Tango Therapeutics, Inc.

Previous wording

Tango Therapeutics was founded with a clear mission: to discover the next wave of targeted therapies in oncology by addressing the specific genetic alterations that drive cancer. We leverage our state-of-the-art target and drug discovery platforms to identify novel disease-relevant targets and develop medicines tailored to defined patient populations with high unmet medical need. Our novel small molecules are designed to be selectively active in cancer cells with specific genetic alterations, killing those cancer cells while sparing normal cells. We believe our approach will provide the ability to deliver deep, durable target inhibition with favorable tolerability and safety profiles, thus potentially maximizing clinical benefit.

Current wording

Tango was founded with a clear mission: to discover the next wave of targeted therapies in oncology by addressing the specific genetic alterations that drive cancer. We leverage our state-of-the-art target and drug discovery platforms to identify novel disease-relevant targets and develop medicines tailored to defined patient populations with high unmet medical need. Our novel small molecules are designed to be selectively active in cancer cells with specific genetic alterations, killing those cancer cells while sparing normal cells. We believe our approach will provide the ability to deliver deep, durable target inhibition with favorable tolerability and safety profiles, thus potentially maximizing clinical benefit.

Previous wording

We are focused on evaluating vopimetostat as a monotherapy and in combination with RAS inhibitors, given the overlap in patient populations, robust preclinical data supporting potential strong combination effect in clinical trials, and favorable clinical efficacy, durability, and safety profiles observed with each applicable drug individually. In June 2025, we treated the first patient in our combination clinical trial evaluating vopimetostat with the RAS(ON) multi-selective inhibitor, daraxonrasib, and RAS(ON) G12D-selective inhibitor, zoldonrasib (Revolution Medicines). Both combinations have been generally well-tolerated to date with encouraging early efficacy data. We plan to provide a clinical data update from this study in 2026 and will provide details of our planned path to registration for vopimetostat at that time.

Current wording

We are currently focused on clinical development of two MTAP-deleted selective PRMT5 inhibitors: vopimetostat (TNG462) for non-CNS cancers, both as a monotherapy and in combination with RAS inhibitors, and TNG456, our next-generation, brain-penetrant PRMT5 inhibitor, for CNS cancers, including GBM. We are evaluating vopimetostat alone and in combination with RAS inhibitors based on overlapping patient populations, preclinical data supporting potential strong combination effect in clinical trials, and favorable clinical efficacy, durability, and safety profiles observed to date with each applicable drug individually. In June 2025, we treated the first patient in our combination clinical trial evaluating vopimetostat with the RAS(ON) multi-selective inhibitor, daraxonrasib, and RAS(ON) G12D-selective inhibitor, zoldonrasib (Revolution Medicines).

Previous wording

Given the differentiated profile of vopimetostat enabling the potential for efficacious and tolerable RAS inhibitor combinations, in March 2026, we entered into a clinical trial collaboration and supply agreement (CTCSA) with Erasca, Inc., or Erasca, to evaluate vopimetostat in combination with Erasca’s pan-RAS molecular glue, ERAS-0015. Under the terms of the agreement, Tango is the sponsor of the trial and Erasca is supplying ERAS-0015 at no cost. We plan to initiate this Phase 1/2 clinical trial in the second half of 2026.

Current wording

Given the differentiated profile of vopimetostat enabling the potential for efficacious and tolerable RAS inhibitor combinations, in March 2026, we entered into a CTCSA with Erasca to evaluate vopimetostat in combination with Erasca’s pan-RAS molecular glue, ERAS-0015. Under the terms of the CTCSA with Erasca, we are the sponsor of the trial and Erasca is supplying ERAS-0015 at no cost. We plan to initiate this Phase 1/2 clinical trial in the second half of 2026.

Previous wording

TNG456 is a brain-penetrant PRMT5 inhibitor. In May 2025, the first patient was treated with TNG456 in the dose escalation portion of the Phase 1/2 clinical trial to evaluate the safety, pharmacokinetics, pharmacodynamics and antitumor activity of TNG456 as a monotherapy. The trial is currently enrolling patients with MTAP-deleted solid tumors, with a focus on GBM. We anticipate providing initial clinical data from this trial in 2026.

Current wording

TNG456 is a brain-penetrant PRMT5 inhibitor. In May 2025, the first patient was treated with TNG456 in the dose escalation portion of the Phase 1/2 clinical trial to evaluate the safety, pharmacokinetics, pharmacodynamics and antitumor activity of TNG456 as a monotherapy. The trial is currently enrolling patients with MTAP-deleted solid tumors, with a focus on GBM. We anticipate providing initial clinical data from this trial in the second half of 2026.

Previous wording

Due to an increased focus on our PRMT5 pipeline, we are deprioritizing future development and resources allocated to TNG260. TNG260, a first-in-class CoREST inhibitor that we recently evaluated in a Phase 1/2 trial, showed limited clinical benefit in patients and we plan to shut down the clinical trial. Additionally, TNG961, a novel molecular glue development candidate targeting HBS1L for degradation in solid tumors in FOCAD-deleted/MTAP-deleted cancers, is currently in the IND-enabling phase of development and we do not have current plans to further advance development of this molecule.

Current wording

Due to an increased focus on our PRMT5 pipeline, we are deprioritizing future development and resources allocated to TNG260 and are in the process of shutting down the clinical trial. Additionally, TNG961 is currently in the IND-enabling phase of development and we do not have current plans to further advance development of this molecule.

Previous wording

Since the Company's inception, we have focused primarily on organizing and staffing our company, business planning, raising capital, discovering product candidates, securing related intellectual property, and conducting research and development activities for our programs. To date, we have funded our operations primarily through equity financings and from the proceeds received from our collaboration agreement with Gilead. Through March 31, 2026, we have raised an aggregate of $1.2 billion from such transactions, including $921.4 million in aggregate gross proceeds from the sale of preferred shares, the closing of our Business Combination, follow-on public and private offerings, and through our "at-the-market" stock offering programs, and $237.1 million through our collaboration with Gilead.

Current wording

Since our inception, we have focused primarily on organizing and staffing our company, business planning, raising capital, discovering product candidates, securing related intellectual property, and conducting research and development activities for our programs. To date, we have funded our operations primarily through equity financings and from the proceeds received from our collaboration agreement with Gilead. Through June 30, 2026, we have raised an aggregate of $1.8 billion from such transactions, including $1.6 billion in aggregate gross proceeds from the sale of preferred shares, the closing of our Business Combination, follow-on public and private offerings, and through our "at-the-market" stock offering programs, and $237.1 million pursuant to our collaboration with Gilead, the research portion of which concluded in August 2025.

Previous wording

We expect that our existing cash, cash equivalents and marketable securities on hand as of March 31, 2026 of $379.8 million, will enable us to fund our operating expenses and capital expenditure requirements into 2028. Since inception, we have incurred significant operating losses. For the three months ended March 31, 2026 and 2025, our net losses were $45.5 million and $39.9 million, respectively. We had an accumulated deficit of $648.7 million as of March 31, 2026. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our product candidates through preclinical and clinical development and seek regulatory approvals, manufacture drug product and drug supply, and maintain and expand our intellectual property portfolio. We also expect to hire additional personnel, pay for accounting, audit, legal, regulatory and consulting services, and pay costs associated with maintaining compliance with Nasdaq listing rules and the requirements of the U.S. Securities and Exchange Commission, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, our clinical trials, and our expenditures on other research and development activities.

Current wording

We expect that our existing cash, cash equivalents and marketable securities on hand as of June 30, 2026 of $1.0 billion, will enable us to meet our current operating plan and fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the financial statements in this Quarterly Report. Since inception, we have incurred significant operating losses. For the six months ended June 30, 2026 and 2025, our net losses were $100.9 million and $78.7 million, respectively. We had an accumulated deficit of $704.0 million as of June 30, 2026. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future as we advance our product candidates through preclinical and clinical development and seek regulatory approvals, manufacture drug product and drug supply, and maintain and expand our intellectual property portfolio. We also expect to hire additional personnel, pay for accounting, audit, legal, regulatory and consulting services, and pay costs associated with maintaining compliance with The Nasdaq Stock Market LLC listing rules and the requirements of the SEC, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, our clinical trials, and our expenditures on other research and development activities.

Previous wording

Because of the numerous risks and uncertainties associated with pharmaceutical development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenues from the sale of our therapies, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.

Current wording

Because of the numerous risks and uncertainties associated with pharmaceutical development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenues from the sale of our therapies, if approved, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.

Previous wording

In October 2018, we entered into a collaboration agreement (the 2018 Gilead Agreement) with Gilead Sciences, Inc. (Gilead), under which we received an initial upfront payment of $50.0 million. In August 2020, the 2018 Gilead Agreement was expanded into a broader collaboration via an amended and restated research collaboration and license agreement (the Gilead Agreement), under which we received an upfront payment of $125.0 million. Upfront payments totaling $175.0 million and subsequent research extension fees totaling $24.0 million were recorded as deferred revenue on our balance sheet and recognized as revenue as or when the performance obligation under the contract was satisfied. In June 2024, Gilead licensed a program for a $12.0 million fee, which was recognized as license revenue in the second quarter of 2024.

Current wording

In October 2018, we entered into the 2018 Gilead Agreement with Gilead, under which we received an initial upfront payment of $50.0 million. In August 2020, the 2018 Gilead Agreement was expanded into the Gilead Agreement, a broader collaboration via an amended and restated research collaboration and license agreement, under which we received an upfront payment of $125.0 million. Upfront payments totaling $175.0 million and subsequent research extension fees totaling $24.0 million were recorded as deferred revenue on our balance sheet and recognized as revenue as or when the performance obligation under the contract was satisfied. In June 2024, Gilead licensed a program for a $12.0 million fee, which was recognized as license revenue in the second quarter of 2024.

Previous wording

In August 2025, the Company and Gilead mutually agreed to truncate the research term of the Gilead Agreement from seven to five years, concluding the research portion of the collaboration. There was no financial penalty to the Company as a result, no licensed programs were returned to the Company, all ongoing work at Gilead on licensed programs will continue and agreements for all future milestones and royalties remain in effect. The Company has no future research obligations and the remaining unrecognized deferred revenue balance at the time of truncating the collaboration agreement of $53.8 million was recognized as revenue in the third quarter of 2025.

Current wording

In August 2025, we and Gilead mutually agreed to truncate the research term of the Gilead Agreement from seven to five years, concluding the research portion of the collaboration. There was no financial penalty to us as a result, no licensed programs were returned to us, all ongoing work at Gilead on licensed programs will continue and agreements for all future milestones and royalties remain in effect. We have no future research obligations and the remaining unrecognized deferred revenue balance at the time of truncating the collaboration agreement of $53.8 million was recognized as revenue in the third quarter of 2025.

Previous wording

During the three months ended March 31, 2026 and 2025, we recognized $0 and $5.4 million, respectively, of collaboration revenue associated with the Gilead agreements based on performance completed during each period.

Current wording

During the three months ended June 30, 2026 and 2025, we recognized $0 and $3.2 million, respectively, and during the six months ended June 30, 2026 and 2025, we recognized $0 and $8.6 million, respectively, of collaboration revenue associated with the 2018 Gilead Agreement and the Gilead Agreement based on performance completed during each period.

Previous wording

external research and development expenses incurred under agreements with contract research organizations, or CROs, vendors and consultants that conduct our preclinical and clinical studies, as well as other development activities related to our product candidates;

Current wording

external research and development expenses incurred under agreements with contract research organizations, vendors and consultants that conduct our preclinical and clinical studies, as well as other development activities related to our product candidates;

Previous wording

Our direct external research and development expenses consist primarily of fees paid to CROs, as well as outside vendors and consultants in connection with our preclinical and clinical development and manufacturing activities. We track these external research and development costs on a program-by-program basis once we have identified a product candidate.

Current wording

Our direct external research and development expenses consist primarily of fees paid to contract research organizations, as well as outside vendors and consultants in connection with our preclinical and clinical development and manufacturing activities. We track these external research and development costs on a program-by-program basis once we have identified a product candidate.

Previous wording

General and administrative expenses consist primarily of employee related costs, including salaries, bonuses, benefits, stock-based compensation and other related costs. General and administrative expense also includes professional services, including legal, accounting and audit services and other consulting fees as well as facility costs not otherwise included in research and development expenses, insurance and other general administrative expenses.

Current wording

General and administrative expenses consist primarily of employee related costs, including salaries, bonuses, benefits, stock-based compensation and other related costs. General and administrative expenses also include professional services, including legal, accounting and audit services and other consulting fees, as well as facility costs not otherwise included in research and development expenses, insurance and other general administrative expenses.

Previous wording

Our provision for income tax consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law. We recorded an insignificant provision for income taxes for each of the three months ended March 31, 2026 and 2025.

Current wording

Our provision for income tax consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law. We recorded an insignificant provision for income taxes for each of the three and six months ended June 30, 2026 and 2025.

Previous wording

Collaboration revenue of $0 and $5.4 million for the three months ended March 31, 2026 and 2025, respectively, was derived from the Gilead Agreement. All remaining deferred revenue from the upfront and research option-extension payments under the Gilead Agreement was recognized as collaboration revenue during the year ended December 31, 2025 as a result of the truncation of the collaboration agreement which concluded all research activities.

Current wording

Collaboration revenue of $0 and $3.2 million for the three months ended June 30, 2026 and 2025, respectively, was derived from the Gilead Agreement. All remaining deferred revenue from the upfront and research option-extension payments under the Gilead Agreement was recognized as collaboration revenue during the year ended December 31, 2025 as a result of the truncation of the Gilead Agreement which concluded all research activities in August 2025.

Previous wording

Research and development expense was $33.5 million for the three months ended March 31, 2026 compared to $36.4 million for the three months ended March 31, 2025. The decrease of $2.9 million was primarily driven by a $1.1 million decrease due to the discontinuation of the TNG908 clinical program, $1.8 million decrease in development costs for TNG961 and lower discovery program expenses. The decrease is also due to lower personnel-related and facilities-related costs. These decreases were partially offset by increased spend related to the advancement of the vopimetostat and TNG456 clinical programs.

Current wording

Research and development expense was $37.2 million for the three months ended June 30, 2026 compared to $32.8 million for the three months ended June 30, 2025. The increase of $4.4 million was primarily driven by a $7.6 million increase in spend related to the advancement of the vopimetostat and TNG456 clinical programs. The increase was also due to higher personnel-related costs. These increases were partially offset by a $1.7 million decrease due to the discontinuation of the TNG908 and TNG260 clinical programs, a $1.5 million decrease in development costs for TNG961, and lower discovery program expenses.

Previous wording

General and administrative expense was $15.2 million for the three months ended March 31, 2026 compared to $11.5 million for the three months ended March 31, 2025. The increase of $3.8 million was primarily due to an increase in personnel-related costs, including share-based compensation expense.

Current wording

General and administrative expense was $22.6 million for the three months ended June 30, 2026 compared to $11.3 million for the three months ended June 30, 2025. The increase of $11.2 million was primarily due to an increase in personnel-related costs, including share-based compensation expense.

Previous wording

Interest income was $2.2 million for the three months ended March 31, 2026 compared to $1.6 million for the three months ended March 31, 2025, with the increase primarily attributable to a higher marketable securities balance during the first quarter of 2026 as compared to the same period in the prior year.

Current wording

Interest income was $3.7 million for the three months ended June 30, 2026 compared to $1.2 million for the three months ended June 30, 2025, with the increase primarily attributable to a higher marketable securities balance during the second quarter of 2026 as compared to the same period in the prior year.

Previous wording

Other income, net was $1.1 million for each of the three months ended March 31, 2026 and 2025. In both periods, other income, net, is primarily derived from accretion from investments purchased at a discount.

Current wording

Other income, net was $0.7 million for the three months ended June 30, 2026 compared to $0.9 million for the three months ended June 30, 2025. In both periods, other income, net, was primarily derived from accretion from investments purchased at a discount.

Previous wording

Provision for income taxes was less than $0.1 million for each of the three months ended March 31, 2026 and 2025. The tax provisions are insignificant in each of the three months ended March 31, 2026 and 2025.

Current wording

Provision for income taxes was less than $0.1 million for each of the three months ended June 30, 2026 and 2025. The tax provisions were insignificant in each of the three months ended June 30, 2026 and 2025.

Previous wording

Since our inception, we have generated recurring net losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have funded our operations primarily through equity financings and from the proceeds received from the Gilead Agreement. Through March 31, 2026, we have raised an aggregate of $1.2 billion from such transactions, including $921.4 million in aggregate gross proceeds from the sale of pre-public entity preferred shares, the closing of our Business Combination, follow-on public and private offerings, and through our "at-the-market" stock offering programs, and $237.1 million through our former collaboration with Gilead. As of March 31, 2026, we had cash and cash equivalents and marketable securities of $379.8 million.

Current wording

Since our inception, we have generated recurring net losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have funded our operations primarily through equity financings and from the proceeds received from the Gilead Agreement. Through June 30, 2026, we have raised an aggregate of $1.8 billion from such transactions, including $1.6 billion in aggregate gross proceeds from the sale of pre-public entity preferred shares, the closing of our Business Combination, follow-on public and private offerings, and through our "at-the-market" stock offering programs, and $237.1 million pursuant to our collaboration with Gilead, the research portion of which concluded in August 2025. As of June 30, 2026, we had cash and cash equivalents and marketable securities of $1.0 billion.

Previous wording

In November 2025, we entered into a sales agreement (the Leerink Sales Agreement) with Leerink Partners LLC (Leerink), which permitted us to sell from time to time, at our option, up to an aggregate of $100.0 million of shares of its common stock through Leerink, as sales agent. Sales of the common stock are made by methods deemed to be "at-the-market" stock offerings. The Leerink Sales Agreement will terminate upon the earliest of: (a) the sale of $100.0 million of shares of the Company's common stock or (b) the termination of the Leerink Sales Agreement by the Company or Leerink. During the three months ended March 31, 2026, we sold 5,148,151 shares of common stock under this stock offering program for gross proceeds of $64.4 million.

Current wording

In November 2025, we entered into the Leerink Sales Agreement, which permitted us to sell from time to time, at our option, up to an aggregate of $100.0 million of shares of our common stock through Leerink Partners, as sales agent. Sales of the common stock are made by methods deemed to be "at-the-market" stock offerings. The Leerink Sales Agreement will terminate upon the earliest of: (a) the sale of $100.0 million of shares of our common stock or (b) the termination of the Leerink Sales Agreement by us or Leerink Partners. During the three months ended June 30, 2026, we did not sell any shares of our common stock under the Leerink Sales Agreement and during the six months ended June 30, 2026, we sold 5,148,151 shares of common stock under this stock offering program for gross proceeds of $64.4 million. We may, at our option, sell up to approximately $35.6 million of shares of our common stock remaining under this stock offering program.

Previous wording

We expect that our existing cash, cash equivalents and marketable securities on hand as of March 31, 2026 of $379.8 million will enable us to fund our operating expenses and capital expenditure requirements into 2028. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we expect.

Current wording

We expect that our existing cash, cash equivalents and marketable securities on hand as of June 30, 2026 of $1.0 billion will enable us to meet our current operating plan and fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the financial statements in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we expect.

Previous wording

The following table summarizes our cash flows for each of the three month periods presented:

Current wording

The following table summarizes our cash flows for each of the six month periods presented:

Previous wording

Net cash used in operating activities was $44.4 million for the three months ended March 31, 2026 compared to net cash used in operating activities of $41.7 million for the three months ended March 31, 2025. The increase in net cash used in operating activities for the three months ended March 31, 2026 was primarily due to an increase in the net loss as a result of higher operating expenses related to the advancement of our programs and personnel-related costs. The increase was partially offset by higher non-cash expenses and a decrease in operating assets and liabilities.

Current wording

Net cash used in operating activities was $83.2 million for the six months ended June 30, 2026 compared to net cash used in operating activities of $78.2 million for the six months ended June 30, 2025. The increase in net cash used in operating activities for the six months ended June 30, 2026 was primarily due to an increase in the net loss as a result of higher operating expenses related to the advancement of our programs and personnel-related costs. The increase was partially offset by higher non-cash expenses and a decrease in operating assets and liabilities.

Previous wording

Net cash provided by investing activities was $9.6 million for the three months ended March 31, 2026 compared to net cash provided by investing activities of $30.6 million for the three months ended March 31, 2025. The change was primarily due to a decrease in sales and maturities of marketable securities and an increase in purchases of marketable securities as compared to the three months ended March 31, 2025.

Current wording

Net cash used in investing activities was $436.3 million for the six months ended June 30, 2026 compared to net cash provided by investing activities of $47.4 million for the six months ended June 30, 2025. The change was primarily due to an increase in purchases of marketable securities, which was partially offset by an increase in sales and maturities of marketable securities as compared to the six months ended June 30, 2025.

Previous wording

Net cash provided by financing activities was $79.8 million for the three months ended March 31, 2026 compared to net cash provided by financing activities of less than $0.1 million for the three months ended March 31, 2025. The cash provided by financing activities for the three months ended March 31, 2026 primarily consisted of $62.8 million in net proceeds received from our "at-the-market" stock offering program during the period, as well as the cash provided from the exercises of stock options of $17.6 million. The cash provided by financing activities for the three months ended March 31, 2025 consisted of the cash provided from the exercises of stock options.

Current wording

Net cash provided by financing activities was $752.4 million for the six months ended June 30, 2026 compared to net cash provided by financing activities of less than $0.6 million for the six months ended June 30, 2025. The cash provided by financing activities for the six months ended June 30, 2026 primarily consisted of $651.4 million in net proceeds received from our June 2026 financing, $62.8 million in net proceeds received from our "at-the-market" stock offering program, as well as the cash provided from the exercises of stock options and ESPP purchases of $38.2 million during the period. The cash provided by financing activities for the six months ended June 30, 2025 consisted of the cash provided from the exercises of stock options and ESPP purchases.

Previous wording

We recognize revenue under ASC Topic 606, Revenue from Contracts with Customers, or ASC 606, which 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. ASC 606 provides a five-step framework whereby revenue is recognized when control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of the revenue standard, we perform the following five steps: (i) identify the promised goods or services in the contract; (ii) determine whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measure the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) we satisfy each performance obligation. We only apply the five-step model to contracts when collectability of the consideration to which we are entitled in exchange for the goods or services we transfer to the customer is determined to be likely. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation. Goods and services that are determined not to be distinct are combined with other promised goods and services until a distinct bundle is identified. We then allocate the transaction price (the amount of consideration we expect to be entitled to from a customer in exchange for the promised goods or services) to each performance obligation and recognize the associated revenue when (or as) each performance obligation is satisfied. Our estimate of the transaction price for each contract includes all variable consideration to which we expect to be entitled.

Current wording

We recognize revenue under ASC 606, Revenue from Contracts with Customers, which 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. ASC 606 provides a five-step framework whereby revenue is recognized when control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of the revenue standard, we perform the following five steps: (i) identify the promised goods or services in the contract; (ii) determine whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measure the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) we satisfy each performance obligation. We only apply the five-step model to contracts when collectability of the consideration to which we are entitled in exchange for the goods or services we transfer to the customer is determined to be likely. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation. Goods and services that are determined not to be distinct are combined with other promised goods and services until a distinct bundle is identified. We then allocate the transaction price (the amount of consideration we expect to be entitled to from a customer in exchange for the promised goods or services) to each performance obligation and recognize the associated revenue when (or as) each performance obligation is satisfied. Our estimate of the transaction price for each contract includes all variable consideration to which we expect to be entitled.