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SEC Filings

10-Q
BIOTIME INC filed this Form 10-Q on 05/10/2018
Entire Document
 
 

 

LifeMap Sciences has licensed from a third party the databases it commercializes and has a contractual obligation to pay royalties to the licensor on subscriptions sold. These costs are included in cost of sales on the condensed consolidated statements of operations when the cash is received and the royalty obligation is incurred as the royalty payments do not qualify for capitalization of costs to fulfill a contract under ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers.

 

Grant Revenues. In applying the provisions of Topic 606, BioTime has determined that government grants are out of the scope of Topic 606 because the government entities do not meet the definition of a “customer”, as defined by Topic 606, as there is not considered to be a transfer of control of good or services to the government entities funding the grant. BioTime has, and will continue to, account for grants received to perform research and development services in accordance with ASC 730-20, Research and Development Arrangements, which requires an assessment, at the inception of the grant, of whether the grant is a liability or a contract to perform research and development services for others. If BioTime or a subsidiary receiving the grant is obligated to repay the grant funds to the grantor regardless of the outcome of the research and development activities, then BioTime is required to estimate and recognize that liability. Alternatively, if BioTime or a subsidiary receiving the grant is not required to repay, or if it is required to repay the grant funds only if the research and development activities are successful, then the grant agreement is accounted for as a contract to perform research and development services for others, in which case, grant revenue is recognized when the related research and development expenses are incurred.

 

Deferred grant revenues represent grant funds received from the governmental funding agencies for which the allowable expenses have not yet been incurred as of the balance sheet date reported.

 

Arrangements with Multiple Performance Obligations. BioTime’s contracts with customers may include multiple performance obligations. For such arrangements, BioTime allocates revenue to each performance obligation based on its relative standalone selling price. BioTime generally determines or estimates standalone selling prices based on the prices charged, or that would be charged, to customers for that product or service. As of, and for the three months ended, March 31, 2018, BioTime did not have significant arrangements with multiple performance obligations.

 

Results of Operations

 

Comparison of Three Months Ended March 31, 2018 and 2017

 

Revenues and Cost of Sales

 

The amounts in the table below show BioTime’s consolidated revenues, by source, for the periods presented (in thousands).

 

  

Three Months Ended March 31

(unaudited)

   $ Increase/   % Increase/ 
   2018   2017   (Decrease)   (Decrease) 
Grant revenue  $326   $11   $315    *
Royalties from product sales and license fees   136    110    26    23.6%
Subscription and advertisement revenues   239    264    (25)   (9.5)%
Sale of research products and services   -    5    (5)   -
Total revenues  $701   $390   $311    79.7%
                     
Cost of Sales  $(109)  $(57)  $52    91.2%

 

* Not meaningful.

 

BioTime total revenues increased by $311,000 for the three months ended March 31, 2018 as compared to the three months ended March 31, 2017, primarily reflecting a $315,000 increase in grant revenues, including $287,000 from a new Small Business Innovation Research grant from the National Institutes of Health awarded to BioTime in September 2017, and $27,000 from the Israeli Innovation Authority to Cell Cure.

 

Cost of sales for the three months ended March 31, 2018 increased by $52,000 over the same period in the prior year primarily attributable to an increase in royalty payments made by LifeMap Sciences for its subscriptions products due to an increase in the royalty rate effective January 1, 2018.

 

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