Revenue Recognition Effective January 1, 2019, the Company adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), using the modified retrospective transition method. Under this method, results for reporting periods beginning after January 1, 2019 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with ASC 605, Revenue Recognition (ASC 605). ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs 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; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue at a point in time, or over time, as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes 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 Company enters into licensing and development agreements which are within the scope of ASC 606, under which it may collaborate with third parties to research, develop, manufacture and commercialize its product candidates. The terms of these arrangements may include payment to the Company of one or more of the following: nonrefundable, upfront license fees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products. As part of the accounting for customer arrangements, the Company must use significant judgment to determine: a) the number of performance obligations based on the determination under step (ii) above; b) the transaction price under step (iii) above; and c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration should be included in the transaction price as described further below. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. In developing the stand-alone price for a performance obligation, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. The Company validates the stand-alone selling price for performance obligations by evaluating whether changes in the key assumptions used to determine the stand-alone selling prices will have a significant effect on the allocation of transaction price between multiple performance obligations. The Company records any amounts received prior to satisfying the revenue recognition criteria as deferred revenue. Amounts recognized as revenue, but not yet received or invoiced are recorded within other receivables on the condensed consolidated balance sheet. Cystic Fibrosis Foundation Development Agreement The Development Program Letter Agreement (the CFF Agreement) with the Cystic Fibrosis Foundation (CFF or CF Foundation) is within the scope of ASC 606. Under the CFF Agreement, CFF made an upfront payment of $200,000 and will make milestone payments to the company as certain milestones defined in the agreement are met. The Company has determined that there is one performance obligation under the CFF Agreement. Hence, the entire estimated transaction price is allocated to this combined performance obligation and is recognized as revenue by measuring progress using the input (cost-to-cost) method, limited by the variable consideration attributed to the probable completion of certain milestones as defined in the agreement. For the three months ended September 30, 2019 and 2018, grant revenue from the CF Foundation totaled approximately $0 and $1.0 million , respectively, and for the nine months ended September 30, 2019 and 2018, totaled approximately $1.0 million and $1.4 million , respectively. All grant revenue was derived from our award agreement with the CF Foundation. Serum License Agreement In July 2019, the Company and Serum International B.V. (SIBV), an affiliate of Serum Institute of India Private Limited, entered into an option agreement which granted SIBV the option to license multiple programs from the Company and access the Companys MabIgX platform technology for asset identification and selection. The Company received an upfront cash payment of $5 million upon execution of this option agreement. In connection with the option agreement, SIBV made an equity investment whereby the Company issued 801,820 shares of its restricted common stock in a private placement to SIBV for total gross proceeds of $10 million. In September 2019, the Company and Serum AMR Products (SAMR), a party under common ownership of SIBV, entered into a License, Development and Commercialization Agreement (the License Agreement). Pursuant to the License Agreement, the Company was to receive upfront payments totaling $15 million, of which $5 million was received in July 2019 through the option agreement referred to above, and may receive milestone payments and royalty-based payments from SAMR if certain milestones and sales levels as defined in the License Agreement are met. See Note 6 for details of the License Agreement. Given the equity investment by SIBV was negotiated in conjunction with the option agreement, which resulted in the execution of the License Agreement, all arrangements were evaluated as a single agreement and amounts were allocated to the elements of the arrangement based on their fair value. See Note 9. The Company allocated the estimated net proceeds received from the sale of the restricted common stock and upfront payment from the License Agreement of approximately $24.2 million accordingly:  the Company recorded approximately $19.6 million to deferred revenue based on the $15 million from upfront payments under the License Agreement and approximately $4.6 million from the equity allocation;  the Company capitalized approximately $1.0 million to contract costs which is included in long term other assets, which consists of approximately $0.4 million issuance costs from the equity allocation and approximately $0.6 million in other direct costs to obtain the License Agreement; and  the Company recorded approximately $5.0 million, which represented the fair value of the restricted common stock issued of $5.4 million, net of $0.4 of issuance costs, to stockholders equity within the Companys condensed consolidated balance sheet (unaudited) as of September 30, 2019. In accordance with ASC 606, the Company determined that no performance obligations were satisfied as of September 30, 2019, and therefore, no revenue related to the License Agreement was recognized for the nine months ended September 30, 2019. The Company is in the process of evaluating the number of performance obligations, the transaction price, the allocation of the transaction price to each performance obligation and the expected timing of when the Company would satisfy each performance obligation. Deferred Revenue Amounts received prior to satisfying the above revenue recognition criteria, or in which the Company has an unconditional right to payment, are recorded as deferred revenue in the Companys condensed consolidated balance sheets. While the Company has not completed its evaluation of the License Agreement under ASC 606, the Company has estimated the classification between current and noncurrent deferred revenue related to the License Agreement within its condensed consolidated balance sheet (unaudited) at September 30, 2019. See Note 6 for details of the License Agreement.