What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-27 compared with 2024-03-26 · 384 added, 319 removed, 526 unchanged (57% of the section changed)

3 unchanged sentences

Consolidated Balance Sheets

Consolidated Statement of Operations

Consolidated Statement of Comprehensive Loss

Consolidated Statement of Changes in Stockholders’ Equity

Consolidated Statement of Cash Flows

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

33 unchanged sentences

Cash and cash equivalents

Marketable securities - current

Marketable securities

Prepaid expenses and other current assets

Total current assets

Non-current assets:

Marketable securities - non current

Noncurrent assets:

Property and equipment, net

2 unchanged sentences

Restricted cash

Long-term deposits and other non-current assets

Total non-current assets

Long-term deposits and other noncurrent assets

Total noncurrent assets

Liabilities and stockholder's equity

3 unchanged sentences

Other current liabilities

Deferred income - current

Deferred grant income - current

Loans - current

Total current liabilities

Non-current liabilities:

Noncurrent liabilities:

Defined benefit pension plan

Operating lease liability - non-current

Deferred income - non-current

Loans - non-current

Total non-current liabilities

Operating lease liability - noncurrent

Deferred grant income - noncurrent

Loans - noncurrent

Total noncurrent liabilities

Total liabilities

5 unchanged sentences

50,000,000 shares authorized;

16,206,680 shares issued and outstanding as of December 31, 2023 and 11,883,368 shares issued and outstanding as of December 31, 2022

27,132,588 and 16,206,680 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Accumulated deficit

7 unchanged sentences

Gain Therapeutics, Inc

Consolidated Statement of Operations

Consolidated Statements of Operations

Year Ended December 31,

16 unchanged sentences

Interest income, net

Foreign exchange loss, net

Foreign exchange gain (loss), net

Loss before income tax

7 unchanged sentences

Gain Therapeutics, Inc

Consolidated Statement of Comprehensive Loss

Consolidated Statements of Comprehensive Loss

Year Ended December 31,

1 unchanged sentence

( 22,267,520 )

Unrealized gain / (loss) on available-for-sale marketable securities

Defined benefit pension plan

Components of other comprehensive (loss) income

Unrealized gain on available-for-sale marketable securities

Changes in defined benefit pension plan obligation, net of tax

Foreign currency translation

Other comprehensive income

Other comprehensive (loss) income, net of tax

Comprehensive loss

2 unchanged sentences

Gain Therapeutics, Inc

Consolidated Statement of Changes in Stockholders’ Equity

Consolidated Statements of Changes in Stockholders’ Equity

Comprehensive

Income (Loss)

Balance as of December 31, 2022

1 unchanged sentence

Stock-based compensation (Note 15)

Defined benefit pension plan (Note 11)

Changes in defined benefit pension plan obligation (Note 11)

Foreign currency translation

6 unchanged sentences

( 60,783,717 )

Balance as of December 31, 2021

( 20,925,459 )

Stock-based compensation (Note 15)

Defined benefit pension plan (Note 11)

Changes in defined benefit pension plan obligation (Note 11)

Foreign currency translation

Net unrealized gain on available-for-sale securities (Note 5)

Issuance of shares in ATM offering (Note 14)

Issuance of shares and warrants in public offering and private placement (Note 14)

( 20,411,191 )

3 unchanged sentences

Gain Therapeutics, Inc

Consolidated Statement of Cash Flows

Consolidated Statements of Cash Flows

Year Ended December 31,

7 unchanged sentences

Changes in operating assets and liabilities:

Prepaid expenses and other currents assets

Long term deposit and other non current assets

Accounts payable

Other current liabilities

Prepaid expenses and other current assets

Long term deposit and other noncurrent assets

Accounts payable and other current liabilities

Defined benefit pension plan

Deferred income

Deferred grant income

Total changes in operating assets and liabilities

Net cash used in operating activities

( 1,080,389 )

Cash used in operating activities

( 18,873,827 )

( 18,865,873 )

Cash flows from investing activities:

2 unchanged sentences

( 1,956,350 )

( 17,735,355 )

Maturities of marketable securities

Net cash provided/(used) by/in investing activities

( 14,774,813 )

Cash provided by investing activities

Cash flow from financing activities:

Net proceeds from issuance of shares in at-the-market (ATM) offering

Net proceeds from issuance of shares and warrants in public offering and private placement

Payments of current portion of long-term debt

Net cash provided/(used) by/in financing activities

Net proceeds from issuance of shares in ATM offering (Note 14)

Net proceeds from issuance of shares and warrants in public offering (Note 14)

Net proceeds from the exercise of warrants (Note 14)

Net proceeds from the exercise of stock options (Note 15)

Payments of offering costs (Note 14)

Payments of current portion of long-term debt (Note 12)

Cash provided by financing activities

Effect of exchange rate changes

Net increase / (decrease) in cash, cash equivalents and restricted cash

Net (decrease)/increase in cash, cash equivalents and restricted cash

( 1,411,412 )

8 unchanged sentences

(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”).

Gain Therapeutics has been a publicly traded company since the Initial Public Offering (“IPO”) completed in March of 2021.

The shares trade on the Nasdaq Global Market under the ticker symbol “GANX”.

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 computational target and drug discovery platform Magellan™ 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.

The Company’s clinical stage product candidate, GT-02287, is being developed for the treatment of Parkinson’s disease with and without GBA1 mutations.

The Company generated an extensive preclinical data package providing evidence of the mechanism of action, in vivo pharmacology, and safety of GT-02287.

In preclinical models of GBA1 Parkinson’s disease, GT-02287 has been shown to restore glucocerebrosidase, or GCase, function in the lysosome, reduce toxic lipid substrates and toxic forms of alpha-synuclein, reduce endoplasmic reticulum stress, improve mitochondrial health and overall survival of dopaminergic neurons, increasing dopamine levels, restoring locomotor and cognitive function, and reducing plasma-based neurodegeneration maker, neurofilament light chain (NfL), back to the level of control animals.

The Company uses the Magellan™ drug discovery platform to identify novel allosteric sites and small molecules for all its pipeline programs.

The Company plans to continue to advance its existing research programs and initiate additional programs targeting allosteric binding sites identified with the Magellan™ platform in various therapeutic areas through academic partnerships, co-development, and licensing arrangements.

Risks and Uncertainties

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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.

These efforts require significant amounts of additional capital, adequate personnel, 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.

Basis of Presentation

The accompanying audited annual consolidated financial statements (the “annual financial statements”) reflect the accounts of Gain Therapeutics, Inc., Gain Therapeutics Australia PTY LTD, 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 annual financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

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 annual financial statements have been prepared on the same basis as applied for the audited annual consolidated financial statements as of and for the year ended December 31, 2023, 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, 2024, the results of its operations and its statements of stockholders’ equity and its statements of cash flows for the years ended December 31, 2024 and 2023.

All amounts in the

consolidated financial statements are expressed in U.S.

dollars and disclosed within these explanatory notes in U.S.

The results for the years ended December 31, 2024 and 2023 are not necessarily indicative of the results to be expected for any future year or period.

These annual financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2023, and the notes thereto, which are included in the Annual Report.

These accompanying annual financial statements reflect the application of significant accounting policies as described below and elsewhere in these notes to the audited consolidated financial statements.

As of December 31, 2024, the Company’s significant accounting policies and estimates, which are detailed herein, have not changed.

Going Concern

At each reporting period, the Company evaluates whether there are conditions or events 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.

At each reporting period, the Company evaluates whether there are relevant conditions or 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.

The Company has incurred recurring losses and negative cash flows from operations since its inception and has primarily funded these losses through the completion of its IPO in March 2021, other equity financings and research grants.

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Substantial additional capital will be needed by the Company to fund its operations and to develop its product candidates.

The Company’s activities have consisted primarily of organizing and staffing the Company, expanding its operations, securing financing, developing and securing its in-licensed technology, performing research and conducting preclinical studies.

The Company’s activities have consisted primarily of performing research and conducting preclinical and clinical studies, organizing and staffing the Company, expanding its operations, securing financing, developing and securing its in-licensed technology.

The Company faces risks associated with early-stage biotechnology companies whose product candidates are in development.

Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing, establishing manufacturing capacity and obtaining regulatory approval prior to commercialization.

These efforts require significant amounts of additional capital for the Company to complete its research and development activities, achieve its research and development objectives, defend its intellectual property rights, and recruit and retain skilled personnel, and key

members of management.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.

In accordance with Accounting Standard Update (“ASU”) No.

In accordance with 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.

The Company assessed that its existing cash, cash equivalents and marketable securities of $ 16.8 million will not be sufficient to fund its estimated operating and capital expenditures for a period of at least 12 months from the date these financial statements are issued.

The Company assessed that its existing cash and cash equivalents of $ 10.4 million as of December 31, 2024 will not be sufficient to fund its estimated operating and capital expenditures for a period of at least 12 months from the date these financial statements are issued.

Because of the current liquidity situation and lack of expected revenues in the foreseeable future, substantial doubt exists about its ability to continue as going concern.

The Company will need to obtain additional capital and/or other funding in order to continue operations beyond the first quarter of 2025.

The Company will need to obtain additional capital and/or other funding in order to continue operations beyond the third quarter of 2025.

Management plans to raise additional capital primarily through private and/or public equity financings and/or convertible debt financings.

As an additional action, management is currently reviewing the cost structure throughout the organization, looking for opportunities to optimize expenditures and create efficiencies with the objective of improving the Company’s overall cash burn rate and reducing the research and development expenses and general and administrative expenses.

As an additional action, management is currently reviewing the cost structure throughout the organization, looking for opportunities to optimize expenditures and create efficiencies with the objective of improving the Company’s overall cash burn rate, optimizing the research and development expenses and reducing general and administrative expenses.

Furthermore, management is actively seeking opportunities for strategic collaborations, licensing agreements and grant fundings, among other strategic opportunities.

The Company may not be successful in its efforts to raise additional funds or achieve profitable operations.

The Company continues to explore potential opportunities and alternatives to obtain the additional resources that will be necessary to support its ongoing operations beyond the first quarter of 2025, including raising additional capital through either private or public equity or debt financing, or additional program collaborations or non-dilutive funding.

The Company continues to explore potential opportunities and alternatives to obtain the additional resources that will be necessary to support its ongoing operations beyond the third quarter of 2025, including raising additional capital through either private or public equity, debt financing, or additional program collaborations.

If the Company is unable to obtain additional funding to support its current or proposed activities and operations, it may not be able to continue its operations as currently anticipated, which may require it to suspend or terminate any ongoing development activities, modify its business plan, curtail various aspects of its operations, cease operations, or seek relief under applicable bankruptcy laws.

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The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as going concern.

Basis of presentation

The consolidated financial statements reflect the accounts of the Gain Therapeutics, Inc., Gain Therapeutics Australia PTY LTD, 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, 2023, 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 of the Financial Accounting Standards Board (“FASB”).

All amounts in the consolidated financial statements are expressed in United States Dollars (USD/$) and disclosed within these explanatory notes in United States Dollars (USD/$).

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, 2022, 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, 2023 and 2022, and the results of its operations, its statements of stockholders’ equity and its statements of cash flows for the years then ended.

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 Australia, Switzerland and Spain.

The Company does not consider these geographies to be separate segments.

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance.

The Company’s Chief Executive Officer is the Company’s CODM.

The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

As such, the Company has determined that it operates as one 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.

The Company has concluded that consolidated net income (loss) is the measure of segment profitability.

The CODM assesses performance for the Company, monitors budget versus actual results, and determines how to allocate resources based on consolidated net income (loss) as reported in the Consolidated Statements of Operations.

There are no other expense categories regularly provided to the CODM that are not already included in the primary financial statements herein.

The Company has operations in four (4) geographic locations:

Switzerland, Spain, the United States, and Australia.

Product candidates currently under development require significant additional research and development efforts, including extensive preclinical and clinical testing, establishing manufacturing capacity and obtaining regulatory approval prior to commercialization, as such no revenue has been generated and therefore no additional disclosures of revenue information from products and services and information on major customers are required.

The following table details the Company’s long-lived assets by geographic location, with the exception of Australia where there are no long-lived assets:

Long-lived assets by geographic location

United States

Summary of Significant Accounting Policies

Foreign currency translation

The holding company is incorporated in the United States of America and has operations in Switzerland, Spain and Australia.

The Company’s reporting currency is USD and the functional currencies of the Company’s operations are the local currencies (US Dollars in the United States, Swiss Franc in Switzerland, Euro in Spain and Australian Dollar in Australia).

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.

Foreign Currency Transactions

The Company is incorporated in the United States of America and has operations in Switzerland, Spain and Australia.

The Company’s reporting currency is U.S.

dollars (“USD”).

The functional currencies of the Company’s operations are the local currencies (USD in the United States, Swiss franc in Switzerland, euro in Spain and Australian dollar in Australia).

Assets and liabilities reported in the Consolidated Balance Sheets are translated into USD (the currency in which these financial statements are presented) at the exchange rates applicable at the balance sheet dates and for the Consolidated Statements of Operations at the average exchange rates for the periods presented.

Items representing the share capital and additional paid-in capital are presented at historical exchange rates.

Adjustments resulting from the translation of the financial statements of the Company’s foreign operations into USD 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, 2023 and 2022, accumulated currency translation adjustment recorded in the accumulated other comprehensive loss amounted to $ 408,487 and $ 158,576 , respectively.

As of December 31, 2024 and December 31, 2023, accumulated currency translation adjustments recorded in accumulated other comprehensive loss amounted to $ 41,247 and $ 408,487 , 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 the assessment of going concern, recognition of accrued expenses, defined benefit pension liability, share-based compensation, 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.

The preparation of the Company’s consolidated financial statements in conformity with U.S.

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, the Company evaluates its estimates, judgments and assumptions including those related to going concern assessment, 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 by management 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.

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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.

The Company classifies cash on hand and held at banks, and all highly liquid investments in money markets, certificates of deposit, time deposits, and other short-term liquid securities with original maturities of less than 90 days, 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.

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, “Investments – Debt Securities” (“ASC 320”).

Marketable securities are classified as available-for-sale since 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/loss.

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 expectations 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”.

Available-for-sale marketable securities are carried out at fair value with the unrealized gain/(loss) excluded from the computation of the earnings of the period and accounted for in other comprehensive income/(loss).

The accretion of discounts (or amortization of premiums) is accounted for in the Company’s Consolidated Statements of Operations as interest income or (expense).

Marketable securities are classified in the Company’s Consolidated Balance Sheets based on their maturities and the Company’s reasonable expectations with regard to those securities.

Marketable securities with a maturity date within 12 months from the reporting date are classified as “Current assets.” Marketable securities with a maturity date over 12 months from reporting date are classified as “Noncurrent assets.”

Concentrations of Credit Risk

1 unchanged sentence

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.

The Company deposits its cash and cash equivalents in financial institutions that it believes have high credit quality and have not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Deferred Issuance Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred issuance costs until such equity issuances are consummated.

After consummation of the equity issuance, these costs are recorded as a reduction of the proceeds generated as a result of the offering.

The Company capitalizes certain legal, professional accounting, and other third-party fees that are directly associated with in-process equity financings as deferred issuance costs until such equity transactions are consummated.

Subsequently, these costs are recorded as a reduction of the proceeds generated as a result of the offering.

Should the planned equity financing be abandoned, the deferred issuance costs will be expensed immediately as a charge to operating expenses in the Consolidated Statements of Operations.

1 unchanged sentence

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 depreciation expenses are recorded using the straight-line method in the Consolidated 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:

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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.

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, 2023 and 2022, internal-use software amount to $ 193,375 and $ 213,967 , respectively, and refer to the external and internal labor costs incurred in the development of the Company’s enterprise resource planning system.

Internal-use software, net consisted of the following:

Internal-use software

accumulated amortization

Internal-use software, net

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 and for the years ended December 31, 2023 and 2022 was $ 45,507 and $ 37,536 , respectively.

The accumulated amortization as of December 31, 2023 and 2022 was $ 91,262 and $ 39,021 , respectively.

The amortization of capitalized software development costs is reflected in general and administrative expenses.

Amortization expense for the years ended December 31, 2024 and December 31, 2023 was $ 47 thousand and $ 46 thousand, 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.

In accordance with ASC 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.

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Amounts incurred are classified as general and administrative expenses.

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 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, “Leases.” 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 using the Company’s incremental borrowing rate applicable to the lease.

The collateralized incremental borrowing rate is based on the information available at the lease commencement date.

The Company is typically required to make fixed minimum rent payments and is often required, by the lease, to pay for certain other costs including real estate taxes, insurance, common area maintenance and/or certain other costs, which may be fixed or variable, depending upon the terms of the respective lease agreement.

To the extent these payments are fixed, the Company has included them in calculating the lease ROU assets and lease liabilities.

Variable lease payments primarily include payments for non-lease components, such as maintenance or utilities.

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 Statements of Operations.

The Company determines the lease term by assuming the exercise of renewal options that are reasonably certain.

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Payables for Social Security Charges

Social Security charges are reported in compliance with rules and laws applicable in the countries where our employees work.

Social security charges are reported in compliance with rules and laws applicable in the countries where the Company’s employees work.

Charges are accrued in accordance with the policies stipulated and in connection with salaries due for the period.

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This process involves reviewing open contracts and purchase orders, communicating with the Company personnel to identify services that have been performed on its 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.

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.

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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 service period using the corridor amortization method.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the Consolidated Statements of Changes in Stockholders’ Equity under accumulated other comprehensive income (loss), and are charged or credited to income over the employees’ expected average remaining service period using the corridor amortization method.

The measurement date used for the Company’s employees defined benefit plan is December 31.

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Stock-based Compensation and Warrants

The Company issues stock-based compensation with service-based, performance-based and market-based vesting conditions.

The Company issues stock-based compensation with service-based and performance-based vesting conditions.

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.

1 unchanged sentence

Forfeitures are recognized as they occur.

The fair value of each stock option award is estimated on the grant date using the Black-Scholes option pricing model.

The Company determines the volatility and the expected term for awards granted based on an analysis of reported data for a peer group of similar biopharmaceutical companies.

The fair value of each stock option award is estimated as of the grant date using the Black-Scholes option pricing model.

The Company determines the volatility and the expected term of exercise for awards granted based on the actual volatility of its share price traded on the Nasdaq and the best estimate of the timing of the exercise by the beneficiaries as of the grant date.

The risk-free interest rate is determined by reference to the U.S.

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therefore, the expected dividend yield is assumed to be nil .

The Company recognizes expenses related to Restricted Stock Units (or RSUs) based on their fair market value, determined as the closing price on Nasdaq of the Company’s common stock as of the grant date, on a straight-line basis over the requisite service period.

For Restricted Stock Units with market or performance -based vesting conditions (or PRSUs), the fair value at grant date is calculated using an option-pricing model (Monte Carlo Simulation) or based on management’s assessment of the likelihood of concurrence of the underlying performance, respectively.

The Company recognizes expenses related to restricted stock units (RSUs) based on their fair market value, determined as the closing price on the Nasdaq of the Company’s common stock as of the grant date, on a straight-line basis over the requisite service period.

For restricted stock units with performance-based vesting conditions ( PRSUs), the fair value at grant date is calculated based on management’s assessment of the likelihood of occurrence of the underlying performance.

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.

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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:

When the Company derives income from its collaboration and licensing agreements, it recognizes revenue in accordance with ASC 606, “Revenues from Contracts with Customers” (“ASC 606”) 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 ASC 606:

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations, the Company applies the five-step model of ASC 606:

(i) identify the contract(s) with a customer;

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(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) we satisfy a performance obligation.

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.

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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.

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 fulfill 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.

Under the terms of the research and development grants awarded, the Company receives upfront payments or is entitled to receive reimbursement of its allowable direct expenses and payroll costs.

Contributions from research and development activities under the grants are recorded when there is reasonable assurance of collection and 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 Statements of Operations as a reduction to research and development expenses.

Grants received in advance of the specific research and development costs to which they relate are deferred and recognized in the Consolidated Balance Sheets as deferred grant income.

The Company is also eligible to obtain certain research and development tax credits.

The tax credits are available on the basis of specific criteria with which the Company must comply.

The tax credits are administered through the local tax authority and can be realized regardless of whether the Company has generated taxable income in the respective jurisdictions.

The Company accounts for the tax credits through offsets to the related research and development as it incurs costs eligible for reimbursement when collectability is reasonably assured and when the applicable conditions under the tax incentive program have been met.

Research and Development Expenses

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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

Fair Value Measurement

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.

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● 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.

In determining fair value, the Company utilizes 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.

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, changes in defined benefit obligation, and unrealized gains / (losses) 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 and shares issuable for little or no cash consideration upon resolution of any applicable contingency.

The Company gives consideration to all potentially dilutive impacts, except where the effect of including such securities would be antidilutive.

As of December 31, 2023 and 2022, common stock equivalents consisted of stock options, RSUs, PRSUs and warrants.

The Company gives consideration to all potentially dilutive impacts, except where the effect of including such securities would be anti-dilutive.

As of December 31, 2024 and December 31, 2023, common stock equivalents consisted of stock options, RSUs, PRSUs 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.

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 accounting pronouncements effective in 2023 with a material impact on the Company’s consolidated financial statements.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date.

Recently issued accounting pronouncements adopted

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This ASU primarily requires incremental disclosures of disaggregated expense information about a Company's reportable segments.

The Company adopted this ASU for the year-end December 31, 2024, and applied it retrospectively to all prior periods presented (see Note 1).

Recently issued accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

This ASU primarily requires disaggregated information about a Company's effective tax rate reconciliation as well as information on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

This ASU will likely result in the required additional disclosures being included in the Company’s consolidated financial statements, once adopted.

As this ASU relates to disclosures only, there will be no impact to the Company’s consolidated results of operations and financial condition.

In November 2024, the FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40) .

The ASU requires new disclosures providing further detail of a company’s income statement expense line items.

The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements.

This ASU will likely result in the required additional disclosures being included in the Company’s consolidated financial statements, once adopted.

As this ASU relates to disclosures only, there will be no impact to the Company’s consolidated results of operations and financial condition.

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.

In connection with this grant, during the year ended December 31, 2022, the Company recorded a reduction to research and development expenses of $ 82 thousand.

The research grant is concluded and no reduction to research and development expenses has been recorded for the year ended December 31, 2023.

During the course of its business, the Company applies for research grants with public or private organization to funds its research projects.

Under the terms of these grants, the Company receives an upfront payment or is entitled to receive reimbursement of its allowable direct research expenses.

In March 2023, the Company’s wholly owned subsidiary, GT Gain Therapeutics SA, announced that Eurostars and Innosuisse awarded a grant in the aggregated amount of $ 1.3 million to a consortium led by Gain Therapeutics that also includes the Institute for Research in Biomedicine, Newcells Biotech and the University of Helsinki.

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In May 2023, the Company’s wholly owned subsidiary, GT Gain Therapetuics SA, announced that Innosuisse awarded the Company a grant, under the Swiss Accelerator program, in the amount of $ 2.8 million to support the further development activities of Gain Therapeutics’ lead program GBA1 Parkinson’s disease.

In connection with the grants announced in March 2023 and May 2023 the Company recorded, during the year ended December 31, 2023, a reduction to research and development expenses of $ 0.6 million and reports deferred income of $ 1.2 million.

In December 2024, the parties to the grant entered into an amendment to the funding agreement whereby the grant amount was amended to approximately $ 2.0 million due to changes in project scope.

There is no impact to the Consolidated Statements of Operations or Consolidated Balance Sheets due to this amendment.

In connection with the grants announced in March 2023 and May 2023 the Company recorded a reduction to research and development expenses of $ 0.9 million and $ 0.6 million and reports deferred grant income of $ 0.3 million and $ 1.2 million during the years ended December 31, 2024 and December 31, 2023, respectively.

In the second quarter of fiscal year 2023, the Company’s wholly owned subsidiary, Gain Therapeutics Australia started the Phase 1 Clinical Trial for its lead program in Parkinson’s disease in Australia.

The Australian government sponsors the Research and Development Tax Incentive (“R&DTI”) program which offers a tax credit for companies conducting eligible research and development activities.

The R&DTI program provides for a cash refund based on a percentage of eligible research and development activities undertaken in Australia by Gain Therapeutics Australia.

The Company recorded a reduction to research and development expenses of $ 1.3 million during the year ended December 31, 2024 related to the R&DTI program.

The corresponding receivable was recorded within Other Current Assets (see Note 6).

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’s cash and cash equivalents include short-term highly liquid investments which are readily convertible into cash and relate to money market securities.

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.

Given their short-term maturities and the underlying value being mainly represented by cash equivalents, their face value amount approximates 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.

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Restricted cash

Restricted cash refers to an amount required under the Company’s office lease agreement in Lugano and deposited into a restricted bank account as a guarantee.

Restricted cash refers to an amount required under the Company’s office lease agreement in Lugano and is deposited into a restricted bank account as a guarantee.

Marketable Securities

As of December 31, 2023 the Company reports $ 5 million of marketable securities, related to United States Treasury Securities (“USTS”), within current assets.

The USTS purchased have maturity dates going from January 2024 to April 2024, on a monthly basis, in tranches of USD 1,000 thousand each month.

As of December 31, 2024 and December 31, 2023, the Company reported nil and $ 5.0 million of marketable securities, respectively, within current assets, related to United States Treasury Securities (“USTS”).

The USTS in the portfolio reached their final maturity in April 2024.

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, 2023:

Unrealized losses on available-for-sale debt securities as of December 31, 2023 were primarily due to changes in interest rates.

The following tables summarize the Company’s investment in available-for-sale marketable securities with the detail of the unrealized losses and the estimated fair value as of December 31, 2023:

December 31, 2023

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Debt Securities - U.S.

government treasury securities, current

As of December 31, 2023, 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 recovery of the unrealized losses, which will be at maturity.

Unrealized losses on available-for-sale debt securities as of December 31, 2023 were primarily due to changes in interest rates.

Accordingly, as of December 31, 2023, the Company has not recorded an allowance for credit losses related to its available-for-sale debt securities.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

government treasury securities

Tax Credits, Prepaid Expenses and Other Current Assets

Tax credits, prepaid expenses and other current assets consisted of the following:

Prepaid and deferred expenses

Other receivable

Prepaid D&O Insurance

Prepaid directors and officers (D&O) insurance costs

Research and development grant receivable

Total prepaid expenses and other current assets

Tax credit consist of a value added tax (“VAT”) receivable from Swiss and Spanish tax authorities on purchases of goods and services executed in those countries.

Tax credits consisted of a value-added tax credit, which is an indirect tax receivable from Swiss and Spanish 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.

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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.

The research and development grant receivable relates to a tax credit for eligible research and development costs incurred under the R&DTI program.

Refer to Note 3 for further discussion.

Property and Equipment, Net

Property and equipment, net, consists of the following :

Property and equipment, net consisted of the following :

Furniture and fixtures

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Property and equipment, net

No disposals, nor impairments occurred during the periods.

No disposals, no r impairments occurred during the years ended December 31, 2024 and 2023.

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, 2023 and 2022 was $ 34,875 and $ 26,632 , respectively.

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.

The current lease portfolio consists of leases with remaining terms ranging from one to three years .

Renewal options are excluded from the calculation of lease liabilities since the Company is not reasonably certain that will exercise the renewal option.

Depreciation expense for the years ended December 31, 2024 and December 31, 2023 was $ 38 thousand and $ 35 thousand, respectively.

Operating Leases

The Company leases offices in Bethesda (United States), Lugano (Switzerland), and Barcelona (Spain).

The current lease portfolio consists of leases with remaining terms ranging from less than one to two years .

Renewal options are included in the calculation of ROU assets and lease liabilities when the Company is reasonably certain that the renewal options will be exercised.

The Company’s lease agreements do not contain residual value guarantees or material restrictive covenants.

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.

Operating lease

Operating lease right-of-use assets

Operating lease liability - current

Operating lease liability - non current

Operating lease liability - noncurrent

Weighted average remaining lease term - years

Weighted average discount rate

The amounts related to lease costs included in the consolidated statements of operations were as follows:

Year Ended December 31

The operating lease expenses are reported as follows:

Research and development

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Total operating lease costs

The Company incurred $ 17,636 in costs related to the short term lease in Bethesda in the year ended December 31, 2024.

The variable lease costs incurred in the years December 31, 2024 and December 31, 2023 was $ 24,469 and $ 39,948 , respectively.

The Company made fixed cash payments related to operating leases of $ 0.2 million in both the years ended December 31, 2024 and December 31, 2023.

The future minimum lease payments for the Company’s operating leases as of December 31, 2024, are as follows:

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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.

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All accounts payable are due in less than 12 months.

Other current liabilities and deferred income

Other current liabilities and deferred income consist of the following as of December 31, 2023 and 2022:

Payable for social security

Other Current Liabilities and Deferred Grant Income

Other current liabilities and deferred grant income consist of the following:

Payable for social security and withholding taxes

Accrued payroll

Accrued expenses

Accrued research and development

Accrued professional fees

Accrued other

Tax provision

Total other current liabilities

Deferred income

Deferred grant income

Total other current liabilities and deferred income

Deferred income refers to the portion of grants cashed in and not yet recognized as a reduction of R&D expenses in the statement of operations.

Accrued payroll refers to accruals for year-end bonuses, accrued vacations and overtime to be paid to employees.

Accrued expenses refer to invoices to be received from vendors for services performed and not yet billed.

Accrued payroll refers to accruals for year-end bonuses, accrued vacations, overtime and other payroll-related accruals.

Accrued other refers 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.

Pension obligations

Net pension obligations related to the Company’s defined pension plan refer only to Swiss employees and as of December 31, 2023 and 2022 can be summarized as follows:

Deferred grant income refers to the upfront payment that the Company has received after the successful application regarding research and development grants with Innosuisse.

Pension and Other Benefit Programs

Net pension obligations related to the Company’s defined pension plan refers only to Swiss employees and as of December 31, 2024 and December 31, 2023 can be summarized as follows:

End of year funded status:

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( 1,342,476 )

( 1,130,217 )

Funded status

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Funded status beginning of year

Employer contribution

Employer contributions

Translation differences

Change in AOCI over the year

Change in accumulated other comprehensive loss

Funded status at end of year

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Expected return on plan assets

Amortization of (gain)/losses

Amortization of prior service cost

Amortization of losses

Amortization of prior service credit

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

Certain other components of net periodic pension costs are reported in interest income, net in the Consolidated Statements of Operations.

Reconciliation of projected benefit obligation:

Projected benefit obligation at January 1

Services cost

Employee contribution

Employee contributions

Interest cost

Benefit payments

(Gain) / loss on financial assumptions

(Gain) / loss on demographic assumptions

(Gain) / loss on experience

Loss on financial assumptions

Loss on demographic assumptions

Gain on experience

Translation differences

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Expected return on plan assets

Gain/(loss) on plan assets

Loss on plan assets

Employer contributions

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Fair value at December 31

Change in net (gain)/loss:

(Gain)/loss at beginning of year

(Gain)/loss on PBO during the year

(Gain)/loss on assets during the year

Amortization of gain/(loss)

(Gain)/loss at end of year

Change in accumulated other comprehensive income (AOCI):

AOCI at beginning of year

Net gain/(loss) amortized

(Gain)/loss on PBO during the year

(Gain)/loss on assets during the year

Change in net loss:

Loss at beginning of year

Loss on pension benefit obligation during the year

Loss on assets during the year

Amortization of loss

Loss at end of year

Change in accumulated other comprehensive loss:

Accumulated other comprehensive income at beginning of year

Net loss amortized

Loss on pension benefit obligation during the year

Loss on assets during the year

Prior service cost/(credit) occurring over the year

Net prior service (cost)/credit amortized

Total AOCI at end of year

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:

Net prior service credit amortized

Total accumulated other comprehensive income at end of year

The assumptions used in the determination of the benefit obligation and the net periodic costs for the pension plans were as follows:

Financial assumptions (%pa):

Discount rate

Interest credit rate / ERoA

Interest credit rate / expected return on assets

Salary increases

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Next year's expected employer contribution

The actuarial losses in 2023 were primarily due to a decrease in discount and interest rates applied against future expected benefit payments and resulted in a increase of the benefit obligation.

The actuarial losses in 2024 were primarily due to a decrease in discount rate applied against future expected benefit payments and resulted in an increase of the benefit obligation.

The increase of the plan assets recorded during the year was mainly related to employer’s and employees’ contributions to the plan.

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The plan asset has been classified within Level 3 of the fair value hierarchy and the approach is consistent with prior years.

We maintain a 401(k) saving Plan, which is available to all U.S.

The Company maintains a 401(k) savings plan, which is available to all U.S.

Participants may make voluntary contributions.

We make matching contributions according to the 401(k) Saving Plan’s matching formula.

The Company makes matching contributions according to the 401(k) savings 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 $ 19,938 and $ 15,875 for the years ended December 31, 2023 and 2022.

Our UK employees are eligible to participate to our UK defined contribution pension scheme upon commencement of employment.

The expenses related to the Company’s 401(k) savings plan consist of matching contributions.

Expenses related to the Company’s 401(k) savings plan totaled $ 36,528 and $ 19,938 for the years ended December 31, 2024 and December 31, 2023.

The Company’s United Kingdom (“UK”) employees are eligible to participate in its 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 $ 16,753 and $ 5,165 for the years ended December 31, 2023 and 2022.

In August 2020, the Company obtained a CHF 638,000 (USD 700,221 at the historical 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:

The expenses related to the Company’s pension scheme consist of matching contributions and totaled $ 14,563 and $ 16,753 for the years ended December 31, 2024 and December 31, 2023, respectively.

In August 2020, the Company obtained a CHF 638,000 ($ 700,221 at the historical exchange rate) nine-year loan, due in quarterly installments with payments commencing on December 31, 2021, and ending on September 30, 2029.

The loan was 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, bears no interest, and had no issuance costs.

The Company accounts for this loan at face value, which is deemed to approximate the related fair value.

The future payments under the loan are reported in the table below:

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 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.

There have been no changes to the valuation methods utilized by the Company, nor were there transfers between levels of the fair value hierarchy.

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 ASC 820, “Fair Value Measurement.” 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

Quoted prices in

active market for

identical assets

Significant other

observable inputs

unobservable inputs

December 31, 2024:

Marketable securities available for sale:

Debt securities - U.S.

government treasury securities, current

Debt securities - U.S.

government treasury securities, non current

Total marketable securities available for sale

Defined benefit pension plan:

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Total defined benefit pension plan

Cash and cash equivalents:

Cash equivalents:

Money market funds

Total cash and cash equivalents

Total cash equivalents

Total financial assets

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government treasury securities, current

Debt securities - U.S.

government treasury securities, non current

Total marketable securities available for sale

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Total defined benefit pension plan

Cash and cash equivalents:

Cash equivalents:

Money market funds

Total cash and cash equivalents

Total cash equivalents

Total financial assets

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.

Please refer to the Note 11 “Pension obligations” for additional details on the valuation of Pension Plan Assets.

The carrying amounts of prepaid expenses and other current assets, accounts payable, and accrued expenses approximate fair value due to their short-term maturities.

Please refer to Note 11 “Pension Obligations” for additional details on the valuation of pension plan assets.

Common Stock, Preferred Stock and Warrants

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As of December 31, 2024 and December 31, 2023, there were 27,132,588 and 16,206,680 shares of common stock, respectively, $ 0.0001 par value, issued and outstanding .

In July 2020, in connection with a private placement, the Company issued equity-classified warrants to placement agent designees.

After a reverse stock split in March 2021, the aggregate number of outstanding warrants totaled 237,249 shares with an exercise price of $ 5.07 per share, valued in the aggregate at $ 413,887 .

The warrants vested immediately upon issuance, provide for a cashless exercise right and are exercisable for a period of five years until July 20, 2025.

As of December 31, 2023, 225,387 warrants were outstanding.

On May 6, 2021, the Company entered into an investment banking services and financial advisory agreement and issued equity-classified warrants to investment bank designees 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 $ 1.0 million.

The warrants vested immediately upon issuance, do not provide cashless exercise right and are exercisable for a period of four years from May 6, 2021.

The fair value of the warrants was fully recognized on a straight-line basis over the service period as general and administrative expense.

As of December 31, 2023, no warrants have been exercised.

At the market offering

In May 2022, the Company entered into a Controlled Equity OfferingSM Sales Agreement with Cantor Fitzgerald, Inc.

(“Cantor”), pursuant to which the Company was able to sell from time to time, through the Agent, shares of common stock, having an aggregate offering price of up to $ 16.0 million (the “ATM Program”).

Sales under the ATM Program are made by any method permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 issued under the Securities Act, including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Company’s common stock, through a market maker or as otherwise agreed by the Company and Cantor.

During the year ended December 31, 2023, we sold an aggregate of 862,535 shares of common stock at an average price of $ 4.60 per share, raising gross proceeds of $ 3.9 million, which includes $ 0.4 million in sales and commissions and other offering expenses.

The Sales Agreement was terminated in conjunction with the public offering and concurrent private placement of shares of the Company’s common stock in November 2023 described below.

Public Offering

In November 2023, we completed the public offering of 2,545,000 shares of our common stock and warrants to purchase 1,272,500 shares of our common stock (the “Public Warrants”).

In May 2022, the Company entered into a Controlled Equity Offering Sales Agreement (the “Cantor Sales Agreement”) with Cantor Fitzgerald & Co.

(“Cantor”), pursuant to which the Company was able to sell from time to time, through the agent, Cantor, shares of common stock, having an aggregate offering price of up to $ 16.0 million (the “ATM Program”).

For the year ended December 31, 2023, the Company sold an aggregate of 862,535 shares of common stock under the ATM Program at an average price of $ 4.60 per share for aggregate gross proceeds of $ 3.9 million, which included $ 0.4 million of sales commissions and other offering expenses.

The Cantor Sales Agreement was terminated in conjunction with the public offering and concurrent private placement of shares of the Company’s common stock in November 2023 as described below.

In September 2024, the Company entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Oppenheimer & Co.

Inc., serving as agent (“Oppenheimer”) with respect to an at-the-market (“ATM”) offering program (the “2024 ATM Program”).

Under the 2024 ATM Program the Company may offer and sell, from time to time at its sole discretion, shares of common stock having an aggregate offering price of up to $ 50.0 million.

The Company will pay Oppenheimer a commission equal to 3.0 % of the gross sales proceeds of any shares sold through Oppenheimer under the Distribution Agreement.

During the year ended December 31, 2024, the Company sold an aggregate of 1,597,128 shares of commons stock at an average selling price of $ 1.97 per share under the 2024 ATM Program, raising gross proceeds of $ 3.1 million, which included $ 0.2 million of sales commissions and other offering expenses.

Public and private offering November 2023

In November 2023, the Company completed the public offering of 2,545,000 shares of its common stock and warrants to purchase 1,272,500 shares of its common stock (the “Public Warrants”).

The warrants have been offered and sold at the rate of one warrant for every two shares of common stock purchased.

The public offering price for each set of two shares of common stock and accompanying warrant to purchase one share of common stock was $ 4.01 , yielding an effective price of $ 2.00 per share and $ 0.01 per warrant.

Each warrant has an exercise price of $ 2.75 per share of common stock and immediately vested upon the finalization of the public offering.

The “Public Offering Warrants” are equity-classified and are exercisable for a period of five years starting from November 2023.

In connection with the public offering we also issued 178,150 warrants to purchase an equal amount of our common stock at an exercise price of $ 2.75 per share to the Underwriter as a consideration for the services provided (the “Underwriter Warrants”), the warrants vested immediately upon the finalization of the public offering.

The “Underwriter Warrants” are equity-classified and are exercisable for a period that goes from May 2024 to November 2028 and provide for cash-less exercise.

Private Placement

In a private placement that was completed concurrently with the public offering we also issued to accredited investors 744,026 shares of our common stock, 1,756,062 pre-funded warrants to purchase an equal amount of our

common stock at the nominal exercise price of $ 0.0001 and private warrants to purchase 2,500,088 shares of our common stock (the “Private Warrants”).

The “Private Warrants” have been offered and sold at the rate of one warrant for every share of common stock (or pre-funded warrant in lieu thereof) purchased in the private placement.

The private placement price per share (or pre-funded warrant in lieu thereof) and accompanying private warrant to purchase one share of common stock was $ 2.00 per set of securities sold privately.

The “Private Warrants” immediately vested upon the finalization of the private placement, are equity-classified, have an exercise price of $ 2.75 per share of common stock and are exercisable for a period that goes from May 2024 to November 2028.

The pre-funded warrants immediately vested upon the finalization of the private placement, are equity-classified and are exercisable for a period of five years starting from November 2023.

In connection with the private placement we also issued 175,006 warrants to purchase an equal amount of our common stock at an exercise price of $ 2.75 to the Placement Agent as a consideration for the services provided (the “Placement Agent Warrants”), the warrants vested immediately upon the finalization of the private placement.

The “Placement Agent Warrants” are equity-classified, are exercisable for a period that goes from May 2024 to November 2028 and provide for cash-less exercise.

The public offering and the concurrent private placement resulted in combined gross proceeds of $ 10.1 million, which includes $ 1.2 million of underwriting commissions, placement agent’s fees and other expenses connected with the financing round.

As of December 31, 2023 $ 0.9 million of the costs associated with the financing round had already been paid or deducted from the gross proceeds, while the reminder of the amount has been paid in the first quarter of 2024.

The fair market value of the “Public Warrants”, “Private Warrants”, and of the “Underwriter Warrants”, “Placement Agent Warrants” (together referred to as “Agent Warrants”) has been calculated using the Black-Scholes option pricing model, while the fair market value of the pre-funded warrants has been determined as the spread between the price paid by the private investors and the share price of our stock at grant date.

Below a table that summarizes the assumptions that have been used in the calculation:

In connection with the public offering that occurred in November 2023, the Company also issued 178,150 warrants to purchase an equal amount of its common stock at an exercise price of $ 2.75 per share to the underwriter as consideration for the services provided (the “2023 Underwriter Warrants”).

The 2023 Underwriter Warrants provide for cashless exercise.

In a private placement that was completed concurrently with the public offering from November 2023 described above, the Company also issued to accredited investors 744,026 shares of its common stock, 1,756,062 pre-funded warrants, to purchase an equal amount of its common stock at the nominal exercise price of $ 0.0001 and private warrants to purchase 2,500,088 shares of its common stock (the “Private Warrants”).

The Private Warrants were sold at the rate of one warrant for every share of common stock (or pre-funded warrant in lieu thereof) purchased in the private placement.

The private placement price per share (or pre-funded warrant in lieu thereof) and accompanying Private Warrants to purchase one share of common stock was $ 2.00 per set of securities sold privately.

In connection with the private placement from November 2023, the Company also issued 175,006 warrants to purchase an equal amount of its common stock at an exercise price of $ 2.75 to the placement agent as consideration for the services provided.

These warrants provide for cashless exercise.

The public offering and the concurrent private placement that were finalized in the fourth quarter of the year ended December 31, 2023, resulted in combined gross proceeds of $ 10.1 million, which included $ 1.2 million of underwriting commissions, placement agent’s fees and other expenses connected with the financing round.

Public offering June 2024:

In June 2024, the Company completed the public offering of 7,116,547 shares of its common stock and 1,031,602 pre-funded warrants (the “Pre-Funded Warrants”) to purchase an equal amount of its common stock at the nominal exercise price of $ 0.0001 .

The public offering price was $ 1.35 per share while the purchase price of each pre-funded warrant was equal to the public offering price at which a share of common stock was sold less $ 0.0001 .

As part of the public offering, the Company granted the underwriter an over-allotment option to purchase up to an additional 1,222,222 shares of its common stock, at the public offering price of $ 1.35 , less underwriting discounts and commissions.

In July 2024, the underwriter partially exercised the over-allotment option and purchased an additional 337,076 shares of the Company’s common stock at the offering price mentioned above.

The over-allotment option expired as of the end of July 2024.

In connection with the public offering, the Company also issued 593,965 warrants to purchase an equal amount of its common stock at an exercise price of $ 1.6875 per share to the underwriter as a consideration for the services provided (the “2024 Underwriter Warrants”).

The 2024 Underwriter Warrants provide for cashless exercise.

The public offering that was finalized in 2024 resulted in gross proceeds of $ 11.5 million, which include $ 1.2 million of underwriting commissions and other expenses connected with the financing round.

The fair value of the shares of common stock issued in the offering has been recorded in additional paid-in capital and the totality of the gross proceeds has been allocated to the shares of common stock issued.

The fair market value of the Underwriter Warrants that have been issued in connection with the public offering that occurred in fiscal year 2024 has been calculated using the Black-Scholes option pricing model, while the fair market value of the pre-funded warrants has been determined as the spread between the price paid by investors and the closing price of the Company’s stock at grant date.

The 2024 Underwriter Warrants were recorded within additional paid-in capital, as they represent compensation associated with the financing round, for $ 0.3 million.

Below is a table that summarizes the assumptions that have been used in the calculation:

Year Ended December 31, 2024

2024 Pre-Funded

2024 Underwriter

Market price at grant date

3 unchanged sentences

Grant date fair value per share

The fair values of the shares, public, private and pre funded warrants to purchase shares of our common stock have been recorded in APIC and allocated to the gross proceeds as follows:

$ 6.25 million for the shares issued in the public offering and the private placement (based on the stock price as of transaction date), $ 0.82 million for the public warrants, $ 2.69 million for the private warrants and $ 0.34 million for the pre funded warrants.

The agent warrants were recorded within APIC as they represent compensation associated with the financing round, for $ 0.3 million.

As of December 31, 2023 no warrant has expired or has been exercised.

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 .

On December 23, 2021, the Board adopted the 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.

The maximum number of shares reserved for issuance pursuant to awards granted under the 2021 Inducement Equity Incentive Plan is 1,000,000 .

The Company’s 2022 Equity Incentive Plan (the “2022 Plan”) was approved by the Board on May 12, 2022.

On June 16, 2022, at the Company’s annual meeting of stockholders, the Company’s stockholders approved the 2022 Plan.

Below is a summary of the Company’s issued and outstanding warrants as of December 31, 2024:

Weighted Average

Expiration Date

Exercise Price

July 20, 2025

November 24, 2028

June 17, 2029

Pre-funded warrants

Outstanding as of December 31, 2024

The following table summarizes the Company’s warrants activity for the year ended December 31, 2024:

Weighted Average

Exercise Price

Outstanding as of December 31, 2023

Pre-funded Warrants

2024 Underwriter Warrants

Pre-funded Warrants

( 1,756,062 )

Public Warrants

Outstanding as of December 31, 2024

Equity Incentive Plan

On September 24, 2020, the Company’s Board of Directors (the “Board”) adopted the 2020 Omnibus Incentive Plan (the “2020 Omnibus Plan”).

On May 12, 2022, the Board approved the Company’s 2022 Equity Incentive Plan (the “2022 Plan”), which was approved at the Company’s annual meeting of stockholders on June 16, 2022.

The 2022 Plan is the successor to, and continuation of, the 2020 Omnibus Plan.

The number of newly authorized shares reserved for issuance under the 2022 Equity Incentive Plan was 646,173 , and the total number of shares initially reserved for issuance under the 2022 Plan (including shares remaining available under the 2020 Omnibus Plan) is 1,800,000 .

On January 1, 2023, the number of shares of common stock issued under the 2022 Plan, increased automatically by 6 % or 713,002 , based on the number of shares of common stock issued and outstanding as of December 31, 2022.

Following such increase, the number of shares of common stock that may be issued under the 2022 Plan totaled 2,513,002 .

The total number of shares reserved for issuance under the 2022 Plan (including shares remaining available under the 2020 Omnibus Plan) is 1,800,000 , which increases automatically by 6 % every year on January 1 based on the number of shares of common stock issued and outstanding as of the previous year-end.

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 equity incentive plans.

The Board is responsible for administering the 2022 Plan.

In addition to the above, on December 23, 2021, the Board adopted the 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.

The maximum number of shares reserved for issuance pursuant to awards granted under the 2021 Inducement Equity Incentive Plan is 1,000,000 .

Stock options are generally granted with a 10 year term at exercise prices equal to the market price at the date of grant.

After one year of service from the date of grant, 25 % of the options become exercisable, with the remainder becoming exercisable monthly over the following three-year period.

RSUs generally vest 25 % after one year of service from the date of grant and the remainder vesting quarterly over the following three-year period.

Stock Option Grants

The following tables summarize the stock option activity for the year ended December 31, 2023 :

The following table summarizes the Company’s stock option activity for the year ended December 31, 2024:

Weighted Average

Remaining Contractual

Exercise Price

1 unchanged sentence

Options outstanding as of December 31, 2023

Canceled and forfeited

Options granted

Options exercised

Options cancelled/forfeited

Options outstanding as of December 31, 2024

3 unchanged sentences

Based on this calculation the intrinsic value of the outstanding stock options as of December 31, 2024 was 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:

As of December 31, 2024, unrecognized compensation costs associated with the stock option grants was $ 2.9 million and will be recognized over a period of 3.25 years.

The fair value of the options vested was $ 2.1 million for both the years ended December 31, 2024 and December 31, 2023.

The assumptions that the Company used to determine the grant-date fair value of stock options granted during the periods ended December 31, 2024 and December 31, 2023 were as follows, presented on a weighted-average basis:

Year Ended December 31

3 unchanged sentences

Expected dividend yield

The assumptions that cause the greatest variation in fair value in the Black-Scholes model are the volatility and expected term of exercise.

Increases or decreases in either the volatility or expected term of exercise will cause the Black-Scholes option value to increase or decrease, respectively.

Each of these inputs is subjective and generally requires significant judgment to determine.

Restricted Stock Units and Performance Restricted Stock Units

The following table summarizes the Company’s RSUs and PRSUs activity for the year ended December 31, 2023:

Restricted Stock Units

The following table summarizes the Company’s RSUs activity for the year ended December 31, 2024:

Weighted Average

5 unchanged sentences

Outstanding as of December 31, 2024

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 vesting period for the RSUs granted in 2023 is four years ( two years for the RSU granted in 2022).

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 these 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 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 $ 1.1 million, using the closing price of the Company’s common stock at grant date.

In April 2023, the Compensation Committee of the Board approved 100,000 awards of performance-based restricted stock units (“PRSUs”) to an executive officer of the Company, subject to vesting on the achievement of certain services, financing and business development performance and market criteria.

The grant date fair value for the PRSUs with financing and business development performance was determined based on the closing price of the Company’s common stock at grant date and for the PRSUs with market condition, through an option-pricing model (Monte Carlo Simulation).

Options, RSUs and PRSUs do not have voting rights and the underlying shares are not considered issued and outstanding.

The total stock-based compensation expense for stock options, RSUs and PRSUs, granted to employees and non-employees, has been reported in the Company’s consolidated statements of operations as follows:

Total unrecognized expense remaining

Years unrecognized expense expected to be recognized over

Options and RSUs do not have voting rights and the underlying shares are not considered issued and outstanding.

The fair value of the RSUs vested was $ 487 thousand and $ 328 thousand for the years ended December 31, 2024 and December 31, 2023, respectively.

The total stock-based compensation expense 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

2 unchanged sentences

Total stock-based compensation

As of December 31, 2023, the total unrecognized compensation cost related to non-vested stock options, RSUs and PRSUs granted was $ 3.48 million and is expected to be recognized over 3 years .

The Company is subject to taxation in the U.S., Switzerland, Spain and Australia.

1 unchanged sentence

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, income/(loss) before income taxes provision includes the following components:

The Company reports a provision for income taxes due to the Spanish and Australian tax authorities pertaining to our subsidiaries Gain Therapeutics Sucursal en España and Gain Therapeutics Australia PTY LTD.

For financial reporting purposes, loss before income tax provision includes the following components:

( 22,388,925 )

2 unchanged sentences

( 22,188,245 )

Following is the breakdown of the components of income tax expense provision for the years ended December 31, 2023 and 2022:

The following is the breakdown of the components of income tax expense provision for the years ended December 31, 2024 and 2023:

Total income tax expense

The breakdown of domestic and foreign NOLs and related DTAs are reported in the following table:

The breakdown of domestic and foreign net operating losses (“NOLs”) and related deferred tax assets are reported in the following table:

NOLs (domestic)

23 unchanged sentences

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.

Tax Cuts and Jobs Act (“TCJA”) that was signed into law on December 22, 2017, federal 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.

10 unchanged sentences

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:

Federal income tax at US statutory rate

Federal income tax at U.S.

statutory rate

State income taxes, net of federal benefit

4 unchanged sentences

Effective income tax rate

For the year ended December 31, 2023, permanent differences are mainly attributable to tax on global intangible low-tax income (“GILTI”) which was enacted as part of Tax Cuts and Jobs Act (the “Tax Act”) on December 22, 2017.

GILTI, in general, is determined annually based on the Company’s aggregate foreign subsidiaries’ income in excess of certain qualified business asset investment return.

For the year ended December 31, 2024, permanent differences are mainly attributable to tax on global intangible low-tax income (“GILTI”) which was enacted as part of the TCJA.

GILTI, in general, is determined annually based on the Company’s aggregate foreign subsidiaries’ income in excess of certain qualified business asset investment returns.

The Company accounts for taxes on GILTI in the period that it is subject to such taxes.

As of December 31, 2023 and 2022, 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.

As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s Consolidated Statements 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.

4 unchanged sentences

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.

Basic 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 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, RSUs and PRSUs 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.

For purposes of the diluted net loss per share calculation, preferred stock, warrants, stock options, RSUs, and PRSUs 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:

1 unchanged sentence

Options to purchase common stock

RSUs and PRSUs

Warrants to purchase common stock

The weighted-average number of warrants to purchase common stock as per the table above does not include the weighted-average effect of 1,031,602 pre-funded warrants for which the exercise price is less than or equal to $ 0.0001 per share.

The weighted average effect of the pre funded warrants has been included in the computation of the net loss per share attributable to common stockholders – basic and diluted in the Consolidated Statement of Operations.

The weighted-average effect of the pre-funded warrants has been included in the computation of the net loss per share attributable to common stockholders – basic and diluted in the Consolidated Statements of Operations.

Related Parties

4 unchanged sentences

● 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, 2023 and 2022, there were no receivables and payables, revenues or expenses with Minoryx.

As of December 31, 2024 and December 31, 2023, there were no receivables and payables, revenues or expenses with Minoryx.

On September 20, 2022 the Company entered into a consulting agreement with Mr.

2 unchanged sentences

The consulting agreement terminated on September 20, 2023.

In connection with this consulting agreement during the year ended December 31, 2023 the Company incurred in expenses for $ 236 thousand.

As of December 31, 2023 there were no receivables or payables connected with the consulting agreement with Mr.

Other Information

The Company does not hold, either directly or indirectly, its own shares and in these periods has not purchased or alienated its own shares.

As of December 31, 2023 and 2022, the Company had research commitments with one year contractual maturity date for $ 4 million and $ 1.5 million, respectively.

In connection with this consulting agreement during the year ended December 31, 2023 the Company incurred expenses of $ 236 thousand.

As of December 31, 2024 and December 31, 2023, there were no receivables or payables connected with the consulting agreement with Mr.

Commitments and Contingencies

As of December 31, 2024, the Company had research commitments for $ 4.2 million for activities that will be performed within one year.

Contingencies:

The Company records a provision for its contingent obligations when it is probable that a loss will be incurred, and the amount of the loss can be reasonably estimated.

On September 18, 2024, Matthias Alder (“Alder”), the Company’s former Chief Executive Officer, filed litigation against the Company in the Circuit Court of Maryland for Montgomery County.

Alder’s employment was terminated on June 25, 2024.

In connection with the litigation, as of December 31, 2024, the Company has made an accrual of $ 0.53 million, reported within payroll related accruals.

Subsequent Events

On February 19, 2024, the Company received notice of the resignation of C.

Evan Ballantyne as the Company’s Chief Financial Officer, effective March 1, 2024.

The Company has initiated a search to identify its next Chief Financial Officer.

In the first quarter of 2024, n.

1,756,062 pre funded warrants have been exercised and converted into common stock.

From January 1, 2025, through March 24, 2025, the Company has sold an aggregate of 1,062,804 shares of common stock through the “2024 ATM Program” at a weighted-average selling price of $ 2.28 for total gross proceeds of $ 2.4 million.

On March 20, 2025, 454,893 pre-funded warrants were exercised resulting in the issuance of 454,893 shares of common stock.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data