Company: CNTB
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001835268-25-000052
Chunk: 46

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 46
---
 successful completion of each obligation during the second quarter of 2024. The Company will recognize the revenue associated with the transfer of a new manufacturing process at a point in time upon 

15

successful completion of the obligation. For the performance obligation to complete certain development services, the Company recognized the transaction price over the expected performance period using an input method. To measure the progress of this obligation, the Company used the cost-to-cost basis approach to estimate the percentage of completion as this method provides the most faithful depiction of the Company’s performance in transferring control of the services promised to Simcere and represents the Company’s best estimate of the period of the obligation. The performance obligation related to certain rademikibart development services was completed in third quarter of 2024.Milestone Payments The Licensor is entitled to development milestones under the License Agreement and certain regulatory milestone payments which are paid upon receipt of regulatory approvals within the Territory.At the end of each reporting period, the Company will re-evaluate the probability of achievement of each milestone and any related constraint, and if necessary, adjust its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect the reported amount of license and collaboration revenues in the period of adjustment.RoyaltiesAs the license is deemed to be the predominant item to which sales-based royalties relate, the Company will recognize revenue when the related sales occur.Contract Assets and LiabilitiesAs of June 30, 2025 and December 31, 2024, the Company had no contract assets related to the License Agreement. As of June 30, 2025 and December 31, 2024, the Company had contract liabilities related to the upfront fee received under the License Agreement of $0.2 million.

6. Commitments and Contingencies

Legal ProceedingsFrom time to time, the Company may be a party to litigation or subject to claims in the ordinary course of business. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. The Company was not a party to any material litigation and did not have contingency reserves established for any liabilities as of June 30, 2025 or December 31, 2024.

7. Leases

In February 2025, we relocated our corporate headquarters to a new location in San Diego, California. This operating lease for the new corporate headquarters is for 6,942 square feet of office space which expires on January 31,