Company: ZLAB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023411
Chunk: 72

Company: Zai Lab Ltd
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 72
---
 develop and commercialize product candidates. Significant License and Collaboration ArrangementsFor a description of the material terms of the Company’s significant license and collaboration agreements, see Note 16 of the 2024 Annual Report. During the first quarter of 2025, the Company did not enter into any new significant license or collaboration agreements or incur any milestone fees under our existing significant license and collaboration agreements. Other License and Collaboration Arrangements That Are Not Individually Significant

The Company recorded upfront fees of $20.0 million into research and development expenses in the first quarter of 2025 for license and collaboration agreements that are not individually significant. 

15. Other (Expense) Income, Net 

The following table presents the Company’s other income, net ($ in thousands):Three Months Ended March 31,20252024Government grants16 2,791 (Loss) Gain on equity investments with readily determinable fair value(1,912)4,889 Other miscellaneous gain1,699 1,681 Total(197)9,361 

16. Restricted Net Assets 

The Company’s ability to pay dividends may depend on the Company receiving distributions of funds from its Chinese subsidiaries. Relevant Chinese laws and regulations permit payments of dividends by the Company’s Chinese subsidiaries only out of its retained earnings, if any, as determined in accordance with Chinese accounting standards and regulations. The results of operations reflected in the unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s Chinese subsidiaries.  In accordance with the Company Law of the People’s Republic of China, a domestic enterprise is required to provide statutory reserves of at least 10% of its annual after-tax profit until such reserve has reached 50% of its respective registered capital based on the enterprise’s Chinese statutory accounts. A domestic enterprise may provide discretionary surplus reserve, at the discretion of the Board of Directors, from the profits determined in accordance with the enterprise’s Chinese statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The Company’s Chinese subsidiaries were established as domestic enterprises and therefore are subject to the above-mentioned restrictions on distributable profits. No appropriation to statutory reserves was made in the first quarter of 2025 and 2024 because the Chinese subsidiaries had substantial losses during such periods. 

14

Zai Lab Limited Notes to the unaudited condensed consolidated financial statements 

As a result of these Chinese laws and regulations, subject to the