Company: MLTX
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001821586-25-000022
Chunk: 87

Company: MoonLake Immunotherapeutics
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 87
---
 into various research and development contracts with companies both inside and outside of the United States. These agreements are generally cancellable, and related payments are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.Pre-Launch Inventory Prior to obtaining regulatory approval of a product candidate, the Company may incur production costs to support the commercial launch of such product. Until the date at which regulatory approval has been received or it is considered probable, and the future economic benefit is expected to be realized, all such costs are recorded as research and development expenses as incurred.Share-Based CompensationThe Company recognizes compensation expense based on estimated fair values for all stock-based payment awards made to eligible employees, members of the board of directors and independent contractors that are expected to vest. The valuation of stock option awards is determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the Company to make assumptions and judgments about the inputs used in the calculations, such as the fair value of the common stock, expected term, expected volatility of the Company’s common stock, risk-free interest rate and expected dividend yield. The valuation of restricted stock awards is measured by the fair value of the Company’s common stock on the date of the grant.For all stock options granted, the Company calculated the expected term as the period that share-based awards are expected to be outstanding. The estimate of expected volatility is based on comparative companies’ volatility within the Company's industry. The risk-free rate is based on the yield available on United States Treasury zero-coupon issues corresponding to the expected term of the award. The fair value of the common stock granted under the ESPP (as defined in Note 14 — Share-Based Compensation) was historically estimated by management with reference to the market-based transaction with its Series A investors, as there was no public market for the common stock. Share-based payment arrangements are accounted for under the fair value method. Total compensation is measured at grant date, based on the fair value of the award at that date, and recorded in earnings over the period the employees are required to render service. The Company recognizes