Company: ZLAB
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038548
Chunk: 45

Company: Zai Lab Ltd
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 45
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15. Other Income (Expense), Net 

The following table presents the Company’s other income, net ($ in thousands):Three Months Ended June 30,Six Months Ended June 30,2025202420252024Government grants3,850 534 3,866 3,325 Loss on equity investments with readily determinable fair value— (10,035)(1,912)(5,147)Other miscellaneous (loss) gain(100)558 1,599 2,240 Total3,750 (8,943)3,553 418 

16. Restricted Net Assets 

Chinese laws and regulations restrict the Company’s ability to receive distributions of funds from its Chinese subsidiaries. For example, 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.  In accordance with the Company Law of the People’s Republic of China, each Chinese subsidiary of the Company 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 registered capital based on the enterprise’s Chinese statutory accounts. The reserves can only be used for specific purposes and are not distributable as cash dividends. Foreign exchange and other regulations in mainland China may further restrict the Company’s Chinese subsidiaries from transferring out funds in the form of dividends, loans, and advances.No appropriation to statutory reserves was made in the three and six months ended June 30, 2025 and 2024 because the Chinese subsidiaries had substantial losses during such periods. The Company did not receive any distributions from its Chinese subsidiaries; such distributions were not permitted under Chinese laws and regulations due to the reserve 

15

Zai Lab Limited Notes to the unaudited condensed consolidated financial statements 

requirements discussed above. As of June 30, 2025 and December 31, 2024, amounts restricted included the paid-in capital of the Company’s subsidiaries in mainland China and were $506.0 million.

17. Commitments and Contingencies 

(a) Purchase Commitments  As of June 30, 2025, the Company’s commitments were $1.1 million and related to commercial manufacturing development activities and capital expenditures that are contracted but not yet reflected in the unaudited condensed consolidated financial statements. These commitments were expected to be incurred within one year.(b) Legal ProceedingsThe Company is not currently a party to any material legal proceedings.