Company: CSTL
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001628280-25-048254
Chunk: 110

Company: CASTLE BIOSCIENCES INC
Filing Date: 2025-11-03
Form: 10-Q
Item: Item 8
Chunk 110
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 obligation within the collaborative arrangement is with a customer, we apply ASC 606.If a portion of a distinct bundle of goods or services within the collaborative arrangement is not with a customer, we apply recognition and measurement based on an analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election. To the extent the arrangement is within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”), we assess whether aspects of the arrangement are within the scope of other accounting literature.

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Table of ContentsCASTLE BIOSCIENCES, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)(UNAUDITED)

In June 2025, we entered into a Collaboration and License Agreement with SciBase Holding AB (“SciBase”). Following approval under the Swedish Screening of Foreign Direct Investments Act in the third quarter of 2025, subsequent to approval, we completed our investment in SciBase. The agreement aims to jointly develop diagnostic tests for dermatologic diseases, initially focused on atopic dermatitis, by combining SciBase’s Electrical Impedance Spectroscopy technology with our diagnostic and development expertise. Under the arrangement, we hold development and commercialization rights in North America, while SciBase retains rights in certain other territories. SciBase is entitled to royalties on our product sales, a mark-up on product sales to us, and a milestone payment upon achieving specified sales thresholds. Development costs are shared; however, SciBase deferred its initial clinical development costs for the initial indication and we will recover those costs through future royalty payments reductions.We determined the agreement is a collaborative arrangement under ASC 808. Certain elements of the arrangement, including license rights and sales-based royalty provisions, represent transactions with a customer and are therefore accounted for under ASC 606. Other elements, such as shared development activities and cost reimbursements, are accounted for in accordance with ASC 808 and presented as reductions to research and development (“R&D”) expenses.Accounts Receivable and Allowance for Credit LossesWe classify accounts receivable balances that are expected to be paid more than one year from the condensed consolidated balance sheet date as noncurrent assets. The estimated timing of payment utilized as a basis for classification as noncurrent is determined by analyses of historical payor-specific payment experience, adjusted for known factors that are expected to change the timing of future payments.We accrue an allowance for credit losses against our accounts receivable based on management’s current estimate of amounts that will not be collected. Management