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Stockholders' Equity
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
Stockholders' Equity

10.

Stockholders’ Equity

 

Common Stock

 

Under the Company’s amended and restated certificate of incorporation, the Company has 400,000,000 shares of Common Stock authorized for issuance with a $0.001 par value per share. The number of authorized shares of Common Stock may be increased or decreased by the affirmative vote of the holders of a majority of the Company’s stock who are entitled to vote. The holders of Common Stock have voting rights equal to one vote per share of Common Stock held. The holders of Common Stock are entitled to receive dividends when and as declared or paid by the Company’s board of directors.

 

Common stock reserved for future issuance is as follows:

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

Convertible Preferred Stock issued and outstanding

 

 

—

 

 

 

8,767,332

 

Preferred Stock Warrants issued and outstanding

 

 

540,666

 

 

 

540,666

 

Options issued and outstanding

 

 

18,077,869

 

[1]

 

18,280,548

 

Total Common Stock reserved

 

 

18,618,535

 

 

 

27,588,546

 

 

[1] Includes 7,304,898 options exercisable for shares of common stock, which underlying shares of common stock were transferred in the name of the Company to Futu Network Technology Limited, the stock plan administrator of the 2023 Omnibus Incentive Sub-Plan for Chinese Participants.

 

2024 ATM Program

On November 27, 2024, Gyre Therapeutics, Inc. entered into an Open Market Sale Agreement (the “ATM Agreement”) with Jefferies LLC (the “Sales Agent”) as sales agent, pursuant to which the Company may offer and sell, from time to time, through the Sales Agent, shares of Common Stock with aggregate gross sales proceeds of up to $50.0 million through an at-the-market offering program (the “ATM Program”). The Company will pay the Sales Agent a commission of up to 3% of the gross proceeds of any shares sold. The Company also agreed to reimburse the Sales Agent for certain expenses incurred in connection with its services under the ATM Agreement, including up to $135,000 for legal expenses in connection with the establishment of the ATM Program. During the year ended and as of December 31, 2024, the Company sold 70,267 shares of Common Stock under ATM Program and received net proceeds of $0.8 million, after deducting commissions and offering costs of $0.02 million.

 

Sales of shares of Common Stock under the ATM Program may be made pursuant to the registration statement on Form S-3 (File No. 333-283237), which was declared effective by the SEC on November 22, 2024, and a related prospectus supplement filed with the SEC on November 27, 2024.

 

Restricted Net Assets

Under PRC laws and regulations, Gyre Pharmaceuticals is subject to restrictions on foreign exchange and cross-border cash transfers, including to parent companies and U.S. stockholders. The ability to distribute earnings to the parent companies and U.S. stockholders is also limited. Current PRC regulations permit Gyre Pharmaceuticals to pay dividends to BJC only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. Amounts restricted include paid-in capital and the statutory reserves of Gyre Pharmaceuticals. The aggregate amounts of restricted capital and statutory reserves, which represented the amount of net assets of the relevant subsidiaries not available for distribution were $64.3 million and $64.3 million as of December 31, 2024 and 2023, respectively.

 

As a result of the above restrictions, parent-only financial statements are presented in Schedule I.

 

Statutory Reserve

 

Gyre Pharmaceuticals is required to set aside at least 10% of its after-tax profits as the statutory reserve fund until the cumulative amount of the statutory reserve fund reaches 50% or more of its registered capital, if any, to fund its statutory reserves, which are not available for distribution as cash dividends. At the Company’s discretion, the Company may allocate a portion of after-tax profits based on PRC accounting standards to a discretionary reserve fund.

 

There were no appropriations to these reserves during the years ended December 31, 2024 and 2023.