Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 05, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'CELLULAR DYNAMICS INTERNATIONAL, INC. | ' |
Entity Central Index Key | '0001482080 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'ICEL | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 15,814,008 |
Balance_Sheets
Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $40,969 | $62,029 |
Accounts receivable, net | 1,736 | 3,318 |
Inventories | 3,971 | 3,884 |
Prepaid expenses and other assets | 1,171 | 964 |
Total current assets | 47,847 | 70,195 |
Property and equipment, net | 3,904 | 2,052 |
Goodwill | 6,817 | 6,817 |
Intangible assets, net | 3,953 | 4,122 |
Debt issuance costs, net | 163 | 199 |
Other assets | 17 | 10 |
Total | 62,701 | 83,395 |
Current liabilities: | ' | ' |
Accounts payable | 1,972 | 1,811 |
Accrued liabilities | 2,586 | 3,361 |
Deferred revenue | 3,521 | 1,439 |
Current maturities of long-term debt | 3,131 | 18 |
Total current liabilities | 11,210 | 6,629 |
Long-term debt, less current portion | 8,916 | 11,879 |
Commitments and contingencies (Note 7) | ' | ' |
Shareholders' equity: | ' | ' |
Preferred stock, $0.01 par value — authorized, 10,000,000 shares at December 31, 2013 and March 31, 2014; no shares issued and outstanding, at December 31, 2013 and March 31, 2014 | 0 | 0 |
Common stock, $0.0001 par value — authorized, 100,000,000 shares at December 31, 2013 and September 30, 2014; issued and outstanding, 15,757,725 shares at December 31, 2013 and 15,762,725 at September 30, 2014 | 2 | 2 |
Additional paid-in capital | 174,421 | 171,907 |
Accumulated deficit | 131,848 | 107,022 |
Total shareholders' equity | 42,575 | 64,887 |
Total | $62,701 | $83,395 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred Stock Par Value (in dollars per share) | $0.01 | $0.01 |
Authorized Preferred Stock (in shares) | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock Outstanding (in shares) | 0 | 0 |
Common Stock Par Value (in dollars per share) | $0.00 | $0.00 |
Common Stock Authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock Issued (in shares) | 15,762,725 | 15,757,725 |
Common Stock Outstanding (in shares) | 15,762,725 | 15,757,725 |
Statement_of_Operations
Statement of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Product sales | $1,669 | $1,793 | $5,534 | $5,516 |
Collaborations, partnerships and other revenues | 1,898 | 730 | 4,609 | 2,209 |
Total revenues | 3,567 | 2,523 | 10,143 | 7,725 |
Costs and expenses: | ' | ' | ' | ' |
Cost of product sales | 418 | 371 | 1,410 | 1,624 |
Research and development | 5,716 | 3,906 | 16,210 | 11,673 |
Sales and marketing | 2,069 | 1,679 | 6,063 | 4,710 |
General and administrative | 3,172 | 3,727 | 10,300 | 7,614 |
Total costs and expenses | 11,375 | 9,683 | 33,983 | 25,621 |
Loss from operations | -7,808 | -7,160 | -23,840 | -17,896 |
Other (expense) income: | ' | ' | ' | ' |
Interest expense | -342 | -358 | -986 | -369 |
Other income | 0 | 20 | 0 | 20 |
Total other expense | -342 | -338 | -986 | -349 |
Net loss | ($8,150) | ($7,498) | ($24,826) | ($18,245) |
Earnings Per Share, Basic and Diluted | ($0.52) | ($0.62) | ($1.58) | ($3.49) |
Shares used in computing net loss per share of common stock, basic and diluted | 15,762,725 | 12,087,370 | 15,761,765 | 5,223,101 |
Statement_of_Cash_Flows
Statement of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($24,826) | ($18,245) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation | 743 | 618 |
Amortization of licenses, patents and other agreements | 445 | 383 |
Amortization of debt issuance costs and debt discount | 79 | 24 |
Loss (Gain) on disposal of assets | -1 | 0 |
Stock-based compensation | 2,363 | 928 |
Gain on revaluation of warrants | 0 | -20 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 1,582 | 750 |
Inventories | -87 | -1,126 |
Prepaid expenses and other current assets | -214 | -430 |
Accounts payable | -200 | 186 |
Accrued liabilities | -789 | 525 |
Accrued interest | 125 | 59 |
Deferred revenue | 2,082 | -45 |
Net cash used in operating activities | -18,698 | -16,393 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -2,246 | -646 |
Proceeds from sale of fixed assets | 12 | 0 |
Payments to acquire licenses | -141 | -235 |
Net cash used in investing activities | -2,375 | -881 |
Cash flows from financing activities: | ' | ' |
Repayments of debt | -18 | -1,055 |
Proceeds from debt | 0 | 12,000 |
Payment of debt issuance costs | 0 | -163 |
Proceeds from exercise of stock options | 31 | 103 |
Proceeds from issuance of common stock, net of offering costs | 0 | 41,064 |
Net cash provided by financing activities | 13 | 51,949 |
Net increase (decrease) in cash and cash equivalents | -21,060 | 34,675 |
Cash and cash equivalents — Beginning of period | 62,029 | 33,900 |
Cash and cash equivalents — End of period | 40,969 | 68,575 |
Supplemental disclosure of cash flow information — | ' | ' |
Cash paid for interest | 776 | 284 |
Supplemental information on noncash activities: | ' | ' |
Issuance of stock options for non-competition agreement | 120 | 70 |
Property and equipment additions not yet paid | 522 | 0 |
Licenses not yet paid | 15 | 25 |
Debt issuance costs not yet paid | 0 | 59 |
Common stock issuance costs not yet paid | $0 | $292 |
Note_1_Description_of_business
Note 1. Description of business | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Description of business | ' |
Description of business | |
Cellular Dynamics International, Inc. (the Company), was incorporated in Wisconsin in late 2007 under the name iPS Cells, Inc. In July 2008, the Company acquired two companies—Cellular Dynamics International, Inc. and Stem Cell Products, Inc.—in a common stock merger transaction. Subsequent to the acquisitions, the combined entity was renamed Cellular Dynamics International, Inc. | |
The Company develops and manufactures fully functioning human cells in industrial quantities to precise specifications. Its proprietary iCell Operating System (iCell O/S) includes true human cells in multiple cell types (iCell products), human induced pluripotent stem cells (iPSCs) and custom iPSCs and iCell products (MyCell products). Its iCell O/S products provide standardized, easy-to-use, cost-effective access to the human cell, the smallest fully functioning operating unit of human biology. Customers use the Company's iCell O/S products, among other purposes, for drug discovery and screening; to test the safety and efficacy of their small molecule and biologic drug candidates; for stem cell banking; and in research and development of cellular therapeutics. | |
On June 27, 2013, the Company’s Board of Directors authorized a 1 for 9.75 reverse split of its Series A preferred stock, Series B preferred stock and common stock which was effective July 9, 2013. These financial statements give retroactive effect to the stock split. |
Note_2_Basis_of_presentation_a
Note 2. Basis of presentation and use of estimates | 9 Months Ended |
Sep. 30, 2014 | |
Basis of presentation [Abstract] | ' |
Basis of presentation and use of estimates | ' |
Basis of presentation and use of estimates | |
Basis of presentation | |
The unaudited interim financial statements have been prepared on the same basis as the annual statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations and cash flows for all interim periods presented herein. The financial data and the other information disclosed in these notes to the financial statements related to the interim periods are unaudited. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2014, for any other interim period or for any other future year. | |
Use of estimates | |
The accompanying financial statements have been presented in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions include primarily those required in the valuation of inventory, patents, licenses, goodwill, intangible assets, and property and equipment; the timing of revenue recognition; and the calculation of stock-based compensation. Management bases its estimates on certain assumptions, which it believes are reasonable in the circumstances, and while actual results could differ from those estimates, management does not believe that any change in those assumptions in the near term would have a significant effect on the Company’s financial position, results of operations or cash flows. | |
These unaudited interim financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto for the fiscal year ended December 31, 2013, included in its Annual Report on Form 10-K/A. |
Note_3_Significant_accounting_
Note 3. Significant accounting policies and supplemental financial information | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Significant accounting policies and supplemental financial information | ' | |||||||
3. Significant accounting policies and supplemental financial information | ||||||||
Significant accounting policies | ||||||||
There have been no material changes to the Company's significant accounting policies as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2013. | ||||||||
Interim Financial Statement Details | ||||||||
The following tables and disclosures show the Company’s financial statement details as of December 31, 2013 and September 30, 2014 and for the three and nine months ended September 30, 2013 and 2014 (tables in thousands, except for share data). | ||||||||
Accounts receivable | ||||||||
The Company establishes an allowance for doubtful accounts based on a customer's ability and likelihood to pay. There was no allowance at either December 31, 2013 or September 30, 2014. | ||||||||
Inventories | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
Raw materials | $ | 1,658 | $ | 1,775 | ||||
Work in process | 547 | 515 | ||||||
Finished goods | 1,679 | 1,681 | ||||||
Total | $ | 3,884 | $ | 3,971 | ||||
Property and equipment | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
Leasehold improvements | $ | 451 | $ | 798 | ||||
Production and lab equipment | 4,815 | 7,160 | ||||||
Office and computer equipment | 546 | 1,262 | ||||||
Construction-in-progress | 932 | 117 | ||||||
6,744 | 9,337 | |||||||
Less accumulated depreciation and amortization | (4,692 | ) | (5,433 | ) | ||||
Total | $ | 2,052 | $ | 3,904 | ||||
Goodwill | ||||||||
Goodwill is not amortized. The Company reviews goodwill for impairment annually during the fourth quarter or more often if conditions warrant. There was no change in goodwill for the nine months ended September 30, 2014. | ||||||||
Accrued liabilities | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
Accrued payroll, vacation and employee-related expenses | $ | 1,024 | $ | 771 | ||||
Accrued incentive compensation | 1,229 | 1,091 | ||||||
Accrued unbilled professional fees | 196 | 87 | ||||||
Accrued royalties | 584 | 295 | ||||||
Accrued quarterly consulting fees | 76 | 76 | ||||||
Accrued incentives for sales staff | 202 | 99 | ||||||
Other | 50 | 167 | ||||||
Total | $ | 3,361 | $ | 2,586 | ||||
Deferred revenue | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
CIRM | $ | 924 | $ | 2,980 | ||||
Coriell | — | 166 | ||||||
Lilly | 279 | 146 | ||||||
Other | 236 | 229 | ||||||
Total | $ | 1,439 | $ | 3,521 | ||||
Deferred revenue represents payments received, but not yet earned. The deferred revenue shown above is primarily generated by long-term contracts and multiple-element arrangements, which include but are not limited to the agreements with the California Institute for Regenerative Medicine (CIRM), Coriell Institute for Medical Research (Coriell) and Eli Lilly and Company (Lilly). | ||||||||
Net loss per share of common stock | ||||||||
The Company’s basic net loss per share of common stock is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share of common stock is computed by dividing the net loss by the weighted-average number of potential common shares outstanding for the period determined using the treasury-stock method. For purposes of this calculation, the following potential common shares were excluded because including them would have been anti-dilutive: | ||||||||
September 30, | ||||||||
2013 | 2014 | |||||||
Common stock warrants | 28,406 | 28,406 | ||||||
Common stock options | 2,305,863 | 2,859,827 | ||||||
2,334,269 | 2,888,233 | |||||||
Concentration of credit risk and other risks and uncertainties | ||||||||
As of September 30, 2014 the Company had $29.6 million invested in a 100% U.S. Treasury Securities Money Market Fund and $4.4 million in a U.S. Government Money Market Fund. An investment in a money market fund is not insured or guaranteed. The Company's remaining cash was deposited with one major financial institution. These deposits exceed federally insured limits. The Company has not experienced any losses in such accounts and believes that the Company is not exposed to any significant risk on these balances. | ||||||||
The Company is currently not profitable and no assurance can be provided that it will ever be profitable. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, dependence on key personnel, dependence on key suppliers, protection of proprietary technology, the validity of and continued access to its owned and licensed intellectual property, compliance with government regulations, uncertainty of widespread market acceptance of products, and the need to obtain additional financing. The Company's products include materials subject to rapid technological change. Certain materials used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such materials cannot be accomplished quickly. While the Company has ongoing programs to minimize the adverse effect of such uncertainty and considers technological change in estimating allowances, uncertainty continues to exist. | ||||||||
Fair value of financial instruments | ||||||||
The carrying amounts of financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, approximate their respective fair values due to the relatively short-term nature of these instruments. | ||||||||
Recent accounting pronouncements | ||||||||
In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern "ASU No. 2014-15", which is included in Accounting Standards Codification 205, Presentation of Financial Statements. ASU No. 2014-15 requires management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. ASU No. 2014-15 will be effective for the Company starting in the first quarter of fiscal year 2017. Early application is permitted. The Company is currently evaluating the impact the adoption of ASU No. 2014-15 will have on its financial statements. | ||||||||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers "ASU No. 2014-09", which supersedes nearly all accounting standards for revenue recognition. ASU No. 2014-09 requires that an entity recognize revenue upon transferring promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 will be effective for the Company starting in the first quarter of fiscal year 2017. Early application is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact the adoption of ASU No. 2014-09 will have on its financial statements. |
Note_4_Intangible_assets
Note 4. Intangible assets | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||||||
Intangible assets | ' | |||||||
4 | Intangible assets | |||||||
Intangible assets and accumulated amortization balances at December 31, 2013 and September 30, 2014, were as follows (in thousands): | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
Trade name | $ | 13 | $ | 13 | ||||
Licenses and patents | 4,578 | 4,734 | ||||||
Non-competition agreement | 641 | 761 | ||||||
5,232 | 5,508 | |||||||
Less accumulated amortization: | ||||||||
Trade name | (13 | ) | (13 | ) | ||||
Licenses and patents | (746 | ) | (1,067 | ) | ||||
Non-competition agreement | (351 | ) | (475 | ) | ||||
(1,110 | ) | (1,555 | ) | |||||
Total, net | $ | 4,122 | $ | 3,953 | ||||
Amortization expense was $132,000 and $151,000 for the three months ended September 30, 2013 and 2014, respectively; and $383,000 and $445,000 for the nine months ended September 30, 2013 and 2014, respectively. | ||||||||
A portion of the March 2014 stock option grant to a scientific founder of the Company was issued in exchange for extending his non-competition agreement from July 2016 to July 2017. As of the grant date, the Company increased the value of the non-competition agreement by $120,000 and began amortizing that amount through July 2017. |
Note_5_Longterm_debt
Note 5. Long-term debt | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Long-term debt | ' | |||||||
5 | Long-term debt | |||||||
Long-term debt at December 31, 2013 and September 30, 2014, consisted of the following (in thousands): | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
Term loan credit agreement, net of debt discount | $ | 11,879 | $ | 12,047 | ||||
License agreements | 18 | — | ||||||
11,897 | 12,047 | |||||||
Less current portion | (18 | ) | (3,131 | ) | ||||
Total | $ | 11,879 | $ | 8,916 | ||||
The Company entered into the Credit Agreement on June 27, 2013. The term of the Credit Agreement is four years. Outstanding loans bear interest at 6.5% per annum plus the greater of 2% or one-month LIBOR. Interest payments are made monthly in arrears. The first of 30 monthly principal payments will occur at the end of January 2015. |
Note_6_Stock_options_and_restr
Note 6. Stock options and restricted common stock | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||
Stock options and restricted common stock | ' | ||||||||
6 | Stock options and restricted common stock | ||||||||
As of the consummation of the Company's initial public offering on July 30, 2013 (IPO), the Company's board of directors adopted and its shareholders approved the 2013 Equity Incentive Plan (the “2013 Plan”). As of that same date, the Company discontinued the granting of options under the 2008 Equity Incentive Plan (the "2008 Plan"). | |||||||||
Assumptions used to value the option grants awarded in 2014 were as follows: | |||||||||
2014 | |||||||||
Estimated expected term | 1 to 8 years | ||||||||
Risk-free interest rate | 0.18% to 2.38% | ||||||||
Expected volatility assumption | 43% to 66% | ||||||||
Forfeiture rate | 0% to 6% | ||||||||
Dividend yield assumption | — | % | |||||||
The number of shares available for grant under the Company's Equity Incentive Plans, as amended (the "Plans") follows: | |||||||||
2008 Plan | 2013 Plan | Total | |||||||
Available for grant — January 1, 2014 | — | 29,870 | 29,870 | ||||||
Plan adjustments | (14,218 | ) | 630,309 | 616,091 | |||||
Grants | — | (575,530 | ) | (575,530 | ) | ||||
Forfeitures | 14,218 | 84,879 | 99,097 | ||||||
Available for grant — September 30, 2014 | — | 169,528 | 169,528 | ||||||
A summary of option activity under the Plans as of September 30, 2014 and changes during the nine month period then ended follows: | |||||||||
Options | Weighted- | Weighted- | |||||||
average | average | ||||||||
exercise | remaining | ||||||||
price | contractual | ||||||||
term | |||||||||
Outstanding — January 1, 2014 | 2,388,394 | $ | 9.7 | 7.63 | |||||
Granted | 575,530 | ||||||||
Exercised | (5,000 | ) | |||||||
Forfeited | (99,097 | ) | |||||||
Outstanding — September 30, 2014 | 2,859,827 | $ | 10.61 | 7.29 | |||||
Vested as of September 30, 2014 | 1,644,346 | $ | 8.51 | 6.18 | |||||
Vested or expected to vest as of September 30, 2014 | 2,850,394 | $ | 10.6 | 7.28 | |||||
Exercisable as of September 30, 2014 | 1,823,202 | $ | 8.88 | 6.3 | |||||
At September 30, 2014, the total compensation cost not yet recognized that related to nonvested awards was $7.8 million which is expected to be recognized over a weighted-average period of 2.80 years. That amount excludes options issued in exchange for and accounted as intangible assets. |
Note_7_Commitments_and_conting
Note 7. Commitments and contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and contingencies | ' |
Commitments and contingencies | |
Contingencies – From time to time, the Company may be subject to various legal proceedings and claims arising in the ordinary course of business. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No such amounts were accrued at December 31, 2013 or September 30, 2014. |
Note_8_Relatedparty_transactio
Note 8. Related-party transactions | 9 Months Ended | |
Sep. 30, 2014 | ||
Related Party Transactions [Abstract] | ' | |
Related-party transactions | ' | |
8 | Related-party transactions | |
The Company has consulting agreements with scientific advisors who are also shareholders. The total expense recorded to general and administrative expenses for these agreements was $76,000 for both the three months ended September 30, 2013 and 2014; and $227,000 for the both the nine months ended September 30, 2013 and 2014. | ||
In March 2014, the Company granted stock options in exchange for future services and amendments to the consulting and non-competition agreements with a scientific founder of the Company who also serves on the board of directors. See Note 4 for additional information. |
Note_3_Significant_accounting_1
Note 3. Significant accounting policies and supplemental financial information Policies | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Accounting | ' |
Basis of presentation | |
The unaudited interim financial statements have been prepared on the same basis as the annual statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations and cash flows for all interim periods presented herein. The financial data and the other information disclosed in these notes to the financial statements related to the interim periods are unaudited. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2014, for any other interim period or for any other future year. | |
Use of Estimates | ' |
Use of estimates | |
The accompanying financial statements have been presented in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions include primarily those required in the valuation of inventory, patents, licenses, goodwill, intangible assets, and property and equipment; the timing of revenue recognition; and the calculation of stock-based compensation. Management bases its estimates on certain assumptions, which it believes are reasonable in the circumstances, and while actual results could differ from those estimates, management does not believe that any change in those assumptions in the near term would have a significant effect on the Company’s financial position, results of operations or cash flows. | |
These unaudited interim financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto for the fiscal year ended December 31, 2013, included in its Annual Report on Form 10-K/A. | |
Accounts receivable | ' |
Accounts receivable | |
The Company establishes an allowance for doubtful accounts based on a customer's ability and likelihood to pay. There was no allowance at either December 31, 2013 or September 30, 2014. | |
Goodwill | ' |
Goodwill | |
Goodwill is not amortized. The Company reviews goodwill for impairment annually during the fourth quarter or more often if conditions warrant. There was no change in goodwill for the nine months ended September 30, 2014. | |
Deferred revenue | ' |
Deferred revenue represents payments received, but not yet earned. The deferred revenue shown above is primarily generated by long-term contracts and multiple-element arrangements | |
Net loss per share of common stock | ' |
Net loss per share of common stock | |
The Company’s basic net loss per share of common stock is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share of common stock is computed by dividing the net loss by the weighted-average number of potential common shares outstanding for the period determined using the treasury-stock method. | |
Concentration of credit risk and other risks and uncertainties | ' |
Concentration of credit risk and other risks and uncertainties | |
As of September 30, 2014 the Company had $29.6 million invested in a 100% U.S. Treasury Securities Money Market Fund and $4.4 million in a U.S. Government Money Market Fund. An investment in a money market fund is not insured or guaranteed. The Company's remaining cash was deposited with one major financial institution. These deposits exceed federally insured limits. The Company has not experienced any losses in such accounts and believes that the Company is not exposed to any significant risk on these balances. | |
The Company is currently not profitable and no assurance can be provided that it will ever be profitable. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, dependence on key personnel, dependence on key suppliers, protection of proprietary technology, the validity of and continued access to its owned and licensed intellectual property, compliance with government regulations, uncertainty of widespread market acceptance of products, and the need to obtain additional financing. The Company's products include materials subject to rapid technological change. Certain materials used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such materials cannot be accomplished quickly. While the Company has ongoing programs to minimize the adverse effect of such uncertainty and considers technological change in estimating allowances, uncertainty continues to exist. | |
Fair value of financial instruments | ' |
Fair value of financial instruments | |
The carrying amounts of financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, approximate their respective fair values due to the relatively short-term nature of these instruments. | |
Recent accounting pronouncements | ' |
Recent accounting pronouncements | |
In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern "ASU No. 2014-15", which is included in Accounting Standards Codification 205, Presentation of Financial Statements. ASU No. 2014-15 requires management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. ASU No. 2014-15 will be effective for the Company starting in the first quarter of fiscal year 2017. Early application is permitted. The Company is currently evaluating the impact the adoption of ASU No. 2014-15 will have on its financial statements. | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers "ASU No. 2014-09", which supersedes nearly all accounting standards for revenue recognition. ASU No. 2014-09 requires that an entity recognize revenue upon transferring promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 will be effective for the Company starting in the first quarter of fiscal year 2017. Early application is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact the adoption of ASU No. 2014-09 will have on its financial statements. |
Note_3_Significant_accounting_2
Note 3. Significant accounting policies and supplemental financial information Tables | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Schedule of Inventory | ' | |||||||
Inventories | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
Raw materials | $ | 1,658 | $ | 1,775 | ||||
Work in process | 547 | 515 | ||||||
Finished goods | 1,679 | 1,681 | ||||||
Total | $ | 3,884 | $ | 3,971 | ||||
Schedule of Property and equipment | ' | |||||||
Property and equipment | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
Leasehold improvements | $ | 451 | $ | 798 | ||||
Production and lab equipment | 4,815 | 7,160 | ||||||
Office and computer equipment | 546 | 1,262 | ||||||
Construction-in-progress | 932 | 117 | ||||||
6,744 | 9,337 | |||||||
Less accumulated depreciation and amortization | (4,692 | ) | (5,433 | ) | ||||
Total | $ | 2,052 | $ | 3,904 | ||||
Schedule of Accrued liabilities | ' | |||||||
Accrued liabilities | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
Accrued payroll, vacation and employee-related expenses | $ | 1,024 | $ | 771 | ||||
Accrued incentive compensation | 1,229 | 1,091 | ||||||
Accrued unbilled professional fees | 196 | 87 | ||||||
Accrued royalties | 584 | 295 | ||||||
Accrued quarterly consulting fees | 76 | 76 | ||||||
Accrued incentives for sales staff | 202 | 99 | ||||||
Other | 50 | 167 | ||||||
Total | $ | 3,361 | $ | 2,586 | ||||
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | ' | |||||||
Deferred revenue | ||||||||
December 31, 2013 | September 30, 2014 | |||||||
CIRM | $ | 924 | $ | 2,980 | ||||
Coriell | — | 166 | ||||||
Lilly | 279 | 146 | ||||||
Other | 236 | 229 | ||||||
Total | $ | 1,439 | $ | 3,521 | ||||
Schedule of common shares that were excluded from diluted net loss per share | ' | |||||||
September 30, | ||||||||
2013 | 2014 | |||||||
Common stock warrants | 28,406 | 28,406 | ||||||
Common stock options | 2,305,863 | 2,859,827 | ||||||
2,334,269 | 2,888,233 | |||||||
Note_4_Intangible_assets_Table
Note 4. Intangible assets Table | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||||||
Schedule of Intangible Assets | ' | |||||||
December 31, 2013 | September 30, 2014 | |||||||
Trade name | $ | 13 | $ | 13 | ||||
Licenses and patents | 4,578 | 4,734 | ||||||
Non-competition agreement | 641 | 761 | ||||||
5,232 | 5,508 | |||||||
Less accumulated amortization: | ||||||||
Trade name | (13 | ) | (13 | ) | ||||
Licenses and patents | (746 | ) | (1,067 | ) | ||||
Non-competition agreement | (351 | ) | (475 | ) | ||||
(1,110 | ) | (1,555 | ) | |||||
Total, net | $ | 4,122 | $ | 3,953 | ||||
Note_5_Longterm_debt_Table
Note 5. Long-term debt Table | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Long-term Debt | ' | |||||||
December 31, 2013 | September 30, 2014 | |||||||
Term loan credit agreement, net of debt discount | $ | 11,879 | $ | 12,047 | ||||
License agreements | 18 | — | ||||||
11,897 | 12,047 | |||||||
Less current portion | (18 | ) | (3,131 | ) | ||||
Total | $ | 11,879 | $ | 8,916 | ||||
Note_6_Stock_options_and_restr1
Note 6. Stock options and restricted common stock Tables | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | ' | ||||||||
2014 | |||||||||
Estimated expected term | 1 to 8 years | ||||||||
Risk-free interest rate | 0.18% to 2.38% | ||||||||
Expected volatility assumption | 43% to 66% | ||||||||
Forfeiture rate | 0% to 6% | ||||||||
Dividend yield assumption | — | % | |||||||
Number of Shares Available for Grant | ' | ||||||||
2008 Plan | 2013 Plan | Total | |||||||
Available for grant — January 1, 2014 | — | 29,870 | 29,870 | ||||||
Plan adjustments | (14,218 | ) | 630,309 | 616,091 | |||||
Grants | — | (575,530 | ) | (575,530 | ) | ||||
Forfeitures | 14,218 | 84,879 | 99,097 | ||||||
Available for grant — September 30, 2014 | — | 169,528 | 169,528 | ||||||
Summary of Option Activity | ' | ||||||||
Options | Weighted- | Weighted- | |||||||
average | average | ||||||||
exercise | remaining | ||||||||
price | contractual | ||||||||
term | |||||||||
Outstanding — January 1, 2014 | 2,388,394 | $ | 9.7 | 7.63 | |||||
Granted | 575,530 | ||||||||
Exercised | (5,000 | ) | |||||||
Forfeited | (99,097 | ) | |||||||
Outstanding — September 30, 2014 | 2,859,827 | $ | 10.61 | 7.29 | |||||
Vested as of September 30, 2014 | 1,644,346 | $ | 8.51 | 6.18 | |||||
Vested or expected to vest as of September 30, 2014 | 2,850,394 | $ | 10.6 | 7.28 | |||||
Exercisable as of September 30, 2014 | 1,823,202 | $ | 8.88 | 6.3 | |||||
Note_1_Description_of_business1
Note 1. Description of business Details - Textual | 1 Months Ended | 0 Months Ended | ||
Jul. 31, 2008 | Jun. 27, 2013 | Jun. 27, 2013 | Jun. 27, 2013 | |
Cellular Dynamics International, Inc. and Stem Cell Products, Inc. [Member] | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Common Class B [Member] | |
Business | ||||
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' |
Companies acquired | 2 | ' | ' | ' |
Reverse stock split ratio, conversion ratio | ' | 9.75 | 9.75 | 9.75 |
Note_3_Significant_accounting_3
Note 3. Significant accounting policies and supplemental financial information - Textual (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Supplemental Financial Information [Line Items] | ' | ' |
Allowance for Doubtful Accounts Receivable, Current | $0 | $0 |
US Treasury Securities [Member] | ' | ' |
Supplemental Financial Information [Line Items] | ' | ' |
Investment amount | 29,600,000 | ' |
Money Market Funds [Member] | ' | ' |
Supplemental Financial Information [Line Items] | ' | ' |
Investment amount | $4,400,000 | ' |
Note_3_Significant_accounting_4
Note 3. Significant accounting policies and supplemental financial information - Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounting Policies [Abstract] | ' | ' |
Raw materials | $1,775 | $1,658 |
Work in process | 515 | 547 |
Finished goods | 1,681 | 1,679 |
Total | $3,971 | $3,884 |
Note_3_Significant_accounting_5
Note 3. Significant accounting policies and supplemental financial information - Property Plant and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounting Policies [Abstract] | ' | ' |
Leasehold improvements | $798 | $451 |
Production and lab equipment | 7,160 | 4,815 |
Office and computer equipment | 1,262 | 546 |
Construction-in-progress | 117 | 932 |
Property, Plant and Equipment, Gross | 9,337 | 6,744 |
Less accumulated depreciation and amortization | -5,433 | -4,692 |
Total | $3,904 | $2,052 |
Note_3_Significant_accounting_6
Note 3. Significant accounting policies and supplemental financial information - Accrued Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounting Policies [Abstract] | ' | ' |
Accrued payroll, vacation and employee-related expenses | $771 | $1,024 |
Accrued incentive compensation | 1,091 | 1,229 |
Accrued unbilled professional fees | 87 | 196 |
Accrued royalties | 295 | 584 |
Accrued quarterly consulting fees | 76 | 76 |
Accrued incentives for sales staff | 99 | 202 |
Other | 167 | 50 |
Total | $2,586 | $3,361 |
Note_3_Significant_accounting_7
Note 3. Significant accounting policies and supplemental financial information - Deferred Revenue (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Deferred Revenue Arrangement | ' | ' |
Deferred Revenue | $3,521,000 | $1,439,000 |
CIRM | ' | ' |
Deferred Revenue Arrangement | ' | ' |
Deferred Revenue | 2,980,000 | 924,000 |
Coriell | ' | ' |
Deferred Revenue Arrangement | ' | ' |
Deferred Revenue | 166,000 | 0 |
Lilly | ' | ' |
Deferred Revenue Arrangement | ' | ' |
Deferred Revenue | 146,000 | 279,000 |
Other | ' | ' |
Deferred Revenue Arrangement | ' | ' |
Deferred Revenue | $229,000 | $236,000 |
Note_3_Significant_accounting_8
Note 3. Significant accounting policies and supplemental financial information - Earnings Per Share (Details) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive shares excluded from the computation of net loss per share | 2,888,233 | 2,334,269 |
Common Stock Warrants [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive shares excluded from the computation of net loss per share | 28,406 | 28,406 |
Equity Option [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive shares excluded from the computation of net loss per share | ' | 2,305,863 |
Details_Schedule_of_Intangible
Details - Schedule of Intangible Assets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | $5,508 | $5,232 |
Finite-Lived Intangible Assets, Accumulated Amortization | -1,555 | -1,110 |
Total, net | 3,953 | 4,122 |
Trade Name [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | 13 | 13 |
Finite-Lived Intangible Assets, Accumulated Amortization | -13 | -13 |
Licensing and patents [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | 4,734 | 4,578 |
Finite-Lived Intangible Assets, Accumulated Amortization | -1,067 | -746 |
Non-competition agreement [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | 761 | 641 |
Finite-Lived Intangible Assets, Accumulated Amortization | ($475) | ($351) |
Note_4_Intangible_assets_Detai
Note 4. Intangible assets Details - Textual (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | ' | ' | ' |
Amortization of licenses, patents and other agreements | $151 | $132 | $445 | $383 |
Non-competition agreement, Period Increase | ' | ' | $120 | ' |
Note_5_Longterm_debt_Details_S
Note 5. Long-term debt Details - Schedule of Long-term debt (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | $12,047 | $11,897 |
Less current portion | -3,131 | -18 |
Total | 8,916 | 11,879 |
Term Loan Credit Agreeement, Net of Debt Discount [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 12,047 | 11,879 |
Licensing Agreements [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | $0 | $18 |
Note_5_Longterm_debt_Details_T
Note 5. Long-term debt Details - Textual (Line of Credit [Member]) | 0 Months Ended |
Jun. 30, 2013 | |
Debt Instrument [Line Items] | ' |
Term of the credit agreement (in years) | '4 years |
Variable rate, reference rate on the credit agreement, percentage | 6.50% |
Variable rate, minimum basis spread on the reference rate, percentage | 2.00% |
Number of monthly installments under the credit agreement | '30 months |
London Interbank Offered Rate (LIBOR) [Member] | ' |
Debt Instrument [Line Items] | ' |
Variable rate, maximum basis spread on the reference rate, interest rate index, period | '1 month |
Note_6_Stock_options_and_restr2
Note 6. Stock options and restricted common stock Details - Assumptions used to value the most recent option grants | 9 Months Ended |
Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Risk free interest Rate, minimum | 0.18% |
Risk free interest Rate, maximum | 2.38% |
Expected Volatility Rate, Minimum | 43.00% |
Expected Volatility Rate, Maximum | 66.00% |
Dividend yield assumption | 0.00% |
Minimum | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Estimated expected term | '1 year |
Forfeiture rate | 0.00% |
Maximum | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Estimated expected term | '8 years |
Forfeiture rate | 6.00% |
Note_6_Stock_options_and_restr3
Note 6. Stock options and restricted common stock Details - Number of shares available grant | 9 Months Ended |
Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Available for Grant [Roll Forward] | ' |
Available for grant — January 1, 2014 | 29,870 |
Plan adjustments | 616,091 |
Grants | -575,530 |
Forfeitures | 99,097 |
Available for grant — September 30, 2014 | 169,528 |
2008 Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Available for Grant [Roll Forward] | ' |
Available for grant — January 1, 2014 | 0 |
Plan adjustments | -14,218 |
Grants | 0 |
Forfeitures | 14,218 |
Available for grant — September 30, 2014 | 0 |
2013 Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Available for Grant [Roll Forward] | ' |
Available for grant — January 1, 2014 | 29,870 |
Plan adjustments | 630,309 |
Grants | -575,530 |
Forfeitures | 84,879 |
Available for grant — September 30, 2014 | 169,528 |
Note_6_Stock_options_and_restr4
Note 6. Stock options and restricted common stock Details - Stock Option Activity (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' |
Outstanding — January 1, 2014 | 2,388,394 | ' |
Granted | 575,530 | ' |
Exercised | -5,000 | ' |
Forfeited | -99,097 | ' |
Outstanding — September 30, 2014 | 2,859,827 | 2,388,394 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ' | ' |
Options Outstanding - Beginning Balance - Weighted average exercise price (in dollars per share) | $9.70 | ' |
Options Outstanding - Beginning Balance - Weighted average exercise price (in dollars per share) | $10.61 | $9.70 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ' | ' |
Options Outstanding - Weighted average remaining contractual term | '7 years 3 months 15 days | '7 years 7 months 17 days |
Options Outstanding - Weighted average remaining contractual term | '7 years 3 months 15 days | '7 years 7 months 17 days |
Vested as of September 30, 2014 | 1,644,346 | ' |
Options Vested - Weighted Average Exercise Price (in dollars per share) | $8.51 | ' |
Options vested - Weighted average remaining contractual term | '6 years 2 months 4 days | ' |
Vested or expected to vest as of September 30, 2014 | 2,850,394 | ' |
Options Vested or expected to vest - Weighted Average Exercise Price (in dollars per share) | $10.60 | ' |
Options Vested or expected to vest - Weighted Average Remaining Contractual Term | '7 years 3 months 10 days | ' |
Exercisable as of September 30, 2014 | 1,823,202 | ' |
Options Exercisable - Weighted Average Exercise Price (in dollars per share) | $8.88 | ' |
Options Exercisable - Average Remaining Contractual Term | '6 years 3 months 19 days | ' |
Note_6_Stock_options_and_restr5
Note 6. Stock options and restricted common stock Details - Textual (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Nonvested awards, compensation cost not yet recognized | $7.80 |
Nonvested awards, compensation cost not yet recognized, period for recognition | '2 years 9 months 20 days |
Note_8_Relatedparty_transactio1
Note 8. Related-party transactions Details - Textual (Scientific Advisor [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Scientific Advisor [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Related party consulting agreement, general and administrative expense | $76,000 | $76,000 | $227,000 | $227,000 |