Company: CNTB
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001835268-25-000035
Chunk: 38

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 38
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 to be representative of their respective fair values because of the short-term maturity of these instruments. Available-for-sale investment securities are carried at fair value.Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements & Disclosures, establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:•Level 1—Observable inputs such as quoted prices in active markets for identical assets or liabilities.•Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.Accounts Receivable, NetAccounts receivable are recorded at the invoice amount, net of an allowance for credit losses. The allowance for credit losses reflects accounts receivable balances that are believed to be uncollectible. In estimating the allowance for credit losses, we consider: (1) our historical experience with collections and write-offs; (2) the credit quality of our customers and any recent or anticipated changes thereto; (3) the outstanding balances and past due amounts from our customers; and (4) reasonable and supportable forecast of economic conditions expected to exist throughout the contractual term of the receivable.

9

As of March 31, 2025 and December 31, 2024, we determined that an allowance for credit losses was not required. For the three months ended March 31, 2025 and 2024, we did not have any material write-offs of accounts receivable balances.Share-Based Compensation ExpenseOn January 1, 2025, we began using the Black-Scholes option pricing model to estimate the fair value of each option grant on the grant date, in order to better align with our peers. Prior to 2025, we estimated the fair value of each option grant on the grant