APRINOIA Therapeutics (APRI) FWPFree writing prospectus

This free writing prospectus reflects the following amendments that were made in Amendment No. 4. All references to page numbers are to page numbers in Amendment No. 4.

Our tau degrader program is supported by Alzheimer’s Drug Discovery Foundation (“ADDF”) following their scientific review of the program which included an independent review by external scientists from academia and industry, who are members of the foundation’s Scientific Review Board in addition to a review by members of the foundation’s Business Review Board.

We plan to implement this trial in the fourth quarter of 2024 in the United States, Europe, the United Kingdom, Japan and Taiwan.

The following table sets forth a consolidated statements of cash flows for the years indicated.

	Years Ended December 31,
	2023		2022
	(in thousands)
Selected consolidated cash flows:
Net cash used in operating activities	$(14,739)		$(17,237)
Net cash used in investing activities	(1,167)		(2,016)
Net cash provided by financing activities	16,288		11,354
Effect of exchange rates on cash	(25)		(554)
Net increase (decrease) in cash	$357		$(8,453)

For the years ended December 31, 2023 and 2022, our net losses were $28.6 million and $28.2 million, respectively.

As of June 30, 2024, we had cash of approximately $0.3 million.

We may seek fast track, breakthrough therapy or similar designation for our drug candidates. On May 8, 2024, the FDA granted fast track designation to APN-1607, underscoring the significant unmet medical need for a diagnostic marker for the early diagnosis of PSP and potentially other tau-related and neurodegenerative diseases, including AD. Fast track designation is designed to facilitate the development and expedite the review of product candidates that demonstrate the potential to address an unmet medical need, with the goal of advancing important new diagnostic and treatment options to patients more quickly than traditional regulatory routes. Once a drug candidate receives fast track designation, early and frequent communication with the FDA, including discussions around the product candidate's development plan and regulatory review process are ensured. If the relevant criteria are met, the product candidate may be eligible for accelerated approval and priority review by the FDA. Fast track designation, however, does not guarantee an accelerated review by the FDA or an increased likelihood that a product candidate will receive approval. Even if we do receive fast track designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program.

We had 64 full-time employees as of December 31, 2023.

We have adopted five equity incentive plans to grant share-based compensation awards to employees, directors and consultants to incentivize their performance and align their interests with ours, namely, the Equity Incentive Plan of APRINOIA adopted on June 19, 2018, the Equity Incentive Plan #2 of APRINOIA adopted on September 3, 2019, the Equity Incentive Plan #3 of APRINOIA adopted on November 9, 2021, and the Equity Incentive Plan #4 of APRINOIA adopted on July 25, 2022, and the Equity Incentive Plan adopted on March 6, 2024 (collectively, the “Equity Incentive Plans” and each an “Equity Incentive Plan”). As of the date of this prospectus, options to purchase a total of 5,898,552 ordinary shares have been granted under the Equity Incentive Plans, in which 2,136,802 options were exercised and fully paid and 391,902 options were canceled or forfeited, resulting in 3,369,848 options outstanding.

Further, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies. The stock price volatility, including any stock run up, may be unrelated to our actual or expected operating performance and financial condition or prospects. As a result, potential investors may find it difficult to assess the rapidly changing value of our securities.

If you purchase our ordinary shares in this offering, you will pay more for your ordinary shares than the amount paid by our existing shareholders for their ordinary shares on a per share basis. As a result, you will experience immediate and substantial dilution of approximately US$11.22 per share, representing the difference between the initial public offering price of US$11.00 per share, the midpoint of the estimated public offering price range shown on the front cover of this prospectus, and our net tangible book value per share as of December 31, 2023, after giving effect to the net proceeds to us from this offering. See “Dilution” for a more complete description of how the value of your investment in our ordinary shares will be diluted upon the completion of this offering.

The resale of our ordinary shares by the Selling Shareholders in the resale offering could result in resales of our ordinary shares by our other shareholders concerned about selling volume. The registration statement of which this prospectus forms a part also registers on behalf of the Selling Shareholders an aggregate of 2,000,000 ordinary shares. There are currently no agreements or understandings in place with the Selling Shareholders to restrict the sale of the ordinary shares to be offered by the Selling Shareholders after the effective date of the registration statement of which this prospectus forms a part. Sales of a substantial number of our ordinary shares by the Selling Shareholders at such time could cause the market price of our ordinary shares to decrease (possibly below the initial public offering price of the ordinary shares in this offering) and could impair our ability to raise capital in the future by selling additional securities. In addition, the resale by the Selling Shareholders could have the effect of depressing the market price for our ordinary shares. The ordinary shares to be offered by us and all of the ordinary shares offered by the Selling Shareholders will be freely tradable without restriction or further registration under the Securities Act. Because these Selling Shareholders have paid a discounted price per ordinary share than participants in this offering, when they are to sell their shares, they may be more willing to accept a lower sales price than the offering price. This fact could impact the trading price of our ordinary shares following completion of this offering, to the detriment of participants in this offering.

We estimate that we will receive net proceeds from this offering of approximately $2.8 million (or approximately $3.6 million if the underwriters exercise their option to purchase additional ordinary shares in full), after deducting the estimated underwriting discounts and commissions and the estimated offering expenses payable by us. These estimates are based upon an assumed initial public offering price of $11.00 per ordinary share, which is the midpoint of the price range shown on the front page of this prospectus. We will not receive any proceeds from the sale by the Selling Shareholders of their shares.

A $1.00 increase or decrease in the assumed initial public offering price of $11.00 per ordinary share would increase or decrease, as applicable, the net proceeds to us from this offering by $0.5 million (or approximately $0.5 million if the underwriters exercise their option to purchase additional ordinary shares in full), assuming the number of ordinary shares offered by us, as set forth on the front cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Maples and Calder (Hong Kong) LLP, our counsel as to Cayman Islands law, has advised us that the courts of the Cayman Islands are unlikely (i) to recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of the federal securities laws of the United States or the securities laws of any state in the United States, and (ii) in entertain original actions brought in the Cayman Islands to impose liabilities against us or our directors or officers that are predicated upon the federal securities laws of the United States or the securities laws of any state in the United States so far as the liabilities imposed by those provisions are penal in nature.

Maples and Calder (Hong Kong) LLP has informed us that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands will, at common law, recognize and enforce a foreign money judgement of a foreign court of competent jurisdiction without any re-examination of the merits of the underlying dispute based on the principle that a judgement of a competent foreign court imposes upon the judgment debtor an obligation to pay the liquidated sum for which such judgment has been given, provided that such judgment (a) is given by a foreign court of competent jurisdiction; (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given; (c) is final and conclusive; (d) is not in respect of taxes, a fine or penalty; (e) is not inconsistent with a Cayman Islands judgment in respect of the same matter; and (f) is not impeachable on the grounds of fraud and was not obtained in a manner, and is not a kind the enforcement of which, is contrary to natural justice or the public policy of the Cayman Islands.

We have funded our operations to date primarily through equity and debt financing and licensing arrangements. We have received net proceeds of $65.9 million from the sale of preferred shares, $17.2 million from the issuance of convertible promissory notes through December 31, 2023, and $5.2 million from the issuance of convertible promissory notes subsequent to December 31, 2023. Subsequent to December 31, 2023, we entered into a short-term loan agreement with a financial institution and a loan agreement with a related party in the principal amounts of $0.7 million and $0.3 million, respectively. During the year ended December 31, 2023, we recognized an aggregate of approximately $8.6 million payment primarily due to the upfront payment and consulting services payment we received from Yantai Yitai Pharmaceutical Technology Co., Ltd. (“Yitai”), a wholly-owned subsidiary of our collaboration partner and related party, Yantai Dongcheng Biochemicals Co., Ltd (together with its subsidiaries, “Dongcheng Pharma”) pursuant to our license and collaboration arrangements with Yitai. As of December 31, 2023, we had $1.6 million in cash.

We have incurred significant operating losses since our inception – our total comprehensive loss was $28.5 million and $28.7 million for the years ended December 31, 2023 and 2022, respectively.

On January 17, 2023, we entered into a business combination agreement (the “Business Combination Agreement”) with Ross Acquisition Corp II (“RAC”), a publicly traded special purpose acquisition company (“SPAC”), APRINOIA Therapeutics Holdings Limited (“PubCo”), APRINOIA Therapeutics Merger Sub 1, Inc., a direct wholly-owned subsidiary of PubCo, APRINOIA Therapeutics Merger Sub 2, Inc., a direct wholly-owned subsidiary of RAC, and APRINOIA Therapeutics Merger Sub 3, Inc., a direct wholly-owned subsidiary of RAC (collectively, the “Business Combination”). In connection with the Business Combination, we and RAC entered into an advance agreement (the “Advance Agreement”), pursuant to which, we advanced an aggregate of $990,000 to RAC’s trust account during the year ended December 31, 2023. On August 21, 2023, we and RAC terminated the Business Combination Agreement in a mutual decision. As a result of the termination, the Business Combination Agreement is of no further force and effect, with the exception of the specified provisions in Section 11.02 of the Business Combination Agreement – Effect of Termination, which shall survive the termination of the Business Combination Agreement and remain in full force and effect in accordance with their respective terms. As a result of the termination of the Business Combination, we expensed approximately $2.7 million in capitalized deferred operating costs related to the Business Combination within the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. In addition, we wrote off the aggregate advance payments made to RAC of $990,000 in general and administrative expense within the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. RAC and its affiliates are no longer considered related parties to us subsequent to the termination of the Business Combination Agreement.

We currently generate revenue through our product licensing by providing our third-party and related party licensees with the right to access our product candidates, through providing our data and documentation for certain clinical research and studies, and through providing consulting services for product development.

Research and development expenses for the year ended December 31, 2023 were $17.0 million, compared to $21.6 million for the year ended December 31, 2022. The decrease of $4.6 million was primarily due to a decrease of $5.0 million in outsourced research services as we reduced the utilization of third-party service providers in research and development activities to conserve cash.

	For the Year Ended December 31,
	2023		2022		Change		%
	(in thousands, except percentages)
Personnel expenses (including share-based compensation)	$7,668		$3,549		$4,119		116
Legal, professional and consulting fees	7,120		2,709		4,411		163
Facilities and office supplies	522		412		110		27
Other expenses	986		371		615		166
	$16,296		$7,041		$9,255		131

General and administrative expenses for the year ended December 31, 2023 were $16.3 million, compared to $7.0 million for the year ended December 31, 2022. The increase of $9.3 million was primarily due to (i) an increase of $4.1 million in employee compensation for our general and administrative personnel as a result of additions to our executive team, including a $1.5 million increase in non-cash share-based compensation expense, (ii) an increase of $4.4 million in legal, professional and consulting fees related to the terminated business combination and the proposed initial public offering, including the write off of $1.0 million in advance payments to RAC, (iii) an increase of $0.1 million in facilities and office supplies, and (iv) an increase of $0.6 million in other expenses primarily due to a $0.4 million increase in system-related service fees.

Interest expense, net for the year ended December 31, 2023 was $4.0 million, compared to $0.1 million for the year ended December 31, 2022. This increase of $3.9 million was primarily due to non-cash interest expense accrued on the convertible promissory notes issued in 2022 and 2023.

Changes in fair value of derivative liabilities for the year ended December 31, 2023 were $0.4 million, compared to $0 for the year ended December 31, 2022. This increase of $0.4 million reflects the changes in the fair value of the embedded redemption features at issuance of the respective convertible promissory notes and each reporting period.

Other income, net remained relatively stable at $0.1 million for the years ended December 31, 2023 and 2022.

Provision for income taxes of $0.9 million and $0.02 million for the years ended December 31, 2023 and 2022, respectively, was generated as a result of taxable income in the United States and Japan. The increase of $0.9 million was primarily due to taxable income earned in Japan in connection with the Yitai License Agreement entered in 2023.

As a result of the foregoing, we had a net loss of $28.6 million and $28.2 million for the years ended December 31, 2023 and 2022, respectively.

We do not currently have any approved products and have not generated any revenue from product sales. We have funded our operations to date primarily through equity and debt financing and licensing arrangements. We have received net proceeds of $65.9 million from the sale of preferred shares, $17.2 million from the issuance of convertible promissory notes through December 31, 2023, and $5.2 million from the issuance of convertible promissory notes subsequent to December 31, 2023. Subsequent to December 31, 2023, we entered into a short-term loan agreement with a financial institution and a loan agreement with a related party in the principal amounts of $0.7 million and $0.3 million, respectively. During the year ended December 31, 2023, we recognized an aggregate of approximately $8.6 million payment primarily due to the upfront payment and consulting services payment we received from Yitai pursuant to our license and collaboration arrangements with Yitai. As of December 31, 2023, we had $1.6 million in cash.

The following table shows a summary of our cash flows for the years ended December 31, 2023 and 2022:

	Years Ended December 31,
	2023		2022
	(in thousands)
Net cash used in operating activities	$(14,739)		$(17,237)
Net cash used in investing activities	(1,167)		(2,016)
Net cash provided by financing activities	16,288		11,354
Effect of exchange rates on cash	(25)		(554)
Net increase (decrease) in cash	$357		$(8,453)

Operating Activities

Net cash used in operating activities in the year ended December 31, 2023 consisted primarily of a net loss of $28.6 million, as adjusted for certain non-cash items of $11.2 million, primarily including non-cash interest expense of $4.1 million associated with convertible promissory notes, share-based compensation expense of $3.2 million, the write-off of deferred offering costs of $2.7 million, advance payments to RAC of $1.0 million under the Advance Agreement, and depreciation expense of $0.4 million, offset by the changes in fair value of derivative liabilities of $0.4 million. The net cash used in operating activities also included a net increase in operating assets and liabilities of $2.6 million for the year ended December 31, 2023, which was primarily attributable to an increase in accrued expenses and other current liabilities of $2.0 million and an increase in accounts payable of $0.6 million.

Net cash used in investing activities for the year ended December 31, 2023 was $1.2 million, consisting of purchases of property and equipment of $0.2 million and advance payments to RAC under the Advance Agreement of $1.0 million.

Net cash used in investing activities for the year ended December 31, 2022 was $2.0 million, consisting of purchases of property and equipment.

Net cash provided by financing activities for the year ended December 31, 2023 was $16.3 million, consisting primarily of proceeds from short-term borrowings of $1.4 million, proceeds from the exercise of share options of $0.3 million, proceeds from issuance of convertible promissory notes of $15.7 million, including $3.3 million proceeds from related party convertible promissory notes, and proceeds from related party payables of $1.5 million. These financing cash inflows were partially offset by the repayment of short-term borrowings of $1.4 million, and repayment of related party payables of $1.2 million.

Net cash provided by financing activities for the year ended December 31, 2022 was $11.4 million, consisting primarily of proceeds from issuance of preferred shares of $9.0 million, proceeds from short-term borrowings of $1.5 million, proceeds from issuance of convertible promissory notes of $1.4 million, including $1.0 million proceeds from a related party convertible promissory note, and proceeds from related party payables of $0.9 million. These financing cash inflows were partially offset by the repayment of short-term borrowings of $0.7 million, and cash settlements related to deferred offering costs associated with the aforementioned terminated business combination of $0.7 million.

Changes to Management and Board of Directors

Effective on June 4, 2024, our General Counsel, Lana Gladstein, resigned from the Company to pursue other opportunities.

On March 14, 2024, Michael Hui Xin submitted his resignation from our Board. His resignation will become effective upon the effectiveness of the registration statement on Form F-1 of which this prospectus forms a part. In addition to Mr. Hui’s resignation, on April 1, 2024, our board approved the appointment of three new independent directors, Jonathan Lieber, Ling Zeng and Walter Lau, each effective upon the effectiveness of the registration statement on Form F-1 of which this prospectus forms a part.


On March 6, 2024, our board adopted the 2024 Equity Incentive Plan (the “2024 Plan”) and 2024 Employee Stock Purchase Plan (the “ESPP”) to be in effect upon the effectiveness of the registration statement on Form F-1 of which this prospectus forms a part. Pursuant to the 2024 Plan and the ESPP, a sum of 2,813,000 shares plus any shares available for issuance under the prior plans and 280,000 shares are initially reserved for initial issuance, respectively, which will increase as defined in the plans.
On December 27, 2023, we entered into a short-term loan agreement with a financial institution in the principal amount of RMB 5.0 million or USD $0.7 million (using the exchange rate in effect on December 27, 2023), maturing in December 2024, which funds were received on January 1, 2024. The bank loan bears interest at a fixed rate of 4.8% and such interest is payable on a monthly basis. In addition, this bank loan is guaranteed by the Chairman of the Board.

We entered into three loan agreements with Dr. Ming-Kuei Jang, our co-founder, chairman of the board and former Chief Executive Officer, in 2022. These loans bear an interest rate of 5% and matured in 2023. Upon the maturity of the loans, the Board approved an extension of these loans through 2024. In August 2024, the Board approved extensions of these loans into 2027 and an increase in the interest rate to 7%.

On April 30, 2024, we entered into a loan agreement with Dr. Jang, in the principal amount of RMB 2.0 million or USD $0.3 million (using the exchange rate in effect on April 30, 2024), which funds were received on May 13, 2024. The loan bears interest at 7.0% per annum and matures one year after the effective date of the loan.

On December 21, 2023, a convertible promissory note that was issued to one of our officers for consideration of $0.1 million matured. On January 24, 2024, we fully repaid the note in the amount of $0.1 million, including interest. On January 9, 2024, we issued convertible promissory notes to two related party investors in the aggregate principal amount of $4.0 million. Each note bears a simple interest rate of 8% per annum and is due one year after the date of the note issuance. The terms of these notes are substantially the same as those issued to other investors, including optional-conversion terms upon the occurrence of aforementioned specific conversion events.

On January 12, 2024, a convertible promissory note that was issued for consideration of $7.5 million matured. The noteholder agreed to extend the note to February 15, 2024 with an increase in the simple interest rate from 5% to 12.5% per annum. On February 15, 2024, we executed a security agreement with the noteholder, which granted a security interest in and to certain collateral of ours in order to secure the obligations of the convertible promissory note, which was extended to January 31, 2025, at 12% interest rate per annum. All other material terms of this note have remained unchanged pursuant to its original convertible note purchase agreement. A copy of the security agreement with such note holder is attached as Exhibit 10.22 to this registration statement of which this prospectus forms a part.

In January and February 2024, we renewed two convertible promissory notes with the aggregate principal amount of $3.3 million with related parties. We further renewed a convertible promissory note with a principal amount of $0.1 million with a third-party investor in February 2024. The simple interest rate of these notes has increased from 5% to 8% per annum. The notes are due one year after their respective refinance date. All other terms of these notes have remained unchanged pursuant to their respective original convertible note purchase agreement.

On May 23, 2024, we renewed two convertible promissory notes with the aggregate principal amount of $4.4 million, each of which bears an increased simple interest of 8% per annum from the date of renewal, and is due one year after the renewal date of such note.

On June 24, 2024, we issued a convertible promissory note to a new investor for consideration of $0.04 million, which bears a simple interest rate of 8% per annum and is due one year after the date of note issuance.

On July 18, 2024, we issued a convertible promissory note to a new investor for consideration of $0.2 million, which bears a simple interest rate of 8% per annum and is due one year after the date of note issuance.

On August 29, 2024, we issued a convertible promissory note to a new investor for consideration of $1.0 million, which bears a simple interest rate of 8% per annum and is due one year after the date of note issuance.

As of December 31, 2023 and 2022, we had cash of $1.6 million and $1.2 million, and short-term borrowings of $1.4 million and $1.5 million respectively. Subsequent to December 31, 2023, we entered into a short-term loan agreement with a financial institution in the principal amount of $0.7 million.

We currently generate revenue through our product licensing by providing third-party and related party licensees with the right to access our product candidates, through providing data and documentation for certain clinical research and studies, and through providing consulting services for product development. All revenues that are earned and received in mainland China are subject to a Chinese value-added tax (“VAT”) at applicable tax rates of gross proceeds. We report applicable revenues net of the Chinese VAT for all the periods presented in the accompanying consolidated statements of operations and comprehensive loss. An entity that is a VAT general taxpayer is allowed to offset qualified input VAT on purchases against its output VAT liabilities. The VAT payable is reflected in accrued expenses and other current liabilities while the VAT receivable is reflected in prepaid expenses and other current assets in the accompanying consolidated financial statements.

In addition, we provide consulting services to assist certain licensee’s product development. Consulting service revenues are generally recognized at a point-in-time when services are provided.

We also assess additional objective and subjective factors that we believe are relevant and which may have changed from the date of the most recent third-party valuation through the date of the grant.

The assumptions we used in the valuation model are based on future expectations combined with management judgement, with inputs of numerous objective and subjective factors, to determine the fair value of our equity value, including the following factors:

The assumptions underlying these valuations represent management’s best estimates, which involve inherent uncertainties and the application of management judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our equity-based compensation could be materially different.

Following the closing of this offering, the fair value of our ordinary shares will be determined based on the quoted market price of our ordinary shares.

The following table sets forth the fair value of our ordinary shares estimated at the grant date during the financial statements period presented in this prospectus with assistance from the third-party valuation specialist:

We plan to approach the FDA in the first half of 2025 to request that this Phase 2 clinical trial be converted to a single, pivotal, Phase 3 clinical trial as a basis for approval of APN-1607 as diagnostic imaging agent in AD.

One of the lessons learned from the development of anti-amyloid antibody in the past 20 years is the importance of selective binding to disease relevant proteins, which reduces side effects but also allows for more effective treatment. As shown in the figure below, APNmAB005 shows selective binding to pathological forms of tau in AD brains but not normal tau. The data is a representative of at least three independent dot blot binding assays and error bars are the standard deviations of three replicates in the experiment (Two-way ANOVA, **** p < 0.0001).

Using our cellular tau degrader assay we have identified compounds that may selectively degrade the pathological tau aggregates while sparing the native (healthy) tau. As shown below, these results were confirmed in a rat primary neuron assay. Our lead compound (TPD-3) has demonstrated in vivo degradation activity in a mouse tauopathy model. Our current effort is focusing on further screening and optimizing the physicochemical properties of tau degraders with the goal to identify lead candidates for IND-enabling preclinical studies and eventual clinical development. The cellular assays in A and B are representatives of more than three independent runs and error bars are SD of n=3 replicates in one experiment. The graph in C is the preliminary study of a single intravenous dose at 25 mg/kg.

We have developed a human dopaminergic neuronal model to test α-Syn soluble oligomer degradation with our compounds. Upon screening with our proprietary degrader library, we have identified several α-Syn degraders as shown in A and B below, which demonstrate characteristics of a PROTAC-based mechanism resulting in proteasome-mediated degradation as shown in C. The cellular data here are representative of more than three independent runs and error bars are standard deviation from three replicate wells in a 96-well plate. Our lead Compound (TPD-2) has also shown degradation of α-Syn in a transgenic mouse model expressing human wild-type α-Syn after given a single intravenous dose at 25 mg/kg. Our current effort, including toxicology studies, is focusing on optimizing the drug properties of our degrader for preclinical candidate selection and eventual clinical development.

On December 20, 2018, we entered into the Research Collaboration Agreement, as amended and restated from time to time, with Lundbeck and Abbvie (the “Research Collaboration Agreement”), pursuant to which the three parties are collaborating on Stage 1 of the project (the “Project”) to evaluate and develop α-Syn PET tracers, designed to reveal the brain accumulation of pathological α-synuclein proteins, a hallmark for α-synucleinopathies such as PD and MSA. We granted Lundbeck and Abbvie, during the term of the Research Collaboration Agreement, a paid-up, non-exclusive, worldwide, non-transferable right to use our experimental α-Syn PET tracer compounds and our related pre-existing intellectual property. The Project is conducted under the direction of individual principal investigators designated by each party, and each party is responsible for using commercially reasonable efforts to carry out its respective activities at its own cost. All arising intellectual properties, including any discoveries, inventions, improvements, know-how and further development which solely relates to the compounds used by any party under the Research Collaboration Agreement (the “Arising IP”), will be owned solely by us. Each party shall own all results (the “Results”), including but not limited to, data including raw data, information, analysis, documents, reports, know-how, discoveries, inventions and improvements generated by the parties during the term of the agreement through conduct of the Project, except for Arising IP. Each party grants to the other parties a worldwide, perpetual, non-exclusive, paid-up license to use the party’s results and write reports summarizing such Results for any purpose. Upon completion of Stage 1, Lundbeck and Abbvie have an option to continue the collaboration into Stage 2 on the terms to be negotiated. Under the Research Collaboration Agreement, the parties have the option to enter into a further development of a clinical candidate. The Research Collaboration Agreement shall remain in full force and effect until the earlier of (i) completion of the Project, (ii) December 31, 2024 or (iii) termination by one party on certain days prior written notice to the other parties.

In addition, on December 12, 2023, we entered into the Consulting Service Agreement (the “Phase III Clinical Trial Consulting Services Agreement”) with Yitai, pursuant to which we agreed to provide additional consulting services for product development based on a fixed contractual rate per hour for services provided.

We had 67 and 64 full-time employees as of December 31, 2022 and 2023, respectively. Of the 64 full-time employees as of December 31, 2023, 21 hold M.D. and/or Ph.D. degrees, 39 were engaged in research and development activities and 25 were engaged in business development, finance, information systems, facilities, human resources or administrative support. Approximately 18 of our employees are located in the United States, 25 of them in China, 17 in Hong Kong and Taiwan, and 4 in Japan. None of our employees are subject to a collective bargaining agreement. We believe that we maintain a good working relationship with our employees, and we have not experienced any material disputes with our employees in our history.

We are headquartered in Cambridge, Massachusetts. We currently lease office space, which serves as our corporate offices for administrative and clinical operations in Cambridge, Massachusetts. We also lease a total of approximately ten thousand square feet of space in Japan, China and Hong Kong for administrative offices, research facilities, laboratories and warehousing. We believe that our existing facilities will be sufficient for our needs for the foreseeable future.

Our board of directors will consist of seven directors upon the effectiveness of our registration statement on Form F-1 of which this prospectus is a part.

The audit committee will oversee our accounting and financial reporting processes and the audits of our financial statements. Our audit committee will be responsible for, among others:

•	appointment, compensation, retention, oversight and, when necessary, termination of the independent auditor;

•

annually reviewing the independent auditor’s report describing the auditing firm’s internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors and all relationships between the independent auditor and our company;

•	review responsibilities, budget and staffing of our internal audit function;

•	reviewing with the independent auditor any audit problems or difficulties and management’s response;

•	reviewing, approving or ratifying and overseeing all related party transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K;

•	reviewing and discussing the annual audited financial statements with management and the independent auditor;

•	reviewing and discussing with management and the independent auditors major issues regarding accounting principles and financial statement presentations;

•	reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments;

•	discussing earnings press releases with management and the independent auditor as appropriate, as well as financial information and earnings guidance provided to analysts and rating agencies;

•	reviewing with management and the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on our financial statements;

•	discussing policies with respect to risk assessment and risk management with management and as appropriate, the independent auditor;

•

timely reviewing reports from the independent auditor regarding all critical accounting policies and practices to be used by our company, all alternative treatments of financial information within US GAAP for material items that have been discussed with management and all other material written communications between the independent auditor and management;

•

establishing procedures for the receipt, retention and treatment of complaints received by our company regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;

•	such other matters that are specifically delegated to our audit committee by our board of directors from time to time; and

•	meeting separately, periodically, with management, internal auditors and the independent auditor.

Prior to the closing of this offering, we will adopt a written code of business conduct and ethics, or the Code of Business Conduct and Ethics, that applies to our directors, officers and employees. We seek to conduct business ethically, honestly, and in compliance with applicable laws and regulations. Our Code of Business Conduct and Ethics sets out the principles designed to guide our business practices—compliance, integrity, respect, and dedication.

We have adopted the 2024 Employee Share Purchase Plan, which we refer to as our ESPP, which will be effective on the date immediately prior to the date the registration statement relating to this offering becomes effective. The material terms of the ESPP, as it is currently contemplated, are summarized below.

Administration. Subject to the terms and conditions of the ESPP, our compensation committee will administer the ESPP. Our compensation committee can delegate administrative tasks under the ESPP to the services of an agent and/or employees to assist in the administration of the ESPP. We will bear all expenses and liabilities incurred by the ESPP administrator.

Share Reserve. The maximum number of shares of our ordinary shares which will be authorized for sale under the ESPP is equal to the sum of (i) 280,000 and (ii) an annual increase commencing on January 1, 2025 and ending in 2034, equal to the lesser of (A) 1% of the ordinary shares outstanding on the last day of the immediately preceding calendar year and (B) such smaller number of ordinary shares as determined by our board of directors.

Eligibility. Employees eligible to participate in the ESPP for a given offering period generally include employees who are employed by us or one of our subsidiaries on the first day of the offering period, or the enrollment date. Our employees (and, if applicable, any employees of our subsidiaries) who customarily work less than five months in a calendar year or are customarily scheduled to work less than 20 hours per week will not be eligible to participate in the ESPP. Finally, an employee who owns (or is deemed to own through attribution) 5% or more of the combined voting power or value of all our classes of shares or of one of our subsidiaries will not be allowed to participate in the ESPP.

Participation. Employees will enroll under the ESPP by completing a payroll deduction form permitting the deduction from their compensation of at least 1% of their compensation but not more than 15% of their compensation. Such payroll deductions may be expressed as a whole number percentage. However, a participant may not purchase more than 100,000 shares in each offering period and may not accrue the right to purchase shares at a rate that exceeds $25,000 in fair market value of shares (determined at the time the option is granted) for each calendar year the option is outstanding (as determined in accordance with Section 423 of the Code).

Offering. Under the ESPP, participants are offered the option to purchase shares of our common stock at a discount during a series of successive offering periods, the duration and timing of which will be determined by the ESPP administrator. However, in no event may an offering period be longer than 27 months in length.

The calculations in the table below are based on 26,361,214 ordinary shares outstanding on an as-converted basis as of the date of this prospectus and 26,861,214 ordinary shares issued and outstanding immediately after the completion of this offering, assuming the underwriters do not exercise their over-allotment option.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days of the date of this prospectus, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person. The Selling Shareholders are under no obligation to sell any shares pursuant to the Resale Prospectus, however, for the purpose of calculating the ordinary shares beneficially owned by them and their voting power after this offering, we assume that the Selling Shareholders will sell all of the ordinary shares offered for sale pursuant to the Resale Prospectus.

	Ordinary Shares Beneficially Owned Prior to This Offering				Ordinary Shares Beneficially Owned After This Offering
	Number		%		Number		%
Directors and Executive Officers**:
Ming-Kuei Jang(1)	2,112,984		7.6%		2,112,984		7.4%
Mark S. Shearman(2)	272,230		1.0%		272,230		1.0%
Michael Xin Hui***	—		—		—		—
Zhigang Luo	—		—		—		—
Roger James Pomerantz	*		*		*		*
Ling Zeng****	—		—		—		—
Jonathan Lieber****	—		—		—		—
Walter Lau****	—		—		—		—
Bradford A. Navia(3)	337,500		1.3%		337,500		1.2%
Brian Achenbach	*		*		*		*
All Directors and Executive Officers as a Group	2,850,214		10.8%		2,850,214		10.6%
Principal Shareholders:
Entities Affiliated with Dongcheng Pharma(4)	4,810,052		18.2%		4,810,052		17.9%
Wealth Path Investments Limited(5)	2,475,000		9.4%		1,905,204		7.1%
Daiwa Taiwan-Japan Biotech Fund(6)	2,437,500		9.2%		1,876,337		7.0%
KTB China Synergy Fund(7)	2,149,067		8.2%		1,654,307		6.2%
ShangPharma Investment Group Limited(8)	1,625,750		6.2%		1,251,469		4.7%

*	Less than 1% of our total outstanding shares.

**	Except as otherwise indicated below, the business address of our directors and executive officers is 245 Main Street, 2nd Floor, Cambridge, MA 02142.

***	Mr. Michael Xin Hui will resign from our board of directors upon the effectiveness of our registration statement on Form F-1, of which this prospectus is a part.

****	Each of Ms. Ling Zeng, Mr. Jonathan Lieber and Dr. Walter Lau has accepted our appointment to be a director of the company upon the effectiveness of our registration statement on Form F-1, of which this prospectus is a part.

(1)	Represents 571,082 ordinary shares held by Mr. Ming-Kuei Jang and 1,541,902 ordinary shares issuable upon the exercise of options held by Mr. Jang within 60 days of the date of this prospectus.

(2)	Represents 55,000 ordinary shares held by Mr. Shearman and 217,230 ordinary shares issuable upon the exercise of options held by Mr. Shearman within 60 days of the date of this prospectus.

(3)	Represents 337,500 ordinary shares issuable upon the exercise of options held by Mr. Bradford A. Navia within 60 days of the date of this prospectus.

(4)

Represents 963,563 ordinary shares and 3,371,805 Series C preferred shares directly held by Yantai Dongcheng Biochemicals Co., Ltd. (“Dongcheng Pharma”) and 474,684 Series C preferred shares directly held by DongCheng International (HongKong) Limited (“Dongcheng HK”), a wholly owned subsidiary of Dongcheng Pharma. The registered address of Dongcheng Pharma is No.7 Chang Bai Shan Road, Yantai Economic and Technological Development Zone, Shandong Province, China, and the registered address of Dongcheng HK is Room 413, 4/F, Lucky Centre, 165-171 Wan Chai Road, Wan Chai, Hong Kong. Dongcheng Pharma is a company publicly listed on the Shenzhen Stock Exchange (stock code: 002675).

(5)

Represents 2,475,000 ordinary shares held by Wealth Path Investments Limited (“Wealth Path”). Wealth Path is wholly owned by Mr. Spencer Lee. By virtue of being the controlling shareholder and the director of Wealth Path, Mr. Spencer Lee may be deemed to have beneficial ownership over shares held by Wealth Path. The registered address of Wealth Path is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.

(6)

Represents 1,500,000 ordinary shares and 937,500 Series B preferred shares directly held by Daiwa Taiwan-Japan Biotech Fund (“Daiwa”). DCI Partners Co., Ltd. (“DCIP”) is the general partner of Daiwa. The voting and investment power of shares held by Daiwa is exercised by majority vote of an investment committee consisting of DCIP’s employees, each of whom disclaims beneficial ownership for the shares held by Daiwa, except to the extent of any pecuniary interest therefrom. The principal business address of Daiwa is 1-9-1 Marunouchi, Chiyoda-ku, Tokyo, 100-6756, Japan.

(7)

Represents 1,562,500 Series B preferred shares, 400,000 Series Pre-C preferred shares and 186,567 Series C preferred shares directly held by KTB China Synergy Fund (“KTB”). The voting and investment power of shares held by KTB is exercised by its general partner, Woori Venture Partners, which disclaims beneficial ownership for the shares held by KTB. The principal business address of KTB is 670 Daewangpangyo-ro, Bundang-gu, Seongnam-si, Gyeonggi-do 10FL, USpace 2A dong, Republic of Korea.

(8)

Represents 1,313,250 ordinary shares and 312,500 Series B preferred shares directly held by ShangPharma Investment Group Limited (“ShangPharma”). The voting and investment power of shares held by ShangPharma is exercised by its managing director, Mr. Michael Xin Hui. The registered address of ShangPharma is Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands.

As of the date of this prospectus, we have 641,250 ordinary shares held by record holders in the United States, representing approximately 2.4% of our total issued and outstanding shares on an as-converted basis. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

A quorum required for any general meeting of shareholders consists of at least two shareholders present or by proxy, representing not less than an aggregate of fifty percentage (50%) of all votes attaching to all of our shares in issue and entitled to vote present in person or by proxy.

Our post-offering memorandum and articles of association provide that upon the requisition of any one or more of our shareholders who together hold shares which carry in aggregate not less than one-third of the total number of votes attaching to all issued and outstanding shares of our company entitled to vote at general meetings as at the date of the deposit, our board will be required to convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting.

On March 20, 2024, we issued a total of 56,250 ordinary shares to certain employees for an aggregate consideration of $31,200 in connection with their exercise of options.

On August 7, 2024, we issued a total of 12,500 ordinary shares to a former employee for an aggregate consideration of $7,900 in connection with their exercise of options.