--- page 1 --- ImmuneOnco Biopharmaceuticals (Shanghai) Inc. ʮ̡ (A joint stock company incorporated in the People’s Republic of China with limited liability) Stock code: 1541 OFFERING GLOBAL Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers Joint Bookrunners and Joint Lead Managers --- page 2 --- IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain professional independent advice. ImmuneOnco Biopharmaceuticals (Shanghai) Inc. ʮ̡ (A joint stock company incorporated in the People’ s Republic of China with limited liability) Global Offering Number of Offer Shares under the Global Offering : 17,147,200 H Shares (subject to the Over-allotment Option) Number of Hong Kong Offer Shares : 1,714,800 H Shares (subject to reallocation) Number of International Offer Shares : 15,432,400 H Shares (subject to reallocation and the Over-allotment Option) Offer Price : HK$18.60 per H Share, plus brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange trading fee of 0.00565% (payable in full on application in Hong Kong dollars and subject to refund) Nominal Value : RMB1.00 per H Share Stock Code : 1541 Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers Joint Bookrunners and Joint Lead Managers Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus. A copy of this prospectus, having attached thereto the documents specified in “Appendix V — Documents Delivered to the Registrar of Companies in Hong Kong and Available on Display,” has been registered with the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other documents referred to above. The Offer Price will be HK$18.60 per Offer Share. Applicants for Hong Kong Offer Shares are required to pay on application, the Offer Price of HK$18.60 for each Hong Kong Offer Share together with a brokerage fee of 1.0%, a SFC transaction levy of 0.0027%, a Stock Exchange trading fee of 0.00565% and an AFRC transaction levy of 0.00015%. The Overall Coordinators (on behalf of the Underwriters) may, where considered appropriate and with our consent, reduce the number of Hong Kong Offer Shares and/or the Offer Price below that stated in this prospectus (being HK$18.60 per Offer Share) at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such case, notices of the reduction in the number of Hong Kong Offer Shares and/or the Offer Price will be published on the websites of the Stock Exchange at www.hkexnews.hk and our Company at www.immuneonco.com as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the last day for lodging applications under the Hong Kong Public Offering .F o r more details, see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares.” The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement to subscribe for, and to procure applicants for the subscription for, the Hong Kong Offer Shares, are subject to termination by the Overall Coordinators (on behalf of the Hong Kong Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. Please refer to “Underwriting.” The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may be offered and sold only (a) in the United States to QIBs in reliance on Rule 144A or another exemption from, or in a transaction not subject to, registration under the U.S. Securities Act and (b) outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act. ATTENTION We have adopted a fully electronic application process for the Hong Kong Public Offering pursuant to Rule 12.11 of the Listing Rules. We will not provid e printed copies of this prospectus or printed copies of any application form to the public in relation to the Hong Kong Public Offering. This prospectus is available on the websites of the Stock Exchange ( www.hkexnews.hk ) and our Company ( www.immuneonco.com ). If you require a printed copy of this prospectus, you may download and print from the website addresses above. IMPORTANT August 24, 2023 --- page 3 --- IMPORTANT NOTICE TO INVESTORS: FULLY ELECTRONIC APPLICATION PROCESS We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus or printed copies of any application forms to the public in relation to the Hong Kong Public Offering. This prospectus is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing Information ” section, and our website at www.immuneonco.com . If you require a printed copy of this prospectus, you may download and print from the website addresses above. To apply for the Hong Kong Offer Shares, you may: (1) apply online through the White Form eIPO service at www.eipo.com.hk ;o r (2) apply through CCASS EIPO service to electronically cause HKSCC Nominees to apply on your behalf, including by: (i) instructing your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Hong Kong Offer Shares on your behalf; or (ii) (if you are an existing CCASS Investor Participant ) giving electronic application instructions through the CCASS Internet System ( https://ip.ccass.com ) or through the CCASS Phone System by calling +852 2979 7888 (using the procedures in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC can also input electronic application instructions for CCASS Investor Participants through HKSCC’s Customer Service Centre at 1/F, One & Two Exchange Square, 8 Connaught Place, Central, Hong Kong by completing an input request. If you have any question about the application for the Hong Kong Offer Shares, you may call the enquiry hotline of our H Share Registrar and White Form eIPO Service Provider, Computershare Hong Kong Investor Services Limited, at +852 2862 8600 on the following dates and times: Thursday, August 24, 2023 — 9:00 a.m. to 9:00 p.m. Friday, August 25, 2023 — 9:00 a.m. to 9:00 p.m. Saturday, August 26, 2023 — 9:00 a.m. to 6:00 p.m. Sunday, August 27, 2023 — 9:00 a.m. to 6:00 p.m. Monday, August 28, 2023 — 9:00 a.m. to 9:00 p.m. Tuesday, August 29, 2023 — 9:00 a.m. to 12:00 noon We will not provide any physical channels to accept any application for the Hong Kong Offer Shares by the public. The contents of the electronic version of this prospectus are identical to the printed document as registered with the Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance. If you are an intermediary , broker or agent , please remind your customers, clients or principals, as applicable, that this prospectus is available online at the website addresses above. Please refer to “How to Apply for Hong Kong Offer Shares” for further details on the procedures through which you can apply for the Hong Kong Offer Shares electronically. IMPORTANT --- page 4 --- Your application through the White Form eIPO service or the CCASS EIPO service must be for a minimum of 200 Hong Kong Offer Shares and in one of the numbers set out in the table. You are required to pay the amount next to the number you select. No. of Hong Kong Offer Shares applied for Amount payable on application No. of Hong Kong Offer Shares applied for Amount payable on application No. of Hong Kong Offer Shares applied for Amount payable on application No. of Hong Kong Offer Shares applied for Amount payable on application HK$ HK$ HK$ HK$ 200 3,757.52 3,000 56,362.74 25,000 469,689.53 100,000 1,878,758.10 400 7,515.03 4,000 75,150.32 30,000 563,627.44 150,000 2,818,137.16 600 11,272.55 5,000 93,937.90 35,000 657,565.34 200,000 3,757,516.20 800 15,030.06 6,000 112,725.49 40,000 751,503.25 250,000 4,696,895.26 1,000 18,787.58 7,000 131,513.08 45,000 845,441.15 300,000 5,636,274.30 1,200 22,545.09 8,000 150,300.65 50,000 939,379.06 350,000 6,575,653.36 1,400 26,302.61 9,000 169,088.23 60,000 1,127,254.85 400,000 7,515,032.40 1,600 30,060.12 10,000 187,875.81 70,000 1,315,130.66 450,000 8,454,411.46 1,800 33,817.64 15,000 281,813.71 80,000 1,503,006.48 500,000 9,393,790.50 2,000 37,575.16 20,000 375,751.62 90,000 1,690,882.29 857,400 (1) 16,108,471.95 (1) Maximum number of Hong Kong Offer Shares you may apply for. No application for any other number of the Hong Kong Offer Shares will be considered and any such application is liable to be rejected. IMPORTANT --- page 5 --- If there is any change in the following expected timetable of the Global Offering, we will issue an announcement in Hong Kong to be published on the websites of Stock Exchange at www.hkexnews.hk and our Company at www.immuneonco.com . Hong Kong Public Offering commences ..............9 : 0 0a . m .o n Thursday, August 24, 2023 Latest time to complete electronic applications under White Form eIPO service through the designated website at www.eipo.com.hk (2) ...........................1 1 : 3 0a . m .o nT u e s d a y , August 29, 2023 Application lists open (3) ..........................1 1 : 4 5a . m .o nT u e s d a y , August 29, 2023 Latest time for (a) completing payment of White Form eIPO applications by effecting internet banking transfer(s) or PPS payment transfer(s) and (b) giving electronic application instructions to HKSCC (4) ......................1 2 : 0 0 noon on Tuesday, August 29, 2023 If you are instructing your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Hong Kong Offer Shares on your behalf, you are advised to contact your broker or custodian for the latest time for giving such instructions which may be different from the latest time as stated above. Application lists close (3) .........................1 2 : 0 0 noon on Tuesday, August 29, 2023 Announcement of:  the final Offer Price  the level of applications in the Hong Kong Public Offering;  the level of indications of interest in the International Offering; and  the basis of allocation of the Hong Kong Offer Shares to be published on our website at www.immuneonco.com (5) and the website of the Stock Exchange at www.hkexnews.hk on o rb e f o r e ........................................... Monday, September 4, 2023 Results of allocations in the Hong Kong Public Offering (with successful applicants’ identification document numbers, where appropriate) to be available through a variety of channels, including:  in the announcement to be published on our website at www.immuneonco.com (5) and the website of the Stock Exchange at www.hkexnews.hk ......................... Monday, September 4, 2023  from the designated results of allocations website at www.iporesults.com.hk (alternatively: English https://www.eipo.com.hk/en/Allotment ; Chinese https://www.eipo.com.hk/zh-hk/Allotment ) with a “ s e a r c hb yI D ”f u n c t i o nf r o m ...............8 : 0 0a . m .o n Monday, September 4, 2023 to 12:00 midnight on Sunday, September 10, 2023 EXPECTED TIMETABLE (1) –i– --- page 6 ---  from the allocation results telephone enquiry by calling +852 2862 8555 between 9:00 a.m. and 6:00 p.m. on ........ Monday, September 4, 2023, Tuesday, September 5, 2023, Wednesday, September 6, 2023 and Thursday, September 7, 2023 H Share certificates in respect of wholly or partially successful applications to be dispatched/collected or deposited into CCASS on or before (6)(8) ....................................... Monday, September 4, 2023 White Form e-Refund payment instructions/refund cheques in respect of wholly or partially unsuccessful applications under the Hong Kong Public Offering to be dispatched/collected on or before (7)(8) ....................... Monday, September 4, 2023 Dealings in H Shares on the Stock Exchange expected to commence at ................................9 : 0 0a . m .o nT u e s d a y , September 5, 2023 Notes: (1) Unless otherwise stated, all times and dates refer to Hong Kong local times and dates. (2) You will not be permitted to submit your application under the White Form eIPO service through the designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted your application and obtained an application reference number from the designated website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of application monies) until 12:00 noon on the last day for submitting applications, when the application lists close. (3) If there is/are a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above and/or Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, August 29, 2023, the application lists will not open and will close on that day. For further details, please see the section headed “How to Apply for Hong Kong Offer Shares — 10. Effect of Bad Weather and/or Extreme Conditions on the Opening and Closing of the Application Lists” in this prospectus. (4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC via CCASS should refer to the section headed “How to Apply for Hong Kong Offer Shares — 6. Applying through CCASS EIPO service” in this prospectus. (5) None of the websites or any of the information contained on the websites forms part of this prospectus. (6) No temporary documents of title will be issued in respect of the Offer Shares. H Share certificates for the Hong Kong Offer Shares will only become valid evidence of title provided that (i) the Global Offering has become unconditional in all respects and (ii) neither of the Underwriting Agreements has been terminated in accordance with their terms prior to 9:00 a.m. on the Listing Date. Investors who trade H Shares on the basis of publicly available allocation details prior to the receipt of H Share certificates or prior to the H Share certificates becoming valid evidence of title do so at their own risk. (7) e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially unsuccessful applications pursuant to the Hong Kong Public Offering. Part of the applicant’s Hong Kong identity card number or passport number, or, if the application is made by joint applicants, part of the Hong Kong identity card number or passport number of the first-named applicant, provided by the applicant(s) may be printed on the refund check, if any. Such data would also be transferred to a third party for refund purposes. Banks may require verification of an applicant’s Hong Kong identity card number or passport number before encashment of the refund check. Inaccurate completion of an applicant’s Hong Kong identity card number or passport number may invalidate or delay encashment of the refund check. (8) Applicants who have applied on White Form eIPO for 500,000 or more Hong Kong Offer Shares may collect any refund checks (where applicable) and/or share certificates in person from our H Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712−1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong from 9:00 a.m. to 1:00 p.m. on Monday, September 4, 2023 or such other date as notified by us as the date of dispatch/collection of share certificates/e-Refund payment instructions/refund checks. Applicants being individuals who are eligible for personal collection may not authorize any other person to collect on their behalf. Individuals must produce evidence of identity acceptable to our H Share Registrar at the time of collection. Applicants who have applied for Hong Kong Offer Shares through CCASS EIPO service should refer to the section headed “How to Apply for Hong Kong Offer Shares — 14. Despatch/Collection of H Share Certificates and Refund Monies — Personal Collection — (ii) if you apply through CCASS EIPO service” in this prospectus for details. EXPECTED TIMETABLE (1) –i i– --- page 7 --- Applicants who have applied through the White Form eIPO service and paid their applications monies through single bank accounts may have refund monies (if any) dispatched to the bank account in the form of e-Refund payment instructions. Applicants who have applied through the White Form eIPO service and paid their application monies through multiple bank accounts may have refund monies (if any) dispatched to the address as specified in their application instructions in the form of refund checks by ordinary post at their own risk. H Share certificates and/or refund checks for applicants who have applied for less than 500,000 Hong Kong Offer Shares and any uncollected share certificates and/or refund checks will be dispatched by ordinary post, at the applicants’ risk, to the addresses specified in the relevant applications. Further information is set out in the sections headed “How to Apply for Hong Kong Offer Shares — 13. Refund of Application Monies” and “How to Apply for Hong Kong Offer Shares — 14. Despatch/Collection of H Share Certificates and Refund Monies.” The H Share certificates will only become valid evidence of title provided that the Global Offering has become unconditional in all respects and neither the Hong Kong Underwriting Agreement nor the International Underwriting Agreement is terminated in accordance with their respective terms prior to 8:00 a.m. on the Listing Date. The Listing Date is expected to be on or about Tuesday, September 5, 2023. Investors who trade the H Shares on the basis of publicly available allocation details prior to the receipt of H Share certificates or prior to the H Share certificates becoming valid evidence of title do so entirely at their own risk. The above expected timetable is a summary only. For further details of the structure of the Global Offering, including its conditions, and the procedures for applications for Hong Kong Offer Shares, please see the sections headed “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this prospectus, respectively. If the Global Offering does not become unconditional or is terminated in accordance with its terms, the Global Offering will not proceed. In such case, the Company will make an announcement as soon as practicable thereafter. EXPECTED TIMETABLE (1) – iii – --- page 8 --- IMPORTANT NOTICE TO PROSPECTIVE INVESTORS This prospectus is issued by our Company solely in connection with the Hong Kong Public Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered by this prospectus pursuant to the Hong Kong Public Offering. This prospectus may not be used for the purpose of making, and does not constitute, an offer or invitation in any other jurisdiction or in any other circumstances. No action has been taken to permit a public offering of the Hong Kong Offer Shares in any jurisdiction other than Hong Kong and no action has been taken to permit the distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution of this prospectus for purposes of a public offering and the offering and sale of the Hong Kong Offer Shares in other jurisdictions are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory authorities or an exemption therefrom. You should rely only on the information contained in this prospectus to make your investment decision. The Hong Kong Public Offering is made solely on the basis of the information contained and the representations made in this prospectus. We have not authorized anyone to provide you with information that is different from what is contained in this prospectus. Any information or representation not contained nor made in this prospectus must not be relied on by you as having been authorized by our Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, any of the Underwriters, any of our or their respective directors, officers, employees, agents or representatives of any of them or any other parties involved in the Global Offering. Information contained on our website (www.immuneonco.com ) does not form part of this prospectus. Page Expected Timetable ...................................................... i Contents .............................................................. i v Summary .............................................................. 1 D e f i n i t i o n s ............................................................ 2 9 Glossary of Technical Terms ............................................... 4 0 Forward-Looking Statements ............................................... 5 2 Risk Factors ........................................................... 5 4 Waivers from Strict Compliance with the Listing Rules and Exemption from Compliance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance ......................... 1 1 2 Information about this Prospectus and the Global Offering ........................ 1 1 9 Directors, Supervisors and Parties Involved in the Global Offering .................. 1 2 3 C o r p o r a t eI n f o r m a t i o n .................................................... 1 2 8 CONTENTS –i v– --- page 9 --- Industry Overview ....................................................... 1 3 0 Regulatory Overview ..................................................... 1 6 8 History, Development and Corporate Structure ................................. 1 9 7 B u s i n e s s.............................................................. 2 2 7 Relationship with Our Controlling Shareholders ................................ 3 3 5 C o r n e r s t o n eI n v e s t o r s.................................................... 3 3 8 Share Capital .......................................................... 3 4 3 Substantial Shareholders .................................................. 3 4 6 Directors, Supervisors and Senior Management ................................. 3 4 9 Financial Information .................................................... 3 6 6 Future Plans and Use of Proceeds ........................................... 4 0 8 Underwriting ........................................................... 4 1 1 Structure of the Global Offering ............................................ 4 2 2 How to Apply for Hong Kong Offer Shares ................................... 4 3 1 Appendix IA — Accountants’ Report ...................................... I A - 1 Appendix IB — Unaudited Condensed Consolidated Financial Statements of the Group as of and for the Six Months Ended June 30, 2023 ..... I B - 1 Appendix II — Unaudited Pro Forma Financial Information .................... II-1 Appendix III — Summary of Articles of Association .......................... III-1 Appendix IV — Statutory and General Information ........................... I V - 1 Appendix V — Documents Delivered to the Registrar of Companies in Hong Kong and Available on Display ............ V - 1 CONTENTS –v– --- page 10 --- This summary aims to give you an overview of the information contained in this prospectus. As this is a summary, it does not contain all the information that may be important to you. You should read the entire document before you decide to invest in the Hong Kong Offer Shares. There are risks associated with any investment. Some of the particular risks in investing in the Hong Kong Offer Shares are set out in “Risk Factors.” In particular, we are a biotechnology company seeking a listing on the Main Board of the Stock Exchange under Chapter 18A of the Listing Rules on the basis that we are unable to meet the requirements under Rule 8.05 (1), (2) or (3) of the Listing Rules. You should read that section carefully before you decide to invest in the Hong Kong Offer Shares. OVERVIEW Founded in June 2015 in the PRC, we are a clinical-stage biotechnology company dedicated to the development of immuno-oncology therapies. We have developed our Core Product, IMM01, an innovative clinical-stage CD47-targeted molecule. Including IMM01, our pipeline consists of 14 drug candidates featured by a comprehensive innate-immunity-based asset portfolio targeting CD47 and other novel immune checkpoints, with eight ongoing clinical programs. SUMMARY –1– --- page 11 --- WE MAY NOT ULTIMATELY BE ABLE TO DEVELOP OR MARKET OUR CORE PRODUCT SUCCESSFULLY. The following chart summarizes the development status of our selected drug candidates as of the Latest Practicable Date: Notes: (1) All of our clinical- and IND-stage drug candidates are classified as Category 1 innovative drugs, and preclinical- and disco very-stage drug candidates are expected to be classified as Category 1 innovative drugs, in accordance with relevant laws and regulation in China. (2) Due to certain products being in the preclinical or discovery stages, their line of treatment has not been decided yet. The Company will determine the line of treatment based on the progress of the drug development. (3) Expected completion date for Phase Ia/I trial refers to the time when RP2D can be determined, and expected completion date for Phase Ib/II trial refers to the time when top-line data is available for regulatory discussions. Follow-up period required would not delay the initiation of the next phase clinical trials, and is thus not considered. (4) We completed the Phase I dose-escalation study of IMM01 monotherapy in R/R lymphoma in January 2022. In accordance with the relevant laws and guidance of the NMPA, the safety and other clinical data from the Phase I monotherapy trial, combined with preclinical study results, form the basis for us to obtain the IND approvals of our multiple IMM01-based combination therapy programs. The favorable safety profile of IMM01 observed in this Phase I trial enabled us to progress directly to the Phase Ib/II trials for our various combination programs. In June 2022, we have completed a Phase Ib trial to evaluate IMM01 in combination with azacitidine for the treatment of R/R MDS and R/R AML, and initiated a Phase II trial mainly for the first-line treatment of higher-risk MDS, unfit AML and CMML. We have also completed a Phase Ib cl inical trial for IMM01 in combination with tislelizumab, and initiated a Phase II trial in December 2022. Based on ongoing evaluation of emerging data across our different clinical programs as well as anticipated synergistic effects of IMM01 and tislelizumab for treating cHL, we strategically plan to prioritize our resources on the clinical development of IMM01-based combination therapies and CD47-based bispecific molecules, which are expected to demonstrate stronger clinical activity and a higher likelihood of obtaining marketing approval. Consequently, we terminated the Phase II clinical trial for IMM01 monotherapy in October 2022 after discussion with principal investigators. Benefited patients in IMM01 monotherapy trials will continue to receive treatment until their diseases progress. (5) The cohort-expansion trials of this combination are mainly designed to target the first-line treatment of higher-risk MDS (p atients who fall into higher-risk group categories in the original or revised International Prognostic Scoring System), unfit AML (individuals of older age with AML who are considered not eligible for intensive treatment approaches), and CMML. Part icularly, we plan to seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML, a rare type of disease with highly unmet medical needs. (6) This combination of IMM01 and tislelizumab targets all subtypes of cHL. (7) In July 2022, we obtained the NMPA’s consent for adding R/R cHL as an additional expansion cohort into the ongoing combinat ion trial of IMM01 and tislelizumab. We dosed the first patient with R/R cHL in China in January 2023. (8) The clinical trial is led and funded by Sunshine Guojian Pharmaceutical (Shanghai) Co., Ltd. (“ Sunshine Guojian”). As denoted by the dotted line, Sunshine Guojian and us have obtained an IND approval for a Phase Ib/II trial of this combination therapy from the NMPA in August 2021, and therefore the parties can skip the Phase Ia stage and directly initiate a Phase Ib/II trial. (9) We will continue to conduct preclinical studies for IMM2547, IMM51, IMM38, IMM50 and IMM62, including cell line development , in vivo studies and further evaluation. (10) We are currently conducting the Phase I trial for IMM27M monotherapy, and have obtained the IND approval for a Phase Ib/II trial for its combination with a PD-1 antibody. * Currently we have several other drug candidates in preclinical stage and plan to further develop these candidates through col laboration, such as IMM2518, a second-generation VEGF×PD-L1 bispecific molecule and IMM5601, a CD47×CD38 bispecific molecule. Abbreviations: MDS refers to myelodysplastic syndrome; AML refers to acute myeloid leukemia; CMML refers to chronic myelomonocytic leukemia; MM refers to multiple myeloma; B-NHL refers to B-cell non-Hodgkin lymphoma; cHL refers to classical Hodgkin lymphoma; IND refers to investigational new drug; CMC refers to chemistry, manufacturing, and controls; ADCC refers to antibody-dependent cellular cytotoxicity. Source: Company Data Adaptive Immunity Innate Immunity Program(1) Target (Modality) IND/IND- Enabling Phase Ia/I Phase Ib/II Phase III/ Pivotal Current Status / Upcoming Milestone(3) Commercial Rights IMM01(4) IMM01 + Azacitidine CD47 (SIRPα-Fc fusion protein) MDS (unfit 1L), AML (1L), CMML (1L)(5) Phase Ib/II commenced in January 2022; expect to complete Phase II and initiate pivotal trial in Q1 2024 Global IMM01 + Tislelizumab CD47+PD-1 Phase Ib/II commenced in May 2022; expect to complete Phase II in Q3 2024 and initiate pivotal trial in Q4 2024(7) Global Global Global IMM01 + Inetetamab CD47+HER2 HER2-positive solid tumors (2L&3L) cHL (≥3L) (6), Solid tumors (2L&3L) devorppaDNIII/bIesahP devorppaDNIII/bIesahPIMM01 + Bortezomib + Dexamethasonum CD47 IMM0306 Monotherapy CD47xCD20 (Bispecific molecule) Indolent B-NHL (≥3L) Phase IIa commenced in March 2023 in China; IND approved in the U.S. Global IMM0306 + Lenalidomide CD47xCD20 (Bispecific molecule) B-NHL (2L) IMM2902 CD47xHER2 (Bispecific molecule) HER2-positive and low-expressing solid tumors (2L&3L) Phase Ia commenced in February 2022 in China and in June 2022 in the U.S.; expect to largely complete Phase Ia trials in China and the U.S. in 2023 Global Global IMM2520 CD47xPD-L1 (Bispecific molecule) Solid tumors (≥2L) IND approved in China and the U.S. in Q4 2022; Phase I commenced in China in March 2023 Global IMM47 CD24 (mAb) Solid tumors (≥2L) labolGg; expect to enter into clinical trials in August 2023nilbane-DNI IMM4701 CD47xCD24 (Bispecific molecule) Solid tumors labolGCMC IMM2547(9) CD24xPD-L1 (Bispecific molecule) Solid tumors labolGyrevocsiD IMM51(9) IL-8 (mAb) Solid tumors labolGlacinilcerP IMM38(9) NKG2A (mAb) Solid tumors Preclinical Global IMM50(9) PSGL-1 (mAb) Solid tumors Discovery Global IMM62(9) Undisclosed Solid tumors Discovery Global IMM2510 VEGFxPD-L1 (Bispecific molecule) Solid tumors (2L&3L) Phase I commenced in August 2021 and 8th cohort ongoing in China; expect to complete Phase I in Q3 2023 Global IMM27M CTLA-4 ADCC+ (mAb) Solid tumors (≥2L) Phase I commenced in June 2022 in China; expect to complete in Q3 2023; IND approved in China for Phase Ib/II trial for its combination with a PD-1 antibody(10) Global IMM40H CD70 (mAb) Liquid/Solid tumors (≥2L) IND approved in China and the U.S. in August 2022 Global Innate Immunity Targets Innate Immunity Targets Adaptive Immunity Targets Adaptive Immunity Targets Innate and Adaptive Immunity Targets Innate and Adaptive Immunity Targets Key ProductCore Product China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA) China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA) China (NMPA)China (NMPA) China (NMPA) China (NMPA)China (NMPA) China (NMPA)China (NMPA) China (NMPA) China (NMPA) China (NMPA)China (NMPA) China (NMPA)China (NMPA) (8) Discovery PreclinicalIndication(s) (line of treatment)(2) MM (≥4L) Phase Ib/IIa commenced in June 2023 SUMMARY –2– --- page 12 --- Our Key Products, namely IMM0306 (CD47×CD20), IMM2902 (CD47×HER2) and IMM2520 (CD47×PD-L1), are three CD47-based bispecific molecules. Both of IMM0306 and IMM2902 are the first bispecific molecules with their respective targets globally to enter clinical trials. IMM2520 is also a highly differentiated molecule with the potential to treat a broad spectrum of cancers and has demonstrated promising efficacy targeting solid tumors in preclinical studies. In addition, our pipeline also includes ten other drug candidates that address key innate and adaptive immune targets at various development stages, including CD24 antibody, CD24-targeted bispecific molecules, and three clinical and IND stage adaptive immunity-based drug assets. Our pipeline reflects our grasp of the frontiers of cancer biology and immunology, and our expertise in turning scientific research into drug candidates. Our founder, Dr. Wenzhi Tian, began to explore the therapeutic potential of CD47 blockade in 2010, long before this innate immune checkpoint became widely recognized and clinically validated in the biopharmaceutical industry. Based on our understanding of the biology underlying CD47-SIRP α interaction and its potential synergy with other tumor targets and/or immune checkpoints, we have built a differentiated CD47-based portfolio with favorable safety and efficacy profiles since our inception in 2015. In addition to CD47, we have selected and validated another innate immune checkpoint, CD24, in recent years. Around CD24, we are developing one IND-enabling-stage and several discovery- and preclinical-stage drug candidates, each with the potential to become the first few of its class to enter into clinical stage around the world. Moreover, we are also developing drug candidates that target other promising innate and adaptive immune checkpoints, including IL-8, NKG2A and PSGL-1, to maximize the clinical and commercial value of our platform. OUR KEY PRODUCTS REMAIN IN EARLY-STAGES OF CLINICAL DEVELOPMENT, AND IN PARTICULAR, WE MAY OR MAY NOT DEVELOP OR MARKET THEM SUCCESSFULLY. Our continuous innovation is driven by an experienced and stable R&D team led by Dr. Tian. Core members of our R&D team have been working with Dr. Tian for over 10 years and possess multi-disciplinary expertise in drug discovery, design and development. Emulating the “Quality-by-Design (QbD)” concept that is intended to improve drug product quality by using analytical and risk-management methodologies, we created the “Drug-by-Design (DbD)” concept that emphasizes the fundamental role of molecule design rationale in the process of large molecule drug development. This concept requires that the structure of every drug molecule be deliberately designed with a sound scientific rationale predicated on target-specific biological functions and validated in preclinical studies. Under the guidance of our “DbD” concept and the leadership of Dr. Tian, we have built a fully-integrated R&D platform. It features our proprietary technologies and know-how (including our mAb-Trap bispecific antibody platform technology) and encompasses all key functionalities throughout the drug development process. For 2021, 2022 and the four months ended April 30, 2023, our R&D expenses (including share-based payments) were RMB176.0 million, RMB277.3 million and RMB75.0 million, respectively. The R&D expenses attributable to our Core Product (including share-based payments) were RMB43.4 million, RMB116.8 million and RMB22.9 million in the same periods, respectively. Our Business Model Our core business model is to in-house discover, develop and commercialize novel immuno-oncology therapies to address highly unmet medical needs. To complement our internal efforts, we may also collaborate with third parties on the clinical development and commercialization of our drug candidates to better capture tremendous market opportunities through out-licensing, co-commercialization or other strategic collaborations. We are collaborating with Sunshine Guojian to conduct clinical trials evaluating a combination therapy using CIPTERBIN ® (inetetamab, a HER2 mAb) and IMM01 for HER2-positive solid tumors in mainland China, and Sunshine Guojian will drive and fund relevant clinical trials. For details, please refer to the paragraphs headed “Business — Collaboration Agreements” in this prospectus. SUMMARY –3– --- page 13 --- Our Core Product and Key Products Our Core Product — IMM01 (SIRP α-Fc fusion protein) IMM01, our Core Product, is an innovative CD47-targeted molecule. It is the first SIRP α-Fc fusion protein to enter into clinical stage in China. IMM01 is being developed for the treatment of various blood cancers and solid tumors in combination with other agents. We (i) have completed the Phase I dose-escalation study of IMM01 in relapsed or refractory (R/R, a condition of a disease that is not being effectively managed or improved with previous treatments) lymphoma patients, (ii) have completed a Phase Ib trial to evaluate IMM01 in combination with azacitidine for the treatment of certain R/R blood cancers, and initiated a Phase II trial mainly for the first-line treatment of higher-risk (HR) MDS, unfit AML and chronic myelomonocytic leukemia (CMML, a rare type of blood cancer) in June 2022, and (iii) have completed a Phase Ib clinical trial and initiated a Phase II trial in December 2022 to evaluate IMM01 in combination with tislelizumab for the treatment of solid tumors, including among others, non-small cell lung cancer (NSCLC), small cell lung cancer (SCLC), and head and neck squamous cell carcinoma (HNSCC), which are all advanced solid tumors that failed to respond to or relapsed from the standard of care such as PD-1/PD-L1 inhibitors, as well as R/R classical Hodgkin lymphoma (cHL). We have also obtained an IND approval for the Phase Ib/IIa clinical trial to evaluate the combination of IMM01 with bortezomib and dexamethasonum for the treatment of MM from the NMPA in January 2023. With preliminary efficacy and favorable safety in monotherapy clinical trials and preclinical data of its combination studies, IMM01 is expected to achieve strong synergistic effects used in combination with other cancer agents. IMM01 can fully activate macrophages via a dual mechanism — simultaneously blocking the “don’t eat me” signal and delivering the “eat me” signal and delivering the “eat me” signal. Furthermore, the CD47-binding domain of IMM01 was specifically engineered to avoid human red blood cell (RBC) binding. With the differentiated molecule design, IMM01 has achieved a favorable safety profile and demonstrated its ability to activate macrophages. Among numerous drug developers of CD47-targeted molecules globally, we are one of the only two companies 1 to have observed complete response (CR) in monotherapy clinical trials with a well tolerated safety profile, according to Frost & Sullivan. For the details on the mechanism of action, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM01 — Mechanism of Action.” IMM01 was discovered, designed and developed by key R&D personnel of our Company, Dr. Wenzhi Tian and Dr. Deqiang Jing, when they worked at their respective former employers. For details, please refer to “Business — Intellectual Property.” We acquired full ownership and related interests in IMM01 after our establishment in 2015, and since then we have continued the preclinical research and are conducting clinical trials to develop IMM01 with our internal team and resources during the Track Record Period and up to the Latest Practicable Date. We are the sole owner of the intellectual property rights and global commercial rights in relation to IMM01. For details of key personnel for the R&D of IMM01, please refer to “Business — Our Platform — Drug Discovery and Preclinical Development” and “Business — Our Platform — Clinical Development.” The currently approved immunotherapies primarily target T-cell immune checkpoints, including PD-1/PD-L1, CTLA-4 and LAG-3. However, only about 10% to 25% of patients across almost all major cancer types can benefit from PD-1/PD-L1 monotherapy treatment. To overcome the limitations of the current immunotherapies, mounting research highlights the potential to deploy innate immunity-targeted strategies for the treatment of a wide range of cancer indications. Among those, the CD47/SIRP α pathway has been clinically validated and became one of the most attractive and innovative immune targets for cancer treatment. Addressable markets and competitive landscape Given the potential broad-spectrum clinical application of CD47/SIRP α-targeted therapies, this new class of therapies presents vast market opportunities globally. 53 CD47/SIRP α-targeted drug candidates are currently under clinical development in China and globally, including fusion proteins, monoclonal antibodies, and bispecific molecules by 24 drug developers in China and 22 worldwide outside of China. As of the Latest Practicable Date, there were six CD47-targeted fusion proteins and 19 CD47-targeted monoclonal antibodies under clinical development globally. As of the Latest Practicable Date, there were no CD47-targeted therapies approved for marketing in China or the rest of the world. For details of competitive landscape of CD47/SIRP α-targeted fusion proteins and monoclonal antibodies, please refer to the paragraphs headed “Industry 1 Trillium Therapeutics (acquired by Pfizer in 2021) is another drug developer, besides us, that has observed CR in monotherapy clinical trials of CD47-targeted molecules with a well tolerated safety profile. SUMMARY –4– --- page 14 --- Overview — Promising Immunotherapies Targeting Innate Immune Checkpoints — Overview of CD47/SIRP α-targeted Drugs — Global and China CD47/SIRP α-targeted drugs competitive landscape — CD47-targeted fusion proteins and monoclonal antibodies.” According to Frost & Sullivan, the global market size of CD47/SIRP α-targeted therapies is expected to reach US$12.6 billion and US$35.4 billion in 2030 and 2035, respectively. China’s CD47/SIRP α-targeted therapy market is expected to grow to US$2.2 billion in 2030 and US$6.7 billion in 2035, with a higher growth rate compared to that of the global market. The prospect promised by CD47-targeted therapies was also validated by several multi-billion dollar take-over transactions of CD47 focused biotechnology companies as well as licensing deals for CD47-targeted agents backed by leading multinational pharmaceutical companies, including Gilead, Pfizer and AbbVie. Nonetheless, such growing market trend signifies that we face the intense competition in the development of CD47-targeted molecule. Globally, in addition to those large multi-national pharmaceutical firms that ventured into this realm through acquisitions, multiple companies are also developing CD47-targeted therapies, such as ALX Oncology, I-MAB and Innovent. Potential competitors also include academic institutions, government agencies, other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available. According to Frost & Sullivan, as of the Latest Practicable Date, there were no commercialized CD47/SIRP α-targeted drugs globally. Barriers to the design and development of effective and safe CD47-targeted drugs include blood toxicity, antigenic sink, Fc isotype selection and resulting efficacy, as well as T-cell toxicity. Failures to overcome these barriers may result in compromised efficacy, drug resistance and severe side effects. For details, please refer to the paragraphs headed “Industry — Promising Immunotherapies Targeting Innate Immune Checkpoints — Overview of CD47/SIRP α-targeted Drugs — Scientific barriers to CD47/SIRP α-targeted drug development.” To address these potential issues, we carefully designed IMM01 with the specific engineered CD47-binding domain and IgG1 Fc to achieve enhanced efficacy balanced with well-tolerated safety profile. We are developing the combination therapy of IMM01 and azacitidine for the first-line treatment of various blood cancers, including HR MDS, unfit AML, and CMML. According to Frost & Sullivan, the total incidence of MDS/CMML and AML was 470.1 thousand and 54.2 thousand in 2022 globally and in China, respectively, and is expected to increase to 553.2 thousand and 61.6 thousand in 2030 globally and in China, respectively. MDS/CMML and AML are two types of hematologic cancers that lack effective options for first-line treatments as current first-line treatments are still limited to conventional chemotherapy. Please refer to “Industry Overview — Selected Indications Analysis — Hematologic Malignancies” for further details on current treatment paradigm and unmet medical needs of MDS/CMML and AML. Our combination therapy of IMM01 and tislelizumab is being evaluated in the ongoing clinical trials for the treatment of various advanced solid tumors that are not responsive to or relapsed from the standard of care such as PD-1/PD-L1 inhibitors, including among others, lung cancer (NSCLC and SCLC) and HNSCC. The total incidence of solid tumors, including among others, NSCLC, SCLC, and HNSCC was 7.0 million and 2.3 million in 2022 globally and in China, respectively, and is expected to increase to 8.6 million and 2.9 million in 2030 globally and in China, respectively. We are also evaluating this combination therapy in R/R cHL patients. The total incidence of cHL was 6.7 thousand and 81.0 thousand in 2022 globally and in China, respectively, and is expected to increase to 7.1 thousand and 90.3 thousand in 2030 globally and in China. Please refer to “Industry Overview — Selected Indications Analysis — Solid Tumors” for further details on current treatment paradigm and unmet medical needs of NSCLC, SCLC, and HNSCC. Monotherapy IMM01 single agent has demonstrated encouraging results in safety and efficacy in our Phase I dose-escalation study targeting R/R lymphoma. For details, please refer to “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM01 — Summary of Clinical Trial Results.” We initiated our clinical development of IMM01 through its monotherapy trial, and subsequently expanded our focus to encompass combination therapy programs, driven by the safety profile of IMM01 monotherapy and its observed synergistic effects with other cancer agents. With positive efficacy signals obtained from the Phase I monotherapy trial, we commenced a Phase II cohort-expansion study for IMM01 monotherapy in October 2021, with the primary goal of developing this monotherapy for one or two niche lymphoma indications. In light of the emerging data from our various clinical programs and prevailing industry trends, we observed that IMM01 SUMMARY –5– --- page 15 --- combination therapies and CD47-based bispecific molecules exhibited stronger clinical activity for the indications initially targeted by IMM01 monotherapy, suggesting a higher probability of obtaining marketing approval. As a result, we strategically reallocated our resources to prioritize the development of combination and bispecific therapies, and subsequently terminated the Phase II monotherapy trial in October 2022, following consultation with principal investigators. On April 26th, 2023, we informed the NMPA through the chinadrugtrials platform (ڦ ʮ̨̻ͪ , a trial registration and publicity platform operated by CDE) of the termination of the Phase II monotherapy clinical trial for IMM01 and have not received any material objections or requests for additional information. The NMPA did not and will not revoke the existing IND approvals due to the termination of the Phase II monotherapy trial. IMM01 will be regulated as the same drug product by the NMPA under the currently effective Drug Registration Administration Measures, regardless of whether IMM01 is used as monotherapy or in combination therapies. The Company conducted a formal consultation with the CDE of the NMPA through the NMPA’s official communication and consultation channel “Drug Registration Applicant’s Window” (ൗ̅͡ሗɛʘ೿ ) between March 28 and March 31, 2022. Based on the consultation and as confirmed by the Company’s PRC legal advisor, a cancer drug (first approved in combination therapies, as is the expected case with IMM01) will remain registered with the NMPA under the same drug approval number when additional supplemental NDA approvals for new indications are obtained through the use of such drug in various combination therapies (if such indication has previously been approved by the NMPA) after the first NDA approval of that drug, as long as the structure, preparation, formulation, and route of administration of such cancer drug remain unchanged in the various newly approved combination therapies. Therefore, under the NMPA’s regulatory regime, once IMM01 receives initial approval for use in one combination therapy, IMM01, the single drug product itself, will be registered under a drug registration certificate with a designated drug approval number. Subsequent approvals for IMM01, when used in other combination therapies for other indications which have obtained competent authorities’ regulatory approvals, will remain registered and regulated as the same single product under the same drug registration certificate with the same drug approval number. In light of the termination of the Phase II monotherapy trial and the suspension or termination of clinical trials of CD47-targeted drug candidates by other drug developers, the Company conducted another formal consultation with the CDE of the NMPA through the Drug Registration Applicant’s Window between April 25 and May 17, 2023. During this consultation, the Company (the trial sponsor for clinical trials of IMM01) summarized and presented the relevant facts and circumstances related to the development status of IMM01. Based on this factual summary, the Company sought confirmation from the CDE as to whether the trial sponsor may, after termination of the Phase II monotherapy trial or after the suspension or termination of clinical trials of same-target drug candidates by other drug companies, continue to advance the various combination therapy clinical trials according to previously approved trial designs and protocols. The CDE, during this consultation, reviewed the Company’s factual summary and consultation questions and confirmed that the trial sponsor itself may choose to suspend or terminate any of its clinical trials. In the consultation, the CDE did not question the Company’s discretion to proceed with the (monotherapy or combination therapy) trials of its own drug candidate (including to advance its combination therapy trials in accordance with previously-approved trial designs and protocols); nor did the CDE require any modification to the previously-approved trial designs and protocols for the combination therapy trials, despite termination of the Phase II monotherapy trial or suspension or termination of other companies’ clinical trials of drug candidates with the same target. The CDE reminded the Company that, in the event of any serious safety issues with any of the trials, the trial sponsor needs to timely report to, and communicate with, the regulatory authority. As of the Latest Practicable Date, the Company has not received any queries, limitations or requirements regarding its combination therapy trials and previously-approved trial designs and protocols, and the Company remains committed to complying with the applicable reporting and other obligations under the relevant rules and regulations. Combination of IMM01 and azacitidine We are evaluating the combination of IMM01 and azacitidine for the first-line treatment of various blood cancers, including HR MDS, unfit AML, and CMML. Upon completion of the Phase Ib trial, we initiated a Phase II cohort expansion trial of IMM01 and azacitidine mainly for the first-line treatment of HR MDS, unfit AML and CMML in China in June 2022. Particularly, we plan to seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML, a rare type of disease with highly unmet medical needs. Subject to the clinical results of Phase II trial, we expect to commence a pivotal trial in China in the first quarter of 2024. SUMMARY –6– --- page 16 --- As validated by multiple publicly reported clinical trials, the combination of CD47-targeted therapies and azacitidine can generate synergistic tumor-killing effects. However, since azacitidine also induces blood toxicity, its combination with CD47 antibodies (which also cause blood toxicity) may lead to exacerbated blood toxicity and serious safety issues. In contrast, based on the initial data from our ongoing Phase Ib/II clinical trial, IMM01 presents strong potential to be a combination partner with azacitidine because of its dual mechanisms and favorable safety profile. IMM01 is also safer than CD47 antibodies partly due to the significantly lower dose required (2.0 mg/kg), as compared to the typical dose of 30.0 to 45.0 mg/kg required for CD47 antibodies. Specifically, for the first-line treatment of MDS, I-MAB’s lemzoparlimab, Gilead’s magrolimab, and Innovent’s IBI188 have achieved ORRs of 80.6%, 90.9%, and 93.9% after three cycles of treatment, respectively, when each used at a dose level of 30 mg/kg in combination with azacitidine. In comparison, IMM01’s combination with azacitidine has achieved an ORR of 93.8% at 2.0 mg/kg after three cycles of treatment. Interim data as of February 10, 2023 from the Phase Ib/II clinical trial has demonstrated favorable safety profile and promising efficacy profile. For further details of preclinical and clinical data, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM01 — Competitive Advantages of IMM01-based Combination Therapies.” Subject to further clinical validation, we plan to file an IND application for a Phase II study with the FDA for this combination treatment. For further details of clinical plan, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM01 — Clinical Development Plan.” Combination of IMM01 and tislelizumab We intend to develop the combination therapy of IMM01 and tislelizumab for the treatment of cancers that are not responsive to or relapsed from the standard of care such as PD-1/PD-L1 inhibitors, including among others, NSCLC, SCLC, and HNSCC. We are currently evaluating IMM01 and tislelizumab in a Phase II trial in various advanced solid tumors that failed to respond to or relapsed from the standard of care such as PD-1/PD-L1 inhibitors. In addition, we are also evaluating this combination therapy in cHL patients who relapsed or progressed after the treatment of PD-1 inhibitors in this Phase Ib/II trial, which may allow us to pursue an accelerated marketing approval leveraging the results of relatively small sample size studies. So far, PD-1/PD-L1 inhibitor monotherapy only produces meaningful responses in 10% to 25% patients across almost all major cancer types. Moreover, survival benefits of current combination therapies based on PD-1/PD-L1 inhibitors are limited in many cancer types, highlighting a clear need for other effective treatment options to improve treatment outcomes for patients. Unlike CD47 antibodies, IMM01 is designed to fully activate macrophages by activating an additional “eat me” signal. Activated macrophages can then secrete certain signaling proteins to recruit T cells to tumor sites, thus effectively converting “cold tumors” (tumors that lack T-cell infiltration) into “hot tumors” that are more responsive to the treatment of PD-1/PD-L1 inhibitors. Our preclinical studies have demonstrated promising synergistic antitumor effects for the combination of IMM01 with either PD-1 or PD-L1 inhibitors. For further details of preclinical data, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM01 — Competitive Advantages of IMM01-based Combination Therapies.” We have completed the Phase Ib trial and initiated the Phase II trial in December 2022. In our Phase Ib trial, a heavily pre-treated NSCLC patient with six lines of prior treatment and refractory to PD-1 inhibitors achieved partial response (PR) after three cycles of treatment with target lesion shrinkage of 40%. In July 2022, we obtained the NMPA’s consent for adding R/R cHL as an additional expansion cohort into the ongoing combination trial of IMM01 and tislelizumab. We dosed the first patient with R/R cHL in January 2023. For further details of clinical plan, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM01 — Clinical Development Plan.” Combination of IMM01 and other drugs IMM01 has demonstrated a positive efficacy and safety profile in its Phase I monotherapy trial, which sets the stage for its combination use with other immunotherapies or targeted therapies. We are currently exploring therapeutic potential of IMM01 in combination with various other drugs for a range of cancer indications. We reached a collaboration with Sunshine Guojian, under which Sunshine Guojian will be primarily responsible for driving and funding the clinical SUMMARY –7– --- page 17 --- development of the combination treatment of IMM01 and inetetamab for HER2-positive solid tumors in mainland China. For details of our collaboration with Sunshine Guojian, please refer to the paragraphs headed “Business — Collaboration Agreement.” We have observed potent antitumor activities of IMM01 combined with bortezomib and dexamethasonum in preclinical studies using MM xenograft model in mice, and subsequently obtained an IND approval for the Phase Ib/IIa clinical trial to evaluate this combination therapy for the treatment of MM from the NMPA in January 2023. We may seek partnership to advance the development of this combination therapy in the future. We are also conducting numerous preclinical studies to evaluate the combination use of IMM01 with other drugs. These combination studies have revealed strong synergistic potential in our mouse models. Our Key Products Our Key Products include IMM0306 (CD47×CD20), IMM2902 (CD47×HER2) and IMM2520 (CD47×PD-L1), which are CD47-based bispecific molecules developed on our proprietary bispecific platform. Their unique structural design allows our CD47-based bispecific molecules to avoid RBC binding, thus enabling full macrophage activation and much improved innate and adaptive immune activities, which results in stronger antitumor immune responses compared to most other CD47 bispecific antibodies. Compared to combination therapies against the same targets, our bispecific molecules are able to bind with two targets co-expressed on the same cancer cell, which is the prerequisite for the dual-targeting strategy to show synergistic effects. As demonstrated in our preclinical studies, our bispecific molecules can exert at least comparable antitumor activity than the combination therapies with same targets even at a relatively lower dose level. In addition, the symmetric structure of our bispecific molecules developed on our mAb-Trap platform minimizes mismatch during the production process, allowing for ease of manufacturing, product stability, higher titer and protein yield. Addressable markets and competitive landscape The following table summarizes the addressable patients and number of competing drug candidates for our key products. For more information regarding the addressable markets and competitors of our key products, please refer to the paragraphs headed “Industry Overview — Promising Immunotherapies Targeting Innate Immune Checkpoints — Overview of CD47/SIRP α-targeted Drugs — Global and China CD47/SIRP α-targeted drugs competitive landscape — CD47-targeted bispecific molecules.” Key Products Indication Addressable Patients (thousand) Number of competitors 1 China Global 2022 2030E 2022 2030E IMM0306 ...... R/R B-cell NHL 39.4 47.2 229.9 275.4 1 IMM2902 ...... HER2-positive and HER2-low expressing solid tumors 3,435.8 4,217.1 13,393.9 16,287.8 0 IMM2520 ...... Solid 3,079.6 3,823.3 10,118.1 12,441.5 8 Note: (1) “Competitors” refer only to bispecific molecules with the same targets as our respective key products. SUMMARY –8– --- page 18 --- IMM0306 (CD47×CD20) IMM0306, one of our Key Products, is the first CD47×CD20 bispecific molecule globally to enter into clinical stage. We are currently developing IMM0306 for the treatment of R/R B-NHL. It has a higher affinity for CD20 than CD47, which enables it to preferentially and simultaneously bind to CD20 and CD47 on malignant B cells rather than CD47-positive normal tissues and further mitigate CD47-related toxicity. For the details on the mechanism of action, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM0306 — Mechanism of Action.” Our preclinical studies suggest that IMM0306 is more potent than RITUXAN ® (rituximab, a CD20 mAb) monotherapy, even at a much lower dosing level, and it is more potent than the combination therapy of IMM01 and rituximab at a comparable dosing level. We initiated a Phase I trial for IMM0306 in R/R B-NHL in China in May 2020, of which the preliminary data demonstrated encouraging results in safety and efficacy. For further details of clinical data, please refer to “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM0306 — Competitive Advantages.” The clinical results of IMM0306 have provided further validation of our mAb-Trap platform. We commenced a Phase IIa trial for IMM0306 monotherapy for the third- or later-line treatment of follicular lymphoma (FL), a slow-growing type of NHL, in March 2023 and plan to seek an accelerated marketing approval through a single-arm trial. We expect to commence pivotal clinical trials in China in the third quarter of 2024. Furthermore, our IND application for the combination of IMM0306 and lenalidomide targeting front-line B-NHL was approved by the NMPA in January 2023. We have commenced the Phase Ib/IIa clinical trial for this combination in China, with the first patient dosed in June 2023. We have also received an IND approval for IMM0306 from the FDA in January 2021. With further clinical validation in the clinical trials in China, we will then decide on our clinical development and collaboration strategy for IMM0306 in the U.S. For further details, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM0306 — Clinical Development Plan.” IMM2902 (CD47×HER2) IMM2902, one of our Key Products, is currently the only CD47×HER2 bispecific molecule that has entered into clinical stage globally. Our IMM2902 is being developed for the treatment of HER2-positive and HER2-low expressing solid tumors. IMM2902 suppresses tumor cell growth and proliferation through the blockade of HER2 and CD47/SIRP α inhibitory signals as well as the promotion of HER2 degradation, and further destroys tumor cells through enhanced innate immune responses. For the details on the mechanism of action, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM2902 — Mechanism of Action.” Our preclinical studies demonstrated strong antitumor activities of IMM2902 in a variety of breast and gastric tumor models, including those with HER2-low expression and resistant to trastuzumab. We are conducting a Phase Ia/Ib clinical trial in China to evaluate IMM2902 in advanced HER2-positive and HER2-low expressing solid tumors, including breast cancer (BC), gastric cancer (GC), non-small cell lung cancer (NSCLC) and biliary tract cancer (BTC), with the first patient dosed in February 2022. IMM2902 was shown to be safe and well tolerated up to 2.0 mg/kg. Dosing is ongoing for higher dose level cohorts. We have also initiated the clinical trial for advanced HER2-positive and HER2-low expressing solid tumors in the U.S. with the first patient dosed in June 2022. We have received the Fast Track Designation from the FDA in July 2022. For further details, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM2902 — Clinical Development Plan.” SUMMARY –9– --- page 19 --- IMM2520 (CD47×PD-L1) IMM2520, one of our Key Products, is a CD47×PD-L1 bispecific molecule for the treatment of solid tumors. By targeting CD47 and PD-L1 on tumor cells and with its unique design, IMM2520 can simultaneously activate macrophages and T cells to achieve strong synergistic effects and trigger lasting immune responses against tumors. For the details on the mechanism of action, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM2520 — Mechanism of Action.” IMM2520 showed in vivo efficacy and safety in several animal models. We have obtained IND approvals for IMM2520 from the NMPA in November 2022 and from the FDA in December 2022, and dosed the first patient for the Phase I clinical trial in China in March 2023. We will primarily focus on the solid tumors generally resistant or not sensitive to the currently available immunotherapies, such as colorectal cancer (CRC), gastric cancer (GC), lung cancer and head and neck squamous cell carcinomas (HNSCC), among others. With further clinical validation from the Phase I trial in China, the Company will carefully decide whether to proceed with a clinical trial or explore potential collaboration opportunities in the U.S. For further details, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM2520 — Clinical Development Plan.” CD24-targeted Drug Candidates In addition to CD47, we have selected and validated another innate immune checkpoint, CD24. We started the discovery research on CD24 as early as 2019, and have successfully identified lead drug candidates with potent target activity and in vivo therapeutic efficacy. Currently, we have one innovative IND-enabling-stage drug candidate (IMM47) and several discovery- and preclinical-stage molecules, including IMM4701 and IMM2547, targeting this checkpoint. CD24 is widely expressed in numerous types of solid tumors, including BC, NSCLC, CRC, HCC, renal cell carcinoma (RCC), and OC, and has been recognized as an important marker for poor prognosis of those cancers, presenting tremendous clinical potential. However, according to Frost & Sullivan, there is no approved drug targeting CD24 globally. No CD24-targeted drug candidate has entered into clinical stage worldwide, except for one drug candidate recently receiving IND approval from the FDA for its Phase I clinical trial. IMM47 (CD24 mAb) IMM47 is a potentially global first-in-class humanized monoclonal antibody targeting CD24 for cancer treatment. We have successfully screened IMM47 despite the fact that the screening of antibodies against CD24 is highly challenging due to the relatively weak immunogenicity resulting from its small extracellular domain. With its differentiated molecule design, IMM47 can specifically bind to CD24 and potently activate macrophage and NK cell-immune responses. IMM47 has been shown to significantly increase the amount of M1 macrophages (a subtype of macrophages that can fight infections and trigger inflammation to defend harmful invaders) in tumor tissues in our in vivo proof-of-concept studies. It can also activate and promote T-cell response likely through tumor antigen presentation and direct blockade of immune inhibitory signals. Our preclinical studies have demonstrated promising efficacy of IMM47. In addition, IMM47 can establish tumor-specific immune responses that prevent tumor growth even against re-inoculation of tumor cells in mice, demonstrating its capability to further induce T-cell-based adaptive immune activation. We expect to file IND applications for IMM47 for the treatment of solid tumors with the NMPA and the FDA in 2023, and initiate a Phase I dose-escalation study in Australia in August 2023. Initiating a clinical trial in Australia first can help us to begin global clinical trials earlier and accelerate clinical validation of IMM47. Additionally, we believe Australian trial can generate valuable clinical data on ethnically diverse populations, thus enhancing our ability to pursue collaboration opportunities with global pharmaceutical companies. SUMMARY –1 0– --- page 20 --- For details on IMM4701, a CD47xCD24 bispecific molecule, please refer to “Business — Our Innate Immune Checkpoint-targeted Drug Candidates — IMM4701(CD47xCD24).” Other Innate Immunity-based Drug Candidates We have also been actively evaluating the therapeutic potential of other innate immune checkpoints, including IL-8, NKG2A and PSGL-1, and we aim to continue to stay at the forefront of the development of immunotherapies through scientific innovation. Adaptive Immunity-based Drug Candidates IMM2510 (VEGF×PD-L1) IMM2510 is a bispecific molecule targeting both VEGF and PD-L1. IMM2510 can block the formation of new blood vessels, causing tumors to shrink. It can also make tumor cells more responsive to the immune system while activating T cells, NK cells, and macrophages. Our preclinical efficacy studies showed that IMM2510 exerted stronger synergistic antitumor activities than the combination of a VEGF blocker and a PD-L1 antibody. We are currently conducting the Phase I dose-escalation trial for IMM2510 in China in a variety of advanced solid tumors, including, but not limited to, HCC, RCC, GC, NSCLC and soft-tissue sarcomas (STS). Initial clinical results as of February 15, 2023 have shown favorable safety and promising efficacy. For further details of clinical data, please refer to “Business — Our Adaptive Immune Checkpoint-Targeted Drug Candidates — IMM2510 — Competitive Advantages.” We expect to complete this dose-escalation study in the third quarter of 2023, and subsequently commence a cohort-expansion study. IMM27M (CTLA-4 ADCC-enhanced mAb) IMM27M is a new generation CTLA-4 antibody with enhanced ADCC activity, which can induce potent T-cell antitumor responses. Our preclinical studies have demonstrated that IMM27M could induce significantly stronger antitumor activity than YERVOY ® (ipilimumab) and it resulted in complete tumor remission even at a dose as low as 0.3 mg/kg (~0.03 mg/kg human equivalent dose), at which ipilimumab only exhibited approximately 50% tumor growth inhibition. We have commenced the Phase I clinical trial in solid tumors, with the first patient dosed in June 2022. We had enrolled 15 patients as of February 10, 2023, and we are currently enrolling patients for the sixth cohort of 5.0 mg/kg. The preliminary data demonstrates that IMM27M is safe and well tolerated up to 3.0 mg/kg and showed positive efficacy signals. For further details of clinical data, please refer to “Business — Our Adaptive Immune Checkpoint-Targeted Drug Candidates — IMM27M.” We expect to complete this trial in the third quarter of 2023. We received an IND approval from the NMPA for a Phase Ib/II study to evaluate the combination of IMM27M and a PD-1 antibody for the treatment of advanced solid tumors, such as RCC, NSCLC, GC and thymic carcinoma (TC), in March 2023. We may initiate clinical trials or explore collaboration opportunities for this combination therapy. For details on IMM40H, a CD70 monoclonal antibody, please refer to “Business — Our Adaptive Immune Checkpoint-targeted Drug Candidates — IMM40H (CD70 mAb).” Our Platform We have established an integrated platform encompassing three main functions: (i) drug discovery and preclinical development, (ii) CMC and pilot manufacturing and (iii) clinical development. Leveraging the collaboration among different functional groups, our platform empowers us with robust research and development capabilities, allowing us to efficiently discover SUMMARY –1 1– --- page 21 --- and advance the development of immunotherapies towards commercialization. As a result, we have constructed a comprehensive pipeline consisting of 14 drug candidates targeting both innate and adaptive immune systems, with eight ongoing clinical programs. Our drug discovery and preclinical platform includes advanced hybridoma technology, high-throughput screening, strong immunoassay and bioassay technology, and a proprietary mAb-Trap bispecific platform. These integrated platforms allow us to efficiently conduct screening for lead compounds and druggability analysis. Our advanced hybridoma technology, together with the high-throughput screening technology, can effectively and quickly screen out antibodies with optimized properties. Our mAb-Trap platform was built to design bispecific molecules that connect engineered binding domains to the heavy chain or light chain of a base antibody. The molecule structure designed on this platform can be best suited for the targets we have selected. Moreover, the bispecific molecules developed on this platform have a symmetric structure, akin to that of native antibodies, allowing for ease of manufacturing, product stability, higher titer and protein yield. Leveraging this mAb-Trap platform, we have constructed a number of bispecific molecules and four of them have entered into clinical development stage, including IMM0306 (Phase II trial in China), IMM2902 (Phase Ia/Ib trial in China and the U.S.), IMM2510 (Phase I trial in China) and IMM2520 (Phase I trial in China). In fact, average protein yield for IMM0306, IMM2902, and IMM2520 ranges from 3.8 g/L to 4.6 g/L, much higher than the industry average for bispecific molecules of 1.0 g/L to 3.0 g/L. Bispecific molecules designed on the mAb-Trap platform will then be evaluated for in vitro pharmaceutical activities with immunoassay and bioassay. Our established preclinical development function enables us to perform studies concerning proof-of-concept in vivo efficacy, preclinical pharmacokinetic and pharmacodynamic, and toxicological in animals. Based on the in vitro activity, in vivo efficacy and quality data, we will select a lead molecule for further evaluation. Leveraging our drug discovery and preclinical development capabilities, we are developing 14 drug candidates at various stages. These in-house developed drug candidates all have the potential to be either first-in-class or best-in-class drugs if successfully advanced to the market. Our CMC team is responsible for, among other relevant functions, cell line development, upstream and downstream process development, formulation development, analytical method development and validation, and pilot manufacturing. For cell line development, we developed CHO-K1 host cell line with the glutamine synthetase gene knocked out via gene editing. We have also developed and optimized the cell line screening techniques which significantly help shorten the time for the development of stable expression cell lines with much higher titer. We have established substantial pilot manufacturing capabilities with a total production capacity of 450L and are able to manufacture drug candidates in-house in an efficient and cost-effective manner. In addition, we have already commenced the construction of our new manufacturing facility occupying a site area of approximately 28.7 thousand square meters in Zhangjiang Science City, Pudong New Area of Shanghai, which is designed to meet the stringent cGMP standards. We plan to complete the first stage of construction by 2025, and plan to commence second stage of construction depending on the schedule of the regulatory approval and the sales ramp-up of our drug portfolio in the future. Our clinical development function is responsible for clinical trial design and implementation, as well as translational medicine. We also engage CROs in China and the U.S. to support our clinical trials. From time to time, we seek advises from consultants with industry expertise to help enhance the design for our trials in China and U.S., and leverage their networks to improve trial execution efficiency in the U.S. We have established long-standing partnerships with hospitals and principal investigators throughout China and the U.S., which enables us to conduct multiple large-scale clinical trials. In addition, our medical function allows us to analyze preclinical and clinical data to guide our clinical strategy, the design and timely adjustments of clinical development plans. SUMMARY –1 2– --- page 22 --- For further details, please refer to the paragraphs headed “Business — Our Platform.” OUR COMPETITIVE STRENGTHS We believe the following strengths have contributed to our success and differentiated us from our competitors:  science-driven biotechnology company with a pipeline harnessing both the innate and adaptive immune systems;  a comprehensive innate immunity-based portfolio targeting a wide range of solid and hematologic tumors;  differentiated molecule design to achieve potent efficacy and favorable safety;  integrated proprietary R&D engine anchored around our deep understanding of tumor immunology, continuously driving the discovery and development of immunotherapies; and  seasoned management team with a track record of drug innovation and clinical development, led by a renowned immunologist founder and backed by blue chip investors. OUR STRATEGIES Leveraging our strengths, we plan to implement the following strategies:  to advance the development of our drug candidates to unleash their therapeutic potential and address substantial unmet medical needs;  to expand our overseas footprint and maximize the clinical and commercial value of our drug candidates through clinical trials and accretive partnerships;  to continuously enrich our innovative pipeline through fundamental biological research and translational medicine;  to upscale our GMP-compliant manufacturing capacity; and  to enlarge our talent pool to support our continuous growth. OUR CUSTOMERS AND SUPPLIERS Customers During the Track Record Period, since we had not obtained regulatory approval for the commercial sale of any of our drug candidates, we had not generated any revenue from sales of any drug products. Our revenue was generated from out-licensing fee, sales of cell strain and other products and testing services during the Track Record Period. For further details, please refer to the paragraphs headed “Financial Information — Description of Selected Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income — Revenue.” In each period of the Track Record Period, the aggregate sales to our five largest customers were RMB5.0 million, RMB0.5 million and RMB0.06 million, representing 98.8%, 84.6% and 89.1% of our total sales, respectively. Revenue from our single largest customer accounted for 93.3%, 28.1% and 43.6% of our total sales amount for the same periods, respectively. SUMMARY –1 3– --- page 23 --- Suppliers During the Track Record Period, our suppliers primarily consisted of CROs, CMO/CDMOs, and suppliers of equipment, devices and construction services. We select our suppliers by considering their product quality, costs, delivery standards, industry reputation and compliance with relevant regulations and industry standards. In each period of the Track Record Period, the aggregate purchases attributable to our five largest suppliers amounted to RMB55.9 million, RMB58.1 million and RMB14.7 million, respectively, representing 32.4%, 30.2% and 40.7% of our total purchases, respectively. Purchases attributable to our single largest supplier amounted to RMB17.8 million, RMB16.8 million and RMB5.8 million for the same periods, accounting for 10.3%, 8.7% and 16.0% of our total purchases, respectively. All of our five largest suppliers during the Track Record Period operate their business in the PRC, except for one major supplier in 2022 and two major suppliers in the four months ended April 30, 2023 that operate their business in the U.S. We believe that we have maintained strong and stable relationships with our major suppliers. COLLABORATION AGREEMENT Collaboration with Sunshine Guojian On January 18, 2021, we entered into a joint drug development collaboration agreement with Sunshine Guojian. Pursuant to this agreement, the parties will collaborate to conduct clinical studies to evaluate the combination therapy of inetetamab and IMM01 for the treatment of HER2-positive solid tumors in mainland China (excluding Hong Kong, Macau and Taiwan). Pursuant to the agreement, Sunshine Guojian is responsible for the design of the clinical study protocol, coordination with the CROs and regulatory filings related to each phase of clinical studies. Sunshine Guojian has final decision-making authority with respect to all material matters in relation to the clinical studies, including but not limited to, the preparation and modification of the clinical trial protocols, of this combination therapy for selected indications. Each party will supply its product for the purpose of clinical studies at its own cost. All costs incurred in the clinical studies in mainland China will be borne by Sunshine Guojian, except for certain costs to be borne by us as provided in the agreement, including the cost of supplying IMM01, the costs of assigning our own representatives to participate in the clinical development and regulatory communications and providing related technology support. Each party retains ownership of intellectual property rights in its own product. Any new data generated and intellectual property rights (including patents) arising from collaborated clinical studies will be jointly owned by both parties. We retain full rights to commercialize IMM01 worldwide. For details, please refer to the paragraphs headed “Business — Collaboration Agreement.” RELATIONSHIP WITH CROs AND CMOs/CDMOs As is customary in the pharmaceutical industry, we use CROs to conduct and support our preclinical studies and clinical trials under our close supervision and overall management. We currently also collaborate with CMOs/CDMOs for the manufacturing of a portion of our drug candidates for preclinical studies and clinical trials. During the Track Record Period and up to the Latest Practicable Date, all the CROs and CMOs/CDMOs that we collaborate with were independent third parties. For further details, please refer to the paragraphs headed “Business — Our Platform — CMC and Pilot Manufacturing” and “Business — Our Platform — Clinical Development.” SUMMARY –1 4– --- page 24 --- INTELLECTUAL PROPERTY As of the Latest Practicable Date, we owned (i) nine issued patents in the PRC, (ii) eight issued patents in the U.S., (iii) eleven issued patents and two allowed 1 patent applications in other jurisdictions, (iv) 16 pending patent applications, including two pending PRC patent applications, one pending Hong Kong patent application, six pending U.S. patent applications, and seven pending patent applications in other jurisdictions; (v) one PRC patent application and one PCT patent application which were filed as priority applications; and (vi) five pending PCT patent applications which may enter various contracting states in the future. Specifically, in relation to our Core Product, IMM01, as of the Latest Practicable Date, we owned one patent family, which includes one issued patent in the PRC, one issued patent in the U.S., one issued patent in the European Union (EU) and one issued patent in Japan with expiration dates in 2035, as well as two pending patent applications in the U.S. and one PCT patent application which has entered national phases 2. In China, we fully own the intellectual property rights in relation to our Core Product, IMM01, which was discovered, designed and developed by Dr. Deqiang Jing 3 and Dr. Wenzhi Tian4, both of whom are currently key R&D personnel of the Company, when Dr. Jing was a consultant at Hanyu and Dr. Tian worked at Huabo Biopharm, respectively. For the purpose of developing the product, Hanyu entered into a technology development agreement with Huabo Biopharm in March 2014, under which Huabo Biopharm was engaged to provide CRO-like technical service for the production of two recombinant proteins, HY03M and HY03MM (which are described in the IMM01 patent family), by using the target gene DNA provided by Hanyu, and Hanyu was required to pay a service fee to Huabo Biopharm. As a result, all the products of the CRO-like technical service along with their legal rights shall belong to Hanyu. During the discovery process, Dr. Jing made substantive contributions to, among others, the structure and sequence designs, biological activity analysis, and animal studies of the IMM01 molecule and Dr. Tian made substantive contributions to the related inventions of IMM01 patent family by, among others, providing suggestions on the sequence, vector construction, protein expression, and bio-assay analysis. In August 2015, the Company entered into a patent application assignment agreement with Hanyu (“ Hanyu Agreement ”), pursuant to which all rights in a Chinese patent application No. 201510203619.7 and the inventions disclosed therein in relation to the target molecule (which was later developed to IMM01) were transferred from Hanyu to the Company. The Company obtained the full rights to IMM01 based on the assignment agreement, and Hanyu does not retain any rights to IMM01 according to this assignment agreement, as confirmed by the IP legal advisor. The initial Chinese patent application filed by Hanyu listed Lijuan Liu, Dr. Deqiang Jing and Hua Wang as inventors. However, as confirmed by Hanyu in supplemental agreements dated August 31, 2015 to the assignment agreement, and confirmed in the interview 1 “Allowed” refers to the status of a patent application that has been approved but not officially granted. If a patent application has been examined and determined to have met all statutory requirements for patent grant in applicable jurisdictions, a notice of allowance will be sent to the applicant, indicating that the patent application has been approved by the relevant authority. A few more steps shall be done before such patent application is officially granted, such as paying the official fees by the applicant and publishing the granted patent by the relevant authority. After completion of all these necessary procedures, this patent application will be officially granted. 2 “National phases” in the PCT process refers to the point at which the applicant begins pursuing specific patents in selected PCT contracting states after initially filing a PCT international patent application. During the national phase, the patent application may undergo further substantive examination, including prior art searches, substantive examination of patentability requirements (e.g., novelty, inventive step, industrial applicability), amendments to the patent application documents, or interviews with patent examiners. Ultimately, if the patent application meets the requirements of the national or regional patent office, a patent may be granted, providing the applicant with exclusive rights to the invention within that jurisdiction. 3 Dr. Deqiang Jing is our senior director in the clinical department. He was engaged as a consultant by Shanghai Hanyu Biopharmaceuticals Co., Ltd (ʮ̡ )( “ Hanyu ”) from February 2014 to July 2020. 4 Dr. Wenzhi Tian is our founder, chief executive officer and chief scientific officer. He co-founded Huabo Biopharm (Shanghai) Co., Ltd. (ᔼᖹҦஔ (ɪऎ)ʮ̡)( “ Huabo Biopharm ”) and served as its general manager from June 2011 to April 2015. SUMMARY –1 5– --- page 25 --- with Dr. Tian, Dr. Jing and Lijuan Liu on November 11, 2022, only Dr. Tian and Dr. Jing are the inventors that made substantive contributions to the inventions of IMM01. Under the supplemental agreements, Hanyu also confirmed that the Company may list the correct inventors in the U.S. patents and patent applications as well as other foreign patents and patent applications in the patent family which were filed subsequently after the transfer of the patent rights. Hanyu was officially deregistered in July 2020 and no longer exists as a legal entity. The Company did not correct the inventorship of the Chinese patent No. ZL201510203619.7 since the relevant patent application was already filed at the time of transfer. As advised by JunHe LLP, the PRC intellectual property legal advisor to the Company, the error in inventorship in this Chinese patent would not affect the ownership rights or validity of this Chinese patent since this Chinese patent has been granted and the error in inventorship does not form a legal ground to challenge the validity of a patent under the Chinese patent laws and regulations, and the Company fully owns the intellectual property rights and global commercial rights in relation to IMM01. For further details on our Chinese patent in relation to IMM01, see “Business — Intellectual Property.” In the U.S., we are aware of certain issued patents belonging to third parties that may potentially cover our CD47-based drug candidates and may not expire before our anticipated commercial launch of relevant drug candidates in the U.S. As reviewed and advised by our U.S. legal advisor as to intellectual property law, Jun He Law Offices P.C. 1, the scope of the relevant patent claims is too broad and the patent claims are obvious over prior art 2 or lack written description and enablement support 3, the validity and enforceability of the third-party patents are thus questionable; as a result, if such third parties bring the legal proceedings against us, the risk that we will be determined by courts or other competent authorities in the U.S. to have infringed on such patent rights of the third parties is remote. However, in the hypothetical worst-case scenario that such patent infringement claims against us do arise, the court subsequently rules against us and we also lose all the subsequent appeal regarding the infringement claims (“Hypothetical Worst-case Scenario ”), we may not be able to commercialize the products in the U.S. unless and until we obtain a license under the applicable patents or such patents expire. Any such license arrangement may require us to pay royalties and other fees to the third parties. We may not be able to obtain a license from third parties, or the terms of the license may not be commercially viable. Such Hypothetical Worst-case Scenario could further expose us to diversion of our resources and our management’s attention. Even if in the Hypothetical Worst-case Scenario, the commercialization of our CD47-based drug candidates in PRC would not be impacted since the potentially relevant patents are U.S. patents which can only have effects in the U.S. For details, please refer to the paragraphs headed “Risk Factors — Key Risks Relating to Our Business, 1 Jun He Law Offices P.C. has a registered office in the Silicon Valley of California and has extensive experience in the U.S. patent practice. Its patent team has deep expertise across many aspects of life sciences including biological and small therapeutic compounds and uses thereof, proteomics, genomics, molecular diagnostics, drug discovery tools, chemicals and materials science, and medical devices. This patent team has decades of experience in a wide range of U.S. patent related matters including drafting, prosecuting patents at the U.S. Patent and Trademark Office, patent infringement and validity opinions regarding U.S. patents, strategic counseling and due diligence reviews of U.S. patents in M&A deals, capital market offerings, financing and other high-value transactions. In addition, a U.S.-based international law firm, Locke Lord LLP, was specifically engaged to analyze one certain relevant patent to assist our U.S. legal advisor to intellectual property laws, Jun He Law Offices P.C., in issuing its legal opinion. 2 “Prior art” refers to publications or knowledge that are available to the public before the effective filing date of a patent application. Prior art may be used to evaluate whether a claimed invention in a patent application contains certain level of creativity ( i.e., more than just a simple and obvious improvement over what already exists). “Obvious over prior art” means that, though a claimed invention is different from the prior art, the difference can be readily conceived by a person having ordinary skills in the relevant field ( i.e., a hypothetical person who is familiar with the ordinary technical knowledge in that field) before the effective filing date of this claimed invention. Generally, a patent should involve inventive steps that are not obvious to a person having ordinary skills in such field. If the claimed invention is obvious over prior art, a patent for this claimed invention may not be obtained, and if obtained, it shall be invalid. 3 “Lack of written description and enablement support” means the specification of a patent or patent application does not contain a written description of the invention which can enable any person having ordinary skills in the relevant field to make and use the same. Generally, a patent should have sufficient written description containing clear and detailed enough information and guidance so that a person having ordinary skills in that field would be readily able to practice the claimed invention. If the claimed invention lacks written description and enablement support, a patent for such a claimed invention may not be obtained, and if obtained, it shall be invalid. SUMMARY –1 6– --- page 26 --- Business Operations, Intellectual Property Rights and Financial Prospects — Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain.” Thus, in the PRC and U.S., as advised by our intellectual property legal advisors, JunHe LLP and Jun He Law Offices P.C., the risk that potential objections or claims from other parties (including, without limitation, Hanyu, Huabo Biopharm, Hua Wang and Lijuan Liu, or any of their respective associates) may affect us in respect of IMM01 would be remote. For the above mentioned potentially relevant patents in the U.S., the risk that we will be determined by courts or other competent authorities to have infringed on such patent rights of the third parties is minimal. Based on the views of our legal advisor as to intellectual property law and our Directors, our drug candidates are unlikely to have infringed the patents of third parties in mainland China and the U.S. During the Track Record Period and up to the Latest Practicable Date, (i) we were not involved in any legal, arbitral or administrative proceedings in respect of, and we had not received notice of any material claims of infringement, misappropriation or other violations of third-party intellectual property; and (ii) we were not involved in any proceedings in respect of any intellectual property rights that may be threatened or pending and that may have an influence on the research and development for any of our drug candidates in which we may be a claimant or a respondent. OUR CONTROLLING SHAREHOLDERS As of the Latest Practicable Date, Dr. Tian, our founder of the Group, chairman of our Board, chief executive officer, chief scientific officer and executive Director, was able to exercise approximately 33.29% of the voting rights in our Company through: (i) 70,182,990 Shares directly held by him and (ii) an aggregate of 48,356,955 Shares held by our Employee Shareholding Platforms, namely Jiaxing Changxian, Jiaxing Changyu and Halo Investment II. Both Jiaxing Changxian and Jiaxing Changyu are limited partnerships incorporated in the PRC of which their respective executive partners are controlled by Dr. Tian. Halo Investment II is a company limited by shares incorporated in the BVI with Dr. Tian controlling the exercise of its voting rights in the Company. For further details on the Employee Shareholding Platforms, see “History, Development and Corporate Structure — Employee Shareholding Platforms.” Immediately upon the completion of the Global Offering (assuming the Over-allotment Option is not exercised), Dr. Tian, together with Jiaxing Changxian, Jiaxing Changyu and Halo Investment II, will be entitled to exercise the voting rights of approximately 31.76% of the enlarged issued share capital of our Company. Accordingly, Dr. Tian, Jiaxing Changxian, Jiaxing Changyu and Halo Investment II will remain as a group of Controlling Shareholders of our Company after the Listing. OUR PRE-IPO INVESTORS Since the establishment, our Company has undertaken a series of capital increases to raise funds for the development of our business and to bring in new shareholders. The Pre-IPO Investments include: (i) Series Pre-A Financing; (ii) Series A Financing; (iii) Series Pre-B Financing; (iv) Series B Financing; (v) Series B+ Financing; and (vi) Series C Financing and we raised a total of approximately US$215.7 million from the Pre-IPO Investments. Our Pre-IPO Investors will be subject to lock-up arrangements at the time of the Global Offering pursuant to the PRC Company Law. Generally, under these lock-up arrangements, each Pre-IPO Investor will not, at any time during the period commencing on the Listing Date and ending on a date which is 12 months from the Listing Date, offer, pledge, sell, transfer or otherwise dispose of their Shares. For details, see “History, Development and Corporate Structure — Pre-IPO Investments.” SUMMARY –1 7– --- page 27 --- Our Pre-IPO Investors consist of private equity funds and private limited liabilities companies, among which some have a specific focus on the healthcare industry. LA V , ZJ Leading VC, Lapam Capital, Shanghai Milestone Asset, LYFE Capital and Greater Bay Area Fund are our Sophisticated Investors pursuant to the Guidance Letter HKEX-GL92-18 issued by the Stock Exchange. For details, see “History, Development and Corporate Structure — Pre-IPO Investments — Information About Our Pre-IPO Investors.” SUMMARY OF HISTORICAL FINANCIAL INFORMATION This summary historical data of financial information set forth below have been derived from, and should be read in conjunction with our consolidated audited financial statements, including the accompanying notes, set forth in the Accountants’ Report set out in Appendix IA to this prospectus, as well as the information set forth in the section headed “Financial Information.” Our financial information was prepared in accordance with IFRSs. Summary Data from Consolidated Statements of Profit or Loss The following table sets forth summary data from our consolidated statements of profit or loss and other comprehensive expenses for the periods indicated. For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Revenue ....................... 5,067 538 234 73 Other income ................... 10,381 14,657 2,397 3,062 Other gains and losses, net ......... (518,347) (29,436) (44,771) (834) Research and development expenses .. (175,954) (277,346) (67,257) (75,001) Administrative expenses ........... (48,319) (92,796) (27,368) (28,469) Listing expenses ................. (4,886) (17,724) (12,059) (10,344) Finance costs .................... (891) (787) (285) (253) Loss before tax .................. (732,949) (402,894) (149,109) (111,766) Income tax expense ............... ———— Loss for the year/period .......... (732,949) (402,894) (149,109) (111,766) Non-IFRS Measure To supplement our consolidated statements of profit or loss and other comprehensive expenses which are presented in accordance with IFRSs, we also use adjusted net loss as a non-IFRS measure, which is not required by, or presented in accordance with, IFRSs. We believe that the presentation of the non-IFRS measure when shown in conjunction with the corresponding IFRS measures provides useful information to management and investors in facilitating a comparison of our operating performance from year to year. In particular, the non-IFRS measure eliminates impact of certain expenses, including loss from changes in fair value of financial liabilities at FVTPL (which ceased to be recorded since January 31, 2022), share-based payments and listing expenses. Such non-IFRS measure allows investors to consider metrics used by our management in evaluating our performance. We define adjusted net loss (non-IFRS measure) as loss for the year/period adjusted by adding back loss from changes in fair value of financial liabilities at FVTPL, share-based payments and listing expenses. Loss from changes in fair value of financial liabilities at FVTPL represents the increase in fair value of the equity interests with preferred rights held by our investors, which is non-cash in nature. We no longer recognized such liabilities since January 31, 2022, as our investors’ certain preferred rights, including liquidation preferences, redemption rights SUMMARY –1 8– --- page 28 --- and anti-dilution rights, were terminated on the same date. Share-based payments are expenses arising from granting restricted shares to selected employees, senior management, directors and consultants, the amount of which is non-cash in nature. Listing expenses are the expenses arising from activities in relation to the proposed Listing and Global Offering, and are excluded from our net loss. The use of the non-IFRS measure has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for, or superior to, analysis of our results of operations or financial condition as reported under IFRSs. In addition, the non-IFRS financial measure may be defined differently from similar terms used by other companies and therefore may not be comparable to similar measures presented by other companies. For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Loss for the year/period .......... (732,949) (402,894) (149,109) (111,766) Adjusted for: Loss from changes in fair value of financial liabilities at FVTPL ...... 511,517 55,510 55,510 — Share-based payments ............. 34,017 103,829 28,987 30,097 Listing expenses ................. 4,886 17,724 12,059 10,344 Adjusted net loss (non-IFRS measure) for the year/period ..... (182,529) (225,831) (52,553) (71,325) We currently have no products approved for commercial sale and have not generated any revenue from product sales. We have not been profitable and have incurred operating losses during the Track Record Period. We recognized revenue of RMB5.1 million, RMB0.5 million and RMB73 thousand in 2021, 2022 and the four months ended April 30, 2023, respectively. Our revenue was generated from out-licensing fee received under the technology transfer agreement with an independent third party signed in 2019, sales of cell strain and other products, as well as provision of testing services. In 2021, 2022 and the four months ended April 30, 2023, we had net loss of RMB732.9 million, RMB402.9 million and RMB111.8 million, respectively. The changes in our net loss mainly resulted from the increases in our research and development expenses and administrative expenses, as well as the recognition of loss from changes in fair value of financial liabilities at FVTPL related to our investors’ preferred rights in 2021 and the subsequent derecognition of the same since January 31, 2022. For detailed discussion of the fluctuation of our net loss, see “Financial Information — Description of Selected Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income.” Our research and development expenses increased from RMB67.3 million for the four months ended April 30, 2022 to RMB75.0 million for the four months ended April 30, 2023. The increase was mainly attributable to (i) an increase of RMB6.5 million in clinical trial expenses for IMM01, primarily in relation to the initiation of its combination trials with tislelizumab, as well as IMM2520, and (ii) an increase of RMB5.7 million in salaries and related benefit costs, mainly due to the expansion of our clinical team, in line with our continuous research and development efforts in advancing and expanding our pipeline drug candidates; partially offset by a decrease of RMB6.8 million in preclinical and CMC expenses, primarily due to a decrease of testing expenses for IMM2520, IMM40H and IMM47 in preparation for IND application filings. Our research and development expenses increased from RMB176.0 million in 2021 to RMB277.3 million in 2022. The significant increase was mainly attributable to (i) an increase of RMB54.0 million in clinical trial expenses for IMM01, primarily in relation to the initiation of its combination trials with azacitidine and tislelizumab respectively, SUMMARY –1 9– --- page 29 --- as well as IMM2902, (ii) an increase of RMB27.0 million in non-cash share-based payments and an increase of RMB22.9 million in salaries and related benefit costs, mainly due to (a) the additional amortization in connection with the restricted shares granted in 2022, and (b) the expansion of our clinical team, and (iii) an increase of RMB3.9 million in preclinical and CMC expenses, primarily due to the increased manufacturing expenses of IMM01 for the use in its combination trials with azacitidine and tislelizumab respectively, as well as IND-enabling expenses associated with IMM47. Our administrative expenses increased from RMB27.4 million for the four months ended April 30, 2022 to RMB28.5 million for the four months ended April 30, 2023, mainly attributable to (i) an increase of RMB1.2 million in salaries and related benefit costs, mainly due to the headcount expansion and compensation raise of our salaries of administrative functions as a result of our business growth, (ii) an increase of RMB1.2 million in depreciation expenses, which was in line with the increases in our right-of-use assets, property and office equipment; partially offset by a decrease of RMB2.0 million in non-cash share-based payments, resulting from a decrease in the number of restricted shares vested in the four months ended April 30, 2023. Our administrative expenses increased from RMB48.3 million in 2021 to RMB92.8 million in 2022, mainly attributable to (i) an increase of RMB42.8 million in non-cash share-based payments, primarily due to the additional amortization in connection with the restricted shares granted in 2022, and (ii) an increase of RMB7.7 million in salaries and related benefit costs due to the headcount expansion and compensation raise of our management and administrative functions as a result of our business growth. In addition, our adjusted net loss (non-IFRS measure) was RMB182.5 million, RMB225.8 million and RMB71.3 million in 2021, 2022 and the four months ended April 30, 2023, respectively. We define adjusted net loss (non-IFRS measure) as loss for the year/period adjusted by adding back loss from changes in fair value of financial liabilities at FVTPL, share-based payments and listing expenses. Summary Data from Consolidated Statements of Financial Position The following table sets forth summary data from our consolidated statements of financial position as of the dates indicated. As of December 31, As of April 30, 2021 2022 2023 (in thousands of RMB) Total non-current assets ................ 188,737 188,107 183,898 Total current assets ................... 704,098 651,871 600,635 Total assets ......................... 892,835 839,978 784,533 Total current liabilities ................ 2,477,831 51,737 78,855 Net current (liabilities) assets .......... (1,773,733) 600,134 521,780 Total non-current liabilities ............. 13,443 9,020 8,121 Total liabilities ...................... 2,491,274 60,757 86,976 Net (liabilities) assets ................. (1,598,439) 779,221 697,557 We recorded net current assets of RMB521.8 million as of April 30, 2023 as compared to net current assets of RMB600.1 million as of December 31, 2022. The decrease of net current assets was primarily due to a decrease of RMB76.1 million in bank balances and cash, partially offset by an increase of RMB25.0 million in our financial assets at FVTPL. We recorded net current assets of RMB600.1 million as of December 31, 2022, as compared to net current liabilities of RMB1,773.7 million as of December 31, 2021. The increase of net current assets was primarily due to a decrease of RMB2,431.6 million in financial liabilities at FVTPL; partially offset by (i) a decrease of RMB33.1 million in bank balances and cash, (ii) a decrease of RMB8.2 million in pledged bank deposits, and (iii) a decrease of RMB10.9 million in prepayments and other receivables. SUMMARY –2 0– --- page 30 --- We have terminated our investors’ preferred rights and no longer recorded any financial liabilities at FVTPL since January 31, 2022. As a result, we recorded net assets of RMB779.2 million as of December 31, 2022, as compared to net liabilities of RMB1,598.4 million as of December 31, 2021. For further information, see our consolidated statements of changes in equity set forth in the Accountants’ Report in Appendix IA to this prospectus. We recorded net liabilities of RMB1,598.4 million as of December 31, 2021, as compared to net assets of RMB779.2 million as of December 31, 2022. The increase of net assets was primarily due to the reclassification of financial liabilities at FVTPL as equity of RMB2,670.7 million in 2022, partially offset by our loss for the year of RMB402.9 million in 2022. We recorded net assets of RMB697.6 million as of April 30, 2023, as compared to net assets of RMB779.2 million as of December 31, 2022. The decrease of net assets was primarily due to our loss for the year of RMB111.8 million in the four months ended April 30, 2023, partially offset by our recognition of equity-settled share-based payments of RMB30.1 million in the same period. Summary Data from Consolidated Cash Flow Statements Our primary uses of cash are to fund the preclinical and clinical development of our drug candidates, administrative expenses and other recurring expenses. Our net cash used in operating activities was RMB190.5 million, RMB238.7 million and RMB79.2 million in 2021, 2022 and the four months ended April 30, 2023, respectively, primarily due to the significant research and development expenses and administrative expenses we incurred during the Track Record Period without generating any revenue from sales of our drug candidates. Our operating cash flow will continue to be affected by our research and development expenses. During the Track Record Period and up to the Latest Practicable Date, we have primarily funded our working capital requirements through proceeds from private equity financings. Our management closely monitors uses of cash and cash balances and strives to maintain a healthy liquidity for our operations. Going forward, we believe our liquidity requirements will be satisfied by a combination of net proceeds from the Global Offering, funds received from potential out-licensing arrangements and cash generated from our operations after the commercialization of our drug candidates. With the continuing expansion of our business, we may require further funding through public or private offerings, debt financings, collaboration arrangements or other sources. As of April 30, 2023, our bank balances and cash amounted to RMB559.1 million. The following table sets forth summary data from our consolidated statements of cash flows for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Net cash used in operating activities .. (190,541) (238,710) (53,019) (79,242) Net cash (used in) from investing activities ..................... (108,722) 49 (5,021) (22,869) Net cash from financing activities .... 793,033 179,380 185,245 27,018 Net increase (decrease) in cash and cash equivalents ................ 493,770 (59,281) 127,205 (75,093) Cash and cash equivalents at beginning of the year/period ...... 183,674 668,326 668,326 635,212 Effect of foreign exchange rate changes, net ................... (9,118) 26,167 10,769 (1,033) Cash and cash equivalents at end of the year/period ................. 668,326 635,212 806,300 559,086 SUMMARY –2 1– --- page 31 --- The Directors are of the opinion that, taking into account the financial resources available to us, including cash and cash equivalents, internally generated funds, financial assets, the estimated net proceeds from the Global Offering and our cash burn rate, which is the average monthly cash used in operations plus payments for property, plant and equipment, going forward will be approximately 1.1 times of the cash burn rate for the year ended December 31, 2022, we have sufficient working capital to cover at least 125% of our costs, including research and development costs, general, administrative and operating costs, for at least the next 12 months from the date of this prospectus. Our Directors believe that, by taking into account our cash and cash equivalents of RMB559.1 million as of April 30, 2023 and assuming that our cash burn rate going forward will be approximately 1.1 times of the cash burn rate for the year ended December 31, 2022, we can remain financially viable for approximately 34 months from April 30, 2023 if taking into account the estimated net proceeds from the Global Offering (being the indicative Offer Price of HK$18.60 per H Share). We will continue to monitor our cash flows from operations closely and expect to raise our next round of financing, if needed, with a minimum buffer of 12 months. KEY FINANCIAL RATIOS The table below sets forth our key financial ratios as of the dates indicated: As of December 31, As of April 30, 2021 2022 2023 Current ratio (1) ...................... 0.28 12.60 7.62 Note: (1) Current ratio represents current assets divided by current liabilities as of the same date. GLOBAL OFFERING STATISTICS The statistics in the following table are based on the assumptions that 17,147,200 H Shares will be issued pursuant to the Global Offering, 210,485,039 Unlisted Shares will be converted into H Shares and the Over-allotment Option is not exercised: Based on the Offer Price of HK$18.60 Market capitalization of our Shares (1) ............................ HK$6,942.3 million Market capitalization of our H Shares (2) .......................... HK$4,234.0 million Unaudited pro forma adjusted consolidated net tangible assets per Share (3) . HK$2.75 Notes: (1) The calculation of market capitalization is based on 373,239,895 Shares expected to be in issue immediately upon completion of the Global Offering. (2) The calculation of the market capitalization of our H Shares is based on the 227,632,239 H Shares, comprising 17,147,200 H Shares to be issued under the Global Offering and 210,485,039 H Shares to be converted from Unlisted Shares, expected to be in issue immediately upon completion of the Global Offering. (3) The unaudited pro forma adjusted consolidated net tangible assets of our Group attributable to owners of our Company per Share is arrived at on the basis that 373,239,895 Shares were in issue assuming that the Global Offering had been completed on April 30, 2023 and it does not take into account of (i) any Share which may be allotted and issued upon the exercise of the over-allotment option or (ii) under the general mandates for the allotment and issue of Shares granted to the directors of our Company. SUMMARY –2 2– --- page 32 --- DIVIDEND We have never declared or paid any dividends on our ordinary shares or any other securities. We currently intend to retain all available funds and earnings, if any, to fund the development and expansion of our business and we do not intend to declare or pay any dividends in the foreseeable future. Investors should not purchase our ordinary shares with the expectation of receiving cash dividends. Any future determination to pay dividends will be made at the discretion of our Directors subject to our Articles of Association and the PRC Company Law, and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our Directors may deem relevant. No dividend shall be declared or payable except out of our profits and reserves lawfully available for distribution. Regulations in the PRC currently permit payment of dividends of a PRC company only out of accumulated distributable after-tax profits as determined in accordance with its articles of association and the accounting standards and regulations in China. As confirmed by our PRC Legal Advisor, according to the PRC law, any future net profit that we make will have to be first applied to make up for our historically accumulated losses, after which we will be obliged to allocate 10% of our net profit to our statutory common reserve fund until such fund has reached more than 50% of our registered capital. We will therefore only be able to declare dividends after (i) all our historically accumulated losses have been made up for; and (ii) we have allocated sufficient net profit to our statutory common reserve fund as described above. USE OF PROCEEDS We estimate that the aggregate net proceeds to our Company from the Global Offering will be approximately HK$233.4 million, after deducting underwriting commissions, fees and estimated expenses in connection with the Global Offering paid and payable by us taking into account any additional discretionary incentive fee and assuming that the Over-allotment Option is not exercised, at the Offer Price of HK$18.60 per H Share. We currently intend to apply such net proceeds from the Global Offering for the following purposes: (a) approximately 40.0%, or HK$93.4 million, will be used for ongoing and planned clinical trials, preparation for registration filings, and planned commercial launch of our Core Product, IMM01 (SIRP α-Fc fusion protein), of which (i) 20.0%, or HK$46.7 million, will be used for funding an ongoing Phase II trial and planned pivotal clinical trials for the combination therapy of IMM01 and azacitidine for the treatment of MDS/AML, and CMML in China, the preparation of relevant registration filings and other regulatory matters; (ii) 17.0%, or HK$39.7 million, will be used for funding ongoing and planned clinical trials of the combination therapy of IMM01 and tislelizumab in China, the preparation of relevant registration filings and other regulatory matters; (iii) 3.0%, or HK$7.0 million, will be used for funding the launch and commercialization of IMM01 in combination therapies. (b) approximately 28.0%, or HK$65.4 million, will be used for ongoing and planned clinical trials, preparation for registration filings, and planned commercial launch of our Key Products, IMM0306 (CD47×CD20), IMM2902 (CD47×HER2) and IMM2520 (CD47×PD-L1), of which (i) approximately 15.0%, or HK$35.0 million, will be used for ongoing and planned clinical trials of IMM0306 for the treatment of R/R B-NHL in China, the preparation of relevant registration filings, other regulatory matters, and planned commercial launch in China; SUMMARY –2 3– --- page 33 --- (ii) approximately 8.0%, or HK$18.7 million, will be used for the ongoing clinical trials of IMM2902 for the treatment of advanced HER2-positive and HER2-low expressing solid tumors in China and the U.S.; and (iii) approximately 5.0%, or HK$11.7 million, will be used for planned clinical trials of IMM2520 in China for the treatment of solid tumors, particularly those resistant or not sensitive to the currently available immunotherapies, such as CRC, GC, lung cancer and HNSCC, among others. (c) approximately 10.0%, or HK$23.3 million, will be used for the planned clinical trial of IMM47 (CD24 mAb); (d) approximately 5.0%, or HK$11.7 million, will be used for the ongoing clinical trials of IMM2510 (VEGF×PD-L1) and IMM27M (CTLA4 ADCC-enhanced mAb); (e) approximately 7.0%, or HK$16.3 million, will be used for construction of our new manufacturing facility in Zhangjiang Science City, Shanghai; (f) approximately 5.0%, or HK$11.7 million, will be used for our continuous preclinical research and development of multiple preclinical- and discovery-stage assets, including without limitation IMM4701, IMM51, IMM38, IMM2547, IMM50 and IMM62, as well as CMC to support the clinical trials including pivotal trials for various assets; and (g) approximately 5.0%, or HK$11.7 million, will be used for working capital and general corporate purposes. See the section headed “Future Plans and Use of Proceeds — Use of Proceeds” for details. RISK FACTORS Our operations and the Global Offering involve certain risks and uncertainties, some of which are beyond our control and may affect your decision to invest in us and/or the value of your investment. See the section headed “Risk Factors” for details of our risk factors, which we strongly urge you to read in full before making an investment in our Shares. Some of the major risks we face include:  We face substantial competition and our competitors may discover, develop or commercialize competing drugs faster or more successfully than we do. In particular, we face intense competition in the development of CD47-targeting molecules. There are numerous drug developers of CD47-targeted molecules globally. Potential competitors also include academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.  We depend substantially on the success of our clinical-stage and preclinical stage drug candidates. If we are unable to successfully complete development, obtain regulatory approval and commercialize our drug candidates, or if we experience significant delays in doing any of the foregoing, our business, financial condition, results of operations and prospects will be materially harmed.  If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or may ultimately be unable to complete, the development and commercialization of our drug candidates. SUMMARY –2 4– --- page 34 ---  We have no track record with very limited experience in launching and marketing approved drugs, and we may not be able to successfully create or increase market awareness of our drugs or sell our products, which will materially affect our ability to generate sales revenue.  We have incurred significant net losses since inception. We expect that we will continue to incur net losses for the foreseeable future and we may not be able to generate sufficient revenue to achieve or maintain profitability. Potential investors are at risk of losing substantially all of their investments in our H Shares.  Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain. We are aware of certain issued patents in the U.S. belonging to third parties that may potentially cover our CD47-based drug candidates and may not expire before our anticipated commercial launch of relevant drug candidates in the U.S. Our Core Product IMM01 is one of the CD47-targeted drug candidates which may be subject to potential legal proceedings of patent infringement. For details, please refer to the paragraphs headed “Risk Factors — Key Risks Relating to Our Business, Business Operations, Intellectual Property Rights and Financial Prospects — Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain.”  All material aspects of the research, development, manufacturing and commercialization of our drug candidates are heavily regulated and are subject to change. Any failure to comply with existing regulations and industry standards or any adverse actions by the drug-approval authorities against us could negatively impact our reputation and our business, financial condition, results of operations and prospects.  We have entered into collaborations with our partners and may form or seek additional collaborations or strategic alliances or enter into licensing arrangements in the future. Please refer to the paragraphs headed “Business — Collaboration Agreement” for further details. We may not realize any or all benefits of such alliances or licensing arrangements, and disputes may arise between us and our collaboration partners.  No public market currently exists for our H Shares, and an active trading market for our H Shares may not develop, especially taking into account that certain of our existing shareholders may be subject to a lock-up period. LISTING EXPENSES Listing expenses to be borne by us are estimated to be approximately HK$85.5 million (including underwriting commission, at the Offer Price of HK$18.60 per H Share), which represent 26.8% of the gross proceeds from the Global Offering, assuming no Shares are issued pursuant to the Over-allotment Option. The above listing expenses are comprised of (i) underwriting-related expenses, including underwriter commission, of RMB17.4 million, and (ii) non-underwriting-related expenses of RMB61.3 million, including (a) the legal advisors and the reporting accountants expenses of RMB35.6 million, and (b) other fees and expenses, including sponsors fee, of RMB25.7 million. In 2021, 2022 and the four months ended April 30, 2023, listing expenses were RMB4.9 million (approximately HK$5.3 million), RMB17.7 million (approximately HK$19.3 million) and RMB10.3 million (approximately HK$11.2 million), respectively, and the deferred issue costs were RMB1.4 million (approximately HK$1.5 million), RMB4.9 million (approximately HK$5.4 million) and RMB0.6 million (approximately HK$0.6 million), respectively. We also adjusted RMB3.9 million (approximately HK$4.2 million) in listing expenses in the four months ended April 30, 2023 from deferred issue costs recorded in 2021 and 2022, reflecting a decrease in our listing expenses which were deducted from equity as of SUMMARY –2 5– --- page 35 --- December 31, 2022. After April 30, 2023, approximately HK$23.5 million is expected to be charged to our consolidated statements of profit or loss and other comprehensive expenses and approximately HK$22.9 million is expected to be accounted for as a deduction from equity upon the Listing. The listing expenses above are the latest practicable estimate for reference only, and the actual amount may differ from this estimate. For details on our listing expenses, see note 11 and note 21 to the Accountants’ Report set out in the Appendix IA to this prospectus. RECENT DEVELOPMENTS Our recent developments of our drug candidates since the end of the Track Record Period include:  Following the completion of the Phase Ib trial to evaluate the combination therapy of IMM01 and azacitidine for the treatment of R/R MDS and R/R AML, we have initiated a Phase II trial mainly for the first-line treatment of HR MDS, unfit AML and CMML in June 2022. Interim data as of February 10, 2023 from the Phase Ib/II trial has demonstrated a favorable safety and promising efficacy profile. Neither DLT nor Grade 3 or higher hemolysis was observed among all 12 patients receiving the combination treatment at all three dose levels of IMM01 (1.0 mg/kg, 1.5 mg/kg, and 2.0 mg/kg) in our Phase Ib trial. Moreover, the interim data obtained from our Phase II trial as of February 10, 2023 has demonstrated that: (i) among the eight evaluable patients with 1L CMML, two reached CR (2 CRs), six reached mCR (6 mCRs), and one reached HI (1 HI, which also achieved mCR), resulting in an ORR of 100%, and (ii) among the 16 evaluable HR MDS patients who have received at least three cycles of treatment, three achieved CR (3 CRs), nine achieved mCR (9 mCRs), and seven achieved HI (7 HIs, among which 4 also achieved mCR), resulting in an ORR of 93.8%.  We have obtained an IND approval of a Phase Ib/II trial to evaluate IMM01 in the combination therapy of IMM01 and tislelizumab in solid tumors, including among others, NSCLC, SCLC, HNSCC, CRC, from the NMPA. We have completed the Phase Ib clinical trial and initiated the Phase II trial in December 2022. In addition, we obtained the NMPA’s consent for adding R/R cHL as an additional expansion cohort into this ongoing trial in July 2022, and dosed the first patient with R/R cHL in January 2023.  We have also observed favorable efficacy and safety data from the ongoing Phase I clinical trial for IMM0306 since January 2022. According to our initial clinical data as of February 27, 2023, IMM0306 was safe and well tolerated up to 2.0 mg/kg. Among the evaluable patients across four cohorts dosed from 0.8 mg/kg to 2.0 mg/kg, who had relapsed or progressed after receiving rituximab previously, two CRs and five PRs were observed. The only evaluable FL patient at 2.0 mg/kg who relapsed and progressed after rituximab treatment has also been confirmed as PR. At 2.0 mg/kg, one patient with primary bone DLBCL who had four lines of prior treatment has achieved PR with all measurable lesions disappeared after 65 days of treatment. All these R/R B-NHL patients have been previously treated with and progressed after rituximab. We commenced a Phase IIa trial for IMM0306 monotherapy for the third- or later-line treatment of FL in March 2023 and plan to seek an accelerated marketing approval through a single-arm trial. Furthermore, our IND application for the combination of IMM0306 and lenalidomide targeting front-line B-NHL was approved by the NMPA in January 2023. We have commenced the Phase Ib/IIa clinical trial for this combination in China, with the first patient dosed in June 2023. SUMMARY –2 6– --- page 36 ---  We have initiated a Phase Ia/Ib trial for IMM2902 in advanced HER2-positive and HER2-low expressing solid tumors, including BC, GC, NSCLC and BTC, in China, and are enrolling the sixth cohort for this dose-escalation study in China. We have also initiated the clinical trial for advanced HER2-positive and HER2-low expressing solid tumors in the U.S. In July 2022, we received the Fast Track Designation for IMM2902 from the FDA.  We have obtained IND approvals for IMM2520 from the NMPA in November 2022 and from the FDA in December 2022. We dosed the first patient for the Phase I clinical trial in China in March 2023.  Our IND application for the combination therapy of IMM27M and IMM2510 was accepted by the NMPA on August 17. Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 We have included our unaudited interim financial report prepared in accordance with IAS 34 as of and for the six months ended June 30, 2023 in Appendix IB to this prospectus. Our unaudited condensed consolidated financial statements have been reviewed by our reporting accountants Deloitte Touche Tohmatsu in accordance with Hong Kong Standards on Review Engagements 2410. See “Appendix IB — Unaudited Condensed Consolidated Financial Statements of the Group as of and for the Six Months Ended June 30, 2023” for details. The following is a discussion of fluctuations of selected line items. We currently have no products approved for commercial sale and have not generated any revenue from product sales. Our revenue decreased by 79.8% from RMB425 thousand in the six months ended June 30, 2022 to RMB86 thousand in the six months ended June 30, 2023. In the six months ended June 30, 2022 and 2023, we had total comprehensive expenses of RMB211.7 million and RMB170.7 million, respectively. Our total comprehensive expenses mainly resulted from research and development expenses and administrative expenses. Our research and development expenses increased by 10.1% from RMB116.4 million in the six months ended June 30, 2022 to RMB128.1 million in the six months ended June 30, 2023. Our administrative expenses decreased by 11.7% from RMB46.7 million in the six months ended June 30, 2022 to RMB41.3 million in the six months ended June 30, 2023. See “Financial Information — Recent Developments” for further details. Expected Net Loss Since the end of the Track Record Period, our business has continuously grown, but we expect that we will continue to record net loss in 2023, primarily because (i) we expect to incur research and development expenses as we continue to carry out and expand our clinical development programs and advance the research and development of preclinical assets; and (ii) we expect to incur listing expenses in connection with our proposed Listing. IMPACT OF THE COVID-19 OUTBREAKS Since late 2019, COVID-19 has spread rapidly globally. We have employed various measures to mitigate any impact the COVID-19 outbreaks may have on our operations in China and the U.S. and the development of our drug candidates, including offering personal protection equipment such as masks to our employees, regularly checking the body temperature of our employees and closely monitoring their health conditions. After the initial outbreak in late 2019, from time to time, especially since late 2021 and throughout 2022, there had been scattered outbreaks of COVID-19 in multiple regions of China and various control measures were taken to contain the COVID-19 spread. In late 2022, China began to modify its COVID-19 policy, and most of the travel restrictions and quarantine requirements were lifted in December 2022. SUMMARY –2 7– --- page 37 --- The COVID-19 outbreaks since March 2022 in Shanghai and certain other regions in China and the quarantine measures taken to contain the spread did not have material impact on us, primarily because (i) the outbreaks only affected our clinical trial sites in certain regions for a limited period of time, such as Shanghai from March to May 2022, Henan province and Liaoning province in October 2022, whereas the clinical trial sites located in COVID-19 low-risk areas were not impacted; (ii) during late March to May 2022 when the quarantine measures were in place in Shanghai, we had several essential workers voluntarily stayed at our facilities to ensure the continued research and development and CMC activities, and for the same reason, manufacturing of our product candidates was not interrupted and was able to continuously support our clinical development activities; (iii) we had resumed daily operations since the beginning of June 2022 in a way that our office had reopened, our employees had returned to office, and our research, clinical development and CMC activities were fully recovered; since then and up to the Latest Practicable Date, we had not been subject to further suspension of our daily operations; (iv) for our drug candidates manufactured by CDMOs, we were informed that they were not severely affected by the outbreaks; (v) we had adequate raw materials for the continued manufacturing of our product candidates; and (vi) the construction of our manufacturing facilities was impacted due to the resurgence of COVID-19 in Shanghai; however, as we plan to work with our CMO/CDMO partners and reserve their manufacturing capacities in advance to meet the drug supply demands for pivotal trials and initial product launch of our product candidates, we expect limited impact of such potential delay on our operations and financial performance. As we experienced temporary delays in subject enrollment and patient engagement activities due to the COVID-19 outbreaks, which reduced the number and availability of patients for a short time period, our operations for clinical trials have experienced slight disruptions and delays. However, our planned schedule of our clinical trials of our drug candidates have not been materially affected by such COVID-19 outbreaks. Considering that we are able to submit our IND applications in an electronic way and maintain open communication channels with the NMPA, the regulatory filings of our drug candidates were not affected by the COVID-19 outbreaks, either. Since December 2022, China has lifted substantially all of its restrictive measures nationwide, and we have resumed the normal operations and have been able to follow our planned schedule for our clinical trials and regulatory communications in China since then. The expected development progress of our drug candidates has taken into account the temporary delays and disruptions on our ongoing clinical trials and manufacturing capabilities caused by the previous COVID-19 outbreaks in China. However, as the COVID-19 outbreaks are with limited precedent, it is not possible to predict the impact on our business or our industry in a precise way. In view of the above situation, our Directors confirmed that the COVID-19 outbreaks did not have a material adverse impact on our business operations and financial performance as of the Latest Practicable Date, as (i) there had been no material disruption of our ongoing clinical trials or research and development efforts; and (ii) we had not encountered any material supply chain disruption. We cannot foresee whether COVID-19 will have a material and adverse impact on our business going forward. See “Risk Factors — Key Risks Relating to Our Business, Business Operations, Intellectual Property Rights and Financial Prospects — The COVID-19 pandemic could adversely impact our business, including our clinical trials.” We will closely monitor and evaluate any impact of such outbreak on us and adjust our precautionary measures according to its developments. We will also continue to monitor the COVID-19 situation as well as various regulatory and administrative measures adopted by local governments to prevent and control the outbreak. NO MATERIAL ADVERSE CHANGE Our Directors confirm that, as of the date of this prospectus, there has been no material adverse change in our financial or trading position, indebtedness, contingent liabilities or prospects of our Group since April 30, 2023, the end of the period reported in the accountants’ report set out in Appendix IA to this prospectus, and up to the date of this prospectus, and there is no event since April 30, 2023 and up to the date of this prospectus that would materially affect the information contained in the accountants’ report set out in Appendix IA to this prospectus. SUMMARY –2 8– --- page 38 --- In this prospectus, unless the context otherwise requires, the following terms and expressions shall have the meanings set forth below. Certain other terms are explained in “Glossary of Technical Terms.” “Accountants’ Report” the accountants’ report of our Company, the text of which is set out in Appendix IA to this prospectus “affiliate(s)” with respect to any specified person, any other person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified person “AFRC” the Accounting and Financial Reporting Council of Hong Kong “AFRCO” the Accounting and Financial Reporting Council Ordinance (Chapter 588 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time “Articles of Association” or “Articles” the articles of association of our Company conditionally adopted on June 14, 2022 and amended on June 1, 2023 with effect from the Listing, as amended, supplemented or otherwise modified from time to time, a summary of which is set out in “Appendix III — Summary of Articles of Association” to this prospectus “associate(s)” has the meaning ascribed to it under the Listing Rules “Audit Committee” the audit committee of our Board “Board” or “Board of Directors” the board of Directors of our Company “Business Day” a day on which banks in Hong Kong are generally open for normal business to the public and which is not a Saturday, Sunday or public holiday in Hong Kong “Capital Market Intermediaries” the capital market intermediaries as named in “Directors, Supervisors and Parties Involved in the Global Offering” “CCASS” the Central Clearing and Settlement System established and operated by HKSCC “CCASS Clearing Participant” a person admitted to participating in CCASS as a direct clearing participant or general clearing participant “CCASS Custodian Participant” a person admitted to participating in CCASS as a custodian participant DEFINITIONS –2 9– --- page 39 --- “CCASS EIPO ” the application for the Hong Kong Offer Shares to be issued in the name of HKSCC Nominees and deposited directly into CCASS to be credited to your or a designated CCASS Participant’s stock account through causing HKSCC Nominees to apply on your behalf, including by (i) instructing your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Hong Kong Offer Shares on your behalf, or (ii) if you are an existing CCASS Investor Participant, giving electronic application instructions through the CCASS Internet System ( https://ip.ccass.com ) or through the CCASS Phone System (using the procedures in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC can also input electronic application instructions for CCASS Investor Participants through HKSCC’s Customer Service Centre by completing an input request “CCASS Investor Participant” a person admitted to participating in CCASS as an investor participant who may be an individual or joint individuals or a corporation “CCASS Operational Procedures” the Operational Procedures of HKSCC in relation to CCASS, containing the practices, procedures and administrative requirements relating to operations and functions of CCASS, as from time to time in force “CCASS Participant” a CCASS Clearing Participant, a CCASS Custodian Participant or a CCASS Investor Participant “China” or “PRC” the People’s Republic of China excluding, for the purpose of this prospectus, Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan “close associate(s)” has the meaning ascribed to it under the Listing Rules “CNIPA” China National Intellectual Property Administration (࢕ ᗆପᛆ҅ ) “Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) as amended, supplemented or otherwise modified from time to time “Companies (Winding Up and Miscellaneous Provisions) Ordinance” the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time DEFINITIONS –3 0– --- page 40 --- “Company,” “our Company” or “the Company” ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (׻׼֝ ᔼᖹҦஔ (ɪऎ)ʮ̡ ), a joint stock company incorporated in the PRC with limited liability on June 14, 2022, or, where the context requires (as the case may be), its predecessor, ImmuneOnco Biopharmaceuticals (Shanghai) Co., Ltd. (ᔼᖹҦஔ (ɪऎ)ʮ ̡), a limited liability company established in the PRC on June 18, 2015 “Compliance Advisor” Rainbow Capital (HK) Limited “connected person(s)” has the meaning ascribed to it under the Listing Rules “connected transaction(s)” has the meaning ascribed to it under the Listing Rules “Controlling Shareholders” refers to Dr. Tian, Jiaxing Changxian, Jiaxing Changyu and Halo Investment II. For further details, see “Relationship with Our Controlling Shareholders” “core connected person(s)” has the meaning ascribed to it under the Listing Rules “Corporate Governance Code” the Corporate Governance Code set out in Appendix 14 to the Listing Rules “CSDC” China Securities Depositary and Clearing Corporation Limited (ப΂ʮ̡ ) “CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ၍ ึ) “Director(s)” or “our Director(s)” the director(s) of our Company “Dr. Tian” Dr. Tian Wenzhi ( ͞˖қ), the chairman of the Board, the chief executive officer, the chief scientific officer and the executive Director of our Company, and one of our Controlling Shareholders “EIT” enterprise income tax “EIT Law” Enterprise Income Tax Law of the PRC ( ʕശɛ͏΍ձ਷ ‘), as amended, supplemented or otherwise modified from time to time “Employee Shareholding Platforms” the Onshore Employee Shareholding Platforms and the Offshore Employee Shareholding Platform “Exchange Participant” a person (a) who, in accordance with the Rules of the Stock Exchange, may trade on or through the Stock Exchange; and (b) whose name is entered in a list, register or roll kept by the Stock Exchange as a person who may trade on or through the Stock Exchange “Extreme Conditions” extreme conditions caused by a super typhoon as announced by the Government of Hong Kong “Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an independent market research and consulting company DEFINITIONS –3 1– --- page 41 --- “Frost & Sullivan Report” the report commissioned by our Company and independently prepared by Frost & Sullivan, a summary of which is set forth in “Industry Overview” “GBA Investment” GBA Fund Investment Limited, a private company incorporated under the laws of Hong Kong on July 8, 2019 “Global Offering” the Hong Kong Public Offering and the International Offering “GREEN Application Form(s)” the application form(s) to be completed by the White Form eIPO Service Provider designated by our Company “Group,” “our Group,” “we” or “us” our Company and our subsidiaries “H Share Registrar” Computershare Hong Kong Investor Services Limited “H Share(s)” ordinary share(s) in the share capital of our Company, with a nominal value of RMB1.00 each, which are to be subscribed for and traded in Hong Kong dollars and for which an application has been made for the granting of listing and permission to deal in on the Stock Exchange “Halo Investment II” or “Offshore Employee Shareholding Platform” Halo Biomedical Investment II Limited, a business company incorporated in the British Virgin Islands on October 20, 2021, one of our Employee Shareholding Platforms, and one of our Controlling Shareholders “Halo LP” Halo Biomedical LP, a limited partnership established under the laws of the British Virgin Islands on October 19, 2021, the sole shareholder of Halo Investment II which is ultimately controlled by Dr. Tian “HK$” or “HK dollars” Hong Kong dollars, the lawful currency of Hong Kong “HKSCC” Hong Kong Securities Clearing Company Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited “HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary of HKSCC “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Hong Kong Offer Shares” 1,714,800 H Shares (subject to reallocation as described in “Structure of the Global Offering”) initially offered by our Company for subscription at the Offer Price pursuant to the Hong Kong Public Offering “Hong Kong Public Offering” the offering of the Hong Kong Offer Shares for subscription by the public in Hong Kong at the Offer Price (plus brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee), on and subject to the terms and conditions described in “Structure of the Global Offering — The Hong Kong Public Offering” “Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed in “Underwriting — Hong Kong Underwriters” DEFINITIONS –3 2– --- page 42 --- “Hong Kong Underwriting Agreement” the underwriting agreement dated August 23, 2023 relating to the Hong Kong Public Offering entered into by, among others, our Company, Dr. Tian, Jiaxing Changxian Enterprise Management L.P. (Limited Partnership) ( ྗጳᬅ Άุ၍ଣΥྫΆุ (Υྫ)), Jiaxing Changyu Enterprise Management L.P. (Limited Partnership) ( ྗጳᬅ ρΆุ၍ଣΥྫΆุ (Υྫ)), Halo Biomedical Investment II Limited, Morgan Stanley Asia Limited, China International Capital Corporation Hong Kong Securities Limited and other Hong Kong Underwriters, as further described in “Underwriting — Underwriting Arrangements and Expenses — The Hong Kong Public Offering — Hong Kong Underwriting Agreement” “Huabo Biopharm” Huabo Biopharm (Shanghai) Co., Ltd. (ᔼᖹҦ ஔ(ɪऎ)ʮ̡), a limited company established under the laws of the PRC “IFRSs” International Financial Reporting Standards, which include standards, amendments and interpretations promulgated by the International Accounting Standards Board and the International Accounting Standards and interpretations issued by the International Accounting Standards Committee “ImmuneOnco Hong Kong” ImmuneOnco Hong Kong Limited, a limited liability company established under the laws of Hong Kong on September 15, 2021, which is a wholly-owned subsidiary of our Company “ImmuneOnco Shanghai” ImmuneOnco (Shanghai) Biopharma Co., Ltd (͛ ᖹุ(ɪऎ)ʮ̡), a limited liability company established under the laws of the PRC on September 28, 2021, which is a wholly-owned subsidiary of our Company “ImmuneTANK” ImmuneTANK Biopharmaceuticals (Shanghai) Co., Ltd. (֝ ᔼᖹҦஔ (ɪऎ)ʮ̡), a limited liability company established under the laws of the PRC on February 5, 2018, which is a wholly-owned subsidiary of our Company “independent third party(ies)” entity(ies) or person(s) which, to the best of our Directors’ knowledge, information, and belief having made all reasonable enquiries, is/are not a connected person(s) of our Company within the meaning of the Listing Rules “International Offer Shares” 15,432,400 H Shares (subject to reallocation) initially offered by our Company pursuant to the International Offering together with, where relevant, any additional H Shares which may be issued by us pursuant to the exercise of the Over-allotment Option as described in “Structure of the Global Offering” DEFINITIONS –3 3– --- page 43 --- “International Offering” the conditional placing of the International Offer Shares by the International Underwriters at the Offer Price outside the United States in offshore transactions in reliance on Regulation S and in the United States to QIBs only in reliance on Rule 144A or any other available exemption from the registration requirements under the U.S. Securities Act, in each case on and subject to the terms and conditions of the International Underwriting Agreement, as further described in “Structure of the Global Offering — The International Offering” “International Underwriters” the underwriters of the International Offering listed in the International Underwriting Agreement “International Underwriting Agreement” the underwriting agreement relating to the International Offering expected to be entered into on or around August 29, 2023 by, among others, our Company and the International Underwriters, as further described in “Underwriting — Underwriting Arrangements and Expenses — The International Offering — International Underwriting Agreement” “Jiaxing Changxian” Jiaxing Changxian Enterprise Management L.P. (Limited Partnership) (Άุ၍ଣΥྫΆุ (Υྫ)), a limited liability partnership incorporated in the PRC on April 29, 2016, one of our Employee Shareholding Platforms, and one of our Controlling Shareholders “Jiaxing Changyu” Jiaxing Changyu Enterprise Management L.P. (Limited Partnership) ( ྗጳᬅρΆุ၍ଣΥྫΆุ (Υྫ)), a limited liability partnership incorporated in the PRC on March 24, 2021, one of our Employee Shareholding Platforms, and one of our Controlling Shareholders “Joint Bookrunners” the joint bookrunners as named in “Directors, Supervisors and Parties Involved in the Global Offering” “Joint Global Coordinators” the joint global coordinators as named in “Directors, Supervisors and Parties Involved in the Global Offering” “Joint Lead Managers” the joint lead managers as named in “Directors, Supervisors and Parties Involved in the Global Offering” “Joint Sponsors” Morgan Stanley Asia Limited and China International Capital Corporation Hong Kong Securities Limited “Lapam Capital” Beijing Lapam Healthcare Investment Centre (Limited Partnership) ( ̏ԯᎲᇂ਄ੰᔼᐕҳ༟ʕː (Υྫ)), a limited partnership incorporated under the laws of the PRC on January 24, 2017 “LA V ImmuneOnco” LA V ImmuneOnco Hong Kong Limited (ʮ ̡), a private company incorporated under the laws of Hong Kong on July 14, 2020 “LA V ImmOn” LA V ImmOn Hong Kong Limited (ʮ̡ ), a private company incorporated under the laws of Hong Kong on February 2, 2021 DEFINITIONS –3 4– --- page 44 --- “Latest Practicable Date” August 17, 2023, being the latest practicable date for the purpose of ascertaining certain information contained in this prospectus prior to its publication “Listing” the listing of the H Shares on the Main Board of the Stock Exchange “Listing Committee” the listing committee of the Stock Exchange “Listing Date” the date expected to be on or about Tuesday, September 5, 2023, on which the H Shares are listed and from which dealings therein are permitted to take place on the Stock Exchange “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise modified from time to time “Macroimmune” Macroimmune Inc, a limited liability company established under the laws of Delaware on January 6, 2014, which is a wholly-owned subsidiary of our Company “Main Board” the stock exchange (excluding the option market) operated by the Stock Exchange which is independent from and operated in parallel with the GEM of the Stock Exchange “Ministry of Finance” or “MOF” the Ministry of Finance of the PRC (݁ ௅) “MOFCOM” the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠ ਕ௅) “NDRC” the National Development and Reform Commission of the PRC (ึ ) “NMPA” the National Medical Products Administration of the PRC (္ຖ၍ଣ҅ ), successor to the China Food and Drug Administration or CFDA (္ຖ၍ଣᐼ ҅) “Nomination Committee” the nomination committee of our Board “Offer Price” the offer price per Offer Share (exclusive of brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange trading fee of 0.00565%) of HK$18.60, at which the Offer Shares are to be subscribed for or purchased pursuant to the Global Offering “Offer Share(s)” the Hong Kong Offer Share(s) and the International Offer Share(s) “Onshore Employee Shareholding Platforms” Jiaxing Changxian and Jiaxing Changyu DEFINITIONS –3 5– --- page 45 --- “Over-allotment Option” the option granted by our Company to the International Underwriters, exercisable by the Overall Coordinators (on behalf of the International Underwriters) pursuant to the International Underwriting Agreement, to require our Company to allot and issue up to an aggregate of 2,572,000 additional H Shares at the Offer Price, representing approximately 15% of the Offer Shares initially available under the Global Offering, to cover, among other things, over-allocations in the International Offering, if any, further details of which are described in “Underwriting — Underwriting Arrangements and Expenses — The International Offering — Over-allotment Option” “Overall Coordinators” the overall coordinators as named in “Directors, Supervisors and Parties Involved in the Global Offering” “PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ ), the central bank of the PRC “PRC Company Law” the Company Law of the PRC (‘), as amended and adopted by the Standing Committee of the Eighth National People’s Congress on December 29, 1993 and effective on July 1, 1994, which was last amended and became effective on October 26, 2018, as amended, supplemented or otherwise modified from time to time “PRC Government” or “State” the central government of the PRC, including all governmental subdivisions (including principal, municipal and other regional or local government entities) and instrumentalities thereof or, where the context requires, any of them “PRC Legal Advisor” JunHe LLP, our legal advisor as to PRC laws “Pre-IPO Investment(s)” the investment(s) in our Company undertaken by the Pre-IPO Investors, details of which are set out in “History, Development and Corporate Structure” “Pre-IPO Investor(s)” the investor(s) from whom our Company obtained several rounds of investments, the details of which are set out in “History, Development and Corporate Structure” “prospectus” this prospectus being issued in connection with the Hong Kong Public Offering “QIB” a qualified institutional buyer within the meaning of Rule 144A “Regulation S” Regulation S under the U.S. Securities Act “Remuneration Committee” the remuneration committee of our Board “RMB” or “Renminbi” Renminbi, the lawful currency of the PRC “Rule 144A” Rule 144A under the U.S. Securities Act “SAFE” the State Administration of Foreign Exchange of the PRC (̮ි၍ଣ҅ ) DEFINITIONS –3 6– --- page 46 --- “SAT” the State Administration of Taxation of the PRC (࢕ ೼ਕᐼ҅) “Series A Financing” one of the Pre-IPO Investments in our Company, the details of which are set out in “History, Development and Corporate Structure — Establishment and Major Shareholding Changes of our Company — Equity Transfer and Series A Financing” “Series B Financing” one of the Pre-IPO Investments in our Company, the details of which are set out in “History, Development and Corporate Structure — Establishment and Major Shareholding Changes of our Company — Equity Transfer and Series B Financing” “Series B+ Financing” one of the Pre-IPO Investments in our Company, the details of which are set out in “History, Development and Corporate Structure — Establishment and Major Shareholding Changes of our Company — Equity Transfer and Series B+ Financing” “Series C Financing” one of the Pre-IPO Investments in our Company, the details of which are set out in “History, Development and Corporate Structure — Establishment and Major Shareholding Changes of our Company — Equity Transfer and Series C Financing” “Series Pre-A Financing” one of the Pre-IPO Investments in our Company, the details of which are set out in “History, Development and Corporate Structure — Establishment and Major Shareholding Changes of our Company — Series Pre-A Financing” “Series Pre-B Financing” one of the Pre-IPO Investments in our Company, the details of which are set out in “History, Development and Corporate Structure — Establishment and Major Shareholding Changes of our Company — Series Pre-B Financing” “SFC” the Securities and Futures Commission of Hong Kong “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time “Shanghai-Hong Kong Stock Connect” a securities trading and clearing links program developed by the Stock Exchange, Shanghai Stock Exchange, HKSCC and CSDC for the establishment of mutual market access between Hong Kong and Shanghai “Share(s)” ordinary share(s) in the share capital of our Company with a nominal value of RMB1.00 each, comprising the Unlisted Shares and H Shares “Shareholder(s)” holder(s) of the Share(s) DEFINITIONS –3 7– --- page 47 --- “Shenzhen-Hong Kong Stock Connect” a securities trading and clearing links program to be developed by the Stock Exchange, Shenzhen Stock Exchange, HKSCC and CSDC for the establishment of mutual market access between Hong Kong and Shenzhen “Sophisticated Investor(s)” has the meaning given to is under Guidance Letter HKEX-GL92-18 issued by the Stock Exchange “Stabilizing Manager” Morgan Stanley Asia Limited “State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫ ) “Stock Exchange” The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited “subsidiary(ies)” has the meaning ascribed to it under the Listing Rules “substantial Shareholder(s)” has the meaning ascribed to it under the Listing Rules “Supervisor(s)” member(s) of our Supervisory Committee “Supervisory Committee” the supervisory committee of our Company “Takeovers Code” the Codes on Takeovers and Mergers and Share Buy-back issued by the SFC, as amended, supplemented or otherwise modified from time to time “Track Record Period” the periods comprising the two financial years ended December 31, 2021, 2022 and the four months ended April 30, 2023 “Underwriters” the Hong Kong Underwriters and the International Underwriters “Underwriting Agreements” the Hong Kong Underwriting Agreement and the International Underwriting Agreement “Unlisted Share(s)” ordinary share(s) issued by our Company with a nominal value of RMB1.0 each which is/are not listed on any stock exchange “U.S.” or “United States” the United States of America, its territories, its possessions and all areas subject to its jurisdiction “U.S. dollar” or “US$” United States dollar, the lawful currency of the United States “U.S. Securities Act” the United States Securities Act of 1933, as amended and supplemented or otherwise modified from time to time, and the rules and regulations promulgated thereunder “White Form eIPO ” the application for the Hong Kong Offer Shares to be issued in the applicant’s own name by submitting applications online through the designated website of White Form eIPO Service Provider at www.eipo.com.hk “White Form eIPO Service Provider” Computershare Hong Kong Investor Services Limited DEFINITIONS –3 8– --- page 48 --- “Zhangjiang Sci & Tech” Shanghai Zhangjiang Science & Technology Venture Capital Co., Ltd. (ʮ̡ ), a company incorporated under the laws of the PRC on October 9, 2004 “ZJ Leading Initiating VC” Shanghai Zhangjiang Leading Initiating Venture Capital (Limited Partnership) (ჯʏʺω௴ุҳ༟ʕː (Ϟ Υྫ)), a limited partnership incorporated under the laws of the PRC on September 17, 2015 “ZJ Leading SiQi VC” Jiaxing Zhangke Lingyi Siqi Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆ ุ(Υྫ)), a limited partnership incorporated under the laws of the PRC on November 2, 2020 “%” per cent For ease of reference, the names of Chinese laws and regulations, governmental authorities, institutions, natural persons or other entities (including certain of our subsidiaries) have been included in this prospectus in both the Chinese and English languages and in the event of any inconsistency, the Chinese versions shall prevail. For the purpose of this prospectus, references to “provinces” of China include provinces, municipalities under direct administration of the central government and provincial-level autonomous regions. Certain amounts and percentage figures included in this prospectus have been subject to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures preceding them. Any discrepancies in any table or chart between the total shown and the sum of the amounts listed are due to rounding. DEFINITIONS –3 9– --- page 49 --- This glossary contains definitions of certain technical terms used in this prospectus in connection with us and our business. These may not correspond to standard industry definitions, and may not be comparable to similarly terms adopted by other companies. “AACR” American Association for Cancer Research “accelerated approval pathway” It refers to a regulatory process offered by agencies like the NMPA and FDA to expedite the approval of drugs and treatments that fill a high unmet medical need, often for serious or life-threatening conditions. The accelerated approval is typically based on a determination that the drug or treatment has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict a clinical benefit. However, after receiving accelerated approval, the drug or treatment must undergo confirmatory trials to verify and describe its clinical benefit “adaptive immunity” a type of immunity that functions as the second line of defense that identifies and eliminates specifically presented foreign substance or antigens “ADC” antibody drug conjugate, a class of biopharmaceutical drugs that combine monoclonal antibodies specific to surface antigens present on particular tumor cells with highly potent antitumor small molecule agents linked via a chemical linker “affinity” the extent or fraction to which a drug binds to receptors at any given drug concentration or the firmness with which the drug binds to the receptor. Affinity describes the strength of the attraction between two chemicals, or an antigen and an antibody “AML” acute myeloid leukemia “angiogenesis” the formation and remodelling of new blood vessels and capillaries from growth of pre-existing blood vessels “antibody-dependent cellular cytotoxicity” or “ADCC” an immune mechanism through which Fc receptor-bearing effector cells can recognize and kill antibody-coated target cells expressing tumor- or pathogen-derived antigens on their surface “antibody-dependent cellular phagocytosis” or “ADCP” the mechanism by which antibody-opsonized target cells activate the Fc receptors on the surface of phagocytes to induce phagocytosis, resulting in internalization and degradation of the target cell through phagosome acidification “antibody-dependent cellular trogocytosis” or “ADCT” tumor-targeted antibody-mediated transfer of membrane fragments and ligands from tumor cells to effector cells such as monocytes, macrophages, and neutrophils “antigen” molecule that stimulates an immune response by activating lymphocytes GLOSSARY OF TECHNICAL TERMS –4 0– --- page 50 --- “antigenic sink” The phenomenon of the “antigenic sink” occurs when the expression of intended targets on normal tissue prevents therapeutic antibodies or drugs from reaching their intended tumor cell targets in the body. This “antigenic sink” phenomenon can necessitate a higher dose to achieve the minimum effective concentration threshold “apoptosis” programmed cell death, a genetically directed process of cell self-destruction that is marked by the fragmentation of nuclear DNA “ASCO” American Society of Clinical Oncology “ASH” American Society of Hematology “assay” an analysis done to determine (1) the presence of a substance and the amount of that substance and (2) the biological or pharmacological potency of a drug “autoimmune diseases” diseases which arise from an abnormal immune response of the body against substances and tissues normally present in the body “azacitidine” a pyrimidine analogue, is an antineoplastic agent that acts mainly by causing hypomethylation of cytosine residues in newly replicated DNA “BC” breast cancer “B cell(s)” a type of white blood cell, which are the results of multipotential cell differentiation in the bone marrow and mainly responsible for producing antibodies “bispecific antibody” antibodies with two binding sites directed at two different targets or two different epitopes on the same target “BLA” biologics license application “B-NHL” B-cell non-Hodgkin lymphoma “BTC” biliary tract cancer “CAGR” compound annual growth rate “carcinoma” a cancer that begins in the lining layer (epithelial cells) of organs “CAR-T” Chimeric Antigen Receptor T-Cell Immunotherapy “CC” cervical cancer “CD3” cluster of differentiation 3, a protein complex and T cell co-receptor that is involved in activating both the cytotoxic T cell and T helper cells “CD20” cluster of differentiation 20, a cell surface protein widely expressed on B cells GLOSSARY OF TECHNICAL TERMS –4 1– --- page 51 --- “CD24” cluster of differentiation 24, is a highly glycosylated protein with a small protein core that is linked to the plasma membrane via a glycosyl-phosphatidylinositol anchor. It is widely expressed on numerous types of tumor cells, and has been recognized as an important marker for poor prognosis of those cancers “CD27” cluster of differentiation 27, a member of the tumor necrosis factor receptors family, is constitutively expressed on thymocytes, naïve T cells, B cells, and NK cells “CD47” cluster of differentiation 47, also known as integrin associated protein, a membrane protein which provides a “don’t eat me” signal to macrophages “CD70” cluster of differentiation 70, a protein that is expressed on activated lymphocytes “CD80” cluster of differentiation 80, one of the proteins in the immunoglobulin superfamily, a type I transmembrane protein on activated B cells, activated monocytes, activated follicular dendritic cells, and some activated T cells, which provides a costimulatory signal to T cells during antigen presentation “CD86” cluster of differentiation 86, a costimulatory molecule belonging to the immunoglobulin superfamily expressed on dendritic cells, macrophages, B cells, and other antigen-presenting cells “CDMO(s)” contract development and manufacturing organization, which is a pharmaceutical company that develops and manufactures drugs for other pharmaceutical companies on a contractual basis “cell line” a population of cells which descend from a single cell and contain the same genetic makeup, thereby producing the same proteins. The productivity of a cell line determines the cost of manufacturing and the quality of a cell line is directly related to the quality of the relevant biologics “cGMP” current Good Manufacturing Practice “chemokines” a family of small cytokines or signaling proteins secreted by cells that induce directed chemotaxis in nearby responsive cells “chemotherapy” or “chemo” a category of cancer treatment that uses one or more anti-cancer chemotherapeutic agents as part of its standardized regimen “cHL” classical Hodgkin lymphoma “chimeric” in the laboratory, a chimeric protein can be made by combining two different genes. For example, a chimeric antibody is made by joining antibody genes from two different species, such as human and mouse GLOSSARY OF TECHNICAL TERMS –4 2– --- page 52 --- “CLL” chronic lymphocytic leukemia “clinical trial” a research study for validating or finding the therapeutic effects and side effects of test drugs in order to determine the therapeutic value and safety of such drugs “CMC” chemistry, manufacturing, and controls processes, including manufacturing techniques, impurities studies, quality controls and stability studies “CMML” chronic myelomonocyte leukemia “CMO(s)” contract manufacturing organization(s), a company that serves other companies in the pharmaceutical industry on a contract basis to provide comprehensive services from drug development through drug manufacturing “cohort” a group of patients as part of a clinical study who share a common characteristic or experience within a defined period and who are monitored over time “cold tumors” tumors that are not likely to trigger a strong immune response. Cold tumors tend to be surrounded by cells that are able to suppress the immune responses and keep T cells from attacking and killing the tumor cells “combination therapy” or “combo” treatment in which a patient is given two or more drugs (or other therapeutic agents) for a single disease “complement-dependent cytotoxicity” or “CDC” the mechanism by which antibody-coated target cells recruit and activate components of the complement cascade, leading to the formation of a membrane attack complex on the cell surface and subsequent cell lysis “compound(s)” a substance consisting of two or more elements in union “COVID-19” coronavirus disease 2019, a disease caused by a novel virus designated as severe acute respiratory syndrome coronavirus “CR” complete response, which means that all target lesions have disappeared during the course of treatment “CRC” colorectal cancer “CRi” complete remission with incomplete hematologic recovery “CRO(s)” contract research organization, a company provides support to the pharmaceutical, biotechnology, and medical device industries in the form of research and development services outsourced on a contract basis “CRS” cytokine release syndrome, an acute systemic inflammatory syndrome characterized by fever and multiple organ dysfunction that is associated with CAR-T therapy, therapeutic antibodies, and haploidentical allogeneic transplantation. GLOSSARY OF TECHNICAL TERMS –4 3– --- page 53 --- “CTLA-4” cytotoxic T-lymphocyte-associated protein 4, which down-regulates T cell immune response to cancer cells “cytokine(s)” a broad and loose category of small proteins that are important in cell signaling, whose release has an effect on the behavior of cells expressing corresponding receptors/ligands “cytotoxic” toxic to living cells “dendritic cells” or “DC” cells that constantly sample their surroundings for pathogens such as viruses and bacteria, detect dangers, and initiate immune responses. Immature patrolling dendritic cells have high endocytic activity and a low T-cells activation potential. Contact with a pathogen induces maturation and the expression of certain cell-surface molecules, greatly enhancing their ability to activate T cells “DCR” disease control rate “DLBCL” diffuse large B-cell lymphoma, a common type of non-Hodgkin’s lymphoma that starts in lymphocytes “DLT” dose-limiting toxicity, side effects of a drug or other treatment that are serious enough to prevent an increase in dose of that treatment in clinical trial “docetaxel” a chemotherapy medication used to treat a number of types of cancer, including breast cancer, head and neck cancer, stomach cancer, prostate cancer and NSCLC “EC” esophageal cancer “EGFR” epidermal growth factor receptor “ESCC” esophageal squamous cell carcinoma, a high-mortality cancer with complex etiology and progression involving both genetic and environmental factors “Fc” or “Fc region” fragment crystallisable region, which is the tail region of an antibody that interacts with cell surface receptors called Fc receptors and some proteins of the complement system “FcγR” or “Fc γ receptors” Fc-gamma receptors, a receptor for the Fc region of immunoglobulin “FDA” the Food and Drug Administration of the United States “first-line” with respect to any disease, the first line therapy, which is the treatment regimen or regimens that are generally accepted by the medical establishment for initial treatment “FL” follicular lymphoma “fusion protein” proteins consisting of at least two domains that are encoded by separate genes “GC” gastric cancer GLOSSARY OF TECHNICAL TERMS –4 4– --- page 54 --- “GMP” a system for ensuring that products are consistently produced and controlled according to quality standards, which is designed to minimize the risks involved in any pharmaceutical production that cannot be eliminated through testing the final product. It is also the practice required in order to conform to the guidelines recommended by agencies that control the authorization and licensing of the manufacture and sale of pharmaceutical products “Grade” term used to refer to the severity of adverse events, using Grade 1, Grade 2, Grade 3, etc. “HCC” hepatocellular carcinoma “hemagglutination” clumping together of red blood cells, a form of agglutination that involves red blood cells “HER2” human epidermal growth factor receptor 2 “HER2-expressing” HER2 status of tumor cells identified with a test score of IHC 1+ or above “HER2-positive” HER2 status of tumor cells identified with a test score of either IHC 3+ or IHC 2+/FISH (or ISH)+ (IHC 2+ plus FISH (or ISH)+) “HER2-low expressing” HER2 status of tumor cells identified with a test score of either IHC 2+/FISH (or ISH)- (IHC 2+ plus FISH (or ISH)-) or IHC 1+ “HI” hematological improvement “higher-risk MDS” or “HR MDS” refers to MDS patients who fall into higher-risk group categories in the original or revised International Prognostic Scoring System “HL” Hodgkin lymphoma “HNSCC” head and neck squamous cell carcinoma “IgG” Immunoglobulin G, the most common type of antibody found in blood circulation, which plays an essential role in immune system “IgG1” immunoglobulin G1 “IgG2” immunoglobulin G2 “IgG4” immunoglobulin G4 “IL-8” Interleukin-8, one of the major mediators of the inflammatory response, which plays a role as a chemoattractant, and is also a potent angiogenic factor GLOSSARY OF TECHNICAL TERMS –4 5– --- page 55 --- “immune checkpoint(s)” regulators of the immune system, which are crucial for self-tolerance as they prevent the immune system from attacking cells indiscriminately. Certain cancers may protect themselves from attack by stimulating immune checkpoint targets “immune checkpoint inhibitors” a type of drugs that block certain proteins made by some types of immune system cells, and/or cancer cells, which help promote immune responses and allow immune cells to kill cancer cells “immunogenicity” the ability of a particular substance, such as an antigen or epitope, to provoke an immune response in the body of a human and other animal. In other words, immunogenicity is the ability to induce a humoral and/or cell-mediated immune responses “immuno-oncology therapies” or “immunotherapy” a type of therapy that involves the immune system to help the body fight cancer, infection, and other diseases “IND” investigational new drug or investigational new drug application, also known as clinical trial application in China or the U.S. “indication” a sign, symptom, or medical condition that leads to the recommendation of a treatment, test, or procedure “inhibitor” a chemical or substance added or applied to another substance to slow down a reaction or to prevent an unwanted chemical change “innate immunity” an immunity system that forms the body’s first line of defense and consists of proteins and cells that identify foreign substances and provide an immediate immune response “intermediate clinical endpoint” An intermediate clinical endpoint is a measure of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on irreversible morbidity or mortality “in vitro ” Latin for “within the glass,” studies using components of an organism that have been isolated from their usual biological surroundings, such as microorganisms, cells or biological molecules “in vivo ” Latin for “within the living,” studies in which the effects of various biological or chemical substances are tested on whole, living organisms as opposed to a partial or dead organism, or those done in vitro “LAG-3” a cell surface molecule expressed on activated T cells, NK cells, B cells, and plasmacytoid dendritic cells, playing an important role in the function of these lymphocyte subsets “macrophages” a type of white blood cell that plays a role to phagocytose antigens, removes dead cells, and stimulates the action of other immune system cells GLOSSARY OF TECHNICAL TERMS –4 6– --- page 56 --- “mCR” marrow complete response “MDS” myelodysplastic syndrome “metastatic” in reference to any disease, including cancer, disease producing organisms or of malignant or cancerous cells transferred to other parts of the body by way of the blood or lymphatic vessels or membranous surfaces “MHC” major histocompatibility complex “MM” multiple myeloma “monoclonal antibody” or “mAb” a monospecific antibody against a specific epitope on an antigen made by identical immune cells that are all clones of a unique parent cell, in contrast to polyclonal antibodies which are made from hundreds of different immune cells “monotherapy” therapy that uses a single drug to treat a disease or condition “MTD” maximum tolerated dose, the highest dose of a drug or treatment that does not cause unacceptable side effects “MZL” marginal zone lymphoma “NDA” new drug application or biologics license application, as applicable “NHL” non-Hodgkin lymphoma “NK cells” natural killer cells, a type of cytotoxic lymphocyte, which provides rapid responses to virus-infected cell and other intracellular pathogens, and respond to tumor formation “NSCLC” non-small cell lung cancer “OC” ovarian cancer “ORR” overall response rate or objective response rate, which is equal to the sum of CR and PR “OS” overall survival “PCT patent application” A PCT patent application is a single application filed under Patent Cooperation Treaty (PCT) that grants the applicant the right to file future national/regional patent applications in any of the contracting states. A PCT patent application shall enter national phases in selected contracting states within specified deadline to pursue patent protection in such jurisdictions “PD” progressive disease, refers to a at least 20% increase in the size of a tumor or in the extent of cancer in the body in response to treatment, according to RECIST GLOSSARY OF TECHNICAL TERMS –4 7– --- page 57 --- “PD-1” programmed cell death protein 1, an immune checkpoint receptor expressed on T cells, B cells and macrophages. The normal function of PD-1 is to turn off the T cell mediated immune response as part of the process that stops a healthy immune system from attacking other pathogenic cells in the body. When PD-1 on the surface of a T cell attaches to certain proteins on the surface of a normal cell or a cancer cell, the T cell turns off its ability to kill the cell “PD-L1” PD-1 ligand 1, which is a protein on the surface of a normal cell or a cancer cell that binds to its receptor, PD-1, on the surface of the T cell that causes the T cell to turn off its ability to kill the cancer cell “PFS” progression-free survival, the length of time during and after the treatment of a disease, such as cancer, that a patient lives without the disease getting worse. In a clinical trial, measuring the progression-free survival is one way to see how well a new treatment works “Phase I clinical trials” study in which a drug is introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion, and if possible, to gain an early indication of its effectiveness “Phase II clinical trials” study in which a drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases, and to determine dosage tolerance and optimal dosage “Phase III clinical trials” study in which a drug is administered to an expanded patient population generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to provide adequate information for the labeling of the product “PK” the activity of drugs in the body over a period of time, including the processes by which drugs are absorbed, distributed in the body, metabolized and excreted “PR” partial response, refers to an at least 30% but below 100% decrease in the size of a tumor or in the extent of cancer in the body in response to treatment, according to RECIST “preclinical studies” studies or programs testing a therapeutic in vitro or in vivo under laboratory condition, to gather efficacy, toxicity, pharmacokinetic and safety information and to decide whether the drug is ready for clinical trials “RBC” red blood cell “RCC” renal cell carcinoma GLOSSARY OF TECHNICAL TERMS –4 8– --- page 58 --- “RECIST” Response Evaluation Criteria in Solid Tumors, a set of published rules as a standard way to measure how well a cancer patient responds to treatment. It is based on whether tumors shrink, stay the same, or get bigger. The criteria were published in February 2000 by an international collaboration including the European Organisation for Research and Treatment of Cancer (EORTC), National Cancer Institute of the United States, and the National Cancer Institute of Canada Clinical Trials Group. Now the majority of clinical trials evaluating cancer treatments for objective response in solid tumors use RECIST. These criteria were developed and published in February 2000, and subsequently updated in 2009 “recombinant” the combination of genetic materials from more than one origin, or a method to express native proteins in vitro by genetic engineering “refractory” when used in reference to any type of cancer, cancer that does not respond to treatment. The cancer may be resistant at the beginning of treatment or it may become resistant during treatment “registrational trial” the clinical trial or study to demonstrate clinical efficacy and safety evidence required before submission for drug marketing approval “relapsed” when used in reference to any disease, including cancer, the return of a disease or the signs and symptoms of a disease after a period of improvement. With respect to cancer, the likely relapse occurs because a few of the original cancer cells survived the initial treatment. Sometimes, this is because cancer cells spread to other parts of the body and were too small to be detected during the follow-up immediately after treatment “RP2D” recommended Phase II dose “R/R” relapsed/refractory “SAE” serious adverse events, any medical occurrence in human drug trials that at any dose: results in death; is life-threatening; requires inpatient hospitalization or causes prolongation of existing hospitalization; results in persistent or significant disability/incapacity; may have caused a congenital anomaly/birth defect, or requires intervention to prevent permanent impairment or damage “SCLC” small-cell lung cancer “SD” stable disease. In oncology, it refers to cancer that is neither decreasing at least 30% nor increasing at least 20% in the size of a tumor or in the extent of cancer in the body in response to treatment, according to RECIST “Siglec-10” Sialic acid-binding Ig-like lectin 10, is an inhibitory receptor that highly expresses in B-cells and other immune cells. GLOSSARY OF TECHNICAL TERMS –4 9– --- page 59 --- “SIRPα” signal regulatory protein α, a regulatory membrane glycoprotein, which serves as an inhibitory receptor and interacts with CD47, negatively controlling effector function of innate immune cells such as phagocytosis “solid tumor” an abnormal mass of tissue that usually does not contain cysts or liquid areas. Solid tumors may be benign (not cancer), or malignant (cancer). Different types of solid tumors are named for the type of cells that form them “standard of care” treatment that is accepted by medical experts as a proper treatment for a certain type of disease and that is widely used by healthcare professionals “surrogate endpoint” Surrogate endpoints are used instead of clinical outcomes in some clinical trials. Surrogate endpoints are used when the clinical outcomes might take a very long time to study, or in cases where the clinical benefit of improving the surrogate endpoint, such as controlling blood pressure, is well understood. Clinical trials are needed to show that surrogate endpoints can be relied upon to predict, or correlate with, clinical benefit “SUSAR” suspected unexpected serious adverse reaction “T cell(s)” or “T lymphocyte(s)” a lymphocyte of a type produced or processed by the thymus gland and actively participating in the immune response, which plays a central role in cell-mediated immunity “tislelizumab” tislelizumab is a humanized IgG4 anti-PD-1 monoclonal antibody “TME” tumor microenvironment “TNBC” triple-negative breast cancer, broadly refers to any breast cancer that does not express the genes for estrogen receptor, progesterone receptor and HER2/neu “toxicity” the degree to which a substance or a mixture of substances can harm humans or animals. It is expressed generally as a dose response “TRAE(s)” treatment-related adverse events “T reg” regulatory T cells, that are a specialized subpopulation of T cells which have a role in regulating or suppressing other cells in the immune system. T reg controls the immune response to antigens and help prevent autoimmune disease “translational medicine” research that transforms scientific discoveries arising from laboratory, clinical or population studies into new clinical tools and applications that improve human health by reducing disease incidence, morbidity and mortality “USPTO” United States Patent and Trademark Office GLOSSARY OF TECHNICAL TERMS –5 0– --- page 60 --- “VEGF” vascular endothelial growth factor, a family of signaling protein critical for the growth of the new vessels and thereby development of cancer cells. VEGF binds to VEGF receptors (VEGFR), which exist as three main subtypes, including VEGFR-1, VEGFR-2 and VEGFR-3 “xenograft model” In the xenograft model, human cancer cells are implanted in an immunodeficient mouse. Subsequently a drug or drug combination is administered GLOSSARY OF TECHNICAL TERMS –5 1– --- page 61 --- This prospectus contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements are contained principally in “Summary,” “Risk Factors,” “Industry Overview,” “Business,” “Financial Information” and “Future Plans and Use of Proceeds.” These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed in “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. These forward-looking statements include, among other things, statements relating to:  our operations and business prospects;  our financial condition and performance;  our capital expenditure plan;  our ability to complete the development and obtain the relevant requisite regulatory approvals of our drug candidates;  our ability to commercialize our approved products in a timely manner;  future developments, trends and conditions in the industries and markets in which we operate or plan to operate;  general economic, political and business conditions in the markets in which we operate;  changes to the regulatory environment in the industries and markets in which we operate;  the effects of the on-going COVID-19 pandemic;  the actions and developments of our competitors;  the ability of third parties to perform in accordance with contractual terms and specifications;  our ability to retain senior management and key personnel and recruit qualified staff;  our business strategies and plans to achieve these strategies;  our ability to defend our intellectual rights and protect confidentiality;  the effectiveness of our quality control systems;  change or volatility in interest rates, foreign exchange rates, equity prices, trading volumes, commodity prices and overall market trends, including those pertaining to the PRC and the industry and markets in which we operate; and  capital market developments. FORWARD-LOOKING STATEMENTS –5 2– --- page 62 --- These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in “Risk Factors.” The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus completely and with the understanding that our actual future results or performance may be materially different from what we expect. In this prospectus, statements of, or references to, our intentions or those of any of our Directors are made as of the date of this prospectus. Any of these intentions may change in light of future development. FORWARD-LOOKING STATEMENTS –5 3– --- page 63 --- An investment in our H Shares involves significant risks. You should carefully consider all of the information in this prospectus, including the risks and uncertainties described below, before making an investment in our H Shares. The following is a description of what we consider to be our material risks. Any of the following risks could have a material adverse effect on our business, financial condition, results of operations and prospects. In any such case, the market price of our H Shares could decline, and you may lose all or part of your investment. These factors are contingencies that may or may not occur , and we are not in a position to express a view on the likelihood of any such contingency occurring. The information given is as of the Latest Practicable Date unless otherwise stated, will not be updated after the date hereof, and is subject to the cautionary statements in the section headed “Forward-looking Statements” in this prospectus. We believe there are certain risks and uncertainties involved in our operations, some of which are beyond our control. We have categorized these risks and uncertainties into: (i) key risks relating to our business, business operations, intellectual property rights and financial prospects; (ii) other risks relating to our business, comprising (a) risks relating to the development of our drug candidates, (b) risks relating to extensive government regulation, (c) risks relating to manufacturing of our drug candidates and drugs, (d) risks relating to commercialization of our drugs, (e) risks relating to our intellectual property rights; and (f) risks relating to our reliance on third parties; (iii) other risks relating to our financial position and need for additional capital; (iv) other risks relating to our operations; (v) risks relating to our doing business in China; and (vi) risks relating to the Global Offering. Additional risks and uncertainties that are presently not known to us or not expressed or implied below or that we currently deem immaterial could also harm our business, financial condition, results of operations and prospects. You should consider our business and prospects in light of the challenges we face, including the ones discussed in this section. KEY RISKS RELATING TO OUR BUSINESS, BUSINESS OPERATIONS, INTELLECTUAL PROPERTY RIGHTS AND FINANCIAL PROSPECTS We face substantial competition and our competitors may discover, develop or commercialize competing drugs faster or more successfully than we do. The development and commercialization of new drugs, especially biological products, is highly competitive. We face competition from other pharmaceutical companies and biopharmaceutical companies worldwide. There are a number of large pharmaceutical and biopharmaceutical companies that currently market and sell drugs or are pursuing the development of drugs for the treatment of the same indications for which we are developing our drug candidates. Some of these competitors have better resources and expertise than us. In particular, we face intense competition in the development of CD47-targeting molecules. In recent years, the therapeutic potential of CD47-targeted agents in lymphoma, MDS/CMML and AML has been validated by accumulating clinical data. For example, in clinical trials, Gilead’s magrolimab in combination with azacitidine has delivered an ORR of 75% and 73% in the first-line treatment of MDS and AML, respectively. IMM01, our Core Product, is an innovative CD47-targeted molecule and is being developed for the treatment of various hematologic malignancies and solid tumors in combination with other agents. There are numerous drug developers of CD47-targeted molecules globally. For example, multiple companies, including large multi-national pharmaceutical companies, are also developing CD47-targeting therapies for hematologic malignancies and solid tumors, including ALX Oncology, Trillium Therapeutics/Pfizer, Forty Seven/Gilead, I-MAB and Innovent. For details, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-targeted Drug Candidates — IMM01 (SIRP α-Fc Fusion Protein) — Our Core Product RISK FACTORS –5 4– --- page 64 --- — Market Opportunities and Competition.” Potential competitors also include academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. In light of the intense competition within the market for CD47-targeted molecules, we may not be able to compete effectively and obtain substantial market share even if we successfully complete the development and commercialization of IMM01. We anticipate that we will face increasing competition as new drugs enter the market and advanced technologies become available. Our commercial opportunity could be reduced or even eliminated if our competitors develop and commercialize drugs that are safer, have fewer or less severe side effects, or are more effective, convenient or less expensive than any drugs that we may develop or commercialize. Our competitors also may obtain approval from the NMPA, FDA, or other comparable regulatory authorities for their drugs more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. They may render our drug candidates obsolete or non-competitive before we can recover expenses of developing and commercializing any of our drug candidates. Mergers and acquisitions in the pharmaceutical and biopharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative or licensing arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. We depend substantially on the success of our clinical-stage and preclinical stage drug candidates. If we are unable to successfully complete development, obtain regulatory approval and commercialize our drug candidates, or if we experience significant delays in doing any of the foregoing, our business, financial condition, results of operations and prospects will be materially harmed. All of our drug candidates are still in development. Our ability to generate revenue and realize profitability depends on our ability to successfully complete the development of our drug candidates, obtain necessary regulatory approvals, and manufacture and commercialize our drug candidates. We have invested a significant portion of our efforts and financial resources in the development of our existing drug candidates, and we expect to continue to incur substantial and increasing expenditures for the development and commercialization of our drug candidates. The success of our drug candidates will depend on several factors, including but not limited to:  successful completion of preclinical and clinical studies;  obtaining positive results in our clinical trials demonstrating efficacy, safety and durability of effect of our drug candidates;  receipt of regulatory approvals for planned clinical trials, future clinical trials or drug registrations, manufacturing and commercialization;  successful identification of potential drug candidates based on our research or business development methodology or search criteria and process;  sufficient resources to acquire or discover additional drug candidates;  establishing sufficient commercial manufacturing capabilities, by expanding our existing facilities, building new facilities, and collaborating with CROs and CDMOs; RISK FACTORS –5 5– --- page 65 ---  the performance by CROs, CDMOs or other third parties we may retain to conduct clinical trials, of their duties to us in a manner that complies with our protocols and applicable laws and that protects the integrity of the resulting data;  obtaining, maintaining and enforcing patent, trademark, trade secret and other intellectual property protection and regulatory exclusivity for our drug candidates;  ensuring we do not infringe, misappropriate or otherwise violate the patents, trademarks, trade secrets or other intellectual property rights of third parties;  successfully launching commercial sales of our drug candidates, if and when approved;  obtaining and maintaining favorable governmental and private reimbursement from third-party payers for drugs, if and when approved;  competition with other drug products; and  continued acceptable safety profile of our drug candidates following regulatory approval. As of the Latest Practicable Date, we had eight ongoing clinical programs in China and/or the U.S., five IND/IND-enabling-stage programs, and multiple discovery- and preclinical-stage assets. However, we cannot guarantee that we will be able to obtain regulatory approvals for our drug candidates in a timely manner, or at all. In addition, none of our drug candidates has been approved for marketing in any jurisdiction. Our pipeline products may require additional preclinical and/or clinical development, regulatory approvals, building of manufacturing capabilities and capacities, and substantial investment and significant marketing efforts, before we are able to generate any revenue from product sales. If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or may ultimately be unable to complete, the development and commercialization of our drug candidates. Before obtaining regulatory approval for the sale of our drug candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of our drug candidates in humans. If the results of clinical trials of our product candidates are not positive or only modestly positive for proposed indications or if they raise safety concerns, we may (i) be subject to substantial liabilities, (ii) be delayed in or even prevented from obtaining regulatory approval for our drug candidates, (iii) obtain approval for indications that are not as broad as intended, (iv) have the product removed from the market after obtaining regulatory approval, (v) be subject to additional post-marketing testing requirements, (vi) be subject to restrictions on how the product is distributed or used; or (vii) be unable to obtain reimbursement for use of the product. Any of such events could materially and adversely affect our ability to commercialize the subject products and generate revenue. A major risk we face is the possibility that we may be prevented or delayed in obtaining marketing approval for such product candidates if the results of our ongoing or future preclinical studies and clinical trials are inconclusive with respect to the safety and efficacy of our product candidates, if we do not meet the clinical endpoints with statistical and clinically meaningful significance, or if there are safety concerns associated with our product candidates. In some instances, there can be significant variability in safety or efficacy results between different preclinical studies and clinical trials of the same drug candidate due to numerous factors, including RISK FACTORS –5 6– --- page 66 --- changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants. While we are in early stages of clinical trials with our product candidates, it is likely that there may be side effects associated with their use. For example, CD47-targeted agents are shown to cause blood toxicity in clinical trials, such as anemia, thrombocytopenia and hemagglutination (clumping of red blood cells). If the results of our trials reveal a high and unacceptable severity and prevalence of these or other side effects associated with our drug candidates, our trials could be suspended or terminated and the NMPA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our drug candidates for any or all targeted indications, and we may need to abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, the laws and regulations governing clinical trials are evolving rapidly, and the interpretations and enforcement of these laws and regulations may bring uncertainties to our drug development process. For example, the Center for Drug Evaluation recently released the Clinical Value-Oriented Anti-tumor Drug Clinical Research and Development Guideline, or the Guideline, which requires that clinical trials shall be designed in a more patient-friendly manner and shall consider the patients’ actual needs when identifying drug candidates. The Guideline releases a signal from the PRC government to raise the quality and safety standards on clinical trials for oncology drugs. Such evolving rules may make it more difficult and costly for us and other biopharmaceutical companies to identify oncology drug candidates, obtain regulatory and ethic approvals, and enroll and maintain subjects for clinical trials. If we encounter difficulties in enrolling subjects in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected. We may not be able to initiate or continue clinical trials for our drug candidates if we are unable to locate and enroll a sufficient number of eligible subjects to participate in these trials as required by the NMPA, the FDA, or similar regulatory authorities, or if there are delays in the enrollment of eligible subjects as a result of the competitive clinical enrollment environment. Overall, we may experience difficulties in subject enrollment in our clinical trials for a variety of reasons, including but not limited to:  severity of the disease under investigation;  the size and nature of the subject population;  the subject eligibility criteria defined in the protocol;  the size of the study population required for analysis of the trial’s primary endpoints;  the proximity of subjects to trial sites;  the design of the trial;  our ability to recruit clinical trial investigators with the appropriate competencies and experience; RISK FACTORS –5 7– --- page 67 ---  clinicians’ and subjects’ perceptions of the potential advantages and side effects of the drug candidate under study compared to other available therapies;  our ability to obtain and maintain subject consents;  the risk that subjects enrolled in clinical trials will not complete a clinical trial; and  the availability of approved therapies that are similar in mechanism to our drug candidates. Our clinical trials may compete with clinical trials for other drug candidates that are in the same therapeutic areas as our drug candidates. This competition will potentially reduce the number and types of subjects available to us, since some subjects who might have opted to enroll in our trials may instead opt for a trial being conducted by our competitors. Even if we are able to enroll a sufficient number of subjects in our clinical trials, delays in subject enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and materially and adversely affect our ability to advance the development of our drug candidates. We have no track record with very limited experience in launching and marketing approved drugs, and we may not be able to successfully create or increase market awareness of our drugs or sell our products, which will materially affect our ability to generate sales revenue. Our financial performance depends on the successful launching and marketing of our clinical-stage and preclinical stage drug candidates. As all of our drug candidates are in the development stage, we have not yet demonstrated an ability to commercialize any of our drug candidates. Our ability to successfully commercialize approved drugs may involve more inherent risk, take longer, and cost more than it would if we were a company with experience launching and marketing approved drugs. We will build up our commercialization and distribution capabilities to maximize our product offering and expedite market acceptance of our products. We will have to compete with other pharmaceutical and biopharmaceutical companies to recruit, hire, train and retain marketing and sales personnel. There can be no assurance that we will be able to further develop and successfully maintain in-house sales and commercial distribution capabilities to successfully commercialize any of our drug candidates, if and when approved, and as a result, we may not be able to generate sales revenue as planned. If we are unable to, or decide not to, further develop internal sales, marketing and commercial distribution capabilities, we will likely pursue collaborative arrangements regarding the sales and marketing of our approved drugs. However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or that we will have effective sales forces after establishing such collaborative arrangements. Any revenue we receive will depend upon the efforts of such third parties. We would have little or no control over the marketing and sales efforts of such third parties, and our revenue from product sales may be lower than if we had commercialized our drug candidates ourselves in a cost-effective manner. We also face competition in our search for third parties to assist us with the sales and marketing efforts for our drug candidates. In case we cannot develop and successfully maintain in-house sales and commercial distribution capabilities or collaborate with third parties to successfully commercialize our products, we may not be able to generate product sales revenue and our business and prospects may suffer. RISK FACTORS –5 8– --- page 68 --- We have incurred significant net losses since inception. We expect that we will continue to incur net losses for the foreseeable future and we may not be able to generate sufficient revenue to achieve or maintain profitability. Potential investors are at risk of losing substantially all of their investments in our H Shares. We have incurred losses in each period since our inception. In 2021, 2022 and the four months ended April 30, 2023, we had total comprehensive expenses of RMB732.9 million, RMB402.8 million and RMB111.8 million, respectively. Our total comprehensive expenses mainly resulted from research and development expenses, administrative expenses, as well as loss from changes in fair value of financial liabilities at FVTPL. We no longer recorded financial liabilities at FVTPL since January 31, 2022, as the investors’ preferred rights in connection with our series of financings, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day. We consider loss from changes in fair value of financial liabilities at FVTPL, together with share-based payments and listing expenses, as non-cash expenses. Our adjusted net loss (non-IFRS measure) was RMB182.5 million, RMB225.8 million and RMB71.3 million in 2021, 2022 and the four months ended April 30, 2023, respectively. For more information about our net losses, see “Financial Information — Description of Selected Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income” in this prospectus. We expect to continue to incur losses and expenses for the foreseeable future, primarily arising from the following events:  conducting clinical trials of our drug candidates;  engaging with CROs and CDMOs in and out of China;  constructing our new GMP manufacturing facility;  seeking regulatory approvals for our drug candidates;  commercializing our drug candidates upon obtaining marketing approval, including establishing a sales, marketing and commercialization team for any future approved products;  hiring additional clinical, quality control and R&D personnel;  seeking to identify additional drug candidates;  obtaining, maintaining, expanding and protecting our intellectual property portfolio; and  enforcing and defending any intellectual property claims. In addition, we will continue to incur costs associated with operating as a public company and in support of our growth as a development-stage or commercial-stage biopharmaceutical company. The size of our future net losses will depend, in part, on the number and scope of our drug development programs and the associated costs of those programs, the cost of commercializing any approved products, our ability to generate revenues, and the timing and amount of milestones and other payments we may receive through arrangements with third parties. If any of our drug candidates fails in clinical trials or does not gain regulatory approval, or if approved, fails to achieve market acceptance, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to become and remain profitable would decrease the value of our Company and could impair our ability to raise capital, maintain our R&D efforts, expand our business, or continue our operations. A decline in the value of our Company may also cause you to lose substantially all or part of your investment. RISK FACTORS –5 9– --- page 69 --- Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain. Our commercial success depends in part on us and our collaborators avoiding infringement, misappropriation, and other violations of the patents and other intellectual property rights of third parties. We cannot guarantee that our drug candidates or any uses of our drug candidates do not and will not in the future infringe third-party patents or other intellectual property rights. It is also possible that we failed to identify, or may in the future fail to identify, relevant patents or patent applications held by third parties that cover our drug candidates. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our products or their use. Third parties might allege that we are infringing their patent rights or that we have misappropriated their trade secrets, or that we are otherwise violating their intellectual property rights, whether with respect to the manner in which we have conducted our research, use or manufacture of the compounds we have developed or are developing. Such third parties might resort to litigation against us or other parties we have agreed to indemnify, which litigation could be based on either existing intellectual property or intellectual property that arises in the future. Our Directors confirm that during the Track Record Period and up to the Latest Practicable Date, we were not involved in any legal, arbitral or administrative proceedings or disputes which allege that we were infringing, misappropriating or otherwise violating any intellectual property right of any third party. We are aware of certain issued patents in the U.S. belonging to third parties that may potentially cover our CD47-based drug candidates and may not expire before our anticipated commercial launch of relevant drug candidates in the U.S. One of those patents was licensed to another drug developer of CD47-targeted molecules. While the clinical studies of our drug candidates are exempted from patent infringement under the U.S. patent laws, third parties who own those issued patents may initiate patent infringement claims or other legal proceedings against us to prevent us from commercializing our CD47-based products. Our Core Product IMM01 is one of the CD47-targeted drug candidates which may be subject to potential legal proceedings of patent infringement. As reviewed and advised by our legal advisor as to U.S. intellectual property law, Jun He Law Offices P.C. 1, the scope of the relevant patent claims is too broad and the patent claims are obvious over prior art 2 or lack written description and enablement support 3, the validity and enforceability of the third-party patents are thus questionable; as a result, if such third parties bring the legal proceedings against us, the risk that we will be determined by courts or other competent authorities in the U.S. to have infringed on such patent rights of the third parties is remote. The claims of a U.S. patent can be broad enough to generally cover the mechanism of 1 A U.S.-based international law firm, Locke Lord LLP, was specifically engaged to analyze one certain relevant patent to assist our U.S. legal advisor to intellectual property laws, Jun He Law Offices P.C., in issuing its legal opinion. 2 “Prior art” refers to publications or knowledge that are available to the public before the effective filing date of a patent application. Prior art may be used to evaluate whether a claimed invention in a patent application contains certain level of creativity ( i.e., more than just a simple and obvious improvement over what already exists). “Obvious over prior art” means that, though a claimed invention is different from the prior art, the difference can be readily conceived by a person having ordinary skills in the relevant field ( i.e., a hypothetical person who is familiar with the ordinary technical knowledge in that field) before the effective filing date of this claimed invention. Generally, a patent should involve inventive steps that are not obvious to a person having ordinary skills in such field. If the claimed invention is obvious over prior art, a patent for this claimed invention may not be obtained, and if obtained, it shall be invalid. 3 “Lack of written description and enablement support” means the specification of a patent or patent application does not contain a written description of the invention which can enable any person having ordinary skills in the relevant field to make and use the same. Generally, a patent should have sufficient written description containing clear and detailed enough information and guidance so that a person having ordinary skills in that field would be readily able to practice the claimed invention. If the claimed invention lacks written description and enablement support, a patent for such a claimed invention may not be obtained, and if obtained, it shall be invalid. RISK FACTORS –6 0– --- page 70 --- actions (MOA) of certain treatment methods for diseases. This means that a newly developed drug with a different structure or sequence could still be subject to potential risk of infringing the patent generally protecting the MOA of its target in the U.S. Our Core Product faces these risks due to the claims in the relevant U.S. patent which covers the use of polypeptides containing soluble human SIRP α to treat CD47+ cancers or tumors. Even using polypeptides with a different amino acid sequence could potentially result in patent infringement risks without obtaining a license from the patent owner. However, according to our legal advisors as to intellectual property law, the claims in the patent that may cover our CD47-based drug candidates are methods that had been disclosed in or suggested by certain prior patent applications and research publications ( i.e., prior art), rendering them “obvious over prior art” and lacking in patentability or validity. As of the Latest Practicable Date, neither we nor our legal advisors as to intellectual property law are aware of any patent infringement legal proceedings related to CD47-targeted drug candidates in China and globally. However, whether a product infringes a patent involves an analysis of complex legal and factual issues, the determination of which is often uncertain, and the burden of proof required to successfully challenge a third-party patent may be high. As such, even if we believe the claims are without merits, the outcome and impact of any potential legal proceedings initiated by third parties alleging that we may have infringed, misappropriated and/or otherwise violated their intellectual property rights would be dependent on court judgment and may not be in our favor. Parties making infringement or other intellectual property claims against us may obtain injunctive or other equitable relief, which could impact our ability to further develop and commercialize relevant product candidates. Such legal proceedings, regardless of their merits, could lead to considerable legal costs and be a distraction to our management. If third parties, including the third parties that control the patents described above, eventually bring successful claims against us for infringement, misappropriation or other violations of their intellectual property rights, such claims could prevent us from commercializing one or more of our drug candidates. We may also have to pay substantial damages, including treble damages and attorneys’ fees under certain circumstances, or pay royalties and other related payments. Alternatively, we may have to enter into royalty or licensing agreements with third parties in order to obtain the right to use their intellectual property rights, which agreements may not be available on terms acceptable to us, or at all. If we were unable to obtain such a license on reasonably acceptable terms, we might not be able to further develop and commercialize our drug candidates, which could harm our business significantly. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us. Defending against claims of patent infringement, misappropriation of trade secrets or other violations of intellectual property rights could be costly and time consuming, regardless of the outcome. Thus, even if we were able to ultimately prevail, or to settle at an early stage, such litigation could burden us with adverse impacts on our business and prospects. If we are unable to obtain and maintain adequate intellectual property protection for our drug candidates throughout the world, or if the scope of such intellectual property rights obtained is not sufficiently broad, our current or any future patents may be challenged and invalidated even after issuance. Our success depends in large part on our ability to protect our proprietary technologies and drug candidates from competition by obtaining, maintaining, defending and enforcing our intellectual property rights, including patent rights. We seek to protect the drug candidates and technologies that we consider commercially important by filing patent applications in China, the U.S. and other jurisdictions, relying on trade secrets or pharmaceutical regulatory protection or employing a combination of these methods. As of the Latest Practicable Date, we owned (i) nine RISK FACTORS –6 1– --- page 71 --- issued patents in the PRC, (ii) eight issued patents in the U.S., (iii) eleven issued patents and two allowed patent applications in other jurisdictions, (iv) 16 pending patent applications, including two pending PRC patent applications, one pending Hong Kong patent application, six pending U.S. patent applications, and seven pending patent applications in other jurisdictions; (v) one PRC patent application and one PCT patent application which were filed as priority applications; and (vi) five pending PCT patent applications which may enter various contracting states in the future. Please refer to the paragraph headed “Statutory and General Information — Further Information about the Business of our Company — Our Material Intellectual Property Rights” in Appendix IV to this document for further information of our material intellectual property rights. In 2019, we signed a technology transfer agreement with SunHo (China) Biopharmaceutical Co. Ltd (“ SunHo ”, a clinical-stage biotech company based in China), pursuant to which such third party acquired certain rights and interests (including one patent application in China relating to IMM2505) from us to develop and commercialize IMM2505 in China (including Hong Kong, Macau and Taiwan), while we retain the full rights and interests to IMM2505 in the rest of the world, and grant SunHo a single-digit percentage of interest in the overseas rights of IMM2505. IMM2505 is a CD47 and PD-L1 bispecific molecule internally discovered by us, which is different from IMM2520. We were the initial applicant of the patent application of IMM2505 in China, and pursuant to the technology transfer agreement, we have transferred the Chinese patent application regarding IMM2505 to such third-party transferee. The Chinese patent application of IMM2505 has been issued, and the issued claims of the Chinese patent are limited to specific amino acid sequences of an anti-PD-L1 antibody. These sequences differ from the amino acid sequences of the anti-PD-L1 antibody used in IMM2520, ensuring that IMM2505’s patent protection does not extend to cover IMM2520. As of the Latest Practicable Date, other than the above-mentioned patent of IMM2505 in China, for IMM2505, we owned one patent family, which includes one issued patent in the U.S. and one issued patent in Japan; for IMM2520, we owned one patent family, which includes one issued patent in Japan, one issued patent in the U.S., one issued patent in China, one pending patent application in the EU, and one pending PCT application which may enter various contracting states in the future. We own the full rights to develop and commercialize IMM2505 in jurisdictions other than China (including Hong Kong, Macau and Taiwan), and shall share with SunHo certain interests as agreed in the technology transfer agreement. In addition, we own the full rights to develop and commercialize IMM2520 in and outside of China. The patent prosecution process is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, defend, enforce or license all necessary or desirable patents at a reasonable cost or in a timely manner in all desirable jurisdictions. As a result, we may not be able to prevent competitors or third parties from developing and commercializing competitive drugs in all such fields and jurisdictions. If we are unable to obtain and maintain patent and other intellectual property protection with respect to our drug candidates and technologies, our business, financial condition, results of operations and prospects could be materially harmed. In addition, the requirements for patentability differ in certain jurisdictions. Many jurisdictions have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many jurisdictions limit the enforceability of patents against government agencies or government contractors. In these jurisdictions, the patent owner may have limited remedies, which could materially diminish the value of such patents. If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be materially impaired, and our business, financial condition, results of operations, and prospects may be adversely affected. Patent applications may not be granted and the granted patents may be invalidated for a number of reasons, including known or unknown prior art, deficiencies in the patent application or the lack of novelty of the underlying invention or technology. It is also possible that we will fail to identify patentable aspects of our R&D output in time to obtain patent protection. Any of these reasons may delay or interfere with our commercialization plans in China and other overseas markets. Although we enter into non-disclosure and confidentiality agreements with parties who RISK FACTORS –6 2– --- page 72 --- have access to confidential or patentable aspects of our R&D output, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to obtain patent protection. In addition, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in China, the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases, not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. Furthermore, China and the U.S. have adopted the “first-to-file” system under which whoever first files a patent application will be awarded the patent if all other patentability requirements are met. Under the first-to-file system, third parties may be granted a patent relating to a technology which we invented. The coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. An adverse determination in any proceeding challenging our patent rights could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or drug candidates and compete directly with us, or result in our inability to manufacture or commercialize drug candidates without infringing third-party patent rights. Thus, even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. In addition, the patent position of biopharmaceutical and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Furthermore, although various extensions may be available, the life of a patent and the protection it offers is limited. Even if we successfully obtain patent protection for an approved drug candidate, it may face competition from generic or biosimilar medications once the patent has expired. Manufacturers of generic or biosimilar drugs may challenge the scope, validity or enforceability of our patents in court or before a patent office, and we may not be successful in enforcing or defending those intellectual property rights and, as a result, may not be able to develop or market the relevant product exclusively, which would have a material adverse effect on any potential sales of that product. Our issued patents for our drug candidates are expected to expire on various dates as described in “Business — Intellectual Property” of this prospectus. Upon the expiration of these patents, we will not be able to assert such patent rights against potential competitors, and our business and results of operations may be adversely affected. Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such drug candidates might expire before or shortly after such drug candidates are commercialized. As a result, our patents and patent applications may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours, which could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects. Additionally, patent rights we own currently or in the future or may license in the future may be subject to a reservation of rights by one or more third parties. Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. To obtain regulatory approval for the sale of our drug candidates, we are required to conduct extensive clinical trials to demonstrate the safety and efficacy of our drug candidates in humans. Clinical trials are expensive, difficult to design and implement, and can take years to complete, with uncertainty as to the outcomes. Our current drug candidates and any future drug candidates RISK FACTORS –6 3– --- page 73 --- are susceptible to the risks of failure inherent at any stage of drug development, including the occurrence of unexpected or unacceptable adverse events or the failure to demonstrate efficacy in clinical trials. While we believe some of our drug candidates have the potential to be innovative and differentiated globally, we cannot guarantee that we will be able to realize such potential for any of our drug candidates. Failure can occur at any time during the clinical development process. The results of preclinical studies and early clinical trials of our drug candidates may not be predictive of the results of later-stage clinical trials. Drug candidates during later stages of clinical trials may fail to show the desired results in safety and efficacy despite having progressed through preclinical studies and initial clinical trials, and despite the level of scientific rigor in the design of such studies and trials and the adequacy of their execution. A number of companies in the pharmaceutical and biopharmaceutical industries have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. In some instances, there can be significant variability in safety and/or efficacy results among different trials of the same drug candidate due to numerous factors, including, but not limited to, differences in individual patient conditions, including genetic differences, and other compounding factors, such as other medications or pre-existing medical conditions, patient adherence to the dosing regimen, other trial protocol elements and the rate of dropout among clinical trial participants. Furthermore, as our drug candidates are developed through preclinical and clinical trials towards approval and commercialization, it is customary that various aspects of the development programs, such as manufacturing and formulation, are altered along the way in an effort to optimize processes and results. Such changes carry the inherent risks that they may not necessarily achieve the intended objectives. Any disruptions, changes and delays in completing our clinical trials may increase our costs, slow down our drug candidate development and approval process, and jeopardize our ability to commence product sales and generate revenue for that drug candidate. Any of these occurrences may harm our business, financial condition and prospects significantly. We may adjust our clinical development strategy from time to time based on our evaluation of emerging data to maximize the value of our entire product portfolio. In light of the emerging data from our various clinical programs and prevailing industry trends, we terminated the Phase II trial of IMM01 monotherapy in October 2022, and strategically reallocated our resources to prioritize the development of combination and bispecific therapies in our pipeline. For details, see “Business — Our Innate Immune Checkpoint-targeted Drug Candidates — IMM01 (SIRP α-Fc Fusion Protein) — Our Core Product — Summary of Clinical Trial Results — IMM01 Monotherapy.” Although we believe that our strategically planned clinical development approach is designed to optimize the clinical and commercial potential of our drug candidates, we cannot guarantee that our specific plans will always efficiently anticipate regulatory and market trend shifts or be successfully implemented. We may face damage to, destruction of or interruption of production at our facilities, which could interrupt our development plans or commercialization efforts. The manufacturing of our drug candidates during the drug development stage relies on our own pilot production lines and the cooperation with CROs and CDMOs. Currently, we have built pilot production lines that can meet needs for the manufacturing of our IMM01 for use of clinical trials. Any interruption in manufacturing operations at our facilities could result in our inability to satisfy the demands of our clinical trials. A number of factors could cause interruptions, including equipment malfunctions or failures, technology malfunctions, outbreak of infectious diseases such as COVID-19, work stoppages, damage to or destruction of either facility due to natural disasters or other unanticipated catastrophic events. If our manufacturing facilities, in particular our pilot production lines, are damaged or destroyed, we may not be able to replace our manufacturing capacity in a timely or cost-effective manner, or at all. In the event of a temporary or protracted loss of our pilot production lines or other production facilities or equipment, we might not be able to source manufacturing to a third RISK FACTORS –6 4– --- page 74 --- party. Even if we could transfer manufacturing to a third party, the shift would likely be expensive and time-consuming, particularly since the new facility would need to comply with the necessary regulatory requirements, and we would need regulatory agency approval before selling any drug products that are manufactured at that facility. We are constructing our GMP facilities for manufacturing. Any delays in completing and receiving regulatory approvals for our manufacturing facilities, or any disruption in the development of new facilities, could reduce or restrict our production capacity or our ability to develop or sell products, which could have a material and adverse effect on our business, financial condition and results of operations. In line with our future manufacturing and commercialization demands, we are currently building our own GMP manufacturing facility in Shanghai, China. We plan to complete the first stage of construction by 2025, which will provide us with an additional manufacturing capacity. We also plan to commence second stage of construction depending on the schedule of the regulatory approval and sales ramp-up of our drug portfolio in the future. However, the construction of such manufacturing facility may encounter delays or interruptions due to a number of factors, some of which are beyond our control. Such delays and interruptions could reduce or restrict our production capacity, slow down our drug development and commercialization efforts, especially if we could not source manufacturing to a third party in a timely or cost-effective manner. Even if collaboration with a third party is feasible, we will incur additional manufacturing costs. All could have a material and adverse effect on our business operations, financial condition and results of operations. Cost overruns associated with constructing or maintaining our new facility could require us to raise additional funds from other sources. Our manufacturing facility is required to obtain and maintain regulatory approvals, including being subject to ongoing, periodic inspection by the NMPA, FDA or other comparable regulatory authorities to ensure compliance with GMP regulations. Further, we will be subject to continued review and site inspections to assess compliance with GMP and adherence to commitments made in any biologics license application, other marketing application and previous responses to any inspection observations. Accordingly, we and others with whom we work must continue to spend time, money and efforts in all areas of regulatory compliance, including manufacturing, production and quality control. In addition, to obtain FDA approval for our products in the U.S., we would need to undergo strict pre-approval inspections of our manufacturing facilities. Historically, manufacturing facilities in China have had difficulty meeting FDA standards. When inspecting our manufacturing facilities, the FDA may cite GMP deficiencies. Remediating deficiencies can be laborious, time consuming and costly. Moreover, the FDA will generally re-inspect the facility to determine whether the deficiency was remediated to its satisfaction and may note further deficiencies during re-inspection. Our failure to follow and document our adherence to such GMP regulations or other regulatory requirements may lead to significant delays in the availability of products for clinical or, in the future, commercial use, may result in the termination of or a hold on a clinical trial, or may delay or prevent filing or approval of marketing applications for our drug candidates or their commercialization, if approved. Regulatory authority may also impose fines, injunctions, civil penalties, suspension or withdrawal of approvals, seizures or recalls of our drug candidates, operating restrictions and criminal prosecutions, any of which could harm our business. Furthermore, if the interpretation or implementation of existing laws and regulations changes or new regulations come into effect, we may be required to obtain additional approvals, permits, licenses or certificates and we cannot assure you that we will be able to do so. RISK FACTORS –6 5– --- page 75 --- We had net cash outflows from our operating activities during the Track Record Period, and we may need to obtain additional financing to fund our operations. If we are unable to obtain sufficient financing on terms acceptable to us or at all, we may be unable to complete the development and commercialization of our drug candidates. We had net cash used in operating activities of RMB190.5 million, RMB238.7 million and RMB79.2 million in 2021, 2022 and the four months ended April 30, 2023, respectively. While we believe we have sufficient working capital to fund our current operations, we expect that we may experience net cash outflows from operating activities for the foreseeable future. Our drug candidates require substantial investments for the completion of clinical development, regulatory review, drug manufacturing, marketing and launch before they can generate product sales revenue. Our operations have consumed substantial amounts of cash since our inception. We will need to expend substantial resources on the R&D and commercialization of our product pipelines. Our future funding requirements will depend on many factors, including but not limited to:  the progress, timing, scope and costs of our clinical trials, including the ability to timely identify and enroll patients in our planned and potential future clinical trials;  the outcome, timing and costs of regulatory approvals of our drug candidates;  the progress, timing, scope and costs related to discovery and early development of additional drug candidates;  the preparation required for anticipated commercialization of our drug candidates, and if regulatory approvals are obtained, to fund the product launch;  the manufacturing requirements and capabilities related to clinical development and future commercialization for any approved drug candidates;  the construction progress of our manufacturing facilities;  our effective management of our CROs, CDMOs and other collaboration partners and associated costs;  selling and marketing costs associated with any future drug candidates that may be approved, including the cost and timing of expanding our marketing and sales capabilities;  the cost of filing, prosecuting, defending and enforcing any patent claims or other intellectual property rights;  the amount and timing of any profit sharing, milestone and royalty payments we receive from our future collaborators;  cash requirements of any future development of other pipeline drug candidates;  our headcount growth and associated costs; and  the costs of operating as a public company and our need to implement additional internal systems and infrastructure, including but not limited to financial and reporting systems. RISK FACTORS –6 6– --- page 76 --- We expect our cash operating costs will increase significantly in light of our expanding clinical trial programs. If the financial resources available to us are insufficient to satisfy our cash requirements, we may seek additional funding through equity offerings, debt financings, collaborations and licensing arrangements. It is uncertain whether financing will be available in the amounts or on terms acceptable to us, if at all. If we were not able to obtain additional capital to meet our cash requirements in the future, our business, financial condition, results of operations and prospects could be materially and adversely affected. The COVID-19 pandemic could adversely impact our business, including our clinical trials. Since the end of December 2019, the outbreaks of a novel strain of coronavirus named COVID-19 have materially and adversely affected the global economy. Many countries and regions where we or our customers operate, including the PRC, the U.S., Europe and Japan, had been affected by the COVID-19 outbreaks and, in response, had imposed certain lockdown measures, closure of workplaces and restrictions on mobility and travel to contain the spread of the virus. The most recent one was the regional outbreak of COVID-19 variants in mainland China, and a series of control measures have been taken in an attempt to contain its spread in 2022. In late 2022, China began to modify its COVID-19 policy, and most of the travel restrictions and quarantine requirements had been lifted since then. However, if the pandemic gets worsen in the future due to reasons such as the emergence of a more severe variant of COVID-19 and the control measures that were once imposed reinitiate, we may experience one or more of the following disruptions to drug development efforts and business operations:  delays or difficulties in enrolling patients in our clinical trials;  delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;  delays or difficulties in dosing patients, or the risk that patients enrolled or dosed in clinical trials may drop out of the trials before completion;  diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;  delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials;  interruption in logistics that may affect the transport of clinical trial materials;  interruption of key clinical trial activities, such as clinical trial site monitoring;  changes in local regulations which may require us to change the ways in which our clinical trials are conducted;  temporary closure of certain office facilities and adopting remote working where possible;  restriction of employee travels, which may adversely affect the sales and marketing efforts;  disruption to the manufacturing activities;  disruption to the supplies of our drug candidates in clinical trials; and RISK FACTORS –6 7– --- page 77 ---  delays in or temporary suspension of the construction of our new GMP manufacturing facility. To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section. For details, see “Financial Information — Impact of the COVID-19 Outbreaks” in this prospectus. We cannot guarantee that the COVID-19 outbreak will not worsen. The extent to which the COVID-19 outbreak may impact our business in the future will depend on future developments, which are highly uncertain and unpredictable, such as the duration of the outbreak, the effectiveness of travel restrictions, the effectiveness of vaccines and vaccination rates in China and overseas, and other measures to contain the outbreak and its impact in China, the U.S., Europe, Japan and other countries where we and our customers operate. Having considered that the past occurrences of epidemics, depending on their scale, have caused different degrees of damage to the global and China’s economy, the COVID-19 outbreaks and any other public health crisis in China or overseas, especially in the cities where we have presence, may result in material disruptions to our operations, which in turn may materially and adversely affect our business, financial condition and results of operations. OTHER RISKS RELATING TO OUR BUSINESS Risks Relating to the Development of Our Drug Candidates We may be unable to discover or develop new drug candidates, or to identify additional therapeutic opportunities for our drug candidates to maintain or expand our product pipeline. Although a substantial amount of our effort will focus on the continued clinical testing, potential regulatory approval, and commercialization of our existing drug candidates, the success of our business depends in part upon our ability to discover, develop, license, or commercialize additional drug candidates. However, we may not be successful in discovering and developing new drug candidates. Although we have developed technology platforms, such as the “mAb-Trap bispecific” technology platform which we believe enables us to design, evaluate and select optimal candidates and continue to enrich our pipeline, we cannot guarantee that we will be successful in discovering and developing potential drug candidates. We may also pursue collaboration with third parties in the discovery and development of potential drug candidates, but we cannot assure you that such collaboration will be able to deliver the intended results. Research programs to discover and develop new drug candidates require substantial technical, financial, and human resources. We may focus our efforts and resources on potential programs or drug candidates that ultimately prove to be unsuccessful. Our research programs or licensing efforts may fail to identify, discover or in-license new drug candidates for clinical development and commercialization for a number of reasons, including, without limitation, the following:  the research methodology used may not be successful in identifying potential indications and/or new drug candidates;  potential drug candidates may, after further study, be shown to have adverse effects or other characteristics that indicate they are unlikely to achieve desired efficacy; or  it may take greater resources to identify additional therapeutic opportunities for our drug candidates or to develop suitable potential drug candidates, thereby limiting our ability to diversify and expand our drug portfolio. RISK FACTORS –6 8– --- page 78 --- Accordingly, there can be no assurance that we will be able to discover and develop new drug candidates or identify additional therapeutic opportunities for our drug candidates or to develop suitable potential drug candidates through internal research programs, which could materially adversely affect our future growth and prospects. Adverse events caused by our drug candidates could interrupt, delay or halt clinical trials, delay or prevent regulatory approval, limit the commercial profile of an approved drug, or result in significant negative consequences following any regulatory approval. Undesirable adverse events caused by our drug candidates, or caused by our drug candidates when used in combination with other drugs, could cause significant negative consequences, including but not limited to the following:  regulatory authorities could interrupt, delay or halt pending clinical trials;  regulatory authorities may order us to cease further development of, or delay or even deny approval of, our drug candidates for any or all targeted indications if results of our trials reveal a high and unacceptable severity or prevalence of certain adverse events;  regulatory authorities may withdraw approvals or revoke licenses of an approved drug candidate, or we may determine to do so even if not required;  regulatory authorities may require additional warnings on the label of an approved drug, issue safety alerts or other communications containing warnings or other safety information of such approved drug, or impose other limitations on such approved drug;  we may suspend, delay or alter development or marketing of our drug candidates;  we may be required to develop a risk evaluation mitigation strategy, or REMS, for the drug candidate, or, if one is already in place, to incorporate additional requirements under the REMS, or to develop a similar strategy as required by a comparable regulatory authority;  we may be required to change the way the drug candidate is administered or conduct post-market studies;  the patient enrollment may be insufficient or slower than we anticipate, or patients may drop out or fail to return for post-treatment follow-up at a higher rate than anticipated;  the costs of clinical trials of our drug candidates may be substantially higher than anticipated;  we could be required to recall our drug candidates and subject to litigation proceedings and regulatory investigations and held liable for harm caused to patients exposed to or taking our drug candidates; and  our reputation may suffer. Any of these events could prevent us from achieving or maintaining market acceptance of the particular drug candidate, and could significantly harm our business, results of operations and prospects. RISK FACTORS –6 9– --- page 79 --- We may seek approvals from the NMPA, FDA or other comparable regulatory authorities to use data from registrational trials via accelerated approval pathways for our drug candidates. If we are not able to use such pathways, we may be required to conduct additional clinical trials beyond those that we contemplate, which would increase the expense of obtaining, and delay the receipt of, necessary marketing approvals, if we receive them at all. The NMPA, FDA and comparable regulatory authorities in other jurisdictions may allow the use of data from a registrational trial and grant accelerated approval to a drug candidate that provides meaningful therapeutic benefit over available therapies, for treatment of a serious or life-threatening condition. The determination is made based on a finding that the drug candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit. For example, the FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on irreversible morbidity or mortality. The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. Prior to seeking such accelerated approval, we will continue to seek feedback from the NMPA, FDA and otherwise evaluate our ability to seek and receive such accelerated approval. There can be no assurance that in the future regulatory authorities will agree with our surrogate endpoints or intermediate clinical endpoints, or that we will decide to pursue or submit any new drug applications, or NDAs, or other comparable applications, for accelerated approval or any other form of expedited development, review or approval. Similarly, there can be no assurance that, after feedback from the regulatory authorities, we will continue to pursue or apply for accelerated approval or any other form of expedited development, review or approval, even if we initially decide to do so. Furthermore, for any submission of an application for accelerated approval or application under another expedited regulatory designation, there can be no assurance that such submission or application will be accepted for filing or that any expedited development, review or approval will be granted on a timely basis, or at all. A failure to obtain accelerated approval or any other form of expedited development, review or approval for our drug candidates, would result in a longer time period for commercialization of such drug candidate, could increase the cost of development of such drug candidate, and could harm our competitive position in the marketplace. Even if we obtain accelerated approval of a drug candidate based on a surrogate endpoint, we will likely be required to conduct a post-approval clinical outcomes trial to confirm the clinical benefit of the drug candidate and, if the post-approval trial is not successful, we may not be able to continue marketing the drug for the relevant indication. Pursuant to the PRC Drug Administration Law, the Administration Measures for Drug Registration, and the Working Procedures for the Review and Approval of Conditionally Approved Drugs (Trial), if (i) we fail to prove the benefits of a conditionally approved drug outweigh its risks through the post-approval research, or (ii) we fail to complete the required post-approval research within the prescribed time limit and submit the supplementary applications in order to obtain a full marketing approval, the NMPA will take actions in accordance with the relevant laws and regulations, including, in the worst case, the revocation of the drug registration certificate. RISK FACTORS –7 0– --- page 80 --- We may not be successful in developing, enhancing or adapting to new technologies and methodologies. The global biologics market is constantly evolving, and we must keep pace with new technologies and methodologies to maintain our competitive position. In 2021, 2022 and the four months ended April 30, 2023, our R&D expenses were RMB176.0 million, RMB277.3 million and RMB75.0 million, respectively. We must continue to invest significant amounts of human and capital resources to develop or acquire technologies that enable us to enhance the scope and quality of our clinical trials. We intend to continue to enhance our technical capabilities in drug discovery, development and manufacturing, which are capital and time intensive. We cannot assure you that we will be able to develop, enhance or adapt to new technologies and methodologies, successfully identify new technological opportunities, develop and bring new or enhanced products to market, obtain sufficient or any patent or other intellectual property protection for such new or enhanced products, or obtain the necessary regulatory approvals in a timely and cost-effective manner, or, if such products are introduced, that those products will achieve market acceptance. Any failure to do so may make our techniques obsolete, which could harm our business and prospects. Risks Relating to Extensive Government Regulations All material aspects of the research, development, manufacturing and commercialization of our drug candidates are heavily regulated and are subject to change. Any failure to comply with existing regulations and industry standards or any adverse actions by the drug-approval authorities against us could negatively impact our reputation and our business, financial condition, results of operations and prospects. All jurisdictions in which we intend to develop and commercialize our drug candidates regulate these activities in great depth and detail. We intend to initially focus our activities in China while pursuing overseas opportunities, particularly in the U.S. The pharmaceutical and biopharmaceutical industries in these jurisdictions are subject to comprehensive government regulation and supervision, in particular, regulation of the development, approval, manufacturing, marketing, sales and distribution of products. However, there are differences in the regulatory regimes that make for a more complex and costly regulatory compliance burden for a company like us that plans to operate in each of these regions. The process of obtaining regulatory approvals and maintaining compliance with appropriate laws and regulations requires the expenditure of substantial time and financial resources. Any recently enacted and future legislations may increase the difficulty and cost for us to obtain regulatory approval of, and commercialize, our drug candidates, and affect the prices we may obtain. Changes in government regulations or in practices relating to the pharmaceutical and biopharmaceutical industries, such as a relaxation in regulatory requirements or the introduction of simplified approval procedures which would lower the entry barrier for potential competitors, or an increase in regulatory requirements which may increase the difficulty for us to satisfy such requirements, may have a material adverse impact on our business, financial condition, results of operations, and prospects. In addition, we are subject to scheduled or unscheduled periodic inspections of our facilities to monitor our regulatory compliance. During the Track Record Period, we passed all the inspections and obtained clearance in relation to discovery and development of our drug candidates from the regulatory authorities in all material respects. However, we cannot assure you that we will be able to do so going forward. Failure to comply with the applicable regulatory requirements in the jurisdictions we operate or target to operate in the future at any time during the drug development process or approval process, or after approval, may subject us to administrative or judicial sanctions. These sanctions could include, but are not limited to, a regulator’s refusal to approve pending applications, withdrawal of an approval, license revocation, a clinical hold, voluntary or mandatory product RISK FACTORS –7 1– --- page 81 --- recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any occurrence of the foregoing could therefore materially adversely affect our business, financial condition, results of operations and prospects. The regulatory approval processes of the NMPA, FDA and other comparable regulatory authorities are lengthy, time-consuming and inherently unpredictable. If we are unable to obtain without undue delay any regulatory approval for our drug candidates in our targeted markets, our business may be materially and substantially affected. Significant time, efforts and expenses are required to bring our drug candidates to market in compliance with the regulatory process, and we cannot assure you that any of our drug candidates will be approved for sale. The time required to obtain approvals from the NMPA, the FDA and other comparable regulatory authorities is often unpredictable, and depends on numerous factors, including the substantial discretion of the regulatory authorities. Our drug candidates could fail to receive regulatory approval in a timely manner for many reasons, including but not limited to:  failure to begin or complete clinical trials due to disagreements with regulatory authorities;  failure to demonstrate that a drug candidate is safe and effective or, it is safe, pure, and potent for its proposed indication;  failure of clinical trial results to meet the level of statistical significance required for approval;  data integrity issues related to our clinical trials;  disagreement with our interpretation of data from preclinical studies or clinical trials;  failure to conduct a clinical trial in accordance with regulatory requirements or our clinical trial protocols; and  clinical sites, investigators or other participants in our clinical trials deviating from a trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial. In addition, the NMPA, the FDA or a comparable regulatory authority may require more information, including additional analyses, reports, data, non-clinical studies and clinical trials, or questions regarding interpretations of data and results, to support approval, which may prolong, delay or prevent approval and our commercialization plans, or we may decide to abandon the development programs. Changes in regulatory requirements and guidance may also occur, and we may need to amend clinical trial protocols submitted to competent regulatory authorities to reflect these changes. Resubmission may impact the costs, timing or successful completion of a clinical trial. The policies of the NMPA, the FDA and other comparable regulatory authorities may also change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may not obtain the regulatory approvals or may lose the approvals that we may have obtained and we may not achieve or sustain profitability. Additionally, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative RISK FACTORS –7 2– --- page 82 --- review periods. Seeking regulatory approvals in various jurisdictions could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming. We cannot assure you that we will be able to meet regulatory requirements of different jurisdictions or that our drug candidates will be approved for sale in those jurisdictions. Additional time, effort and expense may be required to bring our drug candidates, upon regulatory approval, to the international markets in compliance with different regulatory processes. If we experience delays in the completion of, or the termination of, a clinical trial of any of our drug candidates, the commercial prospects of that drug candidate will be harmed, and our ability to generate product sales revenues from any of those drug candidates will be compromised. In addition, any delays in completing our clinical trials will increase our costs, slow down our drug candidate development and approval process, and jeopardize our ability to commence product sales and generate related revenues for that candidate. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our drug candidates. While we believe that our drug candidates’ Category 1 designation in China should confer certain regulatory advantages on us, these advantages may not result in commercial benefits to us as we have expected, and may change in the future in a manner adverse to us. In China, prior to seeking approval from the NMPA, a pharmaceutical company needs to determine the drug’s registration category, which will determine the requirements for its clinical trial and marketing application. The categories of therapeutic biologics range from Category 1 (new biologics: biologics that have not previously been marketed anywhere in the world), to Category 2 (improved biologics: biologics that have been previously marketed in China or abroad with improved safety, efficacy and quality control and that have obvious therapeutic advantages), to Categories 3 (biologics that have been previously marketed in China and abroad). Among our pipeline of drug candidates, all of our clinical-stage drug candidates are designated as Category 1 drug candidates. The NMPA has adopted several mechanisms for expedited review and approval for drug candidates that apply to Category 1 drug candidates. While we believe that our clinical stage drug candidates that have been designated as Category 1 drugs should provide us with a significant regulatory, and therefore commercial advantage over non-Chinese companies seeking to market products in China, we cannot be sure that this will be the case. The pharmaceutical regulatory environment is evolving quickly, and changes in laws, regulations, enforcement and internal policies could result in the “favored” status of Category 1 products changing or being eliminated altogether or our products classification in Category 1 changing. We cannot be certain that the advantages we believe will be conferred by our Category 1 classifications will be realized or result in any material development or commercial advantage. We are subject to stringent privacy laws, information security policies and contractual obligations related to data privacy and security, and we may be exposed to risks related to our management of the medical data of subjects enrolled in our clinical trials and other personal or sensitive information. Data protection and privacy laws and regulations generally require clinical trial sponsors and operators and their personnel to protect the privacy of their enrolled subjects and prohibit unauthorized disclosure of personal information. If such institutions or personnel divulge the subjects’ private or medical records without their consent, they will be held liable for damage caused thereby. We receive, collect, generate, store, process, transmit and maintain medical data treatment records and other personal details of the subjects enrolled in our clinical trials, along with other personal or sensitive information. As such, we are subject to the relevant local, state RISK FACTORS –7 3– --- page 83 --- (the U.S.), national and international data protection and privacy laws, directives regulations and standards that apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data in the various jurisdictions in which we operate and conduct our clinical trials, as well as contractual obligations. As of the Latest Practicable Date, we are primarily subject to numerous PRC laws, Hong Kong laws and U.S. federal and state laws governing data protection and privacy. In recent years, the PRC authorities have promulgated certain laws and regulations in respect of information security, data collection and privacy protection regulations in the PRC, including the Cybersecurity Law of the PRC (جthe Provisions on Protection of Personal Information of Telecommunication and Internet Users (ᚐ ֛the Cybersecurity Review Measures (جthe Data Security Law of the PRC (جwhich became effective from September 1, 2021, the Personal Information Protection Law of the PRC (جwhich became effective from November 1, 2021, and the Measures for the Security Assessment of Outbound Data Transfer (جwhich became effective from September 1, 2022. Under the Personal Information Protection Law of the PRC, in case of any personal information processing, such individual prior consent shall be obtained, unless the Law indicates otherwise. Further, any data processing activities, that are in relation to the sensitive personal information such as biometrics, medical health and personal information of teenagers under fourteen years old, are not allowed, unless such activities have a specific purpose, are highly necessary and strictly protective measures have been taken. In addition, certain industry-specific laws and regulations affect the collection and transfer of data in China. The Regulations on the Administration of Human Genetic Resources of the PRC ( ʕ ശɛ͏΍ձ਷ɛᗳ፲ෂ༟๕၍ଣૢԷ ), or the HGR Regulation, was promulgated by the State Council in May 2019 and came into effect in July 2019. It stipulates that foreign organizations, individuals, and the entities established or actually controlled by foreign organizations or individuals are forbidden to collect, preserve and export China’s human genetic resources. Foreign organizations and the entities established or actually controlled by foreign organizations or individuals may only utilize and be provided with China’s human genetic resources after satisfaction of all requirements under the HGR Regulation and other applicable laws, such as (i) China’s human genetic resources being utilized only in international cooperation with Chinese scientific research institutions, universities, medical institutions, and enterprises for scientific research and clinical trials after completion of requisite approval or filing formalities with competent governmental authorities, and (ii) China’s human genetic resources information being provided after required security review, filing and information backup procedures have been gone through. In October 2020, the SCNPC promulgated the Biosecurity Law of the PRC, which became effective in April 2021. The Biosecurity Law of the PRC (جreaffirms the regulatory requirements stipulated by the HGR Regulation while potentially increasing the administrative sanctions where China’s human genetic resources are collected, preserved, exported or used in international cooperation in violation of applicable laws. Although we have made great efforts to comply with mandatory requirements of laws and government authorities in this regard, we cannot assure you that we will be deemed at all times in full compliance with the HGR Regulation, the Biosecurity Law of the PRC and other applicable laws in our utilizing of and dealing with China’s human genetic resources. As a result, we may be exposed to compliance risks under the HGR Regulation and the Biosecurity Law of the PRC. For more information regarding the PRC laws and regulations governing data protection and privacy, see “Regulatory Overview — Overviews of Laws and Regulations in the PRC” in this prospectus. Numerous U.S. federal and state laws and regulations relate to the privacy and security of personal information. In particular, regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996, or HIPAA, establish privacy and security standards that RISK FACTORS –7 4– --- page 84 --- limit the use and disclosure of individually identifiable health information, known as “protected health information,” and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information. Determining whether protected health information has been handled in compliance with applicable privacy standards and our contractual obligations may require complex factual and statistical analyses and may be subject to changing interpretation. Although we take measures to protect sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or breached due to employee error, malfeasance or other malicious or inadvertent disruptions. Any such breach or interruption could compromise our networks and the information stored there could be accessed by unauthorized parties, manipulated, publicly disclosed, lost or stolen. Any such access, breach or other loss of information could result in legal claims or proceedings, and liability under federal or state laws that protect the privacy of personal information, such as the HIPAA, the Health Information Technology for Economic and Clinical Health Act, and regulatory penalties. Notice of breaches must be made to affected individuals, the Secretary of the Department of Health and Human Services, and for extensive breaches, notice may need to be made to the media or State Attorneys General. Such a notice could harm our reputation and our ability to compete. For more information regarding the US laws and regulations governing data protection and privacy, see “Regulatory Overview — Laws and Regulations in the United States” in this prospectus. Complying with all applicable laws, regulations, standards and obligations relating to data privacy, security, and transfers may cause us to incur substantial operational costs or require us to modify our data processing practices and processes. Non-compliance could result in proceedings against us by data protection authorities, governmental entities or others, including class action privacy litigation in certain jurisdictions, which would subject us to significant fines, penalties, judgments and negative publicity. In addition, if our practices are not consistent or viewed as not consistent with legal and regulatory requirements, including changes in laws, regulations and standards or new interpretations or applications of existing laws, regulations and standards, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions and reputational damage. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects. In addition, our clinical trials frequently also involve professionals from third-party institutions working on-site with our staff and enrolled subjects. We cannot ensure that such persons will always comply with our data privacy measures. We also cooperate with third parties including principal investigators, hospitals, CROs, CDMOs and other third-party contractors and consultants for our clinical trials and operations. Any leakage or abuse of patient data by our third-party partners may be perceived by the patients as our fault, negligence or a result of our failure. Furthermore, any change in such laws and regulations could affect our ability to use medical data and subject us to liability for the use of such data for previously permitted purposes. Any failure or perceived failure by us to prevent information security breaches or to comply with privacy policies or privacy-related legal obligations, or any compromise of information security that results in the unauthorized release or transfer of personally identifiable information or other patient data, could cause our customers to lose trust in us and could expose us to legal claims. If we participate in compassionate use programs, current regulatory discrepancies among competent authorities of different countries may lead to increased risk of adverse drug reactions and serious adverse events arising from the use of our products. Compassionate use programs are regulatory programs that facilitate access to investigational drugs for the treatment of patients with serious or immediately life-threatening diseases or conditions that lack therapeutic alternatives. Currently, there is no unified approach or standard practice to regulate compassionate use programs among competent authorities in different RISK FACTORS –7 5– --- page 85 --- countries for access to investigational drugs. In China, currently there is no officially approved regulation to oversee compassionate use programs. In the U.S., compassionate use programs are limited to patients who have a life-threatening disease or serious disease or condition, who may gain access to an investigational medical product for treatment outside of clinical trials when no comparable or satisfactory alternative therapy options are available. The regulatory discrepancy for compassionate use programs among competent authorities in different countries may lead to uneven patient entry criteria and protocols for compassionate use programs. This may create increased risk of serious adverse events because of enrolled patients’ advanced disease or comorbidities. In addition, because the products in compassionate use programs are investigational drugs, many of which are still in experimental stages and have not received marketing approval, patients in compassionate use programs may exhibit adverse drug reactions from using these products. If we participate in compassionate use programs, we may be subject to the risk of enrolled patients exhibiting adverse drug reactions or serious adverse events arising from the use of our products. These occurrences can potentially lead to clinical holds of our ongoing clinical trials or complicate the determination of the safety profile of a drug candidate under regulatory review for commercial marketing. Even after we obtain regulatory approval for the marketing and distribution of our drug candidates, our products will continue to remain subject to ongoing or additional regulatory obligations and continued regulatory review, which may result in significant additional expenses, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our future approved drugs. If any of our drug candidates is approved in the future, it will be subject to ongoing or additional regulatory requirements for manufacturing, labelling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy and other post-market information, including requirements of regulatory authorities in China, the U.S. and other jurisdictions. These requirements also include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with current Good Manufacture Practices, or the cGMP, and Good Clinical Practice, or the GCP, for any clinical trials that we conduct post-approval. Any approvals that we receive for our drug candidates may be subject to limitations on the approved indicated uses for which the drug may be marketed or to the conditions of approval, which could adversely affect the drug’s commercial potential or contain requirements for potentially costly post-marketing testing and surveillance to monitor the safety and efficacy of the drug candidates. The NMPA, FDA or a comparable regulatory authority may also require a REMS program as a condition of approval of our drug candidates or following approval. Once a drug is approved by the NMPA, FDA or a comparable regulatory authority for marketing, it is possible that there could be a subsequent discovery of previously unknown problems with the drug, including problems with third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements. If any of the foregoing occurs with respect to our drug products, it may result in, among other things:  restrictions on the marketing or manufacturing of the drug, withdrawal of the drug from the market, or voluntary or mandatory drug recalls;  fines, warning letters or holds on clinical trials;  refusal by the NMPA, FDA or comparable regulatory authority to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of drug license approvals; RISK FACTORS –7 6– --- page 86 ---  drug seizure or detention, or refusal to permit the import or export of drugs; and  injunctions or the imposition of civil, administrative or criminal penalties. In addition, we are subject to ongoing regulatory requirements for our day-to-day business operations. Accordingly, we and third parties we work with must continue to expand time, money and efforts in all areas of regulatory compliance, including manufacturing, production and quality control. We cannot predict the likelihood, nature or extent of governmental policies or regulations that may arise from future legislation or administrative actions in China, the U.S. or other jurisdictions, where the regulatory environment is constantly evolving. If we are unable to maintain regulatory compliance, or if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, we may lose any regulatory approval that we have obtained, and we may not achieve or sustain profitability. If we are able to commercialize our drug candidates, we may face uncertainties from national, provincial or other third-party drug reimbursement practices and unfavorable drug pricing policies or regulations, which could harm our business. The regulations that govern regulatory approvals, pricing and reimbursement for new therapeutic products vary widely from jurisdiction to jurisdiction. We intend to seek approval to market our drug candidates in China, the U.S. and in other jurisdictions. In China and some markets outside China, the pricing of drugs and biologics is subject to governmental control, which can take considerable time even after obtaining regulatory approval. Thus, our ability to commercialize any approved drug candidates successfully will depend in part on the extent to which reimbursement for these drugs and related treatments will be available from government health administration authorities, private health insurers and other organizations. A primary trend in the global healthcare industry is cost containment. Government authorities and these third-party payers have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. In China, the National Healthcare Security Administration and the Ministry of Human Resources and Social Security, together with other government authorities, regularly review the inclusion or removal of drugs from China’s National Drug Catalog for Basic Medical Insurance, Work-related Injury Insurance and Maternity Insurance (ᎈ ͦ፽), or the NRDL. The NRDL determines a pharmaceutical product’s reimbursable amounts for program participants under the National Medical Insurance Program, or the NMIP. Under the NMIP, patients are entitled to full or partial reimbursement of costs for pharmaceutical products listed in the NRDL. A pharmaceutical product’s inclusion in or exclusion from the NRDL will significantly affect the demand for such product in China. There is no assurance that any of our future approved drug candidates will be included in the NRDL. The inclusion of pharmaceutical products by relevant authorities into the NRDL is based on a variety of factors, including efficacy, safety and price. The products included in the NRDL are typically generic and essential drugs, while innovative drugs similar to our drug candidates have historically been more limited on their inclusion therein due to the affordability of the government’s Basic Medical Insurance Program. In addition, the PRC government has implemented significant reforms of the pharmaceutical industry in recent years and may enforce additional measures in the future, which may adversely affect our pricing strategy for our pharmaceutical products. In the U.S., no uniform policy of coverage and reimbursement for drugs exists among third-party payers. As a result, obtaining coverage and reimbursement approval of a drug from a government or other third-party payer is a time-consuming and costly process that could require us to provide to each payer supporting scientific, clinical and cost-effectiveness data for the use of our future approved drugs on a payer-by-payer basis, with no assurance that coverage and adequate reimbursement will be obtained. Even if we obtain coverage for a given drug, the resulting reimbursement rates might not be adequate for us to achieve or sustain profitability or may require RISK FACTORS –7 7– --- page 87 --- co-payments that patients find unacceptably high. Additionally, third-party payers may not cover, or provide adequate reimbursement for, long-term follow-up evaluations required following the use of our future approved drug candidates. Patients are unlikely to use any of our future approved drug candidates unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of the drugs. Because some of our drug candidates may have a higher cost of goods than conventional therapies, and may require long-term follow-up evaluations, the coverage and reimbursement rates may be inadequate for us to achieve profitability. Increasingly, third-party payers are requiring that companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for any approved drug candidates that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Reimbursement may impact the demand for, or the price of, any approved drug candidates that we commercialize. Obtaining or maintaining reimbursement for our future approved drug candidates may be particularly difficult because of the higher prices often associated with drugs administered under the supervision of a physician. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any drug candidates that we successfully develop. There may be significant delays in obtaining reimbursement for approved drug candidates, and coverage may be more limited than the purposes for which the drug candidates are approved by the NMPA, the FDA or other comparable regulatory authorities. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim payments for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Payment rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on payments allowed for lower cost drugs that are already reimbursed, and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payers. Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payers for any future approved drug candidates and any new drugs that we develop could have a material adverse effect on our business, our operating results, and our overall financial condition. We may be directly or indirectly subject to applicable anti-kickback, false claims laws, physician payment transparency laws, fraud and abuse laws or similar healthcare and security laws and regulations in China and other jurisdictions, which could, in the event of noncompliance, expose us to administrative sanctions, criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings. Our business operations and current and future arrangements with clinical site investigators, healthcare professionals, consultants, third-party payors, patient organizations, and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we market, sell, and distribute our drug candidates, if approved. Such laws include the PRC Anti-Unfair Competition Law ( ʕശɛ͏΍ձ਷ˀʔ͍຅ᘩ جنthe PRC Criminal Law (جthe U.S. federal Anti-Kickback Statute, the U.S. federal False Claims Act, HIPAA, and the U.S. Physician Payments Sunshine Act. Efforts to ensure that our business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. Government authorities could conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, and if we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of civil, criminal and administrative RISK FACTORS –7 8– --- page 88 --- penalties, damages, disgorgement, monetary fines, possible exclusion from participation in governmental healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and have a significant impact on our businesses and results of operations. If any of the physicians or other providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government-funded healthcare programs, which may also adversely affect our business. Furthermore, defending against any such actions can be costly, time-consuming, and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. If safety, efficacy, manufacturing or supply issues arise with any drug product used in combination with or to facilitate the use of our drug candidates, we may be unable to market such drug candidates or may experience significant regulatory delays or supply shortages. Our strategy to develop combination therapies depends on the safety and efficacy of each component drug within each combination therapy. For example, we are developing IMM01 in combination with other cancer agents, including azacitidine, tislelizumab, inetetamab, and bortezomib/dexamethasonum for a broad range of hematological cancers and solid tumors. If the NMPA, FDA or another comparable regulatory agency revokes or denies its approval of a component therapeutic, in either the clinical design, clinical administration, therapy approval or commercialization stage, we will be forced to terminate or redesign the clinical trials, experience significant regulatory delays or stop our commercialization efforts. We do not manufacture or sell any component drugs we use in combination with our drug candidates. Instead, we primarily purchase the component drugs (such as tislelizumab and azacitidine) on the market with our own funds. Generally, we do not enter into collaboration agreements on the supply of certain drugs we use in our combination trials, such as azacitidine and tislelizumab, to avoid time-consuming negotiation and potential restrictions under the collaboration, thus ensuring our full control over the clinical development process and intellectual property rights. However, the absence of collaboration arrangements with drug suppliers may subject us to unstable supply. If we cannot purchase a sufficient amount of those component drugs from their manufacturers or distributors, or we experience any supply shortage of such component drugs, the clinical development of our drug candidates may be disrupted. The supply shortage may also delay the regulatory approval of our drug candidates or our ability to timely meet market demand for our products upon receipt of marketing approval, which will adversely affect our business and prospects. Although we have not used companion diagnostic tests in the development of our drug candidates, it is common practice in the industry to use companion diagnostic tests to detect a predictive biomarker, such as PD-L1, EGFR and HER2, in patients to evaluate their likely response to certain treatment. In the U.S., the FDA has generally required in vitro companion diagnostics intended to select the patients who will respond to cancer treatment to obtain a pre-market approval for that diagnostic, which can take up to several years, simultaneously with approval of the biologic product. The regulations in China on the companion diagnostic test used for patient identification are still developing and require detailed interpretation and implementation. It remains uncertain whether the future regulatory changes would provide additional restrictions or requirements. If we determine to develop companion diagnostic tests in the future for patient screening or our drug development entails the use of such tests, the developing regulations in China would present uncertainties to our drug development and commercialization and may have an adverse effect on our business and results of operations. RISK FACTORS –7 9– --- page 89 --- Negative results from off-label use of our future marketed drug products could materially harm our business reputation, product brand and financial condition and expose us to liability. Products distributed or sold in the pharmaceutical market may be subject to off-label drug use. Off-label drug use is prescribing a product for an indication, dosage or in a dosage form that is not in accordance with regulatory approved usage and labeling. Even though the NMPA, FDA and other comparable regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label use, there remains the risk that our product is subject to off-label drug use and is prescribed in a patient population, dosage or dosage form that has not been approved by competent authorities. This occurrence may render our products less effective or entirely ineffective and may cause adverse drug reactions or adverse events. Any of these occurrences can create negative publicity and materially and adversely affect our business reputation, product brand, commercial operations and financial condition, including our share price. These occurrences may also expose us to liability and cause a delay in the progress of our clinical trials and may ultimately result in failure to obtain regulatory approval for our drug candidates. Risks Relating to Manufacturing of Our Drug Candidates and Drugs We have limited experience in manufacturing therapeutic biologic products on a large commercial scale, which is a highly exacting and complex process, and our business could be materially and adversely affected if we encounter problems in manufacturing our future drug products. We have limited experience in large-scale manufacturing of our products for commercial use. Moreover, the manufacturing of therapeutic biologics is highly complex. Problems may arise during manufacturing for a variety of reasons, including but not limited to:  equipment malfunction;  failure to follow specific protocols and procedures;  changes in product specification;  low quality or insufficient supply of raw materials;  delays in the construction of new facilities or the expansion of our existing manufacturing facilities as a result of changes in manufacturing production sites and limits to manufacturing capacity due to regulatory requirements;  changes in the types of products produced;  advances in manufacturing techniques;  physical limitations that could inhibit continuous supply; and  man-made or natural disasters and other environmental factors. Products with quality issues may have to be discarded, resulting in product shortages or additional expenses. This could lead to, among other things, increased costs, lost revenue, damage to customer relationships, time and expense spent investigating the cause and, depending on the cause, similar losses with respect to other batches or products. If problems are not discovered before the product is released to the market, recall and product liability costs may also be incurred. RISK FACTORS –8 0– --- page 90 --- Manufacturing methods and formulation are sometimes altered through the development of drug candidates from clinical trials to regulatory approval, and further to commercialization, in an effort to optimize manufacturing processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause the drug candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. This could delay the commercialization of drug candidates and require bridging studies or the repetition of one or more clinical trials, which may result in increases in clinical trial costs, delays in drug approvals and jeopardize our ability to commence product sales and generate revenue. We may encounter problems with achieving adequate or clinical-grade products that meet the NMPA, FDA or other comparable regulatory agency standards or specifications, maintaining consistent and acceptable production costs. We may also experience shortages of qualified personnel, raw materials or key contractors, and experience unexpected damage to our facilities or the equipment. In these cases, we may be required to delay or suspend our manufacturing activities. We may be unable to secure temporary, alternative manufacturers for our drugs with the terms, quality and costs acceptable to us, or at all. Such an event could delay our clinical trials and/or the availability of our products for commercial sale. Moreover, we may spend significant time and costs to remedy these deficiencies before we can continue production at our manufacturing facilities. In addition, the quality of our products, including drug candidates manufactured by us for R&D purposes and, in the future, drugs manufactured by us for commercial use, depends significantly on the effectiveness of our quality control and quality assurance, which in turn depends on factors such as the production processes used in our manufacturing facilities, the quality and reliability of equipment used, the quality of our staff and related training programs and our ability to ensure that our employees adhere to our quality control and quality assurance protocol. However, we cannot assure you that our quality control and quality assurance procedures will be effective in consistently preventing and resolving deviations from our quality standards. Any significant failure or deterioration of our quality control and quality assurance protocol could render our products unsuitable for use, jeopardize any GMP certifications we may have and harm our market reputation and relationship with business partners. Any such developments may have a material adverse effect on our business, financial condition and results of operations. If we are unable to meet the increasing demand for our existing drug candidates and future drug products by ensuring that we have adequate manufacturing capacity, or if we are unable to successfully manage our anticipated growth or to precisely anticipate market demand, our business could suffer. To produce our drug candidates in the quantities that we believe will be required to meet anticipated market demand of our drug candidates, if approved, we will need to increase, or scale up, the production process by a significant factor over the initial level of production. If the scale up is delayed, the cost of this scale up is not economically feasible for us, or we cannot find a third-party supplier, we may not be able to produce our approved drug candidates in a sufficient quantity to meet future demand. In anticipation of commercialization of our drug candidates, we aim to significantly expand our manufacturing capacity, mainly through the construction of our new manufacturing facility. However, the timing and success of the plan are subject to significant uncertainty. Moreover, such plan is capital intensive and requires significant upfront investment, and there can be no assurance that we will be able to timely obtain such financing, if at all. Furthermore, given the size of our new facility, we may not be able to fully utilize it immediately or within a reasonable period of time after we commence the operation. During the construction and ramp up period, there may be significant changes in the macroeconomics of the RISK FACTORS –8 1– --- page 91 --- pharmaceutical and biopharmaceutical industry, including, among other things, market demand, product and supply pricing trends and customer preferences. Any adverse trends in these respects could result in operational inefficiency and unused capacity in our facility. We may also experience various unfavorable events in the course of developing our new manufacturing facility, such as:  unforeseen delays due to construction, land use rights or regulatory issues, which could result in loss of business opportunities;  construction cost overruns, which may require diverting resources and management’s attention from other projects; and  difficulty in finding sufficient numbers of trained and qualified staff. The success of our business expansion also depends on our ability to advance drug candidates through the development, regulatory approval and commercialization stages. Any delay, suspension or termination in such respects would harm our ability to generate satisfactory returns on our investment in manufacturing expansion, if at all, which in turn could have a material adverse effect on our business, financial condition and results of operations. Risks Relating to Commercialization of Our Drugs Our drug candidates, once approved, may fail to achieve the degree of market acceptance by oncology physicians, hospitals, patients, third-party payers and others in the medical community that would be necessary for their commercial success, and the actual market size of our drug candidates might be smaller than expected. Even if our drug candidates receive regulatory approval, they may nonetheless fail to gain sufficient market acceptance by physicians and patients and others in the medical community. If our drug candidates do not achieve an adequate level of acceptance, we may not generate significant product sales revenue and we may not become profitable. The degree of market acceptance of our drug candidates, if approved for commercial sale, will depend on a number of factors, including, but not limited to:  the clinical indications for which our drug candidates are approved;  physicians, hospitals, medical treatment centers and patients considering our drug candidates as a safe and effective treatment;  the potential and perceived advantages of our drug candidates over alternative treatments;  the prevalence and severity of any side effects;  product labelling or package insert requirements of regulatory authorities;  limitations or warnings contained in the labelling approved by regulatory authorities;  the timing of market introduction of our drug candidates as well as competitive drugs;  the cost of treatment in relation to alternative treatments;  the availability of adequate coverage and reimbursement under the national and provincial reimbursement drug lists in the PRC, or from third-party payers and government authorities in other jurisdictions; RISK FACTORS –8 2– --- page 92 ---  price control or downward adjustment by the government authorities or other pricing pressure, including the price reduction during the negotiation for inclusion in the national reimbursement drug lists;  the willingness of patients to pay out-of-pocket in the absence of coverage and reimbursement by third-party payers and government authorities;  relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and  the effectiveness of our sales and marketing efforts. If any approved drug candidates that we commercialize fail to achieve market acceptance among physicians, patients, hospitals, medical treatment centers or others in the medical community, we will not be able to generate revenue as we expect. Even if our future approved drug candidates achieve market acceptance, we may not be able to maintain such market acceptance over time if new products or technologies are introduced that are more favorably received than our drug candidates, are more cost-effective or render our drug candidates obsolete. Our failure to achieve or maintain market acceptance for our future approved drug candidates would materially adversely affect our business, financial condition, results of operations and prospects. If the market opportunities for our drug candidates are limited to those patients who are ineligible for or have failed prior treatments, the market could be small. We conduct our preclinical studies and clinical trials, based on our estimation of the number of patients who have the cancers we are targeting, as well as the subset of patients with these cancers who are able to receive different lines of therapies and who have the potential to benefit from the treatment with our drug candidates. New studies may change the estimated incidence or prevalence of these cancers. The number of eligible patients may turn out to be lower than expected. Additionally, the potentially addressable patient population for our drug candidates may be limited or may not be amenable to treatment with our drug candidates. Our business may suffer if the market opportunities for our product candidates are smaller than we anticipate, or the regulatory approvals we obtain for our drugs are based on a narrower definition of the patient population. Given the small number of patients who have the eligibility criteria and diseases that we are targeting, it is critical to our profitability that we successfully identify such patients. The effort to identify patients with diseases we seek to treat is in early stages, and we cannot accurately predict the number of patients for whom treatment might be possible. New patients may become increasingly difficult to identify or gain access to, which would adversely affect our business, financial condition, results of operations and prospects. Risks Relating to Our Intellectual Property Rights We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful. Competitors or other third parties may challenge the validity and enforceability of our patents, infringe, misappropriate or otherwise violate our other intellectual property rights. To counter infringement, misappropriation or any other unauthorized use, litigation may be necessary in the future to enforce or defend our intellectual property rights, to protect our trade secrets or to determine the validity and scope of our own intellectual property rights or the proprietary rights of others. Litigation and other proceedings in connection with any of the foregoing claims can be expensive and time-consuming and, even if resolved in our favor, may cause us to incur significant RISK FACTORS –8 3– --- page 93 --- expenses and could distract management and our scientific and technical personnel from their normal responsibilities. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Any claims that we assert against perceived infringers and other violators could also provoke these parties to assert counterclaims against us alleging that we infringe, misappropriate or otherwise violate their intellectual property rights. Many of our current and potential competitors have the ability to dedicate substantially greater resources to enforce and defend their intellectual property rights than we can. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon, misappropriating or otherwise violating our intellectual property rights. An adverse result in any such litigation proceeding could put our patents, as well as any patents that may issue in the future from our pending patent applications, at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. Thus, even if we were to ultimately prevail, or to settle at an early stage, such litigation could burden us with substantial unanticipated costs. Moreover, we may not be able to detect infringement against our patents. Even if we detect infringement by a third party of any of our patents, we may choose not to pursue litigation against or settlement with such third party. If we later sue such third party for patent infringement, the third party may have certain legal defense available to it, which otherwise would not be available except for the delay between when the infringement was first detected and when the suit was brought. Such legal defense may make it impossible for us to enforce our patents against such third party. In addition, although we are not currently experiencing any claims challenging the inventorship of our patents or ownership of our intellectual property, we may in the future be subject to claims that former employees, collaboration partners or other third parties have an interest in our owned, out-licensed or in-licensed patents, patent applications, trade secrets or other intellectual property as an inventor or co-inventor. For instance, we may have inventorship disputes arising from conflicting obligations of employees, collaboration partners, consultants or others who are involved in developing our drug candidates or technologies. Litigation may be necessary to defend against these and other claims challenging inventorship of our owned, out-licensed or in-licensed patents, patent applications, trade secrets or other intellectual property. If we fail to defend any claim, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of or right to use intellectual property that is important to our drug candidates. Even if we are successful in defending against such claims, litigation could lead to substantial costs and be a distraction to management and other employees. Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects. Issued patents covering one or more of our drug candidates could be found invalid or unenforceable if challenged in court. Despite measures we take to obtain and maintain patent and other intellectual property rights with respect to our drug candidates, our intellectual property rights could be challenged or invalidated. For example, if we were to initiate legal proceedings against a third party to enforce a patent covering one of our drug candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, CNIPA or the applicable foreign counterpart, or made a misleading statement, during prosecution. Even if we conduct our patent prosecution in accordance with the duty of candor and in good faith, the outcome following legal assertions of invalidity and unenforceability is unpredictable. RISK FACTORS –8 4– --- page 94 --- If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on a drug candidate. Even if a defendant does not prevail on a legal assertion of invalidity and/or unenforceability, our patent claims may be construed in a manner that would limit our ability to enforce such claims against the defendant and others. Even if we establish infringement, the court may decide not to grant an injunction against further infringing activities and instead award only monetary damages, which may not be an adequate remedy. In addition, if the breadth or strength of protection provided by our patents is threatened, it could dissuade companies from collaborating with us to license, develop, or commercialize our current or future drug candidates. Any loss of patent protection could have a material adverse impact on one or more of our drug candidates and our business. Obtaining and maintaining our patent protection depends on compliance with various procedural, documents submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and patent applications are due to be paid to the CNIPA, USPTO and other patent agencies in several stages over the lifetime of a patent. The CNIPA, USPTO and other similar governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application and maintenance process. Although an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In any such event, our competitors might be able to enter the market, which would have a material adverse effect on our business. Changes in patent and other intellectual property laws of China, the U.S. or other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our drug candidates and future drugs. Our success is heavily dependent on obtaining, maintaining, enforcing and defending intellectual property, particularly patents. Obtaining and enforcing patents in the pharmaceutical and biopharmaceutical industry involves technological and legal complexity and is costly, time-consuming and inherently uncertain. Changes in either the patent laws or their interpretation in China, the U.S. or other jurisdictions may increase the uncertainties and costs surrounding the prosecution of our patents, diminish our ability to protect our inventions, and, more generally, affect the value of our intellectual property or narrow the scope of our patent rights. In China, the recent amendment to the PRC Patent Law, amended in October 2020 and implemented in June 2021, introduced patent term compensation mechanism for eligible invention patents related to new drugs. The patents owned by third parties may be extended, which may in turn affect our ability to commercialize our products (if approved) without facing infringement risks. According to the PRC Patent Law, in order to compensate for the time used for the review and approval of new drugs for marketing, the patent administration department of the State Council shall, at the request of the patentee, provide patent term compensation for invention patents of new drugs approved for marketing in China. The patent term compensation may not exceed five years, and the total effective term of the patent after the new drug approved for marketing shall not exceed 14 years. If we are required to delay commercialization for an extended period of time, technological advances may develop and new products may be launched, which RISK FACTORS –8 5– --- page 95 --- may in turn render our products non-competitive. We cannot guarantee that any other changes to PRC intellectual property laws would not have a negative impact on our intellectual property protection. Under the America Invents Act, the AIA, enacted in 2011, the U.S. moved to first-to-file system in early 2013 from the previous system under which the first to make the claimed invention was entitled to the patent. Assuming the other requirements for patentability are met, the first to file a patent application is entitled to the patent. Publications of discoveries in the scientific literatures often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. If we are unable to protect the confidentiality of our trade secrets and confidential information, our business and competitive position would be harmed. We may be subject to claims that our employees, consultants or advisers have wrongfully used or disclosed alleged trade secrets of their former employers, and we may be subject to claims asserting ownership of what we regard as our own intellectual property. In addition to our issued patents and pending patent applications, we rely on trade secrets and confidential information, including unpatented know-how, technology and other proprietary information, to maintain our competitive position and to protect our drug candidates. We seek to protect our trade secrets and confidential information, in part, by entering into non-disclosure and confidentiality agreements with parties that have access to trade secrets or confidential information, such as our employees, corporate collaborators, outside scientific collaborators, sponsored researchers, contract manufacturers, consultants, advisors and other third parties that have access to them. However, we may not be able to prevent the unauthorized disclosure or use of our trade secrets and confidential information by the parties to these agreements. Monitoring unauthorized uses and disclosures is difficult and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. Any of the parties with whom we enter into confidentiality agreements may breach the terms of any such agreements and may disclose our proprietary information, and we may not be able to obtain adequate remedies for any such breach or violation. As a result, we could lose our trade secrets and third parties could use our trade secrets to compete with our drug candidates and technology. Additionally, we cannot guarantee that we have entered into such agreements with each party that may have or has had access to our trade secrets or proprietary technology and processes. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us and our competitive position would be harmed. Furthermore, our employees, consultants and advisors, including our senior management, may currently be, or were previously employed at other pharmaceutical or biopharmaceutical companies, including our competitors or potential competitors. Some of these employees, consultants, and advisors, including each member of our senior management, may have executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. We are not aware of any threatened or pending claims related to these matters or concerning the agreements with our senior management, but in the future litigation may be necessary to defend RISK FACTORS –8 6– --- page 96 --- against such claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to our employees and management. While we typically require our employees, consultants and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. Furthermore, even when we obtain agreements assigning intellectual property to us, the assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, each of which may result in claims by or against us related to the ownership of such intellectual property to determine the ownership of what we regard as our intellectual property. Furthermore, individuals executing agreements with us may have pre-existing or competing obligations to a third party, such as an academic institution, and thus an agreement with us may be ineffective in perfecting ownership of inventions developed by that individual. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. Even if we are successful in prosecuting or defending any of the foregoing claims, litigation could result in substantial costs and be a distraction to our management and scientific personnel. In addition, we may in the future be subject to claims by former employees, consultants or other third parties asserting an ownership right in our owned or licensed patents or patent applications. An adverse determination in any such submission or proceeding may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar drug candidates or technology, without payment to us, or could limit the duration of the patent protection covering our drug candidates and technology. Such challenges may also result in our inability to develop, manufacture or commercialize our drug candidates without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our owned patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future drug candidates. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects. If our trademarks and trade names are not adequately protected, then we may not be able to build brand recognition in our markets of interest and our business may be adversely affected. We currently own issued trademark registrations and have trademark applications pending, any of which may be the subject of a governmental or third-party objection, which could prevent the registration or maintenance of the same. We cannot assure you that any currently pending trademark applications or any trademark applications we may file in the future will be approved. During trademark registration proceedings, we may receive rejections and although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in proceedings before the CNIPA, USPTO or comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceeding may be filed against our trademarks and our trademarks may not survive such proceedings. If we are unsuccessful in obtaining trademark protection for our primary brands, we may be required to change our brand names, which could materially adversely affect our business. Moreover, as our products mature, our reliance on our trademarks to differentiate us from our competitors will increase, and as a result, if we are unable to prevent third parties from adopting, registering or using trademarks that infringe, dilute or otherwise violate our trademark rights, or engaging in conduct that constitutes unfair competition, defamation or other violation of our rights, our business could be materially adversely affected. RISK FACTORS –8 7– --- page 97 --- Our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively, and our business may be adversely affected. Risks Relating to Our Reliance on Third Parties We work with various third parties to develop our drug candidates, such as those who help us conduct our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected timelines, we may not be able to obtain regulatory approval for, or commercialize, our drug candidates, and our business could be materially harmed. We have worked with and plan to continue to work with third-party CROs and CDMOs to monitor and manage data for our ongoing preclinical and clinical programs. We work with these parties to execute our preclinical studies and clinical trials, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards, and our collaboration with the CROs and CDMOs does not relieve us of our regulatory responsibilities. We, our CROs and CDMOs for our clinical programs and our clinical investigators are required to comply with GCP, which are regulations and guidelines enforced by the NMPA, FDA and other comparable regulatory authorities for all of our drugs in clinical development. If we or any of our CROs or CDMOs or clinical investigators fail to comply with applicable GCP, the clinical data generated in our clinical trials may be deemed unreliable and the NMPA, FDA or comparable regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. In addition, our pivotal clinical trials must be conducted with product produced under GMP regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. If any of our relationships with these third-party CROs or CDMOs terminates, we may not be able to enter into arrangements with alternative CROs or CDMOs or to do so on commercially reasonable terms. In addition, our CROs and CDMOs are not our employees, and except for remedies available to us under our agreements with such CROs and CDMOs, we cannot control whether or not they devote sufficient time and resources to our ongoing clinical and non-clinical programs. If CROs or CDMOs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they or our clinical investigators obtain is compromised due to failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our drug candidates. As a result, our results of operations and the commercial prospects for our drug candidates would be harmed, our costs could increase, and our ability to generate revenue could be delayed. Our future revenue is dependent on our ability to work effectively with collaborators to develop our drug candidates, including to obtain regulatory approval. Our arrangements with collaborators will be critical to successfully bringing products to market and commercializing them. We rely on collaborators in various respects, including to undertake R&D programs and conduct clinical trials, manage or assist with the regulatory filings and approval process and to RISK FACTORS –8 8– --- page 98 --- assist with our commercialization efforts. We do not have control over our collaborators, other than pursuant to our agreement with them. Therefore, we cannot ensure that these third parties will adequately and timely perform all of their obligations to us. If they fail to complete the remaining studies successfully, or at all, it could delay, adversely affect or prevent regulatory approval. We cannot guarantee the satisfactory performance of any of our collaborators, and if any of our collaborators breaches or terminates their agreements with us, we may not be able to successfully commercialize the licensed product which could materially and adversely affect our business, financial condition, cash flows and results of operations. We have entered into collaborations with our partners and may form or seek additional collaborations or strategic alliances or enter into licensing arrangements in the future. We may not realize any or all benefits of such alliances or licensing arrangements, and disputes may arise between us and our collaboration partners. The development and potential commercialization of our drug candidates will require substantial additional capital to fund expenses. Historically we have entered into collaboration arrangements with third parties in relation to the development of our drug candidates. Please refer to the paragraphs headed “Business — Collaboration Agreements” in this document for further information on those collaboration arrangements. We may form or seek additional strategic partnerships, enter into licensing arrangements or establish other collaborative relationships with third parties that we believe will complement or augment our R&D and commercialization efforts with respect to our drug candidates. Any of these relationships may require us to incur additional expenses and charges, increase our near and long-term expenditures, issue securities that dilute the value of our shares, or disrupt our management and business. These transactions can also entail numerous operational and financial risks, including exposure to unknown liabilities, and diversion of our management’s time and attention in order to manage a collaboration or develop acquired products, drug candidates or technologies. As a result, if we enter into acquisition or in-license agreements or strategic partnerships, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business. Furthermore, we face significant competition in seeking appropriate strategic partners with whom we collaborate to develop our drug candidates, and the negotiation process is time-consuming and complex. We may not be always successful in our efforts to establish a strategic partnership or other alternative arrangements for our drug candidates because, among other reasons, they may be deemed to be at too early a stage of development for collaborative effort and third parties may not view our drug candidates as having the requisite potential to demonstrate safety and efficacy. If and when we collaborate with a third party for the development and commercialization of a drug candidate, we may also relinquish some or all of the control over the future success of that drug candidate to the third party. Our ability to reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of our technologies, drug candidates and market opportunities. The collaborator may also consider alternative drug candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our drug candidate. We may also be restricted under any license agreements from entering into agreements on certain terms or at all with potential collaborators. Collaborations involving our drug candidates are subject to specific risks, which include, but are not limited to, the following:  collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; RISK FACTORS –8 9– --- page 99 ---  collaborators may not pursue the development and commercialization of our drug candidates or may elect to cease collaboration due to change in their strategic focus, potential acquisition of competitive drugs, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities;  collaborators may delay clinical trials, provide insufficient funding for a clinical trial, discontinue a clinical trial, repeat or conduct new clinical trials, or require a new formulation of a drug candidate for clinical testing;  collaborators could independently develop, or develop with third parties, drugs that compete directly or indirectly with our drug candidates or future drugs;  collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;  collaborators may not always be cooperative or responsive in providing their services in a clinical trial;  disputes may arise between us and a collaborator that cause a delay or termination of the research, development or commercialization of our drug candidates, or that result in costly litigation or arbitration that diverts management attention and resources; and  collaborators may own or co-own intellectual property covering our drug candidates or future drugs that results from our collaborating with them, and in such cases, we would not have the exclusive right over such intellectual property. As a result, we cannot be certain that, following a strategic transaction or license, we will be able to achieve the revenue or specific net income that justifies such transaction. If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a drug candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all. Either would harm our business, financial condition, results of operations and prospects. We have a limited number of suppliers during the Track Record Period and the loss of one or more key suppliers could disrupt our operations. In each period of the Track Record Period, the aggregate purchases attributable to our five largest suppliers amounted to RMB55.9 million, RMB58.1 million and RMB14.7 million, respectively, representing 32.4%, 30.2% and 40.7% of our total purchases, respectively. During the Track Record Period, we had a number of suppliers, and the largest purchase amounts related to manufacturing and CRO services. Our other major purchases were fees paid to research and development services, equipment and construction works. We expect to continue our purchases from these suppliers as we fund the continuing R&D activities of our drug candidates in our pipeline. We believe that we have long and stable relationships with our existing large third-party suppliers. However, the stability of operations and business strategies of our suppliers are beyond our control, and we cannot assure you that we will be able to secure a stable relationship and high-quality outsourced services with our large suppliers. If any of our large suppliers terminates RISK FACTORS –9 0– --- page 100 --- its business relationship with us, we may encounter difficulty in finding a replacement that can provide services of equal quality at a similar price. If this occurs, our operations may be significantly disrupted. If our third-party manufacturers fail to deliver sufficient quantities of product or fail to do so at acceptable quality levels or prices, our business could be harmed. In addition to our pilot product lines, we currently also engage third parties for the manufacturing of certain drug candidates for preclinical studies and clinical use. Such reliance on third-party manufacturers would expose us to the following risks:  we may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the NMPA, FDA or other comparable regulatory authorities must evaluate and/or approve any manufacturers as part of their regulatory oversight of our drug candidates. This evaluation would require new testing and GMP-compliance inspections by the NMPA, FDA or other comparable regulatory authorities;  our third-party manufacturers might be unable to timely manufacture our drug candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any;  manufacturers are subject to ongoing periodic inspection, announced and unannounced, by the regulatory authorities to ensure strict compliance with GMP and other government regulations, and we do not have control over third-party manufacturers’ compliance with these regulations and requirements;  we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our drug candidates;  manufacturers may not properly obtain, protect, maintain, defend or enforce our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;  manufacturers may infringe, misappropriate or otherwise violate the patent, trade secret or other intellectual property rights of third parties;  raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier, may not be available or may not be suitable or acceptable for use due to material or component defects; and  our contract manufacturers may be subject to inclement weather, as well as natural or human-made disasters. Each of these risks could delay or suspend R&D activities, result in higher costs, or adversely impact commercialization of our future approved drug candidates. In addition, we will rely on third parties to perform certain specification tests, including abnormal toxicity tests, on our drug candidates prior to delivery to patients. If these tests are not appropriately done and test data are not reliable, patients could be put at risk of serious harm, and regulatory authorities could place significant restrictions on us until deficiencies are remedied. RISK FACTORS –9 1– --- page 101 --- Manufacturers of drug and biological products often encounter difficulties in production, particularly in scaling up or out, validating the production process, and assuring high reliability of the manufacturing process. These problems include logistics and shipping, difficulties with production costs and yields, quality control, including stability of the product, product testing, operator error, availability of qualified personnel, as well as compliance with strictly enforced regulations. Furthermore, if contaminants are discovered in our supply of our drug candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We cannot assure you that any stability failures or other issues relating to the manufacture of our drug candidates will not occur in the future. If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide any future approved drug candidates for commercial sale and our drug candidates to patients in clinical trials would be jeopardized. Any delay or interruption in the provision of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to begin new clinical trials at additional expense or terminate clinical trials completely. We depend on a stable and adequate supply of quality raw materials, including active pharmaceutical ingredients, reagents and consumables, research and development and manufacturing equipment from our suppliers, and price increases or interruptions of such supply could have an adverse impact on our business. Our business operations require a substantial amount of raw materials, such as active pharmaceutical ingredients, reagents and consumables, as well as equipment and other materials needed for R&D as well as manufacturing purposes. Currently, the materials and equipment are supplied by multiple source suppliers. We have agreements for the supply of drug materials with manufacturers or suppliers that we believe have sufficient capacity to meet our demands. In addition, we believe that adequate alternative sources for such supplies exist. However, any disruption in production or the inability of our suppliers to produce adequate quantities to meet our needs could impair our operations and the R&D of our drug candidates. Moreover, we require a stable supply of materials for our drug candidates in the course of our R&D activities, and such needs are expected to increase significantly once we enter commercial production of drugs upon receipt of marketing approval, but there is no assurance that current suppliers have the capacity to meet our demand. Any significant delay in receiving such materials in the quantity and quality that we need could delay the completion of our clinical studies, regulatory approval of our drug candidates or our ability to timely meet market demand for our commercialized products. Our suppliers may not be able to cater to our growing demand or may reduce or cease their supply of materials to us at any time. Even if our suppliers have adequate capacity to meet our demand, they may fail to deliver the materials to us in a timely manner due to logistics difficulties or other reasons beyond their control. We are also exposed to the possibility of increased costs, which we may not be able to pass on to customers and as a result, lower our profitability. In the event of significant price increases for such materials, we cannot assure you that we will be able to raise the prices of our products sufficiently to cover the increased costs. As a result, any significant price increase for our needed materials may have an adverse effect on our profitability. Additionally, although we have implemented quality inspection on the materials before using them in the manufacturing process, we cannot assure you that we will be able to identify all pre-existing quality issues. In addition, we cannot assure you that these third parties will be able to maintain and renew all licenses, permits and approvals necessary for their operations or comply with all applicable laws and regulations. Failure to do so by them may lead to interruption in their business operations, which in turn may result in shortage of the materials and equipment supplied to us, and cause delays in clinical trials and regulatory filings, or recall of our products. The non-compliance RISK FACTORS –9 2– --- page 102 --- of these third parties may also subject us to potential product liability claims, cause us to fail to comply with the continuing regulatory requirements, and incur significant costs to rectify such incidents of non-compliance, which may have a material and adverse effect on our business, financial condition and results of operation. Our Directors, employees, principal investigators, consultants, commercial partners and independent contractors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, and insider trading, which could harm our reputation and subject us to penalties and significant expenses that have a material and adverse effect on our business, financial condition and results of operations. We are exposed to risks of fraud, bribery, misconduct or other illegal activity by our Directors, employees, principal investigators, consultants, commercial partners and independent contractors that could subject us to financial losses and sanctions imposed by government authorities, which may adversely affect our reputation. Misconduct by these parties could include, but not limited to, intentional, reckless and negligent conduct that fails to:  comply with the laws of the NMPA, the FDA and other comparable regulatory authorities;  provide true, complete and accurate information to the NMPA, the FDA and other comparable regulatory authorities;  comply with manufacturing standards we have established;  comply with healthcare fraud and abuse laws in China, the U.S. and similar fraudulent misconduct laws applicable to us; or  report financial information or data accurately or disclose unauthorized activities to us. If we obtain approval for any of our drug candidates and begin commercializing those drugs in China, the U.S., or other applicable jurisdictions, our potential exposure under relevant laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase. These laws may impact, among other things, our current activities with principal investigators of our clinical trials, and our use of information obtained in the course of patient recruitment for clinical trials, as well as proposed and future sales and marketing programs. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Additionally, we could be liable for actions taken by them that violate anti-bribery, anti-corruption and other related laws and regulations in China, the U.S. or other jurisdictions. The government authorities may seize the products involved in any illegal or improper conduct engaged in by our employees or commercial partners. We may be subject to claims, fines or suspension of our operations. Our reputation, our sales activities or the price of our H Shares could be adversely affected if we are associated with any negative publicity as a result of illegal or improper actions, or allegations of illegal or improper actions, taken by our Directors, employees or commercial partners. During the Track Record Period, we were not aware of any instances of fraud, bribery, or other misconduct involving our Directors, employees and other third parties that had any material and adverse impact on our business and results of operations. However, we cannot assure you that there will not be any such instances in future. Although we consider our internal control policies RISK FACTORS –9 3– --- page 103 --- and procedures to be adequate, we may be unable to prevent, detect or deter all such instances of misconduct. Any such misconduct committed against our interests, which may include past acts that have gone undetected or future acts, may have a material adverse effect on our business and results of operations. OTHER RISKS RELATING TO OUR FINANCIAL POSITION AND NEED FOR ADDITIONAL CAPITAL Fluctuations in exchange rates of the Renminbi could result in foreign currency exchange losses. The RMB has fluctuated against Hong Kong dollar and the U.S. dollar at times significantly and unpredictably. We incurred net foreign exchange losses of RMB9.1 million in 2021, net foreign exchange gains of RMB26.1 million in 2022, and net foreign exchange losses of RMB1.0 million in the four months ended April 30, 2023. We cannot assure you that RMB will not appreciate or depreciate significantly in value against Hong Kong dollar or the U.S. dollar in the future. It is difficult to predict how market forces may impact the exchange rate between RMB and foreign currencies in the future. Significant revaluation of RMB may have a material and adverse effect on your investment. For example, to the extent that we need to convert Hong Kong dollars we receive from this Global Offering into RMB for our operations, appreciation of RMB against Hong Kong dollar would have an adverse effect on the RMB amount we would receive from the conversion. Conversely, if we decide to convert our RMB into Hong Kong dollars for the purpose of making payments for dividends on our H Shares or for other business purposes, appreciation of Hong Kong dollar against RMB would have a negative effect on the Hong Kong dollar amount available to us. Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited, and we may not be able to adequately hedge our exposure or at all. As a result, fluctuations in exchange rates may have a material adverse effect on your investment. We have historically received government grants, subsidies and other preferential policies for our R&D and financing activities and enjoyed preferential tax treatment during the Track Record Period. Expiration of, or changes to, these incentives or policies or our failure to satisfy any condition for these incentives would have an adverse effect on our results of operations. We have historically benefited from government grants, subsidies and other preferential policies as incentives for our R&D and financing activities. We recognized RMB8.7 million, RMB5.2 million and RMB0.1 million in government grants in 2021, 2022 and the four months ended April 30, 2023, respectively. We have been accredited as a High and New Technology Enterprise under the relevant PRC laws and regulations and enjoy a preferential tax rate of 15% for a term of three years starting from 2020. Although we expect to continuously benefit from government grants and preferential tax treatment, the local government authorities have the sole discretion to determine the timing, amount and criteria of such financial incentives. We generally do not have the ability to influence local government authorities in making these decisions. Local authorities may decide to reduce or eliminate incentives at any time. In addition, some of the government financial incentives are granted on a project basis and subject to the satisfaction of certain conditions, including compliance with the applicable financial incentive agreements and completion of the specific projects therein. We cannot guarantee that we will satisfy all relevant conditions, otherwise we may be deprived of all or part of the incentives, which may have an adverse effect on our business, financial performance and results of operations. RISK FACTORS –9 4– --- page 104 --- We had net liabilities and net current liabilities as of December 31, 2021. We cannot assure you that we will not experience net liabilities and/or net current liabilities in the future, which could expose us to liquidity risks. We had net liabilities of RMB1,598.4 million as of December 31, 2021, and we recorded net current liabilities of RMB1,773.7 million as of December 31, 2021. Our financial liabilities at FVTPL, which primarily accounted for our net current liabilities and net liabilities, were RMB2,431.6 million as of December 31, 2021. Our financial liabilities at FVTPL consisted of financial instruments related to the equity interests with preferred rights held by our investors. We no longer recorded any financial liabilities at FVTPL since January 31, 2022, as the investors’ preferred rights in connection with our series of financings, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day. As a result, we recorded net assets of RMB779.2 million and RMB697.6 million as of December 31, 2022 and April 30, 2023, respectively, and net current assets of RMB600.1 million and RMB521.8 million as of December 31, 2022 and April 30, 2023, respectively. While we believe we have sufficient working capital to fund our current operations, we may have net liabilities and/or net current liabilities for the foreseeable future. Net liabilities and/or net current liabilities position can expose us to the risk of shortfalls in liquidity. This in turn would require us to seek adequate financing from sources such as external debt, which may not be available on terms favorable or commercially reasonable to us or at all. If we are unable maintain adequate working capital or obtain sufficient equity or debt financings to meet our capital needs, we may be unable to continue our operations according to our plans and be forced to scale back our operations, which may have a material adverse effect on our business, financial condition, results of operations and prospects. Our financial performance and results of operations may be adversely affected by fair value changes and credit risk associated with our financial assets at FVTPL. We made investment in certain wealth management products and structured deposits during the Track Record Period, and our investment was limited to principal-guaranteed and low-risk products from reputable financial institutions. As of December 31, 2021, December 31, 2022 and April 30, 2023, we recorded financial assets at FVTPL of nil, nil and RMB25.0 million, respectively. For details about our financial assets at FVTPL, see note 24 to the Accountants’ Report set out in the Appendix IA to this prospectus. Our financial assets at FVTPL are stated at fair value, and net changes in their fair value are recorded as other gains and losses, and therefore directly affect our results of operations. We may in the future make investment in certain wealth management products and structured deposits that provide better investment returns than term deposits at commercial banks. We cannot assure you that market conditions and regulatory environment will create fair value gains or we will not incur any fair value losses on our financial assets at FVTPL in the future. If we incur such fair value losses, our financial performance and results of operations may be adversely affected. Share-based payments may impact our financial performance and cause shareholding dilution to our existing Shareholders. We adopted the restrict share scheme and granted restricted shares to certain employees, directors and consultants to incentivize and reward the eligible persons who had contributed and would continue to contribute to the success of our Company. In 2021, 2022 and the four months ended April 30, 2023, we recorded non-cash share-based payments of RMB34.0 million, RMB103.8 million and RMB30.1 million, respectively. To further incentivize our employees, directors and consultants and align their interests with ours, we may grant additional share-based compensation in the future. Expenses incurred with respect to such share-based payment may increase our operating expenses and therefore have an adverse effect on our financial performance. Issuance of additional Shares with respect to such share-based payment may also dilute the shareholding percentage of our existing Shareholders. RISK FACTORS –9 5– --- page 105 --- The impairment of our prepayments and other receivables may affect our business operations. Our prepayments and other receivables were RMB27.5 million, RMB16.6 million and RMB16.5 million as of December 31, 2021, December 31, 2022 and April 30, 2023, respectively. Our prepayments and other receivables consisted of prepayments for research and development related services and materials, and other receivables. For details, see note 21 to the Accountants’ Report set out in Appendix IA to this prospectus. We conduct assessments on the recoverability of prepayments and other receivables based on, among others, our historical settlement records, our relationship with relevant counterparties, payment terms, current economic trends and to a certain extent, the larger economic and regulatory environment, which involve the use of various judgments, assumptions and estimates by our management. However, there is no assurance that our expectations or estimates will be entirely accurate, or any precautions we take to prevent an impairment will be effective, as we are not in control of all the underlying factors affecting such prepayments and other receivables. If we are not able to recover the prepayments and other receivables as scheduled, our financial position and results of operations may be adversely affected. OTHER RISKS RELATING TO OUR OPERATIONS The loss of any key members of our senior management team or our inability to attract and retain highly skilled scientists, clinical and sales personnel could delay or prevent the successful development of our drug candidates and result to a material and adverse effect on our business and results of operations. Our commercial success depends significantly on the continued service of our senior management. For more details of our senior management, see the paragraphs headed “Directors, Supervisors and Senior Management” in the Prospectus. The loss of any of our senior management could have a material adverse effect on our business and operations. Although we have formal employment agreements with each of our executive officers, these agreements do not prevent our executives from terminating their employment with us at any time. Recruiting and retaining qualified scientific, technical, clinical, sales and marketing personnel in the future will also be critical to our success. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our discovery, clinical development and commercialization strategy. To retain valuable employees, in addition to salary and cash incentives, we have provided share incentives that vest over time. The value to employees of these equity grants that vest over time may be significantly affected by movements in the market price of our H Shares that are beyond our control and may, at any time, be insufficient to counteract more lucrative offers from other companies. The loss of the services of our executive officers or other key employees and consultants could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Although we have not historically experienced unique difficulties attracting and retaining qualified employees, we could experience such problems in the future. Competition for qualified employees in the pharmaceutical industry is intense and the pool of qualified candidates is limited. We may not be able to retain the services of, or attract and retain, experienced senior management or key scientific and clinical personnel in the future. The departure of one or more of our senior management or key scientific and clinical personnel, regardless of whether or not they join a competitor or form a competing company, may subject us to risks relating to replacing them in a timely manner or at all, which may disrupt our drug development progress and have a material and adverse effect on our business and results of operations. RISK FACTORS –9 6– --- page 106 --- Furthermore, replacing executive officers, key employees or consultants may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products like those we develop. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel or consultants on acceptable terms given the competition among numerous pharmaceutical and biopharmaceutical companies for similar personnel. To compete effectively, we may need to offer higher compensation and other benefits, which could materially and adversely affect our financial condition and results of operations. In addition, we may not be successful in training our professionals to keep pace with technological and regulatory standards. Any inability to attract, motivate, train or retain qualified scientists or other technical personnel may have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects. We may be involved in lawsuits or other legal proceedings, which could adversely affect our business, financial conditions, results of operations and reputation. We may become subject, from time to time, to legal proceedings and claims that arise in the ordinary course of business or pursuant to governmental or regulatory enforcement activity. Litigation to which we subsequently become a party might result in substantial costs and divert management’s attention and resources. Furthermore, any litigations, legal disputes, claims or administrative proceedings that may initially not appear to be of material importance may escalate and become important to us due to a variety of factors, such as the facts and circumstances of the cases, the likelihood of loss, the monetary amount at stake and the parties involved. Additionally, it is possible that our liabilities could exceed our insurance coverage or that our insurance will not cover all situations in which a claim against us could be made. We may not be able to maintain insurance coverage at a reasonable cost or obtain insurance coverage that will be adequate to satisfy any liability that may arise. A claim brought against us that is uninsured or underinsured could result in unanticipated costs and could have a material and adverse effect on our financial condition, results of operations or reputation. If we fail to comply with anti-bribery laws, our reputation may be harmed and we could be subject to penalties and significant expenses that have a material adverse effect on our business, financial condition and results of operations. We are subject to anti-bribery laws in China that generally prohibit companies and their intermediaries from making payments to government officials for the purpose of obtaining or retaining business or securing any other improper advantage. In addition, although currently our primary operating business is in China, we are subject to the Foreign Corrupt Practices Act, the FCPA. The FCPA generally prohibits us from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Although we have policies and procedures designed to ensure that we, our employees and our agents comply with anti-bribery laws, there is no assurance that such policies or procedures will prevent our agents, employees and intermediaries from engaging in bribery activities. Failure to comply with anti-bribery laws could disrupt our business and lead to severe criminal and civil penalties, including imprisonment, criminal and civil fines, loss of our export licenses, suspension of our ability to do business with the government, denial of government reimbursement for our products and/or exclusion from participation in government healthcare programs. Other remedial measures could include further changes or enhancements to our procedures, policies, and controls and potential personnel changes and/or disciplinary actions, any of which could have a material adverse effect on our business, financial condition, results of operations and liquidity. We could also be adversely affected by any allegation that we violated such laws. RISK FACTORS –9 7– --- page 107 --- We are subject to the risks of doing business globally, including risks relating to political and economic instability and changes in diplomatic and trade relationships, which may materially and adversely affect our business and results of operations. As we operate in the PRC, the U.S. and conduct our clinical trials in these jurisdictions, our business is subject to risks associated with doing business globally. Accordingly, our business and financial results in the future could be adversely affected due to a variety of factors, including:  changes in a specific country’s or region’s political and cultural climate or economic condition;  unexpected changes in laws and regulatory requirements in local jurisdictions;  differences between national and local practice with respect to laws and regulatory requirements in a specific jurisdiction;  difficulty of effective enforcement of contractual provisions in certain jurisdictions;  efforts to develop an international sales, marketing and distribution organization may increase our expenses, divert our management’s attention from the acquisition or development of drug candidates or cause us to forgo profitable licensing opportunities in these geographies;  the occurrence of economic weakness, including inflation or political instability;  inadequate intellectual property protection in certain jurisdictions;  difficulty of ensuring that third-party partners do not infringe, misappropriate, or otherwise violate the patent, trade secret, or other intellectual property rights of others;  enforcement of anti-corruption and anti-bribery laws;  trade protection measures, import or export licensing requirements and fines, penalties or suspension or revocation of export privileges;  delays resulting from difficulty in obtaining export licenses, tariffs and other barriers and restrictions, potentially longer payment cycles, and greater difficulty in accounts receivable collection;  compliance with tax, employment, immigration and labor;  the effects of applicable local tax regimes and potentially adverse tax consequences;  significant adverse changes in local currency exchange rates; and  business interruptions resulting from geo-political actions and cultural climate or economic condition, including war and acts of terrorism, natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes and fires, or the impact of public health pandemics or epidemics, including, for example, the outbreak of COVID-19. The occurrence of any one or more of these risks of doing business internationally, alone or in the aggregate, could materially adversely affect our business and results of operations. RISK FACTORS –9 8– --- page 108 --- Product liability claims or lawsuits against us could result in expensive and time-consuming litigation, payment of substantial damages and increases in our insurance rates. We face an inherent risk of product and professional liability as a result of the clinical testing and any future commercialization of our drug candidates inside and outside China. For example, we may be sued if our drug candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the drug, negligence, strict liability or a breach of warranties. Claims could also be asserted under applicable consumer protection laws. If we cannot successfully defend ourselves against the claims, we may incur substantial liabilities or be required to limit commercialization of our drug candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:  decreased demand for our drug candidates;  injury to our reputation;  withdrawal of clinical trial participants and inability to continue clinical trials;  initiation of investigations by regulatory authorities;  costs to defend the related litigation;  a diversion of management’s time and our resources;  substantial monetary awards to trial participants or patients;  product recalls, withdrawals or labelling, marketing or promotional restrictions;  loss of revenue;  exhaustion of any available insurance and our capital resources;  the inability to commercialize any approved drug candidate; and  a decline in the market price of our H Shares. To cover such liability claims arising from clinical studies, we purchase clinical trial insurance to cover adverse events in our clinical trials. It is possible that our liabilities could exceed our insurance coverage or that our insurance will not cover all situations in which a claim against us could be made. We may not be able to maintain insurance coverage at a reasonable cost or obtain insurance coverage that will be adequate to satisfy any liability that may arise. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims and our business operations could be impaired. Should any of these events occur, it could have a material adverse effect on our business, financial condition and results of operations. RISK FACTORS –9 9– --- page 109 --- Our internal information technology systems, or those used by our CROs, CDMOs, partners, other independent contractors or consultants, may fail or suffer security breaches, which may require us to expend additional resources to protect our information technology systems and could materially and adversely affect our business, financial condition, results of operations and prospects. Our internal computer systems and those of our current and any future third-party vendors, collaborators, consultants, and third parties performing services for us, as well as our clinical sites and regulatory authorities, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, and telecommunication and electrical failures. In addition, the COVID-19 pandemic has intensified our dependence on information technology systems as many of our critical business activities are currently being conducted remotely. Although we have not experienced any such material system failure, accident, or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a disruption of our drug candidate development and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. For example, the loss of clinical trial data from our current or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in the theft or destruction of intellectual property, data, or other misappropriation of assets, financial loss, or otherwise compromise our confidential or proprietary information and disrupt our operations, our competitive position could be harmed, and the further development and commercialization of our drug candidates could be delayed. We could be subject to risks caused by misappropriation, misuse, leakage, falsification, or intentional or accidental release or loss of information maintained in the information systems and networks of our company, our third-party vendors, and clinical sites, including personal information of our employees and, potentially, our clinical study patients, and company and vendor confidential data. In addition, third parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose sensitive information in order to gain access to data and systems. We may experience threats to our data and systems, including malicious codes and viruses, phishing, and other cyber-attacks. The number and complexity of these threats continue to increase over time. If a material breach of our information technology systems or those of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged. We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks. In addition, we could be subject to regulatory actions or claims made by individuals and groups in private litigation involving privacy issues related to data collection and use practices and other data privacy laws and regulations, including claims for misuse or inappropriate disclosure of data, as well as unfair or deceptive practices. Although we develop and maintain systems and controls designed to prevent these events from occurring, and we have a process to identify and mitigate threats, the development and maintenance of these systems, controls, and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated. Moreover, despite our efforts, the possibility of these events occurring cannot be eliminated entirely. As we outsource more of our information systems to vendors, engage in more electronic transactions with clinical sites and collaborators, and rely more on cloud-based information systems, the related security risks will increase, and we will need to expend additional resources to protect our technology and information systems. In addition, there can be no assurance that our internal information technology systems, or those of third parties with which we conduct business, will be sufficient to protect us against breakdowns, service disruption, data deterioration, or loss in RISK FACTORS – 100 – --- page 110 --- the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, security breach, industrial espionage attacks, or insider threat attacks, which could result in financial, legal, business, or reputational harm. If we fail to maintain effective internal controls, we may not be able to accurately report our financial results or prevent fraud, and our business, financial condition, results of operations and reputation could be materially and adversely affected. Prior to this offering, we were a private company with limited accounting and financial reporting personnel and other resources with which to address our internal controls and procedures. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. In preparation for the Global Offering, we engaged an internal control consultant to perform the internal control review, and the review scope covers certain areas including financial closing and reporting. We are in the process of implementing a number of measures to manage our risk exposure. However, we may not effectively monitor risks due to limited information resources or tools and other reasons. In addition, we cannot assure you that all of our employees will comply with our internal control systems and procedures. Although we regularly update our risk management systems and procedures, we may fail to predict risks arising from rapid changes in market conditions, regulatory measures and our entry into new markets. If we fail to effectively improve our risk management and internal control procedures and systems, or if we cannot achieve the intended results of such procedures or systems in a timely manner, our business, financial condition and results of operations may be materially adversely affected. Increased labor costs could result in exceeding expenses, slow our growth and affect our profitability. Our success depends in part upon our ability to attract, motivate and retain a sufficient number of qualified employees, including management, technical, research and development, sales and marketing, production, quality control and other personnel. We face intense competition in recruiting and retaining qualified personnel, as competitors are competing for the same pool of qualified personnel and our remuneration packages may not be as competitive as those of our competitors. Increasing market competition may cause market demand and competition for qualified employees to intensify. If we face labor shortages or significant increases in labor costs, higher employee turnover rates or changes to labor laws and regulations, our operating costs could increase significantly, which could materially adversely affect our results of operations. In addition, we could face labor disputes with our employees, which could lead to fines by governmental authorities and settlement costs to resolve the disputes. Labor disputes could also make it more difficult to recruit new employees due to the reputational damage caused by labor disputes. If we engage in acquisitions or strategic partnerships, this may increase our capital requirements, cause dilution to our Shareholders, cause us to incur debt or assume contingent liabilities and subject us to other risks. From time to time, we may evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies or businesses. Any completed, in-process or potential acquisition or strategic partnership may entail numerous risks, including:  increased operating expenses and cash requirements;  the assumption of additional indebtedness or contingent or unforeseen liabilities;  the issuance of our equity securities; RISK FACTORS – 101 – --- page 111 ---  assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;  the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition;  retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;  risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or drug candidates and regulatory approvals; and  our inability to generate revenue from acquired technology or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs. In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses, and acquire intangible assets that could result in significant future amortization expense. According to the Anti-Monopoly Law of PRC (جand the Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings ( ਷ਕ ֛issued by the State Council, the concentration of business undertakings by way of mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert decisive impact on another market player must also be filed in advance to the MOFCOM when the threshold is crossed and such concentration shall not be implemented without the clearance of prior filing. If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could materially adversely affect our business. We are subject to numerous environmental, health, and safety laws and regulations in China and the U.S., including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We contract with third parties for the disposal of these materials and wastes. We cannot fully eliminate the risk of accidental contamination, biological or chemical hazards or personal injury at our facilities during the process of discovery, testing, development and manufacturing of our drug candidates. In the event of such accident, we could be held liable for damages and clean-up costs which, to the extent not covered by existing insurance or indemnification, could harm our business. We may also be forced to close or suspend operations at certain of our affected facilities temporarily or permanently. As a result, any accidental contamination, biological or chemical hazards or personal injury could have a material and adverse impact on our business, financial condition, results of operations and prospects. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations. In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws and regulations. These current or future laws and regulations may impair our drug candidate R&D program efforts. Moreover, there is increasing stakeholder pressure on companies to diligence environmental, social, and governance matters in the supply chain. Negative publicity regarding production methods, alleged practices or workplace or related conditions of any of our suppliers, CROs, RISK FACTORS – 102 – --- page 112 --- CDMOs or other third parties who perform services for us could adversely affect our reputation and force us to locate alternatives, which could increase our costs and result in delayed supply of components for, and manufacturing of, our drug candidates, or other disruptions to our operations. In terms of the construction of our manufacturing facilities, they can be put into operation after the relevant administrative authorities in charge of environmental protection and health and safety examine and approve such facilities. We cannot assure you that we will be able to obtain all the regulatory approvals for our construction projects in a timely manner, or at all. Delays or failures in obtaining all the requisite regulatory approvals for our construction projects may affect our abilities to develop, manufacture and commercialize our drug candidates as we plan. We have significantly increased, and may need to keep increasing, the size and capabilities of our organization, and we may experience difficulties in managing our growth. If we fail to effectively manage our anticipated growth or execute on our growth strategies, our business, financial condition, results of operations and prospects could suffer. We are a relatively small company, operating in China and the U.S. and working on a rich and expanding pipeline of drug candidates. We had a total of 143 full-time employees as of the Latest Practicable Date. Our future financial performance and our ability to commercialize our drug candidates will depend, in part, on our ability to effectively manage our recent growth and any future growth. We might not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational inefficiencies, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities. As our development and commercialization plans and strategies evolve, we must add a significant number of additional managerial, operational, manufacturing, sales, marketing, financial and other personnel. Our recent growth and any future growth will impose significant added responsibilities on our management, including but not limited to:  identifying, recruiting, integrating, maintaining and motivating additional employees;  continuing to innovate and develop advanced technology in the highly competitive pharmaceutical industry;  managing our relationships with third parties, including suppliers and partners;  managing our internal development efforts effectively, including the clinical and regulatory authority review process for our drug candidates, while complying with our contractual obligations to contractors and other third parties; and  improving our operational, financial and management controls, reporting systems and procedures. If we are not able to effectively manage our growth and further expand our organization by hiring new employees and expanding our groups of consultants and contractors as needed, we may not be able to successfully implement the tasks necessary to further develop and commercialize our drug candidates and, accordingly, may not achieve our research, development and commercialization goals. Our failure to do so could materially adversely affect our business, financial condition, results of operations and prospects. RISK FACTORS – 103 – --- page 113 --- We have limited insurance coverage, and any claims beyond our insurance coverage may result in our incurring substantial costs and a diversion of resources, which may negatively impact our R&D progress and overall operations. We maintain insurance policies that are required under the PRC laws and regulations and that we believe are in line with market practice and adequate for our business to safeguard against risks and unexpected events. Our insurance policies cover adverse events in our clinical trials, and we also maintain property loss insurance. We maintain social welfare insurance for our employees in accordance with relevant PRC laws and regulations. However, our insurance coverage may be insufficient to cover any claims that we may have. Any liability or damage to, or caused by, our facilities or our personnel beyond our insurance coverage may result in our incurring substantial costs and a diversion of resources and may negatively impact our drug development and overall operations. We are subject to risks associated with leasing space. We lease some of our offices and facilities in China. The lessors of the leased properties may not have valid title or the legal rights to such leased properties or may not have complied with all the necessary property leasing procedures. In addition, as our leases expire, we may fail to obtain renewals, either on commercially acceptable terms or at all, which could compel us to close such offices or manufacturing facilities. Our inability to enter into new leases or renew existing leases on terms acceptable to us could materially and adversely affect our business, results of operations or financial condition. Pursuant to PRC laws, both lessors and lessees are required to file the lease agreements with relevant authorities for record and obtain property leasing filing certificates for their leases. In practice, as the filing of the lease agreements requires the coordination of both lessors and lessees, we cannot assure you that the lessor will cooperate and complete the registration in a timely manner. Although we have reached out to our lessors for their necessary support with regard to the filing of the lease agreements, as of the Latest Practicable Date, we and our lessors have not filed four of our leases with the governmental authorities due to various reasons, including, without limitation, the failure or unwillingness of the lessors to provide relevant documents. The failure to file and obtain property leasing filing certificates for such leases, as required under PRC laws, may subject us to a fine ranging from RMB1,000 to RMB10,000 for each agreement not filed, and a maximum fine of RMB40,000 in aggregate. Although non-registration of lease agreements does not in itself invalidate the leases, we may not be able to defend these leases against bona fide third parties, which may negatively affect our ability to operate our business covered under those leases. Negative publicity and allegations involving us, our Shareholders, Directors, officers, employees and business partners may affect our reputation and may, as a result, negatively affect our business, financial condition and results of operations. Any negative publicity concerning us, our affiliates, our Shareholders, Directors, officers, employees and business partners, management, even if untrue, could adversely affect our reputation and business prospects. Such negative coverage in the media and publicity could threaten the perception of our reputation. In addition, to the extent our Shareholders, Directors, officers, employees and business partners were incompliant with any laws or regulations or became involved in lawsuits, disputes, or other legal proceedings or became subject to administrative measures, penalties or investigations by regulatory authorities, we may also suffer negative publicity or harm to our reputation. As a result, we may be required to spend significant time and incur substantial costs in response to allegations and negative publicity. In addition, any negative publicity about us could adversely affect our ability to maintain our existing collaboration arrangements or attract new collaboration partners, and we may not be able to diffuse such negative publicity to the satisfaction of our investors. RISK FACTORS – 104 – --- page 114 --- We may be subject to natural disasters, acts of war or terrorism or other factors beyond our control. Our operations may be under the threat of floods, earthquakes, sandstorms, snowstorms, fire or drought, power, water or fuel shortages, failures, malfunction and breakdown of information management systems, unexpected maintenance or technical problems, or may be susceptible to potential wars or terrorist attacks. Serious natural disasters may result in loss of lives, injury, destruction of assets and disruption of our business and operations. Acts of war or terrorism may also injure our employees, cause loss of lives, disrupt our business network and destroy our markets. Any of these factors and other factors beyond our control could have an adverse effect on the overall business sentiment and environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial conditions and results of operations. Our business could be adversely affected by the effects of epidemics, including COVID-19, avian influenza, severe acute respiratory syndrome (SARS), influenza A (H1N1), Ebola or another epidemic. Any such occurrences could cause severe disruption to our daily operations and may even require a temporary closure of our offices and laboratories. In recent years, there have been outbreaks of epidemics in China and globally. See also “— Key risks relating to our business, business operations, intellectual property rights and financial prospects — The COVID-19 pandemic could adversely impact our business, including our clinical trials.” RISKS RELATING TO OUR DOING BUSINESS IN CHINA The pharmaceutical industry in China is highly regulated and such regulations are subject to change which may affect approval and commercialization of our drugs. We currently conduct most of our operations in China. The pharmaceutical industry in China is subject to comprehensive government regulation and supervision, encompassing the approval, registration, manufacturing, packaging, licensing and marketing of new drugs. In recent years, the regulatory framework in China regarding the pharmaceutical industry has undergone significant changes, and we expect that it will continue to undergo significant changes. Any such changes or amendments may result in increased compliance costs on our business or cause delays in or prevent the successful development or commercialization of our drug candidates in China and reduce the benefits we believe are available to us from developing and manufacturing drugs in China. Changes in, as well as the interpretation and implementation of the relevant laws, rules and regulations, may affect our business, financial condition, results of operations and prospects. Due to our extensive operations in the PRC, our business, financial condition, results of operations and prospects are affected by economic and legal developments in the PRC. Laws, rules and regulations in relation to economic matters are promulgated from time to time, including those related to such as foreign investment, corporate organization and governance, commerce, taxation, finance, foreign exchange and trade, so as to develop a comprehensive system of commercial law. In addition, the interpretation and implementation of the laws and regulations relating to pharmaceutical industry also evolve from time to time. The NMPA’s recent reform in the regulatory regime of marketed drugs could have impacts on our commercialization of drug candidates. For example, the NHC issued the Administrative Measures for Clinical Use of Oncology Drugs (Trial), effective from March 1, 2021, requiring the oncology drugs, as classified into the “restricted-use” and “normal-use” categories, to be rationally used or prescribed by the medical institutions and medical practitioners. In June 2021, the NHC further issued the Administrative Measurements for Rational Clinical Use of Oncology Drugs, which specifies the calculation formula for the administrative measurements used for gauging the RISK FACTORS – 105 – --- page 115 --- rational use of restricted-use oncology drugs. We currently do not experience or foresee any potential material adverse impact of these regulations on our business operations. However, as such administrative regulations are newly released and relevant measures are generally evolving, we cannot assure you if our business operations will not be adversely affected in the future. Changes in U.S. and international trade policies, and in relationships between the PRC and other countries, may adversely impact our business and operating results. The U.S. government has recently made significant changes in its trade policy and has taken certain actions that may materially impact international trade, such as imposing several rounds of tariffs affecting certain products manufactured in the PRC. In March 2018, the former U.S. President Donald J. Trump announced the imposition of tariffs on steel and aluminum entering the U.S. and in June 2018 announced further tariffs targeting goods imported from the PRC. Despite the recent re-exemption of U.S. tariffs on some Chinese goods, it remains unclear what actions, if any, the U.S. government will take with respect to other existing international trade agreements. It is also unknown whether and to what extent new tariffs (or other new laws or regulations) will be adopted, or the effect that any such actions would have on us or our industry. While we have not started commercialization of any of our drug candidates, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our future drug products, the competitive position of our future drug products, the hiring of scientists and other R&D personnel, and import or export of raw materials in relation to drug development, or may prevent us from selling our future drug products in certain countries. If any new tariffs, legislation and regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions, such changes could have an adverse effect on our business, financial condition and results of operations. The existing trade disputes may escalate going forward and may result in certain types of goods, such as advanced R&D equipment and materials, becoming significantly more expensive to procure from overseas suppliers or even becoming illegal to export. Furthermore, there can be no assurance that our existing or potential service providers or collaboration partners will not alter their perception of us or their preferences as a result of adverse changes to the state of relationships between China and the relevant foreign countries or regions. Relationships between the PRC and the relevant foreign countries or regions may therefore adversely affect our business, financial condition, results of operations, cash flows and prospects. We may face risks from transferring our scientific data. On March 17, 2018, the General Office of the State Council promulgated the Measures for the Management of Scientific Data (جor the Scientific Data Measures, which provided a broad definition of scientific data and relevant rules for the management of scientific data. According to the Scientific Data Measures, if the provision of scientific data involving “state secrets” is required in foreign exchanges and cooperation, Chinese enterprises should clarify the type, scope and purpose of the data to be used, and report to the competent authority for approval in accordance with relevant procedures of confidentiality management regulations. When publishing a paper in a foreign academic journal requires the author to submit the relevant scientific data, the author should, prior to the publication, submit such scientific data to the belonged institution for unified management if such scientific data are generated with the government funding. Given the term “state secret” is not clearly defined, we cannot assure you that we can always obtain relevant approvals for sending scientific data, such as the results of our preclinical studies or clinical trials conducted within the PRC, abroad or to our foreign partners in the PRC. If we are unable to obtain necessary approvals in a timely manner, or at all, our R&D of drug candidates may be hindered, which could materially and adversely affect our business, financial condition, results of operations and prospects. If the relevant government authorities RISK FACTORS – 106 – --- page 116 --- consider the transmission of our scientific data to be in violation of the requirements under the Scientific Data Measures, we may be subject to rectification and other administrative penalties imposed by those government authorities. Holders of H Shares may be subject to PRC income taxes. Holders of H Shares, being non-PRC resident individuals or non-PRC resident enterprises, whose names appear on the register of members of H Shares of our Company, are subject to PRC income tax in accordance with the applicable tax laws and regulations, on dividends received from us and gains realized through the sale or transfer by other means of H shares by such shareholders. According to the Individual Income Tax Law of the PRC and the Implementation Regulations for the Individual Income Tax Law of the PRC, both came into effect on January 1, 2019, the tax applicable to non-PRC resident individuals is proportionate at a rate of 20% for any dividends obtained from within China or gains on transfer of shares and shall be withheld and paid by the withholding agent. Pursuant to the Arrangement between the Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (the “ Arrangements ”) executed on August 21, 2006, the PRC Government may levy taxes on the dividends paid by PRC companies to Hong Kong residents in accordance with the PRC laws, but the levied tax (in the case the beneficial owner of the dividends are not companies directly holding at least 25% of the equity interest in the company paying the dividends) shall not exceed 10% of the total dividends. According to the Enterprise Income Tax Law of the PRC, which was newly revised and implemented on December 29, 2018, and the Implementation Regulations for the Enterprise Income Tax Law of the PRC, which was newly revised and implemented on April 23, 2019, if a non-resident enterprise has no presence or establishment within China, or if it has established a presence or establishment but the income obtained has no actual connection with such presence or establishment, it shall pay an enterprise income tax on its income derived from within China with a reduced rate of 10%. Pursuant to the Arrangements, dividends paid by PRC resident enterprises to Hong Kong residents can be taxed either in Hong Kong or in accordance with the PRC laws. However, if the beneficial owner of the dividends is a Hong Kong resident, the tax charged shall not exceed: (i) 5% of the total amount of dividends if the Hong Kong resident is a company that directly owns at least 25% of the capital of the PRC resident enterprise paying dividends; (ii) otherwise, 10% of the total amount of dividends. Considering the above, non-PRC resident holders of our H Shares should be aware that they may be obligated to pay PRC income tax on the dividends and gains realized through sales or transfers by other means of the H Shares. There might be uncertainties in effecting service of legal process, enforcing foreign judgments against us or our Directors and senior management personnel in the PRC. We are a joint stock company incorporated in China. In addition, a majority of our Directors and senior management personnel reside within mainland China, and substantially all of their assets are located within the PRC. Therefore, it may be difficult for investors to directly effect service of legal process upon us or our Directors and senior management personnel in the PRC. On July 14, 2006, the Supreme People’s Court of the PRC and the government of Hong Kong Special Administrative Region entered into the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region pursuant to Choice of Court Agreements between Parties Concerned, or the Arrangement, which was taken into effect on August 1, 2008. RISK FACTORS – 107 – --- page 117 --- Pursuant to the Arrangement, where any designated PRC court or any designated Hong Kong court has made an enforceable final judgment requiring payment of money in a civil or commercial case under a choice of court agreement in writing, any party concerned may apply to the relevant PRC court or Hong Kong court for recognition and enforcement of the judgment. A choice of court agreement in writing is defined as any agreement in writing entered into between parties after the effective date of the Arrangement in which a Hong Kong court or a mainland court is expressly selected as the court having sole jurisdiction for the dispute. On January 18, 2019, the Supreme People’s Court and the Hong Kong SAR Government signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region, or the New Arrangement, which seeks to establish a mechanism with greater clarity and certainty for recognition and enforcement of judgments in wider range of civil and commercial matters between Hong Kong SAR and the mainland China. The New Arrangement does not include the requirement for a choice of court agreement in writing by the parties. The New Arrangement will only take effect after the promulgation of a judicial interpretation by the Supreme People’s Court and the completion of the relevant legislative procedures in the Hong Kong SAR. The New Arrangement will, upon its effectiveness, supersedes the Arrangement. Therefore, before the New Arrangement becomes effective, there might be uncertainties in enforcing a judgment rendered by a Hong Kong court in China if the parties in the dispute do not agree to enter into a choice of court agreement in writing. RISKS RELATING TO THE GLOBAL OFFERING No public market currently exists for our H Shares, and an active trading market for our H Shares may not develop, especially taking into account that certain of our existing shareholders may be subject to a lock-up period. No public market currently exists for our H Shares. The initial Offer Price for our H Shares to the public will be the result of our negotiations with the Overall Coordinators (for themselves and on behalf of the Underwriters) and the Offer Price may differ significantly from the market price of the H Shares following the Global Offering. We have applied to the Stock Exchange for listing of, and permission to deal in, our Offer Shares. A listing on the Stock Exchange, however, does not guarantee that an active and liquid trading market for our H Shares will develop, or if it does develop, that it will be sustained following the Global Offering, or that the market price of the H Shares will not decline following the Global Offering. In particular, certain part of the H Shares in issue as of the date of this Prospectus will be subject to a lock-up period from the Listing Date, which may significantly affect the liquidity and trade volume of our H Shares in the short term following the Global Offering. A listing on the Hong Kong Stock Exchange does not guarantee that an active and liquid trading market for our H Shares will develop, especially during the period when certain portion of our H Shares may be subjected to lock-up, or if it does develop, that it will sustained following the Global Offering, or that market price of the H Shares will rise following the Global Offering. RISK FACTORS – 108 – --- page 118 --- The price and trading volume of our H Shares may be volatile, which could lead to substantial losses to investors. The price and trading volume of our H Shares may be subject to significant volatility in response to various factors beyond our control, including the general market conditions of the securities in Hong Kong and elsewhere in the world. In particular, the business and performance and the market price of the shares of other companies engaging in similar business may affect the price and trading volume of our H Shares. In addition to market and industry factors, the price and trading volume of our H Shares may be highly volatile for specific business reasons, including the following:  the results of clinical trials of our drug candidates;  the results of our applications for regulatory approvals of our drug candidates;  regulatory developments affecting the pharmaceutical industry, healthcare, health insurance and other related matters;  fluctuations in our revenue, earnings, cash flows, investments and expenditures;  relationships with our suppliers;  movements or activities of key personnel; and  actions taken by competitors. Moreover, shares of other companies listed on the Stock Exchange have experienced price volatility in the past, and it is possible that our H Shares may be subject to changes in price not directly related to our performance. There will be a gap of several days between pricing and trading of our H Shares, and the price of our H Shares when trading begins could be lower than the Offer Price. The H Shares will not commence trading on the Stock Exchange until they are delivered, which is expected to be not more than five Business Days after their initial sale at the Offer Price. As a result, investors may not be able to sell or otherwise deal in the H Shares during that period. Accordingly, Shareholders of our H Shares are subject to the risk that the price of the H Shares when trading begins could be lower than the Offer Price as a result of adverse market conditions or other adverse developments that may occur between the time of sale and the time trading begins. Future sales or perceived sales of our H Shares in the public market by major Shareholders following the Global Offering could materially and adversely affect the price of our H Shares. Prior to the Global Offering, there has not been a public market for our H Shares. Future sales or perceived sales by our existing Shareholders of our H Shares after the Global Offering could result in a significant decrease in the prevailing market price of our H Shares. Only a limited number of the H Shares currently outstanding will be available for sale or issuance immediately after the Global Offering due to contractual and regulatory restrictions on disposal and new issuance. Nevertheless, after these restrictions lapse or if they are waived, future sales of significant amounts of our H Shares in the public market or the perception that these sales may occur could significantly decrease the prevailing market price of our H Shares and our ability to raise equity capital in the future. RISK FACTORS – 109 – --- page 119 --- Raising additional capital may cause dilution to our Shareholders, restrict our operations or require us to relinquish rights to our technologies or drug candidates. We may finance our future cash needs through equity offerings, licensing arrangements or other collaborations, government funding arrangements, debt financings, or any combination thereof. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe that we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a holder of our H Shares. The incurrence of additional indebtedness or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in certain additional restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. In addition, issuance of additional equity securities, or the possibility of such issuance, may cause the market price of our H Shares to decline. Potential investors will experience immediate and substantial dilution as a result of the Global Offering. Potential investors will pay a price per H Share in the Global Offering that substantially exceeds the per H Share value of our tangible assets after subtracting our total liabilities as of April 30, 2023. Therefore, purchasers of our H Shares in the Global Offering will experience a substantial immediate dilution in pro forma net tangible assets, and our existing Shareholders will receive an increase in the pro forma adjusted net tangible assets per Share on their Shares. As a result, if we were to distribute our net tangible assets to the Shareholders immediately following the Global Offering, potential investors would receive less than the amount they paid for their H Shares. See “Appendix II — Unaudited Pro Forma Financial Information.” Because we do not expect to pay dividends in the foreseeable future after the Global Offering, you must rely on price appreciation of our H Shares for a return on your investment. We currently intend to retain most, if not all, of our available funds and any future earnings after the Global Offering to fund the development and commercialization of our pipeline drug candidates. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our H Shares as a source for any future dividend income. Our Board has complete discretion as to whether to distribute dividends. Even if our Board decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our Board. Accordingly, the return on your investment in our H Shares will likely depend entirely upon any future price appreciation of our H Shares. There is no guarantee that our H Shares will appreciate in value after the Global Offering or even maintain the price at which you purchased the H Shares. You may not realize a return on your investment in our H Shares and you may even lose your entire investment in our H Shares. We cannot make fundamental changes to our business without the consent of the Stock Exchange. On April 30, 2018, the Hong Kong Stock Exchange adopted rules under Chapter 18A of its Rules Governing the Listing of Securities on the Stock Exchange. Under these rules, without the prior consent of the Stock Exchange, we will not be able to effect any acquisition, disposal or RISK FACTORS –1 1 0– --- page 120 --- other transaction or arrangement or a series of acquisitions, disposals or other transactions or arrangements, which would result in a fundamental change in our principal business activities as set forth in this prospectus. As a result, we may be unable to take advantage of certain strategic transactions that we might otherwise choose to pursue in the absence of Chapter 18A. Were any of our competitors that are not listed on the Stock Exchange to take advantage of such opportunities in our place, we may be placed at a competitive disadvantage, which could have a material adverse effect on our business, financial condition and results of operations. Facts, forecasts and statistics in this prospectus relating to the pharmaceutical industry may not be fully reliable. Facts, forecasts and statistics in this prospectus relating to the pharmaceutical industry in and outside China are obtained from various sources, including information provided or published by government agencies, and we can guarantee neither the quality nor reliability of such source materials. We believe that the information originated from appropriate sources and was extracted and reproduced after taking reasonable care. We have no reason to believe that such information is false or misleading or that any fact has been omitted that would render such information false or misleading. However, neither we, the Overall Coordinators, the Joint Global Coordinators nor our or their respective affiliates or advisors have verified the facts, forecasts and statistics nor ascertained the underlying economic assumptions relied upon in those facts, forecasts and statistics obtained from these sources. Due to possibly flawed or ineffective collection methods or discrepancies between published information and factual information and other problems, the statistics in this prospectus relating to the pharmaceutical industry in and outside China may be inaccurate, and you should not place undue reliance on it. We make no representation as to the accuracy of such facts, forecasts and statistics obtained from various sources. Moreover, these facts, forecasts and statistics involve risk and uncertainties and are subject to change based on various factors and should not be unduly relied upon. You should read the entire prospectus carefully, and we strongly caution you not to place any reliance on any information contained in press articles or other media regarding us or the Global Offering. Subsequent to the date of this prospectus but prior to the completion of the Global Offering, there may be press and media coverage regarding us and the Global Offering, which may contain, among other things, certain financial information, projections, valuations and other forward-looking information about us and the Global Offering. We have not authorized the disclosure of any such information in the press or media and do not accept responsibility for the accuracy or completeness of such press articles or other media coverage. We make no representation as to the appropriateness, accuracy, completeness or reliability of any of the projections, valuations or other forward-looking information about us. To the extent such statements are inconsistent with, or conflict with, the information contained in this prospectus, we disclaim responsibility for them. Accordingly, prospective investors are cautioned to make their investment decisions on the basis of the information contained in this prospectus only and should not rely on any other information. RISK FACTORS – 111 – --- page 121 --- In preparation for the Global Offering, we have sought the following waivers from strict compliance with the relevant provisions of the Listing Rules and exemption from compliance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance: WAIVER IN RELATION TO MANAGEMENT PRESENCE IN HONG KONG Pursuant to Rule 8.12 of the Listing Rules, an issuer must have a sufficient management presence in Hong Kong. This normally means that at least two of its executive directors must be ordinarily resident in Hong Kong. Rule 19A.15 of the Listing Rules further provides that the requirement in Rule 8.12 of the Listing Rules may be waived by having regard to, among other considerations, the new applicant’s arrangements for maintaining regular communication with the Stock Exchange, including but not limited to compliance by the new applicant with Rules 3.06, 3A.23 and 3A.24 of the Listing Rules. Our Company’s management, business operations and assets are primarily located outside Hong Kong. The principal management headquarters of our Company are primarily based in the PRC. Our Company considers that our Group’s management is best able to attend to its functions by being based in the PRC. Except for Ms. Song Ziyi ( ҂ɿɓ)( “ Ms. Song ”), our chief financial officer and executive Director, who is a Hong Kong resident, the executive Directors of our Company are not or will not be ordinarily resident in Hong Kong upon the listing of our Company. Our Directors consider that relocation of the executive Directors to Hong Kong will be burdensome and costly for our Company, and it may not be in the best interests of our Company and Shareholders as a whole to appoint one additional executive Director who is ordinarily resident in Hong Kong. As such, our Company does not have, and for the foreseeable future will not have, sufficient management presence in Hong Kong for the purpose of satisfying the requirements under Rule 8.12 and Rule 19A.15 of the Listing Rules. Our Directors consider that the appointment of one additional executive Director who will be ordinarily resident in Hong Kong would not only increase the administrative expenses of our Group, but also reduce the effectiveness and responsiveness of our Board in making decisions for our Group, especially when business decisions are required to be made on a timely basis. In addition, appointing new executive Director who may not be familiar with the operations of our Group to our Board for the sole purpose of satisfying the requirements under Rule 8.12 of the Listing Rules would not be beneficial to, or appropriate for our Company and therefore would not be in the best interests of our Company and Shareholders as a whole. Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has granted us, a waiver from strict compliance with Rule 8.12 and Rule 19A.15 of the Listing Rules subject to the following conditions: (a) We have appointed Ms. Song and Mr. Li Kin Wai (۾as our authorized representatives (the “ Authorized Representatives ”) pursuant to Rules 3.05 and 3.06(2) of the Listing Rules. The Authorized Representatives will act as our Company’s principal channel of communication with the Stock Exchange. The Authorized Representatives will be readily contactable by phone, facsimile and email to promptly deal with enquiries from the Stock Exchange, and will also be available to meet with the Stock Exchange to discuss any matter within a reasonable period of time upon request of the Stock Exchange. In addition, as a Hong Kong resident, Ms. Song is capable of traveling to Hong Kong as required by the Stock Exchange; WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE –1 1 2– --- page 122 --- (b) When the Stock Exchange wishes to contact our Directors on any matter, each of the Authorized Representatives will have all necessary means to contact all of our Directors (including our independent non-executive Directors) and senior management team promptly at all times. Our Company will also inform the Stock Exchange promptly in respect of any changes in the Authorized Representatives. We have provided the Stock Exchange with the contact details (i.e. mobile phone number, office phone number and email address) of all Directors to facilitate communication with the Stock Exchange; (c) All Directors who do not ordinarily reside in Hong Kong possess or can apply for valid travel documents to visit Hong Kong and can meet with the Stock Exchange within a reasonable period upon request of the Stock Exchange; (d) We have appointed Rainbow Capital (HK) Limited as our compliance advisor (the “Compliance Advisor ”) upon the Listing pursuant to Rule 3A.19 of the Listing Rules for a period commencing on the Listing Date and ending on the date on which we comply with Rule 13.46 of the Listing Rules in respect of our financial results for the first full financial year commencing after the Listing Date. Pursuant to Rule 3A.23 of the Listing Rules, we will ensure that the Compliance Advisor has access at all times to our Authorized Representatives, our Directors and our senior management and will act as the additional channel of communication with the Stock Exchange; and (e) We have provided the Stock Exchange with the names, mobile phone numbers, office phone numbers, fax numbers and email addresses of at least two of the Compliance Advisor’s officers who will act as our Compliance Advisor’s contact persons between the Stock Exchange and our Company. WAIVER AND CONSENT IN RELATION TO SUBSCRIPTION OF OFFER SHARES BY A CLOSE ASSOCIATE OF AN EXISTING SHAREHOLDER, RONGCHANG CHUANGTOU Rule 10.04 of the Listing Rules provides that a person who is an existing shareholder of the applicant may only subscribe for or purchase securities for which listing is sought if no securities will be offered to them on a preferential basis and no preferential treatment will be given to them in the allocation of securities. Paragraph 5(2) of Appendix 6 to the Listing Rules provides, inter alia, that no allocations will be permitted to directors or existing shareholders of the applicant or their close associates, whether in their own names or through nominees, unless any actual or perceived preferential treatment arising from their ability to influence the applicant during the allocation process can be addressed without the prior written consent of the Stock Exchange. Guidance Letter HKEX-GL92-18 provides that existing shareholders are allowed to participate in the initial public offering of a Biotech Company (as defined under Chapter 18A of the Listing Rules) provided that the applicant complies with Rules 8.08(1) and 18A.07 of the Listing Rules in relation to shares held by the public. Further, pursuant to paragraph 5.2 of Guidance Letter HKEX-GL92-18, an existing shareholder holding less than 10% of shares in a Biotech Company may subscribe for shares in the Listing as either a cornerstone investor or as a placee and an existing shareholder holding 10% or more of shares in a Biotech Company may subscribe for shares in the Proposed Listing as a cornerstone investor. WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE –1 1 3– --- page 123 --- As further described in the section headed “Cornerstone Investors” in this prospectus, RemeGen HK (as defined therein) is a close associate of an existing Shareholder, Rongchang Chuangtou, and has entered into a cornerstone investment agreement with the Company. We have applied for a waiver from strict compliance with the requirements under Rule 10.04 of, and a consent under paragraph 5(2) of Appendix 6 to, the Listing Rules, to allow RemeGen HK to participate as a cornerstone investor in the Global Offering. The Stock Exchange has agreed to grant the requested waiver and consent subject to the conditions that: (a) we will comply with the public float requirements of Rules 8.08(1) and 18A.07 of the Listing Rules; (b) the H Shares to be subscribed by and allocated to RemeGen HK under the Global Offering will be at the same Offer Price and on substantially the same terms or no more favorable than the terms of the other cornerstone investors in the Global Offering; (c) no preferential treatment has been, nor will be, given to Rongchang Chuangtou or RemeGen HK by virtue of their relationship with the Company in any allocation in the Global Offering other than the preferential treatment of assured entitlement under the cornerstone investment which follows the principles set out in Guidance Letter HKEX-GL51-13, that, the cornerstone investment agreement of RemeGen HK does not contain any material terms which are more favorable to them than those in other cornerstone investment agreements; and (d) details of the allocation of the H Shares to RemeGen HK as a cornerstone investor under the Global Offering are disclosed in this prospectus, and details of the allocation will be disclosed in the allotment results announcement of our Company. For further information about the cornerstone investment of the RemeGen HK, please refer to the “Cornerstone Investors” in this prospectus. WAIVER IN RELATION TO APPOINTMENT OF JOINT COMPANY SECRETARIES Pursuant to Rules 3.28 and 8.17 of the Listing Rules, the company secretary of an issuer must be an individual who, by virtue of his or her academic or professional qualifications or relevant experience, is, in the opinion of the Stock Exchange, capable of discharging the functions of company secretary. Note 1 to Rule 3.28 of the Listing Rules further provides that the Stock Exchange considers the following academic or professional qualifications to be acceptable: (a) a member of The Hong Kong Chartered Governance Institute (formerly known as The Hong Kong Institute of Chartered Secretaries); (b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159 of the Laws of Hong Kong); and (c) a certified public accountant as defined in the Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong). WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE –1 1 4– --- page 124 --- Note 2 to Rule 3.28 of the Listing Rules further sets out the factors that the Stock Exchange will consider in assessing an individual’s “relevant experience”: (a) length of employment with the issuer and other issuers and the roles he or she played; (b) familiarity with the Listing Rules and other relevant laws and regulations including the SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous Provisions) Ordinance and the Takeovers Code; (c) relevant training taken and/or to be taken in addition to the minimum requirement under Rule 3.29 of the Listing Rules; and (d) professional qualifications in other jurisdictions. Our Company considers that while it is important for the company secretary to be familiar with the relevant securities regulations in Hong Kong, he/she also needs to have experience relevant to our Company’s operations, a nexus to our Board and a close working relationship with the management of our Company in order to perform the function of a company secretary and to take the necessary actions in the most effective and efficient manner. It is for the benefit of our Company to appoint a person who has been a member of the senior management for a period of time and is familiar with our Company’s business and affairs as company secretary. We have appointed Ms. Guan Mei ( ᗫૠ) (our secretary of the Board) (“ Ms. Guan ”) and Mr. Li Kin Wai (۾“() Mr. Li ”) as our joint company secretaries. Mr. Li is a Chartered Secretary, Chartered Governance Professional and a fellow member of both The Hong Kong Chartered Governance Institute (formerly known as “The Hong Kong Institute of Chartered Secretaries”) and The Chartered Governance Institute (formerly known as “The Institute of Chartered Secretaries and Administrators”) in the United Kingdom and therefore meets the qualification requirements under Note 1 to Rule 3.28 of the Listing Rules and is in compliance with Rule 8.17 of the Listing Rules. Ms. Guan, however, does not possess the qualifications set out in Rule 3.28 of the Listing Rules. We believe that Ms. Guan, by virtue of her knowledge and experience in handling financing activities, internal control and securities and listing matters of the Group, is capable of discharging her functions as a joint company secretary. We therefore believe that it would be in the best interests of our Company to appoint Ms. Guan as a joint company secretary. For the biographical information of Ms. Guan and Mr. Li, see “Directors, Supervisors and Senior Management.” We have therefore applied to the Stock Exchange for, and the Stock Exchange has granted us, a waiver from strict compliance with the requirements under Rules 8.17 and 3.28 of the Listing Rules on the conditions that: (i) Mr. Li is appointed as a joint company secretary to assist Ms. Guan in discharging her functions as our joint company secretary and in gaining the relevant experience under Rule 3.28 of the Listing Rules; and (ii) the waiver will be revoked immediately if Mr. Li, during the three-year period, ceases to provide assistance to Ms. Guan as our joint company secretary or if there are material breaches of the Listing Rules by our Company. We expect that Ms. Guan will acquire the qualifications or relevant experience required under Rule 3.28 of the Listing Rules prior to the end of the three-year period after the Listing. We will liaise with the Stock Exchange before the end of the three-year period to enable it to assess whether Ms. Guan, having had the benefit of Mr. Li’s assistance for three years, will have acquired the skills necessary to carry out the duties of a company secretary and relevant experience within the meaning of Rule 3.28 of the Listing Rules so that a further waiver will not be necessary. WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE –1 1 5– --- page 125 --- In addition, Ms. Guan will comply with the annual professional training requirement under Rule 3.29 of the Listing Rules and will enhance her knowledge of the Listing Rules during the three-year period from the Listing Date. Our Company will further ensure that Ms. Guan has access to the relevant training and support that would enhance her understanding of the Listing Rules and the duties of a company secretary of a company listed on the Stock Exchange. Further, our Company has appointed Rainbow Capital (HK) Limited as our Compliance Advisor under Rule 3A.19 of the Listing Rules for a period commencing on the Listing Date and ending on the date on which the Company complies with Rule 13.46 of the Listing Rules in respect of its financial results for the first full financial year to provide the Company with professional advice on continuing obligations under the Listing Rules and to act as an additional channel of communication with the Stock Exchange. Ms. Guan will have access to the Compliance Advisor during the term of appointment, which will provide Ms. Guan an additional source of guidance to assist her to become more familiar with the functions of a company secretary of a company listed on the Stock Exchange. EXEMPTION FROM STRICT COMPLIANCE WITH SECTION 342(1) OF THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE AND PARAGRAPH 27 OF PART I AND PARAGRAPH 31 OF PART II OF THE THIRD SCHEDULE TO THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE Section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance requires all prospectuses to include matters specified in Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and set out the reports specified in Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance. Paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance requires a company to include in its prospectus a statement as to the gross trading income or sales turnover (as the case may be) of the company during each of the three financial years immediately preceding the issue of the prospectus, including an explanation of the method used for the computation of such income or turnover and a reasonable breakdown between the more important trading activities. Paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance further requires the company to include in its prospectus a report by the auditors of the company with respect to (i) the profits and losses of the company and (ii) the assets and liabilities of the company for each of the three financial years immediately preceding the issue of the prospectus. Section 342A(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance provides that the SFC may issue, subject to such conditions (if any) as the SFC thinks fit, a certificate of exemption from the strict compliance with the relevant requirements under the Companies (Winding Up and Miscellaneous Provisions) Ordinance if, having regard to the circumstances, the SFC considers that the exemption will not prejudice the interests of the investing public and compliance with any or all of such requirements would be irrelevant or unduly burdensome, or would otherwise be unnecessary or inappropriate. Rule 4.04(1) of the Listing Rules requires that the consolidated results of an issuer and its subsidiaries in respect of each of the three financial years immediately preceding the issue of the listing document or such shorter period as may be acceptable to the Stock Exchange be included in the accountants’ report to the prospectus. WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE –1 1 6– --- page 126 --- Rule 18A.03(3) of the Listing Rules requires that an eligible biotech company must have been in operation in its current line of business for at least two financial years prior to listing under substantially the same management. Rule 18A.06 of the Listing Rules requires that an eligible biotech company must comply with Rule 4.04 of the Listing Rules modified so that references to “three financial years” or “three years” in Rule 4.04 shall instead reference to “two financial years” or “two years,” as the case may be. Further, pursuant to Rule 8.06 of the Listing Rules, the latest financial period reported on by the reporting accountants for a new applicant must not have ended more than six months from the date of the listing document. Further, pursuant to Rule 8.06 of the Listing Rules, the latest financial period reported on by the reporting accountants for a new applicant must not have ended more than six months from the date of the listing document. In compliance with the abovementioned requirements under the Listing Rules, the Accountants’ Report set out in Appendix IA to this prospectus is prepared to cover the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023. As such, we have applied to the SFC for, and the SFC has granted, a certificate of exemption from strict compliance with section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation to the requirements of paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance regarding the inclusion of the accountants’ report covering the full three financial years immediately preceding the issue of this prospectus on the following grounds: (a) our Company is a science-driven biotechnology company dedicated to the development of immuno-oncology therapies, and falls within the scope of a biotech company as defined under Chapter 18A of the Listing Rules. Our Company will fulfill the additional conditions for listing required under Chapter 18A of the Listing Rules; (b) the Accountants’ Report for each of the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023 has been prepared and is set out in Appendix IA to this prospectus in accordance with Rule 18A.06 of the Listing Rules; (c) given that our Company is only required to disclose our financial results for the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023 in accordance with Chapter 18A of the Listing Rules and Guidance Letter HKEX-GL56-13 issued by the Stock Exchange and preparation of the financial results for the year ended December 31, 2020 would require additional work to be performed by our Company and the reporting accountant of our Company, strict compliance with section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation to the requirements of paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance would be unduly burdensome for our Company; (d) notwithstanding that the financial results set out in this prospectus are only for the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023 in accordance with Chapter 18A of the Listing Rules, other information required to be disclosed under the Listing Rules and requirements under the Companies (Winding Up and Miscellaneous Provisions) Ordinance has been adequately disclosed in this prospectus pursuant to the relevant requirements; and WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE –1 1 7– --- page 127 --- (e) the Accountants’ Report covering the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023 as set out in Appendix IA to this prospectus, together with other disclosures in this prospectus, have already provided the potential investors with adequate and reasonable up-to-date information in the circumstances to form a view on the track record of our Company, and that all information which is necessary for the investing public to make an informed assessment of the business, assets and liabilities, financial position, management and prospects has been included in this prospectus. Therefore, the exemption would not prejudice the interest of the investing public. The SFC has granted a certificate of exemption under section 342A of the Companies (Winding Up and Miscellaneous Provisions) Ordinance exempting our Company from strict compliance with section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation to paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance on the condition that particulars of the exemption are set out in this prospectus and this prospectus will be issued on or before August 24, 2023. WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND EXEMPTION FROM COMPLIANCE WITH THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE –1 1 8– --- page 128 --- DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS This prospectus, for which our Directors (including any proposed director who is named as such in this prospectus) collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules, the Companies (Winding Up and Miscellaneous Provisions) Ordinance and the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws of Hong Kong) for the purpose of giving information to the public with regard to our Group. Our Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this prospectus is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this prospectus misleading. CSRC APPROV AL The CSRC issued an approval letter on January 31, 2023 approving the listing and full circulation of our H Shares on the Stock Exchange, the Global Offering and the conversion of 210,485,039 Unlisted Shares into H Shares. In granting such approval, the CSRC accepts no responsibility for our financial soundness, nor for the accuracy of any of the statements made or opinions expressed in this prospectus or on the GREEN Application Forms. No other approvals are required to be obtained from CSRC for the listing of the H Shares and the conversion of certain Unlisted Shares into H Shares upon Listing on the Stock Exchange. As advised by our PRC Legal Advisor, our Company has obtained all necessary approvals and authorizations in the PRC pursuant to the applicable PRC laws and regulations in relation to the Global Offering and the Listing and the conversion of certain Unlisted Shares into H Shares upon Listing. INFORMATION ON THE GLOBAL OFFERING This prospectus is published solely in connection with the Hong Kong Public Offering. For applications under the Hong Kong Public Offering, this prospectus contains the terms and conditions of the Hong Kong Public Offering. The Global Offering comprises the Hong Kong Public Offering of initially 1,714,800 Offer Shares and the International Offering of initially 15,432,400 Offer Shares (subject, in each, to reallocation on the basis as set out in “Structure of the Global Offering”.) The Hong Kong Offer Shares are offered solely on the basis of the information contained and representations made in this prospectus and on the terms and subject to the conditions set out herein. No person is authorized to give any information in connection with the Global Offering or to make any representation not contained in this prospectus, and any information or representation not contained herein must not be relied upon as having been authorized by our Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Lead Managers, the Joint Bookrunners, the Capital Market Intermediaries, any of the Underwriters, any of our or their affiliates or any of their respective directors, officers, employees, advisors, agents or representatives, or any other persons or parties involved in the Global Offering. Neither the delivery of this prospectus nor any subscription or acquisition made under it shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus or that the information in this prospectus is correct as of any subsequent time. For details of the structure of the Global Offering, including its conditions and the arrangements relating to the Over-allotment Option and stabilization, see “Structure of the Global Offering.” INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING –1 1 9– --- page 129 --- INFORMATION ON THE CONVERSION OF UNLISTED SHARES INTO H SHARES Our Company has applied for the conversion of the Unlisted Shares into H Shares, which involves and aggregate of 210,485,039 Shares held by 34 out of 37 existing Shareholders. For details of the aforementioned Shareholders and their interests in our Company and relevant procedures for the conversion of Unlisted Shares into H Shares, see “History, Development and Corporate Structure” and “Share Capital.” Such H Shares to be converted from Unlisted Shares are restricted from trading for a period of one year after the Listing. The conversion of Unlisted Shares into H Shares has been approved by the CSRC on January 31, 2023 and is still subject to the approval by the Stock Exchange. PROCEDURE FOR APPLICATION FOR HONG KONG OFFER SHARES The procedure for applying for the Hong Kong Offer Shares is set out in “How to Apply for Hong Kong Offer Shares” and the relevant GREEN Application Forms. RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES Each person acquiring the H Shares under the Hong Kong Public Offering will be required to, or be deemed by his/her acquisition of the Hong Kong Offer Shares to, confirm that he/she is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares described in this prospectus. No action has been taken to permit a public offering of the H Shares outside Hong Kong or the distribution of this prospectus in any jurisdiction other than Hong Kong. Accordingly, and without limitation to the following, this prospectus may not be used for the purpose of, and does not constitute, an offer or invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not authorized or to any person to whom it is unlawful to make such an offer or invitation for subscription. The distribution of this prospectus and the offering and sale of the Offer Shares in other jurisdictions are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory authorities or an exemption therefrom. In particular, the Offer Shares have not been offered and sold, and will not be offered and sold, directly or indirectly, in the PRC. UNDERWRITING The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by the Overall Coordinators. The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters subject to the terms and conditions of the Hong Kong Underwriting Agreement. The International Offering is expected to be fully underwritten by the International Underwriters. For further details on the Underwriters and the underwriting arrangements, please refer to “Underwriting.” APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE We have applied to the Stock Exchange for the listing of, and permission to deal in, our H Shares to be issued pursuant to the Global Offering (including any H Shares which may be issued pursuant to the exercise of the Over-allotment Option) and the H Shares to be converted from Unlisted Shares. Dealings in the H Shares on the Stock Exchange are expected to commence on Tuesday, September 5, 2023. Except as otherwise disclosed in this prospectus, no part of our H Shares or debt securities is listed on or dealt in on any other stock exchange, and no such listing or permission to list is being or proposed to be sought in the near future. INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING – 120 – --- page 130 --- Under Section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, any allotment made in respect of any application will be invalid if the listing of, and permission to deal in, the H Shares on the Stock Exchange is refused before the expiration of three weeks from the date of the closing of the application lists, or such longer period (not exceeding six weeks) as may, within the said three weeks, be notified to our Company by or on behalf of the Stock Exchange. H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS Subject to the granting of listing of, and permission to deal in, the H Shares on the Stock Exchange and our compliance with the stock admission requirements of HKSCC, the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the Listing Date or any other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second settlement day after any trading day. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. All necessary arrangements have been made for the H Shares to be admitted in to CCASS. Investors should seek the advice of their stockbroker or other professional advisors for the details of the settlement arrangements as such arrangements may affect their rights and interests. REGISTER OF MEMBERS AND STAMP DUTY All H Shares issued pursuant to applications made in the Global Offering and converted from Unlisted Shares will be registered on our H Share register to be maintained in Hong Kong by our H Share Registrar, Computershare Hong Kong Investor Services Limited. Our principal register of members will be maintained by us at our headquarters in the PRC. Dealings in the H Shares registered in our H Share register will be subject to Hong Kong stamp duty. Hong Kong stamp duty is charged to each of the seller and purchaser at the ad valorem rate of 0.13% on the higher of the consideration for or the market value of the H Shares transferred. In other words, a total of 0.26% will be payable on a typical sale and purchase transaction of the H Shares. In addition, a fixed stamp duty of HK$5.00 is currently payable on each instrument of transfer of H Shares. DIVIDENDS PAYABLE TO HOLDERS OF H SHARES Unless determined otherwise by our Company, dividends payable in Hong Kong dollars in respect of our H Shares will be paid to the Shareholders as recorded on the H Share register of our Company in Hong Kong and sent by ordinary post, at the Shareholders’ risk, to the registered address of each Shareholder. According to the Guide to the Program for “Full Circulation” of H shares promulgated by CSDC on February 7, 2020, cash dividends to domestic investors of H-share “full circulation” shall be distributed through CSDC. An H-share listed company shall transfer RMB cash dividends to the designated bank account of the Shenzhen subsidiary of CSDC, who shall complete the clearing of cash dividends by distributing the cash dividends to investors through domestic securities companies. INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING – 121 – --- page 131 --- PROFESSIONAL TAX ADVICE RECOMMENDED You should consult your professional advisors if you are in any doubt as to the taxation implications of subscribing for, purchasing, holding, disposal of, dealing in or the exercise of any rights in relation to our H Shares. None of our Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Lead Managers, the Joint Bookrunners, the Capital Market Intermediaries, the Underwriters, any of our or their affiliates or any of their respective directors, officers, employees, advisors, agents or representatives, or any other persons or parties involved in the Global Offering accepts responsibility for any tax effects on, or liabilities of, any person resulting from the subscription, purchase, holding, disposal of, dealing in, or the exercise of any rights in relation to, our H Shares. LANGUAGE If there is any inconsistency between this prospectus and its Chinese translation, this prospectus shall prevail. For ease of reference, the names of the Chinese laws and regulations, government authorities, institutions, natural persons or other entities (including certain of our subsidiaries) have been included in this prospectus in both the Chinese and English languages. In the event of any inconsistency, the Chinese version shall prevail. ROUNDING Certain amounts and percentage figures included in this prospectus have been subject to rounding adjustments, or have been rounded to one or two decimal places. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figure preceding them. Any discrepancies in any table, chart or elsewhere between totals and sums of amounts listed therein are due to rounding. CURRENCY TRANSLATION Solely for your convenience, this prospectus contains translations among certain amounts denominated in Renminbi, Hong Kong dollars and U.S. dollars at specified rates. Unless otherwise specified, the translation of Renminbi into Hong Kong dollars, of Renminbi into U.S. dollars and of Hong Kong dollars into U.S. dollars, and vice versa, in this prospectus was made at the following rates: RMB0.92035 to HK$1.00 RMB7.2076 to US$1.00 HK$7.8314 to US$1.00 No representation is made that any amounts in Renminbi, Hong Kong dollars or U.S. dollars can be or could have been at the relevant dates converted at the above rates or any other rates or at all. INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING – 122 – --- page 132 --- DIRECTORS Name Address Nationality Executive Directors Dr. Tian Wenzhi (͞˖қ) Room 403, No. 3, Lane 825 Chenhui Road Pudong New Area Shanghai PRC Chinese Mr. Li Song (ؒ) Room 602, No. 14, Lane 38 Kangjia Road Kangqiao Town Pudong New Area Shanghai PRC Chinese Ms. Song Ziyi (҂ɿɓ) Flat A, 9/F, Ocean Sky Mansion Cullinan West 28 Sham Mong Road Kowloon Hong Kong Chinese (Hong Kong) Non-executive Directors Dr. Xu Cong (ᑋ) Room 1003, No. 7, Lane 688 Huangjincheng Road Changning District Shanghai PRC Chinese Mr. Yu Zhihua (ശ) No. 502, Unit 2, Building 1 Dinghui Xili Haidian District Beijing PRC Chinese Mr. Yu Xiaoyong (ۇ) Room 502, No. 4, Lane 439 Huanlong Road Pudong New Area Shanghai PRC Chinese Independent Non-executive Directors Dr. Zhenping Zhu No. 54, Lane 78 Hongxiu Road Minhang District Shanghai PRC American Dr. Kendall Arthur Smith 618 Owl Way Sarasota Florida 34236 United States American DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING – 123 – --- page 133 --- Name Address Nationality Mr. Yeung Chi Tat (เқ༺) Unit E, 60/F, Tower 3, Vision City 1 Yeung Uk Road Tsuen Wan Hong Kong Chinese (Hong Kong) SUPERVISORS Name Address Nationality Mr. Gu Jiefeng (ᚥ௫ቜ) Room 1001, Building 54, Lane 1065 Gulong Road Minhang District Shanghai PRC Chinese Ms. Tian Miao (ߴ) Room 602, No. 26, Lane 625 Xuanzhen East Road Xuanqiao Town Pudong New Area Shanghai PRC Chinese Mr. Zhao Zimeng (Ⴛɿ഼) Room 601, No. 190, Lane 528 Pailou East Road Pudong New Area Shanghai PRC Chinese For more details on our Directors and Supervisors, see “Directors, Supervisors and Senior Management.” PARTIES INVOLVED IN THE GLOBAL OFFERING Joint Sponsors Morgan Stanley Asia Limited 46th Floor, International Commerce Centre 1 Austin Road West Kowloon Hong Kong China International Capital Corporation Hong Kong Securities Limited 29/F, One International Finance Centre 1 Harbour View Street Central Hong Kong Overall Coordinators and Joint Global Coordinators Morgan Stanley Asia Limited 46th Floor, International Commerce Centre 1 Austin Road West Kowloon Hong Kong DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING – 124 – --- page 134 --- China International Capital Corporation Hong Kong Securities Limited 29/F, One International Finance Centre 1 Harbour View Street Central Hong Kong Joint Bookrunners, Joint Lead Managers and Capital Market Intermediaries Morgan Stanley Asia Limited 46th Floor, International Commerce Centre 1 Austin Road West Kowloon Hong Kong China International Capital Corporation Hong Kong Securities Limited 29/F, One International Finance Centre 1 Harbour View Street Central Hong Kong Fosun International Securities Limited Suite 2101-2105, 21/F, Champion Tower 3 Garden Road Central Hong Kong CMB International Capital Limited 45/F, Champion Tower 3 Garden Road Central Hong Kong BOCI Asia Limited 26/F, Bank of China Tower 1 Garden Road Central Hong Kong ICBC International Securities Limited 37/F, ICBC Tower 3 Garden Road Hong Kong Soochow Securities International Brokerage Limited Level 17, Three Pacific Place 1 Queen’s Road East Hong Kong Futu Securities International (Hong Kong) Limited Unit C1-2, 13/F, United Centre No.95 Queensway Hong Kong DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING – 125 – --- page 135 --- Legal Advisors to our Company As to Hong Kong and United States laws: Cooley HK 35/F, Two Exchange Square 8 Connaught Place Central Hong Kong As to PRC law: JunHe LLP 20/F, China Resources Building 8 Jianguomenbei Avenue Beijing 100005 PRC As to intellectual property laws of the PRC: JunHe LLP 26/F, HKRI Centre One HKRI Taikoo Hui 288 Shimen Road No. 1 Shanghai 200041 PRC As to intellectual property laws of the United States: Jun He Law Offices P.C. 20380 Town Center Lane Suite 128 Cupertino, CA 95014 U.S.A. Legal Advisors to the Joint Sponsors and the Underwriters As to Hong Kong and United States laws: Kirkland & Ellis 26/F, Gloucester Tower The Landmark 15 Queen’s Road Central Hong Kong As to PRC law: Jingtian & Gongcheng 34/F, Tower 3 China Central Place 77 Jianguo Road Chaoyang District Beijing, China DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING – 126 – --- page 136 --- Reporting Accountant and Auditor Certified Public Accountants and Registered Public Interest Entity Auditor Deloitte Touche Tohmatsu 35/F, One Pacific Place 88 Queensway Central Hong Kong Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch Co. Room 2504–2505, Wheelock Square 1717 West Nanjing Road Jing’an District Shanghai PRC Receiving Banks CMB Wing Lung Bank Limited 45 Des V oeux Road Central Hong Kong Bank of China (Hong Kong) Limited 1 Garden Road Hong Kong DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING – 127 – --- page 137 --- Registered Office Unit 15, 1000 Zhangheng Road China (Shanghai) Pilot Free Trade Zone Pudong New Area Shanghai PRC Headquarters and Principal Place of Business in the PRC Unit 15, 1000 Zhangheng Road China (Shanghai) Pilot Free Trade Zone Pudong New Area Shanghai PRC Principal Place of Business in Hong Kong 5/F, Manulife Place 348 Kwun Tong Road Kowloon Hong Kong Company’s Websites www.immuneonco.com (The information contained in this website does not form part of this prospectus) Joint Company Secretaries Ms. Guan Mei ( ᗫૠ) Unit 15, 1000 Zhangheng Road China (Shanghai) Pilot Free Trade Zone Pudong New Area Shanghai PRC M r .L iK i nW a i(۾) Associate member of The Hong Kong Chartered Governance Institute and The Chartered Governance Institute in the United Kingdom 5/F, Manulife Place 348 Kwun Tong Road Kowloon Hong Kong Authorized Representatives Ms. Song Ziyi ( ҂ɿɓ) Flat A, 9/F, Ocean Sky Mansion Cullinan West 28 Sham Mong Road Kowloon Hong Kong M r .L iK i nW a i(۾) 5/F, Manulife Place 348 Kwun Tong Road Kowloon Hong Kong Audit Committee Mr. Yeung Chi Tat ( เқ༺) (Chairman) Dr. Xu Cong (ᑋ) Dr. Zhenping Zhu CORPORATE INFORMATION – 128 – --- page 138 --- Remuneration Committee Dr. Zhenping Zhu (Chairman) Dr. Tian Wenzhi ( ͞˖қ) Dr. Xu Cong (ᑋ) Dr. Kendall Arthur Smith Mr. Yeung Chi Tat ( เқ༺) Nomination Committee Dr. Tian Wenzhi ( ͞˖қ) (Chairman) Dr. Zhenping Zhu Mr. Yeung Chi Tat ( เқ༺) Compliance Advisor Rainbow Capital (HK) Limited Room 5B, 12/F, Tung Ning Building No. 2 Hillier Street Sheung Wan Hong Kong H Share Registrar Computershare Hong Kong Investor Services Limited Shops 1712–1716 17th Floor, Hopewell Centre 183 Queen’s Road East Wan Chai Hong Kong Principal Banks Industrial and Commercial Bank of China (Shanghai Branch, Zhangjiang Pudong Software Park Sub-branch) No. 2 Boyun Road Pudong New Area Shanghai PRC Industrial and Commercial Bank of China (Zhongshan South Road Sub-branch) No. 315 Zhongshan South Road Huangpu District Shanghai PRC China Merchants Bank (Shanghai Branch, Zhangjiang Sub-branch) German Center 3, No. 88 Keyuan Road Pudong New Area Shanghai PRC China Merchants Bank (Shanghai Branch, Lingang Lanwan Sub-branch) No. 271 Yunying Road Fengxian District Shanghai PRC CORPORATE INFORMATION – 129 – --- page 139 --- Certain information and statistics set out in this section have been extracted from various official government publications, available sources from public market data providers and a report prepared by an independent third party source, Frost & Sullivan, which was commissioned by us. The information from official government sources has not been independently verified by our Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, any of the Underwriters, any of our or their respective directors, officers, employees, agents or advisers or any other person or party involved in the Global Offering, and no representation is given as to its accuracy. SOURCE OF INFORMATION We engaged Frost & Sullivan, a market research consultant, to prepare the Frost & Sullivan Report for use in this prospectus. The information from Frost & Sullivan disclosed in this prospectus is extracted from the Frost & Sullivan Report and is disclosed with the consent of Frost & Sullivan. In preparing the Frost & Sullivan Report, Frost & Sullivan collected and reviewed publicly available data such as government-derived information, annual reports, trade and medical journals, industry reports and other available information gathered by not-for-profit organizations as well as market data collected by conducting interviews with industry key opinion leaders. Frost & Sullivan has exercised due care in collecting and reviewing the information so collected and independently analyzed the information, but the accuracy of the conclusions of its review largely relies on the accuracy of the information collected. We agreed to pay Frost & Sullivan a fee of RMB700,000 for the preparation and update of the Frost & Sullivan Report, which is not contingent on the Global Offering proceeding. OVERVIEW OF IMMUNO-ONCOLOGY MARKET Immuno-oncology has emerged as a revolutionary class of cancer treatment that aims to eradicate cancer cells through the stimulation and activation of patients’ own immune systems. Major types of immuno-oncology therapy include immune checkpoint inhibitors, cell therapies, and therapeutic cancer vaccines. Immune checkpoint inhibitors, in particular, have been one of the most successful cancer therapies in the past decade, demonstrated by the unprecedented indication and market expansion of PD-1/PD-L1 inhibitors since their first approval in 2014. So far, PD-1/PD-L1 inhibitors have been approved for the treatment of a broad range of cancers worldwide, and their global sales reached US$40.2 billion in 2022. Currently approved immuno-oncology therapies primarily focus on the stimulation of adaptive immune responses through T-cell activation. However, those T-cell based immunotherapies face certain limitations. PD-1/PD-L1 inhibitors, for example, only produce meaningful responses in 10% to 25% of patients across almost all major cancer indications when used as monotherapy. The response rates to immunotherapies targeting adaptive immune checkpoints are particularly low in “cold tumors” (tumors that lack T-cell infiltration), or in a non-T cell-inflamed immune-suppressive tumor microenvironment (TME), suggesting an urgent need for immunotherapies to improve treatment outcomes. Recent studies have revealed that the limitations of current immunotherapies could be overcome by leveraging the power of innate immunity and the synergistic effects between the innate and adaptive immunities. To date there has not been any approved innate immune checkpoint-targeted therapy worldwide, indicating a vast untapped global market. INDUSTRY OVERVIEW – 130 – --- page 140 --- Overview of Innate and Adaptive Immune Systems Generally, the human immune system can be divided into the innate immune system and the adaptive immune system. The innate immune system forms the body’s first line of defense, identifies foreign substances and elicits an immediate and non-specific immune response. Major innate immune cells include macrophages, natural killer (NK) cells and dendritic cells (DCs). The adaptive immune system, including T cells and B cells, functions as the second line of defense that identifies and eliminates abnormal cells with specificity. The table below sets forth a comparison between critical adaptive and innate immune cells in the TME: Adaptive Immunity Innate Immunity Activation Process First line of defense, short response time, no need for antigen priming Key Immune Cell Type T cell B cell Macrophage NK cell DC Tumor Tissue Distribution(1) 10-30% 3%-40% 20-50% 5%-10% 3%-10% Major Immune Checkpoints PD-1/PD-L1, CTLA-4, LAG-3, TIM-3, TIGIT CD40/CD40L, CD19, CD22 CD47/SIRPα, CD24/Siglec-10, PSGL-1, EP4 KIR family, CD94- NKG2A, CD24/Siglec- 10, TIGIT, EP4 PD-1/PD-L1, CD47/SIRPα, EP4 Major Immune Functions • T-cell mediated killing of tumor cell via exocytosis of cytotoxic granules (perforin, granzymes) and secretion of antitumor cytokines • Antibody production • Cytokine secretion • Macrophage-mediated phagocytosis • Attracting T cells to the tumor microenvironment (TME) • Antigen presentation • Trogocytosis • NK cell-mediated cytolysis via the secretion of perforin and granzymes • Activating of T cells, macrophages and DCs through release of cytokines • Attracting T cells to the TME • Antigen presentation Antigen priming required Note: The tumor tissue distribution is the proportion of certain immune cells in different tumor tissues. Source: Frost & Sullivan Compared with adaptive immune cells, innate immune cells are more extensively distributed in tumor tissues. In addition to providing the first-line defense, innate immune cells play a critical role in promoting the adaptive immune responses, thereby generating a more integrated and enhanced immune response. For instance, activated macrophages and DCs secrete cytokines and chemokines, such as CXCL9 and CXCL10, which can recruit T cells to the TME, thus transforming “cold tumors” to “hot tumors” (tumors infiltrated by T cells and responsive to immunotherapy). Macrophages and DCs may further promote T-cell response through antigen presentation. Activated NK cells can enhance T-cell response by promoting T-cell differentiation and activation. Thus, the combination of therapies targeting innate immune checkpoints and therapies activating adaptive immunity has significant potential in overcoming the limitations faced by currently approved immunotherapies. INDUSTRY OVERVIEW – 131 – --- page 141 --- Overview and Limitations of Current Immuno-oncology Therapies Currently approved immuno-oncology therapies primarily target T-cell immune checkpoints, such as PD-1/PD-L1, CTLA-4, and LAG-3. Although T-cell immune checkpoint inhibitors, such as PD-1/PD-L1 antibodies, are widely used in the clinic (including in the frontline treatment), their response rates remain low across almost all major cancer indications as shown in the table below. Tumor Response Rate to PD-1/PD-L1 Inhibitor Monotherapy Notes: (1) The response rates are based on the latest label from FDA and NMPA except for CRC, GC, SCLC, OC, BTC and STS, which are based on the published clinical results. (2) Only monotherapy clinical results are listed. (3) Results of adjuvant therapy are excluded. Results may vary from different cancer sub-types or clinical trials. (4) The clinical results listed are from general cancer population regardless of PD-L1 expression, except for the ORR of CC, which is restricted in PD-L1 positive population (combined positive score (CPS) ≥1). Definitions: NSCLC refers to non-small cell lung cancer; SCLC refers to small cell lung cancer; CRC refers to colorectal cancer; GC refers to gastric cancer; HNSCC refers to head and neck squamous cell carcinoma; HCC refers to hepatocellular carcinoma; ESCC refers to esophageal squamous cell carcinoma; BTC refers to biliary tract cancer; RCC refers to renal cell carcinoma; OC refers to ovarian cancer; CC refers to cervical cancer; UC refers to urothelial carcinoma; STS refers to soft-tissue sarcomas; DLBCL refers to diffuse large B-cell lymphoma. Source: Frost & Sullivan Other T-cell immunotherapies also face challenges in terms of safety and efficacy. Though treatment with chimeric antigen receptor (CAR)-T therapy produces remarkable and durable responses in some subsets of B-cell leukemia, lymphoma and multiple myeloma (MM), certain limitations still exist, including life-threatening cytokine release syndrome (CRS) and neurotoxicity, exceptionally high cost, and less desirable efficacy targeting solid tumors. Similarly, T-cell engagers, exemplified by CD3-based bispecific antibodies, also present worrying safety concerns, including severe CRS and “on-target, off-tumor” toxicity in healthy tissues. Up to date, intolerable toxicity of CAR-T therapy and CD3 bispecific antibodies have resulted in the termination or suspension of multiple clinical studies for numerous drug candidates worldwide, including Atara’s ATA2271 (autologous mesothelin CAR-T), Amgen’s AMG673 (CD3×CD33), AMG427 (CD3×FLT3) and AMG701 (CD3×BCMA), Regeneron’s odronextamab (CD3×CD20), and Pfizer’s elranatamab (CD3×BCMA). According to Frost & Sullivan, for the treatment of solid tumors, only one T-cell engager is currently being marketed, that is tebentafusp approved for the treatment of uveal melanoma (a rare disease), and there has been no CAR-T therapy approved for solid tumors anywhere in the world. INDUSTRY OVERVIEW – 132 – --- page 142 --- In recent years, research findings have highlighted the potential of innate immunity-targeted approach to overcome the limitations of T-cell based immunotherapies. Innate immune cells are widely distributed in tumor tissues, and once activated, they can directly combat cancer cells and elicit adaptive immune responses through crosstalk with T cells. For example, as detailed in “— Overview of Innate and Adaptive Immune Systems” above, macrophages can be activated by macrophage-targeted immunotherapies and further induce potent adaptive immunity. Since macrophages as a major type of antigen-presenting cell can release cytokines and chemokines to attract T cells, the activation of macrophages should enhance the abundance of T cells in the TME, turning “cold tumors” into “hot tumors.” Other critical innate immune cells like NK cells and DCs can also promote T-cell immune responses through various mechanisms. The synergistic effects achieved by harnessing both innate and adaptive immunities shall maximize the effectiveness of immunotherapies and potentially achieve potent antitumor activity in “cold tumors.” The Responses of Hot Tumor and Different Types of Cold Tumors to PD-1/PD-L1 Inhibitors PDL 1 MHC TCR IFN PD1 γ Type I Lack of TILs in TME Innate immune activation to induce inflammation and attract adaptive immune cells α-TIGIT α-VISTA α-LAG3 Type III PDL1– /TIL+ c Type IV PDL1+ /TIL– d Type II PDL1+ /TIL+ b Type I PDL1– /TIL– a Treg Cell Cold Tumor Hot Tumor Cold Tumor Type III Dysfunctional TILs activation Activation of antigen specific T cells through antigen presenting cells Type IV Lack of TILs in TME Innate immune activation to induce inflammation and attract adaptive immune cells Type II Overregulation of activated TILs PD-(L)1 inhibitors are only expected to generate responses in hot tumors (type II) where abundant T cells are present and activated through antigen presentation by innate immune cells Source: Frost & Sullivan, Literature Review In addition, innate immunity-targeted molecules, if well-designed, could be safe and well tolerated in humans. Overall, novel drug candidates targeting innate immune checkpoints promise great clinical potential as immunotherapies and are expected to capture considerable market opportunities. Global and China Immuno-oncology Therapy Market Due to continued indication expansion, diverse combination strategies, and the emergence of new immunotherapeutic approaches, especially the development of immunotherapies targeting innate immune checkpoints, the addressable patient population and market size of immuno-oncology therapies are expected to rapidly increase in the near future. INDUSTRY OVERVIEW – 133 – --- page 143 --- Immuno-oncology therapies can bring clinical benefits to an increasing number of patients across almost all major cancer types around the world. The following tables provide the global and China’s incidences of major cancer types for the periods indicated, respectively: Global Incidence of Major Cancer Types, 2018−2035E Thousands 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E Breast 2,089 2,134 2,261 2,301 2,348 2,395 2,442 2,489 2,536 2,584 2,631 2,678 2,726 2,773 2,820 2,866 2,911 2,957 Lung 2,094 2,153 2,207 2,266 2,330 2,396 2,463 2,530 2,599 2,669 2,740 2,812 2,885 2,958 3,033 3,106 3,180 3,254 Colorectum 1,801 1,849 1,881 1,928 1,981 2,035 2,090 2,146 2,203 2,261 2,321 2,381 2,441 2,503 2,566 2,628 2,691 2,754 Stomach 1,034 1,061 1,089 1,121 1,151 1,183 1,214 1,247 1,280 1,313 1,348 1,382 1,417 1,453 1,488 1,524 1,560 1,596 Head and Neck 888 909 932 952 973 995 1,017 1,039 1,061 1,083 1,106 1,128 1,150 1,173 1,195 1,217 1,239 1,260 Liver 841 862 906 930 953 976 1,000 1,024 1,049 1,074 1,099 1,124 1,150 1,175 1,201 1,227 1,253 1,279 Lymphoma 590 603 627 640 655 669 684 699 714 730 745 761 777 793 809 826 842 858 Cervical 570 580 604 616 626 637 647 658 668 678 688 698 708 718 728 738 747 756 Esophagus 572 588 604 622 638 655 672 689 707 725 743 761 779 797 815 834 852 870 Bladder 549 565 573 588 606 624 642 661 681 700 721 741 762 784 806 828 850 873 Leukaemia 437 446 475 483 493 503 513 523 533 544 555 565 576 587 599 610 621 633 Kidney 403 413 431 440 451 462 473 484 496 507 519 531 543 555 567 579 591 603 BTC 345 356 368 380 392 405 418 431 444 458 472 487 501 516 531 545 561 576 Ovary 295 302 314 320 326 333 340 346 353 360 366 373 380 387 393 400 407 413 MDS/CMML 274 280 286 292 298 304 311 317 324 331 338 345 351 359 366 373 380 387 STS 172 177 185 191 196 201 207 213 219 224 230 236 243 248 254 260 266 272 Others 5,126 5,252 5,549 5,669 5,819 5,970 6,124 6,281 6,440 6,603 6,768 6,936 7,106 7,279 7,455 7,631 7,809 7,987 Total 18,079 18,529 19,293 19,737 20,236 20,743 21,257 21,779 22,308 22,845 23,390 23,940 24,497 25,059 25,627 26,192 26,760 27,329 Definitions: BTC refers to biliary tract cancer; MDS refers to myelodysplastic syndrome; CMML refers to chronic myelomonocytic leukemia; STS refers to soft-tissue sarcomas Source: Globocan, IARC, Frost & Sullivan analysis China’s Incidence of Major Cancer Types, 2018−2035E Thousands 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E Lung 868 895 924 954 984 1,015 1,047 1,078 1,110 1,142 1,174 1,206 1,238 1,269 1,301 1,331 1,361 1,390 Stomach 442 456 470 484 499 513 528 544 559 574 589 605 620 634 649 663 677 690 Colorectum 427 440 453 468 482 497 512 527 542 558 573 588 604 619 634 649 663 677 Liver 400 410 421 431 442 452 463 473 484 494 505 515 525 534 544 553 562 571 Breast 321 326 332 336 341 346 350 354 358 361 365 368 371 373 375 377 378 380 Esophagus 272 280 290 299 309 318 328 338 348 358 368 377 387 397 406 415 424 433 Head and neck 137 140 143 146 149 152 155 158 160 163 165 168 170 172 174 176 178 180 BTC 136 141 145 150 155 160 165 170 175 181 186 192 197 202 208 213 218 223 Cervical 116 117 118 119 120 121 122 123 124 124 125 125 125 126 126 126 126 126 Lymphoma 93 95 100 102 105 107 110 112 115 117 120 122 125 127 129 132 134 136 Leukaemia 83 84 85 87 88 89 91 92 94 95 96 98 99 100 101 103 104 105 Bladder 82 85 86 89 92 95 98 101 104 107 111 114 117 121 124 127 131 134 Kidney 70 72 74 75 77 79 81 83 85 86 88 90 92 94 95 97 98 100 Ovary 53 54 55 56 57 58 59 59 60 61 61 62 62 63 63 64 64 64 STS 41 43 45 46 47 49 50 52 53 55 56 58 60 61 63 64 66 67 MDS/CMML 22 22 23 23 23 24 24 25 25 26 26 26 27 27 28 28 29 29 Others 722 739 806 823 840 857 873 890 907 923 939 955 971 987 1002 1017 1031 1045 Total 4,285 4,400 4,569 4,688 4,810 4,932 5,055 5,179 5,302 5,425 5,548 5,669 5,789 5,907 6,022 6,135 6,245 6,351 Definitions: BTC refers to biliary tract cancer; MDS refers to myelodysplastic syndrome; CMML refers to chronic myelomonocytic leukemia; STS refers to soft-tissue sarcomas Source: NCCR, Frost & Sullivan analysis INDUSTRY OVERVIEW – 134 – --- page 144 --- According to Frost & Sullivan, the global market size of immuno-oncology therapy reached US$50.2 billion in 2022, and it is expected to continue to grow rapidly in the foreseeable future, driven by the increasing cancer incidence, longer patients’ survival and duration of treatment, and the development of immunotherapies. In 2035, the global immuno-oncology therapy market is projected to reach US$340.4 billion, accounting for over 54% of the total global oncology market. Benefiting from continuous launches of new drugs and improved patient affordability, China’s immuno-oncology therapy market grew, and is expected to further grow at a faster pace than that of the global and the U.S. market. The following diagram sets forth the historical and projected immuno-oncology therapy market size globally, in the U.S. and China, and the global market share of immuno-oncology therapy as a percentage of the global oncology market for the periods indicated: Immuno-Oncology Therapy Market Globally, in the U.S. and in China, 2018−2035E 12.2 16.6 19.5 23.1 27.8 33.2 42.3 52.8 63.6 76.3 89.6 100.6 109.4 118.7 128.5 138.9 150.0 161.7 0.3 1.1 2.2 2.5 3.0 4.0 6.4 10.0 14.3 20.4 25.8 31.9 38.2 44.9 51.9 59.2 66.7 74.4 8.6 11.3 13.4 16.9 19.5 26.4 32.9 39.4 46.0 53.0 61.6 67.9 72.1 76.7 82.1 88.3 95.6 104.2 16.4% 20.2% 23.4% 23.4% 24.5% 27.0% 30.5% 34.1% 37.4% 41.3% 44.9% 47.0% 47.9% 48.9% 50.0% 51.2% 52.6% 54.1% 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E US China RoW % of Oncology Drug Market Period CAGR China US RoW 2018-2022 79.6% 22.9% 22.7% 2022-2026E 47.8% 23.0% 24.0% 2026E-2030E 27.7% 14.5% 11.9% 2030E-2035E 14.3% 8.1% 7.6% Billion USD Note: RoW refers to all countries and regions in the world except the U.S. and China. Source: Frost & Sullivan Growth drivers and future trends of global and China’s immuno-oncology therapy market According to Frost & Sullivan, the growth drivers and future trends of immuno-oncology therapy market globally and in China include the following: Increasing addressable patient population The incidence of cancer has steadily increased both globally and in China, and it is expected to continuously grow due to increasing lifespan, aging of population, modern sedentary lifestyle, and obesity. The increasing incidence rate combined with improving healthcare access and affordability, and the growing demand for effective cancer treatments will fundamentally drive the continued growth of immuno-oncology therapy market. Furthermore, currently approved immuno-oncology therapies often encounter low response rates, high recurrence rates and other limitations, presenting attractive market opportunities for immunotherapies to further improve treatment outcomes. INDUSTRY OVERVIEW – 135 – --- page 145 --- Emerging innate immune targets The remarkable historical growth of immuno-oncology market was largely contributed by drug development efforts around several key T cell immune checkpoints, including PD-1/PD-L1, CTLA-4 and LAG-3. In recent years, breakthroughs in scientific research have identified promising innate immune checkpoints as the immunotherapeutic targets, such as CD47/SIRP α, CD24/Siglec-10, CD94-NKG2A/KIR family, PSGL-1, EP4, and TREM2. Mounting research has revealed the potential of novel innate immune checkpoint-based therapies in treating a broad spectrum of cancer indications. Among innate immune checkpoints, CD47/SIRP α pathway as a critical macrophage checkpoint has gained significant attention in the industry. CD47, overexpressed on numerous tumor cells, binds with SIRP α to convey a “don’t eat me” signal, inhibiting tumor phagocytosis by macrophages and evading macrophage-mediated immune responses. CD47/SIRP α-targeted drug candidates are thus developed to activate macrophages by blocking such inhibitory “don’t eat me” signal. Recently, emerging CD47/SIRP α-targeted therapies have introduced a novel strategy to induce an “eat me” signal in addition to the inhibition of “don’t eat me” signal to fully activate macrophages. CD24 and certain early-stage innate immune targets, such as NKG2A and PSGL-1, also exhibit high potential to be developed for activating innate immune cells, which can further promote adaptive immune responses to achieve potent synergistic effects between two arms of immune systems. For example, in addition to mediating phagocytosis against tumor cells, fully activated macrophages can secrete certain cytokines and chemokines to recruit T cells to tumor sites, thus turning “cold tumors” into “hot tumors”. Activated NK cells can also further promote T-cell differentiation and T-cell response. As a result, the development and clinical application of immunotherapies targeting the emerging innate immune checkpoints, in addition to adaptive immune targets, will further improve clinical benefits for patients and continue to drive the growth of the immuno-oncology market. Development of bispecific molecules and combinations to maximize therapeutic benefits Clinical evidence suggests that synergistic combination and bispecific strategies enabling the dual activation of innate and adaptive immune systems, as well as combination of immunotherapies with other treatments, could induce enhanced tumor-killing effects and improve clinical outcomes, presenting a tremendous market potential. Currently there are nine marketed bispecific molecules for cancer treatment globally, including ELREXFIO ® (elranatamab, BCMA×CD3) LUNSUMIO ® (mosunetuzumab, CD20×CD3), AKESO ® (Cadonilimab, PD-1×CTLA4), TECV AYLI ® (Teclistamab, BCMA×CD3), COLUMVI ® (Glofitamab, CD20×CD3, EPKINLY® (epcoritamab, CD20×CD3), TALVEY ® (talquetamab, GPRC5D×CD3), RYBREV ANT ® (amivantamab, EGFR×c-MET), and BLINCYTO ® (blinatumomab, CD19×CD3). Meanwhile, numerous bispecific molecules are under clinical development for cancer treatment, such as bispecific molecules targeting CD3/BCMA, LAG-3/PD-(L)1, VEGF/PD-(L)1, CTLA-4/PD-(L)1, CD47/PD-(L)1, CD47/CD20, CD47/CD19, and CD47/HER2, representing the future trend of immuno-oncology therapies. Synergistic combination modalities, especially those enabling the activation of both immune systems and those combining immunotherapies with targeted therapies, have shown a high potential to improve clinical outcome for therapeutic benefits in cancer patients. To date, multiple combination therapies of PD-1/PD-L1 inhibitors and targeted therapies have been approved for the treatment of numerous cancer indications in first- and/or later-line settings. For instance, the combination of TECENTRIQ ® (atezolizumab) and A V ASTIN ® (bevacizumab) has been approved for the first-line treatment of NSCLC and HCC, the combination of KEYTRUDA ® (pembrolizumab) with A V ASTIN ® (bevacizumab) has been approved for recurrent or metastatic CC, and the combination of TYVYT ® (sintilimab) and BYV ASDA ® (bevacizumab biosimilar) has been approved for the first-line treatment of HCC. These new modalities and strategies allow immunotherapies to explore unprecedented therapeutic applications in the oncology space, thereby addressing the unfulfilled needs of a huge market. INDUSTRY OVERVIEW – 136 – --- page 146 --- Indication expansion and advancement of treatment line of immuno-oncology therapies The development of immunotherapies in previously untapped indications benefits a growing patient population. PD-1/PD-L1 inhibitors, for instance, were initially approved for the treatment of melanoma in 2014 and have now been approved for use in a wide range of cancers, such as NSCLC, HNSCC, HCC, RCC, UC and Hodgkin lymphoma (HL). In addition, immuno-oncology therapies initially approved for second- or later-line treatments have been gradually advanced towards first-line treatment. For example, pembrolizumab was first approved in 2015 for the treatment of metastatic NSCLC patients with ≥1% tumor cells expressing PD-L1 who relapsed or progressed after chemotherapy, and its combination with chemotherapy was later approved in 2018 for the first-line treatment of metastatic NSCLC regardless of PD-L1 expression levels. Clinical use of immunotherapy in the frontline treatment can significantly increase its addressable patient population and treatment duration, thus further driving the immunotherapy market size. PROMISING IMMUNOTHERAPIES TARGETING INNATE IMMUNE CHECKPOINTS Immunotherapies targeting innate immune checkpoints have demonstrated the potential to have broad-spectrum clinical applications and address the limitations of currently approved immunotherapies that target adaptive immunity. By activating innate immune responses and orchestrating the synergistic effects between innate and adaptive immune systems, immunotherapies targeting innate immune checkpoints can induce and drive potent and long-lasting wholistic immune responses against hematologic and solid tumors. To date, a few key innate immune checkpoints have been studied, including CD47/SIRP α, CD24/Siglec-10, CD94-NKG2A/KIR family, PSGL-1, EP4, and TREM2, so far there has not been any approved innate immune checkpoint-targeted therapy worldwide, indicating a vast untapped global market. Overview of CD47/SIRP α-targeted Drugs CD47, which is overexpressed on the surface of numerous tumor cells, has been identified as a critical macrophage checkpoint. Upregulating CD47 is a mechanism commonly used by tumor cells to evade macrophage-mediated immune responses. By binding with SIRP α, an inhibitory receptor expressed on macrophages, CD47 conveys a “don’t eat me” signal to inhibit tumor phagocytosis by macrophages. CD47/SIRP α-targeted drugs are designed to activate macrophages by blocking the inhibitory “don’t eat me” signal. Activated macrophages can further elicit T-cell immune responses through the crosstalk between innate and adaptive immune systems. Macrophages, as a major type of innate immune cells, are widely distributed in a broad range of tumor types, accounting for 20% to 50% of cells in respective tumor tissues, including NSCLC, SCLC, breast cancer (BC), GC, CRC, HNSCC, HCC, ESCC, BTC, OC, lymphoma, acute myeloid leukemia (AML), myelodysplastic syndrome (MDS), chronic myelomonocytic leukemia (CMML), and MM. Thus, macrophage-activating strategy could be an effective approach to further improve treatment outcomes in a broad range of cancers. Given its critical role in modulating macrophage activity, CD47-SIRP α pathway has attracted growing attention from the biopharmaceutical industry and has been pursued by many multinational corporations as the next revolutionary immune checkpoint after PD-1/PD-L1. Mechanism of macrophage activation Although antibodies targeting CD47 or SIRP α can block the CD47-SIRP α axis and thus inhibit the “don’t eat me” signal, the blockade alone is not sufficient to fully activate macrophages. Activation of macrophages also requires the simultaneous delivery of an “eat me” signal through Fc-Fc γR (especially Fc γRIIA) engagement or co-stimulatory pathways, such as the STING pathway. To achieve potent antitumor activity, CD47-targeted agents must be able to exert dual mechanisms: blocking the “don’t eat me” signal and simultaneously delivering an activating “eat me” signal to fully activate macrophages. As most CD47 antibodies with IgG2 or IgG4 cannot INDUSTRY OVERVIEW – 137 – --- page 147 --- activate Fc effector function on their own, an additional “eat me” signal is further required for combination therapies to achieve efficacy. The following diagrams illustrate how the dual mechanisms work: Dual Mechanisms of Macrophage Activation OR RR Tumor Cell Macrophage SIRPα CD47 C D 4 FcγR CD47 “don’t eat me” signaling No “eat me” signaling Poor macrophage activation SIRPα FcγR CD47 blocked No “eat me” signaling Limited macrophage activation SIRPα CD47 C D 4 Opsonizing Antibodies CD47 “don’t eat me” signaling Fc-receptor “eat me” signaling Limited macrophage activation Anti-CD47 Opsonizing Antibodies IMM01 CD47 blocked Fc-receptor “eat me” signaling Full macrophage activation Anti-CD47 CD47 blocked Fc-receptor “eat me” signaling Full macrophage activation Source: Frost & Sullivan, Literature Review Upon full activation, macrophages can mediate phagocytosis against tumor cells, and assist in promoting tumor-specific adaptive immune responses by remodeling immunosuppressive TME and increasing T cell-mediated cytolysis. Activated macrophages can release a slew of cytokines and chemokines, such as CXCL9 and CXCL10, to recruit T cells into the TME, effectively inflaming “cold tumors” into “hot tumors.” Additionally, macrophages can present tumor-associated antigens to T cells, thereby activating a T cell-mediated response against tumor cells. The diagram below illustrates how fully activated macrophages combat cancer cells: Integrated Antitumor Immune Responses Induced by Macrophage Activation SIRPα FcγR CD47 IMM01 Tumor cell Full activation of macrophages Mϕ Tumor peptides on MHC MHC:TCR Tumor cells fully killed Attract T cells to TME T cells MHC Macrophage Phagocytosis Cytokines/Chemokines Secretion (CXCL9, CXCL10, etc.) Antigen Presentation T cell activation SIRPα domain Active lgG1 Blocking “Don’t eat me” signal via interrupting CD47-SIRPα interaction Activating “Eat me” signal via Fc-FcγR engagement IMM01 Definition: MHC refers to major histocompatibility complex. Source: Frost & Sullivan, Literature Review INDUSTRY OVERVIEW – 138 – --- page 148 --- V alidation of CD47-SIRP α pathway by clinical evidence and global transactions There are 59 CD47/SIRP α-targeted drug candidates currently under clinical development in China and globally, including 6 CD47-targeted fusion proteins, 19 CD47-targeted monoclonal antibodies, 24 CD47-targeted bispecific molecules, and 10 SIRP α-targeted monoclonal antibodies. Therapeutic potential of CD47-targeted agents has been validated by accumulating clinical data in recent years. Multiple agents have shown positive safety and efficacy results in ongoing clinical trials either as monotherapy or in combination with other cancer agents for the treatment of both hematologic and solid tumors, such as non-Hodgkin lymphoma (NHL), MDS, AML, SCLC, HNSCC, OC and GC. The chart below summarizes published clinical trial results of five drug candidates in the global pipeline: Drug Name Molecule Indications Clinical Phase Patient Number Results RegimenORR CR PR SD Forty Seven (Gilead)’s Hu5F9-G4 (Magrolimab) Monoclonal Antibody (IgG4) R/R Non-Hodgkin's Lymphoma (NHL) I/II (US, Row) 22 50% 36% 14% 14% Hu5F9-G4 1-30mg/kg weekly +Rituximab 375mg/m2R/R Diffuse Large B-cell Lymphoma (DLBCL) 33 52% 39% 12% 6% R/R Follicular Lymphoma (FL) 7 71% 43% 28% 0% Untreated Higher-risk Myelodysplastic Syndrome (MDS) Ib (US, Row) 95 75% 33% 42% / Hu5F9-G4 1-30 mg/kg QW/Q2W +AZA 75mg/m2 days 1-7Untreated Acute Myeloid Leukemia (TP53-mutant AML) 22 73% 59% 14% / R/R Ovarian Cancer (OC) Ib (US) 18 / / / 56% Hu5F9-G4 45mg/kg weekly+PD- L1 inhibitor Avelumab 800mg Q2W Untreated Acute Myeloid Leukemia (AML) Ib/II (US) 41 80% 71% 10% / Hu5F9-G4 1-30 mg/kg QW/Q2W +AZA 75mg/m2 days 1 -7+VEN 400mg days 1-28 ALX Oncology’s ALX148 (Evorpacept) Fusion Protein (IgG1 inert) R/R Non-Hodgkin Lymphoma (NHL) I (US, Row) 22 41% 18% 23% 27% ALX148 10mg/kg QW + Rituximab 10 70% 30% 40% 10% ALX148 15mg/kg QW + Rituximab Untreated Head and Neck Squamous Cell Carcinoma (HNSCC) I (US, Row) 13 39% 8% 31% 46% ALX148 10 or 15 mg/kg QW+ Pembrolizumab + 5FU+ Cisplatin or Carboplatin as 1st line therapy, or in combination with trastuzumab (T) + ramucirumab (R) + paclitaxel (P) as ≥2nd line treatment 18 72% 6% 67% 17%Previously Treated Gastric/Gastroesophageal Cancer (GC) Trillium (Pfizer)’s TTI-621 Fusion Protein (IgG1) R/R Diffuse Large B-cell Lymphoma I (US, Row) 7 29% 14% 14% / TTI-621 dosing from 0.2 to 2.0 mg/kg weeklyR/R Cutaneous T-cell Lymphoma 62 19% 3% 16% / R/R Peripheral T-cell Lymphoma 22 18% 9% 9% / Trillium (Pfizer)’s TTI-622 Fusion Protein (IgG4) R/R Lymphomas I (US) 27 33% 7% 26% / TTI-622 weekly intravenous doses between 0.8 and 18 mg/kg I-Mab (AbbVie)’s TJC4 (Lemzoparli mab) Monoclonal Antibody (IgG4) R/R Non-Hodgkin Lymphoma I (China, US) 7 71% 57% 14% 29% Lemzoparlimab 20 or 30 mg/kg weekly +Rituximab 375 mg/m2 QW Untreated IPSS-R intermediate or high-risk MDS II 53 86% 31% 55% / Lemzoparlimab 30 mg/kg weekly + AZA at 75 mg/m2 Notes: (1) ORR refers to objective response rate (objective response was defined as a complete or partial response), CR refers to complete responses, PR refers to partial responses, SD refers to stable disease, R/R refers to relapsed/refractory. (2) Clinical data are extracted from company website and published literature. (3) QW refers to once a week; Q2W refers to once every two weeks. (4) The phase mentioned above refers to the clinical phase corresponding to the disclosed clinical trial results, rather than the latest clinical phase. (5) There were no head-to-head comparison clinical trials conducted between these drugs. The results of clinical trials of a drug cannot be directly compared to that of another drug and may not be representative of the overall data. (6) In the clinical trials for magrolimab in combination with azacitidine in frontline TP53m AML and HR MDS, anemia (29% and 52%, respectively) and thrombocytopenia (32% and 55%, respectively) were observed. In the clinical trials for TTI-621 as monotherapy for the treatment of R/R lymphoma, anemia (12%) and thrombocytopenia (30%) were also observed. As discussed in “— Scientific barriers to CD47/SIRP α-targeted drug development” below, since CD47 is ubiquitously expressed on human RBCs and platelets, a CD47/SIRP α blocking agent may bind to normal blood cells and cause blood toxicity. However, by modifying the structure, SIRP α-Fc fusion protein can avoid binding to normal blood cells to certain extent. The decrease in platelets observed in SIRP α-Fc fusion protein trials conducted by Trillium and ImmuneOnco was also transient and it would not be expected to pose any particular class risk for SIRP α-Fc fusion proteins. Source: Frost & Sullivan, Literature Review, Official Websites of Relevant Companies INDUSTRY OVERVIEW – 139 – --- page 149 --- Having seen the compelling clinical value of CD47-targeted agents, a number of leading pharmaceutical players entered the CD47 area by striking multibillion-dollar deals, further validating the potential of this class of therapeutics. The following table lists significant global deals surrounding CD47-targeted agents: OSE & Boehringer Ingelheim 2018.4 Boehringer Ingelheim has licensed in a pre-clinical SIRPα inhibitor (BI765063) from OSE Immuno-therapeutics, with a total consideration of €1.13 billion in upfront and milestone payments, plus future royalties on worldwide net sales, for the exclusive global rights to develop, register and commercialize BI765063. Alector & Innovent 2020.3 Innovent has licensed in a pre-clinical SIRPα inhibitor AL008 (IBI397) from Alector for the development and commercialization rights in China. I-MAB & AbbVie 2020.9 AbbVie has licensed in a CD47 antibody (lemzoparlimab) in clinical stage from I-MAB with up to $1.94 billion payment for the ex-China global rights. AbbVie will also pay tiered royalties from low-to-mid teen percentages on global net sales outside of greater China. MacroGenics & Zai Lab 2021.6 Zai Lab has licensed in four pre-clinical CD47- or CD3-based bispecific molecules from MacroGenics for regional Asian and global rights with initial consideration of $55 million and up to $1.4 billion potential payments. Forty Seven (Gilead) 2020.3 Gilead acquired Forty Seven, together with its CD47 targeted antibody program, for $4.9 billion. Trillium Therapeutics (Pfizer) 2021.8 Pfizer acquired Trillium, an immuno-oncology company with two lead (SIRPa-Fc)-CD47 targeted molecules, TTI-622 and TTI-621, for $2.26 bn. Licensing M&A Note: For the Licensing column, companies listed in the front are licensors, and companies listed behind are licensees. For the M&A column, companies listed in the front are acquirees, and companies listed in the parentheses are acquirers. Source: Frost & Sullivan, Official Websites of Relevant Companies Scientific barriers to CD47/SIRP α-targeted drug development While being a clinically-validated cancer immunotherapy target with a significant market potential, CD47 still faces great challenges in drug design and development. As of the Latest Practicable Date, the clinical trials of multiple CD47 antibodies have been suspended or partially suspended due to safety issues, such as Bristol-Myers (Celgene)’s CC-90002, Surface Oncology’s SRF231. In early 2022, the FDA placed a partial clinical suspension on studies to evaluate Gilead’s magrolimab in MDS, AML, MM and diffuse large B-cell lymphoma (DLBCL) due to an imbalance in investigator-reported suspected unexpected serious adverse reaction (SUSAR) between study arms observed in trials, all of which have been subsequently lifted as the FDA determined that, following a comprehensive review of the safety data from each trial, the clinical sponsor had satisfactorily addressed the deficiencies. Barriers to the development of effective and safe CD47-targeted drugs are as follows:  Blood toxicity: Safety issues have been the primary concerns around CD47. Other than tumor cells, CD47 is also ubiquitously expressed on human red blood cells (RBCs) and platelets. Thus, a CD47/SIRP α blocking agent may also bind to normal blood cells and cause severe blood toxicity, such as anemia, thrombocytopenia and hemagglutination INDUSTRY OVERVIEW – 140 – --- page 150 --- (clumping of RBCs). In fact, a number of clinical-stage CD47 antibodies show severe strong RBC binding, leading to severe adverse effects, and cases resulting in trial suspensions or termination.  Antigenic sink: Due to ubiquitous expression of CD47 on normal cells, CD47-targeted agents, especially CD47 antibodies, may be quickly exhausted after administration, resulting in limited drug exposure in tumor tissues. “Antigenic sink” issues require a higher dose to reach the minimum effective concentration threshold. Higher doses would in turn cause more severe blood toxicity, especially when used in combination therapies.  Fc isotype selection: Due to the inevitable binding of CD47 antibodies to RBCs, most of those antibodies resort to a less potent IgG4 Fc region, trading their therapeutic efficacy for safety and thus requiring a much higher dose. In contrast, IgG1 Fc is able to elicit strong ADCP activity by macrophages through much more efficient engagement with activating Fc γ receptors.  T-cell apoptosis: CD47 is also expressed on T cells. Upon binding with a particular CD47 epitope on T cells, certain CD47-targeted antibodies may induce T-cell apoptosis, resulting in compromised efficacy, drug resistance and severe side effects. These challenges pose high scientific entry barriers for the development of CD47-targeted therapies. Due to these hurdles, several companies have started to develop SIRP α-targeted therapeutics, most of which are still in early stages. However, since anti-SIRP α antibodies usually adopt IgG4 Fc, they cannot fully activate macrophages and thus are unlikely to elicit potent immune responses against tumor cells. Global and China CD47/SIRP α-targeted drugs market size According to Frost & Sullivan, the global market of CD47/SIRP α-targeted therapies is projected to expand rapidly after the expected launch of the first drug of this class in 2024. This market is projected to increase from US$0.2 billion in 2024 to US$12.6 billion in 2030, representing a CAGR of 106.9% between 2024 to 2030, and further increase to US$35.4 billion in 2035 at a CAGR of 23.0% between 2030 and 2035. CD47/SIRP α-targeted therapy market in the U.S. is expected to reach US$6.8 billion in 2030 at a CAGR of 93.7% from 2024 to 2030, and further to US$16.8 billion in 2035 at a CAGR of 19.7% from 2030 to 2035. China’s CD47/SIRP α-targeted therapy market is expected to grow at a higher speed compared to the global market. The China market is expected to grow from US$0.01 billion in 2024 to US$2.2 billion in 2030, representing a CAGR of 159.1% between 2024 to 2030. It is estimated to further reach US$6.7 billion in 2035 at a CAGR of 25.0% between 2030 to 2035. INDUSTRY OVERVIEW – 141 – --- page 151 --- In the global and China’s CD47/SIRP α-targeted therapy market, CD47-targeted therapies are expected to contribute a substantially higher proportion than SIRP α-targeted therapies, as most SIRPα-targeted therapies are still in relatively early stages. The diagram below sets forth the market size of CD47/SIRP α-targeted therapies in China, the U.S. and the rest of the world for the periods indicated: Global CD47/SIRP α-Targeted Therapies Market, 2018−2035E 1.5 2.9 4.8 6.8 9.1 11.1 13.1 15.0 16.8 0.3 0.8 1.3 2.2 3.0 3.9 4.8 5.7 6.7 0.6 1.3 2.2 3.5 4.9 6.4 8.1 10.0 12.0 0.2 0.4 1.0 2.5 4.9 8.3 12.6 17.0 21.4 25.9 30.7 35.4 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E US China RoW -- -- - - - - Period CAGR China US RoW Total 2018-2022 - - - - 2022-2024E - - - - 2024E-2030E 159.1% 93.7% 130.3% 106.9% 2030E-2035E 25.0% 19.7% 27.5% 23.0% Billion USD Notes: (1) Market size for CD47-targeted and SIRP α-targeted drugs, including monoclonal antibody, bispecific antibody, antibody conjugate drug (ADC), fusion protein. (2) RoW refers to all countries and regions in the world except the U.S. and China. Source: Frost & Sullivan Global and China CD47/SIRP α-targeted drugs competitive landscape As of the Latest Practicable Date, there were no commercialized CD47/SIRP α-targeted drugs globally. Given the therapeutic and market potential of CD47/SIRP α-targeted agents, many drug candidates are currently under clinical development, including fusion proteins, monoclonal antibodies and bispecific molecules. Among the numerous drug developers, ImmuneOnco and Trillium are the only two companies to have observed complete response (CR) in monotherapy clinical trials with a well-tolerated safety profile. There are five anti-SIRP α monoclonal antibodies under clinical development globally, all of which are still in early stages. INDUSTRY OVERVIEW – 142 – --- page 152 --- CD47-targeted fusion proteins and monoclonal antibodies The following chart illustrates comparisons of major clinical-stage CD47-targeted fusion proteins and monoclonal antibodies worldwide: Drug Name Company Molecule Fc isotype RBC binding 1st in human Monotherapy CR Indication(1) Latest Stage(2) Hu5F9 (Magrolimab) Forty Seven (Gilead) mAb IgG4 Yes 2014.8 No AML, MDS, MM, NHL, HNSCC, TNBC, OC, CRC Ph III (combo) TTI-621 Trillium Therapeutics (Pfizer) SIRPαFc IgG1 No 2016.1 Yes AML, MDS, MM, Lymphoma, Leiomyosarcoma, Solid Tumor Ph II (mono & combo) TTI-622 SIRPαFc IgG4 No 2018.5 Yes AML, MM, Lymphoma, OC Ph II (combo) CC-90002 Celgene (BMS) mAb IgG4 Yes 2015.2 No AML, MDS, MM, NHL, Solid tumor Ph I (combo) (Partial Suspension by the Company) SRF231 Surface Oncology mAb IgG4 Yes 2018.4 No Advanced Solid Cancers, Hematologic Cancers Ph I (mono) (Suspension by the Company) ALX-148 (Evorpacept) ALX Oncology SIRPαFc IgG1 Fc(Inert) Yes 2017.1 No AML, MDS, NHL, Solid Tumor Ph II/III (combo) SHR1603 HengRui ࣶۉmAb IgG4 Yes 2018.10 No Advanced Malignancies, Lymphoma Ph I (mono) (Suspension by the Company) (Suspension by the Company)AO-176 Arch Oncology mAb IgG2 Minimal 2019.2 No MM, GC, NSCLC, HNSCC, OC, Prostate Cancer, Endometrial Carcinoma Ph I/II (combo) IBI188 (Letaplimab) Innovent ࣒ࣿmAb IgG4 Yes 2018.11 No AML, MDS, Lymphoma, Solid Tumor Ph Ib/III (combo) TJC4 (Lemzoparlima b) I-Mab ࣒ࣿ׋מ AbbVie mAb IgG4 Minimal 2019.5 No AML, MDS, MM, CD20 Positive Lymphoma, Advanced Solid Tumor Ph III (combo) (Partial Suspension by the Company) (Partial Suspension by the Company) IMM01 ImmuneOnco ॠ SIRPαFc IgG1 No 2019.9 Yes MDS, AML, CMML, HL, NHL, Solid Tumor Ph II (combo)12 AK117 Akesobio ࣒ࣿސډmAb IgG4 Minimal 2020.4 No AML, MDS, Lymphoma, TNBC, HNSCC, NSCLC, SCLC, OC, CRC, HCC Ph II (combo) (Partial Suspension by the Company) (Partial Suspension by the Company) Notes: (1) Denotes the indications targeted by either combination therapy or monotherapy of each drug candidate. Most drug candidates listed in this table are developed primarily through combination strategies rather than as a monotherapy. (2) Denotes the latest clinical development stage of each drug candidate considering its monotherapy and combination trials as a whole. (3) Clinical data are extracted from official websites of relevant companies, reported clinical trials and published literature. (4) Despite a comparison is made here, the key results are not from head-to-head studies. (5) 1st in human refers to the first posted date of the first clinical trial. (6) The stage listed here is the latest clinical trial of the drug. (7) Partial suspension means not all clinical trials of this drug are suspended, such as monotherapy of CC-90002, which has been suspended but its combination therapy with rituximab has been completed. (8) For the drugs associated with two companies, the company in parenthesis is the acquirer. (9) The FDA has lifted all of the partial clinical hold placed on several trials evaluating magrolimab, as it determined that, following comprehensive review of the safety data from each trial, that the clinical sponsor had satisfactorily addressed the deficiencies. (10) As to the monotherapy CR column, “No” means that no CR was achieved in a completed or suspended clinical trial. (11) The dark-gray parts of the diagram indicate that trials are terminated. (12) The most advanced clinical trial of IMM01 is an ongoing Phase II trial evaluating the combination therapy of IMM01 and azacitidine. We had terminated the Phase II clinical trial of IMM01 monotherapy as of the Latest Practicable Date. Source: Frost & Sullivan, Official Websites of Relevant Companies INDUSTRY OVERVIEW – 143 – --- page 153 --- As indicated in the table above, all of those CD47 antibodies exhibit RBC binding activity, and as such they resorted to IgG4 or IgG2 Fc with less potent receptor engagement activity. In contrast, CD47-targeted fusion proteins, including TTI-621 developed by Trillium and IMM01 developed by ImmuneOnco, do not bind with RBCs in vitro , enabling the use of an IgG1 Fc region with a better ability to engage Fc receptors to elicit stronger effector functions compared with other isotypes. Among all CD47-targeted drug candidates, only IMM01 developed by ImmuneOnco, and TTI-621 and TTI-622 developed by Trillium have achieved CR in clinical study as monotherapy. Given TTI-622 adopts an IgG4 Fc with weaker Fc function, its monotherapy CR rate was lower than TTI-621 at a higher dose for peripheral T cell lymphoma (PTCL) and DLBCL. Since ALX-148 contains an inert IgG1 Fc that exhibits no Fc function, no CR was observed in its monotherapy clinical trials. The following chart demonstrates a comparison and considerations of the four subtypes in molecule design: IgG Subtypes IgG1 IgG2 IgG3 IgG4 Plasma Level 60-70% 20-30% 5-8% 1-4% Half-life Period /days 21 21 9 21 Antigen Proteantigen Carbohydrate antigen Proteantigen Chronic antigenic stimulus and inflammation FcγR Affinity Strong Weak Strong Weak ADCC Activity Strong Weak Strong Weak ADCP Activity Strong Weak Strong Weak CDC Activity Strong Weak Strong No Representative Drug Daratumumab Denosumab - Pembrolizumab Source: Frost & Sullivan INDUSTRY OVERVIEW – 144 – --- page 154 --- As of the Latest Practicable Date, there were two clinical-stage CD47-targeted fusion proteins in China and four in the U.S. and the rest of the world. According to Frost & Sullivan, our IMM01 is the first SIRP α fusion protein that has entered in clinical stage in China. The table below summarizes the global pipeline of CD47-targeted fusion proteins: Global Pipeline of CD47-targeted Fusion Proteins Drug Name/Code Company Fc Isotype RBC Binding Monotherapy CR Indica tions Clinical Stage First Posted Date Proposed Line of Treatment Region ALX148 (Evorpacept) ALX Oncology IgG1 (inert) Yes No AML, MDS, NHL, Solid Tumor Phase II/III 2021/08/12 1L or above US, RoW TTI-621 Trillium Therapeutics (Pfizer) IgG1 No Yes AML, MDS, MM, Lymphoma, Leiomyosarcoma, Solid Tumor Phase II (Partial Suspend by the Company) 2021/08/09 2L or above US TTI-622 IgG4 No Yes AML, MM, Lymphoma, OC Phase II 2022/08/19 1L or above US IMM01 ImmuneOnco ॠ IgG1 No Yes MDS, AML, CMML, HL, NHL, Solid Tumor Phase II 2021/09/23 1L or above China SG404 SumgenBio ࣒ࣿAdvanced Malignancy Phase I 2020/12/10 2L or above China HCB101 FBD Biologics ܉ࣿډࡎIgG4 / / Advanced Solid Tumorɼ NHL Phase I 2023/06/07 2L or above US Notes: (1) Company’s information is from the Company and industry information is as of August 17, 2023. (2) First posted date refers to the date on which the study record was first available on Chinadrugtrials.org.cn or Clinicaltrials.gov. (3) RoW refers to regions out of China and the U.S. (4) The clinical stage refers to the latest clinical trials as well as the first posted date. (5) The clinical stage refers to the latest clinical trials. (6) As to the monotherapy CR column, “No” means that no CR was achieved in a completed or suspended clinical trial. “/” represents there has been no disclosed information about the results of the clinical trials so far. Definitions: AML refers to acute myeloid leukemia; MDS refers to myelodysplastic syndrome; HL refers to Hodgkin lymphoma; NHL refers to non-Hodgkin lymphoma; MM refers to multiple myeloma; GC refers to gastric cancer; HNSCC refers to head and neck squamous cell carcinoma; CMML refers to chronic myelomonocytic leukemia. Source: Frost & Sullivan, CDE, ClinicalTrials, Literature Review, Official Websites of Relevant Companies The following chart demonstrates a comparison among major CD47-targeted fusion proteins: Comparison of Major CD47-Targeted Fusion Proteins ImmuneOnco Trillium ALX Oncology IMM01 TTI-621 TTI-622 ALX148 Structure CD47 binding domain Engineered SIRPα D1 Natural SIRPα D1 Engineered SIRPα D1 CD47 binding affinity Moderate Moderate Very high RBC binding No in vitro binding No in vitro binding Strong RBC binding Fc isotype IgG1 IgG1 IgG4 IgG1 (inert) Fc function (ADCP, ADCC) Strong Strong Weak No Safety Well tolerated Well tolerated Well tolerated Single agent activity Yes Yes Yes Very limited “Eat me” signal activation Yes Yes Weak No Combination potential with IgG4 antibody Strong Strong Moderate Weak Fc region (IgG1) CD47 Fc region (Inert IgG1) CD47 Fc region (IgG1) CD47 Fc region (IgG4) CD47 Notes: (1) RBC refers to red blood cell; (2) ADCP refers to antibody-dependent cellular phagocytosis; ADCC refers to antibody-dependent cell-mediated cytotoxicity; (3) AITL refers to angioimmunoblastic T-cell lymphoma; CTCL refers to cutaneous T-cell lymphoma; PTCL refers to peripheral T-cell lymphoma; DLBCL refers to diffuse large B-cell lymphoma. Source: Company Website, Literature Review, Frost & Sullivan analysis INDUSTRY OVERVIEW – 145 – --- page 155 --- As of the Latest Practicable Date, there were 19 CD47-targeted monoclonal antibodies under clinical development globally. All of the ongoing CD47 antibodies with known structure adopt the IgG4 Fc isotype. The table below sets forth details of the global pipeline of CD47-targeted monoclonal antibodies: Global Pipeline of CD47-targeted Monoclonal Antibodies Drug Name/Code Company Fc Isotype RBC Binding Monotherapy CR Indications Clinical Stage First Posted Date Proposed Line of Treatment Region Hu5F9 (Magrolimab) Forty Seven (Gilead) IgG4 Yes No AML, MDS, MM, NHL, HNSCC, TNBC, OC, CRC Phase III (Partial Suspend by the Company) 2020/03/18 1L or later US, RoW IBI188 (Letaplimab) Innovent ࣒ࣿIgG4 Yes No AML, MDS, Lymphoma, Solid Tumor Phase Ib/III (Partial Suspend by the Company) 2020/07/23 1L or later China, US AK117 Akesobio ࣒ࣿސډIgG4 Minimal No AML, MDS, Lymphoma, TNBC, HNSCC, NSCLC, SCLC, OC, CRC, HCC Phase II 2022/01/30 1L or later China, RoW AO-176 Arch Oncology IgG2 Minimal No MM, GC, NSCLC, HNSCC, OC, Prostate Cancer, Endometrial Carcinoma Phase I/II (Suspend by the Company) 2019/02/08 2L or later US TJC4 (Lemzoparlimab) I-Mab ࣒ࣿ׋מ AbbVie IgG4 Minimal No AML, MDS, MM, CD20 Positive Lymphoma, Advanced Solid Tumor Phase III (Partial Suspend by the Company) 2021/03/29 1L or later China, US Gentulizumab GenSci ୐૔哦Џ /// AML, MDS, Advanced Solid Tumor or Lymphoma Phase I 2021/01/12 2L or later China CC-90002 Celgene (BMS) IgG4 Yes No AML, MDS, MM, NHL, Solid tumor Phase I (Partial Suspend by the Company) 2015/02/20 2L or later US SRF231 (Urabrelimab) Surface Oncology IgG4 Yes No Advanced Solid Cancers, Hematologic Cancers Phase I (Suspend by the Company) 2018/04/30 2L or later US, RoW SHR1603 HengRui ࣶۉIgG4 Yes No Advanced Malignancies, Lymphoma Phase I (Suspend by the Company) 2018/10/26 2L or later China ZL-1201 Zai Lab Ӈ滏ԛ哦 IgG4 Yes / Advanced Solid Tumor or Hematologic Malignancies Phase I 2020/02/06 2L or later China, US IMC-002/3D-197 ImmuneOncia/ 3D Medicines ૨ଗ IgG4 No / Lymphoma, Solid Tumor Phase I 2020/03/12 2L or later China, US, RoW MIL95/CM312 MabWorks/KeyMed ؘ࣒ࣿٺמ/ࣿ ࣒ Minimal / Advanced Solid Tumor or Lymphoma Phase I 2020/11/27 2L or later China TQB2928 Chia Tai Tianqing ޲מם࠳Advanced Solid Tumors and Hematological Malignancies Phase I 2021/04/22 2L or later China sB24M Swiss Biopharma Med / / / PV; PG; PPG; Pyoderma Phase I 2021/05/20 3L or later RoW STI-6643 Sorrento Therapeutics IgG4 Minimal / Advanced Solid Tumor Phase I 2021/05/25 2L or later US LD002 LanDun ੒भ哦Џ / / / Advanced Solid Tumor, NL Phase I 2022/03/09 2L or later China F527 XinShiDai ї哦Џ / / / Lymphoma Phase I 2022/04/14 2L or later China HMPL-A83 HutchMed չ௰ԛ哦 IgG4 Minimal / AML, MDS, Lymphoma, Solid Tumor Phase I 2022/05/26 2L or later China FP002 Fapon Biopharma ੅洶Ӳ哦 IgG4 Minimal / Advanced Malignant Tumor Phase I 2023/06/20 2L or above China Notes: (1) Industry information is as of August 17, 2023. (2) First posted date refers to the date on which the study record was first available on Chinadrugtrials.org.cn or Clinicaltrials.gov. (3) RoW refers to regions out of China and the U.S. (4) The clinical stage refers to the latest clinical trials as well as the first posted date. (5) As to the monotherapy CR column, “No” means that no CR was achieved in a completed or suspended clinical trial. “/” means that no published clinical data is available so far. (6) According to public information, Zai Lab has decided to de-prioritize its internal development of ZL-1201 solely for strategic reasons and will explore out-licensing opportunities. According to Frost & Sullivan, such decision would not have any material impact on the competitive landscape of CD47/SIRP α-targeted drugs. Compared to ZL-1201, IMM01 does not bind with RBCs in vitro , thus enabling the adoption of an IgG1 Fc fragment capable of inducing full macrophage activation. (7) The clinical trials of drug candidates marked as dark-gray have been suspended. Definitions: AML refers to Acute Myeloid Leukemia; MDS refers to Myelodysplastic Syndrome; NHL refers to Non-Hodgkin Lymphoma; MM refers to multiple myeloma; HNSCC refers to Head and Neck Squamous Cell Carcinoma; TNBC refers to triple negative breast cancer; OC refers to Ovarian cancer; PV refers to Pyoderma V egetans; PG refers to Pyoderma Gangrenosum; PPG refers to Parastomal Pyoderma Gangrenosum; CRC refers to Colorectal Cancer . Source: Frost & Sullivan, CDE, ClinicalTrials, Literature Review, Official Websites of Relevant Companies INDUSTRY OVERVIEW – 146 – --- page 156 --- CD47-targeted bispecific molecules Bispecific molecules are designed to recognize and specifically bind to two epitopes or targets simultaneously. There has been a rapid development in the bispecific molecule field since the debut of bispecific molecules as a new therapeutic approach. As of the Latest Practicable Date, there were nine marketed bispecific molecules for cancer treatment globally. Besides potential cost benefit and ease of use compared to the combination of two monoclonal antibodies, bispecific molecules with immuno-oncology targets could achieve improved clinical benefits depending on the biological synergy between the targeted pathways and structure design. Over the past decades, various formats of bispecific molecules have been explored. Those formats differ in several aspects, including structure, presence/absence of an Fc-domain, Fc isotype, symmetry, molecule size, antigen-binding sites, and resulting mechanism of action. The following table sets forth a comparison among three major formats of bispecific molecules, namely T cell engagers, and checkpoint/signaling blockers with or without Fc effector function: Major Bispecific Molecule Formats T Cell Engager Dual Checkpoint/Signaling Blockade without Fc Effectors Dual Checkpoint/Signaling Blockade with Fc Effects • Bring T cells into clos e contact with tumor cells, and elicit immediate T-cell immune responses against tumor cells • Through targeting and blocking of immune checkpoints or tumor signaling pathways, it reactivates suppressed immune cell functions • Apart from the blocking of immune checkpoints or tumor signal pathways, it also activates innate immune cells through IgG1 Fc, inducing ADCC, ADCP, and potentially ADCT • Innate immune cells could further recruit and active T cells, eliciting long-lasting immune response • Induce direct tumor killing through T cell activation and the secretion of perforin and granzymes • Severe CRS triggered by immediate T cell response and massive induction of cytokines such as IL-6, interferons, tumor necrosis factors etc. • Efficacy achieved through dual signaling blockade • Loss of Fc effector func tion, as the Fc end has been blocked and IgG • Manageable safety profile compared to T cell engagers • Efficacy achieved through dual signaling blockade, as well as full Fc effector function delivered through IgG1 Fc • Able to bring innate immune cells into close contact with tumor cells, and induce strong ADCC, ADCP, potentially ADCT effects • Manageable safety profile compared to T cell engagers Blincyto® • ORR: 42%, CRS: 15% (ALL) AMG 701 • ORR: 83%, CRS: 65% (MM) Mosunetuzumab • ORR: 80%, CRS: 44.4% (FL) AK112 • ORR: 46.0% (NSCLC, 1L) • ORR: 60.0% (NSCLC, 1L, TPS≥1%) • ORR: 76.9% (NSCLC, 1L, TPS≥50%) HX009 • ORR: 15%, PR: 15% (Advanced malignancies) Rybrevant ® • ORR: 40%, CR: 3.7%, PR: 36% (NSCLC with EGFR exon 20 insertion mutations) StructureFunctionscitsiretcarahC PD-1 Fc region CD47PD-1 Fc region Blincyto (Amgen) Mosunetuzumab (Roche) AK112 (Akesobio) HX009 (Hans Bio) IMM0306 (ImmuneOnco) CD3 CD20 c-MET EGFR Fc region (IgG1) Example Rybrevant (Janssen) CD19 scFv CD3 scFv CD47 Fc region (IgG1) CD20 ADCC Enhancing Note: The clinical results listed in the example line refer to the treatment outcome of monotherapy for R/R diseases, except for AK112, which is designed for the first-line treatment of NSCLC. Definitions: ADCC refers to antibody-dependent cell-mediated cytotoxicity; ADCP refers to antibody-dependent cellular phagocytosis; CDC refers to complement dependent cytotoxicity; ALL refers to acute lymphoblastic leukemia; MM refers to multiple myeloma; NSCLC refers to non-small cell lung cancer; Example refers to representative approved drugs or underdevelopment drugs. Source: Frost & Sullivan, Literature Review, Official Websites of Relevant Companies INDUSTRY OVERVIEW – 147 – --- page 157 --- As exhibited in the table above, the molecular structure design is critical to the success of bispecific molecules. The CD3-based bispecific T-cell engagers can bring T cells into close contact with tumor cells and elicit T-cell immune responses, inducing potent tumor killing effects. However, this type of bispecific molecules may trigger severe CRS through massive induction of cytokines such as IL-6. For example, CRS was seen in 65% of patients in its reported clinical study of Amgen’s AMG701 (CD3×BCMA) in MM. Due to safety issues, numerous clinical trials for the T cell engagers have been suspended or terminated. In terms of dual checkpoint/signaling blockers, the selection of different Fc types could have a significant impact on the activity of the molecules. Two bispecific molecules addressing the same targets, EGFR and c-Met, are excellent examples. Johnson & Johnson’s amivantamab uses an IgG1 Fc and has obtained an accelerated approval from the FDA based on the clinical benefits primarily attributed to Fc-mediated antibody-dependent cellular cytotoxicity (ADCC), antibody-dependent cellular phagocytosis (ADCP) and antibody-dependent cellular trogocytosis (ADCT), while the clinical development of Eli Lilly’s LY3164530 with an IgG4 Fc was suspended due to limited patient benefits and severe toxicity. CD47-targeted bispecific molecules are trickier and require much careful and delicate structural design. Several critical aspects need to be taken into consideration, including RBC-binding activity, IgG subclass and target selection. Due to the two-signal requirements for macrophage activation, potent IgG1 Fc effector function has to be retained, but it can only be applicable in those that do not bind to RBCs, as exemplified by IMM2902 developed by ImmuneOnco. In comparison, those bispecific molecules with Fc region blocked will result in the loss of the Fc effector function, thus hampering their efficacy. INDUSTRY OVERVIEW – 148 – --- page 158 --- As of the Latest Practicable Date, there were 24 CD47-targeted bispecific molecules under clinical development worldwide, including 13 with clinical trials in China. Among these molecules, IMM0306 is the first CD47×CD20 bispecific molecule to have entered into the clinical stage worldwide, which does not bind to red blood cells in vitro and contains an IgG1 Fc region. In addition, IMM2902 is the only one CD47×HER2 bispecific molecule that has entered into the clinical stage globally. The table below sets forth details of the global pipeline of CD47-targeted bispecific molecules: Global Pipeline of CD47-targeted Bispecific Molecules Source: CDE, Clinicaltrials, Company Website, Literature Review, Frost & Sullivan Analysis Target Drug Name/Code Company Fc isotype Fc effector Indications Clinical Stage First Posted Date Proposed Line of Treatment Region CD47, PD-1/L1 HX009 Hans Bio ࣒ࣿۃIgG4 No Lymphoma, HNSCC, BTC, Esophageal Cancers, Sarcoma, Malignant Mesothelioma Phase II 2021/05/14 2L or above China, RoW 6MW3211 Maiwei Bio ࣒ࣿ׺AML, MDS, Refractory or Relapsed Lymphoma, RCC, Lung Cancer Phase II 2022/06/13 1L or above China IBC0966 Sunho Bio ࣒ࣿAdvanced Malignancies Phase I/II 2021/07/08 2L or above China IBI322 Innovent ࣒ࣿIgG4 Minimal AML, MDS, Lymphoma, Advanced Solid Tumor Phase Ia/Ib 2020/03/30 2L or above China, US SG12473 SumgenBio ࣒ࣿNo HL, NSCLC, CRC, HNSCC, Endometrial Carcinoma Phase Ia/Ib 2021/05/13 2L or above China PF-07257876 Pfizer IgG1 Yes NSCLC, HNSCC, OC Phase I 2021/05/11 2L or above US BAT7104 Bio-Thera ࡪ׭Advanced Malignancies Phase I 2022/02/22 2L or above China, RoW SH009 SanHome չ哦Џ / / Advanced Malignancies Phase I 2022/07/01 2L or above China IMM2520 ImmuneOnco ॠ IgG1 Yes Solid Tumor Phase I 2023/02/07 2L or above China, US CD47, CD20 IMM0306 ImmuneOnco ॠ IgG1 Yes Refractory or Relapsed CD20-positive B-NHL Phase I/II 2020/03/23 3L or above China, US JMT601 JMT-Bio (Conjupro Biotherapeutics) ࣔ޿ࡱ(֝) IgG1 Yes Refractory or Relapsed CD20 -Positive B-NHL Phase I/II 2021/04/21 3L or above China, US CC-96673 Celgene (BMS) / / NHL Phase I 2021/04/27 2L or above US, RoW CD47, CD38 ISB 1442 Ichnos Sciences SA IgG1/IgG3 Yes MM Phase I/II 2022/06/22 4L or above US, RoW SG2501 SumgenBio ࣒ࣿMM, Lymphoma Phase I 2022/03/24 2L or above US CD47, HER2 IMM2902 ImmuneOnco ॠ IgG1 Yes HER2-positive and HER2 Low-expression Advanced Solid Tumor Phase I/II 2021/09/22 2L or above China, US D3L-001 D3 Bio (Wuxi) 㨚䋧或坂䐘掍 // HER-2 Positive Advanced Solid Tumors Phase I 2023/07/24 / / CD47, CD19 TG-1801/ NI-1701 TG Therapeutics /Novimmune SA IgG1 Yes B-Cell Lymphoma, Chronic Lymphocytic Leukemia Phase I 2019/01/15 2L or above US, RoW CD47, CD40L SL-172154 Shattuck Labs IgG4 No AML, MDS, OC, Fallopian Tube Cancer, PPC, cSCC; HNSCC Phase I (Partial Suspend by the Company) 2020/05/28 2L or above US CD47, 4-1BB DSP107 Kahr Medical IgG4 No AML, MDS, CMML, Advanced Solid Tumor Phase I/II 2020/06/22 2L or above US CD47eMSLN NI-1801 Novimmune SA IgG1 Yes OC, TNBC, NSCLC Phase I 2022/06/03 2L or above RoW CD47, CLDN- 18.2 PT886 Phanes Therapeutics / / GC, Pancreas Adenocarcinoma Phase I 2022/08/01 2L or above / BC007 Dragon Boat / / Advanced Solid Tumor with CLDN18 .2 Expression Phase I 2022/10/31 2L or above China SG1906 SumgenBio ࣒ࣿIgG1 / Advanced Solid Tumor with CLDN18.2 Expression Phase I 2023/03/13 2L or above China CD47, DLL3 PT217 Phanes Therapeutics / / SCL C, LCNEC, NEPC, GEP-NET Phase I 2022/12/15 2L or above / CD47, CD24 IMM4701 ImmuneOnco ॠ IgG1 Yes Solid Tumor CMC CMC / China, US Notes: (1) Company’s information is from the Company and industry information is as of August 17, 2023. (2) First posted date refers to the date on which the study record was first available on Chinadrugtrials.org.cn or Clinicaltrials.gov. (3) RoW refers to regions out of China and the U.S. (4) The clinical stage refers to the latest clinical trials as well as the first posted date. Definitions: B-NHL refers to B-cell Non-Hodgkin Lymphoma; HNSCC refers to Head and Neck Squamous Cell Carcinoma; NSCLC refers to Non-small Cell Lung Cancer; PPC refers to Primary Peritoneal Cancer; cSCC refers to cutaneous squamous cell cancer; OC refers to Ovarian cancer; TNBC refers to Triple Negative Breast Cancer; LCNEC refers to Large Cell Neuroendocrine Cancer; NEPC refers to Neuroendocrine Prostate Cancer; GEP-NET refers to Gastroenteropancreatic Neuroendocrine Tumors. Source: Frost & Sullivan, CDE, ClinicalTrials, Literature Review, Official Websites of Relevant Companies INDUSTRY OVERVIEW – 149 – --- page 159 --- SIRPα-targeted monoclonal antibodies SIRPα-targeted drug candidates are designed to bind with SIRP α expressed on immune cells and block CD47/SIRP α interaction, however they are not expected to further activate the “eat me” signal regardless of the IgG isotype used. As of the Latest Practicable Date, there were 10 SIRPα-targeted monoclonal antibodies under clinical development globally, all of them are in phase I/II stage. There is no clinical-stage SIRP α-targeted bispecific molecule worldwide. The table below sets forth details of the global pipeline of SIRP α-targeted monoclonal antibodies: Global Pipeline of SIRP α-targeted Monoclonal Antibodies mAb CC-95251 Celgene (BMS) mAb IgG1 No AML, MDS, Advanced Solid Tumor, Advanced Hematologic Cancer Phase I 2018/12/21 US, RoW Drug Name/Code Company Molecule Fc Isotype Monotherapy CR Indications Clinical Stage First Posted Date Region LM-101 LaNova Medicines mAb Advanced Malignant Tumors Phase I/II 2023/01/06 China BI 765063/OSE-172 Boehringer Ingelheim/OSE mAb IgG4 No Advanced Solid Tumor, Melanoma Phase I 2019/06/18 RoW FSI-189/GS-0189 Forty Seven (Gilead) mAb / / NHL Phase I (Suspend by Company) 2020/08/06 US IBI397 Innovent يmAb / / Advanced Solid Tumor Phase Ia/Ib 2022/02/09 China BR105 ௹ቚي/يmAb / / Advanced Solid Tumor Phase I 2022/03/14 China ELA026 Electra Therapeutics Inc. mAb IgG1 / Hemophagocytic Lymphohistiocytosis Phase I 2022/06/13 US, RoW BYON4228 Byondis B.V. mAb IgG1 / Lymphoma Phase I 2023/02/21 / DS-1103a Daiichi Sankyo, Inc./AstraZeneca mAb IgG4 / / Advanced Solid Tumor Phase I 2023/03/13 US ADU-1805 Sairopa B.V IgG2 Advanced Solid Tumor Phase I 2023/05/12 US, RoW //䌀อ䕄䕥 Notes: (1) Industry information is as of August 17, 2023. (2) First posted date refers to the date on which the study record was first available on Chinadrugtrials.org.cn or Clinicaltrials.gov. (3) RoW refers to regions other than China and US. (4) Clinical stage refers to the stage of the most advanced clinical trials of a drug; the first posted date refers to the start date of the first clinical trial of a drug according to public information. (5) The clinical stage refers to the latest clinical trials. (6) As to the monotherapy CR column, “No” means that no CR was achieved in a completed or suspended clinical trial. “/” represents there has been no disclosed information about the results of the clinical trials so far. (7) The clinical trials of drug candidates marked as dark-gray have been suspended. Definitions: AML refers to Acute Myeloid Leukemia; MDS refers to Myelodysplastic Syndrome; NHL refers to Non-Hodgkin Lymphoma. Source: CDE, ClinicalTrials, Company Website, Literature Review, Frost & Sullivan Analysis Overview of CD24-targeted Drugs CD24, another critical innate immune checkpoint, is a highly glycosylated protein with a small protein core that is linked to the plasma membrane via a glycosyl-phosphatidylinositol anchor. It is widely expressed on numerous types of tumor cells, including BC, NSCLC, CRC, HCC, RCC and OC, and has been recognized as an important marker for poor prognosis of those cancers. It is closely related to the occurrence, development, invasion, and migration of tumor cells. CD24 interacts with its ligand, Siglec-10, an inhibitory receptor extensively expressed on the surface of various immune cells including macrophages, NK cells, T cells and B cells. The binding of CD24 and Siglec-10 activates a slew of immune cell inhibitory signal cascades and subsequently blocks the toll-like receptor-mediated inflammation to negatively regulate macrophage, NK cells, T cells and B cells, thus causing immunosuppression. Targeting both innate and adaptive immunity, CD24-targeted drugs present a significant potential in treating a wide range of cancer indications. INDUSTRY OVERVIEW – 150 – --- page 160 --- Mechanism of blocking the CD24/Siglec-10 signaling pathway By blocking the CD24/Siglec-10 signaling pathway, a CD24 antibody can suppress the CD24/Siglec-10 inhibitory signals sent to macrophages, NK cells and T cells. Moreover, a well-designed CD24 antibody with potent Fc function is able to fully activate macrophage and NK cell-immune responses through ADCP and ADCC, and induce apoptosis. It may also activate and promote T-cell response likely through tumor antigen presentation by activated macrophages to T cells and direct blockade of CD24/Siglec-10 inhibitory signals. Given the all-around immune responses stimulated by blocking the CD24/Siglec-10 signaling pathway, CD24-targeted bispecific molecules and combination of CD24-targeted therapies and other immunotherapies, such as therapies targeting PD-1/PD-L1, show tremendous synergistic potential. The following diagram illustrates the mechanism of blocking the CD24/Siglec-10 pathway: Mechanism of Blocking CD24/Siglec-10 Pathway NK Cell Tumor Cell IMM47 CD24 mAb CD24 Siglec-10 ADCC ADCP Apoptosis Signaling Blockade Granzyme, Perforin... Siglec-10 T Cell Siglec-10 T Cell Receptor Granzyme, Perforin...Cytokines Promote T Cell Activation Fc Receptor Macrophage Lysosomes APC Source: Frost & Sullivan, Literature Review INDUSTRY OVERVIEW – 151 – --- page 161 --- Global and China CD24-targeted drugs competitive landscape According to Frost & Sullivan, there is no approved drug targeting CD24 globally. No CD24-targeted drug candidate has entered into clinical stage worldwide, except for one drug candidate recently receiving IND approval from the FDA for its Phase I clinical trial. Recently, Pheast Therapeutics, led by Dr. Amira Barkal and Dr. Irving Weissman, the world’s pioneer in CD47, revealed their move into the development of cancer therapies targeting CD24, which is expected to stir a new wave of enthusiasm for this novel immuno-oncology target across the global biopharmaceutical industry. However, given the relatively weak immunogenicity of CD24 due to its small protein core, the screening and development of monoclonal antibodies against CD24 has been highly challenging. Globally, there is only one CD24-targeted monoclonal antibody that has recently received IND approval from the FDA for Phase I clinical trial, with very few reported CD24-targeted monoclonal antibodies under preclinical development for cancer treatment, including ImmuneOnco’s IMM47. In addition, ImmuneOnco is the only company reported to have been developing CD24-targeted bispecific molecules around the world based on publicly available information, according to Frost & Sullivan. According to Frost & Sullivan, there are two drug candidates targeting Siglec-10 (EXO-CD24/CovenD24 and CD24-Fc/MK-7110)under clinical development for the treatment of COVID-19 globally. Those drug candidates are designed to bind with Siglec-10 to inhibit cytokine secretion and reduce COVID-19 induced immune over-reaction, exhibiting completely different mechanisms from the CD24-targeted therapies, which cannot be applied for cancer treatment. INDUSTRY OVERVIEW – 152 – --- page 162 --- SELECTED INDICATIONS ANALYSIS Summary of the Prevalence of Disease Subtypes, Disease Pathways and Treatment Algorithm for the Selected Indications Disease Incidence of Disease (thousand people) Disease Subtypes Treatment Algorithm Drug Candidates Intended Position of the Company's Product Candidates First Line Second Line Third Line Overseas Markets China Market Solid Tumors NSCLC EGFR/ALK/ROS 1W T Chemo; VEGFi + Chemo; PD -(L)1 (only for PD -L1 expression) ;PD - (L)-1 + Chemo; PD-(L)1; Chemo PD-(L)1; Chemo IMM01 IMM2520 IMM2902 IMM27M IMM2518 1L; 2L 1L; 2L EGFR/ALK/ROS 1m u t a t i o n TKI TKI TKI 2L; 3L 2L; 3L SCLC / Chemo + PD -(L)1; Chemo; Chemo + PD -(L)1; Chemo / IMM01 IMM2520 1L; 2L 1L; 2L BC HER2 positive HER2 -targeted mAb + chemo; TKIs + chemo TKIs ± Chemo; HER2 -targeted ADCs; HER2 - targeted mAb + Chemo TKIs ± Chemo; HER2 -targeted ADCs IMM2902 IMM01 IMM47 1L; 2L; 3L 1L; 2L; 3L HER2 -low expression Chemo; Chemo + TKIs Chemo; Chemo + TKIs Chemo; Chemo + TKIs TNBC Chemo ± PD-(L)1 Chemo Trop-2 targeted ADCs GC HER2 positive HER2 -targeted mAb + Chemo HER2 -targeted ADCs; Chemo ± VEGFR -2 targeted mAb; PD-1; Chemo; HER2 -targeted ADCs; VEGFR -2 targeted therapies IMM2902 IMM2520 IMM01 1L; 2L; 3L 1L; 2L; 3L HER2 negative & low expression Chemo ±P D -1; PD - (L)1 (only for dMMR/MSI-H) Chemo ± VEGFR - 2 targeted mAb; PD-(L)1 (only for dMMR/MSI-H) VEGFR -2 targeted therapies; Chemo CRC / PD-(L)1 (only for MSI-H/dMMR); Chemo ± targeted therapies PD-(L)1 (only for MSI-H/dMMR); Chemo ± targeted therapies / IMM2520 1L; 2L 1L; 2L HNSCC / PD-1+Chemo; PD - 1(only for CPS>=1); Chemo ± targeted therapies PD-1; Chemo / IMM01 IMM2520 1L; 2L 1L; 2L HCC / Small molecule targeted drugs; Targeted therapies(anti - VEGF) ± PD-(L)1 Small molecule targeted drugs; PD-1 / IMM2520 IMM2510 IMM2518 1L; 2L 1L; 2L ESCC / PD-(L)1 + Chemo; Chemo PD-(L)1; Chemo / IMM2520 1L; 2L 1L; 2L Hematologic Malignancies NHL B-cell NHL CD20 targeted therapies + Chemo; CD20 targeted therapies + Chemo; BTKi; CD20xCD3 bsAb CD20 targeted therapies + Chemo; BTKis; CD20xCD3 bsAb IMM0306 1L; 2L; 3L 1L; 2L; 3L NK-cell/T-cell NHL Chemo; Radio HDACi; PD-(L)1; PD-(L)1 + HDACi HDACi; PD-(L)1; PD-(L)1 + HDACi IMM01 2L 2L cHL / Chemo; Radio PD-(L)1 ± Chemo PD-(L)1 ± Chemo IMM01 3L 3L AML Fit AML Intensive Chemo; Chemo + Targeted therapies (FLT3i, CD33i) Chemo; Targeted therapies (CD33i) / IMM01 2L 2L Unfit AML Low intensive chemo; Targeted therapies (BCL -2i) + chemo / / 1L 1L MDS/CMML HR-MDS/CMML HMAs, Chemo. HSCT HMAs + targeted therapies (BCL -2i, IDH1/2i); Chemo + HMAs HMAs + targeted therapies (BCL -2i, IDH1/2i); Chemo + HMAs IMM01 1L 1L LR-MDS/CMML Immunomodulator s; HMAs // / / / MM / Target therapies ±Immunomodulat or ± Chemo , ASCT Target therapies ±Immunomodulat or ± Chemo , ASCT Target therapies ±Immunomodulat or ± Chemo , ASCT IMM01 ≥4L ≥4L 1,144.1 1,265.8 1,585.0 836.8 943.7 1,181.3 1,980.9 2,209.4 2,766.3 2022 2026E 2035E RoW China 201.9 223.4 279.7 147.7 166.5 208.5349.6 389.9 488.2 2022 2026E 2035E 2,006.9 2,178.6 2,577.1 341.0 357.8 379.72,347.9 2,536.4 2,956.8 2022 2026E 2035E 652.6 721.1 905.7 498.6 558.8 690.51,151.3 1,279.9 1,596.2 2022 2026E 2035E 1,498.9 1,661.0 2,077.0 482.2 542.3 677.41,981.0 2,203.3 2,754.4 2022 2026E 2035E 741.9 810.7 972.3 134.1 144.3 162.0876.0 954.9 1,134.3 2022 2026E 2035E2022 2026E 2035E 460.0 508.6 637.1 397.5 435.5 513.7 857.6 944.1 1,150.8 2022 2026E 2035E 296.6 323.2 393.5 277.7 313.1 389.4574.4 636.3 782.9 2022 2026E 2035E 471.8 516.9 628.5 97.6 107.3 128.3569.4 624.2 756.8 2022 2026E 2035E 78.3 82.9 93.4 7.0 7.3 7.885.3 90.2 101.2 2022 2026E 2035E 141.5 153.9 184.8 30.8 32.7 36.7172.4 186.7 221.4 2022 2026E 2035E L 274.3 298.9 358.0 23.4 25.1 29.4297.7 324.0 387.4 2022 2026E 2035E 163.3 181.8 228.322.4 25.0 30.6185.7 206.8 258.9 2022 2026E 2035E INDUSTRY OVERVIEW – 153 – --- page 163 --- Notes: (1) TKI refers to tyrosine kinase inhibitors; Chemo refers to chemotherapy; Radio refers to radiotherapy; WT refers to wild type; HMAs refers to hypomethylating agents; HSCT refers to hematopoietic stem cell transplant; 1L, 2L, 3L and 4L refer to the first line, the second line, the third line and the fourth line respectively; ADC refers to antibody drug conjugate; mAb refers to monoclonal antibody; dMMR/MSI-H refers to deficient DNA mismatch repair/microsatellite instability-high; CPS refers to combined positive score; bsAb refers to bispecific antibody; BTKi refers to bruton tyrosine kinase inhibitor; HDACi refers to histone deacetylase inhibitor; FLT3i refers to FLT3 inhibitor; CD33i refers to CD33 inhibitor; BCL-2i refers to BCL-2 inhibitor; IDH1/2i refers to IDH1/2 inhibitor; TNBC refers to triple negative breast cancer; NHL refers to Non-Hodgkin lymphoma; AML refers to acute myeloid leukemia; HR-MDS/CMML refers to higher risk myelodysplastic syndrome/chronic myelomonocytic leukemia. (2) The drug candidates listed below are being evaluated or have potential to target respective indications. Source: National Cancer Registry (NCCR), International Agency for Research on Cancer (IARC), Frost & Sullivan Solid Tumors Non-Small-Cell Lung Cancer Lung cancer is one of the leading causes of cancer-related mortality in China and worldwide. NSCLC is the most prevalent lung cancer and accounts for 85% of all lung cancer cases. The chart below demonstrates historical and projected incidences of NSCLC in China and around the world for the periods indicated: China and Global Incidence of NSCLC, 2022−2035E 836.8 863.2 889.8 916.6 943.7 970.9 998.2 1,025.4 1,052.4 1,079.1 1,105.4 1,131.4 1,156.7 1,181.3 1,144.1 1,173.4 1,203.5 1,234.3 1,265.8 1,298.0 1,331.1 1,365.0 1,399.8 1,435.5 1,472.2 1,508.9 1,546.5 1,585.0 1,980.9 2,036.6 2,093.3 2,150.9 2,209.4 2,268.9 2,329.3 2,390.4 2,452.2 2,514.6 2,577.7 2,640.4 2,703.2 2,766.3 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan A majority of patients with NSCLC present with advanced or metastatic disease at the time of diagnosis. For those patients diagnosed with late-stage NSCLC, chemotherapy or radiotherapy combined with targeted therapy is commonly used as the standard of care. Since some targeted therapies only work in cancer cells with specific genetic mutations and certain immuno-oncology therapies such as PD-1/PD-L1 inhibitors show limited efficacy, notable unmet medical needs persist across this large patient population. EGFR/ALK/ROS1 wild-type NSCLC accounts for almost 65% of all NSCLC cases. For EGFR/ALK/ROS1 wild-type NSCLC, platinum-based chemotherapy had long been recommended as the standard treatment for a majority of this group. With the emergence of immuno-oncology therapies and anti-angiogenic therapies, PD-1/PD-L1 inhibitors (such as pembrolizumab) and angiogenesis inhibitors (such as bevacizumab) also become available treatment options for those patients. However, PD-1/PD-L1 inhibitor monotherapy has only shown convincing benefits in patients with ≥1% tumor cells expressing PD-L1, which subgroup accounts for less than one quarter (24.4%) of the entire NSCLC population. Even within this subgroup, the response rate of PD-1/PD-L1 inhibitor monotherapy is merely 27% in the first-line setting. The relatively low response rate is possibly due to insufficient immune activation in “cold tumors.” Given the limited INDUSTRY OVERVIEW – 154 – --- page 164 --- efficacy of current immunotherapies, there remains an urgent need for the development of more effective novel immunotherapies, and synergistic combinations of immunotherapies and angiogenesis inhibitors or targeted therapies (such as HER2-targeted therapies) for NSCLC. While targeted therapies, such as EGFR tyrosine kinase inhibitors (TKIs), show good efficacy in treating NSCLC harboring EGFR mutations, all the patients treated with EGFR TKIs will eventually develop acquired drug resistance, and patients with relapsed or refractory disease are left with limited effective treatment options. Similarly, while there are also TKIs specifically targeting ALK and ROS1 mutations of NSCLC, their long-term efficacy is limited due to inevitable drug resistance. Moreover, PD-1/PD-L1 inhibitors only demonstrate modest efficacy targeting this group of patients. Thus, the development of novel immunotherapies, including bispecific molecules and combination therapies, may be a promising strategy to address clinical needs of those patients. Research has revealed that the activation of innate immunity can promote T cell responses in “cold tumors” or non-T cell-inflamed immune-suppressive TME by recruiting T cells to the TME and presenting tumor-specific antigens. Such synergistic effects between innate and adaptive immunities provide a compelling scientific rationale for dual-targeting of critical innate and adaptive immune checkpoints. Moreover, since the overexpression of innate immunity-related ligands, such as CD47 and CD24, is correlated with poor prognosis of NSCLC, therapies harnessing both immune systems and their potential combination with angiogenesis inhibitors or targeted therapies are expected to improve the treatment outcome and bring significant clinical benefits for NSCLC patients with limited response to PD-1/PD-L1 inhibitors. Small Cell Lung Cancer SCLC accounts for 15% of all lung cancer cases and is most commonly diagnosed in patients with histories of heavy smoking. In general, SCLC grows aggressively and is highly metastatic, resulting in a high mortality rate. The chart below illustrates historical and projected incidences of SCLC in China and around the world for the periods indicated: China and Global Incidence of SCLC, 2022−2035E 147.7 152.3 157.0 161.8 166.5 171.3 176.2 181.0 185.7 190.4 195.1 199.7 204.1 208.5 201.9 207.1 212.4 217.8 223.4 229.1 234.9 240.9 247.0 253.3 259.8 266.3 272.9 279.7 349.6 359.4 369.4 379.6 389.9 400.4 411.0 421.8 432.7 443.8 454.9 465.9 477.0 488.2 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan Due to the asymptomatic nature and rapid progression of the disease, most SCLC patients are diagnosed at the late stage with distant metastases, or so-called the extensive stage. Given the high level of heterogeneity of SCLC, developing targeted drugs for this disease has been challenging because of the lack of common and actionable oncogenic drivers. After several decades, chemotherapy remains the front-line standard of care regimen for extensive-stage SCLC. Unfortunately, although patients with extensive-stage SCLC are generally responsive to initial chemotherapy regimens, most of them will eventually relapse due to drug resistance. INDUSTRY OVERVIEW – 155 – --- page 165 --- In recent years, the combination of PD-1/PD-L1 inhibitors (including atezolizumab, durvalumab and serplulimab) and chemotherapy has also been recommended for the treatment of extensive-stage SCLC in first and/or later-line settings. However, treatment benefits offered by this combination therapy are not satisfactory. Clinical trial results of atezolizumab and durvalumab, which are approved PD-1/PD-L1 inhibitors, showed only around two-month improvement in median overall survival (mOS) compared with chemotherapy alone (12.3-13.0 months vs. 10.3 months). Additionally, most patients demonstrate either primary or rapid acquired resistance to current regimens, and very few drugs are approved as effective for second-line treatment of SCLC. Without effective treatment options, the prognosis of patients with SCLC is dismal with an mOS of 4 to 5 months. Limitations of current regimens highlight the clear need to improve effectiveness and expand the scope of current therapeutic strategies. Considering the lack of widely expressed oncogenic drivers and corresponding targeted therapies for SCLC, the development of immuno-therapy presents a promising direction to improve the treatment results in SCLC. Macrophage infiltration and expression of CD47 and CD24 are found to be high in SCLC, and the upregulation of CD47 or CD24 has been a major mechanism exploited by tumor cells to evade immune attack. The clinical benefits of targeting CD47/SIRP α pathway for the treatment of SCLC have also been validated. Since the activation of macrophages can enhance T-cell response through the crosstalk of innate and adaptive immunities, combination therapies and bispecific molecules targeting both CD47 or CD24 and PD-1/PD-L1 may produce encouraging efficacy and achieve better outcomes in the majority of SCLC patients who are not responsive to PD-1/PD-L1 inhibitors. Such novel therapies may also have the potential to advance towards the first-line treatment for SCLC. Breast Cancer BC is cancer that forms in the cells of the breasts. BC is the most prevalent type of cancer in women and became the most common cancer globally as of 2022. The chart below illustrates historical and projected incidences of BC in China and around the world for the periods indicated: China and Global Incidence of BC, 2022−2035E 341.0 345.5 349.8 353.9 357.8 361.4 364.8 367.8 370.6 373.0 375.1 376.9 378.5 379.7 2,006.9 2,049.3 2,092.1 2,135.2 2,178.6 2,222.3 2,266.3 2,310.6 2,355.1 2,399.8 2,444.7 2,488.8 2,533.0 2,577.1 2,347.9 2,394.8 2,441.9 2,489.1 2,536.4 2,583.7 2,631.1 2,678.4 2,725.6 2,772.8 2,819.9 2,865.8 2,911.4 2,956.8 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan Human epidermal growth factor receptor 2 (HER2) is a gene that can play a critical role in the development of BC. HER2 expression level has long served as a key indicator for selecting medical treatment of BC patients. Based on their HER2 expression levels, BC patients can be categorized into three subgroups: HER2-positive (IHC3+, IHC2+ and ISH+), HER2-low expressing (IHC1+, IHC2+ and ISH-) and HER2-negative (IHC0). INDUSTRY OVERVIEW – 156 – --- page 166 --- Approximately 50% of all BC cases exhibit a low-level expression of HER2. In contrast to HER2-positive tumors, tumors with HER2-low expression generally do not respond to HER2-targeted antibodies, such as HERCEPTIN ® (trastuzumab), and thus the clinical significance of low-level HER2 expression had been underappreciated for several decades. Until recently, there had only been one treatment approved specifically for HER2-low expressing BC, i.e., ENHERTU ® (trastuzuab deruxtecan), a novel HER2-targeted antibody-drug conjugate (ADCs) agent. Trastuzumab deruxtecan was approved by the FDA for HER2-positive BC in 2019 and HER2-low expressing BC in 2022. Clinical results showed that trastuzumab deruxtecan resulted in an encouraging ORR of 52.3% in HER2-low expressing group. At the same time, severe adverse events, such as interstitial lung disease and even fatal events, were reported to be associated with trastuzumab deruxtecan, raising certain safety concerns. Given the substantial proportion of patients with HER2-low expressing BC, targeting this group with highly specific and effective therapies presents a promising prospect and large market opportunities. As to HER2-positive BC, HER2-targeted antibodies, such as trastuzumab and PERJETA ® (pertuzumab), in combination with chemotherapy and TKIs, such as pyrotinib and TUKYSA ® (tucatinib), are recommended as the standard of care for first-line and second-line treatments. However, most patients eventually develop resistance to current regimes, as exemplified by the only 7.2 months of median time to progression (TTP) for BC patients treated with trastuzumab. Although HER2-targeted ADCs (e.g., trastuzumab deruxtecan) were approved for relapsed disease, they have been reported to cause severe adverse events. For example, trastuzumab deruxtecan was reported to result in interstitial lung disease with an occurrence rate of 9% and a high fatality rate of 4.3%. Therefore, there remain unfilled needs for safer and more effective treatment targeting HER2-positive BC that relapsed after frontline regimens. For advanced triple negative BC (TNBC), in addition to chemotherapy, PD-1/PD-L1 inhibitors (such as pembrolizumab) combined with chemotherapy and novel Trop2-directed ADCs, such as TRODELVY ® (sacituzumab govitecan), are also recommended as the standard treatment. However, the combination of pembrolizumab and chemotherapy can only benefit a small subgroup of TNBC patients (less than 19%) with high PD-L1 expression (combined positive score (CPS) ≥ 10), and it has exhibited limited efficacy with a median progression-free survival (mPFS) of 9.7 months. Additionally, sacituzumab govitecan showed limited improvement of progression-free survival in HR+/HER2- BC compared to chemotherapy and is reported to cause severe adverse events (such as 52% of Grade 3 and 4 neutropenia), suggesting highly unmet medical needs. To address the significant unmet needs of BC patients, the quest to develop novel precision medicine strategies continues. Notably, since CD47 and CD24 are commonly overexpressed in BC and are important biomarkers for poor prognosis, immuno-oncology therapies targeting innate immunity, and their combination with PD-1/PD-L1 inhibitors or HER2-targeted therapies emerge as attractive solutions with the potential to improve the clinical outcomes for different subtypes of BC. INDUSTRY OVERVIEW – 157 – --- page 167 --- Gastric cancer GC is a common cancer that begins in the stomach. GC was the second most common type of cancer in China in 2022. The chart below illustrates historical and projected incidences of GC in China and around the world for the periods indicated: China and Global Incidence of GC, 2022−2035E 498.6 513.5 528.5 543.6 558.8 574.0 589.4 604.6 619.6 634.3 648.9 663.1 677.0 690.5 652.6 669.1 686.0 703.3 721.1 739.4 758.2 777.6 797.6 818.2 839.6 861.1 883.2 905.7 1,151.3 1,182.6 1,214.4 1,246.9 1,279.9 1,313.4 1,347.6 1,382.1 1,417.1 1,452.6 1,488.4 1,524.2 1,560.2 1,596.2 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan Since the awareness of early screening and detection of GC remains low in China, most cases are not diagnosed until it progresses into advanced stage and becomes metastatic disease, resulting in a high mortality rate of GC patients. Clinically, HER2 has been established as one of the most critical predictive biomarkers for the treatment of metastatic GC. Based on the HER2 expression level, GC cases are mainly categorized as HER2-positive (IHC3+, IHC2+ and ISH+) and HER2-negative (IHC0) in the treatment guideline. While the expression level of “IHC1+, IHC2+ and ISH-” is not clearly defined in the guideline, it is commonly referred to as “HER2-low expression” in academic research and clinical practices, and this new concept has emerged and proved to predict the responses to certain novel HER2-targeted therapies. More than 25% of all GC cases have low-level HER2 expression. Despite the large population, this group has not been identified as a distinct clinical entity from HER2-negative tumors since specific and effective treatment options for this group are lacking. For HER2-low expressing and HER2-negative GC, chemotherapy alone or in combination with immuno-oncology therapy (e.g., PD-1 inhibitor) is the standard frontline treatment, and chemotherapy is a major option for second-line treatment. Since the survival improvement of PD-1/PD-L1 inhibitors combined with chemotherapy in this group is modest (mPFS of 7.7 months) and PD-1/PD-L1 inhibitors as monotherapy can only be used for a small subset of this group (e.g., deficient DNA mismatch repair (dMMR)/microsatellite instability-high (MSI-H) patient who account for 10% to 20% GC patients), there are still urgent needs to develop more efficacious combination therapies of immunotherapies and targeted therapies or angiogenesis inhibitors for the treatment of HER2-low expressing and HER2-negative GC. For HER2-positive GC, HER2-targeted antibodies (e.g., trastuzumab) in combination with chemotherapy is recommended as the standard treatment in the first-line setting. It is inevitable that most patients eventually relapse or become refractory to the treatment of trastuzumab. For relapsed GC patients, traditionally chemotherapy is the major option for their treatment. Recently, novel HER2-targeted ADCs (e.g., trastuzumab deruxtecan) and VEGFR-2 targeted antibodies (e.g. CYRAMZA ®, ramucirumab) in combination with chemotherapy have also been approved to be used in second-line treatment of HER2-positive GC. When the disease further progressed, chemotherapy, targeted therapies (e.g. AITAN ®, apatinib), PD-1 antibodies (e.g. OPDIVO ®, nivolumab), and HER2-targeted ADCs (e.g. AIDIXI ®, disitamab vedotin) can be used for third-line treatment. While novel HER2-targeted ADCs show meaningful responses in HER2-positive GC INDUSTRY OVERVIEW – 158 – --- page 168 --- patients who have previously received trastuzumab therapy, those ADCs are typically associated with severe side effects, such as interstitial lung disease and even deaths. Moreover, the improvement in OS and PFS by ADCs is limited. For instance, in patients with locally advanced or metastatic gastric or gastroesophageal junction adenocarcinoma who have progressed after at least two prior treatment regimens, ENHERTU ® only showed limited survival benefits compared to chemotherapy (mOS: 12.5 months vs. 8.4 months; mPFS: 5.6 months vs. 3.5 months). The addition of immuno-oncology therapies to HER2-targeted agents or angiogenesis inhibitors through combination or bispecific strategies may offer new hope to patients with HER2-low expressing and HER2-negative GC, as well as GC patients who had progressed after the first-line treatment. Macrophages are pervasively present in gastrointestinal (GI) tumors, including GC, CRC and ESCC. CD47 and CD24, key macrophage checkpoints, have been recognized as important biomarkers for poor prognosis in GC. Thus, novel agents targeting CD47 and CD24 are rational combination partners for HER2-targeted agents or PD-1/PD-L1 inhibitors for the treatment of HER2-low expressing and HER2-negative GC given their ability to induce strong innate immune responses and boost integrated immune reaction. Colorectal Cancer CRC includes all types of cancers that begin in the colon and rectum. The chart below illustrates historical and projected incidences of CRC in China and around the world for the periods indicated: China and Global Incidence of CRC, 2022−2035E 482.2 497.0 511.9 527.0 542.3 557.6 573.0 588.4 603.7 618.9 633.9 648.7 663.3 677.4 1,498.9 1,538.1 1,578.2 1,619.1 1,661.0 1,703.8 1,747.5 1,792.1 1,837.7 1,884.3 1,931.8 1979.5 2,027.9 2,077.0 1,981.0 2,035.1 2,090.1 2,146.2 2,203.3 2,261.4 2,320.5 2,380.6 2,441.4 2,503.1 2,565.7 2,628.3 2,691.2 2,754.4 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan Early-detection rate of CRC in China is markedly low for a number of reasons, and 89% of CRC cases are diagnosed at a late stage. For late-stage CRC, chemotherapy or chemotherapy combined with targeted therapies, such as bevacizumab and ERBITUX ® (cetuximab), are recommended for standard first- and later-line treatments. Additionally, for a small fraction of patients with MSI-H/dMMR phenotype, PD-1/PD-L1 inhibitors (e.g., pembrolizumab) are recommended for use in the first- and second-line settings. However, since the efficacy of currently available treatments is modest, the five-year survival rate of patients with late-stage CRC is merely about 10%. Particularly, the disease lacks effective medications to slow or stop its course after treatment failure has occurred with initial standard treatment owing to toxicity or progression. In the absence of alternative therapies, the initial treatment drugs are often reused in patients who have progressed with this regimen in routine clinical practice, although response to and survival benefits of second-line chemotherapy (combined with targeted therapy) are usually very limited. In addition, a substantial majority of CRC patients do not respond to PD-1/PD-L1 inhibitors, possibly due to “cold tumors” or non-T INDUSTRY OVERVIEW – 159 – --- page 169 --- cell-inflamed immune-suppressive TME. PD-1 inhibitors are currently only approved for CRC patients with MSI-H/dMMR, accounting for less than 5% of late-stage CRC patients, while in general CRC patients, PD-1 inhibitor monotherapy merely produced weak responses with ORR below 10%. In spite of decades-long efforts, developing targeted therapies for improved treatment of late-stage CRC still faces significant challenges since many of the key oncogenic drivers are not amenable to targeted therapy. Meanwhile, immuno-oncology therapy has demonstrated promising efficacies and good tolerance in GI-related cancers in recent years and can possibly also bring new options to CRC patients. Although PD-1/PD-L1 inhibitors are not efficient enough by themselves, the combination of PD-1/PD-L1 inhibitors with innate immuno-therapy may offer enhanced responses in metastatic CRC based on preclinical and clinical data. Macrophages are pervasively present in GI cancers, including CRC, GC and ESCC. CD47 and CD24, key macrophage checkpoints widely expressed on colorectal cancer cells, are found to be important biomarkers for poor prognosis. Therefore, targeting CD47 or CD24 can activate macrophages in tumor tissues to directly kill cancer cells and further enhance T cell responses by transforming the “cold tumors” into “hot tumors.” The addition of macrophage-targeted therapies to PD-1/PD-L1 inhibitors is thus expected to enhance the responses of PD-1/PD-L1 inhibitors in a broader CRC patient population and achieve improved treatment outcomes. Head and Neck Squamous Cell Carcinomas HNSCC develop from the mucous membranes of the mouth, nose, and throat and are the most common cancer that arises in the head and neck region. The chart below illustrates historical and projected incidences of HNSCC in China and around the world for the periods indicated: China and Global Incidence of HNSCC, 2022−2035E 134.1 136.7 139.3 141.8 144.3 146.7 148.9 151.1 153.1 155.1 156.9 158.7 160.4 162.0 741.9 758.8 776.0 793.2 810.7 828.2 846.1 864.0 882.1 900.3 918.5 936.4 954.3 972.3 876.0 895.6 915.3 935.0 954.9 974.9 995.0 1,015.1 1,035.2 1,055.3 1,075.4 1,095.1 1,114.7 1,134.3 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China ROW Thousand Notes: (1) The incidence of HNSCC in the chart includes, among others, oral cancer, oropharyngeal cancer, laryngeal cancer, hypopharyngeal cancer, nasopharyngeal cancer; (2) RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan For patients with metastatic HNSCC, recommended first-line treatment options include chemotherapy, targeted therapy (e.g., cetuximab), PD-1 inhibitors, and chemotherapy combined with targeted therapy or PD-1 inhibitors. In second-line treatment, PD-1 inhibitor monotherapy (e.g., pembrolizumab and nivolumab) and chemotherapy are recommended. Despite the use of these treatment options, survival rates for metastatic HNSCC are still considerably low, indicating a need for more effective therapeutics. Although immuno-oncology therapy presents a promising approach to treat HNSCC, currently available immuno-oncology therapies produce poor responses in a majority of HNSCC patients. In the first-line setting, the application of PD-1/PD-L1 inhibitors as monotherapy is limited to 23% of HNSCC patients who have PD-L1 expression (CPS ≥1). In this selected population with PD-L1 INDUSTRY OVERVIEW – 160 – --- page 170 --- expression, the response rates to PD-1 treatment are still relatively low. According to publicly reported data, the ORR was only 19% with PD-1/PD-L1 inhibitors as single agent. When used in first-line treatment for broad HNSCC patients, PD-1/PD-L1 inhibitors combined with chemotherapy showed limited survival benefits compared to cetuximab combined with chemotherapy (mOS: 13.0 months vs. 10.7 months). For patients who have progressed on first-line treatment, the ORR of PD-1/PD-L1 inhibitors was even lower, only reaching 13.3% to 16%. Novel combination strategies showed great promise to improve the responses to PD-1 treatment and achieve better efficacy in HNSCC. CD47, as a critical macrophage checkpoint, plays a broad role in cancer immune evasion. With wide distribution of macrophages in HNSCC, a CD47-targeted therapy with potent IgG1 Fc effector function can further promote T-cell infiltration by fully activating macrophages and facilitating their crosstalk with T cells, thus improving the responsiveness to PD-1/PD-L1 inhibitors and inducing phagocytosis of tumor cells by activated macrophages. In contrast, those CD47-targeted therapies without Fc effector function could only generate limited therapeutic benefits. For example, ALX Oncology’s ALX-148 (a CD47-targeted SIRPα-Fc fusion protein with an inert IgG1 Fc) in combination with pembrolizumab and chemotherapy only showed a 3% improvement in the ORR compared to the combination of pembrolizumab and chemotherapy (39% vs. 36%) for the first-line treatment of HNSCC in its reported clinical trial. Given the synergistic effects of CD47-targeted therapy and PD-1/PD-L1 inhibitors, the combination of these two agents can potentially produce potent and integrated immune responses in HNSCC patients who do not respond to PD-1/PD-L1 inhibitors and provide a new option for metastatic disease without effective treatments. Hepatocellular Carcinoma HCC accounts for 85% of all liver cancer cases. It occurs most often in people with chronic liver diseases, such as cirrhosis caused by hepatitis B or hepatitis C infection, and it is a leading cause of death in people with cirrhosis. The chart below illustrates historical and projected incidences of HCC in China and around the world for the periods indicated: China and Global Incidence of HCC, 2022−2035E 397.5 407.1 416.6 426.0 435.5 444.8 454.2 463.3 472.3 481.0 489.6 497.9 506.0 513.7 460.0 471.7 483.7 496.0 508.6 521.5 534.8 548.4 562.4 576.8 591.6 606.5 621.6 637.1 857.6 878.8 900.3 922.0 944.1 966.4 989.0 1,011.7 1,034.7 1,057.9 1,081.2 1,104.4 1,127.6 1,150.8 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to the rest of the world except China. Source: NCCR, Frost & Sullivan Therapeutic options for HCC are generally determined based on disease staging. For late-stage HCC, systemic therapies are primarily recommended for first- and second-line treatments, two major classes of which are small molecule targeted drugs, such as NEXA V AR ® (sorafenib), LENVIMA ® (lenvatinib) and immune checkpoint inhibitors (e.g., PD-1/PD-L1 inhibitors). The corresponding combination therapies of targeted drugs or immune checkpoint inhibitors are also commonly used in first- and second-line treatments. INDUSTRY OVERVIEW – 161 – --- page 171 --- Due to the limited clinical outcomes associated with small molecule targeted drugs, PD-1/PD-L1 inhibitors have been introduced in the first- and second-line settings to improve treatment outcomes for HCC patients in recent years. However, current immuno-oncology therapy regimens still fail to yield material progression-free and overall survival benefits. For example, although the combination of a PD-1/PD-L1 inhibitor and anti-VEGF therapy, such as atezolizumab or sintilimab plus bevacizumab, has demonstrated certain efficacy (an overall mPFS of around 4 months), there is still room for improvement, indicating a need for more effective combination or bispecific strategies. When it comes to second-line treatment, treatment options become fewer and are usually less effective. For relapsed disease, both PD-1 inhibitors, such as pembrolizumab and BAIZE’AN ® (tislelizumab), and small-molecule targeted therapy, such as STIV ARGA ® (regorafenib), only produced ORRs under 17% in monotherapy clinical trials. The unsatisfactory efficacies of current regimens suggest the dire need for the development of more effective therapeutic strategies. As CD47 and CD24, key macrophage checkpoints, have both been found closely correlated with poor prognosis of HCC, and macrophages are widely distributed in HCC tissues, CD47/CD24-targeted immuno-oncology therapy is expected to work synergistically with PD-1/PD-L1 inhibitors to generate robust immune responses and bring differentiated clinical benefits for HCC patients. Therapies harnessing both the innate and adaptive immune systems and the combinations of immuno-oncology therapies and angiogenesis inhibitors have the potential to address the notable unmet medical needs in HCC. Esophageal Squamous Cell Carcinoma ESCC is the predominant histological subtype of esophageal cancer (EC), accounting for approximately 90% of EC cases. The chart below shows historical and projected incidences of ESCC in China and around the world for the periods indicated: China and Global Incidence of ESCC, 2022−2035E 277.7 286.5 295.3 304.2 313.1 322.0 330.9 339.7 348.4 357.0 365.4 373.7 381.6 389.4 296.6 303.0 309.6 316.3 323.2 330.2 337.4 344.9 352.5 360.4 368.5 376.6 384.9 393.5 574.4 589.5 604.9 620.5 636.3 652.2 668.3 684.6 700.9 717.4 733.9 750.3 766.6 782.9 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan The treatment options for ESCC are still inadequate with a poor prognosis due to the limited knowledge of pathology and genetic drivers for ESCC resulting from its high mutational load. For advanced ESCC, PD-1/PD-L1 inhibitors, such as AIRUIKA ® (camrelizumab) and pembrolizumab, in combination with chemotherapy or as monotherapy have been primarily indicated in both the first-line and second-line settings. However, the PD-1/PD-L1 inhibitor-based combination therapies can only provide limited benefits for patients with advanced ESCC. For example, the combination of pembrolizumab and chemotherapy merely increased the mPFS to 6.3 months from 5.8 months of chemotherapy alone. Further, the mOS of patients treated with this combination therapy was only 12.4 months, compared to 9.8 months when chemotherapy used alone. INDUSTRY OVERVIEW – 162 – --- page 172 --- The paucity of specific driver gene and corresponding targeted drugs urges the development of strategies to improve the response rates of PD-1/PD-L1 inhibitors in treating ESCC. By fully eliciting potent innate and adaptive immune responses, CD47/CD24-targeted therapies combined with PD-1 inhibitors have shown immense promise in overcoming the limitations of current available treatment options. Furthermore, the wide and abundant distribution of macrophage in ESCC tumor tissues, as well as the high correlation of CD47/CD24 overexpression with poor prognosis, implies huge market potential for CD47/CD24-targeted therapies. Hematologic Malignancies Hematologic malignancies, also known as blood cancers, include NHL, HL, MDS/CMML and AML that stem from the abnormal differentiation of hematopoietic stem cells (HSCs) in the bone marrow. Overview and Classification of Hematologic Malignancies Hematopoietic Stem Cells (HSCs) Reed-Sternberg Cells (Mutated B Cells) Mutated T cells Mutated NK cells Multipotent Progenitors (MPPs) Common Lymphoid Progenitor (CLP) Common Myeloid Progenitor (CMP) Mutated B Cells Travels to Lymph Nodes Hodgkin’s Lymphoma Non-Hodgkin’s Lymphoma Myelodysplastic Syndromes/Chronic Myelomonocytic Leukemia (MDS/CMML) Acute Myeloid Leukemia (AML) Mutated Mutated Mutated Source: Literature Review, Frost & Sullivan analysis INDUSTRY OVERVIEW – 163 – --- page 173 --- Non-Hodgkin Lymphoma NHL, accounting for over 80% of lymphomas, is an umbrella term for a group of independent diseases with diverse heterogeneity developed from the lymphatic system, which can be divided into B-cell NHL and NK-cell/T-cell NHL. B-cell NHL accounts for approximately 85% of NHL cases and includes, among others, DLBCL, mantle cell lymphoma (MCL), follicular lymphoma (FL) and chronic lymphocytic leukemia (CLL). NK-cell/T-cell NHL includes NK/T cell lymphoma (NKTCL) and PTCL. The duration of medical treatment for NHL is relatively long considering its five-year OS rate of roughly 69% to 72%. Approximately 50% of NHL patients will eventually progress to R/R NHL due to drug resistance, leaving few effective treatment options. The chart below shows historical and projected incidences of NHL in China and around the world for the periods indicated: China and Global Incidence of NHL, 2022−2035E 97.6 100.0 102.4 104.9 107.3 109.7 112.2 114.6 117.0 119.3 121.7 123.9 126.1 128.3 471.8 482.8 494.0 505.3 516.9 528.7 540.6 552.7 565.0 577.5 590.1 602.9 615.7 628.5 569.4 582.8 596.4 610.2 624.2 638.4 652.8 667.3 682.0 696.8 711.8 726.8 741.8 756.8 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Period CAGR China RoW Total 2022 -2026E 2.4% 2.3% 2.3% 2026E -2030E 2.2% 2.2% 2.2% 2030E -2035E 1.9% 2.2% 2.1% Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan For B-cell NHL, CD20 antibody (such as rituximab) combined with chemotherapy is the main treatment option covering the first and following lines. This combination is also primarily recommended for treating R/R B-cell NHL but only has limited efficacy. In addition, emerging targeted drugs, such as BTK inhibitors (e.g., IMBRUVICA ® (ibrutinib), BRUKINSA ® (zanubrutinib) and orelabrutinib) are also recommended for certain types of B-cell NHL, including CLL, DLBCL and MCL, although the disease will eventually progress due to drug resistance. Although mosunetuzumab (a novel CD20×CD3 bispecific molecule) has been approved for the treatment of R/R FL in the EU and the U.S., this drug is associated with severe safety concerns, including 44.4% of CRS reported in its clinical trials. The second-line or later-line treatment options for certain R/R lymphoma indications, such as FL, are still limited due to the lack of effective treatment with balanced safety and efficacy. For NK-cell/T-cell NHL, chemotherapy and radiotherapy are primarily recommended. As current treatment options are insufficient, although not officially approved by the FDA or the NMPA, PD-1/PD-L1 inhibitors alone or in combination with histone deacetylase inhibitor (HDACi, such as chidamide) are commonly used for R/R NKTCL due to their efficacy, indicating certain unmet needs in availability. Although HDACi is recommended for treating certain subtypes of R/R PTCL, its median duration of response (DOR) stays relatively low at 9.9 months. Thus far, the practically available treatment options for R/R PTCL remain largely limited to chemotherapy, indicating a substantial unmet medical need. INDUSTRY OVERVIEW – 164 – --- page 174 --- As tumor-infiltrating macrophages constitute the major component for the TME of NHL and high expression of CD47 (often correlated with poor prognosis in multiple NHL subtypes) has been identified on NHL cells, bispecific strategies targeting macrophage checkpoints, such as CD47, in addition to CD20 show immense potential to achieve enhanced tumor killing effects compared to CD20 antibodies as the mainstay treatment of NHL. Classical Hodgkin Lymphoma Classical Hodgkin Lymphoma (cHL) is a malignancy of the immune system, accounting for over 90% of HL. The malignant cHL cells not only limit the presentation of tumor antigens, but also hamper the antitumor immune responses by secreting immune-suppressive cytokines. The chart below shows historical and projected incidences of HL in China and around the world for the periods indicated: China and Global Incidence of HL, 2022−2035E 7.0 7.0 7.1 7.2 7.3 7.3 7.4 7.5 7.5 7.6 7.6 7.7 7.8 7.8 78.3 79.5 80.6 81.8 82.9 84.1 85.3 86.4 87.6 88.8 89.9 91.1 92.2 93.4 85.3 86.5 87.8 89.0 90.2 91.4 92.7 93.9 95.1 96.4 97.6 98.8 100.0 101.2 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan Chemotherapy and radiotherapy are mainly recommended for the first-line treatment of cHL. For R/R cHL, PD-1/PD-L1 inhibitors (e.g., sintilimab, tislelizumab, camrelizumab, nivolumab, and pembrolizumab) alone or in combination with chemotherapy are mainly recommended. Despite the fact that PD-1/PD-L1 inhibitors have shown good efficacy in R/R cHL, as demonstrated by an ORR of 66% achieved by pembrolizumab monotherapy, patients who had relapsed or progressed after PD-1/PD-L1 inhibitors are left with very limited treatment options, presenting unmet medical needs to be addressed. As CD47 is commonly overexpressed in cHL, novel CD47-targeted drugs or its combination with PD-1/PD-L1 inhibitors could offer new prospects for those R/R cHL patients previously treated with PD-1/PD-L1 inhibitors, thus addressing a significant unmet medical need. INDUSTRY OVERVIEW – 165 – --- page 175 --- Myelodysplastic Syndrome/Chronic Myelomonocytic Leukemia MDS is a type of myeloid neoplastic disease with gradual expansion of malignant hematopoietic clones leading to normal hematopoietic failure. CMML is a clinically heterogeneous disorder with poor prognosis, which was once classified as a type of MDS according to the French-American-British classification. The chart below shows historical and projected incidences of MDS/CMML in China and around the world for the periods indicated: China and Global Incidence of MDS/CMML, 2022−2035E 23.4 23.8 24.2 24.7 25.1 25.6 26.0 26.5 27.0 27.4 27.9 28.4 28.9 29.4 274.3 280.2 286.4 292.6 298.9 305.2 311.6 318.0 324.5 331.1 337.7 344.4 351.2 358.0 297.7 304.0 310.6 317.3 324.0 330.7 337.6 344.5 351.5 358.6 365.7 372.8 380.1 387.4 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan Currently, patients with MDS/CMML are treated based on risk assessment on an individual basis. Immunomodulators and hypomethylating agents can be deployed for patients with lower-risk MDS/CMML due to different clinical presentation. In contrast, MDS/CMML patients with relatively higher risk have a poor prognosis and are prone to AML transformation, thus requiring high-intensity treatment, such as hypomethylating agents (e.g., azacitidine and decitabine), chemotherapy and hematopoietic stem cell transplantation (HSCT). However, the clinical application of HSCT in MDS patients is limited due to multiple factors, such as its high relapse rate, difficulty in finding an ideal match, and significant cost. Most patients will relapse and progress to higher-risk (HR) MDS/CMML as the existing medical treatments are not curative. Initial responses of patients with HR MDS/CMML to the standard of care (e.g. hypomethylating agents) in the first-line treatment are limited to 40% to 50% and often short-lived, leaving unmet needs for more effective treatment options in the first-line setting. Since MDS/CMML cells can evade immune attack through the upregulation of inhibitory ligands, such as CD47 which is an important biomarker for poor prognosis, strategies targeting CD47 could offer promising solutions for the treatment of HR MDS/CMML. Gilead’s magrolimab in combination with azacitidine has achieved an ORR of 75% in its U.S. trial for the first-line treatment of MDS with intermediate to very high risk. However, safety issues remain a major concern of CD47 antibodies due to their severe blood toxicity observed in clinical trials. Thus, the combination of CD47-targeted therapies with potent efficacy and balanced safety profile and azacitidine will be a promising therapeutic option in addressing the unmet needs of MDS/CMML patients in China and worldwide. INDUSTRY OVERVIEW – 166 – --- page 176 --- Acute Myeloid Leukemia AML is a disorder characterized by uncontrolled proliferation of undifferentiated myeloid precursor cells, which leads to the accumulation of immature myeloid cells and myeloblasts in the bone marrow and peripheral blood. The chart below shows historical and projected incidences of AML in China and around the world for the periods indicated: China and Global Incidence of AML, 2022−2035E 30.8 31.3 31.8 32.3 32.7 33.2 33.7 34.1 34.6 35.0 35.5 35.9 36.3 36.7 141.5 144.6 147.6 150.7 153.9 157.1 160.4 163.8 167.1 170.6 174.1 177.6 181.2 184.8 172.4 175.9 179.4 183.0 186.7 190.4 194.1 197.9 201.7 205.6 209.5 213.5 217.4 221.4 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E China RoW Thousand Note: RoW refers to all countries and regions in the world except China. Source: NCCR, Frost & Sullivan Treatment outcomes for AML vary across patients in different age groups due to age-related physical conditions. Elderly patients generally experience shorter survival and face higher risk of treatment-related toxicity. Thus, the management of AML is dependent on the tolerability of individual patients for intensive antileukemic therapy. Intensive chemotherapy is commonly recommended for AML patients with good physical conditions. When these AML patients have identifiable biomarkers, such as FLT3 gene mutation and CD33 protein expression, targeted drugs including FLT3 inhibitors (e.g., midostaurin) and CD33 inhibitors, such as MYLOTARG ® (gemtuzumab ozogamicin), can be used to improve the treatment outcome. However, only a certain subgroup of patients can benefit from these targeted drugs. For instance, approximately 30% of AML patients with FLT3 mutation can be treated by FLT3 inhibitor, such as XOSPATA ® (gilteritinib). Thus, solutions with improved efficacy and response rates are urgently needed to fill in the current first-line treatment paradigm for AML patients with good physical conditions. For frail/unfit AML patients with poor physical conditions, low-intensity chemotherapy alone or combined with BCL-2 targeted inhibitor, such as VENCLEXTA ® (venetoclax), is approved for the first-line treatment. However, the mOS of this combination therapy was only 14.7 months. Thus, there are considerable unmet needs for developing more efficacious therapies to treat AML patients. Since CD47 is highly expressed in AML and is a biomarker for poor prognosis, strategies targeting innate immunity has strong potential to fulfill those unmet needs. The synergistic effects of CD47-targeted therapies and azacitidine have been validated in global clinical trials. For instance, Gilead’s magrolimab has achieved great efficacy in the first-line treatment of AML with an ORR of 49% when used in combination with azacitidine. However, CD47 antibodies are generally associated with safety issues, including severe blood toxicity, as exemplified by the partial suspension of certain clinical trials for magrolimab as discussed above. Thus, those CD47-targeted drug candidates with better safety profiles could be an effective therapeutic option for treating AML. INDUSTRY OVERVIEW – 167 – --- page 177 --- OVERVIEWS OF LAWS AND REGULATIONS IN THE PRC The section summarizes the principal PRC laws, rules and regulations that are relevant to our business. Drug Regulatory Regime Primary Regulatory Authorities Drug regulatory regime in China consists of the Standing Committee of the National People’s Congress (ึ ,t h e“ SCNPC ”), the State Council and several ministries and agencies under its authority including, among others, the National Medical Product Administration (္ຖ၍ଣ҅ ,t h e“ NMPA”), the predecessor of which is China Food and Drug Administration (္ຖ၍ଣᐼ҅ ,t h e“ CFDA”), the National Health Commission (ึ ,t h e“ NHC”), the predecessor of which is the National Health and Family Planning Commission of the PRC (ึ ), and the National Healthcare Security Administration (ღ҅ ). The NMPA, which inherits the drug supervision function from its predecessors, the CFDA, is the primary drug regulatory authority. The NMPA is responsible for drug registration and supervision, including non-clinical research, clinical trial, marketing approval, production, circulation, etc. under the supervision of State Administration for Market Regulation (the “SAMR,” the predecessors of which is State Administration of Industry and Commerce, an institution for supervising and administrating the market in China). The NHC is the chief healthcare regulator of the PRC, which is primarily responsible for drafting national healthcare policies and regulating public health, medical services and health contingency system, coordinating the healthcare reform and supervising the operation of medical institutions and practicing of medical personnel. The National Healthcare Security Administration (a new authority established in May, 2018 in accordance with the Institutional Reform Program of the State Council (ࣩ)) is responsible for drafting and implementing policies, plans and standards on medical insurance, maternity insurance and medical assistance; administering healthcare fund; formulating a uniform medical insurance catalogue and payment standards on drugs, medical disposables and healthcare services; formulating and administering the bidding and tendering policies for drugs and medical disposables. Laws and Regulations Relating to Drugs Drug Administration Laws and Regulations The PRC Drug Administration Law (جthe “ Drug Administration Law”) promulgated by the SCNPC on September 20, 1984, and amended on February 28, 2001, December 28, 2013, April 24, 2015 and August 26, 2019, and the Implementing Measures of the PRC Drug Administration Law (ૢԷ ) (the “ Drug Administration Law Implementing Measures ”) issued by the State Council on August 4, 2002, and amended on February 6, 2016 and March 2, 2019 have together laid down the legal framework for the administration of drugs, including the research, development, manufacturing and business operation of new drugs, and administer the pharmaceutical manufacturing enterprises, pharmaceutical trading enterprises, and medicinal preparations of medical institutions, and the development, research, manufacturing, distribution, packaging, pricing and advertisements of drugs. REGULATORY OVERVIEW – 168 – --- page 178 --- Non-Clinical Research and Animal Testing The SAMR requires preclinical data to support registration applications for imported and domestic drugs. According to the Administrative Measures for Drug Registration (ൗ̅၍ଣ፬ جnon-clinical drug safety studies shall comply with the Good Laboratory Practice for Non-clinical Laboratory Studies (Ӻሯඎ၍ଣ஝ᇍ ) (the “ GLP”). The GLP was issued by the CFDA on August 6, 2003 and latest revised on July 27, 2017 to improve the quality of non-clinical research, and has been implemented since September 1, 2017. Pursuant to the Circular on Administrative Measures for Certification of Good Laboratory Practice for Non-clinical Laboratory Studies (ஷ ʮѓ) issued by the NMPA on January 19, 2023 and effective from July 1, 2023, the NMPA is responsible for the administration of GLP certification nationwide, while the local provincial medical products administrative authorities is in charge of the daily supervision of non-clinical research institutions within their respective jurisdictions. The NMPA decides whether an institution is qualified for undertaking non-clinical laboratory studies by evaluating, including without limitation, such institution’s organizational structure and personnel, equipment and facilities, and the operation of non-clinical safety studies projects. A GLP Certificate will be issued by the NMPA if all the relevant requirements are satisfied, which will also be published on the NMPA’s website. Any entity without such certification must engage a qualified third party to conduct such non-clinical activities regulated under relevant laws and regulations. Pursuant to the Administrative Regulations on Experimental Animals (၍ଣૢԷ ) issued by the State Science and Technology Commission on November 14, 1988, and latest amended on March 1, 2017 by the State Council, the Administrative Measures on Good Practice of Experimental Animals (جjointly issued by the State Science and Technology Commission and the State Bureau of Quality and Technical Supervision on December 11, 1997, and the Administrative Measures on the Certificate for Experimental Animals (Trial) (ྼ ج( ༊Б)) issued by the Ministry of Science and Technology and other regulatory authorities on December 5, 2001, using and breeding experimental animals shall be subject to certain rules, and performing experiments on animals requires a Certificate for Use of Experimental Animals. Any entity without such certification must engage a qualified third party to conduct such non-clinical activities regulated under relevant laws and regulations. Approval and Reform for Clinical Trials of New Drugs Pursuant to the Drug Administration Law , the Drug Administration Law Implementing Measures and the Administrative Measures for Drug Registration issued by the SAMR on January 22, 2020 which became effective on July 1, 2020, new drug registration applications are subject to clinical trials. The Center for Drug Evaluation (the “ CDE”), an institution under the NMPA, is responsible for the applications for clinical trials of new drugs. The NMPA has taken certain measures to improve the efficiency for approving clinical trial applications, and enhanced the extent of supervising and implementation of the Good Clinical Practice for Drug Trials (ᑗґ༊᜕ሯඎ၍ଣ஝ᇍ ) (the “ PRC GCP ”), to ensure the completeness of the data. The PRC GCP was issued by the CFDA on August 6, 2003 and was latest revised by the NMPA and the NHC, which took effect from July 1, 2020. The Opinions of the State Council on the Reform of Evaluation and Approval System for Drugs and Medical Devices (จԈ ) issued by the State Council on August 9, 2015, established a reform framework of the evaluation and approval system for drugs and medical devices, and indicated the tasks of enhancing the standards of approval for drug registration, accelerating the evaluation and approval process for innovative drugs, and improving the approval for clinical trials of drugs, etc. REGULATORY OVERVIEW – 169 – --- page 179 --- The Announcement of the CFDA on Several Policies on the Evaluation and Approval of Drug Registration (ʮѓ ) issued by the CFDA on November 11, 2015, further simplified the approval process of drugs that the IND of new drugs are subject to one-off umbrella approval instead of declaration, evaluation and approval by stages. On October 8, 2017, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Deepening the Reform of the Evaluation and Approval System and Encouraging Innovation of Drugs and Medical Devices (จԈ ), aiming to simplify the clinical trial procedures and shorten the time. For new drugs and medical devices urgently needed in clinical practice and drugs and medical devices used for the treatment of rare diseases, the evaluation and approval procedures for marketing shall be accelerated. According to the Announcement of the NMP A on Adjusting the Evaluation and Approval Procedures for Clinical Trials of Drugs (ᑗґ༊᜕ᄲ൙ᄲҭ೻ ʮѓ) issued by the NMPA on July 24, 2018, which took effect therefrom, within 60 days from the acceptance of the IND and relevant fees paid up, if the applicant has not received any negative or questioning opinion from the CDE, the applicant may conduct the clinical trials for drugs pursuant to the protocol submitted. The Priority Evaluation and Approval Procedures for Marketing Approvals of Drugs (Trial) (ɪ̹஢̙Ꮄ΋ᄲ൙ᄲҭʈЪ೻ҏ (༊Б)) issued by the NMPA on July 7, 2020, further indicated that a fast track IND or drug registration pathway will be available to the innovative drugs. International Multi-Center Clinical Trials Pursuant to the International Multi-Center Clinical Trial Guidelines (Trial) (ي یܸ( ༊Б)) issued by the CFDA on January 30, 2015 and effective from March 1, 2015, applicants may simultaneously conduct clinical trials in different centers of multiple regions using the same clinical trial protocol, or conduct regional clinical trials simultaneously in multiple centers in different countries within a certain region using the same protocol. Where the data derived from the international multi-center clinical trials are to be used for application for a drug registration in the PRC, it shall satisfy the requirements for clinical trials set forth in the Administrative Measures for Drug Registration . Where the applicants plan to conduct the international multi-center clinical trials in the PRC, it shall comply with the Drug Administration Law, the Drug Administration Law Implementing Measures and the Administrative Measures for Drug Registration and other relevant laws and regulations, to carry out the PRC GCP with reference to international recognized principles such as the ICH-GCP, and to meet the requirements of the laws and regulations of the relevant countries at the same time. The NMPA issued the Technical Guiding Principles for the Acceptance of Overseas Clinical Trial Data of Drugs (ۆࡡon July 6, 2018, to guide work related to the acceptance of overseas clinical trial data as clinical evaluation reference by the applicants applying for the registration of drugs in the PRC. Clinical Trial Registration of Drugs According to the Administrative Measures for Drug Registration , upon obtaining the approval of IND, the applicant shall, prior to conducting the clinical trials of the drugs, register the information in relation to the clinical trial protocol on the registration and information publication platform for clinical trials of drugs. REGULATORY OVERVIEW – 170 – --- page 180 --- Pursuant to the Announcement on the Drug Clinical Trial Information Platform (ᑗ ʮѓ ) issued by the NMPA on September 6, 2013, for all the clinical trials approved by the NMPA and conducted in the PRC, the applicants shall log in the registration and information publication platform for clinical trials of drugs to register, and publish the information of, the clinical trials. The applicant shall complete the pre-registration of the trials within one month after obtaining the approval for the IND, so as to obtain the unique registration number for the trial, and complete the registration of follow-up information before the enrollment of the first subject. If the applicant fails to complete the first submission and publication within one year after obtaining the approval for the IND, the applicant shall submit an explanation; if the applicant fails to complete the first submission and publication within three year after obtaining the approval for the IND, the approval for the IND will expire automatically. Phases of Clinical Trials and Communication with the CDE According to the Technical Guiding Principles for Clinical Trials of Antineoplastic Drugs (Ҥ ۆࡡissued by the CFDA on May 15, 2012, the clinical study of antineoplastic drugs usually consists of Phases I, II and III clinical trials. The primary objectives of Phase I clinical trials are the preliminary study of drug tolerance and pharmacokinetics, so as to provide data support for the design of dosage regimen in later-stage research. Phase II clinical trials are mainly exploratory studies, such as the exploration of drug administration dose, medication scheme and efficacy on tumors, as well as the observation of safety. Phase III clinical trials are intended to further confirm the clinical benefits for tumor patients on the basis of Phase II study, so as to provide sufficient evidence for obtaining the marketing approval. According to the Administrative Measures for Drug Registration , based on the drug’s characteristics and the purpose of research, clinical trials of drugs consist of Phase I, II, III and IV clinical trials, as well as the bioequivalence trials, which include clinical pharmacological research, exploratory clinical trials, confirmatory clinical trials and post-marketing research. On November 19, 2021, the CDE issued the Clinical V alue-oriented Guiding Principles on the Clinical Study for Antineoplastic Drugs (ۆࡡ,) which offered suggestions on the clinical study of antineoplastic drugs from the perspective of patients’ demands, in order to instruct the applicants to implement the clinical value-oriented and patient-centered study concepts during the clinical study, and provided references for the promotion of the scientific and orderly development of antineoplastic drugs. Clinical Trials shall be conducted in accordance with the provisions of the PRC GCP, including the preparation for clinical trials, clinical trial protocols, responsibilities of sponsors and investigators, and protection of subjects, etc. According to the Circular on Adjusting the Evaluation and Approval Procedures for Clinical Trials of Drugs (ʮѓ ), where the clinical trials of a new drug has been approved, upon the completion of Phase I and II clinical trials and prior to Phase III clinical trials, the applicant shall apply to the CDE for a communication session, to discuss with the CDE the key technical issues including the design of Phase III clinical trials. Pursuant to the Administrative Measures for Communication on Drug Development and Technical Reviews (جissued by the CDE on December 10, 2020 and effective therefrom, during the research and development, and application for registration stages of innovative drugs, the applicants may propose communication sessions with the CDE. The forms of communication can be face-to-face conference, video conference, telephone conference or written reply. The communication sessions are classified into three types. Type I sessions are held to address the key safety issues in the clinical trials of drugs and the key technical issues in the research and development of breakthrough therapeutic drugs. Type II sessions are held during the key research and development stages of drugs, mainly including the sessions held prior to the REGULATORY OVERVIEW – 171 – --- page 181 --- application of IND, the sessions held upon completion of Phase II clinical trials and prior to commencement of Phase III clinical trials of new drugs, the sessions held prior to application for marketing approvals of new drugs, and the risk evaluation and control sessions. Type III sessions are those sessions not falling into the categories of Type I or II sessions. Filings for Gathering and Collecting Human Genetic Resources According to the Service Guidance for the Administrative Licensing Items of Collection, Gathering, Trading, Export or Exit of Human Genetic Resources (ɛᗳ፲ෂ༟๕મණeϗණe൯ር یܸissued by the Ministry of Science and Technology on July 2, 2015 and effective therefrom, and the Notice on Implementing the Administrative Licensing for Collection, Gathering, Trading, Export and Exit of Human Genetic Resources (ɛᗳ፲ ٝissued by the Ministry of Science and Technology on August 24, 2015 and effective therefrom, the collection, gathering or research activities of human genetic resources participated by a foreign-invested sponsor falls within the scope of international cooperation, and the cooperating PRC organization shall apply for the approval of the China Human Genetic Resources Management Office via the online system. On October 26, 2017, the Ministry of Science and Technology issued the Circular on Optimizing the Procedures for the Administrative Examination and Approval of Human Genetic Resources (Ꮄ ٝwhich became effective on December 1, 2017, simplifying the procedures for the examination and approval for collection and gathering of human genetic resources for marketing a drug in the PRC. Pursuant to the Administrative Regulations on Human Genetic Resources of the PRC (ʕശɛ ͏΍ձ਷ɛᗳ፲ෂ༟๕၍ଣૢԷ ) issued by the State Council on May 28, 2019 which became effective on July 1, 2019, in order to obtain marketing approvals for the relevant drugs and medical devices in the PRC, no approval is required in the event international cooperating clinical trials are conducted at clinical institutions using the human genetic resources of the PRC but not involving the exit of human genetic resource materials. However, the cooperating parties shall file with the administrative department of science and technology under the State Council the type, quantity and purpose of the human genetic resources intended to be used prior to conducting clinical trials. On May 26, 2023, the Ministry of Science and Technology issued the Implementing Rules of the Administrative Regulations on Human Genetic Resources (ɛᗳ፲ෂ༟๕၍ଣૢԷྼ ۆeffective from July 1, 2023, which further provided specific provisions on the collection, preservation, utilization and external provision of human genetic resources of the PRC. On October 17, 2020, the SCNPC promulgated the Biosecurity Law of the PRC (ʕശɛ͏΍ جthe “ Biosecurity Law ”) which became effective on April 15, 2021, establishing a comprehensive legislative framework on the current regulations in the areas including epidemic control of human, animal and plant infectious diseases, security of biotechnology research, development and application, biosafety management of pathogenic microbiology laboratories, security management of human genetic resources and biological resources, countermeasures against microbial resistance and prevention of bioterrorism and threat of biological weapons. According to the Biosecurity Law , the high-risk and medium-risk biotechnology research and development activities shall be carried out by legal entities lawfully established in the PRC, and shall be approved or filed; the establishment of a pathogenic microbiology laboratory shall be lawfully approved or filed; (i) collecting human genetic resources of important genetic families or specific areas in the PRC, or collecting human genetic resources of which the types and quantities are subject to provisions of the competent department of science and technology under the State Council, (ii) preserving human genetic resources of the PRC, (iii) using human genetic resources of the PRC to carry out international scientific research cooperation, or (iv) transporting, mailing or exiting human genetic resource materials of the PRC, shall be approved by the competent department of science and technology. REGULATORY OVERVIEW – 172 – --- page 182 --- Regulations relating to New Drug Approval According to the Administrative Measures for Drug Registration , upon completion of pharmacological and toxicological studies, clinical trials and other research supporting the marketing registration of drugs, determination of quality standards, completion of validation of commercial-scale production processes, and preparation for acceptance of verification and inspection for drug registration, the applicant may apply for the New Drug Approval (the “ NDA”). The NMPA shall evaluate the application pursuant to applicable laws and regulations. The applicant must obtain the NDA before the drugs can be manufactured and sold in the PRC. If (i) a drug is used for the treatment of severe life-threatening diseases currently lacking effective treatment and the data of clinical trials of the drug can prove the efficacy and forecast the clinical value of the drug; (ii) a drug which is urgently needed for public health and the data of clinical trials of the drug can show the efficacy and forecast the clinical value of the drug; or (iii) a vaccine which is urgently needed to deal with major public health emergencies or deemed to be urgently needed by the NHC, and by assessment the benefit of the vaccine outweighs the risk, the applicant may apply for the conditional NDA during the clinical trials of the drug or vaccine. According to the Administrative Provisions on Special Examination and Approval of New Drug Registration (֛issued by the CFDA on January 7, 2009 and effective therefrom, the special examination and approval by the CFDA for new drug registration applications applies when (i) the effective constituent extracted from plants, animals or minerals, etc. or the preparations thereof have never been marketed in the PRC, or the medicinal materials are newly discovered or the preparations thereof; (ii) the chemical raw medicines or the preparations thereof, or the biological products have not been approved for marketing either in the PRC or aboard; (iii) the new drugs are for the treatment of such diseases as AIDS, malignant tumors or rare diseases with distinctive clinical treatment advantages; or (iv) the new drugs are for the treatment of the diseases currently lacking effective treatment. Under the circumstances of (i) or (ii), the drug registration applicant (the “ Applicant ”) may apply for the special examination and approval when submitting the application for clinical trials of the new drug; while, under the circumstances of (iii) or (iv), the Applicant may only apply for the special examination and approval when applying for production. The CFDA shall, based on the application of the Applicant, give priority to those registration applications which are determined in compliance with the aforementioned conditions after examination during the registration process, and enhance the communication with the Applicant. On November 11, 2015, the NMPA issued the Circular on Several Policies of the Review and Approval of Drug Registrations (ʮѓ ), which provided fast-track clinical trial approvals and drug registration pathways for the following new drug applications: (i) registration of innovative drugs for the prevention or treatment of HIV , malignant tumors (cancers), severe infectious diseases and rare diseases; (ii) registration of pediatric drugs; (iii) registration of geriatric drugs for the treatment of diseases specially or commonly contracted by the senior population; (iv) registration of drugs listed in national major science and technology projects or national key research and development plan; (v) registration of innovative drugs using advanced technology or innovative treatment methods, or having distinctive clinical benefits; (vi) registration of foreign innovative drugs to be manufactured locally in China; (vii) concurrent applications for the clinical trials of new drugs which have been already approved in the United States or the European Union, or concurrent drug registration applications for drugs which are in the process of applying for marketing approvals and have passed onsite inspections by the competent review and approval authorities of drugs of the United States or the European Union, and are manufactured with the same production line in the PRC; and (viii) clinical trial applications for drugs with urgent clinical need and patent expiry within three years, and applications for manufacturing approvals of drugs with urgent clinical need and patent expiry within one year. REGULATORY OVERVIEW – 173 – --- page 183 --- In addition, on May 17, 2018, the NMPA and the NHC jointly issued the Circular on Issues Concerning Optimizing the Review and Approval of Drug Registrations (ൗ̅ᄲ൙ᄲ ʮѓ ), which further simplified and accelerated the drug review and approval process. On July 7, 2020, the NMPA issued the Working Procedures for Priority Review and Approval of Drug Marketing Approvals (Trial) (ɪ̹஢̙Ꮄ΋ᄲ൙ᄲҭʈЪ೻ҏ (༊Б)), which provided that during the clinical trials of drugs, for innovative drugs or improved new drugs for the prevention or treatment of severe life-threatening or life-quality-affecting diseases currently lacking effective prevention or treatment method or having obvious clinical advantages compared to the existing treatment method shown by sufficient evidence, the applicant may apply for the application of the procedures for breakthrough therapeutics during Phase I or II clinical trials, and usually no later than the Phase III clinical trials. Drug Manufacturing License Pursuant to the Drug Administration Law , a drug manufacturer must obtain a drug manufacturing license from the provincial medical products administration authority before manufacturing drugs. Prior to granting drug manufacturing licenses, the relevant governmental authorities shall inspect the applicant’s production facilities and decide whether the sanitary conditions, quality assurance system, management structure and equipment of such facilities have met the required standards. Each drug manufacturing license will be valid for five years and the manufacturer is required to apply for renewal of the license within six months prior to the expiration date and the authorities shall reassess such application of renewal in accordance with the current legal and regulatory requirements. GMP The World Health Organization encourages the adoption of GMP standards in the drug production, in order to minimize the risks of failure to pass the finished product tests in the drug production. The MOH first issued the Guidelines on Good Manufacturing Practices (͛ପሯඎ၍ଣ ஝ᇍ) on March 17, 1988, which was later revised on December 28, 1992. After its establishment, the NMPA revised the Guidelines on Good Manufacturing Practices on June 18, 1999, which became effective from August 1, 1999. The Guidelines on Good Manufacturing Practices revised by the MOH on October 19, 2010, which took effect on March 1, 2011 provided the basic standards for drug production, including production facilities, qualification of management personnel, production plant and facilities, documentation, material packaging and labeling, testing, production management, sales and return of products, complaints of customers, etc. On August 2, 2011, the CFDA issued the Circular on Printing and Distributing the Administrative Measures for the Certification of Good Manufacturing Practice (͛ପ ٝwhich provided that newly established drug manufacturers, or existing drug manufacturers that wish to expand manufacturing scope or build new workshops shall apply for the GMP certification in accordance with the Drug Administration Law Implementing Measures . Those drug manufacturers that have already obtained the GMP certificates shall re-apply for the GMP certification within six months prior to the expiration date of the GMP certificates. On December 30, 2015, the CFDA issued the Notice on Effectively Implementing the Good Manufacturing Practice (ٝwhich provided that those drug manufacturers that failed to obtain the GMP certificates shall not be granted the drug manufacturing license. REGULATORY OVERVIEW – 174 – --- page 184 --- On November 29, 2019, the NMPA issued the Announcement on Matters relating to the Implementation of the Drug Administration Law of the PRC (ۜ ʮѓ ), which confirmed that the GMP certification would be cancelled from December 1, 2019, and no application for GMP certification would be accepted and no GMP certificate would be granted. However, according to the Drug Administrative Law ,d r u g manufacturers shall still comply with the GMP, establish and improve the GMP system, and ensure the whole drug production process consistently in compliance with statutory requirements. On May 24, 2021, the NMPA issued the Administrative Measures for Drug Inspection (Trial) (ج( ༊Б)) which became effective on the same day, and the Administrative Measures for the Certification of Good Manufacturing Practice was repealed. The Administrative Measures for Drug Inspection (Trial) provided that onsite inspections shall be conducted pursuant to the GMP on a drug manufacturer applying for the drug manufacturing license for the first time, while for the drug manufacturers applying for the renewal of drug manufacturing licenses, the review shall be conducted based on the risk management principles, in combination with the drug manufacturers’ compliance with the laws and regulations of drug administration, and the operation of the GMP and quality management system, and inspections on the drug manufacturers’ conformity to the GMP may be conducted where necessary. Administrative Protection and Monitoring Periods for New Drugs According to the Drug Administration Law Implementing Measures , to protect public health, the NMPA may provide for administrative monitoring periods of up to five years for new drugs approved to be manufactured, to consistently monitor the safety of such new drugs. During the monitoring period of a new drug, the NMPA will not approve any other enterprises’ applications to manufacture or import a similar new drug. Other PRC Regulations relating to the Pharmaceutical Industry Coverage of the National Medical Insurance Program The national medical insurance program was first adopted according to the Decision of the State Council on Establishing the Urban Employees’ Basic Medical Insurance System (׵ ֛issued by the State Council on December 14, 1998, under which all employers and their employees in urban cities are required to enroll in the basic medical insurance program and the insurance premium is jointly contributed by the employers and employees. On July 10, 2007, the State Council issued the Guiding Opinions of the State Council on the Pilot Urban Resident Basic Medical Insurance (ᎈ༊ ኬจԈ ), which further expanded the coverage of the basic medical insurance program, and accordingly the urban non-employed residents of the pilot districts may voluntarily enroll in the Urban Resident Basic Medical Insurance. In addition, on January 3, 2016, the Opinions of the State Council on Integrating the Basic Medical Insurance Systems for Urban and Rural Residents (จԈ ) issued by the State Council required the integration of the urban resident basic medical insurance and the new rural cooperative medical care system and the establishment of a unified basic medical insurance system, which will cover all urban and rural residents other than rural migrant workers and persons in flexible employment arrangements who participate in the basic medical insurance for urban employees. The participants of the medical insurance programs are eligible for full or partial reimbursement of the cost of the medicines included in the national medical insurance catalogue. Pursuant to the Notice of the Tentative Administrative Measures of the Scope of Basic Medical Insurance Coverage for Pharmaceutical Products for Urban Employees (ᕄᔖ ٝjointly issued by the Ministry of Labor and Social Security, the Ministry of Finance and other authorities on May 12, 1999, a pharmaceutical product listed in the medical insurance catalogue must be clinically necessary, safe, effective, reasonably REGULATORY OVERVIEW – 175 – --- page 185 --- priced, easy to use, available in sufficient quantity, and must meet any of the following requirements: (i) being included in the pharmacopoeia of the PRC, (ii) satisfying the standards as set out by the NMPA, or (iii) having been approved by the NMPA for imported. According to the Tentative Administrative Measures of the Scope of Basic Medical Insurance Coverage for Pharmaceutical Products for Urban Employees , the Ministry of Labor and Social Security and other relevant governmental authorities have the power to determine the medicines to be included in the national medical insurance catalogue, which is divided into two parts of Part A and Part B. Provincial governments are required to include all Part A medicines listed in the national medical insurance catalogue in their provincial medical insurance catalogue, but have the discretion to adjust upwards or downwards by no more than 15% from the total number of Part B medicines listed in the national medical insurance catalogue. As a result, the contents of Part B of the provincial medical insurance catalogues may differ from region to region in the PRC. Patients purchasing medicines included in Part A of the medical insurance catalogue are entitled to reimbursement in accordance with the regulations in respect of basic medical insurance. Patients purchasing medicines included in Part B of the medical insurance catalogue are required to pay a certain percentage of the purchase price and the remainder shall be reimbursed in accordance with the regulations in respect of basic medical insurance. The percentage of reimbursement for Part B medicines is decided by local authorities and as a result may differ from region to region. National Essential Drug List According to the Opinions of the General Office of the State Council on Improving the National Essential Drugs System (จԈ ) issued on September 13, 2018 and effective therefrom, the Circular on the Printing and Distribution of the Administrative Measures for the National Essential Drug List (ͦ፽၍ଣ፬ ٝissued on February 13, 2015 and effective therefrom, and the National Essential Drug List (2018 version) (ͦ፽ (2018وthe “ National Essential Drug List ”) issued by the NHC on September 30, 2018 and effective from November 1, 2018, basic healthcare institutions funded by the government, which primarily include county-level hospitals, county-level Chinese medicine hospitals, rural clinics and community clinics, shall store up and use drugs listed in the National Essential Drug List . The drugs listed in the National Essential Drug List shall be purchased by centralized tender process and shall be subject to the price control by the National Development and Reform Commission (the “ NDRC”). Remedial drugs listed in the National Essential Drug List are all listed in the medical insurance catalogue and the entire amount of the purchase price of such drugs is entitled to reimbursement. Medical Insurance Reimbursement Standards According to the Decision of the State Council on Establishing the Urban Employees’ Basic Medical Insurance System , the Opinions on the Establishment of the New Rural Cooperative Medical System (ٝissued by the General Office of the State Council on January 16, 2003, the Guiding Opinions of the State Council on the Pilot Urban Resident Basic Medical Insurance and the Opinions of the State Council on Integrating the Basic Medical Insurance Systems for Urban and Rural Residents , medical insurance shall be available to all employees and residents in both rural and urban areas. According to the Notice on Printing and Distribution of the Opinion on the Management of Diagnosis and Treatment Items, Scope and Payment Standards of Medical Service Facilities Covered by the Urban Employees Basic Medical Insurance Program (ᕄᔖʈਿ͉ᔼ ٝissued on June 30, 1999, the basic medical insurance program may cover a portion of the costs of diagnostic and treatment devices and diagnostic testing. The scope and rate of reimbursement shall be decided by provincial policies. REGULATORY OVERVIEW – 176 – --- page 186 --- On June 20, 2017, the General Office of the State Council issued the Guidance on Further Deepening the Reform of the Payment Method of Basic Medical Insurance (ආɓӉଉʷਿ͉ ኬจԈ ), which aimed to implement a diverse medical insurance payment mechanism that includes diagnosis-related groups, per-capita caps, and per-bed-day caps. By 2020, such new reimbursement mechanism will be implemented across the country, replacing the current reimbursement method based on service category and product price. Local medical insurance authorities shall implement the total budget control for their respective administrative regions and determine the amount of reimbursement to public hospitals based on their performance and the expenditure targets of the individual basic medical insurance funds. Other Significant PRC Regulations Affecting Our Business in the PRC Regulations relating to the Company Law and Foreign Investment The establishment, operation and management of corporate entities in the PRC are governed by the Company Law of the PRC (جthe “ Company Law ”), which was promulgated by the SCNPC on December 29, 1993 and became effective on July 1, 1994, and was amended on December 25, 1999, August 28, 2004, October 27, 2005, December 28, 2013 and October 26, 2018 respectively. Pursuant to the Company Law , companies are classified into 2 categories, namely limited liability companies and limited companies by shares. The Company Law also applies to foreign-invested limited liability companies and companies limited by shares. According to the Company Law , the provisions otherwise prescribed by the laws on foreign investment shall prevail. According to the Company Law , companies shall contribute 10% of the profits into their statutory capital reserve upon distribution of their post-tax profits of the current year. A company may discontinue the contribution when the aggregate sum of the statutory capital reserve is more than 50% of its registered capital. Where the balance of the statutory capital reserve of a company is insufficient to make up its losses in the previous year, the company shall make up such losses using its profits of the current year before making contribution to the statutory capital reserve. Upon contribution to the statutory capital reserve with its post-tax profits, a company may make further contribution to the capital reserve with its post-tax profits. After making up its losses and accrued reserves, a company may distribute post-tax profits to its shareholders. Furthermore, the Company Law of the PRC (Revised Draft) (ج( ণ ࣩand the Company Law of the PRC (Revised Draft for Second Review) (ʕശɛ͏΍ձ਷ʮ̡ ج(ɚϣᄲᙄᇃ )) (together, the “ Draft Company Law ”) were released for public comments on December 24, 2021 and December 30, 2022, respectively. The major revisions made by the Draft Company Law included improvement of the system for the establishment and exit of companies, optimization of organizational structures of companies, improvement of capital system of companies, strengthening the responsibilities of the controlling shareholder and management staff, enhancing the social responsibilities of companies, etc. As of the Latest Practicable Date, the Draft Company Law has not been formally adopted. On March 15, 2019, the National People’s Congress (the “ NPC”) promulgated the Foreign Investment Law of the PRC (جthe “ Foreign Investment Law ”), which took effect on January 1, 2020 and repealed the Sino-foreign Equity Joint V entures Law of the PRC (ج,) the Wholly Foreign-owned Enterprise Law of the PRC (ʕ جand the Sino-foreign Cooperative Joint V entures Law of the PRC (ʕശ جSince then, the Foreign Investment Law has become the fundamental law regulating foreign-invested enterprises wholly or partially invested by foreign investors. According to the Foreign Investment Law and the Implementation Regulations for the Foreign Investment Law of the PRC issued by the State Council on December 26, 2019 and effective from January 1, 2020, foreign investment refers to any investment activity directly or indirectly carried out by foreign natural persons, enterprises or other organizations (the “ foreign REGULATORY OVERVIEW – 177 – --- page 187 --- investors ”) within the territory of the PRC, including the following circumstances: (i) a foreign investor establishes a foreign-funded enterprise within the territory of the PRC, either alone or together with any other investor; (ii) a foreign investor acquires shares, equities, property shares or any other similar rights and interests of a PRC enterprise; (iii) a foreign investor invests in any new project within the territory of the PRC, either alone or together with any other investor; or (iv) a foreign investor invests in any other way as stipulated under the laws or administrative regulations or provided by the State Council. The organization form and structure, and the operating rules of foreign-funded enterprises are subject to the provisions of the Company Law , the Partnership Enterprise Law of the PRC and other applicable laws. The administrative system for foreign investment is pre-entry national treatment and negative list in the PRC. Pre-entry national treatment refers to the treatment accorded to foreign investors and their investments at the stage of the entry of investments which shall be no less favorable than that accorded to domestic investors and their investments. Negative list refers to the special administrative measures taken for the entry of foreign investment in the specific sectors stipulated by the PRC government. National treatment will be accorded by the PRC government to the foreign investments not included in the negative list. The NDRC and the Ministry of Commerce (the “ MOFCOM ”) jointly issued the Catalogue of Encouraged Industries for Foreign Investment (2022 version) (ོᎸ̮ਠҳ༟ପุͦ፽ (2022و)) on October 26, 2022, which became effective from January 1, 2023 and the Special Administrative Measures (Negative List) for the Entry of Foreign Investment (2021 version) (ɝतй၍ ݄(૶ఊ) (2021وthe “ Negative List ”) on December 27, 2021, which became effective on January 1, 2022, which together constitute the catalogue of encouraged industries for foreign investment and the special administrative measures for the entry of foreign investment in the restricted or prohibited industries for foreign investment. The Negative List provided the special administrative measures for the entry of foreign investment, such as the requirements on equity and senior management personnel. Any industry not included in the Negative List shall be administered under the principle of equal treatment to domestic and foreign investment. Domestic enterprises engaged in businesses in the prohibited industries for foreign investment as listed in the Negative List shall be subject to the review and approval by the relevant competent authorities for the issuance of shares and listing on the foreign stock markets. Foreign investors shall not participate in the operation and management of the enterprises, and their equity ratio shall be governed with reference to the relevant regulations on the management of overseas investors investing in domestic securities. The Measures on Reporting of Foreign Investment Information (جw a s jointly issued by the MOFCOM and the SAMR on December 30, 2019, which became effective on January 1, 2020. According to the Measures on Reporting of Foreign Investment Information ,i fa foreign investor carries out investment activities directly or indirectly within the territory of the PRC, the foreign investors or the foreign-invested enterprise shall report to the competent authorities of commerce the investment information pursuant to such measures. When a foreign-invested enterprise submits the annual report, it shall report the basic information of the enterprise, information of investors and the actual controller, and operation, assets and liabilities information of the enterprise, and where the special administrative measures for the entry of foreign investment are involved, it shall as well report the information of the relevant industry approvals obtained. Regulations Relating to Intellectual Property Rights Patents Pursuant to the Patent Law of the PRC (جpromulgated by the SCNPC on March 12, 1984 and amended on September 4, 1992, August 25, 2000, December 27, 2008 and October 17, 2020 respectively and effective from June 1, 2021, and the Implementation Rules of REGULATORY OVERVIEW – 178 – --- page 188 --- the Patent Law of the PRC (ۆissued by the State Council on June 15, 2001 and last amended on January 9, 2010 and effective from February 1, 2010, an invention-creation shall refer to an invention, utility model or design. Inventions and utility models for which patent rights are granted shall possess novelty, creativity and practicality. The Patent Office under the State Intellectual Property Office is responsible for the acceptance, examination and approval of patent applications. The protection period is 20 years for an invention patent, 10 years for a utility model patent and 15 years for a design patent, commencing from their respective application dates. The Patent Law of the PRC, for the first time, introduced the patent term compensation and patent linkage system. Pursuant to the Patent Law of the PRC , for the purpose of compensating for the time taken to examine and approve a new drug to be marketed, the patent administrative department under the State Council shall grant compensation to the validity period of patent rights for the invention patents of new drugs approved to be marketed in the PRC upon request of the patentee. The compensation period shall not exceed five years, and the total validity period of patent rights after a new drug is approved to be marketed shall not exceed 14 years. The Patent Law of the PRC also introduced a system for the early resolution of patent disputes concerning generic drug applications. Trademarks Pursuant to the Trademark Law of the PRC (جpromulgated by the SCNPC on August 23, 1982 and amended on February 22, 1993, October 27, 2001 and August 30, 2013, and last amended on April 23, 2019 and effective from November 1, 2019 and the Implementation Regulations of the Trademark Law of the PRC (ૢԷ ) issued by the State Council on August 3, 2002 which became effective on September 15, 2002, and revised on April 29, 2014 which became effective on May 1, 2014, the validity period of registered trademarks is 10 years, commencing from the date of approval of registration. A trademark registrant intending to continue to use the registered trademark upon expiry of its validity period shall go through the formalities of renewal within 12 months before the expiry according to the relevant provisions. If failing to do so, the trademark registrant may be granted a six-month grace period. The validity period of each renewal is 10 years, commencing from the day after the expiry date of the last validity period of the registered trademark. If the formalities of renewal are not undergone within the grace period, the registration of the trademark will be cancelled. Copyright Copyright is protected by the Copyright Law of the PRC (ج) promulgated by the SCNPC on September 7, 1990 and last amended on November 11, 2020 and effective from June 1, 2021 and the Implementation Regulations of the Copyright Law of PRC (ʕ ૢԷ ) issued by the State Council on August 2, 2002 and last amended on January 30, 2013, which provided provisions on the classification of works and the obtaining and protection of copyright and the related rights. Domain Names Domain names are protected by the Administrative Measures of Internet Domain Names (ʝᑌ جissued by the Ministry of Industry and Information Technology (the “ MIIT”) on August 24, 2017 and effective from November 1, 2017 and the Implementing Rules on Registration of China Country Code Top-level Domain Names (ۆissued by China Internet Network Information Center on June 18, 2019 and effective therefrom. The MIIT is the regulatory body responsible for the administration of PRC internet domain names. The China Internet Network Information Center is responsible for the administration of registration of China REGULATORY OVERVIEW – 179 – --- page 189 --- country code top-level domain names. Domain name registrations are processed by the domain name registration service agencies established pursuant to the relevant provisions. The applicants become domain name holders upon successful registration. Trade Secrets According to the Anti-Unfair Competition Law of the PRC (جن) promulgated by the SCNPC on September 2, 1993 and amended on November 4, 2017 and April 23, 2019 respectively and the Provisions of the Supreme People’ s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Trade Secret Infringement (֛issued by the Supreme People’s Court on September 10, 2020 and effective from September 12, 2020, the term “trade secrets” refers to technical, operational and other business information that is unknown to the public, has business value, may create business interests or profits for its legal owners or holders, and is maintained as a secret with relevant security measures taken by its right holders. According to the Anti-Unfair Competition Law of the PRC , business operators are prohibited from infringing others’ trade secrets by (i) acquiring a trade secret from the right holder by theft, bribery, fraud, coercion, electronic intrusion or any other illicit means; (ii) disclosing, using or allowing other person to use a trade secret acquired from the right holder by any means as specified in the preceding subparagraph; (iii) disclosing, using or allowing other person to use a trade secret in its possession in violation of its confidentiality obligation or the requirements of the right holder for keeping the trade secret confidential; (iv) abetting, tempting or aiding a person into or in acquiring, disclosing, using or allowing other person to use the trade secret of the right holder in violation of its confidentiality obligation or the requirements of the right holder for keeping the trade secret confidential. If a third party knows or should have known the abovementioned illegal conducts but nevertheless acquires, uses or allows other persons to use such trade secrets, the third party shall be deemed to have infringed others’ trade secrets. The right holders whose trade secrets are infringed may apply for administrative corrections, and the regulatory authorities shall order to stop any illegal activities and impose fine penalties on the infringers. Regulations relating to Foreign Exchange The principal law governing the foreign currency exchange in the PRC is the Foreign Exchange Administration Regulations of the PRC (ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ ) (the “ Foreign Exchange Administration Regulations ”), which was issued by the State Council on January 29, 1996 and became effective on April 1, 1996, and amended on January 14, 1997 and August 5, 2008 respectively. Pursuant to the Foreign Exchange Administration Regulations , international payments in foreign currencies and transfer of foreign currencies under the current account are not restricted by the government. However, foreign currency transactions under the capital account are still subject to limitations and require approvals from, or registration with, the State Administration of Foreign Exchange of the PRC ( ʕശɛ͏΍ձ਷̮ි၍ଣᐼ҅ ) (the “ SAFE”) or its local counterparts and other relevant PRC governmental authorities. Pursuant to the Regulation of Settlement, Sale and Payment of Foreign Exchange (ഐිeਯ ֛issued by the People’s Bank of China on June 20, 1996 which became effective on July 1, 1996, foreign-invested enterprises may only buy, sell or remit foreign currencies at banks authorized to conduct foreign exchange business after providing valid commercial supporting documents and, in the case of transactions under the capital account, obtaining approvals from the SAFE or its local counterpart. On March 30, 2015, the SAFE issued the Circular on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises (̮ි ٝthe “ SAFE Circular 19 ”), which became effective on June 1, 2015. Pursuant to the SAFE Circular 19 , the foreign exchange capital, for which the monetary contribution has been confirmed by the foreign exchange authorities (or REGULATORY OVERVIEW – 180 – --- page 190 --- for which the monetary contribution has been credited into account by banks) in the capital account of a foreign-invested enterprise may be settled at banks under the actual operation needs of enterprise. Meanwhile, the use of such Renminbi shall be subject to the restrictions as set out in the SAFE Circular 19 , such that it cannot be directly or indirectly used for payment beyond the business scope of the enterprises or as prohibited by the laws and regulations, for securities investments unless otherwise provided by the laws and regulations, for offering Renminbi entrusted loans (unless permitted by the business scope), repaying inter-enterprise borrowings (including advances by a third party) or repaying the Renminbi bank loans that have been sub-lent to a third party, or paying the expenses related to the purchase of real estate not for self-use, except for the foreign-invested real estate enterprises. On June 9, 2016, the SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (ձ஝ᇍ ٝthe “ SAFE Circular 16 ”) which became effective therefrom. Where the previous provisions, such as the SAFE Circular 19 , are not consistent with the SAFE Circular 16 , the SAFE Circular 16 shall prevail. The SAFE Circular 16 unified the discretional foreign exchange settlement for all the domestic institutions. Furthermore, the foreign exchange proceeds under the capital account of a domestic institution shall be used within the business scope of the domestic institution and under the principles of authenticity and self-use. The SAFE Circular 16 reaffirmed that the foreign exchange proceeds under the capital account of and the Renminbi funds obtained from foreign exchange settlement by a domestic institution may be used for expenditures under the current account within its business scope or the expenditures under the capital account permitted by the laws and regulations. The foreign exchange proceeds under the capital account of and the Renminbi funds obtained from foreign exchange settlement by a domestic institution (i) shall not be used directly or indirectly for expenditures beyond the business scope of the domestic institution or as prohibited by the laws and regulations, (ii) unless otherwise provided, shall not be used directly or indirectly for securities investments or other investments than principal-secured products of banks, (iii) shall not be used for offering loans to non-affiliated enterprises, unless expressly permitted by the business scope or (iv) shall not be used for the construction or purchase of real estate not for self-use (except for real estate enterprises). According to the Circular on Optimizing Foreign Exchange Administration to Support the Development of Foreign-related Business (࢝ ٝissued by the SAFE on April 10, 2020 which took effect therefrom, the reform to facilitate the payments of proceeds under the capital accounts shall be promoted nationwide by the SAFE. Provided that the use of funds is true and compliant, and in compliance with the current administrative provisions on the use of the proceeds under the capital accounts, enterprises satisfying the requirements are not required to provide the banks with supporting documents to prove authenticity for each transaction beforehand when making domestic payments with the proceeds under the capital accounts, such as the capital funds and the proceeds of foreign debt or overseas listing. Distribution of Dividends On January 18, 2017, the SAFE issued the Notice on Promoting the Reform of Foreign Exchange Administration and Improving the Review of Authenticity and Compliance (ආɓӉ ٝwhich provided that when processing the outward remittance of profits of a domestic institution equivalent to more than 50,000 US dollars, the bank shall, in light of the principle of genuine transaction, review the profit distribution resolution made by the board of directors (or by the partners), original tax filing form and audited financial statements relating to the outward remittance of profits, and chop on the original tax filing form to endorse the amount and date of the outward remittance. The domestic institution shall make up for its losses in the previous years according to the laws before remitting the profits. REGULATORY OVERVIEW – 181 – --- page 191 --- Regulations relating to Outbound Investment Pursuant to the Administrative Measures on Outbound Investments (ج) issued by the MOFCOM on March 16, 2009 and amended on September 6, 2014, the MOFCOM and the provincial competent departments of commerce shall subject the outbound investments of enterprises to filing or approval, depending on the actual circumstances of such investments. Outbound investments of enterprises involving sensitive country or region, or sensitive industry shall be subject to approval. Other outbound investments of enterprises shall be subject to filing. Pursuant to the Administrative Measures for the Outbound Investments of Enterprises (Άุྤ جissued by the NDRC on December 26, 2017 and effective from March 1, 2018, if an enterprise in the territory of the PRC (the “ Investor ”) intends to make outbound investments, it shall go through the formalities, such as approval or filing, for the outbound investment project (the “ Project ”), report relevant information and cooperate in the supervisory inspections. The sensitive Projects invested directly by the Investor or through the foreign enterprises controlled by the Investor shall be subject to approval. The non-sensitive Projects invested directly by the Investor, which involve the direct contribution of assets, rights and interests, or provision of financing or guarantee by the Investor, shall be subject to filing. The aforementioned sensitive Projects include the Projects involving sensitive country of region, or sensitive industry. The Catalogue of Sensitive Sectors for Outbound Investment (2018 Edition) (ྤ̮ҳ༟ઽชБุͦ ፽(2018وissued by the NDRC on January 31, 2018 and effective from March 1, 2018 listed in detail the sensitive sectors. Regulations relating to Enterprise Income Tax Pursuant to the Enterprise Income Tax Law of the PRC (جthe “EIT Law ”) promulgated by the SCNPC on March, 16 2007, which became effective from January 1, 2008, and last amended on December 29, 2018, enterprises shall be classified into resident enterprises and non-resident enterprises. The income tax rate of resident enterprises is 25%, while the income tax rate of non-resident enterprises is 20%. According to the EIT Law and the Implementation Regulations for the Enterprise Income Tax Law of the PRC (ʕശɛ͏΍ձ਷Άุ ૢԷ ) (the “ Implementation Regulations for EIT Law ”) issued by the State Council on December 6, 2007, which became effective from January 1, 2008, and last amended on April 23, 2019, enterprise income tax shall be payable by a resident enterprise for the income derived from or accruing in or outside the PRC. Enterprise income tax shall be payable by a non-resident enterprise with office or premises within the territory of the PRC for the income derived from or accruing in the PRC by its office or premises, and the income derived from or accruing outside the PRC for which its office or premises has a de facto relationship. Where the non-resident enterprise has no office or premises within the territory of the PRC or the income derived or accrued has no de facto relationship with its office or premises, enterprise income tax shall be payable by the non-resident enterprise for the income derived from or accruing in the PRC at a reduced rate of 10%. According to the EIT Law and the Implementation Regulations for EIT Law , dividends, premium and other gains from equity investments between the qualified resident enterprises shall be tax-exempted. Taxation Relating to Dividends Individual Investors Pursuant to the Individual Income Tax Law of the PRC (جthe “IIT Law ”) promulgated by the SCNPC on September 10, 1980, last amended on August 31, 2018 and effective on January 1, 2019, and the Implementation Regulations for the Individual Income Tax Law of the PRC (ૢԷ ) (the “ Implementation Regulations REGULATORY OVERVIEW – 182 – --- page 192 --- for the IIT Law ”) last amended by the State Council on December 18, 2018 and implemented on January 1, 2019, dividend income derived by individual investors from PRC domestic enterprises (no matter the place of payment is in the PRC or not) shall be subject to individual income tax at a tax rate of 20% and shall be withheld by the PRC domestic enterprises, except for tax-exempt income stipulated in international conventions and agreements to which the PRC Government is a party, as well as other tax-exempt income and tax reduction circumstances stipulated by the State Council. Pursuant to the Arrangement between the Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (ᅄ೼ձԣ˟ਊဍ೼ τર) (the “ Arrangement ”) executed on August 21, 2006, the PRC Government may levy taxes on the dividends paid by PRC companies to Hong Kong residents in accordance with the PRC laws, but the levied tax (in the case the beneficial owner of the dividends are not companies directly holding at least 25% of the equity interest in the company paying the dividends) shall not exceed 10% of the total dividends. However, pursuant to the Fifth Protocol of the Arrangement between the Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (ʫήձ ࣣ֛the “ Fifth Protocol of the Arrangement ”), which came into effect on December 6, 2019, although there are other provisions under the Arrangement , if, after taking into account all relevant facts and conditions, one of the primary purposes for the arrangement or transaction which will bring any direct or indirect benefits under this Arrangement is reasonably deemed to obtaining such benefit, then such benefits shall not be granted with respect to the relevant income, unless it can be confirmed that the grant of benefits under such circumstance is consistent with the purpose and goal of the relevant provisions of this Arrangement . Additionally, pursuant to the Notice on Issues Relating to the Implementation of the Dividend Clauses in the Tax Treaties (ٝissued by the SAT on February 20, 2009 and effective therefrom, where a PRC resident company pays dividends to a Hong Kong resident and the Hong Kong resident (or person collecting the dividends) is the beneficial owner of the dividends, the dividends obtained by the Hong Kong resident is entitled to the treatment of the tax treaties, namely that the income tax payable in the PRC by the Hong Kong resident shall be calculated at the tax rate prescribed in the treaties. If the tax rate prescribed in the treaties is higher than that provided in the tax laws of the PRC, the taxpayer may pay taxes in accordance with the tax laws of the PRC. A taxpayer who intends to enjoy the treatment of the treaties prescribed in the preceding paragraph shall satisfy all the following conditions: (i) a taxpayer eligible for the treatment of the treaties shall be a Hong Kong resident, (ii) a taxpayer eligible for the treatment of the treaties shall be the beneficial owner of the relevant dividends, (iii) dividends eligible for the treatment of the treaties shall be equity investment gains such as dividends and bonuses which are recognized in accordance with the tax laws of the PRC, and (iv) other conditions as prescribed by the SAT. A transaction or arrangement for which the primary purpose is to obtain a preferential tax position shall not constitute the reason for the application of treatment of the treaties; where a taxpayer enjoys unjustifiably the treatment of the tax treaties due to such transaction or arrangement, the competent tax authorities may make adjustments thereto. Enterprise Investors Pursuant to the EIT Law and the Implementation Regulations for the EIT Law , a non-resident enterprise is subject to enterprise income tax for its PRC-sourced income (including equity investment gains such as dividends and bonuses paid by PRC enterprises), but shall be at a reduced tax rate of 10%, if such non-resident enterprise does not have an establishment or premises in the PRC or has an establishment or premises in the PRC but the PRC-sourced income is not connected with such establishment or premises in the PRC. The aforementioned income tax which shall be paid by non-resident enterprises shall be withheld at source, with the payer of the REGULATORY OVERVIEW – 183 – --- page 193 --- income being the withholding agent. Such withholding tax shall be withheld by the withholding agent from the amount paid or amount due and payable upon each payment or payment due and payable. The Circular on Issues Relating to the Withholding and Remittance of Enterprise Income Tax by PRC Resident Enterprises on Dividends Distributed to Overseas Non-Resident Enterprise Shareholders of H Shares (͏ΆุΣྤ̮ H˾ϔ˾ᖮΆุ ٝissued by the SAT on November 6, 2008 and implemented therefrom, further clarified that a PRC resident enterprise shall withhold enterprise income tax at a rate of 10% on the dividends of the year 2008 and onwards distributed to overseas non-resident enterprise shareholders of H Shares. Pursuant to the Arrangement , the PRC Government may levy taxes on the dividends paid by PRC companies to Hong Kong residents in accordance with the PRC law. However, if the beneficial owner of the dividends is a Hong Kong resident, then the levied taxes shall not exceed: (i) 5% of the total dividends if the beneficial owner is a company owns directly at least 25% of the equity interest in the company paying the dividends, or (ii) 10% of the total dividends under the other circumstances. Pursuant to the Fifth Protocol of the Arrangement , although there are other provisions under the Arrangement , if, after taking into account all relevant facts and conditions, one of the primary purposes for the arrangement or transaction which will bring any direct or indirect benefits under this Arrangement is reasonably deemed to obtaining such benefit, then such benefits shall not be granted with respect to the relevant income, unless it can be confirmed that the grant of benefits under such circumstance is consistent with the purpose and goal of the relevant provisions of this Arrangement . Additionally, pursuant to the Notice on Issues Relating to the Implementation of the Dividend Clauses in the Tax Treaties , where a PRC resident company pays dividends to a Hong Kong resident and the Hong Kong resident (or person collecting the dividends) is the beneficial owner of the dividends, the dividends obtained by the Hong Kong resident is entitled to the treatment of the treaties, namely that the income tax payable in the PRC by the Hong Kong resident shall be calculated at the tax rate prescribed in the treaties. If the tax rate prescribed in the treaties is higher than that provided in the tax laws of the PRC, the taxpayer may pay taxes in accordance with the tax laws of the PRC. A taxpayer who intends to enjoy the treatment of the treaties prescribed in the preceding paragraph shall satisfy all the following conditions: (i) a taxpayer eligible for the treatment of the treaties shall be a Hong Kong resident, (ii) a taxpayer eligible for the treatment of the treaties shall be the beneficial owner of the relevant dividends, (iii) dividends eligible for the treatment of the treaties shall be equity investment gains such as dividends and bonuses which are recognized in accordance with the tax laws of the PRC, and (iv) other conditions as prescribed by the SAT. Pursuant to the provisions of relevant dividend clauses in the tax treaties, where a Hong Kong resident directly owns over a certain proportion of equity interest in the PRC resident company paying the dividends, the tax of the dividends obtained by the Hong Kong resident may be levied at the rate prescribed in the tax treaties. A Hong Kong resident who intends to enjoy such treatment of the tax treaties shall satisfy all the following conditions: (i) the Hong Kong resident obtaining the dividends shall be a company according to the provisions of tax treaties, (ii) the proportion directly owned by the Hong Kong resident in the total proprietary interest and voting shares of the PRC resident company shall comply with the prescribed proportion, (iii) the proportion directly owned by the Hong Kong resident in the equity interest of the PRC resident company shall comply with the proportion prescribed in the tax treaties at any time within 12 consecutive months prior to the obtaining of dividends. A transaction or arrangement for which the primary purpose is to obtain a preferential tax position shall not constitute the reason for the application of treatment of the treaties; where a taxpayer enjoys unjustifiably the treatment of the tax treaties due to such transaction or arrangement, the competent tax authorities shall have the rights to make adjustments thereto. REGULATORY OVERVIEW – 184 – --- page 194 --- Tax Treaties Non-PRC resident investors residing in countries which have entered into treaties for the avoidance of double taxation with the PRC or residing in Hong Kong or Macau Special Administrative Region shall be granted to preferential tax rates on dividends from PRC companies. The PRC has entered into arrangements for the avoidance of double taxation with Hong Kong and Macau Special Administrative Region respectively and has entered into treaties for the avoidance of double taxation with certain other countries, including but not limited to Australia, Canada, France, Germany, Japan, Malaysia, Netherlands, Singapore, the United Kingdom and the United States. A non-PRC resident enterprise which is granted to a preferential tax rate under a relevant tax treaty or arrangement may apply to the PRC tax authorities for a refund of the difference between the amount of tax withheld and tax calculated according to the preferential tax rate stipulated by the relevant treaties or arrangements, and such application shall be subject to the approval by the PRC tax authorities. Taxation relating to Share Transfer Individual Investors Pursuant to the IIT Law and the Implementation Regulations for the IIT Law , gains on transfer of properties (including gains derived by individuals from the transfer of priced securities, equity, shares of property in a partnership enterprise) in subject to individual income tax at the rate of 20%. Pursuant to the Circular on Declaring that Individual Income Tax Continues to Be Exempted over Individual Gains from Transfer of Shares (Cai Shui Zi [1998] No. 61) (ɛᔷ ٝ( ৌ೼ο[1998]61 ໮)) issued jointly by the Ministry of Finance and the SAT on March 30, 1998 and implemented therefrom, from January 1, 1997, gains of individuals from the transfer of shares of listed companies continue to be exempted from individual income tax. Enterprise Investors Pursuant to the EIT Law and the Implementation Regulations for the EIT Law , a non-resident enterprise is subject to enterprise income tax for its PRC-sourced income (including gains from transfers of equity investments in PRC enterprises), but shall be at a reduced tax rate of 10%, if such non-resident enterprise does not have an establishment or premises in the PRC or has an establishment or premises in the PRC but the PRC-sourced income is not connected with such establishment or premises in the PRC. The aforementioned income tax which shall be paid by non-resident enterprises shall be withheld at source, with the payer of the income being the withholding agent. Such withholding tax shall be withheld by the withholding agent from the amount paid or amount due and payable upon each payment or payment due and payable. Product Liability Pursuant to the Product Quality Law of the PRC (جpromulgated by the SCNPC on February 22, 1993 and last amended on December 29, 2018 and effective therefrom, manufacturers shall be liable for the quality of products produced by them and guarantee that the product quality satisfies the requirements stipulated by laws, and shall not mix impurities or imitations into products, or to pass fake goods off as genuine ones, or shoddy products off as good ones or sub-standard products off as standard ones. Sellers shall take measures to ensure the quality of the products sold by them. A manufacturer shall be liable to compensate for any bodily injuries or damage to property other than the defective product itself resulting from the defects in the product, unless the manufacturer is able to prove that (i) the product has never been circulated; (ii) the defects causing injuries or damage did not exist at the time when the product was circulated; or (iii) the science and technology at the time when the product was circulated were at a level incapable of detecting the defects. A seller shall be liable to REGULATORY OVERVIEW – 185 – --- page 195 --- compensate for any bodily injuries or damage to property of others caused by the defects in the product if such defects are attributable to the seller. And a seller shall pay compensation if it fails to indicate neither the manufacturer nor the supplier of the defective product. A person who is injured or whose property is damaged caused by the defects in the product may claim for compensation from the manufacturer or the seller of the product. Where the compensation is made by the manufacturer or seller of the product, the manufacturer or seller of the product shall have the right of recovery against the liable party of the product. According to the Civil Code of the PRC (Պ ) promulgated by the NPC on May 28, 2020 and effective from January 1, 2021, where a patient suffers damage due to defects in a drug, the patient may claim for compensation from the holder of the marketing approval for the drug, manufacturer or the medical institution. Where the patient claims for compensation from the medical institution, the medical institution, after making compensation, shall have the right of recovery against the liable holder of the marketing approval for the drug or manufacturer. Equity Incentive Plans On February 15, 2012, the SAFE issued the Circular on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Equity Incentive Plans of Overseas Listed Companies (ٙ ٝthe “ Equity Incentive Rules ”). Pursuant to the Equity Incentive Rules , all individuals (including PRC citizens and the foreigners who have continuously resided within the territory of the PRC for one year, except the foreign diplomatic personnel and representatives of international organizations stationed in the PRC) participating in the same equity incentive plan of an overseas listed company shall collectively entrust a domestic agency (the “ Domestic Agency ”) to deal with the relevant matters, such as foreign exchange registration, account opening, and transfer, remittance and exchange of funds, through their domestic company. The Domestic Agency shall open a special domestic account for foreign exchange at a bank with the foreign exchange registration certificate for the equity incentive plan. The incomes of the account include the foreign exchange funds transferred from individual’s foreign exchange deposit accounts, the foreign exchange funds obtained from the purchase of foreign exchange by the Domestic Agency for the individuals, principals and proceeds repatriated after the sale of the shares or equities under the equity incentive plan by the individuals, the dividend funds repatriated, and other incomes approved by the local branch of the SAFE. The payments of the account include the outbound payments of the funds required for the participation in the equity incentive plan, foreign exchange settlement of the funds repatriated, the funds transferred into the individual’s foreign exchange deposit accounts, and other payments approved by the local branch of the SAFE. The Domestic Agency shall, upon the significant changes or the termination of the equity incentive plan of the overseas listed company, carry out the registration of change of deregistration with the local branch of the SAFE. Labor and Social Insurance The Labor Law of the PRC (جpromulgated on July 5, 1994 and last amended on December 29, 2018 and the Labor Contract Law of the PRC (ʕശɛ͏΍ձ਷௶ਗΥ جpromulgated on June 29, 2007, effective from January 1, 2008, and amended on December 28, 2012 and effective from July 1, 2013, by the SCNPC, together provided the relationship between the employers and the employees as well as specific provisions on the terms and conditions of the labor contracts. Pursuant to the Social Insurance Law of the PRC (جpromulgated by the SCNPC on October 28, 2010, effective from July 1, 2011, and amended on December 29, 2018 and effective therefrom, the Provisional Regulations for the Collection and Payment of Social Insurance Premiums (ᎈ൬ᅄᖮᅲБૢԷ ) issued by the State Council on January 22, REGULATORY OVERVIEW – 186 – --- page 196 --- 1999 and last amended on March 24, 2019, and the Regulations on the Administration of Housing Accumulation Fund (၍ଣૢԷ ) issued by the State Council on April 3, 1994, and amended on March 24, 2002 and March 24, 2019, respectively, employers and/or employees are required to contribute to social insurance premiums, including basic endowment insurance, unemployment insurance, basic medical insurance, employment injury insurance and maternity insurance, and to housing accumulation funds. Regulations relating to Environmental Impact Assessment of Construction Projects According to the Environmental Protection Law of the PRC (ج) promulgated by the SCNPC on December 26, 1989 and amended on April 24, 2014 and effective from January 1, 2015, the Administrative Regulations on the Environmental Protection of Construction Projects (ᚐ၍ଣૢԷ ) issued by the State Council on November 29, 1998, and amended on July 16, 2017 and effective from October 1, 2017, the Environmental Impact Assessment Law of the PRC (جpromulgated by the SCNPC on October 28, 2002 and amended on July 2, 2016 and December 29, 2018 respectively, and the Interim Measures on the Inspection and Acceptance of Environmental Protection of Completed Construction Projects (جissued by the Ministry of Environmental Protection. on November 20, 2017 and effective therefrom, where the completion of a construction project may have impact on the environment, the construction enterprise shall submit a report (form) of environmental impact or a registration form of environmental impact to the relevant authorities of environmental protection. The environmental impact assessment documents of construction projects required by the relevant laws to prepare reports (forms) of environmental impact shall be approved by the authorities of environmental protection before the commencement of construction. Upon completion of construction projects, the construction enterprises shall conduct the inspection and acceptance of environmental protection and prepare the reports of inspection and acceptance pursuant to the standards and procedures as stipulated by the competent authorities of environmental protection. Precursor Chemicals According to the Administrative Regulations on Precursor Chemicals (၍ଣૢ Է) issued by the State Council on August 26, 2005 and effective from November 1, 2005, and amended on July 29, 2014, February 6, 2016 and September 18, 2018 respectively, the production, distribution, purchase, transportation, import and export of precursor chemicals are governed by the government. If an entity intends to purchase Class II or Class III precursor chemicals, it shall file with the public security authorities of the local people’s government at the county level the type and quantity of precursor chemicals in demand prior to the purchase. Fire Control Pursuant to the Fire Protection Law of the PRC (جpromulgated by the SCNPC on April 29, 1998, and last amended on April 29, 2021 and effective therefrom, the Department of Emergency Management under the State Council and the local people’s governments at or above county level shall supervise and administer the matters of fire protection, while the fire control and rescue institutions of such people’s governments shall be responsible for implementation. The design of fire control of the construction projects must comply with the national technical standards of fire control. If the design of fire control of a construction project has not been examined pursuant to the relevant laws or failed to pass the examination, the construction of such project is not allowed. If a completed construction project has not gone through the fire safety inspection or failed to satisfy the requirements of fire safety upon inspection, such project is not allowed to be put to use or business. REGULATORY OVERVIEW – 187 – --- page 197 --- Regulations relating to Information Security and Data Privacy On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC (ʕശɛ͏΍ձ جthe “ Data Security Law ”), which became effective from September 1, 2021. According to the Data Security Law , a data classification protection system shall be established to protect data by classification. Entities engaged in data processing activities shall, in accordance with the laws and regulations, establish a sound whole-process data security management system, organize data security education and training, and take corresponding technical measures and other necessary measures to ensure data security. According to the Civil Code , personal information of natural persons is protected by law. Any organization or individual that needs to obtain personal information of others shall obtain legally and ensure the information security, and shall not illegally collect, use, process, transmit, trade, provide or disclose personal information of others. The Personal Information Protection Law of the PRC (جpromulgated by the SCNPC on August 20, 2021 and effective from November 1, 2021 further emphasized the duties and responsibilities of the processing personnel for the protection of personal information, and provided stricter protection measures for processing sensitive personal information. On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC (ʕശɛ͏ جthe “ Cybersecurity Law ”), which became effective from June 1, 2017. According to the Cybersecurity Law , network operators shall abide by the principles of legality, legitimacy and necessity when collecting and using personal information. Network operators shall disclose the rules for collection and use, specify the purpose, methods and scope of collection and use of information, and obtain consent from the persons whose personal information is collected, when collecting and using personal information. Network operators shall not collect the personal information irrelevant to the services they provide, nor disclose, tamper with or damage the personal information they collect, and shall not provide relevant personal information to others without the prior consent of the persons whose personal information is collected, except for the personal information that cannot be identified and restored after processing. On July 7, 2022, the CAC issued the Measures on Security Assessment of Cross-border Data Transfer (جthe “ Cross-border Data Transfer Measures ”) which became effective on September 1, 2022. Pursuant to the Cross-border Data Transfer Measures , the security assessment of outbound data transfer shall adhere to the integration of prior assessment and continuous supervision and the integration of risk self-assessment and security assessment, so as to prevent security risks arising from outbound data transfer and ensure the orderly and free flow of data in accordance with the law. A data processor shall expressly agree on the data security protection responsibilities and obligations in the legal documents concluded with the overseas recipient. On July 12, 2018, the NHC issued the Administrative Measures on National Health and Medical Care Big Data Standards, Security and Services (Trial) (਄ੰᔼᐕɽᅰኽᅺ๟eτΌ ج( ༊Б)) (the “ Measures on Health and Medical Care Big Data ”), which became effective on the same day. The Measures on Health and Medical Care Big Data provided the guidelines and principles of health and medical big data standard management, security management and service management. According to the Measures on Health and Medical Care Big Data, the NHC, together with other relevant departments, is responsible for the management of national health and medical care big data, while the authorities of health above the county level, together with other relevant departments, are responsible for the management of health and medical care big data within their respective administrative regions. Medical institutions and relevant enterprises, including those engaged by medical institutions to store or operate health and medical care big data, shall take measures, such as data classification, important data backup and encryption, to ensure the security of health and medical care big data, and provide secured channels for the query and replication of information. The responsible parties shall, pursuant to the REGULATORY OVERVIEW – 188 – --- page 198 --- Cybersecurity Law , strictly control the authorization to users at different levels to access and use data, and ensure the use of data within the scope of authorization. Without authorization, no unit or individual shall use or disseminate any health and medical care big data or data beyond the scope of authorization, nor obtain any data in illegal ways. The responsible parties shall abide by the relevant regulations when disclosing health and medical care big data, shall not divulge state secrets, trade secrets or personal privacy, shall not infringe upon the interests of the state or the public, and shall not infringe upon the legitimate rights and interests of citizens, enterprise entities or other organizations. Regulations relating to Overseas Listing On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (ྤʫΆุྤ̮೯БᗇՎձɪ̹ جthe “ Trial Measures ”) and relevant five guidelines. The Trial Measures will comprehensively improve and reform the existing regulatory regime for overseas offering and listing of PRC domestic companies’ securities and will regulate both direct and indirect overseas offering and listing of PRC domestic companies’ securities by adopting a filing-based regulatory regime. According to the Trial Measures , a domestic company seeking direct overseas offering and listing shall file with the CSRC, submit the filing report, legal opinions and other relevant materials as required under the Trial Measures , and state the shareholders’ information and other matters in a truthful, accurate and complete manner. Where a domestic company submits an application for initial public offering to the competent overseas regulators, such domestic company shall file with the CSRC within three business days after such application is submitted. The Trial Measures also require subsequent reports to be filed with the CSRC on material events, such as a change-of-control event, or voluntary or forced delisting of the issuer who has completed the overseas offering and listing. If the issuer fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, it may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies (ٝwhich, among others, clarified that, a domestic company that has already obtained the approval document from the CSRC for overseas public offering and listing may proceed with the overseas listing within the validity period of the approval document. Where the overseas listing has not been completed upon the expiration of the approval document, filing procedures specified in the Trial Measures shall be made as required. Regulations relating to H Share Full Circulation “Full circulation” refers to the listing and circulation of the domestic unlisted shares of an H-share listed company on the Stock Exchange of Hong Kong Limited, including unlisted domestic shares held by domestic shareholders prior to overseas listing, unlisted domestic shares additionally issued after overseas listing, and unlisted shares held by foreign shareholders. On November 14, 2019, the China Securities Regulatory Commission issued the Guidelines on the Application of “Full Circulation” of Domestic Unlisted Shares by H-share Companies (Announcement of the CSRC [2019] No. 22) (H΅͡ሗ “ஷ”ˏ) (the “ Guidelines on ‘Full Circulation’ ”). According to the Guidelines on “Full Circulation,” provided that the requirements set out in the relevant laws and regulations and in the policies for state-owned assets management, foreign investments and industry regulation are satisfied, the shareholders of domestic unlisted shares may decide at their own discretion through negotiation REGULATORY OVERVIEW – 189 – --- page 199 --- the amount and proportion of shares applying for circulation, and entrust the H-share Listed Company to submit the application for “full circulation.” The H-share Listed Company shall apply to the CSRC for “full circulation” in accordance with the administrative licensing procedures required for the “examination and approval of overseas public offering and listing of shares (including additional issuance) by joint stock companies.” Upon approval of the application for “full circulation” by the CSRC, the H-share Listed Company shall submit a report to the CSRC within 15 days after completion of the registration of shares involved in the application with the China Securities Depository and Clearing Co., Ltd. (the “ CSDC”). Pursuant to the Trial Measures , for a domestic company seeking direct overseas listing, the shareholders holding the domestic unlisted shares of such domestic company who apply for the conversion of the domestic unlisted shares into overseas listed shares shall comply with the relevant provisions of the CSRC and entrust such domestic company to file with the CSRC. On December 31, 2019, the CSDC and Shenzhen Stock Exchange jointly issued the Implementation Measures for H-share “Full Circulation” Business (Hٰ“ஷ”ۆ,) which applied to the cross-border transfer registration, maintenance of deposit and holding details, transaction entrustment and instruction transmission, settlement, management of settlement participants, services of nominee holders and other businesses in relation to H-share “full circulation” business. In order to fully promote the reform of H-share “full circulation” and specify the business arrangements and procedures for registration, custody, settlement and delivery of relevant shares, the CSDC issued the Circular on Issuing the Guidance for H-share “Full Circulation” (೯ ̺Hٰ“ஷ”ٝon February 7, 2020, which specified the business preparation, account arrangements, cross-border share transfer registration and overseas centralized custody, etc. In February 2020, the China Securities Depository and Clearing (Hong Kong) Co., Ltd. (the “ CSDC (Hong Kong) ”) issued the Guidance of the China Securities Depository and Clearing (Hong Kong) Co., Ltd. For H-share “Full Circulation” (ʕ਷ᗇՎ೮াഐၑ (ಥ)ʮ ̡Hٰ“ஷ”یܸwhich specified the custody, deposit, agent services, settlement and delivery arrangements by the CSDC (Hong Kong) and other relevant matters. LAWS AND REGULATIONS IN THE UNITED STATES This section summarizes the principal laws and regulations in the United States that are relevant to our business. U.S. Government Regulation of Drug and Biological Products In the United States, the FDA regulates drugs under the Federal Food Drug and Cosmetic Act (the “ FDCA”), its implementing regulations, and biologics implemented under the FDCA and the Public Health Service Act (the “ PHSA”) and their implementing regulations. Both drugs and biologics also are subject to other federal, state and local statutes and regulations, such as those related to competition. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, and local statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or following approval may subject an applicant to administrative actions or judicial sanctions. These actions and sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal of an approval, license revocation, a clinical hold, untitled or warning letters, voluntary or mandatory product recalls or market withdrawals, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement and civil or criminal fines or penalties. REGULATORY OVERVIEW – 190 – --- page 200 --- Once a product candidate is identified for development, it enters preclinical testing, which includes laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies. Preclinical testing is conducted in accordance with FDA’s Good Laboratory Practice regulations. A sponsor of an IND must submit the results of the preclinical tests, manufacturing information, analytical data, the clinical trial protocol, and any available clinical data or literature to the FDA. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions and places the trial on a clinical hold within that 30-day period. FDA may also impose clinical holds or partial clinical holds at any time during clinical trials due to safety concerns or non-compliance. All clinical trials, which involve the administration of the investigational product to humans, must be conducted under the supervision of one or more qualified investigators in accordance with Good Clinical Practice regulations, including the requirement that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an Institutional Review Board (the “ IRB”), must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and re-approve the study at least annually. Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. An IRB can suspend or terminate approval of a clinical trial at its institution if the trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious harm to subjects. Clinical trials generally are conducted in three sequential phases, known as Phase I, Phase II and Phase III, and may overlap.  Phase I clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate. The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side effect tolerability and safety of the product candidate.  Phase II clinical trials involve studies in disease-affected patients to evaluate proof of concept and/or determine the dose required to produce the desired benefits. At the same time, safety and further PK and PD information is collected, possible adverse effects and safety risks are identified, and a preliminary evaluation of efficacy is conducted.  Phase III clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product labeling. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA. Safety reports must be submitted to the FDA and the investigators 15 calendar days after the trial sponsor determines that the information qualifies for reporting. The sponsor also must notify FDA of any unexpected fatal or life-threatening suspected adverse reaction as soon as possible but in no case later than 7 calendar days after the sponsor’s initial receipt of the information. Sponsors of clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information, which is publicly available at www.clinicaltrials.gov. REGULATORY OVERVIEW – 191 – --- page 201 --- Concurrent with clinical trials, companies usually complete additional animal studies and must also finalize a process for manufacturing the product in commercial quantities in accordance with current Good Manufacturing Practice (“ cGMP”) requirements. The process of obtaining regulatory approvals and compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements may subject an applicant to administrative or judicial sanctions. U.S. Review and Approval Processes The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the product, proposed labeling and other relevant information, are submitted to the FDA as part of a BLA. Unless deferred or waived, BLAs, or supplements must contain data adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The submission of a BLA is subject to the payment of a substantial user fee and an annual prescription drug product program fee. Within 60 days of its receipt, the FDA reviews the BLA to ensure that it is sufficiently complete for substantive review before it accepts the BLA for filing. After accepting the BLA filing, the FDA begins an in-depth substantive review to determine, among other things, whether a product is safe and effective for its intended use. The FDA also evaluates whether the product’s manufacturing is cGMP-compliant to assure the product’s identity, strength, quality and purity. Before approving the BLA, the FDA typically will inspect whether the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. The FDA may refer the BLA to an advisory committee, a panel of experts, for review whether the application should be approved and under what conditions and considers such recommendations when making decisions. The FDA may refuse to approve the BLA if the applicable regulatory criteria are not satisfied or may require additional clinical data or other data and information. The FDA will issue a complete response letter describing all of the specific deficiencies that the FDA identified in the BLA that must be satisfactorily addressed before it can be approved. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. The applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application or request an opportunity for a hearing. The regulatory approval may be limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require post-approval studies, including phase IV clinical trials, to further assess a product’s safety and effectiveness after BLA approval and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. REGULATORY OVERVIEW – 192 – --- page 202 --- Expedited Development and Review Programs The FDA has various programs that are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs. The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures. Fast Track Designation To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a drug is intended to treat a serious or life-threatening disease or condition for which there is no effective treatment and demonstrates the potential to address an unmet medical need for the disease or condition. Under the fast track program, the sponsor of a drug candidate may request FDA to designate the product for a specific indication as a fast track product concurrent with or after the filing of the IND for the drug candidate. The FDA must make a fast track designation determination within 60 days after receipt of the sponsor’s request. In addition to other benefits, such as the ability to use surrogate endpoints and have greater interactions with FDA, FDA may initiate review of sections of a fast track product’s NDA before the application is complete. This rolling review is available if the applicant provides, and FDA approves, a schedule for the submission of the remaining information and the applicant pays applicable user fees. However, FDA’s time period goal for reviewing a fast track application does not begin until the last section of the NDA is submitted. In addition, the fast track designation may be withdrawn by FDA if FDA believes that the designation is no longer supported by data emerging in the clinical trial process. Priority Review The FDA may give a priority review designation to drugs that offer major advances in treatment, or provide a treatment where no adequate therapy exists. A priority review means that the goal for the FDA to review an application is six months, rather than the standard review of ten months under the Prescription Drug User Fee Act (the “ PDUFA”) guidelines. These six and ten month review periods are measured from the “filing” date rather than the receipt date for NDAs for new molecular entities, which typically adds approximately two months to the timeline for review and decision from the date of submission. Most products that are eligible for fast track designation are also likely to be considered appropriate to receive a priority review. Accelerated Approval Under FDA’s accelerated approval regulations, the FDA may approve a drug or biologic candidate for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments and demonstrates an effect on either a surrogate endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (“ IMM”), that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the disease or condition and the availability or lack of alternative treatments. A product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of post-approval clinical trial to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or to confirm a clinical benefit during post-marketing studies, will allow the FDA to withdraw the product from the market on an expedited basis. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA. REGULATORY OVERVIEW – 193 – --- page 203 --- Breakthrough Designation Another program available for sponsors is the breakthrough therapy designation. A drug or biologic may be eligible for designation as a breakthrough therapy if the product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. A sponsor may request that a product be designated as a breakthrough therapy concurrently with, or at any time after, the submission of an IND, and the FDA must determine if the candidate qualifies for such designation within 60 days of receipt of the request. If so designated, the FDA shall act to expedite the development and review of the product’s marketing application, including by meeting with the sponsor throughout the product’s development, providing timely advice to the sponsor to ensure that the development program to gather preclinical and clinical data is as efficient as practicable. Orphan Drugs Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs or biologic candidates intended to treat a rare disease or condition generally affecting fewer than 200,000 individuals in the U.S. The first applicant to receive FDA approval for the disease or indication for which it has orphan drug designation is entitled to a seven-year exclusive marketing period. During the exclusivity period, the FDA may not approve any other applications to market the same product for the same disease or condition except in limited circumstance. Post-Marketing Requirements Following approval of a new product, the manufacturer and the approved product are subject to continuing regulation by the FDA, including, among other things, monitoring and record-keeping activities, reporting of adverse experiences, complying with promotion and advertising requirements, which include restrictions on promoting products for unapproved uses or patient populations, known as “off-label use,” and limitations on industry-sponsored scientific and educational activities. Although physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including investigation by federal and state authorities. Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use or first publication. Further, if there are any modifications to the drug or biologic, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or BLA supplement, which may require the development of additional data or preclinical studies and clinical trials. The FDA may also place other conditions on approvals including the requirement for a risk evaluation and mitigation strategy (the “ REMS”), to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS. The FDA will not approve the BLA without an approved REMS, if required. A REMS could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals may be withdrawn for noncompliance with regulatory standards or if problems occur following initial marketing. REGULATORY OVERVIEW – 194 – --- page 204 --- FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMP regulations. These manufacturers must comply with cGMP regulations that require, among other things, quality control and quality assurance, the maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP. Manufacturers and other entities involved in the manufacture and distribution of approved drugs or biologics are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP requirements and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance. The discovery of violative conditions, including failure to conform to cGMP regulations, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions on a product, manufacturer or holder of an approved BLA, including recall. Once an approval is granted, the FDA may issue enforcement letters or withdraw the approval of the product if compliance with regulatory requirements and standards is not maintained or if problems occur after the drug or biologic reaches the market. Corrective action could delay drug or biologic distribution and require significant time and financial expenditures. Later discovery of previously unknown problems with a drug or biologic, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:  restrictions on the marketing or manufacturing of the drug or biologic, suspension of the approval, complete withdrawal of the drug from the market or product recalls;  fines, warning letters or holds on post-approval clinical trials;  refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of drug or biologic approvals; drug or biologic seizure or detention, or refusal to permit the import or export of drugs; or  injunctions or the imposition of civil or criminal penalties. Patient Protection and Affordable Health Care Act The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “ ACA”), became law in the United States in March 2010, and have driven healthcare reform in the United States by extending health insurance coverage and substantially changing the way healthcare financed by both governmental and private insurers in the United States. With regard to pharmaceutical products specifically, the ACA expanded and increased industry rebates for drugs covered under Medicaid programs and made changes to the coverage requirements under the Medicare prescription drug benefit. Among other things, the ACA contains provisions that may reduce the profitability of drug products through increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, and mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. REGULATORY OVERVIEW – 195 – --- page 205 --- Since its enactment, there have been judicial and congressional challenges to certain aspects of the ACA, and there may be additional challenges and amendments to the ACA in the future. Since January 2017, former President Trump has signed Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the ACA have passed, for example, the Tax Act enacted by the Congress in 2017 which eliminated the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” In addition, the 2020 federal spending package permanently eliminates, effective January 1, 2020, the ACA mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax. There may be other efforts to challenge, repeal or replace the ACA. Patent Term Restoration and Marketing Exclusivity After approval, owners of relevant drug or biological product patents may apply for up to a five-year patent extension to restore a portion of patent term lost during product development and FDA review of a BLA if approval of the application is the first permitted commercial marketing or use of a biologic containing the active ingredient under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act. The allowable patent term extension is calculated as one-half of the product’s testing phase, which is the time between IND and BLA submission, and all of the review phase, which is the time between BLA submission and approval, up to a maximum of five years. The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence. The total patent term after the extension may not exceed more than 14 years from the date of FDA approval of the product. Only one patent claiming each approved product is eligible for restoration, only those claims covering the approved product, a method for using it, or a method for manufacturing it may be extended, and the patent holder must apply for restoration within 60 days of approval. The United States Patent and Trademark Office (the “ USPTO ”), in consultation with the FDA, reviews and approves the application for patent term restoration. For patents that might expire during the application phase, the patent owner may request an interim patent extension. An interim patent extension increases the patent term by one year and may be renewed up to four times. For each interim patent extension granted, the post-approval patent extension is reduced by one year. The director of the USPTO must determine that approval of the drug candidate covered by the patent for which a patent extension is being sought is likely. Interim patent extensions are not available for a drug candidate for which a BLA has not been submitted. REGULATORY OVERVIEW – 196 – --- page 206 --- OVERVIEW We are a science-driven biotechnology company dedicated to the development of immuno-oncology therapies. We are one of the few biotechnology companies globally adopting a systematic approach to harness both the innate and adaptive immune systems. Currently approved immunotherapies primarily focus on the adaptive immune system and are often confronted with limited clinical benefits due to low response rates and inevitable drug resistance and/or relapse in many cancer indications. Harnessing both the innate and adaptive immune systems allows us to overcome the limitations of current T-cell-based immunotherapies and address substantial unmet medical needs of cancer patients. Our Company was established in the PRC on June 18, 2015 by Dr. Tian, our founder of the Group, chairman of our Board, chief executive officer, chief scientific officer and executive Director, with his personal funds. Dr. Tian has been leading the research and development activities, overall development strategy, business operations and management of our Group since he founded our Company. For more details of the experience and qualifications of Dr. Tian, see “Directors, Supervisors and Senior Management.” MILESTONES The following is a summary of our key business development milestones since our inception: Month Milestone Jun 2015 Our Company was incorporated in the PRC with limited liability Feb 2017 We completed our Series Pre-A Financing and raised RMB30 million Apr 2018 We completed our Series A Financing and raised RMB90 million May 2019 Our Company received the IND approval for IMM01 from the NMPA Sep 2019 The first patient of the Phase I clinical trial for IMM01 was enrolled Nov 2019 Our Company received the IND approval for IMM0306 from the NMPA Jan 2020 We completed our Series Pre-B Financing and raised RMB40 million Jun 2020 Our Company established our pilot production line with 200L GE single-use mammalian cell bioreactors Nov 2020 We completed our Series B Financing and raised RMB240 million Dec 2020 Our Company received the IND approval for IMM2510 from the NMPA Jan 2021 Our Company received the IND approval for IMM0306 from the FDA Apr 2021 We completed our Series B+ Financing and raised approximately US$65 million Jun 2021 Our Company received the IND approval for IMM2902 from the NMPA Aug 2021 Our Company received the IND approval for IMM2902 from the FDA, and the IND approval for the Phase Ib/II clinical trial of IMM01’s combination with each of azacitidine and CIPTERBIN ® (inetetamab, a HER2 mAb) from the NMPA Oct 2021 We commenced the Phase II clinical trial for IMM01 and dosed its first patient Nov 2021 Our Company received the IND approval for IMM27M from the NMPA Jan 2022 We completed our Series C Financing and raised approximately US$87.5 million HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 197 – --- page 207 --- Month Milestone We commenced the Phase Ib/II clinical trial for IMM01’s combination with azacitidine and dosed its first patient Feb 2022 Our Company received the IND approval for the combination of IMM01 and tislelizumab from the NMPA The Phase I trial for IMM2902 dosed its first patient in China May 2022 We commenced the Phase Ib/II trial in China for IMM01’s combination with tislelizumab for the treatment of various advanced solid tumors and dosed its first patient Jun 2022 The Phase I clinical trial for IMM27M dosed its first patient in China The Phase I clinical trial for IMM2902 dosed its first patient in US We obtained the consent from NMPA for adding R/R cHL as an additional expansion cohort into the combination trial of IMM01 and tislelizumab We commenced the Phase II clinical trial for IMM01’s combination with azacitidine and dosed its first patient Aug 2022 Our Company received the IND approvals for IMM40H from the NMPA and the FDA respectively Nov 2022 Our Company received the IND approval for IMM2520 from the NMPA Dec 2022 Our Company received the IND approval for IMM2520 from the FDA We commenced the Phase II trial in China for IMM01’s combination with tislelizumab Jan 2023 Our IND application for the combination of IMM0306 and lenalidomide targeting front-line B-NHL was approved by the NMPA Mar 2023 We received an IND approval from the NMPA for a Phase Ib/II study to evaluate the combination of IMM27M and a PD-1 antibody We commenced the Phase IIa trial for IMM0306 monotherapy for the third- or later-line treatment of FL in China We dosed the first patient for the Phase I clinical trial for IMM2520 in China Jun 2023 We commenced the Phase Ib/IIa clinical trial for IMM0306’s combination with lenalidomide and dosed its first patient OUR SUBSIDIARIES As of the Latest Practicable Date, we had four wholly-owned subsidiaries and their details are set forth below: ImmuneOnco Shanghai ImmuneOnco Shanghai was established in the PRC on September 28, 2021 with a registered capital of RMB10,000,000 and was established for the purpose of drug manufacturing activities. As of the Latest Practicable Date, ImmuneOnco Shanghai had not commenced any business operations and had been wholly owned by our Company since its establishment. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 198 – --- page 208 --- ImmuneTANK ImmuneTANK was established in the PRC on February 5, 2018 with a registered capital of RMB2,000,000 and was established for the purpose of research and development of exploratory stage immunotherapies. As of the Latest Practicable Date, ImmuneTANK had not commenced any business operations and had been wholly owned by our Company since its establishment. Macroimmune Macroimmune was established under the laws of Delaware on January 6, 2014 with an authorized share capital of 1,500 shares having a par value of US$0.01 per share. On June 2, 2016, our Company entered into a share purchase agreement with Dr. Yumei Ding, Dr. Tian’s spouse and currently a director of Macroimmune, pursuant to which Dr. Ding transferred the 100% equity interests she held in Macroimmune to the Company at a consideration of US$20,000, which was determined with reference to the then estimated value of the assets held by Macroimmune, being certain intellectual property right, and after considering the benefit of having a U.S. subsidiary to deal with administrative matters for our Group’s operations in the United States. Upon the completion of the acquisition on June 13, 2016, Macroimmune became a wholly-owned subsidiary of our Company. As of the Latest Practicable Date, Macroimmune was primarily engaged in administrative matters for our Group’s business operations in the United States. ImmuneOnco Hong Kong ImmuneOnco Hong Kong was established in Hong Kong on September 15, 2021 with a share capital of HK$1 and was established for the purpose of the Group’s financing activities, investor and regulatory communications and global business development. It has been wholly owned by our Company since its establishment. There has been no alteration in the share capital of our subsidiaries within two years immediately preceding the date of this prospectus. ESTABLISHMENT AND MAJOR SHAREHOLDING CHANGES OF OUR COMPANY (1) Establishment of our Company in 2015 Our Company was established as a limited liability company in the PRC on June 18, 2015 with an initial registered capital of RMB2,000,000. At the time of the establishment, our Company was known as ImmuneOnco Biopharmaceuticals (Shanghai) Co. Ltd (ᔼᖹҦஔ (ɪ ऎ)ʮ̡) and wholly owned by Dr. Tian. Since its establishment, our Company has undertaken a series of capital increases to raise funds for the development of our business and to bring in new Shareholders. The major shareholding changes of our Company are set out below. (2) Series Pre-A Financing On December 11, 2015, pursuant to a capital increase subscription agreement entered into among our Company, Dr. Tian and Shanghai Zhangjiang Leading Initiating Venture Capital (Limited Partnership) (ჯʏʺω௴ุҳ༟ʕː (Υྫ)) (“ ZJ Leading Initiating VC”), ZJ Leading Initiating VC acquired the newly issued registered capital of RMB1,206,897 at a consideration of RMB25,000,000. The aforementioned capital increase was completed on January 9, 2017. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 199 – --- page 209 --- On March 1, 2016, pursuant to a capital increase subscription agreement entered into among our Company, Dr. Tian, ZJ Leading Initiating VC and Zhangjiang Sci & Tech, Zhangjiang Sci & Tech acquired the newly issued registered capital of RMB241,379 at a consideration of RMB5,000,000. The aforementioned capital increase was completed on February 23, 2017. Upon completion of the Series Pre-A Financing, the shareholding structure of our Company was as follows: Shareholder Registered capital Equity interest (RMB) (%) Dr. Tian .......................................... 2,000,000 58.00 ZJ Leading Initiating VC ............................. 1,206,897 35.00 Zhangjiang Sci & Tech .............................. 241,379 7.00 Total ............................................ 3,448,276 100.00 For details of the Series Pre-A Financing and backgrounds of ZJ Leading Initiating VC and Zhangjiang Sci & Tech, see “— Pre-IPO Investments” below. (3) Equity Transfer to Jiaxing Changxian On April 29, 2016, Jiaxing Changxian, one of our Onshore Employee Shareholding Platforms, was established under the laws of PRC. On August 3, 2016, pursuant to an equity transfer agreement entered into between Dr. Tian and Jiaxing Changxian, for the purpose of providing share incentive to the key employees and management of the Company, Dr. Tian agreed to transfer to Jiaxing Changxian RMB344,828 registered capital of our Company at a consideration of RMB992,100, which was determined with reference to the proportionate net asset value of our Company at that time. Upon completion of the aforementioned equity transfer on August 22, 2016, the shareholding structure of our Company was as follows: Shareholder Registered capital Equity interest (RMB) (%) Dr. Tian .......................................... 1,655,172 48.00 ZJ Leading Initiating VC ............................. 1,206,897 35.00 Jiaxing Changxian .................................. 344,828 10.00 Zhangjiang Sci & Tech .............................. 241,379 7.00 Total ............................................ 3,448,276 100.00 For details of Jiaxing Changxian, see “— Employee Shareholding Platforms” below. (4) Equity Transfer and Series A Financing On November 25, 2017, pursuant to a capital increase subscription agreement entered into among our Company, Dr. Tian, Shihezi Yaluo Equity Investment Partnership (Limited Partnership) (ΥྫΆุ )( “ Yaluo Investment ”), Jiaxing Changxian, ZJ Leading Initiating VC and Zhangjiang Sci & Tech, Yaluo Investment acquired the newly issued registered capital of RMB173,863 at a consideration of RMB15,000,000. The aforementioned capital increase was completed on January 23, 2018. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 200 – --- page 210 --- On March 29, 2018, pursuant to an equity transfer and capital increase agreement entered into among our Company, Beijing Lapam Healthcare Investment Centre (Limited Partnership) ( ̏ ԯᎲᇂ਄ੰᔼᐕҳ༟ʕː (Υྫ)) (“ Lapam Capital ”), Beijing Chongde Yingsheng Venture Capital Co., Ltd (ʮ̡ )( “ Chongde VC ”), Beijing Yuanchuangke Equity Investment Fund Management Centre (Limited Partnership) (၍ଣ ʕː(Υྫ)) (“ Yuanchuangke Investment ”), Ningbo Langsheng Qianhui Investment Partnership (Limited Partnership) (ସɷිҳ༟ΥྫΆุ (Υྫ)) (“ Langsheng Investment ”), Beijing Zhonghai Jiasu Equity Investment Partnership (Limited Partnership) ( ̏ԯ ᛆҳ༟ΥྫΆุ (Υྫ)) (“ Zhonghai Jiasu ”), Shanghai Licheng Yijing Equity Investment Management Centre (Limited Partnership) (ᛆҳ༟၍ଣʕː (Υ ྫ)) (“ Licheng Investment ”) and the then existing Shareholders of our Company, (i) Lapam Capital, Chongde VC, Yuanchuangke Investment, Langsheng Investment, Zhonghai Jiasu and Licheng Investment acquired a total of RMB776,175 newly issued registered capital of our Company at an aggregate consideration of RMB75,000,000; and (ii) ZJ Leading Initiating VC agreed to sell, and Lapam Capital, Chongde VC, Yuanchuangke Investment, Langsheng Investment, Zhonghai Jiasu and Licheng Investment agreed to purchase a total of RMB294,005 registered capital of the Company at an aggregate consideration of RMB25,000,000. The aforementioned capital increase and equity transfers were completed on April 9, 2018. Upon completion of the abovementioned equity transfer and Series A Financing, the shareholding structure of our Company was as follows: Shareholder Registered capital Equity interest (RMB) (%) Dr. Tian .......................................... 1,655,172 37.63 ZJ Leading Initiating VC ............................. 912,892 20.76 Lapam Capital ..................................... 428,072 9.73 Jiaxing Changxian .................................. 344,828 7.84 Zhangjiang Sci & Tech .............................. 241,379 5.49 Langsheng Investment ............................... 214,036 4.87 Licheng Investment ................................. 214,036 4.87 Yaluo Investment ................................... 173,863 3.94 Zhonghai Jiasu .................................... 107,018 2.43 Chongde VC ...................................... 53,509 1.22 Yuanchuangke Investment ............................ 53,509 1.22 Total ............................................ 4,398,314 100.00 For details of the Series A Financing and backgrounds of the relevant investors, see “— Pre-IPO Investments” below. (5) Series Pre-B Financing On November 25, 2019, our Company, Shijiazhuang Hi-Tech Zone Puen Guoxin Equity Investment Centre (Limited Partnership) (ᛆҳ༟ʕː (Υྫ)) (“Puen Guoxin ”), Shengzhou Minglang Industrial Development Equity Investment Fund Partnership (Limited Partnership) (ΥྫΆุ (Υྫ)) (“Minglang Capital ”), and the then existing Shareholders of our Company entered into an equity transfer and capital increase agreement, pursuant to which (i) Puen Guoxin acquired the newly issued registered capital of RMB109,958 at a consideration of RMB20,000,000; (ii) Minglang Capital acquired the newly issued registered capital of RMB109,958 at a consideration of RMB20,000,000; and (iii) Zhonghai Jiasu agreed to sell and Minglang Capital agreed to purchase the registered capital of RMB33,833 of our Company at a consideration of RMB5,000,000. The aforementioned equity transfer and capital increase were completed on January 22, 2020. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 201 – --- page 211 --- Upon completion of the Series Pre-B Financing, the shareholding structure of our Company was as follows: Shareholder Registered capital Equity interest (RMB) (%) Dr. Tian .......................................... 1,655,172 35.85 ZJ Leading Initiating VC ............................. 912,892 19.77 Lapam Capital ..................................... 428,072 9.27 Jiaxing Changxian .................................. 344,828 7.47 Zhangjiang Sci & Tech .............................. 241,379 5.23 Langsheng Investment ............................... 214,036 4.63 Licheng Investment ................................. 214,036 4.63 Yaluo Investment ................................... 173,863 3.76 Minglang Capital ................................... 143,791 3.11 Puen Guoxin ...................................... 109,958 2.38 Zhonghai Jiasu .................................... 73,185 1.58 Chongde VC ...................................... 53,509 1.16 Yuanchuangke Investment ............................ 53,509 1.16 Total ............................................ 4,618,230 100.00 For details of the Series Pre-B Financing and backgrounds of the relevant investors, see “— Pre-IPO Investments” below. (6) Equity Transfer and Series B Financing On June 22, 2020, our Company, Gongqing City Ruiji Fund III Investment Partnership (ڡ ๿Λɧಂҳ༟ΥྫΆุ (Υྫ)) (“ Ruiji III ”) and the then existing Shareholders of our Company entered into a capital increase agreement, pursuant to which Ruiji III acquired the newly issued registered capital of RMB269,397 at a consideration of RMB70,000,000. The aforementioned capital increase was completed on June 28, 2020. On August 24, 2020, in connection with the Series B Financing, Zhonghai Jiasu and Suzhou Likang Equity Investment Centre (Limited Partnership) (ᛆҳ༟ʕː (Υྫ)) (“Suzhou Likang ”) entered into an equity transfer agreement pursuant to which, Zhonghai Jiangsu agreed to transfer, and Suzhou Likang agreed to purchase the registered capital of RMB73,185 of our Company at a consideration of RMB14,970,000. The aforementioned equity transfer was completed on October 16, 2020. On the same date, our Company, Suzhou Likang, Jiaxing Qiyue Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ)) (“ Jiaxing Qiyue ”), LA V ImmuneOnco Hong Kong Limited (ʮ̡ )( “ LA V ImmuneOnco ”), Borah Peak Limited (“ Borah Peak ”) and the then existing Shareholders of our Company entered into a capital increase agreement as part of the Series B Financing, pursuant to which (i) Suzhou Likang acquired the newly issued registered capital of RMB89,875 at a consideration of RMB23,353,333; (ii) LA V ImmuneOnco acquired the newly issued registered capital of RMB294,977 at a consideration of approximately US$11,395,599 (equivalent to RMB76,646,667 (1)); (iii) Borah Peak acquired the newly issued registered capital of RMB153,941 at a consideration of approximately US$5,952,814 (equivalent to RMB40,000,000 (1)); and (iv) Jiaxing Qiyue acquired the newly issued registered capital of RMB115,456 at a consideration of RMB30,000,000. The aforementioned capital increases were completed on November 3, 2020. Note: (1) Calculated based on the currency conversion rate at the relevant time. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 202 – --- page 212 --- Upon completion of the abovementioned equity transfer and Series B Financing, the shareholding structure of our Company was as follows: Shareholder Registered capital Equity interest (RMB) (%) Dr. Tian .......................................... 1,655,172 29.88 ZJ Leading Initiating VC ............................. 912,892 16.47 LA V − LA V ImmuneOnco .............................. 294,977 5.32 − Suzhou Likang ................................. 163,060 2.94 Lapam Capital ..................................... 428,072 7.72 Jiaxing Changxian .................................. 344,828 6.22 Ruiji III .......................................... 269,397 4.86 Zhangjiang Sci & Tech .............................. 241,379 4.36 Langsheng Investment ............................... 214,036 3.86 Licheng Investment ................................. 214,036 3.86 Yaluo Investment ................................... 173,863 3.14 Borah Peak ....................................... 153,941 2.78 Minglang Capital ................................... 143,791 2.59 Jiaxing Qiyue ..................................... 115,456 2.08 Puen Guoxin ...................................... 109,958 1.98 Chongde VC ...................................... 53,509 0.97 Yuanchuangke Investment ............................ 53,509 0.97 Total ............................................ 5,541,876 100.00 For details of the Series B Financing and backgrounds of the relevant investors, see “— Pre-IPO Investments” below. (7) Equity Transfer and Series B+ Financing Pursuant to the Shareholders’ resolutions passed on February 10, 2021, in connection with the Series B+ Financing, each of (i) Dr. Tian and Suzhou Likang; (ii) ZJ Leading Initiating VC and Granite Peak Limited (“ Granite Peak ”); (iii) Ruiji III and LA V ImmOn; (iv) Ruiji III and Suzhou Likang; (v) ZJ Leading Initiating VC and Suzhou Likang; (vi) Minglang Capital and Jiaxing Zhangke Lingyi Siqi Equity Investment Partnership (Limited Partnership) (ᛆ ҳ༟ΥྫΆุ (Υྫ)) (“ ZJ Leading SiQi VC ”); (vii) Ruiji III and Granite Peak; and (viii) Ruiji III and LA V ImmuneOnco entered into an equity transfer agreement dated February 10, 2021 with details as follows: Transferor Transferee Transferred registered capital Equity interest Consideration (RMB) (%) (RMB)/(US$) Dr. Tian .............. Suzhou Likang 95,550 1.72 RMB50,000,000 ZJ Leading Initiating VC ........ Granite Peak 64,974 1.17 RMB34,000,000 Ruiji III .............. LA V ImmOn 52,400 0.95 US$3,069,158 Ruiji III .............. Suzhou Likang 31,440 0.57 RMB11,900,293 ZJ Leading Initiating VC . Suzhou Likang 30,576 0.55 RMB16,000,000 Minglang Capital ....... ZJ Leading SiQi VC 26,754 0.48 RMB14,000,000 Ruiji III .............. Granite Peak 21,136 0.38 RMB8,000,000 Ruiji III .............. LA V ImmuneOnco 10,480 0.19 US$613,832 The aforementioned equity transfers were completed on April 9, 2021. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 203 – --- page 213 --- On the same date, our Company, GBA Fund Investment Limited ( “GBA Investment” ), Shanghai Sci-Tech Innovation Center Capital Fund I (Limited Partnership) (ٰ ΥྫΆุ (Υྫ)) (“ Sci-Tech Fund I ”), LA V ImmOn, Granite Peak, ZJ Leading SiQi VC, and the then existing Shareholders of our Company entered into a capital increase agreement, pursuant to which GBA Investment, Sci-Tech Fund I, LA V ImmuneOnco, LA V ImmOn, Granite Peak and ZJ Leading SiQi VC acquired a total of the newly issued registered capital of RMB806,245 at an aggregate consideration of US$65,467,010. The aforementioned capital increase was completed on April 1, 2021. Upon completion of the abovementioned equity transfer and Series B+ Financing, the shareholding structure of our Company was as follows: Shareholder Registered capital Equity interest (RMB) (%) Dr. Tian .......................................... 1,559,622 24.58 ZJ Leading VC – ZJ Leading Initiating VC ......................... 817,342 12.89 – ZJ Leading SiQi VC ............................. 123,429 1.94 LA V – LA V ImmuneOnco .............................. 337,306 5.31 − Suzhou Likang ................................. 320,626 5.05 – LA V ImmOn ................................... 211,647 3.33 Lapam Capital ..................................... 428,072 6.74 LYFE Capital – Granite Peak ................................... 201,874 3.18 – Borah Peak .................................... 153,941 2.43 Jiaxing Changxian .................................. 344,828 5.43 GBA Investment ................................... 307,882 4.85 Zhangjiang Sci & Tech .............................. 241,379 3.80 Langsheng Investment ............................... 214,036 3.37 Licheng Investment ................................. 214,036 3.37 Yaluo Investment ................................... 173,863 2.74 Ruiji III .......................................... 153,941 2.43 Minglang Capital ................................... 117,037 1.84 Jiaxing Qiyue ..................................... 115,456 1.82 Puen Guoxin ...................................... 109,958 1.73 Sci-Tech Fund I ................................... 94,828 1.49 Chongde VC ...................................... 53,509 0.84 Yuanchuangke Investment ............................ 53,509 0.84 Total ............................................ 6,348,121 100.00 HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 204 – --- page 214 --- For details of the Series B+ Financing and backgrounds of the relevant investors, see “— Pre-IPO Investments” below. (8) Equity Transfer and Series C Financing Pursuant to the Shareholders’ resolutions passed on December 20, 2021 and the equity transfer agreements entered into with the respective investors, in connection with the Series C Financing, Puen Guoxin transferred, and LA V ImmOn, Suzhou Lirun Equity Investment Centre (Limited Partnership) (ᛆҳ༟ʕː (Υྫ)) (“ Suzhou Lirun ”), Nanjing Xingjian Ruiying Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Ϟ Υྫ)) (“ Nanjing Xingjian Ruiying ”), Suzhou Guofeng Dingjia Venture Capital Partnership (Limited Partnership) ( ᘽψ਷ᔮཻྗ௴ุҳ༟ΥྫΆุ (Υྫ)) (“ Cash Capital ”), Milestone Asset Management (Cayman) Co., Ltd. (“ Milestone Asset ”), Jiaxing Liyou Equity Investment Partnership (ᛆҳ༟ΥྫΆุ (Υྫ)) (“ Jiaxing Liyou ”), Beijing Yuanpei Technology Innovation Investment Centre (Limited Partnership) (Ҧ௴อҳ༟ʕː (ࠢ Υྫ)) (“ Beijing Yuanpei ”), Huanghe Delta Rongchang (Yantai) Entrepreneurship Investment Partnership (Limited Partnership) (׹( ๧̨)௴ุҳ༟ΥྫΆุ (Υྫ)) (“Rongchang Chuangtou ”), Zibo Juancheng No. 2 Equity Investment Fund Partnership (Limited Partnership) (ΥྫΆุ (Υྫ)) (“ Wuming Investment ”), Gongqing City Chuangdongfang Huaying Equity Investment Partnership (Limited Partnership) ( ΍ ᛆҳ༟ΥྫΆุ (Υྫ)) (“ Chuangdongfang Investment ”), Jiaxing Kuanyu Zeyou Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Ϟ Υྫ)) (“ Kuanyu Capital ”), and Wuhu Bloomage Langya Healthcare Industry Investment Partnership (Limited Partnership) (ԭ਄ੰପุҳ༟ΥྫΆุ (Υྫ)) (“ Bloomage Langya ”) acquired registered capital of RMB54,979 of our Company at an aggregate consideration of RMB31,265,026. The aforementioned equity transfers were completed on February 17, 2022. On the same date, pursuant to a capital increase agreement entered into among our Company, Sunshine Life Insurance Corporation Limited (ʮ̡ )( “ Sunshine Life ”), Suzhou Lirun, Nanjing Xingjian Ruiying, Cash Capital, Milestone Asset, Jiaxing Liyou, Beijing Yuanpei, Rongchang Chuangtou, Wuming Investment, Chuangdongfang Investment, Kuanyu Capital, Bloomage Langya, Jiaxing Chenyue Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ)) (“ Jiaxing Chenyue ”) (formerly known as Jiaxing Jianxin Chenyue Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆ ุ(Υྫ))) and the then existing Shareholders of our Company, Sunshine Life, LA V ImmOn, Suzhou Lirun, Nanjing Xingjian Ruiying, Cash Capital, Milestone Asset, Jiaxing Liyou, Beijing Yuanpei, Rongchang Chuangtou, Wuming Investment, Chuangdongfang Investment, Kuanyu Capital, Bloomage Langya, and Jiaxing Chenyue acquired a total of newly issued registered capital of RMB835,279 of our Company at an aggregate consideration of US$87,500,000. The aforementioned capital increase was completed on January 27, 2022. On the same date, our Company issued (i) registered capital of RMB329,771 to Jiaxing Changyu, one of our Onshore Employee Shareholding Platforms, at a consideration of RMB2,708,805; and (ii) registered capital of RMB400,000 to Halo Investment II, our Offshore Employee Shareholding Platform, at a consideration of US$515,160, respectively. Such consideration was determined with reference to the previous valuation at which Jiaxing Changxian (one of our Onshore Employee Shareholding Platforms) subscribed, for the development of our Company and in view of the significance of providing incentives to our key employees. The aforementioned capital increase was completed on January 27, 2022. For further details of our Employee Shareholding Platforms, see “— Employee Shareholding Platforms” below. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 205 – --- page 215 --- Upon completion of the abovementioned equity transfer and the Series C Financing, the shareholding structure of our Company was as follows: Shareholder Registered Capital Equity interest (RMB) (%) Dr. Tian .......................................... 1,559,622 19.71 LA V – LA V ImmuneOnco .............................. 337,306 4.26 – Suzhou Likang ................................. 320,626 4.05 – LA V ImmOn ................................... 278,729 3.52 – Suzhou Lirun .................................. 33,504 0.42 ZJ Leading VC – ZJ Leading Initiating VC ......................... 817,342 10.33 – ZJ Leading SiQi VC ............................. 123,429 1.56 Lapam Capital ..................................... 428,072 5.41 Halo Investment II ................................. 400,000 5.05 Milestone Entities – Licheng Investment ............................. 214,036 2.71 – Jiaxing Liyou .................................. 105,414 1.33 – Milestone Asset ................................ 48,556 0.61 LYFE Capital – Granite Peak ................................... 201,874 2.55 – Borah Peak .................................... 153,941 1.95 Jiaxing Changxian .................................. 344,828 4.36 Jiaxing Changyu ................................... 329,771 4.17 GBA Investment ................................... 307,882 3.89 Zhangjiang Sci & Tech .............................. 241,379 3.05 Langsheng Investment ............................... 214,036 2.71 Yaluo Investment ................................... 173,863 2.20 Ruiji III .......................................... 153,941 1.95 Sunshine Life ..................................... 148,918 1.88 Minglang Capital ................................... 117,037 1.48 Jiaxing Qiyue ..................................... 115,456 1.46 Sci-Tech Fund I ................................... 94,828 1.20 Nanjing Xingjian Ruiying ............................ 75,442 0.95 Cash Capital ...................................... 75,442 0.95 Jiaxing Chenyue ................................... 74,459 0.94 Puen Guoxin ...................................... 54,979 0.70 Chongde VC ...................................... 53,509 0.68 Yuanchuangke Investment ............................ 53,509 0.68 Beijing Yuanpei .................................... 48,556 0.61 Wuming Investment ................................. 46,499 0.59 Rongchang Chuangtou ............................... 45,472 0.57 Chuangdongfang Investment .......................... 45,471 0.57 Kuanyu Capital .................................... 45,471 0.57 Bloomage Langya .................................. 29,972 0.38 Total ............................................ 7,913,171 100.00 For details of the Series C Financing and backgrounds of the relevant investors, see “— Pre-IPO Investments” below. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 206 – --- page 216 --- (9) Conversion into a joint stock company On March 14, 2022, the then Shareholders of our Company passed resolutions approving, among other things, the conversion of our Company from a limited liability company into a joint stock company and the change of name of our Company from ImmuneOnco Biopharmaceuticals (Shanghai) Co. Ltd (ᔼᖹҦஔ (ɪऎ)ʮ̡) to ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (ᔼᖹҦஔ (ɪऎ)ʮ̡ ). Pursuant to the promoters’ agreement dated May 23, 2022 which were signed by all the then Shareholders of our Company, (i) the Company’s audited net assets value in an amount of RMB1,010,563,065.06 as of January 31, 2022 was converted into 356,092,695 Shares with a nominal value of RMB1.00 each at a ratio of 1:0.35237, which were issued to the then Shareholders in proportion to their respective equity interests in the registered capital of our Company; and (ii) the remaining net assets value of RMB654,470,370.06 was credited as capital reserves of our Company. Upon completion of the conversion, the then Shareholders received 45 Shares for each RMB1 registered capital of our Company held by them before the conversion. The conversion was completed on June 14, 2022. Upon completion of the conversion, the shareholding structure of our Company was as follows: Shareholder Number of Shares Equity interest (%) Dr. Tian .......................................... 70,182,990 19.71 LA V – LA V ImmuneOnco .............................. 15,178,770 4.26 – Suzhou Likang ................................. 14,428,170 4.05 – LA V ImmOn ................................... 12,542,805 3.52 – Suzhou Lirun .................................. 1,507,680 0.42 ZJ Leading VC – ZJ Leading Initiating VC ......................... 36,780,390 10.33 – ZJ Leading SiQi VC ............................. 5,554,305 1.56 Lapam Capital ..................................... 19,263,240 5.41 Halo Investment II ................................. 18,000,000 5.05 Milestone Entities – Licheng Investment ............................. 9,631,620 2.71 – Jiaxing Liyou .................................. 4,743,630 1.33 – Milestone Asset ................................ 2,185,020 0.61 LYFE Capital – Granite Peak ................................... 9,084,330 2.55 – Borah Peak .................................... 6,927,345 1.95 Jiaxing Changxian .................................. 15,517,260 4.36 Jiaxing Changyu ................................... 14,839,695 4.17 GBA Investment ................................... 13,854,690 3.89 Zhangjiang Sci & Tech .............................. 10,862,055 3.05 Langsheng Investment ............................... 9,631,620 2.71 Yaluo Investment ................................... 7,823,835 2.20 Ruiji III .......................................... 6,927,345 1.95 Sunshine Life ..................................... 6,701,310 1.88 Minglang Capital ................................... 5,266,665 1.48 Jiaxing Qiyue ..................................... 5,195,520 1.46 Sci-Tech Fund I ................................... 4,267,260 1.20 Nanjing Xingjian Ruiying ............................ 3,394,890 0.95 Cash Capital ...................................... 3,394,890 0.95 Jiaxing Chenyue ................................... 3,350,655 0.94 Puen Guoxin ...................................... 2,474,055 0.70 Chongde VC ...................................... 2,407,905 0.68 HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 207 – --- page 217 --- Shareholder Number of Shares Equity interest (%) Yuanchuangke Investment ............................ 2,407,905 0.68 Beijing Yuanpei .................................... 2,185,020 0.61 Wuming Investment ................................. 2,092,455 0.59 Rongchang Chuangtou ............................... 2,046,240 0.57 Chuangdongfang Investment .......................... 2,046,195 0.57 Kuanyu Capital .................................... 2,046,195 0.57 Bloomage Langya .................................. 1,348,740 0.38 Total ............................................ 356,092,695 100.00 Our PRC Legal Advisor has confirmed that all the required consents, approvals, authorization or filings in relation to the changes of our shareholding described above have been made and obtained and the aforesaid changes of our shareholding have been properly and legally completed in accordance with the applicable PRC laws and regulations. ACQUISITION, MERGER AND DISPOSAL Throughout the Track Record Period and as of the Latest Practicable Date, we did not conduct any acquisitions, mergers or disposals. EMPLOYEE SHAREHOLDING PLATFORMS In recognition of the contributions of our employees and to incentivize them to further promote our development, Jiaxing Changxian and Jiaxing Changyu were established pursuant to PRC law as the Onshore Employee Shareholding Platforms mainly for our PRC employees. Further, Halo Investment II was established pursuant to BVI law as the Offshore Employee Shareholding Platform mainly for our overseas employees and consultants. Jiaxing Changxian Jiaxing Changxian is a limited partnership established under the laws of the PRC on April 29, 2016 and managed by its executive partner, Jiaxing Hanning Enterprise Management Co., Ltd. ( ྗ ʮ̡ )( “ Jiaxing Hanning ”), a limited liability company established under the laws of PRC which holds 0.1% partnership interests in Jiaxing Changxian and is ultimately controlled by Dr. Tian. As of the Latest Practicable Date, the remaining 99.9% partnership interests of Jiaxing Changxian were held by 17 limited partners, including (i) three Directors, namely Dr. Tian (our executive Director), Mr. Li Song (our executive Director and vice president) and Mr. Zhenping Zhu (our independent non-executive Director), who held approximately 28.5%, 20% and 10% partnership interests, respectively, in Jiaxing Changxian; (ii) two members of senior management of our Company, namely Mr. Zhang Ruliang (our deputy general manager and senior vice president) and Ms. Guan Mei (our secretary of the Board and director of the financing and investment strategy department), who held approximately 10% and 2.2% partnership interests, respectively, in Jiaxing Changxian; (iii) two Supervisors, namely, Ms. Tian Miao (our Supervisor) and Mr. Zhao Zimeng (our employee representative Supervisor), who held approximately 3% and 2.5% partnership interests, respectively, in Jiaxing Changxian; and (iv) ten other employees of our Group, who held in aggregate approximately 23.7% partnership interests in Jiaxing Changxian. As of the Latest Practicable Date, Jiaxing Changxian directly held approximately 4.36% equity interest in our Company. For details of the Employee Incentive Plan in respect of Jiaxing Changxian, see “Appendix IV — Statutory and General Information — C. Further Information about Directors, Supervisors, Management and Substantial Shareholders — 4. Employee Incentive Plans.” HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 208 – --- page 218 --- Jiaxing Changyu Jiaxing Changyu is a limited partnership established under the laws of the PRC on March 24, 2021 and managed by Jiaxing Hanning which holds 0.0015% partnership interests in Jiaxing Changyu and is ultimately controlled by Dr. Tian. As of the Latest Practicable Date, the remaining 99.9985% partnership interests were held by 14 limited partners, including (i) one Director, namely Dr. Tian Wenzhi (our executive Director), who held approximately 59.47% partnership interests in Jiaxing Changyu; (ii) three members of senior management of our Company, namely Mr. Zhang Ruliang (our deputy general manager and senior vice president), Dr. Lu Qiying (our chief medical officer and senior vice president) and Dr. Xiong Zikai (our senior vice president), who held approximately 3.65%, 15.92% and 11.37% partnership interests, respectively, in Jiaxing Changyu; and (iii) ten other employees of our Company, who held in aggregate approximately 9.60% partnership interests in Jiaxing Changyu. As of the Latest Practicable Date, Jiaxing Changyu directly held approximately 4.17% equity interest in our Company. For details of the Employee Incentive Plan in respect of Jiaxing Changyu, see “Appendix IV — Statutory and General Information — C. Further Information about Directors, Supervisors, Management and Substantial Shareholders — 4. Employee Incentive Plans.” Halo Investment II Halo Investment II is a limited liability company established in the BVI on October 20, 2021, which is wholly owned by Halo LP, a limited partnership established under the laws of the BVI. The general partner of Halo LP is Halo Biomedical Investment I Limited (the “ Halo Investment I”), a limited liability company established in the BVI with its sole shareholder being Ms. Song Ziyi (“ Ms. Song ”), our executive Director. Pursuant to a voting agreement dated April 29, 2022 entered into between Ms. Song and Dr. Tian, Dr. Tian is entitled to exercise the voting rights in respect of all the shares in Halo Investment I held by Ms. Song. Dr. Tian is the sole director of Halo Investment I. Therefore, all the management powers and voting rights of Halo LP reside with Dr. Tian. As of the Latest Practicable Date, the partnership interests in Halo LP were held by six limited partners, including (i) a Director, namely Ms. Song Ziyi (our executive Director and chief financial officer), who held approximately 19.67% partnership interests in Halo LP; (ii) a member of senior management of our Company, namely Dr. Frank Xiaodong Gan (our senior vice president), who held approximately 10.99% partnership interests in Halo LP; (iii) a director of our subsidiary, namely Dr. Yumei Ding, who is also the spouse of Dr. Tian, held approximately 62.91% partnership interests in Halo LP (among which 46.20% partnership interests were held on behalf of Dr. Tian by Dr. Yumei Ding as his spouse for the purpose of family planning); and (iv) three other employees and consultant of our Company, who held in aggregate approximately 6% partnership interests in Halo LP. As of the Latest Practicable Date, Halo Investment II directly held approximately 5.05% equity interest in our Company. Each of the limited partners of Halo LP were granted with interests in the Shares pursuant to their individual employment agreements and notice of issuances entered into with the Group, and indirectly holds interests in the Company as a limited partner of Halo LP pursuant to the terms of limited partnership agreement entered into among the general partner and limited partners of Halo LP (the “ Limited Partnership Agreement ”). As agreed in the Limited Partnership Agreement, the general partner shall distribute the number of Shares granted to the limited partners in accordance with the distribution schedule and subject to the conditions set out in their individual notice of issuances. For details of each grant, see note 29 to the Accountants’ Report set out in Appendix IA to this prospectus. Pursuant to the Limited Partnership Agreement, until such portion of the Shares granted to the relevant limited partner are distributed and transferred to the limited partner in accordance with his/her notice of issuance, the voting rights associated with such Shares shall be exercised by the sole director of Halo Investment I, Dr. Tian, and none of the limited partners can transfer his/her partnership interests in Halo LP. As of the Latest Practicable Date, all the Shares held by the three Employee Shareholding Platforms had been granted to the relevant individuals and no further grants will be made after Listing. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 209 – --- page 219 --- PRE-IPO INVESTMENTS We attracted several Pre-IPO Investors through equity subscriptions and transfers including: (i) Series Pre-A Financing; (ii) Series A Financing; (iii) Series Pre-B Financing; (iv) Series B Financing; (v) Series B+ Financing; and (vi) Series C Financing. For further details, see “— Establishment and Major Shareholding Changes of Our Company” above. Series Pre-A Financing Series A Financing Series Pre-B Financing Series B Financing Series B+ Financing Series C Financing Date of agreement (1) December 11, 2015; March 1, 2016 November 25, 2017; March 29, 2018 November 25, 2019 June 22, 2020; August 24, 2020 February 10, 2021 December 17, 2021; December 20, 2021 Date of payment of full consideration February 23, 2017 April 9, 2018 January 22, 2020 November 3, 2020 April 1, 2021 January 27, 2022 Approximate cost per RMB1.0 of the registered capital paid (2) Equity subscription: RMB20.71 Equity subscription: RMB94.73 Equity subscription: RMB181.89 Equity subscription: RMB259.84 Equity subscription: RMB518.06 Equity subscription: RMB668.34 — Equity transfer: RMB85.03 Equity transfer: RMB147.78 Equity transfer: RMB204.55 Equity transfer: RMB472.23 Equity transfer: RMB568.67 Amount of registered capital subscribed and/or transferred Equity subscription: RMB1,448,276 Equity subscription: RMB950,038 Equity subscription: RMB219,916 Equity subscription: RMB923,646 Equity subscription: RMB806,245 Equity subscription: RMB835,279 (3) — Equity transfer: RMB294,005 Equity transfer: RMB33,833 Equity transfer: RMB73,185 Equity transfer: RMB333,310 Equity transfer: RMB54,979 Discount to the Offer Price (in approximation) (4) Equity subscription: 97.31% Equity subscription: 87.70% Equity subscription: 76.39% Equity subscription: 66.27% Equity subscription: 32.75% Equity subscription: 13.24% — Equity transfer: 88.96% Equity transfer: 80.82% Equity transfer: 73.45% Equity transfer: 38.70% Equity transfer: 26.18% Amount of consideration paid in connection with the equity subscription and transfers Equity subscription: RMB30,000,000 Equity subscription: RMB90,000,000 Equity subscription: RMB40,000,000 Equity subscription: RMB240,000,000 Equity subscription: US$65,467,010 Equity subscription: US$87,500,000 (3) — Equity transfer: RMB25,000,000 Equity transfer: RMB5,000,000 Equity transfer: RMB14,970,000 Equity transfer: RMB157,397,769 Equity transfer: RMB31,265,026 Post-money valuation of our Company (5)(7) RMB71,428,571 RMB425,000,000 RMB840,000,000 RMB1,440,000,000 (6) US$515,467,974 (6) US$829,883,616 (6) Basis of determination of the valuation and consideration The valuation and considerations for each round of Pre-IPO Investments were determined based on arm’s length negotiation amongst the respective Pre-IPO Investors and our Group (as the case may be) after taking into consideration of the status of our business operations and product development. Other factors were also taken into account in the determination of the consideration including but not limited to (i) the investment risk assumed by the relevant Pre-IPO Investors under the market conditions at the time of the relevant investments and (ii) the strategic benefits which would be brought by the Pre-IPO Investors to our Group as described below. Lock-up Period Under the applicable PRC laws, all existing Shareholders (including the Pre-IPO Investors) are subject to a lock-up period of 12 months following the Listing Date. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 210 – --- page 220 --- Series Pre-A Financing Series A Financing Series Pre-B Financing Series B Financing Series B+ Financing Series C Financing Use of proceeds from the Pre-IPO Investments The proceeds from the equity subscriptions by the Pre-IPO Investors have been used to support the R&D activities of our Group, including the R&D and clinical development associated with our Core Product and Key Products, as well as to support the working capital needs of our Group. As of the Latest Practicable Date, approximately 66.5% of the net proceeds from the equity subscriptions by the Pre-IPO Investors were utilized. Strategic benefits of the Pre-IPO Investors brought to our Company At the time of the Pre-IPO Investments, our Directors were of the view that our Company would benefit from the additional capital provided by, and the knowledge and experience of our Pre-IPO Investors. Our Pre-IPO Investors include renowned companies in relevant industries and professional strategic investors, which can provide us with their industry insights and professional advice on our Group’s development, corporate governance, financial reporting and internal control. In particular, ZJ Leading Initiating VC and Zhangjiang Sci & Tech, both of which are renowned regional financial institutions in the Zhangjiang High Tech Park of Shanghai, could introduce resources to our Group. Further, investors such as LA V and LYFE Capital (each as defined below) have further enhanced our Group’s industry recognition and attracted talents to join our Group. Our Directors are also of the view that the Pre-IPO Investors’ investments demonstrated their confidence in our Group’s operations and served as an endorsement of our Company’s performance, strengths and prospects. Notes: (1). Such date represents the date on which the relevant capital increase agreements and/or equity transfer agreements was signed. (2). The cost per RMB1.0 of the registered capital paid is calculated based on the aggregate amount of consideration paid by the relevant Pre-IPO Inves tors divided by the aggregate amount of registered capital they subscribed/transferred at the relevant time of the Pre-IPO Investments, using the currency convers ion rate of US$1.00 to RMB6.38 as at December 31, 2021. For the avoidance of doubt, the relevant Pre-IPO investments were completed before the conversion of our Company in to a joint stock company on June 14, 2022 as set out in “— (9) Conversion into a joint stock company.” (3). Such amount of registered capital purchased and consideration paid in connection with the equity subscription represented the newly issued reg istered capital to the relevant Pre-IPO Investors. (4). Calculated based on the currency conversion rate of HK$1 to RMB0.92035 and US$1 to HK$7.8314, on the basis of the Offer Price of HK$18.60 and is adju sted pursuant to the conversion of our Company from a limited liability company to a joint stock company on June 14, 2022 as set out in “— (9) Conversion into a j oint stock company.” (5). The key reasons for the material increase in valuation of our Company are set forth below: (a) The increase in valuation from Series Pre-A Financing to Series A Financing was mainly due to the majority of the IND-enabling studies of IMM01 cond ucted in 2017 and early 2018. (b) The increase in valuation from Series A Financing to Series Pre-B Financing was mainly due to the IND approvals for IMM01 and IMM0306 from NMPA in May 2019 and November 2019, respectively. (c) The increase in valuation from Series Pre-B Financing to Series B Financing was mainly due to the development of Phase I clinical trials for IMM01 si nce first half of 2020 and the commencement of Phase I clinical trials for IMM0306 in May 2020. (d) The increase in valuation from Series B Financing to Series B+ Financing was mainly due to the progressive development of Phase I clinical trial for IMM01 since fourth quarter of 2020, the IND approval for IMM0306 from FDA received in January 2021, the IND approval for IMM2510 from NMPA received in December 2020 and the CMC pilot production for IMM01 since August 2020. (e) The increase in valuation from Series B+ Financing to Series C Financing was mainly due to the commencement of Phase II clinical trial for IMM01 in October 2021 and the progressive development of Phase I clinical trial for IMM0306 since April 2021, the IND approvals for IMM2902 from NMPA and FDA received in June 2021 and August 2021, respectively, the IND approvals for combination of IMM01 and azacitidine, and IMM27M received from NMPA in August 2021 and November 2021, respectively, and the commencement of Phase I clinical trial for IMM2510 in August 2021. (f) The increase in valuation from Series C Financing to the proposed IPO valuation for the Listing is mainly due to the development of Phase Ib/II for th e combination of IMM01 and azacitidine since January 2022, the IND approval and clinical trial commencement for IMM01+ tislelizumab in February 2022 a nd May 2022, respectively, the commencement of clinical trial for IMM2902 in China and the United States in February 2022 and June 2022, respectively, th e development of clinical trial for IMM0306, IMM2510 and IMM27M since January 2022, January 2022 and June 2022, respectively, the IND approvals for IMM40H from NMPA and FDA in August 2022, the IND approvals for IMM2520 from NMPA in November 2022 and from FDA in December 2022, the commencement of IND-enabling for IMM47 in February 2022, the commencement of the Phase II trial in China for IMM01’s combination with tislelizumab in December 2022, the commencement of the Phase IIa trial for IMM0306 monotherapy in China in March 2023, the first patient dosing for the Phase I clinical trial for IMM2520 in China in March 2023, the submission of the pre-IND application for IMM47 in April 2023, and the premium attached to the Shares of the Company as they become freely tradeable when the Company becomes a public company. (6). The post-money valuation of our Company is calculated based on the currency conversion rate of US$1.00 to RMB6.38 as at December 31, 2021. (7). The corresponding post-money valuation of our Company is calculated based on the valuation of our Company at the relevant time of each financing s eries taking into account the funds received from the Pre-IPO Investors and the registered capital issued to our Employee Shareholding Platforms. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE –2 1 1– --- page 221 --- Special Rights of the Pre-IPO Investors According to the shareholders agreement entered into among our Company and the then existing Shareholders on December 20, 2021 (the “ Shareholders Agreement ”), the Pre-IPO Investors were granted certain customary special rights, including but not limited to (i) right of first refusal and co-sale; (ii) director nomination right; (iii) anti-dilution rights; (iv) liquidation rights; (v) redemption rights; and (vi) information rights. All such special rights had been and/or will be terminated, according to the nature of such rights, upon the conversion of our Company into a joint stock company or, the submission of a listing application to the Stock Exchange in accordance with the Shareholders Agreement. In the event that: (1) the Company fails to complete the Listing within 18 months from the submission of listing application to the Stock Exchange; or (2) (i) the Company voluntarily withdraws its listing application; (ii) the listing application is rejected or returned by the Stock Exchange; (iii) 12 months after the Stock Exchange considers that the Company is unable to comply with the listing requirements due to some substantial obstacles; or (iv) a requisition from the Shareholders representing a majority of voting rights in the Company to terminate the Listing (the “ Reinstatement Events ”), whichever is earlier, the special rights terminated pursuant to the Shareholders Agreements (except for the redemption right, liquidation rights, anti-dilution rights or provisions which constitute substantial legal obstacles to the Company’s conversion into a joint stock company) shall reinstate, provided that if (i) any Reinstatement Event occurs due to external force majeure factors; or (ii) the Company has initiated the preparation for listing of A shares, then even upon the occurrence of any Reinstatement Event, such special rights shall not be reinstated. However, in the event that (i) the Company is unable to comply with the listing requirements of the Stock Exchange due to substantial obstacles, and the Company has not initiated the preparation for listing of A shares within 3 months after the occurrence of the aforementioned substantial obstacles; or (ii) the Shareholders representing a majority of voting rights in the Company, request to terminate the listing application after the initiation of the preparation for listing of A shares, then such special rights shall be reinstated. We plan to conduct the offering and listing of A shares at an appropriate time after the Global Offering. As of the Latest Practicable Date, we had not determined the size and scope of the contemplated A share offering and had not made any application to any recognized stock exchange in the PRC for approval for the listing of any A shares. There is no assurance that we will conduct an A share offering in the future. Compliance with Interim Guidance and Guidance Letters On the basis that (i) the consideration for the Pre-IPO Investments was settled more than 28 clear days before the date of our first submission of the listing application form to the Listing Division of the Stock Exchange in relation to the Listing and (ii) special rights granted to the Pre-IPO Investors in respect of our Company will be suspended upon filing of a listing application and/or will be terminated upon Listing, the Joint Sponsors have confirmed that the Pre-IPO Investments are in compliance with the Interim Guidance on Pre-IPO Investments issued by the Stock Exchange in January 2012, as updated in March 2017 and the Guidance Letter HKEX-GL43-12 issued by the Stock Exchange in October 2012 and as updated in July 2013 and March 2017. Information about Our Pre-IPO Investors Our Pre-IPO investors include certain Sophisticated Investors, namely LA V , ZJ Leading VC, Lapam Capital, Shanghai Milestone Asset, LYFE Capital and Greater Bay Area Fund (each as defined below). Each of our Sophisticated Investors has made meaningful investment in the HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 212 – --- page 222 --- Company more than six months before the Listing Date for the purpose of paragraph 3.2(g) of Guidance Letter HKEX-92-18 issued by the Stock Exchange. To the best knowledge of our Directors, save as disclosed below, each of our Pre-IPO Investors is an independent third party. 1. LA V: LA V ImmuneOnco Hong Kong Limited, a private company incorporated under the laws of Hong Kong, is wholly owned by LA V Biosciences Fund V , L.P. (“ LA V V”). LA V ImmOn Hong Kong Limited, a private company incorporated under the laws of Hong Kong, is held as to 50.00% by LA V Fund VI, L.P. (“ LA V VI”) and as to 50.00% by LA V Fund VI Opportunities, L.P. (“ LA V VI Opportunities ”). The general partner of LA V VI is LA V GP VI, L.P., the general partner of which is LA V Corporate VI GP, Ltd. (a limited liability company wholly owned by Dr. Yi Shi). As of the Latest Practicable Date, LA V VI had over 100 limited partners, among which the largest limited partner held less than 5% of its partnership interest. The general partner of LA V VI Opportunities is LA V GP VI Opportunities, L.P., the general partner of which is LA V Corporate VI GP Opportunities, Ltd. (a limited liability company wholly owned by Dr. Yi Shi). As of the Latest Practicable Date, LA V VI Opportunities had over 100 limited partners, among which the largest limited partner held less than 5% of its partnership interest. LA V V , LA V VI and LA V VI Opportunities are exempted limited partnership funds established in the Cayman Islands which are ultimately controlled by Dr. Yi Shi. Each of Suzhou Likang Equity Investment Centre (Limited Partnership) (ᛆҳ ༟ʕː(Υྫ)) and Suzhou Lirun Equity Investment Centre (Limited Partnership) ( ᘽ ᛆҳ༟ʕː (Υྫ)) is a limited partnership incorporated under the laws of the PRC. The general partner of Suzhou Likang is Shanghai Liyi Investment Management Partnership (Limited Partnership) ( ɪऎᓿ൪ҳ༟၍ଣΥྫΆุ (Υྫ)) and the general partner of Suzhou Lirun is Shanghai Likun Enterprise Management Partnership (Limited Partnership) ( ɪऎᓿ䃑Άุ၍ଣΥྫΆุ (Υྫ)). Each of Shanghai Liyi Investment Management Partnership (Limited Partnership) and Shanghai Likun Enterprise Management Partnership (Limited Partnership) is a limited partnership incorporated under the laws of the PRC and a private equity fund, each of which is ultimately controlled by Dr. Chen Fei (࠭As of the Latest Practicable Date, Suzhou Likang had 28 limited partners with China Pacific Life Insurance Co., Ltd. (ʮ̡ ), being its largest limited partner, holding approximately 12.00% of its partnership interest. China Pacific Life Insurance Co., Ltd. is ultimately controlled by China Pacific Insurance (Group) Co., Ltd. (ᎈ(ණྠ)ʮ̡), a company dually listed on the Stock Exchange (stock code: 2601) and the Shanghai Stock Exchange (stock code: 601601). As of the Latest Practicable Date, Suzhou Lirun had 37 limited partners with China Merchants Wealth Asset Management Co., Ltd. (ʮ̡ ), being its largest limited partner, holding approximately 12.39% of its partnership interest. China Merchants Wealth Asset Management Co., Ltd. is ultimately controlled as to 55.00% by China Merchants Bank Co., Ltd. (ʮ̡ ), a company dually listed on the Stock Exchange (stock code: 3968) and the Shanghai Stock Exchange (stock code: 600036), and 45.00% by China Merchants Securities Co., Ltd. (ʮ̡ ), a company dually listed on the Stock Exchange (stock code: 6099) and the Shanghai Stock Exchange (stock code: 600999). Each of LA V V , LA V VI and LA V VI Opportunities, Suzhou Likang and Suzhou Lirun is an investment arm of Lilly Asia Ventures (“ LA V”). LA V is a leading Asia-based life science investment firm with portfolios covering all major sectors of the biomedical and healthcare industry including biopharmaceuticals, medical devices, diagnostics and healthcare services. As of the Latest Practicable Date, it managed committed capital of approximately US$5 billion. LA V is one of our Sophisticated Investors. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 213 – --- page 223 --- As confirmed by LA V ImmuneOnco and LA V ImmOn, which are ultimately controlled by Dr. Yi Shi (“ LA V Offshore ”), and Suzhou Likang and Suzhou Lirun, which are ultimately controlled by Dr. Chen Fei (“ LA V Onshore ”), although they are both investment arms under the LA V , each of LA V Offshore and LA V Onshore makes their investment decisions independently from each other and there is no concert party arrangement or voting arrangement between them in respect of their interests in the Company. 2. ZJ Leading VC: Shanghai Zhangjiang Leading Initiating Venture Capital (Limited Partnership) (ჯʏʺω௴ุҳ༟ʕː (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of ZJ Leading Initiating VC is Shanghai Zhangke Lingyi Enterprise Management Center (Limited Partnership) (ჯᔼΆุ၍ଣʕ ː(Υྫ)), a limited partnership incorporated under the laws of PRC. Jiaxing Zhangke Lingyi Siqi Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆ ุ(Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of ZJ Leading SiQi VC is Jiaxing Linghe Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ)), a limited partnership established under the laws of PRC. Both of ZJ Leading Initiating VC and ZJ Leading SiQi VC are indirectly controlled by Shanghai Yongkan Investment Management Co., Ltd. (ʮ̡ ) (“Shanghai Yongkan ”), which is ultimately controlled by Mr. Yu Xiaoyong (ۇone of our non-executive Directors. For more details of Mr. Yu Xiaoyong, please see “Directors, Supervisors and Senior Management” and “Appendix IV — Statutory and General Information — C. Further Information about Directors, Supervisors, Management and Substantial Shareholders.” As of the Latest Practicable Date, ZJ Leading Initiating VC had four limited partners, among which Shanghai Lingqu Enterprise Management Center (Limited Partnership) ( ɪऎჯᒈΆุ၍ଣʕ ː(Υྫ)), being the largest limited partner and ultimately controlled by Mr. Yu Xiaoyong, held approximately 38.92% of its partnership interest, and Shanghai Zhangjiang Huoju Venture Capital Investment Co., Ltd. (ʮ̡ ) and Shanghai Zhangjiang Science & Technology Venture Capital Co., Ltd. (ʮ̡ ), being the second largest limited partners, each held approximately 23.90% of its partnership interest. ZJ Leading SiQi VC had eight limited partners and Mr. Cao Rong ( ૎࿲), being its largest limited partner, held approximately 19.10% of its partnership interest. ZJ Leading VC includes ZJ Leading Initiating VC and ZJ Leading SiQi VC, each of which is indirectly controlled by Shanghai Yongkan, which is ultimately controlled by Mr. Yu Xiaoyong. ZJ Leading VC focuses on investment in companies in biopharmaceutical, diagnostic reagent, medical device sectors which are at their early stage or growth stage of development. As of the Latest Practicable Date, ZJ Leading VC had total assets under management of approximately RMB1 billion. Apart from the investment in our Company, it has invested in other companies such as Shanghai NewMed Medical Co., Ltd. ( ɪऎॲএᔼ ʮ̡ ), Shanghai Ennova Pharmaceutical Co., Ltd (ʮ ̡) and Shanghai Novamab Biopharmaceuticals Co., Ltd (ʮ ̡). ZJ Leading VC is one of our Sophisticated Investors. 3. Lapam Capital: Beijing Lapam Healthcare Investment Center (Limited) ( ̏ԯᎲᇂ਄ੰ ᔼᐕҳ༟ʕː (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Lapam Capital is Tibet Lapam Yijing Venture Capital Center (Limited Partnership) (౻௴ุҳ༟ʕː (ࠢ Υྫ)), which is managed by Beijing Lapam Capital Management Consultant Center (General Partnership) ( ̏ԯᎲᇂҳ༟၍ଣፔ༔ʕː (౷ஷΥྫ)) (“ Lapam Capital GP ”) as the general partner and is ultimately controlled by Mr. Yu Zhihua (ശ), one of our non-executive Directors. For more details of Mr. Yu Zhihua, see “Directors, Supervisors and Senior Management” and “Appendix IV — Statutory and General Information — C. Further Information about Directors, Supervisors, Management and Substantial Shareholders.” As of the Latest Practicable Date, Lapam Capital had 24 HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 214 – --- page 224 --- limited partners and Guotou Chuanghe National Emerging Industry Venture Capital Guiding Fund (Limited Partnership) (ږ( Υ ྫ)), which is its largest limited partner and ultimately controlled by the State-owned Assets Supervision and Administration Commission of the State Council ( ਷ਕ৫਷Ϟ༟ ึ ), held approximately 21.16% of its partnership interest. As of the Latest Practicable Date, Lapam Capital GP had total assets under management of over RMB935 million and its investment portfolio has included companies across biopharmaceutics sectors, including RemeGen Co., Ltd (Ⴁᖹ (๧̨)ࠢ ʮ̡) (stock code: 9995), CANbridge Pharmaceuticals Inc. (ʮ̡ ) (stock code: 1228) and Clover Biopharmaceuticals, Ltd. (ʮ̡ ) (stock code: 2197). Lapam Capital is one of our Sophisticated Investors. 4. Milestone Entities: Each of Jiaxing Liyou Equity Investment Partnership (ٰ ᛆҳ༟ΥྫΆุ (Υྫ)) and Shanghai Licheng Yijing Equity Investment Management Center (Limited Partnership) (ᛆҳ༟၍ଣʕː (Υྫ)) is a limited partnership and private equity fund incorporated under the laws of the PRC. The general partner of both Jiaxing Liyou and Licheng Investment is Shanghai LiNeng Asset Management Co., Ltd. (ʮ̡ )( “ Shanghai Milestone Asset ”), which is wholly owned by Mr. Cheng Yiquan ( ೻່Ό)( “ Mr. Cheng ”), an independent third party. As of the Latest Practicable Date, Jiaxing Liyou had 10 limited partners and Mr. Cheng, being its largest limited partner, held approximately 65.74% of its partnership interest; Licheng Investment had three limited partners and Shanghai Milestone Asset Management Co., Ltd. (ʮ̡ ), which is its largest limited partner and ultimately controlled by Mr. Cheng, held approximately 89.38% of its partnership interest. As of the Latest Practicable Date, Shanghai Milestone Asset had total assets under management of approximately RMB9 billion and its investment portfolio has included companies across technology and biopharmaceutics sectors, including Innovent Biologics, Inc. (Ⴁᖹ ) (stock code: 1801), Berry Genomics Co., Ltd. (ʮ̡ ) (stock code: 000710), and Montage Technology Co., Ltd. (ʮ̡ ) (stock code: 688008). Shanghai Milestone Asset is one of our Sophisticated Investors. Milestone Asset Management (Cayman) Co., Ltd. is a limited liability company incorporated under the laws of the Cayman Islands. As of the Latest Practicable Date, Milestone Asset was owned as to 99.99% by Mr. Cheng and 0.01% by Mr. Yushan Yang, who is an independent third party. As of the Latest Practicable Date, Milestone Asset had total assets under management of over US$5 million. 5. LYFE Capital: LYFE Capital is a global healthcare investment firm and platform dedicated to amplification of healthcare through value creation. It works with multi-stage companies with promising fast growth potentials and provide capital and acceleration, allowing them to realize their maximum potential in a dynamic environment. LYFE Capital is one of our Sophisticated Investors. Granite Peak Limited is an exempted company incorporated under the laws of the Cayman Islands on September 22, 2020. As of the Latest Practicable Date, Granite Peak was owned as to 38.99% by LYFE Capital Fund III (Phoenix) L.P. (“ LYFE Fund III ”), 30.50% by Palace Investments Pte. Ltd, 18.78% by Axiom Asia 6, L.P, and 11.73% by Axiom Asia 6-A SCSP, SICA V — RAIF. LYFE Fund III is a limited partnership incorporated in the state of Delaware, USA, the general partner of which is LYFE Capital Management (Phoenix) LLC, which is wholly owned by Mr. Yao Li Ho. As of the Latest Practicable Date, LYFE Fund III had more than 30 limited partners, all of which are overseas funds, including pension funds, education funds and fund of funds, and none of which held more than 20% of its partnership interest. Palace Investments Pte. Ltd. is an indirectly wholly-owned subsidiary of Pavilion Capital Holdings Pte. Ltd. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 215 – --- page 225 --- (“Pavilion Capital ”), which in turn is an indirectly wholly-owned subsidiary of Temasek Holdings (Private) Limited (“ Temasek”). Pavilion Capital is independently managed, and Temasek is not involved in the business or operating decisions of Pavilion Capital or Palace Investments Pte. Ltd. Borah Peak Limited is a limited liability company incorporated under the laws of Hong Kong. As of the Latest Practicable Date, Borah Peak was wholly owned by LYFE Fund III. Each of Granite Peak and Borah Peak is an investment arm of LYFE Capital and its investment portfolio has included companies in biotech and biopharmaceutics sectors, including CANbridge Pharmaceuticals Inc. (ʮ̡ ) (stock code: 1228), Jiangsu Recbio Technology Co., Ltd.(ʮ̡ ) (stock code: 2179), and Chengdu Easton Biopharmaceuticals Co., Ltd.(ࠢ ʮ̡) (stock code: 688513). As of the Latest Practicable Date, Granite Peak and Borah Peak had total assets under management of approximately US$15.83 million and US$5.95 million, respectively. 6. GBA Investment: GBA Fund Investment Limited is a wholly-controlled subsidiary of Greater Bay Area Homeland Development Fund LP (Υ ྫ)( “ Greater Bay Area Fund ”). The Greater Bay Area Fund is a private equity investment fund that was jointly established by multi-national industrial corporations, financial institutions, and new economic enterprises under the laws of the Cayman Islands. The Greater Bay Area Fund has the general partner being Greater Bay Area Homeland Development Fund (GP) Limited, and is under discretionary management of Greater Bay Area Development Fund Management Limited. Each of Greater Bay Area Homeland Development Fund (GP) Limited and Greater Bay Area Development Fund Management Limited is controlled by GBA Homeland Limited, which is wholly owned by Greater Bay Area Homeland Investments Limited. The objective of the Greater Bay Area Fund is to seize the historical opportunities of the development of the Greater Bay Area, and the construction of an international innovation and technology hub, ushered in through technological innovation, industrial upgrading, improvement in living quality, and construction of smart city. As of the Latest Practicable Date, GBA Investment had total assets under management of approximately HK$9 billion and its investment portfolio has included HBM Holdings Limited (ʮ̡ ) (stock code: 2142), Zhaoke Ophthalmology Limited (ʮ̡ ) (stock code: 6622), and Shenzhen Jingfeng Medical Technology C o . ,L t d .(ʮ̡ ). The Greater Bay Area Fund is one of our Sophisticated Investors. 7. Zhangjiang Sci & Tech: Shanghai Zhangjiang Science & Technology Venture Capital C o . ,L t d .(ʮ̡ ) is a company incorporated under the laws of the PRC, which is wholly owned by Zhangjiang Group ( ɪऎੵϪ(ණྠ)ʮ̡), a company wholly owned by Shanghai Municipal Pudong New Area State-owned Assets Supervision and Administration Commission (ࡰ ึ). Zhangjiang Group serves as an engine for the development of Zhangjiang Science City (۬a booster for emerging industries, and an incubator of science and innovation ecosystem. It focuses on investment in biotech and high-tech companies with operations in China or related to China and manages over RMB1.4 billion of assets in the healthcare industry, and its investment portfolio has included companies across advanced technology and biopharmaceutics sectors, including Shanghai Bio-heart Biological Technology Co., Ltd. (ʮ̡ ) (stock code: 2185), MicroPort Scientific Corporation (ʮ̡ ) (stock code: 0853) and Shanghai MicroPort Endovascular MedTech Co., Ltd (Ҧ (ණ ྠ)ʮ̡ ) (stock code: 688016). HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 216 – --- page 226 --- 8. Langsheng Investment: Ningbo Langsheng Qianhui Investment Partnership (Limited Partnership) (ସɷිҳ༟ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Langsheng Investment is Ningbo Zhenhai Langsheng Baihui Investment Management Co., Ltd. (ت ʮ̡ ) (formerly known as Suzhou Langsheng Investment Management Co., Ltd. (ʮ̡ ), which is ultimately controlled by Mr. Ping Fan ( ̻ɭ), who is an independent third party. As of the Latest Practicable Date, Langsheng Investment had 16 limited partners and Ningbo Zhenhai Jinhui Group Co., Ltd. (ʮ̡ ), which is its largest limited partner and ultimately controlled by Ningbo Municipal Zhenhai District State-owned Assets Administration Service Center (ਕʕː ), held approximately 20.00% of its partnership interest. As of the Latest Practicable Date, Langsheng Investment had total assets under management of approximately RMB500 million. 9. Yaluo Investment: Yaluo Investment Equity Investment L.P. (ᛆҳ༟Ϟ ΥྫΆุ ) is a limited partnership incorporated under the laws of the PRC. The general partner of Yaluo Investment is Ms. Zheng Hongbei (ႍ). As of the Latest Practicable Date, Mr. Zheng Honghui (ฯ), being the sole limited partner of Yaluo Investment, held approximately 95.00% of its partnership interest. As of the Latest Practicable Date, Yaluo Investment had total assets under management of approximately RMB25 million. 10. Ruiji III: Gongqing City Ruiji Fund III Investment Partnership (๿Λɧಂҳ༟Υ ྫΆุ(Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Ruiji III is Shenzhen Zhenji Capital Private Equity Investment Management Co., Ltd. (ʮ̡ ) (formerly known as Shenzhen Ruihe Xingye Assets Management Co., Ltd.) ( ଉέ̹๿ձ ʮ̡ ), which is ultimately controlled by Mr. Dai Shan (ޙand Mr. Zhao Xiaoqiang ( Ⴛʃ੶), who are independent third parties. As of the Latest Practicable Date, Ruiji III had 25 limited partners and Ms. Pi Hailing (ޛbeing its largest limited partner, held approximately 31.01% of its partnership interest. As of the Latest Practicable Date, Ruiji III had total assets under management of approximately RMB258 million. 11. Sunshine Life: Sunshine Life Insurance Corporation Limited (ʮ ̡), is a joint stock company incorporated under the laws of PRC. As of the Latest Practicable Date, Sunshine Life had two shareholders, among whom, Sunshine Insurance Group (ʮ̡ )( “ Sunshine Insurance ”), a joint stock company incorporated under the laws of PRC, held approximately 99.99% of its equity interest, and Lhasa Huiju Enterprise Management Consulting Co., Ltd. (ے ʮ̡ ), which is ultimately controlled by Mr. Song Ning ( ҂ྐྵ), held its remaining equity interest. As of the Latest Practicable Date, Sunshine Insurance had 33 subsidiaries and approximately 1,000 sub-branches, providing customers with insurance plans covering life, pension, medical care, health, and accident. Sunshine Insurance and its subsidiaries have invested in multiple biotech companies such as CARsgen Therapeutics Holdings Limited (ʮ̡ ) (stock code: 2171), Lepu Biopharma Co., Ltd. (ʮ̡ ) (stock code: 2157) and Genor Biopharma Co., Ltd (ʮ̡ ). 12. Minglang Capital: Shengzhou Minglang Industrial Development Equity Investment Fund Partnership (Limited Partnership) (ΥྫΆุ (Ϟ Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Minglang Capital is Jiaxing Minglang Investment Management Partnership (Limited Partnership) (ҳ༟၍ଣΥྫΆุ (Υ ྫ)), which is ultimately controlled by Mr. Zhang Xiaoda ( ੵʃ༺)a n dM r .S uD e k e(ᘽ HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 217 – --- page 227 --- ߅who are independent third parties. As of the Latest Practicable Date, Minglang Capital had six limited partners and Mr. Zhang Xiaoda, being its largest limited partners, held approximately 29.35% of its partnership interest. As of the Latest Practicable Date, Minglang Capital had total assets under management of approximately RMB1 billion. 13. Jiaxing Qiyue: Jiaxing Qiyue Equity Investment Partnership (Limited Partnership) ( ྗ ᛆҳ༟ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Jiaxing Qiyue is Shanghai Qiyin Equity Investment Fund Management Co., Ltd. (ࠢ ʮ̡), which is ultimately controlled as to approximately 34.22%, 32.89% and 32.89% by Mr. Sun Xinghua (ጳശ), Mr. Wang Lu ( ˮ༩) and Mr. Cheng Yiquan ( ೻່Ό) respectively, each of whom is an independent third party. As of the Latest Practicable Date, Jiaxing Qiyue had two limited partners and Qilu Pharma Co., Ltd. (ࠢ ʮ̡), which is its largest limited partner and ultimately controlled by Ms. Li Yan ( ҽ ዲ), held approximately 93.46% of its partnership interest. As of the Latest Practicable Date, Jiaxing Qiyue had total assets under management of approximately RMB32 million. 14. Sci-Tech Fund I: Shanghai Sci-Tech Innovation Center Capital Fund I (Limited Partnership) (ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Sci-Tech Fund I is Shanghai Pujun Enterprise Management Consulting Partnership (Limited Partnership) ( ɪऎऌඓΆุ၍ଣፔ༔ΥྫΆุ (Υྫ)), which is ultimately controlled as to 37.44% by Mr. Yang Bin ( เⅳ), an independent third party. As of the Latest Practicable Date, Shanghai Sci-Tech Innovation Center Capital Fund One (Limited Partnership) (ΥྫΆุ (Υྫ)) (“ Sci-Tech Fund One”), which is the sole limited partner of Sci-Tech Fund I, held approximately 99.01% of its partnership interest. Sci-Tech Fund One is managed by its executive partner Shanghai Sci-Tech Innovation Center Capital Co., Ltd. (၍ ʮ̡ )( “ Shanghai Innovation Center ”). The largest shareholder of Shanghai Innovation Center is Shanghai International Group Co., Ltd (ʮ̡ ), which is wholly owned and controlled by Shanghai Municipal State-owned Assets Supervision and Administration Commission (ึ ). As of the Latest Practicable Date, Sci-Tech Fund One had seven limited partners, among which, Shangxin Asset Management Co. Ltd. (ʮ̡ ), being the largest limited partner, held 30.67% of its partnership interest. As of the Latest Practicable Date, Sci-Tech Fund I had total assets under management of approximately RMB858 million. 15. Nanjing Xingjian Ruiying: Nanjing Xingjian Ruiying Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Nanjing Xingjian Ruiying is Nanjing Fuxin Equity Investment Management Partnership (Limited Partnership) (ᛆҳ༟၍ଣΥྫΆุ (Υྫ)), which is ultimately controlled by Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (ᔼᖹ(ණྠ)΅ ʮ̡), a PRC incorporated company dually listed on the Stock Exchange (stock code: 2196) and the Shanghai Stock Exchange (stock code: 600196). As of the Latest Practicable Date, Nanjing Xingjian Ruiying had five limited partners and Ningbo Fuying Investment Co., Ltd (ʮ̡ ), which is its largest limited partner and wholly owned by Shanghai Fosun Pharmaceutical (Group) Co., Ltd., held approximately 40.15% of its partnership interest. As of the Latest Practicable Date, Nanjing Xingjian Ruiying had total assets under management of approximately RMB378 million. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 218 – --- page 228 --- 16. Cash Capital: Suzhou Guofeng Dingjia Venture Capital Partnership (Limited Partnership) (ᘽψ਷ᔮཻྗ௴ุҳ༟ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The executive partner of Cash Capital is Tibet Guokejiahe Investment Management Partnership (Limited Partnership) (ྗձҳ༟ ၍ଣΥྫΆุ(Υྫ)), a limited partnership incorporated under the laws of the PRC and the executive partner of which is Lhasa Guokejiahe Investment Management Co., Ltd. (ʮ̡ ). Lhasa Guokejiahe Investment Management Co., Ltd. is ultimately controlled by. Mr. Wang Ge ( ˮˑ), Mr. Chen Hongwu (؛ݳand Chinese Academy of Sciences Holdings Co., Ltd. (ʮ̡ ), a wholly-owned company of Chinese Academy of Sciences (ኪ৫). The general partner of Cash Capital is Guoke Shenghua Investment Management Co., Ltd (ʮ ̡), which is ultimately controlled by Mr. Wang Ge ( ˮˑ). As of the Latest Practicable Date, Cash Capital had 16 limited partners and Ningbo Meishan Free Trade Port Tengyunyuansheng Investment Partnership (Limited Partnership) (೼ಥਜᙜථ ᛆҳ༟ΥྫΆุ (Υྫ)), which is its largest limited partner and ultimately controlled by Mr. Huang Tao ( රᏹ) and Mr. Huang Shiying ( ර˰ဦ), held approximately 26.28% of its partnership interest. As of the Latest Practicable Date, Cash Capital had total assets under management of approximately RMB1.4 billion. 17. Jiaxing Chenyue: Jiaxing Chenyue Equity Investment Partnership (Limited Partnership) ( ྗጳ ᛆҳ༟ΥྫΆุ (Υྫ)) (formerly known as Jiaxing Jianxin Chenyue Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ))), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Jiaxing Chenyue is Jianxin (Beijing) Investment Fund Management Co., Ltd. (ڦܔ(̏ԯ)ப΂ʮ̡ ), a limited liability company established under the laws of the PRC which is controlled by CCB Trust Co. Ltd. (ப΂ʮ̡ ), a company duly incorporated and licensed under the laws of the PRC and having its registered office at No. 45 Jiushiqiao Street, Hefei, Anhui, PRC. CCB Trust Co. Ltd. is ultimately controlled by China Construction Bank Corporation (ʮ̡ ), a PRC incorporated company dually listed on the Stock Exchange (stock code: 0939) and the Shanghai Stock Exchange (stock code: 601939). As of the Latest Practicable Date, Beijing Juxinde Investment Management Center (Limited Partnership) (ᅃҳ༟၍ଣʕː (ࠢ Υྫ)) (formerly known as Beijing Jianxin Jude Investment Management Center (Limited Partnership) (ၳᅃҳ༟၍ଣʕː (Υྫ)), which is the sole limited partner of Jiaxing Chenyue and controlled by CCB Trust Co. Ltd., held 99.8% of its partnership interest. As of the Latest Practicable Date, CCB Trust Co. Ltd. had total assets under management of approximately RMB1.46 trillion. 18. Puen Guoxin: Shijiazhuang Hi-Tech Zone Puen Guoxin Equity Investment Center (Limited Partnership) (ᛆҳ༟ʕː (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partners of Puen Guoxin are (i) Guoxin Sichuang Investment Fund Management (Beijing) Co., Ltd. (၍ଣ (̏ԯ)ʮ̡), which is ultimately controlled by Mr. Wang Hongjie ( ˮ҃௫), who is an independent third party; and (ii) Shanghai Shifengxinhui Venture Capital Management Co. Ltd. (ි௴ุҳ༟ ʮ̡ ). As of the Latest Practicable Date, Shanghai Shifengxinhui Venture Capital Management Co. Ltd. had four shareholders, among which, Shanghai Winning Financial Leasing Co. Ltd. (ʮ̡ ), being the largest shareholder, held 29.00% of its equity interest. Shanghai Winning Financial Leasing Co. Ltd. is wholly owned by China Charmaine Pharmaceutical Company Limited ( ʕ਷་ᑢႡᖹϞ ʮ̡), which is ultimately controlled by Mr. Cai Dongchen (ો). As of the Latest Practicable Date, Puen Guoxin had four limited partners and Shijiazhuang Hi-Tech Zone HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 219 – --- page 229 --- Technology Development Investment Co., Ltd. (ʮ̡ ), which is its largest limited partner and ultimately controlled by Shijiazhuang High-Tech Industrial Development Zone Finance Bureau (҅ ), held approximately 30.00% of its partnership interest. As of the Latest Practicable Date, Puen Guoxin had total assets under management of approximately RMB200 million. 19. Chongde VC: Beijing Chongde Yingsheng Venture Capital Co., Ltd. (ସ௴ ʮ̡ ) is a company incorporated under the laws of the PRC. As of the Latest Practicable Date, Chongde VC had 11 shareholders and Beijing Shuanglu Pharma Inc. (ʮ̡ ), a company incorporated in the PRC and listed on the Shenzhen Stock Exchange (stock code: 002038), being its largest shareholder, held approximately 37.96% of its equity interest. As of the Latest Practicable Date, Chongde VC had total assets under management of approximately RMB204 million. 20. Yuanchuangke Investment: Beijing Yuanchuangke Equity Investment Fund Management Center (Limited Partnership) (၍ଣʕː (Υ ྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Yuanchuangke Investment is Zhongwen Huineng (Beijing) Venture Capital Management Co., Ltd. ( ʕ˖ිঐ(̏ԯ)ப΂ʮ̡ ), which is controlled by Beijing Chongde Yingsheng Investment Management Co., Ltd. (ʮ̡ ), which in turn is ultimately controlled by Beijing Shuanglu Pharmaceutical Co. Ltd. (ʮ̡ ), a company listed on the Shenzhen Stock Exchange (stock code: 002038). As of the Latest Practicable Date, Yuanchuangke Investment had five limited partners and China Cultural Industry Development Group Co., Ltd. (ʮ̡ ), which is its largest limited partner and ultimately controlled by the State Council ( ਷ਕ৫), held approximately 32.86% of its partnership interest. As of the Latest Practicable Date, Yuanchuangke Investment had total assets under management of approximately RMB70 million. 21. Beijing Yuanpei: Beijing Yuanpei Technology Innovation Investment Center (Limited Partnership) (Ҧ௴อҳ༟ʕː (Υྫ)), a limited partnership incorporated under the laws of PRC, is a private equity fund. The general partner of Beijing Yuanpei is Founder H Fund Co., Ltd. (ப΂ʮ̡ ), a limited liability company established under the laws of PRC, which is ultimately controlled by Founder Securities Co., Ltd. (ʮ̡ ), a joint stock company listed on the Shanghai Stock Exchange (stock code: 601901). As of the Latest Practicable Date, Beijing Yuanpei had eight limited partners and Beijing Science and Technology Innovation Fund (Limited Partnership) (ږ( Υྫ)) (“ Beijing Sci-Tech ”), being its largest limited partner, held approximately 39.92% of its partnership interest. Beijing Sci-Tech is a private equity investment fund that was established by Beijing Municipal Government. The general partner of Beijing Sci-Tech is Beijing Science and Technology Innovation Investment Management Co. Ltd. (ʮ̡ ), which is ultimately controlled by China International Capital Corporation Limited (ʮ ̡), a PRC incorporated company dually listed on the Stock Exchange (stock code: 03908) and the Shanghai Stock Exchange (stock code: 601995). As of the Latest Practicable Date, Beijing Sci-Tech had seven limited partners. As of the Latest Practicable Date, Beijing Yuanpei had total assets under management of approximately RMB1 billion. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 220 – --- page 230 --- 22. Wuming Investment: Zibo Juancheng No. 2 Equity Investment Fund Partnership (Limited Partnership) (ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of PRC, is a private equity fund. The general partner of Wuming Investment is Shenzhen Wuming Investment Management Co., Ltd. (ʮ̡ ) a limited liability company established under the laws of PRC which is ultimately controlled by Mr. Zhang Yingjie (௫), an independent third party. As of the Latest Practicable Date, Wuming Investment had nine limited partners and Ningbo Meishan Free Trade Port Daokangsihe Investment Partnership (Limited Partnership) (ձҳ༟ΥྫΆุ (Υྫ)), which is its largest limited partner and ultimately controlled by Mr. Hu Yongjie (؏ۇߡheld approximately 29.76% of its partnership interest. As of the Latest Practicable Date, Wuming Investment had total assets under management of approximately RMB34 million. 23. Rongchang Chuangtou: Huanghe Delta Rongchang (Yantai) Entrepreneurship Investment Partnership (Limited Partnership) (׹( ๧̨)௴ุҳ༟ΥྫΆ ุ(Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partners of Rongchang Chuangtou are (i) Rongchang Equity Investment Management (Yantai) Co., Ltd. (ᛆҳ༟၍ଣ (๧̨)ʮ̡), which is ultimately controlled by Dr. Fang Jianmin (਄͏), Mr. Wang Weidong (۾ ؇Mr. Lin Jian (਄), Mr. Xiong Xiaobin ( ဤወᏵ), Dr. Wang Liqiang ( ˮট੶), Mr. Wang Xudong (؇Mr. Deng Yong (ۇMs. Yang Minhua ( เઽശ), Mr. Wen Qingkai ( ๝ᅅ௱) and Mr. Wei Jianliang (Ԅ), Yantai Rongda Venture Capital Center (Limited Partnership) ( ๧̨࿲༺௴ุҳ༟ʕː (Υྫ)), RongChang Holding Group Ltd., and I-NOV A Limited as concert parties (together, the “ Concert Parties ”) pursuant to a concert party agreement dated April 16, 2020; and (ii) Yellow River Delta Industry Investment Fund Management Co., Ltd. (ʮ ̡), a limited liability company established under the laws of PRC which is owned as to (a) 35.00% by Ningxia Yellow River Delta Investment Management Co., Ltd. (රɧ ʮ̡ ), a limited liability company established under the laws of PRC which is ultimately controlled by Ms. Cui Liyuan ( ੦ᘧʩ), an independent third party; (b) 35.00% by Luxin Venture Capital Group Co., Ltd. (ʮ ̡), a joint stock company listed on the Shanghai Stock Exchange (stock code: 600783); and (c) 30.00% by Shandong Saibole Investment Management Co., Ltd. (ᒄЬᆀҳ ʮ̡ ), a limited liability company established under the laws of PRC which is ultimately controlled by Mr. Fang Gang (࡝an independent third party. As of the Latest Practicable Date, Rongchang Chuangtou had five limited partners and Rongchang Pharmaceutical (Zibo) Co., Ltd. (Ⴁᖹ(଍௹ )ʮ̡), which is its largest limited partner and ultimately controlled by the Concert Parties, held approximately 30.50% of its partnership interest. As of the Latest Practicable Date, Rongchang Chuangtou had total assets under management of approximately RMB200 million. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 221 – --- page 231 --- 24. Chuangdongfang Investment: Gongqing City Chuangdongfang Huaying Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Ϟ Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Chuangdongfang Investment is Shenzhen CDF Capital Co., Ltd. (ʮ̡ ), a limited liability company established under the laws of PRC which is ultimately controlled by Mr. Xiao Shuilong ( ӽ˥Ꮂ), who is an independent third party. As of the Latest Practicable Date, Chuangdongfang Investment had nine limited partners and Mr. Ruan Qingguo ( Ԥᅅ਷), being its largest limited partner, held approximately 24.99% of its partnership interest. As of the Latest Practicable Date, Shenzhen CDF Capital Co., Ltd. had total assets under management of approximately RMB25 billion. 25. Kuanyu Capital: Jiaxing Kuanyu Zeyou Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of the PRC, is a private equity fund. The general partner of Kuanyu Capital is Kuanyu Private Equity Fund Management (Hainan) Co., Ltd. ( ᄱౕӷ ၍ଣ (ی)ʮ̡), a limited liability company established under the laws of PRC which is ultimately controlled by Ms. Wang Ran ( ˮ್), an independent third party. As of the Latest Practicable Date, Kuanyu Capital had 14 limited partners and Rudong Taipu Equity Investment Center (Limited Partnership) (ᛆҳ༟ʕː (Υྫ)), which is ultimately controlled by Mr. Li Jinhua (ശ), was its largest limited partner, holding approximately 23.53% of its partnership interest. As of the Latest Practicable Date, Kuanyu Capital had total assets under management of approximately RMB85 million. 26. Bloomage Langya: Wuhu Bloomage Langya Healthcare Industry Investment Partnership (Limited Partnership) (ԭ਄ੰପุҳ༟ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of PRC, is a private equity fund. The general partner of Bloomage Langya is Beijing Alan Asset Management Co., Ltd. (ᒵ ʮ̡ ), a limited liability company incorporated under the laws of PRC, which is ultimately controlled by Mr. Shen Dongri (˚), an independent third party. As of the Latest Practicable Date, Bloomage Langya had three limited partners, and Beihai Guanghe Venture Capital Investment Co., Ltd. (ʮ̡ ) (formerly known as Beihai Guanghe Investment Co., Ltd. (ʮ̡ )), being its largest limited partner, held approximately 56.63% of its partnership interest. As of the Latest Practicable Date, Bloomage Langya had total assets under management of approximately RMB320 million. CAPITALIZATION Our Company has applied for H-share full circulation to convert certain of the Unlisted Shares into H Shares as per the instructions of the relevant Shareholders. The conversion of Unlisted Shares into H Shares will involve an aggregate of 210,485,039 Unlisted Shares held by 34 out of 37 existing Shareholders, representing approximately 56.39% of total issued Share capital of the Company upon completion of the conversion of Unlisted Shares into H Shares and the Global Offering (assuming the Over-allotment Option is not exercised). Save as disclosed in this prospectus and to the best knowledge of our Directors, we are not aware of the intention of any existing Shareholders to convert their Unlisted Shares. For further details, see “Share Capital”. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 222 – --- page 232 --- The table below is a summary of the capitalization of our Company upon completion of the conversion of the Unlisted Shares into H Shares and the Global Offering (assuming the Over-allotment Option is not exercised): Immediately after Global Offering (assuming Over-allotment Option is not exercised) and the conversion of Unlisted Shares into H Shares Shareholder Number of Shares H Shares Approximate percentage of HS h a r e si n the total issued Share capital Unlisted Shares Approximatepercentage ofUnlistedShares in thetotal issuedShare capital 1. Dr. Tian ...................... 70,182,990 35,091,495 9.40% 35,091,495 9.40% LA V 2. — LA V ImmuneOnco .............. 15,178,770 15,178,770 4.07% — — 3. — Suzhou Likang ................ 14,428,170 7,214,085 1.93% 7,214,085 1.93% 4. — LA V ImmOn ................. 12,542,805 12,542,805 3.36% — — 5. — Suzhou Lirun ................. 1,507,680 753,840 0.20% 753,840 0.20% ZJ Leading VC 6. — ZJ Leading Initiating VC .......... 36,780,390 — — 36,780,390 9.85% 7. — ZJ Leading SiQi VC ............ 5,554,305 5,554,305 1.49% — — 8. Lapam Capital .................. 19,263,240 — — 19,263,240 5.16% 9. Halo Investment II ............... 18,000,000 18,000,000 4.82% — — Milestone Entities 10. — Licheng Investment ............. 9,631,620 9,631,620 2.58% — — 11. — Jiaxing Liyou ................. 4,743,630 4,743,630 1.27% — — 12. — Milestone Asset ............... 2,185,020 2,185,020 0.59% — — LYFE Capital 13. — Granite Peak ................. 9,084,330 6,813,248 1.83% 2,271,082 0.61% 14. — Borah Peak .................. 6,927,345 5,195,509 1.39% 1,731,836 0.46% 15. Jiaxing Changxian ................ 15,517,260 7,758,630 2.08% 7,758,630 2.08% 16. Jiaxing Changyu ................. 14,839,695 7,419,848 1.99% 7,419,847 1.99% 17. GBA Investment ................. 13,854,690 13,854,690 3.71% — — 18. Zhangjiang Sci & Tech ............. 10,862,055 — — 10,862,055 2.91% 19. Langsheng Investment ............. 9,631,620 9,631,620 2.58% — — 20. Yaluo Investment ................ 7,823,835 5,476,685 1.47% 2,347,150 0.63% 21. Ruiji III ...................... 6,927,345 3,463,673 0.93% 3,463,672 0.93% 22. Sunshine Life .................. 6,701,310 3,350,655 0.90% 3,350,655 0.90% 23. Minglang Capital ................ 5,266,665 2,633,333 0.71% 2,633,332 0.71% 24. Jiaxing Qiyue .................. 5,195,520 5,195,520 1.39% — — 25. Sci-Tech Fund I ................. 4,267,260 3,200,445 0.86% 1,066,815 0.29% 26. Nanjing Xingjian Ruiying ........... 3,394,890 1,697,445 0.45% 1,697,445 0.45% 27. Cash Capital ................... 3,394,890 3,394,890 0.91% — — 28. Jiaxing Chenyue ................. 3,350,655 3,350,655 0.90% — — 29. Puen Guoxin ................... 2,474,055 2,474,055 0.66% — — 30. Chongde VC ................... 2,407,905 2,407,905 0.65% — — 31. Yuanchuangke Investment ........... 2,407,905 2,407,905 0.65% — — 32. Beijing Yuanpei ................. 2,185,020 2,185,020 0.59% — — 33. Wuming Investment ............... 2,092,455 2,092,455 0.56% — — 34. Rongchang Chuangtou ............. 2,046,240 2,046,240 0.55% — — 35. Chuangdongfang Investment .......... 2,046,195 818,478 0.22% 1,227,717 0.33% 36. Kuanyu Capital ................. 2,046,195 2,046,195 0.55% — — 37. Bloomage Langya ................ 1,348,740 674,370 0.18% 674,370 0.18% Sub total ..................... 356,092,695 210,485,039 56.39% 145,607,656 39.01% Shareholders participating in the Global Offering .................... 17,147,200 17,147,200 4.59% — — Total ........................ 373,239,895 227,632,239 60.99% 145,607,656 39.01% HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 223 – --- page 233 --- PUBLIC FLOAT Upon the completion of the Global Offering (assuming that the Over-allotment Option is not exercised) and the conversion of Unlisted Shares into H Shares, the H Shares held by certain of our Shareholders who are, or directly or indirectly controlled by our core connected persons, will not be counted towards the public float. Details of these Shareholders are set out below:  Dr. Tian is one of our Controlling Shareholders and the 35,091,495 H Shares held by him will not count towards the public float. Further, our Employee Shareholding Platforms, namely, Jiaxing Changxian, Jiaxing Changyu and Halo Investment II, are ultimately controlled by Dr. Tian, and are also considered as our Controlling Shareholders, and the 33,178,478 H Shares held by the Employee Shareholding Platforms in aggregate will not count towards the public float.  ZJ Leading SiQi VC is ultimately controlled by Mr. Yu Xiaoyong, one of our non-executive Directors and therefore it is a close associate of Mr. Yu Xiaoyong and the 5,554,305 H Shares held by ZJ Leading SiQi VC will not count towards the public float. The 145,607,656 Unlisted Shares held by our Shareholders as of the Latest Practicable Date, representing approximately 39.01% of our total issued Shares upon completion of the Global Offering (assuming the Over-allotment Option is not exercised), will not be considered as part of the public float as the Shares are Unlisted Shares which will not be converted into H Shares and traded on the Stock Exchange following the completion of the Global Offering. To the best knowledge of our Directors, save as disclosed above, immediately upon the completion of the Global Offering and conversion of Unlisted Shares into H Shares (assuming the Over-allotment Option is not exercised), (i) assuming 17,147,200 H Shares are issued to the public Shareholders in the Global Offering and 136,660,761 Unlisted Shares held or controlled by our Shareholders who are not our core connected persons will be converted into H Shares, an aggregate of 153,807,961 H Shares representing approximately 41.21% of our total issued Shares will be counted towards the public float, which is in compliance with the requirement under Rule 8.08 of the Listing Rules; and (ii) based on an Offer Price of HK$18.60 per Share, the Company will have a market capitalization of at least HK$375 million held by the public (excluding the H Shares to be subscribed by the Cornerstone Investors or any existing Shareholders) as required under Rule 18A.07 of the Listing Rules. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 224 – --- page 234 --- SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY BEFORE THE COMPLETION OF THE GLOBAL OFFERING The following chart sets forth our Group’s simplified shareholding and corporate structure immediately prior to the completion of the Global Offering: Our Company (PRC) ImmuneOnco Hong Kong (Hong Kong) Macroimmune (USA) ImmuneTANK (PRC) ImmuneOnco Shanghai (PRC) 100% 100% 100% 100% 19.71% 12.25% 11.89% 5.41% 4.65% 4.50% 3.05% 2.71% 2.20% 1.95% 1.88% 1.48% 1.46% 0.95% 1.20%13.58% 3.89% 0.61% 0.57% 6.06% Dr. Tian(1) Employee Shareholding Platforms(2) LapamCapitalLAV(3) ZJ Leading VC(4) Milestone Entities(5) LYFE Capital(6) Langsheng Investment Zhangjiang Sci & Tech Yaluo Investment Ruiji III Jiaxing Qiyue Minglang CapitalSunshine Life Sci-Tech Fund I Other Shareholders(7) GBA Investment Nanjing Xingjian Ruiying Beijing Yuanpei Rongchang Chuangtou Notes: (1) As of the Latest Practicable Date, Dr. Tian, was able to exercise approximately 33.29% of the voting rights in our Company through: (i) 70,182,990 S hares directly held by him and (ii) 48,356,955 Shares held by our Employee Shareholding Platforms, namely Jiaxing Changxian, Jiaxing Changyu and Halo Investment II . Both Jiaxing Changxian and Jiaxing Changyu are our Onshore Employee Shareholding Platforms of which their respective executive partner is controlled by Dr. Tian. Halo Investment II is our Offshore Employee Shareholding Platform with Dr. Tian controlling the exercise of its entire voting rights in the Company. F or further details on the Employee Shareholding Platforms, see “— Employee Shareholding Platforms” above. (2) Represents the three Employee Shareholding platforms of our Group, namely Jiaxing Changxian and Jiaxing Changyu and Halo Investment II. See “— Em ployee Shareholding Platforms” above. (3) LA V includes LA V ImmuneOnco, LA V ImmOn, Suzhou Likang and Suzhou Lirun, each holding 4.26%, 3.52%, 4.05% and 0.42% of the total issued Shares of our Company, respectively, as of the Latest Practicable Date. See “— Pre-IPO Investments — Information about Our Pre-IPO Investors” above for details of their background. (4) ZJ Leading VC includes ZJ Leading Initiating VC and ZJ Leading SiQi VC, each holding 10.33% and 1.56% of the total issued Shares of our Company, respe ctively, as of the Latest Practicable Date. See “— Pre-IPO Investments — Information about Our Pre-IPO Investors” above for details of their background. (5) Milestone Entities include Licheng Investment, Jiaxing Liyou and Milestone Asset, each holding 2.71%, 1.33% and 0.61% of the total issued Shares of our Company, respectively, as of the Latest Practicable Date. See “— Pre-IPO Investments — Information about Our Pre-IPO Investors” above for details of their bac kground. (6) LYFE Capital includes Granite Peak and Borah Peak, each holding 2.55% and 1.95% of the total issued Shares of our Company, respectively, as of the La test Practicable Date. See “— Pre-IPO Investments — Information about Our Pre-IPO Investors” above for details of their background. (7) Other Shareholders include Cash Capital, Jiaxing Chenyue, Puen Guoxin, Chongde VC, Yuanchuangke Investment, Wuming Investment, Chuangdongfa ng Investment, Kuanyu Capital and Bloomage Langya. For further details of their backgrounds and respective shareholding percentages in our Company, see “— Pre-IPO Investments — Information about Our Pre-IPO Investors” and “— Establishment and Major Shareholding Changes of our Company” above. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 225 – --- page 235 --- SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY FOLLOWING THE COMPLETION OF THE GLOBAL OFFERING The following chart sets forth our Group’s shareholding and corporate structure immediately after the completion of the Global Offering (assuming the Over-allotment Option is not exercised). Our Company (PRC) ImmuneOnco Hong Kong (Hong Kong) Macroimmune (USA) ImmuneTANK (PRC) ImmuneOnco Shanghai (PRC) 100% 100% 100% 100% 18.80% 11.70% 11.34% 5.16% 4.44% 4.29% 2.91% 2.58% 2.10% 1.86% 1.80% 1.41% 1.39% 0.91%1.14%12.96% 3.71% 0.59% 0.55% 5.78% Dr. Tian(1) Employee Shareholding Platforms(2) LapamCapitalLAV(3) ZJ Leading VC(4) Milestone Entities(5) LYFE Capital(6) Langsheng Investment Zhangjiang Sci & Tech Yaluo Investment Ruiji III Jiaxing Qiyue Minglang CapitalSunshine Life Sci-Tech Fund I Other Shareholders(7) GBA Investment Beijing Yuanpei Rongchang Chuangtou 4.59% Public Investors Nanjing Xingjian Ruiying Notes: (1) See notes 1 to 2 to the chart in the sub-section headed “Shareholding and Corporate Structure Immediately Before the Completion of the Global Offer ing” in this section above. (2) See notes 1 to 2 to the chart in the sub-section headed “Shareholding and Corporate Structure Immediately Before the Completion of the Global Offer ing” in this section above. (3) LA V includes LA V ImmuneOnco, Suzhou Likang, LA V ImmOn and Suzhou Lirun, each holding 4.07%, 3.87%, 3.36% and 0.40% of the total issued Shares of our Company, respectively, immediately after the completion of the Global Offering (assuming the Over-allotment Option is not exercised). See “— Pre-I PO Investments — Information Relating to Our Pre-IPO Investors” above for details of their background. (4) ZJ Leading VC includes ZJ Leading Initiating VC and ZJ Leading SiQi VC, each holding 9.85% and 1.49% of the total issued Shares of our Company, respec tively, immediately after the completion of the Global Offering (assuming the Over-allotment Option is not exercised). See “— Pre-IPO Investments — Informa tion Relating to Our Pre-IPO Investors” above for details of their background. (5) Milestone Entities include Jiaxing Liyou, Licheng Investment and Milestone Asset, each holding 1.27%, 2.58% and 0.59% of the total issued Shares of our Company, respectively, immediately after the completion of the Global Offering (assuming the Over-allotment Option is not exercised). See “— Pre-IPO Invest ments — Information Relating to Our Pre-IPO Investors” above for details of their background. (6) LYFE Capital includes Granite Peak and Borah Peak, each holding 2.43% and 1.86% of the total issued Shares of our Company, respectively, immediate ly after the completion of the Global Offering (assuming the Over-allotment Option is not exercised). See “— Pre-IPO Investments — Information Relating to Our Pr e-IPO Investors” above for details of their background. (7) Other Shareholders include Cash Capital, Jiaxing Chenyue, Puen Guoxin, Chongde VC, Yuanchuangke Investment, Wuming Investment, Chuangdongfa ng Investment, Kuanyu Capital and Bloomage Langya. For further details of their backgrounds and respective shareholding percentages in our Company, see “— Pre-IPO Investments — Information Relating to Our Pre-IPO Investors” and “— Capitalization” above. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 226 – --- page 236 --- OVERVIEW We are a science-driven biotechnology company dedicated to the development of immuno-oncology therapies. We are one of the few biotechnology companies globally adopting a systematic approach to harness both the innate and adaptive immune systems. Currently approved immunotherapies primarily focus on the adaptive immune system and are often confronted with limited clinical benefits due to low response rates and inevitable drug resistance and/or relapse in many cancer indications. Harnessing both the innate and adaptive immune systems allows us to overcome the limitations of current T-cell-based immunotherapies and address highly unmet medical needs of cancer patients. We have developed a rich pipeline of 14 drug candidates with eight ongoing clinical programs, featured by a comprehensive innate-immunity-based asset portfolio. Our pipeline reflects our extensive understanding into the frontiers of cancer biology and immunology, and our expertise in turning scientific research into drug candidates. We continue to advance the drug development targeting innate immune checkpoints in cancer and we believe that the introduction of these novel therapies into the field of cancer immunotherapy will lead to robust and durable treatment responses. Our founder, Dr. Wenzhi Tian, began to explore the therapeutic potential of CD47 blockade in 2010, long before this innate immune checkpoint became widely recognized and clinically validated in the biopharmaceutical industry. Based on our understanding of the biology underlying CD47-SIRP α interaction and its potential synergy with other tumor targets and/or immune checkpoints, we have built a differentiated CD47-based portfolio with favorable safety and efficacy profiles since our inception in 2015. In addition to CD47, we have selected and validated another innate immune checkpoint, CD24, in recent years. Around CD24, we are developing one IND-enabling-stage and several discovery- and preclinical-stage drug candidates, each with the potential to become the first few of its class to enter into clinical stage around the world. Moreover, we are also developing drug candidates that target other promising innate and adaptive immune checkpoints, including IL-8, NKG2A and PSGL-1, to maximize the clinical and commercial value of our platform. Our continuous innovation is driven by an experienced and stable R&D team led by Dr. Tian. Core members of our R&D team have been working with Dr. Tian for over 10 years and possess multi-disciplinary expertise in drug discovery, design and development. Emulating the “Quality-by-Design (QbD)” concept that is intended to improve drug product quality by using analytical and risk-management methodologies, we created the “Drug-by-Design (DbD)” concept that emphasizes the fundamental role of molecule design rationale in the process of large molecule drug development. This concept requires that the structure of every drug molecule be deliberately designed with a sound scientific rationale predicated on target-specific biological functions and validated in preclinical studies. Under the guidance of our “DbD” concept and the leadership of Dr. Tian, we have built a fully-integrated R&D platform. It features our proprietary technologies and know-how (including our mAb-Trap bispecific antibody platform technology) and encompasses all key functionalities throughout the drug development process. Strictly adhering to the “DbD” concept and leveraging our R&D platform, we have designed and developed a rich pipeline that aims to unlock not only the full power of the largely untapped innate immune system, but also the synergistic potential of harnessing the innate and adaptive immune systems at the same time. The following chart summarizes the development status of our selected drug candidates as of the Latest Practicable Date: BUSINESS – 227 – --- page 237 --- Notes: (1) All of our clinical- and IND-stage drug candidates are classified as Category 1 innovative drugs, and preclinical- and disco very-stage drug candidates are expected to be classified as Category 1 innovative drugs, in accordance with relevant laws and regulation in China. (2) Due to certain products being in the preclinical or discovery stages, their line of treatment has not been decided yet. The Company will determine the line of treatment based on the progress of the drug development. (3) Expected completion date for Phase Ia/I trial refers to the time when RP2D can be determined, and expected completion date for Phase Ib/II trial refers to the time when top-line data is available for regulatory discussions. Follow-up period required would not delay the initiation of the next phase clinical trials, and is thus not considered. (4) We completed the Phase I dose-escalation study of IMM01 monotherapy in R/R lymphoma in January 2022. In accordance with the relevant laws and guidance of the NMPA, the safety and other clinical data from the Phase I monotherapy trial, combined with preclinical study results, form the basis for us to obtain the IND approvals of our multiple IMM01-based combination therapy programs. The favorable safety profile of IMM01 observed in this Phase I trial enabled us to progress directly to the Phase Ib/II trials for our various combination programs. In June 2022, we have completed a Phase Ib trial to evaluate IMM01 in combination with azacitidine for the treatment of R/R MDS and R/R AML, and initiated a Phase II trial mainly for the first-line treatment of higher-risk MDS, unfit AML and CMML. We have also completed a Phase Ib cl inical trial for IMM01 in combination with tislelizumab, and initiated a Phase II trial in December 2022. Based on ongoing evaluation of emerging data across our different clinical programs as well as anticipated synergistic effects of IMM01 and tislelizumab for treating cHL, we strategically plan to prioritize our resources on the clinical development of IMM01-based combination therapies and CD47-based bispecific molecules, which are expected to demonstrate stronger clinical activity and a higher likelihood of obtaining marketing approval. Consequently, we terminated the Phase II clinical trial for IMM01 monotherapy in October 2022 after discussion with principal investigators. Benefited patients in IMM01 monotherapy trials will continue to receive treatment until their diseases progress. (5) The cohort-expansion trials of this combination are mainly designed to target the first-line treatment of higher-risk MDS (p atients who fall into higher-risk group categories in the original or revised International Prognostic Scoring System), unfit AML (individuals of older age with AML who are considered not eligible for intensive treatment approaches), and CMML. Part icularly, we plan to seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML, a rare type of disease with highly unmet medical needs. (6) This combination of IMM01 and tislelizumab targets all subtypes of cHL. (7) In July 2022, we obtained the NMPA’s consent for adding R/R cHL as an additional expansion cohort into the ongoing combinat ion trial of IMM01 and tislelizumab. We dosed the first patient with R/R cHL in China in January 2023. (8) The clinical trial is led and funded by Sunshine Guojian Pharmaceutical (Shanghai) Co., Ltd. (“ Sunshine Guojian”). As denoted by the dotted line, Sunshine Guojian and us have obtained an IND approval for a Phase Ib/II trial of this combination therapy from the NMPA in August 2021, and therefore the parties can skip the Phase Ia stage and directly initiate a Phase Ib/II trial. (9) We will continue to conduct preclinical studies for IMM2547, IMM51, IMM38, IMM50 and IMM62, including cell line development , in vivo studies and further evaluation. (10) We are currently conducting the Phase I trial for IMM27M monotherapy, and have obtained the IND approval for a Phase Ib/II trial for its combination with a PD-1 antibody. * Currently we have several other drug candidates in preclinical stage and plan to further develop these candidates through col laboration, such as IMM2518, a second-generation VEGF×PD-L1 bispecific molecule and IMM5601, a CD47×CD38 bispecific molecule. Abbreviations: MDS refers to myelodysplastic syndrome; AML refers to acute myeloid leukemia; CMML refers to chronic myelomonocytic leukemia; MM refers to multiple myeloma; B-NHL refers to B-cell non-Hodgkin lymphoma; cHL refers to classical Hodgkin lymphoma; IND refers to investigational new drug; CMC refers to chemistry, manufacturing, and controls; ADCC refers to antibody-dependent cellular cytotoxicity. Source: Company Data Adaptive Immunity Innate Immunity Program(1) Target (Modality) IND/IND- Enabling Phase Ia/I Phase Ib/II Phase III/ Pivotal Current Status / Upcoming Milestone(3) Commercial Rights IMM01(4) IMM01 + Azacitidine CD47 (SIRPα-Fc fusion protein) MDS (unfit 1L), AML (1L), CMML (1L)(5) Phase Ib/II commenced in January 2022; expect to complete Phase II and initiate pivotal trial in Q1 2024 Global IMM01 + Tislelizumab CD47+PD-1 Phase Ib/II commenced in May 2022; expect to complete Phase II in Q3 2024 and initiate pivotal trial in Q4 2024(7) Global Global Global IMM01 + Inetetamab CD47+HER2 HER2-positive solid tumors (2L&3L) cHL (≥3L) (6), Solid tumors (2L&3L) devorppaDNIII/bIesahP devorppaDNIII/bIesahPIMM01 + Bortezomib + Dexamethasonum CD47 IMM0306 Monotherapy CD47xCD20 (Bispecific molecule) Indolent B-NHL (≥3L) Phase IIa commenced in March 2023 in China; IND approved in the U.S. Global IMM0306 + Lenalidomide CD47xCD20 (Bispecific molecule) B-NHL (2L) IMM2902 CD47xHER2 (Bispecific molecule) HER2-positive and low-expressing solid tumors (2L&3L) Phase Ia commenced in February 2022 in China and in June 2022 in the U.S.; expect to largely complete Phase Ia trials in China and the U.S. in 2023 Global Global IMM2520 CD47xPD-L1 (Bispecific molecule) Solid tumors (≥2L) IND approved in China and the U.S. in Q4 2022; Phase I commenced in China in March 2023 Global IMM47 CD24 (mAb) Solid tumors (≥2L) labolGg; expect to enter into clinical trials in August 2023nilbane-DNI IMM4701 CD47xCD24 (Bispecific molecule) Solid tumors labolGCMC IMM2547(9) CD24xPD-L1 (Bispecific molecule) Solid tumors labolGyrevocsiD IMM51(9) IL-8 (mAb) Solid tumors labolGlacinilcerP IMM38(9) NKG2A (mAb) Solid tumors Preclinical Global IMM50(9) PSGL-1 (mAb) Solid tumors Discovery Global IMM62(9) Undisclosed Solid tumors Discovery Global IMM2510 VEGFxPD-L1 (Bispecific molecule) Solid tumors (2L&3L) Phase I commenced in August 2021 and 8th cohort ongoing in China; expect to complete Phase I in Q3 2023 Global IMM27M CTLA-4 ADCC+ (mAb) Solid tumors (≥2L) Phase I commenced in June 2022 in China; expect to complete in Q3 2023; IND approved in China for Phase Ib/II trial for its combination with a PD-1 antibody(10) Global IMM40H CD70 (mAb) Liquid/Solid tumors (≥2L) IND approved in China and the U.S. in August 2022 Global Innate Immunity Targets Innate Immunity Targets Adaptive Immunity Targets Adaptive Immunity Targets Innate and Adaptive Immunity Targets Innate and Adaptive Immunity Targets Key ProductCore Product China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA) China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA) China (NMPA)China (NMPA) China (NMPA) China (NMPA)China (NMPA) China (NMPA)China (NMPA) China (NMPA) China (NMPA) China (NMPA)China (NMPA) China (NMPA)China (NMPA) (8) Discovery PreclinicalIndication(s) (line of treatment)(2) MM (≥4L) Phase Ib/IIa commenced in June 2023 BUSINESS – 228 – --- page 238 --- Our CD47-based drug candidates include:  IMM01 , our Core Product, is an innovative CD47-targeted molecule. It is the first SIRPα-Fc fusion protein to enter into clinical stage in China. IMM01 designed with IgG1 Fc can fully activate macrophages via a dual mechanism — simultaneously blocking the “don’t eat me” signal by disrupting CD47/SIRP α interaction and delivering the “eat me” signal through the engagement of activating Fc γ receptors on macrophages. Furthermore, the CD47-binding domain of IMM01 was specifically engineered to avoid human red blood cell (RBC) binding. With the differentiated molecule design, IMM01 has achieved a favorable safety profile and demonstrated its ability to activate macrophages. We are actively evaluating IMM01 in several ongoing and planned clinical trials: — Monotherapy : We have completed a Phase I dose-escalation study evaluating IMM01 in relapsed or refractory (R/R) lymphoma. IMM01 has demonstrated encouraging results in safety and efficacy in this trial as a single agent. Among 27 evaluable patients receiving 0.003 mg/kg to 2.0 mg/kg IMM01 in the dose-escalation study, two patients achieved complete response (2 CRs), one achieved partial response (1 PR), and 13 achieved stable disease (13 SDs) (including six cases with substantial tumor shrinkage observed). Among the six patients receiving an RP2D dose of 2.0 mg/kg in this monotherapy clinical trial, one achieved complete response (1 CR), and four achieved stable disease (4 SDs), resulting in a disease control rate (DCR) of 83% in these previously heavily pre-treated R/R lymphoma patients. Based on the encouraging results of the Phase I dose-escalation study, we initiated clinical trials evaluating combination therapies of IMM01 and other drugs, including each of azacitidine and tislelizumab. According to Frost & Sullivan, among numerous drug developers of CD47-targeted molecules globally, we are one of the only two companies to have observed CR in monotherapy clinical trials with a well tolerated safety profile. With preliminary efficacy and favorable safety in monotherapy clinical trials and preclinical data of its combination studies, IMM01 is expected to achieve strong synergistic effects used in combination with other cancer agents, and therefore we plan to prioritize the clinical development of IMM01 for combination use. — Combination of IMM01 and azacitidine: As validated by multiple publicly reported clinical trials, the combination of CD47-targeted therapies and azacitidine can generate synergistic tumor-killing effects. However, since azacitidine also induces blood toxicity, its combination with CD47 antibodies (which also cause blood toxicity) may lead to exacerbated blood toxicity and serious safety issues. In contrast, based on the initial data from our ongoing Phase Ib/II clinical trial, IMM01 presents strong potential to be a combination partner with azacitidine because of its dual mechanisms and favorable safety profile. IMM01 is also safer than CD47 antibodies partly due to the significantly lower dose required (2.0 mg/kg), as compared to the typical dose of 30.0 to 45.0 mg/kg required for CD47 antibodies. Specifically, for the first-line treatment of MDS, I-MAB’s lemzoparlimab, Gilead’s magrolimab, and Innovent’s IBI188 have achieved ORRs of 80.6%, 90.9%, and 93.9% after three cycles of treatment, respectively, when each used at a dose level of 30 mg/kg in combination with azacitidine. In comparison, IMM01’s combination with azacitidine has achieved an ORR of 93.8% at 2.0 mg/kg after three cycles of treatment. BUSINESS – 229 – --- page 239 --- We are evaluating the combination of IMM01 and azacitidine for the first-line treatment of higher-risk (HR) myelodysplastic syndromes (MDS), unfit acute myeloid leukemia (AML), and chronic myelomonocytic leukemia (CMML). Upon completion of the Phase Ib trial, we initiated the Phase II trial of this combination mainly for the first-line treatment of HR MDS, unfit AML and CMML in China in June 2022. Interim data as of February 10, 2023 from the Phase Ib/II trial has demonstrated favorable safety and promising efficacy profile. Neither DLT nor Grade 3 or higher hemolysis was observed among all 12 patients receiving the combination treatment at all three dose levels of IMM01 (1.0 mg/kg, 1.5 mg/kg, and 2.0 mg/kg) in our Phase Ib trial. Moreover, the interim data obtained from our Phase II trial as of February 10, 2023 has demonstrated that: (i) among the eight evaluable patients with 1L CMML, two reached complete response (2 CRs), six reached marrow complete response (6 mCRs), with one hematological improvement (1 HI, which also achieved mCR), resulting in an overall response rate (ORR) of 100%, and (ii) among the 16 evaluable HR MDS patients who have received at least three cycles of treatment, three achieved CR (3 CRs), nine achieved mCR (9 mCRs), and seven achieved HI (7 HIs, among which 4 also achieved mCR), resulting in an ORR of 93.8%. We expect to commence a pivotal trial in China in the first quarter of 2024. In particular, we plan to seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML, a rare type of disease with highly unmet medical needs. Subject to further clinical validation, we plan to file an IND application with the FDA for a Phase II study of this combination treatment. — Combination of IMM01 and tislelizumab: Unlike CD47 antibodies that often employ an IgG4 Fc region, IMM01 is designed with IgG1 Fc that can fully activate macrophages by activating an additional “eat me” signal through Fc-Fc γR engagement. Activated macrophages can then secrete certain cytokines and chemokines to recruit T cells to tumor sites, thus effectively converting “cold tumors” (tumors that lack T-cell infiltration) into “hot tumors” that are more responsive to the treatment of PD-1/PD-L1 inhibitors. As macrophages are widely distributed and highly infiltrated in tumor tissues of various cancers, this combination has the potential to treat a broad range of solid tumors. Our preclinical studies have demonstrated promising synergistic antitumor effects for the combination of IMM01 with either PD-1 or PD-L1 inhibitors. We intend to develop the combination therapy of IMM01 and tislelizumab for the treatment of solid tumors that are refractory or relapsed from the standard of care such as PD-1/PD-L1 inhibitors, including among others, non-small cell lung cancer (NSCLC), small cell lung cancer (SCLC), and head and neck squamous cell carcinomas (HNSCC). We are currently evaluating IMM01 and tislelizumab in a Phase II trial in various advanced solid tumors that failed to respond to or relapsed from the standard of care such as PD-1/PD-L1 inhibitors. We have completed the Phase Ib trial and initiated the Phase II trial in December 2022. In our Phase Ib trial, a heavily pre-treated NSCLC patient with six lines of prior treatment and refractory to PD-1 inhibitors achieved PR after three cycles of treatment with target lesion shrinkage of 40%. We are also evaluating this combination therapy in cHL patients who relapsed or progressed after the treatment of PD-1 inhibitors, which may allow us to pursue an accelerated marketing approval leveraging the results of relatively small sample size studies. In July 2022, we obtained the NMPA’s consent for adding R/R cHL as an additional expansion cohort into the ongoing combination trial of IMM01 and tislelizumab. We dosed the first patient with R/R cHL in China in January 2023. We expect to initiate a pivotal trial in the fourth quarter of 2024. BUSINESS – 230 – --- page 240 --- — Combination of IMM01 and other drugs: IMM01 has demonstrated a positive efficacy and safety profile in its Phase I monotherapy trial, which sets the stage for its combination use with other immunotherapies or targeted therapies. We are currently exploring therapeutic potential of IMM01 in combination with various other drugs for a range of cancer indications. We reached a collaboration with Sunshine Guojian, under which Sunshine Guojian will be primarily responsible for driving and funding the clinical development of the combination treatment of IMM01 and CIPTERBIN ® (inetetamab, a HER2 mAb) for HER2-positive solid tumors in mainland China. We are also conducting numerous preclinical studies to evaluate the combination use of IMM01 with other drugs. These combination studies have revealed strong synergistic potential in our mouse models. Developed on our mAb-Trap platform, our CD47-based bispecific molecules share a common structure: connecting the same engineered CD47-binding domain used in IMM01 to a base antibody with antibody-dependent cellular cytotoxicity (ADCC)-enhanced human IgG1 Fc fragment. This unique structural design with the engineered CD47-binding fragment allows our CD47-based bispecific molecules to avoid RBC binding, thus enabling the adoption of an ADCC-enhanced IgG1 Fc fragment capable of inducing full macrophage activation and much improved antibody-dependent cellular phagocytosis (ADCP) and ADCC activity, which results in stronger antitumor immune responses compared to most IgG4-based CD47 bispecific antibodies. When designing these molecules, we connect the engineered CD47-binding domain to the N-terminal of the heavy chain or light chain of a base antibody against another tumor target rather than to the Fc end, which ensures undisrupted binding to CD47 and preserves the intact Fc region with full immune effector function. Compared to combination therapies, our bispecific molecules targeting the same set of targets have demonstrated stronger antitumor activity at comparable dose levels in our preclinical studies. Our CD47-based bispecific molecules include:  IMM0306 , one of our Key Products, is the first CD47×CD20 bispecific molecule globally to enter into clinical stage. IMM0306 has a higher affinity for CD20 than CD47, which enables it to preferentially and simultaneously bind to CD20 and CD47 on malignant B cells rather than CD47-positive normal tissues and further mitigate CD47-related toxicity. Our preclinical studies suggest that IMM0306 is more potent than RITUXAN ® (rituximab, a CD20 mAb) monotherapy, even at a much lower dosing level, and it is more potent than the combination therapy of IMM01 and rituximab at a comparable dosing level. We initiated a Phase I trial for IMM0306 in R/R B-cell non-Hodgkin lymphoma (B-NHL) in China in May 2020, of which the preliminary data demonstrated encouraging results in safety and efficacy. According to our initial clinical data as of February 27, 2023, IMM0306 was safe and well tolerated up to 2.0 mg/kg. Among the evaluable patients across four cohorts dosed from 0.8 mg/kg to 2.0 mg/kg, who had relapsed or progressed after receiving rituximab previously, two CRs and five PRs were observed. The only evaluable follicular lymphoma (FL, a subtype of B-NHL) patient at 2.0 mg/kg, who relapsed and progressed after rituximab treatment, has also been confirmed as PR. At 2.0 mg/kg, one patient with primary bone diffuse large B-cell lymphoma (DLBCL) who had four lines of prior treatment has achieved PR with all measurable lesions disappeared after 65 days of treatment. The clinical results of IMM0306 have provided further validation of our mAb-Trap platform. We commenced a Phase IIa trial for IMM0306 monotherapy for the third- or later-line treatment of FL in March 2023 and plan to seek an accelerated marketing approval through a single-arm trial. We expect to commence pivotal clinical trials in China in the third quarter of 2024. Furthermore, our IND application for the combination of IMM0306 and lenalidomide targeting front-line B-NHL was approved by the NMPA in January 2023. We have commenced the Phase Ib/IIa clinical trial for this combination in China, with the first patient dosed in June 2023. We have also received an IND approval for IMM0306 from BUSINESS – 231 – --- page 241 --- the FDA in January 2021. With further clinical validation in the clinical trials in China, we will then decide on our clinical development and collaboration strategy for IMM0306 in the U.S.  IMM2902 , one of our Key Products, is currently the only CD47×HER2 bispecific molecule that has entered into clinical stage globally. By simultaneously binding to HER2 and CD47, IMM2902 suppresses tumor cell growth and proliferation through the blockade of HER2 and CD47/SIRP α inhibitory signals as well as the promotion of HER2 degradation, and further destroys tumor cells through enhanced ADCP, ADCC, and potentially antibody dependent cellular trogocytosis (ADCT). Our preclinical studies demonstrated strong antitumor activities of IMM2902 in a variety of breast and gastric tumor models, including those with HER2-low expression and resistant to HERCEPTIN ® (trastuzumab). We are conducting a Phase Ia/Ib clinical trial in China to evaluate IMM2902 in advanced HER2-positive and HER2-low expressing solid tumors, including breast cancer (BC), gastric cancer (GC), NSCLC and biliary tract cancer (BTC), with the first patient dosed in February 2022. IMM2902 was shown to be safe and well tolerated up to 2.0 mg/kg. Dosing is ongoing for higher dose level cohorts. We have also initiated the clinical trial for advanced HER2-positive and HER2-low expressing solid tumors in the U.S. with the first patient dosed in June 2022. We have received the Fast Track Designation from the FDA in July 2022.  IMM2520 , one of our Key Products, is a CD47×PD-L1 bispecific molecule for the treatment of solid tumors. By targeting CD47 and PD-L1 on tumor cells and with its functional IgG1 Fc, IMM2520 can simultaneously activate macrophages and T cells to achieve strong synergistic effects and induce long-lasting tumor-specific immune responses. IMM2520 showed in vivo efficacy and safety in several animal models. We have obtained IND approvals for IMM2520 from the NMPA in November 2022 and from the FDA in December 2022, and dosed the first patient for the Phase I clinical trial in China in March 2023. We will primarily focus on the solid tumors that are generally resistant or not sensitive to the currently available immunotherapies, such as colorectal cancer (CRC), GC, lung cancer and HNSCC, among others. In addition to CD47, we have selected and validated another innate immune checkpoint, CD24. We started the discovery research on CD24 as early as 2019, and have successfully identified lead drug candidates with potent target activity and in vivo therapeutic efficacy. Currently, we have one innovative IND-enabling-stage humanized monoclonal antibody (IMM47) and several discovery- and preclinical-stage bispecific molecules, including IMM4701 and IMM2547, targeting this checkpoint. CD24 is widely expressed in numerous types of solid tumors, including BC, NSCLC, CRC, HCC, renal cell carcinoma (RCC), and ovarian cancer (OC), and has been recognized as an important marker for those poor prognosis of these cancers, presenting tremendous clinical potential. However, according to Frost & Sullivan, there is no approved drug targeting CD24 globally. No CD24-targeted drug candidate has entered into clinical stage worldwide, except for one drug candidate recently receiving IND approval from the FDA for its Phase I clinical trial.  IMM47 is a potentially global first-in-class humanized monoclonal antibody targeting CD24 for cancer treatment. We have successfully screened IMM47 despite the fact that the screening of antibodies against CD24 is highly challenging due to the relatively weak immunogenicity resulting from its small extracellular domain. With a high affinity for CD24 expressed on tumor cells, IMM47 can suppress the immune inhibitory signals sent from CD24/Siglec-10 pathway to macrophages, natural killer (NK) cells and T cells. With the ADCC-enhanced IgG1 Fc, IMM47 can specifically bind to CD24 and potently activate macrophage and NK cell-immune responses through ADCP and ADCC. IMM47 has also been shown to significantly increase the amount of M1 macrophages in tumor tissues in our in vivo proof-of-concept studies. It can also activate and promote BUSINESS – 232 – --- page 242 --- T-cell response likely through tumor antigen presentation by activated macrophages to T cells and direct blockade of CD24/Siglec-10 inhibitory signals. Our preclinical studies have demonstrated promising efficacy of IMM47. In a colon cancer model, it completely eradicated subcutaneously inoculated tumor cells in all six mice after three doses of 3.0 mg/kg (~0.3 mg/kg human equivalent dose). In addition, IMM47 can establish tumor-specific immune responses that prevent tumor growth even against re-inoculation of tumor cells in mice, demonstrating its capability to further induce T-cell-based adaptive immune activation. We expect to file IND applications for IMM47 for the treatment of solid tumors with the NMPA and the FDA in 2023, and initiate a Phase I dose-escalation study in Australia in August 2023. Initiating a clinical trial in Australia first can help us to begin global clinical trials earlier and accelerate clinical validation of IMM47. Additionally, we believe Australian trial can generate valuable clinical data on ethnically diverse populations, thus enhancing our ability to pursue collaboration opportunities with global pharmaceutical companies.  IMM4701 is a bispecific molecule that simultaneously targets CD47 and CD24. It is also developed on our mAb-Trap platform and shares a similar structure as our other CD47-based bispecific molecules. We have observed robust antitumor activity of IMM4701 in various solid tumor models, in which IMM4701 achieved 122% tumor growth inhibition (TGI) at 3.0 mg/kg (~0.3 mg/kg human equivalent dose). Further leveraging the data observed from IMM47, we plan to file IND applications with the NMPA and the FDA subsequently, and further seek collaboration opportunities with global pharmaceutical companies. We have also been actively evaluating the therapeutic potential of other innate immune checkpoints, including IL-8, NKG2A and PSGL-1, and we aim to continue to stay at the forefront of the development of immunotherapies through scientific innovation. Our adaptive immunity-based drug candidates include:  IMM2510 is a bispecific molecule with a mAb-Trap structure targeting VEGF and PD-L1. IMM2510 can inhibit angiogenesis, leading to tumor shrinkage, and sensitize tumor cells to immune responses, while activating T cells, NK cells, and macrophages via the blockade of PD-L1/PD-1 interaction and the induction of Fc-mediated ADCC/ADCP activity. Our preclinical efficacy studies showed that IMM2510 exerted stronger synergistic antitumor activities than the combination of a VEGF blocker and a PD-L1 antibody. We are currently conducting the Phase I dose-escalation trial for IMM2510 in China in a variety of advanced solid tumors, including, but not limited to, HCC, RCC, GC, NSCLC and soft-tissue sarcomas (STS). Initial clinical results as of February 15, 2023 have shown favorable safety and promising efficacy. IMM2510 was safe and tolerable up to 10.0 mg/kg in patients with advanced solid tumors, and we are currently evaluating patients for 10.0 mg/kg dose cohort. Among the two evaluable NSCLC patients in the trial so far, we have observed PRs in both patients with best tumor shrinkage response of 46% and 35% respectively. We expect to complete this dose-escalation study in the third quarter of 2023, and subsequently commence a cohort-expansion study.  IMM27M is a new generation CTLA-4 antibody with enhanced ADCC activity. It can induce potent immune responses targeting CTLA-4 overexpressed immune-suppressive T reg cells and promote T reg depletion from the TME, thus enhancing T-cell antitumor response. Our preclinical studies have demonstrated that IMM27M could induce significantly stronger antitumor activity than YERVOY ® (ipilimumab) and it resulted in complete tumor remission even at a dose as low as 0.3 mg/kg at which ipilimumab only exhibited approximately 50% TGI. We have commenced the Phase I clinical trial in solid tumors, with the first patient dosed in June 2022. We had enrolled 15 patients as of BUSINESS – 233 – --- page 243 --- February 10, 2023, and we are currently enrolling patients for the sixth cohort of 5.0 mg/kg. The preliminary data demonstrates that IMM27M is safe and well tolerated up to 3.0 mg/kg. We have observed 4 SDs in this trial so far, among whom one patient with breast carcinoma who had six lines of prior treatment has achieved SD with tumor shrinkage of 28.8% at 3.0 mg/kg, and one patient with metastatic melanoma has achieved SD with tumor shrinkage of 22.9% at 2.0 mg/kg. We expect to complete this trial in the third quarter of 2023. We received an IND approval from the NMPA for a Phase Ib/II study to evaluate the combination of IMM27M and a PD-1 antibody for the treatment of advanced solid tumors, such as RCC, NSCLC, GC and thymic carcinoma (TC), in March 2023. We may initiate clinical trials or explore collaboration opportunities for this combination therapy.  IMM40H is a humanized IgG1 CD70 monoclonal antibody with enhanced ADCC activity. It can obstruct the activation and proliferation of T reg cells through the inhibition of CD70/CD27 signaling. Our in vitro cell-based assay demonstrated that IMM40H had much stronger CD70-binding affinity than cusatuzumab (a CD70-targeted antibody developed by Argenx and currently in Phase II stage), allowing it to block the interaction of CD70 and CD27 more effectively. Moreover, IMM40H has also shown potent ADCC, complement-dependent cytotoxicity (CDC) and ADCP activity, resulting in strong immune attack on tumor cells and potentially potent therapeutic efficacy. Our preclinical data also suggests a favorable safety profile of IMM40H. According to Frost & Sullivan, CD70 could potentially be an effective therapeutic target for the treatment of CD70-positive tumors, including CD70-positive lymphoma, RCC, NSCLC, HNSCC and OC. We have obtained IND approvals for IMM40H from the NMPA and the FDA in August 2022, and may initiate Phase I clinical studies or pursue potential collaboration opportunities. As of the Latest Practicable Date, we owned nine issued patents in the PRC, eight issued patents in the U.S., eleven issued patents and two allowed patent applications in other jurisdictions, 16 pending patent applications in different jurisdictions, one PRC patent application filed as a priority application, one PCT patent application filed as a priority application, and five pending PCT patent applications which may enter various contracting states in the future. We will continue to advance the development of our drug candidates and enrich our pipeline. To fully unleash the clinical and commercial potential of our comprehensive portfolio, we may develop and commercialize multiple other discovery- and preclinical-stage drug candidates by ourselves or through business collaboration, such as out-licensing and co-development arrangements. Led by our visionary scientist founder, Dr. Tian, we have assembled a seasoned management team with a global perspective coupled with industry expertise and a proven track record of translating biological discoveries into efficacious therapies. With the deep scientific knowledge and extensive experience of our management team, we will continue to expand our footprint in major markets worldwide and maximize the clinical and commercial value of our drug candidates. BUSINESS – 234 – --- page 244 --- OUR STRENGTHS Science-driven biotechnology company with a pipeline harnessing both the innate and adaptive immune systems We are one of the few biotechnology companies globally adopting a systematic therapeutic approach to harness both the innate and adaptive immune systems, unleashing their synergistic potential to address the limitations of T-cell-based immunotherapies. Currently approved immuno-oncology therapies primarily target T-cell immune checkpoints, exemplified by PD-1/PD-L1, CTLA-4 and LAG3. Although those immunotherapies targeting adaptive immune checkpoints have illuminated the incredible power of the immune system in combatting cancers, only about 10% to 25% of cancer patients could benefit from PD-1/PD-L1 inhibitor monotherapy across almost all major cancer types, according to Frost & Sullivan. The response rates to immunotherapies targeting adaptive immune checkpoints are particularly low in “cold tumors,” or in non-T cell-inflamed immune-suppressive tumor microenvironment (TME). These limitations have driven a continued search for new immunotherapeutic approaches to improve treatment outcomes. In recent years, emerging research breakthroughs have revealed the power of innate immunity and fueled a wave of innovative immuno-oncology drugs. However, there is currently no innate immunity-targeted therapies approved for marketing worldwide, indicating a large untapped market. To unlock the strong power of innate immunity and the synergistic potential between the two arms of immune systems, we have long been researching innate immunity to overcome the limitations of currently approved immunotherapies since our inception in 2015. To date, we have built a rich pipeline of 14 drug candidates that address promising key innate and adaptive immune targets. We believe our pipeline assets have significant clinical potential to treat a broad spectrum of cancer indications. Our selected drug candidates and the immune system and checkpoints they target are illustrated in the diagram below: o IMM01 (CD47) • IMM01 + Azacitidine • IMM01 + Inetetamab o IMM0306 (CD47×CD20) o IMM2902 (CD47×HER2) o IMM51 (IL-8) o IMM50 (PSGL-1) o IMM62 INNATE IMMUNITY ADAPTIVE IMMUNITY INNATE & ADAPTIVE IMMUNITY SIRPαFcγR SIRPαFcγR NK CellMacrophage Tumor Cell o IMM01 + tislelizumab o IMM2520 (CD47×PD-L1濒 o IMM47 (CD24) o IMM4701 (CD47×CD24) o IMM2547 (CD24×PD-L1) o IMM38 (NKG2A) CD47 TAA TeffMacro- phage NK Cell Tumor Cell CD47 CD24 Teff Treg o IMM2510 (VEGF×PD-L1) o IMM27M (CTLA4 ADCC+) o IMM40H (CD70) Tumor Cell VEGF TAA PD-L1 Note: Currently we have several other discovery- and preclinical-stage drug candidates and plan to further develop these candidates by ourselves or through collaboration. Source: Company Data BUSINESS – 235 – --- page 245 --- Compared to adaptive immunity, innate immunity provides immediate non-specific immune responses to a broad array of foreign substances. Major types of innate immune cells, including macrophages, NK cells and dendritic cells (DC), are widely distributed in cancerous tissues. These innate immune cells can induce an instant immune reaction against tumor cells, and can elicit more wholistic and long-lasting immune responses against cancer, working together with adaptive immune system. The following table sets forth an overview and comparison of the key adaptive and innate immune cells in the TME: ytinummI etannIytinummI evitpadA Antigen priming required First line of defense, short response time, no need for antigen priming Key Immune Cell Type Activation Process T cell B cell Macrophage NK cell DC Tumor Tissue Distribution(1) 10-30% 3%-40% 20-50% 5%-10% 3%-10% Major Immune Functions • T-cell mediated killing of tumor cell via exocytosis of cytotoxic granules (perforin, granzymes) and secretion of antitumor cytokines • Antibody production • Cytokine secretion • Macrophage-mediated phagocytosis • Attracting T cells to the tumor microenvironment (TME) • Antigen presentation • Trogocytosis • NK cell-mediated cytolysis via the secretion of perforin and granzymes • Activating of T cells, macrophages and DCs through release of cytokines • Attracting T cells to the TME • Antigen presentation Note: The tumor tissue distribution is the proportion of certain immune cells in different tumor tissues. Source: Frost & Sullivan By unleashing the power of innate immunity, the combination of immunotherapies targeting innate immune checkpoints and those targeting adaptive immune checkpoints may revolutionize the treatment for many cancer patients. According to Frost & Sullivan, driven in part by the growth of the innate immunotherapy market, the global market size of immuno-oncology therapy is expected to reach US$340.4 billion in 2035, representing over 54% of the then global oncology drug market. With a comprehensive portfolio of drug candidates targeting both innate and adaptive immune checkpoints, we believe that we are well-positioned at the forefront of the global immuno-oncology drug market to address the limitations faced by T-cell-based cancer therapeutics and capture immense market opportunities. A comprehensive innate immunity-based portfolio targeting a wide range of solid and hematologic tumors We have developed in-house one of the deepest and broadest portfolios of innate immune-targeted programs globally. Our well-constructed portfolio is built based on key innate immune targets and pathways critical to a variety of hematologic and solid tumors. These portfolio candidates would not only enhance direct tumor-killing activity of innate immune cells, but can also elicit holistic immune responses across the innate and adaptive immune systems that ultimately lead to long-lasting and robust antitumor effects. Through various combination and bispecific strategies, these drug candidates have the potential to address unmet medical meeds in a variety of blood cancers and solid tumors. CD47 Our portfolio features a deep CD47-based pipeline comprising IMM01 (SIRP α-Fc fusion protein), multiple clinical-stage bispecific drug candidates, and numerous other discovery- and preclinical-stage CD47-based bispecific molecules. Among them, IMM0306 (CD47×CD20) and IMM2902 (CD47×HER2), are the first bispecific molecules with their respective targets globally to enter clinical trials. IMM2520 (CD47×PD-L1) is also a highly differentiated molecule that demonstrates very promising efficacy targeting solid tumors in preclinical models. BUSINESS – 236 – --- page 246 --- CD47 is a critical macrophage checkpoint that plays a broad role in cancer immune evasion across many cancer types. The CD47/SIRP α pathway has been clinically validated and became one of the most attractive cancer immunotherapeutic targets, which is believed to potentially rival PD-1/PD-L1 in terms of clinical significance and market size. According to Frost & Sullivan, the global market size of CD47/SIRP α-targeted therapies is expected to reach US$12.6 billion and US$35.4 billion in 2030 and 2035, respectively. The prospect promised by this new therapy has also been validated by publicly reported clinical data and several multibillion-dollar takeover and licensing transactions backed by leading multinational pharmaceutical companies, including Gilead, Pfizer and AbbVie. Despite the promising prospect, the successful development of CD47-targeted drugs still needs to overcome various challenges. On the one hand, binding of CD47-targeted agents with blood cells (particularly RBCs) generates issues including severe blood toxicity, rapid reduction in drug exposure (or “antigenic sink”) and decreased potency. On the other hand, in addition to the blockade of the “don’t eat me” signal, full activation of macrophages requires an additional “eat me” signal. However, due to the inevitable binding (weak or strong) of CD47 antibodies to RBCs, most of those antibodies resorted to an IgG4 Fc region with weaker Fc function, sacrificing their therapeutic efficacy for safety. Even with IgG4 Fc, the hemagglutination (the clumping of RBCs) as a result of RBC binding of CD47 antibodies still presents substantial safety issues as seen in certain clinical trials. In addition to the clinical suspension seen with CD47 antibodies of Bristol-Myers (Celgene) and Surface Oncology, a recent example is that the FDA placed a partial clinical suspension on studies to evaluate Gilead’s magrolimab (a CD47 mAb) in MDS, AML, MM and diffuse large B-cell lymphoma (DLBCL) due to an apparent imbalance in investigator-reported suspected unexpected serious adverse reaction (SUSAR) between study arms observed in trials in early 2022. All of those partial suspensions have been subsequently lifted, as the FDA determined that, following comprehensive review of the safety data from each trial, the clinical sponsor had satisfactorily addressed the deficiencies. Our founder, Dr. Wenzhi Tian, started to explore the therapeutic potential of CD47-targeted strategy in oncology as early as 2010, long before it became widely recognized in the biopharmaceutical industry. Since then, Dr. Tian has continued to closely monitor the scientific progress related to this target and has been further convinced of its potential to be a cancer immunotherapeutic target. Leveraging the fundamental insights into CD47, we started our development efforts on IMM01 since our inception in 2015, which later became the first CD47-targeted SIRP α-Fc fusion protein to enter into clinical stage in China. With its unique structural design, IMM01 has thus far demonstrated encouraging monotherapy efficacy and good tolerability in our completed Phase I trial targeting lymphoma. In addition, since IMM01 does not bind to RBCs in vitro and only a fraction of the dose is required due to its dual mechanisms, it demonstrates encouraging efficacy and is expected to achieve more favorable tolerability than CD47 antibodies, and therefore it could be broadly used in combination therapies for the treatment of a wide range of cancer indications. According to Frost & Sullivan, among numerous drug developers of CD47-targeted molecules globally, we are one of the only two companies to have observed CR in monotherapy clinical trials with a well tolerated safety profile. Leveraging our experience in developing IMM01, we designed and are developing numerous CD47-based bispecific molecules that incorporate the same engineered CD47-binding domain as IMM01 and an ADCC-enhanced IgG1 Fc. The engineered CD47-binding domain enables our CD47-based bispecific molecules to avoid RBC binding, thus allowing the adoption of IgG1 Fc capable of inducing full macrophage activation, much enhanced ADCP and ADCC activity, and stronger antitumor immune responses compared to most IgG4-based CD47 bispecific antibodies. Notably, compared to combination therapies of the same targets, those bispecific molecules displayed better in vivo efficacy, showing promise to offer improved clinical benefits and affordability. BUSINESS – 237 – --- page 247 --- CD24 CD24 is an innate immune checkpoint widely expressed on numerous types of solid tumor cells, including BC, NSCLC, CRC, HCC, RCC and OC, and strongly correlated with poor prognosis. Blocking CD24/Siglec-10 pathway will exert multifaceted activation effects on immune responses against cancer, presenting large clinical and market potential. The screening of monoclonal antibodies against CD24 is highly challenging due to the relatively weak immunogenicity resulting from its small extracellular domain. According to Frost & Sullivan, there is no approved drug targeting CD24 globally. No CD24-targeted drug candidate has entered into clinical stage worldwide, except for one drug candidate recently receiving IND approval from the FDA for its Phase I clinical trial. Around CD24, we have developed one IND-enabling-stage drug candidate, IMM47 (CD24 mAb), and several discovery- and preclinical-stage bispecific molecules. All of those CD24-based candidates have the global first-in-class potential to address enormous market opportunities. IMM47 is a humanized monoclonal antibody targeting CD24, which can disrupt inhibitory CD24/Siglec-10 signaling to macrophages, NK cells and T cells. IMM4701 (CD47×CD24) is at the CMC stage and has demonstrated potent in vivo efficacy in a triple-negative breast cancer (TNBC) animal model. As CD24-targeted therapy is able to activate key innate immune cells and further promote T-cell responses, it can also create a strong synergistic potential with other immunotherapies, such as PD-1/PD-L1 inhibitors, as evidenced by our preclinical studies for the combination of IMM47 and OPDIVO ® or KEYTRUDA ®. Other innate immune checkpoints We have also been actively exploring the therapeutic potential of other innate immune checkpoints, and we aim to continue to stay at the forefront of the development of immunotherapies through scientific innovation. We have expanded our portfolio to target other emerging critical innate immune checkpoints with large clinical and commercial potential, including IL-8, NKG2A and PSGL-1. We will continue to evaluate other innate immune checkpoints and enrich our pipeline with novel therapies. Differentiated molecule design to achieve potent efficacy and favorable safety Targeting our strategically selected innate and adaptive immune checkpoints, we are committed to designing differentiated molecules that can achieve an optimized safety and efficacy profile. Our strong capabilities in molecule design are underpinned by an experienced scientific team with deep expertise in tumor biology and immunology. Underlying our drug discovery and development efforts and guided by our deep understanding of cancer biology and immunology, we uphold an overarching R&D concept that we call “drug-by-design” or “DbD.” The “DbD” concept requires us to carefully select and validate promising targets and to deliberately design the structure of every drug molecule based on a sound scientific rationale and preclinical validation. Guided by our “DbD” concept, all of our programs are designed with a unique structure that best suit the considerations and requirements for each respective target or target pairings. In particular, our clinical-stage drug candidates have demonstrated promising efficacy signals and favorable safety profile in various clinical trials, as a testament to our R&D approach and capabilities. We believe our R&D capabilities and established R&D platforms will enable us to rapidly advance our pipeline candidates towards commercialization, and to continuously discover new generations of immuno-oncology therapies to address critical unmet medical needs. BUSINESS – 238 – --- page 248 --- Selected innate immune checkpoint-targeted drug candidates IMM01 (SIRP α-Fc fusion protein) To tackle the safety concern around CD47, we specifically designed IMM01 to comprise an engineered CD47-binding domain and an IgG1 Fc fragment, enabling it to exert a dual mechanism imperative for full macrophage activation: blocking the “don’t eat me” signal while triggering a strong “eat me” signal. The dual mechanism acts to fully activate both macrophages and NK cells. Activated macrophages will not only mediate direct antitumor phagocytosis, but can also release chemokines and cytokines to recruit T cells into the TME, turning “cold tumors” into “hot tumors,” further activating T-cell response through antigen presentation. Activated NK cells can on the one hand mediate ADCC against tumor cells and, on the other hand, further promote T-cell differentiation and T-cell response. The following diagram illustrates the mechanism of action of IMM01: Mechanism of Action of IMM01 SIRPα FcγR CD47 IMM01 Tumor cell Full activation of macrophages Macrophage Phagocytosis Cytokines/Chemokines Secretion (CXCL9, CXCL10, etc.) Mϕ Tumor peptides on MHC MHC:TCR Tumor cells fully killed Attract T cells to TME Tc e l l s Anti-CD47 Anti-CD47 A FcγR CD47 blocked No “eat me” signaling Limited macrophage activation SIRPα CD47 S I R P C D FcγR CD47 “don’t eat me” signaling No “eat me” signaling Poor macrophage activation M h CD47- binding domain Active lgG1 Blocking “Don’t eat me” signal via interrupting CD47- SIRPα interaction Activating “Eat me” signal via Fc-FcγR engagement IMM01 MHC IMM01 CD47 blocked Fc-receptor “eat me” signaling Full macrophage activation Definition: MHC refers to major histocompatibility complex. Source: Frost & Sullivan, Literature Review, Company Data With an engineered CD47-binding domain of human SIRP α, IMM01 does not bind to human RBCs in in vitro studies. Furthermore, our modification of deglycosylation of the binding domain mitigates the immunogenicity of the molecule. The resulting properties enable IMM01 to reduce blood toxicity and avoid antigenic sink with improved pharmacokinetic (PK) profile. Additionally, IMM01 is also proven not to trigger the T-cell apoptosis that could be induced by certain CD47 antibodies. IMM01 is being developed for the treatment of various blood cancers and solid tumors in combination with other agents. IMM01 monotherapy has exhibited good safety and preliminary efficacy in early clinical trials. We have completed the Phase I dose-escalation study of IMM01 in R/R lymphoma patients. In the Phase I clinical trial, IMM01 was well tolerated and safe up to 2.0 mg/kg in patients. BUSINESS – 239 – --- page 249 --- We are actively evaluating IMM01 in combination with other drugs in the following clinical trials:  Combination of IMM01 and azacitidine: The therapeutic benefits of CD47-targeted therapies in combination with azacitidine have been validated in multiple clinical trials according to publicly reported data. Our in vivo efficacy studies also showed that the combination of IMM01 and azacitidine exhibited favorable safety profiles and strong synergistic antitumor activity. With the dual mechanisms of action, IMM01 has demonstrated a promising efficacy signal in our clinical trials at a dose level of 2.0 mg/kg which is much lower than the typical dose required for CD47 antibodies (30.0 to 45.0 mg/kg) when used in combination with azacitidine. IMM01 in combination with azacitidine has exhibited a favorable safety profile due to such lower doses required for treatment and its minimal impact on RBCs. We have completed the Phase Ib trial and initiated the Phase II trial for the IMM01 combined with azacitidine mainly for the first-line treatment of HR MDS, unfit AML and CMML in China. Interim data from the Phase Ib/II trial has demonstrated a favorable safety profile and promising efficacy profile. For details of clinical data, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM01 — Summary of Clinical Trial Results — IMM01 in combination with azacitidine.”  Combination of IMM01 and tislelizumab: When combined with PD-1 inhibitors that typically consist of IgG4 Fc with weaker Fc functions, IMM01, designed with distinctive IgG1 Fc, is able to deliver the additional “eat me” signal which is for full macrophage activation, in contrast to IgG4 Fc CD47 antibodies. Activation of macrophages can subsequently remodel the immune-suppressive TME and convert “cold tumors” into “hot tumors,” which significantly enhance the efficacy of PD-1/PD-L1 inhibitors. Additionally, IMM01 significantly inhibits the production of IL-8, which acts as one of the key mediators of resistance to PD-1/PD-L1 inhibitors. This is supported by the results of our in vivo efficacy studies assessing IMM01 in combination with a PD-1/PD-L1 monoclonal antibody. We have completed the Phase Ib trial for this combination therapy and initiated the Phase II trial in December 2022. The clinical data from the Phase Ib trial has demonstrated positive safety and preliminary efficacy profile. In our Phase Ib trial, a heavily pre-treated NSCLC patient with six lines of prior treatment and refractory to PD-1 inhibitors achieved PR after three cycles of treatment with target lesion shrinkage of 40%. For details of preclinical and clinical data, please refer to the paragraphs headed “Business Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM01— Competitive Advantages.”  Combination of IMM01 and other drugs: IMM01 has demonstrated a positive efficacy and safety profile in its Phase I monotherapy trial, which sets the stage for its combination use with other immunotherapies or targeted therapies in our various in vivo studies. We are currently exploring the therapeutic potential of IMM01 in combination with other drugs for treating a wide range of cancer indications. CD47-based bispecific molecules Based on the validated molecule structure of IMM01, we have subsequently developed multiple CD47-based bispecific molecules leveraging our mAb-Trap platform. These bispecific molecules all have symmetrical structure with the same engineered CD47-binding fragment used in IMM01. The structure of our bispecific molecules was deliberately designed through a series of rigorous studies and tests guided by our “DbD” concept on various aspects, including synergy between targets, tailored molecule structure, expected dosing level, stability, and ease of manufacturing. BUSINESS – 240 – --- page 250 --- This unique structural design with the engineered CD47-binding fragment allows our CD47-based bispecific molecules to avoid RBC binding, thus enabling the adoption of an ADCC-enhanced IgG1 Fc fragment capable of inducing full macrophage activation and much improved immune activities. Also, all of these bispecific molecules have higher binding affinity with the tumor antigen of the base antibody, attracting them to TME and preferentially binding to CD47 on tumor cells, minimizing “on-target, off-tumor” toxicity. Studies have revealed that the CD47-binding region of SIRP α is located at its N-terminal. When designing the molecules, we thus connect the CD47-binding domain to the N-terminal of the heavy chain or light chain of a base antibody to prevent interference with CD47 binding and preserve the intact Fc region. The below diagram illustrates the unique structure of our bispecific molecules: Structure of Our CD47-based Bispecific Molecules IMM0306 IMM2902 IMM2520 IMM4701 ADCC-enhanced IgG1 Fc with strong ADCC and ADCP SIRPα N terminal: SIRPα binds with CD47 on its N terminal Source: Company Data Compared to combination therapies against the same targets, our bispecific molecules are able to bind with two targets co-expressed on the same cancer cell. As demonstrated in our preclinical studies, our bispecific molecules can exert at least comparable antitumor activity than the combination therapies with same targets even at a relatively lower dose level. In addition, the symmetric structure of our bispecific molecules developed on our mAb-Trap platform minimizes mismatch during the production process, allowing for ease of manufacturing, product stability, higher titer and protein yield. In fact, average protein yield for IMM0306, IMM2902, and IMM2520 ranges from 3.8 g/L to 4.6 g/L, much higher than the industry average for bispecific molecules of 1.0 g/L to 3.0 g/L. IMM0306 (CD47×CD20) IMM0306 is the first bispecific molecule targeting both CD47 and CD20 to enter into clinical stage globally. IMM0306 can simultaneously bind to CD47 and CD20 expressed on malignant B cells, with a higher affinity for CD20 than CD47. This fine-tuned unbalanced affinity design enhances the tumor-targeting specificity to mitigate “on-target, off-tumor” toxicity by reducing binding to CD47 in normal tissues. Upon simultaneous binding to its targets, IMM0306 can deplete malignant B cells by activating enhanced innate immune responses. Our IMM0306 has demonstrated stronger antitumor activities as compared to the combination therapy of IMM01 and rituximab or each of them as a single agent in preclinical studies. Furthermore, our preclinical in vitro studies have also demonstrated that IMM0306 had a favorable safety profile as it does not bind to human RBCs or cause hemagglutination. In addition, preliminary data collected from the Phase I clinical trials for the treatment of R/R B-NHL in China have suggested a favorable safety and promising efficacy profile. According to our initial clinical data as of February 27, 2023, IMM0306 was safe and well tolerated up to 2.0 mg/kg in patients. Among the evaluable patients across four cohorts dosed from 0.8 mg/kg to 2.0 mg/kg, who had relapsed or progressed after receiving rituximab previously, two CRs and five PRs were observed. For details of preclinical and clinical data, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM0306 — Competitive Advantages.” The clinical results of IMM0306 also validated our CD47-based bispecific programs developed with our mAb-Trap platform. BUSINESS – 241 – --- page 251 --- IMM2902 (CD47×HER2) IMM2902 is the only bispecific molecule targeting both CD47 and HER2 that has entered into clinical trial globally. Similarly, IMM2902 also adopts an ADCC-enhanced IgG1 Fc region to further enhance immune activation. In addition to macrophage activation and enhanced ADCC activity, IMM2902 has been demonstrated to accelerate the degradation of HER2 in preclinical studies and can also potentially induce ADCT similar to RYBREV ANT ® (amivantamab, an FDA-approved IgG1 Fc EGFR×c-MET). These mechanisms, working together, lead to enhanced tumor killing of IMM2902. Our preclinical studies revealed strong antitumor activities of IMM2902 in a variety of xenograft models of breast and gastric tumors, including those with HER2-low expression and models resistant to trastuzumab. Our IMM2902 also exhibited favorable efficacy in trastuzumab-sensitive and HER2-low expressing GC models in our preclinical studies. Our preclinical studies have also demonstrated that, compared to magrolimab analog (Hu5F9, a CD47 antibody replicated by us based on public information) that could induce obvious hemagglutination at the concentration beyond 370 ng/ml, IMM2902 does not induce hemagglutination of human red blood cells, even at the concentration as high as 10,000 ng/ml. We are currently developing IMM2902 for the treatment of HER2-positive and HER2-low expressing solid tumors. In the ongoing clinical trials, it was shown to be safe and well tolerated up to 2.0 mg/kg. We have received the Fast Track Designation from the FDA in July 2022. For details of preclinical and clinical data, please refer to the paragraphs headed “Business — Our Innate Immune Checkpoint-Targeted Drug Candidates — IMM2902 — Competitive Advantages.” IMM2520 (CD47×PD-L1) IMM2520 is a bispecific molecule that targets both CD47 and PD-L1 for the treatment of solid tumors. Unlike most other CD47×PD-L1 bispecifics, our engineered CD47-binding fragment allows us to adopt an ADCC-enhanced IgG1 Fc in IMM2520 that is capable of triggering an additionally required “eat me” signal to fully activate macrophages, inducing enhanced ADCP and ADCC activity, mobilizing both innate and adaptive immunities to target tumor cells and improving the clinical response to PD-1/PD-L1 inhibition. A syngeneic model in mice demonstrated that IMM2520 led to complete tumor remission at the dose of 6 mg/kg (~0.6 mg/kg human equivalent dose). In addition, our preclinical toxicity studies of IMM2520 also demonstrated that IMM2520 did not bind to human RBCs. We have obtained IND approvals for IMM2520 from the NMPA in November 2022 and from the FDA in December 2022, and dosed the first patient for the Phase I clinical trial in China in March 2023. We will particularly focus on the solid tumors generally resistant or not sensitive to the currently available immunotherapies, such as CRC, GC, lung cancer and HNSCC, among others. BUSINESS – 242 – --- page 252 --- IMM47 (CD24 mAb) IMM47 is a potentially global first-in-class humanized monoclonal antibody targeting CD24 for oncology treatment. With its unique design, IMM47 can potently activate macrophage- and NK cell-mediated immune responses. IMM47 has also been shown to significantly increase the amount of M1 macrophages in tumor tissues in our in vivo proof-of-concept studies. It can also activate and promote T-cell response likely through tumor antigen presentation by activated macrophages to T cells and direct blockade of CD24/Siglec-10 inhibitory signals. The following diagram illustrates the mechanism of action of IMM47: Mechanism of Action of IMM47 NK Cell Tumor Cell IMM47 CD24 mAb CD24 Siglec-10 ADCC ADCP Apoptosis Signaling Blockade Granzyme, Perforin... Siglec-10 TC e l l Siglec-10 T Cell Receptor Granzyme, Perforin...Cytokines Promote T Cell Activation Fc Receptor Macrophage Lysosomes APC Source: Frost & Sullivan, Literature Review, Company Data With its ability to activate integrated innate and adaptive immune responses, IMM47 has shown robust tumor activity in our preclinical studies. In a colon cancer model, IMM47 completely eradicated subcutaneously inoculated tumor cells in all six mice after three doses of 3.0 mg/kg (~0.3 mg/kg human equivalent dose). Our IMM47 has further demonstrated the ability to induce immunological memory against tumors in our in vivo studies. Mice treated with IMM47 established tumor-specific immune responses that prevented tumor growth even against re-inoculation of tumor cells. Furthermore, our preclinical studies have revealed a strong synergistic effect of IMM47 when used in combination with OPDIVO ® or KEYTRUDA ® as compared to OPDIVO ® or KEYTRUDA ® monotherapy. For details, please see paragraphs and diagrams under the heading “— Our Innate Immune Checkpoint-targeted Drug Candidates — IMM47 (CD24 mAb).” Selected adaptive immune checkpoint-targeted drug candidates IMM2510 (VEGF×PD-L1) IMM2510 is a bispecific molecule with a mAb-Trap structure targeting VEGF and PD-L1 for the treatment of solid tumors. Both VEGF and PD-L1 are clinically validated targets and have shown strong synergistic effects with the approval of combination therapies targeting these two pathways in many solid tumor indications. With the binding of VEGF and PD-L1, IMM2510 can simultaneously block the PD-L1/PD-1 pathway and the VEGF/VEGFR pathway, activating T-cell BUSINESS – 243 – --- page 253 --- tumor killing and at the same time inhibiting tumor angiogenesis and tumor growth. IMM2510 can also activate NK cells and macrophages via IgG1 Fc-mediated immune responses. Our in vivo efficacy studies demonstrated that IMM2510 had a better efficacy profile than the VEGF blockers and PD-L1 antibodies either as a single agent or used in combination. The initial results of the Phase I clinical trial have demonstrated preliminary efficacy of IMM2510. As of February 15, 2023, it was safe and tolerable up to 10.0 mg/kg in patients with advanced solid tumors. Among the two evaluable NSCLC patients in the trial so far, we have observed PRs in both patients with best tumor shrinkage response of 46% and 35% respectively. For details of preclinical and clinical data, please refer to the paragraphs headed “Business — Our Adaptive Immune Checkpoint-Targeted Candidates — IMM2510.” IMM27M (CTLA-4 ADCC-enhanced mAb) IMM27M is a new generation CTLA-4 antibody with enhanced ADCC activity through genetic-engineering modification. Through enhanced ADCC activities, IMM27M is able to induce enhanced immune responses against CTLA-4 overexpressed T reg cells and promote T reg depletion, thus enhancing T-cell antitumor responses. Our in vivo efficacy studies demonstrated that IMM27M could induce a significantly stronger antitumor activity than ipilimumab, and it resulted in complete tumor remission even at a dose as low as 0.3 mg/kg (~0.03 mg/kg human equivalent dose). The preliminary clinical data demonstrates that IMM27M is safe and well tolerated up to 3.0 mg/kg. We have also observed 4 SDs in this trial so far. For details of preclinical and clinical data, please refer to the paragraphs headed “Business — Our Adaptive Immune Checkpoint-Targeted Candidates — IMM27M.” Integrated proprietary R&D engine anchored around our deep understanding of tumor immunology, continuously driving the discovery and development of immunotherapies We have established an integrated in-house R&D platform that covers target selection and validation, drug discovery, high-throughput screening, molecule design, preclinical studies, CMC and IND-enabling capabilities. Our platform enables us to continuously discover and develop oncology therapies and move them forward to the clinical stage. The R&D engine includes a proprietary mAb-Trap bispecific platform, advanced hybridoma technology, high-throughput screening, strong immunoassay and bioassay technology, efficient cell line development and antibody production, as well as robust CMC and manufacturing capacity, which allow us to efficiently conduct screening for leading compounds and druggability analysis, cost-effectively manufacture drug candidates in-house, and provide firm support for our drug development efforts. Our R&D capabilities are anchored by our profound comprehension of biology and our stable R&D, CMC and regulatory affairs teams consisting of 62 members with extensive experience in drug discovery, preclinical research, process development and CMC. Our integrated R&D platform enables us to effectively select novel targets, optimize molecule structure design and accelerate the drug development process. With proprietary hybridoma technology and know-how, we can efficiently identify and improve antibody fragments with higher specificity, affinity and other best-suited properties. We are currently exploiting the hybridoma technology and high-throughput screening to develop multiple therapeutic monoclonal antibodies, including IMM47, IMM40H, and discovery- and preclinical-stage candidates for several new targets, which are targets with no approved drugs in anywhere of the world. As a testament to our R&D competencies, we have successfully in-house discovered and developed 14 drug candidates with 19 IND approvals from the NMPA and the FDA. As of the Latest Practicable Date, around the globe, we owned 28 issued patents, two allowed patent applications, 16 pending patent applications (including two pending PRC patent applications, one pending Hong Kong patent application, six pending U.S. patent applications, and seven pending patent applications in other jurisdictions), five pending PCT patent applications which may enter various contracting states in BUSINESS – 244 – --- page 254 --- the future, one PCT patent application filed as a priority application, and one PRC patent application filed as a priority application, enabling us to tap into the overseas market and maximize the commercial value of our drug candidates. Guided by our insights in tumor biology and immunology and our “DbD” concept, we have built the mAb-Trap bispecific platform to effectively facilitate the science-driven drug design and development. This platform enables us to connect engineered tumor target binding domains to the N-terminal of the heavy chain or light chain of respective antibodies, whichever is best suited for the targets we have selected, allowing for favorable binding affinity with tumor targets while preserving IgG1 Fc effector function. A number of bispecific molecules stemmed from this platform and demonstrated potent efficacy, good safety in preclinical studies. Four of those molecules (i.e., IMM0306, IMM2902, IMM2510 and IMM2520) have entered into clinical development stage. Preliminary clinical results of IMM0306 thus far have further validated the advantages of this unique molecule design and our mAb-Trap platform. IMM0306 was safe and well tolerated up to 2.0 mg/kg in patients. Among the evaluable patients across four cohorts dosed from 0.8 mg/kg to 2.0 mg/kg, who had relapsed or progressed after receiving rituximab previously, two CRs and five PRs were observed. The only evaluable FL patient at 2.0 mg/kg who relapsed and progressed after rituximab treatment has also been confirmed as PR. At 2.0 mg/kg, one patient with primary bone DLBCL who had four lines of prior treatment has achieved PR with all measurable lesions disappeared after 65 days of treatment. In addition, the symmetric structure of these mAb-Trap bispecific molecules, similar to that of native antibodies, allows for ease of manufacturing, product stability, higher tier and protein yield, and makes the CMC process and production by standard antibody manufacturing techniques more feasible. Our mAb-Trap bispecific candidates thus have consistently maintained high production yield in our manufacturing process. For example, the average protein yield for IMM0306, IMM2902, and IMM2520 ranges from 3.8 g/L to 4.6 g/L, much higher than the industry average for bispecific molecules of 1.0 g/L to 3.0 g/L. Seasoned management team with a track record of drug innovation and clinical development, led by a renowned immunologist founder and backed by blue chip investors Our founder, chief executive officer and chief scientific officer, Dr. Wenzhi Tian, EMBA, is a renowned expert in cancer immunotherapies. Dr. Tian brought us over 30 years of academic and industrial experience in the field of immuno-oncology. Based on his in-depth understanding of cancer immunology, Dr. Tian has been at the forefront of scientific research and built a proven track record in target validation, molecule design and drug development for immunotherapies. He identified CD47 as a promising immunotherapeutic target and commenced drug research on CD47 starting from 2010, roughly 10 years earlier than the validation of CD47 by clinical data. His deep expertise and foresight in target selection also led to our development of multiple monoclonal antibody and bispecific molecules targeting CD24, another promising checkpoint since 2019, all with global first-in-class potential. A prolific scientist, Dr. Tian invented 22 issued patents and 28 patent applications, and published over 30 scientific papers in the area of immunology and CD47 in internationally-recognized journals. Led by Dr. Tian, we have assembled a leadership team with extensive preclinical and clinical development experience and a proven track record of drug innovation. Core members of our R&D team, led by Mr. Song Li and Mr. Ruliang Zhang, have been working with Dr. Tian for close to 10 years. Mr. Song Li, our vice president of R&D, has over 10 years of experience in antibody drug discovery and process development. He has led the drug discovery and preclinical development of all our IND-approved drug candidates. Mr. Li possesses solid expertise in lead selection, antibody engineering and optimization, cell line and process development and antibody characterization. Mr. Li holds 19 issued patents and 25 patent applications. BUSINESS – 245 – --- page 255 --- Mr. Ruliang Zhang, our deputy general manager and senior vice president, has over 15 years of CMC, quality control, regulatory and project management experience in the biopharmaceutical industry. Mr. Zhang has successfully advanced 8 drug candidates into clinical stage with 20 IND approvals, among which 16 were approved by the NMPA and four were approved by the FDA. Our team also has other seasoned executives who leverage their extensive experience at leading multinational pharmaceutical companies and top investment banks. Dr. Qiying Lu, our senior vice president and chief medical officer, has around 20 years of experience in clinical practice and oncology drug development. He brings us valuable long-term experience with multinational pharmaceutical companies, including GlaxoSmithKline, AstraZeneca, and Pfizer. During his tenure at Pfizer, he successfully led the strategy development until regulatory marketing approval of various drug candidates in China, including IBRANCE ® and VIZIMPRO ®. Dr. Frank Xiaodong Gan, our senior vice president, has over 25 years of experience in preclinical and clinical development in the academia and biopharmaceutical industry. Dr. Gan has accumulated a wealth of clinical development experience in critical positions over the years at various prestigious multinational pharmaceutical companies. Dr. Gan led the global clinical development of various drug candidates and played an important role in the successful market launch of numerous products, including CYRAMZA ®, BALVERSA ®, and JANUVIA ®. Ms. Ziyi Song, our chief financial officer, brings us over 15 years of capital markets experiences gained at global investment banks, combined with solid biomedical sector knowledge developed through her educational background in medical sciences, healthcare-focused investment banking and investment management experiences. Ms. Song has extensive experience in capital market and corporate strategy through executing high-profile capital market transactions, including IPOs, financings, M&As, and healthcare investment. Dr. Zikai Xiong, Ph.D., our senior vice president of Business Development, has extensive experience in the biotechnology industry, ranging from pharmaceutical giants to startups. During his career, Dr. Xiong held key strategy and business development positions in multinational corporations and biotechnology companies. For further details of our senior management’s proven track record and industry experience, please refer to the section headed “Directors, Supervisors and Senior Management” in this prospectus. We are also backed by multiple global and locally recognized blue-chip institutional investors and healthcare-focused specialized investment funds, including, among others, Lilly Asia Ventures, LYFE Capital, Shanghai Science and Technology Innovation Fund, and RemeGen VC. We have raised approximately US$216 million in capital across 6 series of financings within 6 years, demonstrating the market’s strong confidence in our business potential. OUR STRATEGIES To advance the development of our drug candidates to unleash their therapeutic potential and address substantial unmet medical needs We have formulated and are implementing a stepwise clinical development strategy that would allow us to thoroughly evaluate the therapeutic potential of our innate and adaptive immunity-based candidates spearheaded by our CD47 portfolio and CD24 candidates, and expand their clinical application, with an aim to ultimately overcome the limitations of the current standard of care and potentially reshape the tumor-treatment paradigm globally. BUSINESS – 246 – --- page 256 --- Leveraging the expertise of our clinical development team, we are rapidly advancing the clinical development of our drug candidates targeting innate and adaptive immune checkpoints to treat a wide array of hematologic malignancies and solid tumors and address significant unmet medical demands. Treatment of hematologic malignancies Accumulating clinical evidence has supported the effectiveness of CD47-targeted agents in treating hematologic tumors. We are developing IMM01, IMM0306 and other pipeline candidates for the treatment of hematologic malignancies, such as lymphoma, MDS/CMML and AML, through monotherapy and combination strategies. Our clinical development plans for our programs that target hematologic malignancies are as follows:  IMM01 in combination with azacitidine: Upon completion of the Phase Ib trial, we initiated a Phase II trial to evaluate the combination therapy of IMM01 and azacitidine mainly for the first-line treatment of HR MDS, unfit AML and CMML in June 2022, from which so far we have observed an encouraging efficacy and safety profile of this combination therapy. We expect to commence a pivotal trial in China in the first quarter of 2024. In particular, we plan to seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML, a rare type of disease with highly unmet medical needs. Subject to further clinical validation, we plan to file an IND application with the FDA for a Phase II study of this combination treatment.  IMM01 in combination with tislelizumab: We are evaluating this combination therapy in cHL patients who relapsed or progressed after the treatment of PD-1 inhibitors, which may allow us to pursue an accelerated marketing approval leveraging the results of relatively small sample size studies. We dosed the first patient with R/R cHL in China in January 2023.  IMM0306 (CD47×CD20): We initiated a Phase I trial for IMM0306 in R/R B-NHL in China in May 2020, of which preliminary data showed good safety and promising efficacy. We commenced a Phase IIa trial for IMM0306 monotherapy for the third- or later-line treatment of FL in March 2023 and plan to seek an accelerated marketing approval through a single-arm trial. We expect to commence pivotal clinical trials in China in the third quarter of 2024. Furthermore, our IND application for the combination of IMM0306 and lenalidomide targeting front-line B-NHL was approved by the NMPA in January 2023. We have commenced the Phase Ib/IIa clinical trial for this combination in China, with the first patient dosed in June 2023. We have also received an IND approval for IMM0306 from the FDA in January 2021. With further clinical validation in the clinical trials in China, we will then decide on our clinical development and collaboration strategy for IMM0306 in the U.S.  IMM40H (CD70 mAb): We have obtained IND approvals for IMM40H from the NMPA and the FDA in August 2022, and may initiate Phase I clinical studies or pursue potential collaboration opportunities. BUSINESS – 247 – --- page 257 --- Treatment of solid tumors Parallel with the programs targeting hematologic malignancies, we are also actively advancing the development of our pipeline candidates for the treatment of solid tumors, which would allow us to tap into a huge market with a large patient population. The synergies of our selected innate and adaptive immune targets also multiply the combination potential among our pipeline assets for the treatment of a wide range of tumor indications. Our clinical development plans for our programs targeting solid tumors are as follows:  CD47-targeted drug candidates  IMM01 in combination with tislelizumab: We initiated the Phase Ib/II trial to evaluate IMM01 in combination with tislelizumab for the treatment of various advanced solid tumors that failed to respond to or relapsed from the standard of care such as PD-1/PD-L1 inhibitors, including among others, NSCLC, SCLC, HNSCC and CRC in May 2022. We expect to initiate a pivotal trial in the fourth quarter of 2024.  IMM2902 (CD47×HER2): We initiated a Phase Ia/Ib trial for IMM2902 in advanced HER2-positive and HER2-low expressing solid tumors, including BC, GC, NSCLC and BTC, in China in February 2022. Based on an IND approval for IMM2902 in HER2-positive and HER2-low expressing solid tumors granted by the FDA in August 2021, we have also initiated the clinical trial for advanced HER2-positive and HER2-low expressing solid tumors in the U.S. with the first patient dosed in June 2022. We expect to largely complete the Phase Ia trials in China and the U.S. in 2023.  IMM2520 (CD47×PD-L1): We have obtained IND approvals for IMM2520 from the NMPA in November 2022 and from the FDA in December 2022, and dosed the first patient for the Phase I clinical trial in China in March 2023. With further clinical validation from the Phase I trial in China, the Company will carefully decide whether to proceed with a clinical trial or explore potential collaboration opportunities in the U.S. We will particularly focus on the solid tumors generally resistant or not sensitive to the currently available immunotherapies, such as CRC, GC, lung cancer and HNSCC, among others.  CD24-targeted drug candidates  IMM47 (CD24 mAb): We expect to file IND applications for IMM47 with the NMPA and the FDA for the treatment of solid tumors in 2023, and initiate a Phase I dose-escalation study in Australia in August 2023. Initiating a clinical trial in Australia first can help us to begin global clinical trials earlier and accelerate clinical validation of IMM47. Additionally, we believe Australian trial can generate valuable clinical data on ethnically diverse populations, thus enhancing our ability to pursue collaboration opportunities with global pharmaceutical companies.  IMM4701 (CD47×CD24): Further leveraging the data observed from IMM47, we expect to file IND applications for IMM4701 with the NMPA and the FDA for the treatment of solid tumors, and further seek collaboration opportunities with global pharmaceutical companies. BUSINESS – 248 – --- page 258 ---  Adaptive immune checkpoint-targeted drug candidates  IMM2510 (VEGF×PD-L1): We received the IND approval for IMM2510 from the NMPA in December 2020. We commenced the Phase I dose-escalation trial for IMM2510 in China in August 2021 for the treatment of a variety of advanced solid tumors, including but not limited to, HCC, RCC, GC, NSCLC and STS. We expect to complete this dose-escalation study in the third quarter of 2023, and subsequently commence a cohort-expansion study.  IMM27M (CTLA4 ADCC+): We obtained the IND approval for IMM27M from NMPA in November 2021 have commenced the Phase I clinical trial in solid tumors, with the first patient dosed in June 2022. We expect to complete this trial in the third quarter of 2023. We received an IND approval from the NMPA for a Phase Ib/II study to evaluate the combination of IMM27M and a PD-1 antibody for the treatment of advanced solid tumors, such as RCC, NSCLC, GC and TC, in March 2023. We may initiate clinical trials or explore collaboration opportunities for this combination therapy.  IMM40H (CD70): We have obtained IND approvals for IMM40H from the NMPA and the FDA in August 2022, and may initiate Phase I clinical studies or pursue potential collaboration opportunities. Upon obtaining supportive clinical evidence from our ongoing trials in patients with cancers resistant to currently available therapies, we will further advance our clinical trials towards first-line treatment to expand the market share for our drug candidates. To achieve such goal, we plan to conduct head-to-head clinical trials to evaluate our drug candidates against standard-of-care approved for first-line treatment. Clinical use in the first-line setting will open a significant market for our drug candidates due to larger patient populations and a comparatively longer treatment duration. To expand our overseas footprint and maximize the clinical and commercial value of our drug candidates through clinical trials and accretive partnerships We endeavor to expand our overseas footprint and develop immuno-oncology therapies to fully grasp tremendous market opportunities. We have designed a clear overseas clinical development strategy with an initial focus on the U.S. market. We plan to rapidly advance early-stage clinical studies in China, and may subsequently leverage the China data to accelerate the clinical progress in the U.S. in order to save the time and costs of clinical development in the overseas market. As many of our drug candidates have global first-in-class potential, we believe we are well-positioned to conduct multi-regional clinical trials to obtain marketing approvals in multiple countries and seek potential collaboration opportunities in the overseas market. Dr. Frank Xiaodong Gan, an industry expert with notable clinical development experience at multiple prestigious pharmaceutical companies in the U.S., including Merck, Bristol Myers Squibb, Eli Lilly and Janssen, joined us as our Senior Vice President with responsibility to lead the clinical development in the United States. Moreover, leveraging our experienced senior management team’s deep-rooted network within the medical community in the U.S., we have collaborated with reputable principal investigators to formulate scientific clinical designs and engaged industry-leading CROs for efficient clinical development. We will continue to strengthen our relationships with these principal investigators and CROs, and actively explore other cooperation opportunities globally. We have obtained IND approvals from the FDA for, among others, IMM0306, IMM2902, IMM2520, and IMM40H. Based on an IND approval granted by the FDA in August 2021 for IMM2902, we have initiated the clinical trial for advanced HER2-positive and HER2-low expressing solid tumors in the U.S. with the first patient dosed in June 2022. With the support of further clinical validation from the China trials, we also plan to file an IND application for a Phase II trial for the combination of IMM01 and azacitidine with the FDA. BUSINESS – 249 – --- page 259 --- To penetrate the overseas market in a cost-effective and efficient manner, we will also actively seek strategic collaboration opportunities, including licensing arrangements, co-development and/or co-commercialization arrangements to optimize our pipeline structure, expedite the development of our drug candidates, broaden their addressable patient population, and accelerate the penetration in a variety of markets. We have presented preclinical and clinical data of our drug candidates at various international conferences including annual meetings of AACR, ASH and ASCO, to attract the interest of potential strategic partners. With the proven R&D capabilities and the encouraging preclinical and clinical data of our drug candidates, we believe that we are well-positioned to form value-accretive partnerships with renowned global and local pharmaceutical companies. In particular, we are seeking out-licensing and co-commercialization opportunities for our pipeline with partners that possess (i) strong medical and clinical resources to advance our global clinical development; and/or (ii) an established commercialization infrastructure, including a strong local salesforce, a broad distributor network, and a long-standing relationship with commercial insurers, health maintenance organizations, and pharmacy benefit managers. In addition to our selected pipeline discussed above, leveraging our strong discovery and R&D capability as well as our integrated R&D platform, we have developed multiple drug candidates in discovery and preclinical stage. To fully unleash the value of our comprehensive product pipeline, we will strategically seek out-licensing and other collaboration opportunities for certain drug candidates, such as IMM2518, a second-generation VEGF×PD-L1 bispecific molecule and IMM5601, a CD47×CD38 bispecific molecule, among others, all of which are in preclinical stage. In particular, when seeking potential partners, we expect to reach satisfactory commercial terms with those who possess strong resources and capabilities to advance the clinical development of our drug candidates efficiently. We may also consider strategic collaboration and co-development opportunities with companies that have complementary oncology portfolio with synergistic potential to combine with our drug candidates. We intend to identify and collaborate with the most suitable and resourceful partners, and leverage the complementary capabilities and differentiated expertise of such business partners to maximize the clinical and commercial value of our drug candidates. Furthermore, to maximize the value of our pipeline, we will carefully assess licensing and other collaboration arrangements in the context of our overall development strategy to prevent potential competition among our drug candidates in the same regions or for the same indications. To continuously enrich our innovative pipeline through fundamental biological research and translational medicine The development of cancer therapies requires pioneering foresight in target selection and validation. Leveraging our profound expertise in immunotherapies, we are able to strategically select the targets and effectively design and screen our molecules with a sound scientific rationale and strong validation in preclinical studies. To address the limitations of current immunotherapies, we have established our in-house drug discovery and design capabilities with integrated R&D platform. We believe our comprehensive knowledge in tumor biology and immunology and strong R&D capabilities and technologies serve as the driving force that propels our steady efforts to validate novel targets, improve molecule design and ultimately deliver medicine with clinical potential. We are determined to continue enriching our pipeline by actively exploring new immuno-oncology mechanisms and translating fundamental biological research into drug candidates. We have adopted a systematic approach to research and validate the mechanism of action of novel targets and pathways, assess their clinical significance and global competitive landscape, and screen, develop and design molecules with the best-suited structure and properties, to address unmet medical needs globally. With our methodical approach and integrated R&D platform, we are currently developing multiple therapeutic monoclonal antibodies, including IMM47, IMM40H, and discovery- and preclinical-stage candidates for several new targets, which BUSINESS – 250 – --- page 260 --- are targets with no approved drugs in anywhere of the world. Around CD24, validated by us as another innate immune checkpoint, we have developed one IND-enabling-stage and multiple discovery- and preclinical-stage candidates which exhibit global first-in-class potential. We have also been actively exploring prospects of other immune checkpoints, such as IL-8, NKG2A and PSGL-1. We will continue to single out and evaluate other innate immune checkpoints and enrich our pipeline with novel therapies. We are committed to identifying and validating promising immuno-oncology targets, as well as screening and advancing molecules with the optimum structure for each target. If a novel pathway or target is identified as having combinatorial potential with our drug candidates, we may further explore such potential by building up combination therapies or bispecific molecules. We will continue to invest in our translational medicine research capabilities to expedite our bench-to-bedside process, which we believe would put us at the forefront of the race to market. Meanwhile, we plan to conduct all-encompassing patient sub-group analyses to identify biomarkers that are predictive of the efficacy of our drug candidates. The biomarkers may assist in identifying patients who will benefit the most from the treatment. The expression level of a common biomarker may signal the effectiveness of our approach across a range of tumor indications. In this way, we would be able to present more precise treatment to a wider group of patients. To upscale our GMP-compliant manufacturing capacity We believe a self-sufficient manufacturing capability will grant us many strategic advantages, including improved cost-effectiveness, enhanced quality control, and flexibility in supply chain management. Those advantages are critical for us to grow into the integrated biopharmaceutical company that we envision. Our current pilot production line with a total production capacity of 450L enables us to produce high-quality drugs used in clinical trials in-house for certain drug candidates. We intend to strategically expand our GMP-compliant manufacturing capacity, while improving efficiency and cost-effectiveness. We have already commenced the construction of our new manufacturing facility that occupies a site area of approximately 28.7 thousand square meters in Zhangjiang Science City, Shanghai. This facility is designed to meet the stringent current Good Manufacturing Practices (cGMP) 1 standards. We plan to complete the first stage of construction by 2025, which will support clinical and commercial production of our pipeline products. Prior to completion of the construction, we will collaborate with CDMOs and utilize our in-house pilot manufacturing facilities to manufacture our drug candidates for preclinical studies and clinical trials. We will commence the second stage of construction, depending on the schedule of the regulatory approval and sales ramp-up of our drug portfolio in the future. To enlarge our talent pool to support our continuous growth We place a high priority on selecting and retaining top talents. To fully support our growth, we will continue to recruit industry-leading R&D, clinical development, and commercialization professionals. We are committed to providing our employees with robust career development and learning opportunities, mentorship from our industry veterans, clear career trajectories, competitive compensation, and a close-knit and supportive work environment. 1 cGMP refers to current Good Manufacturing Practices, which are a set of regulations and guidelines established by regulatory authorities to ensure the quality, safety, and efficacy of pharmaceutical products. For example, the FDA requires manufacturers to use proper measures and employ the most up-to-date technologies and systems to ensure drugs are consistently produced and controlled to quality standards appropriate for their intended use. cGMP covers all aspects of the manufacturing process, including facilities and equipment used, training and hygiene of staff, sourcing of materials, production procedures, record keeping, and handling of complaints and product recalls. BUSINESS – 251 – --- page 261 --- With more of our drug candidates advancing into the clinical stage, in the near term we will strengthen our clinical development team by attracting talents with extensive experience both in China and globally, to support clinical development and regulatory affairs in our target markets. We believe that, under the guidance of our seasoned clinical development management team, our new team members can make a significant contribution to our clinical development progress. We also plan to expand our translational medicine team acting as an engine to support our continuous drug development by recruiting talented personnel with interdisciplinary backgrounds. In the longer term, to facilitate our transformation from a biotechnology company to a biopharmaceutical company, we intend to establish a team of dedicated in-house sales staff to execute our commercialization strategy and seek commercialization partnerships with other pharmaceutical industry players. We also plan to build a team of pharmaco-economics experts to develop our competitive pricing strategy, with an aim to facilitate the inclusion of our products into the National Reimbursement Drug List (NRDL) in China as well as the commercial insurance catalogue in the overseas markets. To unleash the market potential of IMM01, we will actively prepare and participate in the price negotiation with the regulators for its inclusion in the NRDL in China, upon obtaining marketing approval. We will also seek its inclusion in commercial insurance catalogue overseas through potential commercialization partners in the global market to further increase its accessibility. OUR DRUG CANDIDATES As a science-driven biotechnology company, we have internally developed all of our pipeline candidates by utilizing our proprietary and integrated R&D platforms. Differentiated from companies that are focused primarily on the development of immunotherapies targeting adaptive immune checkpoints, mostly T-cell-based therapeutics, we constructed our pipeline to harness both innate and adaptive arms of immunity to unleash their synergistic potential. Our pipeline is designed to address the limitations of current T-cell-based immunotherapies, such as limited response due to “cold tumors” or non-T cell-inflamed immune-suppressive TME, thereby bringing clinical benefits to patients with a wide range of cancer indications. As of the Latest Practicable Date, we had built up a pipeline composed of 14 drug candidates targeting critical innate and adaptive immune pathways, with eight ongoing clinical programs. We own worldwide IP and commercial rights to our pipeline candidates, which allows us to address critical medical needs in the global market. As of the Latest Practicable Date, we had eight ongoing clinical programs in China and/or the U.S., four IND-stage and one IND-enabling-stage programs, and multiple discovery and preclinical-stage assets. The following chart summarizes the development status of our selected drug candidates as of the Latest Practicable Date: BUSINESS – 252 – --- page 262 --- Notes: (1) All of our clinical- and IND-stage drug candidates are classified as Category 1 innovative drugs, and preclinical- and disco very-stage drug candidates are expected to be classified as Category 1 innovative drugs, in accordance with relevant laws and regulation in China. (2) Due to certain products being in the preclinical or discovery stages, their line of treatment has not been decided yet. The Company will determine the line of treatment based on the progress of the drug development. (3) Expected completion date for Phase Ia/I trial refers to the time when RP2D can be determined, and expected completion date for Phase Ib/II trial refers to the time when top-line data is available for regulatory discussions. Follow-up period required would not delay the initiation of the next phase clinical trials, and is thus not considered. (4) We completed the Phase I dose-escalation study of IMM01 monotherapy in R/R lymphoma in January 2022. In accordance with the relevant laws and guidance of the NMPA, the safety and other clinical data from the Phase I monotherapy trial, combined with preclinical study results, form the basis for us to obtain the IND approvals of our multiple IMM01-based combination therapy programs. The favorable safety profile of IMM01 observed in this Phase I trial enabled us to progress directly to the Phase Ib/II trials for our various combination programs. In June 2022, we have completed a Phase Ib trial to evaluate IMM01 in combination with azacitidine for the treatment of R/R MDS and R/R AML, and initiated a Phase II trial mainly for the first-line treatment of higher-risk MDS, unfit AML and CMML. We have also completed a Phase Ib cl inical trial for IMM01 in combination with tislelizumab, and initiated a Phase II trial in December 2022. Based on ongoing evaluation of emerging data across our different clinical programs as well as anticipated synergistic effects of IMM01 and tislelizumab for treating cHL, we strategically plan to prioritize our resources on the clinical development of IMM01-based combination therapies and CD47-based bispecific molecules, which are expected to demonstrate stronger clinical activity and a higher likelihood of obtaining marketing approval. Consequently, we terminated the Phase II clinical trial for IMM01 monotherapy in October 2022 after discussion with principal investigators. Benefited patients in IMM01 monotherapy trials will continue to receive treatment until their diseases progress. (5) The cohort-expansion trials of this combination are mainly designed to target the first-line treatment of higher-risk MDS (p atients who fall into higher-risk group categories in the original or revised International Prognostic Scoring System), unfit AML (individuals of older age with AML who are considered not eligible for intensive treatment approaches), and CMML. Part icularly, we plan to seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML, a rare type of disease with highly unmet medical needs. (6) This combination of IMM01 and tislelizumab targets all subtypes of cHL. (7) In July 2022, we obtained the NMPA’s consent for adding R/R cHL as an additional expansion cohort into the ongoing combinat ion trial of IMM01 and tislelizumab. We dosed the first patient with R/R cHL in China in January 2023. (8) The clinical trial is led and funded by Sunshine Guojian Pharmaceutical (Shanghai) Co., Ltd. (“ Sunshine Guojian”). As denoted by the dotted line, Sunshine Guojian and us have obtained an IND approval for a Phase Ib/II trial of this combination therapy from the NMPA in August 2021, and therefore the parties can skip the Phase Ia stage and directly initiate a Phase Ib/II trial. (9) We will continue to conduct preclinical studies for IMM2547, IMM51, IMM38, IMM50 and IMM62, including cell line development , in vivo studies and further evaluation. (10) We are currently conducting the Phase I trial for IMM27M monotherapy, and have obtained the IND approval for a Phase Ib/II trial for its combination with a PD-1 antibody. * Currently we have several other drug candidates in preclinical stage and plan to further develop these candidates through col laboration, such as IMM2518, a second-generation VEGF×PD-L1 bispecific molecule and IMM5601, a CD47×CD38 bispecific molecule. Abbreviations: MDS refers to myelodysplastic syndrome; AML refers to acute myeloid leukemia; CMML refers to chronic myelomonocytic leukemia; MM refers to multiple myeloma; B-NHL refers to B-cell non-Hodgkin lymphoma; cHL refers to classical Hodgkin lymphoma; IND refers to investigational new drug; CMC refers to chemistry, manufacturing, and controls; ADCC refers to antibody-dependent cellular cytotoxicity. Source: Company Data Adaptive Immunity Innate Immunity Program(1) Target (Modality) IND/IND- Enabling Phase Ia/I Phase Ib/II Phase III/ Pivotal Current Status / Upcoming Milestone(3) Commercial Rights IMM01(4) IMM01 + Azacitidine CD47 (SIRPα-Fc fusion protein) MDS (unfit 1L), AML (1L), CMML (1L)(5) Phase Ib/II commenced in January 2022; expect to complete Phase II and initiate pivotal trial in Q1 2024 Global IMM01 + Tislelizumab CD47+PD-1 Phase Ib/II commenced in May 2022; expect to complete Phase II in Q3 2024 and initiate pivotal trial in Q4 2024(7) Global Global Global IMM01 + Inetetamab CD47+HER2 HER2-positive solid tumors (2L&3L) cHL (≥3L) (6), Solid tumors (2L&3L) devorppaDNIII/bIesahP devorppaDNIII/bIesahPIMM01 + Bortezomib + Dexamethasonum CD47 IMM0306 Monotherapy CD47xCD20 (Bispecific molecule) Indolent B-NHL (≥3L) Phase IIa commenced in March 2023 in China; IND approved in the U.S. Global IMM0306 + Lenalidomide CD47xCD20 (Bispecific molecule) B-NHL (2L) IMM2902 CD47xHER2 (Bispecific molecule) HER2-positive and low-expressing solid tumors (2L&3L) Phase Ia commenced in February 2022 in China and in June 2022 in the U.S.; expect to largely complete Phase Ia trials in China and the U.S. in 2023 Global Global IMM2520 CD47xPD-L1 (Bispecific molecule) Solid tumors (≥2L) IND approved in China and the U.S. in Q4 2022; Phase I commenced in China in March 2023 Global IMM47 CD24 (mAb) Solid tumors (≥2L) labolGg; expect to enter into clinical trials in August 2023nilbane-DNI IMM4701 CD47xCD24 (Bispecific molecule) Solid tumors labolGCMC IMM2547(9) CD24xPD-L1 (Bispecific molecule) Solid tumors labolGyrevocsiD IMM51(9) IL-8 (mAb) Solid tumors labolGlacinilcerP IMM38(9) NKG2A (mAb) Solid tumors Preclinical Global IMM50(9) PSGL-1 (mAb) Solid tumors Discovery Global IMM62(9) Undisclosed Solid tumors Discovery Global IMM2510 VEGFxPD-L1 (Bispecific molecule) Solid tumors (2L&3L) Phase I commenced in August 2021 and 8th cohort ongoing in China; expect to complete Phase I in Q3 2023 Global IMM27M CTLA-4 ADCC+ (mAb) Solid tumors (≥2L) Phase I commenced in June 2022 in China; expect to complete in Q3 2023; IND approved in China for Phase Ib/II trial for its combination with a PD-1 antibody(10) Global IMM40H CD70 (mAb) Liquid/Solid tumors (≥2L) IND approved in China and the U.S. in August 2022 Global Innate Immunity Targets Innate Immunity Targets Adaptive Immunity Targets Adaptive Immunity Targets Innate and Adaptive Immunity Targets Innate and Adaptive Immunity Targets Key ProductCore Product China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA) China (NMPA), US (FDA)China (NMPA), US (FDA) China (NMPA), US (FDA) China (NMPA)China (NMPA) China (NMPA) China (NMPA)China (NMPA) China (NMPA)China (NMPA) China (NMPA) China (NMPA) China (NMPA)China (NMPA) China (NMPA)China (NMPA) (8) Discovery PreclinicalIndication(s) (line of treatment)(2) MM (≥4L) Phase Ib/IIa commenced in June 2023 BUSINESS – 253 – --- page 263 --- Our drug candidates are subject to BLA approval by relevant authorities, such as the NMPA in China and the FDA in the U.S., before commercialization in relevant jurisdictions. As of the Latest Practicable Date, we had not received any material concerns, objections or negative statements raised by the NMPA, the FDA or other relevant authorities that we are not able to address in a timely manner. We believe we are on track to advance the development of our discovery- and preclinical-stage as well as clinical-stage drug candidates as described in “— Our Drug Candidates.” OUR INNATE IMMUNE CHECKPOINT-TARGETED DRUG CANDIDATES To overcome the limitations of T-cell-based immunotherapies, we have strategically designed and built a portfolio consisting of four clinical-stage, one IND-enabling-stage and multiple discovery- and preclinical-stage drug candidates targeting innate immune checkpoints. This portfolio includes: (i) a CD47-targeted fusion protein, IMM01 (SIRP α-Fc), being or to be evaluated in combination with each of azacitidine, tislelizumab (PD-1 mAb), inetetamab (HER2 mAb) and bortezomib/dexamethasonum for the treatment of hematologic and solid tumors, (ii) three CD47-based clinical-stage mAb-Trap bispecific molecules with the ability to achieve enhanced tumor-killing effects via ADCP and ADCC activated through IgG1 Fc effector function, namely IMM0306 (CD47×CD20), IMM2902 (CD47×HER2), and IMM2520 (CD47×PD-L1), as well as multiple preclinical-stage CD47-based bispecific molecules, including IMM4701 (CD47×CD24), (iii) one IND-enabling-stage humanized CD24-targeted monoclonal antibody, IMM47 (CD24 mAb), and several CD24-targeted discovery- and preclinical-stage bispecific molecules, including IMM4701 (CD24×CD47) and IMM2547 (CD24×PD-L1), and (iv) various discovery- and preclinical-stage drug candidates targeting other novel innate immune targets, including IL-8, NKG2A and PSGL-1. Our Approach The immuno-oncology therapies present huge clinical and commercial potential. According to Frost & Sullivan, the global immuno-oncology drug market is expected to represent 54.1% of the overall global oncology drug market in 2035. Currently, approved immunotherapies primarily target T-cell immune checkpoints, such as PD-1/PD-L1, CTLA-4, and LAG-3. T-cell immune checkpoint inhibitors have revolutionized the treatment paradigm for many cancer indications in the past decade. However, only about 10% to 25% of patients across almost all major cancer types can benefit from PD-1/PD-L1 monotherapy treatment. The low response rates could be due to lack of T-cell infiltration in “cold tumors,” or non-T cell-inflamed immune suppressive TME. In response to this challenge, we have developed and built a deep portfolio of drug candidates targeting innate immune checkpoints. Major types of innate immune cells (macrophages, NK cells and DCs) widely exist in almost all types of body tissues, including lung, esophagus, stomach, liver, small and large intestines, and serve as the first line of defense against tumor cells. Macrophages, in particular, are widely distributed in a broad range of tumor types, accounting for 20% to 50% of cells in respective tumor tissues, higher than T cells’ 10% to 30% tissue distribution. Upon activation, macrophages can ingest other cells and pathogens, including phagocytotic activity against tumor cells. Activated macrophages can release a slew of cytokines and chemokines, such as CXCL9 and CXCL10, to recruit T cells to tumor sites, effectively turning immune-suppressive “cold tumors” into immune-sensitive “hot tumors.” They can also present tumor-associated antigens to T cells and elicit tumor-specific adaptive immune responses. Activated NK cells can mediate ADCC against tumor cells and promote T-cell differentiation, thus BUSINESS – 254 – --- page 264 --- further enhancing T cell responses. DCs can also attract T cells into the TME and activate T-cells through antigen presentation. The following table sets forth an overview and comparison of the key adaptive and innate immune cells in the TME: ytinummI etannIytinummI evitpadA Antigen priming required First line of defense, short response time, no need for antigen priming Key Immune Cell Type Activation Process T cell B cell Macrophage NK cell DC Tumor Tissue Distribution(1) 10-30% 3%-40% 20-50% 5%-10% 3%-10% Major Immune Functions • T-cell mediated killing of tumor cell via exocytosis of cytotoxic granules (perforin, granzymes) and secretion of antitumor cytokines • Antibody production • Cytokine secretion • Macrophage-mediated phagocytosis • Attracting T cells to the tumor microenvironment (TME) • Antigen presentation • Trogocytosis • NK cell-mediated cytolysis via the secretion of perforin and granzymes • Activating of T cells, macrophages and DCs through release of cytokines • Attracting T cells to the TME • Antigen presentation Note: The tumor tissue distribution is the proportion of certain immune cells in different tumor tissues. Source: Frost & Sullivan CD47 has been recognized as a critical macrophage checkpoint that plays a broad role in cancer immune evasion across multiple cancer types. CD47 interacts with SIRP α, an inhibitory receptor expressed on macrophages. By binding to SIPR α, CD47 conveys a “don’t eat me” signal to inhibit macrophage-mediated tumor phagocytosis. Upregulating CD47 is a primary mechanism by which tumor cells evade attack by the innate immune systems. High CD47 expression is often correlated with aggressive disease and poor outcomes in a wide range of hematologic and solid tumors. Blocking the CD47-SIPR α axis has been validated in various clinical studies as an effective approach for the development of immunotherapeutics. Supported by mounting clinical evidence, this therapeutic strategy has shown a great potential to treat both hematologic and solid tumors, including lymphoma, MDS, AML, GC, HNSCC and SCLC. However, research has revealed that to fully activate macrophages, blocking the “don’t eat me” signal of CD47-SIPR α axis alone is not enough. Therapeutic agents, either as monotherapy or in combination therapy, must also deliver an activating “eat me” signal to macrophages via Fc-Fc γR engagement or other costimulatory pathways. The following diagram illustrates the mechanism of full macrophage activation through both CD47 blockade and the activation of an “eat me” signal: Dual Mechanisms of Macrophage Activation OR RR Tumor Cell Macrophage SIRPα CD47 C D 4 FcγR CD47 “don’t eat me” signaling No “eat me” signaling Poor macrophage activation SIRPα FcγR CD47 blocked No “eat me” signaling Limited macrophage activation SIRPα CD47 C D 4 Opsonizing Antibodies CD47 “don’t eat me” signaling Fc-receptor “eat me” signaling Limited macrophage activation Anti-CD47 Opsonizing Antibodies IMM01 CD47 blocked Fc-receptor “eat me” signaling Full macrophage activation Anti-CD47 CD47 blocked Fc-receptor “eat me” signaling Full macrophage activation Source: Frost & Sullivan, Literature Review BUSINESS – 255 – --- page 265 --- Driven by our extensive understanding into cancer immunology, we have designed and developed IMM01, a SIRP α-Fc fusion protein with an IgG1-Fc region. Unlike IgG4 Fc adopted by most CD47 antibodies, IgG1 Fc used in IMM01 is able to elicit strong ADCP activity mediated by macrophages through efficient engagement with Fc γ receptors. IMM01 can thus exert a dual mechanism to simultaneously (i) block the CD47-SIRP α “don’t eat me” pathway, and (ii) activate the “eat me” signal via Fc-Fc γR engagement. Given the potent efficacy and favorable safety attributable to its unique molecule design, we have been exploring IMM01’s combination potential with other cancer agents, and have designed multiple bispecific molecules that incorporate the engineered CD47-binding domain of IMM01 with an IgG1 Fc. IMM01 (SIRP α-Fc Fusion Protein) — Our Core Product IMM01 is an innovative CD47-targeted molecule that displays favorable safety and encouraging efficacy in clinical studies. IMM01’s favorable safety profile demonstrated in clinical trials is attributable to its specifically-engineered CD47-binding domain of human SIRP α, which does not bind to human RBCs. In terms of efficacy, IMM01 designed with IgG1 Fc can fully activate macrophages by delivering the additionally required “eat me” signal, and induce ADCC by activating NK cells. As a result, IMM01 can lead to all-around innate and adaptive immune responses, demonstrated by its encouraging single-agent efficacy even at a relatively low dose. Thus, we are able to establish the RP2D for IMM01 monotherapy at 2.0 mg/kg, much lower than most CD47 antibodies (typically in the range of 30.0 to 45.0 mg/kg). A lower effective dose of IMM01 allows for a better safety profile. With preliminary efficacy and favorable safety in monotherapy clinical trials and preclinical data of its combination studies, IMM01 is expected to achieve strong synergistic effects used in combination with other cancer agents. IMM01 is being developed for the treatment of various hematologic malignancies and solid tumors in combination with other agents. We select such agents to develop combination programs with IMM01 based on careful review and consideration of various factors, including their synergistic potential when combined with IMM01, preclinical data support, and clinical validation by other industry players. For details of rationale for selecting these agents, see “— IMM01 (SIRP α-Fc Fusion Protein) — Our Core Product — Competitive advantages — Combination potential with a wide range of cancer therapeutics.” We own the global IP and commercial rights of IMM01. As of the Latest Practicable Date, with respect to IMM01, we owned one patent family, which includes one issued patent in China, one issued patent and two pending patent applications in the U.S., one issued patent in Japan, one issued EU patent and one PCT patent application which has entered national phases. Our founder, Dr. Wenzhi Tian, started to explore the therapeutic potential of CD47-targeted strategy in oncology as early as 2010, long before it became widely recognized in the biopharmaceutical industry. Leveraging the fundamental insights into CD47, we started our development efforts on IMM01 since our inception in 2015, which later became the first CD47-targeted SIRP α-Fc fusion protein to enter into clinical stage in China. We (i) have completed the Phase I dose-escalation study of IMM01 in R/R lymphoma patients, (ii) have completed a Phase Ib trial to evaluate IMM01 in combination with azacitidine for the treatment of R/R MDS and R/R AML, and initiated a Phase II trial mainly for the first-line treatment of HR MDS, unfit AML and CMML in June 2022, and (iii) have completed a Phase Ib clinical trial and initiated the Phase II trial in December 2022 for the combination of IMM01 and tislelizumab for the treatment of various advanced solid tumors that failed to respond to or relapsed from the standard of care such as PD-1/PD-L1 inhibitors, including among others, NSCLC, SCLC, and HNSCC. Furthermore, we are collaborating with Sunshine Guojian to develop a combination therapy of inetetamab and IMM01 for HER2-positive solid tumors in mainland China, for which Sunshine Guojian will drive and fund the clinical development. We are also actively conducting numerous preclinical studies to evaluate the combination potential of IMM01 with other drugs. BUSINESS – 256 – --- page 266 --- Clinical data available thus far showed favorable safety and promising preliminary efficacy of IMM01 as a single agent. According to the safety data from the Phase I dose-escalation study, IMM01 was well tolerated and safe up to the RP2D of 2.0 mg/kg in patients and demonstrated no hemagglutination. As of February 10, 2023, neither hemagglutination nor hemolytic anemia had been observed in its Phase II clinical trial. In terms of efficacy, as of December 14, 2022, among 27 evaluable patients in the Phase I monotherapy clinical study, two patients reached CR (2 CRs), one reached PR (1 PR), and 13 reached stable disease (13 SDs) (including six cases with substantial tumor shrinkage observed). According to Frost & Sullivan, among numerous drug developers of CD47-targeted molecules globally, we are one of the only two companies to have observed CR in monotherapy clinical trials with a well tolerated safety profile. We initiated our clinical development of IMM01 through its monotherapy trial, and subsequently expanded our focus to encompass combination therapy programs, driven by the safety profile of IMM01 monotherapy and its observed synergistic effects with other cancer agents. With positive efficacy signals obtained from the Phase I monotherapy trial, we commenced a Phase II cohort-expansion study for IMM01 monotherapy in October 2021, with the primary goal of developing this monotherapy for one or two niche lymphoma indications. In light of the emerging data from our various clinical programs and prevailing industry trends, we observed that IMM01 combination therapies and CD47-based bispecific molecules exhibited stronger clinical activity for the indications initially targeted by IMM01 monotherapy, suggesting a higher probability of obtaining marketing approval. As a result, we strategically reallocated our resources to prioritize the development of combination and bispecific therapies, and subsequently terminated the Phase II monotherapy trial in October 2022, following consultation with principal investigators. On April 26th, 2023, we informed the NMPA through the chinadrugtrials platform (ڦ ʮ̨̻ͪ , a trial registration and publicity platform operated by CDE) of the termination of the Phase II monotherapy clinical trial for IMM01 and have not received any material objections or requests for additional information. The NMPA did not and will not revoke the existing IND approvals due to the termination of the Phase II monotherapy trial. IMM01 will be regulated as the same drug product by the NMPA under the currently effective Drug Registration Administration Measures, regardless of whether IMM01 is used as monotherapy or in combination therapies. The Company conducted a formal consultation with the CDE of the NMPA through the NMPA’s official communication and consultation channel “Drug Registration Applicant’s Window” (ൗ̅͡ሗɛʘ೿ ) between March 28 and March 31, 2022. Based on the consultation and as confirmed by the Company’s PRC legal advisor, a cancer drug (first approved in combination therapies, as is the expected case with IMM01) will remain registered with the NMPA under the same drug approval number when additional supplemental NDA approvals for new indications are obtained through the use of such drug in various combination therapies (if such indication has previously been approved by the NMPA) after the first NDA approval of that drug, as long as the structure, preparation, formulation, and route of administration of such cancer drug remain unchanged in the various newly approved combination therapies. Therefore, under the NMPA’s regulatory regime, once IMM01 receives initial approval for use in one combination therapy, IMM01, the single drug product itself, will be registered under a drug registration certificate with a designated drug approval number. Subsequent approvals for IMM01, when used in other combination therapies for other indications which have obtained competent authorities’ regulatory approvals, will remain registered and regulated as the same single product under the same drug registration certificate with the same drug approval number. In light of the termination of the Phase II monotherapy trial and the suspension or termination of clinical trials of CD47-targeted drug candidates by other drug developers, the Company conducted another formal consultation with the CDE of the NMPA through the Drug Registration Applicant’s Window between April 25 and May 17, 2023. During this consultation, the Company (the trial sponsor for clinical trials of IMM01) summarized and presented the relevant facts and circumstances related to the development status of IMM01. Based on this factual summary, the Company sought confirmation from the CDE as to whether the trial sponsor may, after termination of the Phase II monotherapy trial or after the suspension or termination of clinical trials of same-target drug candidates by other drug companies, continue to advance the various combination therapy clinical trials according to previously approved trial designs and BUSINESS – 257 – --- page 267 --- protocols. The CDE, during this consultation, reviewed the Company’s factual summary and consultation questions and confirmed that the trial sponsor itself may choose to suspend or terminate any of its clinical trials. In the consultation, the CDE did not question the Company’s discretion to proceed with the (monotherapy or combination therapy) trials of its own drug candidate (including to advance its combination therapy trials in accordance with previously-approved trial designs and protocols); nor did the CDE require any modification to the previously-approved trial designs and protocols for the combination therapy trials, despite termination of the Phase II monotherapy trial or suspension or termination of other companies’ clinical trials of drug candidates with the same target. The CDE reminded the Company that, in the event of any serious safety issues with any of the trials, the trial sponsor needs to timely report to, and communicate with, the regulatory authority. As of the Latest Practicable Date, the Company has not received any queries, limitations or requirements regarding its combination therapy trials and previously-approved trial designs and protocols, and the Company remains committed to complying with the applicable reporting and other obligations under the relevant rules and regulations. In multiple clinical trials, data readout suggested encouraging efficacy and favorable safety of several IMM01 combination therapies. For the combination therapy of IMM01 and azacitidine, neither DLT nor Grade 3 or higher hemolysis was observed among all 12 patients receiving the combination treatment at all three dose levels of IMM01 (1.0 mg/kg, 1.5 mg/kg, and 2.0 mg/kg) in our Phase Ib trial. Moreover, the interim data from its Phase II trial as of February 10, 2023 showed that: (i) among the eight evaluable patients with 1L CMML, two reached CR (2 CRs), six reached marrow complete response (6 mCRs), with one hematological improvement (1 HI, which also achieved mCR), resulting in an ORR of 100%, and (ii) among the 16 evaluable HR MDS patients who have received at least three cycles of treatment, three achieved CR (3 CRs), nine achieved mCR (9 mCRs), and seven achieved HI (7 HIs, among which 4 also achieved mCR), resulting in an ORR of 93.8%. For the combination therapy of IMM01 and tislelizumab, a heavily pre-treated NSCLC patient with six lines of prior treatment and refractory to PD-1 inhibitors achieved PR after three cycles of treatment with target lesion shrinkage of 40% in the Phase Ib trial. Mechanism of Action Macrophages are a type of white blood cells that can phagocytose antigens. They are part of the innate immune system that acts as the first line of defense to protect the body from infection. Macrophages are widely distributed in numerous solid tumors with significantly higher tissue penetration than T cells. CD47 is a critical macrophage checkpoint that can transmit a “don’t eat me” signal to macrophages by interacting with SIRP α. Thus, the overexpression of CD47 enables tumor cells to evade immune responses via the CD47-SIRP α immune inhibitory pathway. IMM01 is a SIRP α-Fc fusion protein that consists of an engineered extracellular CD47-binding domain of human SIRP α, linked to the Fc region of human IgG1. IMM01 is designed to fully activate macrophages through a dual mechanism. On one hand, the engineered CD47-binding domain of IMM01 can selectively bind to CD47 overexpressed on tumor cells and prevent CD47 from delivering the “don’t eat me” signal to macrophages. This specifically modified CD47-binding domain can avoid binding to human RBCs in vitro . The binding specificity of IMM01 minimizes its blood toxicity and allows for a favorable safety with the ability to activate macrophages. On the other hand, the engineered human IgG1 Fc of IMM01 can engage Fc receptors on macrophages to deliver a strong “eat me” signal that is essential to full macrophage activation. In addition to direct tumor killing activities, activated macrophages also release a slew of cytokines and chemokines, such as CXCL9 and CXCL10, that can attract and recruit T cells into the TME. Increased T-cell infiltration in solid tumors can turn the non-immune responsive “cold tumors” to immune-sensitive “hot tumors.” The activity of macrophages can further increase antigen presentation to T cells, thus leading to enhanced tumor-specific T-cell response. Additionally, the engineered IgG1 Fc can induce ADCC mediated by NK cells, leading to direct tumor-killing effects. Overall, the activation of macrophages and NK cells and their crosstalk with T cells empower all-around immune responses. BUSINESS – 258 – --- page 268 --- The following diagram illustrates the mechanism of action of IMM01: Mechanism of Action of IMM01 SIRPα FcγR CD47 IMM01 Tumor cell Full activation of macrophages Macrophage Phagocytosis Cytokines/Chemokines Secretion (CXCL9, CXCL10, etc.) Mϕ Tumor peptides on MHC MHC:TCR Tumor cells fully killed Attract T cells to TME T cells Anti-CD47 Anti-CD47 A FcγR CD47 blocked No “eat me” signaling Limited macrophage activation SIRPα CD47 S I R P C D FcγR CD47 “don’t eat me” signaling No “eat me” signaling Poor macrophage activation M h CD47- binding domain Active lgG1 Blocking “Don’t eat me” signal via interrupting CD47- SIRPα interaction Activating “Eat me” signal via Fc-FcγR engagement IMM01 MHC IMM01 CD47 blocked Fc-receptor “eat me” signaling Full macrophage activation Definition: MHC refers to major histocompatibility complex. Source: Frost & Sullivan, Company Data, Literature Review Market Opportunities and Competition The current approved immunotherapies primarily target T-cell immune checkpoints, including PD-1/PD-L1, CTLA-4 and LAG-3. However, the overall response rates of these T-cell immune checkpoint inhibitors are limited in many major types of cancer. As summarized in the table below, only about 10% to 25% of patients across almost all major cancer types respond to PD-1/PD-L1 inhibitor monotherapy. Tumor Response Rates to PD-1/PD-L1 Inhibitor Monotherapy NSCLC SCLC CRC GC HNSCC HCC ESCC BTC RCC OC CC UC STS DLBCL PD-1 19-20% 12-19% <10% 13-14% 13-16% 16-17% 19-20% 3-22% 22% 8-15% 14% 20-29% 5-18% 45% PD-L1 14% 2-10% 5% 10% 13-24% Notes: (1) The response rates are based on the latest label from FDA and NMPA except for CRC, GC, SCLC, OC, BTC and STS, which are based on the published clinical results. (2) Only monotherapy clinical results are listed. (3) Results of adjuvant therapy are excluded. Results may vary from different cancer sub-types or clinical trials. (4) The clinical results listed are from general cancer population regardless of PD-L1 expression, except for the ORR of CC, which is restricted in PD-L1 positive population (combined positive score (CPS) ≥1). Definitions: NSCLC refers to non-small cell lung cancer; SCLC refers to small cell lung cancer; CRC refers to colorectal cancer; GC refers to gastric cancer; HNSCC refers to head and neck squamous cell carcinoma; HCC refers to hepatocellular carcinoma; ESCC refers to esophageal squamous cell carcinoma; BTC refers to biliary tract cancer; RCC refers to renal cell carcinoma; OC refers to ovarian cancer; CC refers to cervical cancer; UC refers to urothelial carcinoma; STS refers to soft-tissue sarcomas; DLBCL refers to diffuse large B-cell lymphoma. Source: Frost & Sullivan BUSINESS – 259 – --- page 269 --- In recent years, mounting research highlights the potential to deploy innate immunity-targeted strategies to overcome the limitations of using only T-cell immunotherapies in cancer treatment. According to Frost & Sullivan, there is significant market potential worldwide and in China for CD47/SIRP α-targeted therapies. The global market size of CD47/SIRP α-targeted therapies is expected to reach US$12.6 billion and US$35.4 billion in 2030 and 2035, respectively. The prospect promised by this new therapy was also validated by several multi-billion dollar take-over transactions of CD47 focused biotechnology companies as well as licensing deals for CD47-targeted agents backed by leading multinational pharmaceutical companies, including Gilead, Pfizer and AbbVie. We believe CD47-targeted agents in combination with other agents have significant opportunities to fulfill the unmet medical needs of numerous hematologic malignancies and solid tumors in China and worldwide. We are developing the combination of IMM01 and azacitidine for the first-line treatment of HR MDS, unfit AML and CMML. The combination of IMM01 and tislelizumab is being developed for the second-line treatment of NSCLC, SCLC, and HNSCC and other solid tumors, as well as the third-line treatment of cHL. We will also consider moving our current treatment into front-line settings in a stepwise manner at a later stage when promising clinical efficacy has been validated. In addition, the combination of IMM01 and inetetamab is intended to be used in the second- and third-line treatments of HER2 positive solid tumors. According to Frost & Sullivan, the relapse rates of the first-line treatments of advanced NSCLC, SCLC, and HNSCC are approximately 75%, 100%, and 50%, and the overall relapse rate post second-line treatment for advanced cHL is roughly 10%. For patients with advanced HER2 positive solid tumors, almost all of them are expected to relapse after the first-line treatment and proceed to second- and third-line of treatments. Please refer to “Industry Overview — Selected Indications Analysis” for more details on the incidence and prevalence of indications targeted by IMM01 in China and oversea markets. Hematologic malignancies CD47 overexpression is widely observed in many hematologic malignancies, including lymphoma, MDS/CMML and AML. It is found to correlate with poor prognosis and reduced overall survival (OS). Over 80% of lymphomas are classified as NHL. The current medical treatments for NHL generally include chemotherapy and targeted therapy. However, approximately 50% of NHL patients will eventually progress to R/R NHL after first-line treatments. Due to the drug resistance and side effects associated with standard treatments, patients with R/R diseases are left with very limited effective treatment options. For classical Hodgkin lymphoma (cHL), PD-1/PD-L1 inhibitors alone or in combination with chemotherapy are mainly recommended. Despite the fact that PD-1/PD-L1 inhibitors have shown good efficacy in R/R cHL, patients who had relapsed or progressed after PD-1/PD-L1 inhibitors are left with very limited treatment options. Additionally, the first-line treatments for MDS/CMML and AML are generally limited to chemotherapy, presenting unmet needs of most patients for highly specific treatment. Please refer to “Industry Overview” for more details on the incidence, treatment paradigm and unmet medical needs for NHL, MDS/CMML and AML. In recent years, the therapeutic potential of CD47-targeted agents in lymphoma, MDS/CMML and AML has been validated by accumulating clinical data. For example, in clinical trials, Gilead’s magrolimab in combination with azacitidine has delivered an ORR of 75% and 73% in the first-line treatment of MDS and AML, respectively. However, since both azacitidine and CD47 antibodies also induce blood toxicity, the combination use of these two agents could induce further exacerbated blood toxicity and ultimately lead to serious safety issues. Given its advantages in single-agent efficacy and safety compared to CD47 antibodies, IMM01, when used in combination with azacitidine, has a high potential to fulfill the unmet medical needs of patients with MDS/CMML and AML. BUSINESS – 260 – --- page 270 --- Solid tumors So far, PD-1/PD-L1 inhibitors have been approved for the treatment of a broad range of cancers worldwide. However, their monotherapy only produces meaningful responses in 10% to 25% patients across almost all major cancer types. The response rates could be particularly low in “cold tumors” with insufficient T-cell infiltration. Moreover, survival benefits of current combination therapies based on PD-1/PD-L1 inhibitors are also limited in many cancer types. For extensive-stage SCLC, metastatic HNSCC and metastatic ESCC, PD-1/PD-L1 inhibitor-based combination therapies only provide an approximately two- to three-month improvement in median overall survival (mOS) compared with chemotherapy alone. Relatively short median progression-free survival (mPFS) is observed with the treatment of PD-1/PD-L1 inhibitor-based combinations in many solid tumors, including metastatic GC (7.7 months), metastatic CRC (8.9 to 10.6 months in the first-line treatment), HCC (4 months), ESCC (6.3 months) and NSCLC (6.4 to 8.8 months in the first-line treatment). Given these limitations of PD-1/PD-L1 inhibitors, there is a clear need for other effective treatment options to improve treatment outcomes for patients. Please refer to “Industry Overview” for more details on the incidence, treatment paradigm and unmet medical needs for the solid tumors. Our research suggests that IMM01 acts synergistically with PD-1/PD-L1 inhibitors and enhance their activity in solid tumors. Macrophages are widely distributed in a broad range of tumor types, accounting for 20% to 50% of cells in respective tumor tissues, including NSCLC, SCLC, GC, BC, HNSCC, HCC, ESCC, BTC, and OC. As described in the “— Mechanism of Action,” IMM01 can fully activate macrophages to promote the T cell immune response, which could potentially enhance the response rates of solid tumors to PD-1/PD-L1 treatments. Thus, combining IMM01 with tislelizumab may be an effective therapeutic approach for treating cold tumors with limited sensitivity to PD-1/PD-L1 inhibition. In our Phase Ib trial evaluating the combination of IMM01 and tislelizumab, a heavily pre-treated NSCLC patient with six lines of prior treatment and refractory to PD-1 inhibitors achieved PR after three cycles of treatment with target lesion shrinkage of 40%. Competitive landscape As of the Latest Practicable Date, there were no CD47-targeted therapies approved for marketing in China or the rest of the world. IMM01 is the first SIRP α-Fc fusion protein targeting CD47 to enter into clinical stage in China. Safety issues have been the primary concern regarding CD47-targeted agents, especially CD47 antibodies. For CD47 antibodies, their inevitable binding with human RBCs and platelets (which ubiquitously express CD47) can lead to severe blood toxicity, such as anemia, thrombocytopenia and hemagglutination. A number of clinical-stage CD47 antibodies have shown RBC binding activity, resulting in severe adverse effects. Gilead’s magrolimab (CD47 mAb) is a recent example. The FDA temporarily placed a partial clinical suspension on trials evaluating magrolimab in MDS, AML, MM and DLBCL in early 2022 due to an apparent imbalance in investigator-reported SUSAR between study arms observed in trials in early 2022. All of those partial suspensions have been subsequently lifted, as the FDA determined that, following comprehensive review of the safety data from each trial, the clinical sponsor had satisfactorily addressed the deficiencies. The clinical trials of multiple other CD47 antibodies, including Bristol-Myers (Celgene)’s CC-90002 (CD47 mAb) and Surface Oncology’s SRF231 (CD47 mAb), have also been suspended or partially suspended due to safety issues. As compared to CD47 antibodies, with an engineered CD47-binding domain, IMM01 does not bind to human RBCs in vitro. It also demonstrated a good safety and tolerability in patients in our Phase I/II clinical trial. To address the safety concerns, almost all CD47 antibodies have resorted to Fc isotypes with weak Fc γ receptors engagements, such as IgG4 and IgG2. Although such design may reduce the risks of inducing macrophage phagocytosis against healthy blood cells, it leads to weakened BUSINESS – 261 – --- page 271 --- immune responses against tumor cells, and thus none of the CD47 antibodies showed single-agent CR in clinical trials. Compared to those CD47 antibodies, IMM01 that incorporates an IgG1 Fc demonstrates enhanced immune effector function and can fully activate macrophages as a single agent. In our Phase I trial of IMM01 monotherapy, promising efficacy signals were observed, including two CRs (2 CRs), one PR (1 PR) and 13 SDs (including six cases with substantial tumor shrinkage observed). According to Frost & Sullivan, among numerous drug developers of CD47-targeted molecules globally, we are one of the only two companies to have observed CR in monotherapy clinical trials with a well tolerated safety profile. The following table summarizes the information of major clinical-stage CD47-targeted molecules globally: Competitive Landscape of CD47-targeted Drug Candidates Drug Name Company Molecule Fc isotype RBC binding 1st in human Monotherapy CR Indication(1) Latest Stage(2) Hu5F9 (Magrolimab) Forty Seven (Gilead) mAb IgG4 Yes 2014.8 No AML, MDS, MM, NHL, HNSCC, TNBC, OC, CRC Ph III (combo) TTI-621 Trillium Therapeutics (Pfizer) SIRPαFc IgG1 No 2016.1 Yes AML, MDS, MM, Lymphoma, Leiomyosarcoma, Solid Tumor Ph II (mono & combo) TTI-622 SIRPαFc IgG4 No 2018.5 Yes AML, MM, Lymphoma, OC Ph II (combo) CC-90002 Celgene (BMS) mAb IgG4 Yes 2015.2 No AML, MDS, MM, NHL, Solid tumor Ph I (combo) (Partial Suspension by the Company) SRF231 Surface Oncology mAb IgG4 Yes 2018.4 No Advanced Solid Cancers, Hematologic Cancers Ph I (mono) (Suspension by the Company) ALX-148 (Evorpacept) ALX Oncology SIRPαFc IgG1 Fc(Inert) Yes 2017.1 No AML, MDS, NHL, Solid Tumor Ph II/III (combo) SHR1603 HengRui ࣶۉmAb IgG4 Yes 2018.10 No Advanced Malignancies, Lymphoma Ph I (mono) (Suspension by the Company) (Suspension by the Company)AO-176 Arch Oncology mAb IgG2 Minimal 2019.2 No MM, GC, NSCLC, HNSCC, OC, Prostate Cancer, Endometrial Carcinoma Ph I/II (combo) IBI188 (Letaplimab) Innovent ࣒ࣿmAb IgG4 Yes 2018.11 No AML, MDS, Lymphoma, Solid Tumor Ph Ib/III (combo) TJC4 (Lemzoparlima b) I-Mab ࣒ࣿ׋מ AbbVie mAb IgG4 Minimal 2019.5 No AML, MDS, MM, CD20 Positive Lymphoma, Advanced Solid Tumor Ph III (combo) (Partial Suspension by the Company) (Partial Suspension by the Company) IMM01 ImmuneOnco ॠ SIRPαFc IgG1 No 2019.9 Yes MDS, AML, CMML, HL, NHL, Solid Tumor Ph II (combo)12 AK117 Akesobio ࣒ࣿސډmAb IgG4 Minimal 2020.4 No AML, MDS, Lymphoma, TNBC, HNSCC, NSCLC, SCLC, OC, CRC, HCC Ph II (combo) (Partial Suspension by the Company) (Partial Suspension by the Company) Notes: (1) Denotes the indications targeted by either combination therapy or monotherapy of each drug candidate. Most drug candidates listed in this table are developed primarily through combination strategies rather than as a monotherapy. (2) Denotes the latest clinical development stage of each drug candidate considering its monotherapy and combination trials as a whole. (3) Clinical data are extracted from official websites of relevant companies, reported clinical trials and published literature. (4) Despite a comparison is made here, the key results are not from head-to-head studies. (5) 1st in human refers to the first posted date of the first clinical trial. (6) The stage listed here is the latest clinical trial of the drug. (7) Partial suspension means not all clinical trials of this drug are suspended, such as monotherapy of CC-90002, which has been suspended but its combination therapy with rituximab has been completed. (8) For the drugs associated with two companies, the company in parenthesis is the acquirer. (9) The FDA has lifted all of the partial clinical hold placed on several trials evaluating magrolimab, as it determined that, following comprehensive review of the safety data from each trial, that the clinical sponsor had satisfactorily addressed the deficiencies. (10) As to the monotherapy CR column, “No” means that no CR was achieved in a completed or suspended clinical trial. (11) The dark-gray parts of the diagram indicate that trials are terminated. (12) The most advanced clinical trial of IMM01 is an ongoing Phase II trial evaluating the combination therapy of IMM01 and azacitidine. We had terminated the Phase II clinical trial of IMM01 monotherapy as of the Latest Practicable Date. Source: Frost & Sullivan, CDE, ClinicalTrials, Company Website, Literature Review Given its good safety and promising single-agent efficacy, IMM01 could be a more favorable combination partner with many other cancer agents as compared to CD47 antibodies. When used in combination with IgG4 Fc antibodies, such as most PD-1 inhibitors, IMM01 with IgG1 Fc can fully activate macrophages to exert more potent antitumor effects than CD47 antibodies with IgG4 Fc. BUSINESS – 262 – --- page 272 --- Competitive Advantages Attributable to its well-designed molecule structure, IMM01 monotherapy has the following competitive strengths: (1) Favorable safety profile with no observed binding to human RBCs in vitro and good tolerability in clinical trials Despite the clinical significance of CD47 as a potential backbone innate immune checkpoint, the therapeutic benefits brought by CD47-targeted agents are largely compromised due to their safety issues. The safety issues are mainly resulted from the ubiquitous expression of CD47 in blood cells, such as RBCs and platelets. Thus, treatment with CD47-targeted agents that bind to CD47 on blood cells may greatly reduce the number of circulating RBCs and platelets, leading to severe blood toxicity, such as anemia and thrombocytopenia. Binding with circulating blood cells with high affinity, CD47 antibodies will confront with “antigenic sink” (rapid drug clearance), thereby preventing the agents from reaching tumor tissues. Additionally, CD47 antibodies with IgG4 Fc cannot fully activate macrophages, thus requiring much higher drug dosing, inducing greater toxicity and inflicting a heavier economic burden on patients. We specifically modified the CD47-binding domain of IMM01 to overcome these limitations. Since CD47 expressed on human RBCs and tumor cells has different glycosylation profiles, the engineered CD47-binding domain selectively binds to CD47 on tumor cells, while not binding to human RBCs in vitro without compromising its ability to activate macrophages. We assessed the binding affinity of IMM01 with normal cells and tumor cells in various in vitro binding assays and cross-reactivity tests. Results of our in vitro studies showed that IMM01 generally has much stronger binding affinity for tumor cells than normal tissue cells, and it does not bind with human RBCs in vitro . Further, deglycosylation modification to CD47-binding domain also mitigates the immunogenicity of IMM01 and improves its PK profile. The chart below illustrates that IMM01 does not bind to human RBCs in vitro as tested in human blood samples obtained from 100 donors with different blood types. Human RBC Binding Analysis of IMM01 350 300 250 200 150 100 12 9 6 3 Donor Characteristics (n=100) Male (n=62) Female (n=38) Type A blood group (n=29) Type B blood group (n=31) Type AB blood group (n=10) Type O blood group (n=30) hB6H12: 500nM TTl-621: 5000nM IMM01: 5000nM hlgG1-Fc: 5000nM Mean Fluorescence Intensity Blank FITC-anti human IgG-Fc hB6H 12 TTI-621IMM01hlgG1-Fc Note: B6H12 is a CD47-based antibody that serves as the control. Source: Company Data BUSINESS – 263 – --- page 273 --- Furthermore, our preclinical studies revealed that IMM01 did not induce phagocytosis against human RBCs in vitro up to 1000 nM, as shown in the following bar chart: Phagocytosis Against Human RBC 200 150 100 50 0 ns ns ns ns ns ns Mean Fluorescence Intensity B6H12 SIRPa-Fc IMM01 Rituximab 10nM1nM 100nM 1,000nM Note: B6H12 is a CD47-based antibody that serves as the control. Source: Company Data By selectively binding to tumor cells, IMM01 triggers tumor cell-specific phagocytosis by macrophages. In addition, the dual mechanisms of IMM01 enables it to exert antitumor activity at a relatively low dosage. IMM01 monotherapy and its combination therapies can achieve a promising efficacy profile at a lower dose of 2.0 mg/kg, as compared to the typical dose of 30.0 to 45.0 mg/kg required for CD47 antibodies. Specifically, for the first-line treatment of MDS, I-MAB’s lemzoparlimab, Gilead’s magrolimab, and Innovent’s IBI188 have achieved ORRs of 80.6%, 90.9%, and 93.9% after three cycles of treatment, respectively, when each used at a dose level of 30 mg/kg in combination with azacitidine. In comparison, IMM01’s combination with azacitidine has achieved an ORR of 93.8% at 2.0 mg/kg after three cycles of treatment. The more favorable safety profile of IMM01 compared to other CD47-targeted molecules in the global pipeline was further demonstrated in our clinical trials. Our Phase I dose-escalation trial demonstrated that IMM01 monotherapy was well tolerated and safe up to 2.0 mg/kg in patients with R/R lymphoma and showed no hemagglutination. As of February 10, 2023, neither hemagglutination nor hemolytic anemia had been observed in its Phase II clinical trial. In addition, neither DLT nor Grade 3 or higher hemolysis was observed in the completed Phase Ib trials and ongoing Phase II trials for IMM01 in combination with each of azacitidine and tislelizumab. In comparison, the publicly available clinical data of magrolimab showed that 41% of patients experienced hemagglutination, and some companies with CD47-targeted drug candidates have reported cases of Grade 3 or higher hemolysis. Further, in the Phase I monotherapy trial, the majority of TRAEs observed are Grade 1 and 2. Grade 3 or above mainly included leukopenia, thrombocytopenia, anemia and neutropenia, with the highest rate of occurrence at 14%. For the combination of IMM01 and azacitidine, among MDS patients, no patient discontinuation due to TRAE nor Grade 3 or higher hemolysis was observed in the Phase II trial. Among all combination programs of CD47-targeted drugs and azacitidine for the treatment of MDS globally, IMM01 combined with azacitidine stands out as one of the few that did not lead to treatment discontinuation due to TRAEs. In contrast, 11.3% of patients discontinued treatment due to TRAEs in the clinical trial for the combination of I-MAB’s lemzoparlimab and azacitidine. As the clinical trial data of IMM01 and those of other CD47-targeted drugs in the global pipeline were generated in independent studies and do not come from head-to-head analysis, and there is no assurance that the data of IMM01 combination programs in later clinical trials will be as favorable as that of this Phase Ib/IIa trial, caution should be exercised in drawing any conclusions from a comparison of the data. However, we believe meaningful insight of IMM01 may be drawn that IMM01 exhibited a more favorable safety profile with less blood toxicity. BUSINESS – 264 – --- page 274 --- Due to safety issues, the clinical trials of multiple CD47 antibodies in the global pipeline have been suspended or partially suspended, such as Bristol-Myers (Celgene)’s CC-90002, Surface Oncology’s SRF231. A recent example is that the FDA placed a partial clinical suspension on studies for Gilead’s magrolimab in MDS, AML, MM and DLBCL due to an apparent imbalance in investigator-reported SUSAR between study arms observed in trials in early 2022. (2) Potent antitumor activity and encouraging preliminary clinical efficacy As IMM01 shows no in vitro binding to human RBCs, it can adopt an IgG1 Fc that assists in full macrophage activation via Fc-Fc γR engagement without serious safety concerns. The IgG1 Fc in IMM01 can fully activate macrophages, leading to enhanced ADCP and ADCC activity and strong immune responses. As demonstrated in the charts below, our in vivo efficacy studies showed that an active IgG1 Fc is imperative for the stimulation of antitumor activity, as IMM01M with an engineered mutant inactive IgG1 Fc has exhibited very limited efficacy as compared to IMM01. In Vivo Efficacy of IMM01 is Dependent on Effective Fc Function (HL-60 xenograft model) IMM01 IMM01M Days Post Treatment Days Post Treatment Days Post Treatment Vehicle IMM01 (5mg/kg) IMM01M-Inactive Fc (5mg/kg) Active IgG1-Fc Inactive IgG1-Fc CR = 0% CR = 100% CR = 0% Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3) 0 500 1,000 1,500 2,000 2,500 3,000 0 3 7 1 01 41 72 12 4 0 50 100 150 200 0 3 7 1 01 41 72 12 4 0 500 1,000 1,500 2,000 2,500 0 3 7 1 01 41 72 12 4 Note: IMM01M has an engineered mutant inactive IgG1 Fc. Source: Company Data In addition, we carefully designed the molecule of IMM01 to avoid triggering T-cell apoptosis. Research revealed that CD47 ligation by certain CD47 antibodies may induce T-cell apoptosis, resulting in T-cell toxicities and compromised T-cell immune response. As illustrated in the chart below, as compared to B6H12, a CD47 antibody, IMM01 does not induce T-cell apoptosis. IMM01 Does Not Induce T cell Apoptosis 120 100 80 60 40 Ctrl B6H12 20ug/ml Jurkat:1×105/ml IMM01 Herceptin OD450/OD450_Ctrl (%) Note: (1) B6H12 is a CD47-based antibody that serves as the control. OD450/OD450 control measures the proportion of live T cells in the respective samples; (2) Three mice per group were used in this study; (3) The colors of graphics represent different groups using different drugs, drug candidates or molecules. Source: Company Data BUSINESS – 265 – --- page 275 --- The advantages of molecule design of IMM01 has also translated into clinical benefits. In the Phase I dose-escalation study, IMM01 has demonstrated promising single-agent antitumor activities. Among 27 evaluable patients in the Phase I monotherapy clinical study, two CRs (2 CRs), one PR (1 PR) and 13 SDs (including six cases with substantial tumor shrinkage observed) were confirmed. Among the six patients at RP2D dose of 2.0 mg/kg, one reached complete response (1 CR), and four reached stable disease (4 SDs), with a DCR of 83% in these previously heavily pre-treated R/R lymphoma patients. Notably, according to Frost & Sullivan, among numerous drug developers of CD47-targeted molecules globally, we are one of the only two companies to have observed CR in monotherapy clinical trials with a well tolerated safety profile. Response Observed in Patients Treated with IMM01 Monotherapy Best Percent Change in Target Lesions from Baseline (%) PD PD PD PD PD PD PD PD PD PD PD SD SD SD SD SD SD SD SD SD SD SD SD SD PR CR CR-100% -50% 0% 50% 100% 150% PD SD PR CR Note: The colors of bars represent the best overall changes in size of target tumor lesions among 27 evaluable patients in the Phase I monotherapy study. Source: Company Data, as of December 14, 2022 (3) Combination potential with a wide range of cancer therapeutics The critical role of macrophages in the stimulation of innate immunity and the enhancement of T-cell response provide robust scientific rationale for the development of IMM01 in combination with other immune-mediated agents, given IMM01’s dual mechanisms for full macrophage activation. Consistent with the scientific rationale, we have observed further enhanced antitumor activity when combining IMM01 with T-cell immunotherapies, including PD-1/PD-L1 inhibitors, other immunotherapies and targeted therapies in our preclinical studies. Also, the clinical validation of the combination of CD47-targeted therapies with certain agents by other industry players further solidifies our basis in selecting a specific combination partner, such as azacitidine, for development of IMM01’s combination programs. With preliminary efficacy and favorable safety in monotherapy clinical trials and preclinical data of its combination studies, IMM01 is expected to achieve strong synergistic effects used in combination with other cancer agents. Combination with azacitidine The combination of CD47 antibody and azacitidine has been well tested and validated in clinical trials. According to publicly disclosed clinical data, the combination of CD47 antibody and azacitidine was efficacious in treating MDS and AML patients. For example, in clinical trials, Gilead’s magrolimab in combination with azacitidine has delivered an ORR of 75% and 73% in the first-line treatment of MDS and AML, respectively. However, when combining with azacitidine which itself can cause blood toxicity such as anemia and thrombocytopenia, CD47 antibodies used at a high dose level may induce combined and exacerbated severe blood toxicity and adverse events, as exemplified by the partial suspension of the trials evaluating magrolimab combined with azacitidine due to an imbalance in investigator-reported SUSAR between study arms, although BUSINESS – 266 – --- page 276 --- those partial suspensions have been subsequently lifted, as the FDA determined that, following comprehensive review of the safety data from each trial, the clinical sponsor had satisfactorily addressed the deficiencies. Different from most CD47 antibodies, IMM01 shows no in vitro human RBC binding activity, thus minimizing blood toxicities when combined with azacitidine. Further, the dual mechanisms of IMM01 enable significantly lower dose required, even at one-fifteenth (1/15) the dose level of that of CD47 antibodies (typically in the range of 30 to 45 mg/kg), to further address safety concerns. IMM01 has demonstrated a favorable safety profile when used in combination with azacitidine in our clinical trial. Upon completion of the Phase Ib trial, we initiated a Phase II trial to evaluate the safety and efficacy of IMM01 in combination with azacitidine mainly for the first-line treatment of HR MDS, unfit AML and CMML in June 2022. Interim data as of February 10, 2023 from the Phase Ib/II trial has demonstrated a favorable safety and promising efficacy profile. Neither DLT nor Grade 3 or higher hemolysis was observed among all 12 patients in the combination treatment at all three dose levels of 1.0 mg/kg, 1.5 mg/kg, and 2.0 mg/kg in our Phase Ib trial. This combination therapy has also shown promising efficacy signal at a low dose level (2.0 mg/kg), which is much less than the typical dose of 30.0 to 45.0 mg/kg required for CD47 antibodies. In our Phase II trial, as of February 10, 2023, (i) among the eight evaluable patients with 1L CMML, two reached CR (2 CRs), six reached mCR (6 mCRs), and one reached HI (1 HI, which also achieved mCR), resulting in an ORR of 100%, and (ii) among the 16 evaluable HR MDS patients who have received at least three cycles of treatment, three achieved CR (3 CRs), nine achieved mCR (9 mCRs), and seven achieved HI (7 HIs, among which 4 also achieved mCR), resulting in an ORR of 93.8%. With a much lower required dose, IMM01 can further reduce potential safety risks as observed with other CD47 antibodies. Combination with tislelizumab Despite their huge commercial success, PD-1/PD-L1 inhibitors can only reach response rates between 10% to 25% across almost all major cancer types as monotherapy, which are particularly low when targeting “cold tumors” that lack T-cell infiltration. While adding additional T-cell immune checkpoint inhibitors, such as LAG3 antibody, to a PD-1/PD-L1 antibody has shown impressive efficacy in certain cancer types, the benefits of such combinations are still expected to limit to “hot tumors” with substantial T-cell infiltration. The IgG1 Fc design of IMM01 provides it with a unique advantage for the development of combination therapy with a PD-1 antibody, as compared to CD47 antibodies with IgG4 Fc. As most PD-1 antibodies also consist of IgG4 Fc, those IgG4 Fc-based CD47 antibodies cannot fully activate macrophages when combined with PD-1 antibodies due to the lack of the additionally required “eat me” signal activation. In contrast, IMM01 with IgG1 Fc can fully activate macrophages as a single agent and achieve synergistic effects in combination with PD-1 antibodies. Fully activated macrophages can secrete cytokines and chemokines that recruit T cells into the TME to turn “cold tumors” into “hot tumors,” and further enhance T-cell response through antigen presentation, thus maximizing the benefits of the combination therapy. Additionally, IMM01 significantly inhibits the production of IL-8 which acts as one of the key mediators of resistance to PD-1/PD-L1 inhibitors. As demonstrated in the charts below, the combination of IMM01 with either a PD-1 or PD-L1 antibody exhibited encouraging synergistic effects in our in vivo solid tumor efficacy models. BUSINESS – 267 – --- page 277 --- Efficacy Study of IMM01 and a PD-1 Monoclonal Antibody in Colon Cancer (CT26) Syngeneic Mouse Model 0 1000 2000 3000 4000 0 1 02 03 04 0 Days Post Treatment (d) Days Post Treatment (d) D ays Post Treatment (d) Days Post Treatment (d)IMM01 CR = 50% Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3) 0 1000 2000 3000 4000 0 1 02 03 04 0 PBS 0 1000 2000 3000 4000 01 0 2 0 3 0 4 0 0 1000 2000 3000 4000 0 1 02 03 04 0 PD-1 mAb CR = 67% IMM01 + PD-1 mAb CR = 100% Efficacy Study of IMM01 and a PD-L1 Monoclonal Antibody in Colon Cancer (CT26) Syngeneic Mouse Model Days Post Treatment (d) Days Post Treatment (d) D ays Post Treatment (d) Days Post Treatment (d) Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3) 0 1000 2000 3000 4000 0 2 04 06 08 0 0 1000 2000 3000 4000 0 2 04 06 08 0 0 1000 2000 3000 4000 02 0 4 0 6 0 8 0 0 1000 2000 3000 4000 0 2 04 06 08 0 IMM01 CR = 67% PBS PD-L1 mAb CR = 50% IMM01 + PD-L1 mAb CR = 100% Notes: (1) Six mice per group were used in this study; (2) The colors of lines represent different groups using different drugs and/or drug candidates. Source: Company Data In our Phase Ib trial for the combination of IMM01 and tislelizumab, a heavily pre-treated NSCLC patient with six lines of prior treatment and refractory to PD-1 inhibitors achieved PR after three cycles of treatment with target lesion shrinkage of 40%. Combination with IMM47 IMM47 is a CD24-targeted humanized monoclonal antibody developed by us and has global first-in-class potential. CD24 is widely expressed in many tumor types and is found to be highly correlated with poor prognosis. Accumulating research has demonstrated that the inhibition on CD24 can prevent tumor cells from delivering inhibitory signals to macrophages, NK cells and T cells. Our preclinical studies have shown a promising efficacy profile of IMM47. For more details on the mechanism of action and preclinical results of IMM47, please refer to “— Our Innate Immune Checkpoint-targeted Drug Candidates — IMM47 (CD24 mAb).” Given IMM01 and IMM47 both work to stimulate and activate overall innate and adaptive immune systems, the combination of these two candidates is expected to act synergistically to induce more profound antitumor immune responses. BUSINESS – 268 – --- page 278 --- The contemplated synergy has been further demonstrated in our preclinical studies. As shown in the diagram below, the combination treatment of IMM01 with IMM47C (previous generation chimeric version of IMM47) strongly suppressed the tumor growth in a xenograft model of TNBC, and largely outperformed either of the single agents alone at the same dose level: IMM01 + IMM47C: Triple-negative Breast Cancer (MCF-7) Xenograft Mouse Model 1,200 900 600 300 0 0 7 14 21 28 Tumor Size (mm3) Days After the Start of Treatment DPBS, IP, BIW×4W, n=6 IMM47C, 5 mg/kg, IP, BIW×4W, n=6 IMM01, 2.5 mg/kg, IP, BIW×4W, n=6 IMM47C+lMM01, 5+2.5 mg/kg, IP+IP, BIW×4W+BlW×4W, n=6 Note: IMM47 revealed highly similar in vitro efficacy as IMM47C (previous generation chimeric version of IMM47), and was eventually selected for further development. Source: Company Data Combination with inetetamab Inetetamab, independently developed by Sunshine Guojian, is a HER2 monoclonal antibody which was approved by the NMPA in June 2020 for the treatment of HER2-positive metastatic BC in combination with chemotherapy. We are collaborating with Sunshine Guojian to develop a combination therapy of inetetamab and IMM01 for HER2-positive solid tumors in mainland China (excluding Hong Kong, Macau and Taiwan). We have obtained an IND approval for a Phase Ib/II clinical trial in HER2-positive solid tumors from the NMPA in August 2021. For details, please refer to the paragraph headed “— Collaboration Agreement — Collaboration with Sunshine Guojian.” Combination with other drugs The combination of IMM01 with other immunotherapies and targeted therapies have all seen promising efficacy in our preclinical studies. We may strategically further develop IMM01-based combination therapies on our own or with collaboration partners. For example, we observed potent antitumor activities of IMM01 combined with bortezomib and dexamethasonum in preclinical studies using MM xenograft model in mice. Considering such clinical potential, we subsequently obtained an IND approval for the Phase Ib/IIa clinical trial to evaluate this combination therapy for the treatment of MM from the NMPA in January 2023. We may seek partnership to advance the development of this combination. We see great potential to target a wide range of tumor indications with IMM01’s combination strategy. BUSINESS – 269 – --- page 279 --- Summary of Clinical Trial Results IMM01 Monotherapy We initiated a Phase I/II study of IMM01 monotherapy in September 2019, with Phase I dose-escalation study in R/R lymphoma completed in January 2022. Such prolonged duration of the Phase I trial was primarily attributable to (i) our cautious trial design with eight escalating doses starting from as low as 3 µg/kg pursuant to the suggestions in the IND approval from the NMPA, as it is the first SIRP α-Fc fusion protein to enter into clinical stage in China and our first clinical-stage pipeline product, with carefully considering the safety issues observed in other CD47-targeted therapies at that time; (ii) temporary delays in subject enrollment and patient engagement activities due to the COVID-19 outbreaks from time to time since late 2019. Leveraging the safety and efficacy data and RP2D obtained from the Phase I trial, we obtained the IND approvals for clinical trials evaluating IMM01 and each of azacitidine, tislelizumab, inetetamab, and bortezomib/dexamethasonum. We commenced the Phase II cohort-expansion study in October 2021. Based on increasing data collected from our ongoing clinical trials for IMM01 monotherapy, combination therapies as well as CD47-based bispecific molecules, we continue to adaptively adjust the clinical development strategy for IMM01 in the context of development planning for our entire CD47-based product portfolio. Considering the much enhanced efficacy data observed in IMM01’s combination trial targeting MDS and AML, promising efficacy data observed in the clinical trial for IMM0306 (CD47×CD20) in R/R B-NHL, as well as anticipated synergistic effects of IMM01 and tislelizumab for treating cHL, we plan to prioritize our resources on the clinical development of IMM01-based combination therapies as well as CD47-based bispecific assets in order to achieve optimal resource allocation. As a result, we subsequently terminated the Phase II monotherapy trial of IMM01 in October 2022, following consultation with principal investigators. On April 26th, 2023, we informed the NMPA through the chinadrugtrials platform (ʮ̨̻ͪ , a trial registration and publicity platform operated by CDE) of the termination of the Phase II monotherapy clinical trial for IMM01 and have not received any material objections or requests for additional information. The NMPA did not and will not revoke the existing IND approvals due to the termination of the Phase II monotherapy trial. Trial Design . The primary objectives of the Phase I monotherapy study were to preliminarily assess safety, tolerability and PK characteristics, and determine the MTD (if any), recommended dose for expansion (RDE) and RP2D of IMM01. Subjects with R/R lymphoma received IMM01 across eight cohorts at 3 µg/kg, 10 µg/kg, 50 µg/kg, 150 µg/kg, 500 µg/kg, 1.0 mg/kg, 1.5 mg/kg, and 2.0 mg/kg, respectively. Dose escalation was performed in the routine accelerated titration design for the 3 µg/kg and 10 µg/kg cohorts, and standard “3+3” design for the 50 µg/kg, 150 µg/kg, 500 µg/kg, 1.0 mg/kg, 1.5 mg/kg, and 2.0 mg/kg cohorts. Each cycle contains four weeks of once-weekly dosing followed by a week’s rest after cycle one. We have enrolled a total of 29 subjects in this Phase I study. The primary endpoints for this Phase I study are adverse events, DLT, MTD and RP2D. The secondary endpoints include PK profile, immunogenicity and preliminary efficacy, including ORR, DCR, duration of response (DoR), PFS, and OS. The Phase II cohort-expansion study is designed to further evaluate the safety, PK profile, preliminary efficacy and immunogenicity of IMM01 monotherapy for the treatment of various hematologic malignancies. RDE dosing level is 1.5 mg/kg to 2.0 mg/kg, and RP2D is eventually set at 2.0 mg/kg. Modifications to the trial design of the IMM01 monotherapy during the process of its clinical trials primarily included the adjustments regarding the expansion cohorts based on trial observations and the renaming of the “Phase Ia/Ib” clinical trial of IMM01 monotherapy to a “Phase I/II” clinical trial in 2022. No material modifications that would require additional approval from the NMPA were made to the trial design during such period. As confirmed by our legal advisor as to PRC laws, Junhe LLP, given we have confirmed that such amendments to trial protocol will not increase safety risks for patients and the ethical committee of the lead BUSINESS – 270 – --- page 280 --- investigation hospital has approved the amended protocol, there is no need for us to obtain additional approval from the NMPA for the adoption or implementation of the amended protocol. As confirmed by Frost & Sullivan, protocol amendments are common in clinical practice. Trial Status. We have completed a Phase I dose-escalation study of IMM01 monotherapy for the treatment of R/R lymphoma in January 2022 with a total of 29 patients enrolled. Phase II cohort-expansion clinical trial of IMM01 monotherapy was initiated in October 2021 and 29 patients with R/R lymphoma have been enrolled. We have discontinued enrolling patients for this Phase II trial since October 2022. Patients with treatment benefit will remain on the trial until their diseases further progress. Safety Results . As of August 30, 2022, data obtained from the Phase I study has demonstrated that IMM01 monotherapy was well tolerated and safe up to 2.0 mg/kg. RDE of 1.5 to 2.0 mg/kg and RP2D of 2.0 mg/kg have been determined and used in the Phase II cohort-expansion study. According to the safety data from the Phase I study as of August 30, 2022, only one subject with DLT was observed at 1.5 mg/kg, and MTD was not reached up to 2.0 mg/kg. As illustrated by the following table, the majority of TRAEs observed are Grade 1 and 2. Grade 3 or above TRAEs of IMM01 mainly included leukopenia, thrombocytopenia, anemia and neutropenia, with the highest rate of occurrence at 14% (four out of 29) 1. Treatment-related adverse event (n=29) ALL n (%) ≥Gr 3 n (%) )95( 71Anti erythrocyte antibody fo evitisoP )7( 2)55( 61ainepokueL )25( 51 sisylomeH )25( 51noitcaer detaler noisufnI )01( 3)54( 31ainepotycobmorhT )54( 31aimedirecylgirtrepyH )54( 31 aimenA 4 (14) )14( 21aineportueN 1 (3) )14( 21sisotycortueN )82( 8desaercni esatahpsohp enilaklA )82( 8sisotycokueL )42( 7aimeniburilibrepyH )12( 6aimeretselohcrepyH Fever 5 (17) )71( 5 airunietorP )41( 4desaercni TLA )01( 3desaercni TGG )01( 3aimecirurepyH )01( 3msidioryhtopyH )41( 4desaercni TSA Notes: (1) TRAE above 10% is presented. (2) IMM01 was generally safe and well tolerated in 29 patients. (3) The majority of TRAEs were grade 1 or 2. (4) Grade 3 and above TRAEs mainly included leukopenia, thrombocytopenia, anemia and neutropenia, with the highest rate of occurrence as 14% (4/29). Source: Company Data 1. The dose-escalation study involves a total of eight cohorts, each having one to six patients. We consolidate the safety data across different dose cohorts in this study and view it as an entirety since the results of each individual cohort with a small sample size could be significant affected by individual variability. This data presentation method for dose-escalation trials is in line with the industry practice for both academic and regulatory purpose, according to Frost & Sullivan. BUSINESS – 271 – --- page 281 --- The impact on hemoglobin or platelet is transient and insignificant following the administration of IMM01. As the diagram below illustrates, although a transient decrease of hemoglobin was observed at 8 to 24 hours after the first dosing, it would generally get back to normal level between day 2 and 4. As of February 10, 2023, neither hemagglutination nor hemolytic anemia had been observed in its Phase II clinical trial. Hemoglobin Changes Following Single-dose Administration in Cycle One by Cohort Days and Cycles HGB (g/L) 50μg/kg (n=3) 150μg/kg (n=3) 500μg/kg (n=3) 1.0mg/kg (n=6) 1.5mg/kg (n=6) 2.0mg/kg (n=6) All Patients 150 145 140 135 130 125 120 115 110 105 100 Note: Dosing days are C1D1, C1D8, C1D15, C1D22, C1D29, C1D36. Source: Company Data Transient decrease in platelet was also observed at 2 hours after the first dosing, but it generally returned to normal level after 5 days, as shown in the diagram below. Platelet Changes Following Single-dose Administration in Cycle One by Cohort Days and Cycles PLT (X109/L) 50μg/kg 150μg/kg 500μg/kg (n=3) 1.0mg/kg (n=6) 1.5mg/kg (n=6) 2.0mg/kg (n=6) All Patients 260 240 220 200 180 160 140 120 100 80 60 40 Note: Dosing days are C1D1, C1D8, C1D15, C1D22, C1D29, C1D36. Source: Company Data BUSINESS – 272 – --- page 282 --- Efficacy Results . As of December 14, 2022, the data obtained from the Phase I dose-escalation study showed a favorable PK/PD profile and preliminary antitumor activity of IMM01 monotherapy: among 27 evaluable patients receiving 0.003 mg/kg to 2.0 mg/kg IMM01 in the Phase I study, two patients reached complete response (2 CRs), one reached partial response (1 PR), and 13 reached stable disease (13 SDs) (including six cases with observed substantial tumor shrinkage). Among the six patients at RP2D dose of 2.0 mg/kg in this monotherapy clinical trial, one reached complete response (1 CR), and four reached stable disease (4 SDs), with a DCR of 83% in these previously heavily pre-treated R/R lymphoma patients. CR observed in one of the evaluable patients lasted for 4.9 months before it turned into a progressive disease (PD) because of new lesions, and this patient was under continued treatment for another 2.5 months subsequently. Another patient achieved CR after 14 cycles of treatment. Treatments are still ongoing for those benefited patients. The diagrams below illustrate the best overall changes in size of target tumor lesions and duration of response in patients treated with IMM01 monotherapy. Response Observed in Patients Treated with IMM01 Monotherapy Best Percent Change in Target Lesions from Baseline (%) PD PD PD PD PD PD PD PD PD PD PD SD SD SD SD SD SD SD SD SD SD SD SD SD PR CR CR-100% -50% 0% 50% 100% 150% PD SD PR CR Note: The colors of bars represent the best overall changes in size of target tumor lesions among 27 evaluable patients in the Phase I monotherapy study. Source: Company Data, as of December 14, 2022 Duration of Response in Patients Treated with IMM01 Monotherapy (150) (100) (50) 0 50 100 150 200 250 300 350 400 450 500 550 600 0 100 200 300 400 500 600 700 800 900 Days Post Treatment (d) C) %( enilesaB morf noiseL tegraT ni egnah 3 μg/kg 10 μg/kg 50 μg/kg 150 μg/kg 500 μg/kg 1000 μg/kg 1500 μg/kg 2000 μg/kg Source: Company Data, as of December 14, 2022 BUSINESS – 273 – --- page 283 --- Conclusion . IMM01 monotherapy has exhibited a favorable safety profile, and its preliminary efficacy results have demonstrated encouraging antitumor activities in R/R lymphoma. According to Frost & Sullivan, among numerous drug developers of CD47-targeted molecules globally, we are one of the only two companies to have observed CR in monotherapy clinical trials with a well tolerated safety profile. The encouraging safety and efficacy data of the Phase I trial lays a solid foundation to support the further development of IMM01 in combination therapies as well as the development of CD47-based bispecific molecules. IMM01 in combination with azacitidine We initiated a Phase Ib/II study of IMM01 and azacitidine in January 2022, with the Phase Ib trial targeting R/R MDS and R/R AML completed in June 2022. We commenced the Phase II clinical trial mainly for the first-line treatment of HR MDS, unfit AML and CMML in June 2022. We expect to complete this Phase II trial in the first quarter of 2024. Trial Design . The primary objectives of the Phase Ib study of the combination of IMM01 and azacitidine were to assess its safety and tolerability for the treatment of R/R MDS and R/R AML, and determine the MTD (if any) and RP2D. Subjects received IMM01 and dose of azacitidine across three cohorts at 1.0 mg/kg, 1.5 mg/kg and 2.0 mg/kg of IMM01 and fixed dose of azacitidine (75 mg/m 2/day), respectively. Dose escalation was performed in the standard “3+3” design for these cohorts. Each cycle contains four weeks of once-weekly dosing of IMM01 and injection of azacitidine for seven consecutive days. We have enrolled a total of 12 subjects in this Phase Ib study. The primary endpoints for the Phase Ib study of IMM01 and azacitidine include adverse events, DLT, MTD and RP2D. The secondary endpoints include PK profile and preliminary efficacy, including CR, PR, SD and PD. The ongoing Phase II cohort-expansion study is designed to further evaluate the safety and efficacy of IMM01 and azacitidine mainly for the first-line treatment of HR MDS, unfit AML and CMML. In the Phase II trial, each cycle contains four weeks of once-weekly dosing of IMM01 and injection of azacitidine for seven consecutive days. The primary endpoints for this Phase II trial include adverse events. The secondary endpoints include PK profile and preliminary efficacy. Trial Status. We have completed the Phase Ib trial of IMM01 and azacitidine for the treatment of R/R MDS and R/R AML with a total of 12 patients enrolled. The Phase II trial of IMM01 in combination with azacitidine was initiated in June 2022, with a total of 78 patients enrolled as of February 10, 2023, including 10 with 1L CMML, 44 with 1L HR MDS, 3 with R/R HR MDS, 16 with 1L AML and 5 with R/R AML. Safety Results . Neither DLT nor Grade 3 or higher hemolysis was observed among all 12 patients in the combination treatment at all three dose levels of 1.0 mg/kg, 1.5 mg/kg, and 2.0 mg/kg in the Phase Ib trial. As of February 10, 2023, among MDS patients, neither patient discontinuation due to TRAE nor Grade 3 or higher hemolysis was observed in the Phase II trial. As of February 10, 2023, no Grade 3 or higher hemolysis was observed among patients with CMML or AML in the Phase II trial. BUSINESS – 274 – --- page 284 --- Efficacy Results . In the Phase II trial, as of February 10, 2023, among the eight evaluable patients with 1L CMML, two reached CR (2 CRs), six reached mCR (6 mCRs), and one reached HI (1 HI, which also achieved mCR), resulting in an ORR of 100% and a CR rate of 25% after one to five cycles of treatment. Best Overall Response 1L CMML (N=8) ORR 8 (100%) CR 2 (25.0%) mCR+HI 1 (12.5%) mCR alone 5 (62.5%) Notes: (1) The clinical data is as of February 10, 2023. (2) ORR (CR+mCR+HI) refers to overall response rate; CR refers to complete response; mCR refers to marrow complete response; HI refers to hematologic improvement. Source: Company Data As of February 10, 2023, 35 patients with 1L HR MDS were evaluable, among which 16 patients had received at least three cycles of treatment. Among these 16 evaluable 1L HR MDS patients who had received at least three cycles of treatment, three achieved CR (3 CRs), nine achieved mCR (9 mCRs), and seven achieved HI (7 HIs, among which 4 also achieved mCR), resulting in an ORR of 93.8%. Most patients received only one or two cycles of treatment as of February 10, 2023, and their treatment are still ongoing. Best Overall Response Treatment Cycle Since First Dose (ES N=35) ≥ 3 cycles (N=16) ≥ 4 cycles (N=13) ORR 15 (93.8%) 12 (92.3%) CR 3 (18.8%) 3 (23.1%) mCR+HI 4 (25.0%) 4 (30.8%) mCR alone 5 (31.3%) 3 (23.1%) HI 3 (18.8%) 2 (15.4%) SD 1 (6.3%) 1 ( 7.7%) SD* 0 0 NE 0 0 PD 0 0 Notes: (1) The clinical data is as of February 10, 2023. (2) ORR refers to overall response rate; CR refers to complete response; mCR refers to marrow complete response; HI refers to hematologic improvement; SD refers stable disease; SD* refers to SD not met for over eight weeks; PD refers to progressive disease; NE refers to not evaluable; (3) ES (evaluable analysis set) is defined as subjects with at least one post-baseline tumor assessment. Source: Company Data BUSINESS – 275 – --- page 285 --- The following diagram illustrates the interim efficacy data of the combination of IMM01 and azacitidine as of February 10, 2023: Efficacy Data of IMM01 in Combination with Azacitidine 1L MDS 1L CMML -100 -80 -60 -40 -20 0 20 40 60 80 100 Best Percentage Change from Baseline in Bone Marrow Blast CR marrowCR marrowCR + HI Patient Response and Duration of Response 0 14 28 42 56 70 84 98 112 126 140 109008 121004 125004 109007 109005 118003 106008 112010 Study Dr ug Tr eatm ent Dur ation (Days) CR marrowCR marrowCR + HI SD NE Treatment Ongoing )%( tsalB worraM enoB ni enilesaB morf egnahC tnecreP tseB -100 -80 -60 -40 -20 0 20 40 60 80 100 # # > 100% change from baseline HI SD CR marrowCR marrowCR + HI * * Baseline in bone marrow blast < 5% Patient )%( tsalB worraM enoB ni enilesaB morf egnahC tnecreP tseB Best Percentage Change from Baseline in Bone Marrow Blast ( ≥ 3 cycles) Response and Duration of Response ( ≥ 3 cycles) 0 14 28 42 56 70 84 98 112 126 140 154 168 182 196 102004 125005 109003 109002 114001 125003 128001 117003 119006 111001 114002 114003 106005 121001 106007 118001 Study Drug Treatment Duration (Days) * CR marrowCR marrowCR + HI SD NE Treatment Ongoing PD HI PR Notes: (1) The clinical data is as of February 10, 2023. (2) ORR refers to overall response rate; CR refers to complete response; MarrowCR refers to marrow complete response; HI refers to hematologic improvement; SD refers stable disease. Source: Company Data Conclusion . The clinical data from the Phase Ib/II trial for the combination of IMM01 and azacitidine has demonstrated positive safety and preliminary efficacy profile, and supports continued development of IMM01 in combination with azacitidine. BUSINESS – 276 – --- page 286 --- IMM01 in combination with tislelizumab We initiated a Phase Ib/II study of IMM01 and tislelizumab in May 2022. We have completed a Phase Ib clinical trial to evaluate IMM01 in combination with tislelizumab, and initiated the Phase II dose expansion trial in December 2022. We expect to complete this Phase II trial in the third quarter of 2024. Trial Design . The Phase Ib dose escalation trial is designed to evaluate the safety, MTD/RP2D and preliminary efficacy in advanced solid tumors that failed to respond to or relapsed from the standard of care. Subjects received IMM01 and tislelizumab across three cohorts at 1.0 mg/kg, 1.5 mg/kg and 2.0 mg/kg of IMM01 and fixed dose of tislelizumab (200 mg), respectively. Dose escalation was performed in the standard “3+3” design for these cohorts. Each cycle contains three weeks of once-weekly dosing of IMM01 and injection of tislelizumab for once a cycle. The primary endpoints for the Phase Ib trial of IMM01 and tislelizumab include adverse events, DLTs, MTD and RP2D. The secondary endpoints include PK profile, immunogenicity and preliminary efficacy, including ORR, DoR, PFS, DCR and time to response. The ongoing Phase II cohort-expansion trial is designed to further evaluate the safety and efficacy of IMM01 and tislelizumab in advanced solid tumors and lymphoma, including NSCLC, SCLC, HNSCC, R/R cHL and others, which failed to respond to or relapsed from the standard of cares including PD-1/PD-L1 inhibitors. In the Phase II trial, each cycle contains three weeks of once-weekly dosing of IMM01 and injection of tislelizumab for once a cycle. The primary endpoint for this Phase II trial is efficacy. The secondary endpoints include safety, tolerability and immunogenicity. Trial Status . We dosed the first patient for the Phase Ib trial in May 2022. We have enrolled a total of 14 subjects in this Phase Ib trial and completed the enrollment of subjects and observation of DLT for the Phase Ib trial. We determined 2.0 mg/kg as the RP2D of IMM01 in combination with tislelizumab and dosed the first patient for the Phase II trial in December 2022. Safety Results . As of February 10, 2023, the combination of IMM01 and tislelizumab was shown to be safe and well tolerated at up to 2.0 mg/kg of IMM01. As of February 10, 2023, no Grade 3 or higher hemolysis was observed in the Phase II trial. Efficacy Results . In our Phase Ib trial, a heavily pre-treated NSCLC patient with six lines of prior treatment and refractory to PD-1 inhibitors achieved PR after three cycles of treatment with target lesion shrinkage of 40% and the treatment is still ongoing. Conclusion . The clinical data from the Phase Ib trial for the combination of IMM01 and tislelizumab has demonstrated positive safety and preliminary efficacy profile, and supports continued development of IMM01 in combination with tislelizumab in the Phase II trial. BUSINESS – 277 – --- page 287 --- Clinical Development Plan Given the favorable safety and efficacy profile of IMM01 shown in early clinical trials, we plan to further develop IMM01 in combination with azacitidine, tislelizumab and other cancer agents that have the potential to address notable unmet medical needs. Program Indications Clinical trial stage (status) Trial site First- patient- in date (Expected) BLA submission date (1) IMM01+ azacitidine China January 2022 Q4 2025 (3) Phase Ib (completed) Phase II (ongoing) Phase Ib (completed) Phase II (ongoing) China May 2022 Q4 2025 (5) IMM01 + tislelizumab MDS, AML, CMML(2) NSCLC, SCLC, HNSCC, other solid tumors, cHL(4) Notes: (1) Denotes the date on which we expect to submit the BLA for each program; (2) We are conducting cohort expansion trials for the first-line treatment of HR MDS, unfit AML and CMML. Particularly, we believe there is possibility that we could seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML, a rare type of disease with highly unmet medical needs; (3) Subject to positive clinical results of the Phase II trial, we plan to commence a pivotal trial in the first quarter of 2024. We plan to submit the BLA for the first-line treatment of CMML and MDS/AML to the NMPA in the fourth quarter of 2025; (4) We are evaluating this combination therapy in cHL patients who relapsed or progressed after the treatment of PD-1 inhibitors which may allow us to pursue an accelerated marketing approval leveraging the results of relatively small sample size studies; (5) We expect to submit the BLA for cHL and solid tumors to the NMPA in the fourth quarter of 2025. We are currently conducting all of the clinical trials for IMM01 in combination therapies in China, and will actively explore opportunities to obtain accelerated marketing approvals leveraging the results of relatively small sample size studies. A conditional marketing approval achieved through single-arm study design will typically have conditions that require the drug developer to obtain and report additional clinical data after the commercial launch of the approved drug to further confirm its efficacy and safety. The NMPA will grant a full marketing approval if the additional clinical data fulfills the requirements for a normal marketing approval. If our IMM01 in combination therapies is conditionally approved through single-arm trial design for accelerated marketing, we will need to discuss and reach consensus with the NMPA on details of the post-approval research pursuant to the relevant laws in China. To fully unleash the clinical value of IMM01 in a cost-effective and efficient manner, in addition to our internal development, we may also strategically seek out-licensing and other co-development opportunities to conduct clinical development in other jurisdictions. Combination with azacitidine In the completed Phase Ib trial evaluating IMM01 in combination with azacitidine, we enrolled 12 patients in total, including 9 patients with R/R AML and 3 patients with R/R MDS. Upon completion of the Phase Ib trial, we initiated a Phase II trial to evaluate the safety and efficacy of IMM01 in combination with azacitidine mainly for the first-line treatment of HR MDS, unfit AML and CMML in June 2022. As of February 10, 2023, we have enrolled 78 patients, including 16 patients with treatment-naive AML, 44 patients with treatment-naive MDS, and 10 BUSINESS – 278 – --- page 288 --- patients with treatment-naive CMML, as well as 8 patients with R/R MDS/AML. We plan to recruit around 80 to 90 patients in total for this trial. Subject to further clinical validation, we plan to file an IND application with the FDA for a Phase II study of this combination treatment. We have acquired Beigene’s VIDAZA ® (azacitidine) for our clinical trials from a large distributor, adhering to market price. Particularly, we believe we could seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML in China, given that CMML is a rare disease whose incidence is around 1 of every 100,000 people in China, and there is a lack of effective treatment for CMML. As indicated by the graph below, the ORR and CR rates range from 37% to 54% and 8% to 18% respectively in major clinical trials of azacitidine in CMML based on historical data. Particularly, real-world data on efficacy and safety of azacitidine therapy in 24 patients with CMML from a multicenter, retrospective study in China published in July 2022 showed an ORR of 37.5% with a CR rate and a mCR/HI rate of 8.3% and 20.8%, respectively. In contrast, in our Phase II trial for the combination of IMM01 and azacitidine, among the eight evaluable patients with 1L CMML, two reached complete response (2 CRs), six reached marrow complete response (6 mCRs), with one hematological improvement (1 HI), resulting in an ORR of 100% and a CR rate of 25%. Summary of Major Clinical Studies in CMML AZA Costa (2011) AZA Ades (2013) AZA Pleyer L (2014) AZA Coston T (2019) AZA YU Xu (2022) IMM01 + AZA ORR CR n=38 n=76 n=48 n=56 n=24 n=10 Notes: (1) The clinical data is as of February 10, 2023. (2) ORR refers to overall response rate; CR refers to complete response. (3) There were no head-to-head comparison clinical trials conducted between these drugs. The results of clinical trials of a drug cannot be directly compared to that of another drug and may not be representative of the overall data. Source: Literature Review, Company Data According to Frost & Sullivan, only few drugs, such as azacitidine, have been approved for the first-line treatment of advanced CMML. However, the initial responses of azacitidine are often limited and short-lived, and very few of other CD47-based drug candidates are being evaluated for CMML in clinical trials. As an innovative drug targeting life-threatening malignancies without effective treatment, this combination therapy could be qualified to apply for an accelerated marketing approval, and the number of patients required for its pivotal trial could be relatively small considering its overall patient population. The Company dosed the first patient with CMML for the Phase II trial in August 2022. Subject to positive clinical results of the Phase II trial, the Company plans to commence a pivotal trial in the first quarter of 2024 and then file an BLA with the NMPA in the fourth quarter of 2025. BUSINESS – 279 – --- page 289 --- Combination with tislelizumab We intend to develop the combination therapy of IMM01 and tislelizumab for the treatment of solid tumors that are refractory or relapsed from the standard of care such as PD-1/PD-L1 inhibitors, including among others, NSCLC, SCLC, and HNSCC, as well as R/R cHL. In February 2022, we obtained the IND approval from the NMPA for Phase Ib/II clinical trial to evaluate the combination therapy of IMM01 and tislelizumab in solid tumors in China. We have procured Beigene’s BAIZE’AN® (tislelizumab) at market price in the open market for our clinical trials, which is in compliance with the relevant laws and regulations and in line with industry practice. We are currently evaluating IMM01 and tislelizumab in a Phase II trial, and we expect to initiate a pivotal trial in the fourth quarter of 2024. As of February 10, 2023, we have enrolled 10 patients, including four patients with NSCLC, three patients with HNSCC, one patient with SCLC, two patients with cHL for this Phase II trial. We are also developing this combination therapy for cHL patients who relapsed or progressed after the treatment of PD-1 inhibitors, which may allow us to pursue an accelerated marketing approval leveraging the results of relatively small sample size studies. According to Frost & Sullivan, currently there is very limited effective treatment for cHL patients who relapsed or progressed post to PD-1 inhibitor treatment, presenting highly unmet medical needs. Given the strong synergistic effects observed in our preclinical studies and preliminary efficacy signal of IMM01 monotherapy shown in clinical trials, we believe this combination therapy has the potential to fulfill the unmet medical needs of those R/R cHL patients. Since none of other CD47-based drug candidates are being evaluated for R/R cHL in clinical trials to date, this combination therapy is well-positioned to pursue an accelerated marketing approval as an innovative therapy targeting R/R cHL if it can demonstrate its therapeutic benefits in the pivotal trial. Since cHL occurs in only 0.57 of every 100,000 people in China and the number of R/R cHL patients is fewer, the patient number required for its pivotal trial could be relatively small. In July 2022, we obtained the NMPA’s consent for adding R/R cHL as an additional expansion cohort into the ongoing combination trial of IMM01 and tislelizumab. We dosed the first patient with R/R cHL in China in January 2023. Combination with other drugs We are currently exploring the therapeutic benefits of IMM01 in combination with various other drugs for a wide range of cancer indications. We reached a collaboration with Sunshine Guojian, under which Sunshine Guojian will be primarily responsible for driving and funding the clinical development of the combination of IMM01 and inetetamab for HER2-positive solid tumors in mainland China. We and Sunshine Guojian have obtained the IND approval for the Phase Ib/II trial to evaluate this combination therapy. Sunshine Guojian will formulate the detailed clinical plan and lead the clinical development for this combination therapy, and this combination trial has not been commenced as of the Latest Practicable Date as the progress of this clinical program is under the control of Sunshine Guojian based on their internal resource allocation and strategic priority. We have no intention of utilizing any proceeds from this Offering for the development of this combination therapy, as the costs we bear for this collaborated trial are minimal and can be entirely covered by our own funds. We are also conducting numerous preclinical studies to evaluate the combination use of IMM01 with other drugs targeting various cancer indications. Multiple combination therapies have shown robust synergistic potential in mouse models. We have obtained an IND approval for the Phase Ib/II clinical trial to evaluate the combination of IMM01 with rituximab (a CD20 mAb) for the treatment of R/R B-NHL from the NMPA in August 2021. Since we will place our focus on the development of IMM0306 for this indication, we currently do not plan to initiate any clinical trials for this combination therapy in the near future. BUSINESS – 280 – --- page 290 --- We observed potent antitumor activities of IMM01 combined with bortezomib and dexamethasonum in preclinical studies using MM xenograft model in mice, and subsequently have also obtained an IND approval for the Phase Ib/IIa clinical trial to evaluate this combination therapy for the treatment of MM from the NMPA in January 2023. We may seek partnership to advance the development of this combination therapy. As such, we have no plans to allocate any proceeds from the Offering towards the development of this combination therapy. Licenses, Rights and Obligations We are internally developing IMM01, and own the global rights to research, develop and commercialize IMM01. We are collaborating with Sunshine Guojian to develop a combination therapy using inetetamab and IMM01 for the treatment of HER2-positive solid tumors in mainland China (excluding Hong Kong, Macau and Taiwan). For details, please refer to the paragraph headed “— Collaboration Agreement — Collaboration with Sunshine Guojian.” Material Communications We had not received any regulatory agency’s concerns or objections to our clinical development plans as of the Latest Practicable Date. WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM01 SUCCESSFULLY. CD47-based Bispecific Molecules Based on the validated molecule structure of IMM01, we have subsequently developed multiple CD47-based bispecific molecules leveraging our mAb-Trap platform. These bispecific molecules all contain the same engineered CD47-binding fragment used in IMM01 and an ADCC-enhanced IgG1 Fc fragment. The structure of our bispecific molecules was deliberately designed through a series of rigorous studies and tests guided by our “DbD” concept on various aspects, including synergy between targets, tailored molecule structure, expected dosing level, stability, and ease of manufacturing. Studies on crystal structure of CD47 have revealed that CD47-binding region of SIRP α is located at its N-terminal. When designing the molecules, we thus connect the CD47-binding domain to the N-terminal of the heavy chain or light chain of a base antibody against another tumor target rather than to the Fc end, as is commonly seen in other CD47 based bispecifics. Our design prevents conformational interference with CD47 binding and preserves the intact Fc region with full immune effector function. A prerequisite for a combination therapy to exert synergistic effects is that the two agents must simultaneously bind to the same cancer cell. As only a portion of the single agents administered will bind with same cancer cells, a much higher dosing level of each agent will be required to achieve a strong synergistic effect. Comparatively, our bispecific molecules with a higher affinity for a tumor antigen than CD47 are more likely to bind to two targets co-expressed on the same tumor cell, and simultaneously activate immune responses through the ADCC-enhanced IgG1 Fc, allowing for stronger synergistic effects. Our preclinical studies have shown that these bispecific molecules, even at a relatively lower dose level, could have better synergistic effects than the combination therapies of two antibodies targeting respective targets. Further, with the fine-tuned unbalanced binding affinity, our bispecific molecules can preferentially bind to CD47 on tumor cells, minimizing “on-target, off-tumor” toxicity. In addition, the symmetric structure of our bispecific molecules developed on our mAb-Trap platform minimizes mismatch during the production process, allowing for ease of manufacturing, product BUSINESS – 281 – --- page 291 --- stability, higher titer and protein yield. In fact, average protein yield for IMM0306, IMM2902, and IMM2520 ranges from 3.8g/L to 4.6g/L, much higher than the industry average for bispecific molecules of 1.0g/L to 3.0g/L. IMM0306 (CD47×CD20) — Our Key Product IMM0306 is a bispecific molecule that simultaneously targets both CD47 and CD20 and is the first CD47 and CD20 dual-targeting bispecific to enter into clinical stage globally. The diagram below illustrates the molecule structure of IMM0306: IgG1 with enhanced ADCC SIRPα-D1 Anti-CD20 mAb IMM0306 Source: Company Data Based on our mAb-Trap platform, we designed the molecule of IMM0306 to consist of the CD47-binding domain of IMM01 and an ADCC-enhanced IgG1 Fc fragment which is capable of inducing full macrophage activation and much improved ADCP and ADCC activity, resulting in strong antitumor immune responses. In our preclinical studies, IMM0306 elicited stronger in vivo antitumor activity compared to rituximab single agent or its combination with IMM01, and showed a favorable safety profile. In May 2020, we initiated a Phase I clinical trial to evaluate IMM0306 in R/R B-NHL in China. The preliminary data from the Phase I clinical trial has demonstrated encouraging efficacy and favorable safety profile of IMM0306. IMM0306 was safe and well tolerated up to 2.0 mg/kg. Among the evaluable patients across four cohorts dosed from 0.8 mg/kg to 2.0 mg/kg, who had relapsed or progressed after receiving rituximab previously, two CRs and five PRs were observed. The only evaluable FL patient at 2.0 mg/kg who relapsed and progressed after rituximab treatment has also been confirmed as PR. At 2.0 mg/kg, one patient with primary bone DLBCL who had four lines of prior treatment has achieved PR with all measurable lesions disappeared after 65 days of treatment. We commenced a Phase IIa trial for IMM0306 monotherapy for the third- or later-line treatment of FL in March 2023, and expect to start pivotal trials in the third quarter of 2024. Furthermore, our IND application for the combination of IMM0306 and lenalidomide targeting front-line B-NHL was approved by the NMPA in January 2023. We have commenced the Phase Ib/IIa clinical trial for this combination in China, with the first patient dosed in June 2023. We have also received an IND approval for IMM0306 from the FDA in January 2021. With further clinical validation in the clinical trials in China, we will then decide on our clinical development and collaboration strategy for IMM0306 in the U.S. We are developing IMM0306 in-house and own its global IP and commercial rights. As of the Latest Practicable Date, with respect to IMM0306, we owned one patent family, which includes five issued patents in China, Japan, the EU and the U.S., and one PCT patent application which has entered national phases. BUSINESS – 282 – --- page 292 --- Mechanism of Action Upon binding with CD20 and CD47, IMM0306 is expected to deplete malignant B cells by inducing enhanced ADCC and ADCP activity and possibly eliciting subsequent T-cell response, leading to an integrated immune activation. The ADCC-enhanced IgG1 Fc region of IMM0306 could further improve its effectiveness for treating patients predominantly expressing FcγRIIIA-158F polymorphism that is less sensitive to CD20 antibody treatment, according to Frost & Sullivan. Public data have demonstrated synergistic therapeutic benefits of the combination use of CD47-targeted agents and CD20 antibodies, showcasing the advantages of this dual-targeting strategy. However, a prerequisite for synergistic effects in this combination therapy is that these two agents must simultaneously bind to the same cancer cell. As only a portion of the single agents administered will bind with same cancer cells, a much higher dosing level of each agent will be required to achieve a strong synergistic effect. Comparatively, IMM0306, as a bispecific molecule, is more likely to bind to two targets co-expressed on the same cell, and simultaneously activate immune responses through its ADCC-enhanced IgG1 Fc, allowing for stronger synergistic effects even at a relatively lower dose level. To ensure targeting specificity of the molecule, the fine-tuned unbalanced binding affinity enables selective targeting to CD20-positive malignant B cells and mitigates “on-target, off-tumor” toxicity by minimizing inadvertent binding to CD47 on blood cells or other normal tissues. The following diagrams illustrate the mechanism of action of IMM0306 in comparison to the combination of separate agents targeting CD47 and CD20: Mechanism of Action of IMM0306 versus Combination of CD47 mAb and CD20 mAb SIRPα FcγR Strong ADCP “Don’t eat me” blocked “Eat me” signal activated Mϕ B cell substantially killedB cellCD20 CD47 SIRPα FcγR Certain ADCP “Don’t eat me” exists “Eat me” signal activated CD20 CD47 SIRPα FcγR Limited ADCP “Don’t eat me” blocked “Eat me” signal inactive CD20 CD47 Mϕ B cell partially killed B cell Mϕ B cell sparsely killedB cell IgG4 CD47 mAb Rituximab (CD20 mAb) IgG1 IgG1 ADCC+ IMM0306 Source: Company Data BUSINESS – 283 – --- page 293 --- Market Opportunities and Competition We are currently developing IMM0306 for the treatment of R/R B-NHL. According to Frost & Sullivan, the global and China incidence of NHL was 569.4 thousand and 95.2 thousand in 2022, respectively, and is expected to increase to 682.0 thousand and 114.6 thousand in 2030, respectively. B-NHL patients account for 85% of patients with NHL. According to Frost & Sullivan, approximately 95% of B-NHL express CD20 antigen. CD20 antibody in combination with chemotherapy is the main treatment option covering the first-line and following treatment for B-NHL. However, approximately 50% of NHL patients will eventually experience disease progression to R/R NHL, which remains a challenge with limited effective treatment options. For R/R B-NHL, CD20-targeted therapy is generally associated with limited effectiveness due to drug resistance. As tumor-infiltrating macrophages constitute the major component for the TME of NHL and high expression of CD47 (often correlated with poor prognosis in multiple NHL subtypes including B-NHL) has been identified on NHL cells, bispecific strategies targeting macrophage checkpoints, such as CD47, in addition to CD20 show immense potential to achieve enhanced tumor killing effects compared to CD20 antibodies as the mainstay treatment of B-NHL. Please refer to “Industry Overview — Selected Indications Analysis” for more details on the incidence and prevalence of indications targeted by IMM0306 and the competitive landscape in China and oversea markets. According to Frost & Sullivan, there were three CD47×CD20 bispecific antibodies/fusion proteins under development globally as of the Latest Practicable Date. Among them, IMM0306 is the first one to enter into a clinical trial. In our ongoing Phase I clinical trial, IMM0306 has shown promising efficacy signals in treating patients with R/R B-NHL. Given IMM0306’s much more potent in vivo efficacy compared to rituximab in our preclinical studies, as well as its encouraging preliminary clinical efficacy data targeting R/R patients previously treated with and progressed after rituximab, we believe that it also has the potential to become a new first-line treatment option for our targeted indications. Competitive Advantages We believe IMM0306 has the following competitive advantages: (1) Potent in vivo antitumor effects at a lower dosing level compared to CD20 antibody as monotherapy or its combination with IMM01 While CD20 antibody used with chemotherapy is currently the main treatment option covering all lines of B-NHL treatment, the potency of CD20 antibody could be hampered by the inhibitory signaling of CD47. By dual-targeting of CD20 and CD47, IMM0306 can lead to stronger antitumor effects than a CD20 antibody through eliciting more integrated immune responses. Although the combined use of a CD47-targeted agent and a CD20 antibody can also achieve the synergistic activity, the prerequisite for such synergistic activity is that both antibodies bind simultaneously on the same tumor cell. Compared to the combination therapy, IMM0306 is more likely to bind with two targets co-expressed on the same tumor cell, thus achieving stronger synergistic effects at a relatively lower dose level. In addition, the IgG1 Fc of IMM0306 enables the molecule to potentially treat patients with the predominantly expressed less-sensitive Fc γRIIIA polymorphism (Fc γRIIIA-158F). Our in vivo efficacy studies have demonstrated that IMM0306 was more potent than rituximab (CD20 mAb) monotherapy, even at a much lower dosing level, and it is more potent than the combination therapy of IMM01 and rituximab at a comparable dosing level. As shown in the diagrams below, under Daudi xenograft model in SCID mice, IMM0306 resulted in complete remission in 100% of mice at 1.5 mg/kg. In the same model, the combination therapy of IMM01 BUSINESS – 284 – --- page 294 --- and rituximab at a comparable dosing level only resulted in a complete remission rate of 37.5%, and rituximab monotherapy led to a complete remission rate of 37.5% even at a much higher dose of 5 mg/kg. Under Raji xenograft model in SCID mice, IMM0306 led to a dose-dependent response with TGI rates of 73.7% and 92.7% at 1.5 mg/kg and 5 mg/kg, respectively. In comparison, at a high dose of 5.0 mg/kg, rituximab only resulted in a much lower TGI rate of 27.6%. Efficacy Study in Lymphoma (Daudi) Xenograft Mouse Model Efficacy Study in Lymphoma (Raji) Xenograft Mouse Model 0 1,000 2,000 3,000 4,000 0 4 7 1 11 41 82 12 5 0 500 1,000 1,500 2,000 2,500 0 4 7 1 11 41 82 12 5 CR=37.5% 0 500 1,000 1,500 0 4 7 1 11 41 82 12 5 CR=37.5% 0 50 100 150 200 250 0 4 7 1 11 41 82 12 5 CR=100% Days Post Treatment Days Post Treatment Days Post Treatment Days Post Treatment Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3)Vehicle Rituximab (5mg/kg) IMM01+Rituximab (0.25+1.25mg/kg) IMM0306 (1.5mg/kg) PBS, IV, QW×4W, n=8 IMM0306, 0.5mg/kg, IV, QW×4, n=8 IMM0306, 1.5mg/kg, IV, QW×4, n=8 IMM0306, 5mg/kg, IV, QW×4, n=8 Rituximab, 5mg/kg, IV, QW×4, n=8 IMM01, 0.25mg/kg, IV, QW×4, n=8 IMM01+Rituximab, 0.25mg/kg+1.25mg/kg, IV+IV, QW×4+QW×4, n=8 IMM0306+Clodronate Liposomes, 5mg/kg+0.2ml, IV+IV, QW×4+Day-3, Day1, Day4, Day7, n=84,000 3,000 2,000 1,000 -3 4 11 18 25 Days After the Start of Treatment 32 0 TGI = 27.6% (Rituximab, 5mg/kg ) TGI = 73.7% (IMM0306, 1.5mg/kg) TGI = 92.7% (IMM0306, 5mg/kg) Tumor volume (mm3) Note: Eight mice per group were used in this study. Source: Company Data We dosed the first patient in a Phase I clinical trial in treating R/R B-NHL in China in May 2020, and preliminary results available thus far showed positive efficacy signals. All patients enrolled in this trial had relapsed or progressed after receiving rituximab previously. Among the evaluable patients across four cohorts dosed from 0.8 mg/kg to 2.0 mg/kg, who had relapsed or progressed after receiving rituximab previously, two CRs and five PRs were observed. The only evaluable FL patient at 2.0 mg/kg who relapsed and progressed after rituximab treatment has also been confirmed as PR. At 2.0 mg/kg, one patient with primary bone DLBCL who had four lines of prior treatment has achieved PR with all measurable lesions disappeared after 65 days of treatment. Currently, the first-line treatment of B-cell lymphoma is primarily CD20 antibody (such as rituximab) plus chemotherapy. IMM0306 has revealed promising efficacy targeting patients who had relapsed or progressed after receiving rituximab. Since IMM0306 demonstrates much stronger in vivo antitumor activity than rituximab at a lower dose level, we believe IMM0306 has the great potential to become a first-line treatment option for B-cell lymphoma. (2) Favorable safety profile with no human red blood cell binding in vitro, with only minor cytokine storm Major concerns regarding the use of CD47-targeted agents are driven by the ubiquitous expression of CD47 in normal tissues, especially on RBCs, which leads to severe blood toxicity and antigenic sink. The safety concerns set up a high technical barrier for the molecule design of CD47-targeted agents. Our IMM0306 does not bind to RBCs in in vitro preclinical studies or cause hemagglutination or hemolysis in clinical trials, attributable to the same CD47-binding domain used in IMM01. With the higher affinity for CD20, IMM0306 can preferentially bind to CD20 and CD47 co-expressing tumor cells, thus minimizing “on-target, off-tumor” toxicity. BUSINESS – 285 – --- page 295 --- As shown in the diagram below, based on the blood samples drawn from 100 donors including males and females with different blood types, IMM0306 interacting with human RBCs manifests minimum mean fluorescence intensity as measured by the flow cytometer, demonstrating no binding activity toward human RBCs, while hB6H12, a CD47 antibody, showed significant RBC binding activities. Human RBC Binding Analysis of IMM0306 350 300 250 200 150 100 12 9 6 3 Mean Fluorescence Intensity Donor Characteristics (n=100) Male (n=62) Female (n=38) Type A blood group (n=29) Type B blood group (n=31) Type AB blood group (n=10) Type O blood group (n=30) hB6H 12:500nM hIgG1-Fc:5000nM IMM0306:5000nM Rituximab:5000nM Blank FITC-anti-human lgG-Fc hB6H12hlgG1-FcIMM0306Rituximab Source: Company Data Moreover, different from T-cell engaging bispecific antibodies, which normally induce serious cytokine release syndrome (CRS), a severe immune reaction in which the body releases too many cytokines within a very short time leading to severe inflammation and potential organ failures, IMM0306 only triggers minor CRS. CRS is one of the main reasons driving dose-limiting toxicities of T-cell engaging bispecific antibodies, mostly CD3-based bispecific antibodies due to their direct activation of T cells, which eventually leads to the termination or suspension of multiple clinical trials for CD3-based bispecifics, including Amgen’s AMG673 (CD3×CD33), AMG427 (CD3×FLT3) and AMG701 (CD3×BCMA), Regeneron’s odronextamab (CD3×CD20), and Pfizer’s elranatamab (CD3×BCMA). Our preliminary clinical data has suggested favorable safety and tolerability profiles of IMM0306. As of February 27, 2022, among 48 patients enrolled in its Phase I clinical trial, no DLT was observed and MTD was not reached. The majority of TRAEs observed are Grade 1 and 2. The most frequent TRAEs were lymphocyte decrease, white blood cell decrease, neutropenia, platelet decrease, anemia and drug-related infusion related reactions. Clinical Development Plan We are executing a comprehensive clinical development plan for IMM0306 in China and the U.S. We initiated a Phase I clinical trial of IMM0306 in treating R/R B-NHL in China in May 2020. We commenced a Phase IIa trial for IMM0306 monotherapy for the third- or later-line treatment of FL in March 2023 and plan to seek an accelerated marketing approval through a single-arm trial. We expect to commence pivotal clinical trials in China in the third quarter of 2024. Furthermore, our IND application for the combination of IMM0306 and lenalidomide targeting front-line B-NHL was approved by the NMPA in January 2023. We have commenced the Phase Ib/IIa clinical trial for this combination in China, with the first patient dosed in June 2023. BUSINESS – 286 – --- page 296 --- We have also received an IND approval for IMM0306 from the FDA in January 2021. With further clinical validation in the clinical trials in China, we will then decide on our clinical development and collaboration strategy for IMM0306 in the U.S. Licenses, Rights and Obligations We are developing IMM0306 in-house and own the global rights to develop and commercialize IMM0306. Material Communications We had not received any regulatory agency’s concerns or objections to our clinical development plans as of the Latest Practicable Date. WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM0306 SUCCESSFULLY. IMM2902 (CD47×HER2) — Our Key Product IMM2902 is the only bispecific molecule targeting CD47 and HER2 simultaneously that has entered into clinical trial globally. The following diagram illustrates the structure of IMM2902: SIRPα-D1 Anti-HER2 mAb IgG1 with enhanced ADCC IMM2902 Source: Company Data With its unique structural design with the engineered CD47-binding fragment connected to the N-terminus of light chains, our IMM2902 shows no RBC binding in vitro, and is able to adopt an ADCC-enhanced IgG1 Fc fragment capable of inducing full macrophage activation, enhanced ADCP and ADCC activity, and potent antitumor immune responses. By simultaneously binding to HER2 and CD47, IMM2902 suppresses tumor cell growth and proliferation through the blockade of CD47/SIRP α immune inhibitory signal, enhanced ADCP/ADCC, as well as the induction of accelerated HER2 internalization and degradation. Additionally, the structurally optimized IgG1 Fc could potentially induce ADCT as found with amivantamab. IMM2902 demonstrated potent antitumor activity in our in vivo efficacy models of trastuzumab-sensitive and trastuzumab-resistant HER2-low expressing BC and GC. In addition, it exhibited a favorable safety profile in our preclinical studies. We have initiated the Phase Ia/Ib trial for the treatment of advanced HER2-positive and HER2-low expressing solid tumors, including BC, GC, NSCLC and BTC, in China in February 2022. We have also initiated the clinical trial for advanced HER2-positive and HER2-low expressing solid tumors in the U.S. with the first patient dosed in June 2022. We have received the Fast Track Designation from the FDA in July 2022. We expect to largely complete the Phase Ia trials in China and the U.S. in 2023. BUSINESS – 287 – --- page 297 --- As of the Latest Practicable Date, with respect to IMM2902, we owned one patent family, which includes one issued patent in the U.S., one issued patent in Japan, four pending patent applications in the PRC, the U.S., the EU and Hong Kong, and one PCT patent application which has entered national phases. Mechanism of Action HER2 regulates cell proliferation and apoptosis, and amplification of HER2 gene promotes the acceleration of tumor cell growth. With the higher affinity for HER2, IMM2902 can preferentially bind to HER2 and CD47-positive tumor cells, while sparing CD47-expressing normal cells, to minimize “on-target, off-tumor” toxicity. IMM2902 can inhibit the signaling of HER2 pathway, thereby directly suppressing tumor growth and proliferation and leading to cell death. IMM2902 has been shown to accelerate the degradation of HER2, leading to tumor cell apoptosis. Moreover, it can block the “don’t eat me” signal via disrupting CD47/SIRP α interaction and also activate the “eat me” signal through Fc-Fc γR engagement, thereby fully activating macrophages. The IgG1 Fc fragment is further engineered to enhance ADCC activity, especially benefiting the patient population harbouring the predominantly expressed polymorphism of phenylalanine at 158 amino acid position of the Fc γ receptor IIIA (Fc γRIIIA-158F). Additionally, IMM2902 is expected to potentially induce ADCT as found with amivantamab (a marketed EGFR/c-MET bispecific antibody designed with IgG1 Fc), an underappreciated mechanism of action contributing to tumor suppression. With the multi-targeting ability and multifaceted mechanisms against tumor cells, IMM2902 is expected to achieve much stronger antitumor activity at a lower dosing level, as compared to HER2 antibodies or their combination with IMM01, and efficacious even for solid tumors with HER2-low expression. The following diagram illustrates the mechanisms of action of IMM2902 in comparison to the combination of separate agents targeting CD47 and HER2: Mechanism of Action of IMM2902 versus Combination of CD47 mAb and HER2 mAb SIRPα FcγR Strong ADCP “Don’t eat me” blocked “Eat me” signal activated Mϕ Cancer cell substantially killed HER2 CD47 SIRPα FcγR Certain ADCP “Don’t eat me” exists “Eat me” signal activated HER2 CD47 SIRPα FcγR Limited ADCP “Don’t eat me” blocked “Eat me” signal active HER2 CD47 IgG4 CD47 mAb Herceptin (HER2 mAb) Mϕ Cancer cell partially killed Mϕ Cancer cell sparsely killedHER2 expressing tumor cell IgG1 IgG1 ADCC+ HER2 expressing tumor cell HER2 expressing tumor cell IMM2902 Source: Company Data BUSINESS – 288 – --- page 298 --- Market Opportunities and Competition According to Frost & Sullivan, HER2 overexpression is prevalent in many major cancer types, such as BC, GC, lung cancer, CRC, esophageal cancer (EC), BTC, HNSCC and cervical cancer (CC). According to Frost & Sullivan, the incidence of BC reached 2.3 million and 0.3 million worldwide and in China in 2022, respectively, and is expected to increase to 2.7 million and 0.4 million in 2030, respectively. The incidence of GC was 1.2 million and 0.5 million in 2022 globally and in China, respectively, and is expected to increase to 1.4 million and 0.6 million in 2030, respectively. The incidence of other major HER2-expressing cancers was 9.9 million and 2.6 million in 2022 globally and in China, respectively, and 12.2 million and 3.2 million in 2030 globally and in China, respectively. Please refer to “Industry Overview — Selected Indications Analysis” for more details on the incidence and prevalence of indications targeted by IMM2902 and the competitive landscape in China and oversea markets. While HER2 antibodies (such as trastuzumab) have been used as the standard treatment for HER2-positive BC and GC in combination with chemotherapy, around 35% of HER2-positive cancer patients have intrinsic resistance to the standard treatment, and the remaining 65% who respond to the standard treatment will eventually develop acquired resistance to the standard treatment with a median response duration of 12.5 months, resulting in disease progression. Moreover, patients with HER2-low expression who comprise about 50% of all BC cases and over 25% of GC cases do not respond to HER2 antibodies in general. Although HER2 antibody-drug conjugates (ADCs) are shown to be active in certain HER2-low expressing tumors in clinical trials, they are often associated with severe adverse effects, such as interstitial lung disease, and can sometimes be fatal. ADCs, such as Enhertu ®, still present limited PFS/OS data targeting patients with certain HER2-expressing solid tumors (including GC and NSCLC), despite a much improved ORR rate. This suggests a clear need to develop novel therapeutics with a better efficacy-safety balance for patients with HER2-low expressing cancers and trastuzumab-resistant cancers. CD47 and HER2 dual-targeting strategy may provide safer and more efficacious treatment for patients with HER2-low expressing solid tumors and those relapsed from trastuzumab treatment. To date, IMM2902 is the only CD47 and HER2 bispecific molecule that has entered into clinical stage globally. Given its multifaceted mechanisms, IMM2902 has shown potent antitumor activity in HER2-low expressing and trastuzumab-resistant solid tumor models. Thus, IMM2902 has the potential to benefit a large patient population globally, including the even larger market with HER2-low expressing solid tumors and those relapsed after prior trastuzumab treatment. Competitive Advantages We believe IMM2902 has the following competitive advantages: (1) Enhanced ADCC, ADCP , potentially ADCT, and accelerated HER2 degradation IMM2902 can fully activate macrophages by activating an additional “eat me” signal, leading to phagocytosis against tumor cells, and stronger T-cell response through the secretion of immune modulatory cytokines and chemokines and boosted antigen presentation. In addition, the IgG1 Fc fragment of IMM2902 is further engineered to enhance ADCC activity. IMM2902 is also expected to potentially induce ADCT activity, another important Fc-induced mechanism observed with amivantamab (a marketed EGFR/c-MET bispecific antibody with IgG1 Fc), which works together with ADCC and ADCP to combat tumor cells. Through these mechanisms, IMM2902 can induce all-around innate and adaptive immune responses and potent tumor killing. BUSINESS – 289 – --- page 299 --- Further, our preclinical study showed that IMM2902 could accelerate the endocytosis and degradation of HER2, thereby resulting in robust tumor suppression. We conducted a Western blot analysis on tumor tissues to compare the HER2 protein degradation induced by IMM2902 with IMM01, trastuzumab and their combination treatment. As can be seen from the diagram below, the reduction of HER2 expression has a strong correlation to the shrinkage of tumor size. Notably, in Group 4 where IMM2902 was administered at a lower dose level of 1 mg/kg (~0.1 mg/kg human equivalent dose) than other study arms, HER2 protein expression significantly decreased due to accelerated degradation induced by IMM2902, and consequently, IMM2902 produced the strongest tumor growth inhibitory activity among all treatment groups. Expression Analysis of HER2 and p-HER2 by Western Blot 0 500 1,000 1,500 1 2 3 4 5 6 7 8 9 10 11 12 13 14Mouse # Group 1 DPBS IP, BIW×4W Group 2 IMM01, 1.5mpk IP, BIW×4W Group 3 Herceptin, 3mpk IP, BIW×4W Group 4 IMM2902, 1mpk IP, BIW×4W Group 5 IMM01+Herceptin, 0.5+3mpk, IP+IP, BIW×4W+BIW×4W Tumor Volume (mm3) p-HER2 HER2 GAPDH Mouse # 23 56 9 1 0 1 1 47 81 1412 13 Group 1 DPBS IP, BIW×4W Group 2 IMM01 1.5mg/kg IP, BIW×4W Group 3 Herceptin 3mg/kg IP, BIW×4W Group 4 IMM2902, 1mg/kg IP, BIW×4W Group 5 IMM01+Herceptin, 0.5+3 mg/kg, IP+IP, BIW×4W+BIW×4W Notes: (1) The data from the Western blot analysis is representative images of the preclinical study. (2) p-HER2 refers to phospho-HER2, DPBS refers to Dulbecco’s Phosphate Buffered Saline, intended to provide a buffer system for maintaining cell culture media in the physiological range of 7.2 to 7.6. (3) Ten mice per group were used in this study. (4) While the change in p-HER2 among the treated group is not significant when compared to the control group, the change in constitutive expression of HER2 in IMM2902-treated group is significantly lower than that in the control group. (5) It demonstrated that down-regulation of HER2 is one of the many important mechanisms by which IMM2902 exerts antitumor activity. Similar phenomenon could be referred to amivantamab (an EGFR×MET bispecific antibody) inducing strong in vivo antitumor activity via several mechanisms including down-regulation of EGFR and MET expression on tumor cells (Mol Cancer Ther (2020) 19 (10):2044-2056) . (6) The study primarily focus on correlations of different variables, which does not necessarily imply a causative relationship. Source: Company Data BUSINESS – 290 – --- page 300 --- (2) Strong in vivo antitumor efficacy A series of in vivo efficacy studies have been completed by two independent and reputable CROs to evaluate tumor inhibitory effects of IMM2902 in xenograft models that are sensitive or resistant to trastuzumab. These preclinical studies revealed strong antitumor activity of IMM2902 against a variety of breast and gastric tumors. As shown in the panels below, IMM2902 completely eradicated established tumors at 10 mg/kg (~1.0 mg/kg human equivalent dose) in both trastuzumab-sensitive and trastuzumab-resistant BC models. In addition, at equivalent doses, IMM2902 was significantly more efficacious than trastuzumab alone or its combination with IMM01. IMM2902 also exhibited favorable efficacy in trastuzumab-sensitive and HER2-low expressing GC models. These promising preclinical results suggest the potential of IMM2902 to treat cancer patients who have relapsed from initial trastuzumab treatment and to subsequently advance to the first-line setting. Efficacy Study in Trastuzumab-Sensitive Breast Cancer (BT474) Xenograft Mouse Model Efficacy Study in Trastuzumab-resistant Breast Cancer (HCC-1954) Xenograft Mouse Model DPBS, IP, BIW×4W, n=10 IMM01, 1.5 mg/kg, IP, BIW×4W, n=10 Herceptin, 3 mg/kg, IP, BIW×4W, n=10 IMM2902, 1 mg/kg, IP, BIW×4W, n=10 IMM2902, 3.5 mg/kg, IP, BIW×4W, n=10 IMM2902, 10 mg/kg, IP, BIW×4W, n=10 IMM01+Herceptin, 0.5+3 mg/kg, IP+IP, BIW×4W+BlW×4W, n=10 Tumor Volume (mm3) 4,000 2,400 1,600 800 0 0 7 14 21 28 35 42 49 3,200 DPBS, IP, BIW×4W, n=10 IMM01, 1.5 mg/kg, IP, BIW×4W, n=10 Herceptin, 3 mg/kg, IP, BIW×4W, n=10 IMM2902, 1 mg/kg, IP, BIW×4W, n=10 IMM2902, 3.5 mg/kg, IP, BIW×4W, n=10 IMM01+Herceptin, 0.5+3 mg/kg, IP+IP, BIW×4W+BlW×4W, n=10 Tumor Volume (mm3) 1,500 1,200 900 600 300 0 0 7 14 21 28 Days After the Start of Treatment Days After the Start of Treatment Efficacy Study in Herceptin-sensitive Gastric Cancer (NCI-N87) Xenograft Mouse Model Efficacy Study in HER2-low Expressing Gastric Cancer (SNU-1) Xenograft Mouse Model Tumor Volume (mm3) 2,000 1,200 800 400 0 0 7 14 21 28 350 7 14 21 28 35 1,600 2,000 1,200 800 400 0 1,600 Tumor Volume (mm3) Days After the Start of Treatment Days After the Start of Treatment DPBS, IP, BIW×4W, n=10 IMM01, 1.5 mg/kg, IP, BIW×4W, n=10 Herceptin, 3 mg/kg, IP, BIW×4W, n=10 IMM2902, 1 mg/kg, IP, BIW×4W, n=10 IMM2902, 3.5 mg/kg, IP, BIW×4W, n=10 IMM2902, 10 mg/kg, IP, BIW×4W, n=10 IMM01+Herceptin, 0.5+3 mg/kg, IP+IP, BIW×4W+BlW×4W, n=10 DPBS, IP, BIW×4W, n=6 Inetetamab, 8 mg/kg, IP, BIW×4W, n=6 IMM2902, 2 mg/kg, IP, BIW×4W, n=6 IMM2902, 6 mg/kg, IP, BIW×4W, n=6 IMM2902, 18 mg/kg, IP, BIW×4W, n=6 Source: Company Data BUSINESS – 291 – --- page 301 --- (3) Favorable safety profile with no human RBC binding in vitro With an engineered CD47-binding domain, IMM2902 does not bind to human RBCs nor induces hemagglutination (clumping of RBCs) in vitro . In our preclinical studies as shown below, while magrolimab analog replicated by us based on public information induced obvious hemagglutination at the concentration beyond 370 ng/ml, IMM2902 did not induce hemagglutination even at the concentration as high as 10,000 ng/ml. In addition, IMM2902 with a higher affinity for HER2 than CD47 can preferentially bind with tumor cells co-expressing HER2 and CD47 rather than CD47-positive normal tissues (including RBCs), which further improves its safety and tolerability. IMM2902 Does Not Induce Hemagglutination of Human Red Blood Cells Conc. (ng/mL) IMM2902 Hu5F9 IMM01 Donor 1 Donor 2 3333.33 10000.00 13.71 1111.11 41.15 370.37 4.57 123.46 0.51 1.53 0.17 0 3333.33 10000.00 13.71 1111.11 41.15 370.37 4.57 123.46 0.51 1.53 0.17 0 Note: Analog of magrolimab (Hu5F9) used in this study was replicated by an independent biotechnology company based on public information, which may not be exactly identical to magrolimab but can exhibit identical or very similar results in preclinical studies. When a competing drug is not available on the market, it is acceptable and common to use its analog for preclinical evaluation in the industry. Our preclinical study showed that Hu5F9 started to induce obvious hemagglutination at the concentration of 370 ng/ml, and neither IMM2902 nor IMM01 induced hemagglutination at the concentration as high as 10,000 ng/ml. The results of this preclinical study provide important guidance to predict the effects of study drugs in human. If the average blood concentration required for a drug to be effective in a human body is higher than the concentration level that induced hemagglutination in vitro (such as 370 ng/ml for Hu5F9 and 10,000 ng/ml for IMM2902 and IMM01), hemagglutination may be induced in human body. As the concentration of a drug in peripheral blood shortly after it is injected will be generally higher than the calculated average blood concentration for a specific dose level, and aging RBCs with poor glycosylation stuck on the walls of blood vessels are more likely to bind with CD47-targeted agents at a lower dose, the dose level that may cause hemagglutination in human could be lower than that observed in this study. Source: Company Data Clinical Development Plan We initiated a Phase Ia/Ib trial for IMM2902 in advanced HER2-positive and HER2-low expressing solid tumors, including BC, GC, NSCLC and BTC, in China in February 2022, and are enrolling the sixth cohort for this dose-escalation study in China. Based on an IND approval for IMM2902 in HER2-positive and HER2-low expressing solid tumors granted by the FDA in August 2021, we have also initiated the clinical trial for advanced HER2-positive and HER2-low expressing solid tumors in the U.S. with the first patient dosed in June 2022. We have received the Fast Track Designation from the FDA in July 2022. We expect to largely complete the Phase Ia trials in China and the U.S. in 2023. BUSINESS – 292 – --- page 302 --- Licenses, Rights and Obligations We are developing IMM2902 in-house and own the global rights to develop and commercialize IMM2902. Material Communications We had not received any regulatory agency’s concerns or objections to our clinical development plans as of the Latest Practicable Date. WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM2902 SUCCESSFULLY. IMM2520 (CD47×PD-L1) — Our Key Product IMM2520 is a CD47 and PD-L1 dual-targeting bispecific molecule for the treatment of solid tumors. As shown in the following diagram, IMM2520 consists of a PD-L1 antibody with an engineered ADCC-enhanced IgG1 Fc region, linked to the same CD47-binding domain used in IMM01 at the N-terminus of heavy chains: IgG1 with enhanced ADCC SIRPα-D1 Anti-PD-L1 mAb IMM2520 Source: Company Data This unique structure allows our CD47-based bispecific molecules to avoid RBC binding, thus enabling the adoption of an ADCC-enhanced IgG1 Fc fragment to fully activate macrophages and induce enhanced ADCP and ADCC activity, resulting in potent integrated antitumor immune responses. We have obtained IND approvals for IMM2520 from the NMPA in November 2022 and from the FDA in December 2022, and dosed the first patient for the Phase I clinical trial in China in March 2023. We will particularly focus on the solid tumors that are generally resistant or not sensitive to the currently available immunotherapies, such as CRC, GC, lung cancer and HNSCC, among others. As of the Latest Practicable Date, with respect to IMM2520, we owned one patent family, which includes one issued patent in Japan, one issued patent in the U.S., one issued patent in the PRC, one pending patent application in the EU, and one pending PCT patent application which may enter various contracting states in the future. BUSINESS – 293 – --- page 303 --- Mechanism of Action CD47 and PD-L1 serve as critical innate and adaptive immune checkpoints, respectively, as these are two key pathways frequently exploited by various cancer cells to escape immune responses. Although PD-1/PD-L1 inhibitors have been approved for the treatment of a broad range of cancers, they only produce limited responses in “cold tumors” or non-T cell-inflamed immune-suppressive TME. With its potent IgG1 Fc, IMM2520 is able to deliver the additionally required “eat me” signal via Fc-Fc γR engagement, thus effectively activating macrophages to exert tumor killing activity through multiple integrated mechanisms of action. Fully activated macrophages, on the other hand, are able to transform “cold tumors” into “hot tumors” and sensitize TME to the PD-1/PD-L1 inhibition, showing great synergistic potential with T-cell activation. Moreover, the engineered IgG1 Fc region also induces enhanced ADCC mediated by NK cells, leading to direct tumor-killing effects. Due to the crosstalk among macrophages, NK cells and T cells, IMM2520 is able to unleash significant synergistic effects, fully eliciting all-around innate and adaptive immune responses and leading to profound and durable tumor killing effects. With the higher affinity for PD-L1, IMM2520 can preferentially bind with PD-L1 and CD47 co-expressing tumor cells, rather than normal cells expressing CD47, thus minimizing “on-target, off-tumor” toxicity. Market Opportunities and Competition According to Frost & Sullivan, only about 10% to 25% of cancer patients are responsive to PD-1/PD-L1 inhibitor monotherapy across almost all major types of cancer, due to “cold tumors” or non-T cell-inflamed immune-suppressive TME. The incidence of the cancers for which conditions PD-1/PD-L1 can be used as monotherapy was approximately 1,086.2 thousand and 344.6 thousand in 2022 globally and in China, respectively, and is expected to increase to 1,306.8 thousand and 419.9 thousand in 2030 globally and in China, respectively. Compared to chemotherapy’s average ORR of approximately 36% in various cancer indications, the addition of PD-1/PD-L1 inhibitor to chemotherapy can enhance the average ORR by approximately 14% for the treatment of those indications. In general, adding PD-1/PD-L1 inhibitors to other cancer agents (including chemotherapy, targeted therapy and other immunotherapy) can achieve an increase of approximately 16% in the average ORR in various cancers as compared to that of the other cancer agents. Since IMM2520 showed more potent antitumor effects than PD-1/PD-L1 inhibitor monotherapy in preclinical studies, IMM2520 in combination with other agents is expected to achieve improved treatment outcomes than PD-1/PD-L1 inhibitor-based combination therapies. However, macrophages are widely distributed in a broad range of tumor types and account for around 20% to 50% of cells in respective tumor tissues, presenting a huge market potential for our IMM2520. With the capability to activate macrophages and unleash their synergistic effects with T-cell activation response, IMM2520 may benefit patients who are previously not responsive to or have progressed after PD-1/PD-L1 inhibitors, thus capturing the vast worldwide market opportunities. According to Frost & Sullivan, as IMM2520 is expected to provide effective treatment for solid tumors with low response rates to PD-1/PD-L1 inhibitors it has the potential to treat a wide range of cancer indications with high macrophage infiltration, including NSCLC, SCLC, HCC, GC, HNSCC, CRC, ESCC, OC, prostate cancer, and pancreatic cancer. Please refer to “Industry Overview — Selected Indications Analysis” for more details on the incidence and prevalence of indications targeted by IMM2520 and the competitive landscape in China and oversea markets. BUSINESS – 294 – --- page 304 --- According to Frost & Sullivan, as of the Latest Practicable Date, a total of nine CD47 and PD-1/PD-L1 bispecific molecules are under clinical development globally. Among those bispecific molecules, certain molecules connect the SIRP α fragment’s N-terminal to the Fc end, which could interfere with CD47-binding epitope also located at its N-terminal, and further disrupt immune activation resulted from Fc-Fc γR engagement. Further, due to the inevitable binding of CD47 antibodies to RBCs, several other bispecific molecules resort to an IgG4 Fc region with weak Fc γR engagement. In contrast, only very few molecules preserve intact IgG1 Fc region with a better ability to engage Fc receptors and elicit stronger effector functions. IMM2520 adopts an ADCC-enhanced IgG1 Fc region and connects the C-terminal of the CD47-binding fragment to the heavy chain, allowing it to efficiently block CD47/SIRP α binding, and at the same time, activate stronger antitumor activity through potent ADCP and ADCC, thus better sensitizing TME to PD-L1 inhibitors, achieving a stronger synergistic effect. Competitive Advantages IMM2520 with an ADCC-enhanced IgG1 Fc can induce full macrophage activation and much improved ADCP/ADCC activity, thus maximizing the synergistic effects and significantly improving treatment outcomes of PD-1/PD-L1 inhibition, which results in stronger antitumor immune responses compared to most IgG4-based CD47 bispecific antibodies. In addition, IMM2520 can simultaneously bind to the two targets on the same tumor cell to achieve potent synergistic effects, as compared to the combination therapy of CD47 antibodies and PD-1/PD-L1 inhibitors which require a higher dose for similar treatment efficacy. As illustrated in the diagram below, our in vivo efficacy studies demonstrated IMM2520’s potent antitumor effects. Efficacy Study in Colon Cancer (CT26) Syngeneic Mouse Model 0 6 12 18 24 30 36 0 1,000 2,000 3,000 G1: PBS, BIW×4w, i.p. G2: IMM01, 3 mpk, BIW×4w, i.p. G6: IMM2520, 6 mpk, BIW×4w, i.p. Tumor Volume (mm3) Days Post Treatment (d) Note: Six mice per group were used in this study. Source: Company Data IMM2520 has also demonstrated a favorable safety profile. Its engineered CD47-binding domain is identical to IMM01’s and shows no binding activity with human RBCs in vitro .I n addition, similar to our other CD47-based bispecific molecules, we designed IMM2520 to have a higher affinity for PD-L1 than CD47, allowing it to preferentially bind to PD-L1 and CD47 co-expressing tumor cells, rather than normal cells expressing CD47, thus minimizing “on-target, off-tumor” toxicity. BUSINESS – 295 – --- page 305 --- Clinical Development Plan We have obtained IND approvals for IMM2520 from the NMPA in November 2022 and from the FDA in December 2022. We dosed the first patient for the Phase I clinical trial targeting a basket of solid tumor indications, with a particular focus on those solid tumors generally resistant or not sensitive to the currently available immunotherapies, such as CRC, GC, lung cancer and HNSCC, among others, in China in March 2023. With further clinical validation from the Phase I trial in China, the Company will carefully decide whether to proceed with a clinical trial or explore potential collaboration opportunities in the U.S. Licenses, Rights and Obligations We are developing IMM2520 in-house and own the global rights to develop and commercialize IMM2520. Material Communications We had not received any regulatory agency’s concerns or objections to our clinical development plans as of the Latest Practicable Date. WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM2520 SUCCESSFULLY. IMM47 (CD24 mAb) IMM47 is a CD24-targeted humanized antibody we internally screened and developed with global first-in-class potential for the treatment of solid tumors. CD24 is widely expressed in numerous types of solid tumors, including BC, NSCLC, CRC, HCC, RCC and OC, and has been recognized as an important marker for poor prognosis of those cancers, presenting a huge market potential in a broad-spectrum application. Please refer to “Industry Overview — Selected Indications Analysis” for more details on the incidence and prevalence of indications targeted by IMM47 and the competitive landscape in China and oversea markets. According to Frost & Sullivan, there is no approved drug targeting CD24 globally. No CD24-targeted drug candidate has entered into clinical stage worldwide, except for one drug candidate recently receiving IND approval from the FDA for its Phase I clinical trial. We started the discovery research on CD24 as early as 2019, and have developed one innovative IND-enabling-stage molecule with potent in vivo efficacy, and multiple discovery- and preclinical-stage bispecific molecules. Recently, Pheast Therapeutics, led by Dr. Amira Barkal and Dr. Irving Weissman, the world’s pioneer in CD47, revealed their move into the development of cancer therapies targeting CD24, which is expected to stir a new wave of enthusiasm for this novel immuno-oncology target across the global biopharmaceutical industry. However, the screening of monoclonal antibodies against CD24 is highly challenging due to the relatively weak immunogenicity resulting from its small extracellular domain. We have developed IMM47 and filed multiple patent applications. We expect to submit IND applications for IMM47 with the NMPA and the FDA in 2023, and subsequently initiate a Phase I clinical trial in Australia in August 2023 for the treatment of various solid tumor indications. Initiating a clinical trial in Australia first can help us to begin global clinical trials earlier and accelerate clinical validation of IMM47. Additionally, we believe Australian trial can generate valuable clinical data on ethnically diverse populations, thus enhancing our ability to pursue collaboration opportunities with global pharmaceutical companies. BUSINESS – 296 – --- page 306 --- CD24 interacts with its ligand, Siglec-10, on the surface of various immune cells, including macrophages, NK cells, T cells and B cells, leading to immune escape of tumor cells. With a high affinity for CD24, IMM47 is able to suppress the CD24/Siglec-10 inhibitory signals sent to macrophages, NK cells and T cells. With its ADCC-enhanced IgG1 Fc, IMM47 can potently activate macrophage and NK cell-immune responses through ADCP and ADCC. It has also been shown to significantly increase the amount of M1 macrophages in tumor tissues in our in vivo proof-of-concept studies. IMM47 can also activate and promote T-cell response likely through tumor antigen presentation by activated macrophages to T cells and direct blockade of CD24/Siglec-10 inhibitory signals. The following diagram illustrates the mechanism of action of IMM47: Mechanism of Action of IMM47 NK Cell Tumor Cell IMM47 CD24 mAb CD24 Siglec-10 ADCC ADCP Apoptosis Signaling Blockade Granzyme, Perforin... Siglec-10 TC e l l Siglec-10 T Cell Receptor Granzyme, Perforin...Cytokines Promote T Cell Activation Fc Receptor Macrophage Lysosomes APC Source: Company Data IMM47 has demonstrated compelling capabilities to kill tumor cells in our preclinical studies as illustrated in the diagram below. At the dose level of 3.0 mg/kg (~0.3 mg/kg human equivalent human dose), IMM47 successfully eradicated subcutaneously inoculated tumor cells in all six mice after three treatments in a colon cancer model, which demonstrated robust antitumor activity of IMM47 as monotherapy in solid tumor models. BUSINESS – 297 – --- page 307 --- Proof-of-Concept Study in Colon Cancer (MC38) Syngeneic Mouse Model 0 2,000 4,000 6,000 0 4 8 1 21 62 02 42 83 2 0 2,000 4,000 6,000 0 4 8 1 21 62 02 42 83 2 0 2,000 4,000 6,000 0 4 8 12 16 20 24 28 32 0 2,000 4,000 6,000 0 4 8 1 21 62 02 42 83 2 Days Post Inoculation Days Post Inoculation Days Post Inoculation Days Post Inoculation PBS, i.p., BIW*8 times IMM47, 1 mg/kg, i.p., BIW*8 times IMM47, 3 mg/kg, i.p., BIW*8 times IMM47, 0.3 mg/kg, i.p., BIW*8 times Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3) Tumor Volume (mm3) Notes: (1) Six mice per group were used in this study. (2) The colors of lines represent the different responses of the six mice in each group. Source: Company Data More intriguingly, IMM47C and IMM47H (both are earlier generations of IMM47) have demonstrated robust antitumor activities, leading to complete tumor eradication, with the ability to induce immunological memory against tumors in our in vivo preclinical studies. Mice treated with IMM47C and IMM47H established tumor-specific immune responses that prevented tumor growth even against re-inoculation of tumor cells. BUSINESS – 298 – --- page 308 --- Proof-of-Concept Study in Colon Cancer (MC38) Syngeneic Mouse Model 8000 6000 4000 2000 300 200 100 0 048 1 2 1 6 2 0 2 4 28 32 36 40 44 48 Group 1 PBS, i.p., BIW*4 times Days Post Administration 8000 6000 4000 2000 300 200 100 0 0 4 81 2 1 6 2 0 2 4 28 32 36 40 44 48 Days Post Administration Group 2 IMM47H, 10mg/kg, i.p., BIW*4 times 2nd Seeding Cell Days Post Administration 0 4 8 12 16 20 24 28 32 36 40 44 48 0 4 8 12 16 20 24 28 32 36 40 44 48 Means of Tumor Volume (mm3) 8000 6000 4000 2000 300 200 100 0 8000 6000 4000 2000 300 200 100 0 2nd Seeding Cell Group 3 IMM47C, 10mg/kg, i.p., BIW*4 times Control 2nd Seeding Cell 2nd Seeding Cell Days Post Administration Means of Tumor Volume (mm3) Means of Tumor Volume (mm3)Means of Tumor Volume (mm3) Notes: (1) IMM47C is a previous chimeric version of IMM47 and IMM47H is an earlier fully humanized version of IMM47. IMM47 revealed highly similar in vitro efficacy as IMM47C and IMM47H, and was eventually selected for further development; (2) Ten mice per group were used in the first seeding, with seven of the ten subsequently used in second inoculation for group 1, 2 and 3, and five used in the control group for the second seeding; (3) The colors of the lines represent the first and the second seeding respectively. Source: Company Data Targeting both innate and adaptive immunity, CD24-targeted drugs present a significant potential in treating a wide range of cancer indications. Given the all-around immune responses stimulated by blocking the CD24/Siglec-10 signaling pathway, they also suggest a strong synergistic potential with other immunotherapies, including PD-1/PD-L1 inhibitors. In fact, as illustrated in the diagrams below, our preclinical studies have shown that the combination of IMM47 and OPDIVO ® or KEYTRUDA ® can lead to a significant increase in response rates in our mouse model compared to using OPDIVO ® or KEYTRUDA ® alone. Furthermore, when we reinoculate the same cancer cells into mice pre-treated with IMM47 and PD-1 antibodies, tumor growth could be rapidly and completely eliminated, indicating the establishment of a tumor-specific immune response. BUSINESS – 299 – --- page 309 --- Proof-of-Concept Study in Colon Cancer (MC38) Syngeneic Mouse Model 0 7 14 21 28 0 500 1000 1500 2000 Vehicle, i.p,Q10D*3 times Days post administration Tumor Volume (mm3) 0 7 14 21 28 0 500 1000 1500 2000 IMM47, 0.5 mpk, i.p., Q10D*3 times Days post administration Tumor Volume (mm3) 0 7 14 21 28 0 500 1000 1500 2000 Opdivo, 2 mpk, i.p., Q10D*3 times Days post administration Tumor Volume (mm3) 0 7 14 21 28 0 500 1000 1500 2000 Keytruda, 2 mpk, i.p., Q10D*3 times Days post administration Tumor Volume (mm3) 0 7 14 21 28 0 50 100 150 200 IMM47+Opdivo, 0.5+2 mpk, i.p., Q10D*3 times Days post administration Tumor Volume (mm3) 0 7 14 21 28 0 50 100 150 200 IMM47+Keytruda, 0.5+2 mpk, i.p., Q10D*3 times Days post administration Tumor Volume (mm3) CR=16.7%(1/6) CR=16.7%(1/6) CR=50.0%(3/6) CR=83.3%(5/6) CR=100%(6/6) 0 7 14 21 28 35 42 49 56 63 70 0 1000 2000 3000 4000 Vehicle, i.p,Q10D*3 times Days post administration Tumor Volume (mm3) 0 7 14 21 28 35 42 49 56 63 70 0 200 400 600 800 1000 Control Days post administration Tumor Volume (mm3) 2nd Seeding Cell 0 7 14 21 28 35 42 49 56 63 70 0 50 100 150 200 IMM47+Opdivo, 0.5+2 mpk, i.p., Q10D*3 times Days post administration Tumor Volume (mm3) 2nd Seeding Cell 0 7 14 21 28 35 42 49 56 63 70 0 50 100 150 200 IMM47+Keytruda, 0.5+2 mpk, i.p., Q10D*3 times Days post administration Tumor Volume (mm3) 2nd Seeding Cell According to Frost & Sullivan, there is no approved drug targeting CD24 globally. No CD24-targeted drug candidate has entered into clinical stage worldwide, except for one drug candidate recently receiving IND approval from the FDA for its Phase I clinical trial. All of our CD24-targeted molecules, including CD24-targeted antibody and CD24-based bispecific molecules, are with global first-in-class potential. Although two drug candidates targeting Siglec-10 are currently under clinical development for the treatment of COVID-19, they are designed to bind with Siglec-10 to inhibit cytokine secretion and reduce COVID-19 induced immune over-reaction, exhibiting completely different mechanisms from the CD24-targeted therapies. As of the Latest Practicable Date, with respect to IMM47, we owned one patent family, which includes one issued patent in the PRC, one allowed patent application in Japan, one pending patent application in each of the U.S., and the EU, and one pending PCT patent application which may enter various contracting states in the future. BUSINESS – 300 – --- page 310 --- WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM47 SUCCESSFULLY. IMM4701 (CD47×CD24) IMM4701, developed based on our mAb-Trap platform, is a bispecific molecule with the global first-in-class potential that targets both CD47 and CD24 for the treatment of solid tumors. According to Frost & Sullivan, there is no approved drug targeting CD24 globally. No CD24-targeted drug candidate has entered into clinical stage worldwide, except for one drug candidate recently receiving IND approval from the FDA for its Phase I clinical trial. It has demonstrated promising antitumor activity in our in vivo efficacy studies. As of the Latest Practicable Date, with respect to IMM4701, we owned one patent family, which includes one issued patent in the PRC, and one patent application in each of the U.S., the EU and Japan, and one pending PCT patent application which may enter various contracting states in the future. Further leveraging the data observed from IMM47, we expect to file the IND applications for IMM4701 with the NMPA and the FDA for the treatment of solid tumors subsequently, and further seek collaboration opportunities with global pharmaceutical companies. IMM4701 consists of an antibody targeting CD24 and the CD47-binding domain same as IMM01 connected to the N-terminal of the heavy chains, enabling it to adopt an ADCC-enhanced IgG1 Fc region. As simultaneous binding of CD47 and CD24 can activate key innate and adaptive immune responses and enhance the synergistic crosstalk between the two immune systems, IMM4701 demonstrates potent synergistic effects. Our preclinical studies revealed strong and robust antitumor activities of IMM4701 against solid tumors. As shown in the diagram below, under MCF-7 xenograft TNBC model in SCID mice, IMM4701 resulted in reduced tumor size and exhibited strong potency at a low dose of 3 mg/kg (~0.3 mg/kg human equivalent dose). Efficacy Study in Triple-negative Breast Cancer (MCF-7) Xenograft Mouse Model DPBS, IP, BIW×4W, n=8 IMM4701C, 3 mg/kg, IP, BIW×4W, n=8 IMM47C, 2.5 mg/kg, IP, BIW×4W, n=8 IMM01, 2.5 mg/kg, IP, BIW×4W, n=8 IMM4701H, 3 mg/kg, IP, BIW×4W, n=8 IMM47C+IMM01, 2.5+2.5 mg/kg, IP+IP, BIW×4W+BIW×4W, n=8 TGI = 17.2% TGI = 37.3% TGI = 92.2% TGI = 112.1% TGI = 122.3% Days After the Strat of Treatment 0 7 14 21 28 35 0 200 400 600 800 1000 1200Tumor Size (mm3) Note: IMM47 revealed highly similar in vitro efficacy as IMM47C (a previous chimeric version of IMM47) and IMM47H (a previous fully humanized version of IMM47), and was eventually selected for the further development. IMM4701, IMM4701C and IMM4701H were developed based on IMM47, IMM47C and IMM47H, respectively. Source: Company Data BUSINESS – 301 – --- page 311 --- As discussed above, CD24-targeted molecules present strong potential in treating a wide range of cancer indications. Currently, our IMM4701 is the only reported CD24-targeted bispecific molecule under development for tumor treatment worldwide, which demonstrates the global first-in-class potential. In addition, leveraging the synergistic effects between innate and adaptive immunity, IMM4701 could also be a promising combination partner with PD-1/PD-L1 inhibitors. WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM4701 SUCCESSFULLY. IMM51 (IL-8 mAb) We are developing IMM51, a monoclonal antibody that targets IL-8, for the treatment of solid tumors. IL-8 is a chemokine that mediates the inflammatory process and functions as a significant regulatory factor within the TME. A high level of IL-8 expression correlates with poor prognosis and short survival time of cancer patients. Given the effects of IL-8 signaling on a variety of effectors and downstream targets, suppressing IL-8 signaling may be an effective therapeutic intervention in targeting the TME. By blocking IL-8, IMM51 can potentially suppress tumor progression and metastasis, and sensitize cancer cells to PD-1/PD-L1 inhibition and other treatments. According to Frost & Sullivan, currently there is only one clinical-stage molecule targeting IL-8 worldwide, that is BMS-986253 being evaluated in a Phase I/II trial. We are evaluating the toxicity and pharmacological effects of IMM51 in a number of in vitro and in vivo preclinical studies. Our in vitro studies have demonstrated IMM51’s favorable binding activity and affinity, as well as its strong capability of blocking the binding of IL-8 with CXCR1 and CXCR2 receptors. We plan to continue to conduct preclinical studies to further evaluate IMM51, including in vivo studies. WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM51 SUCCESSFULLY. OUR ADAPTIVE IMMUNE CHECKPOINT-TARGETED CANDIDATES We have also established a strong pipeline of multiple adaptive immune checkpoint-targeted drug candidates to capture the promising worldwide market opportunities for immunotherapies targeting adaptive immune checkpoints. These drug candidates have also shown significant promise when used in combination with our innate immune drug candidates. Our adaptive immune checkpoint-targeted candidates mainly include: (i) IMM2510 (VEGF×PD-L1), (ii) IMM27M (CTLA-4 mAb with enhanced ADCC activity), (iii) IMM40H (CD70 mAb), and (iv) multiple drug candidates in the discovery and preclinical stage, including IMM2518, a second-generation VEGF×PD-L1 bispecific molecule. IMM2510 (VEGF×PD-L1) IMM2510 is a bispecific molecule with the mAb-Trap structure that targets VEGF and PD-L1 for the treatment of solid tumors. Drugs targeting VEGF and PD-L1, which are clinically validated targets, have demonstrated potent synergistic effects when used in combination. By targeting VEGF and PD-L1, IMM2510 is able to activate T-cell tumor killing activities and simultaneously inhibit tumor angiogenesis and tumor growth. Moreover, IMM2510 can also activate NK cells and macrophages through Fc-mediated ADCC/ADCP activities. With respect to IMM2510, we owned one patent family, which includes one issued patent in the U.S., one issued patent in Japan, one issued patent in the PRC, one pending patent application in each of the EU and the U.S., and one PCT patent application which has entered national phases, as of the Latest Practicable Date. BUSINESS – 302 – --- page 312 --- Mechanism of Action Tumor cells expressing PD-L1 can bind to PD-1 on the surface of T cells to evade T-cell attacks. PD-L1 antibodies could block the PD-1/PD-L1 pathway and thus activate T cells, which has demonstrated robust antitumor activities in a broad range of solid tumors. VEGF, as a dynamic angiogenic factor, is up-regulated in many tumor indications, which contributes to angiogenesis and tumor growth. Inhibiting VEGF can reduce VEGF-mediated tumor angiogenesis and inhibit immune suppression, thus promoting the activation of T-cell immune responses. The powerful synergistic effect between these two targets has been evidenced by anti-PD-1/PD-L1 and anti-VEGF combinations approved for an array of cancer indications, including RCC, NSCLC, HCC and CC. Anti-PD-1/PD-L1 and anti-VEGF combinations, such as TECENTRIQ ® (atezolizumab) and A V ASTIN ® (bevacizumab), are recommended as first-line treatment for late-stage HCC. We connect VEGFR1-D2 (the second extracellular domain of VEGFR1) to the N-terminal of the heavy chain of a PD-L1 antibody with an ADCC-enhanced IgG1 Fc fragment. Through ADCC-enhanced IgG1 Fc, IMM2510 can further activate NK cells and macrophages through strengthened Fc-mediated ADCC/ADCP activities to promote innate and subsequent adaptive immune responses. Market Opportunities and Competition We believe there is a significant market opportunity for IMM2510 as a bispecific molecule targeting PD-L1 and VEGF which combines multiple mechanisms. Currently, PD-1/PD-L1 inhibitors or VEGF blockers have been approved for many cancer indications, and the combination use of these two have also demonstrated robust efficacy in clinical settings for the treatment of a wide range of cancers, indicating huge market opportunities for our IMM2510. For example, PD-1/PD-L1 inhibitors have been approved in BC, HCC, RCC, GC, NSCLC, SCLC, and EC. VEGF blocking agents have been approved in CRC, HCC, NSCLC, GC, RCC, OC and CC. In comparison to the combination therapies, a well-designed bispecific molecule has a competitive edge due to the synergistic effects between the two targets and much lower costs when used as a single agent, having the potential to address the significant market opportunities. Please refer to “Industry Overview — Selected Indications Analysis” for more details on the incidence and prevalence of indications targeted by IMM2510 and the competitive landscape in China and oversea markets. Competitive Advantages According to Frost & Sullivan, there are currently four bispecific molecules simultaneously targeting VEGF and PD-L1 in the global pipeline, two of which have no active IgG1 Fc fragment with potent effector function. Through angiogenesis inhibition and T-cell activation, IMM2510 with ADCC-enhanced IgG1 Fc can modulate the TME and lead to substantially improved therapeutic efficacy. As illustrated by the below diagram, our in vivo efficacy studies showed that IMM2510 had a better efficacy profile than the VEGF or PD-L1 antibodies used as a single agent or in combination. In addition, compared to combination therapies, IMM2510 presents a tremendous competitive advantage with respect to affordability for patients. BUSINESS – 303 – --- page 313 --- Efficacy Study in Breast Cancer (MDA-MB-231-Luc) Xenograft Mouse Model DPBS, IP, BIW×4W, n=6 VEGFR1-Fc, 2 mg/kg, IP, BIW×4W, n=6 Atezolizumab, 6 mg/kg, IP, BIW×4W, n=6 IMM25, 6 mg/kg, IP, BIW×4W, n=6 IMM2510, 8 mg/kg, IP, BIW×4W, n=6 VEGFR1-Fc+IMM25, 2 mg/kg+6 mg/kg, IP+IP, BIW×4W+BIW×4W, n=6 Days After the Start of Treatment Tumor Size (mm3) 0 7 14 21 28 0 500 1000 1500 2000 2500 3000 3500 Source: Company Data The initial results of the Phase I clinical trial have revealed a promising efficacy signal. Our preliminary clinical data as of February 15, 2023 has demonstrated that IMM2510 was safe and tolerable up to 10.0 mg/kg in patients with advanced solid tumors, and we are currently evaluating patients for 10.0 mg/kg dose cohort. Among the two evaluable NSCLC patients in the trial so far, we have observed PRs in both patients with best tumor shrinkage response of 46% and 35% respectively. Dose escalation is still ongoing. Clinical Development Plan We commenced the Phase I dose-escalation trial for IMM2510 in China in August 2021 for the treatment of a variety of advanced solid tumors, including but not limited to, HCC, RCC, GC, NSCLC and STS. We expect to complete the Phase I clinical trial in the third quarter of 2023 and initiate the Phase II clinical trial in 2023 in China. Licenses, Rights and Obligations We are developing IMM2510 in-house and own the global rights to develop and commercialize IMM2510. Material Communications We had not received any regulatory agency’s concerns or objections to our clinical development plans as of the Latest Practicable Date. WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM2510 SUCCESSFULLY. IMM27M (CTLA-4 ADCC-enhanced mAb) IMM27M is a new generation CTLA-4 antibody with enhanced ADCC activity through genetic engineering modification. We have commenced the Phase I clinical trial targeting solid tumors, with the first patient dosed in June 2022. We expect to complete this trial in the third quarter of 2023. BUSINESS – 304 – --- page 314 --- As a protein receptor that can be found on the activated T cells, CTLA-4 can downregulate immune responses by binding to CD80/CD86, its natural ligands found on the surface of antigen presenting cells, delivering inhibitory signal and thus suppressing T-cell immune function. CTLA-4 antibodies can block the interaction between CTLA-4 and CD80/CD86, and thus enhance immune responses of T cells to tumor antigens. Though CTLA-4 is a clinically validated target, so far there is only one approved product globally. Recent studies on CTLA-4 have further revealed that its key mechanism for tumor suppression is T reg depletion. CTLA-4 antibodies deplete T reg cells in the TME, inducing immune attacks against tumor cells. The currently approved CTLA-4 antibody with unmodified Fc shows limited efficacy, thus requiring a high dosage to achieve desirable efficacy which leads to serious safety issues. We thus designed IMM27M with enhanced ADCC modification through genetic engineering. With augmented ADCC activities, IMM27M is able to induce enhanced immune responses targeting CTLA-4 overexpressed T reg cells and promote T reg depletion, thus improving T-cell antitumor response to kill tumor cells. As expected, our in vivo efficacy studies demonstrated that IMM27M could induce a significantly stronger antitumor activity than ipilimumab and result in complete tumor remission even at a dose as low as 0.3 mg/kg (~0.03 mg/kg human equivalent dose), as illustrated in the diagrams below: Efficacy Study in Colon Cancer (MC38) Syngeneic Mouse Model 2000 1000 0 3000Tumor Volume (mm3) G1: PBS, QW×4 doses, i.p. G3: IMM27M, 0.3 mpk, QW×4 doses, i.p. Days Post Treatment (d) Days Post Treatment (d) G2: Ipilimumab, 0.3 mpk, QW×4 doses, i.p. Tumor Volume (mm3) 2000 1000 0 3000 2000 1000 0 3000 0 10 20 30 0 10 20 30 Tumor Volume (mm3) 0 10 20 30 Days Post Treatment (d) CR=30.0% CR=90.0% Notes: (1) Ten mice per group were used in this study. (2) The colors of lines represent different groups using different drugs or drug candidates. Source: Company Data We have commenced the Phase I clinical trial targeting solid tumors, with the first patient dosed in June 2022. We had enrolled 15 patients as of February 10, 2023, and we are currently enrolling patients for the sixth cohort of 5.0 mg/kg. The preliminary data demonstrates that IMM27M is safe and well tolerated up to 3.0 mg/kg. We have observed 4 SDs in this trial so far, among whom one patient with breast carcinoma who had six lines of prior treatment has achieved SD with tumor shrinkage of 28.8% at 3.0 mg/kg, and one patient with metastatic melanoma has achieved SD with tumor shrinkage of 22.9% at 2.0 mg/kg. We expect to complete this trial in the third quarter of 2023. In addition to its strong efficacy as a monotherapy, IMM27M could be used in combination with PD-1 antibodies targeting a wide range of solid tumor indications, as IMM27M could promote T reg depletion and T-cell activation, inducing overall immune responses to fight tumor cells. Moreover, we received an IND approval from the NMPA for a Phase Ib/II study to evaluate the combination of IMM27M and a PD-1 antibody for the treatment of advanced solid tumors, such as RCC, NSCLC, GC and TC, in March 2023. We may initiate clinical trials or explore collaboration opportunities for this combination therapy. Please refer to “Industry Overview — Selected Indications Analysis” for more details on the incidence and prevalence of indications targeted by IMM27M and the competitive landscape in China and oversea markets. BUSINESS – 305 – --- page 315 --- WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM27M SUCCESSFULLY. IMM40H (CD70 mAb) IMM40H is a humanized IgG1 CD70 monoclonal antibody, which demonstrates robust tumor-killing properties and strong synergy when combined with IMM01. CD70 could be targeted for the treatment of liquid and solid tumors. We have obtained IND approvals for IMM40H from the NMPA and the FDA in August 2022, and may initiate Phase I clinical studies or pursue potential collaboration opportunities. We are one of the first few companies to develop molecules targeting CD70 globally. With respect to IMM40H, we owned one patent family, which includes one issued patent in the U.S., one issued patent in the PRC, one allowed patent application in Japan, one pending patent application in the EU, and one pending PCT patent application which may enter various contracting states in the future, as of the Latest Practicable Date. A significant level of CD70 can be detected in various types of tumor tissues and CD27 is expressed on T reg cells. The interaction between CD70 and CD27 can stimulate the proliferation and survival of cancer cells and increase the level of soluble CD27, which is associated with a low survival rate in patients with lymphoma and certain solid tumors. IMM40H can bind with CD70 on tumor tissues and obstruct the activation and proliferation of T reg cells through the inhibition of CD70-CD27 signaling. As evidenced by in vitro cell-based assay, IMM40H has shown a much stronger CD70-binding affinity than cusatuzumab (a CD70-targeted antibody developed by Argenx and currently in Phase II stage), which allows IMM40H to block the interaction of CD70 and CD27 more effectively. Moreover, IMM40H has also demonstrated potent ADCC, CDC and ADCP activity, resulting in strong immune attacks on tumor cells and potentially potent therapeutic efficacy. Our preclinical data also suggests a favorable safety profile of IMM40H. According to Frost & Sullivan, CD70 could potentially be an effective therapeutic target for the treatment of CD70-positive tumors, including CD70-positive lymphoma, RCC, NSCLC, HNSCC and OC. IMM40H has exhibited strong antitumor activity in our preclinical studies. Additionally, strong synergism between IMM01 and IMM40H has been observed in vivo . As shown in the diagram below, the combination therapy of IMM01 and IMM40H has demonstrated strong treatment efficacy: Efficacy Study in Lymphoma (Raji) Orthotopic Mouse Model Group 1 PBS IV BIW×3weeks Group 2 IMM01 0.3mg/kg IV BIW×3weeks Group 3 IMM40H 1mg/kg IV BIW×3weeks Group 4 IMM40H 3mg/kg IV BIW×3weeks Group 5 IMM40H 10mg/kg IV BIW×3weeks Group 6 IMM4002 3.6mg/kg IV BIW×3Weeks Group 7 IMM4003 3.6mg/kg IV BIW×3weeks Group 8 IMM01 0.3mg/kg IV + IMM40H 3mg/kg IV BIW × 3weeks Days Elapsed Percent Survival (%) 100 50 0 0 50 100 150 Note: Eight mice per group were used in this study. Source: Company Data BUSINESS – 306 – --- page 316 --- WE MAY NOT BE ABLE TO ULTIMATELY DEVELOP AND MARKET IMM40H SUCCESSFULLY. OUR PLATFORM We have established an integrated platform encompassing three main functions: (i) drug discovery and preclinical development, (ii) CMC and pilot manufacturing, and (iii) clinical development. Leveraging the collaboration among different functional groups, our platform empowers us with robust research and development capabilities, allowing us to efficiently discover and advance the development of immunotherapies towards commercialization. As a result, we have constructed a comprehensive pipeline consisting of 14 drug candidates targeting both innate and adaptive immune systems, with eight ongoing clinical programs. Drug Discovery and Preclinical Development Led by Dr. Tian and Mr. Song Li, our dedicated drug discovery team consisted of 17 experienced and capable members as of the Latest Practicable Date. This team is responsible for, among others, target screening, molecule (including bispecific molecule) design, optimization, validation and development, cell-line development, and lab scale test process development. Dr. Tian and Dr. Deqiang Jing are the inventors of IMM01, our Core Product. Guided by Dr. Tian, and with joint efforts of other members of our drug discovery team, Mr. Song Li (vice president of research and development), Mr. Ruliang Zhang (deputy general manager and senior vice president), Ms. Wei Zhang (director of up-stream processing), Mr. Xiaoping Tu (director of downstream processing), Ms. Li Zhang (director of quality control), Ms. Fengli Huang (director of quality assurance) and Mr. Dianze Chen (assistant director of research and development), further conducted the preclinical development of IMM01. Among these key drug discovery team members, five hold doctorate or master’s degree, and four have been working with Dr. Tian for close to 10 years. They collectively offer extensive expertise in various areas, including target identification, bioassay, process development, as well as quality control and assurance. Dr. Tian and Mr. Song Li are the inventors of all of our key products, IMM0306, IMM2902 and IMM2520, and are also responsible for the preclinical development of those drug candidates together with Mr. Ruliang Zhang, Ms. Wei Zhang, Mr. Xiaoping Tu, Ms. Li Zhang, Ms. Fengli Huang, Mr. Dianze Chen and other members of our drug discovery team. Our drug discovery and preclinical platform includes advanced hybridoma technology, high-throughput screening, strong immunoassay and bioassay technology, and a proprietary bispecific mAb-Trap platform. These integrated platforms allow us to efficiently conduct screening for lead compounds and druggability analysis. Our established preclinical development function enables us to perform studies concerning proof-of-concept in vivo efficacy, preclinical PK and pharmacodynamic (PD), and toxicity in animals. Leveraging our drug discovery and preclinical development capabilities, we are developing 14 drug candidates at various stages. These in-house developed drug candidates all have the potential to be either first-in-class or best-in-class drugs if successfully advanced to the market:  mAb-Trap bispecific platform: Guided by our insights in tumor biology and immunology and our “DbD” concept, we have built the mAb-Trap bispecific platform, which is best suited for the targets we have selected, to effectively facilitate our science-driven drug design and development. Leveraging this mAb-Trap platform, we have constructed a number of bispecific molecules and four of them (i.e., IMM0306, IMM2902, IMM2510 and IMM2520) have entered into clinical development stage. The bispecific molecules developed based on this platform have a symmetric structure, akin to that of native antibodies, allowing for ease of manufacturing, product stability, higher titer and protein yield. This structure makes the CMC process and production by standard antibody BUSINESS – 307 – --- page 317 --- manufacturing techniques more feasible. The average protein yield for IMM0306, IMM2902, and IMM2520 ranges from 3.8g/L to 4.6g/L, much higher than the industry average for bispecific molecules of 1.0g/L to 3.0g/L.  hybridoma technology: With proprietary hybridoma technology and know-how, we can effectively accomplish the immunization of mice with particular target antigens and efficiently identify and optimize antibody fragments with higher specificity, affinity and other required properties for respective targets. We are currently using this hybridoma technology to screen therapeutic monoclonal antibodies for several new targets, for which no drug has yet been approved globally;  high-throughput screening: Utilizing our high-throughput screening technology, we have identified molecules that have desirable characteristics for further cost-efficient development. This allows us to rapidly advance our assets to the preclinical and clinical evaluation stage and accelerate the drug development process. IMM40H and IMM47 are two excellent examples of using our hybridoma technology and high-throughput screening for antibody drug development;  immunoassay and bioassay technology: Our well-established comprehensive immunoassay and bioassay technology includes, among others, an assay of ADCC, CDC, and ADCP, Jurkat-CVR (Chimeric VEGF Receptor) cell line used for bioassay of VEGF/VEGFR-targeted drug development, Jurkat-CPR (Chimeric PD-1 Receptor) cell line used for bioassay of PD-1/PD-L1 antibody drug development, and Jurkat-CSR (Chimeric SIRP α Receptor) cell line used for bioassay of CD47/SIRP α targeted drug development, immunoassay of receptor occupancy, cytokine release assay, antibody-induced receptor internalization and signal transduction assay. These in-house developed technologies allow us to screen drug candidates effectively and precisely. CMC and Pilot Manufacturing Our CMC and regulatory affairs team, consisting of 45 members as of the Latest Practicable Date, is responsible for, among other relevant functions, cell line development, upstream and downstream process development, formulation development, analytical method development and validation, and pilot manufacturing. For cell line development, we developed a CHO-K1 host cell line with glutamine synthetase gene knocked out via gene editing. The resulting host cell line, named CHOK1-GSKO, has passed the inspections and audits by qualified third parties, was certified to be compliant with GMP standards, and has been validated for use in multiple clinical programs. We have also developed and optimized the cell line screening techniques which significantly help shorten the time for the development of stable expression cell lines with much higher titers. We have established substantial pilot manufacturing capabilities with a total production capacity of 450L. The annual production capacity of the pilot facility is up to fifteen IND or clinical batches (200L / 250L per batch), depending on the drug candidates produced. With our GE and Thermo Fisher single-use mammalian cell bioreactors, AKTA TM Process protein chromatography purification system, quality analysis platform and quality assurance system in accordance with GMP requirements, we are able to manufacture drug candidates in-house in an efficient and cost-effective manner. Our pilot manufacturing facilities have operated at approximately 100% utilization rate since 2021, successfully supporting various preclinical studies, IND applications and early-stage clinical trials of some of our drug candidates. BUSINESS – 308 – --- page 318 --- However, the scale of our pilot production lines is insufficient to meet the demand for commercial sales of our drug candidates in the near future. Considering the strategic benefits of owning self-sufficient manufacturing facilities, we intend to expand our GMP-compliant manufacturing capacity to conduct commercial-scale manufacturing of our future drug products, aiming for improved efficiency and cost-effectiveness. We have already commenced the construction of our new manufacturing facility occupying a site area of approximately 28.7 thousand square meters in Zhangjiang Science City, Pudong New Area of Shanghai, which is designed to meet the stringent cGMP standards. We plan to complete the first stage of construction by 2025, following which our facility will be capable of a 4,000L manufacturing capacity. Our first stage manufacturing facilities were designed to enable an annual production capacity of up to fifteen batches (4,000L per batch). We plan to commence the second stage of construction depending on the schedule of regulatory approval and sales ramp-up of our drug portfolio in the future. The new manufacturing facility is expected to include pilot production lines and will thus replace the existing pilot manufacturing facility. The current pilot manufacturing equipment will be relocated into our new facility. We currently also collaborate with CMOs/CDMOs for the manufacturing of a portion of our drug candidates for preclinical studies and clinical trials. We have adopted procedures to ensure that production qualifications, facilities and processes of CMOs/CDMOs comply with the relevant regulatory requirements and our internal guidelines. We selected our CMOs/CDMOs by carefully reviewing and considering various factors, including their qualifications, expertise, production capacity, geographic proximity, reputation and costs. In accordance with the Administrative Measures for Drug Registration and relevant guidelines and aligned with established market practice, it is critical that the production process (including the production facility) used for biologics in Phase III or pivotal clinical trials remains consistent with the one to be utilized for future commercial manufacturing. To ensure the production process consistency, we will collaborate with reputable CMOs/CDMOs to manufacture certain drug candidates for pivotal clinical trials, followed by initial commercialization. Once our own manufacturing facility construction is completed, we plan to transfer the production process of future commercialized products to this facility to enhance cost-effectiveness. Clinical Development Our clinical development function is responsible for clinical trial design and implementation, as well as translational medicine. We also engage CROs and consultants in China and the U.S. to support our clinical trials. We have established long-standing partnerships with hospitals and principal investigators throughout China and the U.S., which enables us to conduct multiple large-scale clinical trials. In addition, our medical function allows us to analyze preclinical and clinical data to guide our clinical strategy, as well as the design and timely adjustments of clinical development plans. As of the Latest Practicable Date, our clinical development team was comprised of 50 members, among whom 12 hold doctorate degrees or are medical doctors and 19 hold master’s degrees. This team is led by Dr. Qiying Lu, who has around 20 years of experience in clinical practice and oncology drug development with multinational pharmaceutical companies and biotechnology companies, including GlaxoSmithKline, AstraZeneca, and Pfizer, and Dr. Frank Xiaodong Gan, who brings us over 25 years of experience in preclinical and clinical development in academia and the biopharmaceutical industry and had led numerous global clinical development of various drug candidates for multinational pharmaceutical companies, including Merck & Co., Bristol Myers Squibb, Eli Lilly and Janssen. During the Track Record Period, the operation of our clinical programs had been directly managed and driven by our clinical operation directors, supported by our project manager and clinical research associates for each clinical program. We also have a dedicated clinical medical team in charge for formulating trial protocol, reviewing clinical data, as well as adjusting and adapting clinical development plan in a timely manner based BUSINESS – 309 – --- page 319 --- on signals and data observed in clinical trials. The clinical operation directors and clinical medical team collectively reported to the vice president of clinical research, prior to the joining of Dr. Lu. Before Dr. Lu joined us, we had completed the Phase I trial of IMM01 monotherapy, and we were continuously advancing a number of clinical trials of our drug candidates in China, including the Phase Ib/II trial of IMM01 in combination with azacitidine, the Phase I trial of IMM0306, the Phase I trial of IMM2902, and the Phase I trial of IMM2510. The leadership of Dr. Lu and Dr. Gan further strengthen the capabilities of our clinical development function, propelling multiple drug candidates into next clinical stage in China and/or the U.S., including the Phase II trial of IMM01 in combination with azacitidine, the Phase Ib/II trial of IMM01 in combination with tislelizumab, the Phase I trial of IMM2902 in the U.S., and the Phase I trials of IMM27M and IMM2520, and the Phase II trial of IMM0306. The leadership team of our clinical development department is generally responsible for the formulation of the clinical strategy and supervision of overall clinical development of our Core Product and Key Products, and our clinical operation directors are responsible for carrying out the execution of respective clinical programs of our drug candidates. Our strong clinical development team is extensively involved in substantially all stages of our clinical trials, including trial protocol design, selection of investigators and sites, and management of our clinical trial programs. We design protocols and clinical trials in-house to maintain clinical operational excellence. We utilize adaptive clinical trial design to achieve efficiency in drug development processes and potentially accelerate approvals for our drug candidates. Leveraging extensive knowledge and experience in managing clinical trials, our clinical development experts are particularly good at identifying unique therapeutic opportunities for our drug candidates based on the differentiating properties observed in the trials and improving their clinical plans accordingly. We employ in-house medical research team to monitor treatment response in clinical trials, analyze clinical results, timely adapt clinical trial designs, and potentially discover predictive biomarkers to guide the design and execution of clinical studies. Our medical function allows us to validate mechanisms of action and drug resistance mechanisms, increasing the success rate of our clinical trials. As is customary in the pharmaceutical industry, we use CROs to conduct and support our preclinical studies and clinical trials under our close supervision and overall management. We have selected CROs weighing various factors, such as their qualifications, expertise, experience, reputation and costs. Our cooperative relationship with CROs is based on specific projects. The preclinical CROs generally provide services related to preclinical toxicity and safety evaluations (such as animal studies), and in vivo pharmacology and PK studies under our study design. The clinical CROs mainly provide us with assistance in our conduct of clinical trials, including trial preparation, clinical monitoring, medical monitoring, and project management. We have exploited the CROs’ professional expertise to facilitate optimal site selection, timely patient recruitment and efficient conduct of complex clinical trials. We carefully supervise the CROs to ensure that they perform their duties in a manner that complies with our protocols and applicable laws and protects the data integrity. BUSINESS – 310 – --- page 320 --- Below is a summary of the key terms of an agreement we typically enter into with our CROs:  Services. The CRO provides the high-quality services to us, including the implementation and management of a preclinical or clinical research project as specified in the agreement.  Term. The CRO is required to perform its services and complete the preclinical or clinical research project within the prescribed time limit set out in each agreement.  Payments. We are required to make payments to the CRO in accordance with the payment schedule agreed by the parties.  Intellectual property rights. We own all intellectual property rights arising from the preclinical or clinical research project.  Risk allocation. Each party should indemnify the other party for losses caused by its fault or gross negligence. COMMERCIALIZATION As of the Latest Practicable Date, we did not have our internal sales and marketing team. We plan to recruit capable marketing professionals and develop our capabilities of commercialization. As our current pipeline of drug candidates comes to the market, we will build up our commercialization and distribution capabilities as well as seek commercialization partnerships with other pharmaceutical industry players to maximize the reach of our product offering and expedite market acceptance of our products. We are in the process of executing our launch readiness plan, formulating our sales and marketing plans, and exploring commercialization partnerships in anticipation of multiple potential drug launches within the next few years. We expect to work on getting our products into the National Reimbursement Drug List (NRDL) in China and the commercial insurance catalogue in the overseas markets. To unleash the market potential of our products, we will actively prepare and participate in the price negotiation with the regulators for their inclusion in the NRDL in China, upon obtaining marketing approval. We will also seek inclusion of our products in commercial insurance catalogue overseas through potential commercialization partners in the global market to further increase their accessibility. COLLABORATION AGREEMENT Collaboration with Sunshine Guojian On January 18, 2021, we entered into a joint drug development collaboration agreement with Sunshine Guojian, an innovative biopharmaceutical company in China. Pursuant to this agreement, the parties will collaborate to conduct clinical studies to evaluate the combination therapy of a HER2 monoclonal antibody inetetamab and IMM01 for the treatment of HER2-positive solid tumors in mainland China (excluding Hong Kong, Macau and Taiwan). Given the preclinical effects of the combination of CD47 and HER2 targeted therapies, this collaboration allows us to further expand IMM01’s market in a cost-efficient manner by leveraging the funds and resources of Sunshine Guojian. During the Track Record Period and up to the Latest Practical Date, except as disclosed in the paragraphs headed “Directors, Supervisors and Senior Management” in the Prospectus and a limited amount of CDMO services 1 provided by Sunshine Guojian, there were Note: (1) In each period of the Track Record Period, our purchases of the CDMO services provided by Sunshine Guojian accounted for nil, 18.9% and 22.8% of the Company’s total CDMO service purchase amount. BUSINESS –3 1 1– --- page 321 --- not any past or present relationships or dealings (including family, business, employment, trust, financing or otherwise) between the Company and Sunshine Guojian, their respective substantial shareholders, directors or senior management, or any of their respective associates. Pursuant to the agreement, Sunshine Guojian is responsible for the design of the clinical study protocol, coordination with the CROs and regulatory filings related to each phase of clinical studies. Sunshine Guojian is entitled to determine potential indications for the clinical development of this combination therapy. During the term of this agreement, we will not conduct, or supply drugs for, any clinical study of IMM01 in combination with other HER2 antibodies for the indications selected by Sunshine Guojian in mainland China, unless the collaborated clinical studies of this combination therapy for such selected indication fail. Sunshine Guojian has final decision-making authority with respect to all material matters in relation to the clinical studies, including but not limited to, the preparation and modification of the clinical trial protocols, of this combination therapy for selected indications. Each party will supply its product for the purpose of clinical studies at its own cost. All costs incurred in the clinical studies in mainland China will be borne by Sunshine Guojian, except for certain costs to be borne by us as provided in the agreement, which include the cost of supplying IMM01, the costs of assigning our own representatives to participate in the clinical development and regulatory communications, and providing related technology support. Upon Sunshine Guojian’s request, we may execute clinical studies evaluating this combination therapy with the costs and expenses borne by Sunshine Guojian. Each party retains ownership of intellectual property rights in its own product. Any new data generated and intellectual property rights (including patents) arising from collaborated clinical studies will be jointly owned by both parties, and can be used free of charge in manufacturing and commercialization activities of each party. If we, for the purpose of implementing this collaboration program, grant licenses for the use of such new data and intellectual property rights arising from collaborated clinical studies to third parties, we will notify Sunshine Guojian in writing and pay 70% of our gains from the relevant licensing arrangement to Sunshine Guojian, since both parties agree that it is commercially reasonable for Sunshine Guojian to enjoy the majority of fees from the licensing arrangement to the extent related to data and IP generated from the collaborated clinical trials as Sunshine Guojian carries the burden of financing those clinical trials. No explicit arrangement was provided in this agreement for resolving deadlock of IP rights arising from the collaborated clinical studies. In limited scenarios, certain provisions of the PRC laws and regulations related to intellectual properties, especially the PRC Patent Law, can be invoked to determine rights and obligations. For the other issues that remain unresolved through negotiation, Sunshine Guojian and us may resort to the dispute resolution clause in this agreement. We retain full rights to commercialize IMM01 worldwide. Except for the aforementioned costs and fees arrangements, there are no upfront, milestone or other payment arrangements under this agreement. This agreement, unless terminated earlier, will continue until the completion of the clinical studies for this combination therapy. This agreement can be terminated upon (i) mutual consent, or (ii) written notice by either party in the event of the other party’s uncured breach. With respect to any dispute that cannot be resolved by negotiation, either party can submit such dispute to binding and final arbitration. This agreement was negotiated and approved on an arm’s length basis and determined based on normal and fair commercial terms considering the therapeutic potential of this combination therapy, the uniqueness of IMM01 and the potential economic gain for each party. BUSINESS – 312 – --- page 322 --- Collaboration with SunHo In October 2019, we entered into a technology transfer agreement with SunHo, with respect to the technology transfer, development, manufacture and commercialization of IMM2505. SunHo is a clinical-stage biotech company in China. During the Track Record Period and up to the Latest Practicable Date, SunHo was an Independent Third Party. Pursuant to this agreement, we transferred to SunHo (i) all of our rights and interests, including but not limited to development, manufacture, regulatory filings, and commercialization, in relation to IMM2505 in mainland China, Hong Kong, Macau and Taiwan (the “ Territory ”); (ii) all related patents, if applicable, registered in the Territory; and (iii) all technical data and analytical methods relating to the development of IMM2505. We granted SunHo a single-digit percentage of interest in the overseas rights of IMM2505. In exchange of their rights, SunHo is obligated to pay RMB20.0 million assignment fee by installments. As of the Latest Practicable Date, the rights and interests of IMM2505 as well as the related documents and materials had been duly transferred to SunHo and we had received an assignment fee of RMB10.0 million. The remaining RMB10.0 million will be payable upon SunHo’s obtainment of the marketing approval of IMM2505 from the NMPA. In addition, we are entitled to single digit percentage royalties based on the annual net sales of IMM2505 in the Territory until the earlier of the tenth year after the initial launch of IMM2505 or the expiration of the patents of IMM2505 molecule sequences. As of the Latest Practicable Date, SunHo did not make or owe any royalties to us. This agreement shall remain effective from execution until termination or expiration of the agreement. Either party may terminate this agreement if the other party is in breach of its obligations under the agreement, and fails to take rectification measures after the non-breaching party gives a 30 days’ written notice. This agreement can also be terminated upon mutual consent if IMM2505 fails to obtain IND approval or reach the clinical endpoint due to reasons related to druggability. In addition, in the occurrence of pre-specified safety issues resulting in the aforementioned failure of IMM2505, SunHo is entitled to a 50% payment return and we are entitled to restitutions of the transferred rights and interests of IMM2505 upon the termination of this agreement. The termination or expiration of this agreement shall not release either party from any obligations or liabilities that have arisen under this agreement prior to such termination or expiration, nor shall it prevent either party from asserting any rights and remedies that it may have under this agreement or at law. INTELLECTUAL PROPERTY Our intellectual property is an important component of our business. We rely on a combination of patent and other intellectual property, as well as confidentiality procedures, non-disclosure agreements, employee non-disclosure and invention assignment agreements, and other contractual restrictions to establish and protect our commercially important technologies, inventions and know-how related to our business. While we believe our intellectual property rights and applications in the aggregate are important to our competitive position, no single intellectual property right or application is material to our business as a whole. As of the Latest Practicable Date, we owned (i) nine issued patents in the PRC, (ii) eight issued patents in the U.S., (iii) eleven issued patents and two allowed patent applications in other jurisdictions, (iv) 16 pending patent applications, including two pending PRC patent applications, one pending Hong Kong patent application, six pending U.S. patent applications, and seven pending patent applications in other jurisdictions; (v) one PRC patent application and one PCT patent application which were filed as priority applications; and (vi) five pending PCT patent applications which may enter various contracting states in the future. As reviewed and advised by our legal advisor as to intellectual property laws, material aspects (e.g. constructs, sequences or indications under development) of the Company’s Core Product and Key Products can be covered by certain granted patents or pending patent applications in the PRC and the U.S. Furthermore, the Company has pending patent applications in the PRC and the U.S. to cover material aspects (e.g. constructs, sequences or indications under development) of relevant drug candidates. Please refer BUSINESS – 313 – --- page 323 --- to the paragraphs headed “Statutory and General Information — Further Information about the Business of our Company — Our Material Intellectual Property Rights” in Appendix IV to this document for further information of our material intellectual property rights. The following table sets forth the portfolio of patents and patent applications material to our business operations as of the Latest Practicable Date (for each drug candidate, all the counterparts in its related patent family are set forth in the following table): Drug Candidate Title of Invention Application Number Application Date(1) Inventors Jurisdiction Status (2) Grant Date Estimated Expiration Date IMM01 (SIRP α-Fc) Novel Recombinant Bi-functional Fusion Proteins, Preparation and Use Thereof (SIRP αD1-Fc) 201510203619.7 April 24, 2015 Lijuan Liu, Deqiang Jing, Hua Wang(3) PRC Granted January 15, 2019 April 24, 2035 16/905,262 November 16, 2015 Wenzhi Tian, Deqiang Jing U.S. Pending N/A N/A 15/566,724 November 16, 2015 U.S.(4) Granted October 13, 2020 April 14, 2036 18/361,005 November 16, 2015 U.S. Pending N/A N/A 2017-552177 November 16, 2015 Japan Granted March 27, 2020 November 16, 2035 PCT/CN2015/094739 November 16, 2015 PCT Entered national phase N/A N/A 15889744.7 November 16, 2015 EU Granted July 12, 2023 November 16, 2035 Notes: (1) “Application Date” in this table refers to the actual filing date of the PCT application or the first filing date of the non-provisional applications of the patent family which would be the starting date for the purpose of calculating patent term for the resulting patents. As to the patent family relating to IMM01, “Application Date” of the U.S., EU and Japanese counterparts denotes the actual filing date of the PCT application in this patent family, which is typically earlier than the actual submission date of each counterpart application in respective jurisdictions and its substantive examination; (2) “Entered national phase” denotes the status of a PCT patent application that has entered the process whereby an applicant files one or more patent applications in one or more individual jurisdictions or countries of interest. (3) Our IMM01 was discovered, designed and developed by Dr. Deqiang Jing and Dr. Wenzhi Tian, both of whom are currently key R&D personnel of the Company, when Dr. Jing was a consultant at Shanghai Hanyu Biopharmaceuticals Co., Ltd (ʮ̡ ,“ Hanyu ”) and Dr. Tian worked at Huabo Biopharm (Shanghai) Co., Ltd. (ᔼᖹҦஔ (ɪऎ)ʮ̡,“ Huabo Biopharm ”), respectively in 2014. Dr. Jing, our senior director in the clinical department, was engaged as a consultant by Hanyu in February 2014. Dr. Tian co-founded Huabo Biopharm and served as its general manager from June 2011 to April 2015. For the purpose of developing the product, Hanyu entered into a technology development agreement with Huabo Biopharm in March 2014, under which Huabo Biopharm was engaged to provide CRO-like technical service for the production of two recombinant proteins, HY03M and HY03MM (which are described in the IMM01 patent family), by using the target gene DNA provided by Hanyu, and Hanyu was required to pay a service fee to Huabo Biopharm. As a result, all the products of the CRO-like technical service along with their legal rights shall belong to Hanyu. During the discovery process, Dr. Jing made substantive contributions to, among others, the structure and sequence designs, biological activity analysis, and animal studies of the IMM01 molecule and Dr. Tian made substantive contributions to the related inventions of IMM01 patent family by, among others, providing suggestions on the sequence, vector construction, protein expression, and bio-assay analysis. Subsequently, Hanyu filed a Chinese patent application No. 201510203619.7 in relation to the target molecule (which was later developed to IMM01) on April 24, 2015. In August 2015, the Company entered into a patent application assignment agreement with Hanyu, pursuant to which all rights in this Chinese patent application and the inventions disclosed therein were transferred from Hanyu to the Company. After the assignment, the Company has obtained the issued Chinese patent as the sole owner and the right to file the patent and patent applications in relation to IMM01 in other jurisdictions as the sole applicant. The Company obtained the full rights to IMM01 based on the assignment agreement, and Hanyu does not retain any rights to IMM01 according to this assignment agreement, as confirmed by the IP legal advisor. BUSINESS – 314 – --- page 324 --- Hanyu was established in Shanghai on February 13, 2014. According to public information, Hanyu had registered capital of RMB0.2 million and fewer than ten employees in 2014. Hanyu operated as a start-up biotechnology company before it was deregistered on July 21, 2020. Before deregistration, Hanyu was owned by Lijuan Liu and Hua Wang, who are both independent third parties, with Lijuan Liu serving as the sole director of Hanyu. After deregistration, it no longer exists as a legal entity. Huabo Biopharm was established in Shanghai in June 2011. According to public information, Huabo Biopharm has registered capital of RMB80 million and between 50 to 99 employees, and it operates as a biotechnology company with multiple clinical-stage assets in the fields of oncology, autoimmune and ophthalmic. Huabo Biopharm is a wholly-owned subsidiary of Shanghai Hua’aotai Pharmaceutical Co., Ltd., which is in turn a subsidiary of Zhejiang Huahai Pharmaceutical Co., Ltd. (SH stock exchange: 600521) (“ Huahai Pharmaceutical ”). Mr. Song Li (vice president of research and development), Mr. Ruliang Zhang (deputy general manager and senior vice president), and Mr. Zimeng Zhao (supervisor) used to work at Huabo Biopharm. For more details, please refer to “Directors, Supervisors and Senior Management”. They have no connection or association with Huabo Biopharm or Huahai Pharmaceutical since their departure. Each of Mr. Song Li and Mr. Ruliang Zhang was granted a small amount of stock options by Huahai Biopharmaceutical in 2015, but they did not exercise those options thus hold no shares or interests in Huabo Biopharm or Huahai Pharmaceutical. Save for the aforementioned employment relationships, during the Track Record Period and up to the Latest Practicable Date, there were not any material past or present relationships or dealings (including family, business, employment, trust, financing or otherwise) between us and Hanyu, Huabo Biopharm, Hanyu and Huabo Biopharm’s respective shareholders, directors or senior management, or any of their respective associates. The initial Chinese patent application filed by Hanyu listed Lijuan Liu, Dr. Deqiang Jing and Hua Wang as inventors. However, as confirmed by Hanyu in supplemental agreements dated August 31, 2015 to the assignment agreement, and confirmed in the interview with Dr. Tian, Dr. Jing and Lijuan Liu on November 11, 2022, only Dr. Tian and Dr. Jing are the inventors that made substantive contributions to the inventions of IMM01. Dr. Tian and Dr. Jing remained to be our key R&D personnel as of the Latest Practicable Date. Under the supplemental agreements, Hanyu also confirmed that the Company may list the correct inventors in the U.S. patents and patent applications as well as other foreign patents and patent applications in the patent family which were filed subsequently after the transfer of the patent rights. The Company did not correct the inventorship of the Chinese patent No. ZL201510203619.7 since the relevant patent application was already filed at the time of transfer. As advised by JunHe LLP, the PRC intellectual property legal advisor to the Company, the error in inventorship in this Chinese patent would not affect the ownership rights or validity of this Chinese patent since this Chinese patent has been granted and the error in inventorship does not form a legal ground to challenge the validity of a patent under the Chinese patent laws and regulations, and the Company fully owns the intellectual property rights and global commercial rights in relation to IMM01. As of the Latest Practicable Date, the Company has not been involved in any settled, existing or potential legal, arbitral or administrative proceedings, or any dispute or third party claim, in respect of the Chinese patent No. ZL201510203619.7. Furthermore, as the Company has legally obtained full ownership rights to the Chinese patent No. ZL201510203619.7 as the sole owner pursuant to Hanyu Agreement, even if a third party claims any rights in relation to the Chinese patent No. ZL201510203619.7, the Company shall not be deprived of the ownership rights to the Chinese patent No. ZL201510203619.7 to the extent that the Company was a bona fide third party in obtaining the ownership rights to the same. Even if any former employee or agent of Hanyu asserts claims to ownership of any service invention he/she has made contributions to, he/she could only assert such claim to Hanyu under the applicable PRC laws, because Hanyu was the relevant employer or partner who has contractual or employment relationship with him/her. However, as advised by the Company’s PRC legal advisor, JunHe LLP, and the Company’s PRC intellectual property legal advisor, JunHe LLP, it is practically difficult to file a lawsuit against Hanyu because it has been dissolved; by the same token, there won’t be any lawsuit initiated by Hanyu as it has been dissolved. In addition, as advised by the Company’s PRC legal advisor and the Company’s PRC intellectual property legal advisor, considering the above and that Lijuan Liu and Hua Wang have not been substantively involved in the research and development of Chinese patent No. ZL201510203619.7 and are not actual inventors thereof as confirmed during the interviews on November 11, 2022, even if Lijuan Liu or Hua Wang asserts his/her respective rights to the patent or invention, the risk of such claims being upheld by the competent Chinese courts or authorities, which could ultimately result in the loss of the Company’s ownership rights to this patent, is remote. Based on the above analysis and views of our PRC legal advisor and our PRC intellectual property counsel, and having taken into account the factors foregoing, our Directors are of the view that even if the inventors named in the initial Chinese patent No. ZL201510203619.7 other than our employee assert their respective rights to the patent or invention, the risk of such claims being upheld by the competent Chinese courts or authorities, which could ultimately result in the loss of the Company’s ownership rights to this patent, is remote. Based on the due diligence performed by the Joint Sponsors and having taken into account the factors foregoing, the Joint Sponsors are not aware of any factor that would cause them to cast doubt in any material respect on the above views of the Company’s IP Legal Advisors. (4) The three patent applications in relation to IMM01 in the U.S. were filed and directed to a pharmaceutical composition and fusion proteins with different protection scopes, respectively. BUSINESS – 315 – --- page 325 --- Drug Candidate Title of Invention Application Number Application Date(1) Inventors Jurisdiction Status (2) Grant Date Estimated Expiration Date IMM0306 (CD47×CD20) Novel Recombinant Bi-functional Fusion Proteins, Preparation and Application Thereof (CD47/CD20) 201880011334.5 March 15, 2018 Wenzhi Tian, Song Li PRC Granted April 12, 2022 March 15, 2038 201710151979.6 March 15, 2017 PRC Granted October 16, 2020 March 15, 2037 2019-542396 March 15, 2018 Japan Granted April 11, 2022 March 15, 2038 16/489,360 March 15, 2018 U.S. Granted August 9, 2022 December 28, 2038 PCT/CN2018/079187 March 15, 2018 PCT Entered national phase N/A N/A 18768501.1 March 15, 2018 EU Granted July 19, 2023 March 15, 2038 IMM2902 (CD47×HER2) Recombinant Bifunctional Protein Targeting CD47 and HER2 201980051644.4 August 6, 2019 Wenzhi Tian, Song Li PRC Pending N/A N/A 62021034787.3 August 6, 2019 Hong Kong Pending N/A N/A PCT/CN2019/099530 August 6, 2019 PCT Entered National Phase N/A N/A 16/535,075 August 8, 2019 U.S. Granted September 27, 2022 August 8, 2039 19847964.4 August 6, 2019 EU Pending N/A N/A 2021-506322 August 6, 2019 Japan Granted December 12, 2022 August 6, 2039 17/820,624 August 8, 2019 U.S. Pending N/A N/A IMM2520 (CD47×PD-L1) Novel Recombinant Bi-functional Fusion Protein and Preparation and Application Thereof 2021-163660 October 4, 2021 Wenzhi Tian, Song Li Japan Granted April 25, 2022 October 4, 2041 202111083819.5 September 15, 2021 PRC Granted June 20, 2023 September 15, 2041 17/496,051 October 7, 2021 U.S. Granted June 13, 2023 October 7, 2041 21199189.8 September 27, 2021 EU Pending N/A N/A PCT/CN2022/116312 August 31, 2022 PCT Pending N/A N/A BUSINESS – 316 – --- page 326 --- Drug Candidate Title of Invention Application Number Application Date(1) Inventors Jurisdiction Status (2) Grant Date Estimated Expiration Date IMM2510 (PD-L1×VEGF) Recombinant Protein Targeting PD-L1 and VEGF 201980079944.3 December 2, 2019 Wenzhi Tian, Song Li PRC Granted June 20, 2023 December 2, 2039 PCT/CN2019/122446 December 2, 2019 PCT Entered national phase N/A N/A 16/699,732 December 2, 2019 U.S. Granted August 9, 2022 July 16, 2040 19892300.5 December 2, 2019 EU Pending N/A N/A 2021-531099 December 2, 2019 Japan Granted September 27, 2022 December 2, 2039 17/737,159 December 2, 2019 U.S. Pending N/A N/A IMM47 (CD24 mAb) Antibodies targeting CD24 and their preparation and use 202111195246.5 October 13, 2021 Wenzhi Tian, Song Li, Dianze Chen(5), Huiqin Guo(6) PRC Granted June 20, 2023 October 13, 2041 17/685,530 March 3, 2022 U.S. Pending N/A N/A 22156295.2 February 11, 2022 EU Pending N/A N/A 2022-019864 February 10, 2022 Japan Allowed N/A N/A PCT/CN2022/114945 August 25, 2022 PCT Pending N/A N/A IMM4701 (CD24×CD47) Recombinant Protein Targeting CD47 and CD24 202111195248.4 October 13, 2021 Wenzhi Tian, Song Li, Dianze Chen PRC Granted March 31, 2023 October 13, 2041 17/543,033 December 6, 2021 U.S. Pending N/A N/A 22150987.0 January 11, 2022 EU Pending N/A N/A 2021-195587 December 1, 2021 Japan Pending N/A N/A PCT/CN2022/116315 August 31, 2022 PCT Pending N/A N/A Notes: (5) Mr. Dianze Chen served as an assistant director of our Company as of the Latest Practicable Date. He has participated in and made substantive contributions to the screening and validation of our drug candidates, including IMM47, IMM4701 and IMM40H. (6) Ms. Huiqin Guo served as the head of hybridoma antibody discovery of our Company as of the Latest Practicable Date. She has participated in and made substantive contributions to the screening of various drug candidates, including IMM47 and IMM40H. BUSINESS – 317 – --- page 327 --- Drug Candidate Title of Invention Application Number Application Date(1) Inventors Jurisdiction Status (2) Grant Date Estimated Expiration Date IMM40H (CD70 mAb) Antibodies targeting CD70 and their preparation and use 202111191860.4 October 13, 2021 Wenzhi Tian, Song Li, Dianze Chen, Huiqin Guo PRC Granted June 6, 2023 October 13, 2041 2022-015259 February 2, 2022 Japan Allowed N/A N/A 22155661.6 February 8, 2022 EU Pending N/A N/A 17/685,501 March 3, 2022 U.S. Granted March 28, 2023 March 3, 2042 PCT/CN2022/114942 August 25, 2022 PCT Pending N/A N/A The term of an individual patent may vary based on the jurisdictions in which it is granted. The actual protection afforded by a patent varies on a claim-by-claim and jurisdiction-by-jurisdiction basis and depends upon many factors, including the type of patent, the scope of its coverage, the availability of any patent term extensions or adjustments, the availability of legal remedies in a particular jurisdiction and the validity and enforceability of the patent. We cannot provide any assurance that patents will issue with respect to any of our owned pending patent applications or any such patent applications that may be filed in the future, nor can we provide any assurance that any of our owned issued patents or any such patents that may be issued in the future will be commercially useful in protecting our drug candidates and methods of manufacturing the same. It usually takes about three to five years after a patent application enters into substantive examination for the applicable patent examination authorities to make a final decision on whether a patent should be issued or not. Our legal advisors as to intellectual property laws, JunHe LLP and Jun He Law Offices P.C. 1, has checked and reviewed the legal status of the pending patent applications in relation to the Core Product, Key Products and other drug candidates with filed patent applications in the public online databases of the CNIPA, the USPTO, World Intellectual Property Organization (“ WIPO”) and some other public patent databases as well as the information provided by us regarding the pending patent applications. JunHe LLP and Jun He Law Offices P.C. are not aware of any fact or legal impediment with respect to those pending patent applications that would preclude the issuance of patents with respect to such pending patent applications except that these patent applications remain subject to the examination opinions from the applicable patent examination authorities during the ordinary pendency and examination of such patent applications. As reviewed and advised by our legal advisor as to intellectual property laws, material aspects (e.g., constructs, sequences or indications under development) of our Core Product can be covered by granted patent and pending patent applications in the PRC and the U.S. For the pending patent applications, as the time required for the substantial review is at the discretion of relevant patent examination authority, we are unable to predict the expected time frame of receiving material updates in relation to the pending patent applications. Given that obtaining issuance of such pending patent applications is not a prerequisite for our future R&D or 1 Jun He Law Offices P.C. has a registered office in the Silicon Valley of California and has extensive experience in the U.S. patent practice. Its patent team has deep expertise across many aspects of life sciences including biological and small therapeutic compounds and uses thereof, proteomics, genomics, molecular diagnostics, drug discovery tools, chemicals and materials science, and medical devices. Its patent team has decades of experience in a wide range of U.S. patent related matters including drafting, prosecuting patents at the U.S. Patent and Trademark Office, patent infringement and validity opinions regarding U.S. patents, strategic counseling and due diligence reviews of U.S. patents in M&A deals, capital market offerings, financing and other high-value transactions. In addition, a U.S.-based international law firm, Locke Lord LLP, was specifically engaged to analyze one certain relevant patent to assist our legal advisor to U.S. intellectual property laws, Jun He Law Offices P.C., in issuing its legal opinion. This law firm has substantial patent practice experience in the U.S. in life science industry. Its team combines strong scientific understanding, courtroom experience, regulatory knowledge and industry background in the U.S. Their technical understanding spans pharmaceuticals, molecular genetics, biotechnology, organic, inorganic and industrial chemistry, and biochemistry. BUSINESS – 318 – --- page 328 --- commercial activities, we do not expect the pending status of patent applications in relation to our respective products would impose barriers on the commercialization of respective products when those products reach commercialization stage. Even if we fail to obtain issuance of any patents that we are applying for, we will still be able to commercialize our drug candidates in the U.S. (unless a legal proceeding has been filed against us and as a result of the legal proceeding an injunction has been issued or a final decision has been rendered by the court which requires us to cease manufacturing and commercializing our products) and the PRC, although without the protection of the relevant intellectual property right offered by patents during respective patent’s validity period. Therefore, we believe any failure to obtain issuance of the patent applications we are applying for will not directly hamper our business, financial conditions or results of operations. However, if any of the patent applications was rejected, we may lack patent protection covering certain key characteristics of our respective products before or during the commercialization of our products. If any of the above circumstances occurs, our business, financial conditions and prospects could be materially and adversely affected. See for more details in the “Risk Factors — Risks Relating to Our Intellectual Property Rights — If we are unable to obtain and maintain adequate intellectual property protection for our drug candidates throughout the world, or if the scope of such intellectual property rights obtained is not sufficiently broad, our current or any future patents may be challenged and invalidated even after issuance”. We are aware of certain issued patents in the U.S. belonging to third parties that may potentially cover our CD47-based drug candidates and may not expire before our anticipated commercial launch of relevant drug candidates in the U.S. As reviewed and advised by our U.S. legal advisor as to intellectual property law, Jun He Law Offices P.C. 1 the scope of the relevant patent claims is too broad and the patent claims are obvious over prior art 2 or lack written description and enablement support 3, the validity and enforceability of the third-party patents are thus questionable; as a result, if such third parties bring the legal proceedings against us, the risk that we will be determined by courts or other competent authorities in the U.S. to have infringed on such patent rights of the third parties is remote. However, whether a product infringes a patent involves an analysis of complex legal and factual issues, the determination of which is often uncertain, and the burden of proof required to successfully challenge a third-party patent may be high. As of the Latest Practicable Date, neither we nor our legal advisors as to intellectual property law are aware of any patent infringement legal proceedings related to CD47-targeted drug candidates in China and globally. For details, please refer to the paragraphs headed “Risk Factors — Key Risks Relating to Our Business, Business Operations, Intellectual Property Rights and Financial Prospects — Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain.” 1 A U.S.-based international law firm, Locke Lord LLP, was specifically engaged to analyze one certain relevant patent to assist our U.S. legal advisor to intellectual property laws, Jun He Law Offices P.C., in issuing its legal opinion. 2 “Prior art” refers to publications or knowledge that are available to the public before the effective filing date of a patent application. Prior art may be used to evaluate whether a claimed invention in a patent application contains certain level of creativity ( i.e., more than just a simple and obvious improvement over what already exists). “Obvious over prior art” means that, though a claimed invention is different from the prior art, the difference can be readily conceived by a person having ordinary skills in the relevant field ( i.e., a hypothetical person who is familiar with the ordinary technical knowledge in that field) before the effective filing date of this claimed invention. Generally, a patent should involve inventive steps that are not obvious to a person having ordinary skills in such field. If the claimed invention is obvious over prior art, a patent for this claimed invention may not be obtained, and if obtained, it shall be invalid. 3 “Lack of written description and enablement support” means the specification of a patent or patent application does not contain a written description of the invention which can enable any person having ordinary skills in the relevant field to make and use the same. Generally, a patent should have sufficient written description containing clear and detailed enough information and guidance so that a person having ordinary skills in that field would be readily able to practice the claimed invention. If the claimed invention lacks written description and enablement support, a patent for such a claimed invention may not be obtained, and if obtained, it shall be invalid. BUSINESS – 319 – --- page 329 --- In addition, in 2019, we signed a technology transfer agreement with SunHo, pursuant to which such third party acquired certain rights and interests (including one patent application in China relating to IMM2505) from us to develop and commercialize IMM2505 in China (including Hong Kong, Macau and Taiwan), while we retain the full rights and interests to IMM2505 in the rest of the world, and grant SunHo a single-digit percentage of interest in the overseas rights of IMM2505. We decided to license out IMM2505 since such out-licensing arrangement can supplement our cash flow to develop our pipeline products. At the time of such transfer, IMM2505 was at early discovery stage. The Chinese patent application of IMM2505 has been issued, and the issued claims of the Chinese patent are limited to specific amino acid sequences of an anti-PD-L1 antibody. These sequences differ from the amino acid sequences of the anti-PD-L1 antibody used in IMM2520, ensuring that IMM2505’s patent protection does not extend to cover IMM2520. For details, please refer to the paragraphs headed “Risk Factors — Key Risks Relating to Our Business, Business Operations, Intellectual Property Rights and Financial Prospects — If we are unable to obtain and maintain adequate intellectual property protection for our drug candidates throughout the world, or if the scope of such intellectual property rights obtained is not sufficiently broad, our current or any future patents may be challenged and invalidated even after issuance.” We also own a number of registered trademarks and pending trademark applications. As of the Latest Practicable Date, we had registered trademarks for our Company and our corporate logo in the PRC and Hong Kong and are seeking trademark protection for our Company and our corporate logo in the jurisdictions where available and appropriate. During the Track Record Period and up to the Latest Practicable Date, (i) we were not involved in any legal, arbitral or administrative proceedings in respect of, and we had not received notice of any material claims of infringement, misappropriation or other violations of third-party intellectual property; and (ii) we were not involved in any proceedings in respect of any intellectual property rights that may be threatened or pending and that may have an influence on the research and development for any of our drug candidates in which we may be a claimant or a respondent. RAW MATERIALS AND SUPPLIERS Suppliers During the Track Record Period, our suppliers primarily consisted of CROs, CMO/CDMOs, and suppliers of equipment, devices and construction services. We select our suppliers by considering their product quality, costs, delivery standards, industry reputation and compliance with relevant regulations and industry standards. The aggregate purchases attributable to our five largest suppliers in each period during the Track Record Period amounted to RMB55.9 million, RMB58.1 million and RMB14.7 million, respectively, representing 32.4%, 30.2% and 40.7% of our total purchases, respectively. Purchases attributable to our single largest supplier in each period during the Track Record Period amounted to RMB17.8 million, RMB16.8 million and RMB5.8 million for the same periods, accounting for 10.3%, 8.7% and 16.0% of our total purchases, respectively. All of our five largest suppliers in each period during the Track Record Period operate their business in the PRC, except for one major supplier in 2022 and two major suppliers in the four months ended April 30, 2023 that operate their business in the U.S. We believe that we maintain strong and stable relationships with our major suppliers. BUSINESS – 320 – --- page 330 --- The following table sets forth details of our five largest suppliers for the four months ended April 30, 2023: Ranking Supplier Products/Services Length of business relationship Purchase amount % of total purchase (RMB ’000) 1 Supplier A (a CRO) ..... R&D services 3 years 5,788 16.0% 2 Supplier B (a CRO) ..... R&D services 2 years 3,724 10.3% 3 Supplier C (a CRO) ..... R&D services 2 years 2,533 7.0% 4 Supplier D (a pharmaceutical company) ........... Drug 1 year 1,360 3.8% 5 Supplier E (a drug regulatory consultancy) . Consulting service 3 years 1,325 3.7% Total ................ 14,730 40.7% The following table sets forth details of our five largest suppliers for the year ended December 31, 2022: Ranking Supplier Products/Services purchased Length of business relationship Purchase amount % of total purchase (RMB ’000) 1 Supplier F (a CDMO) ... Manufacturing services 2 years 16,751 8.7% 2 Supplier G (a construction company) . Construction 2 years 13,514 7.0% 3 Supplier B (a CRO) .... R&D services 2 years 10,940 5.7% 4 Supplier A (a CRO) .... R&D services 3 years 8,768 4.6% 5 Supplier C (a CRO) .... R&D services 2 years 8,125 4.2% Total ................ 58,098 30.2% The following table sets forth details of our five largest suppliers for the year ended December 31, 2021: Ranking Supplier Products/Services purchased Length of business relationship Purchase amount % of total purchase (RMB ’000) 1 Supplier A (a CRO) ..... R&D services 2 years 17,750 10.3% 2 Supplier F (a CDMO) ... Manufacturing services 1 year 12,704 7.4% 3 Supplier H (a laboratory construction company) . Construction works for office building decoration 3 years 10,415 6.0% 4 Supplier I (a CMO) ..... Manufacturing services 6 years 7,571 4.4% 5 Supplier J (a supplier of equipment) ......... Equipment 4 years 7,442 4.3% Total ................ 55,882 32.4% BUSINESS – 321 – --- page 331 --- None of our five largest suppliers in each period during the Track Record Period was our related parties. None of our Directors or their associates or, to the knowledge of our Directors, any Shareholder with over 5% of the share capital of our Company has any interest in any of our five largest suppliers in the years ended December 31, 2021 and 2022 or the four months ended April 30, 2023. Raw Materials During the Track Record Period, we have procured raw materials for the pilot production of our drug candidates for clinical trials from suppliers in China. The principal raw materials that we used include resin, filtration materials, excipient, among others. We select our suppliers by considering cost and their capability, quality, reputation, delivery and regulatory compliance. CUSTOMERS During the Track Record Period, since we had not obtained regulatory approval for the commercial sale of any of our drug candidates, we had not generated any revenue from sales of any drug products. Our revenue was generated from out-licensing fee, sales of cell strain and other products and testing services during the Track Record Period. For further details, please refer to the paragraphs headed “Financial Information — Description of Selected Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income — Revenue.” The aggregate sales to our five largest customers in each period during the Track Record Period were RMB5.0 million, RMB0.5 million and RMB0.06 million, representing 98.8%, 84.6% and 89.1% of our total sales, respectively. Revenue from our single largest customer in each period during the Track Record Period accounted for 93.3%, 28.1% and 43.6% of our total sales amount for the same periods, respectively. All of our top five customers in each period during the Track Record Period are independent third parties and located in the PRC. The following table sets forth details of our five largest customers for the four months ended April 30, 2023: Ranking Customer Products/Services sold Length of business relationship Sales amount % of total sales (RMB ’000) 1 Customer A (a biotechnology company) ........... Growth medium 4 years 32 43.6% 2 Customer B (a pharmaceutical company) ........... Growth medium 5 years 11 15.2% 3 Customer C (a biotechnology company) ........... Growth medium 2 years 8 11.5% 4 Customer D (a biotechnology company) ........... Growth medium 5 years 8 11.5% 5 Customer E (a biotechnology company) ........... Growth medium 5 years 5 7.3% Total ................ 65 89.1% BUSINESS – 322 – --- page 332 --- The following table sets forth details of our five largest customers for the year ended December 31, 2022: Ranking Customer Products/Services sold Length of business relationship Sales amount % of total sales (RMB ’000) 1 Customer C (a biotechnology company) ........... Cell lines, growth medium and technical services 1 year 151 28.1% 2 Customer F (a biotechnology company) ........... Cell lines and growth medium 2 years 150 27.9% 3 Customer G (a biotechnology company) ........... Growth medium 4 years 98 18.2% 4 Customer A (a biotechnology company) ........... Growth medium 4 years 36 6.7% 5 Customer H (a biotechnology company) ........... Technical services 1 years 20 3.8% Total ................ 455 84.6% The following table sets forth details of our five largest customers for the year ended December 31, 2021: Ranking Customer Products/Services sold Length of business relationship Sales amount % of total sales (RMB ’000) 1 Customer I (a biotechnology company) ........... Technology license; growth medium 3 years 4,727 93.3% 2 Customer J (a CDMO) .. cell strain 1 year 143 2.8% 3 Customer G (a biotechnology company) ........... Growth medium 3 years 61 1.2% 4 Customer K (a biotechnology company) ........... Testing services 1 year 38 0.7% 5 Customer L (a biopharmaceutical company) ........... Testing services 1 year 38 0.7% Total ................ 5,006 98.8% To the knowledge of our Directors, none of our Directors, their respective associates or any of our Shareholders holding more than 5% of our issued share capital immediately following the completion of the Global Offering had an interest in any of our customers during the Track Record Period. BUSINESS – 323 – --- page 333 --- COMPETITION The market for biopharmaceutical industry and immuno-oncology solutions is evolving and highly competitive. While we believe that our research and development capabilities enable us to establish a favorable position in the industry, we encounter competition from international and domestic biopharmaceutical companies, specialty pharmaceutical and biotechnology companies of various sizes, academic institutions and research institutions. For more information on the competitive landscape of our drug candidates, please refer to the paragraphs headed “Industry Overview” and “— Our Drug Candidates.” We believe the primary competitive factors in our markets are identification of promising targets, mechanisms and pathways for drug development, molecule screening and design, efficacy and safety of drug candidates, manufacturing efficiency and commercialization development. We expect the competition will become more intensive in the future as additional players enter into the segments. Any drug candidates that we successfully develop and commercialize will compete with existing drugs or any new drugs that may become available in the future. For potential impact of market competition, see “Risk Factors — Key Risks Relating to Our Business, Business Operations, Intellectual Property Rights and Financial Prospects — We face substantial competition and our competitors may discover, develop or commercialize competing drugs faster or more successfully than we do.” EMPLOYEES As a biotechnology company, our employees are our valuable resource. We are led by a diverse and talented team of management and experts who seek to understand immuno-oncology therapies’ challenges and are dedicated to tackling them. As of the Latest Practicable Date, we had a total of 152 full-time employees, among which 149 were in China, one in Australia and two in the U.S. The following table sets forth a breakdown of our employees categorized by function as of the Latest Practicable Date: Function Number Percentage R&D ............................................ 17 11.2% Clinical Development ............................... 50 32.9% CMC and Regulatory Affairs .......................... 45 29.6% Business Strategy and Corporate Development ............ 12 7.9% General and Administrative ........................... 28 18.4% Total ............................................ 152 100.0% We also plan to develop our internal sales and marketing team preparing for the commercialization of our drug candidates in the future. Employment Agreements with key management and R&D staff We enter into standard labor, confidentiality and non-compete agreements with our employees. The non-compete restricted period typically expires two years after the termination of employment, and we agree to compensate the employees with a certain percentage of their pre-departure salary during the restricted period. For further details regarding the terms of the confidentiality and non-compete and employment agreements with our certain of our senior management, please refer to the section headed “Directors, Supervisors and Senior Management” in this prospectus. BUSINESS – 324 – --- page 334 --- We recruit and retain highly engaged and motivated team players who are driven by our commitment and are excited to contribute to the development of immuno-oncology therapies leveraging their extensive experience. We believe that we are in a good position to create an equitable, inclusive and diverse workplace while maintaining a good working relationship with our employees. As of the Latest Practicable Date, we had not experienced any major labor disputes. Training and Development We offer employees a variety of professional development opportunities and encourage a performance-driven environment. We focus on creating a robust culture to encourage retention and engagement. Given our emphasis on operating a fully-integrated platform for our drug development processes, we attach great importance to internal talent growth. We continually pursue progression opportunities for our staff through various internal and external training and development programs. Employee Benefits We are committed to making sure that working conditions throughout our business network are safe and that employees are treated with care and respect. We believe we offer our employees competitive compensation packages, reflecting our stakeholder-centric ethos which we believe leads to sustainable and durable growth. As required by PRC regulations, we participate in various government statutory employee benefit plans, including social insurance, namely pension insurance, medical insurance, unemployment insurance, work-related injury insurance, maternity insurance, and housing funds. We are required under PRC law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government regulations from time to time. LAND AND PROPERTIES Our corporate headquarter is located in Shanghai Municipality, PRC. As of the Latest Practicable Date, we had a land use right to a land parcel located in Pudong New Area with a site area of approximately 28,763.1 sq.m, and a total of approximately 6,180.98 sq.m leased property space as our office premises, and research and development center in the PRC. The relevant lease agreements generally provide a duration of up to 74 months. The following table sets forth the details of our owned and leased properties as of the Latest Practicable Date: Usage Location GFA (sq.m) Lease Term R&D, manufacturing, office . Shanghai 28,763.10 / (1) R&D, manufacturing, marketing, office ....... Shanghai 2,707.44 May 1, 2019, to July 31, 2024 R&D, office ............ Shanghai 1,662.58 April 1, 2021, to March 31, 2027 Office ................. Shanghai 1,441.37 March 1, 2021, to February 29, 2024 Office ................. Shanghai 403.64 April 1, 2021 to March 31, 2027 Storage, office .......... Shanghai 369.59 October 1, 2022, to November 30, 2028 Note: (1) This property is owned by the Company. BUSINESS – 325 – --- page 335 --- According to Chapter 5 of the Listing Rules and section 6(2) of the Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice, this prospectus is exempted from strict compliance with the requirements of section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance which require a valuation report with respect to all our interests in land or buildings, for the reason that, as of June 30, 2022, none of our properties has a carrying amount of 15% or more of our consolidated total assets. As of the Latest Practicable Date, except for the land use right to a land parcel located in Pudong New Area recently granted to us, we do not own any other real property for our operations. Upon expiration of our leases, we will need to negotiate for renewal of the leases or relocate. There are sufficient alternative locations for us to choose from, but we may incur additional costs in relation to the potential relocation. During the Track Record Period, we did not experience any dispute arising out of our leased properties. For details of risks relating to our leased properties, see the section headed “Risk Factors — Other Risks Relating to Our Operations — We are subject to risks associated with leasing space” in this prospectus. AWARDS AND RECOGNITIONS We have received various awards and recognitions for our projects and entities. The following table sets forth the selected awards and projects for which we received government grants as of the Latest Practicable Date: Year of Grant Award/Recognition Issuing Authority 2023 ...... KPMG China’s 2nd Biotechnology Innovation 50 Companies List KPMG 2023 ...... The Company was ranked 7th in “China Future Healthcare Rankings 2023 — Top 100 Innovative Biopharmaceuticals” VBData 2022 ...... Dr. Tian was awarded as “Top 10 Drug Innovation Scientists/Research Teams of the Year” Securities Times 2022 ...... IMM2902 was awarded as “Drug Innovation and Development of the Year” Securities Times 2022 ...... IMM01 was award as “2022 Top 10 Innovative Pharmaceutical CHIP Seed Projects” CHIP Academy 2022 ...... Shanghai Technologically Advanced Small and Medium-sized Enterprise Shanghai Municipal Commission of Economy and Informatization 2022 ...... Shanghai Pudong New Area Innovative Small and Medium-Sized Enterprise Shanghai Municipal Commission of Economy and Informatization 2022 ...... Joint Unit of the New Overseas Chinese Training Base Shanghai Pudong New Area Government Overseas Chinese Affairs Office BUSINESS – 326 – --- page 336 --- Year of Grant Award/Recognition Issuing Authority 2021 ...... Top 100 China Pharmaceutical Innovative Seed Enterprises in 2021 China Pharmaceutical Enterprise Management Association, China Pharmaceutical Biotechnology Association, General Office of the Central Committee of the Chinese Peasants and Workers Democratic Party, Hangzhou Investment Promotion Bureau, Hangzhou Qiantang New Area Management Committee 2021 ...... Innovative Startup Award Shanghai Pudong New Area Government 2020 ...... High-tech Enterprise Certificate Shanghai Municipal Science and Technology Commission, Shanghai Municipal Finance Bureau, State Administration of Taxation (Shanghai Taxation Bureau) 2019 ...... Top 50 Most Innovative Companies of Chinese Biomedicine in 2019 Shanghai Tuling Biotechnology Co., Ltd. Xingyao Research Institute 2018 ...... Zhangjiang Venture Capital TOP100 Enterprise Honor “Insight into Zhangjiang” Venture Capital Database 2018 ...... 2018 Shanghai Science and Technology Business Incubator 30-year Cutting-edge Start-up Enterprises Shanghai Science and Technology Entrepreneurship Center 2017 ...... Enterprise Excellence Award Shanghai Science and Technology Entrepreneurship Center 2017 ...... Excellent Enterprise Organizing Committee of China Innovation and Entrepreneurship Competition 2016 ...... 50 Top Shanghai Start-ups with Most Investment Potential in 2016 Shanghai SME Development Service Center, Shanghai SME listing Promotion Center BUSINESS – 327 – --- page 337 --- ENVIRONMENTAL, SOCIAL, HEALTH AND SAFETY MATTERS Governance We are committed to environmental protection and promoting corporate social responsibility and best corporate governance practices to develop sustainable value for stakeholders and take up responsibilities as a corporate citizen. We are currently at an early stage of laboratory operations and partially rely on CMO/CDMOs for the manufacturing function and on CROs for animal studies, clinical trials and other activities. As a result, the current nature of our business does not expose us to a substantial risk of environmental, health or work safety matters, and we do not expect the potential risks of such matters will have a material adverse impact on our business operation and financial performance. Our operations in the future, particularly after the completion of construction and commencement of operations of our manufacturing facility in Shanghai, will be subject to numerous environmental, social, health and safety laws and regulations. For a discussion on PRC laws and regulations on environmental protection and work safety, see “Regulations — Regulations relating to Environmental Impact Assessment of Construction Projects.” We are committed to complying with PRC regulatory requirements, preventing and reducing hazards and risks associated with our operation, and ensuring the health and safety of our employees and surrounding communities. We will comply with the environmental, social and governance (“ ESG”) reporting requirements after Listing and the responsibility to publish ESG report on an annual basis in accordance with Appendix 27 to the Listing Rules. We will focus on each of the areas as specified in Appendix 27 to the Listing Rules to analyze and disclose important ESG matters, risk management and the accomplishment of performance objectives, particularly those environmental and social issues that could have a material impact on the sustainability of our operations and that are of interest to our Shareholders. We have adopted company-wide environment, health and safety policies and various systems and procedures relating to hazardous waste management, wastewater treatment, air pollution control, environmental risk management, emergency response and process safety management. We have also adopted and maintained a series of rules, standard operating procedures and measures to maintain a healthy and safe environment for our employees. We implement safety guidelines setting out information about potential safety hazards and procedures for operating in the manufacturing facilities. We require new employees to participate in safety training to familiarize themselves with the relevant safety rules and procedures. In particular, we invite experts on fire control safety to conduct training sessions and regularly perform emergency evacuation drills to reduce risks associated with potential fire accidents. Also, we have adopted relevant policies and measures to ensure the hygiene of our work environment and the health of our employees. We are endeavored to provide a safe work environment in light of the COVID-19 pandemic, including procurement of epidemic prevention materials and release of work-from-home plan and work resumption plan. Our Board has established an ESG working group that comprises three centers, including finance center, production and quality center and human resource center. The ESG working group serves as a supportive role to our Board in implementing the agreed ESG policies, targets and strategies; conducting materiality assessments of environmental-related, climate-related, social-related risks; collecting ESG data from different parties while preparing for the ESG report; and continuous monitoring of the implementation of measures. The ESG working group has to prepare a quantitative report with regard to our environmental-related and social-related data on a quarterly basis and prepare a qualitative report with regard to effectiveness of our ESG measures two times a year. BUSINESS – 328 – --- page 338 --- ESG-related key performance indicators (“KPIs”) Our Board sets targets for each material KPI in accordance with the disclosure requirements of Appendix 27 to the Listing Rules and other relevant rules and regulations upon listing. In setting targets for the ESG-related KPIs, our Group has taken into account their respective historical levels for 2021, 2022 and the four months ended April 30, 2023 and has considered our future business expansion thoroughly and prudently with a view of balancing business growth and environmental protection to achieve sustainable development. We will also review our KPIs on a yearly basis to ensure that they remain appropriate to our Group. Set forth below are our major KPIs during the Track Record Period:  Hazardous waste disposal . We have monitored our hazardous waste disposal levels on a periodic basis. For 2021, 2022 and the four months ended April 30, 2023, our hazardous waste discharge levels were approximately 6.1 tons, 5.6 tons and 1.5 tons, respectively, and such waste was disposed by qualified third parties.  Electricity consumption . We have monitored our electricity consumption levels and implement measures to improve energy efficiency. For 2021, 2022 and the four months ended April 30, 2023, our electricity consumption levels were approximately 2.2 million kWh, 2.7 million kWh and 0.5 million kWh, respectively.  Water consumption . We have monitored our water consumption levels and implement measures to promote water conservation. For 2021, 2022 and the four months ended April 30, 2023, our water consumption levels were approximately 4,971 tons, 5,068 tons and 982 tons, respectively. We do not operate in a highly polluting industry, while our operation may involve the use and disposal of hazardous materials and wastes. We contract with qualified third parties for the disposal of hazardous materials and wastes. We require their operational qualifications in accordance with relevant governmental laws and regulations. We establish a regular assessment as to our suppliers’ safety performance and strengthen our supervision and management of our suppliers. Our contracted third-party service providers are required under our agreements to comply with all applicable laws. In addition, we identify our ESG-related KPIs to include fair employment and healthy and safe environment for our employees. We place a high value on diversity in our Company and continuously implement pro-diversity management practices. We are also dedicated to providing fair and equal treatment and career opportunities to all of our employees. We prohibit any form of discrimination based on gender, family origin, disability, religious beliefs or races throughout our recruiting process. By implementing these practices, we aim to cultivate health, wellbeing and work-life balance for all of our employees. We have also adopted and maintained a series of rules, standard operating procedures and measures to maintain a healthy and safe environment for our employees. Manufacturing During the manufacturing process of our drug candidates for clinical trials and research, we may generate both solid and liquid waste. We have implemented rigorous policies to guarantee the proper handling, management, and disposal of hazardous waste. We have engaged qualified third parties for the disposal of hazardous waste for all of our research and development manufacturing activities in accordance with applicable laws and regulations. We require these third parties to obtain necessary operational qualifications, including permit for disposal of dangerous wastes, and to comply with relevant environmental laws and regulations. We maintain detailed written records BUSINESS – 329 – --- page 339 --- for hazardous wastes, which are then safely packaged before being handed over to these qualified third parties for disposal. We will continuously implement these measures to minimize the environmental impact of hazardous wastes generated during our business operation. Preclinical and Clinical Study We have adopted a series of measures to enhance laboratory and clinical trial safety and comply with relevant regulations through establishing and enforcing internal policies and procedures on clinical trial safety, starting with (a) formulating a comprehensive R&D project management policy to ensure that we monitor the life-cycle process during drug development, including preclinical studies and clinical trials, (b) implementing guidelines with respect to employee health and safety, environmental protection and operational safety in laboratories, (c) monitoring adverse events of drugs and drug candidates from clinical trials as well as recording properly and accurately the clinical trial safety events for each clinical trial, (d) conducting comprehensive analysis on the collected adverse events and evaluating the safety risks, (e) reporting serious adverse events and potential serious safety risks promptly and (f) communicating with relevant employees and CROs on the enforcement of clinical trial protocols. Workplace Safety We have adopted and maintained a series of rules, standard operating procedures, and measures to maintain our employees’ healthy and safe environment. We implement safety guidelines that detail potential safety hazards, safe practices, accident prevention and accident reporting procedures, and we ensure that our employees properly acknowledge their understanding of safety matters on an ongoing basis as necessary. In particular, we (i) have established various guidelines governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes to ensure such guidelines are strictly enforced for the disposal of laboratory materials and wastes; (ii) provide regular safety awareness training to our employees, such as training sessions on fire control and safety; (iii) keep health records for all employees and conduct health examinations before, during and after their time at the company, especially for employees engaged in work involving occupational hazards; (iv) implement company-wide self-protection policies for employees in light of the COVID-19 outbreaks, including providing face masks and disinfectant to our employees; and (v) conduct regular fire safety inspections, maintenance of fire-fighting equipment and regular emergency drills. Medicine Affordability We are committed to developing high-quality drugs that are accessible and affordable to patients. As our current pipeline of drug candidates comes to the market, we will commercialize our products through our internal commercialization team and partnerships with other pharmaceutical industry players to expedite market acceptance of our products. In the sales process in different markets, we will take into account various factors in formulating product marketing plans. In the domestic market, we will actively cooperate with the implementation of medical insurance policies, while in the overseas market, we will collaborate with potential partners, carefully considering the unique disparities in economic development and medical standards across various countries and regions. GHG Emissions As a responsible corporate citizen, we aim to reduce our greenhouse gases (GHG) emissions and contribute to the transition to a low-carbon economy. We adhere to the “3R” approach to environmental conservation, i.e. reduction of waste, reuse of resources and recycling of used materials, to the largest practicable extent in our business operation as a show of care for the environment. The GHG emissions of various scopes are respectively generated from the fuel consumption of vehicles of our Group (Scope 1), power consumption (Scope 2), water BUSINESS – 330 – --- page 340 --- consumption, wastewater discharge, waste disposed at landfill and paper consumption (Scope 3) during business operation. Our Group’s GHG emission results principally from Scope 2 energy indirect GHG emission which is power consumption to support our operations, and Scope 3 other indirect emissions resulting from employee business travel, as well as waste generated during preclinical studies and the manufacturing of our drug candidates. Our Group are implementing an array of measures in mitigating the GHG emissions, including (i) providing trainings and educate our employees on the concept of energy efficiency; (ii) posting water-saving or power-saving signs in eye-catching areas to cultivate our employees’ awareness of environment protection; (iii) promoting paperless environment, encourage the usage of electronic copies instead of hard copies, the use of double-sided printing, and the use of single-sided printed paper when there is no confidential information on it; (iv) requiring employee to turn off all electrical appliances when they are not in use; (v) maintaining indoor temperature at 24 degrees Celsius or above to reduce unnecessary use of energy; (vi) encouraging teleconferences as opposed to physical meetings to reduce travel; (vii) carrying our manual check after shift to eliminate unnecessary lighting; and (viii) implementing policies regarding waste management and carefully selecting qualified third parties for waste disposal. We believe that we are not susceptible to climate change. Moreover, we consider that potential changes to the regulations in the PRC regarding climate change will not adversely impact our business operations. We will continue to pay attention to risks regarding climate change and formulate emergency plans to safeguard us from climate change and extreme weather conditions, such as hurricane and rainstorms. As of the Latest Practicable Date, we had not experienced any material impact on our business operations or financial performance as a result of climate change or extreme weather conditions. For 2021, 2022 and the four months ended April 30, 2023, we spent approximately RMB665.7 thousand, RMB486.3 thousand and RMB123.7 thousand, respectively, with respect to environmental and work safety protection. Our PRC Legal Advisor has confirmed that, during the Track Record Period and up to the Latest Practicable Date, we had not been subject to any material claim or penalty in relation to environmental, social, health and safety protection, had not been involved in an accident or fatality in this regard, and had been in compliance with the relevant PRC laws and regulations in all material aspects. Our Directors recognize the importance of good corporate governance in protecting the interests of our Shareholders. Our directors and senior management will actively develop our environment, social and governance strategies and targets, and evaluate, determine and address the related risks. INSURANCE We maintain insurance policies that we consider to be in line with market practice and adequate for our business to safeguard against risks and unexpected events. Our insurance policies cover adverse events in our clinical trials, and we also maintain property loss insurance. We maintain social insurance for our employees in accordance with relevant PRC laws and regulations. We believe that our insurance coverage is adequate to cover our key assets, facilities, and liabilities. BUSINESS – 331 – --- page 341 --- LICENSES AND PERMITS Our PRC Legal Advisor has advised that during the Track Record Period and up to the Latest Practicable Date, we have obtained all material licenses, permits, approvals and certificates from the relevant government authorities that are material for the business operations of our Group. Our PRC Legal Advisor also confirmed that during the Track Record Period and up to the Latest Practicable Date, we were not involved in any litigation, arbitration or administrative proceedings pending or, to the best knowledge of our Directors, threatened against us or any of our Directors that could have a material adverse effect on our business, results of operations or financial condition. The following table sets forth details of selected material licenses and permits obtained by our Group as of the Latest Practicable Date: License/Permit Holder Date of Grant Expiry Date Customs Declaration Unit Registration Certificate .......... our Company October 18, 2017 long term 1 Foreign Trade Dealers Filing Receipt ...................... our Company May 16, 2018 / Entry and Exit Inspection and Quarantine Declaration Enterprise Filing Receipt ................. our Company October 17, 2017 / Note: 1 As advised by the Company’s PRC legal advisor, “long term” signifies an extended period of validity for this certificate. Specifically, this certificate does not have an exact expiration date, suggesting its validity continues indefinitely. However, if the interpretation or implementation of existing laws and regulations changes or new regulations come into effect in the future, we may be required to seek renewal or acquire additional approvals, permits, licenses, or certificates. LEGAL PROCEEDINGS AND COMPLIANCE As of the Latest Practicable Date, there was no litigation, arbitration or administrative proceedings pending or threatened against the Company or any of our Directors which could have a material and adverse effect on our financial condition or results of operations. Potential future litigation or any other legal or administrative proceeding, regardless of the merit or outcome, is likely to result in substantial costs, diversion of our resources, and have a negative impact on our reputation and brand image, which in turn, would have negative impact on our business, financial condition, and results of operations. For potential impact of legal or administrative proceedings on us, see “Risk Factors — Other Risks Relating to Our Operations — We may be involved in lawsuits or other legal proceedings, which could adversely affect our business, financial conditions, results of operations and reputation.” We are of the view that, during the Track Record Period and up to the Latest Practicable Date, we had complied, in all material respects, with all relevant laws and regulations in the jurisdictions we operate in, and no material administrative penalties imposed on us had been found that may have a material adverse effect on our Group’s business operations. BUSINESS – 332 – --- page 342 --- RISK MANAGEMENT AND INTERNAL CONTROL We have devoted ourselves to establishing and maintaining risk management and internal control systems consisting of policies and procedures that we consider to be appropriate for our business operations, and we are dedicated to continuously improving these systems. Risk Management We are exposed to various risks in our business operations and we recognize that risk management is critical to our success. For more details, please refer to the section headed “Risk Factors” for a discussion of various operational risks and uncertainties we face. We are also exposed to various market risks, in particular, credit, liquidity, interest rate and currency risks that arise in the normal course of our business. Please refer to “Financial Information — Market Risk Disclosure” for a discussion of these market risks. We have adopted a series of risk management policies which set out a risk management framework to identify, assess, evaluate and monitor key risks associated with our strategic objectives on an ongoing basis. Risks identified by management will be analyzed on the basis of likelihood and impact, and will be properly followed up and mitigated and rectified by our Company and reported to our Directors. Our audit committee, and ultimately our Directors supervise the implementation of our risk management policies. The following key principles outline our Group’s approach to risk management and internal control:  Our audit committee will oversee the implementation of, as well as evaluate and improve the internal control system, including (i) reviewing the internal control and risk management policies, and making suggestions to improve the same; (ii) discussing with the management and evaluating the effectiveness of the internal control and risk management policies, to ensure the performance by the management of their duties to formulate effective internal control and risk management policies; (iii) studying the material findings in relation to internal control and the relevant measures taken by the management; and (iv) overseeing any potential misconduct of the employees with respect to internal control, and establishing relevant procedures to investigate and handle the complaints of the same and of the internal control of the Company.  Our Board will be responsible for (i) formulating our risk management policy and reviewing major risk management issues of our Company; (ii) providing guidance on our risk management approach to the relevant teams in our Company; (iii) reviewing the relevant teams’ reporting on key risks and providing feedbacks; and (vi) supervising the implementation of our risk management measures by the relevant teams.  The relevant teams in our Company are responsible for implementing our risk management policy and carrying out our day-to-day risk management practice. In order to formalize risk management across our Company and set a common level of transparency and risk management performance, the relevant teams will (i) gather information about the risks relating to their operation or function; (ii) conduct risk assessments, which include the identification, prioritization, measurement and categorization of all key risks that could potentially affect their objectives; (iii) prepare a risk management report annually for our chief executive officer’s review; (iv) continuously monitor the key risks relating to their operation or function; (v) implement appropriate risk responses where necessary; and (vi) develop and maintain an appropriate mechanism to facilitate the application of our risk management framework. BUSINESS – 333 – --- page 343 --- We consider that our Directors and members of our senior management possess the necessary knowledge and experience in providing good corporate governance oversight in connection with risk management and internal control. Internal Control Our Board is responsible for establishing our internal control system and reviewing its effectiveness. We have engaged an internal control consultant (the “ Internal Control Consultant ”) to perform certain agreed-upon procedures (the “ Internal Control Review ”) in connection with the internal control during the period from November 1, 2020 to October 30, 2021 of our Company and our major operating subsidiaries in certain aspects, including entity-level controls, Financial reporting and disclosure controls, human resources and payroll management, general controls of IT system and other procedures of our operations. The Internal Control Consultant performed the Internal Control Review in November 2021, identified internal control deficiencies and provided recommendation accordingly. We have adopted the corresponding remediation actions to improve the effectiveness of internal control system. The Internal Control Consultant performed a follow-up review with regard to those actions taken by us and there are no further material findings identified in the process of the follow up Review. As of the Latest Practicable Date, there were no material outstanding issues relating to our Company’s internal control. During the Track Record Period, we regularly reviewed and enhanced our internal control system. Below is a summary of the internal control policies, measures and procedures we have implemented or plan to implement:  We have adopted various measures and procedures regarding each aspect of our business operation, such as related party transaction, risk management, protection of intellectual property, environmental protection and occupational health and safety. We provide periodic training about these measures and procedures to our employees as part of our employee training program. Our internal audit team conducts audit fieldwork to monitor the implementation of our internal control policies, reports the weakness identified to our management and audit committee and follows up on the rectification actions.  Our Directors (who are responsible for monitoring the corporate governance of our Group) with help from our legal advisors, will also periodically review our compliance status with all relevant laws and regulations after the Global Offering.  We have established an audit committee which, among others, (i) makes recommendations to our Board of Directors on the appointment and removal of external auditors; and (ii) reviews the financial statements and internal control system of our Company.  We plan to provide various and continuing trainings to update our Directors, senior management, and relevant employees on the latest PRC laws and regulations from time to time with a view to proactively identify any concerns and issues relating to any potential non-compliance. BUSINESS – 334 – --- page 344 --- OVERVIEW As of the Latest Practicable Date, Dr. Tian, our founder of the Group, chairman of our Board, chief executive officer, chief scientific officer and executive Director, was able to exercise approximately 33.29% of the voting rights in our Company through: (i) 70,182,990 Shares directly held by him and (ii) an aggregate of 48,356,955 Shares held by our Employee Shareholding Platforms, namely Jiaxing Changxian, Jiaxing Changyu and Halo Investment II. Both Jiaxing Changxian and Jiaxing Changyu are limited partnerships incorporated in the PRC of which their respective executive partner is controlled by Dr. Tian. Halo Investment II is a company limited by shares incorporated in the BVI with Dr. Tian controlling the exercise of its entire voting rights in the Company. For further details on the Employee Shareholding Platforms, see “History, Development and Corporate Structure — Employee Shareholding Platforms.” Immediately upon the completion of the Global Offering (assuming the Over-allotment Option is not exercised), Dr. Tian, together with Jiaxing Changxian, Jiaxing Changyu and Halo Investment II, will be entitled to exercise the voting rights of approximately 31.76% of the enlarged issued share capital of our Company. Accordingly, Dr. Tian, Jiaxing Changxian, Jiaxing Changyu and Halo Investment II will remain as a group of Controlling Shareholders of our Company after the Listing. For background and biographical details of Dr. Tian, see “Directors, Supervisors and Senior Management — Board of Directors — Executive Directors.” COMPETITION As of the Latest Practicable Date, our Controlling Shareholders confirmed that none of them had any interest in any business, other than our business, which competes or is likely to compete, either directly or indirectly, with our Group’s business which would require disclosure under Rule 8.10 of the Listing Rules. INDEPENDENCE OF OUR BUSINESS Having considered the following factors, our Directors are satisfied that we are capable of carrying out our business independently from our Controlling Shareholders and their respective close associates upon Listing. Operational Independence Our Company has full rights to make all decisions on and to carry out, our own business operations independently. We hold the licenses, intellectual properties, R&D facilities and qualifications necessary to carry on our current business through direct ownership. We have sufficient capital, facilities, technology and employees to operate the business independently from our Controlling Shareholders and their respective close associates. We have access to third parties independently from and not connected with our Controlling Shareholders for sources of suppliers and business partners. Based on the above, our Directors believe that we are operationally independent from our Controlling Shareholders and their respective close associates. Management Independence Our management and operational decisions are made by the Board in a collective manner. The Board comprises three executive Directors, three non-executive Directors and three independent non-executive Directors. RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS – 335 – --- page 345 --- Our Directors are of the view that our other Directors have relevant experience to ensure the proper functioning of the Board. We further believe that our Directors and members of the senior management are able to perform their roles in our Company in managing our business independently from our Controlling Shareholders and their respective close associates for the following reasons: (i) as a part of our preparation for the Global Offering, we have promulgated the Articles of Association to comply with the Listing Rules. In particular, the Articles of Association provide that any Director, Supervisor and senior management member should not place himself or herself in a position where his or her duty and his or her own interests may conflict. In the event of a conflict of interest arising out of any transactions to be entered into by our Group, all Directors with conflicting interest shall abstain from voting in respect of such transactions and shall not be counted in forming a quorum at the relevant Board meetings; (ii) our daily management and operations are carried out by our executive Directors and senior management team, all of whom have substantial experience in the industry in which our Company is engaged, and will therefore be able to make business decisions that are in the best interest of the Group. For details of the industry experience of our executive Directors and senior management team, see “Directors, Supervisors and Senior Management”; (iii) our independent non-executive Directors have extensive experience in different areas. We believe that they will be able to exercise their independent judgment and will be able to provide impartial opinions in the decision-making process of our Board to protect the interests of our Shareholders; (iv) each of our Directors is aware of his or her fiduciary duties as a director, which requires, among other things, that he or she acts for our Company’s best interests and he or she must not allow any conflict between his or her duties as a Director and his or her personal interests; and (v) where a Board meeting or Shareholders’ meeting is held to consider a proposed transaction in which our Directors or Controlling Shareholders or any of their respective close associates have a material interest, the relevant Directors or our Controlling Shareholders and their respective close associates shall abstain from voting on the relevant resolutions and shall not be counted towards the quorum for the voting. Financial Independence We have established our own financial department with a team of independent financial staff responsible for discharging treasury, accounting, reporting, and internal control functions independent from our Controlling Shareholders and their respective close associates from a financial perspective, as well as an independent financial system to make the decisions based on our own business needs. We maintain bank accounts independently and do not share any bank accounts with our Controlling Shareholders and their respective close associates. We make tax registration and pay tax independently with our own funds. In addition, we are capable of obtaining financing from third parties without relying on any guarantee or security provided by our Controlling Shareholders and their respective close associates. During the Track Record Period and as of the Latest Practicable Date, we had received a series of Pre-IPO Investments from third party investors independently. For details of the Pre-IPO Investments, see “History, Development and Corporate Structure.” As of the Latest Practicable Date, there were no loans, advances and balances due to and from our Controlling Shareholders or their respective close associates, nor any pledges and guarantees provided by our Controlling Shareholders or their respective close associates on our Group’s borrowing. RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS – 336 – --- page 346 --- Corporate Governance Measures Our Directors believe that there are adequate corporate governance measures in place to manage the potential conflict of interests between our Controlling Shareholders and our Group and to safeguard the interests of our Shareholders taken as a whole for the following reasons: (i) under the Articles of Association, where a Shareholders’ meeting is to be held for considering proposed transactions in which our Controlling Shareholders or any of their respective close associates has a material interest, our Controlling Shareholders will not vote on the resolutions and shall not be counted in the quorum in the voting; (ii) our Company has established internal control mechanisms to identify connected transactions. Upon the Listing, if any transaction that is proposed between our Group and our Controlling Shareholders and their respective associates, we will comply with the requirements of the Articles of Association and the Listing Rules, including, where appropriate, the reporting, annual review by the independent non-executive Directors, announcement and independent shareholders’ approval; (iii) our Board consists of a balanced composition of executive Directors, non-executive Directors and independent non-executive Directors, with independent non-executive Directors representing not less than one-third of our Board to ensure that our Board is able to effectively exercise independent judgment in its decision-making process and provide independent advice to our Shareholders. Our independent non-executive Directors individually and collectively possess the requisite knowledge and experience to perform their duties. They will review whether there is any conflict of interests between our Group and our Controlling Shareholders and provide impartial and professional advice to protect the interests of our minority Shareholders; (iv) our Company will disclose decisions (with basis) on matters reviewed by the independent non-executive Directors either in its annual report or by way of announcements; (v) where our Directors reasonably request the advice of independent professionals, such as financial advisors, the appointment of such independent professionals will be made at our Company expenses; and (vi) we have appointed Rainbow Capital (HK) Limited as our compliance advisor, who will provide advice and guidance to us in respect of compliance with the applicable laws and the Listing Rules including various requirements relating to directors’ duties and corporate governance, and inform us on a timely basis of any amendment or supplement to the Listing Rules or applicable laws and regulations in Hong Kong. Based on the above, our Directors are satisfied that sufficient corporate governance measures have been put in place to manage conflicts of interest that may arise between our Company and our Controlling Shareholders, and to protect our minority Shareholders’ interests after the Listing. RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS – 337 – --- page 347 --- THE CORNERSTONE INVESTMENT We have entered into cornerstone investment agreements (each a “ Cornerstone Investment Agreement ”, and together the “ Cornerstone Investment Agreements ”) with the cornerstone investors set out below (each a “ Cornerstone Investor ”, and together the “ Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to, subject to certain conditions as set out in the sub-section headed “ Closing Conditions ” below, subscribe at the Offer Price for such number of Offer Shares (rounded down to the nearest whole board lot of 200 H Shares) that may be purchased for an aggregate amount of US$29.7 million (or approximately HK$232.2 million) (exclusive of brokerage, the SFC transaction levy, the AFRC transaction levy and the Stock Exchange trading fee) (the “ Cornerstone Investment ”). Our Company is of the view that, leveraging on the Cornerstone Investors’ investment experience, the Cornerstone Investment will help raise the profile of our Company and to signify that such investors have confidence in our business and prospect, and the Cornerstone Placing ensures a reasonable size of solid commitment at the beginning of the marketing period and provides confidence to the market. Other than the existing Shareholder or its close associate who is a Cornerstone Investor as described below, our Company became acquainted with each of the Cornerstone Investors in its ordinary course of operation through the Group’s business network or through introduction by the Company’s existing shareholders or business partners or through introduction by certain Underwriters in the Global Offering. At the Offer Price of HK$18.60, the total number of Offer Shares to be subscribed by the Cornerstone Investors would be 12,485,200 Offer Shares, (a) representing approximately 72.81% of the Offer Shares pursuant to the Global Offering and approximately 3.35% of our total issued share capital immediately upon completion of the Global Offering (assuming the Over-allotment Option is not exercised); and (b) approximately 63.31% of the Offer Shares pursuant to the Global Offering and approximately 3.32% of our total issued share capital immediately upon completion of the Global Offering (assuming the Over-allotment Option is exercised in full). The Cornerstone Investors will acquire the Offer Shares pursuant to, and as part of, the International Offering. The Cornerstone Investors have agreed to pay for the relevant Offer Shares that they have subscribed before dealings in the H Shares commence on the Stock Exchange. The Offer Shares to be subscribed by the Cornerstone Investors will rank pari passu in all respects with the other fully paid H Shares in issue and will be counted towards the public float of our Company under Rule 8.08 of the Listing Rules. The Offer Shares to be subscribed by the Cornerstone Investors will not be counted towards the public float of our Company for the purpose of Rule 18A.07 of the Listing Rules. Immediately following the completion of the Global Offering, none of the Cornerstone Investors will become a substantial shareholder of our Company or have any Board representation in our Company. Other than a guaranteed allocation of the relevant Offer Shares at the Offer Price, the Cornerstone Investors do not have any preferential rights in their respective Cornerstone Investment Agreement compared with other public Shareholders. RemeGen HK (as defined in this section below) is a close associate of our existing Shareholder, Rongchang Chuangtou, holding less than 10% of shares in our Company, has been permitted to participate in the Cornerstone Investment pursuant to paragraph 5.2 of the Guidance Letter HKEX-GL92-18 and has been granted a waiver from strict compliance with the requirements under Rule 10.04 of, and a consent under paragraph 5(2) of Appendix 6 to, the Listing Rules by the Stock Exchange. Both our Directors and the Joint Sponsors confirm that no preference was given to RemeGen HK other than the preferential treatment of assured entitlement at the Offer Price and the terms are substantially the same as other Cornerstone Investors. To the best knowledge of our Company, except for RemeGen HK, which is a close associate of our existing Shareholder, Rongchang Chuangtou, (i) each of the Cornerstone Investors is an independent third party; (ii) none of the Cornerstone Investors is accustomed to take instructions CORNERSTONE INVESTORS – 338 – --- page 348 --- from our Company, our subsidiaries, our Directors, our Supervisors, chief executive of our Company, our Controlling Shareholders, our substantial Shareholders, our existing Shareholders or their respective close associates in relation to the acquisition, disposal, voting, or other disposition of H Shares registered in its name or otherwise held by it; and (iii) none of the subscription of the relevant Offer Shares by any of the Cornerstone Investors is financed by our Company, our Directors, our Supervisors, chief executive of our Company, our Controlling Shareholders, our substantial Shareholders, our existing Shareholders or any of our subsidiaries or their respective close associates. To the best knowledge of the Company, each of the Cornerstone Investors is independent of other Cornerstone Investors. As confirmed by each Cornerstone Investor, its subscription under the relevant Cornerstone Investment Agreement would be financed by its own internal financial resources. Each of the Cornerstone Investors has confirmed that all necessary approvals have been obtained with respect to the Cornerstone Investment and that no specific approval from any stock exchange (if relevant) or its shareholders is required for the relevant Cornerstone Investment as each of them has general authority to invest. There are no side arrangements or agreements between our Company and the Cornerstone Investors or any benefit, direct or indirect, conferred on the Cornerstone Investors by virtue of or in relation to the Cornerstone Investment, other than a guaranteed allocation of the relevant Offer Shares at the Offer Price. Except for ClinChoice (as defined in this section below), all other Cornerstone Investors have agreed that the Overall Coordinators may defer the delivery of all or any part of the Offer Shares they have subscribed for to a date later than the Listing Date. Such delayed delivery arrangement is in place to facilitate the over-allocation in the International Offering. There will be no delayed delivery if there is no over-allocation in the International Offering. There will not be any deferred settlement in payment by any of the Cornerstone Investors. All of the Cornerstone Investors have agreed that they shall pay for the relevant Offer Shares no later than 8:00 a.m. (Hong Kong time) on the Listing Date. The total number of Offer Shares to be subscribed by the Cornerstone Investors pursuant to the Cornerstone Investment may be affected by reallocation of the Offer Shares between the International Offering and the Hong Kong Public Offering in the event of over-subscription under the Hong Kong Public Offering as described in “Structure of the Global Offering The Hong Kong Public Offering Reallocation” in this prospectus. The number of Offer Shares to be acquired by each Cornerstone Investor may be reduced on a pro rata basis in accordance with the terms of the Cornerstone Investment Agreement to satisfy the shortfall, after taking into account the requirements under Appendix 6 to the Listing Rules. Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors will be disclosed in the allotment results announcement to be issued by the Company on or around September 4, 2023. CORNERSTONE INVESTORS – 339 – --- page 349 --- THE CORNERSTONE INVESTORS The information about our Cornerstone Investors set forth below has been provided by our Cornerstone Investors in connection with the Cornerstone Investment. Harvest International Premium Value (Secondary Market) Fund SPC acting on behalf of and for the account of Harvest Great Bay Investment SP Harvest International Premium Value (Secondary Market) Fund SPC on behalf of Harvest Great Bay Investment SP (“ Harvest ”) is a fund established in February 2022. Harvest International Premium Value (Secondary Market) Fund SPC is a segregated portfolio company established in the Cayman Islands and is an independent third party. 91% of the management shares of Harvest International Premium Value (Secondary Market) Fund SPC are held by Harvest Global Investments Limited (“ HGI”) and 9% of the management shares are held by Harvest Global Capital Investments Limited (“ HGCI”). Incorporated in Hong Kong in 2008, HGI is a wholly-owned subsidiary of Harvest Fund Management Co., Ltd (“ HFM”). HFM is one of the first ten public fund management companies approved to be established within China. HGCI is a company incorporated in Hong Kong in 2011 and licensed to carry out type 1 (dealing in securities), type 4 (advising on securities) and type 9 (asset management) regulated activities under the SFO in Hong Kong by the SFC. HGCI is principally engaged in asset management and investment advisory business. The sole participating shareholder of Harvest is Navigator Technology Limited (“ NTL”), and the ultimate beneficial owner of NTL is Zheng Fuhua, an independent third party. WuXi Venture WuXi Biologics Healthcare Venture (“ WuXi Venture ”) is limited liability partnership incorporated in Hong Kong which is principally engaged in investment activities. WuXi Venture is wholly owned and ultimately controlled by WuXi Biologics (Cayman) Inc. (“ WuXi Biologics ”), a company listed on the Stock Exchange (stock code: 2269) and is a global contract research, development and manufacturing organization (CRDMO) offering end-to-end solutions that enable partners to discover, develop and manufacture biologics from concept to commercialization for the benefit of patients worldwide. To the best of our Directors’ knowledge, information and belief after making reasonable enquiries and as confirmed by WuXi Biologics, no approval from the shareholders of WuXi Biologics or the Stock Exchange is required for WuXi Venture’s investment in our Company as described in this section. RemeGen Hong Kong Limited RemeGen Hong Kong Limited (“ RemeGen HK ”) is a company incorporated in Hong Kong and is primarily engaging in research, development, consulting, production and sales of biotechnology. RemeGen HK is a wholly-owned subsidiary of RemeGen Co., Ltd. (“ RemeGen ”), a company of which its H shares were listed on the Stock Exchange on November 9, 2020 (stock code: 9995) and its A shares were listed on the Shanghai Stock Exchange on March 31, 2022 (stock code: 688331). RemeGen is ultimately controlled by Dr. Fang Jianmin (਄͏), Mr. Wang Weidong (؇۾Mr. Lin Jian (਄), Mr. Xiong Xiaobin ( ဤወᏵ), Dr. Wang Liqiang ( ˮট੶), Mr.Wang Xudong (؇Mr. Deng Yong (ۇMs. Yang Minhua ( เઽശ), Mr. Wen Qingkai (๝ᅅ௱) and Mr. Wei Jianliang (Ԅ), Yantai Rongda Venture Capital Center (Limited Partnership) ( ๧̨࿲༺௴ุҳ༟ʕː (Υྫ)), RongChang Holding Group Ltd., and I-NOV A Limited as concert parties, holding approximately 39.88% of its equity interests in aggregate. RemeGen is a biopharmaceutical company that has entered into commercialization stage. It is committed to discovering, developing and commercializing innovative and distinctive biological drugs for the treatment of autoimmunity, oncology and eye diseases so to address the unmet medical needs in China and rest of the world. To the best of our Directors’ knowledge, information CORNERSTONE INVESTORS – 340 – --- page 350 --- and belief after making reasonable enquiries and as confirmed by RemeGen, no approval from the shareholders of RemeGen or the Stock Exchange is required for RemeGen HK’s investment in our Company as described in this section. ClinChoice Medical Development Limited ClinChoice Medical Development Limited (“ ClinChoice ”) is a limited liability company incorporated in Hong Kong and a full-service clinical CRO offering solutions to pharmaceutical, biotechnology, medical device and consumer products clients and helping its sponsor clients accelerate drug and device approvals to market. ClinChoice is held by a group of shareholders including but not limited to Broad Street Investments Holding (Singapore) Pte. Ltd., a limited liability company incorporated in Singapore and its close associates (ultimately controlled by The Goldman Sachs Group Inc.), Lilly Asia Ventures III Investment (Hong Kong) Co., Limited, a limited liability company incorporated in Hong Kong, and its close associates (ultimately controlled by Dr. Yi Shi, a close associate of our existing Shareholders, LA V ImmuneOnco and LA V ImmOn), Orchids Limited, a limited liability company incorporated in the BVI and its close associates (ultimately controlled by Dr. Chen Fei, a close associate of our existing Shareholders, Suzhou Likang and Suzhou Lirun), each of which holding less than 20% of the equity interest in ClinChoice; and other shareholders each holding less than 10% equity interests in ClinChoice. To the best of our Directors’ knowledge, information and belief after making reasonable enquiries, none of the shareholders of ClinChoice is a connected person of the Company. The table below sets forth details of the Cornerstone Investment: Assuming the Over-allotment Option is not exercised Assuming the Over-allotment Option is fully exercised Cornerstone Investor Total investment Amount (1) Number of Offer Shares to be acquired (4) Approximate % of the Offer Shares Approximate %o ft h eH Shares in issue Approximate %o f ownership Approximate % of the Offer Shares Approximate %o ft h eH Shares in issue Approximate %o f ownership (US$ in million) Harvest ....... 20.0 8,420,800 49.11 3.70 2.26 42.70 3.66 2.24 Wuxi Venture .... 5.0(2) 2,101,800 12.26 0.92 0.56 10.66 0.91 0.56 RemeGen HK .... 2.7(3) 1,129,000 6.58 0.50 0.30 5.73 0.49 0.30 ClinChoice ..... 2.0(4) 833,600 4.86 0.37 0.22 4.23 0.36 0.22 Total ........ 29.7 12,485,200 72.81 5.48 3.35 63.31 5.42 3.32 Notes: (1) Exclusive of brokerage fee of 1%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015%, and to be converted to Hong Kong dollars (where applicable) based on the exchange rate as disclosed in “Information about this Prospectus and the Global Offering — Currency Translation” in this prospectus. (2) The original investment amount under the relevant Cornerstone Investor Agreement is HK$39,093,480, the relevant USD equivalent is calculated using the exchange rate as disclosed in “Information about this Prospectus and the Global Offering Currency Translation” in this prospectus. (3) The original investment amount under the relevant Cornerstone Investor Agreement is HK$21,000,000, the relevant USD equivalent is calculated using the exchange rate as disclosed in “Information about this Prospectus and the Global Offering Currency Translation” in this prospectus. (4) The original investment amount under the relevant Cornerstone Investor Agreement is US$2,000,000 inclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy. (5) Subject to rounding down to the nearest whole board lot of 200 H Shares. CORNERSTONE INVESTORS – 341 – --- page 351 --- CLOSING CONDITIONS The obligation of each of the Cornerstone Investors to acquire the Offer Shares under the respective Cornerstone Investment Agreement is subject to, among other things, the following closing conditions: (i) the Hong Kong Underwriting Agreement and the International Underwriting Agreement being entered into and having become effective and unconditional (in accordance with their respective original terms or as subsequently waived or varied by agreement of the parties thereto) by no later than the time and date as specified in the Hong Kong Underwriting Agreement and the International Underwriting Agreement, and neither the Hong Kong Underwriting Agreement nor the International Underwriting Agreement having been terminated; (ii) the Offer Price having been agreed upon between the Company and the Overall Coordinators (on behalf of the underwriters of the Global Offering); (iii) the Listing Committee having granted the listing of, and permission to deal in, the H Shares (including the H Shares under the Cornerstone Investment) as well as other applicable waivers and approvals and such approval, permission or waiver having not been revoked prior to the commencement of dealings in the H Shares on the Stock Exchange; (iv) no laws shall have been enacted or promulgated by any government authority which prohibits the consummation of the transactions contemplated in Hong Kong Public Offering, the International Offering or the Cornerstone Investment Agreement, and there shall be no orders or injunctions from a court of competent jurisdiction in effect precluding or prohibiting consummation of such transactions; and (v) the respective representations, warranties, acknowledgements, undertakings and confirmations of the Cornerstone Investor under the Cornerstone Investment Agreement are accurate and true in all respects and not misleading and that there is no material breach of the Cornerstone Investment Agreement on the part of the Cornerstone Investor. RESTRICTIONS ON THE CORNERSTONE INVESTOR Each of the Cornerstone Investors has agreed that it will not, whether directly or indirectly, at any time during the period of six months from the Listing Date (the “ Lock-up Period ”), dispose of any of the Offer Shares they have purchased pursuant to the relevant Cornerstone Investment Agreements, save for certain limited circumstances, such as transfers to any of its wholly-owned subsidiaries, or any affiliated fund under common management or control with the relevant Cornerstone Investor, who will be bound by the same obligations of such Cornerstone Investor, including the Lock-up Period restriction. CORNERSTONE INVESTORS – 342 – --- page 352 --- BEFORE THE COMPLETION OF THE GLOBAL OFFERING As of the Latest Practicable Date, the issued share capital of our Company was RMB356,092,695, comprising 356,092,695 Unlisted Shares with a nominal value of RMB1.00 each. UPON THE COMPLETION OF THE GLOBAL OFFERING Immediately following the completion of the Global Offering and conversion of Unlisted Shares into H Shares, assuming that the Over-allotment Option is not exercised, the issued share capital of our Company will be as follows: Description of Shares Number of Shares Approximate percentage to the total share capital of our Company (%) Unlisted Shares in issue (1) ........................... 145,607,656 39.01 H Shares converted from Unlisted Shares (2) .............. 210,485,039 56.39 H Shares to be issued under the Global Offering .......... 17,147,200 4.59 Total ............................................ 373,239,895 100.00 Immediately following the completion of the Global Offering and conversion of Unlisted Shares into H Shares, assuming that the Over-allotment Option is fully exercised, the issued share capital of our Company will be as follows: Description of Shares Number of Shares Approximate percentage to the total share capital of our Company (%) Unlisted Shares in issue (1) ........................... 145,607,656 38.74 H Shares converted from Unlisted Shares (2) .............. 210,485,039 56.01 H Shares to be issued under the Global Offering .......... 19,719,200 5.25 Total ............................................ 375,811,895 100.00 Notes: (1). The Unlisted Shares in issue refer to 36,780,390 Unlisted Shares held by ZJ Leading Initiating VC, 35,091,495 Unlisted Shares held by Dr. Tian, 19,263,240 Unlisted Shares held by Lapam Capital, 10,862,055 Unlisted Shares held by Zhangjiang Sci & Tech, 7,758,630 Unlisted Shares held by Jiaxing Changxian, 7,419,847 Unlisted Shares held by Jiaxing Changyu, 7,214,085 Unlisted Shares held by Suzhou Likang Equity Investment Centre (Limited Partnership) (ᛆҳ༟ʕː (Υྫ)), 3,463,673 Unlisted Shares held by Gongqing City Ruiji Fund III Investment Partnership (๿Λɧಂҳ༟ΥྫΆุ (Υྫ)), 3,350,655 Unlisted Shares held by Sunshine Life Insurance Corporation Limited (ʮ̡ ), 2,633,332 Unlisted Shares held by Shengzhou Minglang Industry Development Equity Investment Fund Partnership (Limited Partnership) (ٰ࢝ ΥྫΆุ (Υྫ)), 2,347,150 Unlisted Shares held by Shihezi Yaluo Equity Investment Partnership (Limited Partnership) (ΥྫΆุ ), 2,271,083 Unlisted Shares held by Granite Peak Limited, 1,731,836 Unlisted Shares held by Borah Peak Limited, 1,697,445 Unlisted Shares held by Nanjing Xingjian Ruiying Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υ ྫ)), 1,227,717 Unlisted Shares held by Gongqing City Chuangdongfang Huaying Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ)), 1,066,815 Unlisted Shares held by Shanghai Sci-Tech Innovation Center Capital Fund I (Limited Partnership) (ΥྫΆ ุ(Υྫ)), 753,840 Unlisted Shares held by Suzhou Lirun Equity Investment Centre (Limited Partnership) ( ᘽ ᛆҳ༟ʕː (Υྫ)) and 674,370 Unlisted Shares held by Wuhu Bloomage Langya Healthcare Industry Investment Partnership (Limited Partnership) (ԭ਄ੰପุҳ༟ΥྫΆุ (Υྫ)). (2). Following the completion of the Global Offering and according to the approval issued by the CSRC on January 31, 2023, 210,485,039 Unlisted Shares will be converted into H Shares on a one-for-one basis and listed on the Stock Exchange for trading. SHARE CAPITAL – 343 – --- page 353 --- OUR SHARES The H Shares, to be issued following the completion of the Global Offering and converted from the Unlisted Shares, and the Unlisted Shares are ordinary Shares in the share capital of our Company, all of which are considered as one class of Shares. Apart from certain qualified domestic institutional investors in the PRC, qualified PRC investors under the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect and other persons entitled to hold H Shares pursuant to the relevant PRC laws and regulations or upon approval by any competent authorities, H Shares generally may not be subscribed for by, or traded between, investors of the PRC. H Shares may only be subscribed for and traded in Hong Kong dollars. Unlisted Shares and H Shares are regarded as one class of Shares under our Articles of Association and will rank pari passu with each other in all other respects and, in particular, will rank equally for all dividends or distributions declared, paid or made after the date of this prospectus. Dividends in respect of our Shares may be paid by us in Hong Kong dollars or Renminbi, as the case may be. In addition to cash, dividends may be distributed in the form of Shares. CONVERSION OF OUR UNLISTED SHARES INTO H SHARES According to the regulations issued by the CSRC and our Articles of Association, the holders of our Unlisted Shares may, at their own option, authorize the Company to apply to the CSRC for conversion of their respective Unlisted Shares to H Shares, and such converted Shares may be listed and traded on an overseas stock exchange provided that the conversion, listing and trading of such converted Shares have been approved by the securities regulatory authorities of the State Council. Additionally, such conversion, trading and listing shall meet any requirement of internal approval process and in all respects comply with the regulations prescribed by the securities regulatory authorities of the State Council and the regulations, requirements and procedures prescribed by the relevant overseas stock exchange. Save as disclosed in this prospectus and to the best knowledge of our Directors, we are not aware of the intention of such existing Shareholders to convert their Unlisted Shares. If any of the Unlisted Shares are to be converted, listed and traded as H Shares on the Stock Exchange, the approvals of the relevant PRC regulatory authorities, including the CSRC, and the approval of the Stock Exchange are necessary for such conversion. Based on the procedures for the conversion of Unlisted Shares into H Shares as set forth below, we will apply for the listing of all or any portion of the Unlisted Shares on the Stock Exchange as H Shares in advance of any proposed conversion after the Global Offering to ensure that the conversion process can be completed promptly upon notice to the Stock Exchange and delivery of Shares for entry on the H Share register. As the listing of additional Shares after the Listing on the Stock Exchange is ordinarily considered by the Stock Exchange to be a purely administrative matter, it does not require such prior application for listing at the time of our listing in Hong Kong. No Shareholder voting is required for the conversion of such Shares or the listing and trading of such converted Shares on an overseas stock exchange. Any application for listing of the converted shares on the Stock Exchange after our initial listing is subject to prior notification by way of announcement to inform our Shareholders and the public of any proposed conversion. After all the requisite approvals have been obtained, the relevant Unlisted Shares will be withdrawn from the Unlisted Share register, and our Company will re-register such Shares on the H Share register maintained in Hong Kong and instruct the H Share Registrar to issue H Share certificates. Registration on the H Share register of our Company will be on the conditions that (i) the H Share Registrar lodges with the Stock Exchange a letter confirming the entry of the relevant H Shares on the H Share register and the due dispatch of H Share certificates; and (ii) the admission of the H Shares to be traded on the Stock Exchange complies with the Listing Rules and the General Rules of CCASS and the CCASS Operational Procedures in force from time to time. SHARE CAPITAL – 344 – --- page 354 --- Until the converted Shares are re-registered on the H Share register of our Company, such Shares would not be listed as H Shares. For details of our existing Shareholders’ proposed conversion of Unlisted Shares into H Shares, see “History, Development and Corporate Structure — Capitalization.” RESTRICTIONS OF SHARE TRANSFER In accordance with the PRC Company Law, the shares issued prior to any public offering of shares by a company cannot be transferred within one year from the date on which such publicly offered shares are listed and traded on the relevant stock exchange. As such, the Shares issued by our Company prior to the issue of H Shares will be subject to such statutory restriction on transfer within a period of one year from the Listing Date. Our Directors, Supervisors and members of the senior management of our Company shall declare their shareholdings in our Company and any changes in their shareholdings. Shares transferred by our Directors, Supervisors and members of the senior management each year during their term of office shall not exceed 25% of their total respective shareholdings in our Company. The Shares that the aforementioned persons held in our Company cannot be transferred within one year from the date on which the Shares are listed and traded, nor within half a year after they leave their positions in our Company. The Articles of Association may contain other restrictions on the transfer of the Shares held by our Directors, Supervisors and members of senior management of our Company. For details of the lock-up undertaking given by our Controlling Shareholders pursuant to Rule 10.07 of the Listing Rules, see “Underwriting — Underwriting Arrangements and Expenses — Undertakings to the Stock Exchange pursuant to the Listing Rules — Undertakings by our Controlling Shareholders” REGISTRATION OF SHARES NOT LISTED ON AN OVERSEAS STOCK EXCHANGE According to the Notice of Centralized Registration and Deposit of Non-overseas Listed Shares of Companies Listed on an Overseas Stock Exchange (΅ ‘) issued by the CSRC, our Company is required to register and deposit our Shares that are not listed on the overseas stock exchange with the CSDC within 15 business days after the Listing and provide a written report to the CSRC regarding the centralized registration and deposit of our Shares that are not listed on the overseas stock exchange as well as the offering and listing of our H Shares. GENERAL MANDATE TO ISSUE SHARES Subject to the completion of the Global Offering, our Board has been granted a general mandate to allot and issue H Shares at any time within a period up to the date of the conclusion of the next annual general meeting of the Shareholders or the date on which our Shareholders pass a resolution to revoke or change such mandate, whichever is earlier, upon such terms and conditions and for such purposes as our Board in their absolute discretion deem fit, provided that, the number of H Shares to be issued shall not exceed 20% of the number of H Shares in issue as at the Listing Date. For further details on this general mandate, see “Appendix IV — Statutory and General Information — A. Further Information about our Group — 4. Resolutions of the Shareholders of our Company.” SHAREHOLDERS’ APPROV AL FOR THE GLOBAL OFFERING Approval from our Shareholders is required for our Company to issue H Shares and seek the listing of H Shares on the Stock Exchange. Our Company has obtained such approval at the Shareholders’ general meeting held on June 14, 2022. SHARE CAPITAL – 345 – --- page 355 --- So far as our Directors are aware, immediately following the completion of the Global Offering and the conversion of our Unlisted Shares to H Shares assuming the Over-allotment Option is not exercised, the following persons will have an interest and/or short position in the Shares or the underlying Shares which would fall to be disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, will be, directly or indirectly interested in 10% or more of the nominal value of any class of our share capital carrying rights to vote in all circumstances at general meetings of our Company: Name of Shareholder Capacity/Nature of interest Description of Shares (13) Number of Shares Approximate percentage of shareholding in the Unlisted Shares/H Shares (13) as of the date of this prospectus Approximate percentage of shareholding in the total Share capital immediately after completion of the Global Offering (assuming the Over-allotment Option is not exercised) (1) Approximate percentage of shareholding in the Unlisted Shares/H Shares immediately after completion of the Global Offering (assuming the Over-allotment Option is not exercised) (2) Dr. Tian (3) (4) ....... Beneficial owner Unlisted Shares 35,091,495 9.85% 9.40% 24.10% H Shares 35,091,495 9.85% 9.40% 15.42% Interest in controlled corporation; Interest of spouse H Shares 18,000,000 5.05% 4.82% 7.91% Interest in controlled corporations Unlisted Shares 15,178,477 4.26% 4.07% 10.42% H Shares 15,178,478 4.26% 4.07% 6.67% Halo Investment II (3) .... Beneficial owner H Shares 18,000,000 5.05% 4.82% 7.91% Jiaxing Changxian (4) .... Beneficial owner Unlisted Shares 7,758,630 2.18% 2.08% 5.33% H Shares 7,758,630 2.18% 2.08% 3.41% Jiaxing Changyu (4) ..... Beneficial owner Unlisted Shares 7,419,847 2.08% 1.99% 5.10% H Shares 7,419,848 2.08% 1.99% 3.26% Mr. Yu Xiaoyong (ۇ5) Interest in controlled corporations Unlisted Shares 36,780,390 10.33% 9.85% 25.26% H Shares 5,554,305 1.56% 1.49% 2.44% ZJ Leading Initiating VC (5) . Beneficial owner Unlisted Shares 36,780,390 10.33% 9.85% 25.26% Lapam Capital (6) ...... Beneficial owner Unlisted Shares 19,263,240 5.41% 5.16% 13.23% Mr. Yi Shi (7) ........ Interest in controlled corporations H Shares 27,721,575 7.78% 7.43% 12.18% LA V ImmuneOnco (7) .... Beneficial owner H Shares 15,178,770 4.26% 4.07% 6.67% LA V ImmOn (7) ....... Beneficial owner H Shares 12,542,805 3.52% 3.36% 5.51% Mr. Cheng Yiquan (೻່Ό)(8) ........ Interest in controlled corporations H Shares 16,560,270 4.65% 4.44% 7.28% Mr. Chen Fei (࠭9) ......... Interest in controlled corporations Unlisted Shares 7,967,925 2.24% 2.13% 5.47% H Shares 7,967,925 2.24% 2.13% 3.50% GBA Investment (10) .... Beneficial owner H Shares 13,854,690 3.89% 3.71% 6.09% Zhangjiang Sci & Tech (11) . Beneficial owner Unlisted Shares 10,862,055 3.05% 2.91% 7.46% Mr. Yao Li Ho (12) ...... Interest in controlled corporations Unlisted Shares 4,002,918 1.12% 1.07% 2.75% H Shares 12,008,757 3.37% 3.22% 5.28% Notes: (1) The calculation is based on the total number of 373,239,895 Shares in issue immediately after completion of the Global Offering (without taking into account the H Shares which may be issued upon the exercise of the Over-allotment Option). (2) The calculation is based on the total number of 145,607,656 Unlisted Shares and 227,632,239 H Shares in issue immediately after completion of the Global Offering (without taking into account the H Shares which may be issued upon the exercise of the Over-allotment Option). SUBSTANTIAL SHAREHOLDERS – 346 – --- page 356 --- (3) Halo Investment II, one of our Employee Shareholding Platforms and a limited liability company incorporated under the laws of the BVI, is wholly owned by Halo LP, a limited partnership established under the laws of the BVI. The general partner of Halo LP is Halo Biomedical Investment I Limited (“ Halo Investment I ”). As of the Latest Practicable Date, Dr. Tian was the sole director of Halo Investment I and controlled the voting rights in Halo Investment I pursuant to the voting agreement entered into between Dr. Tian and the sole shareholder of Halo Investment I, and Halo Investment I was accustomed to act in accordance with Dr. Tian’s instruction. For further details of the voting agreement, see “History, Development and Corporate Structure — Employee Shareholding Platforms — Halo Investment II.” Further, as of the Latest Practicable Date, Dr. Yumei Ding, the spouse of Dr. Tian and a director of our subsidiary, held more than one-third of interests as a limited partner in Halo LP. All limited partners of Halo LP do not have any voting rights in our Company which are resided with the sole director of Halo Investment I being Dr. Tian. As such, under the SFO, Dr. Tian is deemed to be interested in 18,000,000 H Shares held by Halo Investment II as well as Dr. Yumei Ding’s deemed interest in Halo Investment II. (4) Each of Jiaxing Changxian and Jiaxing Changyu, our Employee Shareholding Platforms, is a limited partnership incorporated under the laws of the PRC and is managed by its general partner, Jiaxing Hanning Enterprise Management Co., Ltd. (ʮ̡ ), which is ultimately controlled by Dr. Tian. As such, under the SFO, Dr. Tian is deemed to be interested in an aggregate of 15,178,477 Unlisted Shares and 15,178,478 H Shares held by Jiaxing Changxian and Jiaxing Changyu. (5) ZJ Leading Initiating VC beneficially owns 36,780,390 Unlisted Shares and ZJ Leading SiQi VC beneficially owns 5,554,305 H Shares. ZJ Leading Initiating VC is a limited partnership incorporated under the laws of the PRC, whose general partner is Shanghai Zhangke Lingyi Enterprise Management Center (Limited Partnership) (߅ ჯᔼΆุ၍ଣʕː (Υྫ)), a limited partnership incorporated under the laws of the PRC, which is ultimately controlled by Mr. Yu Xiaoyong (ۇour non-executive Director. ZJ Leading SiQi VC is a limited partnership incorporated under the laws of the PRC, whose general partner is Jiaxing Linghe Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ (Υྫ)), a limited partnership incorporated under the laws of PRC, which is also ultimately controlled by Mr. Yu Xiaoyong (ۇAs such, under the SFO, Mr. Yu Xiaoyong (ۇis deemed to be interested in 36,780,390 Unlisted Shares and 5,554,305 H Shares held by ZJ Leading Initiating VC and ZJ Leading SiQi VC. (6) Lapam Capital is a limited partnership incorporated under the laws of the PRC, whose general partner is Tibet Lapam Yijing Venture Capital Center (Limited Partnership) (౻௴ุҳ༟ʕː (Υྫ)), which is ultimately controlled by Mr. Yu Zhihua (ശ), one of our non-executive Directors. As such, under the SFO, Mr. Yu Zhihua (ശ) is deemed to be interested in 19,263,240 Unlisted Shares held by Lapam Capital. (7) LA V ImmuneOnco beneficially owns 15,178,770 H Shares and LA V ImmOn beneficially owns 12,542,805 H Shares. LA V ImmuneOnco, a private company incorporated under the laws of Hong Kong, is wholly owned by LA V Biosciences Fund V , L.P. (“ LA V V”), which is ultimately controlled by Mr. Yi Shi. LA V ImmOn, a private company incorporated under the laws of Hong Kong, is held as to 50% by LA V Fund VI, L.P. and as to 50% by LA V Fund VI Opportunities, L.P., each of which is also ultimately controlled by Mr. Yi Shi. As such, under the SFO, Mr. Yi Shi is deemed to be interested in an aggregate of 27,721,575 H Shares held by LA V ImmuneOnco and LA V ImmOn. (8) Jiaxing Liyou Equity Investment Partnership (ᛆҳ༟ΥྫΆุ (Υྫ)) (“ Jiaxing Liyou ”) beneficially owns 4,743,630 H Shares, Shanghai Licheng Yijing Equity Investment Management Center (Limited Partnership) (ᛆҳ༟၍ଣʕː (Υྫ)) (“ Licheng Investment ”) beneficially owns 9,631,620 H Shares and Milestone Asset Management (Cayman) Co., Ltd. (“ Milestone Asset ”) beneficially owns 2,185,020 H Shares. Each of Jiaxing Liyou and Licheng Investment is a limited partnership and private equity fund incorporated under the laws of the PRC. The general partner of both Jiaxing Liyou and Licheng Investment is Shanghai Li Neng Asset Management Co., Ltd. (ʮ̡ ), which is ultimately controlled by Mr. Cheng Yiquan (೻່Ό). Milestone Asset is a limited liability company incorporated under the laws of Cayman Islands. As of the Latest Practicable Date, Milestone Asset was owned as to 99.99% by Mr. Cheng Yiquan ( ೻່Ό). As such, under the SFO, Mr. Cheng Yiquan ( ೻່Ό) is deemed to be interested in an aggregate of 16,560,270 H Shares held by Jiaxing Liyou, Licheng Investment and Milestone Asset. (9) Suzhou Likang Equity Investment Centre (Limited Partnership) (ᛆҳ༟ʕː (Υྫ)) (“ Suzhou Likang ”) beneficially owns 7,214,085 Unlisted Shares and 7,214,085 H Shares and Suzhou Lirun Equity Investment Centre (Limited Partnership) (ᛆҳ༟ʕː (Υྫ)) (“ Suzhou Lirun ”) beneficially owns 753,840 Unlisted Shares and 753,840 H Shares. Each of Suzhou Likang and Suzhou Lirun is a limited partnership incorporated under the laws of the PRC. The general partner of Suzhou Likang is Shanghai Liyi Investment Management Limited Partnership ( ɪऎᓿ൪ҳ༟၍ଣΥྫΆุ (Υྫ)) and the general partner of Suzhou Lirun is Shanghai Likun Enterprise Management Partnership (Limited Partnership) ( ɪऎᓿ䃑Άุ၍ଣΥྫΆุ (Υ ྫ)), each of which is ultimately controlled by Mr. Chen Fei (࠭As such, under the SFO, Mr. Chen Fei (࠭) is deemed to be interested in an aggregate of 7,967,925 Unlisted Shares and 7,967,925 H Shares held by Suzhou Likang and Suzhou Lirun. SUBSTANTIAL SHAREHOLDERS – 347 – --- page 357 --- (10) GBA Fund Investment Limited is a wholly-controlled subsidiary of Greater Bay Area Homeland Development Fund LP (Υྫ )( “ Greater Bay Area Fund ”). The general partner of Greater Bay Area Fund is Greater Bay Area Homeland Development Fund (GP) Limited, and Greater Bay Area Fund is a fund that was jointly established by multi-national industrial corporations, financial institutions, and new economic enterprises. Greater Bay Area Fund is under discretionary management of Greater Bay Area Development Fund Management Limited (“ GBA Fund Management ”). Each of Greater Bay Area Homeland Development Fund (GP) Limited and GBA Fund Management is controlled by GBA Homeland Limited, which is wholly owned by Greater Bay Area Homeland Investments Limited. As such, under the SFO, Greater Bay Area Homeland Investments Limited is deemed to be interested in 13,854,690 H Shares held by GBA Fund Investment Limited. (11) Zhangjiang Sci & Tech is a company incorporated under the laws of the PRC, which is wholly owned by Zhangjiang Group ( ɪऎੵϪ(ණྠ)ʮ̡), a company wholly owned by Shanghai Municipal Pudong New Area State-owned Assets Supervision and Administration Commission (ึ ). As such, under the SFO, Shanghai Municipal Pudong New Area State-owned Assets Supervision and Administration Commission is deemed to be interested in 10,862,055 Unlisted Shares held by Zhangjiang Sci & Tech. (12) Granite Peak Limited is an exempted company incorporated under the laws of the Cayman Islands, which is owned as to 38.99% by LYFE Capital Fund III (Phoenix) L.P. (“ LYFE Fund III ”), 30.50% by Palace Investments Pte. Ltd, 18.78% by Axiom Asia 6, L.P, and 11.73% by Axiom Asia 6-A SCSP, SICA V RAIF. LYFE Fund III is a limited partnership incorporated in the state of Delaware, USA, the general partner of which is LYFE Capital Management (Phoenix) LLC, which is wholly owned by Mr. Yao Li Ho. Borah Peak Limited is a limited liability company incorporated under the laws of Hong Kong, which is wholly owned by LYFE Fund III. As such, under the SFO, Mr. Yao Li Ho is deemed to be interested in an aggregate of 4,002,918 Unlisted Shares and 12,008,757 H Shares held by Granite Peak Limited and Borah Peak Limited. (13) For the avoidance of doubt, both Unlisted Shares and H Shares are ordinary Shares in the share capital of our Company, and are considered as one class of Shares. Save as disclosed above, our Directors are not aware of any person who will, immediately following completion of the Global Offering (assuming that the Over-allotment Option is not exercised), have any interest and/or short position in the Shares or underlying Shares of our Company which will be required to be disclosed to our Company and the Stock Exchange pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who are, directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of the Company or any other member of our Group. Our Directors are not aware of any arrangement which may at a subsequent date result in a change of control of our Company. SUBSTANTIAL SHAREHOLDERS – 348 – --- page 358 --- BOARD OF DIRECTORS The Board currently consists of nine Directors, including three executive Directors, three non-executive Directors and three independent non-executive Directors. Pursuant to the Articles of Association, our Directors are elected and appointed by our Shareholders at a Shareholders’ meeting for a term of three years, which is renewable upon re-election and re-appointment. The following table sets forth the key information about our Directors: Name Position Age Date of joining our Group Date of appointment as Director Responsibilities Dr. Tian Wenzhi (͞˖қ)....... Chairman of our Board, chief executive officer, chief scientific officer and executive Director 59 June 18, 2015 June 18, 2015 Responsible for overall strategic planning, business management, and research and development of our Group Mr. Li Song (ؒ)........ Vice president of research and development and executive Director 38 December 17, 2015 December 17, 2015 Responsible for leading preclinical research and development efforts of our Group Ms. Song Ziyi (҂ɿɓ)....... Chief financial officer and executive Director 39 July 26, 2021 January 17, 2022 Responsible for the formulation of financial and development strategies, and overseeing the overall financial management and corporate development of our Group Dr. Xu Cong (ᑋ) ........ Non-executive Director 37 October 14, 2020 October 14, 2020 Responsible for advising on our business plans, major decisions and investment activities of our Group Mr. Yu Zhihua (ശ)....... Non-executive Director 56 March 30, 2018 March 30, 2018 Responsible for advising on our business plans, major decisions and investment activities of our Group Mr. Yu Xiaoyong (ۇ)....... Non-executive Director 51 December 15, 2015 December 15, 2015 Responsible for advising on our business plans, major decisions and investment activities of our Group Dr. Zhenping Zhu ... Independent non-executive Director 58 August 3, 2016 August 3, 2016 Responsible for supervising and providing independent advice to our Board Dr. Kendall Arthur Smith ........ Independent non-executive Director 81 June 14, 2022 June 14, 2022 Responsible for supervising and providing independent advice to our Board Mr. Yeung Chi Tat (เқ༺)....... Independent non-executive Director 53 June 14, 2022 June 14, 2022 Responsible for supervising and providing independent advice to our Board DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 349 – --- page 359 --- Executive Directors Dr. Tian Wenzhi ( ͞˖қ), aged 59, founded our Group in June 2015 and has been serving as a Director since then. He has been serving as the chairman of our Board and the chief executive officer of our Company since December 15, 2015 and has been serving as the chief scientific officer of our Company since June 18, 2018. He was re-designated as an executive Director on June 14, 2022. Dr. Tian is responsible for the overall strategic planning, business management, and research and development of our Group. Since inception, Dr. Tian has been the key driving force in our innovation and overseen our science-driven research and development efforts, from discovery, target selection and validation, CMC development, to clinical studies. He is currently also a director of ImmuneTANK, ImmuneOnco Shanghai, Macroimmune and ImmuneOnco Hong Kong. Dr. Tian has over 30 years of experience in the biomedical industry. Prior to founding our Company, Dr. Tian served as a teaching assistant at the Medical School of Zhengzhou University (ቍψɽኪᔼኪ৫ ) (formerly known as Henan Medical University (ɽኪ ) from July 1990 to September 1993. Dr. Tian also worked on cloning of c-Rel regulated genes that are involved in B cell functions at Weill Cornell Medical College for several years. He later served as a principal research associate at ImClone Systems Inc., a company primarily engaging in research and development of anti-tumor antibody drugs from January 2006 to April 2011, where he was responsible for research of monoclonal antibody drugs addressing novel tumor targets. Dr. Tian co-founded Huabo Biopharm (Shanghai) Co., Ltd. (ᔼᖹҦஔ (ɪऎ)ʮ̡)( “ Huabo Biopharm ”), a company primarily engaging in research and development of new biological drug in tumors and autoimmune diseases, and served as its general manager from June 2011 to April 2015. Dr. Tian was recognized as a senior biomedical engineer by Shanghai Municipal Human Resources and Social Security Bureau (ღ҅ ) in November 2019. Dr. Tian served as a visiting professor at the First Affiliated Hospital of Zhengzhou University ( ቍψ ᙮ᔼ৫ ), a visiting professor at Henan Medical University (ɽኪᔼኪ৫ ), a distinguished professor at the Second Affiliated Hospital of Zhengzhou University ( ቍψɽኪୋɚ ᙮ᔼ৫) and a visiting professor at School of Pharmacy, Fudan University ( ూ͇ɽኪᖹኪ৫ ), respectively. Dr. Tian has published 32 scientific papers, participated in the edition of one monograph and owns 22 issued patents. Dr. Tian obtained a bachelor’s degree in medicine and a master’s degree in immunology of basic medicine department from the Medical School of Zhengzhou University (ɽኪ )i n the PRC in July 1987 and July 1990, respectively. As accredited by a globally recognized institution providing credential evaluation, World Education Services, in September 2022, such education is equivalent to the Doctor of Medicine and a master’s degree in the United States. Dr. Tian pursued his postdoctoral training as a Doctor of Medicine at North Shore University Hospital in the United States from October 1997 to April 2001. He also participated in research at Karolinska Institute in Sweden. Mr. Li Song (ؒ)aged 38, joined our Group in December 2015 and has been serving as a Director since then. Mr. Li served as the senior director of research and development of our Company from January 2019 to January 2023, and has been serving as the vice president of research and development of our Company since January 2023. He was re-designated as an executive Director on June 14, 2022. Mr. Li is responsible for leading preclinical research and development efforts of our Group. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 350 – --- page 360 --- Mr. Li has over 10 years of experience in the biopharmaceutical and biological science industries. Prior to joining our Group, Mr. Li served as a manager of the research and development department at Huabo Biopharm from April 2012 to December 2015, where he was responsible for in vitro studies of antibodies and fusion proteins, construction of stable cell strains and other matters related to molecular biology. Mr. Li obtained a bachelor’s degree in biological science from Inner Mongolia University of Science & Technology (Ҧɽኪ ) in the PRC in July 2008 and a master’s degree in biochemistry and molecular biology from Jilin Agricultural University (ุ༵ɽኪ ) in the PRC in July 2011. Ms. Song Ziyi ( ҂ɿɓ), aged 39, has been serving as the chief financial officer of our Company since July 2021 and a Director since January 2022. She was re-designated as an executive Director on June 14, 2022. Ms. Song is responsible for the formulation of financial and development strategies, and overseeing the overall financial management and corporate development of our Group. Ms. Song has over 15 years of experience in corporate finance and healthcare investment management. Prior to joining our Group, Ms. Song served in the global investment banking division of Bank of America Securities (formerly known as Merrill Lynch and Bank of America Merrill Lynch) from 2006 to 2009 and subsequently from 2010 to 2015, holding her last position as a vice president. After that, Ms. Song served as a director of the corporate advisory division with UBS Securities Hong Kong Limited from 2015 to 2017. Ms. Song later served as a director in the investment banking division of CLSA Limited from 2017 to 2020. From 2020 to 2021, she served as a managing director with Greater Bay Area Development Fund Management Limited ( ɽ ʮ̡ ), leading the healthcare investment efforts of the fund. Ms. Song obtained a bachelor’s degree in mathematics from the University of Chicago in the United States in June 2006 and a master’s degree in medical sciences from the University of Hong Kong in Hong Kong in November 2021. Non-executive Directors Dr. Xu Cong (ᑋ), Ph.D. , aged 37, joined our Group in October 2020 and has been serving as a Director since then. He was re-designated as a non-executive Director on June 14, 2022. Dr. Xu is responsible for advising on our business plans, major decisions and investment activities of our Group. Dr. Xu has approximately 10 years of experience in the biomedical and financial industries. Prior to joining our Group, Dr. Xu joined Lilly Suzhou Pharmaceutical Co., Ltd. Shanghai Branch (ʮ̡ɪऎʱʮ̡ ), which is a subsidiary of Eli Lilly and Company, a company listed on the New York Stock Exchange (“ NYSE”) (stock code: LLY), in August 2012. He has been serving as an executive director of Lilly Asia Ventures (ږsince January 2018. Dr. Xu has been serving as a non-executive director of EdiGene Inc. (ʮ̡ ) and NovoDodex Biopharmaceuticals Co., Ltd. (ʮ̡ ) since August 2018 and March 2021, respectively. He has also been serving as the chairman of the board of Impact Therapeutics (Nanjing) (ʮ̡ ) since July 2020. Dr. Xu obtained a bachelor’s degree in clinical medicine from Tongji Medical College of Huazhong University of Science and Technology (ҦɽኪΝ᏶ᔼኪ৫ ) in the PRC in June 2007 and a Ph.D. in biological sciences from Clemson University in the United States in May 2012. He also obtained a master’s degree in business administration from the University of British Columbia in Canada in May 2018 through attending long-distance learning courses. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 351 – --- page 361 --- Mr. Yu Zhihua (ശ), aged 56, joined our Group in March 2018 and has been serving as a Director since then. He was re-designated as a non-executive Director on June 14, 2022. Mr. Yu is responsible for advising on our business plans, major decisions and investment activities of our Group. Mr. Yu has over 30 years of experiences in investment management and strategic business development. Prior to joining our Group, Mr. Yu founded Beijing Lapam Capital Management Consultant Center (General Partnership) ( ̏ԯᎲᇂҳ༟၍ଣፔ༔ʕː (౷ஷΥྫ)) in 2010 and has been its managing partner since then. He has been serving as a non-executive director of Betta Pharmaceuticals Co., Ltd. (ʮ̡ ), a company listed on the Shenzhen Stock Exchange (stock code: 300558), since October 2017. Mr. Yu obtained a bachelor’s degree in economics from Renmin University of China ( ʕ਷ɛ ͏ɽኪ) in the PRC in July 1990, and his master’s degrees in taxation and business administration from George Washington University in the United States in January 1999 and January 2001, respectively. Mr. Yu Xiaoyong (ۇ)aged 51, joined our Group in December 2015 and has been serving as a Director since then. He was re-designated as a non-executive Director on June 14, 2022. Mr. Yu is responsible for advising on our business plans, major decisions and investment activities of our Group. Mr. Yu has approximately 19 years of experience in project management and investment. Prior to joining our Group, Mr. Yu successively served as an investment manager and the investment director at Shanghai Dingjia Ventures Co., Ltd. (ʮ̡ ) from August 2003 to June 2009, during which he was mainly responsible for project management and project investment. He served as the investment director at Shanghai Zhangjiang Technology Venture Investment Co., Ltd. (ʮ̡ ) from July 2009 to November 2015. He also served as a representative of the executive partner of ZJ Leading Initiating VC, one of our substantial Shareholder, and the chairman of the board of Shanghai Yongkan Investment Management Co., Ltd. (ʮ̡ ) from December 2015 to June 2021. Mr. Yu has been serving as a director of Shanghai Yinpao Information Technology Co., Ltd. (ڦ ʮ̡ ) since August 2010 and an executive director and the general manager of Shanghai Jiangxun Investment Management Co., Ltd. (ʮ̡ ) since January 2016, respectively. He has also been serving as a director of Shanghai Simp Bio-science Co., Ltd. (ʮ̡ ) since August 2019, a supervisor of Shanghai NewMed Medical Co., Ltd. (ʮ̡ ) since March 2021 and an executive director of Shanghai Haili Biotech Service Co., Ltd. (ʮ̡ ) since October 2021. Mr. Yu has also been serving as a director of Hengjing Hechuang Biopharma (Zhejiang) Co., Ltd. ( 㛬หΥ௴͛ ʮ̡ ) since July 2022, Shanghai Hepu Pharmaceutical Co., Ltd. ( ɪऎ൭౷ᖹ ʮ̡ ) since July 2022, Shanghai Jiewei Medical Technology Co., Ltd. (ᔼᖹ ʮ̡ ) since September 2022 and Shanghai Novamab Biopharmaceuticals Co., Ltd. ( ɪऎ ʮ̡ ) since September 2022, respectively. Mr. Yu obtained a bachelor’s degree in technology economics from Jilin Industrial University (ʈุɽኪ ) (currently known as Jilin University (ɽኪ)) in the PRC in July 1994 and a master’s degree in business administration from Nankai University (කɽኪ) in the PRC in January 2001. Mr. Yu has been a qualified intermediate economist in the PRC since November 1998. He obtained the qualification of practitioners in funds industry issued by the Asset Management Association of China (ุ՘ึ ) in December 2017. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 352 – --- page 362 --- Independent non-executive Directors Dr. Zhenping Zhu, Ph.D. , aged 58, has been our independent non-executive Director since September 2016. He was re-designated as an independent non-executive Director on June 14, 2022. Dr. Zhu is responsible for supervising and providing independent advice to our Board. Dr. Zhu has approximately 30 years of experience in the pharmaceutical industry and innovative drug research development. Prior to joining our Group, Dr. Zhu had positions in various biopharmaceutical companies, including ImClone Systems Inc., Novartis Pharma AG, which is a subsidiary of Novartis AG, a company dually listed on the NYSE (stock code: NVS) and Six Swiss Exchange (stock code: NOVN), and Kadmon Corporation. After that, Dr. Zhu successively served as the president of research and development and the chief scientific officer at 3SBio Inc. ( ɧ͛Ⴁ ᖹʮ̡)( “3SBio Inc .”), a company listed on the Stock Exchange (stock code: 1530), from January 2017 to May 2019. He also served as a director, the president of research and development and the chief scientist of Sunshine Guojian Pharmaceutical (Shanghai) Co., Ltd. ( ɧ͛਷਄ᖹุ (ɪऎ)΅ ʮ̡), a company listed on the Science and Technology Innovation Board of Shanghai Stock Exchange (stock code: 688336) and also a subsidiary of 3SBio Inc., from June 2019 to January 2022. Dr. Zhu also previously served as a non-executive director on the board of Refuge Biotechnologies Inc., Verseau Therapeutics and Numab Therapeutic AG. In January 2022, Dr. Zhu founded HanBio Therapeutics €Shanghai) Co., Ltd. ( ʗ͛ᔼᖹҦஔ (ɪऎ)ʮ̡), and served as the chairman of the board and the chief executive officer. In February 2023, Dr. Zhu joined Helixon Biotechnology (Beijing) Co., Ltd. (Ҧ (̏ԯ)ʮ̡) (commonly known as “Helixon”) as a co-founder, and has served as the president and co-chief executive officer since then. Dr. Zhu obtained a bachelor’s degree in clinical medicine from Jiangxi Medical College of Nanchang University (ɽኪϪГᔼኪ৫ ) (formerly known as Jiangxi Medical College ( ϪГᔼ ኪ৫)) in the PRC in July 1985 and a master’s degree in pharmacology from Peking Union Medical College ( ̏ԯ՘ձᔼኪ৫ ) (or namely Chinese Academy of Medical Sciences ( ʕ਷ᔼኪ ኪ৫)) in the PRC in October 1988. Dr. Zhu. further obtained his Ph.D. in immunology and pathology from Dalhousie University in Canada in October 1993 and was a post-doctorate fellow at Genentech, Inc. in the United States. As of the Latest Practicable Date, Dr. Zhu held approximately 10.00% of the partnership interests of Jiaxing Changxian (one of our Onshore Employee Shareholding Platforms), representing an indirect interest of approximately 0.4% of the Company’s total issued Share capital. Dr. Kendall Arthur Smith, M.D. , aged 81, was appointed as an independent non-executive Director on June 14, 2022, and is responsible for supervising and providing independent advice to our Board. Dr. Smith has over 50 years of experience in medicine and biology education and research. He is currently professor of Emeritus of Medicine & Immunology at Weill Cornell Medical College since 2020. Dr. Smith once successively worked as an assistant professor, an associate professor and a professor of medicine at Dartmouth Medical School for approximately 20 years. He later served as a professor of medicine at Weill Cornell Medical College from 1993 to 2020. Dr. Smith is a pioneer in immunological research focused on interleukins. He and his research team identified, purified and characterized interleukin molecules and discovered interleukin-2 receptors. His research promoted the advance in understanding the immune system from cells to molecules. Dr. Smith established that the immune system is regulated by hormone-like molecules that can be manipulated therapeutically. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 353 – --- page 363 --- Dr. Smith obtained a bachelor’s degree in biology from Denison University in the United States in June 1964 and his doctor’s degree in medicine from Ohio State University College of Medicine in the United States in June 1968. Mr. Yeung Chi Tat ( เқ༺), aged 53, was appointed as an independent non-executive Director on June 14, 2022, and is responsible for supervising and providing independent advice to our Board. Mr. Yeung has approximately 30 years of experience in audit, financing and accounting industries. Mr. Yeung is currently the President of the Hong Kong Independent Non-executive Director Association. He has been the chief financial officer and the company secretary at Solargiga Energy Holdings Limited (ʮ̡ ), a company listed on the Stock Exchange (stock code: 757), since December 2021. Prior to joining our Group, Mr. Yeung had positions in various companies, including the Hong Kong office of KPMG as an audit manager, Dynasty Fine Wines Group Limited (ʮ̡ ), a company listed on the Stock Exchange (stock code: 828), as financial controller and the company secretary, and ANTA Sports Products Limited (ʮ̡ ), a company listed on the Stock Exchange (stock code: 2020), as a vice president. After that, Mr. Yeung also served as an independent non-executive director of ANTA Sports Products Limited (ʮ̡ ), a company listed on the Stock Exchange (stock code: 2020), Boer Power Holdings Limited (ʮ̡ ), a company listed on the Stock Exchange (stock code: 1685), New Hope Dairy Holdings Co., Ltd. (ʮ̡ ), a company listed on the Shenzhen Stock Exchange (stock code: 002946), and Guodian Technology & Environment Group Corporation Limited (ණྠ ʮ̡ ), a company formerly listed on the Stock Exchange (stock code: 1296), from February 2007 to June 2018, from September 2010 to June 2020, from December 2016 to May 2023 and from August 2017 to June 2022, respectively. He has been serving as an independent non-executive director of Sitoy Group Holdings Limited (ʮ̡ ), a company listed on the Stock Exchange (stock code: 1023), Birmingham Sports Holdings Limited (ጫ᜗ ʮ̡ ), a company listed on the Stock Exchange (stock code: 2309), and Beijing Capital Grand Limited (ʮ̡ ), a company listed on the Stock Exchange (stock code: 1329), since November 2011, November 2019 and May 2023, respectively. Mr. Yeung obtained a bachelor’s degree in business administration from the University of Hong Kong in November 1993 and a master’s degree in professional accounting with distinction from Hong Kong Polytechnic University in Hong Kong in August 2004. Mr. Yeung has been a fellow member of the Hong Kong Institute of Certified Public Accountants since December 2003, the Association of Chartered Certified Accountants since September 2002 and the Institute of Chartered Accountants in England and Wales since October 2017, respectively. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 354 – --- page 364 --- SUPERVISORY COMMITTEE Our Supervisory Committee comprises three members. Our Supervisors serve a term of three years and may be re-elected for successive reappointments. The functions and duties of the Supervisory Committee include overseeing the financial and business performance of our Group. The following table sets out information in respect of the Supervisors. Name Position Age Date of joining our Group Date of first appointment as Supervisor Responsibilities Mr. Gu Jiefeng (ᚥ௫ቜ) ... Chairman of the Supervisory Committee 40 March 1, 2016 March 1, 2016 Responsible for supervising the performance of our Directors and members of senior management and performing other supervisory duties as a member of the Supervisory Committee Ms. Tian Miao (ߴ)..... Supervisor 31 October 26, 2015 July 24, 2017 Responsible for supervising the performance of our Directors and members of senior management and performing other supervisory duties as a member of the Supervisory Committee Mr. Zhao Zimeng (Ⴛɿ഼) ... Supervisor 32 October 31, 2017 January 17, 2022 Responsible for supervising the performance of our Directors and members of senior management and performing other supervisory duties as a member of the Supervisory Committee Mr. Gu Jiefeng ( ᚥ௫ቜ), aged 40, was appointed as a Supervisor in March 2016 and has been serving as the chairman of Supervisory Committee since March 1, 2016. Mr. Gu is responsible for supervising the performance of our Directors and members of senior management and performing other supervisory duties as a member of the Supervisory Committee. Mr. Gu has approximately 10 years of experience in investment and financing. Mr. Gu has been serving as a duty general manager of Shanghai Zhangke Heren Venture Capital Co., Ltd. ( ɪ ʮ̡ ) since August 2021. He previously worked at Shanghai Yulong Biotech Co., Ltd. (ʮ̡ ) from June 2008 to September 2010. Mr. Gu later worked at Shanghai Pudong Venture Capital Co., Ltd. (ʮ̡ ) from December 2010 to September 2013. He also worked at Venture Accelerator Investment Co., Ltd. (ʮ̡ ) from October 2013 to October 2014. Mr. Gu successively served as a senior investment manager and a director of investment at Zhangjiang Sci & Tech, one of our Pre-IPO Investors and Shareholders, from October 2014 to October 2018 and from October 2018 to August 2021, respectively. Mr. Gu has been serving as a director of Skynor Medical (Ҧ (ɪऎ)ʮ̡), Shanghai Zhangjiang Transformational Medicine R&D Center Co., Ltd. (೯ʕ ʮ̡ ), Joymed Technology (Ҧ (ɪऎ)ʮ̡ ), Shanghai Maiji Biotech Co., Ltd. (ʮ̡ ), Hedu Biotech (Shanghai) Co., Ltd. (Ҧஔ (ɪऎ)ʮ̡), Shanghai Huaiyue Biotech Co., Ltd. (ʮ̡ ), Shanghai Antaike Medical Technology Co., Ltd. (ʮ̡ ) and Shanghai Sajia Biotechnology Co., Ltd. (ʮ̡ ) since March 2017, September 2017, 2018, December 2018, November 2020, January 2021, June 2022 and December 2022, respectively. He has been serving DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 355 – --- page 365 --- as a supervisor of Shanghai Auson Pharmaceuticals Co., Ltd. (ʮ̡ ) and Shanghai Crystal Casting Biotechnology Co., Ltd. (ʮ̡ ) since June 2021 and November 2022, respectively. Mr. Gu obtained a bachelor’s degree in biological sciences in July 2005 and a master’s degree in genetics in June 2008 from Fudan University ( ూ͇ɽኪ)i n the PRC. Ms. Tian Miao (ߴ)aged 31, was appointed as a Supervisor in July 2017, and is responsible for supervising the performance of our Directors and members of senior management and performing other supervisory duties as a member of the Supervisory Committee. Ms. Tian is currently a supervisor of our subsidiary, ImmuneTANK. Ms. Tian joined our Group in October 2015 and has been serving as the head of administration since then. She has also been a supervisor of ImmuneTANK since February 2018. Ms. Tian obtained a bachelor’s degree in enterprise management from Northeast Normal University (ᇍɽኪ ) in the PRC in June 2015. Mr. Zhao Zimeng ( Ⴛɿ഼), aged 32, was appointed as an employee representative Supervisor in January 2022, and is responsible for supervising the performance of our Directors and members of senior management and performing other supervisory duties as a member of the Supervisory Committee. Mr. Zhao is currently a supervisor of our subsidiary, ImmuneOnco Shanghai. Mr. Zhao joined our Group in October 2017 and has been serving as the manager of the laboratory management department since then. He previously served as a manager of procurement department at Huabo Biopharm from July 2012 to October 2017, where he was responsible for supply chain management for laboratories. Mr. Zhao obtained a bachelor’s degree in clinical medicine from Xinxiang Medical University (อඊᔼኪ৫ ) in the PRC in January 2016. SENIOR MANAGEMENT The following table sets forth the key information about our senior management. Name Position Age Date of joining our Group Date of first appointment as our senior management member Responsibilities Dr. Tian Wenzhi (͞˖қ)....... Chairman of our Board, chief executive officer, chief scientific officer and executive Director 59 June 18, 2015 December 15, 2015 Responsible for overall strategic planning, business management, and research and development of our Group Mr. Zhang Ruliang (ڥ)....... Deputy general manager and senior vice president 39 February 3, 2017 February 3, 2017 Responsible for CMC and global clinical registration of our Group Dr. Lu Qiying (ጅ઼Ꮠ)....... Chief medical officer and senior vice president 49 March 21, 2022 March 21, 2022 Responsible for formulating the clinical strategy and direct clinical development of our Group DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 356 – --- page 366 --- Name Position Age Date of joining our Group Date of first appointment as our senior management member Responsibilities Mr. Li Song (ؒ)........ Vice president of research and development and executive Director 38 December 17, 2015 January 1, 2019 Responsible for leading preclinical research and development efforts of our Group Ms. Song Ziyi (҂ɿɓ)....... Chief financial officer and executive Director 39 July 26, 2021 July 26, 2021 Responsible for the formulation of financial and development strategies, and overseeing the overall financial management and corporate development of our Group Dr. Xiong Zikai (ဤ૔⺍)....... Senior vice president 43 March 15, 2022 March 15, 2022 Responsible for business development of our Group Dr. Frank Xiaodong Gan ......... Senior vice president 60 April 1, 2022 April 1, 2022 Responsible for clinical development of our Group in the United States Ms. Guan Mei (ᗫૠ) ........ Secretary of the Board and director of the financing and investment strategy department 41 October 8, 2018 May 23, 2022 Responsible for financing activities, internal control and securities and listing matters of our Group For the biographical details of Dr. Tian, Mr. Li Song and Ms. Song Ziyi, please see “ Ñ Board of Directors.” Mr. Zhang Ruliang (ڥ)aged 39, was appointed as a deputy general manager of our Company in February 2017 and a senior vice president of our Company in January 2023, and is responsible for CMC and global clinical registration of our Group. Mr. Zhang has over 15 years of work experience in CMC, quality control, regulatory and project management in the biopharmaceutical industry. Prior to joining our Company, Mr. Zhang successively served as a researcher, a controller and the manager of the department of quality at Shanghai Newsummit Biopharma Co., Ltd. (ʮ̡ ) from January 2007 to January 2009. He served as a manager of quality and project manager at General Regeneratives (Shanghai) Limited (ᔼᖹҦஔ (ɪऎ)ʮ̡) from February 2009 to September 2012, during which he was responsible for preclinical research and clinical registration. Mr. Zhang later served as the director of projects at Huabo Biopharm from January 2013 to February 2016, during which he was responsible for leading clinical registration and project management. Mr. Zhang obtained a bachelor’s degree in bioengineering from East China University of Science and Technology (ଣʈɽኪ ) in the PRC in July 2006. D r .L uQ i y i n g(ጅ઼Ꮠ), aged 49, was appointed as the chief medical officer and senior vice president of our Company in March 2022, and is responsible for formulating the clinical strategy and direct clinical development of our Group. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 357 – --- page 367 --- Dr. Lu has around 20 years of work experience as a physician and in development of oncology medicine. Prior to joining our Company, Dr. Lu served as a resident physician at the medical oncology department of Beijing Cancer Hospital ( ̏ԯɽኪ໕ᆯᔼ৫ ) from January 2003 to August 2005. He also served as a senior medical advisor at Merck Serono (Beijing) Pharmaceutical Research and Development Co., Ltd. Shanghai Office ( Ꮀд௛ᚆፕ (̏ԯ)೯ ೯ʕː ). Dr. Lu served as a clinical research physician at the medical department of GlaxoSmithKline (China) R&D Company Limited ( ໤ᚆ९̦д (ɪऎ)೯ʕː ʮ̡). He also served as an associate director and clinician at Pfizer (China) Research and Development Co., Ltd. ( ሾ๿(ʕ਷)ʮ̡ ), a Chinese subsidiary of Pfizer Inc., which is a multinational pharmaceutical company listed on the NYSE (stock code: PEF). Dr. Lu served as an associate director and oncology physician at AstraZeneca Investment (China) Company Limited, a Chinese subsidiary of AstraZeneca Plc, which is a company dually listed on the NASDAQ Global Market (stock code: AZN) and the London Stock Exchange (stock code: AZN). He served as a vice general manager of clinical development at Ascentage Pharma (Suzhou) Co., Ltd. ( ᘽψ ʮ̡ ), a subsidiary of Ascentage Pharma Group International ( ԭସᔼᖹණྠ ) which is a company listed on the Stock Exchange (stock code: 6855). Dr. Lu also served at QureBio Biotech (Shanghai) Co., Ltd. (Ҧஔ (ɪऎ)ʮ̡). Dr. Lu obtained a master’s degree in immunology from Hebei Medical University (߅ ɽኪ) in the PRC in June 2008. Dr. Xiong Zikai ( ဤ૔⺍), Ph.D. , aged 43, was appointed as the senior vice president of our Company in March 2022, and is responsible for business development of our Group. Dr. Xiong has over 14 years of work experience in the business development and other important functions of biomedical and pharmaceutical industries. Earlier in his career, Dr. Xiong served as a consultant at Roland Berger International Management Consulting (Shanghai) Co. Ltd. (਷ყ၍ଣፔ༔ (ɪऎ)ʮ̡ ) from June 2009 to June 2011. He served as a strategy manager at Bayer Healthcare Co., Ltd. (ʮ̡ ), which is a company under Bayer AG, a multinational pharmaceutical company listed on the Frankfurt Stock Exchange (stock code: BAYN), from June 2011 to December 2013, during which he was responsible for formulating the corporate strategy, business development and sales performance management. Dr. Xiong also served as the director of products and marketing at Beijing Genetron Biotech Co., Ltd. (͛ ʮ̡ ) and Genetron Health Gene Technology (Beijing) Co., Ltd. (͛ɿਿΪ ʮ̡ ), each of which is a PRC operation entity controlled by Genetron Health, Inc., a precision oncology company listed on the NASDAQ Global Market (stock code: GTH), from December 2013 to March 2016. He co-founded Beijing Open01 Technology Co., Ltd. (߅ ʮ̡ ) in April 2016, a company exploring big-data applications. Dr. Xiong served as the executive director of business development at Veritas Genetics (Shanghai) Co., Ltd. (߅ي Ҧ(ɪऎ)ʮ̡), a PRC operation entity controlled by Veritas Genetics Inc. from March 2018 to March 2019, during which he was responsible for the overall business development. He also served as a senior director of business alliance at Sinovant Sciences Co., Ltd (Ҧ ʮ̡), a company which principally engages in innovative biomedical research and development in the PRC, from November 2019 to June 2021, during which he was responsible for the overall business development. Dr. Xiong served as the vice president of business development and investment of Shanghai De Novo Pharmatech Co., Ltd. (ʮ̡ ), a company which principally engages in the discovery and development of small molecule drugs for cancer patients, from August 2021 to February 2022, during which he was responsible for the overall business development, marketing and investment activities. Dr. Xiong obtained a bachelor’s degree in cell biology and genetics from Peking University (̏ԯɽኪ) in the PRC in July 2002 and his Ph.D. in stem cell genetics from University of Cambridge in the United Kingdom in July 2008. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 358 – --- page 368 --- Dr. Frank Xiaodong Gan , aged 60, was appointed as the senior vice president of our Company in April 2022, and is responsible for clinical development of our Group in the United States. Dr. Gan has over 25 years of work experience in the academia and biopharmaceutical industry. Prior to joining our Company, Dr. Gan worked at Merck & Co., Inc., a multinational pharmaceutical company listed on the NYSE (stock code: MRK) as a biologist from February 2000 to September 2004 and served as a clinical research scientist from September 2004 to July 2007, during which he was responsible for clinical research and development. He served as a clinical research scientist at Bristol Myers Squibb, a multinational pharmaceutical company listed on the NYSE (stock code: BMY), from July 2007 to November 2010, during which he was responsible for early phase clinical development of antitumor drugs. Dr. Gan also served as a clinical research scientist at Eli Lilly and Company, from November 2010 to September 2016. He served as a director and a clinical project scientist of oncology at Janssen Research & Development, LLC, a subsidiary of Johnson & Johnson which is a company listed on the NYSE (stock code: JNJ), from September 2016 to October 2018. Dr. Gan also served as the head of global clinical development at NMS Group from March 2019 to March 2022, during which he was responsible for leading the global clinical development of the company. Dr. Gan currently serves as a member of the board of directors of Sino-American Pharmaceutical Professionals Association (ʕᔼᖹක೯՘ึ ). Dr. Gan obtained a bachelor’s degree in pharmacy and a master’s degree in pharmacognosy from Shanghai Medical College (ɽኪ ) (currently known as Shanghai Medical College of Fudan University ( ూ͇ɽኪɪऎᔼኪ৫ )) in the PRC in July 1984 and October 1988, respectively. He further obtained a master’s degree in pharmaceutical sciences from North Dakota State University in the United States in December 1997. Dr. Gan obtained a doctor’s degree in pharmacy from Shenandoah University in the United States in May 2007 through attending long-distance learning courses, a non-traditional PharmD program. Ms. Guan Mei ( ᗫૠ), aged 41, was appointed as the secretary of the Board on May 23, 2022, and is responsible for financing activities, internal control and securities and listing matters of our Group. She is also one of our joint company secretaries since June 14, 2022. Ms. Guan has over 15 years of work experience in the biotech and investment industries. She has served as the director of the financing and investment strategy department at our Company since October 2018. Earlier in her career, Ms. Guan served as an analyst at General Biologics, Inc. She served as a project manager at ChinaBio Consulting LLC from August 2008 to September 2010. Ms. Guan also worked at SIG Asia Investment Fund (ږand served as a director of investment at Lead Capital Management Co., Ltd. (ʮ̡ ) from February 2016 to September 2018. Ms. Guan obtained a bachelor’s degree in biological sciences from Shanxi University ( ʆГɽ ኪ) in the PRC in July 2003 and a master’s degree in botany from Nanjing University (ԯɽኪ) in the PRC in June 2007. She obtained the qualification of practitioners in funds industry issued by the Asset Management Association of China (ุ՘ึ ) in June 2016. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 359 – --- page 369 --- GENERAL Save as disclosed above, none of our Directors, Supervisors and members of senior management has been a director of any public company the securities of which are listed on any securities market in Hong Kong or overseas in the three years immediately preceding the date of this prospectus. None of the Directors, Supervisors or members of the senior management of our Company is related to any other Directors, Supervisors and members of the senior management. Save as disclosed herein, to the best knowledge, information and belief of our Directors and Supervisors having made all reasonable enquiries, there was no other matter with respect to the appointment of our Directors and Supervisors that needs to be brought to the attention of the Shareholders and there was no information relating to our Directors and Supervisors that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules as of the Latest Practicable Date. JOINT COMPANY SECRETARIES Ms. Guan Mei ( ᗫૠ) was appointed as a joint company secretary of our Company on June 14, 2022. She is primarily responsible for financing activities, internal control and securities and listing matters of our Group. For details of her biography, see “— Senior Management.” M r .L iK i nW a i(۾)was appointed as the other joint company secretary of our Company on June 14, 2022. He is primarily responsible for the corporate secretarial matters of our Group. Mr. Li currently serves as a corporate service manager of Tricor Services Limited, a global professional services provider specializing in integrated business, corporate and investor services. He has over 10 years of experience in providing company secretarial services and compliance services to listed companies and private companies. Mr. Li has been serving as a company secretary/joint company secretary of two companies listed on the Stock Exchange, namely Sinco Pharmaceuticals Holdings Limited (ʮ̡ ) (stock code: 6833) since March 31, 2021, and Zhengye International Holdings Company Limited (ʮ̡ ) (stock code: 3363) since April 1, 2021. Mr. Li is a Chartered Secretary, Chartered Governance Professional and an associate of both The Hong Kong Chartered Governance Institute (“ HKCGI ”) (formerly known as “The Hong Kong Institute of Chartered Secretaries”) and The Chartered Governance Institute (“ CGI”) (formerly known as “The Institute of Chartered Secretaries and Administrators”) in the United Kingdom. Mr. Li obtained a master’s degree of corporate governance from The Open University of Hong Kong in Hong Kong in November 2020. BOARD COMMITTEES Our Board delegates certain responsibilities to various committees. In accordance with the relevant PRC laws and regulations and the Corporate Governance Code, our Company has formed three Board committees, namely the Audit Committee, the Nomination Committee and the Remuneration Committee. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 360 – --- page 370 --- Audit Committee We have established an Audit Committee with written terms of reference in compliance with Rule 3.21 of the Listing Rules and paragraph C.3 and paragraph D.3 of the Corporate Governance Code. The Audit Committee consists of three Directors, namely Dr. Xu Cong, Dr. Zhenping Zhu and Mr. Yeung Chi Tat. Mr. Yeung Chi Tat who holds the appropriate professional qualifications as required under Rules 3.10(2) and 3.21 of the Listing Rules, serves as the chairman of the Audit Committee. The primary duties of the Audit Committee include, but not limited to, the following:  proposing the appointment or change of external auditors to our Board, and monitoring the independence of external auditors and evaluating their performance;  examining the financial information of our Company and reviewing financial reports and statements of our Company;  examining the financial reporting system, the risk management and internal control system of our Company, overseeing their rationality, efficiency and implementation and making recommendations to our Board; and  dealing with other matters that are authorized by the Board. Nomination Committee We have established a Nomination Committee with written terms of reference in compliance with paragraph A.5 of the Corporate Governance Code. The Nomination Committee consists of three Directors, namely Dr. Tian, Dr. Zhenping Zhu and Mr. Yeung Chi Tat. Dr. Tian serves as the chairman of the Nomination Committee. The primary duties of the Nomination Committee include, but not limited to, the following:  conducting extensive search and providing to our Board suitable candidates for our Directors, general managers and other members of the senior management;  reviewing the structure, size and composition of our Board (including but not limited to, gender, age, cultural and educational background, ethnicity, skills, knowledge and experience) at least annually and make recommendations on any proposed changes to the Board to complement our Company’s corporate strategy;  researching and developing standards and procedures for the election of our Board members, general managers and members of the senior management, and making recommendations to our Board; and  dealing with other matters that are authorized by our Board. Remuneration Committee We have established a Remuneration Committee with written terms of reference in compliance with paragraph B.1 of the Corporate Governance Code. The Remuneration Committee consists of five Directors, namely Dr. Tian, Dr. Zhenping Zhu, Mr. Yeung Chi Tat, Dr. Xu Cong and Dr. Kendall Arthur Smith. Dr. Zhenping Zhu serves as the chairman of the Remuneration Committee. The primary duties of the Remuneration Committee include, but not limited to, the following:  advising our Board on the overall remuneration plan and structure of our Directors and senior management and the establishment of transparent and formal procedures for determining remuneration policy of our Company; DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 361 – --- page 371 ---  monitoring the implementation of remuneration system of our Company;  making recommendations on the remuneration packages of our Directors and senior management; and  other duties conferred by our Board. COMPETITION Each of our Directors confirms that as of the Latest Practicable Date, he or she did not have any interest in a business which competes or is likely to compete, directly or indirectly, with our business, and requires disclosure under Rule 8.10 of the Listing Rules. From time to time our non-executive Directors may serve on the boards of both private and public companies within the broader healthcare and biopharmaceutical industries. However, as these non-executive Directors are not members of our executive management team, we do not believe that their interests in such companies as directors would render us incapable of carrying on our business independently from the other companies in which these non-executive Directors may hold directorships from time to time. EMPLOYMENT ARRANGEMENT OF SENIOR MANAGEMENT We normally enter into (i) an employment contract, (ii) a non-competition agreement, and (iii) a confidentiality agreement with certain of our senior management members. The key terms of such contracts are set forth below. Terms: We normally enter into a three-year, four-year or five-year employment contract with our senior management members. Non-competition: the non-competition obligations shall subsist throughout the employee’s period of employment and up to two years after termination of employment. During the non-competition period, the employee shall not (i) hold any position in any other entity which competes with our Company, or (ii) engage in other businesses which could damage our Company’s interests. Confidentiality Confidential information: The employee shall keep confidential information, namely business-related information or technology-related information (including but not limited to operational information, marketing proposal, purchases information, pricing policy, financial information, list of customers, business plan, cost of production, information of research and development etc.) of our Company in confidence. Obligation and duration: The employee shall not, without prior written approval from our Company, divulge, publish or otherwise disclose any confidential information to any third party. Such obligation of confidentiality shall subsist for the term of his or her employment and thereafter, and until the relevant information has been publicized by our Company or otherwise known to the public. Intellectual Property Rights Our Company has a complete, absolute and exclusive right, title and interest in the work that the employee produces, solely or jointly with others, during the period of the employee’s employment with the Company that relates to our Company’s business. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 362 – --- page 372 --- COMPENSATION OF DIRECTORS AND SUPERVISORS Our Directors and Supervisors, certain of whom are also employees of our Company, receive compensation in the form of fee, salaries, allowances, discretionary bonuses, share-based compensation, retirement benefit scheme contributions and other benefits in kind. For the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023, the aggregate amount of remuneration paid or payable to our Directors amounted to approximately RMB16.3 million, RMB70.5 million and RMB19.9 million, respectively. The increase of the aggregate amount of remuneration paid or payable to our Directors during the Track Record Period was primarily due to the increase in the share-based payments resulting from the grant of restricted shares to our Directors. For further details, see note 13 to the Accountants’ Report set out in Appendix IA to this prospectus. For the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023, the aggregate amount of remuneration paid or payable to our Supervisors amounted to approximately RMB4.4 million, RMB3.7 million and RMB0.5 million, respectively. Under the current compensation arrangement, we estimate the total compensation before taxation, including estimated share-based compensation, to be accrued to our Directors and our Supervisors for the year ending December 31, 2023 to be approximately RMB54.3 million. The actual remuneration of Directors and Supervisors for 2023 may be different from the expected remuneration. For the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023, there were two, two and two Directors among the five highest paid individuals, respectively. The total emoluments for the remaining individuals among the five highest paid individuals amounted to approximately RMB6.5 million, RMB26.5 million and RMB10.9 million for the years ended December 31, 2021 and 2022 and the four months ended April 30, 2023, respectively. We confirmed that during the Track Record Period, no remuneration was paid by our Company to, or receivable by, our Directors, Supervisors or the five highest paid individuals as an inducement to join or upon joining our Company or as compensation for loss of office in connection with the management positions of our Company or any subsidiary of our Company. During the Track Record Period, none of our Directors or Supervisors waived any remuneration. Save as disclosed above, no other payments have been paid, or are payable, by our Company or our subsidiary to our Directors, Supervisors or the five highest paid individuals during the Track Record Period. CORPORATE GOVERNANCE Our Company is committed to achieving high standards of corporate governance with a view to safeguarding the interests of our Shareholders. To accomplish this, our Company intends to comply with the corporate governance requirements under the Corporate Governance Code after the Listing. Pursuant to code provision A.2.1 of the Corporate Governance Code, companies listed on the Stock Exchange are expected to comply with, but may choose to deviate from the requirement that the responsibilities between the chairman and the chief executive officer should be segregated and should not be performed by the same individual. We do not have a separate chairman and chief executive officer and Dr. Tian currently performs these two roles. Our Board believes that, in view of his experience, personal profile and his roles in our Company as mentioned above, Dr. Tian is the Director best suited to identify strategic opportunities and focus of the Board due to his extensive understanding of our business as our chief executive officer. The Board also believes DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 363 – --- page 373 --- that vesting the roles of both chairman and chief executive officer in the same person has the benefit of (i) ensuring consistent leadership within our Group, (ii) enabling more effective and efficient overall strategic planning and execution of strategic initiatives of the Board, and (iii) facilitating the flow of information between the management and the Board for our Group. The Board considers that the balance of power and authority for the present arrangement will not be impaired and this structure will enable our Company to make and implement decisions promptly and effectively. Our Board will continue to review and consider splitting the roles of chairman of the Board and the chief executive officer of our Company at a time when it is appropriate by taking into account the circumstances of our Group as a whole. BOARD DIVERSITY POLICY In order to enhance the effectiveness of our Board and to maintain the high standard of corporate governance, we have adopted the board diversity policy which sets out the objective and approach to achieve and maintain diversity of our Board. Pursuant to the board diversity policy, we seek to achieve board diversity through the consideration of a number of factors when selecting the candidates to our Board, including but not limited to gender, skills, age, professional experience, knowledge, cultural and educational background, nationality, ethnicity and length of service. The ultimate decision of the appointment will be based on merit and the contribution which the selected candidates will bring to our Board. Our Directors have a balanced mix of knowledge and skills, including overall management and strategic development, research and clinical development, finance and accounting and corporate governance in addition to industry experience in healthcare and biotechnology. They obtained degrees in various majors including medicine, immunology, biological science, biochemistry, pharmacology, pathology, genetics, bioengineering, cell biology, pharmacy, mathematics, business administration, economics, taxation, biology, accounting, enterprise management and botany. We have three independent non-executive Directors with different industry backgrounds, representing one third of the members of our Board. Further, as of the date of this prospectus, our Board has a relatively wide range of ages ranging from 37 years old to 81 years old. Our Company has reviewed the membership, structure and composition of our Board, and is of the opinion that the structure of our Board is reasonable, and the experience and skills of the Directors in various aspects and fields can enable our Company to maintain a high standard of operation. Besides, we recognize the particular importance of gender diversity. We have taken, and will continue to take, steps to promote gender diversity at all levels of our Company, including but without limitation at our Board and senior management levels. Currently, we have one female Director, namely, Ms. Song Ziyi, who is also our chief financial officer. Going forward, we will continue to work to enhance gender diversity of our Board when selecting and recommending suitable candidates for Board appointments to help achieve greater gender diversity in accordance with stakeholder expectations and recommended best practices. Our Company also intends to promote gender diversity at the mid to senior level so that our Company can maintain a balanced gender ratio at different levels. Taking into account our existing business model and specific needs as well as the different background of our Directors, the composition of our Board satisfies our board diversity policy. Our Nomination Committee is responsible for ensuring the diversity of our Board members. After the Listing, our Nomination Committee will review the board diversity policy from time to time to ensure its continued effectiveness and we will disclose in our corporate governance report about the implementation of the board diversity policy on an annual basis. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 364 – --- page 374 --- COMPLIANCE ADVISOR We have appointed Rainbow Capital (HK) Limited as our Compliance Advisor pursuant to Rules 3A.19 and 3A.23 of the Listing Rules. The Compliance Advisor will provide us with guidance and advice as to compliance with the Listing Rules and other applicable laws, rules, codes and guidelines. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance Advisor will advise our Company in certain circumstances including: (a) before the publication of any regulatory announcement, circular or financial report; (b) where a transaction, which might be a notifiable or connected transaction, is contemplated, including share issues and share repurchases; (c) where we propose to use the proceeds from the Global Offering in a manner different from that detailed in this Prospectus or where our business activities, developments or results deviate from any forecast, estimate or other information in this Prospectus; and (d) where the Stock Exchange makes an inquiry to our Company regarding unusual movements in the price or trading volume of its listed securities or any other matters in accordance with Rule 13.10 of the Listing Rules. Pursuant to Rule 3A.24 of the Listing Rules, the Compliance Advisor will, on a timely basis, inform our Company of any amendment or supplement to the Listing Rules that are announced by the Stock Exchange. The Compliance Advisor will also inform our Company of any new or amended law, regulation or code in Hong Kong applicable to us, and advise us on the continuing requirements under the Listing Rules and applicable laws and regulations. The term of the appointment will commence on the Listing Date and is expected to end on the date on which our Company complies with Rule 13.46 of the Listing Rules in respect of our financial results for the first full financial year commencing after the Listing. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT – 365 – --- page 375 --- You should read the following discussion and analysis in conjunction with our audited consolidated financial information, included in the Accountants’ Report in Appendix IA to this prospectus, together with the respective accompanying notes. Our consolidated financial information has been prepared in accordance with IFRSs. The following discussion and analysis contain forward-looking statements that reflect our current views with respect to future events and financial performance that involve risks and uncertainties. These statements are based on our assumptions and analysis made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However , our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. In evaluating our business, you should carefully consider the information provided in the section headed “Risk Factors” in this prospectus. OVERVIEW We are a science-driven biotechnology company dedicated to the development of immuno-oncology therapies. We are one of the few biotechnology companies globally adopting a systematic approach to harness both the innate and adaptive immune systems for the treatment of cancer. We have developed a pipeline of 14 drug candidates with eight ongoing clinical programs, featured by a comprehensive innate-immunity-based asset portfolio. Our pipeline reflects our extensive understanding into the frontiers of cancer biology and immunology, and our expertise in turning scientific research into drug candidates. Emulating the “Quality-by-Design (QbD)” concept that is intended to improve drug product quality by using analytical and risk-management methodologies, we created the “Drug-by-Design (DbD)” concept that emphasizes the fundamental role of molecule design rationale in the process of large molecule drug development. Strictly adhering to the “DbD” concept and leveraging our R&D platform, we have designed and developed a rich pipeline that aims to unlock not only the full power of the largely untapped innate immune system, but also the synergistic potential of harnessing the innate and adaptive immune systems at the same time. For more information on our drug candidates, see the section headed “Business.” We currently have no products approved for commercial sale and have not generated any revenue from product sales. We have not been profitable and have incurred operating losses during the Track Record Period. In 2021, 2022 and the four months ended April 30, 2023, we had total comprehensive expenses of RMB732.9 million, RMB402.8 million and RMB111.8 million, respectively. Our total comprehensive expenses mainly resulted from research and development expenses, administrative expenses, as well as loss from changes in fair value of financial liabilities at FVTPL. Our adjusted net loss (non-IFRS measure) was RMB182.5 million, RMB225.8 million and RMB71.3 million in 2021, 2022 and the four months ended April 30, 2023, respectively. We define adjusted net loss (non-IFRS measure) as loss for the year/period adjusted by adding back loss from changes in fair value of financial liabilities at FVTPL, share-based payments and listing expenses. For more information about our adjusted net loss (non-IFRS measure), see “— Non-IFRS Measure.” We expect to incur an increased amount of operating expenses for the next several years as we further our preclinical research, continue the clinical development of, seek regulatory approval for and manufacture, our drug candidates, launch our pipeline products, and add personnel necessary to operate our business. Subsequent to the Listing, we expect to incur costs associated with operating as a public company. We expect that our financial performance will fluctuate from FINANCIAL INFORMATION – 366 – --- page 376 --- period to period due to the development status of our drug candidates, timeline and terms of potential collaboration with our partners, regulatory approval timeline and commercialization of our drug candidates. BASIS OF PREPARATION The historical financial information has been prepared based on the accounting policies set out in note 4 to the Accountants’ Report contained in the Appendix IA to this prospectus which conform with the International Financial Reporting Standards, or IFRSs, issued by International Accounting Standards Board, or IASB. All IFRSs effective for the accounting period commencing from January 1, 2023, together with the relevant transitional provisions, have been adopted by our Group in the preparation of the historical financial information throughout the Track Record Period. The historical financial information has been prepared under the historical cost convention except for certain financial instruments which have been measured at fair value at the end of each of the Track Record Period. MATERIAL ACCOUNTING POLICIES INFORMATION AND ESTIMATES Material Accounting Policies Information The historical financial information has been prepared in accordance with the following accounting policies which confirm with IFRSs issued by the IASB. For the purpose of preparation and presentation of the historical financial information, information is considered material if such information is reasonably expected to influence decisions made by primary users. In addition, the historical financial information includes the applicable disclosures required by the Listing Rules and by the Hong Kong Companies Ordinance. The historical financial information has been prepared on the historical cost basis, except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies set out below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, we take into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in the historical financial information is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2 Share-based Payment , leasing transactions that are within the scope of IFRS 16 Leases , and measurements that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets . For financial instruments which are transacted at fair value and a valuation technique that unobservable inputs are to be used to measure fair value in subsequent periods, the valuation technique is calibrated so that at initial recognition the results of the valuation technique equal the transaction price. FINANCIAL INFORMATION – 367 – --- page 377 --- In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:  Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;  Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and  Level 3 inputs are unobservable inputs for the asset or liability. Our most critical accounting policies are summarized below. See note 4 to the Accountants’ Report set out in Appendix IA to this prospectus for a full description of our significant accounting policies. Revenue from Contracts with Customers We recognize revenue when (or as) a performance obligation is satisfied, i.e., when “control” of the goods of services underlying the particular performance obligation is transferred to customer. A performance obligation represents a good or service (or a bundle of goods or services) that is distinct or a series of distinct goods or services that are substantially the same. Except for granting of a license that is distinct from other promised goods or services, control is transferred over time and revenue is recognized over time by reference to the progress towards complete satisfaction of the relevant performance obligation if one of the following criteria is met:  the customer simultaneously receives and consumes the benefits provided by our performance as we perform;  our performance creates or enhances an asset that the customer controls as we perform; or  our performance does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date. Otherwise, revenue is recognized at a point in time when the customer obtains control of the distinct good or service. For granting of a license that is distinct from other promised goods or services, the nature of our promise in granting a license is a promise to provide a right to access our intellectual property if all of the following criteria are met:  the contract requires, or the customer reasonably expects, that we will undertake activities that significantly affect the intellectual property to which the customer has rights;  the rights granted by the license directly expose the customer to any positive or negative effects of our activities; and  those activities do not result in the transfer of a good or a service to the customer as those activities occur. FINANCIAL INFORMATION – 368 – --- page 378 --- If the criteria above are met, we account for the promise to grant a license as a performance obligation satisfied over time. Otherwise, we consider the grant of license as providing the customers the right to use our intellectual property and the performance obligation is satisfied at a point in time at which the license is granted. A contract asset represents our right to consideration in exchange for goods or services that we have transferred to a customer that is not yet unconditional. It is assessed for impairment in accordance with IFRS 9 Financial Instruments . In contrast, a receivable represents our unconditional right to consideration, i.e., only the passage of time is required before payment of that consideration is due. A contract liability represents our obligation to transfer goods or services to a customer for which we have received consideration (or an amount of consideration is due) from the customer. A contract asset and a contract liability relating to the same contract are accounted for and presented on a net basis. V ariable consideration For contracts that contain variable consideration, we estimate the amount of consideration to which it will be entitled using the expected value method, which better predicts the amount of consideration to which we will be entitled. The estimated amount of variable consideration is included in the transaction price only to the extent that it is highly probable that such an inclusion will not result in a significant revenue reversal in the future when the uncertainty associated with the variable consideration is subsequently resolved. At the end of each reporting period, we update the estimated transaction price (including updating its assessment of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period. Notwithstanding the above criteria, we shall recognize revenue for a sales-based or usage-based royalty promised in exchange for a license of intellectual property only when (or as) the later of the following events occurs:  the subsequent sale or usage occurs; and  the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied). Leases Definition of a lease A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. For contracts entered into or modified on or after the date of initial application of IFRS 16, we assess whether a contract is or contains a lease based on the definition under IFRS 16 at inception or modification date, as appropriate. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed. FINANCIAL INFORMATION – 369 – --- page 379 --- Lease liabilities At the commencement date of a lease, we recognize and measure the lease liability at the present value of lease payments that are unpaid at that date. In calculating the present value of lease payments, we use the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. The lease payments include:  fixed payments (including in-substance fixed payments) less any lease incentives receivable;  amounts expected to be paid under residual value guarantees;  the exercise price of a purchase option if we are reasonably certain to exercise the option; and  payments of penalties for terminating a lease, if the lease term reflects us exercising the option to terminate the lease. After the commencement date, lease liabilities are adjusted by interest accretion and lease payments. We remeasure lease liabilities (and make a corresponding adjustment to the related right-of-use assets) whenever: the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the related lease liability is remeasured by discounting the revised lease payments using a revised discount rate at the date of reassessment. We present lease liabilities as a separate line item on the consolidated statements of financial position. Government Grants Government grants are not recognized until there is reasonable assurance that we will comply with the conditions attaching to them and that the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which we recognize as expenses the related costs for which the grants are intended to compensate. Government grants related to income that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to us with no future related costs are recognized in profit or loss in the period in which they become receivable. Such grants are presented under “other income.” Property and Equipment Property and equipment are tangible assets that are held for use in the production or supply of goods or services, or for administrative purposes other than construction in progress stated in the consolidated statements of financial position at cost less subsequent accumulated depreciation and subsequent accumulated impairment losses, if any. Properties, including leasehold improvement, in the course of construction for production, supply or administrative purposes are carried at cost which includes professional fees, less any recognized impairment loss. Costs include any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by FINANCIAL INFORMATION – 370 – --- page 380 --- management, including costs of testing whether the related assets are functioning properly and, for qualifying assets, borrowing costs capitalised in accordance with our accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use. Depreciation is recognized so as to write off the cost of assets less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss. Financial Liabilities All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL. Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when the financial liability is designated as at FVTPL. A financial liability may be designated as at FVTPL upon initial recognition if:  such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or  the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with our documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or  it forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at FVTPL. For financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. For financial liabilities that contain embedded derivatives, the changes in fair value of the embedded derivatives are excluded in determining the amount to be presented in other comprehensive income. Changes in fair value attributable to financial liability’s credit risk that are recognized in other comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred to accumulated losses upon derecognition of the financial liability. Financial liabilities at amortized cost Financial liabilities including trade payables, other payables and borrowings are subsequently measured at amortized cost, using the effective interest method. FINANCIAL INFORMATION – 371 – --- page 381 --- Derecognition of financial liabilities We derecognize financial liabilities when, and only when, our obligations are discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss. Derivative financial instruments Derivatives are initially recognized at fair value at the date when derivative contracts are entered into and are subsequently remeasured to their fair value at the end of the reporting period. The resulting gain or loss is recognized in profit or loss. Embedded derivatives Derivatives embedded in hybrid contracts that contain financial asset hosts within the scope of IFRS 9 are not separated. The entire hybrid contract is classified and subsequently measured in its entirety as either amortized cost or fair value as appropriate. Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of IFRS 9 are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at FVTPL. Generally, multiple embedded derivatives in a single instrument that are separated from the host contracts are treated as a single compound embedded derivative unless those derivatives relate to different risk exposures and are readily separable and independent of each other. Offsetting a financial asset and a financial liability A financial asset and a financial liability are offset and the net amount presented in the consolidated statement of financial position when, and only when, we currently have a legally enforceable right to set off the recognized amounts; and intend either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Critical Accounting Judgements and Key Sources of Estimation Uncertainty In the application of our accounting policies, which are described in note 4 to the Accountants’ Report set out in Appendix IA to this prospectus, our Directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Our most critical accounting judgments and key sources of estimation uncertainty are summarized below. See note 5 to the Accountants’ Report set out in Appendix IA to this prospectus for a full description of our critical accounting judgments and key sources of estimation uncertainty. FINANCIAL INFORMATION – 372 – --- page 382 --- Research and Development Expenses Development expenses incurred on our drug product pipelines are capitalized and deferred only when we could demonstrate (i) the technical feasibility of completing the development of the relevant intangible asset so that it will be available for use or sale; (ii) our intention to complete and our ability to use or sell the asset; (iii) how the asset will generate future economic benefits; (iv) the availability of resources to complete the pipeline; and (v) the ability to measure reliably the expenditure during the development. Research and development expenses which do not meet these criteria are expensed when incurred. Management assesses the progress of each of the research and development projects and determine whether the criteria are met for capitalization. During the Track Record Period, all research and development expenses are expensed when incurred. Fair V alue of Financial Liabilities Measured at FVTPL We have issued series of shares to certain investors during the Track Record Period as set out in note 27 to the Accountants’ Report set out in the Appendix IA to this prospectus. We accounted for these financial instruments as financial liabilities at FVTPL. The fair value of these financial instruments is determined using valuation techniques, namely back-solve method and equity allocation model involving various parameters and inputs. Valuation techniques are certified by an independent qualified professional valuer before being implemented for valuation and are calibrated to ensure that outputs reflect market conditions. However, it should be noted that some inputs, such as possibilities under different scenarios such as liquidation event which require management estimates. Management estimates and assumptions are reviewed periodically and are adjusted if necessary. Should any of the estimates and assumptions changed, it may lead to a change in the fair value of the financial liabilities at FVTPL which may be charged into the profit or loss of the financial statements. As of December 31, 2021, December 31, 2022 and April 30, 2023, the carrying amounts of financial liabilities at FVTPL were RMB2,431.6 million, nil and nil, respectively, as disclosed in note 27 to the Accountants’ Report set out in the Appendix IA to this prospectus. We no longer recognized such liabilities since January 31, 2022, as our investors’ certain preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same date. SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS Our results of operations have been, and are expected to continue to be, affected by a number of factors, many of which may be beyond our control. A discussion of the key factors is set out below. Development and Commercialization of Our Drug Candidates Our business and results of operations will be dependent on our receipt of regulatory approval for and successful commercialization of our drug candidates. As of the Latest Practicable Date, we have established a pipeline of 14 drug candidates, including six in clinical stage, one in IND stage and one in IND-enabling stage, with eight ongoing clinical programs, five IND/IND-enabling-stage programs, and multiple in discovery and preclinical stage. See “Business — Our Drug Candidates” for more information on the development status of our drug candidates. We have not generated any revenue from the sales of our drug products since our inception. Our business and results of operations depend on our ability to continuously advance preclinical and clinical development of, and obtain the requisite regulatory approvals for, our drug candidates. Once our drug candidates are commercialized, our business and results of operations will be driven by the market acceptance and supply of our commercialized drugs. To successfully develop and launch our drug candidates, we intend to continue investing in our R&D and clinical development of our pipeline products, expanding our manufacturing capabilities and seeking collaboration with FINANCIAL INFORMATION – 373 – --- page 383 --- leading pharmaceutical companies. We also plan to build our internal marketing and sales forces before the estimated launch of our pipeline products, and to seek collaboration with business partners. For more details, see “Business — Our Strategies.” Our Cost Structure Our results of operations are significantly affected by our cost structure, which primarily consists of research and development expenses and administrative expenses. In 2021, we recorded substantial loss from changes in fair value of financial liabilities at FVTPL due to our series of financings. However, it is a non-cash item and has ceased to impact our financial performance since January 31, 2022, as our investors’ certain preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day. Financial liabilities at FVTPL were then derecognized and credited to equity. Research and development expenses have been and are expected to continue to be a major component in our cost structure. During the Track Record Period, our research and development expenses primarily consisted of (i) preclinical and CMC expenses, (ii) clinical trial expenses, (iii) salaries and related benefit costs, as well as non-cash share-based payments, for our research and development activities, (iv) costs of materials and consumables, and (v) depreciation expenses for right-of-use assets, property and equipment used for research and development purposes. For detailed information, see “— Description of Selected Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income — Research and Development Expenses.” Our research and development expenses amounted to RMB176.0 million, RMB277.3 million, and RMB75.0 million in 2021, 2022 and the four months ended April 30, 2023, respectively, of which our non-cash share-based payments were RMB13.7 million, RMB40.7 million, and RMB13.4 million in 2021, 2022, and the four months ended April 30, 2023, respectively. During the Track Record Period, our administrative expenses primarily included (i) salaries and related benefit costs, as well as non-cash share-based payments, for our management and administrative functions, (ii) professional service fees paid to our legal counsel, agents and other service providers, (iii) depreciation expenses for right-of-use assets, property and equipment used for administrative purposes, and (iv) general office expenses. For detailed information, see “— Description of Selected Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income — Administrative Expenses.” Our administrative expenses amounted to RMB48.3 million, RMB92.8 million, and RMB28.5 million in 2021, 2022 and the four months ended April 30, 2023, respectively, of which our non-cash share-based payments were RMB20.3 million, RMB63.1 million and RMB16.7 million in 2021, 2022 and the four months ended April 30, 2023, respectively. We expect our cost structure to evolve as we continue to develop and expand our business. As the preclinical studies and clinical trials of our drug candidates continue to progress, we expect to incur additional costs in relation to, among other things, preclinical study and clinical trial expenses, CMC expenses, raw materials procurements, manufacturing and sales and marketing. Additionally, we anticipate increasing legal, compliance, accounting, insurance and investor and public relations expenses associated with being a public company in Hong Kong. Funding for Our Operations During the Track Record Period, we funded our operations primarily through private equity financings. Going forward, in the event of successful commercialization of one or more of our drug candidates, we expect to fund our operations in part with cash on hand, as well as funds generated from licensing arrangements and sales of our commercialized drug products. However, with the continuing expansion of our business, we may require further funding through public or private offerings, debt financings, collaboration arrangements or other sources. Any fluctuation in the funding for our operations will impact our cash flow plan and our results of operations. FINANCIAL INFORMATION – 374 – --- page 384 --- DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME The following table sets forth selected components of our consolidated statements of profit or loss and other comprehensive income for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Revenue ....................... 5,067 538 234 73 Other income ................... 10,381 14,657 2,397 3,062 Other gains and losses, net ......... (518,347) (29,436) (44,771) (834) Research and development expenses .. (175,954) (277,346) (67,257) (75,001) Administrative expenses ........... (48,319) (92,796) (27,368) (28,469) Listing expenses ................. (4,886) (17,724) (12,059) (10,344) Finance costs .................... (891) (787) (285) (253) Loss before tax .................. (732,949) (402,894) (149,109) (111,766) Income tax expense ............... ———— Loss for the year/period .......... (732,949) (402,894) (149,109) (111,766) Other comprehensive income ...... 10 61 22 5 Total comprehensive expenses for the year/period .................... (732,939) (402,833) (149,087) (111,761) Non-IFRS Measure To supplement our consolidated statements of profit or loss and other comprehensive expenses which are presented in accordance with IFRSs, we also use adjusted net loss as a non-IFRS measure, which is not required by, or presented in accordance with, IFRSs. We believe that the presentation of the non-IFRS measure when shown in conjunction with the corresponding IFRS measures provides useful information to management and investors in facilitating a comparison of our operating performance from year to year. In particular, the non-IFRS measure eliminates impact of certain expenses, including loss from changes in fair value of financial liabilities at FVTPL (which ceased to be recorded since January 31, 2022), share-based payments and listing expenses. Such non-IFRS measure allows investors to consider metrics used by our management in evaluating our performance. We define adjusted net loss (non-IFRS measure) as loss for the year/period adjusted by adding back loss from changes in fair value of financial liabilities at FVTPL, share-based payments and listing expenses. Loss from changes in fair value of financial liabilities at FVTPL represents the increase in fair value of the equity interests with preferred rights held by our investors, which is non-cash in nature. We no longer recognized such liabilities since January 31, 2022, as our investors’ certain preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same date. Share-based payments are expenses arising from granting restricted shares to selected employees, senior management, directors and consultants, the amount of which is non-cash in nature. Listing expenses are the expenses arising from activities in relation to the proposed Listing and Global Offering, and are excluded from our net loss. FINANCIAL INFORMATION – 375 – --- page 385 --- The use of the non-IFRS measure has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for, or superior to, analysis of our results of operations or financial condition as reported under IFRSs. In addition, the non-IFRS financial measure may be defined differently from similar terms used by other companies and therefore may not be comparable to similar measures presented by other companies. The following table shows reconciliation from our loss for the year/period to our adjusted net loss (non-IFRS measure) for the year/period indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Loss for the year/period .......... (732,949) (402,894) (149,109) (111,766) Adjusted for: Loss from changes in fair value of financial liabilities at FVTPL ...... 511,517 55,510 55,510 — Share-based payments ............. 34,017 103,829 28,987 30,097 Listing expenses ................. 4,886 17,724 12,059 10,344 Adjusted net loss (non-IFRS measure) for the year/period ..... (182,529) (225,831) (52,553) (71,325) Revenue During the Track Record Period, our revenue was generated from out-licensing fee, sales of cell strain and other products, and provision of testing services. Our out-licensing fee represents a milestone payment received under a technology transfer agreement we entered into with SunHo in 2019, pursuant to which it acquires the rights and interests (including a related patent application) to develop and commercialize IMM2505 in China (including Hong Kong, Macau and Taiwan). IMM2505 is a CD47 and PD-L1 bispecific molecule internally discovered by us, which is different from IMM2520. Except for the foregoing licensing arrangement, we do not have any plan to further develop IMM2505 with our own funds and resources at the current stage. Our revenue generated from sales of cell strain and other products mainly represents the income from selling cell lines and growth medium developed by us. Such cell lines and growth medium are not competing products for our IMM01 and other product candidates. Our revenue generated from testing services mainly represents the income from providing testing assays through fee-for-service contracts, including assay service to detect and quantify the ADCP potency. The provision of testing services falls within our business operations and is not explicitly prohibited by appropriate laws and regulations. Since we did not obtain regulatory approval for the commercial sale of any of our drug candidates, we have not generated any revenue from sales of our drug products during the Track Record Period. As we continue to develop our pipeline candidates toward commercialization and seek collaboration opportunities with leading pharmaceutical companies, we expect the sales generated from our drug products and license fee will be major components of our revenue in the future. FINANCIAL INFORMATION – 376 – --- page 386 --- The table below summarizes a breakdown of our revenue for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Revenue: Out-licensing fee ................. 4 , 7 1 7——— Sales of cell strain and other products . 275 499 204 73 Testing services .................. 75 39 30 — Total .......................... 5,067 538 234 73 Other Income During the Track Record Period, our other income consisted of government grants and bank interest income. The government grants represent various subsidies granted to us by the PRC local government authorities primarily for our research and development accomplishments and financing activities. Bank interest income mainly represents interest on our bank deposits. The following table summarizes a breakdown of our other income for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Other income: Government grants ............... 8,741 5,152 227 134 Bank interest income .............. 1,640 9,505 2,170 2,928 Total .......................... 10,381 14,657 2,397 3,062 Other Gains and Losses, Net During the Track Record Period, our other net gains and losses, primarily consisted of loss from changes in fair value of financial liabilities at FVTPL, net foreign exchange gains or losses, gain from changes in fair value of financial assets at FVTPL, and gain on disposal of property and equipment. Loss from changes in fair value of financial liabilities at FVTPL results from the increase in fair value of the equity interests with preferred rights held by our investors. The fair value of the equity interests is established by using valuation techniques, which include back-solve method and equity allocation model involving various parameters and inputs. For details about our financial liabilities at FVTPL, see note 27 to the Accountants’ Report set out in Appendix IA to this prospectus. Net foreign exchange gains or losses mainly represent the exchange gains or losses resulted from the translation of financial assets and liabilities denominated in U.S. dollar at year end exchange rates. Gain from changes in fair value of financial assets at FVTPL represents the gain from recognizing fair value changes in wealth management products and structured deposits purchased by us and managed by reputable financial institutions. For further details, see “— Liquidity and Capital Resources — Net Cash (Used in) from Investing Activities.” Gain on disposal of property and equipment represents the gain from our disposal of office equipment and other fixtures following the termination of a lease. FINANCIAL INFORMATION – 377 – --- page 387 --- The following table summarizes a breakdown of our other net gains and losses, for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Other gains and losses, net: Loss from changes in fair value of financial liabilities at FVTPL ...... (511,517) (55,510) (55,510) — Net foreign exchange (losses) gains .. (9,128) 26,106 10,742 (1,039) Gain from changes in fair value of financial assets at FVTPL ........ 1,598 — — 218 Gain on disposal of property and equipment .................... 5 5 5——— Gain arising on termination of a lease . 1 6 5——— Others ......................... (20) (32) (3) (13) Total .......................... (518,347) (29,436) (44,771) (834) Financial Liabilities Measured within Level 3 Fair V alue Measurement During the Track Record Period, we had certain financial liabilities categorized within level 3 of fair value measurement (“ Level 3 Financial Liabilities ”). Our Level 3 Financial Liabilities include series of shares issued to certain investors during the Track Record Period (the “ Investors’ Shares ”). We used back-solve method to determine the underlying share value and performed an equity allocation based on a Binomial Option Pricing Model (“ OPM”) to arrive the fair value of the Investors’ Shares as of the dates of issuance and at the end of each reporting period with reference to valuation reports carried out by A VISTA Valuation Advisory Limited (“ AV I S TA”), an independent qualified valuer. In relation to the valuation of our Level 3 Financial Liabilities, with reference to the guidance under the “Guidance Note on Directors’ Duties in the Context of Valuations in Corporate Transactions” issued by the SFC in May 2017 applicable to directors of companies listed on the Stock Exchange, our Directors, based on the professional advice received, adopted the following procedures: (i) reviewed the terms of agreements related to Investors’ Shares; (ii) engaged independent valuer, provided necessary financial and non-financial information to enable the valuer to perform valuation procedures and discussed with the valuer on relevant assumptions; (iii) obtained sufficient understanding of the valuation model, methodologies and techniques on which the valuation is based; and (iv) reviewed the valuation results prepared by the valuer. Based on the above procedures, our Directors are of the view that the valuation analysis performed by the valuer is fair and reasonable, and the financial statements of our Group are properly prepared and disclosed. Details of the fair value measurement of financial liabilities at FVTPL, particularly the fair value hierarchy, the valuation techniques and key inputs, including significant unobservable inputs, the relationship of unobservable inputs to fair value and reconciliation of level 3 measurements are disclosed in note 27 and note 35 to the Accountants’ Report set out in the Appendix IA to this prospectus. The reporting accountant has carried out audit works in accordance with Hong Kong Standard on Investment Circular Reporting Engagement 200 “Accountants’ Reports on Historical Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants for the purpose of expressing an opinion on the Group’s historical financial information for the Track Record Period as a whole in Appendix IA to this prospectus. The reporting accountants’ opinion on the historical financial information of our Group for the Track Record Period is set out on page I-2 of Appendix IA to this prospectus. FINANCIAL INFORMATION – 378 – --- page 388 --- In relation to the fair value assessment of the financial liabilities requiring Level 3 measurements under the fair value classification, the Joint Sponsors have conducted relevant due diligence work, including but not limited to, (i) reviewing relevant notes and disclosure in the Accountants’ Report in Appendix IA to this prospectus; (ii) discussing with the Company and the Reporting Accountant as well as the external valuer the valuation methodology, and the key basis and assumptions for the valuation of the Level 3 Financial Liabilities; (iii) reviewing the valuation analysis prepared by the external valuer engaged by the Company; and (iv) obtaining and reviewing the credentials of the external valuer engaged by the Company. Having considered the work done by the Directors and the Reporting Accountant and the relevant due diligence conducted by the Joint Sponsors, nothing has come to the Joint Sponsors’ attention to disagree with the Directors and the Reporting Accountant in respect of the valuation of such Level 3 Financial Liabilities. Research and Development Expenses During the Track Record Period, our research and development expenses consisted of (i) preclinical and CMC expenses, mostly resulting from the engagement of CROs, CDMOs and other service providers to conduct preclinical studies and CMC on our behalf, (ii) clinical trial expenses for our drug candidates, including expenses with respect to the engagement of clinical trial sites and principal investigators, as well as other expenses incurred in connection with our clinical trials, (iii) salaries and related benefit costs (exclusive of non-cash share-based payments) for our research and development activities, (iv) costs of materials and consumables, primarily representing expenses for procuring materials and consumables used to support our preclinical studies and clinical trials, (v) non-cash share-based payments for our research and development functions, (vi) depreciation expenses, mainly including depreciation expenses for right-of-use assets, property and equipment used for research and development purposes, and (vii) others, including utilities, travelling and transportation expenses and other miscellaneous expenses. Our research and development expenses increased significantly during the Track Record Period primarily attributed to (i) the increases in clinical trial expenses arising from the increased clinical development activities regarding our drug candidates, such as IMM01 and IMM2902, (ii) the increases in salaries and related benefit costs and non-cash share-based payments, mainly due to the expansion of our research and development team and compensation raise, and (iii) the increases in preclinical and CMC expenses primarily due to the increased manufacturing expenses of IMM01 for the use in its combination trials with azacitidine and tislelizumab respectively, as well as IND-enabling expenses associated with IMM47. FINANCIAL INFORMATION – 379 – --- page 389 --- The following table below sets forth a breakdown of our research and development expenses for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 RMB % RMB % RMB % RMB % (in thousands, except percentages) (Unaudited) Research and development expenses: Preclinical and CMC expenses ............. 52,754 30.0 56,628 20.4 15,745 23.4 8,923 11.9 Clinical trial expenses .... 41,620 23.7 95,667 34.5 17,073 25.4 23,591 31.5 Salaries and related benefit costs ................ 26,528 15.1 49,417 17.8 13,743 20.4 19,410 25.9 Costs of materials and consumables .......... 27,721 15.8 15,005 5.4 5,614 8.3 4,065 5.4 Share-based payments .... 13,749 7.7 40,740 14.7 10,225 15.2 13,381 17.8 Depreciation expenses .... 8,600 4.9 12,163 4.4 3,821 5.7 4,428 5.9 Others ................ 4,982 2.8 7,726 2.8 1,036 1.6 1,203 1.6 Total ................. 175,954 100.0 277,346 100.0 67,257 100.0 75,001 100.0 The table below sets forth a breakdown of our research and development expenses incurred on the Core Product for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 RMB % RMB % RMB % RMB % (in thousands, except percentages) (Unaudited) Research and development expenses on the Core Product: Preclinical and CMC expenses ............. 8,958 20.7 23,836 20.4 5,736 22.0 368 1.6 Clinical trial expenses .... 17,333 39.9 52,760 45.2 11,132 42.8 11,042 48.2 Salaries and related benefit costs ................ 4,412 10.2 14,839 12.7 3,677 14.1 4,934 21.6 Costs of materials and consumables .......... 8,633 19.9 7,890 6.8 1,342 5.2 2,885 12.6 Share-based payments .... 1,887 4.3 12,164 10.4 3,091 11.9 2,819 12.3 Depreciation expenses ... 1,206 2.8 3,096 2.7 703 2.7 670 2.9 Others ................ 972 2.2 2,166 1.9 351 1.3 173 0.8 Total ................ 43,401 100.0 116,751 100.0 26,032 100.0 22,891 100.0 During the Track Record Period, all our research and development expenses were expensed and not capitalized. We expect our research and development expenses to grow along with advancement of our clinical programs and continued research and development of our preclinical and future drug candidates. FINANCIAL INFORMATION – 380 – --- page 390 --- Administrative Expenses During the Track Record Period, our administrative expenses consisted of (i) salaries and related benefit costs (exclusive of non-cash share-based payments) for our management and administrative functions, (ii) non-cash share-based payments for our management and administrative functions, (iii) professional service fees paid to legal counsel and agents in relation to (a) financing related services, (b) design services for construction project, (c) finance, tax and legal consulting services, and (d) human resource consulting services, (iv) depreciation expenses, mainly including depreciation expenses for right-of-use assets, property and equipment used for administrative purposes, (v) general office expenses, mainly including office consumables, and (vi) others, mainly including utilities, travelling and transportation expenses and other miscellaneous expenses. The increase of our administrative expenses during the Track Record Period was mainly attributable to the increases in non-cash share-based payments and the increases in salaries and related benefit costs, associated with the headcount expansion and compensation raise of our management and administrative functions as a result of our business growth. The following table sets forth a breakdown of our administrative expenses for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 RMB % RMB % RMB % RMB % (in thousands, except percentages) (Unaudited) Administrative expenses: Salaries and related benefit costs ................ 9,095 18.8 16,808 18.1 5,213 19.0 6,437 22.6 Share-based payments .... 20,268 41.9 63,089 68.0 18,763 68.6 16,716 58.7 Professional service fees .. 9,088 18.8 3,197 3.4 522 1.9 854 3.0 — Financing related services fees ....... 1,714 3.5 366 0.4 366 1.3 — — — Design services fees for construction project .. 3,223 6.7 887 1.0 32 0.0 292 1.0 — Finance, tax and legal consulting services fees .............. 2,023 4.2 421 0.4 103 0.4 263 0.9 — Human resource consulting services fees .............. 2,128 4.4 1,523 1.6 21 0.0 299 1.1 Depreciation expenses .... 4,575 9.5 5,454 5.9 1,932 7.1 3,104 10.9 General office expenses ... 3,366 7.0 1,486 1.6 341 1.2 471 1.7 Others ................ 1,927 4.0 2,762 3.0 597 2.2 887 3.1 Total ................. 48,319 100.0 92,796 100.0 27,368 100.0 28,469 100.0 Listing Expenses Listing expenses represent expenses incurred for our proposed Listing and Global Offering. In 2021, 2022 and the four months ended April 30, 2023, we recorded listing expenses of RMB4.9 million, RMB17.7 million, and RMB10.3 million, respectively. FINANCIAL INFORMATION – 381 – --- page 391 --- Finance Costs During the Track Record Period, our finance costs consisted of interest on lease liabilities and interest on borrowings, which represents the accretion of interest related to our payment obligation under our current leases. The following table summarizes a breakdown of finance costs for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Finance costs: Interest on lease liabilities .......... (891) (787) (285) (226) Interest on borrowings ............ ——— ( 2 7 ) Total .......................... (891) (787) (285) (253) Income Tax Expense Income tax expense represents the sum of the tax currently payable and deferred tax. We are subject to income tax on an entity basis on profits arising in or derived from the jurisdictions in which we are domiciled and operate. China Under the Law of the PRC on Enterprise Income Tax, or the EIT Law, and Implementation Regulation of the EIT Law, the tax rate of our PRC subsidiaries is 25% during the Track Record Period. In November 2020, our Company has been accredited as a High and New Technology Enterprise recognized by Science and Technology Commission of Shanghai Municipality and enjoys a preferential tax rate of 15% for a term of three years starting from 2020. Pursuant to Caishui 2018 circular No. 99, we enjoyed super deduction of 175% on qualifying research and development expenditures throughout the Track Record Period. Hong Kong Under the two-tiered profits tax rates regime which was effective on April 1, 2018, the first HK$2.0 million of profits of a qualifying group entity will be taxed at the rate of 8.25%, and profits above HK$2.0 million will be taxed at the rate of 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5%. We considered the two-tiered profits tax rates regime is insignificant to us, since our subsidiary incorporated in Hong Kong did not have tax assessable profits subject to Hong Kong profits tax during the Track Record Period. FINANCIAL INFORMATION – 382 – --- page 392 --- United States Our U.S. subsidiary is subject to statutory U.S. federal corporate income tax at a rate of 21.0% on any estimated assessable profits arising in the U.S. during the Track Record Period. It is also subject to the state income tax in Delaware at a rate of 8.7% during the Track Record Period. No provision for U.S. profits tax has been made as our subsidiary incorporated in the U.S. has no assessable profits derived from or earned in the U.S. during the Track Record Period. We did not record any income tax expense during the Track Record Period. Our Directors confirm that during the Track Record Period, we had made all the required tax filings and had paid all outstanding tax liabilities with the relevant tax authorities in the relevant jurisdictions, and we are not aware of any outstanding or potential disputes with such tax authorities. PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS Four Months Ended April 30, 2023 Compared to Four Months Ended April 30, 2022 Revenue Our revenue decreased by 68.8% from RMB0.2 million in the four months ended April 30, 2022 to RMB73 thousand in the four months ended April 30, 2023. The decrease was primarily attributable to a decrease of RMB0.1 million in sales of cell strain and other products in the four months ended April 30, 2023, which were one-off in nature and not considered as our main business. Other Income Our other income increased by 27.7% from RMB2.4 million in the four months ended April 30, 2022 to RMB3.1 million in the four months ended April 30, 2023. The increase was primarily attributable to an increase of RMB0.8 million in bank interest income as we purchased more time deposits denominated in the U.S. dollars which enjoyed a higher interest rate. Other Gains and Losses, Net Our other gains and losses decreased by 98.1% from losses of RMB44.8 million in the four months ended April 30, 2022 to RMB0.8 million in the four months ended April 30, 2023. The decrease was primarily attributable to a decrease of RMB55.5 million in our loss from changes in fair value of financial liabilities at FVTPL, due to the fact that we no longer recorded any financial liabilities at FVTPL since January 31, 2022, as our investors’ preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day; partially offset by a change from net foreign exchange gains of RMB10.7 million in the four months ended April 30, 2022 to net foreign exchange losses of RMB1.0 million in the same period in 2022, mainly due to a decrease in our net financial assets dominated in U.S. dollar, which had also slightly depreciated against Renminbi for the four months ended April 30, 2023. Research and Development Expenses Our research and development expenses increased by 11.5% from RMB67.3 million in the four months ended April 30, 2022 to RMB75.0 million in the four months ended April 30, 2023. The increase was primarily attributable to (i) an increase of RMB6.5 million in clinical trial expenses for IMM01, primarily in relation to the initiation of its combination trials with tislelizumab, as well as IMM2520; for detailed information on our progress on IMM01 and IMM2520, see “Business — Our Drug Candidates,” and (ii) an increase of RMB5.7 million in salaries and related benefit costs, mainly due to the expansion of our clinical team, in line with our continuous research and development efforts in advancing and expanding our pipeline drug FINANCIAL INFORMATION – 383 – --- page 393 --- candidates; partially offset by a decrease of RMB6.8 million in preclinical and CMC expenses, primarily due to a decrease of testing expenses for IMM2520, IMM40H and IMM47 in preparation for IND application filings. Administrative Expenses Our administrative expenses increased by 4.0% from RMB27.4 million in the four months ended April 30, 2022 to RMB28.5 million in the four months ended April 30, 2023. The increase was primarily attributable to (i) an increase of RMB1.2 million in salaries and related benefit costs, mainly due to the headcount expansion and compensation raise of administrative functions as a result of our business growth, (ii) an increase of RMB1.2 million in depreciation expenses, which was in line with the increases in our right-of-use assets, property and office equipment; partially offset by a decrease of RMB2.0 million in non-cash share-based payments, resulting from a decrease in the number of restricted shares vested in the four months ended April 30, 2023. Listing Expenses Our listing expenses decreased by 14.2% from RMB12.1 million in the four months ended April 30, 2022 to RMB10.3 million in the four months ended April 30, 2023, which was mainly attributable to professional services provided by the Joint Sponsors, legal counsels and other professional service providers in relation to the Listing. Finance Costs Our finance costs decreased by 11.2% from RMB285 thousand in the four months ended April 30, 2022 to RMB253 thousand in the four months ended April 30, 2023. The decrease was primarily attributable to a decrease of RMB59 thousand in the interest on lease liabilities in relation to the decrease of our lease liabilities. Loss for the Period As a result of the foregoing, our loss for the period decreased by RMB37.3 million from RMB149.1 million in the four months ended April 30, 2022 to RMB111.8 million in the four months ended April 30, 2023. Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenue Our revenue decreased by 89.4% from RMB5.1 million in 2021 to RMB0.5 million in 2022, which was primarily because of the decrease of our out-licensing fee from RMB4.7 million in 2021 to nil in 2022. The out-licensing fee received in 2021 was a milestone payment in connection with a license granted to SunHo in 2019 to develop and commercialize IMM2505 in China (including Hong Kong, Macau and Taiwan). Our revenue decrease was partially offset by an increase of RMB0.2 million in sales of cell strain and other products in 2022, which were one-off in nature and not considered as our main business. Other Income Our other income increased by 41.2% from RMB10.4 million in 2021 to RMB14.7 million in 2022. The increase was primarily attributable to an increase of RMB7.9 million in our bank interest income, mainly due to the increased balance of our bank deposits after our Series C Financing. FINANCIAL INFORMATION – 384 – --- page 394 --- Other Gains and Losses, Net Our other net gains and losses decreased by 94.3% from losses of RMB518.3 million in 2021 to losses of RMB29.4 million in 2022. The decrease was primarily attributable to (i) a decrease of RMB456.0 million in loss from changes in fair value of financial liabilities at FVTPL, due to the fact that we no longer recorded any financial liabilities at FVTPL since January 31, 2022, and our investors’ preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day, and (ii) a change from net foreign exchange losses of RMB9.1 million in 2021 to net foreign exchange gains of RMB26.1 million in 2022, in connection with our net financial assets denominated in U.S. dollar, which had appreciated against Renminbi in 2022; partially offset by the decrease of RMB1.6 million in the gain from changes in fair value of financial assets at FVTPL as we redeemed our investments in wealth management products and structured deposits in 2021, and we did not purchase any wealth management products or structured deposits in 2022. Research and Development Expenses Research and development expenses increased by 57.6% from RMB176.0 million in 2021 to RMB277.3 million in 2022. The significant increase was mainly attributable to (i) an increase of RMB54.0 million in clinical trial expenses for IMM01, primarily in relation to the initiation of its combination trials with azacitidine and tislelizumab respectively, as well as IMM2902; for detailed information on our progress on IMM01 and IMM2902, see “Business — Our Drug Candidates,” (ii) an increase of RMB27.0 million in non-cash share-based payments and an increase of RMB22.9 million in salaries and related benefit costs, mainly due to (a) the additional amortization in connection with the restricted shares granted in 2022, and (b) the expansion of our clinical team, in line with our continuous research and development efforts in advancing and expanding our pipeline drug candidates, and (iii) an increase of RMB3.9 million in preclinical and CMC expenses, primarily due to the increased manufacturing expenses of IMM01 for the use in its combination trials with azacitidine and tislelizumab respectively, as well as IND-enabling expenses associated with IMM47. Administrative Expenses Administrative expenses increased by 92.0% from RMB48.3 million in 2021 to RMB92.8 million in 2022, mainly attributable to (i) an increase of RMB42.8 million in non-cash share-based payments, mainly due to the additional amortization in connection with the restricted shares granted in 2022, and (ii) an increase of RMB7.7 million in salaries and related benefit costs, due to the headcount expansion and compensation raise of our management and administrative functions as a result of our business growth. Listing Expenses Listing expenses increased by 262.8% from RMB4.9 million in 2021 to RMB17.7 million in 2022, which was mainly attributable to professional services provided by the Joint Sponsors, legal counsels and other professional service providers in relation to the Listing. Finance Costs Finance costs slightly decreased by 11.7% from RMB891 thousand in 2021 to RMB787 thousand in 2022, mainly attributable to a decrease of RMB104 thousand in interest on lease liabilities, primarily due to the decrease of our lease liabilities. Loss for the Y ear As a result of the foregoing, our loss for the year decreased by RMB330.0 million from RMB732.9 million in 2021 to RMB402.9 million in 2022. FINANCIAL INFORMATION – 385 – --- page 395 --- DISCUSSION OF CERTAIN SELECTED ITEMS FROM THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION The following table sets forth selected information from our consolidated statements of financial position as of the dates indicated: As of December 31, As of April 30, 2021 2022 2023 (in thousands of RMB) Total non-current assets ................ 188,737 188,107 183,898 Total current assets ................... 704,098 651,871 600,635 Total assets ......................... 892,835 839,978 784,533 Total current liabilities ................ 2,477,831 51,737 78,855 Net current (liabilities) assets .......... (1,773,733) 600,134 521,780 Total non-current liabilities ............. 13,443 9,020 8,121 Total liabilities ...................... 2,491,274 60,757 86,976 Net (liabilities) assets ................. (1,598,439) 779,221 697,557 Equity Paid-in capital ....................... 6,908 — — Share capital ........................ — 356,093 356,093 Reserves ........................... (1,605,347) 423,128 341,464 Total (deficits) equity ................ (1,598,439) 779,221 697,557 Current Assets and Current Liabilities The following table sets forth our current assets and current liabilities as of the dates indicated: As of December 31, As of April 30, As of June 30, 2021 2022 2023 2023 (in thousands of RMB) (Unaudited) Current assets Bank balances and cash ............ 668,326 635,212 559,086 495,967 Prepayments and other receivables ... 27,528 16,593 16,509 8,696 Term deposits with original maturity over three months .............. — — — 43,355 Pledged bank deposits ............. 8 , 2 1 0——— Trade receivables ................ 34 66 16 4 Financial assets at FVTPL ......... — — 25,024 — Total current assets .............. 704,098 651,871 600,635 548,022 Current liabilities Financial liabilities at FVTPL ....... 2,431,584 — — — Trade and other payables ........... 41,151 46,138 44,625 39,185 Lease liabilities .................. 5,096 5,599 4,250 4,826 Borrowings .................... — — 29,980 29,980 Total current liabilities .......... 2,477,831 51,737 78,855 73,991 Net current (liabilities) assets ...... (1,773,733) 600,134 521,780 474,031 FINANCIAL INFORMATION – 386 – --- page 396 --- We recorded net current assets of RMB474.0 million as of June 30, 2023 as compared to net current assets of RMB521.8 million as of April 30, 2023. The decrease of net current assets was primarily due to (i) a decrease of RMB63.1 million in bank balances and cash, which was in line with our business development, and (ii) a decrease of RMB25.0 million in financial assets at FVTPL as we redeemed our structured deposits in June 2023; partially offset by an increase of RMB43.4 million in term deposits with original maturity over three months. We recorded net current assets of RMB521.8 million as of April 30, 2023 as compared to net current assets of RMB600.1 million as of December 31, 2022. The decrease of net current assets was primarily due to a decrease of RMB76.1 million in bank balances and cash due to the continued increase of our research and development expenses and administrative expenses as a result of our business growth, partially offset by an increase of RMB25.0 million in our financial assets at FVTPL, primarily due to our purchase of structured deposits in the four months ended April 30, 2023. We recorded net current assets of RMB600.1 million as of December 31, 2022, as compared to net current liabilities of RMB1,773.7 million as of December 31, 2021. The increase of net current assets was primarily due to a decrease of RMB2,431.6 million in financial liabilities at FVTPL, as we ceased recording financial liabilities at FVTPL since January 31, 2022, and our investors’ preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day, partially offset by (i) a decrease of RMB33.1 million in bank balances and cash due to the continued increase of our research and development expenses and administrative expenses as a result of our business growth, partially offset by an increase in our bank balances as a result of a portion of proceeds we received from our Series C Financing in January 2022, (ii) a decrease of RMB8.2 million in pledged bank deposits due to the release of the biding deposits used for the purchase of a land parcel in Shanghai in 2021, and (iii) a decrease of RMB10.9 million in prepayments and other receivables, primarily due to a release of RMB6.6 million in deposits for plant construction, which were used as a guarantee for the performance of the construction contract in connection with our manufacturing facilities. We recorded net assets of RMB697.6 million as of April 30, 2023, as compared to net assets of RMB779.2 million as of December 31, 2022. The decrease of net assets was primarily due to our loss for the year of RMB111.8 million in the four months ended April 30, 2023, partially offset by our recognition of equity-settled share-based payments of RMB30.1 million in the same period. We have terminated our investors’ preferred rights and no longer recorded any financial liabilities at FVTPL since January 31, 2022. As a result, we recorded net assets of RMB779.2 million as of December 31, 2022, as compared to net liabilities of RMB1,598.4 million as of December 31, 2021. For further information, see our consolidated statements of changes in equity set forth in the Accountants’ Report in Appendix IA to this prospectus. We recorded financial liabilities at FVTPL of RMB2,431.6 million, nil and nil as of December 31, 2021, December 31, 2022 and April 30, 2023, respectively. Our financial liabilities at FVTPL consisted of financial instruments related to the equity interests with preferred rights held by our investors. We no longer recorded any financial liabilities at FVTPL since January 31, 2022, as our investors’ preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day. Bank Balances and Cash Our bank balances and cash decreased by RMB33.1 million from RMB668.3 million as of December 31, 2021 to RMB635.2 million as of December 31, 2022, primarily due to the continued increase of our research and development expenses and administrative expenses as a result of our business growth, partially offset by an increase in our bank balances as a result of a portion of proceeds we received from our Series C Financing in January 2022. Our bank balances and cash FINANCIAL INFORMATION – 387 – --- page 397 --- further decreased by RMB76.1 million from RMB635.2 million as of December 31, 2022 to RMB559.1 million as of April 30, 2023, primarily due to the continued increase of our research and development expenses and administrative expenses as a result of our business growth. Prepayments and Other Receivables Our prepayments and other receivables primarily consisted of prepayments for research and development related services and materials, and other receivables such as deposits for plant construction as a guarantee for the construction contract in connection with our new facilities and deferred issue costs in connection with the proposed Listing and Global Offering. Our prepayments and other receivables decreased by RMB10.9 million from RMB27.5 million as of December 31, 2021 to RMB16.6 million as of December 31, 2022, primarily due to the release of RMB6.6 million in deposits for plant construction, which were used as a guarantee for the performance of the construction contract in connection with our manufacturing facilities. Our prepayments and other receivables decreased by RMB0.1 million from RMB16.6 million as of December 31, 2022 to RMB16.5 million as of April 30, 2023, primarily due to an increase of RMB3.3 million in prepayments for purchase of goods and research and development services, which was in line with the progression of the clinical trials of our drug candidates. The increase was offset by an decrease of RMB3,292.0 thousand in deferred issue cost, primarily due to decrease in capitalise ratio. As of June 30, 2023, RMB10.3 million, representing 62.7% of our total prepayments and other receivables as of April 30, 2023, was settled. The following table sets forth our prepayments and other receivables as of the dates indicated: As of December 31, As of April 30, 2021 2022 2023 (in thousands of RMB) Other receivables: Deposits for plant construction .......... 6,567 — — Deferred issue costs .................. 1,399 6,330 3,038 Interest receivables .................. — 925 869 Others ............................. 21 32 55 Prepayments for: Purchase goods and research and development services ................ 19,420 9,043 12,300 Others ............................. 121 263 247 Total .............................. 27,528 16,593 16,509 Financial Assets at FVTPL We recorded financial assets at FVTPL of nil and nil as of December 31, 2021 and December 31, 2022, since we fully redeemed our investment in those wealth management products and structured deposits in 2021, and did not purchase any wealth management products or structured deposits in 2022. We recorded financial asset at FVTPL of RMB25.0 million as of April 30, 2023 as we purchased structured deposits in the four months ended April 30, 2023. Our structured deposits were principal guaranteed with an expected yield of 2.70% per annum as of April 30, 2023. Our structured deposits had maturity dates within a year. As part of our treasury management, we invested in certain wealth management products and structured deposits to better utilize excess cash when our cash sufficiently covered our ordinary course of business. We have implemented a series of internal control policies and rules setting forth overall principles as well as detailed approval process for our treasury management activities. FINANCIAL INFORMATION – 388 – --- page 398 --- Our finance team, with extensive experience in financial planning and analysis, investment management, and internal control, is responsible for proposing, analyzing and evaluating potential investment in wealth management products and structured deposits. Our management will review the product proposed by our finance department and determine whether to approve the product after thoroughly considering a number of factors, including but not limited to, general market conditions, risk control and credit of issuing financial institutions, our own working capital conditions and the expected profit and potential risk of the investment. Our Board oversees the overall financing activities and investment strategies and supervises our internal audit and risk control departments in the management of our Company’s auditing and treasury management activities, including providing improvement suggestions and engaging periodical discussions with the relevant management team pursuant to our internal control policies. Under our treasury management guidelines, we limited our purchases to principal-guaranteed and low risk products from reputable financial institutions which must not affect our daily operation and business prospects. To control our risk exposure, we have in the past sought, and may continue in the future to seek, principal-guaranteed structured deposits and other wealth management products that provide better investment returns than term deposits at commercial banks. Upon the completion of the Listing, we will comply with relevant size test requirements under Chapter 14 of the Listing Rules and disclose the details of our investments or other notifiable transactions to the extent necessary and as appropriate. Pledged Bank Deposits Our pledged bank deposits represent the bidding deposits to get a guarantee letter issued by the bank for acquisition of a land use right. For more details regarding the land use right, see the sub-section headed “— Right-of-use Assets” in this section. We recorded pledged bank deposits of RMB8.2 million, nil, and nil as of December 31, 2021, December 31, 2022, and April 30, 2023, respectively. The changes were primarily due to the deposits made in relation to the purchase of a land parcel in Shanghai in 2021, which were later released to us in May 2022. Trade Receivables Our trade receivables mainly consisted of the outstanding amounts payable by our customers for the purchase of our cell lines and other related products and testing services. Our trade receivables slightly increased by RMB32.0 thousand from RMB34.0 thousand as of December 31, 2021 to RMB66.0 thousand as of December 31, 2022. Our trade receivables decreased by RMB50 thousand from RMB66 thousand as of December 31, 2022 to RMB16 thousand as of April 30, 2023. As of June 30, 2023, RMB14 thousand, representing 87.1% of our total trade receivables as of April 30, 2023, was settled. We normally granted a credit period of 30 days or a particular period agreed with customers. Our trade receivables turnover days increased from 2.9 days in 2021 to 33.6 days in 2022. Our trade receivables turnover days increased to 66.6 days in the four months ended April 30, 2023. Trade receivables turnover days for a given period are equal to the average trade receivables balances as of the beginning and the end of the period divided by total net revenues during the period and multiplied by the number of days during the period. FINANCIAL INFORMATION – 389 – --- page 399 --- Financial Liabilities at FVTPL Our financial liabilities at FVTPL consisted of financial instruments in connection with the equity interests with preferred rights held by our investors. We recorded financial liabilities at FVTPL of RMB2,431.6 million, nil, and nil as of December 31, 2021, December 31, 2022, and April 30, 2023, respectively. We no longer recorded any financial liabilities at FVTPL since January 31, 2022, as our investors’ preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day. Trade and Other Payables Our trade and other payables mainly included trade payables and accrued research and development expenses for CRO and CDMO services, accrued staff costs and benefits, accrued issue costs, accrued listing expenses, payables for property and equipment and other tax payables. Our trade and other payables increased by RMB5.0 million from RMB41.2 million as of December 31, 2021 to RMB46.1 million as of December 31, 2022, primarily attributable to (i) an increase of RMB5.6 million in accrued staff costs and benefits, due to the expansion of our research and development team and management team as well as the compensation raise in 2022, and (ii) an increase of RMB4.3 million in accrued listing expenses and an increase of RMB1.3 million in issue costs, in connection with the proposed Listing and Global Offering; partially offset by a decrease of RMB0.9 million in accrued research and development expenses, primarily due to our timely repayment of research and development expenses. Our trade and other payables decreased by RMB1.5 million from RMB46.1 million as of December 31, 2022 to RMB44.6 million as of April 30, 2023, primarily attributable to a decrease of RMB4.5 million in accrued staff costs and benefits, primarily because we paid bonuses to our employees in January 2023; partially offset by (i) an increase of RMB2.3 million in accrued listing expenses in connection with the proposed Listing and Global Offering, (ii) an increase of RMB1.6 million in trade payables for research and development expenses which were not yet due as of April 30, 2023, (iii) an increase of RMB1.1 million in accrued research and development expenses, which was in line with the increase of our research and development expenses. As of June 30, 2023, RMB22.9 million, representing 51.0% of our total trade and other payables as of April 30, 2023, was settled. The table below sets forth our trade and other payables as of the dates indicated: As of December 31, As of April 30, 2021 2022 2023 (in thousands of RMB) Trade and other payables: Trade payables for research and development expenses .............. 1,764 1,262 2,831 Accrued research and development expenses ......................... 17,102 16,199 17,274 Accrued staff costs and benefits ......... 7,066 12,709 8,213 Accrued issue costs ................... 834 2,165 948 Accrued listing expenses ............... 2,959 7,249 9,577 Payables for property and equipment ...... 6,928 5,705 5,029 Other tax payables ................... 2,955 612 544 Others ............................. 1,543 237 209 Total .............................. 41,151 46,138 44,625 FINANCIAL INFORMATION – 390 – --- page 400 --- The following table sets forth an aging analysis of our trade payables presented based on the invoice dates at the end of each reporting period: As of December 31, As of April 30, 2021 2022 2023 (in thousands of RMB) 0 — 30 days ........................ 1,764 713 2,831 31 — 90 days ....................... — 481 — 91 — 180 days ...................... —6 8— 1,764 1,262 2,831 Lease Liabilities (current and non-current portions) Our lease liabilities were in relation to the properties that we leased for our office premises, research and development center and production facilities. We recorded lease liabilities of RMB18.5 million, RMB14.6 million, and RMB12.4 million as of December 31, 2021, December 31, 2022, and April 30, 2023, respectively. The decrease of RMB3.9 million in lease liabilities from RMB18.5 million as of December 31, 2021 to RMB14.6 million as of December 31, 2022 was because of the timely repayment of our lease liabilities. The decrease of RMB2.2 million in lease liabilities from RMB14.6 million as of December 31, 2022 to RMB12.4 million as of April 30, 2023 was because of the timely repayment of our lease liabilities. Property and Equipment Our property and equipment primarily consisted of machinery and equipment, leasehold improvements, construction in progress and office equipment and fixtures. Our property and equipment further increased by RMB17.8 million from RMB52.0 million as of December 31, 2021 to RMB69.8 million as of December 31, 2022, primarily because of (i) an increase of RMB19.2 million for the construction of our manufacturing facilities in Zhangjiang Science City, Shanghai, and (ii) an increase of RMB2.8 million for the purchase of research and development related equipment. Our property and equipment further decreased by RMB3.8 million from RMB69.8 million as of December 31, 2022 to RMB66.1 million as of April 30, 2023, primarily because of (i) a decrease of RMB2.1 million in our machinery and equipment, mainly due to the depreciation of our machinery and equipment, and (ii) a decrease of RMB1.9 million in leasehold improvements, mainly due to the depreciation of our office premises and research and development center. The following table sets forth our property and equipment as of the dates indicated: As of December 31, As of April 30, 2021 2022 2023 (in thousands of RMB) Property and equipment: Machinery and equipment .............. 30,542 33,347 31,274 Leasehold improvements ............... 17,634 13,406 11,500 Construction in progress ............... 3,224 22,460 22,707 Office equipment and fixtures ........... 568 594 553 Vehicles ........................... 58 23 23 Total .............................. 52,026 69,830 66,057 FINANCIAL INFORMATION – 391 – --- page 401 --- Right-of-use Assets Our right-of-use assets primarily arose from our leased properties and land use right. Our right-of-use assets decreased by RMB8.0 million from RMB102.1 million as of December 31, 2021 to RMB94.1 million as of December 31, 2022, primarily due to a decrease of RMB4.2 million in land use right and a decrease of RMB3.8 million in leased properties, both of which were resulted from depreciation charge of the properties for the year. Our right-of-use assets decreased by RMB3.4 million from RMB94.1 million as of December 31, 2022 to RMB90.7 million as of April 30, 2023, primarily due to a decrease of RMB2.0 million in leased properties and a decrease of RMB1.4 million in land use right, both of which were resulted from depreciation charge of the properties for the four months ended April 30, 2023. The following table sets forth our right-of-use assets as of the dates indicated: As of December 31, As of April 30, 2021 2022 2023 (in thousands of RMB) Right-of-use assets: Leased properties .................... 17,894 14,089 12,109 Land use right ....................... 84,201 79,973 78,564 Total .............................. 102,095 94,062 90,673 Other Non-current Assets Our other non-current assets consisted of value-added tax recoverable, deposits for plant construction, prepayments for property and equipment, and rental deposits. Our other non-current assets decreased by RMB10.4 million from RMB34.6 million as of December 31, 2021 to RMB24.2 million as of December 31, 2022, primarily because of (i) a decrease of RMB7.1 million in value-added tax recoverable due to the tax refund received in 2022, and (ii) a decrease of RMB3.5 million in prepayments for property and equipment as it was converted to our property and equipment in 2022. Our other non-current assets increased by RMB3.0 million from RMB24.2 million as of December 31, 2022 to RMB27.2 million as of April 30, 2023, primarily because of an increase of RMB2.9 million in value-added tax recoverable mainly in relation to our purchase of laboratory equipment and consumables, and our research and development activities. The following table sets forth our other non-current assets as of the dates indicated: As of December 31, As of April 30, 2021 2022 2023 (in thousands of RMB) Other non-current assets: Value-added tax recoverable ............ 19,623 12,496 15,424 Deposits for plant construction .......... 9,851 9,851 9,851 Prepayments for property and equipment ... 3,483 — — Rental deposits ...................... 1,659 1,868 1,893 Total .............................. 34,616 24,215 27,168 FINANCIAL INFORMATION – 392 – --- page 402 --- KEY FINANCIAL RATIOS The table below sets forth our key financial ratios as of the dates indicated: As of December 31, As of April 30, 2021 2022 2023 Current ratio (1) ...................... 0.28 12.60 7.62 Note: (1) Current ratio represents current assets divided by current liabilities as of the same date. Our current ratio increased from 0.28 as of December 31, 2021 to 12.60 as of December 31, 2022, mainly attributable to the decrease in our current liabilities from RMB2,477.8 million as of December 31, 2021 to RMB51.7 million as of December 31, 2022. The decrease in our current liabilities was primarily because we ceased recording financial liabilities at FVTPL since January 31, 2022, and our investors’ preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day. Our current ratio decreased from 12.60 as of December 31, 2022 to 7.62 as of April 30, 2023, mainly attributable to the decrease in our current assets from RMB651.9 million as of December 31, 2022 to RMB600.6 million as of April 30, 2023. The decrease in our current assets was primarily attributable to a decrease of RMB76.1 million in our bank balances and cash, mainly due to the continued increase of our research and development expenses and our administrative expenses as a result of our business growth. See “— Discussion of Certain Selected Items from the Consolidated Statements of Financial Position — Current Assets and Current Liabilities.” LIQUIDITY AND CAPITAL RESOURCES Our primary uses of cash are to fund the preclinical and clinical development of our drug candidates, administrative expenses and other recurring expenses. Our net cash used in operating activities was RMB190.5 million, RMB238.7 million, and RMB79.2 million in 2021, 2022, and the four months ended April 30, 2023, respectively, primarily due to the significant research and development expenses and administrative expenses we incurred during the Track Record Period without generating any revenue from sales of our drug candidates. Our operating cash flow will continue to be affected by our research and development expenses. During the Track Record Period and up to the Latest Practicable Date, we have primarily funded our working capital requirements through proceeds from private equity financings. Our management closely monitors uses of cash and cash balances and strives to maintain a healthy liquidity for our operations. Going forward, we believe our liquidity requirements will be satisfied by a combination of net proceeds from the Global Offering, funds received from potential collaboration arrangements and cash generated from our operations after the commercialization of our drug candidates. With the continuing expansion of our business, we may require further funding through public or private offerings, debt financings, collaboration arrangements or other sources. As of April 30, 2023, our bank balances and cash amounted to RMB559.1 million. Except as discussed under the paragraphs headed “— Indebtedness” in this section, we did not have any material mortgages, charges, debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness, finance lease or hire purchase commitments, liabilities under acceptances (other than normal trade bills), acceptance credits, which are either guaranteed, unguaranteed, secured or unsecured, or guarantees or other contingent liabilities as of June 30, 2023. FINANCIAL INFORMATION – 393 – --- page 403 --- Cash Flows The following table sets forth our cash flows for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Operating cash flow before movements in working capital ..... (166,464) (260,762) (71,486) (72,138) Changes in working capital ......... (24,077) 22,052 18,467 (7,104) Net cash used in operating activities .. (190,541) (238,710) (53,019) (79,242) Net cash (used in) from investing activities ..................... (108,722) 49 (5,021) (22,869) Net cash from financing activities .... 793,033 179,380 185,245 27,018 Net increase (decrease) in cash and cash equivalents ................ 493,770 (59,281) 127,205 (75,093) Cash and cash equivalents at beginning of the year/period ...... 183,674 668,326 668,326 635,212 Effect of foreign exchange rate changes, net ................... (9,118) 26,167 10,769 (1,033) Cash and cash equivalents at end of the year/period ................. 668,326 635,212 806,300 559,086 Net Cash Used in Operating Activities For the four months ended April 30, 2023, our net cash used in operating activities was RMB79.2 million. Our loss for the period was RMB111.8 million for the same period. The difference between our loss for the period and our net cash used in operating activities was primarily attributable to certain non-cash or non-operating expenses or losses, including share-based payment expenses of RMB30.1 million, depreciation of property and equipment of RMB4.1 million and depreciation of right-of-use assets of RMB3.4 million, partially offset by bank interest income of RMB2.9 million and changes in certain working capital items, including and increase in other non-current assets of RMB3.0 million and increase in prepayments and other receivables of RMB3.3 million. For the year ended December 31, 2022, our net cash used in operating activities was RMB238.7 million. Our loss for the year was RMB402.9 million for the same period. The difference between our loss for the year and our net cash used in operating activities was primarily attributable to (i) certain non-cash or non-operating expenses or losses, including share-based payment expenses of RMB103.8 million, loss from changes in fair value of financial liabilities at FVTPL of RMB55.5 million, depreciation of property and equipment of RMB11.9 million, and depreciation of right-of-use assets of RMB5.7 million, partially offset by net foreign exchange gains of RMB26.1 million and bank interest income of RMB9.5 million; and (ii) changes in certain working capital items, including a decrease in prepayments and other receivables of RMB10.2 million and a decrease in other non-current assets of RMB7.0 million. For the year ended December 31, 2021, our net cash used in operating activities was RMB190.5 million. Our loss for the year was RMB732.9 million for the same period. The difference between our loss for the year and our net cash used in operating activities was primarily attributable to (i) certain non-cash or non-operating expenses or losses, including loss from changes in fair value of financial liabilities at FVTPL of RMB511.5 million, share-based payments expenses of RMB34.0 million, net foreign exchange losses of RMB9.1 million, depreciation of FINANCIAL INFORMATION – 394 – --- page 404 --- property and equipment of RMB7.8 million, and depreciation of right-of-use assets of RMB5.4 million; and (ii) changes in certain working capital items, including an increase in trade and other payables of RMB7.7 million, partially offset by an increase in prepayments and other receivables of RMB18.1 million and an increase in other non-current assets of RMB13.6 million. We recorded net operating cash outflows during the Track Record Period. Going forward, we plan to improve our net operating cash flow position through the continued advancement of clinical development and commercialization of our drug candidates, business collaboration and partnership, including out-licensing, commercialization collaboration, as well as optimization of our cost structure and operating efficiency. In particular, we plan to (i) rapidly advance the clinical development and commercialization of our Core Product and Key Products, for our clinical development and commercialization plans, see “Business — Our Drug Candidates,” (ii) explore potential collaboration opportunities for our product candidates, in particular, we plan to present clinical data of our drug candidates at international conferences to attract the interest of potential strategic partners, for details on our collaboration plans, see “Business — Our Strategies — To Expand Our Overseas Footprint and Maximize the Clinical and Commercial Value of Our Drug Candidates Through Clinical Trials and Accretive Partnerships,” (iii) enhance management over our working capital, by monitoring and managing our receivables collection, payables settlement, and inventory turnover, and (iv) implement comprehensive measures to optimize our cost structure and control our costs and expenses, among others, we aim to strengthen our procurement management to further improve efficiency and lower cost. Net Cash (Used in) from Investing Activities For the four months ended April 30, 2023, our net cash used in investing activities was RMB22.9 million, primarily attributable to purchase of financial assets at FVTPL of RMB112.0 million, partially offset by withdrawal of financial assets at FVTPL of RMB87.0 million. For the year ended December 31, 2022, our net cash from investing activities was RMB49 thousand, primarily attributable to bank interest received of RMB8.6 million, withdrawal of pledged bank deposits of RMB8.2 million and withdrawal of deposits for plant construction of RMB6.6 million, offset by purchase of property and equipment of RMB23.2 million. For the year ended December 31, 2021, our net cash used in investing activities was RMB108.7 million, primarily attributable to purchase of financial assets at FVTPL of RMB329.0 million, payments for right-of-use assets of RMB84.6 million, purchase of property and equipment of RMB24.3 million, and payments for deposits of RMB16.4 million, partially offset by withdrawal of financial assets at FVTPL of RMB352.7 million. Net Cash from Financing Activities For the four months ended April 30, 2023, our net cash from financing activities was RMB27.0 million, which was primarily attributable to bank loans raised of RMB30.0 million. It was partially offset by repayments of lease liabilities of RMB2.2 million. For the year ended December 31, 2022, our net cash from financing activities was RMB179.4 million, which was primarily attributable to remaining proceeds from issue of Series C shares of RMB183.6 million and proceeds from issue of paid-in capital to employee stock ownership platforms of RMB6.0 million. It was partially offset by repayments of lease liabilities of RMB5.8 million and issue costs paid in connection with the proposed Listing and Global Offering of RMB3.6 million. FINANCIAL INFORMATION – 395 – --- page 405 --- For the year ended December 31, 2021, our net cash from financing activities was RMB793.0 million, which was primarily attributable to proceeds from issue of Series B+ shares of RMB427.8 million and proceeds from issue of Series C shares of RMB373.2 million in 2021. It was partially offset by repayments of lease liabilities of RMB4.8 million, and payments for transaction costs for the issue of Series B+ shares and Series C shares of RMB1.7 million. CASH OPERATING COSTS The following table sets forth our cash operating costs for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Costs relating to research and development of our Core Product Preclinical and CMC expenses ...... 8,958 23,836 5,736 368 Clinical trial expenses ............. 17,333 52,760 11,132 11,042 Salaries and related benefit costs ..... 4,412 14,839 3,677 4,934 Costs of materials and consumables .. 8,633 7,890 1,342 2,885 Others ......................... 972 2,166 351 173 Costs relating to research and development of our other product candidates Preclinical and CMC expenses ...... 43,796 32,792 10,009 8,555 Clinical trial expenses ............. 24,286 42,907 5,941 12,549 Salaries and related benefit costs ..... 22,116 34,578 10,066 14,476 Costs of materials and consumables .. 19,088 7,115 4,272 1,180 Others ......................... 4,010 5,560 685 1,030 Total .......................... 153,604 224,443 53,211 57,192 Workforce employment cost (1) ....... 9,095 16,808 5,213 6,437 Direct production cost (2) ........... ———— Non-income taxes, royalties and other governmental charges ............ ———— Contingency allowances ........... ———— Product marketing (3) .............. ———— Notes: (1) Workforce employment cost represents total non-research and development personnel costs mainly including salaries and benefits. (2) We had not commenced commercial manufacturing as of the Latest Practicable Date. (3) We had not commenced product sales as of the Latest Practicable Date. WORKING CAPITAL CONFIRMATION The Directors are of the opinion that, taking into account the financial resources available to us, including cash and cash equivalents, internally generated funds, financial assets, the estimated net proceeds from the Global Offering and our cash burn rate, which is the average monthly cash used in operations plus payments for property, plant and equipment, going forward will be approximately 1.1 times of the cash burn rate for the year ended December 31, 2022, we have sufficient working capital to cover at least 125% of our costs, including research and development costs, general, administrative and operating costs, for at least the next 12 months from the date of this prospectus. FINANCIAL INFORMATION – 396 – --- page 406 --- Our Directors believe that, by taking into account our cash and cash equivalents of RMB559.1 million as of April 30, 2023 and assuming that our cash burn rate going forward will be approximately 1.1 times of the cash burn rate for the year ended December 31, 2022, we can remain financially viable for approximately 34 months from April 30, 2023 if taking into account the estimated net proceeds from the Global Offering (being the indicative Offer Price of HK$18.60 per H Share). We will continue to monitor our cash flows from operations closely and expect to raise our next round of financing, if needed, with a minimum buffer of 12 months. INDEBTEDNESS The following table sets forth our indebtedness by nature as of the dates indicated: As of December 31, As of April 30, As of June 30, 2021 2022 2023 2023 (in thousands of RMB) (Unaudited) Indebtedness: Borrowings ..................... — — 29,980 29,980 Lease liabilities .................. 18,539 14,619 12,371 11,634 Financial liabilities at FVTPL ....... 2,431,584 — — — Total .......................... 2,450,123 14,619 42,351 41,614 Borrowings In January 2023, we entered into a one-year credit facility agreement with a reputable commercial bank in China, which granted us a credit line in an aggregate amount of RMB100.0 million with the interest rate to be determined upon negotiations between the bank and us based on then prevailing loan prime rate. In March 2023, we further entered a one-year credit facility agreement with another reputable commercial bank in China, which granted us a credit line in an aggregate amount of RMB10.0 million with an effective interest rate of 3.10% per annum. As of June 30, 2023, the amount of unutilized credit facilities was RMB80.0 million. Our credit facility agreements contained standard terms, conditions and covenants that were customary for commercial bank loans. Our Directors confirm that we had not experienced any difficulty in obtaining bank borrowings, default in payment of bank borrowings or breach of covenants during the Track Record Period and up to the Latest Practicable Date. Lease Liabilities The following table sets forth our lease liabilities as of the dates indicated: As of December 31, As of April 30, As of June 30, 2021 2022 2023 2023 (in thousands of RMB) (Unaudited) Lease liabilities (secured and unguaranteed): Current ........................ 5,096 5,599 4,250 4,826 Non-current ..................... 13,443 9,020 8,121 6,808 Total .......................... 18,539 14,619 12,371 11,634 FINANCIAL INFORMATION – 397 – --- page 407 --- The weighted average incremental borrowing rate applied to our lease liabilities was 4.75% during the Track Record Period. Also see “— Discussion of Certain Selected Items from the Consolidated Statements of Financial Position — Current Assets and Current Liabilities — Lease Liabilities (current and non-current portions).” Financial Liabilities at FVTPL The aggregated proceeds we received from our various series of financings are recognized as financial liabilities at FVTPL (unsecured and unguaranteed). As of December 31, 2021, the carrying amount of our financial liabilities at FVTPL amounted to RMB2,431.6 million, which included the initial consideration received and subsequent fair value changes. As of December 31, 2022, April 30, 2023 and June 30, 2023, the carrying amount of our financial liabilities at FVTPL was nil, nil and nil, respectively. We no longer recorded any financial liabilities at FVTPL since January 31, 2022, as the investors’ preferred rights in connection with our series of financings, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day. For further information regarding our financial liabilities at FVTPL, see note 27 to the Accountant’s Report set out in Appendix IA to this prospectus. Except as discussed above, we did not have any material mortgages, charges, debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness, finance lease or hire purchase commitments, liabilities under acceptances (other than normal trade bills), acceptance credits, which are either guaranteed, unguaranteed, secured or unsecured, or guarantees or other contingent liabilities as of June 30, 2023. CAPITAL EXPENDITURES We regularly incur capital expenditures to purchase and maintain our property and equipment in order to enhance our development capabilities and expand our business operations. Historically, we have funded our capital expenditures mainly through private equity financings. The following table sets forth our capital expenditures for the periods indicated: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Capital expenditures: Purchases of property and equipment . 24,282 23,224 15,401 1,046 We expect that our capital expenditures in 2023 and 2024 will be approximately RMB22.7 million and RMB45.3 million, respectively, which are primarily related to the construction of our manufacturing facilities as well as maintenance of our existing manufacturing capabilities. See the section headed “Future Plans and Use of Proceeds” for more details. We plan to fund our planned capital expenditures mainly through a combination of internal financial resources, the net proceeds from the Global Offering, bank borrowings, funds from potential collaboration arrangements, revenue expected to be generated from sales of our products in the future and others. We may adjust our capital expenditures for any given period according to our development plans or in light of market conditions and other factors as appropriate. FINANCIAL INFORMATION – 398 – --- page 408 --- CONTRACTUAL OBLIGATIONS Capital Commitments As of December 31, 2021, December 31, 2022 and April 30, 2023, we had capital commitments contracted, but not yet provided, of RMB36.0 million, RMB5.7 million and RMB4.9 million, respectively. Such capital commitments reflected capital expenditure we contracted for but not provided on acquisition of property and equipment in the historical financial information. CONTINGENT LIABILITIES As of December 31, 2021, December 31, 2022 and April 30, 2023, we did not have any contingent liabilities. We confirm that as of the Latest Practicable Date, there had been no material changes or arrangements to our contingent liabilities. OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS We had not entered into any off-balance sheet transactions as of the Latest Practicable Date. RELATED PARTY TRANSACTIONS As of December 31, 2021, December 31, 2022 and April 30, 2023, our related party transactions were compensation including grants of restricted shares to our key management personnel and grants of restricted shares to Dr. Yumei Ding, the spouse of our CEO and executive director Dr. Tian and currently a director of one of our subsidiaries. Dr. Ding, M.D., is a licensed medical practitioner with around 15 years of clinical experience in the U.S. She also conducted academic research in the field of immunology in several academic institutions. With a wealth of clinical experience, Dr. Ding is a member of Chinese American Independent Practice Association (CAIPA) and has established extensive networks and connections with practicing physicians. Given that our senior management team is mainly based in China, as we plan to expand our presence globally, we engaged Dr. Ding as our consultant in June 2021 to provide consulting services for our overseas business operations. In recognition of Dr. Ding’s contribution, we appointed Dr. Ding as the director of Macroimmune, our U.S. subsidiary, in June 2023, upon which Dr. Ding ceased to be our consultant. As a former consultant of the Group and current director of Macroimmune, Dr. Ding has been reviewing business plans and development strategies, identifying challenges and opportunities in overseas market, supervising clinical development efforts in the U.S., liaising with physicians and other external partners, overseeing international business development efforts and initial public offering process, and in exchange for her services, we issued restricted shares to Dr. Ding. The amount of restricted shares issued to Dr. Ding is in line with those issued to our senior management, and we recognized RMB5.6 million, RMB6.0 million, and RMB0.7 million in 2021, 2022 and the four months ended April 30, 2023, respectively, for the expenses of the share-based payment for her compensation according to the accounting standard. FINANCIAL INFORMATION – 399 – --- page 409 --- The remuneration of key management members of our Group during the Track Record Period was as follows: For the Year Ended December 31, For the Four Months Ended April 30, 2021 2022 2022 2023 (in thousands of RMB) (Unaudited) Salaries and other benefits ......... 3,676 11,142 2,608 4,769 Retirement benefits scheme contributions .................. 170 466 93 194 Discretionary bonus ............... 570 2,089 507 732 Share-based payments ............. 12,330 84,859 20,442 25,803 Total .......................... 16,746 98,556 23,650 31,498 It is the view of our Directors that our related party transactions during the Track Record Period (i) were conducted in the ordinary and usual course of business and on normal commercial terms between the relevant parties, and (ii) do not distort our Track Record Period results or make our historical results not reflective of future performance. Details of our transactions with related parties during the Track Record Period are set out in note 32 to the Accountants’ Report in Appendix IA to this prospectus. MARKET RISK DISCLOSURE The risks associated with our financial assets and liabilities include market risks, credit risk and liquidity risk. The market risks that we are exposed to primarily include currency risk, interest rate risk and other price risk. The Directors regularly review and agree policies for managing each of these risks and they are summarized below. For more details, see note 35 to the Accountants’ Report set out in the Appendix IA to this prospectus. Currency Risk Certain of our financial assets and liabilities are exposed to foreign currency risk. We did not have a foreign currency hedging policy against our exposure to currency risk during the Track Record Period and up to the Latest Practicable Date. However, the management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. For details, including relevant sensitivity analysis, see note 35b to the Accountants’ Report set out in Appendix IA to this prospectus. Credit Risk The carrying amounts of trade receivables, other receivables, amounts due from subsidiaries, bank balances and pledged bank deposits included in the consolidated statements of financial position represent our maximum exposure to credit risk in relation to our financial assets. Trade Receivables For trade receivables, we have applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime expected credit losses, or ECL. The ECL on trade receivables are assessed individually, based on the past default experience of the debtor, general economic conditions of the industry in which the debtor operates and an assessment of both the current as well as the forward-looking information that is available without undue cost or effort at the end of each reporting period. Our Directors consider the ECL provision of trade receivables is insignificant as these balances are mainly due from a counterparty of good credit quality. FINANCIAL INFORMATION – 400 – --- page 410 --- Other Receivables For other receivables, we have applied 12-month ECL, or 12m ECL, in IFRS 9 to measure the loss allowance. The ECL on other receivables are assessed individually based on historical settlement records and past default experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the end of each reporting period. Our Directors consider the ECL provision of other receivables is insignificant. Bank Balances and Pledged Bank Deposits The credit risk on bank balances and pledged bank deposits is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. For further details, see note 35b to the Accountants’ Report set out in Appendix IA to this prospectus. Liquidity Risk In the management of the liquidity risk, we monitor and maintain a level of cash and cash equivalents deemed adequate by the management to finance our operations and mitigate the effects of fluctuations in cash flows. We rely on issuance of ordinary shares as significant sources of liquidity. Our Directors are satisfied that we will have sufficient financial resources to meet our financial obligations as they fall due and to sustain our operations for the foreseeable future. For further details on our liquidity risk, see note 35b to the Accountants’ Report set out in Appendix IA to this prospectus. DIVIDEND We have never declared or paid any dividends on our ordinary shares or any other securities. We currently intend to retain all available funds and earnings, if any, to fund the development and expansion of our business and we do not intend to declare or pay any dividends in the foreseeable future. Investors should not purchase our ordinary shares with the expectation of receiving cash dividends. Any future determination to pay dividends will be made at the discretion of our Directors subject to our Articles of Association and the PRC Company Law, and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our Directors may deem relevant. No dividend shall be declared or payable except out of our profits and reserves lawfully available for distribution. Regulations in the PRC currently permit payment of dividends of a PRC company only out of accumulated distributable after-tax profits as determined in accordance with its articles of association and the accounting standards and regulations in China. As confirmed by our PRC Legal Advisor, according to the PRC law, any future net profit that we make will have to be first applied to make up for our historically accumulated losses, after which we will be obliged to allocate 10% of our net profit to our statutory common reserve fund until such fund has reached more than 50% of our registered capital. We will therefore only be able to declare dividends after (i) all our historically accumulated losses have been made up for; and (ii) we have allocated sufficient net profit to our statutory common reserve fund as described above. DISTRIBUTABLE RESERVES As of April 30, 2023, we did not have any distributable reserves. FINANCIAL INFORMATION – 401 – --- page 411 --- LISTING EXPENSES Listing expenses to be borne by us are estimated to be approximately HK$85.5 million (including underwriting commission, at the Offer Price of HK$18.60 per H Share), which represent 26.8% of the gross proceeds from the Global Offering, assuming no Shares are issued pursuant to the Over-allotment Option. The above listing expenses are comprised of (i) underwriting-related expenses, including underwriter commission, of RMB17.4 million, and (ii) non-underwriting-related expenses of RMB61.3 million, including (a) the legal advisors and the reporting accountants expenses of RMB35.6 million, and (b) other fees and expenses, including sponsors fee, of RMB25.7 million. In 2021, 2022 and the four months ended April 30, 2023, listing expenses were RMB4.9 million (approximately HK$5.3 million), RMB17.7 million (approximately HK$19.3 million) and RMB10.3 million (approximately HK$11.2 million), respectively, and the deferred issue costs were RMB1.4 million (approximately HK$1.5 million), RMB4.9 million (approximately HK$5.3 million) and RMB0.6 million (approximately HK$0.6 million) respectively. We also adjusted RMB3.9 million (approximately HK$4.2 million) in listing expenses in the four months ended April 30, 2023 from deferred issue costs recorded in 2021 and 2022, reflecting a decrease in our listing expenses which were deducted from equity as of December 31, 2022. After April 30, 2023, approximately HK$23.5 million is expected to be charged to our consolidated statements of profit or loss and other comprehensive expenses and approximately HK$22.9 million is expected to be accounted for as a deduction from equity upon the Listing. The listing expenses above are the latest practicable estimate for reference only, and the actual amount may differ from this estimate. For details on our listing expenses, see note 11 and note 21 to the Accountants’ Report set out in the Appendix IA to this prospectus. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS The following unaudited pro forma statement of adjusted consolidated net tangible assets of our Group attributable to owners of our Company which has been prepared in accordance with paragraph 4.29 of the Listing Rules is for the purpose of illustrating the effect of the proposed Global Offering as if the Global Offering had taken place on April 30, 2023. This unaudited pro forma statement of adjusted consolidated net tangible assets of our Group attributable to owners of our Company has been prepared for illustrative purpose only and, because of its hypothetical nature, it may not give a true picture of the consolidated net tangible assets of our Group attributable to owners of our Company as of April 30, 2023 or at any further dates following the Global Offering. The following unaudited pro forma statement of adjusted consolidated net tangible assets of our Group attributable to owners of our Company is prepared based on the audited consolidated net tangible assets of our Group attributable to owners of our Company as of April 30, 2023 as derived from the Accountants’ Report set out in Appendix IA to this prospectus and adjusted as described below. Audited consolidated net tangible assets of our Group attributable to owners of our Company as at April 30, 2023 Estimated net proceeds from the Global Offering Unaudited pro forma adjusted consolidated net tangible assets of our Group attributable to owners of our Company as at April 30, 2023 Unaudited pro forma adjusted consolidated net tangible assets of our Group attributable to owners of our Company as at April 30, 2023 per Share RMB’000 RMB’000 RMB’000 RMB HK$ (Note 1) (Note 2) (Note 3) (Note 4) Based on the offer price of HK$18.60 Per H Share ..... 697,557 247,789 945,346 2.53 2.75 FINANCIAL INFORMATION – 402 – --- page 412 --- Notes: (1) The consolidated net tangible assets of our Group attributable to owners of our Company as at April 30, 2023 is the audited consolidated net assets of RMB697,557,000 attributable to owners of our Company as at April 30, 2023 as extracted from the Accountants’ Report set out in Appendix IA to this prospectus. (2) The estimated net proceeds from the issue of the new H Shares pursuant to the Global Offering are based on 17,147,200 H Shares at the offer price of HK$18.60 per H Share, after deduction of the estimated underwriting fees and commissions and other listing related expenses not yet recognised in profit or loss up to April 30, 2023. It does not take into account of (i) any Share which may be allotted and issued upon the exercise of the over-allotment option, or (ii) under the general mandates for the allotment and issue of shares granted to the directors of our Company. For the purpose of this unaudited pro forma statement, the estimated net proceeds from the Global Offering, the amount denominated in HK$ has been converted into RMB at the rate of HK$1 to RMB0.9204, which was the exchange rate prevailing on August 17, 2023 with reference to the rate published by the People’s Bank of China. No representation is made that the HK$ amounts have been, could have been or may be converted to RMB, or vice versa, at that rate or any other rates or at all. (3) The unaudited pro forma adjusted consolidated net tangible assets of our Group attributable to owners of our Company per Share is arrived at on the basis that 373,239,895 Shares were in issue assuming that the Global Offering had been completed on April 30, 2023 and it does not take into account of (i) any Share which may be allotted and issued upon the exercise of the over-allotment option, or (ii) under the general mandates for the allotment and issue of shares granted to the directors of our Company. (4) For the purpose of this unaudited pro forma adjusted consolidated net tangible assets of our Group attributable to owners of our Company per Share, the amount stated in RMB is converted into HK$ at the rate of RMB 1 to HK$ 1.0865, which was the exchange rate prevailing on August 17, 2023 with reference to the rate published by the People’s Bank of China. No representation is made that the RMB amounts have been, could have been or may be converted to HK$, or vice versa, at that rate or any other rates or at all. (5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of our Group attributable to owners of our Company as at April 30, 2023 to reflect any trading result or other transaction of our Group entered into subsequent to April 30, 2023. NO MATERIAL ADVERSE CHANGE Our Directors confirm that, there has been no material adverse change in our financial or trading position or prospects since April 30, 2023 and up to the date of this prospectus and there is no event since April 30, 2023 and up to the date of this prospectus which would materially affect the information shown in our consolidated financial statements included in the Accountants’ Report in Appendix IA to this prospectus. IMPACT OF THE COVID-19 OUTBREAKS Since late 2019, COVID-19 has spread rapidly globally. We have employed various measures to mitigate any impact the COVID-19 outbreaks may have on our operations in China and the U.S. and the development of our drug candidates, including offering personal protection equipment such as masks to our employees, regularly checking the body temperature of our employees and closely monitoring their health conditions. After the initial outbreak in late 2019, from time to time, especially since late 2021 and throughout 2022, there had been scattered outbreaks of COVID-19 in multiple regions of China and various control measures were taken to contain the COVID-19 spread. In late 2022, China began to modify its COVID-19 policy, and most of the travel restrictions and quarantine requirements were lifted in December 2022. The COVID-19 outbreaks since March 2022 in Shanghai and certain other regions in China and the quarantine measures taken to contain the spread did not have material impact on us, primarily because (i) the outbreaks only affected our clinical trial sites in certain regions for a limited period of time, such as Shanghai from March to May 2022, Henan province and Liaoning province in October 2022, whereas the clinical trial sites located in COVID-19 low-risk areas were not impacted; (ii) during late March to May 2022 when the quarantine measures were in place in Shanghai, we had several essential workers voluntarily stayed at our facilities to ensure the continued research and development and CMC activities, and for the same reason, manufacturing of our product candidates was not interrupted and was able to continuously support our clinical FINANCIAL INFORMATION – 403 – --- page 413 --- development activities; (iii) we had resumed daily operations since the beginning of June 2022 in a way that our office had reopened, our employees had returned to office, and our research, clinical development and CMC activities were fully recovered; since then and up to the Latest Practicable Date, we had not been subject to further suspension of our daily operations; (iv) for our drug candidates manufactured by CDMOs, we were informed that they were not severely affected by the outbreaks; (v) we had adequate raw materials for the continued manufacturing of our product candidates; and (vi) the construction of our manufacturing facilities was impacted due to the resurgence of COVID-19 in Shanghai; however, as we plan to work with our CMO/CDMO partners and reserve their manufacturing capacities in advance to meet the drug supply demands for pivotal trials and initial product launch of our product candidates, we expect limited impact of such potential delay on our operations and financial performance. As we experienced temporary delays in subject enrollment and patient engagement activities due to the COVID-19 outbreaks, which reduced the number and availability of patients for a short time period, our operations for clinical trials have experienced slight disruptions and delays. However, our planned schedule of our clinical trials of our drug candidates have not been materially affected by such COVID-19 outbreaks. Considering that we are able to submit our IND applications in an electronic way and maintain open communication channels with the NMPA, the regulatory filings of our drug candidates were not affected by the COVID-19 outbreaks, either. Since December 2022, China has lifted substantially all of its restrictive measures nationwide, and we have resumed the normal operations and have been able to follow our planned schedule for our clinical trials and regulatory communications in China since then. The expected development progress of our drug candidates has taken into account the temporary delays and disruptions on our ongoing clinical trials and manufacturing capabilities caused by the previous COVID-19 outbreaks in Shanghai and certain other regions in China. However, as the COVID-19 outbreaks are with limited precedent, it is not possible to predict the impact on our business or our industry in a precise way. In view of the above situation, our Directors confirmed that the COVID-19 outbreaks did not have a material adverse impact on our business operations and financial performance as of the Latest Practicable Date, as (i) there had been no material disruption of our ongoing clinical trials or research and development efforts; and (ii) we had not encountered any material supply chain disruption. We cannot foresee whether COVID-19 will have a material and adverse impact on our business going forward. See “Risk Factors — Key Risks Relating to Our Business, Business Operations, Intellectual Property Rights and Financial Prospects — The COVID-19 pandemic could adversely impact our business, including our clinical trials.” We will closely monitor and evaluate any impact of such outbreak on us and adjust our precautionary measures according to its developments. We will also continue to monitor the COVID-19 situation as well as various regulatory and administrative measures adopted to prevent and control the outbreak. RECENT DEVELOPMENTS Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 We have included our unaudited interim financial report prepared in accordance with IAS 34 as of and for the six months ended June 30, 2023 in “Appendix IB” to this prospectus. Our unaudited condensed consolidated financial statements have been reviewed by our reporting accountants Deloitte Touche Tohmatsu in accordance with Hong Kong Standards on Review Engagements 2410. We have established an audit committee in compliance with the Corporate Governance Code. The members of the Board, including those of the audit committee, have received and reviewed an extract of the unaudited interim financial information of our Group for the six months ended June 30, 2023, as set out in Appendix IB to this Prospectus. We are not in breach of our Articles of Association or laws and regulations of the PRC or other regulatory requirements regarding our obligation to publish and distribute interim reports in accordance with the requirements under Rule 13.48(1) of the Hong Kong Listing Rules. Pursuant to the Note to FINANCIAL INFORMATION – 404 – --- page 414 --- Rule 13.48(1) of the Hong Kong Listing Rules, we do not intend to publish a separate interim report in respect of the six months ended June 30, 2023 under the aforementioned Rule. See “Appendix IB — Unaudited Condensed Consolidated Financial Statements of the Group as of and for the Six Months Ended June 30, 2023” for details. The following is a discussion of fluctuations of selected line items. Revenue Our revenue decreased by 79.8% from RMB425 thousand in the six months ended June 30, 2022 to RMB86 thousand in the six months ended June 30, 2023. We currently have no products approved for commercial sale and have not generated any revenue from product sales. Our revenue was generated mainly from sales of cell strain and other products, which were one-off in nature and not considered as our main business. Other Income Our other income increased by 51.0% from RMB4.2 million in the six months ended June 30, 2022 to RMB6.4 million in the six months ended June 30, 2023. The increase was primarily attributable to an increase of RMB1.3 million in bank interest income as we purchased more time deposits denominated in the U.S. dollars which enjoyed a higher interest rate. Other Gains and Losses, Net We recorded net other losses of RMB40.8 million in the six months ended June 30, 2022, while we recorded net other gains of RMB6.1 million in the six months ended June 30, 2023. The change was primarily attributable to a decrease of RMB55.5 million in loss from changes in fair value of financial liabilities at FVTPL due to the fact that we no longer recorded any financial liabilities at FVTPL since January 31, 2022, as our investors’ preferred rights, including liquidation preferences, redemption rights and anti-dilution rights, were terminated on the same day; partially offset by a decrease of RMB8.9 million in net foreign exchange gains in the six months ended June 30, 2023, mainly due to a decrease in our net financial assets dominated in U.S. dollar, which had also slightly depreciated against Renminbi for the six months ended June 30, 2023. Research and Development Expenses Our research and development expenses increased by 10.1% from RMB116.4 million in the six months ended June 30, 2022 to RMB128.1 million in the six months ended June 30, 2023. The increase was primarily attributable to (i) an increase of RMB17.5 million in clinical trial expenses for IMM01, primarily in relation to the initiation of its combination trials with tislelizumab, as well as IMM2520, and (ii) an increase of RMB7.5 million in salaries and related benefit costs, mainly due to the expansion of our clinical team, in line with our continuous research and development efforts in advancing and expanding our pipeline drug candidates; partially offset by a decrease of RMB9.5 million in preclinical and CMC expenses, primarily due to a decrease of testing expenses for IMM2520, IMM40H and IMM47 in preparation for IND application filings. Administrative Expenses Our administrative expenses decreased by 11.7% from RMB46.7 million in the six months ended June 30, 2022 to RMB41.3 million in the six months ended June 30, 2023. The decrease was primarily attributable to a decrease of RMB8.1 million in non-cash share-based payments, resulting from a decrease in the number of restricted shares vested in the six months ended June 30, 2023; partially offset by an increase of RMB2.3 million in depreciation expenses, which was in line with the increases in our right-of-use assets, property and office equipment. FINANCIAL INFORMATION – 405 – --- page 415 --- Loss for the Period Our loss for the period decreased by RMB40.9 million from RMB211.7 million in the six months ended June 30, 2022 to RMB170.8 million in the six months ended June 30, 2023. Gearing Ratio Our gearing ratio (calculated by total liabilities divided by total assets) increased from 7.2% as of December 31, 2022 to 11.1% as of June 30, 2023 due to a decrease in our total assets, primarily due to a decrease of RMB95.9 million in our bank balances and cash, while our total liabilities increased, mainly resulting an increase of RMB30.0 million in our borrowings. Corporate Governance Code and Model Code The Company has adopted Corporate Governance Code and a code of conduct regarding directors’ securities transactions on terms no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules and will comply with the required standards set out therein upon Listing. See “Directors, Supervisors and Senior Management Corporate Governance” for further details. Purchase, Sale or Redemption of Listed Securities of the Company Save as disclosed in this prospectus, there was no purchase, sale or redemption of the Company’s listed securities by the Company nor any of its subsidiaries during the six months ended June 30, 2023. Business Review and Outlook We are a science-driven biotechnology company dedicated to the development of immuno-oncology therapies. We are one of the few biotechnology companies globally adopting a systematic approach to harness both the innate and adaptive immune systems. We have developed a rich pipeline of 14 drug candidates with eight ongoing clinical programs, featured by a comprehensive innate-immunity-based asset portfolio. Our pipeline includes one Core Product, IMM01, an innovative clinical-stage CD47-targeted molecule, and 13 other drug candidates targeting CD47 and other novel immune checkpoints. Our pipeline reflects our extensive understanding into the frontiers of cancer biology and immunology, and our expertise in turning scientific research into drug candidates. We continue to advance the drug development targeting innate immune checkpoints in cancer and we believe that the introduction of these novel therapies into the field of cancer immunotherapy will lead to robust and durable treatment responses. We currently have no products approved for commercial sale and have not generated any revenue from product sales. In the six months ended June 30, 2022 and 2023, we had total comprehensive expenses of RMB211.7 million and RMB170.7 million, respectively. Our total comprehensive expenses mainly resulted from research and development expenses and administrative expenses. Moving forward, we plan to focus on the following key strategies for our business:  To advance the development of our drug candidates to unleash their therapeutic potential and address significant unmet medical needs.  To expand our global footprint and maximize the clinical and commercial value of our drug candidates through global clinical trials and accretive partnerships.  To continuously enrich our innovative pipeline through fundamental biological research and translational medicine.  To upscale our GMP-compliant manufacturing capacity. FINANCIAL INFORMATION – 406 – --- page 416 ---  To enlarge our talent pool to support our continuous growth. See “Business — Our Strategies” and “Future Plans and Use of Proceeds” for further details. DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES Our Directors have confirmed that, as of the Latest Practicable Date, there was no circumstance that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules. FINANCIAL INFORMATION – 407 – --- page 417 --- FUTURE PLANS Please see “Business — Our Strategies” for a detailed description of our future plans. USE OF PROCEEDS We estimate that the aggregate net proceeds to our Company from the Global Offering will be approximately HK$233.4 million, after deducting underwriting commissions, fees and estimated expenses in connection with the Global Offering paid and payable by us taking into account any additional discretionary incentive fee and assuming that the Over-allotment Option is not exercised, at the Offer Price of HK$18.60 per H Share. We currently intend to apply such net proceeds from the Global Offering for the following purposes: (a) approximately 40.0%, or HK$93.4 million, will be used for ongoing and planned clinical trials, preparation for registration filings, and planned commercial launch of our Core Product, IMM01 (SIRP α-Fc fusion protein), of which (i) 20.0%, or HK$46.7 million, will be used for funding an ongoing Phase II trial and planned pivotal clinical trials for the combination therapy of IMM01 and azacitidine for the first-line treatment of myelodysplastic syndromes (MDS)/acute myeloid leukemia (AML), and chronic myelomonocytic leukemia (CMML) in China, the preparation of relevant registration filings and other regulatory matters. We expect to initiate the pivotal trial in the first quarter of 2024 and plan to submit the BLA to the NMPA first targeting first-line CMML in the fourth quarter of 2025, followed by MDS/AML. In particular, we plan to seek an accelerated marketing approval through relatively small sample size studies targeting the first-line treatment of CMML. For more details on the clinical development plans of this combination therapy, please see “Business — Our Innate Immune Checkpoint-targeted Drug Candidates — IMM01 (SIRP α-Fc Fusion Protein) — Clinical Development Plan — Combination Therapy — Combination with Azacitidine;” (ii) 17.0%, or HK$39.7 million, will be used for funding ongoing and planned clinical trials of the combination therapy of IMM01 and tislelizumab in China, the preparation of relevant registration filings and other regulatory matters. We have initiated a Phase II trial in China evaluating this combination in various advanced solid tumors that failed to respond to or relapsed from the standard of care such as PD-1/PD-L1 inhibitors, including among others, non-small-cell lung cancer (NSCLC), small cell lung cancer (SCLC), and head and neck squamous cell carcinomas (HNSCC), and expect to initiate a pivotal trial in the fourth quarter of 2024. We are also evaluating this combination therapy in classical Hodgkin lymphoma (cHL) patients who relapsed or progressed after the treatment of PD-1 inhibitors, which may allow us to pursue an accelerated marketing approval leveraging the results of relatively small sample size studies. For more details on the clinical development plans of this combination therapy, please see “Business — Our Innate Immune Checkpoint-targeted Drug Candidates — IMM01 (SIRP α-Fc Fusion Protein) — Clinical Development Plan — Combination Therapy — Combination with tislelizumab;” and (iii) 3.0%, or HK$7.0 million, will be used for funding the launch and commercialization of IMM01 in combination therapies. We may seek collaboration on sales and marketing in addition to building our own team. FUTURE PLANS AND USE OF PROCEEDS – 408 – --- page 418 --- (b) approximately 28.0%, or HK$65.4 million, will be used for ongoing and planned clinical trials, preparation for registration filings, and planned commercial launch of our Key Products, IMM0306 (CD47×CD20), IMM2902 (CD47×HER2) and IMM2520 (CD47×PD-L1), of which (i) approximately 15.0%, or HK$35.0 million, will be used for ongoing and planned clinical trials of IMM0306 for the treatment of R/R B-NHL in China, the preparation of relevant registration filings, other regulatory matters, and planned commercial launch in China. We commenced a Phase IIa trial for IMM0306 monotherapy for the third- or later-line treatment of FL in March 2023 and plan to seek an accelerated marketing approval through a single-arm trial. We expect to commence pivotal trials in China in the third quarter of 2024, and submit the BLA in the fourth quarter of 2025. Furthermore, we have commenced the Phase Ib/IIa clinical trial for IMM0306’s combination with lenalidomide in China, with the first patient dosed in June 2023 following its IND approval obtained in January 2023 from the NMPA. We have also received an IND approval for IMM0306 from the FDA in January 2021. With further clinical validation in the clinical trials in China, we will then decide on our clinical development and collaboration strategy for IMM0306 in the U.S. For more details on the clinical development plans of IMM0306, please see “Business — Our Innate Immune Checkpoint-targeted Drug Candidates — IMM0306 (CD47×CD20) — Clinical Development Plan;” (ii) approximately 8.0%, or HK$18.7 million, will be used for the ongoing clinical trials of IMM2902 for the treatment of advanced HER2-positive and HER2-low expressing solid tumors, such as breast cancer (BC), gastric cancer (GC), NSCLC and biliary tract cancer (BTC) in China and the U.S.. In China, we initiated the Phase Ia clinical trial in February 2022 and are currently enrolling patients for the sixth cohort. In the U.S., we dosed the first patient for Phase Ia clinical trial in June 2022, and received the Fast Track Designation from the FDA in July 2022. We expect to largely complete the Phase Ia trials in China and the U.S. in 2023. For more details on the clinical development plans of IMM2902, please see “Business — Our Innate Immune Checkpoint-targeted Drug Candidates — IMM2902 (CD47×HER2) — Clinical Development Plan;” and (iii) approximately 5.0%, or HK$11.7 million, will be used for planned clinical trials of IMM2520 in China for the treatment of solid tumors, particularly those resistant or not sensitive to the currently available immunotherapies, such as colorectal cancer (CRC), GC and lung cancer, among others. We have obtained IND approvals for IMM2520 from the NMPA in November 2022 and from the FDA in December 2022, and dosed the first patient for the Phase I clinical trial in China in March 2023. For more details on the clinical development plans of IMM2520, please see “Business — Our Innate Immune Checkpoint-targeted Drug Candidates — IMM2520 (CD47×PD-L1) — Clinical Development Plan.” (c) approximately 10.0%, or HK$23.3 million, will be used for the planned clinical trial of IMM47 (CD24 mAb). We plan to submit IND applications for IMM47 (CD24 mAb) with the NMPA and the FDA in 2023, and initiate a Phase I dose-escalation study in Australia in August 2023 targeting various solid tumors, including lung cancer, ovarian cancer, esophageal cancer, among others. Initiating a clinical trial in Australia first can help us to begin global clinical trials earlier and accelerate clinical validation of IMM47. Additionally, we believe Australian trial can generate valuable clinical data on ethnically diverse populations, thus enhancing our ability to pursue collaboration opportunities with global pharmaceutical companies; FUTURE PLANS AND USE OF PROCEEDS – 409 – --- page 419 --- (d) approximately 5.0%, or HK$11.7 million, will be used for the ongoing clinical trials of IMM2510 (VEGF×PD-L1) and IMM27M (CTLA4 ADCC-enhanced mAb). With regard to IMM2510, we have commenced a Phase I trial in China, and expect to complete this trial in the third quarter of 2023. With regard to IMM27M, we have initiated a Phase I trial in China and expect to complete this trial in the third quarter of 2023. For more details on the clinical development plans of these drug candidates, please see “Business — Our Drug Candidates;” (e) approximately 7.0%, or HK$16.3 million, will be used for construction of our new manufacturing facility in Zhangjiang Science City, Shanghai. Our existing pilot manufacturing capabilities have been almost fully utilized since 2021, and to meet future commercial sales demand for our products, we have commenced the construction of our new manufacturing facility, with the first stage of construction by 2025. For more details, please see “Business — Our Platform — CMC and Pilot Manufacturing;” (f) approximately 5.0%, or HK$11.7 million, will be used for our continuous preclinical research and development of multiple preclinical- and discovery-stage assets, including without limitation IMM4701, IMM51, IMM38, IMM2547, IMM50 and IMM62, as well as CMC to support the clinical trials including pivotal trials for various assets; and (g) approximately 5.0%, or HK$11.7 million, will be used for working capital and general corporate purposes. If the Over-allotment Option is exercised in full, the net proceeds of the Global Offering would increase to approximately HK$280.3 million (based on the Offer Price of HK$18.60 per H Share). We intend to apply the additional net proceeds to the above uses in the proportions stated above. To the extent that our net proceeds are not sufficient to fund the purposes set out above, we intend to fund the balance through a variety of means, including cash generated from operations, out-licensing deals, bank loans and other borrowings. To the extent that the net proceeds from the Global Offering are not immediately used for the purposes described above and to the extent permitted by the relevant laws and regulations, they will only be placed in short-term demand deposits with licensed banks and/or authorized institutions in Hong Kong (as defined under the Securities and Futures Ordinance) or China (as defined under the applicable laws in China). We will issue an appropriate announcement if there is any material change to the above proposed use of proceeds. FUTURE PLANS AND USE OF PROCEEDS – 410 – --- page 420 --- HONG KONG UNDERWRITERS Morgan Stanley Asia Limited China International Capital Corporation Hong Kong Securities Limited Fosun International Securities Limited CMB International Capital Limited BOCI Asia Limited ICBC International Securities Limited Soochow Securities International Brokerage Limited Futu Securities International (Hong Kong) Limited UNDERWRITING This prospectus is published solely in connection with the Hong Kong Public Offering. The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a conditional basis on the terms and conditions set out in this prospectus, the GREEN Application Form relating thereto and the Hong Kong Underwriting Agreement. The International Offering is expected to be fully underwritten by the International Underwriters. The Global Offering comprises the Hong Kong Public Offering of initially 1,714,800 Hong Kong Offer Shares and the International Offering of initially 15,432,400 International Offer Shares, subject, in each case, to re-allocation on the basis as described in the section headed “Structure of the Global Offering” in this prospectus as well as to the Over-allotment Option in the case of the International Offering. UNDERWRITING ARRANGEMENTS AND EXPENSES The Hong Kong Public Offering Hong Kong Underwriting Agreement Pursuant to the Hong Kong Underwriting Agreement, we are offering initially 1,714,800 Hong Kong Offer Shares (subject to re-allocation) for subscription by the public in Hong Kong in accordance with the terms and conditions of this prospectus and the GREEN Application Form relating thereto. Subject to (i) the Listing Committee granting listing of, and permission to deal in, the H Shares to be offered as mentioned in this prospectus pursuant to the Global Offering (including any additional H Shares that may be issued pursuant to the exercise of the Over-allotment Option) and (ii) certain other conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed severally and not jointly to subscribe or procure subscribers for their respective applicable proportions of the Hong Kong Offer Shares now being offered which are not taken up under the Hong Kong Public Offering on the terms and conditions of this prospectus and the GREEN Application Form relating thereto and the Hong Kong Underwriting Agreement. The Hong Kong Underwriting Agreement is conditional on and subject to, amongst others, the execution and delivery of the International Underwriting Agreement and the obligations of the International Underwriters thereunder having become unconditional and not having been terminated in accordance with its terms. UNDERWRITING –4 1 1– --- page 421 --- Grounds for Termination The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) shall be entitled by notice to the Company to terminate the Hong Kong Underwriting Agreement with immediate effect, if at any time prior to 8:00 a.m. on the Listing Date: (A) there shall develop, occur, exist or come into effect: (a) any event or series of events in the nature of force majeure (including, without limitation, any acts of government, declaration of a regional, national or international emergency or war, calamity, crisis, epidemic, pandemic, large scale outbreaks of diseases (including, without limitation, SARS, swine or avian flu, H5N1, H1N1, H7N9, contagious coronavirus (COVID-19) and such related/mutated forms), accident or interruption or delay in transportation, economic sanctions, strikes, labour disputes, lock-outs, fire, explosion, flooding, tsunami, earthquake, volcanic eruption, civil commotion, riots, rebellion, public disorder, acts of war, outbreak or escalation of hostilities (whether or not war is declared), acts of God or acts of terrorism (whether or not responsibility has been claimed) in or affecting Hong Kong, the PRC, the Cayman Islands, the BVI, the United States, the United Kingdom or the European Union (or any member thereof) or any other jurisdiction relevant to the Group (collectively, the “ Relevant Jurisdictions ”); or (b) any change or development involving a prospective change, or any event or circumstances or series of events likely to result in any change or development involving a prospective change, in any local, national, regional or international financial, economic, political, military, industrial, legal, fiscal, regulatory, currency, credit or market matters or conditions, equity securities or exchange control or any monetary or trading settlement system or other financial markets (including, without limitation, conditions in the stock and bond markets, money and foreign exchange markets, the interbank markets and credit markets), in or affecting any Relevant Jurisdiction; or (c) any moratorium, suspension or restriction (including, without limitation, any imposition of or requirement for any minimum or maximum price limit or price range) in or on trading in securities generally on the Stock Exchange, the New York Stock Exchange, the NASDAQ Global Market, the London Stock Exchange, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the Singapore Stock Exchange or the Tokyo Stock Exchange; or (d) any general moratorium on commercial banking activities in Hong Kong (imposed by the Financial Secretary or the Hong Kong Monetary Authority or other competent authority), New York (imposed at the U.S. Federal or New York State level or by any other competent authority), London, the PRC, the European Union (or any member thereof), or any of the other Relevant Jurisdictions (declared by the relevant authorities) or any disruption in commercial banking or foreign exchange trading or securities settlement or clearance services, procedures or matters in or affecting any of the Relevant Jurisdictions; or (e) any new law or regulation or any change or any development involving a prospective change or any event or circumstance likely to result in a change or a development involving a prospective change in existing laws or regulations or any change or development involving a prospective change in the interpretation or application thereof by any court or any governmental authority in or affecting any of the Relevant Jurisdictions; or UNDERWRITING – 412 – --- page 422 --- (f) the imposition of economic sanctions, in whatever form, directly or indirectly, by, or for, any of the Relevant Jurisdictions in respect of any jurisdiction relevant to the business operations of any member of the Group; or (g) any change or development involving a prospective change or amendment in or affecting taxation or foreign exchange control, currency exchange rates or foreign investment regulations (including, without limitation, a material devaluation of the Hong Kong dollar or RMB against any foreign currencies, a change in the system under which the value of the Hong Kong dollar is linked to that of the United States dollar or RMB is linked to any foreign currency or currencies), or the implementation of any exchange control, in any of the Relevant Jurisdictions or adversely affecting an investment in the Offer Shares; or (h) a Director, a Supervisor or a member of the Group’s senior management as named in this prospectus being charged with an indictable offence or prohibited by operation of law or otherwise disqualified from taking part in the management or taking directorship of a company; or (i) the chairman, any Director, any Supervisor, the chief executive office or the chief financial officer of the Company or member of senior management of the Company vacating his or her office; or (j) other than with the prior written consent of the Overall Coordinators, the issue or requirement to issue by the Company of a supplement or amendment to this prospectus, any Application Forms, the Preliminary Offering Circular and the Final Offering Circular (as defined in the Hong Kong Underwriting Agreement), or other documents in connection with the offer and sale of the Offer Shares pursuant to the Companies (Winding Up and Miscellaneous Provisions) Ordinance or the Listing Rules or upon any requirement or request of the Stock Exchange and/or the SFC; or (k) a valid demand by any creditor for repayment or payment of any material indebtedness of any member of the Group or in respect of which any member of the Group is liable prior to its stated maturity; or (l) any change or development involving a prospective change in, or a materialization of, any of the risks set out in the section headed “Risk Factors” in this prospectus; or (m) an authority or a political body or organization in any Relevant Jurisdiction commencing any investigation or other action, or announcing an intention to investigate or take other action, against any Director, Supervisor or member of senior management of the Company; or (n) any litigation, dispute, legal action or claim of any third party or regulatory, administrative investigation or action being threatened instigated or announced, against any member of the Group; or (o) any contravention by the Company or any member of the Group of any applicable laws and regulations including the Listing Rules; or (p) a prohibition by an authority on the Company applicable to the Company, any of the Underwriters, and/or any of the foregoing’s respective affiliates for whatever reason from offering, allotting, issuing or selling any of the H Shares (including UNDERWRITING – 413 – --- page 423 --- the 2,572,000 additional H Shares to be purchased by, or by investors procured by, the International Underwriters from the Company pursuant to the Over-allotment Option) pursuant to the terms of the Global Offering; or (q) any non-compliance of this prospectus (or any other documents used in connection with the contemplated subscription and sale of the Offer Shares) or any aspect of the Global Offering with the Listing Rules or any other applicable laws and regulations; or (r) an order or petition for the winding-up of any member of the Group, or any composition or arrangement made by any member of the Group with its creditors or a scheme of arrangement entered into by any member of the Group or any resolution for the winding-up of any member of the Group or the appointment of a provisional liquidator, receiver or manager over all or part of the material assets or undertaking of any member of the Group or anything analogous thereto occurring in respect of any member of the Group, which, individually or in the aggregate, in the sole and absolute opinion of the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters), (A) has or will or may have a material adverse effect, or any development involving a prospective material adverse effect, on or affecting the assets, liabilities, business, general affairs, management, prospects, shareholders’ equity, profits, losses, results of operations, position or condition, financial or otherwise, or performance of the Company and the other members of the Group, taken as a whole; (B) has or will have or may have a material adverse effect on the success or marketability of the Global Offering or the level of applications or the distribution of the Offer Shares under the Hong Kong Public Offering or the level of interests under the International Offering; (C) makes or will make or is likely to make it inadvisable, inexpedient, impracticable or incapable for the Hong Kong Public Offering and/or the International Offering to proceed or to market the Global Offering or the delivery or distribution of the Offer Shares on the terms and in the manner contemplated by this prospectus; or (D) has or will or may have the effect of making any part of the Hong Kong Underwriting Agreement (including underwriting) incapable of performance in accordance with its terms or preventing the processing of applications and/or payments pursuant to the Global Offering or pursuant to the underwriting thereof; or (B) there has come to the notice of the Overall Coordinators that: (a) any statement contained in the Hong Kong Public Offering Documents, the Operative Documents, the Preliminary Offering Circular (as defined in the Hong Kong Underwriting Agreement), and/or any notices, announcements, advertisements, communications or other documents (including any announcement, circular, document or other communication pursuant to the Hong Kong Underwriting Agreement) issued or used by or on behalf of the Company in connection with the Hong Kong Public Offering and the Global Offering (including any supplement or amendment thereto (the “ Offer-Related Documents ”) but excluding information relating to the Underwriters) was, when it was issued, or has become untrue, incorrect, inaccurate, incomplete in any material respects or misleading or deceptive, or any estimate, forecast, expression of opinion, intention or expectation contained in any of such documents is not fair and honest and based on reasonable grounds or reasonable assumptions; or UNDERWRITING – 414 – --- page 424 --- (b) any matter has arisen or has been discovered which would, had it arisen or been discovered immediately before the date of this prospectus, constitutes a material omission from, or misstatement in, any of the Offer-Related Documents; or (c) there is a material breach of any of the obligations imposed upon the Company or the Controlling Shareholders under the Hong Kong Underwriting Agreement or the International Underwriting Agreement or any of the Cornerstone Investment Agreements (as defined in the Hong Kong Underwriting Agreement), as applicable; or (d) there is an event, act or omission which gives or is likely to give rise to any material liability of the Company or the Controlling Shareholders under the Hong Kong Underwriting Agreement pursuant to the indemnities given by any of them; or (e) there is any material adverse effect, or any development involving a prospective material adverse effect, on or affecting the assets, liabilities, business, general affairs, management, prospects, shareholders’ equity, profits, losses, results of operations, position or condition, financial or otherwise, or performance of the Company and the other members of the Group, taken as a whole; or (f) there is a breach of, or any event or circumstance rendering untrue, incorrect, incomplete in any material respect or misleading, any of the warranties given by the Company and the Controlling Shareholders in the Hong Kong Underwriting Agreement or the International Underwriting Agreement, as applicable; or (g) the approval of the Listing Committee of the listing of, and permission to deal in, the H Shares in issue and the H Shares to be issued pursuant to the Global Offering (including the additional H Shares which may be issued upon the exercise of the Over-allotment Option) is refused or not granted, other than subject to customary conditions, on or before the date of the Listing, or if granted, the approval is subsequently withdrawn, cancelled, qualified (other than by customary conditions), revoked or withheld; or (h) any person has withdrawn or is subject to withdrawing its consent to the issue of this prospectus with the inclusion of its reports, letters and/or legal opinions (as the case may be) and references to its name included in the form and context in which it respectively appears; or (i) the Company withdraws this prospectus (and/or any other documents issued or used in connection with the Global Offering) or the Global Offering; or (j) that a material portion of the orders placed or confirmed in the book-building process, or of the investment commitments made by any cornerstone investors under agreements signed with such cornerstone investors, have been withdrawn, terminated or cancelled, or any Cornerstone Investment Agreement is terminated; or (k) there is a prohibition on the Company for whatever reason from offering, allotting, issuing or selling any of the Offer Shares (including any additional H Shares to be issued pursuant to the Option) pursuant to the terms of the Global Offering under applicable laws. UNDERWRITING – 415 – --- page 425 --- Undertakings to the Stock Exchange pursuant to the Listing Rules Undertakings by the Company Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange that, no further shares or securities convertible into equity securities of the Company (whether or not of a class already listed) may be issued or form the subject of any agreement to such an issue within six months from the Listing Date (whether or not such issue of H shares or securities will be completed within six months from the Listing Date), except (a) pursuant to the Global Offering and the Over-allotment Option, if any, (b) pursuant to the Conversion of Unlisted Foreign Shares into H Shares, or (c) under any of the circumstances provided under Rule 10.08 of the Listing Rules. Undertakings by our Controlling Shareholders Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders has undertaken to the Stock Exchange and to the Company that, except pursuant to the Global Offering and the Over-allotment Option, it/he/she shall not and shall procure that the relevant registered holder(s) of the Shares shall not, unless in compliance with the requirements of the Listing Rules: (i) in the period commencing on the date by reference to which disclosure of its/his/her shareholding on the Company is made in this prospectus and ending on the date which is six months from the Listing Date, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of the Shares in respect of which they are shown by this prospectus to be the beneficial owner; and (ii) in the period of six months period commencing on the date on which the period referred to in paragraph (i) above expires, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests, or encumbrances in respect of, any of the securities referred to in paragraph (i) above if, immediately following such disposal or upon the exercise or enforcement of such options, rights, interests or encumbrances, any of they would cease to be a Controlling Shareholder of the Company (as defined in the Listing Rules) or a member of the group of Controlling Shareholders of our Company or would together with the other Controlling Shareholder cease to be the Controlling Shareholders of the Company (as defined in the Listing Rules). Pursuant to Note (3) to Rule 10.07(2) of the Listing Rules, each of the Controlling Shareholders has further undertaken to the Hong Kong Stock Exchange and to the Company that within the period commencing on the date by reference to which disclosure of its/his/her shareholding is made in this Prospectus and ending on the date which is 12 months from the Listing Date, they will: (i) when it/he/she or the relevant registered holders pledge or charge any securities of the Company beneficially owned by it/him/her in favor of an authorized institution pursuant to Note 2 to Rule 10.07(2) of the Listing Rules, immediately inform the Company of such pledge or charge together with the number of Shares so pledged or charged; and (ii) when it/he/she or the relevant registered holders receive indications, either verbal or written, from the pledgee or chargee that any Shares or other securities of the Company pledged or charged will be disposed of, immediately inform the Company in writing of such indications. UNDERWRITING – 416 – --- page 426 --- We will inform the Stock Exchange as soon as we have been informed of the matters referred to in paragraph (i) and (ii) above (if any) by the Controlling Shareholders and subject to the then requirements of the Listing Rules disclose such matters by way of an announcement which is published in accordance with Rule 2.07C of the Listing Rules as soon as possible. Undertakings pursuant to the Hong Kong Underwriting Agreement Undertakings by the Company We have also undertaken to each of the Hong Kong Underwriters, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers and the Joint Sponsors that except for the issue equity, offer or sale of the Offer Shares by the Company pursuant to the Global Offering (including pursuant to the Over-allotment Option), during the period commencing on the date of the Hong Kong Underwriting Agreement and ending on and including the date that is six months after the Listing Date (the “ First Six-Month Period ”), we will not, and will procure that each other member of the Group will not, without the prior written consent of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and unless in compliance with the requirements of the Listing Rules: (i) offer, allot, issue, sell, accept subscription for, contract to allot, issue or sell, contract or agree to allot, issue or sell, assign, grant or sell any option, warrant, right or contract to purchase, purchase any option or contract to sell, grant or agree to grant any option, right or warrant to purchase or subscribe for, or otherwise transfer or dispose of or create an Encumbrance (as defined in the Hong Kong Underwriting Agreement) over, or agree to transfer or dispose of or create an Encumbrance over, either directly or indirectly, conditionally or unconditionally, or repurchase, any legal or beneficial interest in any H Shares or other equity securities of the Company, or any shares or other equity securities of such other member of the Group, as applicable, or any interests in any of the foregoing (including, but not limited to, any securities that are convertible into or exercisable or exchangeable for, or that represent the right to receive, or any warrants or other rights to purchase, any H Shares or other equity securities of such other member of the Group, as applicable), or deposit any H Shares or other equity securities of the Company or any shares or other securities of such other member of the Group, as applicable, with a depositary in connection with the issue of depositary receipts; or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of subscription or ownership (legal or beneficial) of any H Shares or other equity securities of the Company or any shares or other equity securities of such other member of the Group, as applicable, or any interest therein (including, without limitation, any securities of which are convertible into or exchangeable or exercisable for, or represent the right to receive, or any warrants or other rights to purchase, any H Shares or any shares of such other member of the Group, as applicable); or (iii) enter into any transaction with the same economic effect as any transaction specified in paragraph (i) or (ii) above; or (iv) offer to or contract to or agree to announce, or publicly disclose that the Company will or may enter into any transaction described in paragraph (i), (ii) or (iii) above, in each case, whether any of the transactions specified in paragraph (i), (ii) or (iii) above is to be settled by delivery of H Shares or other equity securities of the Company or shares or other equity securities of such other member of the Group, as applicable, in cash or otherwise (whether or not the issue of such H Shares or other equity securities will be completed within the First Six-Month UNDERWRITING – 417 – --- page 427 --- Period, provided that the foregoing restrictions shall not apply to the issue of the H Shares by the Company pursuant to the Global Offering, or any change of the share capital resulting from incorporation of any new subsidiaries of the Company without issuing any new Shares as the consideration for such incorporation). We further agree that, in the event our Company enters into any of the transactions described in paragraph (i), (ii) or (iii) above or offers to or agrees to or contracts to or announces, or publicly discloses, any intention to enter into any such transactions during the period of six months commencing on the date on which the First Six Month Period expires (the “ Second Six Month Period ”), we will take all reasonable steps to ensure that it will not create a disorderly or false market in the securities of the Company. Undertakings by our Controlling Shareholders Pursuant to the Hong Kong Underwriting Agreement, each of our Controlling Shareholders has undertaken to each of the Company, the Overall Coordinators, the Joint Global Coordinators, the Hong Kong Underwriters and the Joint Sponsors that without the prior written consent of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and unless in compliance with the requirements of the Listing Rules, he/it will not, during the First Six-Month Period: (i) offer, pledge, charge, sell, contract or agree to sell, mortgage, charge, hypothecate, lend, grant or sell any option, warrant, contract or right to purchase, grant, or purchase any option, warrant, contract or right to sell, grant or agree to grant any option, right or warrant to purchase or subscribe for, lend or otherwise transfer or dispose of or create an Encumbrance over, either directly or indirectly, conditionally or unconditionally, any H Shares or other equity securities of the Company or any interest in any of the foregoing (including, but not limited to, any securities that are convertible into or exchangeable or exercisable for, or that represent the right to receive, or any warrants or other rights to purchase, any H Shares or other equity securities of the Company) beneficially owned by it as of the Listing Date (the “ Locked-up Securities ”); (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of, any Locked-up Securities; (iii) enter into any transaction with the same economic effect as any transaction described in paragraph (i) or (ii) above; or (iv) offer to or contract to or agree to or publicly disclose that it will or may enter into any transaction described in paragraph (i), (ii) or (iii) above, whether any such transaction described in paragraph (i), (ii), (iii) or (iv) above is to be settled by delivery of such H Shares or other securities of the Company, in cash or otherwise (whether or not the settlement or delivery of such H Shares or other securities will be completed within the First Six-Month Period). Indemnity We have agreed to indemnify the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers and the Hong Kong Underwriters for all losses which they may suffer, including losses arising from the performance of their obligations under the Hong Kong Underwriting Agreement and any breach by the Company of the Hong Kong Underwriting Agreement, as the case may be. UNDERWRITING – 418 – --- page 428 --- Hong Kong Underwriters’ Interests in the Company Except for its obligations under the Hong Kong Underwriting Agreement, none of the Hong Kong Underwriters has any shareholding interest in the Company or any right or option (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for securities in the Company. Following the completion of the Global Offering, the Hong Kong Underwriters and their affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their obligations under the Hong Kong Underwriting Agreement. The International Offering International Underwriting Agreement In connection with the International Offering, it is expected that we will enter into the International Underwriting Agreement with, among others, the International Underwriters. Under the International Underwriting Agreement, subject to the conditions set out therein, it is expected that the International Underwriters would, severally and not jointly, agree to procure purchasers for, or to purchase, Offer Shares being offered pursuant to the International Offering (excluding, for the avoidance of doubt, the Offer Shares which are subject to the Over- allotment Option). It is expected that the International Underwriting Agreement may be terminated on similar grounds as the Hong Kong Underwriting Agreement. Potential investors are reminded that in the event that the International Underwriting Agreement is not entered into, the Global Offering will not proceed. Over-allotment Option We expect to grant to the International Underwriters, exercisable by the Overall Coordinators (for themselves and on behalf of the International Underwriters), the Over-allotment Option, which will be exercisable from the Listing Date until 30 days after the last day for the lodging of applications under the Hong Kong Public Offering, to require the Company to allot and issue up to an aggregate of 2,572,000 H Shares, representing no more than 15% of the initial Offer Shares, at the same price per Offer Share under the International Offering, to, cover over-allocations in the International Offering, if any. Commissions and Expenses In respect of the Hong Kong Public Offering, the Hong Kong Underwriters will receive an underwriting commission of 4% of the aggregate Offer Price payable for the Hong Kong Offer Shares initially offered under the Hong Kong Public Offering, out of which they will pay any sub-underwriting commissions. For unsubscribed Hong Kong Offer Shares reallocated to the International Offering, the Company will pay an underwriting commission at the rate applicable to the International Offering and such commission will be paid to the relevant International Underwriters as set out in the International Underwriting Agreement. In respect of the International Offering, we expect to pay an underwriting commission of 4% of the aggregate Offer Price payable in respect of all International Offer Shares (including any International Offer Shares reallocated to the Hong Kong Public Offering and any Hong Kong Offer Shares reallocated to the International Offering). In addition we may, at our sole and absolute discretion, pay additional discretionary incentive fee of up to 1% of the aggregate Offer Price in respect of all Offer Shares to the Underwriters. The aggregate commissions and fees together with Stock Exchange listing fees, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy, legal and other professional fees and printing and all other expenses relating to the Global Offering are estimated to amount in aggregate to approximately HK$86.5 million (based on the Offer Price of HK$18.60 per Offer Share, the full payment of the discretionary incentive fee and the exercise of the Over-allotment Option in full) and will be payable and borne by the Company. UNDERWRITING – 419 – --- page 429 --- Joint Sponsors’ Fee An amount of US$500,000 is payable by the Company as sponsor fees to each of the Joint Sponsors. Other Services Provided by the Underwriters The Overall Coordinators and the Joint Global Coordinators and the Underwriters may in their ordinary course of business provide financing to investors subscribing for the Offer Shares offered by this prospectus. Such Overall Coordinators, Joint Global Coordinators and Underwriters may enter into hedges and/or dispose of such Offer Shares in relation to the financing which may have a negative impact on the trading price of the H Shares. INDEPENDENCE OF THE JOINT SPONSORS Each of Morgan Stanley Asia Limited and China International Capital Corporation Hong Kong Securities Limited satisfies the independence criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules. ACTIVITIES BY SYNDICATE MEMBERS The underwriters of the Hong Kong Public Offering and the International Offering (together, the “ Syndicate Members ”) and their affiliates may each individually undertake a variety of activities (as further described below) which do not form part of the underwriting or stabilizing process. The Syndicate Members and their affiliates are diversified financial institutions with relationships in countries around the world. These entities engage in a wide range of commercial and investment banking, brokerage, fund management, trading, hedging, investing and other activities for their own account and for the account of others. In relation to the H Shares, those activities could include acting as agent for buyers and sellers of the H Shares, entering into transactions with those buyers and sellers in a principal capacity, proprietary trading in the H Shares, and entering into over-the-counter or listed derivative transactions or listed and unlisted securities transactions (including issuing securities such as derivative warrants listed on a stock exchange) which have as their underlying assets, assets including the H Shares. Those activities may require hedging activity by those entities involving, directly or indirectly, the buying and selling of the H Shares. All such activity could occur in Hong Kong and elsewhere in the world and may result in the Syndicate Members and their affiliates holding long and/or short positions in the H Shares, in baskets of securities or indices including the H Shares, in units of funds that may purchase the H Shares, or in derivatives related to any of the foregoing. In relation to issues by Syndicate Members or their affiliates of any listed securities having the H Shares as their underlying securities, whether on the Stock Exchange or on any other stock exchange, the rules of the exchange may require the issuer of those securities (or one of its affiliates or agents) to act as a market maker or liquidity provider in the security, and this will also result in hedging activity in the H Shares in most cases. All such activities may occur both during and after the end of the stabilizing period described in the section headed “Structure of the Global Offering” in this prospectus. Such activities may affect the market price or value of the H Shares, the liquidity or trading volume in the H Shares and the volatility of the price of the H Shares, and the extent to which this occurs from day to day cannot be estimated. UNDERWRITING – 420 – --- page 430 --- It should be noted that when engaging in any of these activities, the Syndicate Members will be subject to certain restrictions, including the following: (a) the Syndicate Members (other than the Stabilizing Manager or any person acting for it) must not, in connection with the distribution of the Offer Shares, effect any transactions (including issuing or entering into any option or other derivative transactions relating to the Offer Shares), whether in the open market or otherwise, with a view to stabilizing or maintaining the market price of any of the Offer Shares at levels other than those which might otherwise prevail in the open market; and (b) the Syndicate Members must comply with all applicable laws and regulations, including the market misconduct provisions of the SFO, including the provisions prohibiting insider dealing, false trading, price rigging and stock market manipulation. Certain of the Syndicate Members or their respective affiliates have provided from time to time, and expect to provide in the future, investment banking, derivative and other services to us, our affiliates or our shareholders including cornerstone investors for which such Syndicate Members or their respective affiliates have received or will receive customary fees and commissions. UNDERWRITING – 421 – --- page 431 --- THE GLOBAL OFFERING This prospectus is published in connection with the Hong Kong Public Offering as part of the Global Offering. Morgan Stanley Asia Limited and China International Capital Corporation Hong Kong Securities Limited are the Overall Coordinators and the Joint Global Coordinators of the Global Offering. The listing of the H Shares on the Main Board of the Stock Exchange is sponsored by the Joint Sponsors. The Joint Sponsors have made an application on behalf of the Company to the Stock Exchange for the listing of, and permission to deal in, the H Shares in issue and to be issued as mentioned in this prospectus. The Global Offering comprises (subject to re-allocation and the Over-allotment Option): (i) the Hong Kong Public Offering of initially 1,714,800 H Shares in Hong Kong as described below in the section entitled “— The Hong Kong Public Offering” below; and (ii) the International Offering of an aggregate of initially 15,432,400 H Shares to be offered to (i) in the United States to qualified institutional buyers in reliance on Rule 144A or another exemption from, or in transaction not subject to, the registration requirements of the U.S. Securities Act, and (ii) outside the United States in reliance on Regulation S. At any time from the date of the International Underwriting Agreement until 30 days after the last day for the lodging of applications in the Hong Kong Public Offering, the Overall Coordinators, as representatives of the International Underwriters, have an option to require the Company to issue and allot up to an aggregate of 2,572,000 additional Offer Shares, representing approximately 15% of the initial number of Offer Shares to be offered in the Global Offering, at the Offer Price to, among other things, cover over-allocations in the International Offering, if any. Investors may apply for Hong Kong Offer Shares under the Hong Kong Public Offering or apply for or indicate an interest for International Offer Shares under the International Offering, but may not do both. The Offer Shares will represent approximately 4.6% of the enlarged issued share capital of the Company immediately after completion of the Global Offering without taking into account the exercise of the Over-allotment Option. If the Over-allotment Option is exercised in full, the Offer Shares will represent approximately 5.2% of the enlarged issued share capital immediately after completion of the Global Offering and the exercise of the Over-allotment Option as set out in the section headed “— The International Offering — Over-allotment Option” below. The number of Offer Shares to be offered under the Hong Kong Public Offering and the International Offering may be subject to re-allocation as described in the section headed “— The Hong Kong Public Offering — Re-allocation and Clawback” below. THE HONG KONG PUBLIC OFFERING Number of Offer Shares initially offered The Company is initially offering 1,714,800 H Shares for subscription by the public in Hong Kong at the Offer Price, representing approximately 10% of the total number of Offer Shares initially available under the Global Offering. The Hong Kong Offer Shares will represent approximately 0.46% of the Company’s registered share capital immediately after completion of the Global Offering, assuming that the Over-allotment Option is not exercised. STRUCTURE OF THE GLOBAL OFFERING – 422 – --- page 432 --- The Hong Kong Public Offering is open to members of the public in Hong Kong as well as to institutional and professional investors. Professional investors generally include brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities which regularly invest in shares and other securities. Completion of the Hong Kong Public Offering is subject to the conditions as set out in the section headed “— Conditions of the Global Offering” below. Allocation Allocation of the Hong Kong Offer Shares to investors under the Hong Kong Public Offering will be based solely on the level of valid applications to be received under the Hong Kong Public Offering. The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly applied for by applicants. Such allocation could, where appropriate, consist of balloting, which would mean that some applicants may receive a higher allocation than others who have applied for the same number of Hong Kong Offer Shares, and those applicants who are not successful in the ballot may not receive any Hong Kong Offer Shares. The total number of the Hong Kong Offer Shares available under the Hong Kong Public Offering (after taking account of any re-allocation referred to below) is to be divided equally into two pools for allocation purposes: pool A and pool B (with any odd lots being allocated to pool A). The Hong Kong Offer Shares in pool A will be allocated on an equitable basis to applicants who have applied for the Hong Kong Offer Shares with an aggregate price of HK$5 million (excluding the brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy payable) or less. The Hong Kong Offer Shares in pool B will be allocated on an equitable basis to applicants who have applied for the Hong Kong Offer Shares with an aggregate price of more than HK$5 million (excluding the brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy payable) and up to the total value in pool B. Investors should be aware that applications in pool A and applications in pool B may receive different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of the pools are undersubscribed, the surplus Hong Kong Offer Shares will be transferred to the other pool to satisfy demand in this other pool and be allocated accordingly. For the purpose of this paragraph only, the “price” for Offer Shares means the price payable on application therefor. Applicants can only receive an allocation of Offer Shares from either pool A or pool B but not from both pools. Multiple or suspected multiple applications and any application for more than 857,400 Hong Kong Offer Shares (being 50% of the Hong Kong Offer Shares initially available for subscription under the Hong Kong Public Offering) are liable to be rejected. Re-allocation and Clawback The allocation of the Offer Shares between the Hong Kong Public Offering and the International Offering is subject to re-allocation under the Listing Rules. Paragraph 4.2 of Practice Note 18 of the Listing Rules requires a clawback mechanism to be put in place which would have the effect of increasing the number of Offer Shares under the Hong Kong Public Offering to a certain percentage of the total number of Offer Shares offered under the Global Offering if the International Offer Shares are fully subscribed or oversubscribed and certain prescribed total demand levels are reached as further described below:  if the number of Offer Shares validly applied for under the Hong Kong Public Offering represents 15 times or more but less than 50 times the number of Offer Shares initially available for subscription under the Hong Kong Public Offering, then Offer Shares will be reallocated to the Hong Kong Public Offering from the International Offering so that STRUCTURE OF THE GLOBAL OFFERING – 423 – --- page 433 --- the total number of Offer Shares available under the Hong Kong Public Offering will be 5,144,200 Offer Shares, representing approximately 30% of the Offer Shares initially available under the Global Offering;  if the number of Offer Shares validly applied for under the Hong Kong Public Offering represents 50 times or more but less than 100 times the number of Offer Shares initially available for subscription under the Hong Kong Public Offering, then the number of Offer Shares to be reallocated to the Hong Kong Public Offering from the International Offering will be increased so that the total number of Offer Shares available under the Hong Kong Public Offering will be 6,859,000 Offer Shares, representing approximately 40% of the Offer Shares initially available under the Global Offering; and  if the number of Offer Shares validly applied for under the Hong Kong Public Offering represents 100 times or more the number of Offer Shares initially available for subscription under the Hong Kong Public Offering, then the number of Offer Shares to be reallocated to the Hong Kong Public Offering from the International Offering will be increased so that the total number of Offer Shares available under the Hong Kong Public Offering will be 8,573,600 Offer Shares, representing approximately 50% of the Offer Shares initially available under the Global Offering. In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering will be allocated between Pool A and Pool B in equal proportion and the number of Offer Shares allocated to the International Offering will be correspondingly reduced in such manner as the Overall Coordinators deem appropriate. The Offer Shares to be offered in the Hong Kong Public Offering and the International Offering may, in certain circumstances, be reallocated as between these offerings at the discretion of the Overall Coordinators. If the Hong Kong Offer Shares are not fully subscribed, the Overall Coordinators (for themselves and on behalf of the other Underwriters) will have the discretion (but shall not be under any obligation) to reallocate all or any unsubscribed Hong Kong Offer Shares to the International Offering in such amount as the Overall Coordinators (for themselves and on behalf of the other Underwriters) deem appropriate. In addition, the Overall Coordinators may reallocate Offer Shares from the International Offering to the Hong Kong Public Offering to satisfy valid applications under the Hong Kong Public Offering in accordance with Guidance Letter HKEX-GL91-18. In particular, in the event that (i) the International Offer Shares are undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed irrespective of the number of times; or (ii) the International Offer Shares are fully subscribed or oversubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed as to less than 15 times of the number of Hong Kong Offer Shares initially available under the Hong Kong Public Offering, up to 1,714,800 Offer Shares may be reallocated to the Hong Kong Public Offering from the International Offering, so that the total number of the Offer Shares available under the Hong Kong Public Offering will be increased to 3,429,600 Offer Shares, representing approximately 20% of the number of the Offer Shares initially available under the Global Offering (before any exercise of the Over-allotment Option). Applications Each applicant under the Hong Kong Public Offering will also be required to give an undertaking and confirmation in the application submitted by him/her/it that he/she/it and any person(s) for whose benefit he/she/it is making the application have not applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any Offer Shares under the International Offering, and such applicant’s application is liable to be rejected if the said undertaking and/or confirmation is breached and/or untrue (as the case may be) or he/she/it has been or will be placed or allocated Offer Shares under the International Offering. STRUCTURE OF THE GLOBAL OFFERING – 424 – --- page 434 --- The listing of the H Shares on the Stock Exchange is sponsored by the Joint Sponsors. Applicants under the Hong Kong Public Offering are required to pay, on application, the Offer Price of HK$18.60 per Hong Kong Offer Share in addition to any brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy payable on each Hong Kong Offer Share. Further details are set out below in the section entitled “How to Apply for Hong Kong Offer Shares.” References in this prospectus to applications, application monies or the procedure for application relate solely to the Hong Kong Public Offering. THE INTERNATIONAL OFFERING Number of Offer Shares offered Subject to re-allocation as described above, the International Offering will consist of an initial offering of 15,432,400 International Offer Shares representing approximately 90% of the Offer Shares under the Global Offering and approximately 4.1% of the Company’s enlarged share capital immediately after the completion of the Global Offering, assuming that the Over-allotment Option is not exercised. Allocation The International Offering will include selective marketing of the International Offer Shares to institutional and professional investors and other investors anticipated to have a sizeable demand for such International Offer Shares. Professional investors generally include brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities which regularly invest in shares and other securities. Allocation of the International Offer Shares pursuant to the International Offering will be effected in accordance with the “book-building” process described in the section headed “— Pricing of the Global Offering” below and based on a number of factors, including the level and timing of demand, the total size of the relevant investor’s invested assets or equity assets in the relevant sector and whether or not it is expected that the relevant investor is likely to buy further Offer Shares, and/or hold or sell the Offer Shares, after the listing of the Offer Shares on the Stock Exchange. Such allocation is intended to result in a distribution of the Offer Shares on a basis which would lead to the establishment of a solid professional and institutional shareholder base to the benefit of the Company and our Shareholders as a whole. The Overall Coordinators (for themselves and on behalf of the Underwriters) may require any investor who has been offered the International Offer Shares under the International Offering, and who has made an application under the Hong Kong Public Offering to provide sufficient information to the Overall Coordinators so as to allow them to identify the relevant application under the Hong Kong Public Offering and to ensure that he/she/it is excluded from any application of the Hong Kong Offer Shares under the Hong Kong Public Offering. Re-allocation The total number of the Offer Shares to be issued or sold pursuant to the International Offering may change as a result of the clawback arrangement described in the subsection headed “— The Hong Kong Public Offering — Re-allocation and Clawback” or the Over- allotment Option in whole or in part and/or any re-allocation of unsubscribed Offer Shares originally included in the Hong Kong Public Offering. STRUCTURE OF THE GLOBAL OFFERING – 425 – --- page 435 --- OVER-ALLOTMENT OPTION In connection with the Global Offering, we are expected to grant an Over-allotment Option to the International Underwriters exercisable by the Overall Coordinators on behalf of the International Underwriters. Pursuant to the Over-allotment Option, the Overall Coordinators have the right, exercisable at any time from the Listing Date until 30 days after the last day for the lodging of applications in the Hong Kong Public Offering, to require the Company to issue and allot up to an aggregate of 2,572,000 additional Offer Shares, representing approximately 15% of the initial number of Offer Shares to be offered in the Global Offering, at Offer Price to, among other things, cover over-allocation in the International Offering. If the Over-allotment Option is exercised in full, the additional Offer Shares will represent approximately 0.68% of the Company’s enlarged share capital immediately following the completion of the Global Offering and the exercise of the Over-allotment Option. In the event that the Over-allotment Option is exercised, an announcement will be made. The Overall Coordinators may also cover any over-allocations by purchasing the H Shares in the secondary market or by a combination of purchases in the secondary market and a partial exercise of the Over-allotment Option. Any such secondary market purchase will be made in compliance with all applicable laws, rules and regulations. STABILIZATION Stabilization is a usual practice used by underwriters in many markets to facilitate the distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities in the secondary market, during a specified period of time, to retard and, if possible, prevent, any decline in the market price of the securities below the offer price. In Hong Kong and certain other jurisdictions, the price at which stabilization is effected is not permitted to exceed the offer price. In connection with the Global Offering, the Stabilizing Manager or any person acting for them, on behalf of the Underwriters, may over-allocate or effect short sales or any other stabilizing transactions with a view to stabilizing or maintaining the market price of the H Shares at a level higher than that which might otherwise prevail in the open market. Short sales involve the sale by the Stabilizing Manager of a greater number of H Shares than the Underwriters are required to purchase in the Global Offering. “Covered” short sales are sales made in an amount not greater than the Over-allotment Option. The Stabilizing Manager may close out the covered short position by either exercising the Over-allotment Option to purchase additional H Shares or purchasing H Shares in the open market. In determining the source of the H Shares to close out the covered short position, the Stabilizing Manager will consider, among others, the price of H Shares in the open market as compared to the price at which they may purchase additional H Shares pursuant to the Over-allotment Option. Stabilizing transactions consist of certain bids or purchases to be made for the purpose of preventing or retarding a decline in the market price of the H Shares while the Global Offering is in progress. Any market purchases of the H Shares may be effected on any stock exchange, including the Stock Exchange, any over-the-counter market or otherwise, provided that they are made in compliance with all applicable laws and regulatory requirements. However, there is no obligation on the Stabilizing Manager or any person acting for it to conduct any such stabilizing activity, which if commenced, will be done at the absolute discretion of the Stabilizing Manager and may be discontinued at any time. Any such stabilizing activity is required to be brought to an end within 30 days of the last day for the lodging of applications under the Hong Kong Public Offering. The number of the H Shares that may be over-allocated will not exceed the number of the H Shares that may be sold under the Over-allotment Option, namely, 2,572,000 H Shares, which is approximately 15% of the number of Offer Shares initially available under the Global Offering, in the event that the whole or part of the Over-allotment Option is exercised, through delayed delivery arrangements with cornerstone investors who have been allocated Offer Shares in the STRUCTURE OF THE GLOBAL OFFERING – 426 – --- page 436 --- International Offering, except for ClinChoice Medical Development Limited. The delayed delivery arrangements (if specifically agreed by an investor) relate only to the delay in the delivery of the Offer Shares to such investor and the Offer Price for the Offer Shares allocated to such investor will be paid on the Listing Date. In Hong Kong, stabilizing activities must be carried out in accordance with the Securities and Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong), as amended. Stabilizing actions permitted pursuant to the Securities and Futures (Price Stabilizing) Rules include: (a) over-allocation for the purpose of preventing or minimising any reduction in the market price of the H shares; (b) selling or agreeing to sell the H Shares so as to establish a short position in them for the purpose of preventing or minimising any deduction in the market price; (c) subscribing, or agreeing to subscribe, for the H Shares pursuant to the Over- allotment Option in order to close out any position established under (a) or (b) above; (d) purchasing, or agreeing to purchase, the H Shares for the sole purpose of preventing or minimising any reduction in the market price; (e) selling the H Shares to liquidate a long position held as a result of those purchases; and (f) offering or attempting to do anything described in (b), (c), (d) and (e) above. Stabilizing actions by the Stabilizing Manager, or any person acting for it, will be entered into in accordance with the laws, rules and regulations in place in Hong Kong on stabilization. As a result of effecting transactions to stabilize or maintain the market price of the H Shares, the Stabilizing Manager, or any person acting for it, may maintain a long position in the H Shares. The size of the long position, and the period for which the Stabilizing Manager, or any person acting for it, will maintain the long position is at the discretion of the Stabilizing Manager and is uncertain. In the event that the Stabilizing Manager liquidates this long position by making sales in the open market, this may lead to a decline in the market price of the H Shares. Stabilizing action by the Stabilizing Manager, or any person acting for it, is not permitted to support the price of the H Shares for longer than the stabilizing period, which begins on the day on which trading of the H Shares commences on the Stock Exchange and ends on the thirtieth day after the last day for the lodging of applications under the Hong Kong Public Offering. The stabilizing period is expected to end on Thursday, September 28, 2023. As a result, demand for the H Shares, and their market price, may fall after the end of the stabilizing period. These activities by the Stabilizing Manager may stabilize, maintain or otherwise affect the market price of the H Shares. As a result, the price of the H Shares may be higher than the price that otherwise may exist in the open market. Any stabilizing action taken by the Stabilizing Manager, or any person acting for it, may not necessarily result in the market price of the H Shares staying at or above the Offer Price either during or after the stabilizing period. Bids for or market purchases of the H Shares by the Stabilizing Manager, or any person acting for it, may be made at a price at or below the Offer Price and therefore at or below the price paid for the H Shares by applicants. A public announcement in compliance with the Securities and Futures (Price Stabilizing) Rules will be made within seven days of the expiration of the stabilizing period. STRUCTURE OF THE GLOBAL OFFERING – 427 – --- page 437 --- PRICING OF THE GLOBAL OFFERING The Offer Price will be HK$18.60 per H Share, unless otherwise announced as further explained below. If you apply for the H Shares under the Hong Kong Public Offering, you must pay the Offer Price of HK$18.60 per H Share, plus a brokerage fee of 1.0%, a SFC transaction levy of 0.0027%, a Stock Exchange trading fee of 0.00565% and an AFRC transaction levy of 0.00015%, amounting to a total of HK$3,757.52 for one board lot of 200 H Shares. The International Underwriters will be soliciting from prospective investors’ indications of interest in acquiring the International Offer Shares in the International Offering. Prospective professional and institutional investors will be required to specify the number of the International Offer Shares under the International Offering they would be prepared to acquire either at different prices or at a particular price. This process, known as “book-building,” is expected to continue up to, and to cease on or around, the last day for lodging applications under the Hong Kong Public Offering. The Overall Coordinators, on behalf of the Underwriters, may, where considered appropriate, based on the level of interest expressed by prospective professional and institutional investors during the book-building process, and with the consent of the Company, reduce the number of Offer Shares offered in the Global Offering and/or the Offer Price stated in this prospectus at any time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such a case, the Company will, as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offering, cause there to be posted on the website of the Stock Exchange ( www.hkexnews.hk ) and on the website of the Company (www.immuneonco.com ) notices of the reduction. Upon issue of such a notice, the number of Offer Shares offered in the Global Offering and/or the offer price will be final and conclusive. Applicants should have regard to the possibility that any announcement of a reduction in the number of Offer Shares being offered under the Global Offering and/or the Offer Price may not be made until the day which is the last day for lodging applications under the Hong Kong Public Offering. Such notice will also include confirmation or revision, as appropriate, of the Global Offering statistics as currently set out in this prospectus, and any other financial information which may change as a result of such reduction. In the absence of any such notice so published, the Offer Price, will under no circumstances be reduced. In the event of a reduction in the number of Offer Shares being offered under the Global Offering, the Overall Coordinators may at their discretion reallocate the number of Offer Shares to be offered under the Hong Kong Public Offering and the International Offering, provided that the number of the initial Hong Kong Offer Shares shall not be less than 10% of the total number of Offer Shares in the Global Offering. The International Offer Shares to be offered in the International Offering and the Offer Shares to be offered in the Hong Kong Public Offering may, in certain circumstances, be reallocated as between these offerings at the discretion of the Overall Coordinators. The net proceeds of the Global Offering accruing to the Company (after deduction of underwriting commissions and other expenses in relation to the Global Offering, assuming the Over-allotment Option is not exercised) are estimated to be approximately HK$233.4 million, based on the Offer Price of HK$18.60 per Offer Share (or if the Over-allotment Option is exercised in full, approximately HK$280.3 million, based on the Offer Price of HK$18.60 per Offer Share). The indications of interest in the Global Offering, the results of applications and the basis of allotment of the Hong Kong Offer Shares available under the Hong Kong Public Offering, are expected to be announced on Monday, September 4, 2023 on the website of the Stock Exchange (www.hkexnews.hk ) and on the website of the Company ( www.immuneonco.com ). STRUCTURE OF THE GLOBAL OFFERING – 428 – --- page 438 --- Reduction in Offer Price and/or number of Offer Shares If, based on the level of interest expressed by prospective institutional, professional and other investors during the book-building process, the Overall Coordinators (on behalf of the Underwriters) considers it appropriate and together with the Company’s consent, the Offer Price may be reduced below that stated in this prospectus at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such a case, the Company will as soon as practicable following the decision to make any such reduction, and in any event not later than the morning of the last day for lodging applications under the Hong Kong Public Offering: (a) issue a supplemental prospectus, as the relevant laws or government authority or regulatory authorities may require as soon as practicable following the decision to make the change, updating investors of the change in the Offer Price together with an update of all financial and other information in connection with such change; (b) extend the period under which the Global Offering was open for acceptance to allow potential investors sufficient time to consider their subscriptions or reconsider their existing subscriptions; and (c) give potential investors who had applied for the Offer Shares the right to withdraw their applications given the change in circumstances. In the absence of the publication of any such notice, the Offer Price shall under no circumstances be set below the Offer Price indicated in this prospectus. If the number of Offer Shares and/or the Offer Price is reduced, applicants who have submitted an application under the Hong Kong Public Offering will be entitled to withdraw their applications unless positive confirmations from the applicants to proceed are received. Before submitting applications for Hong Kong Offer Shares, applicants should have regard to the possibility that any announcement of a reduction in the Offer Price and/or number of Offer Shares may not be made until the day which is the last day for lodging applications under the Hong Kong Public Offering. HONG KONG UNDERWRITING AGREEMENT The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting Agreement and is conditional upon the International Underwriting Agreement being signed and becoming unconditional. The Company expects to enter into the International Underwriting Agreement relating to the International Offering on or around August 29, 2023. These underwriting arrangements, and the respective Underwriting Agreements, are summarised in the section headed “Underwriting” in this prospectus. CONDITIONS OF THE GLOBAL OFFERING Acceptance of all applications for Hong Kong Offer Shares pursuant to the Hong Kong Public Offering will be conditional on: (i) the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, the Offer Shares being offered pursuant to the Global Offering (including the additional Offer Shares which may be made available pursuant to the exercise of the Over-allotment Option) (subject only to allotment); STRUCTURE OF THE GLOBAL OFFERING – 429 – --- page 439 --- (ii) the execution and delivery of the International Underwriting Agreement on or around August 29, 2023; and (iii) the obligations of the Underwriters under each of the respective Underwriting Agreements becoming and remaining unconditional and not having been terminated in accordance with the terms of the respective agreements. The consummation of each of the Hong Kong Public Offering and the International Offering is conditional upon, among other things, the other offering becoming unconditional and not having been terminated in accordance with its terms. If the above conditions are not fulfilled or waived prior to the times and dates specified, the Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of the lapse of the Hong Kong Public Offering will be published by the website of the Stock Exchange (www.hkexnews.hk ) and on the website of the Company ( www.immuneonco.com ) on the next day following such lapse. In such eventuality, all application monies will be returned, without interest, on the terms set out in the section entitled “How to Apply for Hong Kong Offer Shares.” In the meantime, all application monies will be held in (a) separate Company account(s) with the receiving bank or other licensed bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) (as amended). H Share certificates for the Offer Shares are expected to be issued on Monday, September 4, 2023 but will only become valid evidence of title at 8:00 a.m. on Tuesday, September 5, 2023 provided that (i) the Global Offering has become unconditional in all respects and (ii) the right of termination as described in the section entitled “Underwriting — Underwriting Arrangements and Expenses — The Hong Kong Public Offering — Hong Kong Underwriting Agreement — Grounds for Termination” has not been exercised. Investors who trade the Offer Shares prior to the receipt of H Share certificates or prior to the H Share certificates becoming valid evidence of title do so entirely at their own risk. ADMISSION OF THE H SHARES INTO CCASS All necessary arrangements have been made enabling the H Shares to be admitted into CCASS. If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and the Company complies with the stock admission requirements of HKSCC, the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the H Shares on the Stock Exchange or any other date HKSCC chooses. Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second settlement day after any trading day. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. DEALING ARRANGEMENTS Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m. in Hong Kong on Tuesday, September 5, 2023, it is expected that dealings in the H Shares on the Stock Exchange will commence at 9:00 a.m. on Tuesday, September 5, 2023. The H Shares will be traded in board lots of 200 H Shares each and the stock code of the H Shares will be 1541. STRUCTURE OF THE GLOBAL OFFERING – 430 – --- page 440 --- IMPORTANT NOTICE TO INVESTORS: FULLY ELECTRONIC APPLICATION PROCESS We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide any printed copies of the Prospectus or any printed copies of any application form for use by the public. This Prospectus is available at the website of the Stock Exchange at www.hkexnews.hk under the “HKEXnews > New Listings > New Listing Information” section, and our website at www.immuneonco.com . If you require a printed copy of the Prospectus, you may download and print from the website addresses above. The contents of the electronic version of this Prospectus are identical to the printed prospectus as registered with the Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance. Set out below are procedures through which you can apply for the Hong Kong Offer Shares electronically. We will not provide any physical channels to accept any application for the Hong Kong Offer Shares by the public. If you are an intermediary , broker or agent , please remind your customers, clients or principals, as applicable, that this prospectus is available online at the website addresses above. If you have any question about the application for the Hong Kong Offer Shares, you may call the enquiry hotline of our H Share Registrar and White Form eIPO Service Provider, Computershare Hong Kong Investor Services Limited, at +852 2862 8600 on the following dates and times: Thursday, August 24, 2023 — 9:00 a.m. to 9:00 p.m. Friday, August 25, 2023 — 9:00 a.m. to 9:00 p.m. Saturday, August 26, 2023 — 9:00 a.m. to 6:00 p.m. Sunday, August 27, 2023 — 9:00 a.m. to 6:00 p.m. Monday, August 28, 2023 — 9:00 a.m. to 9:00 p.m. Tuesday, August 29, 2023 — 9:00 a.m. to 12:00 noon 1. HOW TO APPLY We will not provide any printed application form for use by the public. If you apply for the Hong Kong Offer Shares, then you may not apply for or indicate an interest for the International Offer Shares. To apply for the Hong Kong Offer Shares, you may: (1) apply online via the White Form eIPO service at www.eipo.com.hk ; (2) apply through the CCASS EIPO service to electronically cause HKSCC Nominees to apply on your behalf, including by: (i) instructing your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Hong Kong Offer Shares on your behalf; or HOW TO APPLY FOR HONG KONG OFFER SHARES – 431 – --- page 441 --- (ii) (if you are an existing CCASS Investor Participant) giving electronic application instructions through the CCASS Internet System ( https://ip.ccass.com ) or through the CCASS Phone System by calling +852 2979 7888 (using the procedures in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC can also input electronic application instructions for CCASS Investor Participants through HKSCC’s Customer Service Centre at 1/F, One & Two Exchange Square, 8 Connaught Place, Central, Hong Kong by completing an input request. If you apply through channel (1) above, the Hong Kong Offer Shares successfully applied for will be issued in your own name. If you apply through channels (2)(i) or (2)(ii) above, the Hong Kong Offer Shares successfully applied for will be issued in the name of HKSCC Nominees and deposited directly into CCASS to be credited to your or a designated CCASS Participant’s stock account. None of you or your joint applicant(s) may make more than one application, except where you are a nominee and provide the required information in your application. The Company, the Overall Coordinators, the White Form eIPO Service Provider and their respective agents may reject or accept any application in full or in part for any reason at their discretion. 2. WHO CAN APPLY Eligibility for the Application You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you are applying:  are 18 years of age or older;  have a Hong Kong address;  are outside the United States, and are not a United States Person (as defined in Regulation S under the U.S. Securities Act); and  are not a legal or natural person of the PRC. If an application is made by a person under a power of attorney, the Overall Coordinators may accept it at their discretion and on any conditions they think fit, including evidence of the attorney’s authority. The number of joint applicants may not exceed four and they may not apply by means of the White Form eIPO service for the Hong Kong Offer Shares. Unless permitted by the Listing Rules, you cannot apply for any Hong Kong Offer Shares if you are:  an existing beneficial owner of Shares in the Company and/or any its subsidiaries;  a Director, a Supervisor or the chief executive officer of the Company and/or any of its subsidiaries;  a close associate (as defined in the Listing Rules) of any of the above; HOW TO APPLY FOR HONG KONG OFFER SHARES – 432 – --- page 442 ---  a connected person (as defined in the Listing Rules) of the Company or will become a connected person of the Company immediately upon completion of the Global Offering; and/or  have been allocated or have applied for any International Offer Shares or otherwise participate in the International Offering. Items Required for the Application If you apply for Hong Kong Offer Shares online through the White Form eIPO service, you must:  have a valid Hong Kong identity card number; and  provide a valid e-mail address and a contact telephone number. If you are applying for the Hong Kong Offer Shares online by instructing your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals, please contact them for the items required for the application. 3. TERMS AND CONDITIONS OF AN APPLICATION By applying through the application channels specified in this prospectus, among other things, you: (i) undertake to execute all relevant documents and instruct and authorize the Company and/or the Overall Coordinators (or their agents or nominees), as agents of the Company, to execute any documents for you and to do on your behalf all things necessary to register any Hong Kong Offer Shares allocated to you in your name or in the name of HKSCC Nominees as required by the Articles of Association; (ii) agree to comply with the Companies Ordinance, the Companies (Winding Up and Miscellaneous Provisions) Ordinance and the Articles of Association; (iii) confirm that you have read the terms and conditions and application procedures set out in this prospectus and agree to be bound by them; (iv) confirm that you have received and read this prospectus and have only relied on the information and representations contained in this prospectus in making your application and will not rely on any other information or representations except those in any supplement to this prospectus; (v) confirm that you are aware of the restrictions on the Global Offering in this prospectus; (vi) agree that none of the Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, the Underwriters, their respective directors, officers, employees, partners, agents, advisors and any other parties involved in the Global Offering (collectively, “ Relevant Persons ”) is or will be liable for any information and representations not in this prospectus (and any supplement to it); (vii) undertake and confirm that you or the person(s) for whose benefit you have made the application have not applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any International Offer Shares under the International Offering nor participated in the International Offering; HOW TO APPLY FOR HONG KONG OFFER SHARES – 433 – --- page 443 --- (viii) agree to disclose to the Company, our H Share Registrar, receiving banks, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, the Underwriters and/or their respective advisors and agents any personal data which they may require about you and the person(s) for whose benefit you have made the application; (ix) if the laws of any place outside Hong Kong apply to your application, agree and warrant that you have complied with all such laws and none of the Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers the Capital Market Intermediaries and the Underwriters nor any of their respective officers or advisors will breach any law outside Hong Kong as a result of the acceptance of your offer to purchase, or any action arising from your rights and obligations under the terms and conditions contained in this prospectus; (x) agree that once your application has been accepted, you may not rescind it because of an innocent misrepresentation; (xi) agree that your application will be governed by the laws of Hong Kong; (xii) represent, warrant and undertake that (i) you understand that the Hong Kong Offer Shares have not been and will not be registered under the U.S. Securities Act; and (ii) you and any person for whose benefit you are applying for the Hong Kong Offer Shares are outside the United States (as defined in Regulation S) or are a person described in paragraph (h)(3) of Rule 902 of Regulation S; (xiii) warrant that the information you have provided is true and accurate; (xiv) agree to accept the Hong Kong Offer Shares applied for, or any lesser number allocated to you under the application; (xv) authorize the Company to place your name(s) or the name of the HKSCC Nominees, on the Company’s register of members as the holder(s) of any Hong Kong Offer Shares allocated to you, and the Company and/or its agents to send any H Share certificate(s) and/or any e-Refund payment instructions and/or any refund cheque(s) to you or the first-named applicant for joint application by ordinary post at your own risk to the address stated on the application, unless you are eligible to collect the H Share certificate(s) and/or refund cheque(s) in person; (xvi) declare and represent that this is the only application made and the only application intended by you to be made to benefit you or the person for whose benefit you are applying; (xvii) understand that the Company and the Overall Coordinators will rely on your declarations and representations in deciding whether or not to make any allotment of any of the Hong Kong Offer Shares to you and that you may be prosecuted for making a false declaration; (xviii) (if the application is made for your own benefit) warrant that no other application has been or will be made for your benefit by giving electronic application instructions to HKSCC or to the White Form eIPO Service Provider by you or by any one as your agent or by any other person; and (xix) (if you are making the application as an agent for the benefit of another person) warrant that (i) no other application has been or will be made by you as agent for or for the benefit of that person or by that person or by any other person as agent for that person by giving electronic application instructions to HKSCC; and (ii) you have due authority to give electronic application instructions on behalf of that other person as their agent. HOW TO APPLY FOR HONG KONG OFFER SHARES – 434 – --- page 444 --- 4. MINIMUM APPLICATION AMOUNT AND PERMITTED NUMBERS Your application through the White Form eIPO service or the CCASS EIPO service must be for a minimum of 200 Hong Kong Offer Shares and in one of the numbers set out in the table below. You are required to pay the amount next to the number you select. No. of Hong Kong Offer Shares applied for Amount payable on application No. of Hong Kong Offer Shares applied for Amount payable on application No. of Hong Kong Offer Shares applied for Amount payable on application No. of Hong Kong Offer Shares applied for Amount payable on application HK$ HK$ HK$ HK$ 200 3,757.52 3,000 56,362.74 25,000 469,689.53 100,000 1,878,758.10 400 7,515.03 4,000 75,150.32 30,000 563,627.44 150,000 2,818,137.16 600 11,272.55 5,000 93,937.90 35,000 657,565.34 200,000 3,757,516.20 800 15,030.06 6,000 112,725.49 40,000 751,503.25 250,000 4,696,895.26 1,000 18,787.58 7,000 131,513.08 45,000 845,441.15 300,000 5,636,274.30 1,200 22,545.09 8,000 150,300.65 50,000 939,379.06 350,000 6,575,653.36 1,400 26,302.61 9,000 169,088.23 60,000 1,127,254.85 400,000 7,515,032.40 1,600 30,060.12 10,000 187,875.81 70,000 1,315,130.66 450,000 8,454,411.46 1,800 33,817.64 15,000 281,813.71 80,000 1,503,006.48 500,000 9,393,790.50 2,000 37,575.16 20,000 375,751.62 90,000 1,690,882.29 857,400 (1) 16,108,471.95 (1) Maximum number of Hong Kong Offer Shares you may apply for. No application for any other number of the Hong Kong Offer Shares will be considered and any such application is liable to be rejected. 5. APPLYING THROUGH THE WHITE FORM eIPO SERVICE General Individuals who meet the criteria in “Who can apply” section, may apply through the White Form eIPO service for the Offer Shares to be allotted and registered in their own names through the designated website at www.eipo.com.hk . Detailed instructions for application through the White Form eIPO service are on the designated website. If you do not follow the instructions, your application may be rejected and may not be submitted to the Company. If you apply through the designated website, you authorize the White Form eIPO Service Provider to apply on the terms and conditions in this prospectus, as supplemented and amended by the terms and conditions of the White Form eIPO service. HOW TO APPLY FOR HONG KONG OFFER SHARES – 435 – --- page 445 --- If you have any question about the application for the Hong Kong Offer Shares, you may call the enquiry hotline of our H Share Registrar and White Form eIPO Service Provider, Computershare Hong Kong Investor Services Limited, at +852 2862 8600 on the following dates and times: Thursday, August 24, 2023 — 9:00 a.m. to 9:00 p.m. Friday, August 25, 2023 — 9:00 a.m. to 9:00 p.m. Saturday, August 26, 2023 — 9:00 a.m. to 6:00 p.m. Sunday, August 27, 2023 — 9:00 a.m. to 6:00 p.m. Monday, August 28, 2023 — 9:00 a.m. to 9:00 p.m. Tuesday, August 29, 2023 — 9:00 a.m. to 12:00 noon Time for Submitting Applications under the White Form eIPO service You may submit your application to the White Form eIPO Service Provider through the designated website at www.eipo.com.hk (24 hours daily, except on the last application day) from 9:00 a.m. on Thursday, August 24, 2023 until 11:30 a.m. on Tuesday, August 29, 2023 and the latest time for completing full payment of application monies in respect of such applications will be 12:00 noon on Tuesday, August 29, 2023 or such later time under the section headed “How to Apply for Hong Kong Offer Shares — 10. Effect of Bad Weather and/or Extreme Conditions on the Opening and Closing of the Application Lists.” No Multiple Applications If you apply by means of the White Form eIPO service, once you complete payment in respect of any electronic application instruction given by you or for your benefit through the White Form eIPO service to make an application for Hong Kong Offer Shares, an actual application shall be deemed to have been made. For the avoidance of doubt, giving an electronic application instruction under the White Form eIPO service more than once and obtaining different application reference numbers without effecting full payment in respect of a particular reference number will not constitute an actual application. If you are suspected of submitting more than one application through the White Form eIPO service or by any other means, all of your applications are liable to be rejected. Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance For the avoidance of doubt, the Company and all other parties involved in the preparation of this prospectus acknowledge that each applicant who gives or causes to give electronic application instructions is a person who may be entitled to compensation under Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as applied by Section 42E of the Companies (Winding Up and Miscellaneous Provisions) Ordinance). 6. APPLYING THROUGH THE CCASS EIPO SERVICE General CCASS Participants may give electronic application instructions to apply for the Hong Kong Offer Shares and to arrange payment of the money due on application and payment of refunds under their participant agreements with HKSCC and the General Rules of CCASS and the CCASS Operational Procedures. HOW TO APPLY FOR HONG KONG OFFER SHARES – 436 – --- page 446 --- If you are a CCASS Investor Participant, you may give these electronic application instructions through the CCASS Phone System by calling +852 2979 7888 or through the CCASS Internet System ( https://ip.ccass.com ) (using the procedures in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC can also input electronic application instructions for you if you go to: Hong Kong Securities Clearing Company Limited Customer Service Center 1/F, One & Two Exchange Square, 8 Connaught Place, Central, Hong Kong and complete an input request form. If you are not a CCASS Investor Participant, you may instruct your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Hong Kong Offer Shares on your behalf. You will be deemed to have authorized HKSCC and/or HKSCC Nominees to transfer the details of your application to the Company, the Overall Coordinators and the H Share Registrar. Applying through the CCASS EIPO Service Where you have applied through the CCASS EIPO service (either indirectly through a broker or custodian or directly) and an application is made by HKSCC Nominees on your behalf: (i) HKSCC Nominees will only be acting as a nominee for you and is not liable for any breach of the terms and conditions of this prospectus; (ii) HKSCC Nominees will do the following things on your behalf:  agree that the Hong Kong Offer Shares to be allotted shall be issued in the name of HKSCC Nominees and deposited directly into CCASS for the credit of the CCASS Participant’s stock account on your behalf or your CCASS Investor Participant’s stock account;  agree to accept the Hong Kong Offer Shares applied for or any lesser number allocated;  undertake and confirm that you have not applied for or taken up or indicated an interest for, and will not apply for or take up, or indicate an interest for, any International Offer Shares under the International Offering nor participated in the International Offering;  (if the electronic application instructions are given for your benefit) declare that only one set of electronic application instructions has been given for your benefit;  (if you are an agent for another person) declare that you have only given one set of electronic application instructions for the other person’s benefit and are duly authorized to give those instructions as their agent; HOW TO APPLY FOR HONG KONG OFFER SHARES – 437 – --- page 447 ---  confirm that you understand that the Company, the Directors and the Overall Coordinators will rely on your declarations and representations in deciding whether or not to make any allotment of any of the Hong Kong Offer Shares to you and that you may be prosecuted if you make a false declaration;  authorize the Company to place HKSCC Nominees’ name on the Company’s H Share register as the holder of the Hong Kong Offer Shares allocated to you and to send H Share certificate(s) and/or refund monies under the arrangements separately agreed between us and HKSCC;  confirm that you have read the terms and conditions and application procedures set out in this prospectus and agree to be bound by them;  confirm that you have received and/or read a copy of this prospectus and have relied only on the information and representations in this prospectus in causing he application to be made, save as set out in any supplement to this prospectus;  agree that none of the Company and Relevant Persons, is or will be liable for any information and representations not contained in this prospectus (and any supplement to it);  agree to disclose your personal data to the Company, our H Share Registrar, receiving banks and Relevant Persons;  agree (without prejudice to any other rights which you may have) that once HKSCC Nominees’ application has been accepted, it cannot be rescinded for innocent misrepresentation;  agree that any application made by HKSCC Nominees on your behalf is irrevocable before the fifth day after the time of the opening of the application lists (excluding any day which is Saturday, Sunday or public holiday in Hong Kong), such agreement to take effect as a collateral contract with us and to become binding when you give the instructions and such collateral contract to be in consideration of the Company agreeing that it will not offer any Hong Kong Offer Shares to any person before the fifth day after the time of the opening of the application lists (excluding any day which is Saturday, Sunday or public holiday in Hong Kong), except by means of one of the procedures referred to in this prospectus. However, HKSCC Nominees may revoke the application before the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is a Saturday, Sunday or public holiday in Hong Kong) if a person responsible for this prospectus under Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance gives a public notice under that section which excludes or limits that person’s responsibility for this prospectus;  agree that once HKSCC Nominees’ application is accepted, neither that application nor your electronic application instructions can be revoked, and that acceptance of that application will be evidenced by the Company’s announcement of the Hong Kong Public Offering results;  agree to the arrangements, undertakings and warranties under the participant agreement between you and HKSCC, read with the General Rules of CCASS and the CCASS Operational Procedures, for the giving electronic application instructions to apply for Hong Kong Offer Shares; HOW TO APPLY FOR HONG KONG OFFER SHARES – 438 – --- page 448 ---  agree with the Company, for itself and for the benefit of each Shareholder (and so that the Company will be deemed by its acceptance in whole or in part of the application by HKSCC Nominees to have agreed, for itself and on behalf of each of the Shareholders, with each CCASS Participant giving electronic application instructions ) to observe and comply with the Companies Ordinance, the Companies (Winding Up and Miscellaneous Provisions) Ordinance and the Articles of Association;  agree with the Company, for itself and for the benefit of each shareholder of the Company and each director, supervisor, manager and other senior officer of the Company (and so that the Company will be deemed by its acceptance in whole or in part of this application to have agreed, for itself and on behalf of each shareholder of the Company and each director, supervisor, manager and other senior officer of the Company, with each CCASS Participant giving electronic application instructions): (a) to refer all differences and claims arising from the Articles of Association of the Company or any rights or obligations conferred or imposed by the Company Law or other relevant laws and administrative regulations concerning the affairs of the Company to arbitration; (b) that any award made in such arbitration shall be final and conclusive; and (c) that the arbitration tribunal may conduct hearings in open sessions and publish its award;  agree with the Company (for the Company itself and for the benefit of each shareholder of the Company) that the H Shares are freely transferable by their holders;  authorize the Company to enter into a contract on its behalf with each director and officer of the Company whereby each such director and officer undertakes to observe and comply with his obligations to shareholders stipulated in the Articles of Association; and  agree that your application, any acceptance of it and the resulting contract will be governed by the Laws of Hong Kong. Effect of Applying through the CCASS EIPO Service By applying through the CCASS EIPO service, you (and, if you are joint applicants, each of you jointly and severally) are deemed to have done the following things. Neither HKSCC nor HKSCC Nominees shall be liable to the Company or any other person in respect of the things mentioned below:  instructed and authorized HKSCC to cause HKSCC Nominees (acting as nominee for the relevant CCASS Participants) to apply for the Hong Kong Offer Shares on your behalf;  instructed and authorized HKSCC to arrange payment of the Offer Price, brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy by debiting your designated bank account and, in the case of a wholly or partially unsuccessful application, refund of the application monies (including brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy) by crediting your designated bank account; and HOW TO APPLY FOR HONG KONG OFFER SHARES – 439 – --- page 449 ---  instructed and authorized HKSCC to cause HKSCC Nominees to do on your behalf all the things stated in this prospectus. Time for Inputting Electronic Application Instructions 1 CCASS Clearing/Custodian Participants can input electronic application instructions at the following times on the following dates: Thursday, August 24, 2023 — 9:00 a.m. to 8:30 p.m. Friday, August 25, 2023 — 8:00 a.m. to 8:30 p.m. Monday, August 28, 2023 — 8:00 a.m. to 8:30 p.m. Tuesday, August 29, 2023 — 8:00 a.m. to 12:00 noon CCASS Investor Participants can input electronic application instructions from 9:00 a.m. on Thursday, August 24, 2023 until 12:00 noon on Tuesday, August 29, 2023 (24 hours daily, except on Tuesday, August 29, 2023, the last application day). The latest time for inputting your electronic application instructions will be 12:00 noon on Tuesday, August 29, 2023, the last application day or such later time as described in the section headed “— 10. Effect of Bad Weather and/or Extreme Conditions on the Opening and Closing of the Application Lists” in this section. If you are instructing your broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instruction via CCASS terminals to apply for the Hong Kong Offer Shares on your behalf, you are advised to contact your broker or custodian for the latest time for giving such instructions which may be different from the latest time as stated above. No Multiple Applications If you are suspected of having made multiple applications or if more than one application is made for your benefit, the number of Hong Kong Offer Shares applied for by HKSCC Nominees will be automatically reduced by the number of Hong Kong Offer Shares for which you have given such instructions and/or for which such instructions have been given for your benefit. Any electronic application instructions to make an application for the Hong Kong Offer Shares given by you or for your benefit to HKSCC shall be deemed to be an actual application for the purposes of considering whether multiple applications have been made. Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance For the avoidance of doubt, the Company and all other parties involved in the preparation of this prospectus acknowledge that each CCASS Participant who gives or causes to give electronic application instructions is a person who may be entitled to compensation under Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as applied by Section 342E of the Companies (Winding Up and Miscellaneous Provisions) Ordinance). Personal Data The following Personal Information Collection Statement applies to any personal data held by the Company, the H Share Registrar, the receiving banks and Relevant Persons about you in the same way as it applies to personal data about applicants other than HKSCC Nominees. By applying through the CCASS EIPO service, you agree to all of the terms of the Personal Information Collection Statement below. 1. The times in this sub-section are subject to change as HKSCC may determine from time to time with prior notification to CCASS Clearing/Custodian Participants and/or CCASS Investor Participants. HOW TO APPLY FOR HONG KONG OFFER SHARES – 440 – --- page 450 --- Personal Information Collection Statement This Personal Information Collection Statement informs applicant for, and holder of, the Hong Kong Offer Shares, of the policies and practices of the Company and its H Share Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong). Reasons for the Collection of Y our Personal Data It is necessary for applicants and registered holders of the Hong Kong Offer Share to supply correct personal data to the Company or its agents and the H Share Registrar when applying for the Hong Kong Offer Shares or transferring the Hong Kong Offer Shares into or out of their names or in procuring the services of the H Share Registrar. Failure to supply the requested data may result in your application for the Hong Kong Offer Shares being rejected, or in delay or the inability of the Company or its H Share Registrar to effect transfers or otherwise render their services. It may also prevent or delay registration or transfers of the Hong Kong Offer Shares which you have successfully applied for and/or the dispatch of H Share certificate(s) to which you are entitled. It is important that the holders of the Hong Kong Offer Shares inform the Company and the H Share Registrar immediately of any inaccuracies in the personal data supplied. Purposes Your personal data may be used, held, processed, and/or stored (by whatever means) for the following purposes:  processing your application and refund check, where applicable, verification of compliance with the terms and application procedures set out in this prospectus and announcing results of allocation of the Hong Kong Offer Shares;  compliance with applicable laws and regulations in Hong Kong and elsewhere;  registering new issues or transfers into or out of the names of the holders of the Company’s Shares including, where applicable, HKSCC Nominees;  maintaining or updating the Company’s Register of Member;  verifying identities of the holders of the Company’s Shares;  establishing benefit entitlements of holders of the Company’s Shares, such as dividends, rights issues, bonus issues, etc.;  distributing communications from the Company and its subsidiaries;  compiling statistical information and profiles of the holder of the Company’s Shares;  disclosing relevant information to facilitate claims on entitlements; and  any other incidental or associated purposes relating to the above and/or to enable the Company and the H Share Registrar to discharge their obligations to holders of the Company’s Shares and/or regulators and/or any other purposes to which the securities’ holder may from time to time agree. HOW TO APPLY FOR HONG KONG OFFER SHARES – 441 – --- page 451 --- Transfer of Personal Data Personal data held by the Company and its H Share Registrar relating to the holders of the Hong Kong Offer Shares will be kept confidential but the Company and its H Share Registrar may, to the extent necessary for achieving any of the above purposes, disclose, obtain or transfer (whether within or outside Hong Kong) the personal data, to from or with any of the following:  the Company’s appointed agents such as financial advisers, receiving banks and overseas principal share registrar;  where applicants for the Hong Kong Offer Shares request a deposit into CCASS, HKSCC or HKSCC Nominees, who will use the personal data for the purposes of operating CCASS; any agents, contractors or third-party service providers who offer administrative, telecommunications, computer, payment or other services to the Company of the H Share Registrar in connection with their respective business operation;  the Stock Exchange, the SFC and any other statutory regulatory of governmental bodies or otherwise as required by laws, rules or regulations; and  any persons or institutions with which the holders of the Hong Kong Offer Shares have or purpose to have dealings, such as their bankers, solicitors, accountants or stockbrokers etc. Retention of Personal Data The Company and its H Share Registrar will keep the personal data of the applicants and holders of the Hong Kong Offer Shares for as long as necessary to fulfill the purposes for which the personal data were collected. Personal data which is no longer required will be destroyed or dealt with in accordance with the Personal Data (Privacy) Ordinance. Access to and Correction of Personal Data Holders of the Hong Kong Offer Shares have the right to ascertain whether the Company or the H Share Registrar hold their personal data, to obtain a copy of that data, and to correct any data that is inaccurate. The Company and the H Share Registrar have the right to charge a reasonable fee for the processing of such requests. All requests for access to data or correction of data should be addressed to the Company, at the Company’s registered address disclosed in the section headed “Corporate Information” in this prospectus or as notified from time to time, for the attention of the secretary, or the Company’s H Share Registrar for the attentions of the privacy compliance officer. 7. WARNING FOR ELECTRONIC APPLICATIONS The subscription of the Hong Kong Offer Shares through the CCASS EIPO service is only a facility provided to CCASS Participants. Similarly, the application for Hong Kong Offer Shares through the White Form eIPO service is also only a facility provided by the White Form eIPO Service Provider to public investors. Such facilities are subject to capacity limitations and potential service interruptions and you are advised not to wait until the last application day in making your electronic applications. The Company, Relevant Persons and White Form eIPO Service Provider take no responsibility for such applications and provide no assurance that any CCASS Participant applying through the CCASS EIPO service or person applying through the White Form eIPO service will be allotted any Hong Kong Offer Shares. HOW TO APPLY FOR HONG KONG OFFER SHARES – 442 – --- page 452 --- To ensure that CCASS Investor Participants can give their electronic application instructions , they are advised not to wait until the last minute to input their instructions to the systems. In the event that CCASS Investor Participants have problems in the connection to CCASS Phone System/CCASS Internet System for submission of electronic application instructions ,t h e y should go to HKSCC’s Customer Service Centre to complete an input request form for electronic application instructions before 12:00 noon on Tuesday, August 29, 2023, the last day for applications, or such later time as described in “— 10. Effect of Bad Weather and/or Extreme Conditions on the Opening and Closing of the Application Lists” below. 8. HOW MANY APPLICATIONS CAN YOU MAKE Multiple applications for the Hong Kong Offer Shares are not allowed except by nominees. All of your applications will be rejected if more than one application through the CCASS EIPO service (directly or indirectly through your broker or custodian ) or through the White Form eIPO service is made for your benefit (including the part of the application made by HKSCC Nominees acting on electronic application instructions ), and the number of the Hong Kong Offer Shares for which you have given such instructions and/or for which such instructions have been given for your behalf. For the avoidance of doubt, giving an electronic application instruction under the White Form eIPO service more than once and obtaining different application reference number without effecting full payment in respect of a particular reference number will not constitute an actual application. However, any electronic application instructions to make an application for the Hong Kong Offer Shares given by you or for your benefit to HKSCC will be deemed to be an actual application for the purposes of considering whether multiple applications have been made. If an application is made by an unlisted company and:  the principal business of that company is dealing in securities; and  you exercise statutory control over that company, then the application will be treated as being for your benefit. “Unlisted company ” means a company with no equity securities listed on the Stock Exchange. “Statutory control ” means you:  control the composition of the board of directors of the company;  control more than half of the voting power of the company; or  hold more than half of the issued share capital of the company (not counting any part of it which carries no right to participate beyond a specified amount in a distribution of either profits or capital). 9. HOW MUCH ARE THE HONG KONG OFFER SHARES The Offer Price is HK$18.60 per Offer Share. You must also pay brokerage of 1.0%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015%. This means that for one board lot of 200 Hong Kong Offer Shares, you will pay HK$3,757.52. HOW TO APPLY FOR HONG KONG OFFER SHARES – 443 – --- page 453 --- You must pay the Offer Price, brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy in full upon application for the Hong Kong Offer Shares. You may submit an application through the White Form eIPO service or the CCASS EIPO service in respect of a minimum of 200 Hong Kong Offer Shares. Each application or electronic application instruction in respect of more than 200 Hong Kong Offer Shares must be in one of the numbers set out in the table in “— 4. Minimum Application Amount and Permitted Numbers” in this section, or as otherwise specified on the designated website at www.eipo.com.hk . If your application is successful, brokerage will be paid to the Exchange Participants, and the SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy and AFRC transaction levy, collected by the Stock Exchange on behalf of the SFC and AFRC respectively). For further details on the Offer Price, see “Structure of the Global Offering — Pricing of the Global Offering” in this prospectus. 10. EFFECT OF BAD WEATHER AND/OR EXTREME CONDITIONS ON THE OPENING AND CLOSING OF THE APPLICATION LISTS The application lists will not open if there is:  a tropical cyclone warning signal number 8 or above; or  a “black” rainstorm warning; and/or  Extreme Conditions, in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, August 29, 2023. Instead they will open between 11:45 a.m. and 12:00 noon on the next Business Day which does not have either of those warnings and/or Extreme Conditions in Hong Kong in force at any time between 9:00 a.m. and 12:00 noon. If the application lists do not open and close on Tuesday, August 29, 2023 or if there is a tropical cyclone warning signal number 8 or above or a “black” rainstorm warning signal and/or Extreme Conditions in force in Hong Kong that may affect the dates mentioned in the section headed “Expected Timetable”, an announcement will be made in such event. 11. PUBLICATION OF RESULTS The Company expects to announce the final Offer Price, the level of indication of interest in the International Offering, the level of applications in the Hong Kong Public Offering and the basis of allocation of the Hong Kong Offer Shares on Monday, September 4, 2023 on the Company’s website at www.immuneonco.com and the website of the Stock Exchange at www.hkexnews.hk . The results of allocations and the Hong Kong identity card/passport/Hong Kong business registration numbers of successful applicants under the Hong Kong Public Offering will be available at the times and date and in the manner specified below:  in the announcement to be posted on the Company’s website at www.immuneonco.com and the Stock Exchange’s website at www.hkexnews.hk by no later than 8:00 a.m. on Monday, September 4, 2023; HOW TO APPLY FOR HONG KONG OFFER SHARES – 444 – --- page 454 ---  from the designated results of allocations website at www.iporesults.com.hk (alternatively: English https://www.eipo.com.hk/en/Allotment ; Chinese https://www.eipo.com.hk/zh-hk/Allotment )w i t ha“ s e a r c hb yI D ”f u n c t i o no na2 4 hour basis from 8:00 a.m. on Monday, September 4, 2023 to 12:00 midnight on Sunday, September 10, 2023; and  from the allocation results telephone enquiry line by calling +852 2862 8555 between 9:00 a.m. and 6:00 p.m. on Monday, September 4, 2023, Tuesday, September 5, 2023, Wednesday, September 6, 2023 and Thursday, September 7, 2023. If the Company accepts your offer to purchase (in whole or in part), which it may do by announcing the basis of allocations and/or making available the results of allocations publicly, there will be a binding contract under which you will be required to purchase the Hong Kong Offer Shares if the conditions of the Global Offering are satisfied and the Global Offering is not otherwise terminated. Further details are contained in the section headed “Structure of the Global Offering.” You will not be entitled to exercise any remedy of rescission for innocent misrepresentation at any time after acceptance of your application. This does not affect any other right you may have. 12. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOTTED OFFER SHARES You should note the following situations in which the Hong Kong Offer Shares will not be allotted to you: (i) If your application is revoked: By applying through the CCASS EIPO service or the White Form eIPO service, you agree that your application or the application made by HKSCC Nominees on your behalf cannot be revoked on or before the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is Saturday, Sunday or public holiday in Hong Kong). This agreement will take effect as a collateral contract with the Company. Your application or the application made by HKSCC Nominees on your behalf may only be revoked on or before such fifth day if a person responsible for this prospectus under Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as applied by Section 342E of the Companies (Winding Up and Miscellaneous Provisions) Ordinance) gives a public notice under that section which excludes or limits that person’s responsibility for this prospectus. If any supplement to this prospectus is issued, applicants who have already submitted an application will be notified that they are required to confirm their applications. If applicants have been so notified but have not confirmed their applications in accordance with the procedure to be notified, all unconfirmed applications will be deemed revoked. If your application or the application made by HKSCC Nominees on your behalf has been accepted, it cannot be revoked. For this purpose, acceptance of applications which are not rejected will be constituted by notification in the press of the results of allocation, and where such basis of allocation is subject to certain conditions or provides for allocation by ballot, such acceptance will be subject to the satisfaction of such conditions or results of the ballot respectively. HOW TO APPLY FOR HONG KONG OFFER SHARES – 445 – --- page 455 --- (ii) If the Company or its agents exercise their discretion to reject your application: The Company, the Overall Coordinators, the White Form eIPO Service Provider and their respective agents and nominees have full discretion to reject or accept any application, or to accept only part of any application, without giving any reasons. (iii) If the allotment of Hong Kong Offer Shares is void: The allotment of Hong Kong Offer Shares will be void if the Listing Committee of the Stock Exchange does not grant permission to list the H Shares either:  within three weeks from the closing date of the application lists; or  within a longer period of up to six weeks if the Listing Committee notifies the Company of that longer period within three weeks of the closing date of the application lists. (iv) If:  you make multiple applications or suspected multiple applications;  you or the person for whose benefit you are applying have applied for or taken up, or indicated an interest for, or have been or will be placed or allocated (including conditionally and/or provisionally) Hong Kong Offer Shares and International Offer Shares;  your electronic application instructions through the White Form eIPO service are not completed in accordance with the instructions, terms and conditions on the designated website;  your payment is not made correctly;  the Underwriting Agreements do not become unconditional or are terminated;  the Company or the Overall Coordinators believe that by accepting your application, it or they would violate applicable securities or other laws, rules or regulations; or  your application is for more than 857,400 Offer Shares, being 50% of the Hong Kong Offer Shares initially offered under the Hong Kong Public Offering. 13. REFUND OF APPLICATION MONIES If an application is rejected, not accepted or accepted in part only, or if the conditions of the Hong Kong Public Offering are not fulfilled in accordance with “Structure of the Global Offering — The Hong Kong Public Offering — Conditions of the Global Offering” in this prospectus or if any application is revoked, the application monies, or the appropriate portion thereof, together with the related brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy, will be refunded, without interest or the cheque or banker’s cashier order will not be cleared. Any refund of your application monies will be made on or before Monday, September 4, 2023. HOW TO APPLY FOR HONG KONG OFFER SHARES – 446 – --- page 456 --- 14. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND MONIES You will receive one H Share certificate for all Hong Kong Offer Shares allotted to you under the Hong Kong Public Offering (except pursuant to applications made through the CCASS EIPO service where the H Share certificates will be deposited into CCASS as described below). No temporary document of title will be issued in respect of the H Shares. No receipt will be issued for sums paid on application. Subject to arrangement on dispatch/collection of H Share certificates and refund monies as mentioned below, any refund cheques and H Share certificates are expected to be posted on or before Monday, September 4, 2023. The right is reserved to retain any H Share certificate(s) and any surplus application monies pending clearance of cheque(s) or banker’s cashier’s order(s). H Share certificates will only become valid evidence of title at 8:00 a.m. on Tuesday, September 5, 2023 provided that the Global Offering has become unconditional and the right of termination described in the section headed “Underwriting” in this prospectus has not been exercised. Investors who trade the H Shares prior to the receipt of H Share certificates or the H Share certificates becoming valid evidence of title do so at their own risk. Personal Collection (i) If you apply through the White Form eIPO service If you apply for 500,000 Hong Kong Offer Shares or more and your application is wholly or partially successful, you may collect any refund cheque(s) and/or H Share Certificate(s) (where applicable) from the H Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712−1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, from 9:00 a.m. to 1:00 p.m. on Monday, September 4, 2023, or such other date as notified by the Company in the newspapers as the date of despatch/collection of H Share certificates/e-Refund payment instructions/refund cheques. If you do not collect your H Share certificate(s) and/or refund cheques (where applicable) personally within the time specified for collection, they will be sent to the address specified in your application instructions by ordinary post at your own risk. If you apply for less than 500,000 Hong Kong Offer Shares, your H Share certificate(s) and/or refund cheques (where applicable) will be sent to the address specified in your application instructions on or before Monday, September 4, 2023 by ordinary post at your own risk. If you apply and pay the application monies from a single bank account, any refund monies will be despatched to that bank account in the form of e-Refund payment instructions. If you apply and pay the application monies from multiple bank accounts, any refund monies will be despatched to the address as specified in your application instructions in the form of refund cheque(s) by ordinary post at your own risk. (ii) If you apply through the CCASS EIPO service Allocation of Hong Kong Offer Shares For the purposes of allocating Hong Kong Offer Shares, HKSCC Nominees will not be treated as an applicant. Instead, each CCASS Participant who gives electronic application instructions or each person for whose benefit instructions are given will be treated as an applicant. HOW TO APPLY FOR HONG KONG OFFER SHARES – 447 – --- page 457 --- Deposit of H Share Certificates into CCASS and Refund of Application Monies  If your application is wholly or partially successful, your H Share certificate(s) will be issued in the name of HKSCC Nominees and deposited into CCASS for the credit of your designated CCASS Participant’s stock account or your CCASS Investor Participant stock account on Monday, September 4, 2023, or, on any other date determined by HKSCC or HKSCC Nominees.  The Company expects to publish the application results of CCASS Participants (and where the CCASS Participant is a broker or custodian, the Company will include information relating to the relevant beneficial owner), your Hong Kong identity card number/passport number or other identification code (Hong Kong business registration number for corporations) and the basis of allotment of the Hong Kong Public Offering in the manner specified in “ Publication of Results ” above on Monday, September 4, 2023. You should check the announcement published by the Company and report any discrepancies to HKSCC before 5:00 p.m. on Monday, September 4, 2023 or such other date as determined by HKSCC or HKSCC Nominees.  If you have instructed your broker or custodian to give electronic application instructions on your behalf, you can also check the number of Hong Kong Offer Shares allotted to you and the amount of refund monies (if any) payable to you with that broker or custodian.  If you have applied as a CCASS Investor Participant, you can also check the number of Hong Kong Offer Shares allotted to you and the amount of refund monies (if any) payable to you via the CCASS Phone System and the CCASS Internet System (under the procedures contained in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time) on Monday, September 4, 2023. Immediately following the credit of the Hong Kong Offer Shares to your stock account and the credit of refund monies to your bank account, HKSCC will also make available to you an activity statement showing the number of Hong Kong Offer Shares credited to your CCASS Investor Participant stock account and the amount of refund monies (if any) credited to your designated bank account.  Refund of your application monies (if any) in respect of wholly and partially unsuccessful applications will be credited to your designated bank account or the designated bank account of your broker or custodian on Monday, September 4, 2023. 15. ADMISSION OF THE H SHARES INTO CCASS If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and we comply with the stock admission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the H Shares or any other date HKSCC chooses. Settlement of transactions between Exchange Participants (as defined in the Listing Rules) is required to take place in CCASS on the second settlement day after any trading day. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. Investors should seek the advice of their stockbroker or other professional advisor for details of the settlement arrangement as such arrangements may affect their rights and interests. All necessary arrangements have been made enabling the H Shares to be admitted into CCASS. HOW TO APPLY FOR HONG KONG OFFER SHARES – 448 – --- page 458 --- The following is the text of a report set out on pages IA-1 to IA-62, received from the Company’s reporting accountants, Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this prospectus. ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF IMMUNEONCO BIOPHARMACEUTICALS (SHANGHAI) INC., MORGAN STANLEY ASIA LIMITED AND CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED Introduction We report on the historical financial information of ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (“ᔼᖹҦஔ (ɪऎ)ʮ̡ ”) (the “ Company ”) and its subsidiaries (together, the “ Group ”) set out on pages IA-3 to IA-62, which comprises the consolidated statements of financial position of the Group as at December 31, 2021 and 2022 and April 30, 2023, the statements of financial position of the Company as at December 31, 2021 and 2022 and April 30, 2023, and the consolidated statements of profit or loss and other comprehensive income, the consolidated statements of changes in equity and the consolidated statements of cash flows of the Group for each of the two years ended December 31, 2022 and the four months ended April 30, 2023 (the “ Track Record Period ”) and material accounting policies information and other explanatory information (together, the “ Historical Financial Information ”). The Historical Financial Information set out on pages IA-3 to IA-62 forms an integral part of this report, which has been prepared for inclusion in the prospectus of the Company dated August 24, 2023 (the “ Prospectus ”) in connection with the initial listing of shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”). Directors’ responsibility for the Historical Financial Information The directors of the Company are responsible for the preparation of the Historical Financial Information that gives a true and fair view in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information, and for such internal control as the directors of the Company determine is necessary to enable the preparation of the Historical Financial Information that is free from material misstatement, whether due to fraud or error. Reporting accountants’ responsibility Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement. Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants’ judgment, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors of the Company, as well as evaluating the overall presentation of the Historical Financial Information. APPENDIX IA ACCOUNTANTS’ REPORT –I A - 1– --- page 459 --- We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, the Historical Financial Information gives, for the purposes of the accountants’ report, a true and fair view of the Group’s and the Company’s financial position as at December 31, 2021 and 2022 and April 30, 2023, and of the Group’s financial performance and cash flows for the Track Record Period in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information. Review of stub period comparative financial information We have reviewed the stub period comparative financial information of the Group which comprises the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the four months ended April 30, 2022 and other explanatory information (the “ Stub Period Comparative Financial Information ”). The directors of the Company are responsible for the preparation of the Stub Period Comparative Financial Information in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information. Our responsibility is to express a conclusion on the Stub Period Comparative Financial Information based on our review. We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing issued by the HKICPA and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the Stub Period Comparative Financial Information, for the purposes of the accountants’ report, is not prepared, in all material respects, in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information. Report on matters under the Rules Governing the Listing of Securities on the Stock Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance Adjustments In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page IA-3 have been made. Dividends We refer to Note 15 to the Historical Financial Information which states that no dividend was declared or paid by the Company in respect of the Track Record Period. Deloitte Touche Tohmatsu Certified Public Accountants Hong Kong August 24, 2023 APPENDIX IA ACCOUNTANTS’ REPORT –I A - 2– --- page 460 --- HISTORICAL FINANCIAL INFORMATION OF THE GROUP Preparation of Historical Financial Information Set out below is the Historical Financial Information which forms an integral part of this accountants’ report. The consolidated financial statements of the Group for the Track Record Period, on which the Historical Financial Information is based, have been prepared in accordance with the accounting policies which conform with the International Financial Reporting Standards (“ IFRSs ”) issued by International Accounting Standards Board (“ IASB”) and were audited by us in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants (“ Underlying Financial Statements ”). The Historical Financial Information is presented in Renminbi (“ RMB”) and all values are rounded to the nearest thousand (RMB’000) except when otherwise indicated. CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Year ended December 31, Four months ended April 30, NOTES 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Revenue ............... 6 5,067 538 234 73 Other income ........... 8 10,381 14,657 2,397 3,062 Other gains and losses, net . 9 (518,347) (29,436) (44,771) (834) Research and development expenses ............ (175,954) (277,346) (67,257) (75,001) Administrative expenses ... (48,319) (92,796) (27,368) (28,469) Listing expenses ......... (4,886) (17,724) (12,059) (10,344) Finance costs ........... 10 (891) (787) (285) (253) Loss before tax ......... 11 (732,949) (402,894) (149,109) (111,766) Income tax expense ...... 12 ———— Loss for the year/period .. (732,949) (402,894) (149,109) (111,766) Other comprehensive income Item that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations ...... 10 61 22 5 Total comprehensive expenses for the year/period ........... (732,939) (402,833) (149,087) (111,761) Loss per share — Basic and diluted (RMB yuan) ............... 14 (8.50) (1.21) (0.53) (0.31) APPENDIX IA ACCOUNTANTS’ REPORT –I A - 3– --- page 461 --- CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at December 31, As at April 30, NOTES 2021 2022 2023 RMB’000 RMB’000 RMB’000 Non-current assets Property and equipment .............. 16 52,026 69,830 66,057 Right-of-use assets .................. 17 102,095 94,062 90,673 Other non-current assets .............. 19 34,616 24,215 27,168 188,737 188,107 183,898 Current assets Trade receivables ................... 20 34 66 16 Prepayments and other receivables ...... 21 27,528 16,593 16,509 Financial assets at fair value through profit or loss (“ FVTPL ”)............ 24 — — 25,024 Pledged bank deposits ............... 23 8,210 — — Bank balances and cash .............. 23 668,326 635,212 559,086 704,098 651,871 600,635 Current liabilities Trade and other payables ............. 25 41,151 46,138 44,625 Lease liabilities .................... 26 5,096 5,599 4,250 Financial liabilities at FVTPL ......... 27 2,431,584 — — Borrowings ........................ 28 — — 29,980 2,477,831 51,737 78,855 Net current (liabilities) assets ......... (1,773,733) 600,134 521,780 Total assets less current liabilities ..... (1,584,996) 788,241 705,678 Non-current liabilities Lease liabilities .................... 26 13,443 9,020 8,121 Net (liabilities) assets ................ (1,598,439) 779,221 697,557 Capital and reserves Paid-in capital ..................... 29 6,908 — — Share capital ....................... 29 — 356,093 356,093 Reserves ......................... (1,605,347) 423,128 341,464 Total (deficits) equity ............... (1,598,439) 779,221 697,557 APPENDIX IA ACCOUNTANTS’ REPORT –I A - 4– --- page 462 --- STATEMENTS OF FINANCIAL POSITION OF THE COMPANY As at December 31, As at April 30, NOTES 2021 2022 2023 RMB’000 RMB’000 RMB’000 Non-current assets Property and equipment .............. 16 52,026 69,830 66,057 Right-of-use assets .................. 17 102,095 94,062 90,673 Investments in subsidiaries ............ 18 135 135 135 Other non-current assets .............. 19 34,616 24,215 27,168 188,872 188,242 184,033 Current assets Trade receivables ................... 20 34 66 16 Prepayments and other receivables ...... 21 27,507 16,561 16,484 Amounts due from subsidiaries ........ 22 10 1,958 2,273 Financial assets at FVTPL ............. 24 — — 25,024 Pledged bank deposits ............... 23 8,210 — — Bank balances and cash .............. 23 668,208 633,403 556,697 703,969 651,988 600,494 Current liabilities Trade and other payables .............. 25 40,774 45,672 43,656 Amount due to a subsidiary ........... 22 2 7 0—— Lease liabilities .................... 26 5,096 5,599 4,250 Financial liabilities at FVTPL ......... 27 2,431,584 — — Borrowings ........................ 28 — — 29,980 2,477,724 51,271 77,886 Net current (liabilities) assets ......... (1,773,755) 600,717 522,608 Total assets less current liabilities ..... (1,584,883) 788,959 706,641 Non-current liabilities Lease liabilities .................... 26 13,443 9,020 8,121 Net (liabilities) assets ................ (1,598,326) 779,939 698,520 Capital and reserves Paid-in capital ..................... 29 6,908 — — Share capital ....................... 29 — 356,093 356,093 Reserves ......................... 30 (1,605,234) 423,846 342,427 Total (deficits) equity ............... (1,598,326) 779,939 698,520 APPENDIX IA ACCOUNTANTS’ REPORT –I A - 5– --- page 463 --- CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Paid-in capital Share capital Share premium Capital reserve Other reserve (Note) Share-based payments reserve Translation reserve Accumulated losses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2021 .............. 5,542 — — 395,971 (399,513) 3,123 (3) (904,637) (899,517) Loss for the year ................ ——————— (732,949) (732,949) Other comprehensive income for the year ..... ——————1 0—1 0 Total comprehensive income (expense) for the year ——————1 0 (732,949) (732,939) Issue of Series B+ shares (Note 27) ........ 806 — — 426,993 ———— 427,799 Issue of Series C shares — first tranche (Note 27) . 560 — — 372,616 ———— 373,176 Recognition of liabilities on Series B+ and C shares (Note 27) ................... ———— (800,975) — — — (800,975) Recognition of equity- settled share-based payments (Note 31) ................... ————— 34,017 — — 34,017 As at December 31, 2021 ............ 6,908 — — 1,195,580 (1,200,488) 37,140 7 (1,637,586) (1,598,439) Loss for the year ................ ——————— (402,894) (402,894) Other comprehensive income for the year ..... ——————6 1—6 1 Total comprehensive income (expense) for the year ——————6 1 (402,894) (402,833) Issue of remaining Series C shares (Note 27) .... 276 — — 183,320 ———— 183,596 Recognition of liabilities on Series C shares (Note 27) ................... ———— (183,596) — — — (183,596) Issue of paid-in capital to employee stock ownership platforms .............. 730 — — 5,244 ———— 5,974 Reclassification of financial liabilities at FVTPL as equity (Note 27) ................ ———— 2,670,690 — — — 2,670,690 Conversion into a joint stock company (Note 29) .. (7,914) 356,093 654,470 (1,384,144) (1,286,606) (41,493) — 1,709,594 — Recognition of equity-settled share-based payments (Note 31) ................... ————— 103,829 — — 103,829 As at December 31, 2022 ............. — 356,093 654,470 — — 99,476 68 (330,886) 779,221 Loss for the period ................ ——————— ( 1 1 1,766) (111,766) Other comprehensive income for the period .... —————— 5— 5 Total comprehensive income (expense) for the period .................... —————— 5 ( 1 1 1,766) (111,761) Recognition of equity-settled share-based payments (Note 31) ................... ————— 30,097 — — 30,097 As at April 30, 2023 ............... — 356,093 654,470 — — 129,573 73 (442,652) 697,557 APPENDIX IA ACCOUNTANTS’ REPORT –I A - 6– --- page 464 --- Paid-in capital Share capital Share premium Capital reserve Other reserve (Note) Share-based payments reserve Translation reserve Accumulated losses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2022 .............. 6,908 — — 1,195,580 (1,200,488) 37,140 7 (1,637,586) (1,598,439) Loss for the period ................ ——————— (149,109) (149,109) Other comprehensive income for the period .... ——————2 2—2 2 Total comprehensive income (expense) for the period .................... ——————2 2 (149,109) (149,087) Issue of remaining Series C shares (Note 27) .... 276 — — 183,320 ———— 183,596 Recognition of liabilities on Series C shares (Note 27) ................... ———— (183,596) — — — (183,596) Issue of paid-in capital to employee stock ownership platforms .............. 730 — — 5,244 ———— 5,974 Reclassification of financial liabilities at FVTPL as equity (Note 27) ................ ———— 2,670,690 — — — 2,670,690 Conversion into a joint stock company (Note 29) .. (7,914) 356,093 654,470 (1,384,144) (1,286,606) (41,493) — 1,709,594 — Recognition of equity-settled share-based payments (Note 31) ................... ————— 28,987 — — 28,987 As at April 30, 2022 (unaudited) ......... — 356,093 654,470 — — 24,634 29 (77,101) 958,125 Note: Other reserve mainly comprises recognition of financial liabilities at FVTPL on ordinary shares as disclosed in Note 27. APPENDIX IA ACCOUNTANTS’ REPORT –I A - 7– --- page 465 --- CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) OPERATING ACTIVITIES Loss for the year/period ........... (732,949) (402,894) (149,109) (111,766) Adjustments for: Gain from changes in fair value of financial assets at FVTPL ...... (1,598) — — (218) Loss from changes in fair value of financial liabilities at FVTPL .... 511,517 55,510 55,510 — Transaction costs for the issue of Investors’ Shares (defined in Note 27) ........... 1 , 7 1 4——— Depreciation of property and equipment .................. 7,774 11,908 3,876 4,143 Depreciation of right-of-use assets . 5,402 5,709 1,877 3,389 Share-based payment expenses .... 34,017 103,829 28,987 30,097 Bank interest income ........... (1,640) (9,505) (2,170) (2,928) Finance costs ................. 891 787 285 253 Adjustments to listing expenses ... — — — 3,853 Gain on disposal of property and equipment .................. (555) — — — G a i na r i s i n go nt e r m i n a t i o no fa lease ...................... (165) — — — Net foreign exchange losses (gains) . 9,128 (26,106) (10,742) 1,039 Operating cash flow before movements in working capital .... (166,464) (260,762) (71,486) (72,138) Decrease (increase) in trade receivables ................... 12 (32) (29) 50 (Increase) decrease in prepayments and other receivables ........... (18,099) 10,224 (5,918) (3,264) (Increase) decrease in other non-current assets .............. (13,642) 6,981 15,786 (2,953) Increase (decrease) in trade and other payables ..................... 7,652 4,879 8,628 (937) NET CASH USED IN OPERATING ACTIVITIES ................. (190,541) (238,710) (53,019) (79,242) APPENDIX IA ACCOUNTANTS’ REPORT –I A - 8– --- page 466 --- Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) INVESTING ACTIVITIES Bank interest received ............ 1,577 8,580 2,170 2,984 Gains on financial assets at FVTPL .. ——— 1 9 3 Proceeds on disposal of property and equipment .................... 5 7 5——— Purchase of property and equipment . (24,282) (23,224) (15,401) (1,046) Withdrawal of financial assets at FVTPL ...................... 352,652 — — 87,000 Purchase of financial assets at FVTPL (329,000) — — (112,000) Payments for right-of-use assets ..... (84,553) — — — Payments for deposits for plant construction .................. (16,418) — — — Payments for rental deposits ....... (1,063) (84) — — Placement for pledged bank deposits . (8,210) — — — Withdrawal of pledged bank deposits . — 8,210 8,210 — Withdrawal of deposits for plant construction .................. — 6 , 5 6 7—— NET CASH (USED IN) FROM INVESTING ACTIVITIES ........ (108,722) 49 (5,021) (22,869) FINANCING ACTIVITIES Proceeds from issue of Series B+ shares ....................... 427,799 — — — Proceeds from issue of Series C shares ....................... 373,176 183,596 183,596 — Proceeds from issue of paid-in capital to employee stock ownership platforms ..................... — 5,974 5,974 — Payments for transaction costs for the issue of Investors’ Shares ............... (1,714) — — — Bank loans raised ................ 10 — — 29,980 Repayments of bank loans .......... (10) — — — Repayments of lease liabilities ...... (4,772) (5,803) (1,517) (2,248) Issue costs paid .................. (565) (3,600) (2,523) (461) Interest paid .................... (891) (787) (285) (253) NET CASH FROM FINANCING ACTIVITIES .................. 793,033 179,380 185,245 27,018 NET INCREASE (DECREASE) IN CASH AND CASH EQUIV ALENTS .......... 493,770 (59,281) 127,205 (75,093) CASH AND CASH EQUIV ALENTS AT BEGINNING OF THE YEAR/PERIOD ................ 183,674 668,326 668,326 635,212 Effect of foreign exchange rate changes ...................... (9,118) 26,167 10,769 (1,033) CASH AND CASH EQUIV ALENTS AT THE END OF THE YEAR/PERIOD ................ 668,326 635,212 806,300 559,086 APPENDIX IA ACCOUNTANTS’ REPORT –I A - 9– --- page 467 --- NOTES TO THE HISTORICAL FINANCIAL INFORMATION 1. GENERAL INFORMATION The Company was incorporated in the People’s Republic of China (the “ PRC”) on June 18, 2015 as a limited liability company. On June 14, 2022, the Company was converted to a joint stock company with limited liability under the Company Law of the PRC. The respective address of the registered office and the principal place of business of the Company are set out in the section headed “Corporate Information” to the prospectus dated August 24, 2023 (the “Prospectus ”). The Group is a science-driven biotechnology group dedicated to the development of immuno-oncology therapies. Particulars and principal activities of the subsidiaries are disclosed in Note 37. The Historical Financial Information is presented in Renminbi (“ RMB”), which is also the functional currency of the Company. 2. BASIS OF PREPARATION OF THE HISTORICAL FINANCIAL INFORMATION The Historical Financial Information has been prepared based on the accounting policies set out in Note 4 which conform with IFRSs issued by the IASB. The statutory financial statements of the Company for the year ended December 31, 2021 and 2022 were prepared in accordance with Accounting Standards for Business Enterprises of the PRC and were audited byה( ౷ஷΥྫ )/Shangkuai Certified Public Accountants (LLP)*, CPA registered in the PRC. 3. ADOPTION OF NEW AND AMENDMENTS TO IFRSs For the purpose of preparing and presenting the Historical Financial Information for the Track Record Period, the Group has consistently applied the accounting policies which conform with the IFRSs, amendments to IFRSs and the related interpretations issued by the IASB, which are effective for the accounting period beginning on January 1, 2023 throughout the Track Record Period. New and amendments to IFRSs in issue but not yet effective At the date of this report, the following new and amendments to IFRSs have been issued which are not yet effective: Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 1 Amendments to IFRS 16 Lease Liability in a Sale and Leaseback 2 Amendments to IAS 1 Classification of Liabilities as Current or Non-current 2 Amendments to IAS 1 Non-current Liabilities with Covenants 2 Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements 2 1 Effective for annual periods beginning on or after a date to be determined. 2 Effective for annual periods beginning on or after January 1, 2024 The directors of the Company anticipate that the application of these new and amendments to IFRSs will have no material impact on the Group’s consolidated financial statements in the foreseeable future. * English name for identification purpose only APPENDIX IA ACCOUNTANTS’ REPORT – IA-10 – --- page 468 --- 4. MATERIAL ACCOUNTING POLICIES INFORMATION The Historical Financial Information has been prepared in accordance with the following accounting policies which confirm with IFRSs issued by the IASB. For the purpose of preparation and presentation of the Historical Financial Information, information is considered material if such information is reasonably expected to influence decisions made by primary users. In addition, the Historical Financial Information includes the applicable disclosures required by the Rules Governing the Listing of Securities on the Main Board of the Stock Exchange and by the Hong Kong Companies Ordinance. The Historical Financial Information has been prepared on the historical cost basis, expect for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies set out below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in the Historical Financial Information is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2 Share-based Payment , leasing transactions that are within the scope of IFRS 16 Leases , and measurements that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets . For financial instruments which are transacted at fair value and a valuation technique that unobservable inputs are to be used to measure fair value in subsequent periods, the valuation technique is calibrated so that at initial recognition the results of the valuation technique equals the transaction price. In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:  Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;  Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and  Level 3 inputs are unobservable inputs for the asset or liability. The principal accounting policies are set out below. Basis of consolidation The Historical Financial Information incorporate the financial statements of the Company and its subsidiaries. Control is achieved when the Company:  has power over the investee; APPENDIX IA ACCOUNTANTS’ REPORT –I A - 1 1– --- page 469 ---  is exposed, or has rights, to variable returns from its involvement with the investee; and  has the ability to use its power to affect its returns. The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary. When necessary, adjustments are made to the financial information of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Investments in subsidiaries Investments in subsidiaries are included in the statement of financial position of the Company at cost less any identified impairment losses. Revenue from contracts with customers The Group recognizes revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the goods of services underlying the particular performance obligation is transferred to customer. A performance obligation represents a good or service (or a bundle of goods or services) that is distinct or a series of distinct goods or services that are substantially the same. Except for granting of a license that is distinct from other promised goods or services, Control is transferred over time and revenue is recognized over time by reference to the progress towards complete satisfaction of the relevant performance obligation if one of the following criteria is met:  the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs;  the Group’s performance creates or enhances an asset that the customer controls as the Group performs; or  the Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. Otherwise, revenue is recognized at a point in time when the customer obtains control of the distinct good or service. APPENDIX IA ACCOUNTANTS’ REPORT – IA-12 – --- page 470 --- For granting of a license that is distinct from other promised goods or services, the nature of the Group’s promise in granting a license is a promise to provide a right to access the Group’s intellectual property if all of the following criteria are met:  the contract requires, or the customer reasonably expects, that the Group will undertake activities that significantly affect the intellectual property to which the customer has rights;  the rights granted by the license directly expose the customer to any positive or negative effects of the Group’s activities; and  those activities do not result in the transfer of a good or a service to the customer as those activities occur. If the criteria above are met, the Group accounts for the promise to grant a license as a performance obligation satisfied over time. Otherwise, the Group considers the grant of license as providing the customers the right to use the Group’s intellectual property and the performance obligation is satisfied at a point in time at which the license is granted. A contract asset represents the Group’s right to consideration in exchange for goods or services that the Group has transferred to a customer that is not yet unconditional. It is assessed for impairment in accordance with IFRS 9 Financial Instruments . In contrast, a receivable represents the Group’s unconditional right to consideration, i.e. only the passage of time is required before payment of that consideration is due. A contract liability represents the Group’s obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. A contract asset and a contract liability relating to the same contract are accounted for and presented on a net basis. V ariable consideration For contracts that contain variable consideration, the Group estimates the amount of consideration to which it will be entitled using the expected value method, which better predicts the amount of consideration to which the Group will be entitled. The estimated amount of variable consideration is included in the transaction price only to the extent that it is highly probable that such an inclusion will not result in a significant revenue reversal in the future when the uncertainty associated with the variable consideration is subsequently resolved. At the end of each reporting period, the Group updates the estimated transaction price (including updating its assessment of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period. APPENDIX IA ACCOUNTANTS’ REPORT – IA-13 – --- page 471 --- Notwithstanding the above criteria, the Group shall recognize revenue for a sales-based or usage-based royalty promised in exchange for a license of intellectual property only when (or as) the later of the following events occurs:  the subsequent sale or usage occurs; and  the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied). Leases Definition of a lease A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. For contracts entered into or modified on or after the date of initial application of IFRS 16, the Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 at inception or modification date, as appropriate. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed. The Group as a lessee Allocation of consideration to components of a contract For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. Non-lease components are separated from lease component and are accounted for by applying other applicable standards. Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the recognition exemption for lease of low-value assets. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis or another systematic basis over the lease term. Right-of-use assets The cost of right-of-use assets includes:  the amount of the initial measurement of the lease liability;  any lease payments made at or before the commencement date, less any lease incentives received;  any initial direct costs incurred by the Group; and  an estimate of costs to be incurred by the Group in dismantling and removing the underlying assets, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. APPENDIX IA ACCOUNTANTS’ REPORT – IA-14 – --- page 472 --- Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities other than adjustments to lease liabilities resulting from Covid-19-related rent concessions in which the Group applied the practical expedient. Right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. The Group presents right-of-use assets as a separate line item on the consolidated statements of financial position. Refundable rental deposits Refundable rental deposits paid are accounted under IFRS 9 and initially measured at fair value. Adjustments to fair value at initial recognition are considered as additional lease payments and included in the cost of right-of-use assets. Lease liabilities At the commencement date of a lease, the Group recognizes and measures the lease liability at the present value of lease payments that are unpaid at that date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. The lease payments include:  fixed payments (including in-substance fixed payments) less any lease incentives receivable;  amounts expected to be paid under residual value guarantees;  the exercise price of a purchase option if the Group is reasonably certain to exercise the option; and  payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate the lease. After the commencement date, lease liabilities are adjusted by interest accretion and lease payments. The Group remeasures lease liabilities (and makes a corresponding adjustment to the related right-of-use assets) whenever: the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the related lease liability is remeasured by discounting the revised lease payments using a revised discount rate at the date of reassessment. The Group presents lease liabilities as a separate line item on the consolidated statements of financial position. Lease modifications Except for Covid-19-related rent concessions in which the Group applied the practical expedient, the Group accounts for a lease modification as a separate lease if:  the modification increases the scope of the lease by adding the right to use one or more underlying assets; and APPENDIX IA ACCOUNTANTS’ REPORT – IA-15 – --- page 473 ---  the consideration for the leases increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract. For a lease modification that is not accounted for as a separate lease, the Group remeasures the lease liability based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. The Group accounts for the remeasurement of lease liabilities by making corresponding adjustments to the relevant right-of-use assets. When the modified contract contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the modified contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. Foreign currencies In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recognized at the rates of exchanges prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are recognized in profit or loss in the period in which they arise, except for exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income. For the purposes of presenting the Historical Financial Information, the assets and liabilities of the Group’s operations are translated into the presentation currency of the Group (i.e. RMB) using exchange rates prevailing at the end of each reporting period. Income and expenses items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity under the heading of translation reserve (attributed to non-controlling interests as appropriate). On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale. All borrowing costs are recognized in profit or loss in the period in which there are incurred. APPENDIX IA ACCOUNTANTS’ REPORT – IA-16 – --- page 474 --- Government grants Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Government grants related to income that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable. Such grants are presented under “other income”. Employee benefits Retirement benefit costs The Group participates in state-managed retirement benefit schemes, which are defined contribution schemes, pursuant to which the Group pays a fixed percentage of its staff’s wages as contributions to the plans. Payments to such retirement benefit schemes are recognized as an expense when employees have rendered service entitling them to the contributions. A subsidiary in the United States of America (the “ USA”) adopted a qualified defined contribution plan covering all its eligible employees. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Employees become eligible to participate in the plan on the first of the calendar month following the date the employee meets the eligibility requirements as defined. As defined by the plan, participants may contribute up to US$19,500 of pretax annual compensation. Participants who reach age 50 may elect to make catch-up contributions US$6,500. The subsidiary contributes matching contribution of 3% of each eligible participant’s compensation. Short-term employee benefits Short-term employee benefits are recognized at the undiscounted amount of the benefits expected to be paid as and when employees rendered the services. All short-term employee benefits are recognized as an expense unless another IFRS requires or permits the inclusion of the benefit in the cost of an asset. A liability is recognized for benefits accruing to employees (such as wages and salaries, annual leave) after deducting any amount already paid. Share-based payment Equity-settled share-based payment transactions Restricted shares (“ RS”) granted to employees and others providing similar services Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value of the equity-settled share-based payments determined at the grant date without taking into consideration all non-market vesting conditions is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity (share-based payments reserve). At the end APPENDIX IA ACCOUNTANTS’ REPORT – IA-17 – --- page 475 --- of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest based on assessment of all relevant non-market vesting conditions. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share-based payments reserve. For RS that vest immediately at the date of grant, the fair value of the RS granted is expensed immediately to profit or loss. When the RS are forfeited after the vesting date, the amount previously recognized in share-based payments reserve will be transferred to accumulated losses. Modification to the terms and conditions of the share-based payment arrangements When the terms and conditions of an equity-settled share-based payment arrangement are modified, the Group recognizes, as a minimum, the services received measured at the grant date fair value of the equity instruments granted, unless those equity instruments do not vest because of failure to satisfy a vesting condition (other than a market condition) that was specified at grant date. In addition, if the Group modifies the vesting conditions (other than a market condition) in a manner that is beneficial to the employees, for example, by reducing the vesting period, the Group takes the modified vesting conditions into consideration over the remaining vesting period. The incremental fair value granted, if any, is the difference between the fair value of the modified equity instruments and that of the original equity instruments, both estimated as at the date of modification. If the modification occurs during the vesting period, the incremental fair value granted is included in the measurement of the amount recognized for services received over the period from modification date until the date when the modified equity instruments are vested, in addition to the amount based on the grant date fair value of the original equity instruments, which is recognized over the remainder of the original vesting period. If the modification occurs after vesting period, the incremental fair value granted is recognized immediately, or over the vesting period if additional period of service is required before the modified equity instruments are vested. If the modification reduces the total fair value of the share-based arrangement, or is not otherwise beneficial to the employee, the Group continues to account for the original equity instruments granted as if that modification had not occurred. Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from “loss before tax” because of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Historical Financial Information and the corresponding tax base used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary difference to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business APPENDIX IA ACCOUNTANTS’ REPORT – IA-18 – --- page 476 --- combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill. Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of each reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of each reporting period, to recover or settle the carrying amount of its assets and liabilities. For the purposes of measuring deferred tax for leasing transactions in which the Group recognizes the right-of-use assets and the related lease liabilities, the Group first determines whether the tax deductions are attributable to the right-of-use assets or the lease liabilities. For leasing transactions in which the tax deductions are attributable to the lease liabilities, the Group applies IAS 12 requirements to the lease liabilities and the related assets separately. The Group recognises a deferred tax asset related to lease liabilities to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised and a deferred tax liability for all taxable temporary differences. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income tax levied to the same taxable entity by the same taxation authority. Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Property and equipment Property and equipment are tangible assets that are held for use in the production or supply of goods or services, or for administrative purposes other than construction in progress stated in the consolidated statements of financial position at cost less subsequent accumulated depreciation and subsequent accumulated impairment losses, if any. Properties, including leasehold improvement, in the course of construction for production, supply or administrative purposes are carried at cost which includes professional fees, less any recognized impairment loss. Costs include any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, including costs of testing whether the related assets are functioning properly and, for APPENDIX IA ACCOUNTANTS’ REPORT – IA-19 – --- page 477 --- qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use. Depreciation is recognized so as to write off the cost of assets less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. Intangible assets Internally-generated intangible assets-research and development expenditure Expenditure on research activities is recognized as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development activities (or from the development phase of an internal project) is recognized if, and only if, all of the following have been demonstrated:  the technical feasibility of completing the intangible asset so that it will be available for use or sale;  the intention to complete the intangible asset and use or sell it;  the ability to use or sell the intangible asset;  how the intangible asset will generate probable future economic benefits;  the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and  the ability to measure reliably the expenditure attributable to the intangible asset during its development. The amount initially recognized for internally-generated intangible asset is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally- generated intangible asset can be recognized, development expenditure is recognized in profit or loss in the period in which it is incurred. Impairment on property and equipment and right-of-use assets At the end of each reporting period, the Group reviews the carrying amounts of its property and equipment and right-of-use assets to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the relevant asset is estimated in order to determine the extent of the impairment loss (if any). APPENDIX IA ACCOUNTANTS’ REPORT – IA-20 – --- page 478 --- The recoverable amount of property and equipment and right-of-use assets are estimated individually. When it is not possible to estimate the recoverable amount individually, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. In testing a cash-generating unit for impairment, corporate assets are allocated to the relevant cash-generating unit when a reasonable and consistent basis of allocation can be established, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be established. The recoverable amount is determined for the cash-generating unit or group of cash-generating units to which the corporate asset belongs, and is compared with the carrying amount of the relevant cash-generating unit or group of cash-generating units. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset (or a cash-generating unit) for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or a cash-generating unit) is reduced to its recoverable amount. For corporate assets or portion of corporate assets which cannot be allocated on a reasonable and consistent basis to a cash-generating unit, the Group compares the carrying amount of a group of cash-generating units, including the carrying amounts of the corporate assets or portion of corporate assets allocated to that group of cash-generating units, with the recoverable amount of the group of cash-generating units. In allocating the impairment loss, the impairment loss is allocated first to reduce the carrying amount of any goodwill (if applicable) and then to the other assets on a pro-rata basis based on the carrying amount of each asset in the unit or the group of cash-generating units. The carrying amount of an asset is not reduced below the highest of its fair value less costs of disposal (if measurable), its value in use (if determinable) and zero. The amount of the impairment loss that would otherwise have been allocated to the asset is allocated pro rata to the other assets of the unit or the group of cash-generating units. An impairment loss is recognized immediately in profit or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or a cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. Cash and cash equivalents Cash and cash equivalents presented on the consolidated statement of financial position include:  cash, which comprises of cash on hand and demand deposits, excluding bank balances that are subject to regulatory restrictions that result in such balances no longer meeting the definition of cash; and  cash equivalents, which comprises of short-term (generally with original maturity of three months or less), highly liquid investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. APPENDIX IA ACCOUNTANTS’ REPORT – IA-21 – --- page 479 --- Contingent liabilities A contingent liability is a present obligation arising from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Where the Group is jointly and severally liable for an obligation, the part of the obligation that is expected to be met by other parties is treated as a contingent liability and it is not recognized in the Historical Financial Information. The Group assesses continually to determine whether an outflow of resources embodying economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognized in the Historical Financial Information in the reporting period in which the change in probability occurs, except in the extremely rare circumstances where no reliable estimate can be made. Financial instruments Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instrument. All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place. Financial assets and financial liabilities are initially measured at fair value except for trade receivable arising from contracts with customers which are initially measured in accordance with IFRS 15 Revenue from Contracts with Customers. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets or financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributed to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income and interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts and payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Financial assets Classification and subsequent measurement of financial assets Financial assets that meet the following conditions are subsequently measured at amortised cost:  the financial asset is held within a business model whose objective is to collect contractual cash flows; and  the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. APPENDIX IA ACCOUNTANTS’ REPORT – IA-22 – --- page 480 --- All other financial assets are subsequently measured at FVTPL. (i) Amortised cost and interest income Interest income is recognized using the effective interest method for financial assets measured subsequently at amortised cost and calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired (see below). For financial assets that have subsequently become credit-impaired, interest income is recognized by applying the effective interest rate to the amortised cost of the financial asset from the next reporting period. If the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognized by applying the effective interest rate to the gross carrying amount of the financial asset from the beginning of the reporting period following the determination that the asset is no longer credit-impaired. (ii) Financial assets at FVTPL Financial assets that do not meet the criteria for being measured at amortised cost are measured at FVTPL. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognized in profit or loss. The net gain or loss recognized in profit or loss includes any interest earned on the financial asset and is included in the “other gains and losses, net” line item. Derecognition of financial assets The Group derecognizes a financial asset only when the contractual rights to the cash flows from the assets expire. On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. Financial liabilities and equity Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs. Repurchase of the Company’s own equity interests is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancelation of the Company’s own equity interests. APPENDIX IA ACCOUNTANTS’ REPORT – IA-23 – --- page 481 --- Financial liabilities All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL. Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when the financial liability is designated as at FVTPL. A financial liability may be designated as at FVTPL upon initial recognition if:  such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or  the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or  it forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at FVTPL. For financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. For financial liabilities that contain embedded derivatives, the changes in fair value of the embedded derivatives are excluded in determining the amount to be presented in other comprehensive income. Changes in fair value attributable to financial liability’s credit risk that are recognized in other comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred to accumulated losses upon derecognition of the financial liability. Financial liabilities at amortised cost Financial liabilities including trade payables, other payables and borrowings are subsequently measured at amortised cost, using the effective interest method. Derecognition of financial liabilities The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss. Derivative financial instruments Derivatives are initially recognized at fair value at the date when derivative contracts are entered into and are subsequently remeasured to their fair value at the end of the reporting period. The resulting gain or loss is recognized in profit or loss. APPENDIX IA ACCOUNTANTS’ REPORT – IA-24 – --- page 482 --- Embedded derivatives Derivatives embedded in hybrid contracts that contain financial asset hosts within the scope of IFRS 9 are not separated. The entire hybrid contract is classified and subsequently measured in its entirety as either amortised cost or fair value as appropriate. Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of IFRS 9 are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at FVTPL. Generally, multiple embedded derivatives in a single instrument that are separated from the host contracts are treated as a single compound embedded derivative unless those derivatives relate to different risk exposures and are readily separable and independent of each other. Offsetting a financial asset and a financial liability A financial asset and a financial liability are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the recognized amounts; and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. 5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’s accounting policies, which are described in Note 4, the directors of the Company are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgments in applying accounting policies The following are the critical judgments, apart from those involving estimations (see below), that the directors of the Company have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognized in the Historical Financial Information. Research and development expenses Development expenses incurred on the Group’s drug product pipelines are capitalised and deferred only when the Group could demonstrate (i) the technical feasibility of completing the development of the relevant intangible asset so that it will be available for use or sale; (ii) the Group’s intention to complete and the Group’s ability to use or sell the asset; (iii) how the asset will generate future economic benefits; (iv) the availability of resources to complete the pipeline; and (v) the ability to measure reliably the expenditure during the development. Development expenses which do not meet these criteria are expensed when incurred. Management assesses the progress of each of the research and development projects and determine whether the criteria are met for capitalisation. During the Track Record Period, all research and development expenses are expensed when incurred. APPENDIX IA ACCOUNTANTS’ REPORT – IA-25 – --- page 483 --- Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of each reporting period, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the coming twelve months, are described below. Fair value measurement of financial liabilities at FVTPL The Company issued series of shares to certain investors during the Track Record Period as set out in Note 27. The Group accounted for these financial instruments as financial liabilities at FVTPL. The fair value of these financial instruments is determined using valuation techniques, namely back-solve method and equity allocation model involving various parameters and inputs. Valuation techniques are certified by an independent qualified professional valuer before being implemented for valuation and are calibrated to ensure that outputs reflect market conditions. However, it should be noted that some inputs, such as possibilities under different scenarios such as liquidation event which require management estimates. Management estimates and assumptions are reviewed periodically and are adjusted if necessary. Should any of the estimates and assumptions changed, it may lead to a change in the fair value of the financial liabilities at FVTPL. As at December 31, 2021 and 2022 and April 30, 2023, the carrying amounts of financial liabilities at FVTPL were RMB2,431,584,000, nil and nil, respectively, as disclosed in Note 27. 6. REVENUE Disaggregation of revenue from contracts with the customers: Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Types of goods or services Out-licensing fee ................. 4 , 7 1 7——— Sales of cell strain and other products . 275 499 204 73 Testing services .................. 75 39 30 — 5,067 538 234 73 Geographical market The PRC ....................... 5,067 538 234 73 Timing of revenue recognition At a point in time ................ 5,067 538 234 73 Out-licensing fee In 2019, the Group out-licenses its patented intellectual property (“ IP”) exclusively to a customer to develop and commercialize the IP in China (including Hong Kong, Macau and Taiwan). The consideration for the out-licensing comprises an upfront fee of RMB2,358,000 and variable considerations as development milestones payments of RMB16,509,000 and sales-based royalties. Upfront fee is recognized as revenue only when the customer has ability to use the IP, and variable considerations are recognized when the customer has ability to use the IP and only to the extent that it is highly probable that such an inclusion will not result in a significant revenue reversal in the future. Variable considerations are not included in the transaction price in APPENDIX IA ACCOUNTANTS’ REPORT – IA-26 – --- page 484 --- accordance with the requirements for constraining estimates of variable consideration. As a result, as at December 31, 2021 and 2022 and April 30, 2023, after considering the constraint, there is no transaction price that would be allocated to unsatisfied performance obligations. During the years ended December 31, 2021 and 2022 and the four months ended April 30, 2022 and 2023, milestone payment of RMB4,717,000, nil, nil (unaudited) and nil are recognized as revenue, respectively. As at December 31, 2021 and 2022 and April 30, 2023, the Group may receive remaining milestone payments up to an aggregate amount of RMB9,434,000, RMB9,434,000 and RMB9,434,000, respectively (excluding sales-based royalty arrangement in accordance with relevant contracts). Sales of cell strain and other products Revenue from sales of cell strain and other products is recognized when the control of the relevant product is obtained by customers. To gain control over a product means to dominate the use of the product and gain almost all economic benefits from it. All sales of products are for a period of less than one year. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed. Testing services The Group earns revenues by providing testing services to its customers through fee-for-service contracts. Contract duration ranges from a few days to weeks. Services revenue are recognized at a point of time upon the customer obtains deliverables of the Group’s service. All testing services are for a period of less than one year. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed. 7. SEGMENTS INFORMATION Operating segments are identified on the basis of internal reports about components’ of the Group that are regularly reviewed by the chief operating decision maker (“ CODM”), which is also identified as the chief executive officer of the Group, in order to allocate resources to segments and to assess their performance. During the Trade Record Period, the CODM reviews the overall results and financial position of the Group as a whole which are prepared based on the same accounting policies as set out in Note 4. Accordingly, the Group has only one single segment and no further analysis of the single segment is presented. Geographical information As at December 31, 2021 and 2022 and April 30, 2023, all non-current assets are located in the PRC. APPENDIX IA ACCOUNTANTS’ REPORT – IA-27 – --- page 485 --- Information about major customers Revenue from customers contributing over 10% of the total revenue of the Group during the Track Record Period are as follows: Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Customer A ..................... 4,727 — — N/A Customer B ..................... — 151 N/A 8 Customer C ..................... N/A 150 142 — Customer D ..................... N/A 98 33 — Customer E ..................... N/A N/A — 32 Customer F ..................... N/A N/A — 11 Customer G .................... N/A N/A — 8 N/A: not disclosed as amounts less than 10% of total revenue 8. OTHER INCOME Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Government grants (Note) ......... 8,741 5,152 227 134 Bank interest income .............. 1,640 9,505 2,170 2,928 10,381 14,657 2,397 3,062 Note: The amount represents various subsidies received from the PRC local government authorities as incentives mainly for the Group’s research and development activities and financing activities. 9. OTHER GAINS AND LOSSES, NET Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Loss from changes in fair value of financial liabilities at FVTPL (Note 27) ..................... (511,517) (55,510) (55,510) — Net foreign exchange (losses) gains .. (9,128) 26,106 10,742 (1,039) Gain from changes in fair value of financial assets at FVTPL ........ 1,598 — — 218 Gain on disposal of property and equipment .................... 5 5 5——— Gain arising on termination of a lease . 1 6 5——— Others ......................... (20) (32) (3) (13) (518,347) (29,436) (44,771) (834) APPENDIX IA ACCOUNTANTS’ REPORT – IA-28 – --- page 486 --- 10. FINANCE COSTS Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Interest on lease liabilities .......... (891) (787) (285) (226) Interest on borrowings ............. ——— ( 2 7 ) (891) (787) (285) (253) 11. LOSS BEFORE TAX Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Loss before tax for the year/period has been arrived at after charging: Depreciation of property and equipment .................... 7,774 11,908 3,876 4,143 Depreciation of right-of-use assets ... 5,754 9,937 3,286 3,389 Total depreciation ................ 13,528 21,845 7,162 7,532 Capitalised in construction in progress ...................... (352) (4,228) (1,409) — 13,176 17,617 5,753 7,532 Listing expenses ................ 4,886 17,724 12,059 10,344 Directors’ and supervisors’ emoluments (Note 13(a)) ......... 20,693 74,139 21,852 20,384 Other staff costs: — salaries and other benefits ....... 13,031 51,700 13,360 19,507 — discretionary bonus (Note) ....... 2,805 4,818 1,669 1,785 — retirement benefit scheme contributions ................ 2,091 3,951 1,003 1,707 — share-based payments ........... 19,141 38,505 10,058 12,568 57,761 173,113 47,942 55,951 Note: Discretionary bonus is determined based on their duties and responsibilities of the relevant individuals within the Group and the Group’s performance. APPENDIX IA ACCOUNTANTS’ REPORT – IA-29 – --- page 487 --- 12. INCOME TAX EXPENSE Under the Law of the PRC on Enterprise Income Tax (the “ EIT Law ”) and Implementation Regulation of the EIT Law, the tax rate of the PRC subsidiaries of the Company is 25% during the Track Record Period. In November 2020, the Company has been accredited as a High and New Technology Enterprise recognized by Science and Technology Commission of Shanghai Municipality and enjoys a preferential tax rate of 15% for a term of three years starting from 2020. Pursuant to Caishui 2018 circular No. 99, the Company enjoyed super deduction of 175% (subsequently raised to 200% from 2023 onwards) on qualifying research and development expenditures throughout the Track Record Period. No provision for taxation in Hong Kong or the United States has been made as the Group’s income neither arises in, nor is derived from Hong Kong and the United States. The income tax expense for the Track Record Period can be reconciled to the loss before tax per the consolidated statements of profit or loss and other comprehensive income as follows: Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Loss before tax .................. (732,949) (402,894) (149,109) (111,766) Tax PRC EIT rate at 25% ......... (183,237) (100,723) (37,277) (27,942) Tax effect of expenses that are not deductible for tax purpose ................ 130,453 14,011 13,902 67 Tax effect of super deduction on research and development expenses (Note) .. (18,576) (29,448) (6,585) (9,435) Tax effect of tax losses not recognized .................... 61,367 91,291 20,720 28,319 Tax effect of deductible temporary differences not recognized ................. 12,821 29,145 12,533 12,497 Utilisation of deductible temporary differences previously not recognized ........ (2,828) (4,276) (3,293) (3,506) Income tax expense ............... ———— Note: Pursuant to Caishui 2018 circular No. 99, the Company enjoys super deduction of 175% (subsequently raised to 200% from 2023 onwards) on qualified research and development expenditures throughout the Track Record Period. APPENDIX IA ACCOUNTANTS’ REPORT – IA-30 – --- page 488 --- As at December 31, 2021 and 2022 and April 30, 2023, the Group has unused tax losses of RMB490,289,000, RMB922,710,000 and RMB1,077,205,000, respectively, and deductible temporary differences of RMB54,717,000, RMB154,194,000 and RMB190,158,000, respectively. No deferred tax asset has been recognized in respect of the tax losses or temporary differences due to the unpredictability of future profit streams. The unused tax losses will be carried forward and expire in years as follows: As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 2023 .............................. 111 2024 .............................. 111 2025 .............................. 398 398 398 2026 .............................. 11,590 11,590 11,590 2027 .............................. 22,161 22,163 22,163 2028 .............................. 34,330 34,330 34,355 2029 .............................. 49,233 49,233 49,233 2030 .............................. 127,109 127,109 127,109 2031* ............................. 245,400 312,658 312,658 2032** ............................ — 364,498 405,718 2033 .............................. — — 113,026 2034 and later ....................... 66 729 953 490,289 922,710 1,077,205 * The unused tax losses changed due to tax authority approved super deduction of 175% on additional quantified research and development expenditures in June 2022. ** The unused tax losses changed due to tax authority approved super deduction of 175% on additional quantified research and development expenditures in May 2023. 13. DIRECTORS’, SUPERVISORS’ AND CHIEF EXECUTIVE OFFICER’S EMOLUMENTS AND FIVE HIGHEST PAID INDIVIDUALS Details of the emoluments paid or payable to the individuals who were appointed as directors, supervisors and the chief executive officer of the Company during the Track Record Period are as follows: (a) Executive and non-executive directors and supervisors Date of appointment Director fees Salaries and other benefits Discretionary bonuses Retirement benefit scheme contributions Share-based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 For the year ended December 31, 2021 Executive director and chief executive officer: Dr. TIAN ............... June 18, 2015 — 2,048 200 57 6,042 8,347 Executive director: Mr. LI Song ............. December 15, 2015 — 416 80 57 99 652 Ms. SONG Ziyi ........... January 17, 2022 — 363 190 — 5,019 5,572 APPENDIX IA ACCOUNTANTS’ REPORT – IA-31 – --- page 489 --- Date of appointment Director fees Salaries and other benefits Discretionary bonuses Retirement benefit scheme contributions Share-based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Non-Executive director: Mr. YU Xiaoyong .......... December 15, 2015 —————— Mr. YU Zhihua ........... March 30, 2018 —————— Dr. XU Cong ............. October 14, 2020 —————— Director: Dr. HUANG Cheng (Note v) .... October 14, 2020 — 1,168 211 57 322 1,758 Independent non-executive director: Dr. Zhenping Zhu .......... August 3, 2016 —————— Supervisors: Mr. GU Jiefeng ........... March 1, 2016 —————— Ms. TIAN Miao ........... July 24, 2017 — 184 36 25 1,322 1,567 Ms. GUAN Mei (Note v) ...... October 14, 2020 — 347 70 54 970 1,441 Mr. ZHAO Zimeng ......... January 17, 2022 — 193 36 25 1,102 1,356 — 4,719 823 275 14,876 20,693 Date of appointment Director fees Salaries and other benefits Discretionary bonuses Retirement benefit scheme contributions Share-based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 For the year ended December 31, 2022 Executive director and chief executive officer: Dr. TIAN ............... June 18, 2015 — 2,374 690 63 52,450 55,577 Executive director: Mr. LI Song ............. December 15, 2015 — 684 100 63 49 896 Ms. SONG Ziyi ........... January 17, 2022 — 1,429 262 15 10,963 12,669 Non-Executive director: Mr. YU Xiaoyong .......... December 15, 2015 —————— Mr. YU Zhihua ........... March 30, 2018 —————— Dr. XU Cong ............. October 14, 2020 —————— Director: Dr. HUANG Cheng (Note v) .... October 14, 2020 — 1,279 — 46 (322) 1,003 Independent non-executive director: Dr. Zhenping Zhu .......... August 3, 2016 —————— Dr. Kendall A. Smith ........ June 14, 2022 182 ———— 1 8 2 Mr. YEUNG Chi Tat ......... June 14, 2022 140 ———— 1 4 0 Supervisors: Mr. GU Jiefeng ........... March 1, 2016 —————— Ms. TIAN Miao ........... July 24, 2017 — 324 47 34 915 1,320 Ms. GUAN Mei (Note v) ...... October 14, 2020 — 540 77 61 507 1,185 Mr. ZHAO Zimeng ......... January 17, 2022 — 325 46 34 762 1,167 322 6,955 1,222 316 65,324 74,139 APPENDIX IA ACCOUNTANTS’ REPORT – IA-32 – --- page 490 --- Date of appointment Director fees Salaries and other benefits Discretionary bonuses Retirement benefit scheme contributions Share-based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 For the four months ended April 30, 2022 (unaudited) Executive director and chief executive officer: Dr. TIAN ............... June 18, 2015 — 789 230 20 13,027 14,066 Executive director: Mr. LI Song ............. December 15, 2015 — 224 33 20 26 303 Ms. SONG Ziyi ........... January 17, 2022 — 452 83 5 4,713 5,253 Non-Executive director: Mr. YU Xiaoyong .......... December 15, 2015 —————— Mr. YU Zhihua ........... March 30, 2018 —————— Dr. XU Cong ............. October 14, 2020 —————— Director: Dr. HUANG Cheng (Note v) .... October 14, 2020 — 566 — 20 214 800 Independent non-executive director: Dr. Zhenping Zhu .......... August 3, 2016 —————— Dr. Kendall A. Smith ........ June 14, 2022 —————— Mr. YEUNG Chi Tat ......... June 14, 2022 —————— Supervisors: Mr. GU Jiefeng ........... March 1, 2016 —————— Ms. TIAN Miao ........... July 24, 2017 — 105 16 9 370 500 Ms. GUAN Mei (Note v) ...... October 14, 2020 — 177 26 19 271 493 Mr. ZHAO Zimeng ......... January 17, 2022 — 105 15 9 308 437 — 2,418 403 102 18,929 21,852 Date of appointment Director fees Salaries and other benefits Discretionary bonuses Retirement benefit scheme contributions Share-based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 For the four months ended April 30, 2023 Executive director and chief executive officer: Dr. TIAN ............... June 18, 2015 393 572 230 27 16,082 17,304 Executive director: Mr. LI Song ............. December 15, 2015 — 268 33 22 2 325 Ms. SONG Ziyi ........... January 17, 2022 — 714 89 5 1,216 2,024 Non-Executive director: Mr. YU Xiaoyong .......... December 15, 2015 —————— Mr. YU Zhihua ........... March 30, 2018 —————— Dr. XU Cong ............. October 14, 2020 —————— Director: Dr. HUANG Cheng (Note v) .... October 14, 2020 —————— APPENDIX IA ACCOUNTANTS’ REPORT – IA-33 – --- page 491 --- Date of appointment Director fees Salaries and other benefits Discretionary bonuses Retirement benefit scheme contributions Share-based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Independent non-executive director: Dr. Zhenping Zhu .......... August 3, 2016 —————— Dr. Kendall A. Smith ........ June 14, 2022 114 ———— 1 1 4 Mr. YEUNG Chi Tat ......... June 14, 2022 87 ————8 7 Supervisors: Mr. GU Jiefeng ........... March 1, 2016 —————— Ms. TIAN Miao ........... July 24, 2017 — 122 16 13 125 276 Mr. ZHAO Zimeng ......... January 17, 2022 — 121 15 14 104 254 594 1,797 383 81 17,529 20,384 Notes: (i) None of the directors or supervisors of the Company waived or agreed to waive any emoluments during the Track Record Period. (ii) During the Track Record Period, no emoluments were paid by the Group to any of the directors or supervisors of the Company as an inducement to join or upon joining the Group or as compensation for loss of office. (iii) The executive directors’, non-executive directors’ and supervisors’ emoluments shown above were for their services in connection with the management of the affairs of the Group and the Company, respectively. (iv) The discretionary bonuses were determined with reference to their duties and responsibilities of the relevant individuals within the Group and the Group’s performance. (v) Dr. Huang Cheng was a director of the Company from October 14, 2020 till January 17, 2022, and he resigned from the Company in September 2022. Ms. GUAN Mei was a supervisor of the Company from October 14, 2020 till January 17, 2022. (b) Independent non-executive directors Dr. Zhenping Zhu was appointed as independent non-executive directors of the Company on August 3, 2016. Dr. Kendall A. Smith and Mr. Yeung Chi Tat were appointed as independent non-executive directors of the Company on June 14, 2022. (c) Five Highest Paid Individuals The five highest paid individuals of the Group included two, two, three (unaudited) and two directors of the Company for the years ended December 31, 2021 and 2022 and the four months ended April 30, 2022 and 2023, respectively, details of whose remuneration are set out above. Details of the remuneration for the remaining, three, three, two (unaudited) and three highest paid individuals for the years ended December 31, 2021 and 2022 and the four months ended April 30, 2022 and 2023, respectively, are as follows: Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Salaries and other benefits ......... 1,415 5,458 598 2,367 Retirement benefit scheme contributions .................. 142 263 38 118 Discretionary bonuses (Note) ....... 218 851 83 318 Share-based payments ............. 4,696 19,903 2,675 8,064 6,471 26,475 3,394 10,867 Note: Discretionary bonuses were determined based on their duties and responsibilities of the relevant individuals within the Group and the Group’s performance. APPENDIX IA ACCOUNTANTS’ REPORT – IA-34 – --- page 492 --- The emoluments of the five highest paid individuals for the years ended December 31, 2021 and 2022 and the four months ended April 30, 2022 (unaudited) and 2023 are within the following bands: Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 No. of employees No. of employees No. of employees No. of employees (unaudited) Nil to Hong Kong Dollars (“ HK$”) 1,000,000 ..................... —— 1— HK$1,000,001 to HK$1,500,000 ..... —— 1— HK$2,000,001 to HK$2,500,000 ..... ——— 1 HK$2,500,001 to HK$3,000,000 ..... 3— 1— HK$3,000,001 to HK$3,500,000 ..... ——— 1 HK$3,500,001 to HK$4,000,000 .... ——— 1 HK$5,500,001 to HK$6,000,000 ..... ——— 1 HK$6,000,001 to HK$6,500,000 ..... —— 1— HK$6,500,001 to HK$7,000,000 ..... 1——— HK$7,500,001 to HK$8,000,000 ..... — 1—— HK$10,000,001 to HK$10,500,000 ... 1——— HK$10,500,001 to HK$11,000,000 ... — 1—— HK$12,000,001 to HK$12,500,000 ... — 1—— HK$14,500,001 to HK$15,000,000 ... — 1—— HK$17,000,001 to HK$17,500,000 ... —— 1— HK$19,500,001 to HK$20,000,000 ... ——— 1 HK$64,500,001 to HK$65,000,000 ... — 1—— During the Track Record Period, no emoluments were paid by the Group to the directors of the Company or the five highest paid individuals (including directors and employees) as an inducement to join or upon joining the Group or as compensation for loss of office. 14. LOSS PER SHARE The calculation of the basic and diluted loss per share is based on the following data: Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 (unaudited) Loss for the purpose of calculating basic and diluted loss per share: Loss for the year/period attributable to the owners of the Company (RMB’000) ....... (732,949) (402,894) (149,109) (111,766) Number of shares (’000): Weighted average number of ordinary shares for the purpose of basic and diluted loss per share (Note i) ..... 86,183 331,794 282,183 356,093 Basic and diluted loss per share (RMB yuan) (Note ii) ................. (8.50) (1.21) (0.53) (0.31) Notes: (i) Certain investors’ shares, which are recorded as Financial Liabilities at FVTPL in Note 27, are not treated as outstanding shares and thus are excluded in the calculation of basic loss per share until the redemption right was legally terminated on January 31, 2022. The Company was converted to a joint stock company on June 14, 2022, APPENDIX IA ACCOUNTANTS’ REPORT – IA-35 – --- page 493 --- 356,092,695 ordinary shares with par value of RMB1 each were issued and allotted to the respective shareholders of the Company according to the paid-in capital registered under these shareholders on that day. This capitalization of share capital is applied retrospectively for the purpose of calculating basic loss per share, as adjusted for the capital contributions by the then shareholders and the number of ordinary shares. (ii) Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. For the year ended December 31, 2021 and the period from January 1, 2022 to January 31, 2022, the Company had certain investors’ shares which are potential ordinary shares. As the Group incurred losses for the years ended December 31, 2021 and 2022 and for the four months ended April 30, 2022 (unaudited) and 2023, the potential ordinary shares were not included in the calculation of diluted loss per share, as their inclusion would be anti-dilutive. Accordingly, diluted loss per share for the years ended December 31, 2021 and 2022 and for the four months ended April 30, 2022 (unaudited) and 2023 are the same as basic loss per share for the respective years. 15. DIVIDENDS No dividend was declared or paid by the Company during the Track Record Period. 16. PROPERTY AND EQUIPMENT The Group and the Company Leasehold improvements Machinery and equipment Office equipment and fixtures Vehicles Construction in progress Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 COST As at January 1, 2021 .......... 9,601 28,101 283 338 — 38,323 Additions ................. 754 11,675 551 7 14,490 27,477 Disposals ................. (551) (22) (63) — — (636) Transfer .................. 11,266 — — — (11,266) — As at December 31, 2021 ........ 21,070 39,754 771 345 3,224 65,164 Additions ................. 1,085 8,889 166 — 19,572 29,712 Transfer .................. 336 — — — (336) — As at December 31, 2022 ........ 22,491 48,643 937 345 22,460 94,876 Additions ................. — 113 10 — 247 370 As at April 30, 2023 ........... 22,491 48,756 947 345 22,707 95,246 DEPRECIATION As at January 1, 2021 .......... 950 4,599 198 233 — 5,980 Provided for the year ........... 3,036 4,625 59 54 — 7,774 Eliminated on disposals ......... (550) (12) (54) — — (616) As at December 31, 2021 ........ 3,436 9,212 203 287 — 13,138 Provided for the year ........... 5,649 6,084 140 35 — 11,908 As at December 31, 2022 ........ 9,085 15,296 343 322 — 25,046 Provided for the period ......... 1,906 2,186 51 — — 4,143 As at April 30, 2023 ........... 10,991 17,482 394 322 — 29,189 CARRYING AMOUNT As at December 31, 2021 ........ 17,634 30,542 568 58 3,224 52,026 As at December 31, 2022 ........ 13,406 33,347 594 23 22,460 69,830 As at April 30, 2023 ........... 11,500 31,274 553 23 22,707 66,057 The above items of property and equipment, other than construction in progress, are depreciated on a straight-line basis, after taking into account of the residual value, over the following period: Leasehold improvements Over the shorter of the relevant lease terms or 6 years Machinery and equipment 7 years APPENDIX IA ACCOUNTANTS’ REPORT – IA-36 – --- page 494 --- Office equipment and fixtures 5 years Vehicles 6 years 17. RIGHT-OF-USE ASSETS The Group and the Company Leased properties Land use right Total RMB’000 RMB’000 RMB’000 Carrying amount As at January 1, 2021 ................. 8,816 — 8,816 Additions .......................... 15,320 84,553 99,873 Termination of lease .................. (840) — (840) Depreciation charge for the year ......... (5,402) (352) (5,754) As at December 31, 2021 .............. 17,894 84,201 102,095 Additions .......................... 1,904 — 1,904 Depreciation charge for the year ......... (5,709) (4,228) (9,937) As at December 31, 2022 .............. 14,089 79,973 94,062 Depreciation charge for the period ....... (1,980) (1,409) (3,389) As at April 30, 2023 .................. 12,109 78,564 90,673 Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Expenses relating to short-term leases and low-value leases ............ —4 63 2— Total cash outflow for leases ........ 90,216 6,636 1,834 2,474 During the Track Record Period, the Group leases various properties for its operations. Lease contracts are entered into for fixed term of 3 to 6 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. There were no extension options in the lease contracts. In determining the lease term and assessing the length of the non-cancellable period, the Group applies the definition of a contract and determines the period for which the contract is enforceable. In addition, the Group’s interests in land use right represent prepaid operating lease payments for land located in the PRC and the remaining lease term is 20 years. As at December 31, 2021 and 2022 and April 30, 2023, the Group’s lease liabilities of RMB18,539,000, RMB14,619,000 and RMB12,371,000 are recognized with related right-of-use assets of RMB17,894,000, RMB14,089,000 and RMB12,109,000, respectively. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. APPENDIX IA ACCOUNTANTS’ REPORT – IA-37 – --- page 495 --- 18. INVESTMENTS IN SUBSIDIARIES The Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Cost of investments ................... 135 135 135 19. OTHER NON-CURRENT ASSETS The Group and the Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Value-added tax recoverable ............ 19,623 12,496 15,424 Deposits for plant construction .......... 9,851 9,851 9,851 Prepayments for property and equipment ... 3,483 — — Rental deposits ...................... 1,659 1,868 1,893 34,616 24,215 27,168 20. TRADE RECEIV ABLES The following is an aged analysis of trade receivable net of allowance for credit losses presented based on the date of completion of service or delivery of goods at the end of each reporting period: The Group and the Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Within 30 days ...................... 21 11 16 31−60 days ......................... 36 — 61−120 days ........................ 10 27 — 121−180 days ....................... —2 2— 34 66 16 The Group normally grants a credit period of 30 days or a particular period agreed with customers effective from the date when the services have been completed or control of goods has been transferred to the customer and billed to the customer. Details of the assessment on the provision of expected credit losses of trade receivables of the Group and the Company as at December 31, 2021 and 2022 and April 30, 2023 are set out in Note 35. APPENDIX IA ACCOUNTANTS’ REPORT – IA-38 – --- page 496 --- 21. PREPAYMENTS AND OTHER RECEIV ABLES The Group As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Other receivables: Deposits for plant construction ........ 6,567 — — Deferred issue costs ................. 1,399 6,330 3,038 Interest receivables ................. — 925 869 Others .......................... 21 32 55 Prepayments for: Purchase goods and research and development services .............. 19,420 9,043 12,300 Others .......................... 121 263 247 27,528 16,593 16,509 The Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Other receivables: Deposits for plant construction ........ 6,567 — — Deferred issue costs ................. 1,399 6,330 3,038 Interest receivables ................. — 925 869 Others ........................... ——3 0 Prepayments for: Purchase goods and research and development services .............. 19,420 9,043 12,300 Others .......................... 121 263 247 27,507 16,561 16,484 22. AMOUNTS DUE FROM SUBSIDIARIES/AMOUNT DUE TO A SUBSIDIARY As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Amounts due from subsidiaries Immuneonco Hong Kong Limited ........ — 1,199 1,276 Macroimmune Inc .................... — 738 952 ImmuneOnco Pharmaceutical Biological (Shanghai) Co., Ltd).*ᖹ ุ(ɪऎ)ʮ̡ .................. —1 13 5 ImmuneTank Biopharmaceuticals (Shanghai) Co., Ltd.* (ᔼ ᖹҦஔ(ɪऎ)ʮ̡). ............. 10 10 10 10 1,958 2,273 Amount due to a subsidiary ImmuneOnco Hong Kong Limited ........ 2 7 0—— * The English name is for identification purpose only. APPENDIX IA ACCOUNTANTS’ REPORT – IA-39 – --- page 497 --- The amounts are non-trade related in nature, unsecured, interest free and repayable on demand. 23. BANK BALANCES AND CASH The Group As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Cash at bank ........................ 668,326 635,212 559,086 Pledged bank deposits (Note) ........... 8,210 — — 676,536 635,212 559,086 The carrying amounts of the Group’s bank balances and cash denominated in currencies other than functional currencies of the relevant group entities at the end of each reporting period are as follows: As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 US$............................... 211,687 207,784 196,880 HK$ .............................. —3 51 1 The Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Cash at bank ........................ 668,208 633,403 556,697 Pledged bank deposits (Note) ........... 8,210 — — 676,418 633,403 556,697 Note: Pledged bank deposits represented the bidding deposits to get a guarantee letter issued by the bank for acquisition of a land use right, as disclosed in Note 17. The pledged deposits were released to the Group in May 2022. Bank balances and cash denominated in currencies other than functional currency of the Company at the end of each reporting period are as follows: As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 US$............................... 211,575 206,026 194,515 Bank balances held by the Group and the Company carry interests at market rates ranging from 0.01% to 1.35%, 0.01% to 4.74% and 0.25% to 5.22% as at December 31, 2021 and 2022 and April 30, 2023, respectively. APPENDIX IA ACCOUNTANTS’ REPORT – IA-40 – --- page 498 --- 24. FINANCIAL ASSETS AT FVTPL The Group and the Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Structured deposits (Note i) ............. — — 25,024 Note: (i) The Group invested in financial products managed by a financial institution. The principal is guaranteed by the financial institution with an expected yield of 2.70% per annum as at April 30, 2023, and the actual yield to be received is uncertain until maturity. All investments have maturity date within one year and are classified as financial assets measured at FVTPL. The amount of fair value change for the four months ended April 30, 2023 is RMB24,000, and the Group adopts an income approach to value the assets as disclosed in Note 35. 25. TRADE AND OTHER PAYABLES The Group As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Trade payables for research and development expenses ............... 1,764 1,262 2,831 Accrued research and development expenses ......................... 17,102 16,199 17,274 Accrued staff costs and benefits ......... 7,066 12,709 8,213 Accrued issue costs ................... 834 2,165 948 Accrued listing expenses ............... 2,959 7,249 9,577 Payables for property and equipment ...... 6,928 5,705 5,029 Other tax payables ................... 2,955 612 544 Others ............................. 1,543 237 209 41,151 46,138 44,625 The Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Trade payables for research and development expenses ............... 1,764 1,262 2,831 Accrued research and development expenses ......................... 17,102 16,199 17,274 Accrued staff costs and benefits ......... 6,707 12,243 7,245 Accrued issue costs ................... 834 2,165 948 Accrued listing expenses ............... 2,959 7,249 9,577 Payables for property and equipment ...... 6,928 5,705 5,029 Other tax payables ................... 2,937 612 543 Others ............................. 1,543 237 209 40,774 45,672 43,656 The average credit period on purchases of goods/services of the Group is 45 days. APPENDIX IA ACCOUNTANTS’ REPORT – IA-41 – --- page 499 --- The following is an aged analysis of trade payables presented based on the invoice dates at the end of each reporting period: As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 0−30 days .......................... 1,764 713 2,831 31−90 days ......................... — 481 — 91−180 days ....................... —6 8— 1,764 1,262 2,831 26. LEASE LIABILITIES The Group and the Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Lease liabilities payable: Within one year ...................... 5,096 5,599 4,250 Within a period of more than one year but not exceeding two years ............. 5,997 3,392 2,584 Within a period of more than two years but not exceeding five years ............. 6,939 5,261 5,302 More than five years ................. 507 367 235 18,539 14,619 12,371 Less: Amount due for settlement within 12 months shown as current liabilities ..... (5,096) (5,599) (4,250) Amount due for settlement after 12 months shown as non-current liabilities ........ 13,443 9,020 8,121 The weighted average incremental borrowing rates applied to the lease liabilities is 4.75% per annum for the Track Record Period. 27. FINANCIAL LIABILITIES AT FVTPL In December 2015 and March 2016, the Company entered into investment agreements with several independent investors, pursuant to which the investors made a total investment of RMB30,000,000 in the Company as consideration for subscription of the Company’s paid-in capital of RMB1,448,000 (“ Series Pre-A Shares ”). The Company had received all investment funds for Series Pre-A Shares by February 2017. In November 2017 and March 2018, the Company entered into investment agreements with several independent investors, pursuant to which the investors made a total investment of RMB90,000,000 in the Company as consideration for subscription of the Company’s paid-in capital of RMB950,000 (“ Series A Shares ”). The Company had received all investment funds for Series A Shares by April 2018. APPENDIX IA ACCOUNTANTS’ REPORT – IA-42 – --- page 500 --- In November 2019, the Company entered into an investment agreement with several independent investors, pursuant to which the investors made a total investment of RMB40,000,000 in the Company as consideration for subscription of the Company’s paid-in capital of RMB220,000 (“Series Pre-B Shares ”). The Company had received all investment funds for Series Pre-B Shares by January 2020. In June and August 2020, the Company entered into investment agreements with several independent investors, pursuant to which the investors made a total investment of RMB239,513,000 in the Company as consideration for subscription of the Company’s paid-in capital of RMB924,000 in total (“ Series B Shares ”). The Company had received all investment funds for Series B Shares by November 2020. In February 2021, the Company entered into an investment agreement with several independent investors, pursuant to which the investors made a total investment of US$65,467,000 (equivalent to RMB427,799,000) in the Company as consideration for subscription of the Company’s paid-in capital of RMB806,000 in total (“ Series B+ Shares ”). The Company had received all investment funds for Series B+ Shares by April 2021. In December 2021, the Company entered into an investment agreement with several independent investors, pursuant to which the investors made a total investment of US$87,500,000 (equivalent to RMB556,772,000) in the Company as consideration for subscription of the Company’s paid-in capital of RMB835,000 in total (“ Series C Shares ”). The Company had received investment funds of US$58,600,000 (equivalent to RMB373,176,000) for part of the Series C Shares by December 31, 2021, representing paid-in capital of RMB560,000, and the remaining US$28,900,000 (equivalent to RMB183,596,000), representing paid-in capital of RMB276,000, was received subsequently in January 2022. On January 31, 2022, the liquidation preferences, redemption and anti-dilution feature attached to the Series Pre-A, Series A, Series Pre-B, Series B, Series B+ and Series C Shares (together as “ Investors’ Shares ”) were terminated. Financial liabilities at FVTPL were then derecognized and credited to equity. The key terms of Investors’ Shares prior to the termination of the liquidation preferences, redemption and anti-dilution feature are summarized as follows: Voting rights All shareholders, including the holders of ordinary shares and holders of Investors’ Shares, are entitled to vote together as a single class on a pro-rata basis. Dividend rights The Group’s capital reserve, surplus reserve and undistributed reserve (if any) are shared by all shareholders in proportion to their shareholding. No dividend or distribution, whether in cash, in property, or in any other shares of the Group, shall be declared, paid, set aside or made with respect to the ordinary shares at any time unless a dividend or distribution in like amount is likewise declared, paid, set aside or made at the same time with respect to each issued and outstanding payable of Investors’ Shares in cash when, as and if declared by the Group. APPENDIX IA ACCOUNTANTS’ REPORT – IA-43 – --- page 501 --- Liquidation preferences In the event of any liquidation including deemed liquidation, dissolution or winding up of the Group, whether voluntary or involuntary (the “ Liquidation Event ”), the holders of Investors’ Shares shall be entitled to receive the amount equal to 100% original investment amount limited by the Group’s net assets and all proceeds derived from the Liquidation Event shall be distributed in the following order:(1) Series C Shares; (2) Series B+ Shares; (3) Series B Shares; (4) Series Pre-B Shares; (5) Series A Shares; (6) Series Pre-A Shares. The investors shall be entitled to receive the amount equal to the higher of (i) the original investment amount plus accumulated dividends or declared but undistributed dividends; and (ii) the net assets of the Group corresponding to its shareholding ratio, and limited by the Group’s net assets. In a sale event (as defined below), all consideration received by the Group or its shareholders as a result of the sale event shall also be distributed in accordance with the above scheme. Sale event refers to an equity sale event or asset sale event. Equity sale event means a merger, acquisition or other similar transaction of the Group resulting in a change in control of the Group such that the shareholders prior to the occurrence of such event have less than 50% of their shares or voting rights in the surviving entity after the occurrence of such event. Asset sale event means that all or substantially all of the Group’s assets are sold, transferred, leased or disposed of, or all or substantially all of the Group’s intellectual property rights are exclusively licensed, sold or transferred to a third party. Anti-dilution rights If the Company increases its paid-in capital at a price lower than the price paid by the investors of Investors’ Shares on a per paid-in capital basis, the investors have a right to require the Company to issue more paid-in capital for nil consideration (or any other minimum price permitted by law) to the investors or the Company and the founder shall compensate the investors in cash, so that: (i) For Series Pre-A, Series A, Series Pre-B and Series B investors, the total amount paid by the investors divided by the total amount of paid-in capital obtained is equal to the price per paid-in capital in the new issuance. (ii) For Series B+ and Series C investors, adjusted in a weighted average manner, that is, the price per share invested in the Company by Series B+ and Series C investors will be equal to the new price per share calculated according to a pre-determined formula. The new price was calculation based on the price per paid-in capital, taking into account the re-designation of certain Series Pre-A, Series Pre-B and Series B Share into Series B+ and Series C shares in Series B+ and Series C financing. Redemption rights Certain investors of Series B Shares, investors of Series B+ and Series C Shares shall be redeemed by the Company, at the option of the investors, upon the occurrence of certain contingent events, including: (i) major violations of laws and regulations by the Group or ordinary shareholders of the Company, or major violations of transaction documents by the Group or ordinary shareholders of the Company, and failure to remedy such acts within 90 days from the date of receiving written notice from investors, or (ii) the Group or the founding shareholder repurchases the equity of other shareholders, except that the founding shareholders purchase the Company’s equity held by any investor with assets beyond the limit of the redemption obligations or the Company repurchases the Company’s equity according to the employee stock ownership plan approved by the board of directors. The repurchase price is the original investment from the investors plus a yield at 10% per annum. The redemption amount shall be distributed in the following order: (1) Series C Shares investors; (2) Series B+ Shares investors; (3) certain Series B Shares investors. APPENDIX IA ACCOUNTANTS’ REPORT – IA-44 – --- page 502 --- Presentation and classification As at December 31, 2021, the Company recognized the Investors’ Shares issued to investors as financial liabilities at FVTPL and classified as current liabilities, because not all triggering payment events mentioned in the key terms above were within the control of the Company and these financial instruments did not meet the definition of equity for the Company. Financial liabilities are measured at fair value and any changes in the fair value of the financial liabilities were recorded in “loss on changes in fair value of financial liabilities at FVTPL” in the consolidated statement of profit or loss and other comprehensive income. The directors of the Company considered that the changes in the fair value of the Investors’ Shares attributable to the change in credit risk of the Group is minimal. The Company used back-solve method to determine the underlying share value of the Company and performed an equity allocation based on a Binomial Option Pricing Model (“ OPM”) to arrive the fair value of the Investors’ Shares as of the dates of issuance and at the end of each reporting period with reference to valuation reports carried out by A VISTA Valuation Advisory Limited (“ A VISTA”), an independent qualified valuer. The address of A VISTA is Unit C, 23/F, Phase II, Sino-Ocean Tower, No. 618 East Yan An Road, Huangpu District, Shanghai, PRC. In addition to the underlying share value of the Company determined by back-solve method, other key valuation assumptions used in OPM to determine the fair value are as follows: As at December 31, 2021 Time to liquidation ............................................... 0.67 years Time to redemption ............................................... 0.67 years Time to occurrence of sale event ..................................... 0.67 years Time to conversion to joint stock company ............................. 0.67 years Risk-free interest ................................................. 2.26% Possibilities under liquidation scenario ................................ 5% Possibilities under redemption scenario ................................ 5% Possibilities under occurrence of sale event scenario ...................... 40% Possibilities under conversion scenario ................................ 50% V olatility....................................................... 42.36% The directors of the Company estimated the risk-free interest rate based on the yield of the United States Treasury Bonds with a maturity life of the ordinary shares with redemption obligations and close to period from the respective valuation dates to the expected liquidation dates. V olatility was estimated on each valuation date based on average of historical volatilities of the comparable companies in the same industry for a period from the respective valuation dates to expected liquidation dates. APPENDIX IA ACCOUNTANTS’ REPORT – IA-45 – --- page 503 --- The movements of the financial liabilities at FVTPL are set out below: Series Pre-A Series A Series Pre-B Series B Series B+ Series C Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2021 ....... 305,280 337,077 85,159 391,576 — — 1,119,092 Re-designation of Series Pre-A Shares to Series B+ Shares (Note i) .............. (27,301) — — — 27,301 — — Re-designation of Series B Shares to Series B+ Shares (Note ii) .. — — — (25,461) 25,461 — — Re-designation of Series Pre-B Shares to Series B+ and Series C Shares (Note iii) ....... — — (33,314) — 9,263 24,051 — Recognition of liabilities on Series B+ Shares (Note iv) ....... ———— 427,799 — 427,799 Recognition of liabilities on Series C Shares (Note iv) ........ ————— 373,176 373,176 Changes in fair value (Note v) ... 115,534 118,670 23,021 62,455 180,590 11,247 511,517 As at December 31, 2021 ...... 393,513 455,747 74,866 428,570 670,414 408,474 2,431,584 Recognition of liabilities on Series C Shares (Note iv) ........ ————— 183,596 183,596 Changes in fair value (Note v) ... 19,393 18,725 2,454 9,559 5,457 (78) 55,510 Reclassification of financial liabilities at FVTPL as equity (Note vi) ............. (412,906) (474,472) (77,320) (438,129) (675,871) (591,992) (2,670,690) As at December 31, 2022 ...... ——————— Notes: (i) In April 2021, the Series Pre-A investors entered into share transfer agreements with Series B+ investors, according to which Series Pre-A Shares with carrying amount of RMB27,301,000 were transferred to Series B+ investors and re-designated as Series B+ Shares. (ii) In April 2021, the Series B Investors entered into share transfer agreements with Series B+ investors, according to which Series B Shares with carrying amount of RMB25,461,000 were transferred to Series B+ investors and re-designated as Series B+ Shares. (iii) In April and December 2021, the Series Pre-B investors entered into share transfer agreements with Series B+ and Series C investors, respectively, according to which Series Pre-B Shares with carrying amount of RMB9,263,000 were transferred to Series B+ investors and re-designated as Series B+ Shares, and Series Pre-B Shares with carrying amount of RMB24,051,000 were transferred to Series C investors and re-designated as Series C Shares. (iv) Recognizing liabilities on these shares debited equity of the Group, as presented in the consolidated statements of changes in equity. (v) Exchange gains and losses are included in changes in fair value. (vi) On January 31, 2022, the liquidation preferences, redemption and anti-dilution feature attached to the Series Pre-A, Series A, Series Pre-B, Series B, Series B+ and Series C Shares were terminated. Financial liabilities at FVTPL was then derecognized and credited to equity. APPENDIX IA ACCOUNTANTS’ REPORT – IA-46 – --- page 504 --- 28. BORROWINGS The Group and the Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Unsecured bank borrowings ............ — — 29,980 As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 The carrying amounts of the above borrowings are repayable: Within one year ...................... — — 29,980 Note: The interest rate of our bank borrowings ranged from nil, nil, 3.1% to 3.9% as of December 31, 2021 and 2022 and April 30 2023, respectively. 29. SHARE CAPITAL AND PAID-IN CAPITAL As disclosed in Note 1, the Company converted into a joint stock company on June 14, 2022, the balance as at January 1, 2021 and December 31, 2021 represented the paid-in capital of the Company prior to the conversion of the Company. Share capital as at December 31, 2022 and April 30, 2023 represented the issued share capital of the Company. Paid-in capital Paid-in capital RMB’000 Issued and paid As at January 1, 2021 ............................................. 5,542 Issue of Series B+ Shares (Note i) ................................... 806 Issue of Series C Shares (Note ii) ................................... 560 As at December 31, 2021 .......................................... 6,908 Issue of Series C Shares (Note ii) .................................... 276 Issue of paid-in capital to share incentive platforms (Note iii) .............. 730 Conversion into a joint stock company (Note iv) ......................... (7,914) As at December 31, 2022 and April 30, 2023 ........................... — Share capital Number of shares Nominal value of shares RMB’000 Ordinary shares of RMB1 each Authorized and issued As at January 1, 2021 and December 31, 2021 ........... —— Issue of ordinary shares upon conversion into a joint stock company (Note iv) ...................... 356,092,695 356,093 As at December 31, 2022 and April 30, 2023 ............. 356,092,695 356,093 APPENDIX IA ACCOUNTANTS’ REPORT – IA-47 – --- page 505 --- Notes: (i) In April 2021, the Company completed Series B+ financing with RMB427,799,000 invested into the Company, among which RMB806,000 was credited to the Company’s paid-in capital and the remaining balance was credited as capital reserve. (ii) In December 2021, the Company completed Series C financing, with the first tranche of RMB373,176,000 invested into the Company, among which RMB560,000 was credited to the Company’s paid-in capital and the remaining balance was credited as capital reserve. In January 2022, the remaining of Series C financing of RMB183,596,000 was invested into the Company, among which RMB276,000 was credited to the Company’s paid-in capital and the remaining balance was credited as capital reserve. (iii) In January 2022, Jiaxing Changyu and Halo Investment II (the Company’s employee shareholding platforms disclosed in note 31) subscribed for the Company’s registered capital of RMB330,000 and RMB400,000, respectively. (iv) On June 14, 2022, the Company was converted into a joint stock company with limited liability under the Company Law of the PRC. A portion of the Company’s net assets as of January 31, 2022 was converted into 356,092,695 shares with a nominal value of RMB1.00 each. The excess of net assets converted over nominal value of the ordinary shares was credited to the Company’s share premium. 30. RESERVES OF THE COMPANY Share premium Capital reserve Other reserve Share-based payment reserve Accumulated losses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2021 ........ — 395,971 (399,513) 3,123 (904,585) (905,004) Loss and total comprehensive expenses for the year ....... ———— (732,881) (732,881) Issue of Series B+ Shares (Note 27) ............... — 426,993 — — — 426,993 Issue of Series C Shares — first tranche (Note 27) .......... — 372,616 — — — 372,616 Recognition of liabilities on Series B+ and C Shares (Note 27) .... — — (800,975) — — (800,975) Recognition of equity-settled share-based payments (Note 31) . — — — 34,017 — 34,017 As at December 31, 2021 ...... — 1,195,580 (1,200,488) 37,140 (1,637,466) (1,605,234) Loss and total comprehensive expenses for the year ....... ———— (402,228) (402,228) Issue of remaining Series C shares . — 183,320 — — — 183,320 Recognition of liabilities on Series C shares (Note 27) ......... — — (183,596) — — (183,596) Issue of paid-in capital to employee stock ownership platforms ............... — 5,244 — — — 5,244 Reclassification of financial liabilities at FVTPL as equity (Note 27) ............... — — 2,670,690 — — 2,670,690 Conversion into a joint stock company ............... 654,470 (1,384,144) (1,286,606) (41,493) 1,709,594 (348,179) Recognition of equity-settled share-based payments (Note 31) . — — — 103,829 — 103,829 As at December 31, 2022 ...... 654,470 — — 99,476 (330,100) 423,846 Loss and total comprehensive expenses for the period ...... ———— ( 1 1 1,516) (111,516) Recognition of equity-settled share-based payments (Note 31) . — — — 30,097 — 30,097 As at April 30, 2023 ......... 654,470 — — 129,573 (441,616) 342,427 APPENDIX IA ACCOUNTANTS’ REPORT – IA-48 – --- page 506 --- 31. SHARE-BASED PAYMENT TRANSACTIONS Restricted shares scheme In recognition of the contributions of certain eligible employees, directors and consultants, the founder of the Company established an employee stock ownership platform, namely Jiaxing Changxian Enterprise Management Center (“ Jiaxing Changxian ”) in April 2016, to hold the Company’s paid-in capital of RMB345,000, which was transferred from the founder, to implement restricted shares (“ RS”) scheme (“ Jiaxing Changxian RS Scheme ”). Under the Jiaxing Changxian RS Scheme, eligible employees, directors and consultants shall subscribe for partnership interest of Jiaxing Changxian at a consideration price ranges from RMB1 to RMB8.08 for RMB1 registered capital and indirectly hold the incentive shares of the Company. Details of the restricted shares issued under the Jiaxing Changxian RS Scheme are as follows: Grant date Amount of registered capital Grantee Vesting schedule defined in contract term Sell back rights/Repurchase rights RMB’000 December 17, 2015 ... 69 A director 100% on grant date Note i September 19, 2016 ... 34 A director 50% on grant date; 25% one year after grant date; 25% two years after grant date N/A July 4, 2017 (cancelled in September 2021) .. 17 A consultant 20% on the grant date; 80% upon the achievement of certain performance conditions N/A February 3, 2020 ..... 34 An employee 50% on the grant date; 50% five years after grant date, and the latter 50% with the achievement of certain performance conditions Note i January 31, 2021 ..... 108 Employees 40% one year after grant date; 30% two year after grant date; 30% three year after grant date; With the achievement of certain performance conditions Note i In March 2021, the founder of the Company established an employee stock ownership platform, namely Jiaxing Changyu Enterprise Management Center (“ Jiaxing Changyu ”), to hold the Company’s paid-in capital of RMB330,000, to implement RS scheme (“ Jiaxing Changyu RS Scheme ”). Under the Jiaxing Changyu RS Scheme, eligible employees and directors shall subscribe for partnership interest of Jiaxing Changyu at a consideration of RMB8.21 for RMB1 registered capital and indirectly hold the incentive shares of the Company. Details of the restricted shares issued under the Jiaxing Changyu RS Scheme are as follows: Grant date Amount of registered capital Grantee Vesting schedule defined in contract term Sell back rights/Repurchase rights RMB’000 June 29, 2021 ...... 174 Directors, employees 25% 22 months after grant date; 25% 34 months after grant date; 25% 46 months after grant date; 25% 58 months after grant date; With the achievement of certain performance conditions Note ii APPENDIX IA ACCOUNTANTS’ REPORT – IA-49 – --- page 507 --- Grant date Amount of registered capital Grantee Vesting schedule defined in contract term Sell back rights/Repurchase rights RMB’000 April 29, 2022 ...... 155 Directors, employees 25% 12 months after grant date; Note ii September 8, 2022 .... 8 A director 25% 24 months after grant date; September 28, 2022 ... 6 A director 25% 36 months after grant date; December 31, 2022 ... 1 A director 25% 48 months after grant date; With the achievement of certain performance conditions Notes: (i) Before the date of Initial Public Offering (“ IPO”), grantees, during their tenure, have a right to discuss with the executive partner of the platform or a third party designated by the executive partner to sell the RSs of not more than 30% of the vested shares at a price referring to the most recent post-investment valuation of the Company. If the grantees terminate the labor relationship with the Company, the executive partner of Jiaxing Changxian has the right to buy back the vested RSs from the grantees at original consideration plus interest at market rate of similar period or decide that the grantees to keep the RSs. (ii) Before the date of IPO, grantees, during their tenure, have right to discuss with the executive partner of the platform or a third party designated by the executive partner to sell the RSs of not more than 30% of the vested shares at a price referring to the most recent post-investment valuation of the Company. If the grantees terminate the labor relationship with the Company, the executive partner of Jiaxing Changyu has the right to buy back the vested RSs from the grantees at original consideration plus interest at 5% of similar period or decide that the grantees keep to keep the RSs. In October 2021, the founder of the Company established an employee stock ownership platform, namely Halo Biomedical Investment II Limited (“ Halo Investment II ”), to hold the Company’s paid-in capital of RMB400,000. Such employees and directors shall subscribe for partnership interest of Halo Investment II at a consideration of RMB8.21 for RMB1 registered capital and indirectly hold the incentive shares of the Company pursuant to their individual employment arrangements with the Group. Details of the restricted shares issued through Halo Investment II are as follows: Grant date Amount of registered capital Grantee Vesting schedule defined in contract term Sell back rights/Repurchase rights RMB’000 June 29, 2021. ...... 67 Dr. Yumei Ding (note) 50% upon the successful of IPO; 12.5% 19 months after grant date; 12.5% 31 months after grant date; 12.5% 43 months after grant date; 12.5% 55 months after grant date N/A June 20, 2021 ...... 26 Consultants 25% 19 months after grant date; 25% 31 months after grant date; 25% 43 months after grant date; 25% 55 months after grant date N/A July 26, 2021 ....... 67 A director 50% upon the successful of IPO; 12.5% 18 months after grant date; 12.5% 30 months after grant date; 12.5% 42 months after grant date; 12.5% 54 months after grant date N/A APPENDIX IA ACCOUNTANTS’ REPORT – IA-50 – --- page 508 --- Grant date Amount of registered capital Grantee Vesting schedule defined in contract term Sell back rights/Repurchase rights RMB’000 January 14, 2022 ..... 12 A director 50% upon the successful of IPO; 12.5% 12 months after grant date; 12.5% 24 months after grant date; 12.5% 36 months after grant date; 12.5% 48 months after grant date N/A January 14, 2022 ..... 229 A director and an employee 25% 12 months after grant date; 25% 24 months after grant date; 25% 36 months after grant date; 25% 48 months after grant date N/A Note: These RSs were granted to Dr. Yumei Ding, spouse of Dr. Tian, for her services provided to the Group, which constituted a related party transaction. The expenses recognized for the share-based payment transaction in the years ended December 31, 2021 and 2022 and the four months ended April 30, 2022 and 2023 were RMB5,628,000, RMB6,017,000, RMB3,234,000 (unaudited) and RMB733,000, respectively. The following table summarized the movement of the Group’s unvested restricted shares: Unvested registered capital Weighted average grant date fair value per registered capital ’000 RMB Unvested as at January 1, 2021 ........................ 33 56.18 Granted .......................................... 442 250.00 Vested ........................................... (149) 227.83 Cancelled ........................................ (1) 53.40 Unvested as at December 31, 2021 ..................... 325 240.67 Granted .......................................... 396 406.39 Vested ........................................... (180) 303.36 Unvested as at June 14, 2022, before conversion to a joint stock company (Note) ............................. 541 340.83 Note: The Company was converted to a joint stock company on June 14, 2022, 356,092,695 ordinary shares with par value of RMB1 each were issued and allotted to the respective shareholders of the Company according to the paid-in capital registered under these shareholders on that day and following table to reflect the impact of the conversion. One registered share capital before the conversion represented 45 shares of the joint stock company: Unvested restricted shares Weighted average grant date fair value per restricted shares ’000 RMB Unvested as at June 14, 2022 .............................. 24,345 7.57 Granted ........................................... 675 10.15 Vested ............................................ (6,750) 7.54 Forfeited .......................................... (270) 6.25 Unvested as at December 31, 2022 .......................... 18,000 7.70 Vested ............................................ (3,915) 7.75 Unvested as at April 30, 2023 ............................. 14,085 7.69 APPENDIX IA ACCOUNTANTS’ REPORT – IA-51 – --- page 509 --- Fair value of RS The Group used the back-solve method to determine the underlying equity fair value of the Company. The fair value of RS at grant date was determined to be in the range from RMB14.52 to RMB464.85 per RMB1 registered capital, by referring to the equity fair value of the Company and the purchase price of the RS ranged from RMB1 to RMB8.21. The foresaid fair value of RS at date of grant was valued by directors of the Company with reference to valuation reports carried out by A VISTA. The Group has recognized share-based payment expenses of RMB34,017,000, RMB103,829,000, RMB28,987,000 (unaudited) and RMB30,097,000 for the years ended December 31, 2021 and 2022 and the four months ended April 30, 2022 and 2023, respectively. 32. RELATED PARTY TRANSACTIONS Except for the disclosed services with Dr. Yumei Ding in Note 31, the Group has the following transactions with its related parties during the Track Record Period. Compensation of key management personnel The remuneration of members of key management of the Group during the Track Record Period were as follows: Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Salaries and other benefits ......... 3,676 11,142 2,608 4,769 Retirement benefits scheme contribution ................... 170 466 93 194 Discretionary bonus (Note) ......... 570 2,089 507 732 Share-based payments ............. 12,330 84,859 20,442 25,803 16,746 98,556 23,650 31,498 Note: Discretionary bonus is determined based on their duties and responsibilities of the relevant individuals within the Group and the Group’s performance. 33. CAPITAL COMMITMENTS As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Capital expenditure contracted for but not provided in the Historical Financial Information in respect of: — acquisition of property and equipment .. 36,046 5,713 4,856 APPENDIX IA ACCOUNTANTS’ REPORT – IA-52 – --- page 510 --- 34. CAPITAL RISK MANAGEMENT The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to investors through the optimization of the debt and equity balance. The Group’s overall strategy remains unchanged throughout the Track Record Period. The capital structure of the Group consists of net debts, which includes lease liabilities disclosed in Note 26, financial liabilities at FVTPL disclosed in Note 27 and borrowings disclosed in Note 28, net of bank balances and cash disclosed in Note 23 and equity attributable to owners of the Company, comprising paid-in capital, share capital and reserves. The management of the Group reviews the capital structure regularly. As part of this review, the management of the Group considers the cost of capital and the risks associated with each class of capital. Based on recommendation of the management of the Group, the Group will balance its overall capital structure through the new share issues or issue of new debt. 35. FINANCIAL INSTRUMENTS (a) Categories of financial instruments The Group As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Financial assets Amortised cost ...................... 683,158 636,235 560,026 Financial assets at FVTPL .............. — — 25,024 Financial liabilities Amortised cost ...................... 31,130 32,817 65,848 Financial liabilities at FVTPL ........... 2,431,584 — — Lease liabilities ..................... 18,539 14,619 12,371 The Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Financial assets Amortised cost ...................... 683,029 636,352 559,855 Financial assets at FVTPL .............. — — 25,024 Financial liabilities Amortised cost ...................... 31,400 32,817 65,848 Financial liabilities at FVTPL ........... 2,431,584 — — Lease liabilities ..................... 18,539 14,619 12,371 APPENDIX IA ACCOUNTANTS’ REPORT – IA-53 – --- page 511 --- (b) Financial risk management objectives and policies The Group’s major financial assets and liabilities include trade receivables, other receivables, bank balances and cash, pledge bank deposits and financial assets at FVTPL, trade and other payables, lease liabilities, financial liabilities at FVTPL and borrowings. The Company’s major financial assets and liabilities include trade receivables, other receivables, amounts due from subsidiaries, amount due to a subsidiary, bank balances and cash, pledge bank deposits and financial assets at FVTPL, trade and other payables, lease liabilities, financial liabilities at FVTPL and borrowings. Details of these financial assets and liabilities are disclosed in respective notes. The risks associated with these financial assets and liabilities include market risks, credit risk and liquidity risk. The policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Market risk The Group’s and the Company’s activities expose it primarily to currency risk, interest rate risk and other price risk. There has been no change in the Group’s and the Company’s exposure to these risks or the manner in which it manages and measures the risks. (i) Currency risk Certain financial assets and liabilities are denominated in foreign currency of respective group entities which are exposed to foreign currency risk. The Group currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. The carrying amounts of the Group’s and the Company’s foreign currency denominated monetary assets and liabilities at the end of each reporting period are as follows: The Group As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Assets US$............................... 211,709 207,817 196,904 Liabilities US$............................... 791,014 — — The Company As at December 31, As at April 30, 2021 2022 2023 RMB’000 RMB’000 RMB’000 Assets US$............................... 211,575 206,026 194,515 Liabilities US$............................... 791,014 — — APPENDIX IA ACCOUNTANTS’ REPORT – IA-54 – --- page 512 --- Sensitivity analysis The following table details the Group’s and the Company’s sensitivity to a 5% increase and decrease in RMB against US$, the foreign currency with which the Group and the Company may have a material exposure. 5% represents management’s assessment of the reasonably possible change in foreign exchange rate. The sensitivity analysis uses outstanding foreign currency denominated monetary items as a base and adjusts their translation at the end of each reporting period for a 5% change in foreign currency rate. A negative/positive number below indicates an increase/decrease in loss where RMB strengthens 5% against US$. For a 5% weakening of RMB against US$, there would be an equal and opposite impact on loss for the year. Year ended December 31, Four months ended April 30, 2021 2022 2022 2023 RMB’000 RMB’000 RMB’000 RMB’000 (unaudited) Impact on profit or loss The Group US$........................... 28,965 (10,391) (13,853) (9,845) The Company US$........................... 28,972 (10,301) (13,794) (9,726) (ii) Interest rate risk The Group and the Company are primarily exposed to fair value interest rate risk in relation to term deposit (Note 23), lease liabilities (Note 26) and fixed-rate bank borrowings (Note 28) and cash flow interest rate risk in relation to bank balances (Note 23). The Group currently does not have an interest rate hedging policy to mitigate interest rate risk; nevertheless, the management monitors interest rate exposure and will consider hedging significant interest rate risk should the need arise. The Group considers that the exposure of cash flow interest rate risk arising from variable-rate bank balances is insignificant because the current market interest rates are relatively low and stable. (iii) Other price risk The Group and the Company are exposed to other price risk arising from issue of Investors’ Shares, which were classified as financial liabilities at FVTPL as at December 31, 2021. Sensitivity analysis The sensitivity analyses below have been determined based on the exposure to equity price risk at the reporting date for financial liabilities at FVTPL. If the equity value of the Company had been changed based on the 5% higher or lower, the Group’s and the Company’s post-tax loss for the year ended December 31, 2021 would increase by approximately RMB107,276,000 or decrease by approximately RMB107,877,000. APPENDIX IA ACCOUNTANTS’ REPORT – IA-55 – --- page 513 --- Credit risk The carrying amounts of trade receivables, other receivables, amounts due from subsidiaries, bank balances and pledged bank deposits included in the consolidated statements of financial position represent the Group’s maximum exposure to credit risk in relation to its financial assets. Trade receivables For trade receivables, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime ECL. The ECL on trade receivables are assessed individually, based on the past default experience of the debtor, general economic conditions of the industry in which the debtor operates and an assessment of both the current as well as the forward-looking information that is available without undue cost or effort at the end of each reporting period. The expected credit loss rate of trade receivables as at December 31, 2021 and 2022 and April 30, 2023 were insignificant. Management considered the ECL provision of trade receivables is insignificant as these balances are mainly due from a counterparty of good credit quality. Other receivables For other receivables, the Group has applied 12m ECL in IFRS 9 to measure the loss allowance. The ECL on other receivables are assessed individually based on historical settlement records and past default experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the end of each reporting period. The expected credit loss rate of other receivables as at December 31, 2021 and 2022 and April 30, 2023 were insignificant. Management considered the ECL provision of other receivables is insignificant. Amounts due from subsidiaries For amounts due from subsidiaries, the Group has applied 12m ECL to measure the loss allowance. In assessing the probability of defaults of amounts due from subsidiaries, the management has taken into account the financial position of the counterparties as well as forward looking information that is available without undue cost or effort. The expected credit loss rate of amounts due from subsidiaries as at December 31, 2021 and 2022 and April 30, 2023 were all insignificant. Management considered the ECL provision of amounts due from subsidiaries is insignificant. Bank balances and pledged bank deposits The credit risk on bank balances and pledged bank deposits is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. The Group’s internal credit risk grading assessment comprises the following categories: Internal credit rating Description Trade receivables Other financial assets Low risk ....... The counterparty has a low risk of default and does not have any past-due amounts Lifetime ECL — not credit-impaired 12m ECL Watch list ...... Debtor frequently repays after due dates but usually settle in full Lifetime ECL — not credit-impaired 12m ECL Doubtful. ...... There have been significant increases in credit risk since initial recognition through information developed internally or external resources Lifetime ECL — not credit-impaired Lifetime ECL — not credit-impaired APPENDIX IA ACCOUNTANTS’ REPORT – IA-56 – --- page 514 --- Internal credit rating Description Trade receivables Other financial assets Loss ......... There is evidence indicating the asset is credit-impaired Lifetime ECL — credit-impaired Lifetime ECL - credit-impaired Write-off ...... There is evidence indicating that the debtor is in severe financial difficulty and the Group has no realistic prospect of recovery Amount is written off Amount is written off The tables below detail the credit risk exposures of the Group’s and the Company’s financial assets, which are subject to ECL assessment: The Group The Company As at December 31, 2021 As at December 31, 2022 As at April 30, 2023 As at December 31, 2021 As at December 31, 2022 As at April 30, 2023 Notes Internal credit rating 12m or lifetime ECL Gross carrying amount Gross carrying amount Gross carrying amount Gross carrying amount Gross carrying amount Gross carrying amount RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Financial assets at amortised cost Trade receivables ........ 20 Low risk Lifetime ECL — not credit-impaired 34 66 16 34 66 16 Other receivables ........ 21 Low risk 12m ECL 6,588 957 924 6,567 925 869 Amounts due from subsidiaries ... 22 Low risk 12m ECL — — _— 10 1,958 2,273 Bank balances and pledged bank deposits ......... 23 N/A 12m ECL 676,536 635,212 559,086 676,418 633,403 556,697 Liquidity risk In the management of the liquidity risk, the Group and the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s and the Company’s operations and mitigate the effects of fluctuations in cash flows. The Group relies on issuance of Investors’ Shares and ordinary shares and bank borrowings as significant sources of liquidity. The directors of the Company are satisfied that the Group will have sufficient financial resource to meet its financial obligation as they fall due and to sustain its operations for the foreseeable future. APPENDIX IA ACCOUNTANTS’ REPORT – IA-57 – --- page 515 --- The following table details the Group’s and the Company’s remaining contractual maturity for its financial liabilities and lease liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. Weighted Average effective interest rate Within 1 year and on demand 1 to 2 years 2 to 5 years Over 5 years Total Carrying amount % RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 The Group As at December 31, 2021 Trade and other payables .. — 31,130 — — — 31,130 31,130 Financial liabilities at FVTPL ........... — 1,200,488 — — — 1,200,488 2,431,584 Lease liabilities ....... 4.75 7,005 6,493 7,418 508 21,424 18,539 1,238,623 6,493 7,418 508 1,253,042 2,481,253 As at December 31, 2022 Trade and other payables .. — 32,817 — — — 32,817 32,817 Lease liabilities ....... 4.75 6,803 3,721 5,662 376 16,562 14,619 39,620 3,721 5,662 376 49,379 47,436 As at April 30, 2023 Trade and other payables .. — 35,868 — — — 35,868 35,868 Borrowings .......... 3.47 29,980 — — — 29,980 29,980 Lease liabilities ....... 4.75 6,275 3,100 4,710 239 14,324 12,371 72,123 3,100 4,710 239 80,172 78,219 Weighted Average effective interest rate Within 1 year and on demand 1 to 2 years 2 to 5 years Over 5 years Total Carrying amount % RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 The Company As at December 31, 2021 Trade and other payables .. — 31,130 — — — 31,130 31,130 Amount due to a subsidiary . — 270 — — — 270 270 Financial liabilities at FVTPL ........... — 1,200,488 — — — 1,200,488 2,431,584 Lease liabilities ....... 4.75 7,005 6,493 7,418 508 21,424 18,539 1,238,893 6,493 7,418 508 1,253,312 2,481,523 As at December 31, 2022 Trade and other payables .. — 32,817 — — — 32,817 32,817 Lease liabilities ....... 4.75 6,803 3,721 5,662 376 16,562 14,619 39,620 3,721 5,662 376 49,379 47,436 As at April 30, 2023 Trade and other payables .. — 35,868 — — — 35,868 35,868 Borrowings .......... 3.47 29,980 — — — 29,980 29,980 Lease liabilities ....... 4.75 6,275 3,100 4,710 239 14,324 12,371 72,123 3,100 4,710 239 80,172 78,219 APPENDIX IA ACCOUNTANTS’ REPORT – IA-58 – --- page 516 --- (c) Fair value measurements of financial instruments The fair value of financial assets and financial liabilities (except for those set out below) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions. (i) Financial assets and liabilities measured at fair values on a recurring basis The Group’s financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of those financial liabilities are determined (in particular, the valuation techniques and inputs used). Notes Fair value as at December 31, Fair value as at April 30, Fair value hierarchy Valuation techniques and key inputs Significant unobservable inputs Relationship of unobservable inputs to fair value 2021 2022 2023 RMB’000 RMB’000 RMB’000 The Group and the Company Financial assets at FVTPL ... 24 — — 25,024 Level 2 Discounted cash flows method, estimated based on expected return. N/A N/A Financial liabilities at FVTPL .. 27 2,431,584 — — Level 3 Back-solve Model and OPM Model — the key inputs are: possibilities under different scenarios as disclosed in Note 27, risk free interest rate and volatility V olatility 2021: 42% The higher the volatility, the lower the fair value (Note) Note: A 5% increase or decrease in volatility, while all other variables keep constant, would decrease or increase the carrying amount of financial liabilities as at December 31, 2021 by RMB1,428,000 and RMB1,449,000, respectively. There were no transfers between different levels during the Track Record Period. (ii) Fair value of financial assets and financial liabilities that are not measured at fair value The directors of the Company consider that the carrying amount of the Group’s and the Company’s financial assets and financial liabilities recorded at amortised cost in the Historical Financial Information approximate their fair values. Such fair values have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis. (iii) Reconciliation of Level 3 fair value measurements Details of reconciliation of Level 3 fair value measurement for Investors’ Shares is set out in Note 27. Fair value gains or losses on financial liabilities at FVTPL are included in “other gains and loss, net”. (iv) Fair value measurement and valuation process In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Group engages third party qualified valuers to perform the valuation or uses quoted forward exchange rates derived from quoted exchange rates matching maturities of the contracts at the end of each reporting period. The finance department of the Company works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. APPENDIX IA ACCOUNTANTS’ REPORT – IA-59 – --- page 517 --- 36. RETIREMENT BENEFIT PLANS The employees of the Group’s subsidiaries in the PRC are members of the state-sponsored retirement benefit scheme organized by the relevant local government authority in the PRC. The subsidiary is required to contribute, based on a certain percentage of the payroll costs of its employees, to the retirement benefit scheme and has no further obligations for the actual payment of pensions or post-retirement benefits beyond the annual contributions. The total amount provided by the Group to the scheme in the PRC and charged to profit or loss are RMB2,349,000, RMB3,972,000, RMB1,105,000 (unaudited) and RMB1,546,000 for the years ended December 31, 2021 and 2022 and the four months ended April 30, 2022 and 2023, respectively. 37. PARTICULARS OF SUBSIDIARIES During the Track Record Period and as at the date of this report, the Company has direct equity interests in the following subsidiaries: Name of subsidiaries Place/country and date of establishment/ incorporation Issued and fully paidin/registered capital Equity interest attributable to the Company Principal activities As at December 31, As at April 30, As at the date of this report2021 2022 2023 Macroimmune Inc. (Note i) .. USA/ January 6, 2014 US$20,000 100% 100% 100% 100% Research, development and commercialization of innovative therapies ᔼᖹҦஔ (ɪऎ)ʮ̡ (ImmuneTank Biopharmaceuticals (Shanghai) Co., Ltd). * (Note ii) ........ The PRC/ February 5, 2018 — 100% 100% 100% 100% Research, development and commercialization of innovative therapies ImmuneOnco Hong Kong Limited (Note iii) .... Hong Kong/ September 15, 2021 — 100% 100% 100% 100% Research, development and commercialization of innovative therapies ᖹุ (ɪऎ)ࠢ ʮ̡ (ImmuneOnco Pharmaceutical Biological (Shanghai) Co., Ltd). * (Note ii) ......... The PRC/ September 28, 2021 — 100% 100% 100% 100% Research, development and commercialization of pharmaceutical drug * The English names are for identification purpose only Notes: i No statutory financial statements were available, as there is no statutory audit requirement. ii The statutory financial statements of these subsidiaries for the year ended December 31, 2021 and 2022 were prepared in accordance with Accounting Standards for Business Enterprises and were audited byԫਕ ה(౷ஷΥྫ )/Shangkuai Certified Public Accountants (LLP), CPA registered in the PRC. iii The statutory financial statements of the subsidiary for the period from date of incorporation to December 31, 2022 were prepared in accordance with Hong Kong Financial Reporting Standards and were audited by Deloitte Touche Tohmatsu. APPENDIX IA ACCOUNTANTS’ REPORT – IA-60 – --- page 518 --- 38. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s consolidated statement of cash flows as cash flows from financing activities. Lease liabilities Financial liabilities at FVTPL Accrued issue costs Borrowings Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2021 . 9,176 1,119,092 — — 1,128,268 Issue cost accrued .... — — 1,399 — 1,399 Financing cash flow ... (5,663) 800,975 (565) — 794,747 Fair value changes ... — 511,517 — — 511,517 Finance costs ........ 8 9 1——— 8 9 1 New leases entered .... 14,135 — — — 14,135 As at December 31, 2021 ............. 18,539 2,431,584 834 — 2,450,957 Issue cost accrued .... — — 4,931 — 4,931 Financing cash flow ... (6,590) 183,596 (3,600) — 173,406 Fair value changes ... — 55,510 — — 55,510 Finance costs ........ 7 8 7——— 7 8 7 New leases entered .... 1 , 8 8 3——— 1 , 8 8 3 Reclassification of financial liabilities at FVTPL as equity .... — (2,670,690) — — (2,670,690) As at December 31, 2022 ............. 14,619 — 2,165 — 16,784 Issue cost accrued .... — — 561 — 561 Financing cash flow ... (2,474) — (461) 29,953 27,018 Reversal on accrued issue costs ........ — — (1,317) — (1,317) Finance costs ........ 226 — — 27 253 As at April 30, 2023 .. 12,371 — 948 29,980 43,299 As at December 31, 2021 ............. 18,539 2,431,584 834 — 2,450,957 Issue cost accrued (unaudited) ....... — — 3,313 — 3,313 Financing cash flow (unaudited) ....... (1,802) 183,596 (2,523) — 179,271 Fair value changes (unaudited) ....... — 55,510 — — 55,510 Finance costs (unaudited) ....... 2 8 5——— 2 8 5 Reclassification of financial liabilities at FVTPL as equity (unaudited) ....... — (2,670,690) — — (2,670,690) As at April 30, 2022 (unaudited) ........ 17,022 — 1,624 — 18,646 APPENDIX IA ACCOUNTANTS’ REPORT – IA-61 – --- page 519 --- 39. MAJOR NON-CASH TRANSACTIONS During the Track Record Period, the Group granted RS to certain employees, directors and consultants. Further details are given in Note 31. During the Track Record Period, the Group entered into new lease agreements for office premises for 1 to 3 years. On the lease commencement, the Group recognized right-of-use assets amounted to RMB15,320,000, RMB1,904,000, nil (unaudited) and nil and lease liabilities amounted to RMB14,135,000, RMB1,883,000, nil (unaudited) and nil during the years ended December 31, 2021 and 2022 and the four months ended April 30, 2022 and 2023, respectively. 40. SUBSEQUENT EVENTS There has been no significant event since the end of the Track Record Period. 41. SUBSEQUENT FINANCIAL STATEMENTS No audited financial statements of the Group, the Company or any of its subsidiaries have been prepared in respect of any period subsequent to April 30, 2023 and up to the date of this report. APPENDIX IA ACCOUNTANTS’ REPORT – IA-62 – --- page 520 --- The following is the text of a report set out on pages IB-1 to IB-15, received from the Company’ s reporting accountants, Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this document. REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF IMMUNEONCO BIOPHARMACEUTICALS (SHANGHAI) INC. Introduction We have reviewed the condensed consolidated financial statements of ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (“ᔼᖹҦஔ (ɪऎ)ʮ̡ ”) (the “Company ”) and its subsidiaries (collectively referred to as the “ Group ”) set out on pages IB-2 to IB-15, which comprise the condensed consolidated statement of financial position as of June 30, 2023 and the related condensed consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the six-month period then ended, and certain explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provision thereof and International Accounting Standard 34 “Interim Financial Reporting” (“ IAS 34 ”) issued by the International Accounting Standards Board. The directors of the Company are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with IAS 34. Our responsibility is to express a conclusion on these condensed consolidated financial statements based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Scope of Review We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” (“ HKSRE 2410 ”) issued by the Hong Kong Institute of Certified Public Accountants. A review of these condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34. Deloitte Touche Tohmatsu Certified Public Accountants Hong Kong August 24, 2023 APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 1– --- page 521 --- CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2023 Six months ended June 30, NOTES 2022 2023 RMB’000 RMB’000 (unaudited) (unaudited) Revenue ................................ 4 425 86 Other income ............................ 5 4,212 6,359 Other gains and losses, net .................. 6 (40,786) 6,106 Research and development expenses ........... (116,363) (128,086) Administrative expenses .................... (46,703) (41,256) Listing expenses .......................... (12,059) (13,409) Finance costs ............................. (416) (630) Loss before tax ........................... 7 (211,690) (170,830) Income tax expense ........................ 8 —— Loss for the period ....................... (211,690) (170,830) Other comprehensive income Item that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations ....................... 20 82 Total comprehensive expenses for the period ..... (211,670) (170,748) Loss per share — Basic and diluted (RMB yuan) ............. 9 (0.69) (0.48) APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 2– --- page 522 --- CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT JUNE 30, 2023 At December 31, At June 30, NOTES 2022 2023 RMB’000 RMB’000 (audited) (unaudited) Non-current assets Property and equipment ..................... 11 69,830 64,264 Right-of-use assets ........................ 11 94,062 88,978 Other non-current assets .................... 24,215 29,610 188,107 182,852 Current assets Trade receivables ......................... 12 66 4 Prepayments and other receivables ............ 13 16,593 8,696 Term deposits with original maturity over three months ................................ 14 — 43,355 Bank balances and cash ..................... 15 635,212 495,967 651,871 548,022 Current liabilities Trade and other payables .................... 16 46,138 39,185 Lease liabilities ........................... 5,599 4,826 Borrowings .............................. 17 — 29,980 51,737 73,991 Net current assets ........................ 600,134 474,031 Total assets less current liabilities ........... 788,241 656,883 Non-current liabilities Lease liabilities ........................... 9,020 6,808 Net assets ............................... 779,221 650,075 Capital and reserves Paid-in capital ............................ 18 —— Share capital ............................. 18 356,093 356,093 Reserves ................................ 423,128 293,982 Total equity ............................. 779,221 650,075 APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 3– --- page 523 --- CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2023 Paid-in capital Share capital Share premium Capital reserve Other reserve Share-based payments reserve Translation reserve Accumulated losses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2022 (audited) ........ 6,908 — — 1,195,580 (1,200,488) 37,140 7 (1,637,586) (1,598,439) Loss for the period .... ——————— ( 2 1 1,690) (211,690) Other comprehensive income for the period .. ——————2 0—2 0 Total comprehensive income (expense) for the period ......... ——————2 0 ( 2 1 1,690) (211,670) Issue of remaining Series C shares ........ 276 — — 183,320 ———— 183,596 Recognition of liabilities on Series C shares ... ———— (183,596) — — — (183,596) Issue of paid-in capital to employee stock ownership platforms ... 730 — — 5,244 ———— 5,974 Reclassification of financial liabilities at FVTPL as equity .... ———— 2,670,690 — — — 2,670,690 Conversion into a joint stock company ..... (7,914) 356,093 654,470 (1,384,144) (1,286,606) (41,493) — 1,709,594 — Recognition of equity- settled share-based payments (Note 19) ... ————— 50,825 — — 50,825 As at June 30, 2022 (unaudited) ....... — 356,093 654,470 — — 46,472 27 (139,682) 917,380 As at January 1, 2023 (audited) ........ — 356,093 654,470 — — 99,476 68 (330,886) 779,221 Loss for the period .... ——————— (170,830) (170,830) Other comprehensive income for the period .. ——————8 2—8 2 Total comprehensive income (expense) for the period ......... ——————8 2 (170,830) (170,748) Recognition of equity- settled share-based payments (Note 19) ... ————— 41,602 — — 41,602 As at June 30, 2023 (unaudited) ....... — 356,093 654,470 — — 141,078 150 (501,716) 650,075 APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 4– --- page 524 --- CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2023 Six months ended June 30, 2022 2023 RMB’000 RMB’000 (unaudited) (unaudited) OPERATING ACTIVITIES Loss for the period ................................. (211,690) (170,830) Adjustments for: Gain from changes in fair value of financial assets at FVTPL ....................................... — (324) Loss from changes in fair value of financial liabilities at FVTPL ....................................... 55,510 — Depreciation of property and equipment ............... 5,819 6,207 Depreciation of right-of-use assets .................... 2,816 5,084 Share-based payment expenses ....................... 50,825 41,602 Bank interest income .............................. (3,937) (5,279) Finance costs .................................... 416 630 Adjustments to listing expenses ...................... — 3,853 Net foreign exchange gains ......................... (14,737) (5,800) Operating cash flow before movements in working capital ... (114,978) (124,857) (Increase) decrease in trade receivables .................. (81) 62 Decrease in prepayments and other receivables ............ 7,717 3,910 Decrease (increase) in other non-current assets ............ 14,668 (5,395) Increase (decrease) in trade and other payables ............ 1,305 (6,076) NET CASH USED IN OPERATING ACTIVITIES ....... (91,369) (132,356) INVESTING ACTIVITIES Bank interest received ............................... 3,937 5,974 Proceeds on disposal of property and equipment ........... — 324 Purchase of property and equipment .................... (18,713) (1,345) Withdrawal of financial assets at FVTPL ................ — 112,000 Purchase of financial assets at FVTPL .................. — (112,000) Placement of time deposits with maturity over three months .. — (43,355) Withdrawal of pledged bank deposits ................... 8,210 — NET CASH USED IN INVESTING ACTIVITIES ........ (6,566) (38,402) FINANCING ACTIVITIES Proceeds from issue of Series C shares .................. 183,596 — Proceeds from issue of paid-in capital to employee stock ownership platforms .............................. 5,974 — Bank loans raised .................................. — 29,980 Repayments of lease liabilities ........................ (2,258) (2,984) Issue costs paid .................................... (2,523) (736) Interest paid ...................................... (416) (630) NET CASH FROM FINANCING ACTIVITIES .......... 184,373 25,630 NET INCREASE (DECREASE) IN CASH AND CASH EQUIV ALENTS ................................. 86,438 (145,128) CASH AND CASH EQUIV ALENTS AT BEGINNING OF THE PERIOD .................................. 668,326 635,212 Effect of foreign exchange rate changes ................. 14,756 5,883 CASH AND CASH EQUIV ALENTS AT THE END OF THE PERIOD .................................. 769,520 495,967 APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 5– --- page 525 --- 1. GENERAL INFORMATION The Company was incorporated in the People’s Republic of China (the “ PRC”) on June 18, 2015 as a limited liability company. On June 14, 2022, the Company was converted to a joint stock company with limited liability under the Company Law of the PRC. The respective address of the registered office and the principal place of business of the Company are set out in the section headed “Corporate Information” to the prospectus dated August 24, 2023 (the “Prospectus ”). The Group is a science-driven biotechnology group dedicated to the development of immuno-oncology therapies. The condensed consolidated financial statements are presented in Renminbi (“ RMB”), which is also the functional currency of the Company. 2. BASIS OF PREPARATION The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 (“ IAS 34 ”) “Interim Financial Reporting” issued by the International Accounting Standards Board as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”). 3. PRINCIPAL ACCOUNTING POLICIES The condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values. The accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended June 30, 2023 are the same as those presented in Historical Financial Information included in the accountants’ report as set out in Appendix IA to the Prospectus. 4. REVENUE AND SEGMENT INFORMATION Six months ended June 30, 2022 2023 RMB’000 RMB’000 (unaudited) (unaudited) Types of goods or services A point in time Sales of cell strain and other products ................... 386 86 Testing services .................................... 39 — 425 86 Sales of cell strain and other products Revenue from sales of cell strain and other products is recognized when the control of the relevant product is obtained by customers. To gain control over a product means to dominate the use of the product and gain almost all economic benefits from it. All sales of products are for a period of less than one year. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed. APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 6– --- page 526 --- Testing services The Group earns revenues by providing testing services to its customers through fee-for-service contracts. Contract duration ranges from a few days to weeks. Services revenue are recognized at a point of time upon the customer obtains deliverables of the Group’s service. All testing services are for a period of less than one year. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed. Segment information Operating segments are identified on the basis of internal reports about components’ of the Group that are regularly reviewed by the chief operating decision maker (“ CODM”), which is also identified as the chief executive officer of the Group, in order to allocate resources to segments and to assess their performance. During the Trade Record Period, the CODM reviews the overall results and financial position of the Group as a whole. Accordingly, the Group has only one single segment and no further analysis of the single segment is presented. Geographical information As at December 31, 2022 and June 30, 2023, all non-current assets are located in the PRC. 5. OTHER INCOME Six months ended June 30, 2022 2023 RMB’000 RMB’000 (unaudited) (unaudited) Government grants (Note) ............................ 275 1,038 Bank interest income ................................ 3,937 5,279 Others ........................................... —4 2 4,212 6,359 Note: The amount represents various subsidies received from the PRC local government authorities as incentives mainly for the Group’s research and development activities. 6. OTHER GAINS AND LOSSES, NET Six months ended June 30, 2022 2023 RMB’000 RMB’000 (unaudited) (unaudited) Loss from changes in fair value of financial liabilities at FVTPL ........................................ (55,510) — Net foreign exchange gains ........................... 14,737 5,800 Gain from changes in fair value of financial assets at FVTPL . — 324 Others ........................................... (13) (18) (40,786) 6,106 APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 7– --- page 527 --- 7. LOSS BEFORE TAX Six months ended June 30, 2022 2023 RMB’000 RMB’000 (unaudited) (unaudited) Loss before tax has been arrived at after charging: Depreciation of property and equipment ................. 5,819 6,207 Depreciation of right-of-use assets ..................... 4,930 5,084 Total depreciation .................................. 10,749 11,291 Capitalised in construction in progress .................. (2,114) — 8,635 11,291 Listing expenses ................................... 12,059 13,409 Directors’ and supervisors’ emoluments .................. 35,872 29,400 Other staffs costs: Salaries and other benefits .......................... 19,601 29,036 Discretionary bonus ............................... 2,463 2,687 Retirement benefit scheme contributions ............... 1,549 2,505 Share-based payments ............................. 19,551 16,501 Total staff costs .................................... 79,036 80,129 8. INCOME TAX EXPENSE No provision for income tax expense has been made since the Company and its subsidiaries have no assessable profits for both periods. 9. LOSS PER SHARE The calculation of the basic and diluted loss per share is based on the following data: Six months ended June 30, 2022 2023 RMB’000 RMB’000 (unaudited) (unaudited) Loss Loss for the purpose of basic loss per share for the period attributable to owners of the Company (RMB’000) ....... (211,690) (170,830) Number of shares (’000) Weighted average number of ordinary shares for the purpose of basic loss per share (Note i) ...................... 307,092 356,093 Basic and diluted loss per share (RMB yuan) (Note ii) ...... (0.69) (0.48) APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 8– --- page 528 --- Notes: (i) Certain investors’ shares, which are recorded as Financial Liabilities at FVTPL in the Historical Financial Information included in the accountants’ report as set out in Appendix IA to the Prospectus, are not treated as outstanding shares and thus are excluded in the calculation of basic loss per share until the redemption right was legally terminated on January 31, 2022. The Company was converted to a joint stock company on June 14, 2022, 356,092,695 ordinary shares with par value of RMB1 each were issued and allotted to the respective shareholders of the Company according to the paid-in capital registered under these shareholders on that day. This capitalization of share capital is applied retrospectively for the purpose of calculating basic loss per share, as adjusted for the capital contributions by the then shareholders and the number of ordinary shares. (ii) Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. For the period from January 1, 2022 to January 31, 2022, the Company had certain investors’ shares which are potential ordinary shares. As the Group incurred losses for the six months ended June 30, 2022, the potential ordinary shares were not included in the calculation of diluted loss per share, as their inclusion would be anti-dilutive. Accordingly, diluted loss per share for the six months ended June 30, 2022 and 2023 are the same as basic loss per share for the respective periods. 10. DIVIDENDS No dividend was paid, declared or proposed for the shareholders of the Company during six months ended June 30, 2022 and 2023, nor has any dividend been proposed since the end of the reporting period. 11. PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS The Group incurred approximately RMB0.6 million and RMB22.8 million for the six months ended June 30, 2022 and 2023, respectively, for acquisition of machinery and equipment. For the six months ended June 30, 2022 and 2023, the Group doesn’t have new lease agreement. 12. TRADE RECEIV ABLES The following is an aged analysis of trade receivable net of allowance for credit losses presented based on the date of completion of service or delivery of goods at the end of the reporting period: At December 31, 2022 At June 30, 2023 RMB’000 RMB’000 (audited) (unaudited) Within 30 days .................................... 11 — 31−60 days ....................................... 62 61−120 days ...................................... 27 2 121−180 days ..................................... 22 — 66 4 The Group normally grants a credit period of 30 days or a particular period agreed with customers effective from the date when the services have been completed or control of goods has been transferred to the customer and billed to the customer. APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 9– --- page 529 --- 13. PREPAYMENTS AND OTHER RECEIV ABLES At December 31, 2022 At June 30, 2023 RMB’000 RMB’000 (audited) (unaudited) Other receivables: Deferred issue costs ............................... 6,330 3,038 Interest receivables ............................... 925 230 Others ......................................... 32 30 Prepayments for: Purchase goods and research and development services .... 9,043 5,215 Others ......................................... 263 183 16,593 8,696 14. TERM DEPOSITS WITH ORIGINAL MATURITY OVER THREE MONTHS As at June 30, 2023, the term deposits with original maturity over three months amounted US$6,000,000 (equivalent to RMB43,355,000) carry interest at 4.85% per annum. These term deposits will mature within 12 months. 15. BANK BALANCES AND CASH At December 31, 2022 At June 30, 2023 RMB’000 RMB’000 (audited) (unaudited) Cash at bank ...................................... 635,212 495,967 Bank balances held by the Group carry interests at market rates ranging from 0.01% to 4.74% and 0.25% to 5.25% as at December 31, 2022 and June 30, 2023, respectively. The carrying amounts of the Group’s term deposits and bank balances and cash denominated in currencies other than functional currencies of the relevant group entities at the end of the reporting period are as follows: At December 31, 2022 At June 30, 2023 RMB’000 RMB’000 (audited) (unaudited) USD ............................................ 207,784 162,922 APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 – IB-10 – --- page 530 --- 16. TRADE AND OTHER PAYABLES At December 31, 2022 At June 30, 2023 RMB’000 RMB’000 (audited) (unaudited) Trade payables for research and development expenses ...... 1,262 436 Accrued research and development expenses .............. 16,199 13,137 Accrued staff costs and benefits ....................... 12,709 9,340 Accrued issue costs ................................. 2,165 947 Accrued listing expenses ............................. 7,249 9,578 Payables for leasehold improvements ................... 5,705 5,002 Other tax payables ................................. 612 589 Others ........................................... 237 156 46,138 39,185 The average credit period on purchases of goods/services of the Group is 45 days. Ageing analysis of the Group’s trade payables based on the invoice dates at the end of the reporting period is as follows: At December 31, 2022 At June 30, 2023 RMB’000 RMB’000 (audited) (unaudited) 0−30 days ........................................ 713 436 31−90 days ....................................... 481 — 91−180 days ...................................... 68 — 1,262 436 17. BORROWINGS At December 31, 2022 At June 30, 2023 RMB’000 RMB’000 (audited) (unaudited) Unsecured bank borrowings .......................... — 29,980 The carrying amounts of the above borrowings are repayable: Within one year .................................. — 29,980 The interest rate of the bank borrowings ranged from 3.1% to 3.9% per annum. 18. SHARE CAPITAL As disclosed in Note 1, the Company converted into a joint stock company on June 14, 2022, the balance as at January 1, 2022 represented the paid-in capital of the Company prior to the conversion of the Company. Share capital as at June 30, 2022, December 31, 2022 and June 30, 2023, represented the issued share capital of the Company. APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 –I B - 1 1– --- page 531 --- Paid-in capital Paid-in capital RMB’000 Issued and paid As at January 1, 2022 (audited) ...................................... 6,908 Issue of Series C Shares (Note i) .................................... 276 Issue of paid-in capital to share incentive platforms (Note ii) ............... 730 Conversion into a joint stock company (Note iii) ........................ (7,914) As at June 30, 2022 (unaudited), December 31, 2022 (audited) and June 30, 2023 (unaudited) ........................................ — Share capital Number of shares Nominal value of shares RMB’000 Ordinary shares of RMB1 each Authorized and issued As at January 1, 2022 (audited) ........................ —— Issue of ordinary shares upon conversion into a joint stock company (Note iii) ................................ 356,092,695 356,093 As at June 30, 2022 (unaudited), December 31, 2022 (audited) and June 30, 2023 (unaudited) ............... 356,092,695 356,093 Notes: (i) In December 2021, the Company completed Series C financing, with the first tranche of RMB373,176,000 invested into the Company, among which RMB560,000 was credited to the Company’s paid-in capital and the remaining balance was credited as capital reserve. In January 2022, the remaining of Series C financing of RMB183,596,000 was invested into the Company, among which RMB276,000 was credited to the Company’s paid-in capital and the remaining balance was credited as capital reserve. (ii) In January 2022, Jiaxing Changyu Enterprise Management Center (“ Jiaxing Changyu ”) and Halo Biomedical Investment II Limited (“ Halo Investment II ”) (the Company’s employee shareholding platforms disclosed in note 19) subscribed for the Company’s registered capital of RMB330,000 and RMB400,000, respectively. (iii) On June 14, 2022, the Company was converted into a joint stock company with limited liability under the Company Law of the PRC. A portion of the Company’s net assets as of January 31, 2022 was converted into 356,092,695 shares with a nominal value of RMB1 each. The excess of net assets converted over nominal value of the ordinary shares was credited to the Company’s share premium. 19. SHARE-BASED PAYMENT TRANSACTIONS Restricted shares scheme The restricted shares (“ RS”) issued under the Jiaxing Changxian Enterprise Management Center restricted shares scheme, which are disclosed in Note 31 to the Historical Financial Information included in the accountants’ report as set out in Appendix IA to the Prospectus, has no change for the six months ended June 30, 2023. APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 – IB-12 – --- page 532 --- The restricted shares issued under the Jiaxing Changyu RS Scheme, which are disclosed in Note 31 to the Historical Financial Information included in the accountants’ report as set out in Appendix IA to the Prospectus, has no change for the six months ended June 30, 2023, except for the following: Grant date Amount of registered capital Grantee Vesting schedule defined in contract term Sell back rights/ Repurchase rights RMB’000 May 31, 2023 ............ 4 An employee 25% 12 months after grant date; 25% 24 months after grant date; 25% 36 months after grant date; 25% 48 months after grant date; With the achievement of certain performance conditions Note i Note: (i) Before the date of IPO, grantees, during their tenure, have right to discuss with the executive partner of the platform or a third party designated by the executive partner to sell the RSs of not more than 30% of the vested shares at a price referring to the most recent post-investment valuation of the Company. If the grantees terminate the labor relationship with the Company, the executive partner of Jiaxing Changyu has the right to buy back the vested RSs from the grantees at original consideration plus interest at 5% of similar period or decide that the grantees to keep the RSs. The restricted shares issued through Halo Investment II, which are disclosed in Note 31 to the Historical Financial Information included in the accountants’ report as set out in Appendix IA to the Prospectus, has no change for the six months ended June 30, 2023. Part of the RSs issued through Halo Investment II were granted to Dr. Yumei Ding, spouse of Dr. Tian, for her services provided to the Group, which constituted a related party transaction. The expenses recognized for the share-based payment transaction the six months ended June 30, 2022 and 2023 were RMB4,634,000 (unaudited) and RMB1,090,000 (unaudited), respectively. The following table summarized the movement of the Group’s unvested restricted shares: Unvested registered capital Weighted average grant date fair value per registered capital ’000 RMB Unvested as at December 31, 2021 (audited) .............. 325 240.67 Granted .......................................... 396 406.39 Vested ........................................... (180) 303.36 Unvested as at June 14, 2022, before conversion to a joint stock company (Note) ............................. 541 340.83 APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 – IB-13 – --- page 533 --- Note: The Company was converted to a joint stock company on June 14, 2022, 356,092,695 ordinary shares with par value of RMB1 each were issued and allotted to the respective shareholders of the Company according to the paid-in capital registered under these shareholders on that day and following table to reflect the impact of the conversion. One registered share capital before the conversion represented 45 shares of the joint stock company: Unvested restricted shares Weighted average grant date fair value per restricted shares ’000 RMB Unvested as at June 14, 2022 and June 30, 2022 (unaudited) .......... 24,345 7.57 Unvested as at December 31, 2022 (audited) .................... 18,000 7.70 Granted ........................................... 180 10.15 Vested ............................................ (5,175) 7.69 Cancelled .......................................... (180) 10.15 Unvested as at June 30, 2023 (unaudited) ...................... 12,825 7.70 Fair value of RS The Group used the back-solve method to determine the underlying equity fair value of the Company. For the six months ended June 30, 2023, the fair value of RS at grant date was determined to be RMB464.85 per RMB1 registered capital, by referring to the equity fair value of the Company and the purchase price of the RS is RMB8.21. The foresaid fair value of RS at date of grant was valued by directors of the Company with reference to valuation reports carried out by AV I S TA . The Group has recognized share-based payment expenses of RMB50,825,000 (unaudited) and RMB41,602,000 (unaudited) for the six months ended June 30, 2022 and 2023, respectively. 20. CAPITAL COMMITMENT At December 31, 2022 At June 30, 2023 RMB’000 RMB’000 (audited) (unaudited) Capital expenditure contracted for but not provided in the condensed consolidated financial statements: Acquisition of property and equipment ................ 5,713 4,821 21. RELATED PARTY TRANSACTIONS Except for the disclosed services with Dr. Yumei Ding in Note 19, the Group has the following transactions with its related parties during the Track Record Period. APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 – IB-14 – --- page 534 --- Compensation of key management personnel The remuneration of directors of the Company and other members of key management was as follows: Six months ended June 30, 2022 2023 RMB’000 RMB’000 (unaudited) (unaudited) Salaries and other benefits ........................... 4,977 6,605 Retirement benefits scheme contribution ................. 127 327 Discretionary bonus (Note) ........................... 1,027 1,098 Share-based payments ............................... 37,521 35,780 43,652 43,810 Note: Discretionary bonus is determined based on their duties and responsibilities of the relevant individuals within the Group and the Group’s performance. 22. FAIR V ALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS The fair value of financial assets and financial liabilities (in particular, the valuation technique(s) and inputs used), as well as the level of the fair value hierarchy into which the fair value measurements are categorised (Levels 1 to 3) based on the degree to which the inputs to the fair value measurements is observable. (i) Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis The directors of the Company consider that the carrying amount of the Group’s and the Company’s financial assets and financial liabilities recorded at amortised cost approximate their fair values. Such fair values have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis. 23. EVENTS AFTER THE END OF THE REPORTING PERIOD There has been no significant event since the end of the reporting period. APPENDIX IB UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2023 – IB-15 – --- page 535 --- The information set forth in this Appendix does not form part of the accountants’ report on the historical financial information of the Group for each of the two years ended December 31, 2022 and four months ended April 30, 2023 (the “ Track Record Period ”) (the “ Accountants’ Report ”) prepared by Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, the reporting accountants of the Company, as set forth in Appendix IA to this prospectus, and is included herein for information only. The unaudited pro forma financial information should be read in conjunction with the section headed “Financial Information” in this prospectus and the consolidated financial statements set out in Appendix IA to this prospectus. A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP ATTRIBUTABLE TO OWNERS OF THE COMPANY The following unaudited pro forma statement of adjusted consolidated net tangible assets of the Group attributable to owners of the Company which has been prepared in accordance with paragraph 4.29 of the Listing Rules is for the purpose of illustrating the effect of the proposed Hong Kong public offering and international offering of the Shares of the Company (the “ Global Offering ”) as if the Global Offering had taken place on April 30, 2023. This unaudited pro forma statement of adjusted consolidated net tangible assets of the Group attributable to owners of the Company has been prepared for illustrative purpose only and, because of its hypothetical nature, it may not give a true picture of the consolidated net tangible assets of the Group attributable to owners of the Company as at April 30, 2023 or at any further dates following the Global Offering. The following unaudited pro forma statement of adjusted consolidated net tangible assets of the Group attributable to owners of the Company is prepared based on the audited consolidated net tangible assets of the Group attributable to owners of the Company as at April 30, 2023 as derived from the Accountants’ Report set out in Appendix IA to this prospectus and adjusted as described below. Audited consolidated net tangible assets of the Group attributable to owners of the C o m p a n ya sa t April 30, 2023 Estimated net proceeds from the Global Offering Unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the Company as at April 30, 2023 Unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the Company as at April 30, 2023 per Share Renminbi (“ RMB”) ’000 RMB’000 RMB’000 RMB Hong Kong dollars (“ HK$”) (Note 1) (Note 2) (Note 3) (Note 4) Based on the offer price of HK$18.60 Per H Share .. 697,557 247,789 945,346 2.53 2.75 Notes: (1) The consolidated net tangible assets of the Group attributable to owners of the Company as at April 30, 2023 is the audited consolidated net assets of RMB697,557,000 attributable to owners of the Company as at April 30, 2023 as extracted from the Accountants’ Report set out in Appendix IA to this prospectus. APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION – II-1 – --- page 536 --- (2) The estimated net proceeds from the issue of the new H Shares pursuant to the Global Offering are based on 17,147,200 H Shares at the offer price of HK$18.60 per H Share, after deduction of the estimated underwriting fees and commissions and other listing related expenses not yet recognised in profit or loss up to April 30, 2023. It does not take into account of (i) any Share which may be allotted and issued upon the exercise of the over-allotment option or (ii) under the general mandates for the allotment and issue of shares granted to the directors of the Company. For the purpose of this unaudited pro forma statement, the estimated net proceeds from the Global Offering, the amount denominated in HK$ has been converted into RMB at the rate of HK$1 to RMB0.9204, which was the exchange rate prevailing on August 17, 2023 with reference to the rate published by the People’s Bank of China. No representation is made that the HK$ amounts have been, could have been or may be converted to RMB, or vice versa, at that rate or any other rates or at all. (3) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the Company per Share is arrived at on the basis that 373,239,895 Shares were in issue assuming that the Global Offering had been completed on April 30, 2023 and it does not take into account of (i) any Share which may be allotted and issued upon the exercise of the over-allotment option or (ii) under the general mandates for the allotment and issue of shares granted to the directors of the Company. (4) For the purpose of this unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the Company per Share, the amount stated in RMB is converted into HK$ at the rate of RMB1 to HK$1.0865, which was the exchange rate prevailing on August 17, 2023 with reference to the rate published by the People’s Bank of China. No representation is made that the RMB amounts have been, could have been or may be converted to HK$, or vice versa, at that rate or any other rates or at all. (5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the Company as at April 30, 2023 to reflect any trading result or other transaction of the Group entered into subsequent to April 30, 2023. B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION The following is the text of the independent reporting accountants’ assurance report received from Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, the reporting accountants of the Company, in respect of the Group’s unaudited pro forma financial information prepared for the purpose of incorporation in this prospectus. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION To the Directors of ImmuneOnco Biopharmaceuticals (Shanghai) Inc. We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (the “ Company ”) and its subsidiaries (hereinafter collectively referred to as the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma statement of adjusted consolidated net tangible assets as at April 30, 2023 and related notes as set out on pages II-1 to II-2 of Appendix II to the prospectus issued by the Company dated August 24, 2023 (the “ Prospectus ”). The applicable criteria on the basis of which the Directors have compiled the unaudited pro forma financial information are described on pages II-1 to II-2 of Appendix II to the Prospectus. The unaudited pro forma financial information has been compiled by the Directors to illustrate the impact of the proposed Global Offering (as defined in the Prospectus) on the Group’s financial position as at April 30, 2023 as if the proposed Global Offering had taken place at April 30, 2023. As part of this process, information about the Group’s financial position has been extracted by the Directors from the Group’s historical financial information for each of the two years ended December 31, 2022 and the four months ended April 30, 2023, on which an accountants’ report set out in Appendix IA to the Prospectus has been published. APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION – II-2 – --- page 537 --- Directors’ Responsibilities for the Unaudited Pro Forma Financial Information The Directors are responsible for compiling the unaudited pro forma financial information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” (“ AG 7 ”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). Our Independence and Quality Management We have complied with the independence and other ethical requirements of the “Code of Ethics for Professional Accountants” issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior. Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1 “Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements” issued by the HKICPA, which requires the firm to design, implement and operate a system of quality management including policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Reporting Accountants’ Responsibilities Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the unaudited pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue. We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountants plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the unaudited pro forma financial information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA. For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the unaudited pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the unaudited pro forma financial information. The purpose of unaudited pro forma financial information included in an investment circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction at April 30, 2023 would have been as presented. APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION – II-3 – --- page 538 --- A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:  the related pro forma adjustments give appropriate effect to those criteria; and  the unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information. The procedures selected depend on the reporting accountants’ judgment, having regard to the reporting accountants’ understanding of the nature of the Group, the event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances. The engagement also involves evaluating the overall presentation of the unaudited pro forma financial information. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion: (a) the unaudited pro forma financial information has been properly compiled on the basis stated; (b) such basis is consistent with the accounting policies of the Group; and (c) the adjustments are appropriate for the purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules. Deloitte Touche Tohmatsu Certified Public Accountants Hong Kong August 24, 2023 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION – II-4 – --- page 539 --- SUMMARY OF ARTICLES OF ASSOCIATION Set out below is a summary of the principal provisions of the Articles of Association of ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (the “ AoA”). The main purpose of this appendix is to provide an overview of the AoA for prospective investors, and therefore it may not contain all the information that is important to prospective investors. Directors Power to Allot and Issue Shares The AoA do not contain clauses that authorize the board of directors to allot or issue shares. Any such allotment or issuance shall be in accordance with the procedures stipulated in applicable laws and administrative regulations. Power to Dispose of the Issuer’s or Any of Its Subsidiaries’ Assets The board of directors shall exercise the function and power to decide on the acquisition and disposal of assets of the Company within the scope of authorization by the general meeting or in accordance with the provisions of the listing rules of the stock exchange where the Company’s shares are listed. Giving of Financial Assistance to Purchase the Issuer’s or Any of Its Subsidiaries’ Shares The Company or its subsidiary companies (including enterprises affiliated to it) shall not, in the form of grants, advances, guarantees, compensations or loans, among others, provide any financial aid to directors purchasing or intending to purchase the shares of the Company. Remuneration The general meeting shall exercise the function and power in accordance with the laws to decide on the matters relating to the remuneration of the directors who are not representatives of staff, which shall be passed by ordinary resolutions. Retirement, Appointment, Removal The board of directors consists of 9 directors and has one chairman. At all times, at least one-third of the board of directors shall be independent non-executive directors, and the total number of independent non-executive directors shall not be less than three, among whom there shall be at least one independent non-executive director with appropriate professional qualifications meeting the regulatory requirements, or with appropriate accounting or relevant financial management expertise. The general meeting shall exercise the function and power in accordance with the laws to elect and change the directors who are not representatives of staff, which shall be passed by ordinary resolutions. Directors shall be elected or replaced at the general meeting, and the general meeting may remove the director from his or her office before the expiration of the term of office. The term of office of a director is three years, and a director may be re-elected and serve consecutive terms upon expiration of the term. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-1 – --- page 540 --- The term of office of a director shall commence from the date of him/her assuming office until expiry of the term of the prevailing session of the board of directors. If the term of office of a director expires but re-election is not made forthwith, before the re-elected director takes office, such retiring director shall continue to perform his/her duties as a director pursuant to the requirements of the laws, administrative regulations, departmental rules and this AoA. Any person appointed by the board of directors to fill a casual vacancy of the board of directors or as an addition to the board of directors shall only hold office until the first annual general meeting after his/her appointment and that person shall then be eligible for re-election and re-appointment. Save as otherwise prescribed in the laws, regulations and regulatory rules of the place where the shares of the Company are listed, the shareholders shall have the right to remove a director whose term of office has not yet expired by ordinary resolution at a general meeting, provided that any claim for damages under any contract by such director will not be affected by such removal. The directors of the Company shall be natural persons, but a person who falls under any of the following circumstances may not serve as a director of the Company: (i) the person is without civil conduct capacity or with limited civil conduct capacity; (ii) it has not been more than five years since the person’s completion of service of a sentence received for a crime of embezzlement, bribery, appropriation of property, misappropriation of property, or disruption of the economic order of the socialist market, or it has not been more than five years since the person’s completion of service of a sentence to deprival of political rights for a crime; (iii) it has not been more than three years since the date of completion of bankruptcy liquidation of a company or enterprise where the person used to be a director or a factory director or a manager who was personally liable for the bankruptcy of the company or enterprise; (iv) it has not been more than three years since the date of forfeiture of the business license of a company or enterprise of which the person used to be the legal representative who was personally liable for the forfeiture of the business license or the ordered closedown of the company or enterprise for any violation of the law; (v) the person fails to repay a relatively large amount of due debts; (vi) the person is banned by the CSRC from access to the securities market, and the ban has not expired; or (vii) any other circumstances as set out by any law, administrative regulation or departmental rule, or the regulatory rules of the place where the Company’s shares are listed. Where any director is elected or appointed in violation of this article, such election or appointment shall be void. Where any director falls under any of the circumstances as set out in this article during his or her term of office, the Company shall remove him or her from the office. Borrowing Powers The AoA do not contain any special provision in respect of the manner in which borrowing powers may be exercised by the Directors, other than provisions which (a) give the Board the power to formulate proposals for the issuance of corporate bonds by the Company; and (b) require the issuance of corporate bonds to be approved by the Shareholders in general meeting by way of a special resolution. Alterations to Constitutional Documents The Company may make amendments to this AoA in accordance with the provisions of the laws, administrative regulations, the Hong Kong Listing Rules and this AoA subject to the approval by more than two-thirds of the voting rights held by the shareholders present at the general meeting. The Company shall amend the AoA if falling in one of the following situations: (i) upon revision of the Company Law or the relevant laws and administrative regulations or the Hong Kong Listing Rules, the provisions of the AoA conflict with the revised laws, administrative APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-2 – --- page 541 --- regulations or the Hong Kong Listing Rules; (ii) where the Company’s circumstances change to such an extent that they are inconsistent with what is registered in the AoA; or (iii) where the general meeting resolves to amend the AoA. Where any amendment to the AoA adopted by a resolution of the shareholders’ meeting is subject to the approval of the appropriate authorities, it shall be reported to the appropriate authorities for approval. Where the Company’s registration items are involved, such amendments shall be registered according to the laws. Special Resolutions — Majority Required Resolutions of general meetings include ordinary resolutions and special resolutions. Special resolutions of the general meetings shall be passed by more than two-thirds of the voting rights held by the shareholders (including proxies) present at the meeting. The following matters shall be passed by special resolutions at a general meeting: (i) increase or reduction in the registered capital of the Company; (ii) the merger, division, split, dissolution and liquidation of the Company; (iii) amendment to this AoA; (iv) purchases or sales of major assets or provision of guarantees in a year, the amount of which exceeds 30% of the audited total assets of the Company of the last period; (v) equity incentive plans; and (vi) other matters as required by the laws, administrative regulations, department rules and regulatory rules of the place where the shares of the Company are listed or this AoA and matters which, as resolved by way of an ordinary resolution at a general meeting, will have a material impact on the Company and need to be approved by way of a special resolution. Voting Rights (Generally and on a Poll) Shareholders (including proxies) shall exercise their voting rights by the number of voting shares they represent, and each share shall have one vote. When a poll is taken, a shareholder (including his/her/its proxies) entitled to two or more votes does not need to cast all his/her votes as affirmative or negative votes or abstention. The shares held by the Company have no voting right, and those shares are not included in the total number of voting shares present at the general meeting. Where a shareholder purchases shares of the Company with voting rights in violation of the provisions of paragraphs 1 and 2 of Article 63 of the Securities Law, the voting rights of the shares exceeding the prescribed proportion shall neither be exercised within 36 months after the purchase, nor be included in the total number of shares with voting rights attending the shareholders’ meeting. If it is required by the provisions of the laws, administrative regulations or regulatory rules of the place where the shares of the Company are listed that shareholder shall not exercise any voting right or shall abstain from voting or be restricted to cast only affirmative or negative votes on a specific resolution, then the not exercising of voting rights or abstaining from voting by the shareholder or his/her/its proxy pursuant to the aforementioned provisions, or any votes cast by the shareholder or his/her/its proxy in breach of the aforementioned provisions or restrictions shall not be counted in the voting results. The board of directors, an independent non-executive director, or a shareholder holding 1% or more of the voting shares of a company or an investor protection institution formed in accordance with laws, administrative regulations, or the rules of securities regulatory authorities of the place where the Company’s shares are listed may publicly solicit proxies. In proxy solicitation, the voting intention and other relevant information shall be fully disclosed to the shareholders APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-3 – --- page 542 --- from whom proxy is solicited. The qualified shareholders of the Company publicly solicit the convening rights, rights to submit proposals, rights of nomination, voting rights at the shareholders’ meetings and other shareholder rights lawfully held by other shareholders. Proxy solicitation with the provision of direct or indirect compensation shall be prohibited. The Company may not impose any minimum shareholding requirement for proxy solicitation, except under the conditions as stipulated in the relevant laws and regulations and the Hong Kong Listing Rules. When matters relating to related party transactions are reviewed at a general meeting, the shareholders constituting related persons (the “ related shareholders ”) shall abstain from voting, the number of voting shares they represent shall not be counted in the total number of valid votes. The announcement of resolutions of the general meeting shall fully disclose the voting of the non-related shareholders. Requirements for Annual General Meetings The general meeting is the authoritative body of the Company and shall exercise the following functions and powers in accordance with the laws: (i) to decide on the operating policies and investment plans of the Company; (ii) to elect and change the directors and supervisors who are not representatives of staff, and decide on the matters relating to the remuneration of the relevant directors and supervisors; (iii) to review and approve reports of the board of directors; (iv) to review and approve reports of the supervisory committee; (v) to review and approve the annual financial budget plans and final account plans of the Company; (vi) to review and approve the profit distribution plans and loss recovery plans of the Company; (vii) to make resolutions on the increase or reduction of the registered capital of the Company; (viii) to make resolutions on the issuance of bonds or other securities and the listing plans of the Company; (ix) to make resolutions on the merger, division, dissolution, liquidation or change in the form of the Company; (x) to amend this AoA; (xi) to make resolutions on the engagement, removal or discontinuance of engagement of accounting firms of the Company, and the matters relating to the remuneration of the accounting firms; (xii) to review and approve matters relating to external guarantee which shall be approved by the general meetings under this AoA; (xiii) to review matters concerning purchase or sales of major assets in a year that exceed 30% of the Company’s audited total assets of the last period; (xiv) to review and approve the material transactions and related party transactions that shall be reviewed and approved by the general meetings as stipulated by the laws, administrative regulations, regulatory rules of the places where the Company’s shares are listed and this AoA; (xv) to review the proposals submitted by shareholder(s) holding individually or collectively 3% or more of the shares carrying voting rights of the Company; (xvi) to review and approve the matters relating to change of the use of proceeds; (xvii) to review equity incentive plans and employee stock option plans; and (xviii) to review other matters which shall be determined by the general meetings as stipulated by the laws, administrative regulations, department rules, the Hong Kong Listing Rules or this AoA. The general meetings of the Company include the annual general meetings and the extraordinary general meetings. The annual general meetings shall be convened once a year, and shall be held within six months after the end of the prior fiscal year. Accounts and Audit The Company shall establish its financial and accounting systems in accordance with the laws, administrative regulations and the provisions of relevant PRC authorities. Where the securities regulatory authorities of the place where the shares of the company are listed provide otherwise, such provisions shall prevail. The fiscal year of the Company shall be the calendar year, commencing from January 1 and ending on December 31 of each calendar year. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-4 – --- page 543 --- The Company shall disclose its annual reports within 120 days from the end of each accounting year, and disclose its interim reports within 60 days from the end of the first half year of each accounting year. The Company shall submit and disclose its annual reports and interim reports in accordance with the relevant laws and regulations, and the Hong Kong Listing Rules. The aforesaid annual reports or interim reports shall be prepared in accordance with the relevant laws, administrative regulations and rules of the CSRC and the stock exchange of the place where the Company’s shares are listed. Notice of Meetings and Business to Be Conducted Thereat The Company shall hold an extraordinary general meeting within two months upon the occurrence of any of the following events: (i) the number of directors falls short of the number required by the Company Law or is less than two-thirds of the number required by this AoA; (ii) the uncovered loss of the Company reaches one-third of the total paid-in capital contribution of the Company; (iii) upon request(s) in written form by shareholder(s) individually or collectively holding more than 10% of the Company’s issued and outstanding shares carrying voting rights (shareholding percentage shall be calculated based on shares held by the relevant shareholders on the date when the written request is made); (iv) as deemed necessary by the board of directors; (v) proposed by the supervisory committee; and (vi) other circumstances as stipulated by the laws, administrative regulations, department rules, regulatory rules of the place where the shares of the Company are listed or this AoA. All the shareholders shall be notified by public announcement at least 21 days (excluding the date of the annual general meeting) before the date of the annual general meeting. All the shareholders shall be notified by public announcement at least 15 days (excluding the date of the extraordinary general meeting) before the date of the extraordinary general meeting. Where there are other provisions stipulated by the laws, regulations and the securities regulatory authorities of the place where the shares of the company are listed, such provisions shall prevail. Where the Company convenes a general meeting, the board of directors, the supervisory committee and shareholder(s) holding individually or collectively 3% or more of the Company’s shares may submit a proposal to the Company. Shareholder(s) holding individually or collectively 3% or more of the Company’s shares may submit a temporary proposal in writing to the convener of the general meeting 10 days before the date of the general meeting. The convener shall, within two days after receiving the proposal, send a supplementary notice of the general meeting detailing the content of the temporary proposal. Save as the circumstances specified above, the convener shall not amend the proposals having been set out in the notice of the general meeting or add any new proposal after sending the notice. The proposals not listed in the notice of the general meeting or inconsistent with the provisions of this AoA shall not be voted and resolved at the general meetings. Transfer of Shares The shares of the Company may be transferred in accordance with the laws. Transfer documents and other documents relating to or affecting the ownership of H shares shall be registered with the local stock registrar entrusted by the Company. Fully paid H shares may be freely transferred pursuant to this AoA. However, unless the following conditions are met, the board of directors may refuse to acknowledge any transfer document without stating any reasons: (i) the transfer documents relate only to H shares; (ii) the stamp duty payable on the transfer documents has been paid; (iii) the relevant share certificates and the evidence as reasonably required by the board of directors to prove that the transferor has APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-5 – --- page 544 --- the right to transfer the shares have been provided; (iv) the shares are free and clear of any and all liens of the Company; and (v) no transfer of any shares shall be made to minors or to persons of unsound mind or under other legal disability. Shares held by promoters shall not be transferred within one year from the date of incorporation of the Company. Shares issued by the Company before the public offering of shares shall not be transferred within one year from the date on which the Shares of the Company are listed on a stock exchange. Directors, supervisors and senior executives of the Company shall declare their shareholding in the Company and any changes thereof, and shall not transfer shares more than 25% of total Shares held by them, respectively, each year during their term, nor transfer any Shares within one year from the date on which the Shares of the Company are listed on a stock exchange. The aforesaid persons shall not transfer any Shares within half a year after leaving their post, respectively. Where the provisions of the securities regulatory authorities of the place where the Shares of the Company are listed stipulate otherwise regarding the restrictions on transfer of shares listed overseas, such provisions shall prevail. Power of the Issuer to Purchase Its Own Shares The Company may, according to the provisions of the relevant laws, administrative regulations, departmental rules and this AoA, purchase its shares under the following circumstances: (i) to reduce the registered capital of the Company, (ii) to merge with other companies which hold the shares of the Company, (iii) to use shares for employees stock ownership plan or equity incentives, (iv) to acquire shares held by shareholders who vote against any resolution adopted at the shareholders’ general meeting on the merger or demerger of the Company upon their request, (v) to use shares for converting convertible corporate bonds issued by the Company, (vi) necessary for the Company to maintain the value and shareholders’ equity of the Company, or (vii) other circumstances permitted by laws, administrative regulations, departmental rules and the supervisory regulations of the place where the Company’s shares are listed, etc. A company may purchase its shares in the manner of centralized public trading, or other methods approved by laws, and administrative regulations and relevant regulatory authorities. Dividends and Other Methods of Distribution Shareholders of the Company shall enjoy the right to receive dividends and other forms of distributions of interest in proportion to their respective shareholdings. When the Company distributes the after-tax profits of the current year, it shall allocate 10% of the profits into the statutory reserve fund. If the accumulated amount of the statutory reserve fund reaches 50% of the registered capital, the Company is released from the obligation of withholding statutory reserve fund. Where the Company’s statutory reserve fund is insufficient to cover the previous year’s losses, the Company shall first use the profits of the current year to cover the losses before withholding the statutory reserve fund according to the preceding paragraph. After the Company withholds the statutory reserve fund from the after-tax profit, it may further withhold optional reserve fund from the after-tax profit upon resolution by the general meeting. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-6 – --- page 545 --- The remaining after-tax profits of the Company after making up the losses and withholding the reserve funds may be distributed according to the proportion of shares held by the shareholders, unless it is provided in this AoA not to distribute according to the proportion of shares held. Where the general meeting, in violation of the preceding paragraph, distributes the profits to the shareholders before the Company makes up the losses and withholds the statutory reserve fund, the shareholders must return the profits distributed in violation of the provisions to the Company. The Company’s shares held by the Company shall not participate in the distribution of profits. After the general meeting makes a resolution on the profit distribution plan, the board of directors shall complete the distribution and payment of dividends (or shares) within two months of the general meeting. The Company may distribute profits in cash, shares or other forms permitted by the laws, administrative regulations, department rules and regulatory rules of the place where the shares of the Company are listed, while distribution in cash is preferred. Cash dividends and other distributions declared by the Company to the holders of domestic unlisted shares shall be paid in Renminbi. Cash dividends and other distributions declared by the Company to the holders of overseas listed shares shall be denominated and declared in Renminbi, and paid in foreign currencies or Renminbi. Foreign currencies for the payment of cash dividends and other distributions by the Company to the holders of overseas listed shares shall be distributed pursuant to the relevant regulations on the administration of foreign exchange of the PRC. The Company shall appoint collection agents for the holders of overseas listed shares. The collection agents shall receive the dividends and other amount payable by the Company with respect to the overseas listed shares on behalf of the relevant shareholders. The collection agent appointed by the Company shall satisfy requirements of the laws and the relevant provisions of the stock exchange of the place where the shares of the Company are listed. The collection agent of the shareholders of overseas listed shares listed in Hong Kong appointed by the Company shall be a trust company registered in accordance with the Trustee Ordinance of Hong Kong. Proxies Any shareholder entitled to attend and vote at the general meeting may attend general meetings in person or appoint one or several persons (who may not be shareholders) to act as his/her/its proxy to attend and vote at the general meeting on his/her/its behalf. Shareholders who have appointed proxy(ies) to attend any meeting on their behalf shall be deemed to attend in person. The power of attorney issued by the shareholders to appoint other persons to attend the general meeting shall contain the following contents: (i) the name of the proxy; (ii) whether the proxy has the right to vote or not; (iii) the instructions on voting in favor of, against or abstaining from each item listed on the agenda of the general meeting; (iv) the date of issuance and validity period of the power of attorney; and (v) signature (or seal) of the principal or the appointed proxy in writing. If the principal is an institution shareholder, the power of attorney shall be affixed with the seal of the institution or executed by its directors, officially appointed proxy or officially authorized person. Where there are special provisions on the power of attorney under the Hong Kong Listing Rules, such provisions shall prevail. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-7 – --- page 546 --- The power of attorney shall be deposited at the domicile of the Company or other places designated in the notice of the meeting at least 24 hours before the meeting at which the proxy is authorized to vote or 24 hours before the specified voting time. If the power of attorney is executed by a person authorized by the principal, the authorization letter authorizing the execution or other authorization documents shall be notarized. The notarized authorization letter or other authorization documents, together with the power of attorney must be deposited at the domicile of the Company or other places as specified in the notice of the meeting. Inspection of Register of Members The Company shall create a register of members based on the documents provided by the securities depository institution. The register of members shall be sufficient evidence of the shareholders’ shareholding in Company, unless there is evidence to the contrary. The shareholders shall enjoy the rights and assume the obligations according to the class of the shares they hold. The shareholders holding the same class of shares shall enjoy the same rights and assume the same obligations. The register of members shall contain the following items, or the shareholders shall be registered pursuant to the laws, administrative regulations, departmental rules and the Hong Kong Listing Rules: (i) the name (title), address (domicile), occupation or nature of each shareholder; (ii) the class and number of shares held by each shareholder; (iii) the amount paid or payable on the shares held by each shareholder; (iv) the serial numbers of the shares held by each shareholder; (v) the date on which each shareholder was registered as a shareholder; and (vi) the date on which each shareholder ceased to be a shareholder. Any assignment or transfer of shares shall be registered in the register of members. The Company may, in accordance with the understanding and agreement reached between the securities regulatory authorities under the State Council and the overseas securities regulatory authorities, keep the register of members of overseas listed shares outside the PRC and appoint overseas agencies to keep such register. The original register of members of overseas listed shares listed in Hong Kong shall be kept in Hong Kong. Copies of the register of members of overseas listed shares shall be kept at the Company’s domicile. Appointed overseas agencies shall from time to time maintain the consistency of the original register of members of overseas listed shares and the copies thereof. In case of any inconsistency between the original and copies of the register of members of overseas listed shares, the original shall prevail. The Company shall keep a complete register of members. A register of members shall contain the following parts: (i) register of members other than those provided in items (ii) and (iii) below and kept at the Company’s domicile; (ii) register of members of overseas listed shares of the Company kept at the place where the stock exchange where the shares are listed overseas is located; (iii) register of members kept in other place(s) decided by the board of directors for the purpose of listing the shares of the Company. Different parts of the register of members shall not overlap. The transfer of shares registered in a certain part of the register of members shall not, during the continuance of the registration of such shares, be registered in any other part of the register of members. Changes or corrections to each part of the register of members shall be made pursuant to the laws of the places where that part is kept. Shareholders of the Company enjoy the rights to consult the register of members of the Company according to the provisions of laws, administrative regulations and this AoA, where there are other provisions stipulated by the securities regulatory rules of the place where the shares of the company are listed, such provisions shall prevail. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-8 – --- page 547 --- The Company shall keep the full copies of the register of members at the address of the Company in Hong Kong for view by the shareholders for free in accordance with the requirements under the Hong Kong Listing Rules, except that the Company may suspend registration of shareholders on terms equivalent to those under the Hong Kong Companies Ordinance (Chapter 622 of the Laws of Hong Kong). If the shareholders request access to such information or materials, they shall provide the Company with written documents evidencing the class and number of the shares held by them in the Company, and upon verification of their status as shareholders, the Company shall provide the shareholders with such information or materials as required by them. Rights of the Minorities in Relation to Fraud or Oppression thereof The controlling shareholder or actual controller of the Company may not damage the interests of the Company by taking advantage of its affiliation. Where it violates the relevant provisions and causes losses, it shall assume compensatory liability. The controlling shareholder or actual controller of the Company shall have a duty of good faith to the Company and the holders of the publicly traded shares of the Company. The controlling shareholder shall exercise its investor’s rights in strict accordance with the law, and may not damage the lawful rights and interests of the Company and the holders of the publicly traded shares by taking advantage of profit distribution, asset restructuring, foreign investment, funds appropriation, and loan guarantee, among others or damage the interests of the Company and the holders of the publicly traded shares by taking advantage of its controlling status. Procedures on Liquidation The Company shall be dissolved due to any of the following reasons: (i) the occurrence of events of dissolution as provided by this AoA; (ii) the general meeting resolves to dissolve the Company; (iii) the dissolution is required due to merger or division of the Company; (iv) the business license of the Company is revoked, or the Company is ordered to close down or revoked in accordance with laws; or (v) shareholders holding 10% or more of all the voting rights of the Company applies to the People’s Court for dissolution when the Company experiences severe difficulties in its operations and management and continual operation of the Company will bring significant losses to the interest of Shareholders and there are no other way to resolve the difficulties. Where the Company is dissolved in accordance with the provisions of items (i), (ii), (iv), and (v) above, a liquidation committee shall be established within 15 days of the occurrence of the events of dissolution and commence liquidation. The liquidation committee shall consist of persons determined by the board of directors or the general meeting. If the Company fails to set up the liquidation committee within the period, the creditors may apply to the People’s Court for appointment of relevant persons to form a liquidation committee and carry out liquidation. During the liquidation period, the liquidation committee shall perform the following functions and powers: (i) to sort out the Company’s properties, and to prepare a balance sheet and a list of properties respectively; (ii) to notify the creditors and make public announcement; (iii) to deal with the unfinished business of the Company with respect to the liquidation; (iv) to pay up all outstanding tax and tax incurred in the course of liquidation; (v) to settle credits and debts; (vi) to dispose the remaining properties after settlement of the Company’s debts; and (vii) to participate in civil litigations on behalf of the Company. The liquidation committee shall give notice to the creditors within 10 days after its establishment and publish announcements within 60 days. The creditors shall claim their credits to the liquidation committee within 30 days after receipt of such notice, or within 45 days after the date of the announcement if no notice is received. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-9 – --- page 548 --- When claiming credits, a creditor shall explain the relevant information of the credits and provide supporting materials. The liquidation committee shall register the credits. During the period of credits claiming, the liquidation committee shall not make any debt repayment to the creditors. After the liquidation committee has sorted out the properties of the Company and prepared the balance sheet and the list of properties, the liquidation committee shall formulate a liquidation plan and present it to the general meeting or to the People’s Court for confirmation. For the remaining properties of the Company after payment of liquidation expenses, remuneration, social security and statutory compensation payable to employees, as well as tax and debt payable, respectively, the Company shall distribute to its shareholders according to the proportion of shares held. During the liquidation period, the Company remains subsisting but may not carry out any business activities not related to the liquidation. The properties of the Company shall not be distributed to shareholders before repayments have been made pursuant to the preceding paragraph. If after sorting out the properties of the Company and preparing the balance sheet and list of properties, the liquidation committee finds out that the properties of the Company are insufficient to repay the debts of the Company in full, it shall apply to the People’s Court for a declaration of insolvency. After the Company is declared insolvent by the People’s Court, the liquidation of the Company shall be taken up by the People’s Court from the liquidation committee. Upon completion of the liquidation of the Company, the liquidation committee shall prepare a liquidation report, after confirmation by the general meeting or the People’s Court, submit the same to the companies registration authorities and apply for deregistration of the Company, and publish an announcement on the dissolution of the Company. Where the Company is declared insolvent according to the laws, it shall carry out an insolvency liquidation according to the laws in respect of the insolvency of enterprises. Other Provisions Material to the Issuer or the Shareholders thereof Shares Issuance of Shares The shares of the Company shall be in registered form. The share certificates of the Company shall contain items provided in the Company Law and other items as required by the stock exchange where the shares of the Company are listed. Each share of the same class of the Company shall have equal rights. All the shares issued by the Company shall have a par value indicated in Renminbi. The Company or its subsidiary companies (including enterprises affiliated to it) shall not, in the form of grants, advances, guarantees, compensations or loans, among others, provide any financial aid to any person purchasing or intending to purchase the shares of the Company. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-10 – --- page 549 --- Increase and Reduction of Shares Increase of Registered Capital The Company may, based on its operating and development needs and in accordance with the laws and regulations, increase its registered capital by the following methods, subject to the resolutions adopted respectively by the shareholders’ general meeting: (i) public offering, (ii) private offering, (iii) allotting stock dividends to existing shareholders, (iv) capitalizing its capital reserve, or (v) other methods stipulated by laws and administrative regulations and approved by the relevant regulatory authority. If the Company increases its registered capital by issuing new shares, after the increase of registered capital has been approved in accordance with the provisions of this AoA, it shall be conducted in accordance with the procedures set out in the relevant laws and administrative regulations of the PRC and the Hong Kong Listing Rules. Reduction of Registered Capital The Company may reduce its registered capital. The reduction in registered capital shall be conducted in accordance with the procedures set out in the Company Law, other relevant regulations and this AoA. Rights and Obligations of the Shareholders Shareholders of the Company shall enjoy the following rights: (i) to receive dividends and other forms of distributions of interest in proportion to their respective shareholdings; (ii) to request, convene, preside over and attend general meeting in person or by proxy and exercise the corresponding right of voting; (iii) to supervise the operations of the Company and to make recommendations or interrogations; (iv) to transfer, gift or pledge the shares they hold according to the provisions of laws, administrative regulations and this AoA; (v) to consult this AoA, the register of members, the stubs of corporate bonds, the minutes of shareholders’ meetings, the minutes of the meetings of the board of directors, the minutes of the meetings of the board of supervisors, and the financial accounting reports of the Company according to the provisions of laws, administrative regulations and this AoA, where there are other provisions stipulated by the securities regulatory rules of the place where the shares of the company are listed, such provisions shall prevail; The Company shall keep the full copies of the register of members and the minutes of the general meetings at the address of the Company in Hong Kong for view by the shareholders for free in accordance with the requirements under the Hong Kong Listing Rules, except that the Company may suspend registration of shareholders on terms equivalent to those under the Hong Kong Companies Ordinance (Chapter 622 of the Laws of Hong Kong). If the shareholders request access to such information or materials, they shall provide the Company with written documents evidencing the class and number of the shares held by them in the Company, and upon verification of their status as shareholders, the Company shall provide the shareholders with such information or materials as required by them; APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-11 – --- page 550 --- (vi) to participate in the distribution of the Company’s remaining assets in proportion to their shareholdings upon termination or liquidation of the Company; (vii) to request the Company to purchase the shares of those shareholders who object to a resolution of a general meeting on merger or division of the Company; and (viii)any other rights prescribed by the laws, administrative regulations, department rules, regulatory rules of the places where the Company’s shares are listed and this AoA. Shareholders of the Company shall assume the following obligations: (i) to abide by the laws, administrative regulations, department rules, regulatory rules of the places where the Company’s shares are listed and this AoA; (ii) to pay the capital contribution according to the shares subscribed and the method of subscription; (iii) not to withdraw the shares unless otherwise provided by the laws and administrative regulations; (iv) not to abuse their shareholders’ rights to harm the lawful interests of the Company or other shareholders, and not to abuse the independent legal person status of the Company and the limited liability of the shareholders to harm the interests of any creditor of the Company; and (v) other obligations provided by the laws, administrative regulations, regulatory rules of the places where the Company’s shares are listed and this AoA. Shareholders of the Company abusing their shareholder’s rights and thereby causing loss to the Company or other shareholders shall be liable for indemnity according to the law; if shareholders of the Company abuse the Company’s status as an independent legal person and the limited liability of shareholders for the purpose of evading repayment of debts, thereby materially impairing the interests of the creditors of the Company, such shareholders shall be jointly and severally liable for the debts owed by the Company. The Board of Directors Board of Directors The Company has set up a board of directors, which shall be accountable to the general meetings. The board of directors consists of 9 directors and has one chairman. At all times, at least one-third of the board of directors shall be independent non-executive directors, and the total number of independent non-executive directors shall not be less than three, among whom there shall be at least one independent non-executive director with appropriate professional qualifications meeting the regulatory requirements, or with appropriate accounting or relevant financial management expertise. The board of directors shall exercise the following functions and powers: (i) to convene the general meetings and report its work to the general meeting; (ii) to implement the resolutions of the general meeting; (iii) to decide on the business plans and investment schemes of the Company; (iv) to formulate the Company’s annual financial budget plan and final account plan; (v) to formulate the Company’s profit distribution plan and loss recovery plan; (vi) to formulate the proposals for the increase or reduction in the Company’s registered capital, and plans for the APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-12 – --- page 551 --- issuance of bonds or other securities and listing; (vii) to draw up plans for significant acquisition, purchase of the shares of the Company, merger, division, dissolution and change in the form of the Company; (viii) to review and approve the external guarantee matters of the Company within the scope of authorization by the general meeting or to the extent not meeting the standards to be reviewed and approved by the general meeting; (ix) to decide on the external investment, acquisition and disposal of assets, asset mortgage, external guarantee, entrusted wealth management, related party transactions, external donation, external financing, etc. of the Company within the scope of authorization by the general meeting or in accordance with the provisions of the listing rules of the stock exchange where the Company’s shares are listed; (x) to decide on the set-up of the Company’s internal management organization; (xi) to decide on the appointment or removal of the Company’s general manager and secretary to the board of directors, and to decide on the appointment or removal of the Company’s other senior management personnel such as the deputy general manager, chief financial officer, senior research and development director, and to decide on the remuneration, punishment and reward matters thereof; (xii) to formulate the Company’s basic management system; (xiii) to formulate proposals for the amendment to this AoA; (xiv) to propose to the general meeting the appointment or replacement of the accounting firm which audits for the Company; (xv) to listen to the work report of the general manager of the Company and to examine the work of the general manager; (xvi) to manage information disclosure of the Company; and (xvii) other functions and powers conferred by the laws, administrative regulations, department rules, regulatory rules of the place where the shares of the Company are listed and this AoA. The board of directors discuss matters by convening board meetings. Board meetings include regular board meetings and interim board meetings. Regular board meeting shall be convened at least 4 times a year (quarterly) by the chairman of the board of directors. A board meeting shall be held with the attendance of more than half of the directors. When the board of directors makes a resolution, it must be passed by more than half of the directors. When voting at a board meeting, each director has one vote. The directors shall attend the board meetings in person. Where any director is unable to attend for any reason, he/she may authorize another director in writing to attend on his/her behalf. The power of attorney shall specify the name of the proxy, matters to be represented, scope of authorization and validity term and shall bear the signature or seal of the principal. The director who attends the board meeting on behalf shall exercise the director’s rights within the scope of authorization. Where a director does not attend a board meeting and does not appoint a proxy to attend on his/her behalf, he/she shall be deemed to have forfeited his/her voting rights at the said meeting. A director or any of his/her close associates having a material interest in or connection with any matter proposed by the board of directors shall be prohibited from voting on such resolution or voting as proxy for another director when such matter is reviewed by the board of directors, and shall not be counted in the quorum present at the meeting. The board meeting may be held if more than half of the unrelated directors attend the meeting, and the resolutions of the board meeting shall be passed by more than half of the unrelated directors. Where the number of unrelated directors present at the board meeting is less than three, the matter shall be submitted to the general meeting for deliberation. Where provisions are set out otherwise in the Hong Kong Listing Rules , such provisions shall prevail. If any related shareholder or director, from the perspective of the board of directors, has any major conflict of interest in the matters to be considered by the board of directors, the relevant matters shall be dealt with at a board meeting (rather than by a written resolution). Independent non-executive directors who themselves and whose close associates have no material interests in the transactions shall attend the relevant board meetings. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-13 – --- page 552 --- Secretary to the Board of Directors The Company has a secretary to the board of directors, who is responsible for the preparations for the meetings of the shareholders’ meeting and the board of directors, retention of documents, management of materials on shareholders, and handling of information disclosure and other matters. Supervisors and the Supervisory Committee Supervisors The Directors, general manager and other senior management personnel shall not concurrently serve as supervisors. The term of office of a supervisor is three years. A supervisor may be re-elected and serve consecutive terms upon expiration of his/her term of office. If the term of office of a supervisor expires but re-election is not made forthwith, or a supervisor resigns prior to the expiration of his/her term of office and the number of the members of the supervisory committee therefore does not constitute a quorum, before the re-elected supervisor takes office, such retiring supervisor shall continue to perform his/her duties as a supervisor pursuant to the provisions of the laws, administrative regulations and this AoA. Supervisors may attend the board meetings as nonvoting delegates and make inquiries or recommendations on the matters to be reviewed by the board of directors. Supervisory Committee The Company has set up a supervisory committee. The supervisory committee consists of three supervisors and has one chairman. The appointment or dismissal of the chairman of the supervisory committee shall be approved by more than half of all the supervisors. The chairman of the supervisory committee convenes and presides over the meetings of the supervisory committee. In the event the chairman of the supervisory committee is unable or fails to perform his/her duties, a supervisor appointed jointly by more than half of the supervisors shall convene and preside over the meetings of the supervisory committee. The supervisory committee shall include shareholder representatives and an appropriate proportion of employee representatives, which shall be no less than one-third. The employee representatives in the supervisory committee shall be democratically elected and removed at employee representatives’ meeting, employees’ general meeting or otherwise, while the shareholder representatives in the supervisory committee shall be elected and removed by the general meeting. The supervisory committee shall exercise the following functions and powers: (i) to review the Company’s periodical reports prepared by the board of directors and making written comments thereon after review; (ii) to examine the financial status of the Company; (iii) to supervise the performance of duties by the directors and senior management personnel, and to propose to remove the directors or the senior management personnel in violation of the laws, administrative regulations, this AoA or resolutions of the general meetings; (iv) to require the directors and senior management personnel to correct their conducts that harm the interest of the Company; (v) to propose to hold an extraordinary general meeting, and to convene and preside over the general meeting when the board of directors fails to fulfill its duty to convene and preside over the general meeting specified by the Company Law and this AoA; (vi) to submit proposals to the general meetings; (vii) to bring lawsuits against the directors and senior management personnel according to Article 151 of the Company Law ; (viii) to conduct an investigation where the operation of the APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-14 – --- page 553 --- Company is found to be abnormal, and to engage professional organizations such as accounting firms and law firms to provide assistance when necessary, at the expenses of the Company; and (ix) other functions and powers as conferred by this AoA. The meetings of supervisory committee include regular meetings and interim meetings. The regular meetings of supervisory committee shall be convened at least every six months and twice a year by the chairman of the supervisory committee. A supervisor may propose to convene an interim meeting of supervisory committee. The supervisors shall attend the meetings of the supervisory committee in person. Where any supervisor is unable to attend the meetings of the supervisory committee for any reason, he/she may authorize another supervisor in writing to attend on his/her behalf. The power of attorney shall specify the name of the proxy, matters to be represented, scope of authorization and validity term and shall bear the signature or seal of the principal. The supervisor who attends the meeting on behalf shall exercise the supervisor ‘s rights within the scope of authorization. Where a supervisor does not attend a meeting of the supervisory committee and does not appoint a proxy to attend on his/her behalf, he/she shall be deemed to have forfeited his/her voting rights at the said meeting. Resolutions of the supervisory committee shall be passed by more than half of the supervisors. General Manager and Other Senior Management Personnel The Company has one general manager, one deputy general manager, one chief financial officer, one senior research and development director and one secretary to the board of directors. The general manager, deputy general manager, chief financial officer, senior research and development director and secretary to the board of directors are the senior management personnel of the Company, and shall be appointed or dismissed by the board of directors. A person who holds an administrative position other than director and supervisor at the controlling shareholder of the Company shall not serve as the senior management personnel of the Company. The term of office of a general manager is three years. A general manager may be re-engaged and serve consecutive terms. The general manager shall be accountable to the board of directors and exercise the following functions and powers: (i) to lead the management of production and operation of the Company, to organize the implementation of the resolutions of the board of directors, and to report to the board of directors; (ii) to organize the implementation of the Company’s annual business schemes and investment plans; (iii) to draft the plans for the set-up of internal management organizations of the Company; (iv) to draft the basic management system of the Company; (v) to formulate the specific rules of the Company; (vi) to propose to the board of directors to engage or dismiss the deputy general manager, chief financial officer, senior research and development director and other senior management personnel of the Company; (vii) to decide on the engagement or dismissal of the management staff other than those required to be engaged or dismissed by the board of directors; and (viii) other functions and powers conferred by this AoA or the board of directors. The general manager shall attend the board meetings as nonvoting delegates. The deputy general manager, chief financial officer and senior research and development director shall be proposed by the general manager and be engaged or dismissed by the board of directors. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-15 – --- page 554 --- Qualification and Obligations of the Directors, Supervisors, General Manager and Other Senior Management Personnel of the Company The directors of the Company shall be natural persons, but a person who falls under any of the following circumstances may not serve as a director of the Company: (i) the person is without civil conduct capacity or with limited civil conduct capacity; (ii) it has not been more than five years since the person’s completion of service of a sentence received for a crime of embezzlement, bribery, appropriation of property, misappropriation of property, or disruption of the economic order of the socialist market, or it has not been more than five years since the person’s completion of service of a sentence to deprival of political rights for a crime; (iii) it has not been more than three years since the date of completion of bankruptcy liquidation of a company or enterprise where the person used to be a director or a factory director or a manager who was personally liable for the bankruptcy of the company or enterprise; (iv) it has not been more than three years since the date of forfeiture of the business license of a company or enterprise of which the person used to be the legal representative who was personally liable for the forfeiture of the business license or the ordered closedown of the company or enterprise for any violation of the law; (v) the person fails to repay a relatively large amount of due debts; (vi) the person is banned by the CSRC from access to the securities market, and the ban has not expired; or (vii) any other circumstances as set out by any law, administrative regulation or departmental rule, or the regulatory rules of the place where the Company’s shares are listed. Where any director is elected or appointed in violation of this article, such election or appointment shall be void. Where any director falls under any of the circumstances as set out in this article during his or her term of office, the Company shall remove him or her from the office. The above circumstances shall also apply to the supervisors and senior management of the Company. Directors shall have the following duties of loyalty to the Company in accordance with laws, administrative regulations and this AoA: (i) directors may not accept bribes or obtain any other illegal income by taking advantage of their functions or appropriate any property of the Company; (ii) directors may not misappropriate the funds of the Company; (iii) directors may not open accounts in their own names or in other individuals’ names to deposit any assets or funds of the Company; (iv) directors may not, in violation of this AoA, lend any funds of the Company to others or provide security for others with any property of the Company without the permission of the shareholders’ meeting or the board of directors; (v) directors may not enter into contracts or transact with the Company in violation of this AoA or without the permission of the shareholders’ meeting; (vi) without the permission of the shareholders’ meeting, directors may not take advantage of their positions to seek, for themselves or others, business opportunities that otherwise belong to the Company, or operate the same kind of business as the Company for their own accounts or on behalf of others; (vii) directors may not accept any commissions from others on transactions conducted with the Company; (viii) directors may not disclose any secret of the Company without authorization; (ix) directors may not use their affiliations to damage the interests of the Company; and (x) other duties of loyalty as set out by laws, administrative regulations, departmental rules, and this AoA. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-16 – --- page 555 --- Directors shall have the following duties of diligence to the Company in accordance with laws, administrative regulations and this AoA: (i) directors shall prudentially, carefully and diligently exercise the rights conferred by the Company to ensure that the business conduct of the Company complies with the laws and administrative regulations of the state and the requirements of various economic policies of the state and the commercial transactions of the Company are within the scope of business indicated in the business license of the Company; (ii) directors shall fairly treat all shareholders; (iii) directors shall keep them informed in a timely manner of the operating and management conditions of the Company; (iv) directors shall confirm in writing and sign the periodic reports of the Company, and ensure the veracity, accuracy and completeness of the information disclosed by the Company; (v) directors shall honestly provide relevant information and materials to the board of supervisors, and may not interfere with the exercise of functions by the board of supervisors or supervisors; and (vi) other duties of diligence as set out by laws, administrative regulations, departmental rules, and this AoA. The duties of loyalty of directors and the aforementioned (iv), (v) and (vi) duties of diligence shall also apply to the senior management. Supervisors shall abide by laws, administrative regulations and this AoA, and have the duties of loyalty and the duties of diligence to the Company, shall faithfully perform their duties of supervision, may not accept bribes or obtain any other illegal income by taking advantage of their functions, and may not appropriate any property of the Company. APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION – III-17 – --- page 556 --- A. FURTHER INFORMATION ABOUT OUR GROUP 1. Incorporation of Our Company Our Company was established as a limited liability company in the PRC on June 18, 2015 and was converted into a joint stock limited company on June 14, 2022 under the laws of the PRC. Accordingly, our corporate structure and Articles of Association are subject to the relevant laws and regulations of the PRC. A summary of our Articles of Association is set out in “Appendix III — Summary of Articles of Association” to this prospectus. Our principal place of business in Hong Kong is at 5/F, Manulife Place, 348 Kwun Tong Road, Kowloon, Hong Kong. We were registered as a non-Hong Kong company under Part 16 of the Companies Ordinance on July 6, 2022. Mr. Li Kin Wai has been appointed as our authorized representative for the acceptance of service of process and notices in Hong Kong. 2. Changes in the Share Capital of Our Company On June 14, 2022, our Company was converted into a joint stock company with limited liability and renamed as ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (ᔼᖹҦ ஔ(ɪऎ)ʮ̡ ). As of the Latest Practicable Date, our registered capital was RMB356,092,695 divided into 356,092,695 shares with a nominal value of RMB1.00 each. Save as disclosed above and in “History, Development and Corporate Structure,” there has been no other alteration in our share capital within two years immediately preceding the date of this prospectus. 3. Changes in the Share Capital of Our Subsidiaries A summary of the corporate information and the particulars of our subsidiaries are set out in Note 1 and Note 36 to the Accountants’ Report in Appendix IA to this prospectus. As disclosed in “History, Development and Corporate Structure”, save for the establishment of ImmuneOnco Hong Kong with the issued share capital of HK$1 on September 15, 2021 and the establishment of ImmuneOnco Shanghai with the registered capital of RMB10,000,000 on September 28, 2021, there has been no alteration in the share capital of our subsidiaries within two years immediately preceding the date of this prospectus. 4. Resolutions of the Shareholders of our Company Pursuant to the resolutions passed at a duly convened general meeting of our Shareholders on June 14, 2022, the following resolutions, among others, were passed by the Shareholders: (a) the issue of H Shares with a nominal value of RMB1.00 each and such H Shares be listed on the Stock Exchange; (b) the number of H Shares to be issued shall not be more than 25% of the total issued share capital of our Company as enlarged by the Global Offering, and the grant to the underwriters (or their representatives) of the Over-allotment Option of not more than 15% of the number of H Shares issued pursuant to the Global Offering; (c) subject to CSRC’s approval, upon completion of the Global Offering, 210,485,039 Unlisted Shares held by certain existing Shareholders will be converted into H Shares; APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 1– --- page 557 --- (d) subject to the completion of the Global Offering and approvals from the CSRC and other relevant PRC authorities for the issuance of H Shares, the granting of a general mandate to the Board to allot and issue H Shares at any time within a period up to the date of the conclusion of the next annual general meeting of the Shareholders or the date on which the Shareholders pass a resolution to revoke or change such mandate, whichever is earlier, upon such terms and conditions and for such purposes as the Board in their absolute discretion deem fit, provided that, the number of H Shares to be issued shall not exceed 20% of the number of H Shares in issue as at the Listing Date; (e) subject to the completion of the Global Offering, the Articles of Association have been approved and adopted, which shall become effective on the Listing Date, and the Board has been authorized to amend the Articles of Association to the extent necessary in accordance with any comments from the relevant regulatory authorities; and (f) authorizing our Board to handle all relevant matters relating to, among other things, the implementation of issuance of H Shares and the Listing. Pursuant to the resolutions passed at a duly convened general meeting of our Shareholders on June 1, 2023, among other matters, the Articles of Association was further amended, approved and adopted and shall become effective upon the Listing. 5. Restrictions on Repurchase Please refer to “Appendix III — Summary of Articles of Association” to this prospectus for details of the restrictions on the shares repurchase by our Company. B. FURTHER INFORMATION ABOUT THE BUSINESS OF OUR COMPANY 1. Summary of Material Contracts The following contracts (not being contracts entered into in the ordinary course of business) was entered into by our Group within the two years preceding the date of this prospectus and is or may be material: (a) the Hong Kong Underwriting Agreement; (b) the cornerstone investment agreement dated August 21, 2023 entered into among our Company, HARVEST INTERNATIONAL PREMIUM V ALUE (SECONDARY MARKET) FUND SPC acting on behalf of and for the account of HARVEST GREAT BAY INVESTMENT SP, Morgan Stanley Asia Limited and China International Capital Corporation Hong Kong Securities Limited, pursuant to which HARVEST INTERNATIONAL PREMIUM V ALUE (SECONDARY MARKET) FUND SPC acting on behalf of and for the account of HARVEST GREAT BAY INVESTMENT SP agreed to subscribe for Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of US$20,000,000 (excluding brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy); (c) the cornerstone investment agreement dated August 22, 2023 entered into among our Company, WUXI BIOLOGICS HEALTHCARE VENTURE, Morgan Stanley Asia Limited and China International Capital Corporation Hong Kong Securities Limited, pursuant to which WUXI BIOLOGICS HEALTHCARE VENTURE agreed to subscribe for Shares at the Offer Price in the aggregate amount of HK$39,093,480 (excluding brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy); APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 2– --- page 558 --- (d) the cornerstone investment agreement dated August 21, 2023 entered into among our Company, REMEGEN HONG KONG LIMITED (ʮ̡ ), Morgan Stanley Asia Limited and China International Capital Corporation Hong Kong Securities Limited, pursuant to which REMEGEN HONG KONG LIMITED agreed to subscribe for Shares at the Offer Price in the aggregate amount of HK$21,000,000 (excluding brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy); and (e) the cornerstone investment agreement dated August 21, 2023 entered into among our Company, ClinChoice Medical Development Limited (ʮ̡ ), Morgan Stanley Asia Limited and China International Capital Corporation Hong Kong Securities Limited, pursuant to which ClinChoice Medical Development Limited agreed to subscribe for Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of US$2,000,000 (inclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy). 2. Our Material Intellectual Property Rights As of the Latest Practicable Date, our Company has registered, or has applied for the registration of the following intellectual property rights which were material to our Group’s business. (a) Trademarks As of the Latest Practicable Date, we had registered the following trademarks which we consider to be or may be material to our business: No. Trademark Owner Registration No. Place of registration Class Expiry date 1 Our Company 17611702 PRC 5 May 20, 2027 2 Our Company 17611767 PRC 42 May 20, 2027 3 Our Company 18321401 PRC 5 December 20, 2026 4 Our Company 18321441 PRC 42 December 20, 2026 5 Our Company 305861962 Hong Kong 5 and 42 January 18, 2032 (b) Patents For a discussion of the details of the material patents and material patent applications by the Company in connection with our Core Product and pipeline products, see “Business — Intellectual Property.” APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 3– --- page 559 --- (c) Domain Names As of the Latest Practicable Date, we owned the following domain name which we consider to be or may be material to our business: No. Domain name Registrant Registration date Expiry date 1. immuneonco.com Our Company July 23, 2015 July 23, 2025 Save as the above, as of the Latest Practicable Date, there were no other trademarks, patents, intellectual or industrial property rights which were material in relation to our Group’s business. C. FURTHER INFORMATION ABOUT DIRECTORS, SUPERVISORS, MANAGEMENT AND SUBSTANTIAL SHAREHOLDERS 1. Disclosure of Interests (a) Interests and short positions of our Directors, Supervisors and the chief executive of our Company in the Shares, underlying Shares and debentures of our Company and our associated corporations Immediately following completion of the Global Offering and the conversion of our Unlisted Shares to H Shares (assuming the Over-allotment Option is not exercised), the interests and short positions of our Directors, Supervisors and chief executive of our Company in our Shares, underlying Shares or debentures of our Company or any of our associated corporations (within the meaning of Part XV of the SFO) (i) which will have to be notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions in which they are taken or deemed to have under such provisions of the SFO), or (ii) which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or (iii) which will be required to be notified to us and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, in each case once our Shares are listed on the Stock Exchange: Long position in the Shares of our Company Name of Director/ Supervisor/Chief Executive Capacity/Nature of interest Description of Shares (4) Number of Shares Held or Interested Approximate percentage of shareholding in our Unlisted Shares/H shares (as appropriate) (4) Approximate percentage of shareholding in the total issued share capital of our Company Dr. Tian (Chairman of the Board, chief executive officer, chief scientific officer and executive Director) . Beneficial owner Unlisted Shares 35,091,495 24.10% 9.40% H Shares 35,091,495 15.42% 9.40% Interest in controlled corporations; Interest of spouse (1) Unlisted Shares 15,178,477 10.42% 4.07% H Shares 33,178,478 14.58% 8.89% Mr. Yu Zhihua (ശ) (Non-executive Director) ....... Interest in controlled corporation (2) Unlisted Shares 19,263,240 13.23% 5.16% Mr. Yu Xiaoyong (ۇ) Non-executive Director) ....... Interest in controlled corporations (3) Unlisted Shares 36,780,390 25.26% 9.85% H Shares 5,554,305 2.44% 1.49% APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 4– --- page 560 --- Notes: (1) Each of Jiaxing Changxian and Jiaxing Changyu is a limited partnership established in the PRC and is managed by its general partner, Jiaxing Hanning Enterprise Management Co., Ltd. (ʮ̡ ), which is in turn ultimately controlled by Dr. Tian. As such, under the SFO, Dr. Tian is deemed to be interested in an aggregate of 15,178,477 Unlisted Shares and 15,178,478 H Shares held by Jiaxing Changxian and Jiaxing Changyu. Halo Investment II is a limited liability company incorporated under the laws of the BVI, which is wholly owned by Halo LP. The general partner of Halo LP is Halo Biomedical Investment I Limited (“ Halo Investment I ”). As of the Latest Practicable Date, Dr. Tian was the sole director of Halo Investment I and controlled the voting rights in Halo Investment I pursuant to the voting agreement entered into between Dr. Tian and the sole shareholder of Halo Investment I, and Halo Investment I was accustomed to act in accordance with Dr. Tian’s instruction. For further details of the voting agreement, see “History, Development and Corporate Structure — Employee Shareholding Platforms — Halo Investment II.” Further, as of the Latest Practicable Date, Ms. Yumei Ding, the spouse of Dr. Tian and a director of our subsidiary, held more than one-third of interests as a limited partner in Halo LP. All limited partners of Halo LP do not have any voting rights in our Company which are resided with the sole director of Halo Investment I being Dr. Tian. As such, under the SFO, Dr. Tian is deemed to be interested in 18,000,000 H Shares held by Halo Investment II as well as Dr. Yumei Ding’s deemed interest in Halo Investment II. (2) Lapam Capital is a limited partnership established in the PRC and is managed by its general partner, Tibet Lapam Yijing Venture Capital Center (Limited Partnership) (౻௴ุҳ༟ʕː (Υྫ)), which is in turn ultimately controlled by Mr. Yu Zhihua (ശ). As such, Mr. Yu is deemed to be interested in 19,263,240 Unlisted Shares held by Lapam Capital under the SFO. (3) Each of ZJ Leading Initiating VC and ZJ Leading SiQi VC is a limited partnership established in the PRC and is managed by its general partner. The general partner of ZJ Leading Initiating VC is Shanghai Zhangke Lingyi Enterprise Management Center (Limited Partnership) (ჯᔼΆุ၍ଣʕː (Υྫ)) and the general partner of ZJ Leading SiQi VC is Jiaxing Linghe Equity Investment L.P. (Limited Partnership) (ᛆҳ༟ ΥྫΆุ(Υྫ)), each is ultimately controlled by Mr. Yu Xiaoyong (ۇAs such, Mr. Yu is deemed to be interested in 36,780,390 Unlisted Shares and 5,554,305 H Shares held by ZJ Leading Initiating VC and ZJ Leading SiQi VC in aggregate under the SFO. (4) For the avoidance of doubt, both Unlisted Shares and H Shares are ordinary Shares in the share capital of our Company, and are considered as one class of Shares. (b) Interests of the substantial shareholders in the Shares Save as disclosed in “Substantial Shareholders,” immediately following the completion of the Global Offering and without taking into account any Shares which may be issued pursuant to the exercise of the Over-allotment Option, our Directors are not aware of any other person (not being a Director, Supervisor or chief executive of our Company) who will have an interest or short position in our Shares or the underlying Shares which would fall to be disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the issued voting shares of our Company. (c) Interests of the substantial shareholders in other members of our Group So far as our Directors are aware, as of the Latest Practicable Date, no persons were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of our Group. 2. Particulars of Directors’ and Supervisors’ Service Contracts We have entered into a service contract with each of our Directors and Supervisors which contains provisions in relation to, among other things, compliance with relevant laws and regulations and observance of the Articles of Association. The principal particulars of these service contracts are: (a) each of the contracts is for a term of three years following his/her respective effective date of his/her appointment; and (b) each of the contracts is subject to termination in accordance with their respective terms. The contracts may be renewed in accordance with our Articles of Association and the applicable rules. APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 5– --- page 561 --- Save as disclosed in “Directors, Supervisors and Senior Management” and above, we have not entered into, and do not propose to enter into any service contracts with any of our Directors and Supervisors in their respective capacities as Directors or Supervisors (excluding agreements expiring or determinable by any member of our Group within one year without payment of compensation other than statutory compensation). 3. Remuneration of Directors and Supervisors Save as disclosed in “Directors, Supervisors and Senior Management” and Note 13 to the Accountants’ Report set out in Appendix IA to this prospectus for the two financial years ended December 31, 2021 and 2022 and the four months ended April 30, 2023, none of our Directors or Supervisors received other remunerations of benefits in kind from us. 4. Employee Incentive Plans The following is a summary of the principal terms of the employee incentive plan I approved and adopted by the management of the Company on January 31, 2021 (the “ Plan I ”) and employee incentive plan II approved and adopted by the Board on December 20, 2021 (the “ Plan II ”, collectively, the “ Employee Incentive Plans ”), respectively. The terms of the Employee Incentive Plans are not subject to the provisions of Chapter 17 of the Listing Rules as the Employee Incentive Plans do not involve the grant of options by our Company to subscribe for H Shares after the Listing. Given the underlying Shares under the Employee Incentive Plans were either transferred by Dr. Tian to or had already been issued by the Company to the relevant Onshore Employee Shareholding Platforms, there will be no dilutive effect to the issued Shares upon the vesting of the awards under the Employee Incentive Plans. In addition, the Company is not expected to be a party to any subsequent dealings by connected grantees in relation to the Shares underlying the awards granted under the Employee Incentive Plans. In the event that any such subsequent dealing constitutes a connected transaction due to particular circumstances, the Company will comply with the applicable requirements under Chapter 14A of the Listing Rules as appropriate. As of the Latest Practicable Date, Jiaxing Changxian was the Company’s Onshore Employee Shareholding Platform holding the underlying Shares (i.e. 15,501,735 Unlisted Shares) in respect of share awards granted under the Plan I, and Jiaxing Changyu was the Company’s Onshore Employee Shareholding Platform holding the underlying Share in respect of share awards granted under the Plan II (i.e. 14,839,470 Unlisted Shares). For details of Jiaxing Changxian and Jiaxing Changyu, see “History, Development and Corporate Structure — Employee Shareholding Platforms.” (a) Objectives The objectives of the Employee Incentive Plans are to further improve the corporate governance of the Company, to build an incentive mechanism for senior management members and core employees, to achieve our strategies and to advance development of the Company. (b) Eligibility Pursuant to the plan documents (the “ Plan Documents ”), participants of the Employee Incentive Plans include our Company’s senior management members, core employees and other talents as approved by the manager of the Employee Incentive Plans, Dr. Tian (the “ Manager ”). The Plan Documents further provided that the following employees or other talents may not be selected as participants to the Employee Incentive Plans (as the case may be):  Persons who have received administrative penalties from government authorities due to material violation of laws and regulations in the preceding three years; APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 6– --- page 562 ---  Persons who are forbidden to hold the position of director, supervisor or senior management pursuant to the Company Law of the PRC;  Persons who have breached employment contracts, confidentiality agreements, non-competition agreements or any other agreements entered into with our Company;  Persons who have seriously violated laws, professional ethics, Articles of Association and the internal policies of our Company, or jeopardized the reputation or interests of the Company or cause severe accidents to the Company due to serious misconduct or gross negligence;  Persons who have been considered as unqualified by the Company or the Manager during the probation period; or  Persons who are otherwise not eligible as determined by the Manager or his/her supervisors. (c) Grant of awards The general partner of Jiaxing Changxian and Jiaxing Changyu is Jiaxing Hanning Enterprise Management Co., Ltd. (ʮ̡ ), which is ultimately controlled by Dr. Tian. Therefore, all management powers and voting rights of Jiaxing Changxian and Jiaxing Changyu reside with Dr. Tian. All selected participants do not have any direct voting right in our Company. Each selected participants will be granted awards in the form of economic interest in the relevant Onshore Employee Shareholding Platforms as a limited partner. Upon becoming the limited partner of the relevant Onshore Employee Shareholding Platforms, the selected participant indirectly receives economic interest in the number of Shares underlying the award granted to the selected participants held by the relevant Onshore Employee Shareholding Platforms. As of the Latest Practicable Date, an aggregate of 30,341,205 Unlisted Shares underlying the awards granted under the Employee Incentive Plans had been granted to 29 selected participants (being the individuals who are the limited partners of the Onshore Employee Shareholding Platforms). For further details of the awards granted, see “History, Development and Corporate Structure — Employee Shareholding Platforms.” (d) Administration The Manager or the Board retains sole discretion over, among other things, the matters of the Employee Incentive Plans to the extent approved by the shareholders’ meeting (as the case may be) including the implementation, amendment, termination and interpretation of the Employee Incentive Plans, subject to compliance with applicable laws, regulations, rules, requirements of relevant regulatory authorities and the Articles of Association. The Employee Incentive Plans are implemented by the office of share incentive comprising three responsible employees appointed by the Manager, subject to the terms of the Employee Incentive Plans and authorization by the Manager and/or the Board, with respect to the matters including (as the case may be):  the formulation of implement plan of Employee Incentive Plans;  the management of relevant documents under the Employee Incentive Plans;  the administration of the general matters of the Employee Incentive Plans; APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 7– --- page 563 ---  the internal coordination with the selected participants; and  the regular assessment of the selected participants. (e) Restrictions on transfer Prior to the Listing, the selected participants may not transfer any or all of his or her interest in the relevant Onshore Employee Shareholding Platforms unless approved by the Manager pursuant to the terms of the Employee Incentive Plans. After the Listing, in addition to the restrictions under the Employee Incentive Plans, the transfer or sale by selected participants shall be subject to the lock-up requirements under the relevant laws and regulations and the stock exchange rules, or the respective agreements entered into between the Company and the relevant selected participants pursuant to the terms of the Employee Incentive Plans (if applicable). 5. Disclaimers Save as disclosed in this prospectus: (a) none of our Directors, Supervisors or our chief executive has any interest or short position in our Shares, underlying Shares or debentures of us or any of our associated corporations (within the meaning of Part XV of the SFO) which will have to be notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which will be required to be notified to us and the Stock Exchange pursuant to Model Code for Securities Transactions by our Directors of Listed Issuers once the H Shares are listed on the Stock Exchange; (b) none of our Directors or Supervisors is aware of any person (not being a Director, Supervisor or chief executive of our Company) who will, immediately following completion of the Global Offering and conversion of Unlisted Shares into H Shares (without taking into account any H Shares which may be allotted and issued pursuant to the exercise of the Over-allotment Option), have an interest or short position in our Shares or underlying Shares which would fall to be disclosed to us under the provisions of Divisions 2 and 3 of Part XV of the SFO or who is interested, directly or indirectly, in 10% or more of the issued voting shares of any member of our Group; (c) so far as is known to our Directors, none of our Directors, their respective close associates (as defined under the Listing Rules) or Shareholders who own more than 5% of the number of issued shares of our Company have any interests in the five largest customers or the five largest suppliers of our Group; and APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 8– --- page 564 --- (d) save as disclosed in this prospectus, none of our Directors, Supervisors or any of the parties listed in “Qualifications of Experts” of this Appendix is: i. interested in our promotion, or in any assets which have been, within two years immediately preceding the date of this prospectus, acquired or disposed of by or leased to us, or are proposed to be acquired or disposed of by or leased to any member of our Group; or ii. materially interested in any contract or arrangement subsisting at the date of this prospectus which is significant in relation to our business. D. OTHER INFORMATION 1. Estate duty Our Directors have been advised that no material liability for estate duty is likely to fall on our Company or any of our subsidiaries under the laws of the PRC. 2. Litigation As of the Latest Practicable Date, we were not engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance is known to our Directors to be pending or threatened by or against any member of our Group, that would have a material adverse effect on our Group’s results of operations or financial condition, taken as a whole. 3. Preliminary expenses As of the Latest Practicable Date, our Company has not incurred material preliminary expenses. 4. Promoters The promoters of the Company are all of the 37 then shareholders of our Company as of May 23, 2022 immediately before our conversion into a joint stock limited liability company. Save as disclosed in this prospectus, within the two years immediately preceding the date of this prospectus, no cash, securities or other benefit has been paid, allotted or given or is proposed to be paid, allotted or given to the promoters in connection with the Global Offering and the related transactions described in this prospectus. 5. Taxation of Holders of H Shares (a) Hong Kong The sale, purchase and transfer of H Shares registered with our Hong Kong branch register of members will be subject to Hong Kong stamp duty. The current rate charged on each of the purchaser and seller is 0.13% of the consideration of or, if higher, of the fair value of our Shares being sold or transferred. (b) Consultation with professional advisers Potential investors in the Global Offering are urged to consult their professional tax advisers if they are in any doubt as to the taxation implications of subscribing for, purchasing, holding or disposing of or dealing in our H Shares (or exercising rights attached to them). None of us, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 9– --- page 565 --- Joint Lead Managers, the Capital Market Intermediaries, or any other person or party involved in the Global Offering accept responsibility for any tax effects on, or liabilities of, any person, resulting from the subscription, purchase, holding or disposal of, dealing in or the exercise of any rights in relation to our H Shares. 6. Application for Listing The Joint Sponsors have made an application on behalf of our Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the H Shares to be issued as mentioned in this prospectus (including any H Shares which may be issued pursuant to the exercise of Over-allotment Option) and the H Shares to be converted from Unlisted Shares, on the Main Board of the Stock Exchange. All necessary arrangements have been made to enable the securities to be admitted into CCASS. 7. No Material Adverse Change Our Directors confirm that, up to the date of this prospectus, there has been no material adverse change in the financial or trading position or prospect of our Group since April 30, 2023 (being the date to which the latest audited consolidated financial statements of our Group were prepared). 8. Qualifications of Experts The qualifications of the experts (as defined under the Listing Rules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance) who have given their opinion and/or advice in this prospectus are as follows: Name Qualifications Morgan Stanley Asia Limited Licensed corporation to conduct Type 1 (dealing in securities), Type 4 (advising on securities), Type 5 (advising on futures contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities as defined under the SFO China International Capital Corporation Hong Kong Securities Limited Licensed corporation to conduct Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts) and Type 6 (advising on corporate finance) regulated activities as defined under the SFO Deloitte Touche Tohmatsu Certified Public Accountants under the Professional Accountants Ordinance (Cap. 50) and Registered Public Interest Entity Auditor under the AFRCO (Cap. 588) JunHe LLP PRC Legal Advisor JunHe LLP Legal advisor as to intellectual property laws of the PRC Jun He Law Offices P.C. Legal advisor as to intellectual property laws of the United States Frost & Sullivan (Beijing) Inc., Shanghai Branch Co. Independent industry consultant As of the Latest Practicable Date, none of the experts named above had any shareholding interest in our Company or any of our subsidiaries or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of our Group. APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 1 0– --- page 566 --- 9. Consents Each of the experts as referred to “8. Qualifications of Experts” of this Appendix has given and has not withdrawn their respective written consents to the issue of this prospectus with the inclusion of their reports and/or letters (as the case may be) and the references to their names included in the form and context in which they are respective included. 10. Joint Sponsors’ Independence Each of the Joint Sponsors satisfies the independence criteria applicable to the sponsor set out in Rule 3A.07 of the Listing Rules. Pursuant to the engagement letter entered into between the Company and the Joint Sponsors, the Joint Sponsors’ fees payable by us to each of the Joint Sponsors in respect of their services as sponsors in connection with the proposed listing on the Stock Exchange is US$500,000. 11. Binding Effect This prospectus shall have the effect, if an application is made in pursuance of it, of rendering all persons concerned bound by all of the provisions (other than the penal provisions) of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so far as applicable. 12. Bilingual Prospectus The English and Chinese language versions of this prospectus are being published separately, in reliance upon the exemption provided under section 4 of the Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong). APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 1 1– --- page 567 --- 13. Miscellaneous Save as otherwise disclosed in this prospectus: (a) within the two years preceding the date of this prospectus, our Company has not issued nor agreed to issue any share or loan capital fully or partly paid either for cash or for a consideration other than cash; (b) no Share or loan capital of our Company, if any, is under option or is agreed conditionally or unconditionally to be put under option; (c) there are no founder shares, management shares or deferred shares issued by the Group; (d) our Company has no outstanding convertible debt securities or debentures; (e) with the two years immediately preceding the date of this prospectus, save in connection with the Underwriting Agreements, no commission, discount, brokerage or other special term has been granted in connection with the issue or sale of any capital of our Company; (f) there is no arrangement under which future dividends are waived or agreed to be waived; (g) there has been no interruption in our business which may have or have had a significant effect on the financial position in the last 12 months; (h) our Company is not presently listed on any stock exchange or traded on any trading system; and (i) our Company is a foreign investment joint stock limited company and is subject to the PRC Company Law. APPENDIX IV STATUTORY AND GENERAL INFORMATION –I V - 1 2– --- page 568 --- DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG The documents attached to the copy of this prospectus delivered to the Registrar of Companies in Hong Kong for registration were: 1. a copy of the GREEN Application Form; 2. the written consents referred to in “Appendix IV — Statutory and General Information — Other Information — Consents;” and 3. a copy of each of the material contracts referred to in “Appendix IV — Statutory and General Information — Further Information about the Business of our Company — Summary of Material Contracts.” DOCUMENTS A V AILABLE ON DISPLAY Copies of the following documents will be available on display on the website of the Stock Exchange at www.hkexnews.hk and our websites at www.immuneonco.com during a period of 14 days from the date of this prospectus: 1. the Articles of Association; 2. the accountants’ report prepared by Deloitte Touche Tohmatsu on the historical financial information of our Group, the text of which is set forth in Appendix IA to this prospectus; 3. the audited consolidated financial statements of our Company for the two years ended December 31, 2021 and 2022 and the four months ended April 30, 2023; 4. the report prepared by Deloitte Touche Tohmatsu on the unaudited condensed consolidated financial statements of our Group as of and for the six months ended June 30, 2023, the text of which is set out in Appendix IB to this prospectus; 5. the report prepared by Deloitte Touche Tohmatsu on the unaudited pro forma financial information of our Group, the text of which is set forth in Appendix II to this prospectus; 6. the material contracts referred to in “Appendix IV — Statutory and General Information — Further Information about the Business of our Company — Summary of Material Contracts;” 7. the written consents referred to in “Appendix IV — Statutory and General Information — Other Information — Consents;” 8. the service contracts referred to in “Appendix IV — Statutory and General Information — Further Information about Directors, Supervisors, Management and Substantial Shareholders — Particulars of Directors’ and Supervisors’ Service Contracts;” 9. the legal opinion issued by JunHe LLP, our PRC Legal Advisor, in respect of, among other things, the general corporate matters and property interests of our Group under the PRC law; APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY –V - 1– --- page 569 --- 10. the legal opinions issued by JunHe LLP, our legal advisor as to intellectual property laws of the PRC and Jun He Law Offices P.C., our legal advisor as to intellectual property laws of the United States, in respect of certain aspects of the intellectual property laws of the PRC and the United States; 11. the industry report issued by Frost & Sullivan, the summary of which is set forth in “Industry Overview;” 12. a copy of the following PRC laws, together with unofficial English translations: (i) the PRC Company Law; (ii) the PRC Securities Law; and (iii) the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies; and 13. the terms of the Employee Incentive Plans. APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY –V - 2– --- page 570 --- ImmuneOnco Biopharmaceuticals (Shanghai) Inc. ʮ̡