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SEC Filings

10-K
SERES THERAPEUTICS, INC. filed this Form 10-K on 03/06/2019
Entire Document
 

 

SERES THERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

 

Restricted Stock Units

The Company has granted restricted stock units with time-based vesting conditions.  The table below summarizes the Company’s restricted stock activity for the twelve months ended December 31, 2018:

 

 

 

Number

of Shares

 

 

Weighted

Average Grant

Date Fair Value

 

Unvested restricted stock units as of December 31, 2017

 

 

356,778

 

 

$

10.01

 

Granted

 

 

30,900

 

 

$

7.50

 

Forfeited

 

 

(22,730

)

 

$

9.87

 

Vested

 

 

(138,048

)

 

$

10.09

 

Unvested restricted stock units as of December 31, 2018

 

 

226,900

 

 

$

9.64

 

The aggregate intrinsic value of restricted stock units that vested during the years ended December 31, 2018, 2017 and 2016 was $1,206, $445, and $0, respectively.

Stock-based Compensation

The Company recorded stock-based compensation expense related to stock options and restricted stock units in the following expense categories of its consolidated statements of operations and comprehensive loss:

 

 

 

Year Ended December 31,

 

 

 

2018

 

 

2017

 

 

2016

 

Research and development expenses

 

$

8,388

 

 

$

8,115

 

 

$

8,310

 

General and administrative expenses

 

 

8,253

 

 

 

9,247

 

 

 

8,547

 

 

 

$

16,641

 

 

$

17,362

 

 

$

16,857

 

 

As of December 31, 2018, the Company had an aggregate of $21,554 of unrecognized stock-based compensation cost, which is expected to be recognized over a weighted average period of 2.19 years.

 

 

9.

Collaboration Revenue

The Company adopted ASC 606 on January 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for 2018 reflect the application of ASC 606 while the reported results for 2017 and 2016 were prepared under ASC 605.

Adoption of ASC Topic 606, Revenue from Contracts with Customers

The adoption of ASC 606 changed the pattern and timing of revenue recognition under the Collaboration and License Agreement (“License Agreement”) with NHS. Under ASC 605, the upfront fee of $120,000 received by the Company in the first quarter of 2016 was deferred and recognized on a straight-line basis over the estimated performance period of ten years. In addition, the Company recognized revenue associated with substantive development milestones not considered probable at the inception of the License Agreement with NHS in their entirety in the period in which the milestone was achieved, in accordance with ASC 605-28, Revenue Recognition-Milestone Method.

Under ASC 606, the Company recognizes revenue using the cost-to-cost method which best depicts the transfer of control to the customer. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Under this method, revenue will be recorded as a percentage of the estimated transaction price based on the extent of progress towards completion. The estimate of the Company’s measure of progress and estimate of transaction price will be updated at each reporting date, as a change in estimate, and will require judgement. The amount of consideration allocated to satisfied performance obligations, based on the Company’s measure of progress will be recognized immediately on a cumulative catch-up basis, resulting in an adjustment to revenue in the period of change. The amount related to the unsatisfied portion will be recognized as that portion is satisfied over time.  In addition, substantive

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