Company: CNTB
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001835268-25-000014
Chunk: 181

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 181
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, it could become more difficult to dispose of, or obtain accurate price quotations for, our ADSs, and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our ADSs to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

Further, being deemed an investment company under the Investment Company Act of 1940 (the “Investment Company Act”) could lead to our being delisted. We are not an “investment company” and do not intend to become registered as an “investment company” under the Investment Company Act. Generally, a company is an “investment company” if it is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities or owns or proposes to own investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, unless an exception, exemption or safe harbor applies. We do not hold ourselves out as being primarily engaged, or proposing to engage primarily, in the business of investing, reinvesting or trading in securities. Rather, we have historically been and are currently primarily engaged in the business of development of therapies for inflammatory diseases. We intend to continue to conduct our operations so that we will not be deemed an investment company. However, our status under the Investment Company Act may depend on several factors. If we were to become subject to the Investment Company Act, any violation of the Investment Company Act could subject us to material adverse consequences, including potentially significant regulatory penalties. Additionally, as a foreign private issuer, we would not be eligible to register under the Investment Company Act. Accordingly, we would either have to obtain exemptive relief from the SEC or dispose of investments in order to fall outside the definition of an investment company, each of which may have a material adverse effect on the Company. Finally, being deemed an investment company under the Investment Company Act could also make us unable to comply with our reporting obligations as a public company in the U.S., which would have a material adverse effect on the liquidity and value of our ADSs and ordinary shares, and may affect our ability to offer securities to investors in the U.S. market and our ability to continue to be listed on the Nasdaq Global Market. 

An active, liquid trading market for our ADSs may not be maintained. 

We can provide no assurance that we will