Washington | 000-5513 | 02-0592619 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit | Description |
99.1 | English translation of Tanshin dated February 13, 2014. |
ACUCELA INC. | ||
By: | /s/ David L. Lowrance | |
David L. Lowrance | ||
Date: February 13, 2014 | Chief Financial Officer, Treasurer and Secretary |
Exhibit Number | Description |
99.1 | English translation of Tanshin dated February 13, 2014. |
Company name | Acucela Inc. |
Stock exchange listing | Tokyo Stock Exchange Mothers Market (Foreign Stocks) |
Code number | 4589 |
URL | http://www.acucela.jp/ |
Representative | Ryo Kubota |
Chairman, President and CEO | |
Attorney-in-fact | Baker & McKenzie (Gaikokuho Joint Enterprise) |
Ken Takahashi (Telephone: 03-6271-9900) | |
Contact | Tomomi Sukagawa, Director |
Japan Office, Acucela Inc. | |
(Telephone: 03-5789-5872) | |
Scheduled data of general shareholders meeting | June 5th, 2014 |
Scheduled date of annual securities report submission | March 31st, 2014 |
Scheduled date of dividend payment commencement | - |
Supplementary materials for financial results | No |
Earnings announcement for financial results | No |
(1) | Operating Results |
Revenues from collaborations with a related party | Operating income | Income before income tax | Net Income | ||||||||||||
FY2013 | 52,878 (5,572,812) | 14 | % | 6,818 (718,549) | -3 | % | 7,004 (738,151) | 35 | % | 4,186 (441,162) | 0 | % | |||
FY2012 | 46,424 (4,892,625) | 36 | % | 7,033 (741,207) | 82 | % | 6,825 (719,286) | 80 | % | 4,178 (440,319) | -33 | % |
Basic earnings per share | Diluted earnings per share | Net income to equity ratio | Ratio of income before income tax to total assets | Ratio of operating income to revenues from collaborations with a related party | |||||
FY2013 | 0.09 (9) | 0.09 (9) | 13% | 13% | 13% | ||||
FY2012 | 0.09 (9) | 0.09 (9) | 16% | 15% | 15% |
Total assets | Net assets | Shareholders’ equity | Shareholders’ equity ratio | Shareholders' equity per share | ||||||
As of December 31, 2013 | 54,792 (5,774,525) | 31,046 (3,271,936) | 31,046 (3,271,936) | 57 | % | 2.59 (273) | ||||
As of December 31, 2012 | 47,024 (4,955,854) | 25,607 (2,698,718) | 25,607 (2,698,718) | 54 | % | 2.15 (227) |
Cash flows from operating activities | Cash flows from investing activities | Cash flows from financing activities | Cash and cash equivalents at end of year | ||||
FY2013 | 7,219 | -6,582 | -3,283 | 13,993 | |||
(760,811) | (-693,677) | (-345,996) | (1,474,722) | ||||
FY2012 | 11,246 | -3,743 | -624 | 16,639 | |||
(1,185,208) | (-394,475) | (-65,764) | (1,753,584) |
(Unit: US$ (JPY), except for %) | Annual dividend per share | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Year-end | Total | Total Dividend Paid | Payout Ratio | Ratio of Total Amount of Dividends to Net Assets | |||||||||
FY2012 | — | — | — | — | — | — | — | — | ||||||||
FY2013 | — | — | — | — | — | — | — | — | ||||||||
FY2014 (forecasts) | — | — | — | — | — | — | — | — |
Revenues from collaborations with a related party | Operating Income | Income before income tax | Net Income | Net income per share | |||||||||||||
Half Year (accumulated) | 29,683 (3,128,291) | 10 | % | 401 (42,261) | -93 | % | 208 (21,921) | -96 | % | 127 (13,385) | -97 | % | 0.01 (1) | ||||
Full Year | 61,840 (6,517,318) | 17 | % | 836 (88,106) | -88 | % | 433 (45,634) | -94 | % | 264 (27,823) | -94 | % | 0.02 (2) |
1. Business Results | 1 | |
(1) Analysis of Business Results | 1 | |
(2) Analysis of Financial Condition | 3 | |
(3) Basic Policy on Distribution of Profits and Distribution for FY2013 and Distribution Forecast for FY2014 | 4 | |
2. Management Policy | 4 | |
(1) Basic Management Policy | 4 | |
(2) Target Financial Index | 5 | |
(3) Mid-and-Long-Term Business Strategy and Issues to be addressed | 5 | |
3. Financial Statements and Other Information | 8 | |
(1) Balance Sheets | 8 | |
(2) Statements of Income | 9 | |
(3) Statement of Comprehensive Income | 10 | |
(4) Statement of Stockholders' Equity | 11 | |
(5) Statements of Cash Flow | 12 | |
(6) Notes regarding Assumption of Going Concern | 13 | |
(7) Notes on the Financial Statements | 13 | |
Changes in Directors, Corporate Auditors, and Executive Officers | 16 | |
Year Ended December 31, | Change | |||||||||||||
2013 | 2012 | $ | % | |||||||||||
Emixustat | $39,118 | $19,328 | $19,790 | 102 | % | |||||||||
(4,122,646) | (2,036,978) | (2,085,668) | ||||||||||||
Rebamipide | $12,270 | $18,987 | $(6,717) | (35 | )% | |||||||||
(1,293,135) | (2,001,040) | ((707,905)) | ||||||||||||
OPA-6566 | $1,490 | $8,108 | $(6,618) | (82 | )% | |||||||||
(157,031) | (854,502) | ((697,471)) |
Year Ended December 31, | Change | |||||||||||||
2013 | 2012 | $ | % | |||||||||||
Internal Research | $2,593 | $2,515 | $78 | 3 | % | |||||||||
(273,276) | (265,056) | (8,220) | ||||||||||||
Emixustat | $25,788 | $13,707 | $12,081 | 88 | % | |||||||||
(2,717,797) | (1,444,581) | (1,273,217) | ||||||||||||
Rebampide | $7,185 | $9,823 | $(2,638) | (27 | )% | |||||||||
(757,227) | (1,035,246) | ((278,019)) | ||||||||||||
OPA-6566 | $1,250 | $5,559 | $(4,309) | (78 | )% | |||||||||
(131,738) | (585,863) | ((454,126)) | ||||||||||||
DR/DME | $124 | $0 | $124 | 100 | % | |||||||||
(13,068) | 0 | (13,068) |
December 31, 2012 | December 31, 2013 | ||||||
US$ | JPY | US$ | JPY | ||||
Net income | 4,178 | 440,319 | 4,186 | 441,162 | |||
Net income attributable to participating securities | 3,056 | 322,071 | 3,056 | 322,071 | |||
Net income attributable to common shareholders | 1,122 | 118,247 | 1,130 | 119,090 | |||
Net income per share attributable to common shareholders | |||||||
Basic | 0.09 | 9 | 0.09 | 9 | |||
Diluted | 0.09 | 9 | 0.09 | 9 | |||
Weighted average shares used to compute net income per share attributable to common shareholders (in thousand shares): | |||||||
Basic | 11,901 | 11,964 | |||||
Diluted | 12,158 | 12,355 |
Years Ended December 31, | |||||||
2013 | 2012 | ||||||
Cash flows provided by operating activities | $7,219 | $11,246 | |||||
760,811 | (1,185,208) | ||||||
Cash flows used in investing activities | $(6,582) | $(3,743) | |||||
((693,677)) | ((394,475)) | ||||||
Cash flows used in financing activities | $(3,283) | $(624) | |||||
((345,996)) | ((65,764)) |
FY2012 | FY2013 | ||||
Stockholders’ equity ratio (%) | 54 | % | 57 | % | |
Stockholders’ equity ratio based on market prices (%) | 738 | % | 1,365 | % | |
Debt to annual cash flow ratio (%) | 1.07 | 1.66 | |||
Interest coverage ratio (times) | 26.78 | – |
• | Drive the development and commercialization of our product candidates. We intend to continue to operate a flexible and efficient business model, which enables us to cost-effectively develop our product candidates. Should our product candidates be approved, we plan to establish our own specialized sales and marketing infrastructure or selectively collaborate with one or more strategic partners to pursue the commercial opportunity of our product candidates globally. |
• | Educate the marketplace on the benefits of VCM. We believe our innovative VCM-based product candidates provide a ground-breaking approach to addressing the fundamental pathophysiology of various retina degenerative diseases. We intend to educate the ophthalmic community on the benefits of VCM-based therapies by expanding our intellectual property portfolio, through the successful approval of our products in development, and the commercial launch of our products following approval. We also plan to continue to maintain and extend our leadership position in the area of VCM through active promotion of VCM and its attributes and potential to treat and alter the progression of a variety of sight-threatening ophthalmic diseases. |
• | Continue to expand our ophthalmic product pipeline through internal research and additional partnering opportunities. We have primarily focused our efforts on ophthalmology since our inception and have assembled a research and development team with extensive expertise in this field. We intend to continue to invest in our internal drug discovery and development efforts to expand our product pipeline. We also intend to continue to actively seek to license or otherwise acquire the rights to potential new product candidates that will allow us to leverage our ophthalmic research and development expertise and expand the breadth of our product offerings. |
• | Continue to expand our infrastructure. We expect to selectively add executives to our management team and make other key hires to further strengthen and expand our core competencies and enable us to support our growth and remain a leader in VCM and the field of ophthalmology. |
• | Collaborate with Otsuka to successfully develop our product candidates. We are leading the clinical development and U.S. regulatory strategies for the product candidates that we are developing in collaboration with Otsuka. We plan to continue this relationship, which we expect will enable us to capitalize on a large, underserved market while maintaining financial stability. |
• | Clearly differentiate our VCM-based compounds from the retinol-binding antagonists and educate the medical and scientific community; |
• | Enhance the leadership position of our product candidates relating to dry AMD; |
• | Utilize the proprietary data and know-how obtained for our development of emixustat; and |
• | Strengthen our ability to discover treatments for serious diseases of the eye. |
December 31, | December 31, | ||||||||||
2012 | 2013 | ||||||||||
US$ | JPY | US$ | JPY | ||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | 16,639 | 1,753,584 | 13,993 | 1,474,722 | |||||||
Investments | 6,927 | 730,036 | 14,947 | 1,575,264 | |||||||
Restricted investments | 5,009 | 527,898 | — | — | |||||||
Accounts receivable from collaborations with a related party | 8,700 | 916,893 | 10,464 | 1,102,800 | |||||||
Deferred tax asset | 770 | 81,150 | 770 | 81,150 | |||||||
Prepaid expenses and other current assets | 1,521 | 160,298 | 2,430 | 256,097 | |||||||
Total current assets | 39,566 | 4,169,859 | 42,604 | 4,490,033 | |||||||
Property and equipment, net | 1,143 | 120,460 | 1,113 | 117,299 | |||||||
Long-term investment | 3,478 | 366,546 | |||||||||
Restricted long-term investments | 750 | 79,042 | |||||||||
Long-term deferred tax asset | 3,895 | 410,494 | 1,699 | 179,057 | |||||||
Deferred offering costs | 1,199 | 126,362 | 5,548 | 584,703 | |||||||
Other assets | 471 | 49,637 | 350 | 36,887 | |||||||
Total assets | 47,024 | 4,955,854 | 54,792 | 5,774,525 | |||||||
Liabilities and shareholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Current maturities of contingently convertible debt, related party | 6,500 | 685,035 | 12,000 | 1,264,680 | |||||||
Accounts payable | 735 | 77,461 | 754 | 79,464 | |||||||
Accrued liabilities | 3,109 | 327,657 | 7,079 | 746,055 | |||||||
Accrued compensation | 2,413 | 254,306 | 3,337 | 351,686 | |||||||
Deferred revenue from collaborations with a related party | 570 | 60,072 | 254 | 26,769 | |||||||
Deferred rent and lease incentives | 249 | 26,242 | 267 | 28,139 | |||||||
Total current liabilities | 13,576 | 1,430,774 | 23,691 | 2,496,793 | |||||||
Commitments | |||||||||||
Long-term deferred rent, lease incentives, and others | 341 | 35,937 | 55 | 5,796 | |||||||
Long-term deferred revenue from collaborations with a related party | 2,000 | 210,780 | — | — | |||||||
Long-term contingently convertible debt, related party | 5,500 | 579,645 | — | — | |||||||
Total long-term liabilities | 7,841 | 826,362 | 55 | 5,796 | |||||||
Shareholders’ equity: | |||||||||||
Convertible preferred stock, no par value, 52,453 shares authorized: | |||||||||||
Series A, no par value, 2,734 shares authorized, issued, and outstanding (liquidation value of $2,051) | 2,051 | 216,154 | 2,051 | 216,154 | |||||||
Series B, no par value, 17,900 shares authorized, issued, and outstanding (liquidation value of $13,425) | 13,387 | 1,410,855 | 13,387 | 1,410,855 | |||||||
Series C, no par value, 31,818 shares authorized, 11,807 shares issued and outstanding (liquidation value of $12,988) | 12,771 | 1,345,935 | 12,771 | 1,345,935 | |||||||
Common stock, no par value, 60,000 shares authorized; 11,910 and 11,972 shares issued and outstanding as of December 31, 2012 and 2013, respectively | 3,192 | 336,404 | 3,654 | 385,095 | |||||||
Additional paid-in capital | 1,965 | 207,091 | 2,766 | 291,508 | |||||||
Accumulated other comprehensive loss | — | — | (10 | ) | (1,053 | ) | |||||
Accumulated deficit | (7,759 | ) | (817,721 | ) | (3,573 | ) | (376,558 | ) | |||
Total shareholders’ equity | 25,607 | 2,698,718 | 31,046 | 3,271,936 | |||||||
Total liabilities and shareholders’ equity | 47,024 | 4,955,854 | 54,792 | 5,774,525 |
Year Ended December 31, | Year Ended December 31, | ||||||
2012 | 2013 | ||||||
US$ | JPY | US$ | JPY | ||||
Revenues from collaborations with a related party | 46,424 | 4,892,625 | 52,878 | 5,572,812 | |||
Expenses: | |||||||
Research and development | 31,604 | 3,330,745 | 36,940 | 3,893,106 | |||
General and administrative | 7,787 | 820,671 | 9,120 | 961,156 | |||
Total expenses | 39,391 | 4,151,417 | 46,060 | 4,854,263 | |||
Income from operations | 7,033 | 741,207 | 6,818 | 718,549 | |||
Other income (expense), net: | |||||||
Interest income | 27 | 2,845 | 122 | 12,857 | |||
Interest expense | (138) | (14,543) | (116) | (12,225) | |||
Other income (expense), net | (97) | (10,222) | 180 | 18,970 | |||
Total other expense, net | (208) | (21,921) | 186 | 19,602 | |||
Income before income tax | 6,825 | 719,286 | 7,004 | 738,151 | |||
Income tax benefit (expense) | (2,647) | (278,967) | (2,818) | (296,989) | |||
Net income | 4,178 | 440,319 | 4,186 | 441,162 | |||
Net income attributable to participating securities | 3,056 | 322,071 | 3,056 | 322,071 | |||
Net income attributable to common shareholders | 1,122 | 118,247 | 1,130 | 119,090 | |||
Net income per share attributable to common shareholders | |||||||
Basic | 0.09 | 9 | 0.09 | 9 | |||
Diluted | 0.09 | 9 | 0.09 | 9 | |||
Weighted average shares used to compute net income per share attributable to common shareholders: | |||||||
Basic | 11,901 | 11,964 | |||||
Diluted | 12,158 | 12,355 |
Year Ended December 31, | Year Ended December 31, | ||||||
2012 | 2013 | ||||||
US$ | JPY | US$ | JPY | ||||
Net income | 4,178 | 440,319 | 4,186 | 441,162 | |||
Other comprehensive income: | |||||||
Net unrealized gain on securities | 6 | 632 | (10) | (1,053) | |||
Comprehensive income | 4,184 | 440,951 | 4,176 | 440,108 |
Convertible Preferred Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | ||||||||
Series A | Series B | Series C | Common Stock | |||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||
Balance at December 31, 2011 | 2,734 | 2,051 | 17,900 | 13,387 | 11,807 | 12,771 | 11,899 | 3,133 | 1,441 | (6) | (11,937) | 20,840 |
(216,154) | (1,410,855) | (1,345,935) | (330,186) | (151,866) | ((632)) | ((1,258,040)) | (2,196,324) | |||||
Stock-based compensation | – | – | – | – | – | – | – | – | 524 | – | – | 524 |
(–) | (–) | (–) | (–) | (55,225) | (–) | (–) | (55,225) | |||||
Common stock issued in connection with stock option exercises | – | – | – | – | – | – | 5 | 2 | – | – | – | 2 |
(–) | (–) | (–) | (211) | (–) | (–) | (–) | (211) | |||||
Common stock issued in connection with the restricted stock purchase agreement | – | – | – | – | – | – | 6 | 57 | – | – | – | 57 |
(–) | (–) | (–) | (6,007) | (–) | (–) | (–) | (6,007) | |||||
Net income | – | – | – | – | – | – | – | – | – | – | 4,178 | 4,178 |
(–) | (–) | (–) | (–) | (–) | (–) | (440,319) | (440,319) | |||||
Unrealized gain on marketable securities available for sale | – | – | – | – | – | – | – | – | – | 6 | – | 6 |
(–) | (–) | (–) | (–) | (–) | (632) | (–) | (632) | |||||
Balance at December 31, 2012 | 2,734 | 2,051 | 17,900 | 13,387 | 11,807 | 12,771 | 11,910 | 3,192 | 1,965 | – | (7,759) | 25,607 |
(216,154) | (1,410,855) | (1,345,935) | (336,404) | (207,091) | (–) | ((817,721)) | (2,698,718) | |||||
Stock-based compensation | – | – | – | – | – | – | – | – | 678 | – | – | 678 |
(–) | (–) | (–) | (–) | (71,455) | (–) | (–) | (71,455) | |||||
Tax benefit from stock compensation | – | – | – | – | – | – | – | – | 123 | – | – | 123 |
(–) | (–) | (–) | (–) | (12,962) | (–) | (–) | (12,962) | |||||
Common stock issued in connection with stock option exercises | – | – | – | – | – | – | 30 | 6 | – | – | – | 6 |
(–) | (–) | (–) | (632) | (–) | (–) | (–) | (632) | |||||
Common stock issued in connection with the restricted stock purchase agreement | – | – | – | – | – | – | 31 | 456 | – | – | – | 456 |
(–) | (–) | (–) | (48,059) | (–) | (–) | (–) | (48,059) | |||||
Net income | – | – | – | – | – | – | – | – | – | – | 4,186 | 4,186 |
(–) | (–) | (–) | (–) | (–) | (–) | (441,163) | (441,163) | |||||
Unrealized gain on marketable securities available for sale | – | – | – | – | – | – | – | – | – | (10) | – | (10) |
(–) | (–) | (–) | (–) | (–) | ((1,053)) | (–) | ((1,053)) | |||||
Balance at December 31, 2013 | 2,734 | 2,051 | 17,900 | 13,387 | 11,807 | 12,771 | 11,971 | 3,654 | 2,766 | (10) | (3,573) | 31,046 |
(216,154) | (1,410,855) | (1,345,935) | (385,095) | (291,508) | ((1,053)) | ((376,558)) | (3,271,936) |
Years Ended December 31, | Years Ended December 31, | |||||||
2012 | 2013 | |||||||
US$ | JPY | US$ | JPY | |||||
Cash flows from operating activities | ||||||||
Net income | 4,178 | 440,319 | 4,186 | 441,162 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 464 | 48,900 | 530 | 55,856 | ||||
Amortization of deferred financing costs | 10 | 1,053 | – | – | ||||
Loss from the disposal of fixed assets | 79 | 8,325 | – | – | ||||
Stock-based compensation | 581 | 61,231 | 1,134 | 119,512 | ||||
Amortization of premium/discount on marketable securities | 107 | 11,276 | 333 | 35,094 | ||||
Deferred taxes | 2,434 | 256,519 | 2,196 | 231,436 | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable from collaborations with a related party | 3,551 | 374,239 | (1,764) | (185,907) | ||||
Prepaid expenses and other current assets | (1,037) | (109,289 | ) | (909) | (95,799) | |||
Accounts payable | (1,949) | (205,405 | ) | (102) | (10,749) | |||
Accrued liabilities | 1,315 | 138,587 | 3,154 | 332,400 | ||||
Accrued compensation | 778 | 81,993 | 924 | 97,380 | ||||
Deferred rent and lease incentives | 48 | 5,058 | (268) | (28,244) | ||||
Deferred revenue from collaborations with a related party | 570 | 60,072 | (2,316) | (244,083) | ||||
Other assets | 117 | 12,330 | 121 | 12,753 | ||||
Net cash provided by operating activities | 11,246 | 1,185,208 | 7,219 | 760,811 | ||||
Cash flows from investing activities | ||||||||
Purchases of marketable securities available for sale | (15,580) | (1,641,976 | ) | (23,217) | (2,446,839) | |||
Maturities of marketable securities available for sale | 12,163 | 1,281,858 | 17,135 | 1,805,857 | ||||
Additions to property and equipment | (326) | (34,357 | ) | (500) | (52,695) | |||
Net cash used in investing activities | (3,743) | (394,475 | ) | (6,582) | (693,677) | |||
Cash flows from financing activities | ||||||||
Proceeds from issuance of common stock | 2 | 210 | 6 | 632 | ||||
Restricted investments income | (13) | (1,370 | ) | – | – | |||
Payments for deferred offering costs | (613) | (64,604 | ) | (3,412) | (359,590) | |||
Excess tax benefit from stock-based compensation | – | – | 123 | 12,962 | ||||
Net cash used in financing activities | (624) | (65,764 | ) | (3,283) | (345,996) | |||
(Decrease) increase in cash and cash equivalents | 6,879 | 724,969 | (2,646) | (278,862) | ||||
Cash and cash equivalents – beginning of year | 9,760 | 1,028,606 | 16,639 | 1,753,584 | ||||
Cash and cash equivalents – end of year | 16,639 | 1,753,584 | 13,993 | 1,474,722 | ||||
Supplemental disclosure | ||||||||
Cash paid for interest | 420 | 44,263 | – | – | ||||
Cash paid for income taxes | 151 | 15,913 | 828 | 87,262 | ||||
Restriction of investments as collateral | 5,750 | 605,992 | (5,759) | (606,941) | ||||
Unpaid deferred offering costs | – | – | 937 | 98,750 |
FY 2012 | FY2013 | |||
Numerator: | ||||
Net Income (US$ in thousands (JPY in thousands) | 4,178 (440,319) | 4,186 (441,162) | ||
Net income attributable to participating securities (US$ in thousands (JPY in thousands) | 3,056 (322,071) | 3,056 (322,071) | ||
Net income attributable to common shareholders (US$ in thousands (JPY in thousands) | 1,122 (118,247) | 1,130 (119,090) | ||
Denominator: | ||||
Basic weighted average shares of common stock outstanding (shares) | 11,900,886 | 11,963,875 | ||
Dilutive effect of exercise of stock options (shares) | 256,574 | 390,934 | ||
Diluted weighted average shares of common stock outstanding (shares) | 12,157,460 | 12,354,809 | ||
Basic net income per share (common stock) (US$ (JPY)) | 0.09 (9) | 0.09 (9) | ||
Diluted net income per share (common Stock) (US$ (JPY)) | 0.09 (9) | 0.09 (9) |
• | On February 10, 2014, we completed our IPO whereby we sold 9,200,000 shares of common stock at $17.72 per share and received net proceeds of $143,100,000 (JPY 15,081,309,000) (after underwriting discounts and commissions and estimated offering costs not yet paid as of December 31, 2013; |
• | On February 13, 2014, the automatic conversion of $12,000,000 (JPY 1,264,680,000) of outstanding principal underlying a convertible note that we issued to SBI Holdings, Inc. in May 2006, which converted upon the completion of our IPO into an aggregate of 3,636,364 shares of our common stock; |
• | On February 13, 2014, the 32,441,604 outstanding shares of convertible preferred stock automatically converted into an aggregate of 10,813,867 shares of common stock upon the closing of our IPO; |
• | On February 10, 2014, we filed an amended and restated certificate of incorporation with the State of Washington to authorize 100 million shares of common stock and zero preferred stock. |
US GAAP | Japanese GAAP |
Revenue Recognition In the United States, in accordance with the authoritative accounting guideline (which summarizes the views of certain of the staff of the Securities and Exchange Commission (the "SEC")) publicized and amended by the SEC, revenue shall be recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery of products has occurred or services have been rendered; (3) the seller's price to the buyer is fixed or determinable; and (4) collectibility is reasonably assured. In addition, another authoritative accounting guideline on revenue recognition has been added to arrangements in which multiple products or services are provided; the amendment has been applicable to the Company prospectively, as from November 1, 2010. In the United States, in October 2009, the FASB amended the guideline on revenue recognition with regard to multi-element arrangements. The guideline has eliminated the residual method of allocation with regard to revenue recognition and requires that if neither vendor-specific objective evidence (VSOE) nor third-party evidence (TPE) is available, management's best estimate of the selling price of each element in the relevant arrangement be used. Furthermore, in April 2010, the FASB publicized guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions; the guidance was early adopted by the Company as of December 31, 2009. | Revenue Recognition In Japan, the authoritative guidance states that revenues are recognized upon sale of goods or provision of services in accordance with the principle of realization. The authoritative guidance in Japan is not as prescriptive as US GAAP. |
Marketable Securities At each reporting period, the Company determines whether a decline in the value of marketable securities and investments is temporary, based on the criteria that include the duration and extent of the market decline, the financial position and business outlook of the issuer and the intent and ability of the Company to retain the marketable securities and investments for a sufficient period of time for anticipated recovery in fair value. If a decline in the value of marketable securities and investments is determined to be other than temporary, the difference between the book value and the fair value shall be recorded as an impairment charge in the statement of income. | Marketable Securities For securities where there is a market price or rationally calculable value, the fair value after the significant drop should be used as the new book value, unless the fair value is expected to recover. The valuation differences are treated as loss for the accounting period. |
Compensated Absences Under ASC 710-10-25, a liability for compensation for future absences is recorded if certain criteria are met. | Compensated Absences There is no requirement to record accruals for compensated absences under Japanese GAAP. |
Stock Option In the United States, stock-based compensation, including stock options, shall be accounted for in accordance with the guidance of ASC Topic 718, Compensation - Stock Compensation. The guidance, which requires the recognition of cost of all stock-based payment transactions on the financial statements, requires entities to determine fair value as a measuring object and apply a measurement method based on fair value in accounting for stock-based payment transactions. Stock-based compensation classified as equity shall be accounted for with adjustment made to paid-in surplus and shall not be stated separately on the balance sheet. | Stock Option In Japan, in accordance with the Accounting Standards Board of Japan (ASBJ) Accounting Standard - ASBJ Statement No. 8, Accounting Standard for Stock-based Payment, with regard to stock options granted on or after May 1, 2006, such compensation costs shall be recognized based on fair appraisal value thereof as of the grant date for the period from the grant date of the stock options to the date on which the stock options become exercisable, and the corresponding amount shall be recorded as a separate item in the "net assets section" of the balance sheet. With regard to stock options granted prior to May 1, 2006, no specified accounting standard exist and generally, no compensation cost is recognized. The stock acquisition right account would be reversed when the options are expired unused and reversal gain is recognized in earnings. |
Research and Development In the United States, in accordance with ASC 730 (previously, EITF 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities), nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities shall be deferred, and shall be amortized for the period during which goods or services are used or rendered, based on the evaluation of their recoverability. | Research and Development In Japan, no such accounting treatment is required. |
Fair Value In the United States, ASC Topic 820, Fair Value Measurements and Disclosures defines fair value, provides a framework for fair value measurements and expands disclosures about fair value measurements. With regard to the definition of fair value, while the guidance under Topic 820 still uses the concept of a price for exchange, it expressly provides that the price is a price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date. ASC Topic 820 emphasizes that fair value is a market-based value and is not an entity-specific value. It also establishes a multi-level hierarchy of fair values as a framework for fair value measurements and requires expanded disclosures of assets and liabilities measured at fair value. | Fair Value In Japan, there is no comprehensive accounting standard for fair value measurements. In the respective accounting standards for financial instruments and nonfinancial assets and liabilities, fair value is defined as a value based on a market price or if no market price is available, a reasonably assessed value. |
Subsequent Event Disclosure The scope is events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Financial statements are considered available to be issued when they are complete in a form and format that complies with GAAP and all approvals necessary for issuance have been obtained. | Subsequent Event Disclosure “Audit Treatment for Subsequent Events” defines subsequent events, which are within the scope of the financial statements audit, as events which occur after the balance sheet date and before the reporting date. Because it includes the definition, scope and treatment of subsequent events, it is used as a practical guide for accounting. In addition, it sets the rules for the events which occur after the reporting date and before the submission date of the annual security report. |
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• | Corporate Auditor |