Company: MLTX
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001821586-25-000018
Chunk: 12

Company: MoonLake Immunotherapeutics
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 (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 compensation cost only for those awards expected to meet the service conditions on a straight-line basis over the requisite service period of the award.Foreign CurrencyThe functional currency of the Company and its subsidiaries is the U.S. dollar. Balances and transactions denominated in foreign currencies are converted as follows: monetary assets and liabilities are translated using exchange rates in effect at the balance sheet dates and non-monetary assets and liabilities are translated at historical exchange rates. Income and expenses are translated at the daily exchange rate on the respective transaction date.Gains or losses from foreign currency translation are included in the condensed consolidated statements of operations and comprehensive loss in "Other income, net". The Company recognized foreign currency transaction gain of $378 thousand and $343 thousand for the three and six months ended June 30, 2025, respectively, and a foreign currency transaction loss of $39 thousand and $99 thousand for the three and six months ended June 30, 2024, respectively.Income TaxesThe Company accounts for income taxes by using the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is recorded to the extent it is more likely than not that all or a portion of the Company's deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred 

11

MOONLAKE IMMUNOTHERAPEUTICSNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2025(Unaudited)

tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.Net Loss per Class A Ordinary SharesBasic net loss per Class A Ordinary Share is calculated using the two-class method under which earnings are allocated to both Class A Ordinary Shares and participating securities. Basic net loss per share is calculated