​ ( 144,146 ) Employer contribution ​ ​ 123,193 ​ ​ 88,819 Translation differences ​ ​ 1,478 ​ ​ ( 1,437 ) Change in AOCI over the year ​ ​ 227,131 ​ ​ ( 101,136 ) Funded status at end of year ​ $ ( 157,580 ) ​ $ ( 329,458 ) ​ ​ ​ ​ ​ ​ ​ Component of net periodic pension costs: ​ ​ ​ ​ ​ ​ Service cost ​ $ 169,709 ​ $ 132,809 Interest cost ​ ​ 3,376 ​ ​ 1,318 Expected return on plan assets ​ ​ ( 9,000 ) ​ ​ ( 5,558 ) Amortization of (gain)/losses ​ ​ 16,753 ​ ​ 16,212 Amortization of prior service cost ​ ​ ( 914 ) ​ ​ ( 635 ) Total ​ $ 179,924 ​ $ 144,146 ​ ​ ​ ​ ​ ​ ​ Service cost is reported in 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 ​ $ 1,272,483 ​ $ 648,846 Services cost ​ ​ 169,709 ​ ​ 132,809 Employee contribution ​ ​ 83,731 ​ ​ 49,143 Interest Cost ​ ​ 3,376 ​ ​ 1,318 Benefit payments ​ ​ ( 413,780 ) ​ ​ 315,300 (Gain) / loss on financial assumptions ​ ​ ( 242,607 ) ​ ​ ( 27,799 ) (Gain) / loss on demographic assumptions ​ ​ — ​ ​ ( 43,123 ) (Gain) / loss on experience ​ ​ ( 715 ) ​ ​ 192,547 Translation differences ​ ​ ( 25,130 ) ​ ​ 11,502 Plan Amendment ​ ​ ( 14,360 ) ​ ​ ( 8,060 ) ​ ​ $ 832,707 ​ $ 1,272,483 ​ ​ ​ ​ ​ ​ ​ ​ 102 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Reconciliation of fair value of plan assets: ​ ​ ​ ​ ​ ​ Fair value at January 1 ​ $ 943,025 ​ $ 477,288 Expected return on plan assets ​ ​ 9,000 ​ ​ 5,558 Gain/(loss) on plan assets ​ ​ ( 46,390 ) ​ ​ ( 3,148 ) Employer contributions ​ ​ 123,193 ​ ​ 88,819 Employee contributions ​ ​ 83,731 ​ ​ 49,143 Benefit payments ​ ​ ( 413,780 ) ​ ​ 315,300 Translation differences ​ ​ ( 23,652 ) ​ ​ 10,065 Fair value at December 31 ​ $ 675,127 ​ $ 943,025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Change in net (gain)/loss: ​ ​ ​ ​ ​ ​ (Gain)/loss at beginning of year ​ $ 263,226 ​ $ 154,665 (Gain)/loss on PBO during the year ​ ​ ( 243,322 ) ​ ​ 121,625 (Gain)/loss on assets during the year ​ ​ 46,390 ​ ​ 3,148 Amortization of gain/(loss) ​ ​ ( 16,753 ) ​ ​ ( 16,212 ) (Gain)/loss at end of year ​ $ 49,541 ​ $ 263,226 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Change in accumulated other comprehensive income (AOCI): ​ ​ ​ ​ ​ ​ AOCI at beginning of year ​ $ 255,801 ​ $ 154,665 Net gain/(loss) amortized ​ ​ ( 16,753 ) ​ ​ ( 16,212 ) (Gain)/loss on PBO during the year ​ ​ ( 243,322 ) ​ ​ 121,625 (Gain)/loss on assets during the year ​ ​ 46,390 ​ ​ 3,148 Prior Service Cost/(credit) occurring over the year ​ ​ ( 14,360 ) ​ ​ ( 8,060 ) Net prior service (cost)/credit amortized ​ ​ 914 ​ ​ 635 Total AOCI at end of year ​ $ 28,670 ​ $ 255,801 ​ 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, ​ 2022 2021 Financial Assumptions (%pa): ​ ​ ​ ​ Discount rate ​ ​ 2.30 % ​ ​ 0.30 % Interest credit rate / ERoA ​ ​ 1.50 % ​ ​ 1.00 % Salary increases ​ ​ 2.50 % ​ ​ 1.00 % Pension increases ​ ​ 0.00 % ​ ​ 0.00 % Inflation ​ ​ 1.50 % ​ ​ 1.00 % Demographic Assumptions: ​ ​ ​ ​ ​ ​ Lump-sum option ​ ​ 25 % ​ ​ 25 % Retirement age ​ ​ 65 / 64 ​ ​ 65 / 64 Proportion married ​ ​ BVG 2020 ​ ​ BVG 2020 Allowance for child pensions ​ ​ 5 % loading on risk benefits ​ ​ 5 % loading on risk benefits Mortality base table ​ ​ BVG 2020 ​ ​ BVG 2020 Longevity improvement ​ ​ CMI 2018 ( 1.25 %) ​ ​ CMI 2018 ( 1.25 %) Turnover ​ ​ BVG 2020 ​ ​ BVG 2020 Disability ​ ​ 80 % BVG 2020 ​ ​ 80 % BVG 2020 ​ ​ 103 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ December 31, ​ ​ ​ 2022 ​ 2021 Expected benefit payments: ​ ​ ​ ​ ​ ​ Year 1 ​ $ 38,493 ​ $ 162,208 Year 2 ​ ​ 44,884 ​ ​ 54,723 Year 3 ​ ​ 50,459 ​ ​ 58,224 Year 4 ​ ​ 55,444 ​ ​ 60,869 Year 5 ​ ​ 59,369 ​ ​ 63,281 Next 5 years ​ $ 450,981 ​ $ 428,371 ​ ​ ​ ​ ​ ​ ​ Other disclosure items: ​ ​ ​ ​ ​ ​ Next year's expected employer contribution ​ $ 128,746 ​ $ 112,396 ​ The actuarial gains in 2022 were primarily due to an increase in discount rates applied against future expected benefit payments and resulted in a decrease of the benefit obligation. 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 asset relates to mandatory and discretionary contributions made in accordance with Swiss Law to a leading pension provider. The capital is insured and provides for a minimum 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 Plan consist of our matching contributions. Expenses related to our 401(k) Savings Plan totaled $ 15,875 and $ 3,243 for the years ended December 31, 2022 and 2021. Our UK employees are eligible to participate to our UK defined contribution pension scheme upon commencement of employment. The employees and the Company will make such contributions in line with the rules of the Pension Scheme in force. The expense related to our pension scheme consist of our matching contributions and totaled GBP 4,283 and nil for the years ended December 31, 2022 and 2021. 12 . Loans In March 2020, the Company obtained a CHF 14,600 five-year loan. The loan had zero interest and original maturity on June 30, 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 COVID-19 pandemic. In February 2022, the Company early extinguished the loan. No expenses or charges were incurred for the early extinguishment of the loan. In August 2020, the Company obtained a CHF 638,000 (USD 700,221 at the historical foreign exchange rate) nine-year loan. The loan has zero interest and 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 COVID-19 pandemic, and the loan issued under the program does not bear interest and there are no applicable issuance costs. The Company accounts for its loan at face value, which is deemed to approximate the related fair value. The future loan payments are reported in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December, 31 ​ Total 2023 2024 2025 2026 2027 Thereafter Loan $ ( 603,393 ) ​ ( 108,135 ) ​ ( 86,508 ) ​ ( 86,508 ) ​ ( 86,508 ) ​ ( 86,508 ) ​ ( 149,226 ) ​ ​ 104 Table of Contents ​ ​ 13. 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. 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, 2022: ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ Marketable securities available for sale ​ ​ ​ ​ ​ ​ ​ Debt securities - U.S. government treasury securities, current ​ ​ 12,826,954 ​ — ​ — Debt securities - U.S. government treasury securities, non current ​ ​ 1,941,488 ​ — ​ — Total marketable securities available for sale ​ $ 14,768,442 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents: ​ ​ ​ ​ ​ ​ ​ Money market funds ​ ​ 4,401,165 ​ — ​ — Total cash and cash equivalents ​ $ 4,401,165 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ Total financial assets ​ $ 19,169,607 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ — ​ — ​ 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. 14. Common Stock, Preferred Stock and Warrants As of December 31, 2022 and 2021, 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, 2022 and 2021, 11,883,368 shares of common stock, $ 0.0001 par value, were issued and outstanding . No preferred stocks were outstanding as of December 31, 2022 and 2021. 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 105 Table of Contents 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, 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 Company’s 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 and 2022, 11,862 and nil warrants, respectively, were exercised resulting in 3,283 shares having been issued following the cashless mechanism as per the respective warrant agreement. On May 6, 2021, the Company entered into an investment 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 for a cashless exercise right and are exercisable for a period of four years from May 6, 2021. The fair value of the warrants was fully recognized on a straight-line basis over the nine months service period as general and administrative expense. As of December 31, 2022, no warrants were exercised or exchanged. ​ 15. Equity Incentive Plans On September 24, 2020, the Board adopted the 2020 Omnibus Incentive Plan (the “2020 Omnibus Plan”). The 2020 Omnibus Plan provided 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 Company’s Board. The maximum number of shares to be issued under the 2020 Omnibus Plan was 1,153,827 , as adjusted after a stock split of 1-for- 0.880784 approved by stockholders on March 4, 2021. The 2020 Omnibus Plan has been succeeded by the 2022 Equity Incentive Plan (as described below), and no additional awards will be granted under the 2020 Omnibus Plan although all outstanding awards granted under the 2020 Omnibus Plan will continue to be subject to the terms and conditions as set forth in the agreements evidencing such awards and the terms of the 2020 Omnibus Plan. On December 23, 2021, the Board determined it 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 granted under the 2021 Inducement Equity Incentive Plan is 1,000,000 . On June 16, 2022, at the Company’s annual meeting of stockholders, the Company’s stockholders approved the Company’s 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan is the successor to and continuation of the 2020 Omnibus Plan, in order to allow the Company to continue to utilize a broad array of equity incentives in order to secure and retain the services of its employees, directors, and consultants, and that are intended to align the interests of employees, directors, and consultants with the interests of the Company’s stockholders. The number of newly authorized shares that can be issued under the 2022 Equity Incentive Plan is 646,173 , and the total number of shares reserved for issuance under the 2022 Plan (which amount includes shares remaining available for issuance under the 2020 Omnibus Plan as well as certain shares underlying awards then outstanding under the 2020 Omnibus Plan that will become available for issuance under the 2022 Plan if certain conditions are met) is 1,800,000 . In addition, beginning on January 1, 2023 and ending on (and including) January 1, 2032, the maximum number of shares of common stock that may be issued under the 2022 Plan will cumulatively be increased by 6 % of the number of shares of common stock issued and outstanding on the immediately preceding December 31st, or such lesser number of shares as determined by the Board. No incentive stock options may be granted under the 2022 Plan after May 12, 2032 and the Board may suspend or terminate the 2022 Plan at any time. The Board is responsible for administering the 2022 Plan, including determining the individuals to be granted options and other awards, the number of shares of common stock subject to each award that an individual will receive, the exercise price per share (if any) subject to an award, and the exercise period of each option, subject to the terms of the 2022 Plan. No option will have a term in excess of 10 years . The exercise price of a stock option generally cannot be less than 100 % of the fair market value of our common stock on the date of grant for non-statutory stock options. 106 Table of Contents Stock Option Grants The following tables summarize the stock option activity for the year ended December 31, 2022 : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Remaining ​ Aggregate ​ ​ ​ ​ ​ Grant Date ​ ​ Weighted Average ​ Contractual ​ Intrinsic ​ Shares ​ Fair Value ​ Exercise Price Terms (Years) Value Options outstanding as of December 31, 2021 960,216 $ 3.46 ​ $ 5.13 9.23 163,237 Options granted 1,005,800 ​ 2.49 ​ ​ 3.80 9.07 — Options exercised — ​ — ​ ​ — — — Options cancelled/forfeited ( 86,354 ) ​ 3.66 ​ ​ 5.12 — — Options outstanding as of December 31, 2022 1,879,662 $ 2.94 ​ $ 4.42 ​ 8.85 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ 3.29 2,500 9.75 ​ $ 3.29 ​ $ 2.45 — ​ ​ — $ 3.30 ​ 14,000 ​ 9.43 ​ $ 3.30 ​ $ 2.45 ​ — ​ ​ — $ 3.38 ​ 496,662 ​ 7.81 ​ $ 3.38 ​ $ 2.30 ​ 391,066 ​ $ 3.38 $ 3.47 ​ 10,000 ​ 9.02 ​ $ 3.47 ​ $ 2.56 ​ — ​ ​ — $ 3.50 ​ 453,800 ​ 9.72 ​ $ 3.50 ​ $ 1.99 ​ — ​ ​ — $ 4.01 ​ 242,700 ​ 9.02 ​ $ 4.01 ​ $ 2.97 ​ — ​ ​ — $ 4.22 ​ 245,800 ​ 9.28 ​ $ 4.22 ​ $ 2.94 ​ 20,000 ​ $ 4.22 $ 5.86 ​ 210,000 ​ 8.98 ​ $ 5.86 ​ $ 4.22 ​ 53,047 ​ $ 5.86 $ 5.99 ​ 31,000 ​ 8.57 ​ $ 5.99 ​ $ 4.34 ​ 10,480 ​ $ 5.99 $ 7.80 ​ 95,000 ​ 8.61 ​ $ 7.80 ​ $ 5.52 ​ 33,320 ​ $ 7.80 $ 10.03 ​ 78,200 ​ 8.36 ​ $ 10.03 ​ $ 5.25 ​ 75,964 ​ $ 10.03 ​ 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 Company’s 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 awards previously recorded 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, 2022. Based on this calculation the intrinsic value of the outstanding stock options as of December 31, 2022 is nil . 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: ​ 107 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2021 ​ Grant date fair value $ 2.49 ​ $ 4.27 ​ Volatility 80 % ​ 80 % Expected term (years) ​ 5.24 ​ ​ 5.66 ​ Risk-free interest rate 3.39 % ​ 0.98 % 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, 2022 and 2021 was $ 2.49 and $ 4.27 , respectively. Restricted Stock Units and Performance Stock Units The following table lists the RSUs awarded under the 2022 Plan for year ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ 2022 2021 RSUs granted and outstanding 103,050 ​ ​ — Grant date fair value $ 3.48 ​ $ — ​ In 2022 the Company granted a total of 103,050 RSUs covering an equal number of shares of the Company’s common stock to employees and consultants with a weighted-average grant date fair value of $ 3.48 . The fair value of the RSUs is based on the closing price of the Company’s stock on the grant date. The fair value of the RSUs is recognized as an expense over the duration of the vesting period. The weighted average duration of the vesting period for the RSUs granted is two years . In December 2021, the Compensation Committee of the Board approved 200,000 awards of performance-based restricted stock units (“PRSUs”) to an executive officer of the Company, subject to vesting on the achievement of certain services, business development and clinical development performance criteria. The grant date fair value for this PRSUs award was determined to be nil under ASC 718 based upon a determination that as of the grant date, it was not probable that the performance conditions will be achieved. The Company evaluates the performance targets in the context of its business development plan and product candidates’ development pipeline and recognized compensation expense based on the probable number of PRSUs that will ultimately vest. The maximum potential fair value for the PRSU award, based on achieving the maximum level of performance under the award as of the grant date, was calculated to be $ 1,139 thousand, using the closing price of the Company’s common stock on the grant date. RSUs and PRSUs do not have the voting rights of shares of common stock, and the shares underlying the RSUs and PRSUs are not considered issued and outstanding. Under the 2022 Plan, each RSU/PRSU represents a contingent right to receive one share of the Company’s common stock. Total stock-based compensation expense is recognized for stock options and RSUs granted to employees and non-employees has been reported in the Company’s consolidated statements of operations as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ 2022 2021 Research and development 583,764 ​ 344,304 General and administrative 942,670 ​ 495,067 Total stock-based compensation $ 1,526,434 $ 839,371 ​ As of December 31, 2022, the total unrecognized compensation cost related to non-vested stock options and RSUs granted was USD 3,503 thousand and is expected to be recognized over 4 years . ​ 16. Collaboration Agreement On April 20, 2021, we 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 used its licensed SEE-Tx® computational platform technology to identify binding site on target proteins 108 Table of Contents 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. 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. During the course of 2022, Zentalis informed us of its desire to wind down the collaboration. As of December 31, 2022, the Company recognized $ 133 thousand of revenues and reported current portion of deferred revenues for $ 55 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. For financial reporting purposes, loss before income taxes provision includes the following components: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2022 2021 Domestic ​ $ ( 17,341,701 ) ​ $ ( 7,601,640 ) Foreign ​ ( 156,061 ) ​ ​ ( 6,284,958 ) Total ​ $ ( 17,497,762 ) ​ $ ( 13,886,598 ) ​ Following is the breakdown of the components of income tax expense provision for the years ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2022 ​ 2021 Current: ​ ​ ​ ​ ​ ​ Federal ​ ​ — ​ ​ — State ​ ​ — ​ ​ — Foreign ​ ​ 92,976 ​ ​ 4,008 Total ​ $ 92,976 ​ $ 4,008 Deferred: ​ ​ ​ ​ ​ ​ Federal ​ ​ — ​ ​ — State ​ ​ — ​ ​ — Foreign ​ ​ — ​ ​ — Total ​ ​ — ​ ​ — Total income tax expense ​ $ 92,976 ​ $ 4,008 ​ 109 Table of Contents The breakdown of domestic and foreign NOLs and related DTAs are reported in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2022 2021 NOLs (foreign) ​ $ ( 11,455,938 ) ​ $ ( 12,021,483 ) NOLs (domestic) ​ ​ ( 22,833,222 ) ​ ​ ( 6,218,309 ) Total NOLs ​ $ ( 34,289,160 ) ​ $ ( 18,239,792 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets related to: ​ ​ ​ ​ ​ ​ Net operating loss (foreign) ​ ​ 2,140,174 ​ ​ 2,243,668 Net operating loss (domestic) ​ ​ 6,283,703 ​ ​ 1,677,610 Stock based compensation (foreign) ​ ​ 41,093 ​ ​ — Stock based compensation (domestic) ​ ​ 399,538 ​ ​ 253,439 Warrant expense ​ ​ 278,198 ​ ​ 284,531 Patent expense ​ ​ 202,149 ​ ​ 106,936 Other temporary differences ​ ​ 117,371 ​ ​ 82,927 Total deferred tax assets ​ $ 9,462,226 ​ $ 4,649,111 Deferred tax liabilities ​ ​ ​ ​ ​ ​ Depreciation and other ​ ​ ( 20,011 ) ​ ​ ( 16,118 ) Total deferred tax liabilities ​ $ ( 20,011 ) ​ $ ( 16,118 ) ​ ​ ​ ​ ​ ​ ​ Valuation allowance ​ ​ 9,442,215 ​ ​ 4,632,993 Net deferred tax assets ​ ​ — ​ ​ — ​ Foreign NOLs refer to the Company’s Swiss subsidiary and according to Swiss tax law such 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 and risks and uncertainties related to our business. As of December 31, 2022 and 2021, 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 their realization, the Company continues to maintain a full valuation allowance on the Company’s domestic and foreign deferred tax assets as of December 31, 2022 and 2021 and until sufficient positive evidence will exist to support the reversal of the valuation allowance. 110 Table of Contents A reconciliation of income tax expense computed at the statutory federal income tax rate to the Company’s effective tax rate as reflected in the consolidated financial statements is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, ​ ​ ​ 2022 ​ 2021 Federal income tax at US statutory rate ​ ​ 21.00 % ​ ​ 21.00 % ​ State income taxes, net of federal benefit ​ ​ 6.22 % ​ ​ 6.52 % ​ Permanent differences ​ ​ ( 0.17 )% ​ ​ ( 0.10 )% ​ Provision to return ​ ​ ( 0.13 )% ​ ​ 0.13 % ​ Foreign tax ​ ​ ( 0.12 )% ​ ​ ( 0.03 )% ​ Valuation allowance ​ ​ ( 27.33 )% ​ ​ ( 27.52 )% ​ Effective income tax rate ​ ​ ( 0.53 )% ​ ​ 0.00 % ​ ​ As of December 31, 2022 and 2021, 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. For purposes of the diluted net loss per share calculation, preferred stock, warrants, stock options and RSUs 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 weighted-average 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 ​ 2022 ​ 2021 Options to purchase common stock ​ 1,394,676 ​ 616,162 RSUs ​ 35,764 ​ — Warrants to purchase common stock 425,387 ​ 364,926 ​ In addition 200,000 PRSUs, granted in December 2021, contingently issuable upon meeting certain performance conditions are outstanding and will be included in the computation upon not resulting in anti-dilutive impacts and when the related performance conditions will be met. ​ 19. Related Parties Dr. Khalid Islam, the Chairman of the Company’s Board, shareholder and founder of the Company, is currently the Chairman of the Board of Directors of Minoryx Therapeutics SL (“Minoryx”), and therefore Minoryx is considered a related party of the Company. In December 2017, the Company entered into an exclusive worldwide, royalty-bearing, assignable, transferable license agreement with Minoryx to use and exploit Minoryx’s intellectual property 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 or any other way of operation. According to the terms and 111 Table of Contents conditions of 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; and ● 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 (as such term is defined in the agreement). ​ As of December 31, 2022 and 2021, 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, 2022 and 2021, the Company had research commitments with one year contractual maturity date for $ 1,461 thousand and $ 453 thousand, respectively. ​ ​ ​ 112 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.