MoonLake ImmunotherapeuticsMLTX
MoonLake Immunotherapeutics Stock Compensation Disclosure
Share-Based Compensation
As of December 31, 2025, the Company had the following share-based compensation arrangements:
a.Restricted Founder Shares (as defined below) – created in April 2021 by MoonLake AG (fully vested as of April 2023);
b.The Employee Share Participation Plan (“ESPP”) – created in July 2021 by MoonLake AG;
c.The Employee Stock Option Plan (“ESOP”) – created in July 2021 by MoonLake AG (fully vested as of January 2024);
d.MoonLake Immunotherapeutics 2022 Equity Incentive Plan ("Equity Incentive Plan") – created in April 2022 by MoonLake.
The purpose of the arrangements is to attract and retain the best available personnel and to provide participants with additional incentive to increase their efforts on behalf and in the best interest of the Company and its subsidiaries. The reference to “Common Shares” refers to shares in MoonLake AG.
MoonLake AG's compensation plans are settled with its Common Shares and with a number of Class C Ordinary Shares of the Company, determined by multiplying the number of Common Shares by the Exchange Ratio. The owners of
Common Shares have the right to exchange their Common Shares for a number of Class A Ordinary Shares derived using the Exchange Ratio. In the event MoonLake AG shareholders elect to exchange their Common Shares, such MoonLake AG shareholder forfeits a number of Class C Ordinary Shares equal to the number of Class A Ordinary Shares issued (refer to Note 12 — Shareholders’ Equity - Class C Ordinary Shares).
As of January 1, 2024, the Company executed the conversion of the majority of the outstanding ESOP awards into an equivalent number of Equity Incentive Plan option awards that are settled with Class A Ordinary Shares, thereby eliminating the intermediary right to the exchange step noted above. From an accounting perspective, there is no underlying modification to the economic, control or legal rights of the awards, including vesting terms and conditions, exercise price and accounting classification. This is purely an administrative change as opposed to an accounting modification whereby the plan issuer is amended from MoonLake AG to MoonLake Immunotherapeutics. Consequently, there is no incremental fair value generated following the conversion and therefore no incremental expense recorded. Any remaining unvested compensation expense will be recorded over the remaining vesting period of the original awards, thereby resulting in no change to the consolidated financial statements if the conversion had not occurred.
As a result of this administrative conversion, the two plans which remain active as of December 31, 2025 are the ESPP and Equity Incentive Plan, whereas the Restricted Founder Shares and ESOP are fully vested as of April 2023 and January 2024, respectively.
For the years ended December 31, 2025, 2024, and 2023, the Company has recognized an increase in equity in the consolidated balance sheets due to share-based compensation expense in the consolidated statements of operations and comprehensive loss of $12.9 million, $7.3 million, and $7.1 million, respectively. The share-based compensation expense was mainly driven by the aforementioned two active share-based compensation plans and programs:
(in thousands) | ||||||||||||||||||||
Compensation Plan | Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||||||||||||
MoonLake AG Restricted Founder Shares | $ | — | $ | — | $ | 1,574 | ||||||||||||||
ESPP | 2,940 | 2,933 | 3,353 | |||||||||||||||||
ESOP | (18) | — | 974 | |||||||||||||||||
Equity Incentive Plan | 9,976 | 4,349 | 1,205 | |||||||||||||||||
Total share-based compensation expense | $ | 12,898 | $ | 7,282 | $ | 7,106 | ||||||||||||||
Of which: included in research and development expense | 3,938 | 1,971 | 1,525 | |||||||||||||||||
Of which: included in general and administrative expense | 8,960 | 5,311 | 5,581 | |||||||||||||||||
The Company expects that all future employee awards will be made under the Equity Incentive Plan. As of December 31, 2025, 1,836,618 Class A Ordinary Shares from the authorized pool of 4,353,948 Class A Ordinary Shares remain available for future grants, and 2,156,512 Class A Ordinary Shares are reserved for issuance upon exercise of stock options granted under the Equity Incentive Plan.
Restricted Founder Shares 2021-2023 - MoonLake AG
On April 28, 2021, the shareholders’ agreement between the co-founders, the Series A investors and MoonLake AG imposed a reverse vesting condition on 90% of the total 110,000 Common Shares (the equivalent of 3,700,257 Class C Ordinary Shares) held by each of the three co-founders. Therefore, 99,000 Common Shares (the equivalent of 3,330,231
Class C Ordinary Shares) held by each of the co-founders were subject to these restrictions and considered unvested (the “Restricted Founder Shares”). The Restricted Founder Shares vested on the 28th of each month at a rate of 4.166% over a period of two years until April 28, 2023. In the event of a termination of the contractual relationship of the relevant co-founder before the end of the vesting period, MoonLake AG in first priority, or any third-party designated by it, and the other shareholders in second priority pro rata to their shareholdings, had an option to purchase all or a pro rata portion of the leaver shares that remained unvested on the effective day of the termination at nominal value of CHF 0.10.
Employee Share Participation Plan 2021-2026 - MoonLake AG
The ESPP grants will vest 25% on each anniversary of the grant date. In the event of a termination of contractual relationship between the Company and the entitled employee, the awards can be deemed forfeited by MoonLake AG if certain conditions are met. Awards feature an accelerated vesting condition linked to a “Change of Control”, defined as any transfer of shares that results in the proposed acquirer holding more than 50% of the then issued share capital of MoonLake AG or the Company, as the case may be, where all the outstanding awards (whether currently outstanding or granted in the future) will be deemed fully vested.
ESPP | Number of Shares | Weighted-Average Grant Date Fair Value | |||||||||
Awards unvested as of January 1, 2025 | 319,769 | $ | 10.00 | ||||||||
Awards vested for the year ended December 31, 2025 | (293,867) | 10.00 | |||||||||
Awards unvested as of December 31, 2025 | 25,902 | $ | 10.00 | ||||||||
As of December 31, 2025, MoonLake AG had $0.1 million of total unrecognized compensation expense related to the ESPP that will be recognized over the weighted average period of 0.05 years. All ESPP awards, including those unvested, have been converted to Class A Ordinary Shares.
Employee Stock Option Plan 2021-2025 - MoonLake AG
The ESOP grants vested 25% on each anniversary of the grant date. In the event of a termination of the contractual relationship between the Company and the entitled employee, options could be forfeited by MoonLake AG if certain conditions were met. The awards featured an accelerated vesting condition linked to a “Change of Control”, defined as any transfer of shares that resulted in the proposed acquirer holding more than 50% of the then issued share capital of MoonLake AG or the Company, as the case may be, where all the outstanding awards (whether currently outstanding or granted in the future) would have been deemed fully vested.
ESOP | Number of Options | Weighted-Average Exercise Price | Aggregate Intrinsic Value (in thousands) | Weighted-Average Remaining Contractual Term (in years) | |||||||||||||||||||
Awards outstanding as of January 1, 2025 | 98,393 | $ | 1.50 | $ | 5,180 | 6.73 | |||||||||||||||||
Awards exercised for the year ended December 31, 2025 | (93,347) | 1.30 | n/a | n/a | |||||||||||||||||||
Awards forfeited for the year ended December 31, 2025 | (5,046) | 5.25 | n/a | n/a | |||||||||||||||||||
Awards outstanding as of December 31, 2025 | — | $ | — | $ | — | $ | — | ||||||||||||||||
Weighted average assumptions for the awards issued during the year ended December 31, 2023(4) | |||||
Estimated fair value of the option on the grant date using Black-Scholes model ($) | 25.53 | ||||
Exercise price ($) | 37.11 | ||||
Expected term of the award on the grant date (years) (1) | 6 | ||||
Expected volatility of the share price (2) | 75% | ||||
Risk-free interest rate (3) | 4% | ||||
Expected dividend rate | —% | ||||
(1) The expected term represents the period that share-based awards are expected to be outstanding. (2) The expected volatility was derived from the historical stock volatilities of comparable peer public companies within the Company’s industry. (3) 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. (4) The issued awards include awards that were converted from the ESOP to the EIP as of January 1, 2024. | |||||
MoonLake Immunotherapeutics 2022 Equity Incentive Plan
On April 5, 2022 (the “Effective Date”), the Company created the Equity Incentive Plan to promote and closely align the interests of employees, officers, non-employee directors and other service providers of MoonLake Immunotherapeutics and its shareholders by providing share-based compensation and other performance-based compensation.
The Equity Incentive Plan provides for the grant of options, stock appreciation rights, restricted stock units, restricted stock, and other share-based awards and for incentive bonuses, which may be paid in cash, Common Shares or a combination thereof, as determined by the compensation committee of the board of directors or such other committee as designated by the board of directors to administer the Equity Incentive Plan. The Equity Incentive Plan shall remain available for the grant of awards until the 10th anniversary of the Effective Date.
Equity Incentive Plan (Options) | Number of Options | Weighted-Average Exercise Price | Aggregate Intrinsic Value (in thousands) | Weighted-Average Remaining Contractual Term (in years) | |||||||||||||||||||
Awards outstanding as of January 1, 2025 | 972,476 | $ | 24.94 | $ | 28,588 | 8.18 | |||||||||||||||||
Awards granted for the year ended December 31, 2025 | 1,358,127 | 26.44 | n/a | n/a | |||||||||||||||||||
Awards exercised for the year ended December 31, 2025 | (27,149) | 17.68 | n/a | n/a | |||||||||||||||||||
Awards forfeited for the year ended December 31, 2025 | (146,942) | 42.87 | n/a | n/a | |||||||||||||||||||
Awards outstanding as of December 31, 2025 | 2,156,512 | $ | 24.76 | $ | 3,700 | 8.52 | |||||||||||||||||
Awards exercisable as of December 31, 2025 | 622,487 | $ | 16.77 | $ | 3,222 | 6.31 | |||||||||||||||||
The aggregate intrinsic value represents the difference between the exercise price and the selling price received by option holders upon the exercise of stock options during the period.
The total intrinsic value of options exercised was $0.9 million and $2.3 million for the years ended December 31, 2025 and 2024, respectively. No options were exercised for the year ended December 31, 2023.
As of December 31, 2025, the Company had $23.6 million of total unrecognized compensation expense related to options under the Equity Incentive Plan that will be recognized over the weighted average period of 2.58 years.
Weighted average assumptions for the awards issued during | Year Ended December 31, 2025 | Year Ended December 31, 2024(4) | Year ended December 31, 2023 | ||||||||||||||
Estimated fair value of the option on the grant date using Black-Scholes model ($) | 18.08 | 31.82 | 25.58 | ||||||||||||||
Exercise price ($) | 26.44 | 46.36 | 37.22 | ||||||||||||||
Expected term of the award on the grant date (years) (1) | 6 | 6 | 6 | ||||||||||||||
Expected volatility of the share price (2) | 75% | 75% | 75% | ||||||||||||||
Risk-free interest rate (3) | 4.0% | 4.3% | 4% | ||||||||||||||
Expected dividend rate | —% | —% | —% | ||||||||||||||
(1) The expected term represents the period that share-based awards are expected to be outstanding. (2) The expected volatility was derived from the historical stock volatilities of comparable peer public companies within the Company’s industry. (3) 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. (4) The issued awards exclude awards that were converted from the ESOP to the EIP as of January 1, 2024. | |||||||||||||||||
Equity Incentive Plan (Restricted Stock Awards) | Number of Shares | Weighted-Average Grant Date Fair Value | |||||||||
Awards unvested as of January 1, 2025 | — | $ | — | ||||||||
Awards granted for the year ended December 31, 2025 | 191,526 | 41.77 | |||||||||
Awards unvested as of December 31, 2025 | 191,526 | $ | 41.77 | ||||||||
Weighted average assumptions for the awards issued during the nine months ended December 31, 2025 | |||||
Estimated fair value of Common Shares on the grant date ($) | 41.77 | ||||
As of December 31, 2025, the Company had $6.3 million of total unrecognized compensation expense related to restricted stock awards under the Equity Incentive Plan that will be recognized over the weighted average period of
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 20, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.