mnlk-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-39630

MOONLAKE IMMUNOTHERAPEUTICS

(Exact Name of Registrant as Specified in Its Charter)


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)

41 415108022

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A ordinary share, par value $0.0001 per share

MLTX

The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 1, 2023, there were 43,654,455 Class A Ordinary Shares, $0.0001 par value (the "Class A Ordinary Shares"), and 9,046,656 Class C Ordinary Shares, $0.0001 par value (the "Class C Ordinary Shares"), issued and outstanding.

MOONLAKE IMMUNOTHERAPEUTICS

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS


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

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

MOONLAKE IMMUNOTHERAPEUTICS

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in USD, except share data)


	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

The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

MOONLAKE IMMUNOTHERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Amounts in USD, except share and per share data)

(Unaudited)


	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)

The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

1 As a result of the Business Combination, the Company has retroactively restated the weighted average number of shares outstanding prior to April 5, 2022 to give effect to

the Exchange Ratio.

MOONLAKE IMMUNOTHERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

(Amounts in USD, except share data)

(Unaudited)


	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)

The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

2 As defined in Note 2 — Business Combination Agreement with Helix and Recapitalization included in MoonLake’s audited financial statements and notes thereto for the year ended December 31, 2022 included in MoonLake’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 20, 2023

MOONLAKE IMMUNOTHERAPEUTICS

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

(Amounts in USD, except share data)

(Unaudited)


	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
Balance at December 31, 2022		38,977,600	$	3,898			13,723,511	$	1,373	$	129,192,291	$	(80,650,212)	$	350,946	$	48,898,296	$	19,868,402	$	68,766,698
Share-based compensation under the equity incentive plan ESPP, ESOP, 2022 MoonLake Immunotherapeutics Equity Incentive Plan and reverse vesting of Restricted Founder Shares		—	—				—	—		1,875,992		—		—		1,875,992		701,195		2,577,187
Refund of stamp duty fees		—	—				—	—		3,517		—		—		3,517		1,406		4,923
Net loss for the three months ended March 31, 2023		—	—				—	—		—		(9,004,856)		—		(9,004,856)		(3,214,131)		(12,218,987)
Other comprehensive income		—	—				—	—		—		—		(12,625)		(12,625)		(5,047)		(17,672)
Conversion of MoonLake Class C Ordinary Shares into Class A Ordinary Shares

SEC Form 10-Q filed by MoonLake Immunotherapeutics