Revenue From Contracts With Customers

The following tables represent a disaggregation of revenue by each significant research, development and licensing agreement and payment type for the years ended

December

31,

2019

and

2018:

	2019 Revenue Recognized From
	Non-Refundable Payments				Research and
			Up front		Development
	Milestones		Payments		Services		Total
GSK Inhaled	$	1,345,320	$	6,726,600	$	—	$	8,071,920
Other		—		—		200		200
Total	$	1,345,320	$	6,726,600	$	200	$	8,072,120

	2018 Revenue Recognized From
	Non-Refundable Payments				Research and
			Up front		Development
	Milestones		Payments		Services		Total
GSK Inhaled	$	45,058	$	225,293	$	168,000	$	438,351
Other		—		943,419		1,325,211		2,268,630
Total	$	45,058	$	1,168,712	$	1,493,211	$	2,706,981

September 2015,

GSK Inhaled exercised the option to permanently license the technology for a non-refundable payment to the Company of

$15.0

million. Pursuant to the license provisions of the collaboration agreement, GSK Inhaled is potentially required to pay the Company for certain milestones reached in addition to tiered royalties on the worldwide sales of the licensed products at percentages ranging from the mid-single digits to low-single digits depending on the total number of products developed and other royalty step-down events with a fixed low-single digit royalty floor. In

February 2016,

GSK Inhaled paid the Company a

$3.0

million milestone payment pursuant to the collaboration agreement. The combined

$18

million in up-front and milestone payments was subject to deferral pursuant to the adoption of ASC

606

and the revenue policy described herein.

July 2018,

GSK notified the Company of its plans to discontinue development of the inhaled antiviral for viral exacerbations in chronic obstructive pulmonary disease under the GSK Inhaled collaboration agreement after completion of the related Phase

clinical trial. In

June 2019,

the Company and GSK executed the

third

amendment to the collaboration agreement providing the Company rights to develop and commercialize additional inhaled programs at the Company’s sole cost. This amendment granted the Company the right to develop

three

additional molecular entities for application in inhaled programs using the Company’s PRINT technology and a mechanism to acquire further molecular entities for inhaled applications. New inhaled programs developed under this amendment would carry milestone and royalty payments due to GSK upon initiation of Phase

studies and subsequent commercialization, respectively. This amendment, among other factors including the lack of continued performance anticipated by the Company and GSK under the original agreement, led the Company to the belief that

further research and development services will be provided to GSK under the collaboration agreement and the earnings process related to the up front and development milestone payments previously received under the collaboration agreement was completed under the proportional performance model. Therefore, the remaining deferred revenue of

$8.1

million was recognized as revenue during the year ended

December 31, 2019.

If GSK were to request additional services under the original agreement, which the Company believes is a remote likelihood, the Company does

not

expect the value of any incremental efforts that the Company might agree to perform to be material. Any potential milestone or royalty payments from the Company to GSK associated with this amendment will be recorded as operating expenses. Accordingly, in

January 2020,

the Company notified GSK of its intent to terminate the GSK Inhaled collaboration agreement based upon GSK's lack of performance under the agreement, which the Company believes constitutes a material breach of the agreement. In

February 2020,

the Company received a letter from GSK disputing the Company’s basis for termination. The parties are currently attempting to resolve the dispute pursuant to the terms of the agreement.

June 2016,

the Company entered into a development and license agreement with G&W Laboratories (“G&W”) to develop multiple products for topical delivery in dermatology using the Company’s PRINT technology (the “G&W Agreement”). The

first

non-refundable up-front fee of

$1.0

million was received in

June 2016.

Research and development services commenced in

July 2016

on the

first

program pursuant to this agreement. In

April 2018,

the Company and G&W mutually agreed to terminate the G&W Agreement. As a result, during the

second

quarter of

2018,

the remaining unamortized balances in the related deferred revenue and deferred sublicense payments of

$0.9

million and

$0.1

million, respectively, were fully recorded as Revenues and Cost of Sales, respectively, in the Statement of Operations and Comprehensive Loss for the year ended

December 31, 2018.

Deferred Sublicense Payments

Sublicense payments to UNC are considered direct and incremental fulfillment costs of the Company’s research, development and licensing agreements as the PRINT technology resources used by the Company are continually researched by UNC. These costs are deferred and then amortized into Cost of Sales over the same estimated period of benefit as the period of the underlying revenue recognition. In conjunction with the

June 2019

amendment to the GSK collaboration agreement, the balance of deferred sublicense payments of

$807,192

were expensed to Cost of Sales in the same period. As of

December

31,

2019,

the balances of these unamortized payments was

$0.

As of

December

31,

2018,

the balances of these unamortized payments included in current and long-term prepaid expenses and other assets was

and

$807,192,

respectively.