Aligos Therapeutics, Inc. - 10-K filing on 2022-03-10

Benefit plans	12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]
Benefit plans	14. Benefit plans Defined contribution plans The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company made matching contributions of $690,000 and $432,000 to the plan during the years ended December 31, 2021 and 2020, respectively. Defined benefit plans—regular pension plan ASC Topic 715, Compensation—Retirement Benefits, requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit post retirement plan in the year in which the changes occur. Accordingly, the Company is required to report changes in its funded status on its consolidated statement of stockholders’ deficit and consolidated statement of operations and comprehensive loss. Aligos-Belgium offers its employees a regular pension plan in the form of a defined contribution plan (the Regular Pension Plan), which contains a 1.75% legally required minimum rate of return for the participants. The Regular Pension Plan does not meet all the requirements that are needed for recognition of the plans as a defined contribution plan. The Company therefore recognizes the Regular Pension Plan as a defined benefit plan. The Company measures the fair value of the Regular Plan assets by using Level 3 inputs, unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of assets, including pricing models, discounted cash flow methodologies and similar techniques. The net periodic benefit cost of the Pension Plan was $249,000 and $268,000, and is recognized in accrued liabilities on the consolidated balance sheet as of December 31, 2021 and 2020, respectively. At December 31, 2021, the projected benefit obligation was $1.0 million, the plan assets were $886,000 and the net pension liability was $116,000. As of December 31, 2020, the projected benefit obligation was $897,000, the plan assets were $636,000, and the net pension liability was $261,000. The Company has recorded the unfunded amount as a liability in its consolidated balance sheet at December 31, 2021 and 2020, under the accrued liabilities caption. The unrealized actuarial gain and loss on pension benefits, net of tax, at December 31, 2021 and 2020 was $127,000 and $84,000, respectively. These amounts were reflected in other comprehensive loss under the caption gain (loss) on pension plans. The Company expects to make contributions to the Pension Plan of approximately $272,000 during 2022. The Company estimates future benefit payments from 2022 to 2026 to be $411,000, and from 2027 thereafter to be $538,000. Defined benefit plans—Top Hat Plan In Aligos-Belgium, the Company established a pension bonus complementary plan (the Top Hat Plan), where the bonus payments to each participant are added to the Top Hat Plan. The annual contributions to this plan are based on performance and determined on a discretionary basis by the Company. The Top Hat Plan contains a legal yield guarantee of 1.75%. The Top Hat Plan became effective as of January 1, 2019. In 2019, the Company accounted for the Top Hat Plan in accordance with ASC 715—Compensation—Retirement Benefits, once it became effective. The Top Hat Plan does not meet all the requirements that are needed for recognition as a defined contribution plan. The Company therefore recognizes the Top Hat Plan as a defined benefit plan. The net periodic benefit cost of the Top Hat Plan was $389,000 and $916,000, and is recognized in accrued liabilities on the consolidated balance sheet as of December 31, 2021 and 2020, respectively. At December 31, 2021, the projected benefit obligation was $1.7 million, the plan assets were $1.2 million and the net pension liability was $463,000. As of December 31, 2020, the projected benefit obligation was $1.7 million, the plan assets were $629,000, and the net pension liability was $1.1 million. The Company has recorded the unfunded amount as a liability in its consolidated balance sheet at December 31, 2021 and 2020, under the accrued liabilities caption. The unrealized actuarial gain and loss on pension benefits, net of tax, at December 31, 2021 and 2020 was $472,000 and $52,000, respectively. These amounts were reflected in other comprehensive loss under the caption gain (loss) on pension plans. The Company expects to make contributions to the Pension Plan of approximately $382,000 during 2022. The Company estimates future benefit payments from 2022 to 2026 to be $79,000, and from 2027 thereafter to be $281,000.

Benefit plans

12 Months Ended

Dec. 31, 2021

14. Benefit plans

Defined contribution plans

The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company made matching contributions of $690,000 and $432,000 to the plan during the years ended December 31, 2021 and 2020, respectively.

Defined benefit plans—regular pension plan

ASC Topic 715, Compensation—Retirement Benefits, requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit post retirement plan in the year in which the changes occur. Accordingly, the Company is required to report changes in its funded status on its consolidated statement of stockholders’ deficit and consolidated statement of operations and comprehensive loss.

Aligos-Belgium offers its employees a regular pension plan in the form of a defined contribution plan (the Regular Pension Plan), which contains a 1.75% legally required minimum rate of return for the participants. The Regular Pension Plan does not meet all the requirements that are needed for recognition of the plans as a defined contribution plan. The Company therefore recognizes the Regular Pension Plan as a defined benefit plan.

The Company measures the fair value of the Regular Plan assets by using Level 3 inputs, unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of assets, including pricing models, discounted cash flow methodologies and similar techniques.

The net periodic benefit cost of the Pension Plan was $249,000 and $268,000, and is recognized in accrued liabilities on the consolidated balance sheet as of December 31, 2021 and 2020, respectively. At December 31, 2021, the projected benefit obligation was $1.0 million, the plan assets were $886,000 and the net pension liability was $116,000. As of December 31, 2020, the projected benefit obligation was $897,000, the plan assets were $636,000, and the net pension liability was $261,000. The Company has recorded the unfunded amount as a liability in its consolidated balance sheet at December 31, 2021 and 2020, under the accrued liabilities caption. The unrealized actuarial gain and loss on pension benefits, net of tax, at December 31, 2021 and 2020 was $127,000 and $84,000, respectively. These amounts were reflected in other comprehensive loss under the caption gain (loss) on pension plans. The Company expects to make contributions to the Pension Plan of approximately $272,000 during 2022. The Company estimates future benefit payments from 2022 to 2026 to be $411,000, and from 2027 thereafter to be $538,000.

Defined benefit plans—Top Hat Plan

In Aligos-Belgium, the Company established a pension bonus complementary plan (the Top Hat Plan), where the bonus payments to each participant are added to the Top Hat Plan. The annual contributions to this plan are based on performance and determined on a discretionary basis by the Company. The Top Hat Plan contains a legal yield guarantee of 1.75%. The Top Hat Plan became effective as of January 1, 2019.

In 2019, the Company accounted for the Top Hat Plan in accordance with ASC 715—Compensation—Retirement Benefits, once it became effective. The Top Hat Plan does not meet all the requirements that are needed for recognition as a defined contribution plan. The Company therefore recognizes the Top Hat Plan as a defined benefit plan.

The net periodic benefit cost of the Top Hat Plan was $389,000 and $916,000, and is recognized in accrued liabilities on the consolidated balance sheet as of December 31, 2021 and 2020, respectively. At December 31, 2021, the projected benefit obligation was $1.7 million, the plan assets were $1.2 million and the net pension liability was $463,000. As of December 31, 2020, the projected benefit obligation was $1.7 million, the plan assets were $629,000, and the net pension liability was $1.1 million. The Company has recorded the unfunded amount as a liability in its consolidated balance sheet at December 31, 2021 and 2020, under the accrued liabilities caption. The

unrealized actuarial gain and loss on pension benefits, net of tax, at December 31, 2021 and 2020 was $472,000 and $52,000, respectively. These amounts were reflected in other comprehensive loss under the caption gain (loss) on pension plans. The Company expects to make contributions to the Pension Plan of approximately $382,000 during 2022. The Company estimates future benefit payments from 2022 to 2026 to be $79,000, and from 2027 thereafter to be $281,000.