Financial Statements Schedule I

12 Months Ended

Dec. 31, 2019

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 thousands of U.S. dollars ("$") except for number of shares and per share data)

	As of December 31,
	2018			2019
	$			$
Assets
Current assets:
Cash and cash equivalents		746			55,442
Short-term investment		200,350			200,000
Prepayments and other current assets		2,912			4,179
Total current assets		204,008			259,621
Investment in subsidiaries		48,748			36,504
Total assets		252,756			296,125
Liabilities and shareholders' deficits
Liabilities
Current liabilities:
Other current liabilities		505			607
Total current liabilities		505			607
Deferred income		1,170			858
Total liabilities		1,675			1,465
Shareholders' equity
Ordinary shares (par value of US$0.00006 per share; 83,333,333 shares    authorized, 58,006,967 and 68,237,247 shares outstanding as of    December 31, 2018 and 2019, respectively)		3			4
Additional paid-in capital		498,043			734,734
Accumulated deficit		(249,627	)		(444,698	)
Additional other comprehensive income		2,662			4,620
Total shareholders' equity		251,081			294,660
Total liabilities and shareholders' equity		252,756			296,125

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 thousands of U.S. dollars ("$") except for number of shares and per share data)

	Year Ended December 31,
	2017			2018			2019
	$			$			$
Operating Expenses:
Research and development		—			(234	)		(101	)
General and administrative		(4,114	)		(4,251	)		(4,864	)
Loss from operations		(4,114	)		(4,485	)		(4,965	)
Interest income		50			3,042			7,987
Changes in fair value of warrants		200			—			—
Other income, net		78			312			311
Loss before income tax and equity in loss of subsidiaries		(3,786	)		(1,131	)		3,333
Equity in loss of subsidiaries		(46,598	)		(137,944	)		(198,404	)
Income tax expense		—			—			—
Net loss attributable to ordinary shareholders		(50,384	)		(139,075	)		(195,071	)
Net loss		(50,384	)		(139,075	)		(195,071	)
Other comprehensive income, net of tax of nil:
Foreign currency translation adjustment		1,148			2,212			1,958
Comprehensive loss		(49,236	)		(136,863	)		(193,113	)

Additional financial information of parent company -

Financial statements schedule I

Zai Lab Limited

Financial information of parent company

Condensed statements of cash flows

(In thousands of U.S. dollars ("$") except for number of shares and per share data)

	Year Ended December 31,
	2017			2018			2019
	$			$			$
Cash flows from Operating activities:
Net loss		(50,384	)		(139,075	)		(195,071	)
Adjustments to reconcile net loss to net cash provided    by operating activities:
Amortization of deferred income		(78	)		(312	)		(312	)
Share based compensation		3,346			1,408			2,013
Change of fair value of warrants		(200	)		—			—
Equity in loss of subsidiaries		46,598			137,944			198,404
Changes in operating assets and liabilities:
Prepayments and other current assets		(450	)		(2,462	)		(1,267	)
Other current liabilities		553			(49	)		102
Deferred income		1,560			—			—
Net cash provided by (used in) operating activities		945			(2,546	)		3,869
Cash flows from investing activities:
Purchases of short-term investments		—			(200,350	)		(277,640	)
Proceeds from maturity of short-term investments		—			—			277,990
Investment in subsidiaries		(31,708	)		(118,773	)		(165,924	)
Net cash used in investing activities		(31,708	)		(319,123	)		(165,574	)
Cash flows from financing activities:
Proceed from issuance of convertible preferred     shares, net of issuance cost		29,100			—			—
Proceeds from exercise of warrants		1,000			—			—
Proceeds from exercises of stock options		66			196			1,055
Proceeds from issuance of ordinary shares     upon public offerings		160,425			141,000			216,200
Payment of public offering costs		(2,730	)		(692	)		(854	)
Net cash provided by financing activities		187,861			140,504			216,401
Effect of foreign exchange rate changes on cash and cash    equivalent		—			—			—
Net increase (decrease) in cash and cash equivalents		157,098			(181,165	)		54,696
Cash and cash equivalents-beginning of the year		24,813			181,911			746
Cash and cash equivalents-end of the year		181,911			746			55,442

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, 2018 and 2019, there were no material contingencies, significant provisions of long term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of the Company.