Company: CNTB
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001835268-25-000014
Chunk: 271

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-03-31
Form: 10-K
Item: Item 8
Chunk 271
---
 we provided three executive officers with one-time severance payments upon termination, continued benefits for a specified period of time, and certain stock option modifications. The total expense for these activities was $3.2 million, $2.0 million of which was primarily for cash severance and $1.2 million of which was for non-cash, share-based compensation expense. During the year ended December 31, 2024, we recognized $3.2 million of the total expense, $1.8 million of which was included in general and administrative expense, and $1.4 million of which was included in research and development expense. As of December 31, 2024, we have paid $0.4 million of the cash severance charges. The remaining cash severance charges are expected to be substantially paid in the first quarter of 2025. We have accounted for these expenses in accordance with the FASB ASC Topic 420, Exit or Disposal Cost Obligation.

8.Shareholders’ Equity

Ordinary Shares Reserved for Future IssuanceAs of December 31, 2024, we reserved ordinary shares as follows:Number of SharesStock options outstanding14,263,242Ordinary shares reserved for future grants under the equity incentive plans4,442,951Ordinary shares reserved for future purchases under the Employee Share Purchase Plan1,020,251Total ordinary shares reserved for future issuance19,726,444Treasury SharesOrdinary shares previously issued  were repurchased by the Company for the purpose of issuing shares under the 2019 Stock Incentive Plan (“2019 Plan”) in 2019 and 2020. In 2021 the Company repurchased 12,705 shares for a total price of $180,000. The remaining ordinary shares were repurchased by the Company at no cost. As of December 31, 2024 and 2023, there were 2,513,495 and 2,405,591 treasury shares, respectively.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. During the 

125

years ended December 31,