MoonLake Immunotherapeutics 10-Q for FY2023 Q1

MoonLake Immunotherapeutics (MLTX)

10-Q 2023-05-11 For: 2023-03-31

Added on April 08, 2026

About this 10-Q

MoonLake Immunotherapeutics filed this 10-Q on May 11, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $9M; compared with a net loss of $15.88M a year earlier
Diluted EPS: -$0.23; compared with -$3.17 a year earlier

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Cayman Islands						98-1711963
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Dorfstrasse 29
6300 Zug
Switzerland						N/A
(Address of principal executive offices)						(ZIP Code)


PART I. FINANCIAL INFORMATION			2
Item 1. Financial Statements (Unaudited)			2
Condensed Consolidated Balance Sheets			2
Condensed Consolidated Statements of Operations and Comprehensive Loss			3
Condensed Consolidated Statements of Changes In Equity (Deficit)			4
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures About Market Risk			35
Item 4. Controls and Procedures			35
PART II. OTHER INFORMATION			37
Item 1. Legal Proceedings			37
Item 1A. Risk Factors			37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			37
Item 3. Defaults Upon Senior Securities			37
Item 4. Mine Safety Disclosures			37
Item 5. Other Information			37
Item 6. Exhibits			39
SIGNATURES			40


	March 31, 2023 (Unaudited)		December 31, 2022
Current assets
Cash and cash equivalents	$	50,129,197	$	39,505,627
Short-term marketable debt securities	12,920,960		32,609,108


Other receivables	378,445		217,129
Prepaid expenses	3,075,862		4,179,468

Total current assets	66,504,464		76,511,332

Non-current assets
Operating lease right-of-use assets	246,256		282,580
Property and equipment, net	46,099		49,389




Total non-current assets	292,355		331,969
Total assets	$	66,796,819	$	76,843,301

Current liabilities
Trade and other payables	$	3,827,403	$	254,972
Short-term portion of operating lease liabilities	155,173		153,629

Accrued expenses and other current liabilities	3,296,839		7,256,845


Total current liabilities	7,279,415		7,665,446

Non-current liabilities
Long-term portion of operating lease liabilities	91,081		128,951
Pension liability	314,174		282,206

Total non-current liabilities	405,255		411,157
Total liabilities	7,684,670		8,076,603
Commitments and contingencies (Note 15)

Equity (deficit)



Class A Ordinary Shares: $0.0001 par value; 500,000,000 shares authorized; 39,154,203 shares issued and outstanding as of March 31, 2023; 38,977,600 shares issued and outstanding as of December 31, 2022	3,916		3,898
Class C Ordinary Shares: $0.0001 par value; 100,000,000 shares authorized; 13,546,908 shares issued and outstanding as of March 31, 2023; 13,723,511 shares issued and outstanding as of December 31, 2022	1,355		1,373
Additional paid-in capital	131,308,849		129,192,291
Accumulated deficit	(89,655,068)		(80,650,212)
Accumulated other comprehensive income (loss)	340,108		350,946
Total shareholders’ equity (deficit)	41,999,160		48,898,296
Noncontrolling interests	17,112,989		19,868,402
Total equity (deficit)	59,112,149		68,766,698
Total liabilities and equity (deficit)	$	66,796,819	$	76,843,301


	Three Months Ended March 31,
		2023		2022


Operating expenses
Research and development		$	(7,415,097)	$	(10,454,948)
General and administrative		(5,516,469)		(5,487,368)
Total operating expenses		(12,931,566)		(15,942,316)
Operating loss		(12,931,566)		(15,942,316)

Other income (expense), net		723,589		69,506



Loss before income tax		(12,207,977)		(15,872,810)

Income tax expense		(11,010)		(7,332)
Net loss		$	(12,218,987)	$	(15,880,142)
Of which: net loss attributable to controlling interests shareholders		(9,004,856)		(15,880,142)
Of which: net loss attributable to noncontrolling interests shareholders		(3,214,131)		—

Net unrealized gain on marketable securities and short term investments		24,472		—

Actuarial gain (loss) on employee benefit plans		(42,144)		266,269
Other comprehensive income (loss)		(17,672)		266,269
Comprehensive loss		$	(12,236,659)	$	(15,613,873)
Comprehensive loss attributable to controlling interests shareholders		(9,017,481)		(15,613,873)
Comprehensive loss attributable to noncontrolling interests		(3,219,178)		—

Weighted-average number of Class A Ordinary Shares, basic and diluted		39,061,977		—
Basic and diluted net loss per share attributable to controlling interests shareholders		$	(0.23)	$	—

Weighted-average number of Common Shares, basic and diluted1		—		5,013,646
Basic and diluted net loss per Common Share		$	—	$	(3.17)


	MoonLake AG Series A Preferred Shares			MoonLake AG Common Shares			MoonLake AG Common Shares Held In Treasury			Class A Ordinary Shares			Class C Ordinary Shares		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Shareholders' Equity (Deficit)		Noncontrolling Interests		Total Equity (Deficit)
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount			Shares													Amount
Balance at December 31, 2021 (As previously reported)	680,196	$	72,466	361,528	$	38,537	(57,756)	$	(6,202)	—	$	—		—	$	—	$	42,061,984	$	(53,643,615)	$	(168,177)	$	(11,645,007)	$	—	$	(11,645,007)
Retroactive application of the recapitalization due to the Business Combination2	22,200,712	—		11,799,803	—		(1,885,081)	—		—	—			—	—		—		—		—		—		—		—
Balance at December 31, 2021, effect of Business Combination	22,880,908	72,466		12,161,331	38,537		(1,942,837)	(6,202)		—	—			—	—		42,061,984		(53,643,615)		(168,177)		(11,645,007)		—		(11,645,007)
Share-based compensation granted under the equity incentive plan ESPP, and reverse vesting of Restricted Founder Shares	—	—		—	—		1,177,354	3,791		—	—			—	—		1,988,871		—		—		1,992,662		—		1,992,662
Net loss for the three months ended March 31, 2022	—	—		—	—		—	—		—	—			—	—		—		(15,880,142)		—		(15,880,142)		—		(15,880,142)
Other comprehensive income	—	—		—	—		—	—		—	—			—	—		—		—		266,269		266,269		—		266,269
Balance at March 31, 2022, effect of Business Combination	22,880,908	$	72,466	12,161,331	$	38,537	(765,483)	$	(2,411)	—	$	—		—	$	—	$	44,050,855	$	(69,523,757)	$	98,092	$	(25,266,218)	$	—	$	(25,266,218)


	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Cash flow from operating activities
Net loss	$	(12,218,987)	$	(15,880,142)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	3,290		2,488
Share-based payment	2,577,187		1,988,871

Net periodic pension benefit (gain) cost for the qualified pension plan	(13,271)		77,087
Other non-cash items	58,806		4,876
Changes in operating assets and liabilities:
Other receivables	(161,316)		(432,799)


Prepaid expenses	1,103,606		(847,950)
Trade and other payables	3,572,431		2,247,274
Accrued expenses and other current liabilities	(3,946,173)		(1,345,669)


Net cash flow used in operating activities	(9,024,427)		(14,185,964)

Cash flow from investing activities

Proceeds from maturities of short-term marketable debt securities	19,648,532		—
Purchase of property and equipment	—		(16,010)
Net cash flow provided by (used in) investing activities	19,648,532		(16,010)

Cash flow from financing activities





Proceeds from short-term loans	—		15,000,000


Grants of additional Shares under ESPP	—		3,791

Net cash flow provided by financing activities	—		15,003,791

Effect of movements in exchange rates on cash held	(535)		(6,504)
Net change in cash and cash equivalents	10,623,570		795,313

Cash and cash equivalents, beginning of period	39,505,627		8,038,845
Cash and cash equivalents, end of period	$	50,129,197	$	8,834,157.72


	March 31, 2023				December 31, 2022
	Level 2		Total			Level 2		Total
Eurocommercial Papers(1)	$	27,782,510	$	27,782,510		$	42,552,608	$	42,552,608
Certificates of Deposit	19,910,200		19,910,200			9,937,899		9,937,899
Total	$	47,692,710	$	47,692,710		$	52,490,507	$	52,490,507


	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Eurocommercial Papers	$	27,499,398	$	283,112	$	—	$	27,782,510
Certificates of Deposit	19,778,087		132,113		—		19,910,200
Total	$	47,277,485	$	415,225	$	—	$	47,692,710
of which classified within Cash and cash equivalents	34,601,432		170,318		—		34,771,750
of which classified within Marketable securities	12,676,053		244,907		—		12,920,960


Beginning balance, January 1, 2023			390,753
Other comprehensive income before reclassifications			600,768
Amounts reclassified from accumulated other comprehensive income			(576,296)


Net current-period other comprehensive income	24,472
Ending balance, March 31, 2023	$	415,225


	March 31, 2023		December 31, 2022
Non-clinical research and clinical development services	$	1,991,902	$	2,443,863
Insurances	698,556		1,416,597
Other prepayments	385,404		319,008

Total	$	3,075,862	$	4,179,468


	March 31, 2023		December 31, 2022
Research and development services and license fees	$	3,070,454	$	31,687
Supply and manufacturing fees payable	510,524		65,979
Other consulting and advisory services	123,568		51,658
Legal and intellectual property (“IP”) advisory fees payable	58,361		40,532


Other payables	64,496		65,116
Total	$	3,827,403	$	254,972


Three months ended March 31, 2023	Amount
2023 (remaining 9 months)	$	117,414
2024	130,461
2025	—
2026	—
2027	—
Thereafter	—
Total lease payments	247,875
Less imputed interest	(1,621)
Total lease liability	246,254
Less current portion of operating lease liability	(155,173)
Long-term portion operating lease liability	$	91,081


	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Service cost	$	29,802	$	116,165
Interest cost	7,442		1,302
Expected return on plan assets	(8,871)		(3,998)

Amortization of unrecognized loss	—		467

Total Net Periodic Benefit Cost	$	28,373	$	113,936


	Class A Ordinary Shares(1)		Class C Ordinary Shares(1)		Total Number of Ordinary Shares
		Authorized	Issued	Authorized	Issued	Authorized	Issued and Outstanding








Balance - January 1, 2023		500,000,000	38,977,600	100,000,000	13,723,511	600,000,000	52,701,111
Conversion of Class C Ordinary Shares into Class A Ordinary Shares		—	176,603	—	(176,603)	—	—
Balance - March 31, 2023		500,000,000	39,154,203	100,000,000	13,546,908	600,000,000	52,701,111


Assumptions for the awards issued during the three months ended March 31, 2023
Grant date			1/1/2023
Estimated fair value of the option on the grant date using Black-Scholes model ($) (1)			239.23
Exercise price (USD)			353.21
Expected term of the award on the grant date (years) (2)			6
Expected volatility of the share price (3)			75%
Risk-free interest rate (4)			3%
Expected dividend rate			0%
(1) MoonLake AG estimated the fair value of the Common Shares multiplying the MoonLake Immunotherapeutics closing date trading share price on the grant date by the Exchange Ratio. (2) The expected term represents the period that share-based awards are expected to be outstanding. (3) The expected volatility was derived from the historical stock volatilities of comparable peer public companies within the Company’s industry. (4) The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the measurement date with maturities approximately equal to the expected term.


	Total		Less than 1 year		1 to 5 Years		More than 5 years

Purchase obligations(1)	$	28,458,820	$	20,110,613	$	8,348,207	—
Lease commitments(2)	247,875		156,553		91,322		—
Total contractual obligations	$	28,706,695	$	20,267,166	$	8,439,529	—


11 May 2023
MoonLake Immunotherapeutics Walkers Corporate Limited 190 Elgin Avenue George Town Grand Cayman KY1-9008 Cayman Islands


WALKERS


Compensation Plan	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
MoonLake AG Restricted Founder Shares	$	1,210,082	$	1,210,082
ESPP	1,056,954		692,678


ESOP	188,239		86,111


MoonLake Immunotherapeutics 2022 Equity Incentive Plan	121,912		—
Total share-based compensation expense	$	2,577,187	$	1,988,871
Of which: included in research and development expense	586,994		109,516
Of which: included in general and administrative expense	1,990,193		1,879,355


Grant date			4/28/2021
Estimated fair value per share of Restricted Founder Shares on the grant date ($) (1)			49
Estimated fair value of Restricted Founder Shares on the resignation date of one of the co-founders of MoonLake AG ($) (2)			336.39
Purchase price (CHF)			0.10
(1) MoonLake AG estimated the fair value of the Restricted Founder Shares with reference to the market-based transaction with the other Series A Preferred Shares Investors (refer to Note 9 of MoonLake AG's audited consolidated financial statements for the year ended December 31, 2021).
(2) MoonLake AG estimated the fair value of the Restricted Founder Shares at co-founder’s resignation date by dividing the Company Enterprise Value ($360,000,000) as defined by the Business Combination Agreement by the Company’s fully diluted shares (1,070,196).


Grants awarded
Program			Restricted Founder Shares
Awards outstanding at January 1, 2022			4,440,308
Awards vested for the three months ended March 31, 2022			(832,558)
Awards outstanding at March 31, 2022			3,607,750

Awards outstanding at January 1, 2023			1,110,078
Awards vested for the three months ended March 31, 2023			(832,558)
Awards outstanding at March 31, 2023			277,520


ESPP 2021
Assumptions for the awards issued during the three months ended March 31, 2022
Grant dates			01/18/2022
Estimated fair value per share of Common Shares on the grant date ($) (1)			336.39
Purchase price (CHF)			0.10
(1) MoonLake AG estimated the fair value of the Common Shares by dividing the Company Enterprise Value ($360,000,000) as defined by the Business Combination Agreement by the Company’s fully diluted shares (1,070,196).


	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022		Change		Change %

Operating expenses
Research and development	$	(7,415,097)	$	(10,454,948)	$	3,039,851	(29.1)	%
General and administrative	(5,516,469)		(5,487,368)		(29,101)		0.5	%
Total operating expenses	(12,931,566)		(15,942,316)		3,010,750		(18.9)	%
Operating loss	(12,931,566)		(15,942,316)		3,010,750		(18.9)	%



Other income (expense), net	723,589		69,506		654,083		941.0	%
Loss before income tax	(12,207,977)		(15,872,810)		3,664,833		(23.1)	%

Income tax expense	(11,010)		(7,332)		(3,678)		50.2	%
Net loss	(12,218,987)		(15,880,142)		3,661,155		(23.1)	%

Net unrealized gain on marketable securities and short term investments	24,472		—		24,472		-
Actuarial gain (loss) on employee benefit plans	(42,144)		266,269		(308,413)		(115.8)	%
Other comprehensive income (loss)	(17,672)		266,269		(283,941)		(106.6)	%
Comprehensive loss	$	(12,236,659)	$	(15,613,873)	$	3,377,214	(21.6)	%


	For the three months ended
	March 31, 2023		March 31, 2022
Net cash used in operating activities	$	(9,024,427)	$	(14,185,964)
Net cash provided by (used in) investing activities	19,648,532		(16,010)
Net cash provided by financing activities	—		15,003,791
Effect of movements in exchange rates on cash held	(535)		(6,504)
Net increase in cash and cash equivalents	$	10,623,570	$	795,313


No.						Description of Exhibit
3.1						Memorandum and Articles of Association of MoonLake Immunotherapeutics (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 11, 2022)
5.1*						Opinion of Walkers (Cayman) LLP
10.1*						Sales Agreement, dated May 11, 2023, between MoonLake Immunotherapeutics and SVB Securities LLC
23.1*						Consent of Walkers (Cayman) LLP (included in Exhibit 5.1 hereto)
31.1*						Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*						Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**						Certification of Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*						Inline XBRL Instance Document.
101.SCH*						Inline XBRL Taxonomy Extension Schema Document.
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


Very truly yours,


MOONLAKE IMMUNOTHERAPEUTICS


By:			/s/ Matthias Bodenstedt
			Name: Matthias Bodenstedt
			Title: Chief Financial Officer


			ACCEPTED as of the date
			first-above written:

			SVB SECURITIES LLC

By:			/s/ Peter M. Fry
			Name: Peter M. Fry
			Title: Head of Alt Equities


By:
			Name: Jorge Santos da Silva
			Title: Chief Executive Officer
			Date:


By:
			Name: Matthias Bodenstedt
			Title: Chief Financial Officer
			Date: