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Investment In Inex Bio, Inc | 9 Months Ended
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Sep. 30, 2015
Schedule Of Investments [Abstract] |
Investment in Inex Bio, Inc | 3. Investment in Inex Bio, Inc. In April 2012, the Company made a strategic decision to enter into a License Agreement with Inex Bio, Inc. (Inex Bio), a Republic of Korea corporation (the Inex License Agreement). Under the Inex License Agreement, the Company provided Inex Bio with an exclusive license to the Company’s technology to be used in products only in certain Asian countries. In exchange for the Inex License Agreement, the Company received a $300 up-front license fee. In addition, the Company was eligible to receive milestone payments of up to $775 based upon completion of clinical trials and a 5% royalty on net sales of applicable products using the aNK cells. No milestone payments were due or received for the nine months ended September 30, 2014 or 2015. In May 2012, the Company acquired 57,000 shares of Inex Bio for $249, which represented 22.2% of the outstanding shares and 17.4% of the fully-diluted shares of Inex Bio. The Company accounted for its investment under the equity method. The Company reviewed its investment for impairment in accordance with ASC Topic 320, Investments—Debt and Equity Securities. In February and March 2015, InexBio Holdings (Holdings), an entity owned fifty percent (50%) by Cambridge Equities, L.P., an entity in which Dr. Soon-Shiong, the Company’s chief executive officer and one of the Company’s directors, is the sole member of its general partner, and fifty percent (50%) Eragon Ventures, LLC, an entity of which Dr. Ji, one of our directors, is managing member, acquired 220,000 shares or 67.3% of Inex Bio from third party owners for $1,100. On March 30, 2015, the Company entered into a Stock Purchase Agreement with Holdings and the third party owners, pursuant to which the Company acquired all the remaining outstanding shares of Inex Bio not previously held by the Company. The Company paid to the other owners of Inex Bio cash of $1,482 and issued warrants to acquire 593,072 shares of the Company’s Class A common stock at an exercise price of $2.00 per share. The Company valued the warrants using the Black-Sholes option-pricing model with a stock price of $10.72 per share as of March 30, 2015, an expected term of 0.04 years, and a volatility of 80%. In April 2015, the Company received $1,185 for the full exercise of the warrants. The Company recorded the transaction as an asset purchase because Inex Bio was a shell corporation without any employees or other significant assets and did not meet the definition of a business under ASC Topic 805, Business Combinations. The purchase price paid to acquire Inex Bio from the other owners is as follows:
Consideration |  | Total |
Cash paid by InexBio Holdings, LLC |  | $ | 1,100 |
Cash paid by Company |  |  | 1,482 |
Fair value of warrants |  |  | 5,170 |
Aggregate purchase price |  | $ | 7,752 |
The following table summarizes the assets acquired and liabilities assumed:
Cash |  | $ | 763 |
Intangible assets—reacquired rights of Company technology |  |  | 7,199 |
Other assets |  |  | 12 |
Investment in Inex Bio |  |  | (221 | )
Accounts payable |  |  | (1 | )
Total assets acquired and liabilities assumed |  | $ | 7,752 |
The license solely covers pending patent applications at this time. The Company will amortize the intangible assets related to the reacquired rights of the Company technology over 4 years, which represents the period until the next action date of the pending patent application in the territory of the license issued to Inex Bio. The Company paid Holdings cash of $6,518 and issued warrants to acquire 2,609,520 shares of the Company’s Class A common stock at an exercise price of $2.00 per share for their assistance in negotiating the acquisition of Inex Bio from the other owners. The Company valued the warrants using the Black-Sholes option-pricing model with a stock price of $10.72 per share as of March 30, 2015, an expected term of 0.04 years, and a volatility of 80%. In April 2015, the Company received $5,215 for the full exercise of the warrants. The following summarizes the net consideration paid to Holdings:
Consideration |  | Total |
Cash |  | $ | 6,518 |
Fair value of warrants |  |  | 22,747 |
Less cash paid to acquire shares in Inex Bio |  |  | (1,100 | )
Net consideration |  | $ | 28,165 |
The Company recorded compensation expense for the portion of the cash and warrants issued to Holdings that exceeded the fair value of the shares acquired consistent with ASC Topic 718. The Company recorded $22,747 of stock-based compensation and $5,418 of cash compensation to the Company’s chief executive officer and the director as a result of acquiring their interest in Inex Bio.

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- Definition The entire disclosure for investment holdings. This includes the information required in the supplementary schedule applicable to management investment companies listing holdings of unaffiliated investments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-12) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611133-123010 + Details
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