Gain Therapeutics, Inc. New Standards Disclosure

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. Except as noted below, the Company believes that the

impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements and disclosures.

Recently issued accounting pronouncements adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU No. 2023-09 primarily requires disaggregated information about a Company's effective tax rate reconciliation as well as information on income taxes paid. ASU No. 2023-09 is effective on a prospective basis for annual periods beginning after December 15, 2024. The Company adopted ASU No. 2023-09 on a prospective basis for annual disclosures for the year ended December 31, 2025. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

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Recently issued accounting pronouncements not yet adopted

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 ASU No. 2024-03 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. ASU No. 2024-03 will likely result in the required additional disclosures being included in the Company’s consolidated financial statements, once adopted. As ASU No. 2024-03 relates to disclosures only, there will be no impact to the Company’s consolidated results of operations and financial condition.

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In September 2025, the FASB issued ASU No. 2025-06, Intangibles–Goodwill and Other– Internal-Use Software (Subtopic 350-40). ASU No. 2025-06 modernizes the accounting for software development by removing all references to prescriptive and sequential software development stages in favor of a probable-to-completion recognition threshold. The probable-to-completion recognition threshold requires two criteria be met for entities to begin capitalizing software costs: (i) management, with the relevant authority, implicitly or explicitly authorizes and commits to funding a computer software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. ASU No. 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within fiscal years beginning after December 15, 2027. Adoption of ASU No. 2025-06 can either be applied prospectively, retrospectively, or via a modified prospective transition method. The modified prospective transition approach would allow entities to account for an in-process project that, before the transition date, met the capitalization requirements but would no longer meet the requirements for capitalization under ASU No. 2025-06 by derecognizing the capitalized costs for that in-process project through a cumulative-effect adjustment to the opening balance of retained earnings. The Company is evaluating this new standard, but does not expect it to have material impact on its consolidated results of operations and financial condition.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. Under ASU No. 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. ASU No. 2025-10 provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. ASU No. 2025-10 also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU No. 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. ASU No. 2025-10 can be applied prospectively, modified prospectively, or retrospectively. The Company is currently evaluating the impact of adopting ASU No. 2025-10 on its operating results, financial position, and cash flows.