Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies |
Basis of Presentation |
We have prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our fiscal year ends on December 31. The accompanying consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
Use of Estimates |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Fair Value of Financial Instruments |
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Three levels of inputs, of which the first two are considered observable and the last unobservable, may be used to measure fair value which are the following: |
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| • | | Level 1 — Quoted prices in active markets for identical assets or liabilities. | | | | | | | | | | | | | |
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| • | | Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, 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. | | | | | | | | | | | | | |
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| • | | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | | | | | | | | | | | | | |
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The following table represents the fair value hierarchy for our financial assets (cash equivalents and marketable securities) by major security type and contingent consideration liability measured at fair value on a recurring basis as of December 31, 2014 and 2013 (in thousands): |
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December 31, 2014 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets | | | | | | | | | | | | | | | | |
Money market funds | | $ | 12,674 | | | $ | — | | | $ | — | | | $ | 12,674 | |
Corporate debt securities | | | — | | | | 24,617 | | | | — | | | | 24,617 | |
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Total assets | | $ | 12,674 | | | $ | 24,617 | | | $ | — | | | $ | 37,291 | |
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Liabilities | | | | | | | | | | | | | | | | |
Contingent consideration liability | | $ | — | | | $ | — | | | $ | 30,800 | | | $ | 30,800 | |
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Total liabilities | | $ | — | | | $ | — | | | $ | 30,800 | | | $ | 30,800 | |
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December 31, 2013 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets | | | | | | | | | | | | | | | | |
Money market funds | | $ | 11,345 | | | $ | — | | | $ | — | | | $ | 11,345 | |
Corporate debt securities | | | — | | | | 12,003 | | | | — | | | | 12,003 | |
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Total assets | | $ | 11,345 | | | $ | 12,003 | | | $ | — | | | $ | 23,348 | |
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Liabilities | | | | | | | | | | | | | | | | |
Contingent consideration liability | | $ | — | | | $ | — | | | $ | 39,200 | | | $ | 39,200 | |
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Total liabilities | | $ | — | | | $ | — | | | $ | 39,200 | | | $ | 39,200 | |
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Our available-for-sale debt securities are valued utilizing a multi-dimensional relational model. Inputs, listed in approximate order of priority for use when available, include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. There were no transfers between Level 1 and Level 2 measurements during the year ended December 31, 2014, and there were no changes in our valuation technique. |
Contingent Consideration Liability |
In connection with the exercise of our option to purchase all of the outstanding equity of Symphony Allegro, Inc., or Allegro, in 2009, we are obligated to make contingent cash payments to the former Allegro stockholders related to certain payments received by us from future collaboration agreements pertaining to ADASUVE/AZ-104 (Staccato loxapine) or AZ-002 (Staccato alprazolam). In order to estimate the fair value of the liability associated with the contingent cash payments, we prepared several cash flow scenarios for ADASUVE, AZ-104 and AZ-002, which are subject to the contingent payment obligation. Each potential cash flow scenario consisted of assumptions of the range of estimated milestone and license payments potentially receivable from such collaborations and assumed royalties received from future product sales. Based on these estimates, we computed the estimated payments to be made to the former Allegro stockholders. Payments were assumed to terminate in accordance with current agreement terms or, if no agreements exist, upon the expiration of the related patents. |
The projected cash flow assumptions for ADASUVE in the United States are based on the License and Supply Agreement, or the Teva Agreement, between us and Teva Pharmaceuticals USA, Inc., or Teva, (see Note 8) and on internally and externally developed product sales forecasts. The timing and extent of the projected cash flows for ADASUVE for the territories licensed to Ferrer are based on the Ferrer Agreement (see Note 8). The timing and extent of the projected cash flows for the remaining territories for ADASUVE and worldwide territories for AZ-002 and AZ-104 were based on internal estimates for potential milestones and multiple product royalty scenarios and are also consistent in structure to the most recently negotiated collaboration agreements. |
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We then assigned a probability to each of the cash flow scenarios based on several factors, including: the product candidate’s stage of development, preclinical and clinical results, technological risk related to the successful development of the different drug candidates, estimated market size, market risk and potential collaboration interest to determine a risk adjusted weighted average cash flow based on all of these scenarios. These probability and risk adjusted weighted average cash flows were then discounted utilizing our estimated weighted average cost of capital, or WACC. Our WACC considered our cash position, competition, risk of substitute products, and risk associated with the financing of the development projects. In 2013, we reduced the discount rate from 18.0% to 16.5% to reflect our then current estimated WACC. The change in discount rate increased the net loss for 2013 by approximately $3,600,000 or $0.22 per share. In 2014, we increased the discount rate from 16.5% to 20% to reflect our current estimated WACC. The change in discount rate decreased the net loss for 2014 by approximately $6.4 million or $0.36 per share. The increase in our discount rate reflects the impact of our current financial condition, market capitalization and our estimated increase in borrowing costs. |
The fair value measurement of the contingent consideration liability is based on significant inputs not observed in the market and thus represents a Level 3 measurement. Level 3 measurements are valued based on unobservable inputs that are supported by little or no market activity and reflect our assumptions in measuring fair value. |
We record any changes in the fair value of the contingent consideration liability in earnings in the period of the change. Certain events including, but not limited to, the timing and terms of any collaboration agreement, clinical trial results, approval or non-approval of any future regulatory submissions and the commercial success of ADASUVE, AZ-104 or AZ-002 could have a material impact on the fair value of the contingent consideration liability, and as a result, our results of operations and financial position for the impacted period. |
During the year ended December 31, 2012, we modified the assumptions and the timing and extent of certain cash flows regarding the increased probability that we will commercialize ADASUVE in the United States internally without a collaborator and the timing of the commercial launch of ADASUVE in the United States. This change in assumptions resulted in a decrease to the contingent consideration liability as the former Allegro stockholders do not receive payments from us for product revenues generated by us. We also modified assumptions to reflect the approval of the ADASUVE NDA in December 2012 and the December 2012 positive opinion by the Committee for Medicinal Products for Human recommending that ADASUVE be granted European Union centralized marketing authorization by the European Commission, resulting in an increase in the contingent consideration liability. The changes in these assumptions resulted in a decrease to net loss per share of $0.15 for the year ended December 31, 2012. |
During the year ended December 31, 2013, we modified the assumptions regarding the timing and amount of certain cash flows primarily to reflect (i) the increased probability in the first quarter of 2013 that we would license the U.S. commercialization rights to ADASUVE to a third party, (ii) the impact of the licensing and the terms of the Teva Agreement in the second quarter of 2013, (iii) the change in the projected ADASUVE launch date to the first quarter of 2014 and (iv) the projected timing of certain future revenues and the potential expansion of the ADASUVE label. These changes in assumptions, the change in the discount rate in 2013 described above, and the effects of the passage of a year on the present value computation resulted in an increase to the net loss of $39,913,000, or $2.39 per share, for the year ended December 31, 2013. |
During the year ended December 31, 2014, we modified the assumptions associated with the amount and timing of milestones and royalties projected for ADASUVE and AZ-002 and the probability that AZ-002 would be licensed or sold by us. These changes in assumptions, the change in the discount rate and the effects of the passage of a year on the present value computation resulted in a decrease to the net loss of $8,149,000, or $0.46 per share, for the year ended December 31, 2014. |
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The following table represents a reconciliation of the change in the fair value measurement of the contingent consideration liability for the years ended December 31, 2014 and 2013 (in thousands). |
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| | December 31, | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | |
| | (In thousands) | | | | | | | | | |
Beginning balance | | $ | 39,200 | | | $ | 9,600 | | | | | | | | | |
Payments made | | | (251 | ) | | | (10,313 | ) | | | | | | | | |
Adjustments to fair value measurement | | | (8,149 | ) | | | 39,913 | | | | | | | | | |
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Ending balance | | $ | 30,800 | | | $ | 39,200 | | | | | | | | | |
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The $10,313,000 of aggregate payments in 2013 were the result of our receipt of the $40,000,000 upfront payment from Teva (see Note 8) and our receipt of the $1,250,000 milestone payment from Ferrer associated with the launch of ADASUVE in Germany. The $251,000 of aggregate payment in 2014 was primarily the results of our receipt the $1,000,000 milestone payment from Ferrer associated with the launch of ADASUVE in Spain. |
Financing Obligations |
We have estimated the fair value of our financing obligations (see Note 7) using the net present value of the payments discounted at an interest rate that is consistent with our estimated current borrowing rate for similar long-term debt. We believe the estimates used to measure the fair value of the financing obligations constitute Level 3 inputs. |
At December 31, 2014 and 2013, the estimated fair value of our financing obligations was $52,075,000 and $9,342,000, respectively and had book values of $63,767,000 and $11,524,000, respectively. Our payment commitments associated with these debt instruments may vary with changes in interest rates and are comprised of interest payments and principal payments. The estimated fair value of our debt will fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest. In addition, the fair value of our royalty securitization financing will be affected by the timing and amount of royalties and milestones earned under the Teva Agreement. |
Concentration of Credit Risk |
Financial instruments that potentially subject us to credit risk consist of cash, cash equivalents, marketable securities and restricted cash to the extent of the amounts recorded on the balance sheets. Our cash, cash equivalents and marketable securities are placed with high credit-quality U.S. financial institutions and issuers. |
Cash Equivalents and Marketable Securities |
We determine the appropriate classification of our investments at the time of purchase. These securities are recorded as either cash equivalents or marketable securities. |
We consider all highly liquid investments with original maturities of three months or less from date of purchase to be cash equivalents. Cash equivalents consist of interest-bearing instruments including obligations of U.S. government agencies, high credit rating corporate borrowers and money market funds, which are carried at market value. |
All other investments are classified as available-for-sale marketable securities. We view our available-for-sale investments as available for use in current operations. Accordingly, we have classified all investments as short-term marketable securities, even though the stated maturity date may be one year or more beyond the current balance sheet date. Marketable securities are carried at estimated fair value with unrealized gains or losses included in accumulated other comprehensive income (loss) in stockholders’ (deficit) equity. |
The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in interest and other income (expense), net. Realized gains and losses, if any, are also included in interest and other income (expense), net. The cost of all securities sold is based on the specific-identification method. Interest and dividends are included in interest income. |
We review our investments for other than temporary decreases in market value on a quarterly basis. To date, we have not recorded any charges related to other-than-temporary impairments. |
Restricted Cash |
In March 2014, from the proceeds from the Royalty Securitization Financing (see Note 7), we established a $6,890,000 interest reserve account, which is classified as a noncurrent asset, to cover any potential shortfall in royalties and milestones received from Teva and quarterly interest payments. At December 31, 2014, $2,757,000 remained in the interest reserve account. |
Property and Equipment |
Property and equipment are stated at cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated life of the asset, generally three years for computer equipment, five years for manufacturing equipment and laboratory equipment and seven years for furniture. Leasehold improvements are amortized over the estimated useful life or the remaining lease term, whichever is shorter. |
Impairment of Long-Lived Assets |
We review long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value. Through December 31, 2014, we have not recognized any long-lived asset impairment. |
Revenue Recognition |
We recognize revenue when (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. Prior to the second quarter of 2013, our revenue consisted primarily of amounts earned from collaboration agreements and under research grants with the National Institutes of Health. Beginning in the second quarter of 2013, we also have revenue from product sales and beginning in the first quarter of 2014, we have royalty revenue. |
For collaboration agreements, revenues for non-refundable upfront license fee payments, where we continue to have performance obligations, are recognized as performance occurs and obligations are completed. Revenues for non-refundable upfront license fee payments where we do not have significant future performance obligations are recognized when the agreement is signed and the payments are due. |
For multiple element arrangements, such as collaboration agreements in which a collaborator may purchase several deliverables, we account for each deliverable as a separate unit of accounting if both of the following criteria are met: (i) the delivered item or items have value to the customer on a standalone basis; and (ii) for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. We evaluate how the consideration should be allocated among the units of accounting and allocate revenue to each non-contingent element based upon the relative selling price of each element. We determine the relative selling price for each deliverable using (i) vendor-specific objective evidence, or VSOE, of selling price if it exists; (ii) third-party evidence, or TPE, of selling price if it exists; or (iii) our best estimated selling price for that deliverable if neither VSOE nor TPE of selling price exists for that deliverable. We then recognize the revenue allocated to each element when the four basic revenue criteria described above are met for each element. |
For milestone payments received in connection with our collaboration agreements, we have elected to adopt the milestone method of accounting under Financial Accounting Standards Board Accounting Standards Codification 605-28, Milestone Method. Under the milestone method, revenues for payments which meet the definition of a milestone will be recognized as the respective milestones are achieved. |
We recognize product revenue as follows: |
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| • | | Persuasive Evidence of an Arrangement. We currently sell product through license and supply agreements with our collaborators, Ferrer and Teva. Persuasive evidence of an arrangement is generally determined by the receipt of an approved purchase order from the collaborator in connection with the terms of the license and supply agreements. | | | | | | | | | | | | | |
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| • | | Delivery. Typically, ownership of the product passes to the collaborator upon shipment. Our current license and supply agreements also provide our collaborators with an acceptance period during which they may reject any product which does not conform to agreed-upon specifications. Because ADASUVE is a new product, a new technology and our first product to be commercialized, and because we do not have a history of producing product to collaborator specifications, we will not consider delivery to have occurred until after the collaborator acceptance period has ended or the collaborator has positively accepted the product. Once we have demonstrated over the course of time an ability to reliably produce the product to collaborator specifications, we will consider delivery to have occurred upon shipment in the absence of any other relevant shipment or acceptance terms. | | | | | | | | | | | | | |
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| • | | Sales Price Fixed or Determinable. Sales prices for product shipments are determined by the license and supply agreements and documented in the purchase orders. After the collaborator acceptance period has ended or the collaborator has positively accepted the product, our collaborators do not have any product return or replacement rights, including for expired products. | | | | | | | | | | | | | |
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| • | | Collectability. Payment for the product is contractually obligated under the license and supply agreements. We will monitor payment histories for our collaborators and specific issues as they arise to determine whether collection is probable for a specific transaction and defer revenue as necessary. | | | | | | | | | | | | | |
Royalty revenue from our collaboration agreements is recognized as we receive information from our collaborators regarding product sales. |
Significant management judgment is used in the determination of revenue to be recognized and the period in which it is recognized. |
Inventory |
Inventory is stated at standard cost, which approximates actual cost, determined on a first-in first-out basis, not in excess of market value. Inventory includes the direct costs incurred to manufacture products combined with allocated manufacturing overhead, which consists of indirect costs, including labor and facility overhead. We are in the early stages of commercialization and have incurred significantly higher than normal indirect costs in the production of our inventory due to start-up manufacturing costs and low production volumes. The carrying cost of inventory is reduced so as to not be in excess of the market value of the inventory as determined by the contractual transfer prices to Ferrer and Teva. The excess over the market value is expensed to cost of goods sold. All costs associated with the ADASUVE manufacturing process incurred prior to regulatory approval and the beginning of commercial manufacturing were expensed as a component of research and development expense. If information becomes available that suggests that all or certain of the inventory may not be realizable, we may be required to expense a portion, or all, of the capitalized inventory into cost of goods sold. Inventory, which is stated at the lower of cost or estimated market value, consists of the following (in thousands): |
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| | December 31, | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | |
Raw materials | | $ | 3,677 | | | $ | 3,044 | | | | | | | | | |
Work in process | | | — | | | | — | | | | | | | | | |
Finished goods | | | 52 | | | | 403 | | | | | | | | | |
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Total inventory | | $ | 3,729 | | | $ | 3,447 | | | | | | | | | |
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Research and Development |
Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services. Research and development costs are expensed as incurred. |
Clinical development costs are a significant component of research and development expenses. We have a history of contracting with third parties that perform various clinical trial activities on our behalf in the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. We accrue and expense costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations and clinical trial sites. |
Income Taxes |
We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. |
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. |
Share-Based Compensation |
Compensation cost for employee share-based awards is based on the grant-date fair value and is recognized on a ratable basis over the requisite service periods of the awards, which are generally the vesting periods. We issue employee share-based awards in the form of stock options and restricted stock units under our equity incentive plans and stock purchase rights under our employee stock purchase plan. |
Stock Options, Stock Purchase Rights and Restricted Stock Units |
During the years ended December 31, 2014, 2013 and 2012, the weighted average fair value per share of the employee stock options, restricted stock units and stock purchase rights granted were: |
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| | 2014 | | | 2013 | | | 2012 | | | | | |
Stock Options | | $ | 2.83 | | | $ | 3.46 | | | $ | 2.6 | | | | | |
Restricted Stock Units | | | — | | | | 4.67 | | | | 4.96 | | | | | |
Stock Purchase Rights | | | 1.32 | | | | 1.76 | | | | 3.86 | | | | | |
The estimated grant date fair values of the stock options and stock purchase rights were calculated using the Black-Scholes valuation model. The Black-Scholes model requires the use of a number of highly subjective and complex assumptions in determining the fair value of stock-based awards as follows: |
Weighted-Average Expected Term We determine the expected term of stock options granted through a combination of our own historical exercise experience and expected future exercise activities and post-vesting termination behavior. Under the Employee Stock Purchase Plan, the expected term of employee stock purchase plan shares is equal to the offering period. |
Volatility We utilize our historical volatility to determine future volatility for the purpose of determining share-based payments for all options granted. |
Risk-Free Interest Rate We utilize U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the options or purchase rights on the respective grant dates to determine our risk-free interest rate. |
Dividend Yield We have never declared or paid any cash dividends and do not plan to pay cash dividends in the foreseeable future, and, therefore, use an expected dividend yield of zero in the valuation model. |
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Forfeiture Rate We use historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. All stock-based payment awards are amortized on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. |
During the years ended December 31, 2014, 2013 and 2012, we calculated the estimated grant date fair value of stock options and stock purchase rights using the following assumptions: |
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| | 2014 | | 2013 | | 2012 | | | | | | | | | | |
Stock Option Plans | | | | | | | | | | | | | | | | |
Weighted-average expected term | | 5.0 Years | | 5.0 Years | | 5.0 Years | | | | | | | | | | |
Expected volatility | | 83% | | 99% | | 98% | | | | | | | | | | |
Risk-free interest rate | | 1.66% | | 0.86% | | 0.62% | | | | | | | | | | |
Dividend yield | | 0% | | 0% | | 0% | | | | | | | | | | |
Employee Stock Purchase Plan | | | | | | | | | | | | | | | | |
Weighted-average expected term | | 0.5 Years | | 0.5 Years | | 0.6 Years | | | | | | | | | | |
Expected volatility | | 61% | | 80% | | 98% | | | | | | | | | | |
Risk-free interest rate | | 0.86% | | 0.70% | | 0.14% | | | | | | | | | | |
Dividend yield | | 0% | | 0% | | 0% | | | | | | | | | | |
Restricted Stock Units The estimated fair value of restricted stock unit awards is calculated based on the market price of our common stock on the date of grant, reduced by the present value of dividends expected to be paid on our common stock prior to vesting of the restricted stock unit. Our estimate assumes no dividends will be paid prior to the vesting of the restricted stock unit. |
In 2013, certain restricted stock unit awards were issued that vest based on market conditions. The estimated fair value of these awards was calculated using a binomial lattice model with a term of 10 years, an expected volatility of 99.4%, a risk-free interest rate of 1.94% and a dividend yield of 0%. |
As of December 31, 2014, there was $3,020,000, $334,000 and $13,000 total unrecognized compensation costs related to non-vested stock option awards, restricted stock unit awards and stock purchase rights, respectively, which are expected to be recognized over a weighted average period of 2.7 years, 2.1 years and 0.3 years, respectively. |
New Accounting Pronouncements |
In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, companies will have reduced diversity in the timing and content of footnote disclosures than under the current guidance. ASU 2014-15 is effective for us in the first quarter of 2016 with early adoption permitted. We do not believe the impact of adopting ASU 2014-15 on our results of operations or financial position. |
In May 2014 the Financial Accounting Standards Board, or FASB, issued the Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), that will supersede nearly all existing revenue recognition guidance under US GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard will be effective for public entities for annual and interim periods beginning after December 15, 2016. |
Entities can choose to apply the standard using either the full retrospective approach or a modified retrospective approach. Entities electing the full retrospective adoption will apply the standard to each period presented in the financial statements. This means that entities will have to apply the new guidance as if it had been in effect since the inception of all its contracts with customers presented in the financial statements. Entities that elect the modified retrospective approach will apply the guidance retrospectively only to the most current period presented in the financial statements. This means that entities will have to recognize the cumulative effect of initially applying the new standard as an adjustment to the opening balance of retained earnings at the date of initial application. The new revenue standard will be applied to contracts that are in progress at the date of initial application. |
We plan to adopt the new standard on January 1, 2017. We have not yet evaluated which adoption method we plan to use or the potential effect the new standard will have on our consolidated financial statements. |