Company: CNTB
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001835268-25-000052
Chunk: 48

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 48
---
 expense, $0.7 million of which was included in general and administrative expense, and $0.7 million of which was included in research and development expense. The remaining expense of $1.8 million was recognized during the third quarter of 2024. As of June 30, 2025, we have paid the $2.0 million of cash severance charges. We have accounted for these expenses in accordance with the FASB ASC Topic 420, Exit or Disposal Cost Obligation.

9. Shareholders’ Equity

Statutory ReservesIn accordance with the People’s Republic of China (“PRC”) regulations and the articles of association of the companies registered in the PRC, companies are required to set aside 10% of their net profit for the year, offsetting any prior year losses, to the statutory surplus reserve fund as determined under the relevant PRC accounting standards. When the balance of such reserve reaches 50% of the entity’s registered capital, any further appropriation is optional. As of June 30, 2025, we have not made any profit appropriations to the reserve fund, as all of our subsidiaries in the PRC were in an accumulated loss position.Under PRC laws and regulations, there are restrictions on the Company’s PRC subsidiaries with respect to transferring certain of their net assets to the Company either in the form of dividends, loans, or advances. As of June 30, 2025 and December 31, 2024, restricted net assets including paid-in capital and statutory reserve funds of the Company’s PRC subsidiaries was $28.1 million and $29.6 million, respectively.

10. Equity Incentive Plans

Option Plan ActivityThe following table summarizes the stock option activity for the six months ended June 30, 2025:Outstanding OptionsNumber of OptionsWeighted-Average Exercise PriceOutstanding at December 31, 202414,263,242$2.93 Granted1,104,000$0.78 Exercised(26,500)$0.76 Cancelled(1,442,640)$8.05 Outstanding at June 30, 202513,898,102$2.23 

17

Share-based CompensationThe following table summarizes share-based compensation expense related to share-based payment awards granted pursuant to all of our equity compensation arrangements (in thousands):Three Months Ended June 30,Six Months Ended June 30,2025202420252024Research and development$