risk-free rate is based on the rates in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately
equal to each grant’s expected life. A dividend yield of zero is applied since Asterias has not historically paid dividends
and does not expect to pay dividends in the foreseeable future. The expected volatility is based upon the volatility of Asterias’
own trading stock and of a group of publicly traded industry peer companies. The expected term of options granted is derived from
a combination of Asterias historical experience, to the extent available, and using the simplified method under SEC Staff Accounting
Bulletin Topic 14.
to the adoption of ASU 2016-09 in 2017 stock-based compensation expense was recognized based on awards that are ultimately expected
to vest, and as a result, the amount has been reduced by estimated forfeitures. Forfeitures were estimated at the time of grant
and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates. Forfeitures were estimated
based on Asterias’ historical experience and future expectations. Subsequent to the adoption of ASU 2016-09 on January 1,
2017, forfeitures are accounted for as they occur.
determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models
and assumptions requiring the use of judgment. If Asterias had made different assumptions, its stock-based compensation expense,
and net loss for years ended December 31, 2017, 2016 and 2015, may have been significantly different.
does not recognize deferred income taxes for incentive stock option compensation expense, and records a tax deduction only when
a disqualified disposition has occurred.
expenses include stock-based compensation expense as follows (in thousands):
Ended December 31,|| |
|| ||1,975|| ||
|| ||2,142|| ||
|| ||2,021|| |
stock-based compensation expense||
of December 31, 2017, unrecognized compensation expense related to stock options and RSUs was $4.8 million and $1.7 million, respectively
with a weighted-average remaining amortization period of 2.75 years and 2.31 years, respectively.
Stock Reserved for Future Issuance
had the following shares of common stock reserved for future issuance under the Equity Incentive Plan:
of December 31,|| |
|| || || ||
|| || || |
stock subject to options outstanding||
|| ||6,376|| ||
|| ||6,232|| |
|| ||690|| ||
|| ||200|| |
available for future grants||
|| ||2,782|| ||
|| ||2,115|| |
stock reserved for future issuances||
|| ||9,848|| ||
|| ||8,547|| |
Commitments and Contingencies
and Manufacturing Services Agreement
August 3, 2016, Asterias entered into a Development and Manufacturing Services Agreement (the “Services Agreement”)
with Cognate BioServices, Inc. (“Cognate”), a fully-integrated contract bioservices organization providing development
and current Good Manufacturing Practice (“cGMP”) manufacturing services to companies and institutions engaged in the
development of cell-based products.
the Services Agreement, Cognate is performing under an Initial Statement of Work process development studies in support of Asterias’
clinical and commercial development activities of AST-VAC1 and production and manufacturing services of AST-VAC1 under cGMP under
the Second Statement of Work. In consideration for the process development services set forth in the Initial Statement of Work,
Asterias agreed to make aggregate payments of up to approximately $1.7 million in fees over the term of the Initial Statement
of Work and pay for additional pass through costs for materials and equipment estimated by management to be approximately $0.5
million. In consideration of the production and manufacturing services set forth in the Second Statement of Work, once the services
under the Initial Statement of Work are completed and if Asterias receives FDA concurrence on the clinical protocol for an AST-VAC1
trial, then Asterias will make an initial start-up payment, a monthly payment for dedicated manufacturing capacity, and certain
other manufacturing fees.