Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the U.S. (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. On an ongoing basis, we evaluate our estimates, including but

not

limited to those related to collectability of receivables, intangible assets, contingent consideration and legal contingencies. As additional information becomes available or actual amounts become determinable, the recorded estimates are revised and reflected in the operating results. Actual results could differ from those estimates. License and other revenue amounts have been combined in prior periods’ financial statements to conform to the current year presentation. In addition, certain amounts in the income tax rate reconciliation have been reclassified within the notes to the consolidated financial statements to conform to current year presentation.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of Progenics as well as its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

Our international subsidiaries generally consider their respective local currency to be their functional currency. Assets and liabilities of these international subsidiaries are translated into U.S. dollars at quarter-end exchange rates and revenues and expenses are translated at average exchange rates during the quarter and year-to-date period. Foreign currency translation adjustments for the reported periods are included in accumulated other comprehensive loss in our consolidated statements of comprehensive loss, and the cumulative effect is included in the stockholders’ equity section of our consolidated balance sheets. Realized gains and losses denominated in foreign currencies are recorded in operating expenses in our consolidated statements of operations and were

not

material to our consolidated results of operations for the years ended

December 31, 2018,

2017,

and

2016.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results

may

differ from those estimates.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

May 2014,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”)

2014

09,

Revenue from Contracts with Customers (Topic

606

)

. The standard provides a single model for revenue arising from contracts with customers and supersedes current revenue recognition guidance. We adopted ASU

2014

January 1, 2018,

using the modified retrospective method, for all contracts

not

completed as of the date of adoption. The adoption of ASU

2014

represents a change in accounting principle that will more closely align revenue recognition with the transfer of promised goods or services to the customer. We implemented internal controls in

2017

to ensure we adequately evaluated our contracts and properly assessed the impact of the new accounting standard related to revenue recognition on our financial statements to facilitate adoption on

January 1, 2018.

There were

significant changes to our internal control over financial reporting due to the adoption of the new standard.

Based on the evaluation of our current contracts, revenue recognition is consistent under Accounting Standards Codification (“ASC”) Topic

605,

Revenue Recognition

and ASC

606,

Revenue from Contracts with Customers

, except for revenue from variable consideration bonus payments under our software licensing arrangements. The cumulative effect of applying ASU

2014

to all contracts that were

not

completed as of

January 1, 2018

was recorded as a post-adoption adjustment of approximately

$35

thousand to the opening balance of accumulated deficit on

January 1, 2018,

with a corresponding increase to accounts receivable. Subsequent to the adoption of the new standard, variable consideration related to the bonus payments are estimated and recognized when it is probable that a significant reversal of revenue will

not

occur.

Under this new guidance, we recognize revenue when our customers obtain control of the promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To account for arrangements that are within the scope of this new guidance, we perform the following

five

steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy our performance obligations.

For contracts determined to be within the scope of ASU

2014

09,

we assess the goods or services promised within each contract for the purpose of identifying them as performance obligations. We must apply judgement in assessing whether each promised good or service is distinct. If a promised good or service is

not

distinct, we will combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct.

The transaction price is then determined and allocated to the identified performance obligations in proportion to their estimated fair value, which requires significant judgment. Variable consideration, which is estimated using the expected value method or the most likely amount method, is included in the transaction price only if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will

not

occur.

For arrangements that include development, regulatory or sales milestone payments, we evaluate whether the milestones are probable of being reached and estimate 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 associated milestone value is included in the transaction price. Milestone payments that are

not

within our control or the licensee’s control, such as regulatory approvals, are generally

not

considered probable of being achieved until those approvals are received.

We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The following are our revenue streams from contracts with customers:

Source	2018		2017		2016
Royalty income	$	14,908	$	10,965	$	10,295
Other revenue		714		733		59,134
Total revenue	$	15,622	$	11,698	$	69,429

Royalty income

- represents revenue from the sales-based royalties under our intellectual property licensing arrangements and is recognized upon net sales of the licensed products.

Other revenue

– represents revenue from upfront payments (fixed consideration) and development and sales milestones, sublicense payments, support and service payments and sales-based bonus payments (variable consideration) under our licensing or software arrangements. The fixed consideration will be recognized as revenue at the time when the transfer of know-how is completed. The variable consideration will be estimated using the most likely amount method and recognized only when we have “a high degree of confidence” that revenue will

not

be reversed in a subsequent reporting period. The other revenue also includes revenue from product sales of research reagents, that is recognized upon shipment to the end customer (i.e. control of the product is deemed to be transferred).

Included in the

$59.1

million other revenue for the year ended

December 31, 2016,

$50.7

million we recognized under the RELISTOR License Agreement, of which

$50.0

million related to the achievement of a development milestone (FDA approval of RELISTOR tablets) and

$0.7

million related to our share of the upfront payment Bausch received from a Canadian-based distributor of RELISTOR. In addition, during

2016,

we recognized license revenue of

$7.0

million under the license agreement with Bayer, of which

$4.0

million related to the upfront payment and

$3.0

million related to the achievement of a preclinical development milestones. We are eligible for future milestone and royalty payments under both license agreements with Bausch and Bayer.

We had receivable contract balances of

$3.8

million and

$4.0

million as of

December 31, 2018

and

2017,

respectively, primarily related to the royalty revenue stream (see

Note

. Accounts Receivable

Research and Development Expense, Policy [Policy Text Block]

Research and Development Expenses

Research and development expenses consist of costs for clinical development and manufacturing of clinical trial materials associated with our research and development activities. Our research and development expenses include:

●

External research and development expenses incurred under arrangements with

third

-parties, such as Contract Research Organizations, or CROs, consultants and Contract Manufacturing Organizations, or CMOs;

●

Employee-related expenses, including salaries, benefits, travel and stock-based compensation;

●

Facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory supplies; and

●

License and sub-license fees.

We expense research and development costs as incurred. We account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received.

At each period end, we evaluate the accrued expense balance related to these activities based upon information received from the suppliers and estimated progress towards completion of the research or development objectives to ensure that the balance is reasonably stated. Such estimates are subject to change as additional information becomes available.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

Patents

As a result of research and development efforts conducted by us, we have applied, or are applying, for a number of patents to protect proprietary inventions. All costs associated with patents are expensed as incurred.

Earnings Per Share, Policy [Policy Text Block]

Net

(Loss)

Income

Per Share

We prepare earnings per share (“EPS”) data in accordance with ASC

260

(Topic

260,

Earnings Per Share

). Basic net (loss) income per share amounts have been computed by dividing net (loss) income attributable to us by the weighted-average number of common shares outstanding during the period. For

2018

and

2017,

we reported net losses and, accordingly, potential common shares were

not

included since such inclusion would have been anti-dilutive. For

2016,

we reported net income, and the computation of diluted earnings per share is based upon the weighted-average number of our common shares and dilutive effect, determined using the treasury stock method, of potential common shares outstanding including amounts of unrecognized compensation expense. Shares to be issued upon the assumed conversion of the contingent consideration liability are excluded from the diluted earnings per share calculation, if performance conditions have

not

been met.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive (Loss) Income

Comprehensive (loss) income represents the change in net assets of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Our comprehensive (loss) income includes net (loss) income adjusted for the changes in foreign currency translation adjustment. The disclosures required by ASC

220

(Topic

220,

Comprehensive Income

) for

2018,

2017,

and

2016

have been included in the consolidated statements of comprehensive (loss) income. There was

income tax expense/benefit allocated to any component of other comprehensive (loss) income (see

Note

10.

Stockholders’ Equity

for additional information).

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations of Credit Risk

Financial instruments which potentially subject us to concentrations of risk consist principally of cash, cash equivalents, and receivables. We invest our excess cash in money market funds, which are classified as cash and cash equivalents. We have established guidelines that relate to credit quality, diversification and maturity and that limit exposure to any

one

issue of securities. We hold

collateral for these financial instruments.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

We consider all highly liquid investments which have maturities of

three

months or less, when acquired, to be cash equivalents. The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair value. Cash and cash equivalents subject us to concentrations of credit risk. At

December 31, 2018

and

2017,

we had invested approximately

$136.1

million and

$87.2

million, respectively, in cash equivalents in the form of money market funds with

two

investment companies and held approximately

$1.6

million and

$3.4

million, respectively, in

three

commercial banks.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

Restricted cash included in long-term assets of

$1.5

million at

December 31, 2018

and

2017,

represents collateral for a letter of credit securing a lease obligation. We believe the carrying value of this asset approximates fair value.

Receivables, Policy [Policy Text Block]

Accounts Receivable

We estimate the level of accounts receivable which ultimately will be uncollectable based on a review of specific receivable balances, industry experience and the current economic environment. We reserve for affected accounts receivable an allowance for doubtful accounts. At

December 31, 2018,

we had

allowance for doubtful accounts.

Goodwill and Intangible Assets, Policy [Policy Text Block]

In-Process Research and Development

Othe

Identified

Intangible Assets

and Goodwill

The fair values of in-process research and development (“IPR&D”) and other identified intangible assets acquired in business combinations are capitalized. The Company utilizes the “income method”, which applies a probability weighting that considers the risk of development and commercialization to the estimated future net cash flows that are derived from projected sales revenues and estimated costs or “replacement costs”, whichever is greater. These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. This analysis is performed for each IPR&D project and other identified intangible assets independently. IPR&D assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. Other identified intangible assets are amortized over the relevant estimated useful life. The IPR&D assets are tested at least annually or when a triggering event occurs that could indicate a potential impairment and any impairment loss is recognized in our consolidated statements of operations.

Goodwill represents excess consideration in a business combination over the fair value of identifiable net assets acquired. Goodwill is

not

amortized but is subject to impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. The Company determines whether goodwill

may

be impaired by comparing the fair value of the reporting unit (the Company has determined that it has only

one

reporting unit for this purpose), calculated as the product of shares outstanding and the share price as of the end of a period, to its carrying value (for this purpose, the Company’s total stockholders’ equity).

goodwill impairment has been recognized as of

December 31, 2018

2017.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

In accordance with ASC

820

(Topic

820,

Fair Value Measurements and Disclosures

), we use a

three

-level hierarchy for fair value measurements of certain assets and liabilities for financial reporting purposes that distinguishes between market participant assumptions developed from market data obtained from outside sources (observable inputs) and our own assumptions about market participant assumptions developed from the best information available to us in the circumstances (unobservable inputs). We assign hierarchy levels to our contingent consideration liability arising from the Molecular Insight Pharmaceuticals, Inc. (“MIP”) acquisition based on our assessment of the transparency and reliability of the inputs used in the valuation. The fair value hierarchy is divided into

three

levels based on the source of inputs as follows:

●

Level

- Valuations based on unadjusted quoted market prices in active markets for identical assets or liabilities that we have the ability to access

●

Level

- Valuations for which all significant inputs are observable, either directly or indirectly, other than Level

inputs

●

Level

- Valuations based on inputs that are unobservable and significant to the overall fair value measurement

To estimate the fair values of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value

may

fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.

Recurring Fair Value Measurements

We believe the carrying amounts of our cash equivalents, accounts receivable, other current assets, other assets, accounts payable, and accrued expenses approximated their fair values as of

December 31, 2018

and

2017.

The fair value of the contingent consideration liability represents future potential milestone payments related to the MIP acquisition. The fair value of the contingent consideration liability is categorized as a Level

instrument, as displayed in Note

We record the contingent consideration liability at fair value with changes in estimated fair values recorded in the consolidated statements of operations. We reassess the fair value of the contingent consideration at each reporting period. The contingent consideration liability results from probability adjusted discounted cash flows and Monte Carlo simulation models which include estimates of milestone payments to former MIP stockholders under the acquisition agreement.

Nonrecurring Fair Value Measurements

Our non-financial assets, such as intangible assets and property and equipment, are measured and recorded at fair value on the acquisition date, and if indicators of impairment exist, we assess recoverability by measuring the amount of any impairment by comparing the carrying value of the asset to its then-current estimated fair value (for intangible assets) or to market prices for similar assets (for property and equipment). If the carrying value is

not

recoverable we record an impairment charge in our consolidated statements of operations.

impairments for property and equipment occurred for the years ended

December

31,

2018

and

2017.

Based on the results from the

1404

Phase

trial completed in

2018,

whereby only

one

of the co-primary endpoints was met, we changed our Level

assumptions of potential future sales projections, resulting in a

$23.2

million impairment of the

1404

indefinite-lived assets fair value. The corresponding non-cash impairment charge was recorded as part of operating expenses in the consolidated statements of operations.

Other current assets are comprised of prepaid expenses, interest, and other receivables, all of which are expected to be settled within

one

year. Restricted cash, included in other assets, represents collateral for letters of credit securing a lease obligation. We believe the carrying value of these assets approximates fair value and are considered Level

assets.

Property, Plant and Equipment, Policy [Policy Text Block]

Fixed Assets

Leasehold improvements, furniture and fixtures, and equipment are stated at cost. Furniture, fixtures and equipment are depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements are amortized on a straight-line basis over the life of the lease or of the improvement, whichever is shorter. Costs of construction of long-lived assets are capitalized but are

not

depreciated until the assets are placed in service.

Expenditures for maintenance and repairs which do

not

materially extend the useful lives of the assets are charged to expense as incurred. The cost and accumulated depreciation of assets retired or sold are removed from the respective accounts and any gain or loss is recognized in operations. The estimated useful lives of fixed assets are as follows:

Lessee, Leases [Policy Text Block]

Deferred

ease

iability and Incentive

Our lease agreements include fixed escalations of minimum annual lease payments and we recognize rental expense on a straight-line basis over the lease terms and record the difference between rent expense and current rental payments as deferred lease liability. Deferred lease incentive includes a construction allowance from our landlord which is amortized as a reduction to rental expense on a straight-line basis over the lease term. As of

December 31, 2018,

and

2017,

our consolidated balance sheets include the following:

	2018		2017
Other current liabilities:
Deferred lease incentive	$	26	$	26

Other liabilities:
Deferred lease liability	$	1,541	$	1,225
Deferred lease incentive	$	277	$	303

Income Tax, Policy [Policy Text Block]

Income Taxes

We account for income taxes in accordance with the provisions of ASC

740

(Topic

740,

Income Taxes

), which requires that we recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (temporary differences) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. A valuation allowance is established for deferred tax assets for which realization is uncertain.

In accordance with ASC

718

(Topic

718,

Compensation – Stock Compensation

) and ASC

505

(Topic

505,

Equity

), we have made a policy decision related to intra-period tax allocation, to account for utilization of windfall tax benefits based on provisions in the tax law that identify the sequence in which amounts of tax benefits are used for tax purposes (i.e., tax law ordering). We adopted Accounting Standards Update (“ASU”)

No.

2016

09,

Compensation – Stock Compensation (Topic

718

)

(“ASU

2016

09”

) on

January 1, 2017,

which requires that all excess tax benefits and tax deficiencies during the period be recognized in income (rather than in equity) on a prospective basis.

Uncertain tax positions are accounted for in accordance with ASC

740,

which prescribes a comprehensive model for the manner in which a company should recognize, measure, present and disclose in its financial statements all material uncertain tax positions that we have taken or expect to take on a tax return. ASC

740

applies to income taxes and is

not

intended to be applied by analogy to other taxes, such as sales taxes, value-add taxes, or property taxes. We review our nexus in various tax jurisdictions and our tax positions related to all open tax years for events that could change the status of our ASC

740

liability, if any, or require an additional liability to be recorded. Such events

may

be the resolution of issues raised by a taxing authority, expiration of the statute of limitations for a prior open tax year or new transactions for which a tax position

may

be deemed to be uncertain. Those positions, for which management's assessment is that there is more than a

50%

probability of sustaining the position upon challenge by a taxing authority based upon its technical merits, are subjected to the measurement criteria of ASC

740.

We record the largest amount of tax benefit that is greater than

50%

likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. Any ASC

740

liabilities for which we expect to make cash payments within the next

twelve

months are classified as "short term." In the event that we conclude that we are subject to interest and/or penalties arising from uncertain tax positions, we will record interest and penalties as a component of income taxes (see

Note

13.

Income Taxes

for additional information).

The U.S. Tax Cuts and Jobs Act (“Tax Act”) subjects a U.S. shareholder to current tax on global intangible low-taxed income earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic

740,

No.

Accounting for Global Intangible Low-Taxed Income, states that we are permitted to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as global intangible low-taxed income in future years or provide for the tax expense related to such income in the year the tax is incurred. We have elected to provide for the tax expense in the year the tax is incurred.

Risk and Uncertainties, Policy [Policy Text Block]

Risks and Uncertainties

To date, we have relied principally on external funding, license fees and milestone payments under agreements with Bausch, Bayer and others, out-licensing and asset sale arrangements, and royalties to finance our operations. There can be

assurance that our research and development will be successfully completed, that any products developed will obtain necessary marketing approval by regulatory authorities or that any approved products will be commercially viable. In addition, we operate in an environment of rapid change in technology, and we are dependent upon satisfactory relationships with our partners and the continued services of our current employees, consultants and subcontractors. We are also dependent upon Bausch fulfilling their manufacturing obligations, either on their own or through

third

-party suppliers. For

2018,

2017,

and

2016,

the primary sources of our revenues were royalty and milestone payments. There can be

assurance that such revenues will continue. Substantially all of our accounts receivable at

December 31, 2018

and

2017

were from the above-named sources.

Legal Costs, Policy [Policy Text Block]

Legal Proceedings

From time to time, we

may

be a party to legal proceedings in the course of our business. The outcome of any such proceedings, regardless of the merits, is inherently uncertain. The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. We record accruals for contingencies to the extent that the occurrence of the contingency is probable, and the amount of liability is reasonably estimable. If the reasonable estimate of liability is within a range of amounts and some amount within the range appears to be a better estimate than any other, then we record that amount as an accrual. If

amount within the range is a reasonable estimate, then we record the lowest amount within the range as an accrual. Loss contingencies that are assessed as remote are

not

reported in the financial statements, or in the notes to the consolidated financial statements.

New Accounting Pronouncements, Policy [Policy Text Block]

Impact of Recently

Issued and

Adopted

Accounting Standards

Recently Adopted

May 2014,

the FASB issued ASU

2014

09,

Revenue from Contracts with Customers (Topic

606

)

. The standard provides a single model for revenue arising from contracts with customers and supersedes current revenue recognition guidance. We adopted ASU

2014

January 1, 2018,

using the modified retrospective method, for all contracts

not

completed as of the date of adoption. (See

Revenue Recognition

section above for additional information)

January 2016,

the FASB issued ASU

2016

01,

Financial Instruments - Overall (Subtopic

825

Recognition and Measurement of Financial Assets and Financial Liabilities

(“ASU

2016

01”

). The standard requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, and separate presentation of financial assets and financial liabilities by measurement category and type of financial asset. Additionally, ASU

2016

eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments on the balance sheet. We adopted this standard on

January 1, 2018.

The adoption of this standard did

not

have a material impact on our consolidated financial statements, as we do

not

have any equity investments.

November 2016,

the FASB issued ASU

2016

(“ASU

2016

18”

Statement of Cash Flows (Topic

230

)

Restricte

Cash

. For entities that have restricted cash and are required to present a statement of cash flows, ASU

2016

changes the cash flow presentation for restricted cash. We adopted this standard on

January 1, 2018.

Accordingly, the consolidated statement of cash flow for the years ended

December 31, 2017

and

2016

have been re-casted to conform with the current year presentation under this new guidance.

January 2017,

the FASB issued ASU

2017

(“ASU

2017

01”

Business Combinations (Topic

805

): Clarifying the Definition of a Business.

The standard narrows the application of when an integrated set of assets and activities is considered a business and provides a framework to assist entities in evaluating whether both an input and a substantive process are present to be considered a business. We adopted this standard on

January 1, 2018.

The adoption of this standard did

not

have a material impact on our consolidated financial statements.

January 2017,

the FASB issued ASU

2017

(“ASU

2017

04”

Intangibles - Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment

. The standard simplifies how an entity is required to test goodwill for impairment by eliminating Step

from the goodwill impairment test. Step

measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. We adopted this standard on

January 1, 2018.

The adoption of this standard did

not

have a material impact on our consolidated financial statements.

Recently Issued

February 2016,

the FASB issued ASU

2016

(“ASU

2016

02”

Leases (Topic

842

)

. This standard established a right-of-use model that requires all lessees to recognize right-of-use assets and liabilities on their balance sheet that arise from leases with terms longer than

months as well as provide disclosures with respect to certain qualitative and quantitative information related to their leasing arrangements. This standard became effective for us on

January 1, 2019.

The FASB has subsequently issued the following amendments to ASU

2016

02,

which have the same effective date and transition date of

January 1, 2019,

and which we collectively refer to as the new leasing standards:

●

ASU

No.

2018

01,

Leases (Topic

842

): Land Easement Practical Expedient for Transition to Topic

842,

which permits an entity to elect an optional transition practical expedient to

not

evaluate under Topic

842

land easements that exist or expired prior to adoption of Topic

842

and that were

not

previously accounted for as leases under the prior standard, ASC

840,

Leases

●

ASU

No.

2018

10,

Codification Improvements to Topic

842,

Leases

, which amends certain narrow aspects of the guidance issued in ASU

2016

02.

●

ASU

No.

2018

11,

Leases (Topic

842

): Targeted Improvements

, which allows for a transition approach to initially apply ASU

2016

at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as well as an additional practical expedient for lessors to

not

separate non-lease components from the associated lease component.

●

ASU

No.

2018

20,

Narrow-Scope Improvements for Lessors

, which contains certain narrow scope improvements to the guidance issued in ASU

2016

02.

We will adopt the new leasing standards on

January 1, 2019,

using a modified retrospective transition approach to be applied to leases existing as of, or entered into after,

January 1, 2019.

We have reviewed our existing lease contracts and the impact of the new leasing standards on our consolidated financial statements. Upon adoption of the new leasing standards, we expect to recognize a lease liability of approximately

$15.3

million and related right-of-use asset of approximately

$13.5

million on our consolidated balance sheet. The impact of adoption of the new leasing standards will have

impact to our consolidated statements of operations.

August 2018,

the FASB issued ASU

2018

(“ASU

2018

13”

Fair Value Measurement - Disclosure Framework (Topic

820

)

: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement

. The updated guidance improves the disclosure requirements on fair value measurements. ASU

2018

is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

Early adoption is permitted for any removed or modified disclosures. We are currently assessing the timing of adopting the updated provisions and the impact of the updated provisions on our consolidated financial statements.

Computer equipment (in years)

Machinery and equipment (in years)

Furniture and fixtures (in years)

Leasehold improvements

Earlier of life of improvement or lease