Company: CNTB
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001835268-25-000058
Chunk: 27

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 our stock option grants would be considered “plain-vanilla” and we have a limited history of option exercise activity.The following are the weighted-average assumptions for stock options:For the Nine Months Ended September 30,20252024Risk-free interest rate4.0%4.3%Dividend yield0.0%0.0%Volatility105.9%103.8%Expected life (years)610Early exercise multiple (years)— 2.2 - 2.8The weighted-average fair value of options granted was $0.85 and $1.17 for the nine months ended September 30, 2025 and 2024, respectively.We estimate the fair value of each purchase right granted under our Employee Stock Purchase Plan at the beginning of each new offering period using the Black-Scholes option pricing model. There was no new offering period during the three months ended September 30, 2025 or 2024.

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11. Income Taxes

For the three and nine months ended September 30, 2025, we recorded income tax expense of $61,000 and $170,000, respectively, compared to $57,000 and $117,000, respectively, for the same periods in 2024. Our effective tax rate for both the three and nine months ended September 30, 2025 was (0.4)%, compared to (0.4)% and (1.8)%, respectively, for the same periods in 2024. The effective tax rate in both periods was primarily driven by the full valuation allowance maintained against the Company’s deferred tax assets.For the three and nine months ended September 30, 2025, the Company’s provision for income taxes was based on its worldwide estimated annualized effective tax rate, except for (1) jurisdictions for which a loss is expected for the year and no benefit can be realized for those losses, (2) jurisdictions for which forecasted pre-tax income or loss cannot be estimated, and (3) the tax effect of discrete items occurring during the period. The tax for jurisdictions for which a forecast cannot be estimated is based on actual taxes and tax reserves for the quarter.Under the provisions of ASC 740, Income Taxes, the determination of the Company’s ability to recognize its deferred tax assets requires an assessment of both negative and positive evidence. The evidence evaluated by the Company included operating results during the most recent three-year period and future projections, with more weight given to historical results than expectations of future profitability, which