Deferred Revenue

9 Months Ended

Sep. 30, 2017

Deferred Revenue [Abstract]

Deferred Revenue

5.Deferred Revenue

    We primarily generate revenue through licensing arrangements of our intellectual property. The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the Company's balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current liabilities.

Deferred revenue represents amounts received prior to revenue recognition. On October 3, 2017, we entered into a Reimbursement Agreement with NantCell, Inc. whereby we agreed to reimburse them for payment obligations under certain of the contracts under the Nantcell licensing agreement up to a maximum of $4.2 million plus one half of any amounts in excess thereof. Once all conditions of the agreement are met and no contingencies remain outstanding, the revenue will be recognized as licensing fee revenue. We recognized $6.9 million of deferred revenue from the NantCell licensing agreement and anticipate recording this as revenues in 2018, once the Company's cost reimbursement obligations are met.