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

The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018, was recorded as an adjustment to the opening balance of accumulated deficit for 2018, with an associated impact to deferred revenue, as of the adoption date as follows:

 

 

 

As Reported at

 

 

Adjustments Due to

 

 

Balance at

 

 

 

December 31, 2017

 

 

ASC 606

 

 

January 1, 2018

 

Deferred revenue - related party

 

 

12,079

 

 

 

5,339

 

 

 

17,418

 

Deferred revenue, net of current portion - related party

 

 

84,847

 

 

 

21,518

 

 

 

106,365

 

Accumulated deficit

 

 

(263,571

)

 

 

(26,857

)

 

 

(290,428

)

 

Further, the impact of adoption to our current year results in the Consolidated Statements of Operations and Comprehensive Loss is as follows:

 

 

 

Year Ended December 31, 2018

 

 

 

As Reported under

ASC 606

 

 

Pro forma as if

accounted for

under ASC 605

 

Collaboration revenue - related party

 

$

26,917

 

 

$

52,197

 

Loss from operations

 

$

(100,284

)

 

 

(75,004

)

Net loss

 

$

(98,942

)

 

 

(73,662

)

Net loss per share attributable to common stockholders,

   basic and diluted

 

$

(2.43

)

 

$

(1.81

)

 

Finally, the impact of the adoption to our current year Consolidated Statements of Cash Flows is as follows:

 

 

 

Year Ended December 31, 2018

 

 

 

As Reported under

ASC 606

 

 

Pro forma as if

accounted for

under ASC 605

 

Net loss

 

$

(98,942

)

 

$

(73,662

)

Deferred revenue

 

$

13,476

 

 

 

(11,804

)

 

Collaboration revenue

Arrangements with collaborators may include licenses to intellectual property, research and development services, manufacturing services for clinical and commercial supply, and participation on joint steering committees. We evaluate the promised goods or services to determine which promises, or group of promises, represent performance obligations. In contemplation of whether a promised good or service meets the criteria required of a performance obligation, we consider the stage of development of the underlying intellectual property, the capabilities and expertise of our customer relative to the underlying intellectual property, and whether the promised goods or services are integral to or dependent on other promises in the contract. When accounting for an arrangement that contains multiple performance obligations, we must develop judgmental assumptions, which may include market conditions, reimbursement rates for personnel costs, development timelines and probabilities of regulatory success to determine the stand-alone selling price for each performance obligation identified in the contract. 

When we conclude that a contract should be accounted for as a combined performance obligation and recognized over-time, we must then determine the period over which revenue should be recognized and the method by which to measure revenue. We generally recognize revenue using a cost-based input method.

Licenses of intellectual property

If a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenue allocated to the license when the license is transferred to our customer and our customer is able to use and benefit from the license.  For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue associated with the bundled performance obligation.  We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of progress and related revenue recognition.

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