ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are 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”) and metabolic disorders through molecular chaperoning to stabilize misfolded proteins and increase their activity, as well as other diseases that can be targeted through protein inactivation or modulation, such as oncology. We use our computational target and drug discovery platform, MagellanTM, 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. We believe that MagellanTM is uniquely suited to identify allosteric binding sites on the protein surface, which are different from the active (or orthosteric) binding site where the natural ligand of the protein binds. Targeting an allosteric binding site instead of the active binding site of a protein provides numerous advantages, including: the ability to regulate proteins implicated in disease through several different mechanisms of action covering both functional and conformational effects, including stabilization, destabilization, targeted degradation, allosteric inhibition, and allosteric activation of the targeted protein; improved specificity of small molecules because binding to an allosteric binding site is non-competitive with the natural substrate that binds to the active binding site; and the ability to identify small molecules with more favorable drug-like properties. We have used our drug discovery platform to identify novel allosteric sites and small molecules for all of our pipeline programs. We plan to continue to advance our existing research programs and initiate additional programs targeting allosteric binding sites identified with the MagellanTM platform in various therapeutic areas through academic partnerships, co-development and licensing arrangements.

Our clinical stage product candidate, GT-02287, is being developed for the treatment of Parkinson’s disease with and without GBA1 mutations. We have 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. In a Phase 1 first-in-human study (n = 72), GT-02287 was safe and generally well tolerated up to and including

Table of Contents

the highest planned dose level, enabling further development in GBA1 Parkinson’s patients. Additionally, administration of GT-02287 was associated with a mean increase in GCase activity of 53% among healthy volunteers at doses that were predicted to be in the therapeutic range based on preclinical models and will be carried forward in later stage trials of GT-02287. The good safety and tolerability profile and the observed range of plasma exposure levels achieved after oral administration further bolster GT-02287’s best in-class potential.

We continue to monitor the impacts on our operations and access to financing, global and worsening macroeconomic conditions, such as the war in Ukraine, the Hamas-Israel conflict, global geopolitical tension, exchange rate fluctuations, supply chain disruptions, liquidity concerns and increases in commodity, energy and fuel prices.

Financial Condition

Since our inception in 2017, we have devoted substantially all of our resources to identify and develop next-generation brain-penetrant allosteric small molecules for the treatment of devastating diseases with high-unmet medical needs using our MagellanTM platform. Our operations have consisted primarily of organizing and staffing the Company, expanding its operations, securing financing, performing research, conducting preclinical studies and acquiring, developing and securing our in-licensed technology. To date, we do not have any product candidates approved for sale and have not generated any revenue from product sales, and as a result, we face risks associated with early-stage biotechnology companies whose product candidates are in development. We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. We expect our research and development expenses to remain significant, and to increase to support progress in our research and development activities. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities. These efforts require significant amounts of additional capital for us to complete our research and development, achieve our research and development objectives, defend our intellectual property rights, and recruit and retain skilled personnel, and key members of management. Even if our product development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.

In May 2022, we filed a shelf registration statement on Form S-3, which covers the offering, issuance and sale of up to a maximum aggregate offering price of $100.0 million of any combination of our common stock, preferred stock, debt securities and/or warrants from time to time in one or more offerings.

In the second quarter of fiscal year 2022, we entered into a Controlled Equity Offering Sales Agreement (the “Cantor Sales Agreement”), with Cantor Fitzgerald & Co. (“Cantor”), pursuant to which we were able to offer and sell shares of our common stock having an aggregate offering price of up to $16.0 million from time to time through or to Cantor, acting as our agent or principal, in a series of one or more at-the-market equity offerings. 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 included $0.4 million in sales and commissions and other offering expenses. The Cantor Sales Agreement was terminated in conjunction with the public offering and concurrent private placement of shares of our common stock in November 2023, as described below.

In November 2023, we completed the public offering of 2.5 million shares of our common stock and warrants to purchase 1.3 million shares of our common stock. The warrants have an exercise price of $2.75 per share and were sold at the rate of one warrant for every two shares of common stock purchased in the public offering. 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 (with an effective price of $2.00 per share and $0.01 per warrant). In a private placement that was completed concurrently with the public offering we also issued to accredited investors 2.5 million of shares of our common stock (or pre-funded warrants in lieu thereof) and private warrants to purchase 2.5 million shares of our common stock with an exercise price of $2.75 per share. The private offering price per share and accompanying warrant in the private placement was $2.00 per set of securities sold privately. The public offering and the concurrent private placement 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. Additionally, a total of 353,156 warrants to purchase an equal amount of our common stock at an exercise price of $2.75 per share were granted to the underwriter and the placement agent associated with the offerings as consideration for the services provided, which provide for cash-less exercise.

Table of Contents

In June 2024, we completed the public offering of 7.1 million shares of our common stock and 1.0 million pre-funded warrants (the “Pre-Funded Warrants”) to purchase an equal amount of our common stock at the nominal exercise price of $0.0001. The public offering price is $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 to the public in this offering, minus $0.0001. The public offering resulted in gross proceeds of $11.0 million, which included $1.2 million of underwriting commissions and other expenses connected with the financing round.

As part of the public offering in June 2024, we granted the underwriter an over-allotment option to purchase up to an additional 1,222,222 shares of our 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 our common stock at the offering price mentioned above. The exercise of the over-allotment option resulted in gross proceeds of $0.46 million, which included $42 thousand of underwriting commissions and other expenses connected with the exercise of the option. We also issued 593,965 warrants to purchase an equal amount of our common stock at an exercise price of $1.6875 per share to the underwriter as consideration for the services provided, which provide for cash-less exercise.

In the third quarter of 2024, we 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 we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million. We 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, we sold an aggregate of 1,597,128 shares of our common stock at a weighted average price of $1.97 per share under the 2024 ATM Program, raising gross proceeds of $3.1 million, which included $0.2 million in sales commissions and other offering expenses.

From inception through December 31, 2024, we have raised an aggregate of $89 million of gross proceeds through equity financing, including the issuance of convertible preferred stock, our initial public offering, secondary offerings and previous sales under our ATM programs.

As of December 31, 2024, we had cash and cash equivalents of $10.4 million. We have incurred recurring losses and negative cash flows from operations since inception and as of December 31, 2024 and December 31, 2023, had an accumulated deficit of $81.2 million and $60.8 million, respectively. We anticipate incurring additional losses until such time, if ever, that we can generate sales of our product candidates currently in development. We have not generated any product revenues and have not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, we will need significant additional financing to fund our operations and to develop our product candidates. Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our pipeline, management may need to curtail our development efforts and planned operations to conserve cash.

Going Concern

As of December 31, 2024 and December 31, 2023, we had an accumulated deficit of $81.2 million and $60.8 million, respectively, and as of December 31, 2024, we had cash and cash equivalents of $10.4 million. During the year ended December 31, 2024, we incurred net losses of $20.4 million andnegative cash flows from operations of $18.9 million. Our current operating plan indicates that we will continue to incur losses from operations and generate negative cash flows from operating activities. Our projected cash outflows for the upcoming periods raise substantial doubt about our ability to continue as a going concern for at least 12 months from the issuance of the financial statements included elsewhere in this Annual Report. We will need to raise additional capital to fund continued operations beyond the third quarter of 2025. We plan to address our liquidity needs by taking steps to improve our operations and cash position, including identifying access to future capital and potential cost-reduction measures.

Table of Contents

Financing Requirements; Current Financing Environment

Until such time, if ever, as we can generate substantial product revenues to support our business and corporate strategy, we expect to finance our cash needs through a combination of public and private equity offerings, including an at-the-market offering, debt financings, government or private party grants, collaborations, strategic alliances and licensing arrangements. We may not be able to obtain financing on acceptable terms, or at all, and we may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect our holdings or the rights of our stockholders. If we are unable to obtain funding, we could be required to delay, limit, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, or grant rights to develop, sell and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves, which could adversely affect our business prospects.

The war in Ukraine, the conflict between Hamas and Israel, global geopolitical tensions, and the post COVID-19 environment continue to have unpredictable impacts on global societies, economies, financial markets, and business practices. Recently worsening global macroeconomic conditions, liquidity concerns at and failures of banks and other financial institutions, volatility in the capital markets, and related market uncertainty may impact our ability to obtain additional financing when needed on favorable terms or at all.

Strategic Transactions; Collaboration and Licensing Arrangement

In connection with our business development activities, we are continually looking to enter into collaboration and licensing arrangements with third parties to use our licensed MagellanTM computational platform technology to discover novel allosteric sites on proteins and identify proprietary small molecules that bind these sites and may be developed into pharmaceutical products. We expect to continue to identify and evaluate collaboration, co-development and licensing opportunities that may be similar to or different from the collaboration and licenses arrangements that we have entered into.

Components of Our Consolidated Results of Operations

Revenue

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future, if at all. If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval and successfully commercialize them, we will not generate revenues in the future. Historically, we have received limited collaboration revenue pursuant to a collaboration agreement with Zentalis Pharmaceuticals which concluded in the year ended December 31, 2023.

Operating Expenses

Our operating expenses since inception have consisted solely of research and development and general and administrative costs.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, which include:

Table of Contents

The following table provides a breakout of our research and development expenses by major category:

Year Ended

December 31,

We recognize research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid or accrued research and development expenses. We anticipate that our research and development expenses will increase substantially in future periods to support progress in our research and development activities, including the progressing of the clinical trials for product candidates we are developing. These increases will likely also result from expanded infrastructure and increased insurance costs. Such expenses are offset by contributions from research grants, which are recorded as a reduction to research and development expenses based on our best estimate of the periods in which the related expenditures are incurred and activities performed.

Our primary research and development focus since inception has been the application of our MagellanTM platform to various indications and targets, and more recently the development of our clinical stage lead product candidate GT-02287 for the treatment of Parkinson’s disease and other neurodegenerative diseases.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will continue to increase in the foreseeable future as we (i) increase personnel costs, including stock-based compensation, (ii) continue preclinical development of our lead compounds, (iii) progress our clinical trials for certain product candidates, (iv) continue to discover and develop additional product candidates, and (v) pursue later stages of clinical development of product candidates.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, bonus and other related costs, including share-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel expenses, and facility-related expenses, and other operating costs.

We will continue to focus on preserving our liquidity resources while we seek to maximize shareholders’ value.

Other Financial Income (Expense)

Other financial income (expense) consists of interest income, interest expense and foreign exchange gain or loss, net.

Table of Contents

Consolidated Results of Operations

The following table summarizes our results of operations for the years ended December 31, 2024 and December 31, 2023.

Year Ended

December 31,

Increase

Revenues:

Other income — — —

Operating expenses:

Other income (expense):

Net loss per shares:

Comparison of the Years Ended December 31, 2024 and 2023

Revenues

For the years ended December 31, 2024 and 2023, total revenues were nil and $55 thousand, respectively, and consisted mainly of income from a collaboration agreement with Zentalis Pharmaceuticals that ended as of December 31, 2023.

Research and development expenses

Research and development expenses decreased by $0.7 million to $10.8 million for the year ended December 31, 2024, as compared to $11.5 million for the year ended December 31, 2023. The decrease in research and development expenses was primarily related to higher recognition of research grant income principally comprised of a tax credit for eligible research and development expenses in Australia. These increases were partially offset by higher costs associated with the Clinical Phase 1 trial of our lead program compound GT-02287 for the treatment of Parkinson’s disease.

General and administrative expenses

General and administrative expenses decreased by $1.2 million to $9.6 million for the year ended December 31, 2024 from $10.8 million for the year ended December 31, 2023. The decrease in general and administrative expenses was primarily attributable to lower personnel and stock-based compensation costs.

Table of Contents

Foreign exchange gain (loss), net

Foreign exchange loss, net decreased by $0.5 million to a gain of $0.1 million for the year ended December 31, 2024 from a loss of $0.4 million for the year ended December 31, 2023. The decrease was mainly attributable to favorable foreign exchange currency translation as the Swiss franc weakened against the U.S. dollar.

Interest income, net

Interest income, net decreased by $0.1 million to $0.4 million for the year ended December 31, 2024 from $0.5 million for the year ended December 31, 2023. The decrease was mainly attributable to lower interest income from treasury securities that reached maturity in April 2024.

Income taxes

Income taxes are $537 thousand and $79 thousand for the years ended December 31, 2024 and 2023, respectively. The increase was mainly attributable to higher income taxes payable in Australia.

Liquidity and Capital Resources

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We have not yet received approval for or commercialized any products or technologies, and we do not expect to generate revenue from sales of any products in the near term, if at all. As described in additional detail under “Financial Condition” above, we have funded our operations to date primarily through a combination of sales of our securities and research grants.

As of December 31, 2024 and December 31, 2023, we had $10.4 million in cash and cash equivalents and $16.8 million in cash, cash equivalents and marketable securities, respectively, and an accumulated deficit of $81.2 million and $60.8 million, respectively. We had indebtedness of $0.4 million and $0.6 million as of December 31, 2024 and December 31, 2023, respectively. Our cash and cash equivalents available at December 31, 2024 are expected to be sufficient to fund our anticipated operating and capital requirements into the third quarter of 2025 and will not be sufficient to finance our operations for one year from the issuance of the financial statements included in this Annual Report. Therefore, we have reported that there is substantial doubt about our ability to continue as a going concern. Please refer to the discussion above titled “Going Concern”.

Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes, or other developments. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our pipeline, management may need to curtail our development efforts and planned operations to conserve cash.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. We may not be able to obtain additional funds through equity or debt financings when needed on favorable terms or at all, including as a result of rising interest rates, liquidity concerns at, and failures of, banks and other financial institutions, volatility in the capital markets and

Table of Contents

related market uncertainty. Further, if we are unable to obtain additional funding to support our current or proposed activities and operations, we may not be able to continue our operations as currently anticipated, which may require us to suspend or terminate any ongoing development activities, modify our business plan, curtail various aspects of our operations, cease operations, or seek relief under applicable bankruptcy laws.

Cash Flows

The following table summarizes our cash flows for the periods presented:

Year Ended

December 31,

Cash Flows from Operating Activities

During the years ended December 31, 2024 and 2023, we used $18.9 million of cash in operating activities, primarily to fund our operations related to the development of our pipeline and product candidates as well as related general and administrative support activities.

Cash Flows from Investing Activities

During the year ended December 31, 2024, net cash provided by investing activities was $5.0 million, primarily due to the maturity of marketable securities.

During the year ended December 31, 2023, net cash provided by investing activities was $10.2 million, primarily due to the maturity of marketable securities for $12.2 million partially offset by the purchase of marketable securities for $2.0 million.

Cash Flows from Financing Activities

During the year ended December 31, 2024, cash provided by financing activities was $13.0 million primarily related to the following: $10.3 million provided by net proceeds from the issuance of shares and warrants in the public offering, $3.0 million provided by net proceeds from issurance of shares in the ATM offering, $0.2 million provided by the exercise of stock options and public warrants, partially offset by $0.3 million payment of offering costs and $0.1 million repayment of long-term debt.

During the year ended December 31, 2023, cash provided by financing activities was $12.6 million mainly related to the net proceeds from the public offering and the concurrent private placement for $9.2 million, and the net proceeds related to the issurance of shares in the ATM offering of $3.5 million.

Funding Requirements

Our primary use of cash is to fund our operating expenses, which consist of research and development and general and administrative expenditures.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

Table of Contents

We will need additional funding to meet our operational needs and capital requirements for our preclinical studies and clinical trials, other research and development expenditures, and business development activities. Because of the numerous risks and uncertainties associated with the development of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, including at-the-market offerings, debt financings, government or private party grants, collaborations, strategic alliances and licensing arrangements. We may not be able to obtain additional funds through equity or debt financings when needed on favorable terms or at all.

Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, defined benefit pension liability, share-based compensation, recognition of research grants and the going concern assessment. Our actual results may differ from these estimates under different assumptions or conditions. During the year ended December 31, 2024, there were no material changes to our critical accounting policies. While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe the following accounting policies are the most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Table of Contents

Accrued expenses

As part of the process of preparing our financial statements, we are required to estimate our accrued expenses as of each balance sheet date. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time at the date of the preparation of the financial statements. There may be instances in which payments made to our vendors exceed the level of services provided, and result in a prepayment reported under other current assets, which are subsequently expensed in the Consolidated Statements of Operations when the related activity has been performed. To date, there have been no material differences between our estimates of accrued expenses reported at each balance sheet date and the amounts actually incurred.

Pension obligations

We operate defined benefit pension plans and defined contribution pension plans in accordance with local regulations and practices. These plans are funded by regular contributions made by the employer and the employees to a third-party. For defined benefit pension plans, the liability recognized in the balance sheets is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The overfunded or underfunded status of the defined benefit plans is calculated as the difference between plan assets and the projected benefit obligations. Estimates are used in determining the assumptions incorporated in the calculation of the pension obligations, which is supported by input from independent actuaries. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in “Accumulated Other Comprehensive Income (Loss)” in the Consolidated Statements of Changes in Stockholders’ Equity and are charged or credited to income over the employees’ expected average remaining working lives. The measurement date used for our employee defined benefit plan is December 31st.

Share-based compensation

We recognize compensation costs related to share-based compensation granted to employees, consultants, and directors based on the estimated fair value of the awards as of the grant date. We estimate the grant date fair value and the resulting share-based compensation using the Black-Scholes option-pricing model for stock option awards. The grant date fair value of the stock option awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. We estimate the fair value of stock options using the Black-Scholes option-pricing model, which requires assumptions, including volatility, the expected term of exercise, the risk free interest rate for a period that approximates the expected term of exercise, and our expected dividend yield. Certain assumptions used in our Black-Scholes option-pricing model represent management’s best estimates and involve a number of assumptions and the application of management’s judgment, as they are inherently subjective. We recognize expenses related to Restricted Stock Units (or RSUs) based on their fair market value, determined as the closing price on the Nasdaq of our 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 occurrence of the underlying performance.

Research grants

Under the terms of the research and development grants awarded, we are entitled to receive upfront payments or reimbursement of our allowable direct expenses. 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 Statements of Operations as a reduction to research and development expenses.

Under the Australian government’s Research and Development Tax Incentive (“R&DTI”) program, we are also eligible to obtain certain research and development tax credits. The tax credits are available on the basis of specific criteria with which we must comply. The tax credits are administered through the local tax authority and can be realized regardless of whether we have generated taxable income in the respective jurisdictions. The tax credits are based on a percentage of eligible research and development activities under the program and are recorded based on management’s best estimate of the periods in which the related expenditures are incurred and activities performed and

Table of Contents

are classified in the Consolidated Statements of Operations as a reduction to research and development expenses when collectability is reasonably assured.

Going concern assessment

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. The assessment over going concern is based on management’s most updated budget and forecast and does not take into consideration estimated future cash inflows that are not certain as of the date of preparation of the financial statements.

Jumpstart Our Business Startups (“JOBS”) Act

We qualify as an “emerging growth company”, as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to public companies that are not emerging growth companies. These provisions include, but are not limited to: being permitted to report only two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis of financial conditions and results of operations disclosure; an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, the JOBS Act permits emerging growth companies to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. As a result, the information we provide might be different from the information that is available for other public companies. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and the market price of our common stock may be more volatile.

We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenue of $1.235 billion or more, (ii) December 31, 2026, (iii) the date on which we have issued more than $1.0 billion of non-convertible debt instruments during the previous three fiscal years or (iv) the date on which we are deemed a “large accelerated filer” under the rules of the SEC with at least $700 million of outstanding equity securities held by non-affiliates.

Recent Accounting Pronouncements

A description of recent accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our audited financial statements included elsewhere in this Annual Report.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Under SEC rules and regulations, because we are considered to be a “smaller reporting company”, we are not required to provide the information required by this item in this Annual Report.

Table of Contents

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 1460) 84

Consolidated Balance Sheets 85

Consolidated Statements of Operations 86

Consolidated Statements of Comprehensive Loss 87

Consolidated Statements of Changes in Stockholders’ Equity 88

Consolidated Statements of Cash Flows 89

Notes to Consolidated Financial Statements 90

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Gain Therapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Gain Therapeutics, Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations since inception and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young AG

We have served as the Company’s auditor since 2020.

Lugano, Switzerland

March 27, 2025

Table of Contents

Gain Therapeutics, Inc

Consolidated Balance Sheets

December 31, December 31,

Assets

Current assets:

Marketable securities — 4,999,704

Prepaid expenses and other current assets 945,536 741,638

Noncurrent assets:

Long-term deposits and other noncurrent assets 32,109 17,890

Liabilities and stockholder's equity

Current liabilities:

Noncurrent liabilities:

Operating lease liability - noncurrent 53,598 229,855

Deferred grant income - noncurrent 47,441 94,786

Stockholders’ equity

Accumulated other comprehensive (loss) income (247,549) 247,241

Table of Contents

Gain Therapeutics, Inc

Consolidated Statements of Operations

Year Ended December 31,

Revenues:

Collaboration revenues $ — $ 55,180

Other income — —

Total revenues — 55,180

Operating expenses:

Other income (expense):

Net loss per shares:

Table of Contents

Gain Therapeutics, Inc

Consolidated Statements of Comprehensive Loss

Year Ended December 31,

Components of other comprehensive (loss) income

Unrealized gain on available-for-sale marketable securities 4,974 89,304

Other comprehensive (loss) income, net of tax (494,790) 211,614

Table of Contents

Gain Therapeutics, Inc

Consolidated Statements of Changes in Stockholders’ Equity

Shares Amounts Capital Income (Loss) Deficit Total

Foreign currency translation — — — 249,911 — 249,911

Foreign currency translation — — — (367,240) — (367,240)

Table of Contents

Gain Therapeutics, Inc

Consolidated Statements of Cash Flows

Year Ended December 31,

Operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Changes in operating assets and liabilities:

Prepaid expenses and other current assets (356,650) 54,378

Long term deposit and other noncurrent assets (21,000) (10,057)

Accounts payable and other current liabilities 274,889 (693,698)

Defined benefit pension plan (122,915) 6,313

Total changes in operating assets and liabilities (1,080,389) 442,230

Cash flows from investing activities:

Purchases of marketable securities — (1,956,350)

Cash flow from financing activities:

Net proceeds from the exercise of warrants (Note 14) 113,800 —

Net proceeds from the exercise of stock options (Note 15) 57,711 —

Payments of offering costs (Note 14) (280,867) —

Supplemental Data:

Table of Contents

Notes to the Consolidated Financial Statements

1. Nature of the Business and Basis of Presentation

Operations and Business

Gain Therapeutics, Inc. (and together with its subsidiary, the “Company”), was incorporated under the laws of the state of Delaware (U.S.) on June 26, 2020. 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’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 MagellanTM 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 MagellanTM platform in various therapeutic areas through academic partnerships, co-development, and licensing arrangements.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, risks associated with completion and success of preclinical studies and clinical testing, dependence on key personnel, protection of proprietary technology, compliance with applicable governmental regulations, development by competitors of new technological innovations, protection of proprietary technology and the ability to secure additional capital to fund operations. Drug candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and prior to regulatory approval and commercialization. These efforts require significant amounts of additional capital, adequate personnel, 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. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The 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

Table of Contents

consolidated financial statements are expressed in U.S. dollars and disclosed within these explanatory notes in U.S. dollars.

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 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. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development. Substantial additional capital will be needed by the Company to fund its operations and to develop its product candidates.

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 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 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 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, 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 third quarter of 2025, including raising additional capital through either private or public equity, debt financing, or additional program collaborations.

Table of Contents

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. In such event, the Company’s stockholders may lose a substantial portion or even all of their investment.

Because of the actions that management is taking to secure future financial resources, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as going concern.

Segment Information

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:

December 31, December 31,

Long-lived assets by geographic location

2. Summary of Significant Accounting Policies

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, 2024 and December 31, 2023, accumulated currency translation adjustments recorded in accumulated other comprehensive loss amounted to $41,247 and $408,487, respectively.

Table of Contents

Use of Estimates

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. Changes in estimates are recorded in the period in which they become known. To the extent that material differences arise between the estimates and actual results, the Company’s future results of operations will be affected.

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, “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 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

The Company has no significant off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that may expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents which are deposited in accredited financial institutions in excess of federally insured limits. The Company deposits its cash and cash equivalents in financial institutions that it believes have high credit quality and 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 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.

Table of Contents

Property and Equipment

Property and equipment are stated at cost, including any accessory and direct costs that are necessary to make the assets fit for use, and adjusted by the corresponding accumulated depreciation. The depreciation expenses are recorded using the straight-line method in the Consolidated Statements of Operations and have been calculated by taking into consideration the use, purpose and financial-technical duration of the assets, on the basis of their estimated useful economic lives. The Company believes the above criteria to be represented by the following depreciation rates:

- Equipment & furniture 12.5 %

- Electronic office equipment 20 %

- Leasehold improvements based on the terms of the lease

- Laboratory equipment 15 %

Ordinary maintenance costs are entirely attributed to the Consolidated Statements of Operations in the year in which they are incurred. Extraordinary maintenance costs, the purpose of which is to extend the useful economic life of the asset, to technologically upgrade it and/or to increase its productivity or safety for the purposes of the economic productivity of the Company, are attributed to the asset to which they refer and depreciated on the basis of its estimated useful economic lives. Amortization of leasehold improvements is computed using the straight-line method based upon the terms of the applicable lease or estimated useful life of the improvements, whichever is lower.

Capitalized Software Development Costs

The Company capitalizes the costs of software obtained for internal use in accordance with ASC 350-40, “Internal-Use Software”. Capitalized software development costs consist of costs incurred during the development stage and include purchased software licenses, implementation costs, consulting costs, and payroll-related costs for projects that qualify for capitalization. All other costs, primarily related to maintenance and minor software fixes, are expensed as incurred.

Internal-use software, net consisted of the following:

December 31, December 31,

The Company amortizes the capitalized software development costs on a straight-line basis over the estimated useful life of the software, which is generally six years, beginning when the asset is substantially ready for use. The amortization of capitalized software development costs is reflected in general and administrative expenses. Amortization expense for the years ended December 31, 2024 and December 31, 2023 was $47 thousand and $46 thousand, respectively.

Impairment of Long-lived Assets

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. In circumstances where impairment is determined to exist, the Company will write down the asset to its fair value based on the present value of estimated cash flows. No impairments have been identified by management as of and for any periods presented.

Patents

Patent-related costs refer to legal fees incurred in connection with filing and prosecuting patent applications and are expensed as incurred due to uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses.

Table of Contents

Leases

The Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances, as per ASC 842, “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.

Accounts Payable

Accounts payable are reported at their nominal amounts due to their short-term maturities. Trade accounts payable are recorded net of trade discounts; cash discounts are recorded at the time of payment.

Payables for Social Security Charges

Social security charges are reported in compliance with rules and laws applicable in the countries where the Company’s employees work. Charges are accrued in accordance with the policies stipulated and in connection with salaries due for the period.

Accrued Expenses

As part of the process of preparing the Company’s consolidated financial statements, the Company is required to estimate its accrued expenses as of each balance sheet date. This process involves reviewing open contracts and purchase orders, communicating with the Company personnel to identify services that have been performed on its behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The Company makes estimates of its accrued expenses as of each balance sheet date based on facts and circumstances known at the time of the preparation of its consolidated financial statements. There may be instances in which payments made to the Company’s vendors exceed the level of services provided, and result in a prepayment reported under Other Current Assets, which is subsequently expensed in the Consolidated Statement of Operations when the related activity has been performed. To date, there have been no material differences between the Company’s estimates of accrued expenses reported at each balance sheet date and the amounts actually incurred.

Pension Obligations

The Company operates defined benefit pension plan and defined contribution pension plans in accordance with local regulations and practices in the countries in which the Company operates. These plans are funded by regular contributions made by the Company and its employees. For the defined benefit pension plan, the liability recognized in the Consolidated Balance Sheets is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The overfunded or underfunded status of the defined benefit plan is calculated as the difference between plan assets and the projected benefit obligations. Estimates are used in determining the assumptions incorporated in the calculation of the pension obligations, which is supported by input from independent actuaries. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the Consolidated Statements of 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.

Table of Contents

For defined contribution pension plans, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.

Stock-based Compensation and Warrants

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. The Company recognizes the corresponding expense in the statement of operations over the period the participants are required to render service. Forfeitures are recognized as they occur.

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. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The Company has not paid, and does not anticipate paying, cash dividends on its common stock; therefore, the expected dividend yield is assumed to be nil.

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.

The assumptions used in calculating the fair value of share-based awards and warrants represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

Revenue Recognition

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 the Company fulfills its obligations, the Company applies the five-step model of ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) it satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. If a contract is determined to be within the scope of ASC 606 at inception, the Company assesses the goods or services promised within such contract, determines which of those goods and services are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Costs and revenues associated with collaborative arrangements are reported in the Consolidated Statements of Operations on a gross basis when the counterpart is identified as being a customer, when the performance obligations incurred and rendered to 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.

Table of Contents

Research Grants

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

The Company expenses all costs incurred in performing research and development activities. Research and development expenses include salaries and other related costs, materials and supplies, preclinical expenses, manufacturing expenses, contract services, and other third-party expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, benefits, and other related costs, for personnel and consultants in the Company’s executive, administrative, and finance functions. General and administrative expenses also include professional fees for legal, finance, accounting, intellectual property, auditing, tax and consulting services, travel expenses and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs not otherwise included in research and development expenses.

Income Taxes

The Company accounts for income taxes under the liability method. Under this method deferred income tax liabilities and assets are determined based on the difference between the financial statements carrying amounts of assets and liabilities and the related tax basis using enacted tax rates in effect in the years in which the associated deferred taxes are expected to reverse. A valuation allowance is recorded if it is “more likely than not” that a portion or all of a deferred tax asset will not be realized.

As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets. In consideration of the start-up status of the Company, a full valuation allowance has been established to offset the deferred tax assets, as the related realization is currently uncertain. In the future, should management conclude that it is more likely than not that the deferred tax assets are partially or fully realizable, the valuation allowance will be reduced to the extent of such expected realization, and the corresponding amount will be recognized as income tax benefit in the Company’s Consolidated Statements of Operations.

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. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels based on their observability in the market and degree of judgment involved:

● Level 1 – Quoted prices in active markets for identical assets or liabilities.

Table of Contents

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, 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 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 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.

Table of Contents

3. Research Grants

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. The grant is intended to support the development of our alpha-1 antitrypsin deficiency program. The portion of the grant that was allocated to the Company was $0.45 million.

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 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 yearended December 31, 2024 related to the R&DTI program. The corresponding receivable was recorded within Other Current Assets (see Note 6).

4. Cash, Cash Equivalents and Restricted Cash

The Company considers all short-term, highly liquid investments, with an original maturity of three months or less, to be cash equivalents. The Company’s cash and cash equivalents include short-term highly liquid investments which are readily convertible into cash 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.

Cash, cash equivalents and restricted cash are broken down as follows:

December 31, December 31,

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.

Table of Contents

5. Marketable Securities

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. 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:

Gross Gross

Allowance for Unrealized Unrealized Estimated Fair

Amortized Cost Credit Losses Gains Losses Value

Marketable securities available for sale

6. Tax Credits, Prepaid Expenses and Other Current Assets

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

December 31, December 31,

Prepaid directors and officers (D&O) insurance costs 80,959 133,000

Research and development grant receivable 494,684 —

Total prepaid expenses and other current assets $ 945,536 $ 741,638

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. Deferred expenses mainly refer to research agreements entered into with third parties for research projects that will be recognized as expenses throughout the research period.

Prepaid D&O insurance costs relate to 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.

100

Table of Contents

7. Property and Equipment, Net

Property and equipment, net consisted of the following:

December 31, December 31,

No disposals, nor 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, 2024 and December 31, 2023 was $38 thousand and $35 thousand, respectively.

8. 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.

December 31, December 31,

Operating lease

Operating lease liability - noncurrent $ 53,598 $ 229,855

Weighted average remaining lease term - years 1.38 2.25

Weighted average discount rate 1.53 1.51

The operating lease expenses are reported as follows:

December 31, December 31,

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.

101

Table of Contents

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

Fiscal Year Operating Leases

Total future minimum lease payments 216,964

Less amount representing interest or imputed interest 2,453

Present value of lease liabilities $ 214,511

9. Accounts Payable

Accounts payable refer to amounts due to third parties on outstanding invoices received for services already provided. As of December 31, 2024 and December 31, 2023, accounts payable amounted to $0.9 million and $1.3 million, respectively. All accounts payable are due in less than 12 months.

10. Other Current Liabilities and Deferred Grant Income

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

December 31, December 31,

Payable for social security and withholding taxes $ 229,319 $ 368,345

Total other current liabilities and deferred income $ 2,741,413 $ 3,377,290

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.

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

102

Table of Contents

11. 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:

December 31, December 31,

End of year funded status:

Reconciliation of funded status:

Change in accumulated other comprehensive loss (132,524) (127,601)

Component of net periodic pension costs:

Expected return on plan assets (11,133) (11,786)

Amortization of losses 8,252 —

Amortization of prior service credit (3,799) (2,734)

Service cost is reported in general and administrative expenses. Certain other components of net periodic pension costs are reported in interest income, net in the Consolidated Statements of Operations.

December 31, December 31,

Reconciliation of projected benefit obligation:

Loss on demographic assumptions — 2,730

103

Table of Contents

December 31, December 31,

Reconciliation of fair value of plan assets:

Expected return on plan assets 11,133 11,786

December 31, December 31,

Change in net loss:

Loss on pension benefit obligation during the year 93,406 74,303

Loss on assets during the year 36,566 59,077

Amortization of loss (8,252) —

December 31, December 31,

Change in accumulated other comprehensive loss:

Net loss amortized (8,252) —

Loss on pension benefit obligation during the year 93,406 74,303

Loss on assets during the year 36,566 59,077

Prior service cost/(credit) occurring over the year 7,005 (8,513)

Net prior service credit amortized 3,799 2,734

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

December 31, December 31,

Financial assumptions (%pa):

Discount rate 0.90% 1.40%

Interest credit rate / expected return on assets 1.25% 1.25%

Salary increases 2.50% 2.50%

Pension increases 0.00% 0.00%

Demographic assumptions:

Lump-sum option 25% 25%

Proportion married BVG 2020 BVG 2020

Mortality base table BVG 2020 BVG 2020

104

Table of Contents

December 31, December 31,

Expected benefit payments:

Other disclosure items:

Next year's expected employer contribution $ 123,399 $ 156,395

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.

The Company’s investment strategy for its pension plans is to optimize the long-term investment return on plan assets in relation to the liability structure to maintain an acceptable level of risk while minimizing the cost of providing pension benefits and maintaining adequate funding levels in accordance with applicable rules in each jurisdiction. The Company does not manage any assets internally. The insurance contract plan asset relates to mandatory and discretionary contributions made in accordance with Swiss law to a leading pension provider. The capital is insured and provides for a minimum rate of return. The fair value is equal to the employees’ accrued savings and is calculated using total employer and employee contributions plus any accumulated interest credited (which is substantially equivalent to the related cash surrender value). The plan asset has been classified within Level 3 of the fair value hierarchy and the approach is consistent with prior years.

The Company maintains a 401(k) savings plan, which is available to all U.S. employees. Participants may make voluntary contributions. The Company makes matching contributions according to the 401(k) savings plan’s matching formula. All matching contributions and participant contribution vest immediately. 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 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.

GANX US Equity

GANX · 10-K · period ended 2024-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GANX US Equity☆

GANX · 10-K · period ended 2024-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GANX US Equity