| Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting
Policies Cash and Cash Equivalents We consider all short-term investments readily
convertible to cash, without notice or penalty, with an initial maturity of 90 days or less to be cash equivalents. Restricted Cash Under the terms of an operating
lease related to one of our facilities (Note 4), we are required to maintain a letter of credit as collateral. Accordingly, at April 30,
2022 and 2021, restricted cash of $ 0.35 The following table provides a reconciliation
of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts
shown in the consolidated statements of cash flows (in thousands):
Schedule of Restricted Cash
As of April 30,
2022 2021 2020
Cash and cash equivalents $ 126,166 $ 169,915 $ 36,262
Restricted cash 350 350 350
Total cash, cash equivalents and restricted cash $ 126,516 $ 170,265 $ 36,612 Revenue Recognition We recognize revenue in accordance with the authoritative
guidance of ASC 606, Revenue from Contracts with Customers Revenue recognized from services provided under
our customer contracts are disaggregated into manufacturing and process development revenue streams. Manufacturing revenue Manufacturing revenue generally represents revenue
from the manufacturing of customer products recognized over time utilizing an input method that compares the cost of cumulative work-in-process
to date to the most current estimates for the entire cost of the performance obligation. Under a manufacturing contract, a quantity of
manufacturing runs are ordered at a specified scale with prescribed dates, where the product is manufactured according to the customer’s
specifications and typically includes only one performance obligation. Each manufacturing run represents a distinct service that is sold
separately and has stand-alone value to the customer. The products are manufactured exclusively for a specific customer and have no alternative
use. The customer retains control of its product during the entire manufacturing process and can make changes to the process or specifications
at its request. Under these agreements, we are entitled to consideration for progress to date that includes an element of profit margin. Process development revenue Process development revenue generally represents
revenue from services associated with the custom development of a manufacturing process and analytical methods for a customer’s
product. Process development revenue is recognized over time utilizing an input method that compares the cost of cumulative work-in-process
to date to the most current estimates for the entire cost of the performance obligation. Under a process development contract, the customer
owns the product details and process, which has no alternative use. These process development projects are customized to each customer
to meet its specifications and typically includes only one performance obligation. Each process represents a distinct service that is
sold separately and has stand-alone value to the customer. The customer also retains control of its product as the product is being created
or enhanced by our services and can make changes to its process or specifications upon request. Under these agreements, we are entitled
to consideration for progress to date that includes an element of profit margin. The
following table summarizes our manufacturing and process development revenue streams (in thousands):
Disaggregation of revenue
Fiscal Year Ended April 30,
2022 2021 2020
Manufacturing revenues $ 99,282 $ 83,678 $ 52,046
Process development revenues 20,315 12,190 7,656
Total revenues $ 119,597 $ 95,868 $ 59,702 The timing of revenue recognition, billings and
cash collections results in billed accounts receivable, contract assets (unbilled receivables), and contract liabilities (customer deposits
and deferred revenue). Contract assets are recorded when our right to consideration is conditioned on something other than the passage
of time. Contract assets are reclassified to accounts receivable on the consolidated balance sheet when our rights become unconditional.
Contract liabilities represent customer deposits and deferred revenue billed and/or received in advance of our fulfillment of performance
obligations. Contract liabilities convert to revenue as we perform our obligations under the contract. During the fiscal years ended April 30, 2022
and 2021, we recognized revenue of $ 34.0 27.3 The transaction price for services provided under
our customer contracts reflects our best estimates of the amount of consideration to which we are entitled in exchange for providing goods
and services to our customers. For contracts with multiple performance obligations, we allocate transaction price to each performance
obligation identified in a contract on a relative standalone selling price basis. We generally determine relative standalone selling prices
based on the price observed in the customer contract for each distinct performance obligation. If observable standalone selling prices
are not available, we may estimate the applicable standalone selling price based on the pricing of other comparable services or on a price
that we believe the market is willing to pay for the applicable service. In determining the transaction price, we
also considered the different sources of variable consideration including, but not limited to, discounts, credits, refunds, price
concessions or other similar items. We have included in the transaction price some or all of an amount of variable
consideration, utilizing the most likely method, only to the extent that it is probable that a significant reversal in the amount of
cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently
resolved. The actual amount of consideration ultimately received may differ. In addition, our customer contracts generally
include provisions entitling us to a cancellation or postponement fee when a customer cancels or postpones its commitments prior to our
initiation of services, therefore not utilizing their reserved capacity. The determination of such cancellation and postponement fees
are based on the terms stated in the related customer contract but are generally considered substantive for accounting purposes and create
an enforceable right and obligation due to us when the cancellation or postponement occurs. Accordingly, we recognize such fees, subject
to variable consideration, as revenue upon the cancellation or postponement date utilizing the most likely method. Management may be required to exercise judgement
in estimating revenue to be recognized. Judgement is required in identifying performance obligations, estimating the transaction price,
estimating the stand-alone selling prices of identified performance obligations, estimating variable consideration, and estimating the
progress towards the satisfaction of performance obligations. If actual results in the future vary from our estimates, the estimates will
be adjusted, which will affect revenues in the period that such variances become known. During the fiscal year ended April 30, 2022, changes
in estimates for variable consideration resulted in a decrease in revenues of $ 14.7 11.7 During the fiscal years ended April 30, 2021 and
2020, changes in estimates for variable consideration resulted in an increase in revenues of $ 1.1 1.5 We apply the practical expedient available under
ASC 606 that permits us not to disclose the value of unsatisfied performance obligations for contracts with an original expected length
of one year or less. As of April 30, 2022, we do not have any unsatisfied performance obligations for contracts greater than one year. Costs incurred to obtain a contract are not material. These costs are
generally employee sales commissions, which are expensed as incurred and included in selling, general and administrative expense in the
consolidated statements of operations and comprehensive income (loss). Accounts Receivable, Net Accounts receivable is primarily comprised of
amounts owed to us for services provided under our customer contracts and are recorded at the invoiced amount net of an allowance for
doubtful accounts, if necessary. We apply judgment in assessing the ultimate realization of our receivables and we estimate an allowance
for doubtful accounts based on various factors, such as the aging of our receivables, historical experience, and the financial condition
of our customers. Based on our analysis of our accounts receivable
balance as of April 30, 2022, we determined an allowance for doubtful accounts of $ 18.4 Based on our analysis of our accounts receivable
balance as of April 30, 2021, we determined no Concentrations of Credit
Risk and Customer Base Financial instruments that potentially subject
us to concentrations of credit risk consist of cash and cash equivalents, accounts receivable, net and contract assets. As of April 30,
2022 and 2021, we maintain our cash balances primarily with one and two major commercial banks, respectively, and our deposits held with
the banks exceed the amount of government insurance limits provided on our deposits. We are exposed to credit risk in the event of default
by the major commercial banks holding our cash balances to the extent of the cash amounts recorded on the accompanying consolidated balance
sheets exceed the amount of government insurance limits provided on our deposits. Our accounts receivable from
amounts billed for services provided under customer contracts are derived from a limited number of customers. Most customer contracts
require up-front payments and installment payments during the service period. We perform periodic evaluations of the financial condition
of our customers and generally do not require collateral, but we can terminate any contract if a material default occurs. At April 30,
2022 and 2021, approximately 84 98 88 97 Our revenues are derived from
a limited number of customers. Historically, these customers have not entered into long-term contracts because their need for drug supply
depends on a variety of factors, including a product’s stage of development, the timing of regulatory filings and approvals, the
product needs of their collaborators, if applicable, their financial resources and the market demand with respect to a commercial product. The table below identifies
each of our customers that accounted for 10% or more of our total revenues during any of the fiscal years ended April 30, 2022, 2021
and 2020:
Concentration of revenues
Customer Geographic Location 2022 2021 2020
Halozyme Therapeutics, Inc. (1) U.S. 41 % 51 % 28 %
IGM Biosciences, Inc. U.S. 11 * 11
Gilead Sciences, Inc. U.S. * 16 24
Acumen Pharmaceuticals, Inc. U.S. * * 11
Coherus BioSciences, Inc. U.S. * * 10 ______________
(1) Revenues are derived from the manufacture of multiple therapeutics
that our customer uses in various products and product candidates.
* Represents a percentage less than 10% of our total revenues. We attribute revenue to the individual countries
where the customer is headquartered. Revenues derived from U.S. based customers were approximately 100 99 Leases We account for our leases in accordance with the
authoritative guidance of ASC 842, Leases Our operating leases may include options to extend
the lease which are included in the lease term when it is reasonably certain that we will exercise a renewal option. Operating lease expense
is recognized on a straight-line basis over the expected lease term. Our finance lease with a term greater than one
year is included as an asset within property and equipment, net and a lease liability equal to the present value of the minimum lease
payments is included in other current liabilities and finance lease liabilities, less current portion in our consolidated balance sheets.
The present value of the finance lease payments are calculated using the implicit interest rate in the lease. Finance lease ROU assets
are amortized on a straight-line basis over the expected useful life of the asset and the carrying amount of the lease liability is adjusted
to reflect interest, which is recorded as interest expense. Leases with an initial term of 12 months or less
are not recorded on our consolidated balance sheets and lease expense for these short-term leases is recognized on a straight-line basis
over the lease term. We have also elected the practical expedient to not separate lease components from non-lease components. Inventory Inventory consists of raw materials
inventory and is valued at the lower of cost, determined by the first-in, first-out method, or net realizable value. We periodically review
raw materials inventory for potential impairment and adjust inventory to its net realizable value based on the estimate of future use
and reduce the carrying value of inventory as deemed necessary. Property and Equipment Property and equipment is recorded
at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over
the estimated useful lives of the related asset, which are generally as follows:
Schedule of estimated useful lives of property
Description Estimated Useful Life
Leasehold improvements Shorter of estimated useful life or lease term
Laboratory and manufacturing equipment 5 – 10 years
Computer equipment and software 3 – 5 years
Furniture, fixtures and office equipment 5 – 10 years Costs for property and equipment
net yet placed into service have been capitalized as construction-in-progress. These costs are primarily related to equipment and leasehold
improvements associated with our manufacturing facilities, and will be depreciated in accordance with the above guidelines once placed
into service. Interest costs incurred during construction of major capital projects are capitalized as construction-in-progress until
the underlying asset is ready for its intended use, at which point the interest costs are amortized as depreciation expense over the
life of the underlying asset. Interest capitalized as construction-in-progress was $ 0.2
Schedule of property and equipment
April 30,
2022 2021
Leasehold improvements $ 37,345 $ 23,000
Laboratory and manufacturing equipment 30,089 20,793
Computer equipment and software 5,326 5,541
Furniture, fixtures and office equipment 843 843
Construction-in-progress 43,809 8,372
Total property and equipment, gross 117,412 58,549
Less: accumulated depreciation and amortization (24,457 ) (21,094 )
Total property and equipment, net $ 92,955 $ 37,455 Depreciation and
amortization expense for the fiscal years ended April 30, 2022, 2021 and 2020 was 4,480 3,453 3,091 Capitalized Software Implementation
Costs We capitalize certain
implementation costs incurred under cloud computing hosting arrangements. Costs incurred during the application development stage
related to the implementation of the hosting arrangement are capitalized and included within other assets on the accompanying
consolidated balance sheets. Amortization of capitalized implementation costs is recognized on a straight-line basis over the term
of the associated hosting arrangement when it is ready for its intended use. Costs related to preliminary project activities and
post-implementation activities are expensed as incurred. As of April 30, 2022 and 2021, we had capitalized software implementation
costs of $ 3.5 0.9 Impairment Long-lived assets are reviewed for impairment
in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or
changes in circumstances that indicate that their carrying value may not be recoverable. If such events or changes in circumstances arise,
we compare the carrying amount of the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the
long-lived assets. If the long-lived assets are determined to be impaired, any excess of the carrying value of the long-lived assets over
its estimated fair value is recognized as an impairment loss. For the fiscal years ended April 30, 2022 and 2021, there were no Fair Value of Financial Instruments The carrying amounts in the
accompanying consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable, net, accounts payable and
accrued liabilities approximate their fair values due to their short-term maturities. Fair Value Measurements Fair value is defined as the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. The guidance prioritizes the inputs used in measuring fair value into the following hierarchy:
· Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets
or liabilities.
· Level 2 – Observable inputs other than quoted prices included in Level 1, such as assets or liabilities
whose values are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices
of instruments with similar attributes in active markets.
· Level 3 – Unobservable inputs that are supported by little or no market activity and significant
to the overall fair value measurement of the assets or liabilities; therefore requiring the company to develop its own valuation techniques
and assumptions. As of April 30, 2022 and 2021,
we did not have any Level 2 or Level 3 financial assets and our cash equivalents of $ 116.3 158.8 Stock-Based Compensation We account for stock options,
restricted stock units, performance stock units and other stock-based awards granted under our equity compensation plans in accordance
with the authoritative guidance of ASC 718, Compensation – Stock Compensation Debt Discount and Issuance Costs Debt discount and issuance costs related to convertible
senior notes are recorded as deductions that net against the principal value of the debt and are amortized to interest expense over the
contractual term of the debt using the effective interest method (Note 3). Upon the adoption of ASU 2020-06 on May 1, 2021, the unamortized
debt discount balance was derecognized as of the adoption date (Note 2). Advertising Costs Advertising costs are expensed as incurred and included in selling,
general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). For the fiscal years
ended April 30, 2022, 2021 and 2020, advertising costs were $ 0.6 0.3 0.2 Income Taxes We utilize the liability method of
accounting for income taxes in accordance with ASC 740, Income Taxes 115.0 We are required to file federal and state income
tax returns in various jurisdictions. The preparation of these returns requires us to interpret the applicable tax laws in effect in such
jurisdictions, which could affect the amount paid by us. Comprehensive Income (Loss) Comprehensive income (loss) is the change in equity
during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) is equal to our
net income (loss) for all periods presented. Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standards
Board (“FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06,
Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic
815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity We elected to early adopt ASU 2020-06 on May 1,
2021, using a modified retrospective transition method. Under this transition method, prior period financial information and disclosures
are not adjusted and continue to be reported under the accounting standards that were in effect prior to our adoption of ASU 2020-06. The adoption of ASU 2020-06
resulted in the re-combination of the debt and equity components of our convertible senior notes (Note 3) into a single debt instrument,
which resulted in a $42.4 million decrease in additional paid-in capital from the derecognition of the bifurcated equity component, a
$41.6 million increase in convertible senior notes from the derecognition of the discount associated with the bifurcated equity component,
or debt discount, and $0.8 million decrease to the opening balance of accumulated deficit, representing the cumulative non-cash interest
expense recognized related to the amortization of the debt discount associated with the bifurcated equity component of our convertible
senior notes. The adoption of this standard also reduces the non-cash interest expense recognized in future periods due to the derecognition
of the debt discount associated with the bifurcated equity component of our convertible senior notes. When calculating net income per
share of common stock attributable to common stockholders, we use the if-converted method as required under ASU 2020-06 to determine the
dilutive effect of our convertible senior notes. Accounting Standards Not
Yet Adopted In June 2016, the FASB issued ASU No. 2016-13,
Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic
815) and Leases (Topic 842): Effective Dates |
