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v3.25.1

Debt | 3 Months Ended
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Mar. 31, 2025
Debt Disclosure [Abstract] |
Debt | Note 4 – Debt On March 31, 2025 (the “Closing Date”), MoonLake as a guarantor entered into a loan and security agreement (the “Loan and Security Agreement”) with its subsidiary, MoonLake AG, as borrower, the lenders party thereto (the “Lenders”), and Hercules Capital, Inc. ("Hercules"), as the administrative and collateral agent for itself and the Lenders. The Loan and Security Agreement provides a non-dilutive term loan facility (the “Credit Facility”) of up to an aggregate principal amount of $500.0 million. The Credit Facility matures on April 1, 2030 (the “Maturity Date”) and bears interest at an annual rate equal to the greater of (i) prime rate as reported in The Wall Street Journal plus 1.45% and (ii) 8.45%, subject to a 0.25% reduction upon achievement of the U.S. Food and Drug Administration's ("FDA") approval of a Biologics License Application ("BLA") for SLK. The Credit Facility comprises: a.A first tranche (the "Tranche 1 Loan") in an aggregate principal amount of $75.0 million fully funded on the Closing Date, b.Subject to MoonLake’s announcement that the VELA-1 and VELA-2 Phase 3 studies of SLK in adult patients with moderate to severe hidradenitis suppurativa each achieved their protocol-specified primary endpoint with SLK having demonstrated an acceptable safety profile (the “Tranche 2 Milestone”), a second tranche with additional term loans in an aggregate principal amount of up to $125.0 million, available on the Tranche 2 Milestone achievement date through the earlier of (i) 30 days following such date and (ii) December 31, 2025, c.Subject to MoonLake's announcement that the IZAR-1 and IZAR-2 Phase 3 studies of SLK in patients with active psoriatic arthritis each achieved their protocol-specified primary endpoint with SLK having demonstrated an acceptable safety profile (the “Tranche 3 Milestone”), a third tranche with additional term loans in an aggregate principal amount of up to $50.0 million, available on the Tranche 3 Milestone achievement date through the earlier of (i) 60 days following such date and (ii) September 15, 2026, d.Subject to the Company’s achievement of the Tranche 2 Milestone and Tranche 3 Milestone and the FDA’s acceptance of the Company’s submission of a BLA for SLK (collectively, the “Tranche 4 Milestone”), a fourth tranche with additional term loans in an aggregate principal amount of up to $50.0 million, available on the Tranche 4 Milestone achievement date through the earlier of (i) 60 days following such date and (ii) March 15, 2027, and e.Subject to approval by the Lenders’ in their discretion, a fifth tranche (the "Tranche 5 Loan") of additional term loans in an aggregate principal amount of up to $200.0 million. As of March 31, 2025, the carrying value of the term loan consists of the Tranche 1 Loan principal amount outstanding less the debt discount and debt issuance costs. The effective interest rate is 10.41% and no significant interest expense has been recorded for the three months ended March 31, 2025. A portion of the debt issuance costs relate to undrawn tranches and are recognized as deferred charges.
(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current liabilities |  |  | March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |
Principal amount |  |  | $ | 75,000 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt issuance cost |  |  | (1,127) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt discount |  |  | (851) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Carrying value |  |  | $ | 73,022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred charges - long-term debt |  |  | $ | 1,698 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total |  |  | $ | 1,698 |  |  |  |  |  |  |  |  |  |  |  |  |  |
The Company may prepay advances in whole at any time subject to a prepayment charge. Upon repayment of all term loans on or after April 1, 2027, the Company is additionally required to pay an End of Term Charge (as defined in the Loan and Security Agreement) equal to 6.95% for the Tranche 1 Loan and any draws under Tranche 2-4 Loans; and 4.25% for any draw under the Tranche 5 Loan. If repayment occurs prior to 24 months, the charge applied will be 4.25%. As of March 31, 2025, the End of Term Charge (as defined in the Loan and Security Agreement) is accrued at 6.95% of the Tranche 1 Loan balance, recorded at present value of $3.3 million as an addition to the long-term debt in non-current liabilities and equally offset by unamortized contra non-current liabilities. The unamortized contra-liability will be amortized and the present value will be accreted up to the future value over the loan term as interest expense. The full repayment of the $75.0 million Tranche 1 Loan is due in 2030 and no other repayments are currently due. Additional fees will be payable in connection with the Credit Facility upon drawing of future tranches. The Loan and Security Agreement allows for the Company to satisfy a portion of the cash interest payments by capitalizing such interest payments as payment-in-kind (“PIK”). No PIK interest relating to the term loan has been recorded and included in the condensed consolidated balance sheet as of March 31, 2025. The Loan and Security Agreement contains customary covenants, such as financial covenants and certain events of default after which loans under the Credit Facility may be due and payable immediately. The Company was in compliance with all covenants as of March 31, 2025. All obligations under the Loan and Security Agreement will be secured on a first-priority basis, subject to certain exceptions, by security interests in substantially all assets of the Company and material subsidiaries of the Company, including its intellectual property, and will be guaranteed by material subsidiaries of the Company, including foreign subsidiaries, subject to certain exceptions. The above description of the Loan and Security Agreement and Credit Facility is a summary only and is qualified in its entirety by reference to the Loan and Security Agreement, which is filed as an exhibit to this Quarterly Report on Form 10-Q for the quarter ending March 31, 2025.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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