Company: CNTB
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001835268-25-000035
Chunk: 48

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 48
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 administrative expense, and $1.4 million of which was included in research and development expense. As of March 31, 2025, we have paid the $2.0 million of cash severance 

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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 March 31, 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, there are restrictions on the Company’s PRC subsidiaries with respect to transferring certain of their net assets to the Company either in the form of dividends, loans, or advances. As of March 31, 2025 and December 31, 2024, restricted net assets including paid-in capital and statutory reserve funds of the Company’s PRC subsidiaries was $29.2 million and $29.6 million, respectively.

10. Equity Incentive Plans

Option Plan ActivityThe following table summarizes the stock option activity for the three months ended March 31, 2025:Outstanding OptionsNumber of OptionsWeighted-Average Exercise PriceOutstanding at December 31, 202414,263,242$2.93 Granted252,000$0.96 Exercised(3,000)$0.75 Cancelled(1,193,348)$8.98 Outstanding at March 31, 202513,318,894$2.35 Share-based CompensationThe following table summarizes share-based compensation expense related to share-based payment awards granted pursuant to all of our equity compensation arrangements (in thousands):Three Months Ended March 31,20252024Research and development$331 $607 General and administrative611 709 Total share-based compensation expense$942 $1,316 As of March 31, 2025, there was $9.4 million of total unrecognized compensation