Company: ZLAB
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001628280-25-008409
Chunk: 58

Company: Zai Lab Ltd
Filing Date: 2025-02-27
Form: 10-K
Item: Item 16
Chunk 58
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. Other License and Collaboration Arrangements That Are Not Individually SignificantThe Company may be required to pay an additional aggregate amount of up to $2,045.4 million in development, regulatory, and sales-based milestones as well as certain royalties at tiered percentage rates on annual net sales under such agreements.

17.    Other Income, Net 

The following table presents the Company’s other income, net ($ in thousands):Year Ended December 31,202420232022Government grants8,170 2,433 11,471 (Loss) Gain on equity investments with readily determinable fair value(6,105)2,789 (8,952)Other miscellaneous gain3,235 1,784 594 Total5,300 7,006 3,113 

18.    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 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 

F-35

Zai Lab LimitedNotes to the Consolidated Financial StatementsFor the Years Ended December 31, 2024, 2023, and 2022

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 2024, 2023, and 2022 because the Chinese subsidiaries had substantial losses during such periods. As a result of these Chinese laws and regulations, subject to the limits discussed above that require annual appropriations of 10% of after-tax profit to be set aside, prior to payment of dividends, as a general reserve fund,