Structure Therapeutics Inc. 10-K

Item 8. Financial Statements and Supplementary Data ​ STRUCTURE THERAPEUTICS INC. INDEX TO FINANCIAL STATEMENTS Years Ended December 31, 2022 and 2021 ​ ​ ​ ​ ​ ​ ​ Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238) ​ 175 Consolidated Financial Statements ​ ​ Consolidated Balance Sheets ​ 176 Consolidated Statements of Operations and Comprehensive Loss ​ 177 Consolidated Statements of Redeemable Convertible Preferred Shares, Redeemable Noncontrolling Interest and Shareholders’ Deficit ​ 178 Consolidated Statements of Cash Flows ​ 179 Notes to Consolidated Financial Statements ​ 180 ​ ​ ​ ​ ​ ​ ​ ​ 174 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Structure Therapeutics Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Structure Therapeutics Inc. and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, of redeemable convertible preferred shares, redeemable noncontrolling interest and shareholders’ deficit and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP San Jose, California March 30, 2023 We have served as the Company’s auditor since 2020. 175 Table of Contents STRUCTURE THERAPEUTICS INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ ​ 2022 ​ 2021 Assets ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 26,091 ​ $ 105,305 Short-term investments ​ 64,750 ​ 2,002 Prepaid expenses and other current assets ​ 2,248 ​ 1,943 Total current assets ​ 93,089 ​ 109,250 Property and equipment, net ​ 1,031 ​ 1,185 Operating right-of-use assets ​ 262 ​ 609 Other non-current assets ​ 3,463 ​ 111 Total assets ​ $ 97,845 ​ $ 111,155 Liabilities, redeemable convertible preferred shares and shareholders’ deficit ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 6,009 ​ $ 3,484 Accrued expenses and other current liabilities ​ 6,741 ​ 4,825 Operating lease liabilities, current portion ​ 260 ​ 349 Total current liabilities ​ 13,010 ​ 8,658 Operating lease liabilities, net of current portion ​ — ​ 272 Total liabilities ​ 13,010 ​ 8,930 Commitments and contingencies (Note 6) ​ ​ Series A redeemable convertible preferred shares – $0.0001 par value, 19,200 shares authorized, issued and outstanding as of December 31, 2022 and 2021 (liquidation preference of $32,001 as of December 31, 2022 and 2021) ​ 32,001 ​ 32,001 Series A+ redeemable convertible preferred shares – $0.0001 par value, 12,800 shares authorized, issued and outstanding as of December 31, 2022 and 2021 (liquidation preference of $26,000 as of December 31, 2022 and 2021) ​ 26,000 ​ 26,000 Series B redeemable convertible preferred stock – $0.0001 par value, 32,857 and 24,702 shares authorized, issued and outstanding as of December 31, 2022 and 2021, respectively (liquidation preference of $133,015 and $100,000 as of December 31, 2022 and 2021, respectively) ​ 133,015 ​ 100,000 Series B‑1 redeemable convertible preferred stock – $0.0001 par value, 2,161 shares authorized, issued and outstanding as of December 31, 2022 and 2021 (liquidation preference of $7,000 as of December 31, 2022 and 2021) ​ 8,959 ​ 8,959 Shareholders’ deficit: ​ ​ Ordinary shares – $0.0001 par value; 432,982 and 441,137 shares authorized as of December 31, 2022 and 2021, respectively; 10,527 and 10,894 shares issued and outstanding as of December 31, 2022 and 2021, respectively ​ 1 ​ 1 Additional paid-in capital ​ 1,921 ​ — Accumulated other comprehensive loss ​ (110) ​ — Accumulated deficit ​ (116,952) ​ (64,736) Total shareholders’ deficit ​ (115,140) ​ (64,735) Total liabilities, redeemable convertible preferred shares and shareholders’ deficit ​ $ 97,845 ​ $ 111,155 ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 176 Table of Contents STRUCTURE THERAPEUTICS INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED DECEMBER 31, ​ ​ 2022 2021 Operating expenses: ​ ​ ​ ​ Research and development ​ $ 36,193 ​ $ 29,111 General and administrative ​ 16,368 ​ 8,585 Total operating expenses ​ 52,561 ​ 37,696 Loss from operations ​ (52,561) ​ (37,696) Interest and other income (expense), net ​ 1,257 ​ (122) Loss before provision for income taxes ​ (51,304) ​ (37,818) Provision for income taxes ​ 17 ​ 231 Net loss ​ (51,321) ​ (38,049) Less: Accretion of redeemable convertible preferred shares to their redemption value ​ (1,515) ​ (3,757) Less: Excess of the fair value of the consideration paid over the carrying value of redeemable noncontrolling interest ​ — ​ (1,959) Net loss attributable to ordinary shareholders ​ $ (52,836) ​ $ (43,765) Net loss per share attributable to ordinary shareholders, basic and diluted ​ $ (5.51) ​ $ (5.38) Weighted-average ordinary shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted ​ 9,584 ​ 8,141 Other comprehensive loss: ​ ​ Unrealized (loss) gain on investments, net ​ (110) ​ 1 Total other comprehensive (loss) gain ​ (110) ​ 1 Comprehensive loss ​ $ (51,431) ​ $ (38,048) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. 177 Table of Contents STRUCTURE THERAPEUTICS INC. CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED SHARES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ DEFICIT (IN THOUSANDS) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ACCUMULATED ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ REDEEMABLE ​ ​ ​ ​ ​ ​ ADDITIONAL ​ OTHER ​ ​ ​ ​ TOTAL ​ ​ REDEEMABLE CONVERTIBLE PREFERRED SHARES ​ NONCONTROLLING ​ ORDINARY ​ PAID-IN ​ COMPREHENSIVE ​ ACCUMULATED ​ SHAREHOLDERS’ ​ ​ SERIES A ​ SERIES A+ ​ SERIES B ​ SERIES B-1 ​ INTEREST ​ SHARES ​ CAPITAL ​ LOSS ​ DEFICIT ​ DEFICIT ​ ​ SHARES ​ AMOUNT ​ SHARES ​ AMOUNT ​ SHARES ​ AMOUNT ​ SHARES ​ AMOUNT ​ ​ ​ SHARES ​ AMOUNT ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2020 ​ 19,200 ​ $ 32,001 ​ 12,800 ​ $ 26,000 ​ — ​ $ — ​ — ​ $ — ​ $ — ​ 10,865 ​ $ 1 ​ $ 477 ​ $ (1) ​ $ (22,946) ​ $ (22,469) Issuance of Series B redeemable convertible preferred shares, net of issuance costs of $3,551 — ​ — — ​ — 24,702 ​ 96,449 — ​ — ​ — — ​ — ​ — ​ — ​ — ​ — Accretion of Series B redeemable convertible preferred shares to their redemption value — ​ — — ​ — — ​ 3,551 — ​ — ​ — — ​ — ​ (1,038) ​ — ​ (2,513) ​ (3,551) Issuance of Series Seed redeemable convertible preferred shares of Basecamp to noncontrolling interest holders, net of issuance costs of $91 — ​ — — ​ — — ​ — — ​ — ​ 6,909 — ​ — ​ — ​ — ​ — ​ — Accretion of Series Seed redeemable convertible preferred shares to their redemption value ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 91 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (91) ​ ​ (91) Issuance of Series B-1 redeemable convertible preferred shares in exchange of redeemable noncontrolling interest, net of issuance costs of $115 (including $1,959 representing the excess of the fair value of Series B-1 redeemable convertible preferred shares over the carrying amount of redeemable noncontrolling interest) ​ — ​ — ​ — ​ — ​ — ​ — ​ 2,161 ​ 8,844 ​ (7,000) ​ — ​ — ​ (937) ​ — ​ (1,022) ​ ​ (1,959) Accretion of Series B-1 redeemable convertible preferred shares to their redemption value — ​ — — — — ​ — — ​ 115 ​ — — ​ — ​ — ​ — ​ (115) ​ (115) Issuance of ordinary share upon exercise of vested share options — ​ — — — — ​ — — ​ — ​ — 29 ​ — ​ 11 ​ — ​ — ​ 11 Share-based compensation expense — ​ — — — — ​ — — ​ — ​ — — ​ — ​ 1,487 ​ — ​ — ​ 1,487 Unrealized gain on investments, net — ​ — — — — ​ — — ​ — ​ — — ​ — ​ — ​ 1 ​ — ​ 1 Net loss — ​ — — — — ​ — — ​ — ​ — — ​ — ​ — ​ — ​ (38,049) ​ (38,049) Balance at December 31, 2021 19,200 ​ $ 32,001 12,800 ​ $ 26,000 24,702 ​ $ 100,000 2,161 ​ $ 8,959 ​ $ — 10,894 ​ $ 1 ​ $ — ​ $ — ​ $ (64,736) ​ $ (64,735) Issuance of Series B redeemable convertible preferred shares, net of issuance costs of $1,515 — ​ — — ​ — 8,155 ​ 31,500 — ​ — ​ — — ​ — ​ — ​ — ​ — ​ — Accretion of Series B redeemable convertible preferred shares to their redemption value — ​ — — ​ — — ​ 1,515 — ​ — ​ — — ​ — ​ (620) ​ — ​ (895) ​ (1,515) Repurchase of unvested restricted share awards — ​ — — ​ — — ​ — — ​ — ​ — (450) ​ — ​ (6) ​ — ​ — ​ (6) Issuance of ordinary share upon exercise of vested share options ​ — ​ ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ 83 ​ ​ — ​ ​ 33 ​ ​ — ​ ​ — ​ ​ 33 Share-based compensation expense — ​ — — — — ​ — — ​ — ​ — — ​ — ​ 2,514 ​ — ​ — ​ 2,514 Unrealized loss on investments, net — ​ — — — — ​ — — ​ — ​ — — ​ — ​ — ​ (110) ​ — ​ (110) Net loss — ​ — — — — ​ — — ​ — ​ — — ​ — ​ — ​ — ​ (51,321) ​ (51,321) Balance at December 31, 2022 19,200 ​ $ 32,001 12,800 ​ $ 26,000 32,857 ​ $ 133,015 2,161 ​ $ 8,959 ​ $ — 10,527 ​ $ 1 ​ $ 1,921 ​ $ (110) ​ $ (116,952) ​ $ (115,140) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 178 ​ Table of Contents STRUCTURE THERAPEUTICS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED DECEMBER 31, ​ 2022 2021 Cash flows from operating activities ​ ​ ​ ​ ​ ​ Net loss ​ $ (51,321) ​ $ (38,049) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Share-based compensation expense ​ 2,514 ​ 1,487 Depreciation ​ 277 ​ 72 Non-cash lease expense ​ 347 ​ 194 Amortization (accretion) of net investment premium (discount) ​ (905) ​ 27 Amortization of debt discount and issuance costs ​ — ​ 47 Changes in operating assets and liabilities: ​ ​ ​ Prepaid expenses and other current assets ​ (305) ​ (1,008) Other non-current assets ​ ​ (60) ​ ​ — Other non-current assets ​ — ​ (36) Accounts payable ​ 2,153 ​ 1,897 Accrued expenses and other current liabilities ​ 1,541 ​ 3,413 Operating lease liabilities ​ (361) ​ (204) Net cash used in operating activities ​ (46,120) ​ (32,160) Cash flows from investing activities ​ ​ Purchases of short-term investments ​ (123,453) ​ (4,212) Maturities of short-term investments ​ 61,500 ​ 23,277 Purchases of property and equipment ​ (155) ​ (1,206) Net cash (used in) provided by investing activities ​ (62,108) ​ 17,859 Cash flows from financing activities ​ ​ Proceeds from issuance of Series B redeemable convertible preferred shares, net of issuance costs ​ 31,500 ​ 96,449 Proceeds from issuance of Series Seed redeemable convertible preferred shares of Basecamp to noncontrolling interest holders ​ — ​ 6,909 Payments of deferred offering costs ​ ​ (2,513) ​ ​ — Repurchases of unvested restricted share awards ​ ​ (6) ​ ​ — Proceeds from exercise of share options ​ 33 ​ 11 Payment of Series B-1 redeemable convertible preferred shares issuance costs ​ — ​ (115) Net cash provided by financing activities ​ 29,014 ​ 103,254 Net change in cash and cash equivalents ​ (79,214) ​ 88,953 Cash and cash equivalents ​ ​ Beginning of the period ​ 105,305 ​ 16,352 End of the period ​ $ 26,091 ​ $ 105,305 Supplemental disclosures of noncash investing and financing activities ​ ​ Accretion of redeemable convertible preferred shares to their redemption value ​ $ 1,515 ​ $ 3,757 Issuance of Series B-1 redeemable convertible preferred stock to noncontrolling interest holders in exchange of Series Seed redeemable convertible preferred stock of Basecamp ​ $ — ​ $ 8,959 Purchases of property and equipment in accounts payable and accrued expenses and other current liabilities ​ $ — ​ $ 32 Operating lease right-of-use assets obtained in exchange for new lease liabilities, net ​ $ — ​ $ 545 Deferred offering costs included in accounts payable and accrued expenses and other current liabilities ​ $ 854 ​ $ 75 ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 179 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS ​ 1. Organization and Nature of the Business Structure Therapeutics Inc. (the “Company”) is a clinical stage global biopharmaceutical company aiming to develop and deliver novel oral therapeutics to treat a wide range of chronic diseases with unmet medical needs. The Company was incorporated in February 2019 in the Cayman Islands, with operating subsidiaries in the United States and China. In June 2022, the Company changed its name from ShouTi Inc. to Structure Therapeutics Inc. Prior to the formation of the Company, the operating activities were carried out by the subsidiaries of the Company. Structure Therapeutics USA Inc., a Delaware corporation (“StructureTx US”), was incorporated on June 6, 2016. On January 20, 2017, StructureTx US was reorganized as a limited liability company. Annapurna Bio, Inc. (“Annapurna”), a Delaware corporation, was incorporated on January 26, 2017, and Gasherbrum Bio, Inc. (“Gasherbrum”), a Delaware corporation, was incorporated on April 19, 2017. On April 18, 2019, Annapurna, Gasherbrum, StructureTx US and the Company entered into a share exchange agreement (the “Share Exchange Agreement”). As a result of the Share Exchange Agreement, StructureTx US, Annapurna and Gasherbrum became wholly-owned subsidiaries of the Company. At the closing of the Share Exchange Agreement on April 18, 2019, the Company issued to the shareholders of Annapurna, Gasherbrum, and StructureTx US an aggregate of 10,766,250 ordinary shares (the “Share Exchange”). On April 19, 2019, ShouTi LLC was converted into ShouTi Inc., a Delaware corporation, which subsequently changed its name to Structure Therapeutics USA Inc. The Share Exchange was accounted for as a capital transaction. On June 28, 2019, ShouTi Hong Kong Ltd (“ShouTi Hong Kong”) was incorporated as a wholly-owned subsidiary of the Company. On July 26, 2019, Shanghai ShouTi Biotechnology Co., Ltd (“ShouTi Shanghai”) was incorporated as a wholly-owned subsidiary of ShouTi Hong Kong. On April 1, 2020, Lhotse Bio, Inc. (“Lhotse”) was incorporated as a wholly-owned subsidiary of the Company. On February 10, 2021, the Company incorporated Basecamp Bio Inc. (“Basecamp”) in the Cayman Islands with a wholly owned subsidiary, Basecamp Bio Hong Kong Limited (“Basecamp HK”) in Hong Kong. Shanghai Basecamp Biotechnology Co., Ltd., a wholly owned subsidiary of Basecamp HK, was established on March 26, 2021 in Shanghai, China. The purpose of Basecamp is to develop certain of the Company’s technologies in Mainland China. In March 2021, Basecamp issued 7,000,000 Series Seed shares to other investors that are also investors of the Company, which was accounted for as redeemable noncontrolling interest in the consolidated financial statements (see Note 8). In December 2021, the Company acquired the 7,000,000 Series Seed redeemable convertible preferred shares of Basecamp held by the other investors in exchange for 2,161,402 shares of its Series B-1 redeemable convertible preferred shares with Basecamp becoming a wholly owned subsidiary (see Note 8). The Company has consolidated Basecamp since its incorporation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Initial Public Offering On February 7, 2023, the Company closed its initial public offering (“IPO”) of American Depositary Shares (“ADS”). Each ADS represents three ordinary shares. The net proceeds from the IPO were approximately $166.7 million after deducting underwriting discounts and commissions and estimated offering costs. Upon the closing of the IPO, all outstanding shares of the Company’s redeemable convertible preferred shares converted into 67,018,087 ordinary shares. In connection with the completion of its IPO, the 180 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ Company’s memorandum of association was amended and restated to provide for 500,000,000 authorized ordinary shares with a par value of $0.0001 per share and 100,000,000 authorized shares with a par value of $0.0001 per share, of such class or classes as may be designated by the Company’s board of directors in accordance with the Company’s articles of association. The consolidated financial statements as of December 31, 2022, including share and per share amounts, do not give effect to the IPO, as it closed subsequent to December 31, 2022. Liquidity and Capital Resources The Company has incurred significant net operating losses and negative cash flows from operations since inception and had an accumulated deficit of $117.0 million as of December 31, 2022. Through December 31, 2022, the Company has financed its operations primarily through the private placement of equity securities. On February 7, 2023, the Company completed its IPO for net proceeds of approximately $166.7 million, after deducting underwriting discounts and estimated offering costs. To date, the Company has no product candidates approved for sale and therefore the Company has not generated any revenue from its products. The Company has not generated any revenue from collaboration or other agreements. Management expects operating losses and negative cash flows to continue for the foreseeable future, until such time, if ever, that it can generate significant sales from its product candidates currently in development or through collaboration or other agreements. The Company’s prospects are subject to risks and uncertainties frequently encountered by companies in the biotechnology industry as discussed in Note 2. As of December 31, 2022, the Company had cash, cash equivalents and short-term investments of $90.8 million. Based on its current business plan, the Company believes that its current cash, cash equivalents and short-term investments, together with the net proceeds from its IPO, will be sufficient to fund its projected operations for at least 12 months from the date of the issuance of these consolidated financial statements. Impact of the COVID-19 Pandemic and Other Macroeconomic Factors The COVID-19 (coronavirus) pandemic, which has impacted worldwide economic activity, poses risks that the Company or its employees, contractors, suppliers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. Although the impact of COVID-19 has not been material to the Company and its operations, the extent to which the COVID- 19 pandemic will impact the Company’s business will depend on future developments that are highly uncertain and cannot be predicted at this time. While the pandemic appears to have waned, there may be significant uncertainty resulting from any changes with regards to COVID-19 infections, along with the impact of other macroeconomic factors such as inflation, supply chain issues, rising interest rates, future bank failures and the impact of the Russian/Ukraine conflict. . 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements and related disclosures have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The functional and reporting currency of the Company and its subsidiaries is the U.S. dollar. The aggregate foreign currency transaction loss included in determining net loss was not material for the periods presented. 181 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of expenses during the reporting periods. Such estimates include lease liability, accruals for research and development activities, Series B-1 redeemable convertible preferred shares valuation, ordinary share valuation and related share-based compensation and certain other accrued liabilities. Actual results could differ from those estimates. Segments The Company operates and manages its business as one reportable and operating segment, which is the business of research and development of medicines that target chronic diseases with unmet medical needs. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. The Company’s long-lived assets are primarily in China. Concentration of Credit Risk The Company is exposed to credit risk from its deposits of cash, cash equivalents and short-term investments in excess of the amount of insurance provided on such deposits. The Company invests its cash, cash equivalents and short-term investments in money market funds, corporate debt securities, U.S. government bonds and U.S. government agency bonds. The Company limits its credit risk associated with cash, cash equivalents and short-term investments by placing them with banks and institutions it believes are highly creditworthy and in highly rated investments. The Company has not experienced any losses on its deposits of cash, cash equivalents and short-term investments to date. The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements. Risks and Uncertainties The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials and regulatory approval prior to commercialization. These efforts require significant amounts of additional resources, adequate personnel, infrastructure and extensive compliance and reporting. The Company’s product candidates are still in development and, to date, none of the Company’s product candidates have been approved for sale and, therefore, the Company has not generated any revenue from any of its products. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate any revenue from any of its products. The Company operates in an 182 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. The Company relies and expects to continue to rely on a small number of vendors to manufacture supplies and materials for its use in the clinical trial programs. These programs could be adversely affected by a significant interruption in these manufacturing services. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with maturities of 90 days or less from the original date of purchase to be cash equivalents. As of December 31, 2022 and 2021, the Company’s cash and cash equivalents consist of cash deposited with banks and investments in money market funds. Short-Term Investments The Company classifies its investments as available-for-sale and records them at fair value based upon market prices at period end. Unrealized gains and losses that are deemed temporary in nature are recorded in accumulated other comprehensive income as a separate component of shareholders’ deficit. Dividend and interest income are recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of investments sold. The Company may sell these securities at any time for use in current operations. Other-Than-Temporary Impairment The Company evaluates its investments with unrealized losses for other-than-temporary impairment. When assessing investments for other-than-temporary declines in value, the Company considers factors such as, among other things, the extent and length of time the investment’s fair value has been lower than its cost basis, the financial condition and near-term prospects of the investment, the Company’s ability and intent to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value, and the expected cash flows from the security. If any adjustments to fair value reflects a decline in the value of the investment that the Company considers to be “other than temporary,” the Company reduces the investment to fair value through a charge to the consolidated statements of operations and comprehensive loss. No such adjustments were necessary during the periods presented. Fair Value of Financial Instruments The Company establishes the fair value of its assets and liabilities using 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 and established a fair value hierarchy based on the inputs used to measure fair value. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy which establishes three levels of inputs that may be used to measure fair value (see Note 4). Property and Equipment, Net Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally two to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the assets’ estimated useful lives or the remaining term of the lease. When assets are retired or otherwise disposed of, the cost and 183 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ accumulated depreciation are removed from the balance sheet, and any resulting gain or loss is reflected in operating expenses in the period realized. Maintenance and repairs are charged to operating expenses as incurred. Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment, net, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that a long-lived asset be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by the asset group to the carrying amount of the asset group. If the carrying amount of the long-lived asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. During the years ended December 31, 2022 and 2021, the Company has not recorded impairment charges on its long-lived assets. Deferred Offering Costs The Company capitalizes, within other non-current assets, certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings, including its IPO, until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs will be immediately written off to general and administrative expenses. As of December 31, 2022 and 2021, deferred offering costs were $3.4 million and $0.1 million, respectively. Accrued Research and Development Expenses The Company has entered into various agreements with contract manufacturing organizations (“CMOs”) and contract research organizations (“CROs”). The Company’s research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in other current liabilities on the consolidated balance sheets. If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Payments made to CMOs and CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets on the consolidated balance sheets until the services are rendered. Leases The Company determines if an arrangement is, or contains, a lease at inception and then classifies the lease as operating or financing based on the underlying terms and conditions of the contract. Leases with terms greater than one year are initially recognized on the consolidated balance sheets as right-of-use assets and lease liabilities based on the present value of lease payments over the expected lease term. The Company has also elected to not apply the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less and does not include any options to purchase the underlying asset that the Company is reasonably certain to exercise. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are excluded from the right-of-use assets and operating lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company elected the practical expedient not to separate non-lease components from lease 184 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ components for the Company’s facility leases and to account for the lease and non-lease components as a single lease component. Redeemable Convertible Preferred Shares The Company records all shares of redeemable convertible preferred shares at the amount of proceeds received, less amounts allocated to redeemable convertible preferred shares tranche liability and issuance costs. The fair value of Series B-1 redeemable convertible preferred shares issued in connection with the Basecamp share exchange transaction was estimated at fair value based on market-based factors similar to those used in determining the fair value of ordinary shares. Though not mandatorily redeemable, the redeemable convertible preferred shares are recorded outside of permanent equity because in certain events considered not solely within the Company’s control, such as a merger, acquisition, or sale of all or substantially all of the Company’s assets (each, a “deemed liquidation event”), the redeemable convertible preferred shares may become redeemable at the option of the holders of at least a majority of the then outstanding shares on or after April 29, 2026. The Company made an accounting policy election to recognize changes in the redemption value of redeemable convertible preferred shares immediately as they occur and adjust the carrying value of redeemable convertible preferred shares to equal it to its redemption value at the end of each reporting period. All outstanding shares of the redeemable convertible preferred shares converted into ordinary shares upon effectiveness of its IPO. Research and Development Expenses Research and development expenses include costs directly attributable to the conduct of research and development programs, including payroll and related expenses, costs for CMOs, costs for CROs, materials, supplies, consulting costs, and the allocated portions of facility costs, such as rent, utilities, insurance, information technology costs and general support services. Research and development costs are expensed within the consolidated statements of operations and comprehensive loss as incurred. Fair Value of Ordinary Shares Prior to the IPO, the fair value of the Company’s ordinary shares was determined by its Board of Directors with input from management and third-party valuation specialists. The Company’s approach to estimate the fair value of the Company’s ordinary shares is consistent with the methods outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Determining the best estimated fair value of the Company’s ordinary shares requires significant judgment and management considers several factors, including the Company’s stage of development, equity market conditions affecting comparable public companies, significant milestones and progress of research and development efforts. Subsequent to the Company’s IPO, the fair value of the Company’s ordinary shares is determined based on its closing market price of the Company’s ADS, which each represents three ordinary shares. Share-Based Compensation The Company accounts for share-based compensation arrangements with employees and non-employees using a fair value method which requires the recognition of compensation expense for costs related to all share-based payments including share options. The fair value method requires the Company to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted that are expensed on a straight-line basis over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures as they occur. Option valuation models, including the Black-Scholes option-pricing model, require the input of several assumptions. 185 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ The Company granted share options to employees of China. The exercise of share options granted to employees of China are conditioned to liquidity events which are outside the Company’s control. The liquidity events are not probable until consummated and employees of China cannot benefit from their share options. As such, no share-based compensation expense has been recognized for the employees of China’s share options during the years ended December 31, 2022 and 2021. Income Taxes Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the consolidated financial statement and tax bases of assets and liabilities at the applicable enacted tax rates. The Company will establish a valuation allowance for deferred tax assets if it is more likely than not that these items will expire before the Company is able to realize its benefits or that future deductibility is uncertain. The Company recognizes the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax position is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in its provision for income taxes. There were no uncertain income tax positions or unrecognized income tax benefits as of December 31, 2022 and 2021. Net Loss Per Share Attributable to Ordinary Shareholders Basic net loss per ordinary share is calculated by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period, without consideration of potentially dilutive securities. Net loss attributable to ordinary shareholders is computed as net loss less accretion of redeemable convertible preferred shares and less any excess of the fair value of the consideration paid over the carrying value of noncontrolling interest. Diluted net loss per share is computed by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the redeemable convertible preferred shares, ordinary share warrants, unvested restricted ordinary shares subject to repurchase and share options are considered to be potentially dilutive securities. Basic and diluted net loss per share attributable to ordinary shareholders is presented in conformity with the two-class method required for participating securities as the redeemable convertible preferred shares are considered a participating security because they participate in dividends with ordinary shares. The holders of redeemable convertible preferred shares do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to ordinary shareholders. Because the Company has reported a net loss for all periods presented, diluted net loss per ordinary share is the same as basic net loss per ordinary share for those periods. Comprehensive Income (Loss) Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. Other comprehensive loss represents unrealized gains or losses on short-term investments that are reported as a component of shareholders’ deficit on the consolidated balance sheets. JOBS Act Accounting Election The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised 186 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Account Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes , which simplify various aspects related to the accounting for income taxes. This ASU removes exceptions to the general principles in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. For the Company, the amendments are effective for the year ended December 31, 2022. The adoption of this ASU did not have a material effect on the Company’s consolidated financial statements and related disclosures. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This ASU replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures. 3.Composition of Certain Consolidated Financial Statement Line Items Property and equipment, net consists of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ 2022 2021 Laboratory equipment ​ $ 1,098 ​ $ 1,015 Furniture and fixtures ​ 115 ​ 90 Computer equipment and software ​ 58 ​ 42 Leasehold improvements ​ 109 ​ 110 ​ ​ $ 1,380 ​ $ 1,257 Less: Accumulated depreciation ​ (349) ​ (72) Property and equipment, net ​ $ 1,031 ​ $ 1,185 ​ ​ ​ ​ ​ ​ ​ ​ 187 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ Depreciation expense for the years ended December 31, 2022 and 2021 was $0.3 million and $0.1 million, respectively. Accrued expenses and other current liabilities consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ 2022 2021 Accrued compensation ​ $ 3,544 ​ $ 1,943 Accrued research and development expenses ​ 1,818 ​ 2,053 Accrued clinical expenses ​ ​ 438 ​ ​ 368 Accrued professional services ​ ​ 313 ​ ​ 159 Income tax and VAT payable ​ 174 ​ 231 Accrued other liabilities ​ 454 ​ 71 Total accrued expenses and other current liabilities ​ $ 6,741 ​ $ 4,825 ​ ​ ​ ​ ​ ​ ​ ​ ​ 4. Fair Value Measurements The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy which establishes three level of inputs that may be used to measure fair value, as follows: Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. 188 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ 2022 ​ 2021 ​ LEVEL 1 LEVEL 2 LEVEL 3 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Money market funds ​ $ 18,994 ​ $ — ​ $    — ​ $ 18,994 ​ $ 89,795 ​ $ — ​ $    — ​ $ 89,795 Cash equivalents ​ 18,994 ​ — ​ — ​ 18,994 ​ 89,795 ​ — ​ — ​ 89,795 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government bonds ​ ​ 11,763 ​ ​ — ​ ​ — ​ ​ 11,763 ​ ​ — ​ ​ — ​ ​ — ​ ​ — U.S. government agency bonds ​ ​ — ​ ​ 1,794 ​ ​ — ​ ​ 1,794 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Corporate debt securities ​ — ​ 51,193 ​ — ​ 51,193 ​ — ​ 2,002 ​ — ​ 2,002 Short-term investments ​ 11,763 ​ 52,987 ​ — ​ 64,750 ​ — ​ 2,002 ​ — ​ 2,002 Total fair value of financial assets ​ $ 30,757 ​ $ 52,987 ​ $ — ​ $ 83,744 ​ $ 89,795 ​ $ 2,002 ​ $ — ​ $ 91,797 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ 2022 2021 ​ ​ AMORTIZED UNREALIZED FAIR ​ AMORTIZED UNREALIZED FAIR ​ COST ​ LOSSES GAINS VALUE COST ​ LOSSES GAINS VALUE Money market funds ​ $ 18,994 ​ $ — ​ $    — ​ $ 18,994 ​ $ 89,795 ​ $    — ​ $    — ​ $ 89,795 Cash equivalents ​ 18,994 ​ — ​ — ​ 18,994 ​ 89,795 ​ — ​ — ​ 89,795 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government bonds ​ ​ 11,820 ​ ​ (57) ​ ​ — ​ ​ 11,763 ​ ​ — ​ ​ — ​ ​ — ​ ​ — U.S. government agency bonds ​ ​ 1,801 ​ ​ (7) ​ ​ — ​ ​ 1,794 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Corporate debt securities ​ 51,239 ​ (49) ​ 3 ​ 51,193 ​ 2,002 ​ — ​ — ​ 2,002 Short-term investments ​ 64,860 ​ (113) ​ 3 ​ 64,750 ​ 2,002 ​ — ​ — ​ 2,002 Total fair value of financial assets ​ $ 83,854 ​ $ (113) ​ $ 3 ​ $ 83,744 ​ $ 91,797 ​ $ — ​ $ — ​ $ 91,797 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 and 2021, the Company did not have any liabilities measured at fair value on a recurring basis. There were no transfers in and out of Level 3 during the years ended December 31, 2022 and 2021. Money market funds and U.S. government bonds are included within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Corporate debt securities and U.S. government agency bonds are classified within Level 2 of the fair value hierarchy as they take into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate the fair value. These inputs include reported trades of and broker/dealer quotes on similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs. ​ 5. Term Loan On August 4, 2020, the Company entered into a Loan and Security Agreement (the “SVB Agreement”) with Silicon Valley Bank (“SVB”) to raise up to $8.0 million in debt financing (the “SVB Loan”) consisting of $5.0 million available to draw on or before July 31, 2021 (“Tranche A”), and the option to draw up to an additional $3.0 million (“Tranche B”) on or before January 31, 2022, which were conditioned to initiation of a 189 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ Phase 1 clinical trial on or before July 31, 2021, and nomination of a development candidate for a second asset on or prior to January 31, 2022, both of which the Company accomplished in May 2021. The Tranche B draw period was extended to July 31, 2022, upon the receipt of net cash proceeds in an amount of at least $50.0 million from the issuance and sale by the Company of its equity securities to investors and/or subordinated debt on or prior to January 31, 2022, which the Company accomplished in July 2021. The Company elected to allow the Tranche A and Tranche B financings to expire unused on July 31, 2021 and July 31, 2022, respectively. In connection with the entering into the SVB Agreement, the Company issued SVB a warrant to purchase shares of its ordinary shares at an exercise price of $0.48 per share (“SVB Warrant”). The SVB Warrant is immediately exercisable for 112,279 ordinary shares of the Company and could have been exercisable for an additional number of ordinary shares equal to 44,567 ordinary shares upon draw of Tranche A and 22,283 ordinary shares upon draw of Tranche B. The warrant for Tranche A shares and Tranche B shares expired on July 31, 2021 and July 31, 2022, respectively, as the Company elected to allow the Tranche A and Tranche B financings to expire unused on July 31, 2021 and July 31, 2022, respectively. In February 2023, SVB fully exercised the SVB Warrant for 106,060 ordinary shares through a cashless exercise. 6. Commitments and Contingencies Operating Leases In January 2020, ShouTi Shanghai entered into a lease agreement to lease approximately 6,000 square feet of office space in Chamtime Plaza in Shanghai, China. The lease commenced on November 1, 2020, and was scheduled to expire on December 31, 2022. ShouTi Shanghai had an option to extend the lease term, however the renewal term and conditions were to be agreed to between ShouTi Shanghai and the landlord. For accounting purposes, the lease term did not include the option to extend the lease term as it was not reasonably certain that the lease term would be extended. In connection with entering into new lease agreement in Chamtime Plaza in June 2021, the lease agreement was terminated early on October 31, 2021. In June 2021, ShouTi Shanghai entered into a lease agreement to lease approximately 5,900 square feet of office space in Chamtime Plaza in Shanghai, China. The lease commenced on September 16, 2021 and expires on September 15, 2023. ShouTi Shanghai has an option to extend the lease term, however the renewal term and conditions should be agreed between ShouTi Shanghai and the landlord. For accounting purposes, the lease term did not include the option to extend the lease term as it is not reasonably certain that the lease term will be extended. In November 2021, StructureTx US entered into a lease agreement to lease approximately 4,050 square feet of office spaces in South San Francisco, California. The lease commenced on November 11, 2021, and expires on October 31, 2023. 190 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ The maturities of operating lease liabilities as of December 31, 2022, were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ ​ 2022 2023 ​ $ 267 Total undiscounted lease payments ​ 267 Less: imputed interest ​ 7 Total operating lease liability ​ 260 Less: current portion ​ 260 Operating lease liability, net of current portion ​ $ — ​ ​ ​ ​ ​ Operating lease cost was $1.1 million and $0.5 million for the years ended December 31, 2022 and 2021, respectively, including $0.7 million and $0.2 million short-term lease costs for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the weighted average remaining lease term was 0.8 years, and the weighted average discount rate used to measure the lease liabilities for such operating leases upon recognition was 7.8%. During the years ended December 31, 2022 and 2021, cash paid for amounts included in operating lease liabilities of $0.4 million and $0.2 million, respectively, was included in cash flows from operating activities on the consolidated statements of cash flows. Indemnification Agreements In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential number of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by the applicable law and the amended and restated memorandum and articles of association of the Company. The Company currently has directors’ and officers’ liability insurance. As of December 31, 2022 and 2021, the Company did not have any material indemnification claims that were probable or reasonably possible and consequently had not recorded related liabilities. Legal Proceedings The Company is subject to claims and assessments from time to time in the ordinary course of business but is not aware of any such matters, individually or in the aggregate, that will have a material adverse effect on the Company’s financial position, results of operations or cash flows. 7. Redeemable Convertible Preferred Shares Under the Company’s Memorandum and Articles of Association, as amended, the Company’s redeemable convertible preferred shares are issuable in series. The Company’s board of directors is authorized to determine the rights, preferences, privileges and terms of each series. 191 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ Redeemable convertible preferred shares consisted of the following (in thousands, except share and per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, 2022 ​ ​ ​ ​ ​ SHARES ISSUED ​ ​ ​ ​ ​ SHARES ORIGINAL AND CARRYING LIQUIDATION SERIES ​ AUTHORIZED ​ ISSUE PRICE OUTSTANDING ​ VALUE ​ VALUE A 19,200,000 ​ $ 1.6667 19,200,000 ​ $ 32,001 ​ $ 32,001 A+ 12,799,681 ​ 2.0313 12,799,681 ​ 26,000 ​ 26,000 B 32,857,004 ​ 4.0483 32,857,004 ​ 133,015 ​ 133,015 B-1 2,161,402 ​ 3.2386 2,161,402 ​ 8,959 ​ 7,000 ​ 67,018,087 ​ ​ ​ 67,018,087 ​ $ 199,975 ​ $ 198,016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, 2021 ​ ​ ​ ​ SHARES ISSUED ​ ​ ​ ​ ​ SHARES ORIGINAL AND CARRYING LIQUIDATION SERIES ​ AUTHORIZED ​ ISSUE PRICE OUTSTANDING ​ VALUE ​ VALUE A 19,200,000 ​ $ 1.6667 19,200,000 ​ $ 32,001 ​ $ 32,001 A+ ​ 12,799,681 ​ ​ 2.0313 ​ 12,799,681 ​ ​ 26,000 ​ ​ 26,000 B ​ 24,701,732 ​ ​ 4.0483 ​ 24,701,732 ​ ​ 100,000 ​ ​ 100,000 B-1 2,161,402 ​ 3.2386 2,161,402 ​ 8,959 ​ 7,000 ​ 58,862,815 ​ ​ ​ 58,862,815 ​ $ 166,960 ​ $ 165,001 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The original issuance price in the table above reflects the stated issuance price per the respective purchase agreements. Series A Redeemable Convertible Preferred Shares In April 2019, the Company entered into a Series A redeemable convertible preferred shares purchase agreement with certain investors to issue and sell 9,600,000 shares of its Series A redeemable convertible preferred shares at a price of $1.6667 per share (the “Series A Purchase Price”) for total gross proceeds of $16.0 million. The issuance costs were $0.3 million. The purchase agreement also provided for the issuance and sale to investors of an additional 9,600,000 Series A redeemable convertible preferred shares at the Series A Purchase Price upon achieving certain operational milestones (the “Milestone Closing”) around the selection of targeted programs and progress of certain candidate programs. The issuance of Series A redeemable convertible preferred shares was recorded at the amount of proceeds received less issuance costs and the amounts allocated to the Milestone Closing liability (“redeemable convertible preferred shares tranche liability”). During the year ended December 31, 2019, the carrying value of the redeemable convertible preferred shares was adjusted to equal to its redemption value. The Milestone Closing occurred on December 9, 2019, and the Company issued 9,600,000 Series A redeemable convertible preferred shares at $1.6667 per share for gross proceeds of $16.0 million. The redeemable convertible preferred shares tranche liability was settled upon the Milestone Closing. 192 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ Series A+ Redeemable Convertible Preferred Shares In March 2020, the Company entered into a Series A+ redeemable convertible preferred shares purchase agreement with certain investors to issue and sell 12,799,681 shares of its Series A+ redeemable convertible preferred shares at a price of $2.0313 per share (the “Series A+ Purchase Price”) for total gross proceeds of $26.0 million. The issuance costs were $0.2 million. The issuance of Series A+ redeemable convertible preferred shares was recorded at the amount of proceeds received less issuance costs. During the year ended December 31, 2020, the carrying value of the redeemable convertible preferred shares was adjusted to equal to its redemption value. Series B Redeemable Convertible Preferred Shares In July 2021, the Company entered into a Series B redeemable convertible preferred shares purchase agreement with certain investors to issue and sell 24,701,732 shares of its Series B redeemable convertible preferred shares at a price of $4.0483 per share (the “Series B Purchase Price”) for total gross proceeds of $100.0 million. The issuance costs were $3.6 million. The issuance of Series B redeemable convertible preferred shares was recorded at the amount of proceeds received less issuance costs. During the year ended December 31, 2022, the carrying value of the redeemable convertible preferred shares was adjusted to equal to its redemption value. In July 2021, the Company executed letter agreements with one of the investors and its affiliates granting them the right to purchase a certain number of the Company’s ordinary shares equal to the product of (i) the total number of ordinary shares of the Company being sold in the Company’s first firm committed underwritten public offering of the capital stock of the Company (the “IPO”), and (ii) aggregate percentage ownership of the capital stock of the Company of the investor and its affiliates (the “IPO Participation Right”). The ordinary shares offered to the investor and its affiliates shall be offered on the same terms and price at which such ordinary shares are being offered to the public pursuant to the Company’s IPO. The purchase price of ordinary shares will be the fair value at the time of purchase as it will represent the fair value of the Company’s ordinary shares at the time of the IPO. IPO Participation Right has no fair value as it represents a right, not obligation, to purchase additional securities at fair value. In April 2022, the Company issued and sold an additional 8,155,272 shares of its Series B redeemable convertible preferred shares for gross proceeds of $33.0 million, pari-passu with the other Series B shareholders. The issuance of the additional Series B redeemable convertible preferred shares was recorded at the amount of gross proceeds received less issuance costs of  $1.5 million. During the year ended December 31, 2022, the carrying value of the redeemable convertible preferred shares was adjusted to equal to its redemption value. Series B-1 Redeemable Convertible Preferred Shares In December 2021, the Company entered into a share exchange agreement with other investors of Series Seed redeemable convertible preferred shares of Basecamp. The Company issued 2,161,402 Series B-1 redeemable convertible preferred shares to the other investors of Series Seed redeemable convertible preferred shares of Basecamp to acquire the 7,000,000 Series Seed redeemable convertible preferred shares of Basecamp held by the other investors. The issuance costs were $0.1 million. The issuance of Series B-1 redeemable convertible preferred shares was recorded at the fair value of the amount of Series B -1 redeemable convertible preferred shares. The fair value of Series B-1 redeemable convertible shares was determined by management with input from third-party valuation specialists. During 193 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ the year ended December 31, 2022, the carrying value of the redeemable convertible preferred shares was adjusted to equal to its redemption value. Rights, Preferences and Privileges On February 7, 2023, upon the closing of the Company’s IPO, all outstanding redeemable convertible preferred shares automatically converted into 67,018,087 ordinary shares. Prior to the closing of the Company’s IPO, the holders of redeemable convertible preferred shares had the following various rights and preferences: Voting Rights Each share of redeemable convertible preferred share has the same voting rights as the number of shares of ordinary shares into which it is convertible and votes together with the holders of ordinary shares as a single class. The holders of shares of Series B redeemable convertible preferred shares shall be entitled, voting separately as a single class, to elect two directors of the Company (the “Series B Directors”). The holders of shares of Series A+ redeemable convertible preferred shares shall be entitled, voting separately as a single class, to elect two directors of the Company (the “Series A+ Directors”). The holders of shares of Series A redeemable convertible preferred shares shall be entitled, voting separately as a single class, to elect two directors of the Company (the “Series A Directors”). The holders of ordinary shares shall be entitled, voting separately as a single class, to elect two directors of the Company. The holders of ordinary shares and redeemable convertible preferred shares shall be entitled, voting together, to elect the remaining directors of the Company. Dividends Holders of outstanding shares of redeemable convertible preferred shares are entitled on a pari passu basis, to participate ratably (on an as if converted to ordinary shares basis) in the payment of any dividends when, as and if declared by the board of directors on the ordinary shares. Dividends are noncumulative, and none were declared as of December 31, 2022 and 2021. Liquidation In the event of any liquidation, dissolution or winding up of the Company, or deemed liquidation event, either voluntary or involuntary (“Liquidation”), the holders of Series B-1 and Series B redeemable convertible preferred shares shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of Series A+ and Series A redeemable convertible preferred shares and ordinary shares, an amount equal to $3.2386 per share and $4.0483 per share, respectively, plus all declared but unpaid dividends. If, upon the occurrence of the Liquidation, the assets and funds thus distributed among the holders of Series B-1 and Series B redeemable convertible preferred shares shall be insufficient to permit the payment to such holders of the full amounts, then the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the holders of Series B-1 and Series B redeemable convertible preferred shares in proportion to the preferential amount each such holder is otherwise entitled to receive. After the payment to the holders of Series B-1 and Series B redeemable convertible preferred shares of the full preferential amounts specified above, the holders of Series A+ and Series A redeemable convertible preferred shares shall be entitled to receive, prior and in preference to any distribution of any of the assets of 194 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ the Company to the holders of ordinary shares, an amount equal to $2.0313 per share and $1.6667 per share, respectively, plus all declared but unpaid dividends. If, upon the occurrence of the Liquidation, the assets and funds thus distributed among the holders of Series A+ and Series A redeemable convertible preferred shares shall be insufficient to permit the payment to such holders of the full amounts, then the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the holders of Series A+ and Series A redeemable convertible preferred shares in proportion to the preferential amount each such holder is otherwise entitled to receive. After the payment to the holders of redeemable convertible preferred shares of the full preferential amounts specified above, the remaining assets of the Company available for distribution to shareholders shall be distributed among the holders of ordinary shares and redeemable convertible preferred shares pro rata based on the number of shares held by each such holder if all shares of each such series of redeemable convertible preferred shares were converted to ordinary shares until such time as the aggregate amount distributed to the holders of redeemable convertible preferred shares is equal to three times the applicable original issue price per redeemable convertible preferred shares then held by them. After the payment to the holders of ordinary shares and redeemable convertible preferred shares of the full amounts specified above, all of the remaining assets of the Company available for distribution to shareholders shall be distributed among the holders of ordinary shares pro rata based on the number of shares of ordinary shares held by each such holder. Conversion Each redeemable convertible preferred share is convertible, at the option of the holder, into the number of fully-paid and non-assessable ordinary shares that result from dividing the applicable original issue price per share by the applicable conversion price per share at the time of conversion. Redeemable convertible preferred shares are convertible into the Company’s ordinary shares on a one-for-one basis. Each share of redeemable convertible preferred share is convertible into ordinary shares automatically immediately upon the earlier of (i) the Company’s consummation of an initial public offering of the ordinary shares on an internationally recognized stock exchange (which may include, without limitation, the Hong Kong Exchange, the New York Stock Exchange or the Nasdaq Stock Market) at a public offering price per share price that implies a market capitalization of the Company immediately prior to the offering of not less than $400.0 million, and having an aggregate offering amount of not less than $60.0 million (a “Qualified IPO”), or (ii) the Company’s receipt of a written request for such conversion from the holders of the majority of the then outstanding redeemable convertible preferred shares on an as-converted to ordinary shares basis. Redemption The redeemable convertible preferred shares are recorded within mezzanine equity because they will become redeemable at the option of the shareholders upon the occurrence of certain deemed liquidation events that are considered not solely within the Company’s control after April 29, 2026. The Company made an accounting policy election to recognize changes in the redemption value of redeemable convertible preferred shares immediately as they occur and adjust the carrying value of redeemable convertible preferred shares to equal it to its redemption value at the end of each reporting period. 8. Basecamp Bio Inc. In March 2021, Basecamp entered into a purchase agreement with certain investors to issue and sell 9,000,000 shares of its Series Seed redeemable convertible preferred shares of Basecamp at a price of $1.00 195 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ per share for total gross proceeds of $9.0 million. Of the 9,000,000 shares of Series Seed redeemable convertible preferred shares, 2,000,000 shares were issued to the Company and the remaining 7,000,000 shares were issued to other existing investors of the Company. Concurrent with this financing, the Company and Basecamp entered into the License and Collaboration Agreement (the “License Agreement”) in which the Company granted Basecamp a license to use its proprietary structural biology technology platform to conduct a research program to discover, research and develop novel compounds for certain selected GPCR (G protein coupled receptor) targets and the Company received 14,000,000 ordinary shares of Basecamp in exchange. The Company shall make payments to Basecamp to fund the research program specified in the License Agreement, milestone payments if and when the certain milestones are achieved by Basecamp, and royalties related to net sales. The Company and Basecamp also executed a Services Agreement under which the Company provides research and development services, business development services, management and administrative services, operational services, intellectual property services to Basecamp in consideration for fees. Basecamp was considered a variable interest entity and the Company consolidated Basecamp as it was considered the primary beneficiary. The Series Seed redeemable convertible preferred shares of Basecamp held by other investors were classified as redeemable noncontrolling interest in temporary equity because while it was not mandatorily redeemable, in the deemed liquidation event the redeemable convertible preferred shares might become redeemable at the option of the holders of at least a majority of the then outstanding shares after March 22, 2028. Losses of Basecamp were not attributed to the redeemable noncontrolling interest as the holders of Series Seed redeemable convertible preferred shares do not have a contractual obligation to share in Basecamp’s losses due to their liquidation preference right. In December 2021, the Company acquired the 7,000,000 Series Seed redeemable convertible preferred shares of Basecamp held by the other investors in exchange for 2,161,402 shares of its Series B-1 redeemable convertible preferred shares with Basecamp becoming a wholly owned subsidiary of the Company. As the share exchange did not result in a change of control, the transaction was accounted as an equity transaction. Series B-1 redeemable convertible preferred shares were accounted for at fair value of $9.0 million, and $2.0 million representing the excess of the fair value over the carrying amount of noncontrolling interest on the date of share exchange of $7.0 million was recorded in additional paid-in capital and accumulated deficit. 9. Ordinary Share Warrants In connection with the entering into the SVB Agreement on August 4, 2020, the Company issued SVB a warrant to purchase shares of the Company’s ordinary shares which were recorded at fair value within additional paid-in capital in shareholders’ deficit. The SVB Warrant had a fair value of $0.1 million as of the issuance date and was recorded as a deferred asset within other non-current assets on the consolidated balance sheets that was amortized to interest and other income (expense), net, on a straight-line basis until Tranche A and Tranche B availability end date. The SVB Warrant is equity classified as it is indexed to the Company’s own shares and meets all other conditions for equity classification. The SVB Warrant is not subsequently remeasured and is immediately exercisable for 112,279 ordinary shares of the Company. In addition, the SVB Warrant could have been exercisable for an additional number of ordinary shares equal to 44,567 ordinary shares upon draw of Tranche A and 22,283 ordinary shares upon draw of Tranche B. The SVB Warrant for the Tranche A shares and Tranche B shares expired on July 31, 2021 and July 31, 2022, respectively, as the Company elected to allow the Tranche A and Tranche B financings to expire unused on July 31, 2021 and July 31, 2022, respectively. The SVB Warrant has an exercise price of $0.48 per share and expires in ten years. In February 2023, SVB fully exercised the SVB Warrant for 106,060 ordinary shares through a cashless exercise. ​ ​ 196 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ 10. Ordinary Shares The Company’s Memorandum and Articles of Association, as amended, authorizes the Company to issue 432,981,913 ordinary shares with a par value of $0.0001 per share, as of December 31, 2022. Ordinary shareholders are entitled to dividends if and when declared by the Company’s board of directors subject to the prior rights of the preferred shareholders. As of December 31, 2022 and 2021, no dividends on ordinary shares had been declared by the board of directors. The Company has the following ordinary shares reserved for future issuance (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ 2022 2021 Conversion of redeemable convertible preferred shares 67,018 58,863 Share options available for future grant 977 4,026 Share options issued and outstanding 7,612 4,646 Ordinary share warrants 112 135 Total ordinary shares reserved 75,719 67,670 ​ ​ ​ ​ ​ ​ ​ ​ 11. Shareholders’ Equity In April 2019, the Company adopted the 2019 Equity Incentive Plan (“2019 Plan”), under which its board of directors can issue share options. As of December 31, 2022, there were 8,916,263 shares authorized and reserved for issuance under the 2019 Plan. Awards granted under the 2019 Plan may be either incentive share options (“ISOs”), nonstatutory share options (“NSOs”), share appreciation rights (“SARs”), or restricted share units (“RSUs”). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees and consultants. The Company’s board of directors has the authority to determine to whom options will be granted, the number of shares, the term, and the exercise price. The exercise price of ISOs and NSOs shall not be less than 100% of the estimated fair value of the shares on the date of grant. The exercise price of ISOs granted to an employee who, at the time of grant, owns shares representing more than 10% (“10% shareholder”) of the voting power of all classes of shares of the Company shall be no less than 110% of the estimated fair value of the shares on the date of grant. The options usually have a term of 10 years (or no more than five years if granted to a 10% shareholder). Vesting conditions determined by the plan administrator may apply to share options and may include continued service, performance and/or other conditions. Generally, options and restricted share awards vest over a four-year period. 197 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ Options A summary of share option activity is set forth below (in thousands except per share amounts and years): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OUTSTANDING AWARDS ​ ​ NUMBER ​ ​ ​ ​ ​ ​ WEIGHTED- ​ ​ ​ ​ ​ OF ​ NUMBER OF ​ ​ ​ ​ AVERAGE ​ ​ ​ ​ ​ SHARES ​ SHARES ​ WEIGHTED- ​ REMAINING ​ ​ ​ ​ ​ AVAILABLE ​ UNDERLYING ​ AVERAGE ​ CONTRACTUAL ​ AGGREGATE ​ ​ FOR ​ OUTSTANDING ​ EXERCISE ​ TERM ​ INTRINSIC ​ GRANT OPTIONS PRICE (IN YEARS) VALUE As of December 31, 2021 4,026 4,646 ​ $ 0.83 8.96 ​ $ 7,911 Granted (4,218) 4,218 ​ ​ 2.66 ​ Exercised — (83) ​ ​ 0.40 ​ Forfeited 1,169 (1,169) ​ ​ 2.35 ​ As of December 31, 2022 977 7,612 ​ ​ 1.62 8.57 ​ 13,283 Exercisable at December 31, 2022 ​ ​ 2,753 ​ ​ 1.04 8.04 ​ 6,398 Vested and expected to vest at December 31, 2022 ​ ​ 7,612 ​ ​ 1.62 8.57 ​ 13,283 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying share options and the fair value of the Company’s ordinary shares for share options that were in-the-money at the end of each period. The aggregate intrinsic value of options exercised for the years ended December 31, 2022 and 2021 was $0.2 million and less than $0.1 million, respectively. The total fair value of options that vested during the years ended December 31, 2022 and 2021 was $1.5 million and $0.3 million, respectively. Restricted Shares On April 29, 2019, 5,891,064 shares of the Company’s ordinary shares which were previously issued to its founders were converted to restricted ordinary shares with a vesting term of four years with 25% of the shares vesting after one year from the vesting commencement date of April 29, 2019 and the remainder ratably on a monthly basis over the following three years, provided that the shareholder continues to provide services to the Company as of the date of such vesting. The transaction was accounted for as a grant of restricted shares with weighted-average per share grant-date fair value of $0.33 per share with the total compensation cost of $1.9 million, which will be recognized over the four years of requisite service period. Activity with respect to restricted shares was as follows (in thousands, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NUMBER OF SHARES ​ ​ ​ ​ ​ UNDERLYING ​ WEIGHTED- ​ ​ OUTSTANDING ​ AVERAGE ​ ​ RESTRICTED ​ GRANT DATE FAIR ​ SHARES VALUE Unvested, December 31, 2021 ​ 1,513 ​ $ 0.33 Vested ​ (1,186) ​ ​ 0.33 Unvested, December 31, 2022 327 ​ 0.33 ​ ​ ​ ​ ​ ​ 198 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ ​ Share-Based Compensation Associated with Awards to Employees and Non-Employees The Company recognized share-based compensation as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED ​ ​ DECEMBER 31, ​ 2022 2021 Research and development ​ $ 875 ​ $ 946 General and administrative ​ 1,639 ​ 541 Total share-based compensation ​ $ 2,514 ​ $ 1,487 ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022, the total unrecognized share-based compensation expense related to unvested share options was $7.4 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.5 years. As of December 31, 2022, the total unrecognized compensation expense related to unvested restricted shares was $0.1 million, which is expected to be recognized over the remaining weighted-average vesting period of 0.3 years. The fair value of restricted shares vested during the years ended December 31, 2022 and 2021 was $0.4 million and $0.5 million, respectively. The Company estimated the fair value of share options using the Black Scholes option-pricing model. The fair value of share options is being amortized on a straight-line basis over the requisite service period of the awards. The options granted during the years ended December 31, 2022 and 2021 had a weighted-average per share grant-date fair value of $1.96 and $1.07 per share, respectively, which was estimated using the following weighted-average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED ​ ​ ​ DECEMBER 31, ​ ​ ​ 2022 2021 Expected term (in years) 5.9 5.9 ​ Expected volatility 87.7 % 85.2 % Risk-free interest rate 2.0 % 0.9 % Expected dividend yield 0.0 % 0.0 % ​ ​ ​ ​ ​ ​ ​ The assumptions are as follows: ● Expected term.  The expected term represents the period that the share-based awards are expected to be outstanding. The expected term is calculated using the simplified method which is used when there is insufficient historical data about exercise patterns and post-vesting employment termination behavior. The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting-tranche for awards with graded vesting. The mid-point between the vesting date and the maximum contractual expiration date is used as the expected term under this method. 199 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ For awards with multiple vesting-tranches, the times from grant until the mid-points for each of the tranches may be averaged to provide an overall expected term. ● Expected volatility.  The Company estimated the volatility data based on a study of publicly traded industry peer companies as it did not have any trading history for its ordinary shares. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies. For each grant, the Company measured historical volatility over a period equivalent to the expected term. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own share price becomes available. ● Risk-free interest rate.  The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero-coupon U.S. Treasury notes with remaining terms similar to the expected term of the options. ● Expected Dividend yield.  The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to. In addition to the assumptions used in the Black-Scholes option-pricing model, the Company recognizes the actual forfeitures by reducing the employee share-based compensation expense in the same period the forfeiture occurs. Share Option Modification In November 2021, the Company entered into a separation and consulting agreement in connection with the resignation of a Company founder and executive. The terms of the agreement resulted in compensation expense for unvested awards expected to vest during the consultancy of $0.5 million was recognized immediately during the year ended December 31, 2021 as no substantive future service was required. 12. Income Taxes The following table presents loss before income tax expense (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED ​ ​ DECEMBER 31, ​ 2022 2021 Loss before income expense: ​ ​ ​ ​ ​ ​ Domestic loss ​ $ (44,258) ​ $ (35,051) Foreign income (loss) ​ (7,046) ​ ​ (2,767) Loss before income tax expense ​ $ (51,304) ​ $ (37,818) ​ ​ ​ ​ ​ ​ ​ ​ 200 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ The following table presents the current and deferred income tax provision for income taxes (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED ​ ​ DECEMBER 31, ​ ​ 2022 2021 Current tax provision (benefit): ​ ​ Federal ​ $ — ​ $ — State ​ 3 ​ — Foreign ​ 74 ​ 219 ​ ​ 77 ​ 219 Deferred tax provision (benefit): ​ ​ Federal ​ — ​ — State ​ — ​ — Foreign ​ (60) ​ — ​ ​ ​ ​ ​ Total provision (benefit) for income taxes: ​ $ 17 ​ $ 219 ​ ​ ​ ​ ​ ​ ​ ​ The Company is domiciled in the Cayman Islands. A reconciliation of the expected tax computed at the zero tax rate for the Cayman Islands to the total provision for income taxes was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ ​ ​ 2022 2021 Expected tax at 0% ​ — % — % State income tax, net of federal tax 3.8 4.9 ​ Share-based compensation (0.6) (0.3) ​ Non-deductible expenses (0.1) (0.2) ​ U.S. income tax differential 18.2 19.5 ​ Other foreign income tax differential 0.3 2.2 ​ Research credits 0.8 0.9 ​ Other 0.5 (0.2) ​ Change in valuation allowance (22.9) (27.3) ​ Effective tax rate — % (0.5) % ​ ​ ​ ​ ​ ​ ​ Deferred income taxes as of each of the following periods reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 201 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ Significant components of the Company’s net deferred tax asset or liability were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ ​ 2022 2021 Net operating loss ​ $ 18,918 ​ $ 14,501 Compensation ​ 1,336 ​ 779 Research and experimentation expenses ​ ​ 5,986 ​ ​ — Property and equipment ​ ​ 18 ​ ​ — Operating lease liability ​ 57 ​ 146 Related party accrued expenses ​ 651 ​ 1,128 Other ​ 74 ​ 66 Research credits ​ 866 ​ 320 Total deferred tax assets ​ 27,906 ​ 16,940 Valuation allowance ​ (27,740) ​ (16,797) Net deferred tax assets ​ 166 ​ 143 ​ ​ ​ ​ ​ ​ ​ Right-of-use assets ​ (43) ​ (143) Unrealized gains and losses ​ ​ (63) ​ ​ — Total deferred tax liabilities ​ (106) ​ (143) Net deferred tax assets ​ $ 60 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ Realization of the Company’s deferred tax assets is dependent upon the Company generating sufficient taxable income in future years to obtain benefit from the reversal of temporary differences. Management considered all available evidence under existing tax law and anticipated expiration of tax statutes and determined that a valuation allowance of $27.7 million and $16.8 million was required as of December 31, 2022 and 2021, respectively for those deferred tax assets that are not expected to provide future tax benefits. As of December 31, 2022, the Company had available net operating loss carryforwards of $66.4 million for federal income tax purposes, all of which were generated after 2017. The federal net operating loss carryforwards are not subject to expiration. As of December 31, 2022, the net operating losses for state purposes was $74.6 million and will begin to expire in 2037 if not utilized. As of December 31, 2022, the net operating losses for Australia purposes was $0.2 million and are not subject to expiration. As of December 31, 2022, the Company has federal and state income tax credit carryforwards, net of reserves, of $0.6 million and $0.3 million, respectively. The federal credit carryovers begin to expire in 2029 and the state credit carryovers do not expire. The Company has not completed a study to determine whether any ownership change per the provisions of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state provisions, has occurred. Utilization of the Company’s net operating loss and income tax credit carryforwards may be subject to a substantial annual limitation due to ownership changes that may have occurred or that could occur in the future. These ownership changes may limit the amount of the net operating loss and income tax credit carryover that can be utilized annually to offset future taxable income. In general, an 202 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50% of the outstanding ordinary shares of a company by certain shareholders. Uncertain Tax Positions In accordance with authoritative guidance, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company does not anticipate that there will be a substantial change in unrecognized tax benefits within the next 12 months. The following table reconciles the change in unrecognized tax benefits for the years as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, ​ ​ 2022 2021 Beginning of year ​ $ 107 ​ $ — Additions for tax positions related to current year ​ 198 ​ 96 Additions for tax positions related to prior years ​ — ​ 11 Reductions for tax positions related to prior years ​ ​ (16) ​ ​ — End of year ​ $ 289 ​ $ 107 ​ ​ ​ ​ ​ ​ ​ ​ The total unrecognized tax benefits do not impact the Company’s effective tax rate. The Company does not anticipate that there will be a substantial change in unrecognized tax benefits within the next twelve months. The Company recognizes interest and penalties related to unrecognized tax positions within the income tax expense line in the accompanying consolidated statements of operations and comprehensive loss. There were no accrued interest and penalties associated with uncertain tax positions as of December 31, 2022 and 2021. The Company and its subsidiaries are subject to U.S. federal, state and foreign income tax, and in the normal course of business, its income tax returns are subject to examination by the relevant taxing authorities. As of December 31, 2022, the 2017 to 2021 tax years remained subject to examination in the U.S. federal tax and various state tax jurisdictions. The Company is not currently under examination by federal, state, or foreign jurisdictions. Indefinite Reinvestment of Foreign Earnings The Company considers the earnings of certain subsidiaries to be indefinitely invested outside the Cayman Islands on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the specific plans for reinvestment of those subsidiary earnings. The Company has not recorded a deferred tax liability related to the income taxes and foreign withholding taxes on indefinitely reinvested undistributed earnings of foreign subsidiaries. If the Company decides to repatriate the foreign earnings, it would need to adjust the income tax provision in the period it was determined that the earnings would no longer be indefinitely invested outside the Cayman Islands. The Company’s subsidiaries in the United States do not have undistributed earnings to distribute. As of December 31, 2022, a subsidiary in China has $0.7 million of undistributed earnings which would be subject to a 10% withholding tax if distributed. 203 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ On December 22, 2017 the legislation commonly known as the Tax Cuts and Jobs Act ("TCJA") was signed into law. The TCJA resulted in significant changes to the treatment of research or experimental (“R&E”) expenditures under Internal Revenue Code Section 174. For tax years beginning after December 31, 2021, taxpayers are required to capitalize and amortize all R&E expenditures that are paid or incurred in connection with their trade or business which represent costs in the experimental or laboratory sense. Specifically, costs for U.S.-based R&E activities must be amortized over five years and costs for foreign R&E activities must be amortized over 15 years; both using a midyear convention. In 2022, the Company has capitalized $30.1 million of research and development costs. After amortization, there remains a future temporary deductible item in the amount of $28.5 million. ​ 13. Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders, which excludes unvested restricted shares and shares which are legally outstanding, but subject to repurchase by the Company (in thousands, except share and per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED ​ ​ DECEMBER 31, ​ ​ 2022 2021 Numerator: ​ ​ Net loss attributable to ordinary shareholders ​ $ (51,321) ​ $ (38,049) Accretion of redeemable convertible preferred shares to their redemption value ​ (1,515) ​ (3,757) Excess of the fair value of the consideration paid over the carrying value of NCI ​ — ​ (1,959) Net loss attributable to ordinary shareholders ​ $ (52,836) ​ $ (43,765) Denominator: ​ ​ Weighted-average ordinary shares outstanding ​ 10,933 ​ 10,889 Less: weighted-average unvested restricted ordinary shares subject to repurchase ​ (1,349) ​ (2,748) Weighted-average ordinary shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted ​ 9,584 ​ 8,141 Net loss per share attributable to ordinary shareholders, basic and diluted ​ $ (5.51) ​ $ (5.38) ​ ​ ​ ​ ​ ​ ​ ​ The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to ordinary shareholders for the periods presented because including them would have been antidilutive (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED ​ ​ DECEMBER 31, ​ ​ 2022 2021 Redeemable convertible preferred shares 67,018 58,863 Options to purchase ordinary shares 7,612 4,646 Ordinary share warrants 112 135 Unvested restricted ordinary share awards 327 1,513 Total 75,069 65,157 ​ ​ ​ ​ ​ ​ ​ ​ 204 Table of Contents STRUCTURE THERAPEUTICS INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ​ 14. Defined Contribution Plan The Company maintains a defined contribution plan under Section 401(k) of the Code covering substantially all full-time U.S. employees. Employee contributions are voluntary and are determined on an individual basis subject to the maximum allowable under federal tax regulations. For the year ended December 31, 2022, the Company started to make safe-harbor matching contributions of 100% of each dollar contributed by eligible employees, up to 4% of an employee’s eligible compensation. The Company may also make discretionary contributions to the 401(k) plan. During the year ended December 31, 2022, matching contributions were $0.2 million. 15. Related Party Transactions Ramy Farid, the President and Chief Executive Officer of Schrödinger, Inc. (“Schrödinger”) is a member of the Company’s board of directors. During the years ended December 31, 2022 and 2021, the Company had existing collaboration agreements to use the results provided by Schrödinger’s software platform for its research purposes. During the years ended December 31, 2022 and 2021, the Company paid $0.2 million and $0.7 million to Schrödinger, respectively, and had none and less than $0.1 million payable balance to Schrödinger as of December 31, 2022 and 2021, respectively. As discussed in Note 8 during the year ended December 31, 2021, existing Company shareholders acquired a redeemable noncontrolling interest in Basecamp and ultimately exchanged that interest for Series B-1 redeemable convertible preferred shares of the Company. 16. Subsequent Events In January 2023, the Company’s board of directors approved share options for 3,550,000 ordinary shares to certain officers of the Company, which were granted under the 2023 Equity Incentive Plan on February 2, 2023. The exercise price per share of these share options are equal to $5.00, which is the fair market value of each ordinary share, based on the public offering price of $15.00 per ADS in the Company’s IPO. Each share option will vest over four years, subject to the executive’s continuous service through each vesting date. Of these share options granted, share options for 1,200,000 ordinary shares are subject to achievement of certain clinical milestones in the first year following grant. ​ ​ 205 Table of Contents ​ Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. ​