Revenue

12 Months Ended

Dec. 31, 2023

Revenue

Revenue

12.        Revenue

Product Sales

On April 19, 2022, Elusys Therapeutics entered into a contract with Public Works and Government Services of Canada to deliver 3,000 vials of ANTHIM® (FDA-approved anthrax antitoxin) for treatment of inhalational anthrax due to Bacillus anthrax. The total contract award was $5.9 million with a delivery date on or before September 30, 2022. This order was fulfilled on September 13, 2022 for the total contract amount of $5.9 million, of which after deducting fulfillment expenses, $1.1 million was retained by ElusysTherapeutics and $4.6 million was paid to Seller. This is included in net loss from discontinued operations on the consolidated statements of operations and comprehensive loss. On September 13, 2023, Elusys completed the manufacturing conversion of 23,732 vials of ANTHIM® with its contract with the US Department of Health and Human Services for the contract amount of $6.7 million which is included in net loss from discontinued operations on the consolidated statements of operations and comprehensive loss.

Refer to Note 2, “Discontinued Operations” of the Notes to Consolidated Financial Statements for additional information.

Grant Revenue

In June 2016, Pelican entered into a cancer research grant contract (“Grant Contract”) with CPRIT, under which CPRIT awarded a grant not to exceed $15.2 million for use in developing cancer treatments by targeting a novel T-cell costimulatory receptor (namely, DR3/TNFRSF25). The Grant Contract initially covered a period from June 1, 2016 through November 30, 2019, as amended, was extended to May 30, 2022. The first tranche of funding of $1.8 million was received in May 2017, a second tranche of funding of $6.5 million was received in October 2017, and a third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million was received in April 2023. As of December 31, 2023, all $15.2 million has been recognized and received.

The grant was subject to customary CPRIT funding conditions including a matching funds requirement where Pelican will match $0.50 for every $1.00 from CPRIT. Consequently, Pelican is required to provide $7.6 million in matching funds over the life of the project. Upon commercialization of the product, the terms of the grant require Pelican to pay tiered royalties in the low to mid-single digit percentages. Such royalties reduce to less than one percent after a mid-single-digit multiple of the grant funds have been paid to CPRIT in royalties.

License revenue

In June 2016, Scorpius licensed certain provisional patent applications and know-how related to fusion proteins to treat cancer and other diseases with Shattuck. Shattuck paid the Company an initial license fee of $50,000 in June 2016 and is obligated to pay the Company fees upon its receipt of sublicensing income, achievement of certain milestones, and royalties upon sales of commercial products. In March 2023, the Company received a milestone payment of $100,000 from Shattuck due to completion of a Phase 1A monotherapy dose escalation clinical trial of SL-172154. Refer to Note 19, “Subsequent Events,” for additional information about the subsequent sale of the Shattuck license.

Process Development Revenue

During the years ended December 31, 2023 and 2022, the Company recognized $6.6 million and $0.1 million of process development revenue, respectively. Revenue was primarily derived from two customers who represented 86% of total recognized process development revenue for the year ended December 31, 2023. One customer accounted for 74% of process development revenue for the fiscal year ended December 31, 2023, and is migrating to a larger CDMO for commcrcial manufacture of their product.

The following table presents changes in contract liabilities for the years ended December 31, 2023 and 2022:

	Contract Liabilities
Balance at December 31, 2021	$	37,500
Changes to the beginning balance arising from:
Reclassification to revenue as the result of performance obligations satisfied		(76,019)
Net change to contract balance recognized since beginning of period due to amounts collected		1,656,827
Balance at December 31, 2022		1,618,308
Changes to the beginning balance arising from:
Reclassification to revenue as the result of performance obligations satisfied		(6,358,617)
Net change to contract balance recognized since beginning of period due to amounts collected		7,129,750
Balance at December 31, 2023	$	2,389,441

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and contract liabilities (customer deposits and deferred revenue). 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 December 31, 2023 and 2022, we recognized revenue of $1.2 million and $0.003 million, respectively, for which the contract liability was recorded in a prior period.

The opening and closing balances of the Company’s accounts receivables are as follows:

Opening on January 1, 2022	$	66,049
Closing on December 31, 2022	$	81,456
Closing on December 31, 2023	$	375,192