Summary of Significant Accounting Policies
January 1, 2018, the Company follows the provisions of ASC Topic 606, Revenue from Contracts with Customers. The guidance
provides a unified model to determine how revenue is recognized.
determining the appropriate amount of revenue to be recognized as it fulfills its obligations under the Company’s agreements,
the Company performs the following steps: (i) identifies the promised goods or services in the contract; (ii) determines whether
the promised goods or services are performance obligations including whether they are distinct in the context of the contract;
(iii) measures the transaction price, including the constraint on variable consideration; (iv) allocates the transaction price
to the performance obligations based on estimated selling prices; and (v) recognizes revenue when (or as) the Company satisfies
each performance obligation.
performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account
in ASC Topic 606. The Company’s performance obligations generally included in customer contracts are research and development
services for clinical studies or licenses to use intellectual property. Customer contracts for research and development services
require significant management judgment to determine the level of effort required under an arrangement and the period over which
the Company expects to complete its performance obligation. If the Company cannot reasonably estimate when its performance obligations
either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such
estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method.
The Company considers licenses for the use of intellectual property “right of use” licenses. The Company recognizes
revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the
customer can use and benefit from the license. At September 30, 2018, all the performance obligations under the Company’s
license agreements have been satisfied as control transferred at contract inception when the customer could benefit from the right
of use license. Currently, since none of the Company’s contracts contain more than one performance obligation, no allocation
of the transaction price is necessary. However, if the Company enters into an arrangement containing more than one performance
obligation the total transaction price will be allocated to each performance obligation based on the estimated relative standalone
selling prices of the promised goods or service.
income: The Company generates grant income from award contracts to support the clinical development of AST-OPC1. These contracts
provide for the reimbursement of qualified expenses for research and development activities. Revenue under these arrangements
is recognized when the related qualified research expenses are incurred.
payments: At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones
are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely
amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such
as completion of a therapeutic administration of a licensed product to a certain number of patients by the Company) is included
in the transaction price. Milestone payments that are not within the control of the Company are not considered probable of being
achieved until the contingent event has occurred.
and Royalties: The Company considers licenses for the use of intellectual property “right of use” licenses. The
Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the
customer, and the customer can use and benefit from the license. For arrangements that include sales-based royalties and the license
is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the
related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied
(or partially satisfied). The Company’s arrangement that contain royalty minimums also contain termination clauses, therefore
these royalties are considered variable consideration and included in the transaction price when the notice period has lapsed.
to License Patents: The Company recognizes revenues from up-front fees associated with granting a material right to, or an
option to license certain intellectual property to certain third parties (“optionees”), whereby the option itself
is deemed to be a performance obligation of the Company, upon the earlier of a) the date the Company and the optionee enter into
a license agreement or b) if no license is consummated, at the end of the period to negotiate a license.