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SEC Filings

10-Q
SERES THERAPEUTICS, INC. filed this Form 10-Q on 11/08/2018
Entire Document
 

We do not assess whether a contract has a significant financing component if the expectation at contract inception is that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year, or less or the amount is immaterial. At September 30, 2018, we have not capitalized any costs to obtain any of our contracts.

Income Taxes

The adoption of ASC 606 resulted in an increase to deferred revenue, which in turn generated an additional deferred tax asset that increased the Company’s net deferred tax asset position. As the Company fully reserves its net deferred tax assets, the impact was offset by the valuation allowance.

Impact of New Revenue Guidance on Financial Statement Line Items

The following table compares the reported condensed consolidated balance sheet, statement of operations and cash flows, as of and for the three and nine months ended September 30, 2018 to the pro-forma amounts had the previous guidance (ASC 605) been in effect:

 

 

 

As of September 30, 2018

 

 

 

As Reported under

ASC 606

 

 

Pro forma as if

accounted for

under ASC 605

 

Deferred revenue - related party

 

 

17,901

 

 

 

12,118

 

Deferred revenue, net of current portion - related party

 

 

89,554

 

 

 

76,034

 

Accumulated deficit

 

 

(368,083

)

 

 

(348,780

)

 

Total reported liabilities were $19,303 greater as reported under ASC 606 than would have been reported under ASC 605 as of  September 30, 2018. This change consists of a $13,520 increase in deferred revenue, net of current portion, related party, and a $5,783 increase in deferred revenue - related parties.  

 

 

 

Three Months Ended

September 30, 2018

 

 

Nine Months Ended

September 30, 2018

 

 

 

As Reported under

ASC 606

 

 

Pro forma as if

accounted for

under ASC 605

 

 

As Reported under

ASC 606

 

 

Pro forma as if

accounted for

under ASC 605

 

Collaboration revenue - related party

 

$

8,684

 

 

$

3,084

 

 

$

16,721

 

 

$

9,167

 

Loss from operations

 

 

(22,211

)

 

 

(27,811

)

 

 

(78,613

)

 

 

(86,167

)

Net loss

 

$

(21,949

)

 

$

(27,549

)

 

$

(77,655

)

 

$

(85,209

)

Net loss per share attributable to common stockholders,

   basic and diluted

 

$

(0.54

)

 

$

(0.68

)

 

$

(1.91

)

 

$

(2.09

)

 

Collaboration revenue – related party increased by approximately $5,600 and $7,554 as reported under ASC 606 when compared to what would have been reported under ASC 605 for the three and nine months ended September 30, 2018

 

 

 

Nine Months Ended September 30, 2018

 

 

 

As Reported under

ASC 606

 

 

Pro forma as if

accounted for

under ASC 605

 

Net loss

 

$

(77,655

)

 

$

(85,209

)

Deferred revenue

 

 

(16,328

)

 

 

(8,774

)

 

The adoption of ASC 606 resulted in a $7,554 decrease in net loss, due to a corresponding increase in revenue and a decrease of $7,554 in the change in deferred revenue for the nine months ended September 30, 2018.  The adoption of ASC 606 did not change net cash used in operating activities.

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify

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