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SEC Filings

10-K
SERES THERAPEUTICS, INC. filed this Form 10-K on 03/16/2017
Entire Document
 

 

SERES THERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except share and per share data)

 

 

Legal Proceedings

On September 28, 2016, a purported stockholder of the Company filed a putative class action lawsuit in the U.S. District Court for the District of Massachusetts against the Company entitled Mariusz Mazurek v. Seres Therapeutics, Inc., et.al. and on February 12, 2017, the Company received an amended complaint. The lawsuit alleges violations of Sections 10(b), 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, as amended, by making allegedly false and misleading statements and omissions about the Company’s clinical trials for its product candidate SER-109 in the Company’s public disclosures between June 25, 2015 and July 29, 2016. The lawsuit seeks, among other things, damages in connection with the Company’s allegedly inflated stock price between June 25, 2015 and July 29, 2016 as a result of those allegedly false and misleading statements, as well as interest, attorneys’ fees and costs. The Company can make no assurances as to the time or resources that will need to be devoted to this lawsuit or its final outcome, or the impact, if any, of this lawsuit or any proceedings on its business, financial condition, results of operations and cash flows. While the Company is vigorously defending against all claims asserted, this litigation could result in substantial costs to the Company and a diversion of the Company’s management’s attention and resources, which could harm its business. In addition, the uncertainty of the pending lawsuit or potential filing of additional lawsuits could lead to more volatility and a reduction in the Company’s stock price. Given the early stage of the litigation, at this time the Company is unable to reasonably estimate possible losses or form a judgment that an unfavorable outcome is either probable or remote. It is not currently possible to assess whether or not the outcome of these proceedings may have a material adverse effect on the Company.

 

 

13.

Income Taxes

During the years ended December 31, 2016, 2015 and 2014, the Company recorded no income tax benefits for the net operating losses incurred in each year or interim period, due to its uncertainty of realizing a benefit from those items.

A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:

 

 

 

Year Ended December 31,

 

 

 

2016

 

 

2015

 

 

2014

 

Federal statutory income tax rate

 

 

(34.0

)%

 

 

(34.0

)%

 

 

(34.0

)%

Research and development tax credits

 

 

(8.8

)

 

 

(5.7

)

 

 

(3.8

)

State taxes, net of federal benefit

 

 

(5.8

)

 

 

(5.3

)

 

 

(5.3

)

Stock-based compensation

 

 

(6.3

)

 

 

4.1

 

 

 

2.3

 

Revaluation of preferred stock warrant liability

 

 

 

 

 

 

 

 

3.3

 

Other

 

 

0.1

 

 

 

0.3

 

 

 

0.2

 

Change in deferred tax asset valuation allowance

 

 

54.8

 

 

 

40.6

 

 

 

37.3

 

Effective income tax rate

 

 

%

 

 

%

 

 

%

 

F-26



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