Gain Therapeutics(US:GANX)2023-08-09 16:00PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's analysis of financial condition and operations Item 1. Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, for the period ended June 30, 2023 Condensed Consolidated Balance Sheets This table provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates | Financial Metric | June 30, 2023 ($) | December 31, 2022 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $6,319,925 | $7,311,611 | | Marketable securities (current & non-current) | $9,873,209 | $14,768,442 | | Total current assets | $17,308,448 | $21,091,296 | | Total assets | $18,260,874 | $24,099,387 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $5,588,164 | $4,125,251 | | Total liabilities | $7,168,040 | $5,219,873 | | Total stockholders' equity | $11,092,834 | $18,879,514 | Condensed Consolidated Statements of Operations This table summarizes the company's revenues, expenses, and net loss over specified periods | Metric | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | Six Months Ended June 30, 2023 ($) | Six Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $0 | $95,102 | $55,180 | $140,108 | | Research and development expenses | ($3,987,943) | ($2,582,224) | ($6,779,148) | ($4,138,664) | | General and administrative expenses | ($3,743,171) | ($2,689,263) | ($6,236,930) | ($4,466,306) | | Net loss | ($7,687,969) | ($5,085,420) | ($12,825,288) | ($8,358,063) | | Net loss per share - basic and diluted | ($0.62) | ($0.43) | ($1.05) | ($0.70) | Condensed Consolidated Statements of Comprehensive Loss This table presents the net loss and other comprehensive income/loss components for the reporting periods | Metric | Three Months Ended June 30, 2023 ($) | Six Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | Net loss | ($7,687,969) | ($5,085,420) | | Comprehensive loss | ($7,649,956) | ($5,116,686) | Condensed Consolidated Statement of Stockholders' Equity This section details changes in the company's equity, including net loss and capital raises - Total stockholders' equity decreased from $18.9 million at December 31, 2022, to $11.1 million at June 30, 2023. The decrease was primarily driven by the net loss of $12.8 million, which was partially offset by $3.0 million in net proceeds from an at-the-market (ATM) stock offering25 Condensed Consolidated Statements of Cash Flows This table outlines the cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2023 ($) | Six Months Ended June 30, 2022 ($) | | :--- | :--- | :--- | | Cash used in operating activities | ($9,238,779) | ($7,498,450) | | Cash provided by/(used in) investing activities | $5,152,086 | ($14,897,232) | | Cash provided by/(used in) financing activities | $2,946,272 | ($36,611) | | Net decrease in cash | ($990,688) | ($22,576,168) | Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations of the company's accounting policies, business operations, and financial statement items, including its going concern assessment - The company is a biotechnology firm developing small molecule therapeutics using its exclusively in-licensed computational platform, Site-Directed Enzyme Enhancement Therapy (SEE-Tx®), for CNS disorders, lysosomal storage disorders, metabolic disorders, and oncology37 - Management believes the company has sufficient cash and cash equivalents to fund its operating expenses and capital expenditure requirements into the third quarter of 2024 and for at least the next twelve months from the financial statement issuance date4950 - During the six months ended June 30, 2023, the company sold 681,559 shares of common stock under its At-The-Market (ATM) Program for aggregate gross proceeds of $3.3 million121 - As of June 30, 2023, the company had research commitments of $2.1 million for activities that will be performed before the end of Q2 2024140 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's financial condition, operational results, and future outlook, focusing on its therapeutic development and liquidity Overview This section provides a strategic overview of the company's business, product pipeline, and operational priorities - The company's lead product candidate, GT-02287 for GBA1 Parkinson's disease, has generated an extensive preclinical data package. An application to conduct a Phase 1 clinical trial in Australia was submitted in July 2023, with the study expected to begin in the second half of 2023143 - The company is streamlining operational plans to improve capital efficiency and is pursuing partnering opportunities for its pipeline programs, including its lead Parkinson's program and lysosomal storage disease programs145 Results of Operations This section analyzes the company's financial performance, detailing changes in revenues and expenses over time | Expense Category | Six Months Ended June 30, 2023 ($) | Six Months Ended June 30, 2022 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Research and development | $6.8 million | $4.1 million | +$2.7 million | | General and administrative | $6.2 million | $4.5 million | +$1.7 million | - The increase in R&D expenses was primarily due to higher costs for third-party services related to the development of the company's Parkinson's disease program172 - The increase in G&A expenses was mainly attributable to higher legal fees for intellectual property and corporate matters, professional accounting fees, and increased personnel-related costs173 Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations - As of June 30, 2023, the company had cash, cash equivalents, and marketable securities totaling $16.2 million, down from $22.1 million at the end of 2022176 - The company believes its existing cash resources will be sufficient to fund its operating expenses and capital expenditure requirements into the third quarter of 2024178284 - The company has an At-The-Market (ATM) Program with approximately $12.7 million of remaining capacity as of June 30, 2023, to raise additional capital180 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," Gain Therapeutics is not required to provide the quantitative and qualitative disclosures about market risk - The company is a "smaller reporting company" and is not required to provide the information for this item196 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2023. No material changes were made to the internal control over financial reporting during the quarter - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2023197 - There were no changes in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting198 PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other miscellaneous disclosures Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings and is not aware of any pending or threatened legal proceedings that could have a material adverse effect on its business - The company is not currently a party to any material legal proceedings203 Item 1A. Risk Factors This section outlines significant investment risks, including operating losses, capital needs, reliance on licensed technology, and regulatory challenges - The company has a history of operating losses and expects to incur losses for the foreseeable future, with no guarantee of ever achieving profitability208 - The company will need to raise additional capital, which may not be available on favorable terms. Failure to do so could force delays or elimination of R&D programs283284 - The business is significantly dependent on its exclusive license from Minoryx Therapeutics for the SEE-Tx® platform. Termination of this license would have a material adverse effect on the business305 - The company faces risks from global macroeconomic conditions, including inflation, rising interest rates, and geopolitical instability, which could adversely affect its financial condition and operations358 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states there were no unregistered sales of equity securities during the period. It also confirms that the use of proceeds from the company's March 2021 IPO, which raised net proceeds of $40.5 million, has not materially changed from the plans described in the final prospectus - The company's IPO in March 2021 raised net proceeds of $40.5 million, and there has been no material change in the planned use of these proceeds450451 Item 3. Defaults Upon Senior Securities The company reports that this item is not applicable - Not applicable452 Item 4. Mine Safety Disclosures The company reports that this item is not applicable - Not applicable453 Item 5. Other Information The company reports that this item is not applicable - Not applicable454 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, material contracts, and certifications required by the Sarbanes-Oxley Act - Lists exhibits filed with the report, including certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002456