Company: CNTB
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001835268-25-000014
Chunk: 278

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-03-31
Form: 10-K
Item: Item 8
Chunk 278
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%21.0 %State tax, net of federal benefit— %— %Stock options(6.1)%1.3 %Foreign rate differential(32.6)%(5.3)%Unrecognized tax benefits(7.9)%— %Valuation allowance(20.9)%(31.1)%General business credits22.7 %11.7 %Change of estimates and other22.3 %2.2 %Effective tax rate(1.5)%(0.2)%The Company’s federal income taxes from continuing operations for the years ended December 31, 2024 and 2023 was $0.2 million and $0.1 million, respectively. The Company was not subject to any state incomes taxes for the years ended December 31, 2024 and 2023.Significant components of the Company’s deferred tax assets and liabilities from continued operations as of December 31, 2024 and 2023 are as follows:December 31,20242023Deferred tax assets:Net operating loss carryforward$67,822 $61,016 Research and development credits4,853 5,572 Intangible assets192 3,543 Other2,105 1,677 Total gross deferred tax assets74,972 71,808 Deferred tax liabilities:Right-of-use lease assets(37)(96)Total gross deferred tax liabilities(37)(96)Valuation allowance (U.S.)(7,114)(7,347)Valuation allowance (China, Hong Kong and Australia)(67,821)(64,365)Net deferred tax assets$— $— The Company has gross U.S. federal research and development tax credit carryforwards, before consideration of unrecognized tax benefits, of $5.3 million, which begin to expire in 2042. The Company also has U.S. state research credit carryforwards, before consideration of unrecognized tax benefits, of $1.0 million, which will carry forward indefinitely. The change in the U.S. valuation allowance was a decrease of $0.2 million for the year ended December 31, 2024. As of 

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December 31, 2024, the Company has net operating losses of $205.0 million in China, which begin to expire in 2025. The Company has NOLs of $182.2 million in Hong Kong and NOLs of