Financial Statements Schedule I

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Financial Statements Schedule I

Additional financial information of parent company -

Financial statements schedule I

Zai Lab Limited

Financial information of parent company

Condensed balance sheets

(In U.S. dollars ("$") except for number of shares)

	As of December 31,
	2017			2018
	$			$
Assets
Current assets:
Cash and cash equivalents		181,910,618			745,980
Short-term investment		—			200,350,000
Prepayments and other current assets		450,333			2,912,408
Total current assets		182,360,951			204,008,388
Investment in subsidiaries		54,885,326			48,747,970
Total assets		237,246,277			252,756,358
Liabilities and shareholders' deficits
Liabilities
Current liabilities:
Other payables		593,317			504,645
Total current liabilities		593,317			504,645
Deferred income		1,482,000			1,170,000
Total liabilities		2,075,317			1,674,645
Shareholders' equity
Ordinary shares (par value of US$0.00006 per share; 83,333,333 shares    authorized, 49,803,050 and 58,006,967 shares outstanding as of    December 31, 2017 and 2018, respectively)		2,995			3,481
Subscription receivable		(18	)		—
Additional paid-in capital		345,269,688			498,043,011
Accumulated deficit		(110,551,613	)		(249,626,508	)
Additional other comprehensive income		449,908			2,661,729
Total shareholders' equity		235,170,960			251,081,713
Total liabilities and shareholders' equity		237,246,277			252,756,358

Additional financial information of parent company -

Financial statements schedule I

Zai Lab Limited

Financial information of parent company

Condensed statements of operations and comprehensive loss

(In U.S. dollars ("$") except for number of shares)

	Year Ended December 31,
	2016			2017			2018
	$			$			$
Operating Expenses:
Research and development		—			—			(234,185	)
General and administrative		(534,660	)		(4,114,144	)		(4,250,655	)
Loss from operations		(534,660	)		(4,114,144	)		(4,484,840	)
Interest income		—			50,060			3,041,842
Changes in fair value of warrants		(1,920,000	)		200,000			—
Equity in loss of subsidiaries		(35,057,552	)		(46,598,092	)		(137,943,897	)
Other income		—			78,000			312,000
Loss before income tax		(37,512,212	)		(50,384,176	)		(139,074,895	)
Income tax expense		—			—			—
Net loss attributable to ordinary shareholders		(37,512,212	)		(50,384,176	)		(139,074,895	)
Net loss		(37,512,212	)		(50,384,176	)		(139,074,895	)
Other comprehensive (loss) income, net of tax of nil:
Foreign currency translation adjustment		(594,912	)		1,148,440			2,211,821
Comprehensive loss		(38,107,124	)		(49,235,736	)		(136,863,074	)

Additional financial information of parent company -

Financial statements schedule I

Zai Lab Limited

Financial information of parent company

Condensed statements of cash flows

(In U.S. dollars ("$") except for number of shares)

	Year Ended December 31,
	2016			2017			2018
	$			$			$
Cash flows from Operating activities:
Net loss		(37,512,212	)		(50,384,176	)		(139,074,895	)
Adjustments to reconcile net loss to net cash provided    by operating activities:
Amortization of deferred income		—			(78,000	)		(312,000	)
Share based compensation		534,660			3,346,039			1,408,110
Change of fair value of warrants		1,920,000			(200,000	)		—
Equity in loss of subsidiaries		35,057,552			46,598,092			137,943,897
Changes in operating assets and liabilities:
Prepayments and other current assets		—			(450,333	)		(2,462,075	)
Other payables		—			553,317			(48,672	)
Deferred income		—			1,560,000			—
Net cash provided by operating activities		—			944,939			(2,545,635	)
Cash flows from investing activities:
Purchases of short-term investments		—			—			(200,350,000	)
Investment in subsidiaries		(84,501,020	)		(31,707,566	)		(118,773,187	)
Net cash used in investing activities		(84,501,020	)		(31,707,566	)		(319,123,187	)
Cash flows from financing activities:
Proceed from issuance of convertible preferred     shares, net of issuance cost		106,200,000			29,100,000			—
Proceeds from exercise of warrants		—			1,000,000			—
Proceeds from exercises of stock options		—			65,500			195,711
Proceeds from issuance of ordinary shares     upon public offerings		—			160,424,994			141,000,000
Payment of public offering costs		—			(2,730,299	)		(691,527	)
Net cash provided by financing activities		106,200,000			187,860,195			140,504,184
Effect of foreign exchange rate changes on cash and cash    equivalent		—			—			—
Net increase (decrease) in cash and cash equivalents		21,698,980			157,097,568			(181,164,638	)
Cash and cash equivalents-beginning of the year		3,114,070			24,813,050			181,910,618
Cash and cash equivalents-end of the year		24,813,050			181,910,618			745,980

Additional financial information of parent company -

Financial statements schedule I

Zai Lab Limited

Financial information of parent company

Notes to schedule I

(In U.S. dollars ("$") except for number of shares)

1. Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year.

2. The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. For the parent company, the Company records its investments in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments-Equity Method and Joint Ventures. Such investments are presented on the Condensed Balance Sheets as ‘‘Investment in subsidiaries’’. Ordinarily under the equity, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of this Schedule I, the parent company has continued to reflect its share, based on its proportionate interest, of the losses of subsidiaries regardless of the carrying value of the investment even though the parent company is not obligated to provide continuing support or fund losses.

3. As of December 31, 2017 and 2018, there were no material contingencies, significant provisions of long term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of the Company.