10-Q

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 June 30, 2023

OR

☐ 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: 001-39362

Gelesis Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	84-4730610
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
501 Boylston Street, Suite 6102, Boston, MA	02116
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 456-4718

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class Trading Symbol(s) Name of each exchange on which registered

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, smaller reporting company, or an emerging growth company. See the 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 August 11, 2023, the registrant had 73,335,110 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	1
	Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	2
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2023 and 2022	3
	Unaudited Condensed Consolidated Statements of Noncontrolling Interest, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2023 and 2022	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II.	OTHER INFORMATION	42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	50
SIGNATURES		52

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or this Quarterly Report, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Quarterly Report, including statements regarding our future results of operations and financial position, our business strategy, the realization of our order backlog, plans and prospects, existing and prospective products, research and development costs, timing and likelihood of success, market growth, trends, events and the objectives of management for future operations and results, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include:

•our ability to successfully complete the proposed merger with PureTech which is subject to a number of conditions, including, among others, the completion of the SEC’s review of the Company’s proxy statement in connection with the merger, the approval of the Company’s stockholders of the merger, certain closing conditions in the merger agreement as well as agreement between PureTech and certain noteholders of the Company;

•our ability to raise financing in the future, if and when needed;

•our ability to continue as a going concern;

•our reliance on funding from PureTech under the convertible notes and the operating restrictions under the interim operating covenants in the merger agreement, including PureTech’s approval rights over our budgets;

•our ability to achieve and maintain widespread market acceptance of Plenity, including building brand recognition and loyalty, increasing sales, and achieving commercial success;

•the risk of potential delay in, or failure to achieve, over-the-counter approval for Plenity;

•the impact of current and future applicable laws and regulations, whether in the United States or foreign countries, and our ability to comply with such laws and regulations;

•our ability to produce adequate supply of Plenity, including its ability to continue to invest in manufacturing capacity and to build additional manufacturing sites;

•risks related to the development of the telehealth market and regulations related to remote healthcare;

•global economic, political and social conditions and uncertainties in the markets that we serve, including risks and uncertainties caused by the COVID-19 pandemic or other natural or man-made disasters;

•our ability to enter into additional strategic collaborations with third parties, to acquire businesses or products or form strategic alliances in the future and to realize the benefits of such collaborations, acquisitions and alliances;

•our ability to adequately protect our proprietary technology or maintain issued patents that are sufficient to protect Plenity and our ability to prevent third parties from infringing on our proprietary technology;

•the risk that a third-party’s activities, including with respect to third parties that we have granted out licenses to or granted limited exclusive or non-exclusive commercial rights, may overlap or interfere with the commercialization of Plenity or that we become dependent on such arrangements;

•our ability to successfully develop and expand our operations and manufacturing and to effectively manage such growth;

•risks related to our suppliers and distributors, including the loss of such suppliers or distributors, or their inability to provide adequate supply of materials or distribution;

•our ability to retain our senior executive officers and to attract and keep senior management and key scientific and commercial personnel;

1

•our ability to identify and discover additional product candidates and to obtain and maintain regulatory approval for such candidates;

•risks related to potential product liability exposure for Plenity or other future product candidates;

•risks related to adverse publicity in the weight management industry, changes in the perception of our brands, and the impact of negative information or inaccurate information about us on social media;

•our ability to generate product sales and to reduce operating losses going forward;

•our ability to accurately forecast revenue and appropriately monitor its associated expenses in the future;

•our ability to compete against other weight management and wellness industry participants or other more effective or more favorably perceived weight management methods, including pharmaceuticals, devices and surgical procedures;

•foreign currency fluctuations and inflation;

•failure to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows; and

•our ability to successfully protect against security breaches and other disruptions to our information technology structure

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report and the information incorporated by reference herein will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise.

You should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This Quarterly Report also contains estimates, projections and other information concerning our industry, our business, and the markets for our products, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties.

2

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

GELESIS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	June 30,			December 31,
	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	7,909		$	7,412
Accounts receivable		799			1,233
Grants receivable		5,119			3,359
Inventories		5,688			6,865
Prepaid expenses and other current assets		5,163			4,627
Total current assets		24,678			23,496
Property and equipment, net		56,927			59,335
Operating lease right-of-use assets		1,202			1,520
Intangible assets, net		12,280			13,413
Other assets		788			5,560
Total assets	$	95,875		$	103,324
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable, including due to related party of $649 and $135, respectively	$	9,052		$	4,131
Accrued expenses and other current liabilities, including due to related party of $2,853 and $2,809, respectively		7,277			10,468
Deferred income		26,300			27,793
Operating lease liabilities		546			597
Convertible promissory notes, including due to related party of $24,376 and $22,082, respectively		28,327			27,403
Notes payable, including due to related party of $1,960 and $2,007, respectively at December 31, 2022		5,039			7,954
Total current liabilities		76,541			78,346
Deferred income		9,860			9,544
Operating lease liabilities		697			967
Notes payable, including due to related party of $13,973 and $13,659, respectively		27,266			25,342
Warrant liabilities		—			130
Earnout liability		—			563
Other long-term liabilities, including due to related party of $0 and $674, respectively		136			898
Total liabilities		114,500			115,790
Commitments and contingencies (Note 18)
Noncontrolling interest		12,905			12,590
Stockholders’ deficit:
Preferred stock, $0.0001 par value - 250,000,000 shares authorized at June 30, 2023 and December 31, 2022; zero shares issued and outstanding at June 30, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value – 900,000,000 shares authorized at June 30, 2023 and December 31, 2022; 73,335,110 and 73,325,022 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		7			7
Additional paid-in capital		303,686			297,468
Accumulated other comprehensive income		339			104
Accumulated deficit		(335,562	)		(322,635	)
Total stockholders’ deficit		(31,530	)		(25,056	)
Total liabilities, noncontrolling interest, redeemable convertible preferred stock and stockholders’ deficit	$	95,875		$	103,324

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

GELESIS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Revenue:
Product revenue, net	$	1,107		$	8,973		$	2,860		$	16,487
Total revenue, net		1,107			8,973			2,860			16,487
Operating expenses:
Costs of goods sold, including related party expenses of $44 and $359, respectively, and $115 and $659, respectively		498			4,786			1,735			9,699
Selling, general and administrative, including related party expenses of $127 and $125, respectively, and $255 and $250, respectively		7,456			32,450			15,743			70,156
Research and development, including related party expenses of $61 and $57, respectively, and $120 and $119, respectively		2,582			5,523			6,219			12,933
Amortization of intangible assets		567			566			1,133			1,133
Total operating expenses		11,103			43,325			24,830			93,921
Loss from operations		(9,996	)		(34,352	)		(21,970	)		(77,434	)
Change in the fair value of earnout liability		—			18,812			563			52,681
Change in the fair value of convertible promissory notes		2,672			—			7,631			(156	)
Change in the fair value of warrants		—			2,600			130			6,084
Interest expense, net		(565	)		(186	)		(1,457	)		(321	)
Other income, net		208			613			2,292			930
Loss before income taxes		(7,681	)		(12,513	)		(12,811	)		(18,216	)
Provision for income taxes		—			—			16			—
Net loss		(7,681	)		(12,513	)		(12,827	)		(18,216	)
Accretion of Legacy Gelesis senior preferred stock to redemption value		—			—			—			(37,934	)
Accretion of noncontrolling interest put option to redemption value		—			(85	)		—			(173	)
Income allocated to noncontrolling interest holder		—			—			(100	)		—
Net loss attributable to common stockholders	$	(7,681	)	$	(12,598	)	$	(12,927	)	$	(56,323	)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.10	)	$	(0.17	)	$	(0.18	)	$	(0.83	)
Weighted average common shares outstanding—basic and diluted		73,334,861			72,423,043			73,329,685			67,609,838

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

GELESIS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Net loss	$	(7,681	)	$	(12,513	)	$	(12,827	)	$	(18,216	)
Other comprehensive loss:
Foreign currency translation adjustment		10			(426	)		235			(564	)
Total other comprehensive income (loss)		10			(426	)		235			(564	)
Comprehensive loss	$	(7,671	)	$	(12,939	)	$	(12,592	)	$	(18,780	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

GELESIS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF NONCONTROLLING INTEREST, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share and per share data)

	Noncontrolling Interest			Legacy Gelesis Redeemable Convertible Preferred Stock						Common Stock				Additional Paid-in Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Total Stockholders' Deficit
				Shares			Amount			Shares		Amount
Balance at December 31, 2021	$	11,855			18,736,936		$	311,594			2,410,552	$	1	$	(64,549	)	$	219		$	(265,507	)	$	(329,836	)
Accretion of Legacy Gelesis senior preferred stock to redemption value prior to Business Combination		—			—			37,934			—		—		(37,934	)		—			—			(37,934	)
Conversion of Legacy Gelesis convertible preferred stock into common stock upon Business Combination		—			(48,566,655	)		(349,528	)		48,566,655		—		349,528			—			—			349,528
Proceeds from Business Combination, net of issuance costs and assumed liabilities		—			—			—			17,399,440		6		70,472			—			—			70,478
Conversion of Legacy Gelesis preferred stock warrants into common stock warrants upon Business Combination		—			—			—			—		—		16,747			—			—			16,747
Recognition of earnout liability upon Business Combination		—			—			—			—		—		(58,871	)		—			—			(58,871	)
Assumed private placement warrant liability upon Business Combination		—			—			—			—		—		(8,140	)		—			—			(8,140	)
Stock based compensation expense		—			—			—			—		—		13,989			—			—			13,989
Exercise of warrants		—			—			—			176,126		—		4			—			—			4
Accretion of noncontrolling interest   put option to redemption value		88			—			—			—		—		—			—			(88	)		(88	)
Foreign currency translation adjustment		(239	)		—			—			—		—		—			(137	)		—			(137	)
Net loss		—			—			—			—		—		—			—			(5,703	)		(5,703	)
Balance at March 31, 2022	$	11,704			(29,829,719	)		—			68,552,773	$	7	$	281,246		$	82		$	(271,298	)	$	10,037
Stock based compensation expense		—			—			—			—		—		7,976			—			—			7,976
Issuance of common stock upon exercise of stock options		—			—			—			162,064		—		110			—			—			110
Accretion of noncontrolling interest put option to redemption value		85			—			—			—		—		—			—			(85	)		(85	)
Foreign currency translation adjustment		(702	)		—			—			—		—		—			(426	)		—			(426	)
Net loss		—			—			—			—		—		—			—			(12,513	)		(12,513	)
Balance at June 30, 2022	$	11,087			(29,829,719	)	$	—			68,714,837	$	7	$	289,332		$	(344	)	$	(283,896	)	$	5,099
Balance at December 31, 2022	$	12,590			(29,829,719	)	$	-			73,325,022	$	7	$	297,468		$	104		$	(322,635	)	$	(25,056	)
Stock based compensation expense		—			—			—			—		—		2,091			—			—			2,091
Release of restricted stock units		—			—			—			7,566		—					—			—			—
Issuance of common stock warrants		—			—			—			—		—		1,297			—			—			1,297
Income allocated noncontrolling interest holder		100			—			—			—		—		—			—			(100	)		(100	)
Net loss		—			—			—			—		—		—			—			(5,146	)		(5,146	)
Foreign currency translation gain		206			—			—			—		—		—			225			—			225
Balance at March 31, 2023	$	12,896			(29,829,719	)	$	—			73,332,588	$	7	$	300,856		$	329		$	(327,881	)	$	(26,689	)
Stock based compensation expense		—			—			—			—		—		2,384			—			—			2,384
Release of restricted stock units		—			—			—			2,522		—					—			—			—
Issuance of common stock warrants		—			—			—			—		—		446			—			—			446
Net loss		—			—			—			—		—		—			—			(7,681	)		(7,681	)
Foreign currency translation gain		9			—			—			—		—		—			10			—			10
Balance at June 30, 2023	$	12,905			(29,829,719	)	$	—			73,335,110	$	7	$	303,686		$	339		$	(335,562	)	$	(31,530	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

GELESIS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Six Months Ended June 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(12,827	)	$	(18,216	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets		1,133			1,133
Reduction in carrying amount of right-of-use assets		322			265
Depreciation		3,509			1,440
Stock-based compensation		4,475			21,965
Unrealized loss on foreign currency transactions		(71	)		672
Non-cash interest (income) expense		(325	)		(3	)
Change in the fair value of earnout liability		(563	)		(52,681	)
Change in the fair value of warrants		(130	)		(6,084	)
Change in the fair value of convertible promissory notes		(7,631	)		156
Change in fair value of One S.r.l. call option		(677	)		865
Change in fair value of interest rate swap contract		—			—
Changes in operating assets and liabilities:
Accounts receivable		434			(1,473	)
Grants receivable		(1,691	)		(1,078	)
Prepaid expenses and other current assets		(473	)		5,048
Inventories		1,149			(5,258	)
Other assets		4,834			(536	)
Accounts payable		4,977			11,486
Accrued expenses and other current liabilities		(2,737	)		571
Operating lease liabilities		(325	)		(263	)
Deferred income		(1,372	)		2,300
Other long-term liabilities		(90	)		(81	)
Net cash used in operating activities		(8,079	)		(39,772	)
Cash flows from investing activities:
Purchases of property and equipment		(242	)		(5,067	)
Net cash used in investing activities		(242	)		(5,067	)
Cash flows from financing activities:
Proceeds from Business Combination, net of transaction costs		—			70,478
Principal repayment of notes payable		(1,585	)		(1,119	)
Repayment of convertible promissory notes		—			(27,284	)
Proceeds from issuance of convertible promissory notes and warrants		10,350			—
Proceeds from exercise of share-based awards		—			110
Proceeds from exercise of warrants		—			4
Net cash provided by financing activities		8,765			42,189
Effect of exchange rates on cash		53			(406	)
Net increase (decrease) in cash		497			(3,056	)
Cash and cash equivalents at beginning of year		7,412			28,397
Cash and cash equivalents at end of period	$	7,909		$	25,341
Noncash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expense	$	181		$	1,027
Recognition of earnout liability	$	—		$	58,871
Recognition of private placement warrant liability	$	—		$	8,140
Supplemental cash flow information:
Interest paid on notes payable	$	151		$	181

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

GELESIS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

1.Nature of the Business and Basis of Presentation

Nature of Business

Gelesis Holdings, Inc., or the Company, formerly known as Capstar Special Purpose Acquisition Corp. or “CPSR”, is a consumer-centered biotherapeutics company incorporated under the laws of the State of Delaware. The Company aims to transform weight management through proprietary hydrogel technology, inspired by the compositional and mechanical properties of raw vegetables. Since its inception, the Company has devoted substantially all of its efforts to business planning, licensing technology, research and development, commercial activities, recruiting management and technical staff and raising capital and has financed its operations through the issuance of redeemable convertible preferred and common stock, a license and collaboration agreement, supply and distribution agreements, long-term loans, convertible promissory note financings, and government grants.

The Company currently manufactures and markets Plenity® (the “Product”), which is based on a proprietary hydrogel technology. Plenity received a de novo clearance from the United States Food and Drug Administration (the “FDA”) on April 12, 2019 to aid in weight management when used in conjunction with diet and exercise. In 2020, the Company received its original Conformité Européenne (CE) certificate which allowed Plenity to be marketed as a medical device in Europe as well as the rest of the world where CE mark is acceptable. Plenity has been commercially available by prescription in the United States since May 2020. In January 2023, the Company made a 510 (k) submission to the FDA to switch Plenity from prescription (“Rx”) to over-the-counter (“OTC”).

On July 19, 2021, Gelesis, Inc. (together with its consolidated subsidiaries, “Legacy Gelesis”) entered into a Business Combination Agreement (as amended on November 8, 2021 and December 30, 2021, the “Business Combination Agreement”) with CPSR, a Delaware corporation and special purpose acquisition company, and CPSR Gelesis Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of CPSR (“Merger Sub”). On January 13, 2022, Legacy Gelesis, CPSR, and Merger Sub consummated the business combination (“Business Combination”) pursuant to the terms of the Business Combination Agreement. Pursuant to the Business Combination Agreement, on the closing date, (i) Merger Sub merged with and into Legacy Gelesis (the “Merger”), with Legacy Gelesis as the surviving company in the Merger, and, after giving effect to such Merger, Legacy Gelesis became a wholly-owned subsidiary of CPSR and (ii) CPSR changed its name to “Gelesis Holdings, Inc.” (together with its consolidated subsidiaries, “Gelesis Holdings”). The Business Combination, together with the PIPE Investment and the sale of the Backstop Purchase Shares, generated approximately $105 million in gross proceeds and $70.5 million in net proceeds. On January 14, 2022, Gelesis Holdings’ common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “GLS” and “GLS.W”, respectively. In January 2023, the Company’s public warrants were delisted from the NYSE due to low trading price. As of April 10, 2023, the NYSE Regulation reached a decision to delist the Company’s common stock and subsequently on April 26, 2023, the Company’s common stock was delisted from the NYSE.

The Business Combination was accounted for as a reverse recapitalization in conformity with accounting principles generally accepted in the United States. Under this method of accounting, CPSR has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the Legacy Gelesis’ stockholders comprising a relative majority of the voting power of the combined company, the Legacy Gelesis’ operations prior to the acquisition comprising the only ongoing operations of Gelesis Holdings, the majority of Gelesis Holdings’ board of directors appointment by Legacy Gelesis, and Legacy Gelesis’ senior management comprising the entirety of the senior management of Gelesis Holdings. Accordingly, for accounting purposes, the consolidated financial statements of Gelesis Holdings represent a continuation of the consolidated financial statements of Legacy Gelesis with the Business Combination being treated as the equivalent of Legacy Gelesis issuing stock for the net assets of CPSR, accompanied by a recapitalization. The net assets of CPSR are stated at historical costs, with no goodwill or other intangible assets recorded.

Planned Merger

On June 12, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with PureTech Health LLC, a Delaware limited liability company (“Parent” or “PureTech”) and Caviar Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the terms and conditions set forth therein, the Company will merge with and into Merger Sub (the “Merger”) with Merger Sub surviving the Merger as a wholly-owned subsidiary of Parent. Both the Parent and Merger Sub are subsidiaries of PureTech Health PLC, which beneficially owns 16,883,102 shares of Company’s common stock and 259,345,750 shares of the Company’s warrants.

The Merger is conditioned upon i) the Company obtaining a company stockholder approval as defined in the Merger Agreement, ii) the absence of a bankruptcy or insolvency proceeding or formal corporate action by the Company or its Subsidiaries to commence any such proceeding, iii) certain conditions related to the Company’s submission to the FDA, including that the Company shall not have

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received a “Not Substantially Equivalent” letter or a notice identifying any deficiencies from the FDA and with respect to such deficiencies, limitations on the costs and time frame to rectify them, iv) the receipt of certain amendments to agreements with certain lenders of the Company to restructure the terms of the applicable debt, and v) other customary closing conditions for a transaction of this type. The Company anticipates that at least one or more of these conditions will not be satisfied and will necessitate a waiver or amendment of the condition by PureTech. If the Merger is completed, each outstanding share of Company Common Stock (other than (i) shares held in the treasury of the Company, (ii) shares owned by Parent or any of its direct or indirect subsidiaries (including Merger Sub) immediately before the effective time of the Merger, (iii) shares of restricted Company Common Stock issued pursuant to the Business Combination Agreement (the “BCA”), dated as of July 19, 2021, by and among the Legacy Gelesis and CPSR, as amended and/or otherwise modified, and subject to all of the terms and conditions of the BCA in respect of the “Earn Out Shares” (“Earn Out Shares”) and (iv) shares held by Gelesis Stockholders will be converted automatically into and will thereafter represent only the right to receive $0.05664 in cash (the “Merger Consideration”), without interest and subject to applicable withholding taxes. Upon consummation of the Merger, the Company would become a subsidiary of the Parent and cease to be a publicly traded company.

In connection with entering into the Merger Agreement, and as described in Note 10, on June 12, 2023, the Company received $3.0 million from Parent through the issuance of convertible notes. The proceeds from this issuance of convertible notes are intended to provide the necessary funding required for the Company to continue its operations as a stand-alone entity through the consummation of the planned merger. Despite the planned Merger and funding provided by the issuance of convertible notes to Parent, the Company expects its cash on hand as of the date of the condensed consolidated financial statements and collection of accounts and grants receivable are not sufficient to meet the Company’s obligations for at least twelve months beyond the date of issuance of the condensed consolidated financial statements, and may not be sufficient to continue operations through the anticipated date of closing the Merger without additional bridge funding. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company will need to raise additional capital in future periods to fund its operations. The Company will seek to raise necessary funds through a combination of equity issuances, debt financings, strategic collaborations and licensing arrangements, government grants, or other financing mechanisms. The Company’s ability to fund the completion of its ongoing and planned clinical studies, as well as its regulatory and commercial efforts, may be substantially dependent upon whether the Company can obtain sufficient funding at acceptable terms. If adequate sources of funding are not available to the Company, the Company may be required to delay, reduce or eliminate research and development programs, reduce or eliminate commercialization efforts, and reduce its headcount. Additionally, the Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of the full-scope product commercialization in targeted markets, clinical trials and preclinical studies, the impact of the COVID-19 pandemic on the Company’s supply chain and results of operations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and development by competitors of technological innovations.

2.Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") as found in the Accounting Standards Codification ("ASC"), Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB") and the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2022 and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 28, 2023.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements, and updated, as necessary, in this report. In the opinion of the Company's management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company's financial position as of June 30, 2023, the results of its operations, non-controlling interest, redeemable convertible preferred stock and stockholders' deficit for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023. Such adjustments are of a normal and recurring nature. The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 or for any future period.

The Company’s condensed consolidated financial statements include the accounts of the Company, its two wholly-owned subsidiaries and a variable interest entity (“VIE”), Gelesis S.r.l., in which the Company has a controlling interest and is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

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Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. The Company assesses the above estimates on an ongoing basis; however, actual results could materially differ from those estimates.

Subsequent Event(s)

The Company considers events or transactions that occur after the balance sheet date but before the condensed consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company evaluated all events and transactions through the date these condensed consolidated financial statements were filed with the Securities and Exchange Commission (“SEC”) or were available to be issued.

Business Combination

The Company accounts for its business combinations using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired in a business combination are included in the Company's consolidated financial statements from the date of acquisition.

As discussed in Note 1, on January 13, 2022, the Company consummated the Business Combination pursuant to the Business Combination Agreement with CPSR dated July 19, 2021, as amended on November 8, 2021 and December 30, 2021. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, CPSR, who was the legal acquirer, was treated as the acquired company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Gelesis issuing stock for the net assets of CPSR, accompanied by a recapitalization.

Fair Value of Financial Instruments

The guidance in FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or Level 2 to Level 3.

The Company’s earnout liability, private placement warrants, interest rate swaps, call option liability, and convertible promissory notes are recorded at fair value on a recurring basis. The carrying amount of accounts receivable, grants receivable, accounts payable and accrued expenses are considered a reasonable estimate of their fair value, due to the short-term maturity of these instruments. The carrying amount of notes payable is also considered to be a reasonable estimate of the fair value based on the nature of the debt and that the debt bears interest at the prevailing market rate for instruments with similar characteristics. The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above.

Earnout Liability: In connection with the Business Combination, Legacy Gelesis equity holders received the right to receive additional common stock upon the achievement of certain earnout targets. As the earnout consideration contains a settlement provision that precludes it from being indexed to the Company’s stock, it is classified as a liability held at fair value in accordance ASC 815 and the

8

instrument is adjusted to fair value at each reporting period. In determining the fair value of the earnout liability at inception and on a recurring basis, the Company utilizes the Monte Carlo simulation value model where the fair value of the earnout is the present value of a distribution of potential outcomes on a daily basis over the term of the earnout period.

Private Placement Warrant Liability: The Private Placement Warrants are recognized as liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities held at fair value and adjusts the instruments to fair value at each reporting period. In determining the fair value of the Private Placement Warrant liability, the Company utilized a modified Monte Carlo simulation value model at inception and on a recurring basis.

One Srl Call Option: In connection with the October 2020 amended agreement with One Srl, the Company granted One a contingent call option to buy back the 10% ownership that the Company acquired in the 2019 One Amendment. The One Srl call option was recorded as a liability held at fair value at the date of issuance and is remeasured at each subsequent reporting date with changes in fair value recorded in other income (expense) in the accompanying condensed consolidated statements of operations. Fair value is determined using a Black-Scholes option pricing model.

Convertible promissory notes: The convertible promissory notes issued in conjunction with the Company’s bridge financing arrangements from time to time were recognized at fair value at issuance and subsequent changes in fair value were recorded in the accompanying consolidated statements of operations (see Note 12). Fair value of the promissory notes is determined using a multiple scenario-based valuation method. The fair value of the hybrid instrument was determined by calculating the value of the instrument in each scenario “with” the respective conversion feature and “without”. The significant inputs used in estimating the fair value of the convertible promissory notes include the estimated discount rate, expected term, and the outcome probability with respect to each scenario.

Revenue Recognition

Product Revenue

The Company commercializes Plenity in the U.S. markets principally through synergistic partnerships with online pharmacies and telehealth providers, which in turn sell Plenity directly to patients based on prescriptions. Outside the U.S., the Company primarily seeks collaborations with strategic partners to market Plenity and obtain necessary regulatory approvals as necessary.

Product revenue is recognized by the Company in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services when the customer obtains control of the product, which occurs at a point in time, when the product is received by the Company's customers.

Reserves for Variable Consideration

Revenues from product sales are recorded as product revenue at the net sales price (transaction price), which includes estimates of variable consideration that are reimbursable to customers for which reserves are established and which result from (a) shipping charges to end-users, (b) pharmacy dispensing and platform fees, (c) merchant and processing fees, (d) promotional discounts offered by the Company to end-users, and (e) reserves for expected product quality returns. These reserves for contractual adjustments are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than the customer). Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as the Company's historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company's best estimates of the amount of consideration to which the Company is entitled based on the terms of the contract(s). The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from the Company's estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The Company has no plan to seek government or commercial payor reimbursements in the US or the overseas markets. Therefore, reserves for variable consideration do not contain any components related to government and payor rebates or chargebacks.

Product Returns

The Company generally does not accept customer returns, except for product quality related cases. The Company evaluates quality related returns and adjusts the corresponding product warranty reserves and liabilities at least quarterly and at the end of each reporting period.

Stock-Based Compensation

The Company accounts for all stock-based compensation awards granted to employees and non-employees in accordance with ASC 718, Compensation – Stock Compensation. The Company’s stock-based compensation consists primarily of stock options. The

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measurement date for share-based awards is the date of grant, and stock-based compensation costs are recognized as expense over the respective requisite service periods, which are typically the vesting period. The fair value of each stock option grant is estimated as of the date of grant using the Black-Scholes option-pricing model that requires management to apply judgment and make estimates, including:

•exercise price: The exercise price is the fair market value on grant date, which shall mean the closing sale price of common stock, as reported on such market on that date (or if there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations);

•expected volatility: As the Company was previously a privately-owned company, there is not sufficient historical volatility for the expected term of the options. Therefore, the Company used an average historical share price volatility based on an analysis of reported data for a peer group of comparable companies for which historical information is available. For these analyses, the Company selects companies with comparable characteristics to itself including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its stock-based awards. The Company intends to consistently apply this process using representative companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available;

•risk-free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption;

•expected term, which is calculated using the simplified method, as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment, as the Company has insufficient historical information regarding its stock options to provide a basis for an estimate. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term of ten years and the weighted-average vesting term of the stock options, taking into consideration multiple vesting tranches;

•dividend yield, which is zero based on the fact that the Company never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The measurement date for non-employee awards is the date of grant without changes in the fair value of the award. Stock-based compensation costs for non-employees are recognized as expense over the vesting period. Stock-based compensation expense is classified in the condensed consolidated statements of operations based on the function to which the related services are provided. Forfeitures are recorded as they occur.

Recently Issued Pronouncements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements. This update requires leasehold improvements associated with common control leases be amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset (the leased asset) through a lease. However, if the lessor obtained the right to control the use of the underlying asset through a lease with another entity not within the same common control group, the amortization period may not exceed the amortization period of the common control group. Further, leasehold improvements associated with common control leases be accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of the underlying asset. Those leasehold improvements are subject to the impairment guidance in Topic 360, Property, Plant, and Equipment. This update is effective for annual periods beginning after December 15, 2023, and early application is permitted. This guidance should be applied either (i) prospectively to all new leasehold improvements recognized on or after the date of initial application; (ii) prospectively to all new and existing leasehold improvements recognized on or after the date of initial application, with any remaining unamortized balance of existing leasehold improvements amortized over their remaining useful life to the common control group determined at that date; or (iii) retrospectively to the beginning of the period in which the entity first applied Topic 842, with any leasehold improvements that otherwise would not have been amortized or impaired recognized through a cumulative-effect adjustment to the opening balance of retained earnings at the beginning of the earliest period presented in accordance with Topic 842. The Company is evaluating the potential impact of this update and does not intend to early adopt this update for fiscal year 2023.

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3.Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis consisted of the following at June 30, 2023 (in thousands):

			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Interest rate swap contract (see Note 11)	$	757	$	—	$	757	$	—
Liabilities:
2022 convertible promissory notes (see Note 11)		20,114		—		—		20,114
2023 NPA ̶ Initial Close Note (see Note 11)		3,199		—		—		3,199
One S.r.l. call option (see Note 10)		—		—		—		—
Total liabilities measured at fair value	$	23,313	$	—	$	—	$	23,313

Assets and liabilities measured at fair value on a recurring basis consisted of the following at December 31, 2022 (in thousands):

			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Interest rate swap contract (see Note 11)	$	800	$	—	$	800	$	—
Liabilities:
2022 promissory notes (see Note 11)		27,403		—		—		27,403
Earnout liability (see Note 13)		563		—		—	$	563
Private placement warrant liability (see Note 12)		130		—		—		130
One S.r.l. call option (see Note 10)		674		—		—		674
Total liabilities measured at fair value	$	28,770	$	—	$	—	$	28,770

The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments during the six months ended June 30, 2023:

	Convertible Promissory Notes			One S.r.l. Call Option			Earnout Liability			Private Placement Warrant Liability
Balance at December 31, 2022	$	27,403		$	674		$	563		$	130
Issuance of convertible promissory notes		5,000			—			—			—
Transaction price allocated to warrant issuance		(1,459	)		—			—			—
Changes in fair value		(7,631	)		(678	)		(563	)		(130	)
Foreign currency translation adjustment		—			4			—			—
Balance at June 30, 2023	$	23,313		$	—		$	—		$	—

There were no transfers into or out of level 3 instruments and/or between level 1 and level 2 instruments during the six months ended June 30, 2023. The fair value measurement of the convertible promissory notes, Legacy Gelesis preferred stock warrant liability, One Srl call option liability, earnout liability and private placement warrant liability utilized inputs not observable in the market and thus represents a Level 3 measurement.

4.Product Revenue Reserve and Allowance

The Company sells the Product principally to a limited number of customers consisting of telemedicine and online pharmacies, that in turn resell the Product to consumers.

Revenue for the three and six months ended June 30, 2023 and 2022 consisted of the following (in thousands):

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	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Roman Health Pharmacy LLC	$	608	$	6,916	$	1,623	$	13,415
GoGoMeds		496		2,057		1,157		3,072
CMS		—		—		77		—
Other		3		—		3		—
Total	$	1,107	$	8,973	$	2,860	$	16,487

Roman Health Pharmacy LLC (“Ro”)

Net product revenue recognized with respective to the Ro supply and distribution agreement was $0.6 million and $1.6 million for the three and six months ended June 30, 2023,and $6.9 million and $13.4 million for the three and six months ended June 30, 2022, respectively, in the accompanying condensed consolidated statements of operations. At June 30, 2023 and December 31, 2022, the Company recorded a deferred income balance of $24.3 million and $25.9 million, respectively, in the accompanying condensed consolidated balance sheets representing customer prepayment available to be used for future Product purchases with respect to Ro.

GoGoMeds (“GGM”)

Net product revenue recognized with respect to Specialty Medical Drugstore, LLC, d/b/a/ GoGoMeds, or GGM distribution agreement was $0.5 million and $1.2 million for the three and six months ended June 30, 2023 and $2.1 million and $3.1 million for the three and six months ended June 30, 2022, respectively, in the accompanying condensed consolidated statements of operations. At June 30, 2023 and December 31, 2022, the Company recorded an accounts receivable balance of $0.8 million and $1.1 million, respectively, prior to reserves and allowances, in the accompanying condensed consolidated balance sheets with respect to GGM.

CMS Bridging DMCC (“CMS”)

Net product revenue recognized with respect to the CMS licensing and collaboration agreements was $0.1 million for the three and six months ended June 30, 2023, respectively, in the accompanying condensed consolidated statements of operations. There was no product sales to CMS for the three and six months ended June 30, 2022.

Reserves and Allowances

The following table summarizes the activity in the product revenue reserve and allowances during the three and six months ended June 30, 2023 and June 30, 2022 (in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Balance at beginning of period	$	7		$	238		$	23		$	82
Provision related to product sales		174			619			384			1,193
Credits and payments made		(177	)		(736	)		(403	)		(1,154	)
Balance at end of period	$	4		$	121		$	4		$	121

At June 30, 2023 and 2022, product related reserve and allowances comprised solely contractual adjustments owed to the Company’s telehealth and online pharmacy partners, which were netted to accounts receivable in the Company’s condensed consolidated balance sheets for the year. Through June 30, 2023, there had been no product related reserves or allowances owed to other parties, including the federal and state governments or their agencies.

5.Inventories

Inventories consisted of the following (in thousands):

	June 30,			December 31,
	2023			2022
Raw materials	$	8,781		$	9,549
Work in process		4,434			4,695
Finished goods		5,395			5,955
Inventories, gross		18,610			20,199
Less: inventory reserves		(12,922	)		(13,334	)
Total inventories	$	5,688		$	6,865

In January 2023, the Company submitted a 510(k) application with the FDA to change the classification of Plenity from prescription only to OTC, which, if cleared by the FDA, would make Plenity available to consumers without the need for a prescription. If Plenity

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is approved by the FDA as an OTC weight management aid, a portion of finished goods and raw material inventories with Rx labeling and marking information would become obsolete. Additionally, finished goods and work-in-process inventories with expiration dates ranging between July 2023 and March 2024 are subject to shelf-life limitations.

As of June 30, 2023, the Company estimated that approximately $5.0 million finished goods, $4.3 million work-in-progress and $3.6 million raw material inventories wouldn’t be sold or utilized. Therefore, the Company recorded an aggregate $12.9 million excess and obsolescence inventory reserves as a component of inventories on the accompanying consolidated balance sheet as of June 30, 2023.

6.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Prepaid expenses	$	207	$	314
Prepaid insurance		1,238		268
Prepaid contract research costs		72		189
Research and development tax credit		498		567
Value added tax receivable		825		2,036
Income tax receivable		208		203
Investment tax credit		2,115		1,050
Prepaid expenses and other current assets	$	5,163	$	4,627

7.Property and Equipment, Net

Property and equipment, net, consists of the following (in thousands):

	June 30,			December 31,
	2023			2022
Laboratory and manufacturing equipment	$	41,333		$	29,944
Land and buildings		8,562			10,673
Leasehold improvements		1,553			1,525
Computer equipment and software		825			811
Capitalized software		232			232
Construction in process		15,687			24,287
Property and equipment – at cost		68,192			67,472
Less accumulated depreciation		(11,265	)		(8,137	)
Property and equipment – net	$	56,927		$	59,335

The Company owns and operates commercial manufacturing and research and development facilities in Italy, including a 51,000 square foot facility, which the Company expects to further expand to an 88,600 square foot facility, as well as approximately 12 acres of land, where the Company initiated construction activities for an additional 207,000 square foot facility. Both facilities are near the Town of Lecce in the Puglia region of Italy. Property and equipment classified as construction in process at June 30, 2023 and December 31, 2022 are related to the development of manufacturing lines that have not yet been placed into service at June 30, 2023 and December 31, 2022, respectively.

Depreciation expense was approximately $1.5 million and $3.5 million for the three and six months ended June 30, 2023 and $0.4 million and $1.4 million for the three and six months ended June 30, 2022, respectively.

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8.Accrued Expenses

Accrued expenses and other current liabilities consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Accrued payroll and related benefits	$	1,741	$	1,550
Accrued professional fees and outside contractors (including    due to related party of $75 and $153, respectively)		560		3,521
Accrued property, plant and equipment additions		182		378
Accrued inventory and manufacturing expense		71		1,020
Unpaid portion of One S.r.l. equity acquisition (see Note 10)		2,778		2,656
Tax payables		548		543
Deferred legal fees		738		738
Accrued interest		659		62
Total accrued expenses	$	7,277	$	10,468

9.Other Long-Term Liabilities

Other long-term liabilities consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Long-term tax liabilities	$	136	$	224
One S.r.l. call option (see Note 10)		—		674
Total other long-term liabilities	$	136	$	898

10.Significant Agreements

Puglia Grants

In May 2020, the Company was awarded a grant by the Puglia region of Italy as an incentive to manufacture and carry out research and development activities in Italy (“PIA 1 Grant”), with the key underlying activity being the development of the commercial facility to expand production capacity for the Product.

In November 2020, the Company was awarded a second grant by the Puglia region of Italy as an incentive to manufacture and carry out research and development activities in Italy (“PIA 2 Grant”), with the key underlying activity being the development of a second manufacturing line at the commercial facility to expand production capacity for the Product, and research and development activities targeting new gastrointestinal health indications.

The following table represents amounts recognized on the consolidated statements of operations for the three months ended June 30, 2023 and 2022 in relation to the Puglia 1 Grant and Puglia 2 Grant (in thousands):

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2023			2022		2023		2022
PIA 1 Grant income	$	195		$	204	$	389	$	409
Income attributable to R&D expense		18			18		36		36
Income attributable to investments in facilities and equipment		177			186		353		373
PIA 2 Grant Income	$	56		$	874	$	393	$	1,062
Income attributable to R&D expense (reclassification)		(51	)		874		181		1,062
Income attributable to investments in facilities and equipment		107			—		212		—

The following table represents amounts recorded on the consolidated balance sheets at June 30, 2023 and December 31, 2022 in relation to the Puglia 1 Grant and Puglia 2 Grant (in thousands):

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	June 30,		December 31,
	2023		2022
PIA 1 Grant
Grant receivable	$	—	$	3,237
Deferred income		4,693		5,001
Current portion of deferred income		777		771
PIA 2 Grant
Grant receivable		5,119		122
Long-term grant receivable		—		4,732
Deferred income		3,347		3,502
Current portion of deferred income		427		420

One S.r.l. (“One”) Amended Patent License and Assignment Agreement

In October 2008 and December 2008, the Company entered into a patent license and assignment agreement and master agreement with One, the original inventor and owner of the Company’s core patents and a related party to the Company (see Notes 18 and 19), to license and subsequently purchase certain intellectual property to develop hydrogel-based product candidates. The One agreements were subsequently amended and restated in December 2014 (the “2014 One Amendment”), June 2019 (the “2019 One Amendment”), October 2020 (the “2020 One Amendment”) and August 2022 (the "2022 One Amendment").

In conjunction with the 2019 One Amendment, the Company accounted for the reduction in royalties that the Company is required to pay on future net revenues as an intangible asset under ASC 350, Intangibles – Goodwill and Other, which shall be amortized over its useful life, which was determined to be the earliest expiration of patents related to the underlying intellectual property in November 2028. Additionally, the Company acquired a 10% equity interest in One in exchange for cash consideration. The Company accounted for the acquisition of the 10% equity interest in One under ASC 323, Investments – Equity Method and Joint Ventures.
 

At June 30, 2023 and December 31, 2022, respectively, the remaining undiscounted payment obligations to One shareholders were included in accrued expenses in the accompanying condensed consolidated balance sheets as it is expected to be settled within the next twelve months. None of the future milestones under the amended and restated master agreement, have been met, or are deemed to be probable of being met, at the transaction date or at June 30, 2023 and December 31, 2022, respectively.

In conjunction with the 2020 One Amendment, the Company cancels its obligation to issue a warrant for redeemable convertible preferred stock in the 2019 One Amendment for additional commercial milestone consideration and a warrant to purchase common stock. Additionally, the Company granted One a contingent call option to buy back the 10% ownership that the Company acquired in the 2019 One Amendment at an exercise price of €6.0 million (approximately $6.6 million at June 30, 2023). The call option is only exercisable upon (1) a change of control or a deemed liquidation event by the Company, as defined, in the Company’s Restated Certification of Incorporation or (2) the date in which the Company’s current Chief Executive Officer is no longer affiliated with the Company in his capacity as either an executive officer or a member of the board of directors.

The One S.r.l. call option was recorded as a liability held at fair value at the date of issuance and is remeasured at each subsequent reporting date with changes in fair value recorded in other income (expense) in the accompanying condensed consolidated statements of operations. Fair value is determined using a Black-Scholes option pricing model. The significant inputs used in estimating the fair value of call option liability include the estimated fair value of the underlying stock price, expected term, risk free interest rate, and expected volatility. The Company determined that the fair value of the One S.r.l. call at June 30, 2023 was de minimis, reflecting the expectations related to the closing of the pending merger described in Note 1. Accordingly, the valuation assumptions as of June 30, 2023 are not presented in the below fair value assumption table due to the assessment of de minimis value.
 

The following represents a summary of the changes to Company’s One S.r.l. call option liability during the three and six months ended June 30, 2023 and June 30, 2022 (in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Balance at Beginning of Period	$	141		$	2,623		$	674		$	2,416
Change in fair value		(142	)		607			(678	)		865
Foreign currency translation gain		1			(168	)		4			(219	)
Balance at the End of Period	$	—		$	3,062		$	—		$	3,062

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The following weighted average assumptions were used to determine the fair value of the One S.r.l. call option liability at December 31, 2022:

	December 31,
	2022
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.2	%
Estimated fair value of ownership interest	$	1,772
Exercise price of call option	$	6,422

Research Innovation Fund (“RIF”) Financing

In August 2020, Gelesis S.r.l. entered into a loan and equity agreement with RIF, an investment fund out of the EU, whereby Gelesis S.r.l. received €10.0 million (approximately $10.9 million at June 30, 2023) from RIF as an equity investment and €15.0 million (approximately $16.3 million at June 30, 2023) as a loan with a fixed interest rate of 6.35% per annum (see Note 12). The equity investment can be called by the Company, beginning in December 2023 and ending in December 2026, by paying the investment plus 15% percent annual interest. If the Company does not exercise this call option, beginning in January 2027 and ending in December 2027, RIF may put the investment to the Company at a cost of the investment amount plus 3.175% percent annual interest. The loan has a termination date of December 31, 2030 and is repayable over 8 years starting 24 months subsequent to its issuance. Any unpaid principal and interest must be repaid upon exercise of the call option by the Company, or subsequent exercise of a put option by RIF. At June 30, 2023, RIF holds approximately 20% of the equity of Gelesis S.r.l.

The Company recorded the following noncontrolling interest components in the condensed consolidated statements of noncontrolling interest, redeemable convertible preferred stock and stockholders' deficit (in thousands):

	For the Six Months Ended June 30,
	2023		2022
Balance at beginning of period	$	12,590	$	11,855
Accretion of put option		—		173
Income allocated to noncontrolling interest holder		100		—
Foreign currency translation adjustment		215		(941	)
Balance at the end of period	$	12,905	$	11,087

11.Debt

The Company’s non-convertible debt outstanding at June 30, 2023 and December 31, 2022 is summarized as follows:

	June 30,			December 31,
	2023			2022
Italian Economic Development Agency Loan	$	168		$	331
Intesa Sanpaolo Loan 1		6,731			7,094
Intesa Sanpaolo Loan 2		4,989			5,352
Horizon 2020 Loan		360			389
RIF Shareholders Loan		16,328			16,055
UniCredit Loan		4,042			4,421
Total debt obligation	$	32,618		$	33,642
Unamortized loan discount and issuance costs		(313	)		(346	)
Total debt obligation carrying amount	$	32,305		$	33,296
Current portion	$	5,039		$	7,954
Long-term portion	$	27,266		$	25,342

Future maturities with respect to non-convertible debt outstanding at June 30, 2023 are as follows (in thousands):

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	At June 30, 2023
2023		3,016
2024		7,806
2025		5,390
2026		4,050
2027		4,032
More than 5 years		8,324
Total maturities	$	32,618

2022 Promissory Notes

In the third quarter of 2022, the Company issued three term promissory notes in the aggregate principal amount of $25.0 million to existing investor CMS, and existing investors and related parties PureTech Health LLC and SSD2 LLC, for aggregate cash proceeds of $25.0 million. Each of the 2022 promissory notes is unsecured and bears interest at a rate of 15% per annum. Each promissory note matures on the earlier of (a) December 31, 2023 or (b) five (5) business days following a qualified financing. Upon a payment default under any promissory note that has not been cured after five days (i) the Company will be required to issue certain warrants to the holders as defined by the promissory note agreements and (ii) the holders will have the option to convert outstanding principal and accrued interest into a number of shares of Gelesis common stock as defined by the promissory note agreements.

At June 30, 2023 and December 31, 2022, the aggregate outstanding balance of the 2022 promissory notes was $22.6 million and $27.4 million recorded at fair value on the accompanying condensed consolidated balance sheet. During the three and six months ended June 30, 2023, the Company recognized a fair value gain of $2.5 million and $7.3 million relating to the 2022 promissory notes.

The following assumptions were used to determine the fair value of the 2022 promissory notes at June 30, 2023 and December 31, 2022:

	June 30, 2023			December 31, 2022
Expected term	6 months			1 year
Weighted average discount rate		123.7	%		26.0	%
Probability of repayment after qualified financing		—			50.0	%
Probability of holder electing conversion option		—			50.0	%
Probability of a business combination		90.0	%		—
Probability of Company default		10.0	%		—

2023 Senior Secured Note and Warrant Purchase Agreement (the “2023 NPA — Initial Close”)

On February 21, 2023, the Company entered into a Note and Warrant Purchase Agreement with PureTech (the “2023 NPA”), pursuant to which the Company issued a short-term convertible senior secured note (the “Initial Close Note”) in the aggregate principal amount of $5.0 million and warrants to purchase 23,688,047 shares of the Company’s common stock at an exercise price of $0.2744 (”Initial Warrant”). The Initial Close Note bears interest at a rate of 12% per annum, and its original maturity date was July 31, 2023. The Notes issued pursuant to the 2023 NPA are secured by a first-priority lien on substantially all assets of the Company, including without limitation, intellectual property, regulatory filings and product approvals, clearances and trademarks worldwide (other than the equity interests in, and assets held by, Gelesis, S.r.l.) and a pledge of 100% of PureTech’s equity in the Company.

The Initial Warrant issued pursuant to the 2023 NPA are indexed to the Company's own stock and met the derivative scope exception provided by ASC 810-0-15-74, therefore were recorded as change in additional paid-in-capital. Accordingly, the total 2023 NPA Initial Close proceeds of $5.0 million was allocated between the senior secured note and the warrants based on the relative respective fair value as of February 21, 2023. The Company determined that the allocated fair value of the warrants and the related deferred financing costs were $1.5 million and $0.2 million, respectively, based on the following Black-Scholes inputs as of February 21, 2023:

Market price of common stock	$	0.28
Expected volatility		160	%
Expected term (in years)		0.24
Risk-free interest rate		4.9	%
Expected dividend yield		—

Accordingly, the allocated fair value of the Initial Close Note and the related deferred financing costs were $3.5 million and $0.4 million, respectively, as of February 21, 2023. The Company elected the fair value accounting option to account for the 2023 NPA Initial Close Note for the initial and subsequent measurements, and expensed the allocated deferred financing costs as non-cash

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interest expense due to the immaterial amount. The following assumptions were used to determine the fair value of the Initial Close Note at June 30, 2023 and the original issuance date of February 21, 2023:

	June 30, 2023			February 21, 2023
Expected term	0.75 year			0.4 year
Weighted average discount rate		113.8	%		26.9	%
Probability of repayment after qualified financing		—			—
Probability of holder electing conversion upon a business combination		90.0	%		50.0	%
Probability of Company default		10.0	%		40.0	%
Probability of holder electing conversion option upon other default events		—			10.0	%

2023 NPA — Additional Closes

Amendment No. 1 to the 2023 NPA : On May 1, 2023, the Company and PureTech entered into an Amendment No.1 to the 2023 NPA (the “Amendment No. 1”), under which PureTech waived certain conditions and received (i) the convertible note in the aggregate principal amount of $2.0 million (the “Second Close Note”) and (ii) additional warrants to purchase up to 192,307,692 shares of the Company’s common stock at an exercise price of $0.0182 (the “Second Close Warrant”). Pursuant to the Amendment No. 1, the conversion of the Notes and the exercise of the Warrants pursuant to the NPA are no longer subject to the approval of the Company’s stockholders.

Limited Waiver to the 2023 NPA and Amendment No. 2 to the 2023 NPA: On May 26, 2023, the Company and PureTech entered into a Limited Waiver to the 2023 NPA (the “Waiver”), pursuant to which the PureTech waived certain conditions with respect to the Company’s issuance of $350,000 aggregate principal amount of convertible note (the “Amendment No. 2”). Pursuant to the Amendment No. 2 and the Waiver, the Company issued to PureTech Additional Notes with par value of $350,000 (the “Third Close Note”) and additional warrants to purchase up to 43,133,803 shares of the Company’s common stock at an exercise price of $0.0142 (the “Third Close Warrants”), for an aggregate cash purchase price of $350,000.

Bridge Note: In connection with the execution of the Merger Agreement described in Note 1, on June 12, 2023, the Company issued $3.0 million convertible note (the “Bridge Note”, or the “Forth Close” of the 2023 NPA) to PureTech for a cash price of $3.0 million. No concurrent warrant was issued to PureTech in connection with the Bridge Note.

Amendment No. 3 and Extension of Maturity Date of the 2023 NPA Notes: On June 28, 2023, the Company and PureTech entered into Amendment No. 3 to the 2023 NPA (“Amendment No. 3”), pursuant to which maturity date of all Notes issued pursuant to the 2023 NPA was extended to March 31, 2024.

Cash proceeds received as well as issuance costs incurred from the Second and Third Close were allocated between the respective Notes and Warrants based on their relative fair market values as of the closing date of May 1, 2023 and May 26, 2023, respectively. Based on the fair value analyses performed by an independent valuation firm, as of May 1, 2023, the Second Close Note and Warrant had an allocated price of $1.6 million and $0.4 million, respectively. As of May 26, 2023, the Third Close Note and Warrant had an allocated price of $0.3 million and less than $0.1 million, respectively. On June 12, 2023, the Bridge Note was issued at par value without any concurrent warrants. These Notes issued at Additional Close are recorded at their respective amortized costs.

At June 30, 2023, the aggregate carrying amount of the 2023 NPA Notes was $8.2 million, of which the Initial Close Note with principal amount of $5.0 million was recorded at fair value in the amount of $3.2 million, and the Additional Close Notes with aggregate principal amount of $5.35 million was recorded at amortized cost of $5.0 million on the accompanying condensed consolidated balance sheet. The Company recognized a fair market gain of $0.2 million and $0.3 million, non-cash interest expense and amortization of issuance costs of $0.2 million and $0.6 million with respect to the 2023 NPA notes for the three and six months ended June 30, 2023, respectively,

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12.Warrant Liabilities

The following represents a summary of the warrant liabilities activity during the six months ended June 30, 2023:

	Private Placement Warrants
Balance at December 31, 2022	$	130
Changes in fair value		(130	)
Balance at June 30, 2023	$	—

Private Placement Warrants

At June 30, 2023, there were 7,520,000 Private Placement Warrants outstanding exercisable at $11.50 per share for common stock at the same terms as the Public Warrants. However, the warrants will not be redeemable by the Company for cash so long as they are held by the initial stockholders or their permitted transferees. The initial purchasers of the Private Placement Warrants, or their permitted transferees, also have the option to exercise the Private Placement Warrants on a cashless basis. If Private Placement Warrants are held by holders other than the initial purchasers thereof or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.

The warrants were initially recorded at fair value with subsequent changes in fair value being recorded in the accompanying condensed consolidated statements of operations. The warrants at issuance and at June 30, 2023, were valued utilizing a modified Monte Carlo Simulation value model and significant unobservable Level 3 inputs.

The following weighted-average assumptions were used to determine the fair value of the Private Placement Warrant liability at December 31, 2022:

	Private Placement Warrants
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.0	%
Price of Gelesis Common Stock	$	0.29
Exercise price of warrants	$	11.50

The Company was notified by the NYSE Regulation in March 2023 that Company had fallen below the NYSE’s continued listing standard requiring listed companies to maintain an average global market capitalization over a consecutive 30 trading day period of at least $15.0 million. The NYSE reached its determination and publicly announced that the GLS common stock had been suspended from trading effective April 10, 2023. The Company’s common stock under the ticker symbol of GLS or GLSH were subsequently traded on the OTC markets ranging between $0.01 and $0.05 per share. As a result, the fair value of outstanding warrant liabilities was determined to be immaterial as of June 30, 2023.

13.Earnout Liability

The following represents a summary of the earnout liability activity during the six months ended June 30, 2023:

	Earnout Liability
Balance at December 31, 2022	$	563
Changes in fair value		(563	)
Balance at June 30, 2023	$	—

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At Business Combination close and at June 30, 2023, there were 18,758,241 earnout shares unissued and unvested. At June 30, 2023, none of the triggering events had been met.

The earnout liability was initially recorded at fair value with subsequent changes in fair value being recorded in the accompanying condensed consolidated statements of operations. The earnout liability at issuance and at December 31, 2022, were valued utilizing a Monte Carlo Simulation and significant unobservable Level 3 inputs.

The following weighted-average assumptions were used to determine the fair value of the earnout liability at December 31, 2022:

	December 31, 2022
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.0	%
Price of Gelesis Common Stock	$	0.29

The Company's common stock under the ticker symbol of GLS or GLSH were suspended from trading on the NYSE effective April 10, 2023 and subsequently traded on the OTC markets ranging between $0.01 and $0.05 per share. Therefore, the fair value of outstanding earnout liabilities was determined to be immaterial as of June 30, 2023.

14.Stockholders' Equity (Deficit)

Common Stock

The Company’s authorized capital stock consists of (a) 900,000,000 shares of common stock, par value $0.0001 per share; and (b) 250,000,000 shares of preferred stock, par value $0.0001 per share. At June 30, 2023, there were 73,335,110 shares of common stock issued and outstanding.

Public Warrants

In connection with the Business Combination the Company assumed 13,800,000 Public Warrants, which entitle the holder to acquire common stock, which are exercisable at an exercise price of $11.50 per share. The Public Warrants will expire on the earlier to occur of five years after the completion of the Business Combination or redemption.
 

Once the Public Warrants become exercisable, the Company may call the Public Warrants for redemption for cash:
 

•in whole and not in part;
 

•at a price of $0.01 per warrant;
 

•upon not less than thirty (30) days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and
 

•if, and only if, the closing price of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) trading days within a thirty (30)-trading day period ending three (3) business days before the Company sends the notice of redemption to the warrant holders.
 

If the Company calls the Public Warrants for redemption, the Company will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis, as described in the warrant agreement. Additionally, in no event will the Company be required to net cash settle.

At June 30, 2023, there were 13,800,000 Public Warrants outstanding.

Rollover Warrants

Immediately prior to the closing of the Business Combination, Legacy Gelesis redeemable preferred stock warrants were converted into Legacy Gelesis common warrants and were subsequently split according to the exchange ratio of 2.59. Upon closing of the Business Combination, holders received shares of common stock of the Company on a one-to-one basis. At close of Business

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Combination and June 30, 2023, there were 1,836,429 and 1,660,303 warrants outstanding, respectively, with an exercise price of $0.02. During the three months ended March 31, 2022, 176,126 rollover warrants were exercised for proceeds of less than $0.1 million.

Immediately prior to the closing of the Business Combination, existing Legacy Gelesis common warrants were also split according to the exchange ratio of 2.59. Upon closing of the Business Combination, holders received shares of common stock of the Company on a one-to-one basis. At close of Business Combination and through June 30, 2023, respectively, there were 1,353,062 of these warrants outstanding with an exercise price of $4.26.

At June 30, 2023 and December 31, 2022 common stock reserved for future issuances was as follows:

	June 30,		December 31,
	2023		2022
Common stock issued upon option exercise and RSUs vesting		15,335,476		16,881,549
Conversion of all classes of redeemable convertible   preferred stock		—		—
Issuances upon exercise of common stock warrants		283,862,907		24,733,365
Earnout shares		23,482,845		23,482,845
Total common stock reserved for future issuance		322,681,228		65,097,759

15.Stock-Based Compensation

2021 Stock Option Plan

In January 2022, the Company's Board of Directors approved the 2021 Stock Option and Incentive Plan (the "2021 Plan"), which supersedes the 2016 Stock Option and Grant Plan and the 2006 Stock Incentive Plan and provides for the grant of incentive stock options, nonqualified stock options, restricted stock awards and restricted stock units to employees, directors, and nonemployees of the Company. The 2021 Plan was authorized initially to issue 9,583,570 shares, plus on January 1, 2023 and each January 1 thereafter, the number of shares of Stock reserved and available for issuance under the Plan shall be cumulatively increased by 4 percent of the number of shares of Stock issued and outstanding on the immediately preceding December 31. Under the 2021 Plan, 7,375,070 shares remained available for issuance at June 30, 2023.

Options and restricted stock awards generally vest based on the grantee’s continued service with the Company during a specified period following a grant as determined by the Board of Directors and expire ten years from the grant date. In general, awards typically vest in three to four years, but vesting conditions can vary based on the discretion of the Company’s Board of Directors.

The fair value of the options is estimated at the grant date using Black-Scholes and recognized over the vesting period, taking into account the terms and conditions upon which options are granted. The fair value of restricted stock awards is the fair value at the date of grant reduced by the exercise price of the award, if any. The fair value of both options and restricted stock awards are amortized on a straight-line basis over the requisite service period of the awards.

Stock-based compensation expense is summarized for employees and nonemployees, by category in the accompanying condensed consolidated statements of operations as follows (in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	209	$	3,008	$	543	$	8,073
Selling, general and administrative		2,175		4,968		3,932		13,892
Total	$	2,384	$	7,976	$	4,475	$	21,965

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Stock Option Activity

The following table summarizes the Company’s stock option activity during the six months ended June 30, 2023:

	Number of Options			Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022		12,798,479		$	3.97		5.80	$	25
Granted		—
Exercised		—
Forfeited - unvested		(158,733	)	$	4.02
Forfeited - vested		—
Expired		(999,070	)	$	4.12
Outstanding at June 30, 2023		11,640,676		$	3.95		5.32	$	—
Exercisable at June 30, 2023		9,827,923		$	3.92		4.75	$	—
Vested and Expected to Vest at June 30, 2023		11,640,676		$	3.95		5.32	$	—

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the common stock. The total fair value of options vested during the three and six months ended June 30, 2023 was $1.0 million and $2.9 million, respectively.

At June 30, 2023, there was $4.1 million unrecognized compensation cost related to unvested stock option grants under the 2021 Plan, which was expected to be recognized over a weighted-average period of 2.1 years.

Restricted Stock Unit (“RSU”) Activity

The following table summarizes the Company’s RSU activity during the six months ended June 30, 2023:

	Number of RSUs			Weighted- Average Grant Date Fair Value
Outstanding and Unvested at December 31, 2022		4,083,070		$	4.31
Granted		—
Vested		(10,088	)	$	8.26
Forfeited		(378,182	)	$	3.35
Outstanding at June 30, 2023		3,694,800		$	4.39

Each RSU entitles the holder to one share of common stock on vesting and the RSU awards are based on a cliff vesting schedule over requisite service periods in which the Company recognizes compensation expense for the RSUs. Vesting of the RSUs is subject to the satisfaction of certain service and or certain performance conditions. The Company recognizes the estimated grant date fair value of these awards as stock-based compensation expense over the service and or performance periods based upon its determination of whether it is probable that the service and or performance conditions will be achieved. The Company assesses the probability of achieving the service and our performance conditions at each reporting period. Cumulative adjustments, if any, are recorded to reflect subsequent changes in the estimated or actual outcome of service and or performance-related conditions.

At June 30, 2023, unrecognized compensation cost for RSU awards granted totaled $5.4 million, which was expected to be recognized over a weighted-average period of 2.7 years.

16.Income Taxes

The Company recorded a provision of less than $0.1 million and $0.0 million during the six months ended June 30, 2023 and June 30, 2022, respectively. The provision recorded differs from the US statutory rate of 21% for the six months ended June 30, 2023 and June 30, 2022 primarily due to the valuation allowance recorded against the net operating losses and deferred tax assets.

The Company continues to evaluate the positive and negative evidence bearing upon the realizability of its net deferred tax assets and determined that it is not more likely than not that the Company will recognize the benefits of the net deferred tax assets. Therefore, a full valuation allowance has been recorded against the balance of net deferred tax assets in the United States as of June 30, 2023 and December 31, 2022, respectively.

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17.Earnings (Loss) per Share

Basic and diluted loss per share attributable to common stockholders was calculated as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Numerator:
Net loss	$	(7,681	)	$	(12,513	)	$	(12,827	)	$	(18,216	)
Accretion of redeemable convertible preferred stock to redemption value		—			—			—			(37,934	)
Accretion of noncontrolling interest put option to redemption value		—			(85	)		—			(173	)
Income allocated to noncontrolling interest holder		—			—			(100	)		—
Net loss attributable to common stockholders	$	(7,681	)	$	(12,598	)	$	(12,927	)	$	(56,323	)
Denominator:
Weighted average common shares outstanding, basic and diluted		73,334,861			72,423,043			73,329,685			67,609,838
Net loss per share, basic and diluted	$	(0.10	)	$	(0.17	)	$	(0.18	)	$	(0.83	)

The Company’s potential dilutive securities, which include stock options, RSUs, warrants and earnout shares have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same for all periods presented. The Company excluded the following potential common stock, presented based on amounts outstanding at June 30, 2023 and 2022 from the computation of diluted net loss per share attributable to common stockholders because including them would have had an anti-dilutive effect.

	June 30,
	2023		2022
Options and RSUs to acquire common stock		15,335,476		20,000,493
Warrants on common stock		283,862,907		24,333,365
Earnout shares		—		—
Total		299,198,383		44,333,858

Total potentially dilutive common share equivalents for the three and six months ended June 30, 2023, excludes 23,482,845 shares related to the earnout liability as these shares are contingently issuable upon meeting certain triggering events.

18.Commitments and Contingencies

Operating Leases

In June 2019, the Company entered into an operating lease agreement with PureTech Health LLC, or PureTech, for office space located in Boston, Massachusetts. The lease expires in August 2025, with total lease payments of $3.2 million over the term. The Company also has operating leases for certain storage and equipment with various terms expiring in 2027. The remaining weighted average noncancelable term of the Company’s operating leases was 2.3 years at June 30, 2023, and the weighted average discount rate was 5.4%.

The following table summarizes the Company's operating lease activity (in thousands):

	For the six months ended June 30,
	2023		2022
Lease liabilities, current		546		550
Lease liabilities, non-current		697		1,222
Total operating lease liabilities	$	1,243		1,772
Operating lease rental expense	$	376	$	272

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Future maturities of the lease liability under the Company’s noncancelable operating leases at June 30, 2023 are as follows (in thousands):

Remaining 2023 maturities		320
2024		565
2025		389
2026		38
2027		18
More than 5 years		-
Total undiscounted lease maturities	$	1,330
Imputed interest		(87	)
Total lease liability	$	1,243

Royalty Agreements

Expenses from royalty agreements on net product sales and sublicense income is recognized as a cost of goods sold in the accompanying condensed consolidated statements of operations during the period in which the associated revenues are recognized.

PureTech

In December 2009, the Company entered into a royalty and sublicense income agreement with PureTech, a significant stockholder in the Company, whereby the Company is required to pay PureTech a 2.0% royalty on net product sales received as a result of developing products and technology using the intellectual property purchased from One.

One S.r.l

Under the amended and restated master agreement with One, the Company is required to pay a 2.0% royalty on net product sales and an aggregate of €17.5 million (approximately $19.0 million at June 30, 2023) upon the achievement of certain commercial milestones of new medical indications as well as Plenity and pay royalties on net product sales and/or a percentage of sublicense income. At June 30, 2023, none of the milestones have been met.

Grant Agreements

The Company has been awarded grants from governmental agencies, which are recognized as income as the qualifying expenses are incurred (see Note 11). The grant agreements contain certain provisions, including, among others, maintaining a physical presence in the region for defined periods. Failure to comply with these covenants would require either a full or partial refund of the grant to the granting authority.

19.Related Party Transactions

The Company had the following transactions with related parties:

PureTech

In June 2019, PureTech executed a sublease agreement with the Company (see Note 18). With respect to the sublease, the Company incurred lease expense of approximately $0.1 million and $0.3 million during the three and six months ended June 30, 2023, and $0.1 million and $0.3 million during the three and six months ended June 30, 2022, respectively, recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations. The Company incurred royalty expense of less than $0.1 million and $0.1 million in connection with the PureTech royalty agreement (see Note 18) during the three and six months ended June 30, 2023, and $0.1 million and $0.3 million during the three and six months ended June 30, 2022, respectively, recorded in cost of goods sold in the accompanying condensed consolidated statements of operations. The Company had an accounts payable accrued expense balance to PureTech of $0.6 million and $0.1 million at June 30, 2023 and December 31, 2022, respectively, in the accompanying condensed consolidated balance sheets.

On July 25, 2022, the Company issued a convertible promissory note to PureTech in the principal amount of $15.0 million (see Note 11). At June 30, 2023 and December 31, 2022, the outstanding balance was $12.1 million and $16.6 million, respectively, recorded at fair value in the accompanying condensed consolidated balance sheets. During the three and six months ended June 30, 2023, the Company recognized a gain of $1.6 million and $4.5 million with respect to the change in fair value of the 2022 convertible promissory notes on the accompanying condensed consolidated statements of operations.

Between February 2023 and June 2023, the Company entered into the 2023 NPA and amendments with aggregate gross proceeds of $10.4 million (see Note 11), pursuant to which the Company issued convertible senior secured notes in the aggregate par value of $10.4 million and warrants to purchase 259,129,542 shares of the Company’s common stock. The warrants have an exercise price ranging between $0.0142 and $0.2744 and may not be exercised prior to the receipt of stockholders' approval. At June 30, 2023, the

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outstanding balance of the 2023 NPA convertible senior secured notes amounted to an aggregate of $8.2 million on the accompanying condensed consolidated balance sheets. The Company recognized a gain of $0.2 million and $0.3 million for the three and six months ended June 30, 2023 with respect to the change in fair value, as well as interest and issuance cost amortization of $ 0.2 million and $0.6 million for the three and six months ended June 30, 2023, respectively, in the accompanying condensed consolidated statements of operations.

SSD2

On July 25, 2022, the Company issued a convertible promissory note to SSD2, LLC in the principal amount of $5.0 million (see Note 11). At June 30, 2023 and December 31, 2022, the outstanding balance was $4.0 million and $5.5 million, respectively, recorded at fair value on the accompanying condensed consolidated balance sheets. The Company recognized a gain of $0.5 million and $1.5 million with respect to the change in fair value of the convertible promissory notes in the accompanying condensed consolidated statements of operations.

One S.r.l

Consulting Agreement with Founder of One

The Company and one of the founders of One, who is also a stockholder of the Company, entered into a consulting agreement for the development of the Company's science and technology. The Company incurred costs for consulting services received from the founder of One totaling less than $0.1 million and $0.1 million for the three and six months ended June 30, 2023, and less than $0.1 million and $0.1 million for the three and six months ended June 30, 2022, respectively, recorded in research and development expense in the accompanying condensed consolidated statements of operations. The Company recorded an accounts payable balance to the founder of less than $0.1 million at both June 30, 2023 and December 31, 2022, respectively, on the accompanying condensed consolidated balance sheets.

Acquisition of One

In connection with the amended and restated master agreement with One (see Note 10), the Company acquired a 10.0% equity interest in One in exchange for cash consideration. The Company had remaining undiscounted payments of €2.5 million due to One at June 30, 2023 and December 31, 2022 (approximately $2.7 million due to One at June 30, 2023 and December 31, 2022), respectively. The balance at June 30, 2023 and December 31, 2022 was recorded in accrued expenses on the accompanying condensed consolidated balance sheets as it is expected to be settled within the next twelve months.

Additionally, the Company incurred royalty expense of less than $0.1 million and $0.1 million with One (see Note 18) for the three and six months ended June 30, 2023, respectively, and $0.2 million and $0.3 million for the three and six months ended June 30, 2022, respectively, recorded in cost of goods sold in the accompanying condensed consolidated statements of operations. The Company had an accounts payable and accrued expense balance of $0.1 million at June 30, 2023 and December 31, 2022, respectively, related to royalties on the accompanying condensed consolidated balance sheets.

RIF Transaction

In connection with the RIF transaction entered into in August 2020, the Company received $12.3 million from RIF as an equity investment that can be called by the Company beginning in December 2023 and ending in December 2026 by paying the investment plus 15.0% percent annual interest or put by RIF starting in January 2027 and ending in December 2027 for the investment amount plus 3.175% percent annual interest. RIF holds approximately 20% of the equity of Gelesis S.r.l. at December 31, 2021 (see Note 10). In addition, the shareholders of RIF provided the Company with a loan for $16.3 million with a fixed interest rate of 6.35% per annum (see Note 11).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to the “Company,” “our,” “us,” “we,” or “Gelesis” refer to Gelesis Holdings, Inc. and its consolidated subsidiaries. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with (i) the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q and (ii) the audited consolidated financial statements and related notes thereto and management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 28, 2023. Certain of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including, but not limited to, those set forth in the section entitled “Cautionary Note Regarding Forward-Looking Statements” and those set forth in the section entitled “Risk Factors” in Item 1A of Part II of this Quarterly Report on Form 10-Q and in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 28, 2023, actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a commercial stage biotherapeutics company built for consumer engagement. We are focused on advancing first-in-class superabsorbent hydrogel therapeutics for chronic gastrointestinal, or GI, diseases including excess weight, type 2 diabetes, non-alcoholic fatty liver disease/non-alcoholic steatohepatitis (“NAFLD/NASH”), functional constipation (“FC”), and inflammatory bowel disease. Our biomimetic superabsorbent hydrogels are inspired by the composition and mechanical properties (e.g. firmness) of raw vegetables. They are conveniently administered in capsules taken with water to create a much larger volume of small, non-aggregating hydrogel pieces that become an integrated part of the meals, and act locally in the digestive system.

Our first commercial product, Plenity, received de novo clearance from the FDA on April 12, 2019 to aid in weight management in adults with excess weight or obesity, Body Mass Index (BMI) of 25 to 40 kg/m2, when used in conjunction with diet and exercise. In January 2023, we submitted a premarket notification, or 510(k), to the FDA to change Plenity from prescription-only to over-the-counter, or OTC, in the United States and anticipate the FDA's decision on our 510(k) submission by the first quarter of 2024. We believe Plenity’s advantages are its differentiated safety-to-efficacy profile, broad approved labeling, and affordability to the consumer. Accordingly, we believe making Plenity available OTC could make Plenity more accessible to people struggling with excess weight, reduce costs associated with acquiring new members as well as allow us to reduce costs associated with the prescription granting process, while also enabling new sales channels for us.

Our product pipeline also includes multiple other potential therapeutic candidates for common chronic conditions affected by gut health that are currently in clinical and preclinical testing, including type 2 diabetes, NAFLD, NASH and FC, all based on our hydrogel technology.

Since our inception, we have devoted our resources to business planning, developing proprietary superabsorbent hydrogel manufacturing know-hows and technologies, preclinical and clinical development, commercial activities, recruiting management and technical staff and raising capital. We have funded our operations to date through proceeds from the issuance of redeemable convertible preferred stock, license and collaboration agreements, long-term loans, and government grants. We have incurred significant operating losses to date. Our net losses were $7.7 million and $12.8 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2023, we had an accumulated deficit of $335.6 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future.
 

As a result, we will require substantial additional funding to support our continuing operations until we are able to generate positive cash flows from product sales. Until such time, we expect to finance our operations through equity offerings, debt financings or other capital sources, including collaborations, licenses, dealership partnerships or similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if at all. If we are unable to obtain funding, we may be forced to delay, reduce or eliminate some or all of our commercialization efforts, research and development programs or product pipeline expansion, which could adversely affect our business prospects, or we may be unable to continue operations.
 

As of the date of this Quarterly Report, we expect that our existing cash and cash equivalents, and collection of accounts and grants receivable, are not sufficient to meet the Company’s current obligations, prior to considering any additional funding, and not at least twelve months beyond the date of issuance of the unaudited condensed consolidated financial statements included elsewhere in this

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Quarterly Report. As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report, which have been prepared in accordance with GAAP, contemplate that we will continue to operate as a going concern. Our financial statements do not contain any adjustments that might result if we are unable to continue as a going concern. See “—Liquidity and Capital Resources” for further information.
 

Recent Events

Delisting from NYSE

On April 10, 2023, the NYSE Regulation reached its decision to delist our common stock because we had fallen below the NYSE's continued listing standard requiring listed companies to maintain an average global market capitalization over a consecutive 30 trading day period of at least $15 million. We did not appeal the delisting determination. Subsequently commencing April 11, 2023, our common stock has been traded on the OTC Pink Market operated by the OTC Markets Group Inc. (the “OTC Market”). In connection with the delisting, on April 26, 2023, the NYSE filed a Form 25 with the SEC regarding the removal of shares of our Common Stock from listing and the withdrawal of the registration of our Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which became effective ten days thereafter. We will continue to make all required filings with the SEC and remain subject to all SEC rules and regulations applicable to reporting companies under the Exchange Act.

Merger with PureTech

On June 12, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with PureTech Health LLC, a Delaware limited liability company (“Parent”) and Caviar Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the terms and conditions set forth therein, we will merge with and into Merger Sub (the “Merger”) with Merger Sub surviving the Merger as a wholly-owned subsidiary of Parent. Both the Parent and Merger Sub are subsidiaries of PureTech Health PLC, which beneficially owns 16,883,102 shares of our common stock and 259,345,750 shares of our warrants.

The Merger is conditioned upon i) our obtaining stockholder’s approval, ii) the absence of a bankruptcy or insolvency proceeding or formal corporate action by us or our subsidiaries to commence any such proceeding, iii) certain conditions related to our submission to the FDA, including that we shall not have received a “Not Substantially Equivalent” letter or a notice identifying any deficiencies from the FDA and with respect to such deficiencies, limitations on the costs and time frame to rectify them, iv) the receipt of certain amendments to agreements with certain lenders of the Company to restructure the terms of the applicable debt, and v) other customary closing conditions for a transaction of this type. We anticipates that at least one or more of these conditions will not be satisfied and will necessitate a waiver or amendment of the condition by PureTech. If the Merger is completed, each outstanding share of our common stock (other than (i) shares held in our treasury, (ii) shares owned by Parent or any of its direct or indirect subsidiaries (including Merger Sub) immediately before the effective time of the Merger, (iii) shares of our restricted common stock issued pursuant to the Business Combination Agreement (the “BCA”), dated as of July 19, 2021, by and among the Legacy Gelesis and Capstar Special Purpose Acquisition Corp. (“CPSR”) , as amended and/or otherwise modified, and subject to all of the terms and conditions of the BCA in respect of the “Earn Out Shares” (“Earn Out Shares”) and (iv) shares held by our stockholders will be converted automatically into and will thereafter represent only the right to receive $0.05664 in cash (the “Merger Consideration”), without interest and subject to applicable withholding taxes. Upon consummation of the Merger, we would become a subsidiary of the Parent and cease to be a publicly traded company.

2023 Senior Secured Note and Warrant Purchase Agreements

On February 21, 2023, we entered into a Note and Warrant Purchase Agreement with PureTech (the “2023 NPA”), pursuant to which we issued a short-term convertible senior secured note ("Initial Close Note") in the aggregate principal amount of $5.0 million and warrants to purchase 23,688,047 shares of our common stock at an exercise price of $0.2744. The Initial Close Note bears interest at a rate of 12% per annum and matures on July 31, 2023. The notes issued pursuant to the 2023 NPA are secured by a first-priority lien on substantially all of our assets, including without limitation, intellectual property, regulatory filings and product approvals, clearances and trademarks worldwide (other than the equity interests in, and assets held by, Gelesis, S.r.l., our subsidiary located in Italy) and a pledge of 100% of the PureTech’s equity in us.

On May 1, 2023, we amended the Note and Warrant Purchase Agreement dated February 21, 2023 with PureTech (the “Amendment No. 1”). Pursuant to this Amendment, for a cash purchase price of $2.0 million, PureTech waived certain conditions contained in the original NPA and (i) we issued to PureTech Additional Notes in the aggregate principal amount of $2.0 million (the “Second Close Note”) and (ii) we issued to PureTech additional warrants to purchase up to 192,307,692 shares of our common stock, at an exercise

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price of $0.0182 (the “Second Close Warrant”). Additionally, as a result of the delisting from the NYSE, the Initial Warrant was amended to provide that the exercise thereof is no longer subject to the approval of our stockholders, additionally, the conversion of the Notes issued pursuant to the NPA is no longer subject to the approval of our stockholders.

On May 26, 2023, we entered into a Limited Waiver to the 2023 NPA (the “Waiver”) with PureTech, pursuant to which the PureTech waived the certain conditions with respect to the issuance of $350,000 aggregate principal amount of convertible note (the “Third Close Note”). Additionally, we entered into Amendment No. 2 to the 2023 NPA (“Amendment No. 2”) with PureTech, under which if we enter into a binding definitive agreement with respect to a Takeover Proposal (as defined in the Merger Agreement) with any party other than PureTech and/or its affiliates, we will immediately pay to PureTech an amount equal to 200% of the aggregate principal amount of outstanding Additional Notes, and the Additional Notes will be cancelled. Pursuant to the Amendment No.2 and the Waiver, we issued to PureTech Additional Notes with par value of $350,000 (the “Third Close Note”) and additional warrants to purchase up to 43,133,803 shares of our common stock at an exercise price of $0.0142 (the “Third Close Warrants”), for an aggregate cash purchase price of $350,000.

Bridge Note

In connection with the execution of the Merger Agreement, on June 12, 2023, we issued $3.0 million convertible note (the “Bridge Note”, or the “Fourth Close Note” of the 2023 NPA) to PureTech for a cash price of $3.0 million. No concurrent warrant was issued to PureTech in connection with the Bridge Note pursuant to Amendment No. 2.

Amendment No. 3 and Extension of Maturity Date of the 2023 NPA Notes

On June 28, 2023, we entered into Amendment No. 3 to the 2023 NPA (“Amendment No. 3”) PureTech, pursuant to which the maturity date of all Notes issued to the PureTech pursuant to the NPA was extended to March 31, 2024.

Key Factors Affecting Results of Operations

We believe that our performance and future success depend on several factors that present not only significant opportunities for us but also pose risks and challenges, including those discussed below.

New Consumer Acquisition

Our ability to attract new consumers is a key factor for our future growth. To date we have successfully acquired consumers through our U.S. commercial launch in conjunction with the continued development of marketing and sales tactics. We intend to acquire new members in the United States by promoting Plenity directly to the consumer. However, in light of limited cash resources and to preserve liquidity, we suspended investments in broad awareness media and consumer acquisition and reduced spend in digital marketing while waiting for the FDA approval of our 510K submission to switch Plenity from Rx to OTC. However, we continue to commercially make Plenity available to consumer through one of two channels:

•Telehealth: We continue to partner with a leading telehealth platform in the United States, providing convenient and immediate access to physicians online at no cost. Pursuant to an amended and restated agreement, we have granted Ro exclusive distributor rights to sell Plenity in the United States with respect to (i) consumers who seek an on-line consultation through myplenity.com in the United States and (ii) certain named competitors and or third parties.

•Health Care Providers: To support prescription fulfillment for our non-telehealth tradition HCP promotional efforts, we continue to engage GoGoMeds (“GGM”), to distribute all non-telehealth mail order prescriptions generated in the United States by health care providers.

Retention of Consumers

Our ability to retain consumers is a key factor in our ability to generate revenue. We expect our direct home delivery, simple and transparent pricing, and consumer engagement to enhance the experience of our consumers and promote recurring revenue. If consumer retention decreases in the future, then future revenue will be negatively impacted. The ability of our consumers to continue to pay for our products and services will also impact the future results of our operations.

Rest of World

We are evaluating global strategic partnerships to build our brand globally; however, we may also retain the rights.

•Europe: We received approval to market Plenity in Europe through a Conformité Européenne (CE) mark for Plenity as a Class III medical device indicated for weight loss in overweight and obese adults with a Body Mass Index (BMI) of 25-40 kg/m2, when used in conjunction with diet and exercise.

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•CMS: In Greater China (including Mainland China, Hong Kong, Macau, and Taiwan), Singapore and United Arab Emirates, Brunei, Myanmar, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Thailand and Vietnam, we partner with China Medical System Holdings Limited (CMS) (HKG:0867) for the commercialization of Plenity.

Product Candidate Expansion

In addition to Plenity, we have invested in a pipeline of product candidates for prevalent and important gastrointestinal, or GI, tract-related chronic diseases including, type 2 diabetes, NAFLD/NASH, chronic idiopathic constipation, and inflammatory bowel disease by targeting the natural processes of the GI pathway. We expect to continue investing in our pipeline over time to broaden our commercial opportunity. The continued preclinical and clinical development of the pipeline will require significant financial resources. If we are unable to generate sufficient demand in Plenity or raise additional capital at favorable terms, if at all, we may not have sufficient funds to invest in the research and development of additional product candidates.

Key Business Metrics

We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe the following metrics are useful in evaluating our business (dollar amounts in thousands except where noted):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
In thousands	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
New members acquired		5,251			43,800			13,188			84,200
Units sold		15,819			139,890			44,442			244,460
Product revenue, net		1,107			8,973			2,860			16,487
Average selling price per unit, net	$	69.98		$	64.14		$	64.35		$	67.44
Gross profit		609			4,187			1,125			6,788
Gross margin		55.0	%		46.7	%		39.3	%		41.2	%

New members acquired

We define new members acquired as the number of consumers in the United States who have begun their weight loss journey with Plenity during the financial period presented. This is the total number of recurring and non-recurring consumers who have begun their weight loss journey during the financial period presented. We do not differentiate from recurring and non-recurring consumers as of the date of this Quarterly Report as (i) we strongly believe every member’s weight-loss journey is chronic and long-term in nature, and (ii) we have not initiated our long-term strategy and mechanisms to retain and/or win-back members. We will continue to evaluate the utility of this business metric in future periods.

Units sold

Units sold is defined as the number of 28-day supply units of Plenity sold to consumers based on prescriptions, through our strategic partnerships with online pharmacies and telehealth providers as well as the units sold to our strategic partners outside the United States.

Product revenue, net

See elsewhere in this discussion and analysis under the heading “Key Components of Results of Operations — Product revenue, net”.

Average selling price per unit, net

Average selling price per unit, net is the gross price per unit sold during the period net of estimates of per unit variable consideration for which reserves are established for expected product returns, shipping charges to end-users, pharmacy dispensing and platform fees, merchant and processing fees, and promotional discounts offered to end-users. See “— Critical Accounting Policies and Significant Judgments and Estimates” below and the “Revenue Recognition” section of Note 2 in the accompanying Notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for a more detailed discussion of our revenue recognition policy.

Gross profit and gross margin

Our gross profit represents product revenue, net, less our total cost of goods sold, and our gross margin is our gross profit expressed as a percentage of our product revenue, net. See discussion elsewhere in this discussion and analysis under the headings “Key Components of Results of Operations — Cost of goods sold”.

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Our gross profit and gross margin have been and will continue to be affected by a number of factors, including the prices we charge for our product, the costs we incur from our vendors for certain components of our cost of goods sold, the mix of channel sales in a period, and our ability to sell our inventory. We expect our gross margin to increase over the long term, although gross margins may fluctuate from period to period depending on these and other factors.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with GAAP, we believe the following non-GAAP measure is useful in evaluating our operating performance. We use the following non-GAAP financial measure to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measure, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. We consider Adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis. We believe that the use of Adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance.

However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided below for the non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measure and the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA

Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. We define “Adjusted EBITDA” as net (loss) income before depreciation and amortization expenses, provision for (benefit from) income taxes, interest expense, net, stock-based compensation and (gains) and losses related to changes in fair value of our earnout liability, fair value of our warrant liability, our convertible promissory note liability and the One S.r.l. call option.

The following table reconciles net loss to Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022, respectively:

	For the Three Months Ended June 30,						For the six months ended June 30,
	2023			2022			2023			2022
In thousands	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Adjusted EBITDA
Net loss	$	(7,681	)	$	(12,513	)	$	(12,827	)	$	(18,216	)
Provision for income taxes		—			—			16			—
Depreciation and amortization		2,066			987			4,642			2,573
Stock based compensation expense		2,384			7,976			4,475			21,965
Change in fair value of earnout liability		—			(18,812	)		(563	)		(52,681	)
Change in fair value of warrants		—			(2,600	)		(130	)		(6,084	)
Change in fair value of convertible    promissory notes		(2,672	)		—			(7,631	)		156
Change in fair value of One S.r.l. call    option		(141	)		607			(677	)		865
Interest expense, net		566			186			1,457			321
Adjusted EBITDA	$	(5,478	)	$	(24,169	)	$	(11,238	)	$	(51,101	)

Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures. In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our

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performance, you should consider Adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

Basis of Presentation

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. Any reference in this discussion and analysis to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”).

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, the Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. We view our operations and manage our business as one operating segment.

The noncontrolling interest attributable to Gelesis S.r.l., our variable interest entity (“VIE”), is presented as a separate component from stockholders’ equity (deficit) in our consolidated balance sheets and as a noncontrolling interest in our condensed consolidated statements of noncontrolling interest, redeemable convertible preferred stock and stockholders’ equity. All intercompany balances and transactions have been eliminated in consolidation.

Key Components of Results of Operations

Product revenue, net

We recognize product revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, when we transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Our product revenue is derived from product sales of Plenity, net of estimates of variable consideration for which reserves are established for expected product returns, shipping charges to end-users, pharmacy dispensing and platform fees, merchant and processing fees, and promotional discounts offered to end-users.

Cost of goods sold

Cost of goods sold includes the cost of manufacturing our proprietary superabsorbent hydrogels for Plenity for which revenue was recognized during the period, as well as the associated costs for encapsulation, packaging, shipment, supply management and quality assurance. Expenses from royalty agreements on net product sales are also recognized as a component of cost of goods sold during the period in which the associated revenues are recognized. A portion of depreciation with respect to property and equipment directly utilized in manufacturing Plenity units is recognized as a component of cost of goods sold over the depreciable life of the asset.

Selling, general and administrative expense

A significant component of our selling, general and administrative expenses is comprised of our selling and marketing expense, which includes our limited contract sales force in the US markets and discretionary consumer acquisition expenses.

Selling, general and administrative costs are expensed as incurred. Selling, general and administrative costs include sales and marketing costs incurred as a result of the commercialization of our products, payroll and personnel expense, stock-based compensation expense, and costs of programs and infrastructure necessary for the general conduct of our business.

Research and development expense

Research and development costs are expensed as incurred. Prepaid research and development costs are deferred and amortized over the service period, as the services are provided. Research and development costs include payroll and personnel expense, stock-based compensation expense, consulting costs, external contract research and development expenses, as well as depreciation and utilities. These activities relate primarily to formulation, CMC, preclinical and discovery activities. As such, we do not track these research and development expenses on an indication-by-indication basis as they primarily relate to expenses which are deployed across multiple projects under development or are for future product and pipeline candidates which utilize our platform technology. These costs are included in unallocated research and development expenses in the tables below.

Clinical trial costs are a component of research and development expenses and consist of clinical trial and related clinical manufacturing costs, fees paid to clinical research organizations and investigative sites. We track and maintain these costs on an indication-by-indication basis.

Amortization expense

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Amortization expense relates to the intangible asset that resulted from an amendment to our master agreement with the original inventor of our core patents, pursuant to which the percentage of royalties we are required to pay on future net revenues was reduced. The intangible asset is amortized over its useful life, which was determined as of the date of the amendment to be the earliest expiration of patents related to the underlying IP in November 2028.

Other non-operating income (expense), net

Change in the fair value of earnout liability

We have earnout shares which are contingent issuable as incremental consideration pursuant to ASC 815. The earnout shares are initially recorded at fair value and remeasured to fair value at each reporting date until settlement with gains and losses arising from changes in fair value recognized in the consolidated statements of operations.

Changes in the fair value of warrants

We have issued warrants to investors which are liability classified and initially recorded at fair value and remeasured to fair value at each reporting date until settlement with gains and losses arising from changes in fair value recognized in the consolidated statements of operations.

Interest expense, net

Interest expense, net consists of interest incurred on our various loans and interest income earned on our cash, cash equivalents and marketable securities.

Other income (expense), net

Other income, net primarily consists of income earned on our grants from government agencies in Italy, research and development tax credits earned in Italy for qualifying expenses, and gains and losses on foreign currency transactions. Other income, net also consists of changes in fair value of the One Srl call option.

Provision for income taxes

We must make certain estimates and judgments in determining income tax expense for financial statement purposes. The amount of taxes currently payable or refundable is accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for realizable loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using substantively enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are not recorded if we do not assess their realization as probable. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in our financial statements in the period that includes the substantive enactment date.

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Results of Operations

Comparison of the three months ended June 30, 2023 and 2022:

The following table summarizes our results of operations for the three months ended June 30, 2023 and 2022:

	For the Three Months Ended June 30,
	2023			2022			Change
	(Unaudited)			(Unaudited)
Revenue:
Product revenue, net	$	1,107		$	8,973		$	(7,866	)
Total revenue, net		1,107			8,973			(7,866	)
Operating expenses:
Costs of goods sold		498			4,786			(4,288	)
Selling, general and administrative		7,456			32,450			(24,994	)
Research and development		2,582			5,523			(2,941	)
Amortization of intangible assets		567			566			1
Total operating expenses		11,103			43,325			(32,222	)
Loss from operations		(9,996	)		(34,352	)		24,356
Other non-operating income (expense), net		2,315			21,839			(19,524	)
Loss before income taxes		(7,681	)		(12,513	)		4,832
Provision for income taxes		—			—			—
Net loss	$	(7,681	)	$	(12,513	)	$	4,832

Product revenue, net

We recognized product revenue, net of $1.1 million for the three months ended June 30, 2023, as compared to $9.0 million for the three months ended June 30, 2022, a decrease of $7.9 million or 88%. We sold 15,819 units at an average selling price per unit, net of $69.98 for the three months ended June 30, 2023, as compared to 139,890 units at an average selling price per unit, net of $64.14 for the three months ended June 30, 2022.

The decrease in units sold was primarily attributable to the suspension of broad media campaigns and reduced digital marketing efforts for prescription-based Plenity branding, while we anticipate a decision by the FDA on our OTC application by the first quarter of 2024. Activities associated with a full commercial launch of the prescription-based Plenity in the United States began in late 2021, followed by the first national broad awareness media campaign in February 2022. We suspended broad media campaigns during the third quarter of 2022 and reduced digital marketing efforts during the first quarter of 2023 to preserve liquidity.

Cost of goods sold

We recognized cost of goods sold of $0.5 million for the three months ended June 30, 2023, as compared to $4.8 million for the three months ended June 30, 2022, a decrease of $4.3 million or 90%. Depreciation as a component of cost of goods sold was $0.5 million and $0.6 million for the three months ended June 30, 2023 and 2022, respectively. The decrease in cost of goods sold was primarily attributable to a decrease in units sold for the three months ended June 30, 2023, as compared to the three months ended June 30, 2022.

Gross profit was $0.6 million for the three months ended June 30, 2023, as compared to $4.2 million for the three months ended June 30, 2022. Gross margin was 55% for the three months ended June 30, 2023, as compared to 47% for the three months ended June 30, 2022. A slight increase in gross margin was primarily due to lower manufacturing cost per unit for on hand inventory, partially offset by higher fulfillment cost per unit shipped, driven by a decrease in sales volume during the three months ended June 30, 2023.

Selling, general and administrative expense

The following table summarizes our selling, general and administrative expenses for the three months ended June 30, 2023 and 2022:

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	For the Three Months Ended June 30,
	2023		2022		Change
In thousands
Selling and marketing expense	$	649	$	22,197	$	(21,548	)
General and administrative expense		4,632		5,285		(653	)
Non-cash stock-based compensation expense		2,175		4,968		(2,793	)
Total selling, general and administrative expense	$	7,456	$	32,450	$	(24,994	)

Our selling, general and administrative expense was $7.5 million for the three months ended June 30, 2023, as compared to $32.5 million for the three months ended June 30, 2022, a decrease of $25.0 million or 77%.

Selling and marketing expense decreased $21.5 million for the three months ended June 30, 2023, as compared to the three months ended June 30, 2022. The decrease in selling and marketing expense was primarily attributable to the suspension of broad awareness media campaign and reduced digital marketing efforts for prescription-based Plenity during the three months ended June 30, 2023 compared to the same quarter in 2022.

Non-cash stock-based compensation expense decreased $2.8 million for the three months ended June 30, 2023, as compared to the three months ended June 30, 2022. The decrease was primarily attributable to the elimination of non-essential positions between the second half of 2022 and the first quarter of 2023.

General and administrative expense decreased $0.7 million for the three months ended June 30, 2023, as compared to the three months ended June 30, 2022. The decrease was attributable to cost saving activities put in place since September 2022 to preserve liquidity, including the elimination of certain sales, marketing and supply chain positions.

Research and development expenses

The following table summarizes our research and development expenses for the three months ended June 30, 2023 and 2022:

	For the Three Months Ended June 30,
	2023		2022			Change
In thousands	(Unaudited)		(Unaudited)
GS200	$	—	$	4			(4	)
GS300		—		(55	)		55
GS500		—		—			—
Unallocated expenses
Other research and development expenses		2,373		2,566			(193	)
Non-cash stock-based compensation expense		209		3,008			(2,799	)
Total Research and development expense	$	2,582	$	5,523		$	(2,941	)

Our research and development expense was $2.6 million for the three months ended June 30, 2023, as compared to $5.5 million for the three months ended June 30, 2022, a decrease of $2.9 million, or 53%.

Non-cash stock-based compensation expense decreased $2.8 million for the three months ended June 30, 2023, as compared to the three months ended June 30, 2022. This decrease was primarily attributable to reduction in research and development headcount since most of our research and development programs were put on hold during the second half of 2022 to preserve liquidity.

Non-operating income (expense), net

The following table summarizes our non-operating income (expenses) for the three months ended June 30, 2023 and 2022:

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	For the Three Months Ended June 30,
	2023			2022			Change
In thousands	(Unaudited)			(Unaudited)
Change in the fair value of earnout liability	$	—		$	18,812		$	(18,812	)
Change in the fair value of convertible promissory notes		2,672			—			2,672
Change in the fair value of warrants		—			2,600			(2,600	)
Interest expense, net		(565	)		(186	)		(379	)
Other income, net		208			613			(405	)
Total non-operating income, net	$	2,315		$	21,839		$	(19,524	)

We recognized non-operating income, net of $2.3 million for the three months ended June 30, 2023, as compared to income, net of $21.8 million for the three months ended June 30, 2022, a decrease in non-operating income of $19.5 million. The income for the three months ended June 30, 2023 was primarily attributable to a gain of $2.7 million with respect to the change in the fair value of our convertible promissory notes outstanding. The non-operating income for the three months ended June 30, 2022 was primarily attributable to a gain with respect to the change in fair value of our earnout liabilities and warrant liabilities of $18.8 million and $2.6 million, respectively.

Comparison of the six months ended June 30, 2023 and June 30, 2022:

The following table summarizes our results of operations for the six months ended June 30, 2023 and 2022:

	For the Six Months Ended June 30,
	2023			2022			Change
	(Unaudited)			(Unaudited)
Revenue:
Product revenue, net	$	2,860		$	16,487		$	(13,627	)
Total revenue, net		2,860			16,487			(13,627	)
Operating expenses:
Costs of goods sold		1,735			9,699			(7,964	)
Selling, general and administrative		15,743			70,156			(54,413	)
Research and development		6,219			12,933			(6,714	)
Amortization of intangible assets		1,133			1,133			—
Total operating expenses		24,830			93,921			(69,091	)
Loss from operations		(21,970	)		(77,434	)		55,464
Other non-operating income (expense), net		9,159			59,218			(50,059	)
Loss before income taxes		(12,811	)		(18,216	)		5,405
Provision for income taxes		16			—			16
Net loss	$	(12,827	)	$	(18,216	)	$	5,389

Product revenue, net

We recognized product revenue, net of $2.9 million for the six months ended June 30, 2023, as compared to $16.5 million for the six months ended June 30, 2022, a decrease of $13.6 million or 83%. We sold 44,442 units at an average selling price per unit, net of $64.35 for the six months ended June 30, 2023, as compared to 244,460 units at an average selling price per unit, net of $67.44 for the six months ended June 30, 2022.

The decrease in units sold was primarily attributable to the suspension of broad media campaigns and reduced digital marketing efforts for prescription-based Plenity branding, while we anticipate the FDA approval of our OTC application by the first quarter of 2024. Activities associated with a full commercial launch of the prescription-based Plenity in the United States began in late 2021, followed by the first national broad awareness media campaign in February 2022. We suspended broad media campaigns during the third quarter of 2022 and reduced digital marketing efforts during the first quarter of 2023 to preserve liquidity.

Cost of goods sold

We recognized cost of goods sold of $1.7 million for the six months ended June 30, 2023, as compared to $9.7 million for the six months ended June 30, 2022, a decrease of $8.0 million or 82%. Depreciation as a component of cost of goods sold was $1.2 million and $0.8 million for the six months ended June 30, 2023 and 2022, respectively. The decrease in cost of goods sold was primarily attributable to a decrease in units sold for the six months ended June 30, 2023, as compared to the six months ended June 30, 2022.

Gross profit was $1.1 million for the six months ended June 30, 2023, as compared to $6.8 million for the six months ended June 30, 2022. Gross margin was 39% for the six months ended June 30, 2023, as compared to 41% for the six months ended June 30, 2022. A

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decrease in gross margin was primarily due to higher fulfillment cost per unit shipped, driven by a decrease in sales volume during the six months ended June 30, 2023.

Selling, general and administrative expense

The following table summarizes our selling, general and administrative expenses for the six months ended June 30, 2023 and 2022:

	For the Six Months Ended June 30,
	2023		2022		Change
In thousands
Selling and marketing expense	$	2,988	$	43,361	$	(40,373	)
General and administrative expense		8,823		12,903		(4,080	)
Non-cash stock-based compensation expense		3,932		13,892		(9,960	)
Total selling, general and administrative expense	$	15,743	$	70,156	$	(54,413	)

Our selling, general and administrative expense was $15.7 million for the six months ended June 30, 2023, as compared to $70.2 million for the six months ended June 30, 2022, a decrease of $54.4 million or 78%.

Selling and marketing expense decreased $40.4 million for the six months ended June 30, 2023, as compared to the six months ended June 30, 2022. The decrease in selling and marketing expense was primarily attributable to the suspension of broad awareness media campaign and reduced digital marketing efforts for prescription-based Plenity during the six months ended June 30, 2023 compared to the same period in 2022.

Non-cash stock-based compensation expense decreased $10.0 million for the six months ended June 30, 2023, as compared to the six months ended June 30, 2022. The decrease was primarily attributable to the recording of a one-time compensation cost with respect to vested portion of the contingently issuable earnout shares pertaining to a business combination completed during the first quarter of 2022, partially offset by the reduction in sales, marketing and supply chain headcount since the second half of 2022.

General and administrative expense decreased $4.1 million for the six months ended June 30, 2023, as compared to the six months ended June 30, 2022. The decrease was attributable to professional and legal expenses incurred with respect to a business combination completed in the first quarter of 2022, as well as cost saving activities put in place since September 2022 to preserve liquidity.

Research and development expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2023 and 2022:

	For the Six Months Ended June 30,
	2023		2022		Change
In thousands
GS200	$	—	$	47		(47	)
GS300		—		127		(127	)
GS500		—		75		(75	)
Unallocated expenses
Other research and development expenses		5,676		4,611		1,065
Non-cash stock-based compensation expense		543		8,073		(7,530	)
Total Research and development expense	$	6,219	$	12,933	$	(6,714	)

Our research and development expense was $6.2 million for the six months ended June 30, 2023, as compared to $12.9 million for the six months ended June 30, 2022, a decrease of $6.7 million, or 52%.

Non-cash stock-based compensation expense decreased $7.5 million for the six months ended June 30, 2023, as compared to the six months ended June 30, 2022. This decrease was primarily attributable to the recording of a one-time compensation cost with respect to vested portion of the contingently issuable earnout shares pertaining to a business combination completed during the first quarter of 2022, partially offset by a decrease in research and development headcount since the second half of 2022.

The decline in research and development expenses within clinical indications (GS200, GS300 and GS500) was primarily attributable to the conclusion of the LIGHT-UP study with respect to GS200 during the year ended December 31, 2021, as well as the strategic prioritization of the commercialization of Plenity particularly with respect to our financial and human resources. Other research and

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development expenses increased by $1.0 million for the six months ended June 30, 2023, as compared to the six months ended June 30, 2022, primarily driven by an increase in allocation of facilities overhead to research and development.

Non-operating income (expense), net

The following table summarizes our non-operating income (expenses) for the six months ended June 30, 2023 and 2022:

	For the Six Months Ended June 30,
	2023			2022			Change
In thousands	(Unaudited)			(Unaudited)
Change in the fair value of earnout liability	$	563		$	52,681		$	(52,118	)
Change in the fair value of convertible promissory notes		7,631			(156	)		7,787
Change in the fair value of warrants		130			6,084			(5,954	)
Interest expense, net		(1,457	)		(321	)		(1,136	)
Other income, net		2,292			930			1,362
Total non-operating income, net	$	9,159		$	59,218		$	(50,059	)

We recognized non-operating income, net of $9.2 million for the six months ended June 30, 2023, as compared to income, net of $59.2 million for the six months ended June 30, 2022, a decrease in income of $50.1 million. The non-operating income for the six months ended June 30, 2023 was primarily attributable to a gain of $7.6 million with respect to the change in the fair value of our convertible promissory notes outstanding, an aggregate gain of $0.7 million with respect to the change in the fair value of our earnout and warrant liabilities, a gain of $0.7 million with respect to the change in the fair value of the One S.r.l. call option, income of $1.6 million in Italian regional grants and investment tax credits, which was partially offset by the interest expense, net of $1.5 million.

The non-operating income for the six months ended June 30, 2022 was primarily attributable to a gain with respect to the change in fair value of our earnout liabilities of $52.7 million as well as income with respect to the change in fair value of our warrant liabilities of $6.1 million.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily from the issuance of equity and debt instruments, license and collaboration agreements, supply and distribution agreements, and government grants. As of June 30, 2023, our principal sources of liquidity were our cash and cash equivalents in the amount of $7.9 million. As of the date of this Quarterly Report, we expect that our existing cash and cash equivalents and collection of accounts and grants receivable are not sufficient to meet our current obligations.

Due to our available cash and cash equivalents, a history of recurring losses from operations, negative cash flows from operations, and a significant accumulated deficit, we have concluded that there is substantial doubt about our ability to continue as a going concern. In addition, our independent registered public accounting firm included an emphasis of matter paragraph in their opinion for the years ended December 31, 2022 and 2021, respectively, as to the substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report, which have been prepared in accordance with GAAP, contemplate that we will continue to operate as a going concern. Our financial statements do not contain any adjustments that might result if we are unable to continue as a going concern.

We have incurred negative cash flows from operating activities and significant losses from operations in the past. We expect to continue to incur operating losses for at least the next twelve months due to the investments that we intend to make in our business to support the commercialization of Plenity and, as a result, we will require additional capital resources to grow our business.

Future Liquidity Requirements

Due to limited available liquidity to fund operations, we implemented an alternative business plan, significantly curtailed our sales marketing as well as supply chain activities since the third and fourth quarter of 2022, reduced headcount and delayed certain long-term capital expenditures in commercial infrastructure and certain research and development expenses. We have sought out, and continue to seek out financing and other alternative commercial arrangements or geographic distribution partnerships to finance certain investments in sales and marketing associated with the sale of Plenity. We expect these actions will provide us with sufficient liquidity to manage short-term risk and uncertainty and (i) enable us to execute our alternative business plan, (ii) afford us time to access financing alternatives to provide for long-term liquidity and (iii) enable us to fund the continued commercialization of Plenity. See Part II, Item 1A, “Risk Factors — There is no assurance that the proposed Merger will be completed in a timely manner or at all. If the proposed Merger is not consummated, our business could suffer materially and our stock price could decline.” and “Risk Factors

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— If we are not successful in implementing an alternative business plan and/or raising additional capital in a timely manner, we may have insufficient cash and liquidity to pay operating expenses and other obligations. Any such event would have a material adverse effect on our business and financial condition.” in this Form 10-Q for more information regarding certain factors that may impact our liquidity and our ability to raise additional capital.

We will need substantial additional funding to support our continuing operations and pursue an OTC strategy upon receipt of an anticipated FDA approval in the first quarter of 2024. Until such time as we can generate revenue from product sales, if ever, we expect to finance our operations through issuance of additional equity, debt financings or other capital sources, which may include collaborations with other companies or other strategic transactions.

On June 12, 2023, we entered into a Merger Agreement with PureTech and Merger Sub. We anticipate closing the transaction in the fourth quarter of 2023 pending satisfactory completion of the closing conditions set forth within the Merger Agreement. In connection with entering into the Merger Agreement, we received $3.0 million from PureTech through the issuance of convertible notes, in addition to the $7.4 million in aggregate proceeds previously received from PureTech during 2023. The proceeds from this and previous issuances of convertible notes are intended to provide the necessary funding required for us to continue our operations as a stand-alone entity through the consummation of the proposed Merger. Despite the planned Merger and funding provided by the issuance of convertible notes to PureTech, we expect our cash on hand as of the date of the condensed consolidated financial statements and collection of accounts and grants receivable are not sufficient to meet our obligations for at least twelve months beyond the date of issuance of the condensed consolidated financial statements, and may not be sufficient to continue operations through the anticipated date of closing the Merger without additional bridge funding. Our raise of additional capital would be conditional upon obtaining PureTech consent.

As of the date of this Quarterly Report, we are continuing to evaluate opportunities to raise additional capital. If we are unsuccessful in raising additional capital, we may need to further restrict our spending particularly with respect to discretionary sales and marketing activities and our manufacturing and supply chain functions, liquidate all or a portion of our assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code. Further changes to the execution of our alternative business plan may impact the growth of Plenity sales and the pace of acquisition and retention of consumers, as well as the price of our common stock.

Revenue Projections

Our revenue projections are highly dependent on (i) our ability to acquire new consumers and/or retain existing consumers and (ii) our ability to access additional capital and raise sufficient levels of funding in a timely manner to support the sales and marketing of Plenity at a broad national level within the United States. If our access to additional capital is delayed or insufficient, it may adversely impact the sale of Plenity and our revenue projections.

Financing Risk

We expect to devote significant efforts to raise capital, restructure our indebtedness and identify and evaluate potential strategic alternatives, in each case, to the extent permitted under the Merger Agreement or with Parent’s consent, however, there can be no assurance that we will be successful in obtaining capital sufficient to meet our operating needs on terms or a timeframe acceptable to us or at all. Further, in the event that market conditions preclude our ability to consummate such a transaction, we may be required to evaluate additional alternatives in restructuring our business and our capital structure. Any failure in these efforts could force us to delay, limit or terminate our operations, make reductions in our workforce, discontinue our commercialization efforts for Plenity as well as other development programs, liquidate all or a portion of our assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

Although we have estimated our liquidity requirements based on assumptions we consider to be reasonable, we may need additional cash resources due to changed business conditions or other developments, including supply chain challenges, disruptions due to COVID-19, competitive pressures, and regulatory developments, among other developments. Our budget projections may be subject to cost overruns for reasons outside of our control and Plenity may experience slower sales growth than anticipated, which would pose a risk to achieve positive cash flow.

Our future capital requirements will depend on many factors, including increases in sales of Plenity, increases in our customer base, the timing and extent of spend to support the expansion of sales, marketing and development activities, and the impact of the COVID-19 pandemic. We may in the future also enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights.

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We have based our estimate of liquidity on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Our cash flows may fluctuate and are difficult to forecast and will depend on many factors mentioned elsewhere in this discussion and analysis. If we require additional equity or debt financing from outside sources, we may not be able to raise it on terms acceptable to us, or at all, and the Company may pursue financing transactions that are not completed. If we are unable to raise additional capital when desired, our business, financial condition and results of operations would be harmed.

Cash flows

The following table summarizes our cash flows for each of the periods presented:

	For the Six Months Ended June 30,
	2023			2022
In thousands
Cash (used in) provided by:
Operating activities	$	(8,079	)	$	(39,772	)
Investing activities		(242	)		(5,067	)
Financing activities		8,765			42,189
Effect of exchange rates on cash		53			(406	)
Increase (decrease) in cash and cash equivalents	$	497		$	(3,056	)

Cash used in operating activities

Net cash used in operating activities was $8.1 million for the six months ended June 30, 2023, as compared to $39.8 million for the six months ended June 30, 2022. The decrease in outflows was primarily attributable to cost saving measures put in place since the second half of 2022, including reduction in research and development, supply chain, sales and marketing activities as well as the elimination of non-essential positions while we anticipate the FDA approval of our OTC submission by the first quarter of 2024.

Cash used in investing activities

Net cash used in investing activities was $0.2 million for the six months ended June 30, 2023, as compared to $5.1 million for the six months ended June 30, 2022. The outflows were primarily attributable to $1.9 million in the purchase of property and equipment for the commercial manufacturing scale-up during the six months ended June 30, 2022. Cash used in investing activities was significantly reduced due to our need to preserve cash and the delay of our plan for additional manufacturing scale up was delayed until the FDA approval of our OTC submission is approved and we are able to successfully re-market Plenity in the OTC markets.

Cash provided by financing activities

Net cash provided by financing activities was $8.8 million for the six months ended June 30, 2023, as compared to $42.2 million for the six months ended June 30, 2022. The cash inflows for the six months ended June 30, 2023 was primarily attributable to the proceeds from the issuance of a short-term convertible senior secured note and warrants, partially offset by the repayments of term loans in Italy. The cash inflows for the six months ended June 30, 2022 was primarily attributable to net proceeds of $70.5 million received from the completion of a business combination in January 2022, which was partially offset by our repayment of convertible promissory notes also in January 2022, totaling $27.3 million.

Contractual Obligations and Commitments

For the three and six months ended June 30, 2023, there were no material changes to our contractual obligations and commitments from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 28, 2023. For further information on these commitments, please see Note 18 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Critical Accounting Policies and Significant Judgments and Estimates

For the three and six months ended June 30, 2023, there have been no material changes to our critical accounting policies from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 28, 2023, other than those described in Note 2 in the accompanying Notes to unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Recent Accounting Pronouncements

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For a discussion of recent accounting pronouncements, see Note 2 in the accompanying Notes to unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

JOBS Act Accounting Election

Under Section 107(b) of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, an “emerging growth company” can delay the adoption of new or revised accounting standards until such time as those standards would apply to private companies. We have elected to avail ourselves of this exemption to delay adopting new or revised accounting standards until such time as those standards apply to private companies. However, where allowable we have early adopted certain standards as described in Note 2 of our consolidated financial statements. There are other exemptions and reduced reporting requirements provided by the JOBS Act that we are currently evaluating. For example, as an “emerging growth company,” we are exempt from Sections 14A(a) and (b) of the Exchange Act which would otherwise require us to (1) submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “golden parachutes;” and (2) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of our chief executive officer’s compensation to our median employee compensation.

We also intend to rely on an exemption from the rule requiring us to provide an auditor’s attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. We will continue to remain an “emerging growth company” until the earliest of the following: (1) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (2) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (3) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and are not required to provide the information otherwise required under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

As of June 30, 2023, as required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective at the reasonable assurance level as of such date. Management has concluded that the condensed consolidated financial statements included in this quarterly report on Form 10-Q present fairly, in all material respects, the Company's financial position, results of operations and cash flows for the periods disclosed in accordance with U.S. GAAP.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2023 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, we may become party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect our future results of operations, cash flows, or financial position. We are not presently party to any legal proceedings that, in the opinion of management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows.

Item 1A. Risk Factors.

An investment in our securities involves a high degree of risk. Certain factors that may affect the Company’s business or operations are described under “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2022. Other than the risk factors set forth below, there have been no material changes in the risk factors previously disclosed in such Annual Report on Form 10-K. You should consider all of such risks, together with the other information set forth in this Quarterly Report on Form 10-Q and the Annual Report on Form 10-K, before making a decision to invest in our securities. If any of these events occur, our business, financial condition and operating results may be adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.

Risks Related to Our Transactions with PureTech

There is no assurance that the proposed Merger will be completed in a timely manner or at all. If the proposed Merger is not consummated, our business could suffer materially and our stock price could decline.

On June 12, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with PureTech Health LLC, a Delaware limited liability company (“Parent”) and Caviar Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the terms and conditions set forth therein, we will merge with and into Merger Sub (the “Merger”) with Merger Sub surviving the Merger as a wholly-owned subsidiary of Parent (the “Surviving Company”). Parent and Merger Sub are subsidiaries of PureTech Health PLC, which beneficially owns 16,727,582 shares of our common stock, options to purchase 155,520 shares of our common stock and warrants held by PureTech to purchase 259,345,750 shares of our common stock in the aggregate.

The Merger is conditioned upon, among other things, (i) the approval of the Merger Agreement by the affirmative vote of (x) the holders of a majority of the shares of our common stock not owned directly or indirectly by Parent or any of its subsidiaries or affiliates at the special meeting of company stockholders to be held for the purpose of obtaining approval from the Company’s stockholders (the “Special Meeting”) and (y) the holders of a majority of the shares of our common stock, in each case, that are outstanding and entitled to vote thereon at the Special Meeting (together, the “Stockholder Approval”), (ii) the absence of a bankruptcy or insolvency proceeding or formal corporate action by the Company or its subsidiaries to commence any such proceeding, (iii) the absence of certain adverse events related to a submission by the Company to the United States Food and Drug Administration, including that we shall not have received a “Not Substantially Equivalent” letter or a notice identifying any deficiencies from the FDA and with respect to such deficiencies, limitations on the costs and time frame to rectify them, (iv) the receipt of certain amendments to agreements with certain lenders of the Company to restructure the terms of the applicable debt and (v) other customary closing conditions for a transaction of this type, including the absence of a material adverse effect on the Company, the accuracy of representations and warranties, the performance of covenants and the delivery of certain customary closing certificates. The closing of the Merger is not subject to a financing condition. We anticipate that at least one or more of these conditions will not be satisfied and will necessitate a waiver or amendment of the condition by PureTech. If the conditions are not satisfied or waived, the proposed Merger may be materially delayed or abandoned. If the proposed Merger is not consummated, our ongoing business may be adversely affected and, without realizing any of the benefits of having consummated the proposed Merger.

During the period prior to the closing of the Merger, our business is exposed to certain inherent risks due to the effect of the announcement or pendency of the Merger on our business relationships, financial condition, operating results and business, including:

•the possibility of disruption to our business and operations, including diversion of time and resources by our remaining management and employees, which could otherwise have been devoted to other opportunities that may have been beneficial to us;

•the inability to attract and retain key personnel, and the possibility that our current employees could be distracted, and their productivity decline as a result, due to uncertainty regarding the Merger;

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•the inability to pursue alternative business opportunities or make changes to our business pending the completion of the Merger, and other restrictions on our ability to conduct our business;

•our inability to solicit other acquisition proposals during the pendency of the Merger;

•the significant expenses related to the proposed Merger even if the Merger is not consummated; and

•other developments beyond our control, including, but not limited to, changes in domestic or global economic conditions that may affect the timing or success of the Merger.

The Merger may be delayed, an may ultimately not be completed, due to a number of factors, including:

•the failure to obtain the approval of the Merger Agreement by our stockholders;

•potential future stockholder litigation and other legal and regulatory proceedings, which could delay or prevent the Merger; and

•the failure to satisfy the other conditions to the completion of the Merger.

If the Merger does not close, our business and stockholders would be exposed to additional risks, including:

•the market price of our common stock may decline to the extent that the current market price reflects a market assumption that the proposed Merger will be completed; and

•we could be obligated to pay a termination fee equal to $350,000 plus all reasonable out-of-pocket and documented expenses incurred by Parent, Merger Sub, and their respective affiliates and representatives in connection with the Merger Agreement and the Merger, up to $1,000,000 in the aggregate.

We also could be subject to litigation related to any failure to consummate the proposed Merger or to perform our obligations under the Merger Agreement. If the proposed Merger is not consummated, these risks may materialize and may adversely affect our business, financial condition and the market price of our common stock.

Even if successfully completed, there are certain risks to our stockholders from the Merger, including:

•the amount of cash to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, or projections relating to our stock;

•the fact that the receipt of the all-cash per share merger consideration under the Merger Agreement is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes; and

•the fact that, if the Merger is completed, our stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company.

If the proposed Merger is not completed, we may be unsuccessful in completing an alternative transaction on terms that are as favorable as the terms of the proposed Merger with PureTech, or at all, and we may otherwise be unable to continue to operate our business. Our board of directors may decide to pursue a dissolution and liquidation of Gelesis. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

While we have entered into the Merger Agreement with PureTech, the closing of the proposed Merger may be delayed or may not occur at all and there can be no assurance that the proposed Merger will deliver the anticipated benefits we expect. If we are unable to consummate the proposed Merger, our board of directors may elect to pursue an alternative strategy, one of which may be a strategic transaction similar to the proposed Merger. Attempting to complete an alternative transaction like the proposed Merger will be costly and time consuming, and we can make no assurances that such an alternative transaction would occur at all. Alternatively, our board of directors may elect to continue our operations to advance the development of our programs, which would require that we obtain additional funding, and to resume our efforts to seek potential collaborative, partnering or other strategic arrangements for our program, including a sale or other divestiture of our program assets, or our board of directors could instead decide to pursue a dissolution and liquidation of our company. In such an event, the amount of cash available for distribution to our shareholders will depend heavily on the timing of such decision, and subject to the provisions of the law of the state of Delaware, and with the passage of time the amount of cash available for distribution will be reduced as we continue to fund our operations. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, our board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount

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to reserve. Accordingly, holders of our common stock could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up of the company.

If adverse changes occur and we and PureTech still complete the Merger, the market price of the combined organization’s common stock may suffer. This in turn may reduce the value of the Merger to the equityholders of our company, PureTech or both.

Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

The terms of the Merger Agreement prohibit us from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances when our board of directors determines in good faith that an unsolicited bona fide alternative takeover proposal is more favorable to our stockholders, from a financial point of view, than the terms of the Merger and is reasonably likely to be consummated in accordance with its terms on a timely basis, taking into account all legal, regulatory, financial, financing and other aspects of such proposal and of the Merger Agreement. Our board of directors must also determine in good faith that the failure to take actions with respect to such proposal would be inconsistent with its fiduciary duties. If we terminate the Merger Agreement to enter into an alternative takeover proposal, we are required to pay a termination fee of $350,000 and reimburse Parent for certain expenses up of $1,000,000.

We are subject to business uncertainties and contractual restrictions while the proposed Merger is pending, which could adversely affect our business and operations.

In connection with the pendency of the Merger, it is possible that some customers, suppliers and other persons with whom we have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with us as a result of the Merger, which could negatively affect our revenues, earnings and cash flows, as well as the market price of our common stock, regardless of whether the Merger is completed.

Under the terms of the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the Merger, which may adversely affect our ability to execute certain of our business strategies, including the ability in certain cases to enter into or amend contracts, acquire or dispose of assets, incur indebtedness or incur capital expenditures. Such limitations could negatively affect our business and operations prior to the completion of the Merger.

All the risks described above may be exacerbated by delays or other adverse developments with respect to the completion of the Merger.

Uncertainties associated with the Merger may cause a loss of management personnel and other key employees which could adversely affect our business and results of operations.

We are dependent on the experience and industry knowledge of our officers and other key employees to execute our business plan. Prior to completion of the Merger, current and prospective employees of the Company may experience uncertainty about their roles within the combined company following the completion of the Merger, which may have an adverse effect on our ability to attract or retain key management and other key personnel and in turn could adversely affect our business and results of operations.

While the Merger Agreement is in effect, we are subject to certain interim covenants and our management could be distracted.

The Merger Agreement generally requires us to operate our business in the ordinary course, subject to certain exceptions, including as required by applicable law, and subjects us to customary interim operating covenants that restrict us, without Parent’s approval (such approval not to be unreasonably withheld, delayed or conditioned), from taking certain specified actions until the Merger is completed or the Merger Agreement is terminated in accordance with its terms. For example, the Merger Agreement requires us to provide budget plans and cash flow projections on a bi-weekly and monthly basis demonstrating capital requirements satisfactory to PureTech. These restrictions could prevent us from pursuing certain business opportunities that may arise prior to the consummation of the Merger and may affect our ability to execute our business strategies and attain financial and other goals and may impact our financial condition, results of operations and cash flows.

In addition, our management will also need to take certain other actions in connection with the pendency of the proposed Merger, including, among other things, convening a meeting of our stockholders for the purpose of considering and voting on the Merger, filing a proxy statement in connection with our solicitation of proxies from our stockholders for such meeting, using reasonable best efforts to obtain all necessary consents and approvals required in connection with the Merger and to satisfy the other conditions to the consummation of the Merger, addressing any litigation brought against the Company in connection with the Merger, and responding to questions we may receive from our stockholders, employees, vendors and other interested stakeholders regarding the Merger. Taking these actions could require our management to expend time and resources, reducing the time and resources our management

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could otherwise direct towards our ongoing business operations. If our management is unable to expend the necessary time and resources on our business, our results of operations could be negatively impacted.

The dilutive nature of the financing transactions with PureTech could result in PureTech’s ownership of the vast majority of our outstanding Common Stock and limited proceeds of an acquisition for other stockholders.

Since inception, we have financed our operations from the issuance of equity and debt instruments and have engaged in multiple financing transactions with PureTech. As of the date of this Quarterly Report on Form 10-Q, we have issued, and PureTech holds, 16,727,582 shares of Common Stock, options to purchase up to 155,520 shares of Common Stock, notes in the aggregate principal amount of $25.4 million, which are convertible into 378,943,720 shares of Common Stock, and warrants to purchase 259,345,750 shares of Common Stock, which warrants are immediately exercisable. If PureTech elects to convert all the notes and exercise all the warrants, PureTech would hold 655,172,572 shares of Common Stock, or approximately 92.0% of the Company. As a result, the dilution caused by PureTech’s ownership interests could result in PureTech’s ownership of the vast majority of our outstanding shares of Common Stock and the proceeds of any acquisition of us by a third-party. In such a scenario, other stockholders would only receive a small portion of the proceeds of any such transaction.

Risks Related to Ownership of Our Common Stock

An active trading market for our Common Stock may never develop or be sustained, which may make it difficult to sell the shares of our Common Stock you purchase.

Our Common Stock is currently traded in the OTC Market (as defined below) and not listed on a securities exchange. The trading volume of securities in the OTC Market is typically much lower than on a securities exchange. An active trading market for our Common Stock may not develop or continue or, if developed, may not be sustained, which would make it difficult for you to sell your shares of our Common Stock at an attractive price (or at all). The market price of our Common Stock may decline below your purchase price, and you may not be able to sell your shares of our Common Stock at or above the price you paid for such shares (or at all).

The NYSE has delisted our public warrants and our Common Stock from trading on its exchange, which has and could limit investors’ ability to make transactions in our Common Stock and subject us to additional trading restrictions.

Our Common Stock was listed on the NYSE, but as a result of our failure to maintain the NYSE’s continued listing standard requiring listed companies to maintain an average global market capitalization over a consecutive 30 trading day period of at least $15 million under Section 802.01B of the NYSE Listed Company Manual, on April 10, 2023, our Common Stock was delisted from NYSE. On April 11, 2023, our Common Stock began trading on the OTC Pink Market operated by the OTC Markets Group Inc. (the “OTC Market”) On April 26, 2023, the NYSE filed the Notification of Removal From Listing and Registration Under 12(b) of the Securities

Exchange Act of 1934 with the SEC. Our warrants were also previously delisted from the NYSE.

Delisting from the NYSE has made trading our Common Stock and warrants more difficult for investors, potentially leading to declines in the trading price of our securities and liquidity and other material adverse consequences including:

•limited availability of market quotations for our securities;

•a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to

adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for

our Common Stock;

•a limited amount of analyst coverage;

•a decreased ability to issue additional securities or obtain additional financing in the future; and

•loss of confidence by shareholders, employees, and business partners.

We do not now, and are not expected to in the foreseeable future, meet the listing standards of the NYSE or any other national securities exchange. We can provide no assurance that our Common Stock or warrants will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our ordinary shares on the OTC Market, whether the trading volume of our Common Stock or warrants will be sufficient to provide for an efficient trading market or whether quotes for our Common Stock or warrants will continue on this market in the future, which could result in significantly lower trading volumes and reduced liquidity for investors seeking to buy or sell our Common Stock or warrants.

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The price of our Common Stock has been, and may continue to be, volatile, and you could lose all or part of your investment.

Our Common Stock is currently quoted for public trading on the OTC Market under the symbol “GLS.” The market price and trading volume of our Common Stock has been, and may continue to be, highly volatile and the price of our Common Stock has declined substantially. To date, the closing price of our Common Stock has fluctuated from a high of $10.78 on February 9, 2021 to a low of $0.01 per share on April 13, 2023. To date, daily trading volume ranged from approximately zero to 9,578,900 shares. Continued volatility in the market price and trading volume of our Common Stock could cause purchasers of our Common Stock to incur substantial losses. The market price and trading volume of our Common Stock could continue to remain volatile for many reasons, including in response to the risks described herein and in the other filings we make with the SEC, or for reasons unrelated to our operations, many of which may be beyond our control, such as:

•our inability to raise funding and any corresponding reduction in our marketing efforts;

•any delay or failure to achieve over the counter approval for Plenity;

•any delay in our regulatory filings or any adverse regulatory decisions, including failure to receive regulatory approval of our product candidates;

•changes in laws or regulations applicable to our product candidates, including but not limited to clinical trial requirements for approvals;

•adverse developments concerning our manufacturing operations and plans;

•our ability to generate sufficient patient demand for our product and product candidates;

•our inability to establish collaborations, if needed;

•our failure to continue to commercialize Plenity and our other product candidates;

•departures of key scientific, commercial or management personnel;

•unanticipated serious safety concerns related to the use of our product candidates;

•introduction of new products or services offered by us or our competitors;

•announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;

•our ability to effectively manage our growth;

•actual or anticipated variations in quarterly operating results;

•our cash position;

•our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public;

•publication of research reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts;

•changes in the market valuations of similar companies;

•overall performance of the equity markets;

•sales of our Common Stock by us or our stockholders in the future;

•trading volume of our Common Stock;

•changes in accounting practices;

•ineffectiveness of our internal controls;

•disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

•significant lawsuits, including patent or shareholder litigation;

•general political and economic conditions; and

•other events or factors, many of which are beyond our control.

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The stock market, and biotechnology companies, in recent years, and during the COVID-19 pandemic in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our Common Stock, regardless of our actual operating performance. Continued declines in the market price of our Common Stock have, among other things, made it more difficult to raise capital on terms acceptable to us, or at all, and may make it difficult for our investors to sell their Common Stock. In addition, in the past, securities class action litigation has often been instituted against companies following periods of volatility in, or significant market price decline of, a company’s securities. This type of litigation, if instituted against us, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, financial condition and results of operations.

Because our Common Stock is subject to the “penny stock” rules, brokers cannot generally solicit the purchase of our Common Stock, which adversely affects its liquidity and market prices.

The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. The market price of our Common Stock on the OTC Market is presently less than $5.00 per share and therefore we are considered a “penny stock” company according to SEC rules. Further, we do not expect our stock price to rise above $5.00 in the foreseeable future. The “penny stock” designation requires any broker-dealer selling our securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules limit the ability of broker-dealers to solicit purchases of our Common Stock and therefore reduce the liquidity of the public market for our shares.

Moreover, as a result of apparent regulatory pressure from the SEC and the Financial Industry Regulatory Authority (FINRA), a growing number of broker-dealers decline to permit investors to purchase and sell or otherwise make it difficult to sell shares of penny stocks. The “penny stock” designation may have a depressive effect upon our Common Stock price.

Risks Related to Financial Position and Financing Needs

We are a commercial stage biotherapeutics company, but to date we have generated limited product sales. We have incurred significant operating losses since our inception and anticipate that we will continue to incur continued losses for the next several years.

We are a commercial stage biotherapeutics company and to date we have funded our operations through proceeds from collaborations,

the issuance of common stock and convertible preferred stock, the issuance of convertible and non-convertible debt and non-dilutive

grants received from government agencies. We have incurred losses in each year since our inception, other than fiscal year 2013. Our

net losses were $7.7 million and $12.8 million for the three and six months ended June 30, 2023, and $55.8 million for the year ended December 31, 2022, respectively. As of June 30, 2023, we had an accumulated deficit of $335.6 million. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ deficit and working capital. We expect to incur increasing levels of operating losses over at least the next several years. We expect to continue to incur significant sales and marketing expenses and additional costs associated with operating as a public company. Because of the numerous risks and uncertainties associated with commercializing Plenity and developing any future product candidates, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis.

Our ability to become profitable depends upon our ability to generate product sales. To date, we have generated limited product sales

of Plenity, and we do not know when or if we will generate meaningful product sales from Plenity. Our ability to generate product

sales depends on a number of factors, including, but not limited to, our ability to:

•commercialize Plenity by achieving over the counter approval and entering into collaborations with third parties;

•achieve market acceptance of Plenity in the medical community and with patients, many of whom could be required to pay out-of-pocket for Plenity; and

•supplement our commercial scale to meet demand in a facility owned or leased by us or by a strategic collaboration partner or third-party manufacturer.

We expect to incur significant sales and marketing costs as we commercialize Plenity and we may not achieve profitability soon after generating product sales, if ever, and we may be unable to continue operations without continued funding. Failure to successfully commercialize Plenity would materially harm our business, financial condition and results of operations.

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If we are not successful in implementing an alternative business plan and/or raising additional capital in a timely manner, we may

have insufficient cash and liquidity to pay operating expenses and other obligations. Any such event would have a material

adverse effect on our business and financial condition.

We implemented an alternative business plan, prioritizing over the counter approval and expenses related to such regulatory

pathway, short-term working capital needs, and delaying certain long-term capital expenditures in commercial infrastructure and

certain research and development expenses. We reduced and optimized investments in sales and marketing, prioritizing investments in

high return and high exposure mediums. We have sought out an alternative regulatory path and alternative commercial arrangements or geographic distribution partnerships to facilitate the commercial launch of Plenity. These changes to the execution of our business plan may impact the growth of Plenity sales and the pace of acquisition and retention of consumers. We may need to raise additional capital to fund our operations and our alternative business plan. There can be no assurance that we will be successful in implementing this strategy or obtaining capital sufficient to meet our operating needs on terms or a timeframe acceptable to us or at all. Further, in the event that market conditions preclude our ability to consummate such a transaction, we may be required to evaluate additional alternatives in restructuring our business and our capital structure.

We believe our current cash and cash equivalents will not be sufficient to fund our business for the next twelve months from the

date of the unaudited consolidated financial statements included elsewhere in this Form 10-Q, raising substantial doubt about our

ability to continue as a going concern.

As of June 30, 2023, our cash and cash equivalents was $7.9 million. Based on our current operating plan, we expect that our existing cash and cash equivalents and collection of accounts and grants receivable, are not sufficient to meet the Company’s current obligations, and not at least twelve months beyond the date of issuance of the unaudited consolidated financial statements included elsewhere in this Form 10-Q without generating positive cash flows through increased revenue and by raising additional capital from outside sources. In addition, we anticipate that this extension of our cash runway will only be achievable with a continued reduction of discretionary spending from prior levels, particularly with respect to our discretionary sales and marketing activities and manufacturing and supply chain functions. In addition, our current operating plan is based on current assumptions that may prove to be wrong, and we could use our available capital resources sooner than is currently expected. As stated above, if we are unable to obtain additional funding on a timely basis, or at all, we may be required to significantly curtail, delay or discontinue our research or development programs or the commercialization of Plenity (including our marketing efforts) or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, liquidate all or a portion of our assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code, which could materially affect our business, financial condition and results of operations. There can be no assurance that we will be able to continue as a going concern.

Raising additional funding in the future may cause dilution to our stockholders, restrict our operations or require us to relinquish

rights.

We may seek additional capital through a combination of private and public equity and debt offerings, government or other third party

funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these sources. To the extent that we raise additional capital through the sale of common stock or securities convertible

or exchangeable into common stock, your ownership interest in us will be diluted. In addition, the terms of any such securities may

include liquidation or other preferences that materially adversely affect your rights as a stockholder. In addition, upon a payment default under any of our promissory notes we issued on July 25, 2022 and August 4, 2022 that is not cured after five days, (i) we will

be required to issue certain warrants to the holder of such note, which the holder may then exercise for shares of our Common Stock

and (ii) the holder of such notes will also have the option to convert the outstanding principal and accrued interest under such note into

a number of shares of our Common Stock. Further debt financing, if available, would increase our fixed payment obligations and may

involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt,

making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic partnerships and licensing arrangements with third parties, we may have to relinquish valuable rights to Plenity, our intellectual property or future

revenue streams or grant licenses on terms that are not favorable to us.

48

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

49

Item 6. Exhibits.

Exhibit Number	Description
2.1†	Agreement and Plan of Merger, dated June 12, 2023, by and between Gelesis Holdings, Inc., PureTech Health LLC and Caviar Merger Sub LLC by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on June 12, 2023
3.1	Amended and Restated Certificate of Incorporation of Gelesis Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Company on January 20, 2022)
3.2	Amended and Restated Bylaws of Gelesis Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by the Company on January 20, 2022)
4.1	Warrant Agreement, dated July 1, 2020, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by Capstar Special Purpose Acquisition Corp. on July 8, 2020).
10.1	Amendment No.1 to Note and Warrant Purchase Agreement, dated May 1, 2023, by and among Gelesis Holdings, Inc., Gelesis, Inc., Gelesis 2012, Inc., Gelesis LLC and PureTech Health LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on May 3, 2023)
10.2	Form of the Convertible Senior Secured Promissory Note (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Company on May 3, 2023)
10.3	Form of Amended Warrant (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Company on May 3, 2023)
10.4	Form of New Warrant (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by the Company on May 3, 2023)
10.5	Limited Waiver to Note and Warrant Purchase Agreement, dated May 26, 2023, by and among Gelesis Holdings, Inc., Gelesis, Inc., Gelesis 2012, Inc., Gelesis LLC and PureTech Health LLC by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on May 31, 2023
10.6	Convertible Senior Secured Promissory Note, dated May 26, 2023, issued to PureTech Health LLC by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Company on May 31, 2023
10.7	Warrant, dated May 26, 2023, issued to PureTech Health LLC by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Company on May 31, 2023
10.8	Form of Voting and Support Agreement by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on June 12, 2023
10.9	Amendment No. 2 to Note and Warrant Purchase Agreement, dated June 12, 2023, by and among Gelesis Holdings, Inc., Gelesis, Inc., Gelesis 2012, Inc., Gelesis LLC and PureTech Health LLC by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Company on June 12, 2023
10.10	Convertible Senior Secured Promissory Note, dated June 12, 2023, issued to PureTech Health LLC by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Company on June 12, 2023
10.11	Amendment No. 3 to Note and Warrant Purchase Agreement, dated June 28, 2023, by and among Gelesis Holdings, Inc., Gelesis, Inc., Gelesis 2012, Inc., Gelesis LLC and PureTech Health LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on June 29, 2023)
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

50

* Filed herewith.

† Certain portions of this exhibit are omitted because they are not material and would likely cause competitive harm to the registrant if disclosed.

+ The certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to be furnished with this Quarterly Report on Form 10-Q and will not be deemed to be "filed" for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

51

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GELESIS HOLDINGS, INC.
Date: August 14, 2023	By:	/s/ Yishai Zohar
		Yishai Zohar
		Chief Executive Officer (Principal Executive Officer)
Date: August 14, 2023	By:	/s/ Elliot Maltz
		Elliot Maltz
		Chief Financial Officer (Principal Financial and Accounting Officer)

52

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Yishai Zohar, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Gelesis Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023	By:	/s/ Yishai Zohar
		Yishai Zohar
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Elliot Maltz, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Gelesis Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023	By:	/s/ Elliot Maltz
		Elliot Maltz
		Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Gelesis Holdings, Inc. (the “Company”) for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2023	By:	/s/ Yishai Zohar
		Yishai Zohar
		Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Gelesis Holdings, Inc. (the “Company”) for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2023	By:	/s/ Elliot Maltz
		Elliot Maltz
		Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Aug. 11, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Entity File Number	001-39362
Entity Registrant Name	Gelesis Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-4730610
Entity Address, Address Line One	501 Boylston Street
Entity Address, Address Line Two	Suite 6102
Entity Address, City or Town	Boston
Entity Address State Or Province	MA
Entity Address, Postal Zip Code	02116
City Area Code	617
Local Phone Number	456-4718
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Central Index Key	0001805087
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		73,335,110

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 7,909	$ 7,412
Accounts receivable	799	1,233
Grants receivable	5,119	3,359
Inventories	5,688	6,865
Prepaid expenses and other current assets	5,163	4,627
Total current assets	24,678	23,496
Property and equipment, net	56,927	59,335
Operating lease right-of-use assets	1,202	1,520
Intangible assets, net	12,280	13,413
Other assets	788	5,560
Total assets	95,875	103,324
Current liabilities:
Accounts payable, including due to related party of $649 and $135, respectively	9,052	4,131
Accrued expenses and other current liabilities, including due to related party of $2,853 and $2,809, respectively	7,277	10,468
Deferred income	26,300	27,793
Operating lease liabilities	546	597
Convertible promissory notes, including due to related party of $24,376 and $22,082, respectively	28,327	27,403
Notes payable, including due to related party of $1,960 and $2,007, respectively at December 31, 2022	5,039	7,954
Total current liabilities	76,541	78,346
Deferred income	9,860	9,544
Operating lease liabilities	697	967
Notes payable, including due to related party of $13,973 and $13,659, respectively	27,266	25,342
Warrant liabilities	0	130
Earnout liability	0	563
Other long-term liabilities, including due to related party of $0 and $674, respectively	136	898
Total liabilities	114,500	115,790
Commitments and contingencies (Note 18)
Noncontrolling interest	12,905	12,590
Stockholders' deficit:
Preferred stock, $0.0001 par value - 250,000,000 shares authorized at June 30, 2023 and December 31, 2022; zero shares issued and outstanding at June 30, 2023 and December 31, 2022
Common stock, $0.0001 par value - 900,000,000 shares authorized at June 30, 2023 and December 31, 2022; 73,335,110 and 73,325,022 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	7	7
Additional paid-in capital	303,686	297,468
Accumulated other comprehensive income	339	104
Accumulated deficit	(335,562)	(322,635)
Total stockholders' deficit	(31,530)	(25,056)
Total liabilities, noncontrolling interest, redeemable convertible preferred stock and stockholders' deficit	$ 95,875	$ 103,324

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Accounts payable, due to related party	$ 649	$ 135
Accrued expenses and other liabilities, due to related parties	2,853	2,809
Convertible promissory note due to related party	24,376	22,082
Notes payable, due to related party current	1,960	2,007
Notes payable, due to related party noncurrent	13,973	13,659
Other long-term liabilities noncurrent, due to related party	$ 0	$ 674
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	73,335,110	73,325,022
Common stock, shares outstanding	73,335,110	73,325,022
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	250,000,000	250,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue:
Total revenue, net	$ 1,107	$ 8,973	$ 2,860	$ 16,487
Operating expenses:
Costs of goods sold, including related party expenses of $44 and $359, respectively, and $115 and $659, respectively	498	4,786	1,735	9,699
Selling, general and administrative, including related party expenses of $127 and $125, respectively, and $255 and $250, respectively	7,456	32,450	15,743	70,156
Research and development, including related party expenses of $61 and $57, respectively, and $120 and $119, respectively	2,582	5,523	6,219	12,933
Amortization of intangible assets	567	566	1,133	1,133
Total operating expenses	11,103	43,325	24,830	93,921
Loss from operations	(9,996)	(34,352)	(21,970)	(77,434)
Change in the fair value of earnout liability		18,812	563	52,681
Change in the fair value of convertible promissory notes	2,672		7,631	(156)
Change in the fair value of warrants		2,600	130	6,084
Interest expense, net	(565)	(186)	(1,457)	(321)
Other income, net	208	613	2,292	930
Loss before income taxes	(7,681)	(12,513)	(12,811)	(18,216)
Provision for income taxes			16	0
Net loss	(7,681)	(12,513)	(12,827)	(18,216)
Accretion of Legacy Gelesis senior preferred stock to redemption value				(37,934)
Accretion of noncontrolling interest put option to redemption value		(85)		(173)
Income allocated to noncontrolling interest holder			(100)
Net loss attributable to common stockholders	$ (7,681)	$ (12,598)	$ (12,927)	$ (56,323)
Net loss per share attributable to common stockholders - basic	$ (0.10)	$ (0.17)	$ (0.18)	$ (0.83)
Net loss per share attributable to common stockholders - diluted	$ (0.10)	$ (0.17)	$ (0.18)	$ (0.83)
Weighted average common shares outstanding - basic	73,334,861	72,423,043	73,329,685	67,609,838
Weighted average common shares outstanding - diluted	73,334,861	72,423,043	73,329,685	67,609,838
Product Revenue, Net
Revenue:
Total revenue, net	$ 1,107	$ 8,973	$ 2,860	$ 16,487

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PARENTHETICAL) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Cost of goods sold, related party expense	$ 44	$ 359	$ 115	$ 659
Selling, general and administrative, related party expense	127	125	255	250
Research and development, related party expense	$ 61	$ 57	$ 120	$ 119

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (7,681)	$ (12,513)	$ (12,827)	$ (18,216)
Other comprehensive loss:
Foreign currency translation adjustment	10	(426)	235	(564)
Total other comprehensive income (loss)	10	(426)	235	(564)
Comprehensive loss	$ (7,671)	$ (12,939)	$ (12,592)	$ (18,780)

XML

CONDENSED CONSOLIDATED STATEMENTS OF NONCONTROLLING INTEREST, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Total	Legacy Gelesis Redeemable Convertible Preferred Stock	Noncontrolling Interest	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit
Balance at Dec. 31, 2021	$ (329,836)			$ 1	$ (64,549)	$ 219	$ (265,507)
Temporary Equity Balance at Dec. 31, 2021		$ 311,594	$ 11,855
Temporary Equity Balance, shares at Dec. 31, 2021		18,736,936
Balance, shares at Dec. 31, 2021				2,410,552
Accretion of legacy gelesis senior preferred stock to redemption value prior to business combination	(37,934)				(37,934)
Temporary Equity, Accretion of legacy gelesis senior preferred stock to redemption value prior to business combination		$ 37,934
Conversion of legacy gelesis convertible preferred stock into common stock upon business combination	349,528				349,528
Conversion of legacy gelesis convertible preferred stock into common stock upon business combination, shares				48,566,655
Temporary Equity, Conversion of legacy gelesis convertible preferred stock into common stock upon business combination		$ (349,528)
Temporary Equity, Conversion of legacy gelesis convertible preferred stock into common stock upon business combination, shares		(48,566,655)
Proceeds from business combination, net of issuance costs and assumed liabilities	70,478			$ 6	70,472
Proceeds from business combination, net of issuance costs and assumed liabilities, shares				17,399,440
Conversion of legacy gelesis preferred stock warrants into common stock warrants upon business combination	16,747				16,747
Recognition of earnout liability upon Business Combination	(58,871)				(58,871)
Assumed private placement warrant liability upon business combination	(8,140)				(8,140)
Stock based compensation expense	13,989				13,989
Exercise of warrants	4				4
Exercise of warrants, shares				176,126
Accretion of noncontrolling interest put option to redemption value	(88)						(88)
Temporary Equity, Accretion of noncontrolling interest put option to redemption value			88
Foreign currency translation adjustment	(137)					(137)
Temporary Equity, Foreign currency translation adjustment			(239)
Net loss	(5,703)						(5,703)
Balance at Mar. 31, 2022	10,037			$ 7	281,246	82	(271,298)
Temporary Equity Balance at Mar. 31, 2022			11,704
Temporary Equity Balance, shares at Mar. 31, 2022		29,829,719
Balance, shares at Mar. 31, 2022				68,552,773
Balance at Dec. 31, 2021	(329,836)			$ 1	(64,549)	219	(265,507)
Temporary Equity Balance at Dec. 31, 2021		$ 311,594	11,855
Temporary Equity Balance, shares at Dec. 31, 2021		18,736,936
Balance, shares at Dec. 31, 2021				2,410,552
Net loss	(18,216)
Balance at Jun. 30, 2022	5,099			$ 7	289,332	(344)	(283,896)
Temporary Equity Balance at Jun. 30, 2022			11,087
Temporary Equity Balance, shares at Jun. 30, 2022		29,829,719
Balance, shares at Jun. 30, 2022				68,714,837
Balance at Mar. 31, 2022	10,037			$ 7	281,246	82	(271,298)
Temporary Equity Balance at Mar. 31, 2022			11,704
Temporary Equity Balance, shares at Mar. 31, 2022		29,829,719
Balance, shares at Mar. 31, 2022				68,552,773
Stock based compensation expense	7,976				7,976
Issuance of common stock upon exercise of stock options	110				110
Issuance of common stock upon exercise of stock options, shares				162,064
Accretion of noncontrolling interest put option to redemption value	(85)						(85)
Temporary Equity, Accretion of noncontrolling interest put option to redemption value			85
Foreign currency translation adjustment	(426)					(426)
Temporary Equity, Foreign currency translation adjustment			(702)
Net loss	(12,513)						(12,513)
Balance at Jun. 30, 2022	5,099			$ 7	289,332	(344)	(283,896)
Temporary Equity Balance at Jun. 30, 2022			11,087
Temporary Equity Balance, shares at Jun. 30, 2022		29,829,719
Balance, shares at Jun. 30, 2022				68,714,837
Balance at Dec. 31, 2022	(25,056)			$ 7	297,468	104	(322,635)
Temporary Equity Balance at Dec. 31, 2022			12,590
Temporary Equity Balance, shares at Dec. 31, 2022		29,829,719
Balance, shares at Dec. 31, 2022				73,325,022
Stock based compensation expense	2,091				2,091
Release of restricted stock units, shares				7,566
Issuance of common stock warrants	1,297				1,297
Income allocated to noncontrolling interest holder	(100)						(100)
Temporary Equity, Income allocated to noncontrolling interest holder			100
Foreign currency translation adjustment	225					225
Temporary Equity, Foreign currency translation adjustment			206
Net loss	(5,146)						(5,146)
Balance at Mar. 31, 2023	(26,689)			$ 7	300,856	329	(327,881)
Temporary Equity Balance at Mar. 31, 2023			12,896
Temporary Equity Balance, shares at Mar. 31, 2023		29,829,719
Balance, shares at Mar. 31, 2023				73,332,588
Balance at Dec. 31, 2022	(25,056)			$ 7	297,468	104	(322,635)
Temporary Equity Balance at Dec. 31, 2022			12,590
Temporary Equity Balance, shares at Dec. 31, 2022		29,829,719
Balance, shares at Dec. 31, 2022				73,325,022
Net loss	(12,827)
Balance at Jun. 30, 2023	(31,530)			$ 7	303,686	339	(335,562)
Temporary Equity Balance at Jun. 30, 2023			12,905
Temporary Equity Balance, shares at Jun. 30, 2023		29,829,719
Balance, shares at Jun. 30, 2023				73,335,110
Balance at Mar. 31, 2023	(26,689)			$ 7	300,856	329	(327,881)
Temporary Equity Balance at Mar. 31, 2023			12,896
Temporary Equity Balance, shares at Mar. 31, 2023		29,829,719
Balance, shares at Mar. 31, 2023				73,332,588
Stock based compensation expense	2,384				2,384
Release of restricted stock units, shares				2,522
Issuance of common stock warrants	446				446
Foreign currency translation adjustment	10					10
Temporary Equity, Foreign currency translation adjustment			9
Net loss	(7,681)						(7,681)
Balance at Jun. 30, 2023	$ (31,530)			$ 7	$ 303,686	$ 339	$ (335,562)
Temporary Equity Balance at Jun. 30, 2023			$ 12,905
Temporary Equity Balance, shares at Jun. 30, 2023		29,829,719
Balance, shares at Jun. 30, 2023				73,335,110

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (12,827)	$ (18,216)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets	1,133	1,133
Reduction in carrying amount of right-of-use assets	322	265
Depreciation	3,509	1,440
Stock-based compensation	4,475	21,965
Unrealized loss on foreign currency transactions	(71)	672
Non-cash interest (income) expense	(325)	(3)
Change in the fair value of earnout liability	(563)	(52,681)
Change in the fair value of warrants	(130)	(6,084)
Change in the fair value of convertible promissory notes	(7,631)	156
Change in fair value of One S.r.l. call option	(677)	865
Changes in operating assets and liabilities:
Account receivables	434	(1,473)
Grants receivable	(1,691)	(1,078)
Prepaid expenses and other current assets	(473)	5,048
Inventories	1,149	(5,258)
Other assets	4,834	(536)
Accounts payable	4,977	11,486
Accrued expenses and other current liabilities	(2,737)	571
Operating lease liabilities	(325)	(263)
Deferred income	(1,372)	2,300
Other long-term liabilities	(90)	(81)
Net cash used in operating activities	(8,079)	(39,772)
Cash flows from investing activities:
Purchases of property and equipment	(242)	(5,067)
Net cash used in investing activities	(242)	(5,067)
Cash flows from financing activities:
Proceeds from Business Combination, net of transaction costs		70,478
Principal repayment of notes payable	(1,585)	(1,119)
Repayment of convertible promissory notes		(27,284)
Proceeds from issuance of convertible promissory notes and warrants	10,350
Proceeds from exercise of share-based awards		110
Proceeds from the exercise of warrants		4
Net cash provided by financing activities	8,765	42,189
Effect of exchange rates on cash	53	(406)
Net increase (decrease) in cash	497	(3,056)
Cash and cash equivalents at beginning of year	7,412	28,397
Cash and cash equivalents at end of period	7,909	25,341
Noncash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expense	181	1,027
Recognition of earnout liability		58,871
Recognition of private placement warrant liability		8,140
Supplemental cash flow information:
Interest paid on notes payable	$ 151	$ 181

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Nature of the Business and Basis of Presentation

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of the Business and Basis of Presentation

1.Nature of the Business and Basis of Presentation

Nature of Business

Gelesis Holdings, Inc., or the Company, formerly known as Capstar Special Purpose Acquisition Corp. or “CPSR”, is a consumer-centered biotherapeutics company incorporated under the laws of the State of Delaware. The Company aims to transform weight management through proprietary hydrogel technology, inspired by the compositional and mechanical properties of raw vegetables. Since its inception, the Company has devoted substantially all of its efforts to business planning, licensing technology, research and development, commercial activities, recruiting management and technical staff and raising capital and has financed its operations through the issuance of redeemable convertible preferred and common stock, a license and collaboration agreement, supply and distribution agreements, long-term loans, convertible promissory note financings, and government grants.

The Company currently manufactures and markets Plenity® (the “Product”), which is based on a proprietary hydrogel technology. Plenity received a de novo clearance from the United States Food and Drug Administration (the “FDA”) on April 12, 2019 to aid in weight management when used in conjunction with diet and exercise. In 2020, the Company received its original Conformité Européenne (CE) certificate which allowed Plenity to be marketed as a medical device in Europe as well as the rest of the world where CE mark is acceptable. Plenity has been commercially available by prescription in the United States since May 2020. In January 2023, the Company made a 510 (k) submission to the FDA to switch Plenity from prescription (“Rx”) to over-the-counter (“OTC”).

On July 19, 2021, Gelesis, Inc. (together with its consolidated subsidiaries, “Legacy Gelesis”) entered into a Business Combination Agreement (as amended on November 8, 2021 and December 30, 2021, the “Business Combination Agreement”) with CPSR, a Delaware corporation and special purpose acquisition company, and CPSR Gelesis Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of CPSR (“Merger Sub”). On January 13, 2022, Legacy Gelesis, CPSR, and Merger Sub consummated the business combination (“Business Combination”) pursuant to the terms of the Business Combination Agreement. Pursuant to the Business Combination Agreement, on the closing date, (i) Merger Sub merged with and into Legacy Gelesis (the “Merger”), with Legacy Gelesis as the surviving company in the Merger, and, after giving effect to such Merger, Legacy Gelesis became a wholly-owned subsidiary of CPSR and (ii) CPSR changed its name to “Gelesis Holdings, Inc.” (together with its consolidated subsidiaries, “Gelesis Holdings”). The Business Combination, together with the PIPE Investment and the sale of the Backstop Purchase Shares, generated approximately $105 million in gross proceeds and $70.5 million in net proceeds. On January 14, 2022, Gelesis Holdings’ common stock and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “GLS” and “GLS.W”, respectively. In January 2023, the Company’s public warrants were delisted from the NYSE due to low trading price. As of April 10, 2023, the NYSE Regulation reached a decision to delist the Company’s common stock and subsequently on April 26, 2023, the Company’s common stock was delisted from the NYSE.

The Business Combination was accounted for as a reverse recapitalization in conformity with accounting principles generally accepted in the United States. Under this method of accounting, CPSR has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the Legacy Gelesis’ stockholders comprising a relative majority of the voting power of the combined company, the Legacy Gelesis’ operations prior to the acquisition comprising the only ongoing operations of Gelesis Holdings, the majority of Gelesis Holdings’ board of directors appointment by Legacy Gelesis, and Legacy Gelesis’ senior management comprising the entirety of the senior management of Gelesis Holdings. Accordingly, for accounting purposes, the consolidated financial statements of Gelesis Holdings represent a continuation of the consolidated financial statements of Legacy Gelesis with the Business Combination being treated as the equivalent of Legacy Gelesis issuing stock for the net assets of CPSR, accompanied by a recapitalization. The net assets of CPSR are stated at historical costs, with no goodwill or other intangible assets recorded.

Planned Merger

On June 12, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with PureTech Health LLC, a Delaware limited liability company (“Parent” or “PureTech”) and Caviar Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the terms and conditions set forth therein, the Company will merge with and into Merger Sub (the “Merger”) with Merger Sub surviving the Merger as a wholly-owned subsidiary of Parent. Both the Parent and Merger Sub are subsidiaries of PureTech Health PLC, which beneficially owns 16,883,102 shares of Company’s common stock and 259,345,750 shares of the Company’s warrants.

The Merger is conditioned upon i) the Company obtaining a company stockholder approval as defined in the Merger Agreement, ii) the absence of a bankruptcy or insolvency proceeding or formal corporate action by the Company or its Subsidiaries to commence any such proceeding, iii) certain conditions related to the Company’s submission to the FDA, including that the Company shall not have

received a “Not Substantially Equivalent” letter or a notice identifying any deficiencies from the FDA and with respect to such deficiencies, limitations on the costs and time frame to rectify them, iv) the receipt of certain amendments to agreements with certain lenders of the Company to restructure the terms of the applicable debt, and v) other customary closing conditions for a transaction of this type. The Company anticipates that at least one or more of these conditions will not be satisfied and will necessitate a waiver or amendment of the condition by PureTech. If the Merger is completed, each outstanding share of Company Common Stock (other than (i) shares held in the treasury of the Company, (ii) shares owned by Parent or any of its direct or indirect subsidiaries (including Merger Sub) immediately before the effective time of the Merger, (iii) shares of restricted Company Common Stock issued pursuant to the Business Combination Agreement (the “BCA”), dated as of July 19, 2021, by and among the Legacy Gelesis and CPSR, as amended and/or otherwise modified, and subject to all of the terms and conditions of the BCA in respect of the “Earn Out Shares” (“Earn Out Shares”) and (iv) shares held by Gelesis Stockholders will be converted automatically into and will thereafter represent only the right to receive $0.05664 in cash (the “Merger Consideration”), without interest and subject to applicable withholding taxes. Upon consummation of the Merger, the Company would become a subsidiary of the Parent and cease to be a publicly traded company.

In connection with entering into the Merger Agreement, and as described in Note 10, on June 12, 2023, the Company received $3.0 million from Parent through the issuance of convertible notes. The proceeds from this issuance of convertible notes are intended to provide the necessary funding required for the Company to continue its operations as a stand-alone entity through the consummation of the planned merger. Despite the planned Merger and funding provided by the issuance of convertible notes to Parent, the Company expects its cash on hand as of the date of the condensed consolidated financial statements and collection of accounts and grants receivable are not sufficient to meet the Company’s obligations for at least twelve months beyond the date of issuance of the condensed consolidated financial statements, and may not be sufficient to continue operations through the anticipated date of closing the Merger without additional bridge funding. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company will need to raise additional capital in future periods to fund its operations. The Company will seek to raise necessary funds through a combination of equity issuances, debt financings, strategic collaborations and licensing arrangements, government grants, or other financing mechanisms. The Company’s ability to fund the completion of its ongoing and planned clinical studies, as well as its regulatory and commercial efforts, may be substantially dependent upon whether the Company can obtain sufficient funding at acceptable terms. If adequate sources of funding are not available to the Company, the Company may be required to delay, reduce or eliminate research and development programs, reduce or eliminate commercialization efforts, and reduce its headcount. Additionally, the Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of the full-scope product commercialization in targeted markets, clinical trials and preclinical studies, the impact of the COVID-19 pandemic on the Company’s supply chain and results of operations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and development by competitors of technological innovations.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2.Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") as found in the Accounting Standards Codification ("ASC"), Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB") and the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2022 and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 28, 2023.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements, and updated, as necessary, in this report. In the opinion of the Company's management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company's financial position as of June 30, 2023, the results of its operations, non-controlling interest, redeemable convertible preferred stock and stockholders' deficit for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023. Such adjustments are of a normal and recurring nature. The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 or for any future period.

The Company’s condensed consolidated financial statements include the accounts of the Company, its two wholly-owned subsidiaries and a variable interest entity (“VIE”), Gelesis S.r.l., in which the Company has a controlling interest and is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. The Company assesses the above estimates on an ongoing basis; however, actual results could materially differ from those estimates.

Subsequent Event(s)

The Company considers events or transactions that occur after the balance sheet date but before the condensed consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company evaluated all events and transactions through the date these condensed consolidated financial statements were filed with the Securities and Exchange Commission (“SEC”) or were available to be issued.

Business Combination

The Company accounts for its business combinations using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired in a business combination are included in the Company's consolidated financial statements from the date of acquisition.

As discussed in Note 1, on January 13, 2022, the Company consummated the Business Combination pursuant to the Business Combination Agreement with CPSR dated July 19, 2021, as amended on November 8, 2021 and December 30, 2021. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, CPSR, who was the legal acquirer, was treated as the acquired company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Gelesis issuing stock for the net assets of CPSR, accompanied by a recapitalization.

Fair Value of Financial Instruments

The guidance in FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or Level 2 to Level 3.

The Company’s earnout liability, private placement warrants, interest rate swaps, call option liability, and convertible promissory notes are recorded at fair value on a recurring basis. The carrying amount of accounts receivable, grants receivable, accounts payable and accrued expenses are considered a reasonable estimate of their fair value, due to the short-term maturity of these instruments. The carrying amount of notes payable is also considered to be a reasonable estimate of the fair value based on the nature of the debt and that the debt bears interest at the prevailing market rate for instruments with similar characteristics. The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above.

Earnout Liability: In connection with the Business Combination, Legacy Gelesis equity holders received the right to receive additional common stock upon the achievement of certain earnout targets. As the earnout consideration contains a settlement provision that precludes it from being indexed to the Company’s stock, it is classified as a liability held at fair value in accordance ASC 815 and the

instrument is adjusted to fair value at each reporting period. In determining the fair value of the earnout liability at inception and on a recurring basis, the Company utilizes the Monte Carlo simulation value model where the fair value of the earnout is the present value of a distribution of potential outcomes on a daily basis over the term of the earnout period.

Private Placement Warrant Liability: The Private Placement Warrants are recognized as liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities held at fair value and adjusts the instruments to fair value at each reporting period. In determining the fair value of the Private Placement Warrant liability, the Company utilized a modified Monte Carlo simulation value model at inception and on a recurring basis.

One Srl Call Option: In connection with the October 2020 amended agreement with One Srl, the Company granted One a contingent call option to buy back the 10% ownership that the Company acquired in the 2019 One Amendment. The One Srl call option was recorded as a liability held at fair value at the date of issuance and is remeasured at each subsequent reporting date with changes in fair value recorded in other income (expense) in the accompanying condensed consolidated statements of operations. Fair value is determined using a Black-Scholes option pricing model.

Convertible promissory notes: The convertible promissory notes issued in conjunction with the Company’s bridge financing arrangements from time to time were recognized at fair value at issuance and subsequent changes in fair value were recorded in the accompanying consolidated statements of operations (see Note 12). Fair value of the promissory notes is determined using a multiple scenario-based valuation method. The fair value of the hybrid instrument was determined by calculating the value of the instrument in each scenario “with” the respective conversion feature and “without”. The significant inputs used in estimating the fair value of the convertible promissory notes include the estimated discount rate, expected term, and the outcome probability with respect to each scenario.

Revenue Recognition

Product Revenue

The Company commercializes Plenity in the U.S. markets principally through synergistic partnerships with online pharmacies and telehealth providers, which in turn sell Plenity directly to patients based on prescriptions. Outside the U.S., the Company primarily seeks collaborations with strategic partners to market Plenity and obtain necessary regulatory approvals as necessary.

Product revenue is recognized by the Company in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services when the customer obtains control of the product, which occurs at a point in time, when the product is received by the Company's customers.

Reserves for Variable Consideration

Revenues from product sales are recorded as product revenue at the net sales price (transaction price), which includes estimates of variable consideration that are reimbursable to customers for which reserves are established and which result from (a) shipping charges to end-users, (b) pharmacy dispensing and platform fees, (c) merchant and processing fees, (d) promotional discounts offered by the Company to end-users, and (e) reserves for expected product quality returns. These reserves for contractual adjustments are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than the customer). Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as the Company's historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company's best estimates of the amount of consideration to which the Company is entitled based on the terms of the contract(s). The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from the Company's estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The Company has no plan to seek government or commercial payor reimbursements in the US or the overseas markets. Therefore, reserves for variable consideration do not contain any components related to government and payor rebates or chargebacks.

Product Returns

The Company generally does not accept customer returns, except for product quality related cases. The Company evaluates quality related returns and adjusts the corresponding product warranty reserves and liabilities at least quarterly and at the end of each reporting period.

Stock-Based Compensation

The Company accounts for all stock-based compensation awards granted to employees and non-employees in accordance with ASC 718, Compensation – Stock Compensation. The Company’s stock-based compensation consists primarily of stock options. The

measurement date for share-based awards is the date of grant, and stock-based compensation costs are recognized as expense over the respective requisite service periods, which are typically the vesting period. The fair value of each stock option grant is estimated as of the date of grant using the Black-Scholes option-pricing model that requires management to apply judgment and make estimates, including:

•exercise price: The exercise price is the fair market value on grant date, which shall mean the closing sale price of common stock, as reported on such market on that date (or if there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations);

•expected volatility: As the Company was previously a privately-owned company, there is not sufficient historical volatility for the expected term of the options. Therefore, the Company used an average historical share price volatility based on an analysis of reported data for a peer group of comparable companies for which historical information is available. For these analyses, the Company selects companies with comparable characteristics to itself including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its stock-based awards. The Company intends to consistently apply this process using representative companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available;

•risk-free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption;

•expected term, which is calculated using the simplified method, as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment, as the Company has insufficient historical information regarding its stock options to provide a basis for an estimate. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term of ten years and the weighted-average vesting term of the stock options, taking into consideration multiple vesting tranches;

•dividend yield, which is zero based on the fact that the Company never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The measurement date for non-employee awards is the date of grant without changes in the fair value of the award. Stock-based compensation costs for non-employees are recognized as expense over the vesting period. Stock-based compensation expense is classified in the condensed consolidated statements of operations based on the function to which the related services are provided. Forfeitures are recorded as they occur.

Recently Issued Pronouncements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements. This update requires leasehold improvements associated with common control leases be amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset (the leased asset) through a lease. However, if the lessor obtained the right to control the use of the underlying asset through a lease with another entity not within the same common control group, the amortization period may not exceed the amortization period of the common control group. Further, leasehold improvements associated with common control leases be accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of the underlying asset. Those leasehold improvements are subject to the impairment guidance in Topic 360, Property, Plant, and Equipment. This update is effective for annual periods beginning after December 15, 2023, and early application is permitted. This guidance should be applied either (i) prospectively to all new leasehold improvements recognized on or after the date of initial application; (ii) prospectively to all new and existing leasehold improvements recognized on or after the date of initial application, with any remaining unamortized balance of existing leasehold improvements amortized over their remaining useful life to the common control group determined at that date; or (iii) retrospectively to the beginning of the period in which the entity first applied Topic 842, with any leasehold improvements that otherwise would not have been amortized or impaired recognized through a cumulative-effect adjustment to the opening balance of retained earnings at the beginning of the earliest period presented in accordance with Topic 842. The Company is evaluating the potential impact of this update and does not intend to early adopt this update for fiscal year 2023.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

3.Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis consisted of the following at June 30, 2023 (in thousands):

			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Interest rate swap contract (see Note 11)	$	757	$	—	$	757	$	—
Liabilities:
2022 convertible promissory notes (see Note 11)		20,114		—		—		20,114
2023 NPA ̶ Initial Close Note (see Note 11)		3,199		—		—		3,199
One S.r.l. call option (see Note 10)		—		—		—		—
Total liabilities measured at fair value	$	23,313	$	—	$	—	$	23,313

Assets and liabilities measured at fair value on a recurring basis consisted of the following at December 31, 2022 (in thousands):

			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Interest rate swap contract (see Note 11)	$	800	$	—	$	800	$	—
Liabilities:
2022 promissory notes (see Note 11)		27,403		—		—		27,403
Earnout liability (see Note 13)		563		—		—	$	563
Private placement warrant liability (see Note 12)		130		—		—		130
One S.r.l. call option (see Note 10)		674		—		—		674
Total liabilities measured at fair value	$	28,770	$	—	$	—	$	28,770

The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments during the six months ended June 30, 2023:

	Convertible Promissory Notes			One S.r.l. Call Option			Earnout Liability			Private Placement Warrant Liability
Balance at December 31, 2022	$	27,403		$	674		$	563		$	130
Issuance of convertible promissory notes		5,000			—			—			—
Transaction price allocated to warrant issuance		(1,459	)		—			—			—
Changes in fair value		(7,631	)		(678	)		(563	)		(130	)
Foreign currency translation adjustment		—			4			—			—
Balance at June 30, 2023	$	23,313		$	—		$	—		$	—

There were no transfers into or out of level 3 instruments and/or between level 1 and level 2 instruments during the six months ended June 30, 2023. The fair value measurement of the convertible promissory notes, Legacy Gelesis preferred stock warrant liability, One Srl call option liability, earnout liability and private placement warrant liability utilized inputs not observable in the market and thus represents a Level 3 measurement.

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Product Revenue Reserve and Allowance

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Product Revenue Reserve and Allowance

4.Product Revenue Reserve and Allowance

The Company sells the Product principally to a limited number of customers consisting of telemedicine and online pharmacies, that in turn resell the Product to consumers.

Revenue for the three and six months ended June 30, 2023 and 2022 consisted of the following (in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Roman Health Pharmacy LLC	$	608	$	6,916	$	1,623	$	13,415
GoGoMeds		496		2,057		1,157		3,072
CMS		—		—		77		—
Other		3		—		3		—
Total	$	1,107	$	8,973	$	2,860	$	16,487

Roman Health Pharmacy LLC (“Ro”)

Net product revenue recognized with respective to the Ro supply and distribution agreement was $0.6 million and $1.6 million for the three and six months ended June 30, 2023,and $6.9 million and $13.4 million for the three and six months ended June 30, 2022, respectively, in the accompanying condensed consolidated statements of operations. At June 30, 2023 and December 31, 2022, the Company recorded a deferred income balance of $24.3 million and $25.9 million, respectively, in the accompanying condensed consolidated balance sheets representing customer prepayment available to be used for future Product purchases with respect to Ro.

GoGoMeds (“GGM”)

Net product revenue recognized with respect to Specialty Medical Drugstore, LLC, d/b/a/ GoGoMeds, or GGM distribution agreement was $0.5 million and $1.2 million for the three and six months ended June 30, 2023 and $2.1 million and $3.1 million for the three and six months ended June 30, 2022, respectively, in the accompanying condensed consolidated statements of operations. At June 30, 2023 and December 31, 2022, the Company recorded an accounts receivable balance of $0.8 million and $1.1 million, respectively, prior to reserves and allowances, in the accompanying condensed consolidated balance sheets with respect to GGM.

CMS Bridging DMCC (“CMS”)

Net product revenue recognized with respect to the CMS licensing and collaboration agreements was $0.1 million for the three and six months ended June 30, 2023, respectively, in the accompanying condensed consolidated statements of operations. There was no product sales to CMS for the three and six months ended June 30, 2022.

Reserves and Allowances

The following table summarizes the activity in the product revenue reserve and allowances during the three and six months ended June 30, 2023 and June 30, 2022 (in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Balance at beginning of period	$	7		$	238		$	23		$	82
Provision related to product sales		174			619			384			1,193
Credits and payments made		(177	)		(736	)		(403	)		(1,154	)
Balance at end of period	$	4		$	121		$	4		$	121

At June 30, 2023 and 2022, product related reserve and allowances comprised solely contractual adjustments owed to the Company’s telehealth and online pharmacy partners, which were netted to accounts receivable in the Company’s condensed consolidated balance sheets for the year. Through June 30, 2023, there had been no product related reserves or allowances owed to other parties, including the federal and state governments or their agencies.

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Inventories

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Inventories

5.Inventories

Inventories consisted of the following (in thousands):

	June 30,			December 31,
	2023			2022
Raw materials	$	8,781		$	9,549
Work in process		4,434			4,695
Finished goods		5,395			5,955
Inventories, gross		18,610			20,199
Less: inventory reserves		(12,922	)		(13,334	)
Total inventories	$	5,688		$	6,865

In January 2023, the Company submitted a 510(k) application with the FDA to change the classification of Plenity from prescription only to OTC, which, if cleared by the FDA, would make Plenity available to consumers without the need for a prescription. If Plenity

is approved by the FDA as an OTC weight management aid, a portion of finished goods and raw material inventories with Rx labeling and marking information would become obsolete. Additionally, finished goods and work-in-process inventories with expiration dates ranging between July 2023 and March 2024 are subject to shelf-life limitations.

As of June 30, 2023, the Company estimated that approximately $5.0 million finished goods, $4.3 million work-in-progress and $3.6 million raw material inventories wouldn’t be sold or utilized. Therefore, the Company recorded an aggregate $12.9 million excess and obsolescence inventory reserves as a component of inventories on the accompanying consolidated balance sheet as of June 30, 2023.

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Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses And Other Current Assets

6.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Prepaid expenses	$	207	$	314
Prepaid insurance		1,238		268
Prepaid contract research costs		72		189
Research and development tax credit		498		567
Value added tax receivable		825		2,036
Income tax receivable		208		203
Investment tax credit		2,115		1,050
Prepaid expenses and other current assets	$	5,163	$	4,627

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

7.Property and Equipment, Net

Property and equipment, net, consists of the following (in thousands):

	June 30,			December 31,
	2023			2022
Laboratory and manufacturing equipment	$	41,333		$	29,944
Land and buildings		8,562			10,673
Leasehold improvements		1,553			1,525
Computer equipment and software		825			811
Capitalized software		232			232
Construction in process		15,687			24,287
Property and equipment – at cost		68,192			67,472
Less accumulated depreciation		(11,265	)		(8,137	)
Property and equipment – net	$	56,927		$	59,335

The Company owns and operates commercial manufacturing and research and development facilities in Italy, including a 51,000 square foot facility, which the Company expects to further expand to an 88,600 square foot facility, as well as approximately 12 acres of land, where the Company initiated construction activities for an additional 207,000 square foot facility. Both facilities are near the Town of Lecce in the Puglia region of Italy. Property and equipment classified as construction in process at June 30, 2023 and December 31, 2022 are related to the development of manufacturing lines that have not yet been placed into service at June 30, 2023 and December 31, 2022, respectively.

Depreciation expense was approximately $1.5 million and $3.5 million for the three and six months ended June 30, 2023 and $0.4 million and $1.4 million for the three and six months ended June 30, 2022, respectively.

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Accrued Expenses

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses

8.Accrued Expenses

Accrued expenses and other current liabilities consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Accrued payroll and related benefits	$	1,741	$	1,550
Accrued professional fees and outside contractors (including    due to related party of $75 and $153, respectively)		560		3,521
Accrued property, plant and equipment additions		182		378
Accrued inventory and manufacturing expense		71		1,020
Unpaid portion of One S.r.l. equity acquisition (see Note 10)		2,778		2,656
Tax payables		548		543
Deferred legal fees		738		738
Accrued interest		659		62
Total accrued expenses	$	7,277	$	10,468

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Other Long-Term Liabilities

6 Months Ended

Jun. 30, 2023

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities

9.Other Long-Term Liabilities

Other long-term liabilities consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Long-term tax liabilities	$	136	$	224
One S.r.l. call option (see Note 10)		—		674
Total other long-term liabilities	$	136	$	898

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Significant Agreements

6 Months Ended

Jun. 30, 2023

Significant Agreements [Abstract]

Significant Agreements

10.Significant Agreements

Puglia Grants

In May 2020, the Company was awarded a grant by the Puglia region of Italy as an incentive to manufacture and carry out research and development activities in Italy (“PIA 1 Grant”), with the key underlying activity being the development of the commercial facility to expand production capacity for the Product.

In November 2020, the Company was awarded a second grant by the Puglia region of Italy as an incentive to manufacture and carry out research and development activities in Italy (“PIA 2 Grant”), with the key underlying activity being the development of a second manufacturing line at the commercial facility to expand production capacity for the Product, and research and development activities targeting new gastrointestinal health indications.

The following table represents amounts recognized on the consolidated statements of operations for the three months ended June 30, 2023 and 2022 in relation to the Puglia 1 Grant and Puglia 2 Grant (in thousands):

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2023			2022		2023		2022
PIA 1 Grant income	$	195		$	204	$	389	$	409
Income attributable to R&D expense		18			18		36		36
Income attributable to investments in facilities and equipment		177			186		353		373
PIA 2 Grant Income	$	56		$	874	$	393	$	1,062
Income attributable to R&D expense (reclassification)		(51	)		874		181		1,062
Income attributable to investments in facilities and equipment		107			—		212		—

The following table represents amounts recorded on the consolidated balance sheets at June 30, 2023 and December 31, 2022 in relation to the Puglia 1 Grant and Puglia 2 Grant (in thousands):

	June 30,		December 31,
	2023		2022
PIA 1 Grant
Grant receivable	$	—	$	3,237
Deferred income		4,693		5,001
Current portion of deferred income		777		771
PIA 2 Grant
Grant receivable		5,119		122
Long-term grant receivable		—		4,732
Deferred income		3,347		3,502
Current portion of deferred income		427		420

One S.r.l. (“One”) Amended Patent License and Assignment Agreement

In October 2008 and December 2008, the Company entered into a patent license and assignment agreement and master agreement with One, the original inventor and owner of the Company’s core patents and a related party to the Company (see Notes 18 and 19), to license and subsequently purchase certain intellectual property to develop hydrogel-based product candidates. The One agreements were subsequently amended and restated in December 2014 (the “2014 One Amendment”), June 2019 (the “2019 One Amendment”), October 2020 (the “2020 One Amendment”) and August 2022 (the "2022 One Amendment").

In conjunction with the 2019 One Amendment, the Company accounted for the reduction in royalties that the Company is required to pay on future net revenues as an intangible asset under ASC 350, Intangibles – Goodwill and Other, which shall be amortized over its useful life, which was determined to be the earliest expiration of patents related to the underlying intellectual property in November 2028. Additionally, the Company acquired a 10% equity interest in One in exchange for cash consideration. The Company accounted for the acquisition of the 10% equity interest in One under ASC 323, Investments – Equity Method and Joint Ventures.
 

At June 30, 2023 and December 31, 2022, respectively, the remaining undiscounted payment obligations to One shareholders were included in accrued expenses in the accompanying condensed consolidated balance sheets as it is expected to be settled within the next twelve months. None of the future milestones under the amended and restated master agreement, have been met, or are deemed to be probable of being met, at the transaction date or at June 30, 2023 and December 31, 2022, respectively.

In conjunction with the 2020 One Amendment, the Company cancels its obligation to issue a warrant for redeemable convertible preferred stock in the 2019 One Amendment for additional commercial milestone consideration and a warrant to purchase common stock. Additionally, the Company granted One a contingent call option to buy back the 10% ownership that the Company acquired in the 2019 One Amendment at an exercise price of €6.0 million (approximately $6.6 million at June 30, 2023). The call option is only exercisable upon (1) a change of control or a deemed liquidation event by the Company, as defined, in the Company’s Restated Certification of Incorporation or (2) the date in which the Company’s current Chief Executive Officer is no longer affiliated with the Company in his capacity as either an executive officer or a member of the board of directors.

The One S.r.l. call option was recorded as a liability held at fair value at the date of issuance and is remeasured at each subsequent reporting date with changes in fair value recorded in other income (expense) in the accompanying condensed consolidated statements of operations. Fair value is determined using a Black-Scholes option pricing model. The significant inputs used in estimating the fair value of call option liability include the estimated fair value of the underlying stock price, expected term, risk free interest rate, and expected volatility. The Company determined that the fair value of the One S.r.l. call at June 30, 2023 was de minimis, reflecting the expectations related to the closing of the pending merger described in Note 1. Accordingly, the valuation assumptions as of June 30, 2023 are not presented in the below fair value assumption table due to the assessment of de minimis value.
 

The following represents a summary of the changes to Company’s One S.r.l. call option liability during the three and six months ended June 30, 2023 and June 30, 2022 (in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Balance at Beginning of Period	$	141		$	2,623		$	674		$	2,416
Change in fair value		(142	)		607			(678	)		865
Foreign currency translation gain		1			(168	)		4			(219	)
Balance at the End of Period	$	—		$	3,062		$	—		$	3,062

The following weighted average assumptions were used to determine the fair value of the One S.r.l. call option liability at December 31, 2022:

	December 31,
	2022
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.2	%
Estimated fair value of ownership interest	$	1,772
Exercise price of call option	$	6,422

Research Innovation Fund (“RIF”) Financing

In August 2020, Gelesis S.r.l. entered into a loan and equity agreement with RIF, an investment fund out of the EU, whereby Gelesis S.r.l. received €10.0 million (approximately $10.9 million at June 30, 2023) from RIF as an equity investment and €15.0 million (approximately $16.3 million at June 30, 2023) as a loan with a fixed interest rate of 6.35% per annum (see Note 12). The equity investment can be called by the Company, beginning in December 2023 and ending in December 2026, by paying the investment plus 15% percent annual interest. If the Company does not exercise this call option, beginning in January 2027 and ending in December 2027, RIF may put the investment to the Company at a cost of the investment amount plus 3.175% percent annual interest. The loan has a termination date of December 31, 2030 and is repayable over 8 years starting 24 months subsequent to its issuance. Any unpaid principal and interest must be repaid upon exercise of the call option by the Company, or subsequent exercise of a put option by RIF. At June 30, 2023, RIF holds approximately 20% of the equity of Gelesis S.r.l.

The Company recorded the following noncontrolling interest components in the condensed consolidated statements of noncontrolling interest, redeemable convertible preferred stock and stockholders' deficit (in thousands):

	For the Six Months Ended June 30,
	2023		2022
Balance at beginning of period	$	12,590	$	11,855
Accretion of put option		—		173
Income allocated to noncontrolling interest holder		100		—
Foreign currency translation adjustment		215		(941	)
Balance at the end of period	$	12,905	$	11,087

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Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt

11.Debt

The Company’s non-convertible debt outstanding at June 30, 2023 and December 31, 2022 is summarized as follows:

	June 30,			December 31,
	2023			2022
Italian Economic Development Agency Loan	$	168		$	331
Intesa Sanpaolo Loan 1		6,731			7,094
Intesa Sanpaolo Loan 2		4,989			5,352
Horizon 2020 Loan		360			389
RIF Shareholders Loan		16,328			16,055
UniCredit Loan		4,042			4,421
Total debt obligation	$	32,618		$	33,642
Unamortized loan discount and issuance costs		(313	)		(346	)
Total debt obligation carrying amount	$	32,305		$	33,296
Current portion	$	5,039		$	7,954
Long-term portion	$	27,266		$	25,342

Future maturities with respect to non-convertible debt outstanding at June 30, 2023 are as follows (in thousands):

	At June 30, 2023
2023		3,016
2024		7,806
2025		5,390
2026		4,050
2027		4,032
More than 5 years		8,324
Total maturities	$	32,618

2022 Promissory Notes

In the third quarter of 2022, the Company issued three term promissory notes in the aggregate principal amount of $25.0 million to existing investor CMS, and existing investors and related parties PureTech Health LLC and SSD2 LLC, for aggregate cash proceeds of $25.0 million. Each of the 2022 promissory notes is unsecured and bears interest at a rate of 15% per annum. Each promissory note matures on the earlier of (a) December 31, 2023 or (b) five (5) business days following a qualified financing. Upon a payment default under any promissory note that has not been cured after five days (i) the Company will be required to issue certain warrants to the holders as defined by the promissory note agreements and (ii) the holders will have the option to convert outstanding principal and accrued interest into a number of shares of Gelesis common stock as defined by the promissory note agreements.

At June 30, 2023 and December 31, 2022, the aggregate outstanding balance of the 2022 promissory notes was $22.6 million and $27.4 million recorded at fair value on the accompanying condensed consolidated balance sheet. During the three and six months ended June 30, 2023, the Company recognized a fair value gain of $2.5 million and $7.3 million relating to the 2022 promissory notes.

The following assumptions were used to determine the fair value of the 2022 promissory notes at June 30, 2023 and December 31, 2022:

	June 30, 2023			December 31, 2022
Expected term	6 months			1 year
Weighted average discount rate		123.7	%		26.0	%
Probability of repayment after qualified financing		—			50.0	%
Probability of holder electing conversion option		—			50.0	%
Probability of a business combination		90.0	%		—
Probability of Company default		10.0	%		—

2023 Senior Secured Note and Warrant Purchase Agreement (the “2023 NPA — Initial Close”)

On February 21, 2023, the Company entered into a Note and Warrant Purchase Agreement with PureTech (the “2023 NPA”), pursuant to which the Company issued a short-term convertible senior secured note (the “Initial Close Note”) in the aggregate principal amount of $5.0 million and warrants to purchase 23,688,047 shares of the Company’s common stock at an exercise price of $0.2744 (”Initial Warrant”). The Initial Close Note bears interest at a rate of 12% per annum, and its original maturity date was July 31, 2023. The Notes issued pursuant to the 2023 NPA are secured by a first-priority lien on substantially all assets of the Company, including without limitation, intellectual property, regulatory filings and product approvals, clearances and trademarks worldwide (other than the equity interests in, and assets held by, Gelesis, S.r.l.) and a pledge of 100% of PureTech’s equity in the Company.

The Initial Warrant issued pursuant to the 2023 NPA are indexed to the Company's own stock and met the derivative scope exception provided by ASC 810-0-15-74, therefore were recorded as change in additional paid-in-capital. Accordingly, the total 2023 NPA Initial Close proceeds of $5.0 million was allocated between the senior secured note and the warrants based on the relative respective fair value as of February 21, 2023. The Company determined that the allocated fair value of the warrants and the related deferred financing costs were $1.5 million and $0.2 million, respectively, based on the following Black-Scholes inputs as of February 21, 2023:

Market price of common stock	$	0.28
Expected volatility		160	%
Expected term (in years)		0.24
Risk-free interest rate		4.9	%
Expected dividend yield		—

Accordingly, the allocated fair value of the Initial Close Note and the related deferred financing costs were $3.5 million and $0.4 million, respectively, as of February 21, 2023. The Company elected the fair value accounting option to account for the 2023 NPA Initial Close Note for the initial and subsequent measurements, and expensed the allocated deferred financing costs as non-cash

interest expense due to the immaterial amount. The following assumptions were used to determine the fair value of the Initial Close Note at June 30, 2023 and the original issuance date of February 21, 2023:

	June 30, 2023			February 21, 2023
Expected term	0.75 year			0.4 year
Weighted average discount rate		113.8	%		26.9	%
Probability of repayment after qualified financing		—			—
Probability of holder electing conversion upon a business combination		90.0	%		50.0	%
Probability of Company default		10.0	%		40.0	%
Probability of holder electing conversion option upon other default events		—			10.0	%

2023 NPA — Additional Closes

Amendment No. 1 to the 2023 NPA : On May 1, 2023, the Company and PureTech entered into an Amendment No.1 to the 2023 NPA (the “Amendment No. 1”), under which PureTech waived certain conditions and received (i) the convertible note in the aggregate principal amount of $2.0 million (the “Second Close Note”) and (ii) additional warrants to purchase up to 192,307,692 shares of the Company’s common stock at an exercise price of $0.0182 (the “Second Close Warrant”). Pursuant to the Amendment No. 1, the conversion of the Notes and the exercise of the Warrants pursuant to the NPA are no longer subject to the approval of the Company’s stockholders.

Limited Waiver to the 2023 NPA and Amendment No. 2 to the 2023 NPA: On May 26, 2023, the Company and PureTech entered into a Limited Waiver to the 2023 NPA (the “Waiver”), pursuant to which the PureTech waived certain conditions with respect to the Company’s issuance of $350,000 aggregate principal amount of convertible note (the “Amendment No. 2”). Pursuant to the Amendment No. 2 and the Waiver, the Company issued to PureTech Additional Notes with par value of $350,000 (the “Third Close Note”) and additional warrants to purchase up to 43,133,803 shares of the Company’s common stock at an exercise price of $0.0142 (the “Third Close Warrants”), for an aggregate cash purchase price of $350,000.

Bridge Note: In connection with the execution of the Merger Agreement described in Note 1, on June 12, 2023, the Company issued $3.0 million convertible note (the “Bridge Note”, or the “Forth Close” of the 2023 NPA) to PureTech for a cash price of $3.0 million. No concurrent warrant was issued to PureTech in connection with the Bridge Note.

Amendment No. 3 and Extension of Maturity Date of the 2023 NPA Notes: On June 28, 2023, the Company and PureTech entered into Amendment No. 3 to the 2023 NPA (“Amendment No. 3”), pursuant to which maturity date of all Notes issued pursuant to the 2023 NPA was extended to March 31, 2024.

Cash proceeds received as well as issuance costs incurred from the Second and Third Close were allocated between the respective Notes and Warrants based on their relative fair market values as of the closing date of May 1, 2023 and May 26, 2023, respectively. Based on the fair value analyses performed by an independent valuation firm, as of May 1, 2023, the Second Close Note and Warrant had an allocated price of $1.6 million and $0.4 million, respectively. As of May 26, 2023, the Third Close Note and Warrant had an allocated price of $0.3 million and less than $0.1 million, respectively. On June 12, 2023, the Bridge Note was issued at par value without any concurrent warrants. These Notes issued at Additional Close are recorded at their respective amortized costs.

At June 30, 2023, the aggregate carrying amount of the 2023 NPA Notes was $8.2 million, of which the Initial Close Note with principal amount of $5.0 million was recorded at fair value in the amount of $3.2 million, and the Additional Close Notes with aggregate principal amount of $5.35 million was recorded at amortized cost of $5.0 million on the accompanying condensed consolidated balance sheet. The Company recognized a fair market gain of $0.2 million and $0.3 million, non-cash interest expense and amortization of issuance costs of $0.2 million and $0.6 million with respect to the 2023 NPA notes for the three and six months ended June 30, 2023, respectively,

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Warrants Liability

6 Months Ended

Jun. 30, 2023

Warrants and Rights Note Disclosure [Abstract]

Warrants Liablities

12.Warrant Liabilities

The following represents a summary of the warrant liabilities activity during the six months ended June 30, 2023:

	Private Placement Warrants
Balance at December 31, 2022	$	130
Changes in fair value		(130	)
Balance at June 30, 2023	$	—

Private Placement Warrants

At June 30, 2023, there were 7,520,000 Private Placement Warrants outstanding exercisable at $11.50 per share for common stock at the same terms as the Public Warrants. However, the warrants will not be redeemable by the Company for cash so long as they are held by the initial stockholders or their permitted transferees. The initial purchasers of the Private Placement Warrants, or their permitted transferees, also have the option to exercise the Private Placement Warrants on a cashless basis. If Private Placement Warrants are held by holders other than the initial purchasers thereof or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.

The warrants were initially recorded at fair value with subsequent changes in fair value being recorded in the accompanying condensed consolidated statements of operations. The warrants at issuance and at June 30, 2023, were valued utilizing a modified Monte Carlo Simulation value model and significant unobservable Level 3 inputs.

The following weighted-average assumptions were used to determine the fair value of the Private Placement Warrant liability at December 31, 2022:

	Private Placement Warrants
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.0	%
Price of Gelesis Common Stock	$	0.29
Exercise price of warrants	$	11.50

The Company was notified by the NYSE Regulation in March 2023 that Company had fallen below the NYSE’s continued listing standard requiring listed companies to maintain an average global market capitalization over a consecutive 30 trading day period of at least $15.0 million. The NYSE reached its determination and publicly announced that the GLS common stock had been suspended from trading effective April 10, 2023. The Company’s common stock under the ticker symbol of GLS or GLSH were subsequently traded on the OTC markets ranging between $0.01 and $0.05 per share. As a result, the fair value of outstanding warrant liabilities was determined to be immaterial as of June 30, 2023.

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Earnout Liability

6 Months Ended

Jun. 30, 2023

Derivative Instrument Detail [Abstract]

Earnout Liability

13.Earnout Liability

The following represents a summary of the earnout liability activity during the six months ended June 30, 2023:

	Earnout Liability
Balance at December 31, 2022	$	563
Changes in fair value		(563	)
Balance at June 30, 2023	$	—

At Business Combination close and at June 30, 2023, there were 18,758,241 earnout shares unissued and unvested. At June 30, 2023, none of the triggering events had been met.

The earnout liability was initially recorded at fair value with subsequent changes in fair value being recorded in the accompanying condensed consolidated statements of operations. The earnout liability at issuance and at December 31, 2022, were valued utilizing a Monte Carlo Simulation and significant unobservable Level 3 inputs.

The following weighted-average assumptions were used to determine the fair value of the earnout liability at December 31, 2022:

	December 31, 2022
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.0	%
Price of Gelesis Common Stock	$	0.29

The Company's common stock under the ticker symbol of GLS or GLSH were suspended from trading on the NYSE effective April 10, 2023 and subsequently traded on the OTC markets ranging between $0.01 and $0.05 per share. Therefore, the fair value of outstanding earnout liabilities was determined to be immaterial as of June 30, 2023.

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Stockholder's Equity (Deficit)

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Stockholder's Equity (Deficit)

14.Stockholders' Equity (Deficit)

Common Stock

The Company’s authorized capital stock consists of (a) 900,000,000 shares of common stock, par value $0.0001 per share; and (b) 250,000,000 shares of preferred stock, par value $0.0001 per share. At June 30, 2023, there were 73,335,110 shares of common stock issued and outstanding.

Public Warrants

In connection with the Business Combination the Company assumed 13,800,000 Public Warrants, which entitle the holder to acquire common stock, which are exercisable at an exercise price of $11.50 per share. The Public Warrants will expire on the earlier to occur of five years after the completion of the Business Combination or redemption.
 

Once the Public Warrants become exercisable, the Company may call the Public Warrants for redemption for cash:
 

•in whole and not in part;
 

•at a price of $0.01 per warrant;
 

•upon not less than thirty (30) days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and
 

•if, and only if, the closing price of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) trading days within a thirty (30)-trading day period ending three (3) business days before the Company sends the notice of redemption to the warrant holders.
 

If the Company calls the Public Warrants for redemption, the Company will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis, as described in the warrant agreement. Additionally, in no event will the Company be required to net cash settle.

At June 30, 2023, there were 13,800,000 Public Warrants outstanding.

Rollover Warrants

Immediately prior to the closing of the Business Combination, Legacy Gelesis redeemable preferred stock warrants were converted into Legacy Gelesis common warrants and were subsequently split according to the exchange ratio of 2.59. Upon closing of the Business Combination, holders received shares of common stock of the Company on a one-to-one basis. At close of Business

Combination and June 30, 2023, there were 1,836,429 and 1,660,303 warrants outstanding, respectively, with an exercise price of $0.02. During the three months ended March 31, 2022, 176,126 rollover warrants were exercised for proceeds of less than $0.1 million.

Immediately prior to the closing of the Business Combination, existing Legacy Gelesis common warrants were also split according to the exchange ratio of 2.59. Upon closing of the Business Combination, holders received shares of common stock of the Company on a one-to-one basis. At close of Business Combination and through June 30, 2023, respectively, there were 1,353,062 of these warrants outstanding with an exercise price of $4.26.

At June 30, 2023 and December 31, 2022 common stock reserved for future issuances was as follows:

	June 30,		December 31,
	2023		2022
Common stock issued upon option exercise and RSUs vesting		15,335,476		16,881,549
Conversion of all classes of redeemable convertible   preferred stock		—		—
Issuances upon exercise of common stock warrants		283,862,907		24,733,365
Earnout shares		23,482,845		23,482,845
Total common stock reserved for future issuance		322,681,228		65,097,759

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

15.Stock-Based Compensation

2021 Stock Option Plan

In January 2022, the Company's Board of Directors approved the 2021 Stock Option and Incentive Plan (the "2021 Plan"), which supersedes the 2016 Stock Option and Grant Plan and the 2006 Stock Incentive Plan and provides for the grant of incentive stock options, nonqualified stock options, restricted stock awards and restricted stock units to employees, directors, and nonemployees of the Company. The 2021 Plan was authorized initially to issue 9,583,570 shares, plus on January 1, 2023 and each January 1 thereafter, the number of shares of Stock reserved and available for issuance under the Plan shall be cumulatively increased by 4 percent of the number of shares of Stock issued and outstanding on the immediately preceding December 31. Under the 2021 Plan, 7,375,070 shares remained available for issuance at June 30, 2023.

Options and restricted stock awards generally vest based on the grantee’s continued service with the Company during a specified period following a grant as determined by the Board of Directors and expire ten years from the grant date. In general, awards typically vest in three to four years, but vesting conditions can vary based on the discretion of the Company’s Board of Directors.

The fair value of the options is estimated at the grant date using Black-Scholes and recognized over the vesting period, taking into account the terms and conditions upon which options are granted. The fair value of restricted stock awards is the fair value at the date of grant reduced by the exercise price of the award, if any. The fair value of both options and restricted stock awards are amortized on a straight-line basis over the requisite service period of the awards.

Stock-based compensation expense is summarized for employees and nonemployees, by category in the accompanying condensed consolidated statements of operations as follows (in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	209	$	3,008	$	543	$	8,073
Selling, general and administrative		2,175		4,968		3,932		13,892
Total	$	2,384	$	7,976	$	4,475	$	21,965

Stock Option Activity

The following table summarizes the Company’s stock option activity during the six months ended June 30, 2023:

	Number of Options			Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022		12,798,479		$	3.97		5.80	$	25
Granted		—
Exercised		—
Forfeited - unvested		(158,733	)	$	4.02
Forfeited - vested		—
Expired		(999,070	)	$	4.12
Outstanding at June 30, 2023		11,640,676		$	3.95		5.32	$	—
Exercisable at June 30, 2023		9,827,923		$	3.92		4.75	$	—
Vested and Expected to Vest at June 30, 2023		11,640,676		$	3.95		5.32	$	—

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the common stock. The total fair value of options vested during the three and six months ended June 30, 2023 was $1.0 million and $2.9 million, respectively.

At June 30, 2023, there was $4.1 million unrecognized compensation cost related to unvested stock option grants under the 2021 Plan, which was expected to be recognized over a weighted-average period of 2.1 years.

Restricted Stock Unit (“RSU”) Activity

The following table summarizes the Company’s RSU activity during the six months ended June 30, 2023:

	Number of RSUs			Weighted- Average Grant Date Fair Value
Outstanding and Unvested at December 31, 2022		4,083,070		$	4.31
Granted		—
Vested		(10,088	)	$	8.26
Forfeited		(378,182	)	$	3.35
Outstanding at June 30, 2023		3,694,800		$	4.39

Each RSU entitles the holder to one share of common stock on vesting and the RSU awards are based on a cliff vesting schedule over requisite service periods in which the Company recognizes compensation expense for the RSUs. Vesting of the RSUs is subject to the satisfaction of certain service and or certain performance conditions. The Company recognizes the estimated grant date fair value of these awards as stock-based compensation expense over the service and or performance periods based upon its determination of whether it is probable that the service and or performance conditions will be achieved. The Company assesses the probability of achieving the service and our performance conditions at each reporting period. Cumulative adjustments, if any, are recorded to reflect subsequent changes in the estimated or actual outcome of service and or performance-related conditions.

At June 30, 2023, unrecognized compensation cost for RSU awards granted totaled $5.4 million, which was expected to be recognized over a weighted-average period of 2.7 years.

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Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

16.Income Taxes

The Company recorded a provision of less than $0.1 million and $0.0 million during the six months ended June 30, 2023 and June 30, 2022, respectively. The provision recorded differs from the US statutory rate of 21% for the six months ended June 30, 2023 and June 30, 2022 primarily due to the valuation allowance recorded against the net operating losses and deferred tax assets.

The Company continues to evaluate the positive and negative evidence bearing upon the realizability of its net deferred tax assets and determined that it is not more likely than not that the Company will recognize the benefits of the net deferred tax assets. Therefore, a full valuation allowance has been recorded against the balance of net deferred tax assets in the United States as of June 30, 2023 and December 31, 2022, respectively.

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Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

17.Earnings (Loss) per Share

Basic and diluted loss per share attributable to common stockholders was calculated as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Numerator:
Net loss	$	(7,681	)	$	(12,513	)	$	(12,827	)	$	(18,216	)
Accretion of redeemable convertible preferred stock to redemption value		—			—			—			(37,934	)
Accretion of noncontrolling interest put option to redemption value		—			(85	)		—			(173	)
Income allocated to noncontrolling interest holder		—			—			(100	)		—
Net loss attributable to common stockholders	$	(7,681	)	$	(12,598	)	$	(12,927	)	$	(56,323	)
Denominator:
Weighted average common shares outstanding, basic and diluted		73,334,861			72,423,043			73,329,685			67,609,838
Net loss per share, basic and diluted	$	(0.10	)	$	(0.17	)	$	(0.18	)	$	(0.83	)

The Company’s potential dilutive securities, which include stock options, RSUs, warrants and earnout shares have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same for all periods presented. The Company excluded the following potential common stock, presented based on amounts outstanding at June 30, 2023 and 2022 from the computation of diluted net loss per share attributable to common stockholders because including them would have had an anti-dilutive effect.

	June 30,
	2023		2022
Options and RSUs to acquire common stock		15,335,476		20,000,493
Warrants on common stock		283,862,907		24,333,365
Earnout shares		—		—
Total		299,198,383		44,333,858

Total potentially dilutive common share equivalents for the three and six months ended June 30, 2023, excludes 23,482,845 shares related to the earnout liability as these shares are contingently issuable upon meeting certain triggering events.

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Commitment and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

18.Commitments and Contingencies

Operating Leases

In June 2019, the Company entered into an operating lease agreement with PureTech Health LLC, or PureTech, for office space located in Boston, Massachusetts. The lease expires in August 2025, with total lease payments of $3.2 million over the term. The Company also has operating leases for certain storage and equipment with various terms expiring in 2027. The remaining weighted average noncancelable term of the Company’s operating leases was 2.3 years at June 30, 2023, and the weighted average discount rate was 5.4%.

The following table summarizes the Company's operating lease activity (in thousands):

	For the six months ended June 30,
	2023		2022
Lease liabilities, current		546		550
Lease liabilities, non-current		697		1,222
Total operating lease liabilities	$	1,243		1,772
Operating lease rental expense	$	376	$	272

Future maturities of the lease liability under the Company’s noncancelable operating leases at June 30, 2023 are as follows (in thousands):

Remaining 2023 maturities		320
2024		565
2025		389
2026		38
2027		18
More than 5 years		-
Total undiscounted lease maturities	$	1,330
Imputed interest		(87	)
Total lease liability	$	1,243

Royalty Agreements

Expenses from royalty agreements on net product sales and sublicense income is recognized as a cost of goods sold in the accompanying condensed consolidated statements of operations during the period in which the associated revenues are recognized.

PureTech

In December 2009, the Company entered into a royalty and sublicense income agreement with PureTech, a significant stockholder in the Company, whereby the Company is required to pay PureTech a 2.0% royalty on net product sales received as a result of developing products and technology using the intellectual property purchased from One.

One S.r.l

Under the amended and restated master agreement with One, the Company is required to pay a 2.0% royalty on net product sales and an aggregate of €17.5 million (approximately $19.0 million at June 30, 2023) upon the achievement of certain commercial milestones of new medical indications as well as Plenity and pay royalties on net product sales and/or a percentage of sublicense income. At June 30, 2023, none of the milestones have been met.

Grant Agreements

The Company has been awarded grants from governmental agencies, which are recognized as income as the qualifying expenses are incurred (see Note 11). The grant agreements contain certain provisions, including, among others, maintaining a physical presence in the region for defined periods. Failure to comply with these covenants would require either a full or partial refund of the grant to the granting authority.

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Related Party Transactions

6 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

19.Related Party Transactions

The Company had the following transactions with related parties:

PureTech

In June 2019, PureTech executed a sublease agreement with the Company (see Note 18). With respect to the sublease, the Company incurred lease expense of approximately $0.1 million and $0.3 million during the three and six months ended June 30, 2023, and $0.1 million and $0.3 million during the three and six months ended June 30, 2022, respectively, recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations. The Company incurred royalty expense of less than $0.1 million and $0.1 million in connection with the PureTech royalty agreement (see Note 18) during the three and six months ended June 30, 2023, and $0.1 million and $0.3 million during the three and six months ended June 30, 2022, respectively, recorded in cost of goods sold in the accompanying condensed consolidated statements of operations. The Company had an accounts payable accrued expense balance to PureTech of $0.6 million and $0.1 million at June 30, 2023 and December 31, 2022, respectively, in the accompanying condensed consolidated balance sheets.

On July 25, 2022, the Company issued a convertible promissory note to PureTech in the principal amount of $15.0 million (see Note 11). At June 30, 2023 and December 31, 2022, the outstanding balance was $12.1 million and $16.6 million, respectively, recorded at fair value in the accompanying condensed consolidated balance sheets. During the three and six months ended June 30, 2023, the Company recognized a gain of $1.6 million and $4.5 million with respect to the change in fair value of the 2022 convertible promissory notes on the accompanying condensed consolidated statements of operations.

Between February 2023 and June 2023, the Company entered into the 2023 NPA and amendments with aggregate gross proceeds of $10.4 million (see Note 11), pursuant to which the Company issued convertible senior secured notes in the aggregate par value of $10.4 million and warrants to purchase 259,129,542 shares of the Company’s common stock. The warrants have an exercise price ranging between $0.0142 and $0.2744 and may not be exercised prior to the receipt of stockholders' approval. At June 30, 2023, the

outstanding balance of the 2023 NPA convertible senior secured notes amounted to an aggregate of $8.2 million on the accompanying condensed consolidated balance sheets. The Company recognized a gain of $0.2 million and $0.3 million for the three and six months ended June 30, 2023 with respect to the change in fair value, as well as interest and issuance cost amortization of $ 0.2 million and $0.6 million for the three and six months ended June 30, 2023, respectively, in the accompanying condensed consolidated statements of operations.

SSD2

On July 25, 2022, the Company issued a convertible promissory note to SSD2, LLC in the principal amount of $5.0 million (see Note 11). At June 30, 2023 and December 31, 2022, the outstanding balance was $4.0 million and $5.5 million, respectively, recorded at fair value on the accompanying condensed consolidated balance sheets. The Company recognized a gain of $0.5 million and $1.5 million with respect to the change in fair value of the convertible promissory notes in the accompanying condensed consolidated statements of operations.

One S.r.l

Consulting Agreement with Founder of One

The Company and one of the founders of One, who is also a stockholder of the Company, entered into a consulting agreement for the development of the Company's science and technology. The Company incurred costs for consulting services received from the founder of One totaling less than $0.1 million and $0.1 million for the three and six months ended June 30, 2023, and less than $0.1 million and $0.1 million for the three and six months ended June 30, 2022, respectively, recorded in research and development expense in the accompanying condensed consolidated statements of operations. The Company recorded an accounts payable balance to the founder of less than $0.1 million at both June 30, 2023 and December 31, 2022, respectively, on the accompanying condensed consolidated balance sheets.

Acquisition of One

In connection with the amended and restated master agreement with One (see Note 10), the Company acquired a 10.0% equity interest in One in exchange for cash consideration. The Company had remaining undiscounted payments of €2.5 million due to One at June 30, 2023 and December 31, 2022 (approximately $2.7 million due to One at June 30, 2023 and December 31, 2022), respectively. The balance at June 30, 2023 and December 31, 2022 was recorded in accrued expenses on the accompanying condensed consolidated balance sheets as it is expected to be settled within the next twelve months.

Additionally, the Company incurred royalty expense of less than $0.1 million and $0.1 million with One (see Note 18) for the three and six months ended June 30, 2023, respectively, and $0.2 million and $0.3 million for the three and six months ended June 30, 2022, respectively, recorded in cost of goods sold in the accompanying condensed consolidated statements of operations. The Company had an accounts payable and accrued expense balance of $0.1 million at June 30, 2023 and December 31, 2022, respectively, related to royalties on the accompanying condensed consolidated balance sheets.

RIF Transaction

In connection with the RIF transaction entered into in August 2020, the Company received $12.3 million from RIF as an equity investment that can be called by the Company beginning in December 2023 and ending in December 2026 by paying the investment plus 15.0% percent annual interest or put by RIF starting in January 2027 and ending in December 2027 for the investment amount plus 3.175% percent annual interest. RIF holds approximately 20% of the equity of Gelesis S.r.l. at December 31, 2021 (see Note 10). In addition, the shareholders of RIF provided the Company with a loan for $16.3 million with a fixed interest rate of 6.35% per annum (see Note 11).

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") as found in the Accounting Standards Codification ("ASC"), Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB") and the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2022 and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 28, 2023.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements, and updated, as necessary, in this report. In the opinion of the Company's management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company's financial position as of June 30, 2023, the results of its operations, non-controlling interest, redeemable convertible preferred stock and stockholders' deficit for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023. Such adjustments are of a normal and recurring nature. The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 or for any future period.

The Company’s condensed consolidated financial statements include the accounts of the Company, its two wholly-owned subsidiaries and a variable interest entity (“VIE”), Gelesis S.r.l., in which the Company has a controlling interest and is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. The Company assesses the above estimates on an ongoing basis; however, actual results could materially differ from those estimates.

Subsequent Event(s)

Subsequent Event(s)

The Company considers events or transactions that occur after the balance sheet date but before the condensed consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company evaluated all events and transactions through the date these condensed consolidated financial statements were filed with the Securities and Exchange Commission (“SEC”) or were available to be issued.

Business Combinations

Business Combination

The Company accounts for its business combinations using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired in a business combination are included in the Company's consolidated financial statements from the date of acquisition.

As discussed in Note 1, on January 13, 2022, the Company consummated the Business Combination pursuant to the Business Combination Agreement with CPSR dated July 19, 2021, as amended on November 8, 2021 and December 30, 2021. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, CPSR, who was the legal acquirer, was treated as the acquired company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Gelesis issuing stock for the net assets of CPSR, accompanied by a recapitalization.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The guidance in FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or Level 2 to Level 3.

The Company’s earnout liability, private placement warrants, interest rate swaps, call option liability, and convertible promissory notes are recorded at fair value on a recurring basis. The carrying amount of accounts receivable, grants receivable, accounts payable and accrued expenses are considered a reasonable estimate of their fair value, due to the short-term maturity of these instruments. The carrying amount of notes payable is also considered to be a reasonable estimate of the fair value based on the nature of the debt and that the debt bears interest at the prevailing market rate for instruments with similar characteristics. The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above.

Earnout Liability: In connection with the Business Combination, Legacy Gelesis equity holders received the right to receive additional common stock upon the achievement of certain earnout targets. As the earnout consideration contains a settlement provision that precludes it from being indexed to the Company’s stock, it is classified as a liability held at fair value in accordance ASC 815 and the

instrument is adjusted to fair value at each reporting period. In determining the fair value of the earnout liability at inception and on a recurring basis, the Company utilizes the Monte Carlo simulation value model where the fair value of the earnout is the present value of a distribution of potential outcomes on a daily basis over the term of the earnout period.

Private Placement Warrant Liability: The Private Placement Warrants are recognized as liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities held at fair value and adjusts the instruments to fair value at each reporting period. In determining the fair value of the Private Placement Warrant liability, the Company utilized a modified Monte Carlo simulation value model at inception and on a recurring basis.

One Srl Call Option: In connection with the October 2020 amended agreement with One Srl, the Company granted One a contingent call option to buy back the 10% ownership that the Company acquired in the 2019 One Amendment. The One Srl call option was recorded as a liability held at fair value at the date of issuance and is remeasured at each subsequent reporting date with changes in fair value recorded in other income (expense) in the accompanying condensed consolidated statements of operations. Fair value is determined using a Black-Scholes option pricing model.

Convertible promissory notes: The convertible promissory notes issued in conjunction with the Company’s bridge financing arrangements from time to time were recognized at fair value at issuance and subsequent changes in fair value were recorded in the accompanying consolidated statements of operations (see Note 12). Fair value of the promissory notes is determined using a multiple scenario-based valuation method. The fair value of the hybrid instrument was determined by calculating the value of the instrument in each scenario “with” the respective conversion feature and “without”. The significant inputs used in estimating the fair value of the convertible promissory notes include the estimated discount rate, expected term, and the outcome probability with respect to each scenario.

Revenue Recognition

Revenue Recognition

Product Revenue

The Company commercializes Plenity in the U.S. markets principally through synergistic partnerships with online pharmacies and telehealth providers, which in turn sell Plenity directly to patients based on prescriptions. Outside the U.S., the Company primarily seeks collaborations with strategic partners to market Plenity and obtain necessary regulatory approvals as necessary.

Product revenue is recognized by the Company in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services when the customer obtains control of the product, which occurs at a point in time, when the product is received by the Company's customers.

Reserves for Variable Consideration

Revenues from product sales are recorded as product revenue at the net sales price (transaction price), which includes estimates of variable consideration that are reimbursable to customers for which reserves are established and which result from (a) shipping charges to end-users, (b) pharmacy dispensing and platform fees, (c) merchant and processing fees, (d) promotional discounts offered by the Company to end-users, and (e) reserves for expected product quality returns. These reserves for contractual adjustments are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than the customer). Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as the Company's historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company's best estimates of the amount of consideration to which the Company is entitled based on the terms of the contract(s). The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from the Company's estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The Company has no plan to seek government or commercial payor reimbursements in the US or the overseas markets. Therefore, reserves for variable consideration do not contain any components related to government and payor rebates or chargebacks.

Product Returns

The Company generally does not accept customer returns, except for product quality related cases. The Company evaluates quality related returns and adjusts the corresponding product warranty reserves and liabilities at least quarterly and at the end of each reporting period.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for all stock-based compensation awards granted to employees and non-employees in accordance with ASC 718, Compensation – Stock Compensation. The Company’s stock-based compensation consists primarily of stock options. The

measurement date for share-based awards is the date of grant, and stock-based compensation costs are recognized as expense over the respective requisite service periods, which are typically the vesting period. The fair value of each stock option grant is estimated as of the date of grant using the Black-Scholes option-pricing model that requires management to apply judgment and make estimates, including:

•exercise price: The exercise price is the fair market value on grant date, which shall mean the closing sale price of common stock, as reported on such market on that date (or if there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations);

•expected volatility: As the Company was previously a privately-owned company, there is not sufficient historical volatility for the expected term of the options. Therefore, the Company used an average historical share price volatility based on an analysis of reported data for a peer group of comparable companies for which historical information is available. For these analyses, the Company selects companies with comparable characteristics to itself including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its stock-based awards. The Company intends to consistently apply this process using representative companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available;

•risk-free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption;

•expected term, which is calculated using the simplified method, as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment, as the Company has insufficient historical information regarding its stock options to provide a basis for an estimate. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term of ten years and the weighted-average vesting term of the stock options, taking into consideration multiple vesting tranches;

•dividend yield, which is zero based on the fact that the Company never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The measurement date for non-employee awards is the date of grant without changes in the fair value of the award. Stock-based compensation costs for non-employees are recognized as expense over the vesting period. Stock-based compensation expense is classified in the condensed consolidated statements of operations based on the function to which the related services are provided. Forfeitures are recorded as they occur.

Recently Issued Pronouncements

Recently Issued Pronouncements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements. This update requires leasehold improvements associated with common control leases be amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset (the leased asset) through a lease. However, if the lessor obtained the right to control the use of the underlying asset through a lease with another entity not within the same common control group, the amortization period may not exceed the amortization period of the common control group. Further, leasehold improvements associated with common control leases be accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of the underlying asset. Those leasehold improvements are subject to the impairment guidance in Topic 360, Property, Plant, and Equipment. This update is effective for annual periods beginning after December 15, 2023, and early application is permitted. This guidance should be applied either (i) prospectively to all new leasehold improvements recognized on or after the date of initial application; (ii) prospectively to all new and existing leasehold improvements recognized on or after the date of initial application, with any remaining unamortized balance of existing leasehold improvements amortized over their remaining useful life to the common control group determined at that date; or (iii) retrospectively to the beginning of the period in which the entity first applied Topic 842, with any leasehold improvements that otherwise would not have been amortized or impaired recognized through a cumulative-effect adjustment to the opening balance of retained earnings at the beginning of the earliest period presented in accordance with Topic 842. The Company is evaluating the potential impact of this update and does not intend to early adopt this update for fiscal year 2023.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis consisted of the following at June 30, 2023 (in thousands):

			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Interest rate swap contract (see Note 11)	$	757	$	—	$	757	$	—
Liabilities:
2022 convertible promissory notes (see Note 11)		20,114		—		—		20,114
2023 NPA ̶ Initial Close Note (see Note 11)		3,199		—		—		3,199
One S.r.l. call option (see Note 10)		—		—		—		—
Total liabilities measured at fair value	$	23,313	$	—	$	—	$	23,313

Assets and liabilities measured at fair value on a recurring basis consisted of the following at December 31, 2022 (in thousands):

			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Interest rate swap contract (see Note 11)	$	800	$	—	$	800	$	—
Liabilities:
2022 promissory notes (see Note 11)		27,403		—		—		27,403
Earnout liability (see Note 13)		563		—		—	$	563
Private placement warrant liability (see Note 12)		130		—		—		130
One S.r.l. call option (see Note 10)		674		—		—		674
Total liabilities measured at fair value	$	28,770	$	—	$	—	$	28,770

Summary of Changes in Fair Value of Company's Level 3 Financial Instruments

The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments during the six months ended June 30, 2023:

	Convertible Promissory Notes			One S.r.l. Call Option			Earnout Liability			Private Placement Warrant Liability
Balance at December 31, 2022	$	27,403		$	674		$	563		$	130
Issuance of convertible promissory notes		5,000			—			—			—
Transaction price allocated to warrant issuance		(1,459	)		—			—			—
Changes in fair value		(7,631	)		(678	)		(563	)		(130	)
Foreign currency translation adjustment		—			4			—			—
Balance at June 30, 2023	$	23,313		$	—		$	—		$	—

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Product Revenue Reserve and Allowance (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Summary of Revenue

Revenue for the three and six months ended June 30, 2023 and 2022 consisted of the following (in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Roman Health Pharmacy LLC	$	608	$	6,916	$	1,623	$	13,415
GoGoMeds		496		2,057		1,157		3,072
CMS		—		—		77		—
Other		3		—		3		—
Total	$	1,107	$	8,973	$	2,860	$	16,487

Summary of Activity in Product Revenue Reserve and Allowance

Reserves and Allowances

The following table summarizes the activity in the product revenue reserve and allowances during the three and six months ended June 30, 2023 and June 30, 2022 (in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Balance at beginning of period	$	7		$	238		$	23		$	82
Provision related to product sales		174			619			384			1,193
Credits and payments made		(177	)		(736	)		(403	)		(1,154	)
Balance at end of period	$	4		$	121		$	4		$	121

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Inventories (Tables)

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following (in thousands):

	June 30,			December 31,
	2023			2022
Raw materials	$	8,781		$	9,549
Work in process		4,434			4,695
Finished goods		5,395			5,955
Inventories, gross		18,610			20,199
Less: inventory reserves		(12,922	)		(13,334	)
Total inventories	$	5,688		$	6,865

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Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Prepaid expenses	$	207	$	314
Prepaid insurance		1,238		268
Prepaid contract research costs		72		189
Research and development tax credit		498		567
Value added tax receivable		825		2,036
Income tax receivable		208		203
Investment tax credit		2,115		1,050
Prepaid expenses and other current assets	$	5,163	$	4,627

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net, consists of the following (in thousands):

	June 30,			December 31,
	2023			2022
Laboratory and manufacturing equipment	$	41,333		$	29,944
Land and buildings		8,562			10,673
Leasehold improvements		1,553			1,525
Computer equipment and software		825			811
Capitalized software		232			232
Construction in process		15,687			24,287
Property and equipment – at cost		68,192			67,472
Less accumulated depreciation		(11,265	)		(8,137	)
Property and equipment – net	$	56,927		$	59,335

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses and other current liabilities consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Accrued payroll and related benefits	$	1,741	$	1,550
Accrued professional fees and outside contractors (including    due to related party of $75 and $153, respectively)		560		3,521
Accrued property, plant and equipment additions		182		378
Accrued inventory and manufacturing expense		71		1,020
Unpaid portion of One S.r.l. equity acquisition (see Note 10)		2,778		2,656
Tax payables		548		543
Deferred legal fees		738		738
Accrued interest		659		62
Total accrued expenses	$	7,277	$	10,468

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Other Long-Term Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities

Other long-term liabilities consist of the following (in thousands):

	June 30,		December 31,
	2023		2022
Long-term tax liabilities	$	136	$	224
One S.r.l. call option (see Note 10)		—		674
Total other long-term liabilities	$	136	$	898

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Significant Agreements (Tables)

6 Months Ended

Jun. 30, 2023

Significant Agreements [Abstract]

Summary of Grant Recognized

The following table represents amounts recognized on the consolidated statements of operations for the three months ended June 30, 2023 and 2022 in relation to the Puglia 1 Grant and Puglia 2 Grant (in thousands):

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2023			2022		2023		2022
PIA 1 Grant income	$	195		$	204	$	389	$	409
Income attributable to R&D expense		18			18		36		36
Income attributable to investments in facilities and equipment		177			186		353		373
PIA 2 Grant Income	$	56		$	874	$	393	$	1,062
Income attributable to R&D expense (reclassification)		(51	)		874		181		1,062
Income attributable to investments in facilities and equipment		107			—		212		—

The following table represents amounts recorded on the consolidated balance sheets at June 30, 2023 and December 31, 2022 in relation to the Puglia 1 Grant and Puglia 2 Grant (in thousands):

	June 30,		December 31,
	2023		2022
PIA 1 Grant
Grant receivable	$	—	$	3,237
Deferred income		4,693		5,001
Current portion of deferred income		777		771
PIA 2 Grant
Grant receivable		5,119		122
Long-term grant receivable		—		4,732
Deferred income		3,347		3,502
Current portion of deferred income		427		420

Summary of Changes in Fair Value of Call Option Liability

The following represents a summary of the changes to Company’s One S.r.l. call option liability during the three and six months ended June 30, 2023 and June 30, 2022 (in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Balance at Beginning of Period	$	141		$	2,623		$	674		$	2,416
Change in fair value		(142	)		607			(678	)		865
Foreign currency translation gain		1			(168	)		4			(219	)
Balance at the End of Period	$	—		$	3,062		$	—		$	3,062

Weighted Average Assumptions Used to Determine Fair Value of Call Option Liability

The following weighted average assumptions were used to determine the fair value of the One S.r.l. call option liability at December 31, 2022:

	December 31,
	2022
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.2	%
Estimated fair value of ownership interest	$	1,772
Exercise price of call option	$	6,422

Summary of Noncontrolling Interest

The Company recorded the following noncontrolling interest components in the condensed consolidated statements of noncontrolling interest, redeemable convertible preferred stock and stockholders' deficit (in thousands):

	For the Six Months Ended June 30,
	2023		2022
Balance at beginning of period	$	12,590	$	11,855
Accretion of put option		—		173
Income allocated to noncontrolling interest holder		100		—
Foreign currency translation adjustment		215		(941	)
Balance at the end of period	$	12,905	$	11,087

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Debt (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Summary of Non-Convertible Debt Outstanding

The Company’s non-convertible debt outstanding at June 30, 2023 and December 31, 2022 is summarized as follows:

	June 30,			December 31,
	2023			2022
Italian Economic Development Agency Loan	$	168		$	331
Intesa Sanpaolo Loan 1		6,731			7,094
Intesa Sanpaolo Loan 2		4,989			5,352
Horizon 2020 Loan		360			389
RIF Shareholders Loan		16,328			16,055
UniCredit Loan		4,042			4,421
Total debt obligation	$	32,618		$	33,642
Unamortized loan discount and issuance costs		(313	)		(346	)
Total debt obligation carrying amount	$	32,305		$	33,296
Current portion	$	5,039		$	7,954
Long-term portion	$	27,266		$	25,342

Summary of Future Maturities to Debt Outstanding

Future maturities with respect to non-convertible debt outstanding at June 30, 2023 are as follows (in thousands):

	At June 30, 2023
2023		3,016
2024		7,806
2025		5,390
2026		4,050
2027		4,032
More than 5 years		8,324
Total maturities	$	32,618

Summary of Assumptions Used to Determine Fair Value of Debt

The following assumptions were used to determine the fair value of the 2022 promissory notes at June 30, 2023 and December 31, 2022:

	June 30, 2023			December 31, 2022
Expected term	6 months			1 year
Weighted average discount rate		123.7	%		26.0	%
Probability of repayment after qualified financing		—			50.0	%
Probability of holder electing conversion option		—			50.0	%
Probability of a business combination		90.0	%		—
Probability of Company default		10.0	%		—

The following assumptions were used to determine the fair value of the Initial Close Note at June 30, 2023 and the original issuance date of February 21, 2023:

	June 30, 2023			February 21, 2023
Expected term	0.75 year			0.4 year
Weighted average discount rate		113.8	%		26.9	%
Probability of repayment after qualified financing		—			—
Probability of holder electing conversion upon a business combination		90.0	%		50.0	%
Probability of Company default		10.0	%		40.0	%
Probability of holder electing conversion option upon other default events		—			10.0	%

Summary of Fair Value of Warrants Based on Black-Scholes Inputs

The Company determined that the allocated fair value of the warrants and the related deferred financing costs were $1.5 million and $0.2 million, respectively, based on the following Black-Scholes inputs as of February 21, 2023:

Market price of common stock	$	0.28
Expected volatility		160	%
Expected term (in years)		0.24
Risk-free interest rate		4.9	%
Expected dividend yield		—

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Warrants Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Class of Warrant or Right [Line Items]

Summary of Changes in Warrant Liabilities Activity

The following represents a summary of the warrant liabilities activity during the six months ended June 30, 2023:

	Private Placement Warrants
Balance at December 31, 2022	$	130
Changes in fair value		(130	)
Balance at June 30, 2023	$	—

Summary of Weighted Average Assumptions of Fair Value of Liabilities

Assets and liabilities measured at fair value on a recurring basis consisted of the following at June 30, 2023 (in thousands):

			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Interest rate swap contract (see Note 11)	$	757	$	—	$	757	$	—
Liabilities:
2022 convertible promissory notes (see Note 11)		20,114		—		—		20,114
2023 NPA ̶ Initial Close Note (see Note 11)		3,199		—		—		3,199
One S.r.l. call option (see Note 10)		—		—		—		—
Total liabilities measured at fair value	$	23,313	$	—	$	—	$	23,313

Assets and liabilities measured at fair value on a recurring basis consisted of the following at December 31, 2022 (in thousands):

			Fair Value Measurements
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Interest rate swap contract (see Note 11)	$	800	$	—	$	800	$	—
Liabilities:
2022 promissory notes (see Note 11)		27,403		—		—		27,403
Earnout liability (see Note 13)		563		—		—	$	563
Private placement warrant liability (see Note 12)		130		—		—		130
One S.r.l. call option (see Note 10)		674		—		—		674
Total liabilities measured at fair value	$	28,770	$	—	$	—	$	28,770

Private Placement Warrants

Class of Warrant or Right [Line Items]

Summary of Weighted Average Assumptions of Fair Value of Liabilities

The following weighted-average assumptions were used to determine the fair value of the Private Placement Warrant liability at December 31, 2022:

	Private Placement Warrants
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.0	%
Price of Gelesis Common Stock	$	0.29
Exercise price of warrants	$	11.50

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Earnout Liability (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instrument Detail [Abstract]

Summary of Earnout Liability Activity

The following represents a summary of the earnout liability activity during the six months ended June 30, 2023:

	Earnout Liability
Balance at December 31, 2022	$	563
Changes in fair value		(563	)
Balance at June 30, 2023	$	—

Summary of Weighted Average Assumptions Used to Determine Fair Value of Earnout Liability

The following weighted-average assumptions were used to determine the fair value of the earnout liability at December 31, 2022:

	December 31, 2022
Expected term	4.0 years
Expected volatility		86.0	%
Expected dividend yield		0.0	%
Risk free interest rate		4.0	%
Price of Gelesis Common Stock	$	0.29

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Stockholder's Equity (Deficit) (Tables)

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Schedule of Common Stock Reserved for Future Issuance

At June 30, 2023 and December 31, 2022 common stock reserved for future issuances was as follows:

	June 30,		December 31,
	2023		2022
Common stock issued upon option exercise and RSUs vesting		15,335,476		16,881,549
Conversion of all classes of redeemable convertible   preferred stock		—		—
Issuances upon exercise of common stock warrants		283,862,907		24,733,365
Earnout shares		23,482,845		23,482,845
Total common stock reserved for future issuance		322,681,228		65,097,759

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock-Based Compensation Expense

Stock-based compensation expense is summarized for employees and nonemployees, by category in the accompanying condensed consolidated statements of operations as follows (in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	209	$	3,008	$	543	$	8,073
Selling, general and administrative		2,175		4,968		3,932		13,892
Total	$	2,384	$	7,976	$	4,475	$	21,965

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity during the six months ended June 30, 2023:

	Number of Options			Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022		12,798,479		$	3.97		5.80	$	25
Granted		—
Exercised		—
Forfeited - unvested		(158,733	)	$	4.02
Forfeited - vested		—
Expired		(999,070	)	$	4.12
Outstanding at June 30, 2023		11,640,676		$	3.95		5.32	$	—
Exercisable at June 30, 2023		9,827,923		$	3.92		4.75	$	—
Vested and Expected to Vest at June 30, 2023		11,640,676		$	3.95		5.32	$	—

Summary of Restricted Stock Unit Activity

The following table summarizes the Company’s RSU activity during the six months ended June 30, 2023:

	Number of RSUs			Weighted- Average Grant Date Fair Value
Outstanding and Unvested at December 31, 2022		4,083,070		$	4.31
Granted		—
Vested		(10,088	)	$	8.26
Forfeited		(378,182	)	$	3.35
Outstanding at June 30, 2023		3,694,800		$	4.39

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Earnings (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Summary of Basic and Diluted Net Loss Per Share

Basic and diluted loss per share attributable to common stockholders was calculated as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Numerator:
Net loss	$	(7,681	)	$	(12,513	)	$	(12,827	)	$	(18,216	)
Accretion of redeemable convertible preferred stock to redemption value		—			—			—			(37,934	)
Accretion of noncontrolling interest put option to redemption value		—			(85	)		—			(173	)
Income allocated to noncontrolling interest holder		—			—			(100	)		—
Net loss attributable to common stockholders	$	(7,681	)	$	(12,598	)	$	(12,927	)	$	(56,323	)
Denominator:
Weighted average common shares outstanding, basic and diluted		73,334,861			72,423,043			73,329,685			67,609,838
Net loss per share, basic and diluted	$	(0.10	)	$	(0.17	)	$	(0.18	)	$	(0.83	)

Schedule of Anti-dilutive Securities Excluded from Computation of Net Loss Per Share

The Company excluded the following potential common stock, presented based on amounts outstanding at June 30, 2023 and 2022 from the computation of diluted net loss per share attributable to common stockholders because including them would have had an anti-dilutive effect.

	June 30,
	2023		2022
Options and RSUs to acquire common stock		15,335,476		20,000,493
Warrants on common stock		283,862,907		24,333,365
Earnout shares		—		—
Total		299,198,383		44,333,858

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Commitment and Contingencies (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Operating Lease Activity

The following table summarizes the Company's operating lease activity (in thousands):

	For the six months ended June 30,
	2023		2022
Lease liabilities, current		546		550
Lease liabilities, non-current		697		1,222
Total operating lease liabilities	$	1,243		1,772
Operating lease rental expense	$	376	$	272

Schedule of Future Maturities of the Lease Liability Under the Company's Noncancelable Operating Leases

Future maturities of the lease liability under the Company’s noncancelable operating leases at June 30, 2023 are as follows (in thousands):

Remaining 2023 maturities		320
2024		565
2025		389
2026		38
2027		18
More than 5 years		-
Total undiscounted lease maturities	$	1,330
Imputed interest		(87	)
Total lease liability	$	1,243

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Nature of the Business and Basis of Presentation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	Jun. 12, 2023	Jan. 13, 2022	Jun. 30, 2023	Dec. 31, 2022
Subsidiary Sale Of Stock [Line Items]
Common stock, shares outstanding			73,335,110	73,325,022
Gelesis
Subsidiary Sale Of Stock [Line Items]
Gross proceeds from business combinations		$ 105.0
Net proceeds from business combinations		$ 70.5
Business combination, share price subject to applicable withholding taxes	$ 0.05664
Legacy Gelesis
Subsidiary Sale Of Stock [Line Items]
Business combination agreement date	Jul. 19, 2021
PureTech Health PLC
Subsidiary Sale Of Stock [Line Items]
Common stock, shares outstanding	16,883,102
Number of warrants outstanding	259,345,750
PureTech Health PLC | Senior Secured Note | Bridge Note
Subsidiary Sale Of Stock [Line Items]
Proceeds from issuance of convertible notes	$ 3.0

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Summary of Significant Accounting Policies - Additional Information (Details) - One Srl	Jun. 30, 2023	Jun. 30, 2019
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Equity Method Investment, Ownership Percentage		10.00%
Call Option
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Equity Method Investment, Ownership Percentage	10.00%

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Business Combination and Reverse Recapitalization - Additional Information (Details) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Common stock, shares issued	73,335,110	73,325,022
Common stock, par value	$ 0.0001	$ 0.0001
Common Stock
Business Acquisition [Line Items]
Common stock, shares issued	73,335,110
Common stock, par value	$ 0.0001

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Business Combination and Reverse Recapitalization - Schedule of Consummation of Business Combination (Details) - shares	Jun. 30, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Total common stock immediately after Closing	73,335,110	73,325,022
Common Stock
Business Acquisition [Line Items]
Total common stock immediately after Closing	73,335,110

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Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Liabilities:
Total liabilities measured at fair value	$ 23,313	$ 28,770
Level 3
Liabilities:
Total liabilities measured at fair value	23,313	28,770
Interest rate swap contract
Asset:
Interest rate swap contract (see Note 11)	757	800
Interest rate swap contract | Level 2
Asset:
Interest rate swap contract (see Note 11)	757	800
2022 Convertible Promissory Notes
Liabilities:
2022 Convertible promissory notes (see Note 11)	20,114	27,403
2022 Convertible Promissory Notes | Level 3
Liabilities:
2022 Convertible promissory notes (see Note 11)	20,114	27,403
2023 NPA - Initial Close Note
Liabilities:
2023 NPA - Initial Close Note (see Note 11)	3,199
2023 NPA - Initial Close Note | Level 3
Liabilities:
2023 NPA - Initial Close Note (see Note 11)	$ 3,199
Earnout Liability
Liabilities:
Earnout liability (see Note 13)		563
Earnout Liability | Level 3
Liabilities:
Earnout liability (see Note 13)		563
Private Placement Warrant Liability
Liabilities:
Warrant liability		130
Private Placement Warrant Liability | Level 3
Liabilities:
Warrant liability		130
One Srl Call Option
Liabilities:
One Srl call option (see Note 10)		674
One Srl Call Option | Level 3
Liabilities:
One Srl call option (see Note 10)		$ 674

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Fair Value Measurements - Summary of Changes in Fair Value of Company's Level 3 Financial Instruments (Details) - Level 3 $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Convertible Promissory Notes
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance	$ 27,403
Issuance of convertible promissory notes	5,000
Transaction price allocated to warrant issuance	(1,459)
Change in fair value	(7,631)
Balance	23,313
One Srl Call Option
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance	674
Change in fair value	(678)
Foreign currency translation adjustment	4
Earnout Liability
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance	563
Change in fair value	(563)
Private Placement Warrant Liability
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance	130
Change in fair value	$ (130)

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Fair Value Measurements - Additional Information (Details)	6 Months Ended
	Jun. 30, 2023 USD ($)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net [Abstract]
Liabilities, Transfer from Level 1 to Level 2	$ 0
Liabilities, Transfer from Level 2 to Level 1	0
Liabilities, Transfer into Level 3	0
Liabilities, Transfer out of Level 3	$ 0

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Product Revenue Reserve and Allowance - Summary of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Product Information [Line Items]
Revenue	$ 1,107	$ 8,973	$ 2,860	$ 16,487
Product Revenue, Net
Product Information [Line Items]
Revenue	1,107	8,973	2,860	16,487
Roman Health Pharmacy LLC | Product Revenue, Net
Product Information [Line Items]
Revenue	608	6,916	1,623	13,415
GoGoMeds | Product Revenue, Net
Product Information [Line Items]
Revenue	496	2,057	1,157	3,072
CMS Bridging DMCC | Product Revenue, Net
Product Information [Line Items]
Revenue	100	$ 0	77	$ 0
Other | Product Revenue, Net
Product Information [Line Items]
Revenue	$ 3		$ 3

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Product Revenue Reserve and Allowance - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Product Information [Line Items]
Revenue	$ 1,107	$ 8,973	$ 2,860	$ 16,487
Accounts receivable	799		799		$ 1,233
Product Revenue, Net
Product Information [Line Items]
Revenue	1,107	8,973	2,860	16,487
Product Revenue, Net | Roman Health Pharmacy LLC
Product Information [Line Items]
Revenue	608	6,916	1,623	13,415
Deferred income	24,300		24,300		25,900
Product Revenue, Net | GoGoMeds
Product Information [Line Items]
Revenue	496	2,057	1,157	3,072
Accounts receivable	800		800		$ 1,100
Product Revenue, Net | CMS Bridging DMCC
Product Information [Line Items]
Revenue	$ 100	$ 0	$ 77	$ 0

XML

Product Revenue Reserve and Allowance - Summary of Activity in Product Revenue Reserve and Allowance (Details) - Product Revenue, Net - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Product Information [Line Items]
Product revenue reserve and allowance, beginning balance	$ 7	$ 238	$ 23	$ 82
Provision related to product sales	174	619	384	1,193
Credits and payments made	177	736	403	1,154
Product revenue reserve and allowance, ending balance	$ 4	$ 121	$ 4	$ 121

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 8,781	$ 9,549
Work in process	4,434	4,695
Finished goods	5,395	5,955
Inventories gross	18,610	20,199
Less: inventory reserves	(12,922)	(13,334)
Total inventories	$ 5,688	$ 6,865

XML

Inventories - Additional Information (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Estimated unsold or unutilized inventory finished goods	$ 5,000
Estimated unsold or unutilized inventory work-in-progress	4,300
Estimated unsold or unutilized inventory raw material	3,600
Inventory reserves	$ 12,922	$ 13,334

XML

Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 207	$ 314
Prepaid Insurance	1,238	268
Prepaid contract research costs	72	189
Research and development tax credit	498	567
Value added tax receivable	825	2,036
Income tax receivable	208	203
Investment tax credit receivable	2,115	1,050
Prepaid expenses and other current assets	$ 5,163	$ 4,627

XML

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment - at cost	$ 68,192	$ 67,472
Less accumulated depreciation	(11,265)	(8,137)
Property and equipment – net	56,927	59,335
Laboratory And Manufacturing Equipment
Property, Plant and Equipment [Line Items]
Property and equipment - at cost	41,333	29,944
Land and Buildings
Property, Plant and Equipment [Line Items]
Property and equipment - at cost	8,562	10,673
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property and equipment - at cost	1,553	1,525
Computer Equipment and Software
Property, Plant and Equipment [Line Items]
Property and equipment - at cost	825	811
Capitalized Software
Property, Plant and Equipment [Line Items]
Property and equipment - at cost	232	232
Construction in Process
Property, Plant and Equipment [Line Items]
Property and equipment - at cost	$ 15,687	$ 24,287

XML

Property and Equipment, Net - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) ft² a	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) ft² a	Jun. 30, 2022 USD ($)
Property, Plant and Equipment [Abstract]
Area of facility under manufacturing and research and development	51,000		51,000
Area of facility under manufacturing and research and development expects to expand	88,600		88,600
Area of land | a	12		12
Additional area of facility initiated for construction	207,000		207,000
Depreciation | $	$ 1,500	$ 400	$ 3,509	$ 1,440

XML

Accrued Expenses - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued payroll and related benefits	$ 1,741	$ 1,550
Accrued professional fees and outside contractors (including due to related party of $35 and $153, respectively)	560	3,521
Accrued property, plant and equipment additions	182	378
Accrued inventory and manufacturing expense	71	1,020
Unpaid portion of One S.r.l. equity acquisition (see Note 10)	2,778	2,656
Tax payables	548	543
Deferred legal fees	738	738
Accrued interest	659	62
Total accrued expenses	$ 7,277	$ 10,468

XML

Accrued Expenses - Summary of Accrued Expenses and Other Current Liabilities (Parenthetical) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued Professional fee, due to related party	$ 75	$ 153

XML

Other Long-Term Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Long-term tax liabilities	$ 136	$ 224
One S.r.l. call option (see Note 10)		674
Total other long-term liabilities	$ 136	$ 898

XML

Significant Agreements - Additional Information (Details) € in Millions, $ in Millions	1 Months Ended		6 Months Ended
	Oct. 31, 2020 EUR (€)	Aug. 31, 2020 EUR (€)	Jun. 30, 2023 USD ($)	Jun. 30, 2019
One
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Equity interest acquired (as a percent)				10.00%
Research Innovation Fund Financing
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from RIF		€ 10.0	$ 10.9
Interest rate		6.35%
Investments interest rate		15.00%
Annual interest rate in connection with transaction		3.175%
Long term debt term		8 years
Period of subsequent issuance		24 months
Equity interest held by related party			20.00%
Debt		€ 15.0	$ 16.3
Call Option | One
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Equity interest acquired (as a percent)			10.00%
Exercise price of call option to buy back ownership percentage	€ 6.0		$ 6.6

XML

Significant Agreements - Summary Of Amounts Recognized On Consolidated Statements Of Operations And On Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Puglia1 Grant
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Grant Income	$ 195	$ 204	$ 389	$ 409
Income attributable to R&D expense (reclassification)	18	18	36	36
Income attributable to investments in facilities and equipment	177	186	353	373
Grants receivable	0		0		$ 3,237
Deferred income	4,693		4,693		5,001
Current portion of deferred income	777		777		771
Puglia 2 Grant
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Grant Income	56	874	393	1,062
Income attributable to R&D expense (reclassification)	51	$ 874	181	$ 1,062
Income attributable to investments in facilities and equipment	107		212
Grants receivable	5,119		5,119		122
Long-term grant receivable					4,732
Deferred income	3,347		3,347		3,502
Current portion of deferred income	$ 427		$ 427		$ 420

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Significant Agreements - Summary of Changes in Fair Value of Call Option Liability (Details) - One S.r.l - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Beginning balance	$ 141	$ 2,623	$ 674	$ 2,416
Change in fair value	(142)	607	(678)	865
Foreign currency translation gain	1	(168)	4	(219)
Ending balance	$ 0	$ 3,062	$ 0	$ 3,062

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Significant Agreements - Summary of Weighted Average Assumptions Used to Determine Fair Value of Call Option Liability (Details) - One S R L [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Expected term	4 years
Expected Volatility	86.00%
Expected dividend yield	0.0
Risk free interest rate	4.20%
Estimated fair value of ownership interest	$ 1,772
Exercise price of call option	$ 6,422

XML

Significant Agreements - Summary of Noncontrolling Interest (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Balance at beginning of period	$ 12,590
Balance at the end of period	12,905
Research Innovation Fund Financing
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Balance at beginning of period	12,590	$ 11,855
Accretion of put option		173
Income allocated to noncontrolling interest holder	100
Foreign currency translation adjustment	215	941
Balance at the end of period	$ 12,905	$ 11,087

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Debt - Summary of Non-Convertible Debt Outstanding (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total debt obligation	$ 32,618
Non-convertible Debt
Debt Instrument [Line Items]
Total debt obligation	32,618	$ 33,642
Unamortized loan discount and issuance costs	(313)	346
Total debt obligation carrying amount	32,305	33,296
Current portion	5,039	7,954
Long-term portion	27,266	25,342
Non-convertible Debt | Italian Economic Development Agency Loan
Debt Instrument [Line Items]
Total debt obligation	168	331
Non-convertible Debt | Intesa Sanpaolo Loan 1
Debt Instrument [Line Items]
Total debt obligation	6,731	7,094
Non-convertible Debt | Intesa Sanpaolo Loan 2
Debt Instrument [Line Items]
Total debt obligation	4,989	5,352
Non-convertible Debt | Horizon 2020 Loan
Debt Instrument [Line Items]
Total debt obligation	360	389
Non-convertible Debt | RIF Shareholders Loan
Debt Instrument [Line Items]
Total debt obligation	16,328	16,055
Non-convertible Debt | UniCredit Loan
Debt Instrument [Line Items]
Total debt obligation	$ 4,042	$ 4,421

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Debt - Summary of Future Maturities to Debt Outstanding (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Debt Disclosure [Abstract]
2023	$ 3,016
2024	7,806
2025	5,390
2026	4,050
2027	4,032
More than 5 years	8,324
Total maturities	$ 32,618

XML

Debt - Additional Information (Details)					3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 28, 2023	Jun. 12, 2023 USD ($)	May 26, 2023 USD ($) $ / shares shares	Feb. 21, 2023 USD ($) $ / shares shares	Jun. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($) Notes Days	Jun. 30, 2023 USD ($) shares	Dec. 31, 2022 USD ($) shares	May 01, 2023 USD ($) $ / shares shares
Debt Instrument [Line Items]
Warrants to purchase common stock | shares					283,862,907		283,862,907	24,733,365
Aggregate outstanding balance of debt					$ 5,039,000		$ 5,039,000	$ 7,954,000
2022 Promissory Notes | Existing Investor and Related Party
Debt Instrument [Line Items]
Interest rate						15.00%
Maturity date						Dec. 31, 2023
Threshold number of business days following a qualified financing | Days						5
Fair value of promissory notes					22,600,000		22,600,000	27,400,000
Fair market gain relating to convertible promissory notes					2,500,000			$ 7,300,000
NPA - Initial Close Note
Debt Instrument [Line Items]
Fair market gain recognized on debt					200,000		300,000
CMS Bridging DMCC, PureTech Health LLC and SSD2 LLC | 2022 Promissory Notes
Debt Instrument [Line Items]
Number of promissory notes issued | Notes						3
Aggregate principal amount of notes						$ 25,000,000.0
Aggregate cash proceeds						$ 25,000,000.0
PureTech Health LLC | Third Close Warrants
Debt Instrument [Line Items]
Exercise price of warrants | $ / shares			$ 0.0142
Note and Warrant Purchase Agreement
Debt Instrument [Line Items]
Non-cash interest expense on debt					200,000		600,000
Note and Warrant Purchase Agreement | PureTech Health LLC
Debt Instrument [Line Items]
Warrants to purchase common stock | shares				23,688,047
Exercise price of warrants | $ / shares				$ 0.2744
Total proceeds from agreement				$ 5,000,000.0
Note and Warrant Purchase Agreement | PureTech Health LLC | Warrants
Debt Instrument [Line Items]
Allocated fair value of warrants				1,500,000
Deferred financing costs				$ 200,000
Note and Warrant Purchase Agreement | PureTech Health LLC | Senior Secured Note
Debt Instrument [Line Items]
Interest rate				12.00%
Maturity date				Jul. 31, 2023
Percentage of debt holder's equity pledged				100.00%
Aggregate carrying amount					8,200,000		8,200,000
Note and Warrant Purchase Agreement | PureTech Health LLC | NPA - Initial Close Note
Debt Instrument [Line Items]
Aggregate principal amount of notes				$ 5,000,000.0	5,000,000.0		5,000,000.0
Fair value of promissory notes					3,200,000		3,200,000
Fair value of debt				3,500,000
Deferred financing costs				$ 400,000
Amendment No. 1 to the 2023 NPA | PureTech Health LLC | Second Close Warrants
Debt Instrument [Line Items]
Exercise price of warrants | $ / shares									$ 0.0182
Amendment No. 1 to the 2023 NPA | PureTech Health LLC | Senior Secured Note | Maximum
Debt Instrument [Line Items]
Warrants to purchase common stock | shares									192,307,692
Amendment No. 1 to the 2023 NPA | PureTech Health LLC | Second Close Note
Debt Instrument [Line Items]
Aggregate principal amount of notes									$ 2,000,000.0
Limited Waiver to the 2023 NPA and Amendment No. 2 to the 2023 NPA | PureTech Health LLC | Third Close Warrants
Debt Instrument [Line Items]
Aggregate cash purchase price			$ 350,000
Warrants to purchase common stock | shares			43,133,803
Limited Waiver to the 2023 NPA and Amendment No. 2 to the 2023 NPA | PureTech Health LLC | Third Close Note
Debt Instrument [Line Items]
Aggregate principal amount of notes			$ 350,000
Bridge Note | PureTech Health LLC | Senior Secured Note
Debt Instrument [Line Items]
Aggregate principal amount of notes		$ 3,000,000.0
Aggregate cash proceeds		$ 3,000,000.0
Amendment No. 3 and Extension of Maturity Date of the 2023 NPA Notes | PureTech Health LLC | Second Close Warrants
Debt Instrument [Line Items]
Warrant allocated price									400,000
Amendment No. 3 and Extension of Maturity Date of the 2023 NPA Notes | PureTech Health LLC | Third Close Warrants | Maximum
Debt Instrument [Line Items]
Warrant allocated price			100,000
Amendment No. 3 and Extension of Maturity Date of the 2023 NPA Notes | PureTech Health LLC | Senior Secured Note
Debt Instrument [Line Items]
Maturity date	Mar. 31, 2024
Amendment No. 3 and Extension of Maturity Date of the 2023 NPA Notes | PureTech Health LLC | Second Close Note
Debt Instrument [Line Items]
Fair value of debt									$ 1,600,000
Amendment No. 3 and Extension of Maturity Date of the 2023 NPA Notes | PureTech Health LLC | Third Close Note
Debt Instrument [Line Items]
Fair value of debt			$ 300,000
Additional Close Notes
Debt Instrument [Line Items]
Aggregate principal amount of notes					5,350,000		5,350,000
Debt securities, amortized cost					$ 5,000,000.0		$ 5,000,000.0

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Debt - Summary of Assumptions Used to Determine Fair Value of Debt (Details)		6 Months Ended	12 Months Ended
	Feb. 21, 2023	Jun. 30, 2023	Dec. 31, 2022
2022 Promissory Notes
Debt Instrument [Line Items]
Expected term		6 months	1 year
Weighted average discount rate		123.70%	26.00%
Probability of repayment after qualified financing			50.00%
Probability of holder electing conversion option			50.00%
Probability of a business combination		90.00%
Probability of Company default		10.00%
NPA - Initial Close Note
Debt Instrument [Line Items]
Expected term	4 months 24 days	9 months
Weighted average discount rate	26.90%	113.80%
Probability of holder electing conversion upon a business combination	50.00%	90.00%
Probability of Company default	40.00%	10.00%
Probability of holder electing conversion option upon other default events	10.00%

XML

Debt - Summary of Fair Value of Warrants Based on Black-Scholes Inputs (Details) - PureTech Health LLC - Note and Warrant Purchase Agreement - Warrant	Feb. 21, 2023 $ / shares
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Market price of common stock	$ 0.28
Expected term	2 months 26 days
Expected Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, fair value measurement input	160
Risk Free Interest Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants, fair value measurement input	4.9

XML

Warrants Liabilities - Summary of Warrants Outstanding (Details) - Private Placement $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Class Of Warrant Or Right [Line Items]
Balance	$ 130
Change in fair value	$ (130)

XML

Warrant Liabilities - Additional Information (Details) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($) $ / shares shares
Class of Warrant or Right [Line Items]
Minimum share price requirement trading days period	30 days
Maximum
Class of Warrant or Right [Line Items]
OTC market trade	$ 0.05
Minimum
Class of Warrant or Right [Line Items]
Average global market capitalization | $	$ 15.0
OTC market trade	$ 0.01
Private Placement
Class of Warrant or Right [Line Items]
Number of warrants outstanding | shares	7,520,000
Private Placement | Class A common stock
Class of Warrant or Right [Line Items]
Exercise price of warrants	$ 11.50

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Warrants Liabilities - Summary of Weighted Average Assumptions of Fair Value of Liabilities (Details) - Private Placement - Level 3 - Monte Carlo Simulation value model	Dec. 31, 2022 yr
Expected term
Class Of Warrant Or Right [Line Items]
Private Placement Warrants	4.0
Expected Volatility
Class Of Warrant Or Right [Line Items]
Private Placement Warrants	86.0
Expected Dividend Yield
Class Of Warrant Or Right [Line Items]
Private Placement Warrants	0.0
Risk Free Interest Rate
Class Of Warrant Or Right [Line Items]
Private Placement Warrants	4.0
Price Of Gelesis Common Stock
Class Of Warrant Or Right [Line Items]
Private Placement Warrants	0.29
Exercise Price of Warrants
Class Of Warrant Or Right [Line Items]
Private Placement Warrants	11.50

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Earnout Liability - Summary of Earnout Liability Activity (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Derivatives, Fair Value [Line Items]
Balance	$ 563
Changes in fair value	(563)
Balance	$ 0

XML

Earnout Liability - Additional Information (Details)	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Maximum
Derivatives, Fair Value [Line Items]
OTC market trade	$ 0.05
Minimum
Derivatives, Fair Value [Line Items]
OTC market trade	$ 0.01
Earnout Liability
Derivatives, Fair Value [Line Items]
Number of earn out shares unissued and unvested | shares	18,758,241

XML

Earnout Liability - Summary of Weighted Average Assumptions Used to Determine Fair Value of Earnout Liability (Details) - Level 3 - Monte Carlo Simulation value model - Earnout Liability	Dec. 31, 2022 yr
Expected term
Derivatives, Fair Value [Line Items]
Derivative Liability, Measurement Input	4.0
Expected Volatility
Derivatives, Fair Value [Line Items]
Derivative Liability, Measurement Input	86.0
Expected Dividend Yield
Derivatives, Fair Value [Line Items]
Derivative Liability, Measurement Input	0.0
Risk Free Interest Rate
Derivatives, Fair Value [Line Items]
Derivative Liability, Measurement Input	4.0
Price Of Gelesis Common Stock
Derivatives, Fair Value [Line Items]
Derivative Liability, Measurement Input	0.29

XML

Stockholder's Equity (Deficit) - Additional Information (Details)		3 Months Ended	6 Months Ended
	Jan. 13, 2022 $ / shares shares	Mar. 31, 2022 USD ($) shares	Jun. 30, 2023 Item Days $ / shares shares	Dec. 31, 2022 $ / shares shares
Class of Stock [Line Items]
Common shares, shares authorized (in shares)			900,000,000	900,000,000
Common shares, par value (in dollars per share) | $ / shares			$ 0.0001	$ 0.0001
Common shares, shares issued (in shares)			73,335,110	73,325,022
Common shares, shares outstanding (in shares)			73,335,110	73,325,022
Preferred stock, shares authorized			250,000,000	250,000,000
Preferred stock, par value | $ / shares			$ 0.0001	$ 0.0001
Common Stock
Class of Stock [Line Items]
Common shares, shares authorized (in shares)			900,000,000
Common shares, par value (in dollars per share) | $ / shares			$ 0.0001
Common shares, shares issued (in shares)			73,335,110
Common shares, shares outstanding (in shares)			73,335,110
Public Warrants
Class of Stock [Line Items]
Number of warrants outstanding			13,800,000
Exercise price of warrants | $ / shares	$ 11.50
Warrants expiration term	5 years
Public Warrants | Common Stock
Class of Stock [Line Items]
Number of warrants outstanding	13,800,000
Public Warrants | Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $18.00
Class of Stock [Line Items]
Redemption price per public warrant (in dollars per share) | $ / shares	$ 0.01
Redemption period	30 days
Threshold trading days for redemption of public warrants | Days			20
Minimum threshold written notice period for redemption of public warrants | Item			30
Threshold number of business days before sending notice of redemption to warrant holders | Item			3
Public Warrants | Minimum | Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $18.00
Class of Stock [Line Items]
Class of warrant or right redemption of warrants or rights stock price trigger | $ / shares			$ 18.00
Roller Warrants
Class of Stock [Line Items]
Number of warrants outstanding	1,353,062		1,353,062
Exercise price of warrants | $ / shares	$ 4.26		$ 4.26
Warrants exchange ratio	2.59
Warrant conversion terms			Immediately prior to the closing of the Business Combination, Legacy Gelesis redeemable preferred stock warrants were converted into Legacy Gelesis common warrants and were subsequently split according to the exchange ratio of 2.59. Upon closing of the Business Combination, holders received shares of common stock of the Company on a one-to-one basis.
Warrants exercised		176,126
Roller Warrants | Common Stock
Class of Stock [Line Items]
Number of warrants outstanding	1,836,429		1,660,303
Exercise price of warrants | $ / shares	$ 0.02		$ 0.02
Warrants exchange ratio	2.59
Roller Warrants | Maximum
Class of Stock [Line Items]
Proceeds from warrants exercised | $		$ 100,000

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Stockholder's Equity (Deficit) - Schedule of Common Stock Reserved for Future Issuance (Details) - shares	Jun. 30, 2023	Dec. 31, 2022
Common Stock
Common stock issued upon option exercise and RSUs vesting	15,335,476	16,881,549
Issuances upon exercise of common stock warrants	283,862,907	24,733,365
Earnout shares	23,482,845	23,482,845
Total common stock reserved for future issuance	322,681,228	65,097,759

XML

Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended	6 Months Ended
	Jan. 31, 2022	Jun. 30, 2023	Jun. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total fair value of options vested		$ 1.0	$ 2.9
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost		$ 5.4	$ 5.4
Weighted-average period of unrecognized compensation cost expected to be recognized			2 years 8 months 12 days
2021 Stock Option Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares authorized to issue on common stock	9,583,570
Remaining shares available for issuance		7,375,070	7,375,070
Increase in percentage, number of shares of stock issued and outstanding	4.00%
Expiration period of awards granted			10 years
Unrecognized compensation cost		$ 4.1	$ 4.1
Weighted-average period of unrecognized compensation cost expected to be recognized			2 years 1 month 6 days
2021 Stock Option Plan | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period			3 years
2021 Stock Option Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period			4 years

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Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - Employees and Non Employees - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 2,384	$ 7,976	$ 4,475	$ 21,965
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	209	3,008	543	8,073
Selling, General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 2,175	$ 4,968	$ 3,932	$ 13,892

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Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward]
Number of Options, Outstanding	12,798,479
Number of Options, Forfeited - unvested	(158,733)
Number of Options, Expired	(999,070)
Number of Options, Outstanding	11,640,676	12,798,479
Number of Options, Exercisable	9,827,923
Number of Options, Vested and expected to vest	11,640,676
Weighted Average Exercise Price per Share
Weighted- Average Exercise Price per Share, Outstanding	$ 3.97
Weighted- Average Exercise Price per Share, Forfeited - unvested	4.02
Weighted- Average Exercise Price per Share, Expired	4.12
Weighted- Average Exercise Price per Share, Outstanding	3.95	$ 3.97
Weighted- Average Exercise Price per Share, Exercisable	3.92
Weighted- Average Exercise Price per Share, Vested and expected to vest	$ 3.95
Weighted Average Remaining Contractual Term (Years)
Weighted- Average Remaining Contractual Term (Years), Outstanding	5 years 3 months 25 days	5 years 9 months 18 days
Weighted- Average Remaining Contractual Term (Years), Exercisable	4 years 9 months
Weighted- Average Remaining Contractual Term (Years), Vested and expected to vest	5 years 3 months 25 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value, Outstanding		$ 25

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Stock-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of RSUs, Outstanding and Unvested | shares	4,083,070
Number of RSUs, Vested | shares	(10,088)
Number of RSUs, Forfeited | shares	(378,182)
Number of RSUs, Outstanding and Unvested | shares	3,694,800
Weighted- Average Grant Date Fair Value, Outstanding and Unvested | $ / shares	$ 4.31
Weighted- Average Grant Date Fair Value, Vested | $ / shares	8.26
Weighted- Average Grant Date Fair Value, Forfeited | $ / shares	3.35
Weighted- Average Grant Date Fair Value, Outstanding and Unvested | $ / shares	$ 4.39

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Contingency [Line Items]
Provision for income taxes	$ 16	$ 0
U.S statutory rate	21.00%	21.00%
Maximum
Income Tax Contingency [Line Items]
Provision for income taxes	$ 100

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Earnings (Loss) Per Share - Summary of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Numerator:
Net loss	$ (7,681)	$ (5,146)	$ (12,513)	$ (5,703)	$ (12,827)	$ (18,216)
Accretion of redeemable convertible preferred stock to redemption value						(37,934)
Accretion of noncontrolling interest put option to redemption value			(85)			(173)
Income allocated to noncontrolling interest holder					(100)
Net loss attributable to common stockholders	$ (7,681)		$ (12,598)		$ (12,927)	$ (56,323)
Denominator:
Weighted average common shares outstanding - basic	73,334,861		72,423,043		73,329,685	67,609,838
Weighted average common shares outstanding - diluted	73,334,861		72,423,043		73,329,685	67,609,838
Net loss per share, basic	$ (0.10)		$ (0.17)		$ (0.18)	$ (0.83)
Net loss per share, diluted	$ (0.10)		$ (0.17)		$ (0.18)	$ (0.83)
Legacy Gelesis
Numerator:
Accretion of redeemable convertible preferred stock to redemption value						$ (37,934)

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Earnings (Loss) Per Share - Schedule of Anti-dilutive Securities Excluded from Computation of Net Loss Per Share (Details) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of net loss per share	299,198,383	44,333,858
Options and RSU to Acquire Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of net loss per share	15,335,476	20,000,493
Warrants on Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of net loss per share	283,862,907	24,333,365

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Earnings (Loss) per Share (Additional Information) (Details) - shares	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Earnings Per Share [Abstract]
Potentially dilutive common share equivalents	23,482,845	23,482,845

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Commitment and Contingencies - Additional Information (Details) $ in Thousands, € in Millions	1 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Dec. 31, 2009	Jun. 30, 2023 USD ($)	Jun. 30, 2023 EUR (€)
Loss Contingencies [Line Items]
Operating lease commencement	2019-06
Operating lease expiration	2025-08
Total lease payments			$ 1,330
Operating lease remaining weighted average lease terms			2 years 3 months 18 days	2 years 3 months 18 days
Operating lease weighted average discount rate, percent			5.40%	5.40%
Office space located in Boston
Loss Contingencies [Line Items]
Total lease payments	$ 3,200
Certain Storage and Equipment
Loss Contingencies [Line Items]
Operating lease expiring year			2027
PureTech | Royalty and Sublicense Income Agreement
Loss Contingencies [Line Items]
Royalty payment required percentage		2.00%
One S.r.l | Amended And Restated Master Agreement
Loss Contingencies [Line Items]
Percentage of royalty			2.00%
Payments to be made upon the achievement of certain milestones			$ 19,000	€ 17.5

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Commitments and Contingencies - Schedule of Operating Lease Activity (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Operating lease liabilities	$ 546	$ 550	$ 597
Operating lease liabilities	697	1,222	$ 967
Total operating lease liabilities	1,243	1,772
Operating lease rental expense	$ 376	$ 272

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Commitment and Contingencies - Schedule of Future Maturities of the Lease Liability Under the Company's Noncancelable Operating Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Remaining 2023 maturities	$ 320
2024	565
2025	389
2026	38
2027	18
More than 5 Years	0
Total undiscounted lease maturities	1,330
Imputed interest	(87)
Total lease liability	$ 1,243	$ 1,772

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Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		5 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Feb. 21, 2023	Jul. 25, 2022
Related Party Transaction [Line Items]
Accounts payable, due to related party	$ 649		$ 649	$ 649		$ 135
Notes payable	1,960		$ 1,960	1,960		$ 2,007
Gain of change in fair value of the instrument	$ 2,672			$ 7,631	$ (156)
Number of shares called by warrants issued	283,862,907		283,862,907	283,862,907		24,733,365
RIF Transaction
Related Party Transaction [Line Items]
Principal amount	$ 16,300		$ 16,300	$ 16,300
PureTech
Related Party Transaction [Line Items]
Loss of change in fair value of convertible promissory notes	200			300
Interest and issuance cost amortization	200			600
PureTech | 2022 Promissory Notes
Related Party Transaction [Line Items]
Principal amount								$ 15,000
Notes payable	12,100		12,100	12,100		$ 16,600
Gain of change in fair value of the instrument	1,600			4,500
PureTech | Management Services Expenses
Related Party Transaction [Line Items]
Research and development, including related party expenses	100	$ 100		300	300
Accounts payable, due to related party	600		600	600		100
PureTech | Royalty Expense
Related Party Transaction [Line Items]
Research and development, including related party expenses		$ 100		100	$ 300
SSD2 | 2022 Promissory Notes
Related Party Transaction [Line Items]
Principal amount	4,000		4,000	4,000		5,500		$ 5,000
Gain of change in fair value of the instrument				$ 500		$ 1,500
Maximum | PureTech | Royalty Expense
Related Party Transaction [Line Items]
Research and development, including related party expenses	$ 100
Note and Warrant Purchase Agreement | PureTech
Related Party Transaction [Line Items]
Gross proceeds			$ 10,400
Note and Warrant Purchase Agreement | PureTech | Warrants
Related Party Transaction [Line Items]
Number of shares called by warrants issued	259,129,542		259,129,542	259,129,542
Note and Warrant Purchase Agreement | PureTech | NPA Convertible Senior Secured Notes
Related Party Transaction [Line Items]
Principal amount	$ 8,200		$ 8,200	$ 8,200
Note and Warrant Purchase Agreement | PureTech | Senior Secured Note
Related Party Transaction [Line Items]
Aggregate principal amount of notes	$ 10,400		$ 10,400	$ 10,400
Note and Warrant Purchase Agreement | Maximum | PureTech | Warrants
Related Party Transaction [Line Items]
Exercise price of warrants							$ 0.2744
Note and Warrant Purchase Agreement | Minimum | PureTech | Warrants
Related Party Transaction [Line Items]
Exercise price of warrants							$ 0.0142

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Related Party Transactions - Additional Information - One S.r.l (Details) $ in Thousands, € in Millions	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2023 EUR (€)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 EUR (€)
Related Party Transaction [Line Items]
Cost of goods sold	$ 498	$ 4,786	$ 1,735		$ 9,699
Founder of One | Consulting Agreement
Related Party Transaction [Line Items]
Research and development, including related party expenses			100		100
Founder of One | Consulting Agreement | Maximum
Related Party Transaction [Line Items]
Research and development, including related party expenses	100	100
Outstanding accrued expenses and remaining undiscounted payments, related parties	$ 100		100			$ 100
One S.r.l
Related Party Transaction [Line Items]
Payments related to acquisition			$ 2,700	€ 2.5		2,700	€ 2.5
One S.r.l | Equity Interest
Related Party Transaction [Line Items]
Equity interest acquired (as a percent)	10.00%		10.00%
One S.r.l | Royalty Expense
Related Party Transaction [Line Items]
Outstanding accrued expenses and remaining undiscounted payments, related parties	$ 100		$ 100			$ 100
Cost of goods sold	$ 100	$ 200	$ 100		$ 300

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Related Party Transactions - Additional Information - RIF (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended
	Aug. 31, 2020	Jun. 30, 2023	Dec. 31, 2021
Equity investment that can be called beginning in December 2023 and ending in December 2026
Related Party Transaction [Line Items]
Annual interest rate in connection with transaction		15.00%
Put by RIF starting in January 2027 and ending in December 2027
Related Party Transaction [Line Items]
Annual interest rate in connection with transaction		3.175%
RIF Transaction
Related Party Transaction [Line Items]
Proceeds from sale of equity investment	$ 12.3
Equity interest held by related party			20.00%
Principal amount		$ 16.3
Fixed interest rate on loan		6.35%

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Subsequent Event(s) - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Subsequent Event [Line Items]
Minimum share price requirement trading days period	30 days
Warrants to purchase common stock	283,862,907	24,733,365
Minimum
Subsequent Event [Line Items]
Average global market capitalization	$ 15.0