Company: CNTB
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001835268-25-000058
Chunk: 25

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 25
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 of operating lease expense and we paid $76,000 and $225,000, respectively, for our operating leases.Annual future minimum lease payments as of September 30, 2025 are as follows (in thousands):2025 (remainder of year)$105 2026371 2027354 202830 Thereafter— Total future minimum lease payments860 Less: amount representing interest(79)Total lease liabilities$781 

8. Reorganization

Executive Officer DeparturesDuring the second and third quarters of 2024, we implemented changes to our executive leadership structure. In connection with these changes, we provided three executive officers with one-time severance payments upon termination, continued benefits for a specified period of time, and certain stock option modifications. The total expense for these activities was $3.2 million, $2.0 million of which was primarily for cash severance and $1.2 million of which was for non-cash, share-based compensation expense. During the three months ended September 30, 2024, we recognized $1.8 million of the total expense, $1.1 million of which was included in general and administrative expense, and $0.7 million of which was included in research and development expense. During the nine months ended September 30, 2024, we recognized $3.2 million of the total expense, $1.8 million of which was included in general and administrative expense, and $1.4 million of which was included in research and development expense. As of September 30, 2025, we have paid $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 September 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