|12 Months Ended|
Dec. 31, 2017
|Related Party Transactions [Abstract]|
5. Related-Party Transactions
Due from related parties consists of receivables due from another subsidiary of the Parent related to payroll services provided by the Company to the other subsidiary.
Due to related parties consists of cash advances, license fees, amounts owed under the intercompany management agreement, and interest charged on outstanding amounts. Amounts due to the Parent that are included in due to related parties on the balance sheet bear interest at a rate of the European Interbank Offered Rate for 12 months (EURIBOR 12) plus 5% per annum.
The Company has a management agreement with the Parent, in which the Company pays the Parent a monthly fee for certain services provided by the Parent, which include general sales and administration functions, accounting functions, research and development, legal advice, human resources, and information technology. The Company recorded expenses associated with the management agreement of $1,968 thousand, $3,150 thousand and $1,884 thousand for the year ended December 31, 2017, 2016 and 2015, respectively. For the year ended December 31, 2017, 2016 and 2015, the Company classified $1,811 thousand, $2,969 thousand and $1,704 thousand, respectively, as a component of sales, general and administrative expenses, while $157 thousand, $181 thousand and $180 thousand, respectively, were classified as a component of R&D expenses.
As of December 31, 2017, the Company had short-term Parent obligations of $1.4 million consisting of amounts owed under the intercompany management agreement for services provided by Cellectis and costs incurred by Cellectis on behalf of the Company.
In consideration of, and as an inducement to, landlord’s agreement to enter into the Lease Agreement, defined in Note 11 Commitments and Contingencies, Cellectis entered into a Lease Guaranty with the landlord, whereby Cellectis has guaranteed all of the Company’s obligations under the Lease Agreement. Cellectis’ guarantee of the Company’s obligations under the sale-leaseback transaction will terminate at the end of the second consecutive calendar year in which the Company tangible net worth exceeds $300 million, as determined in accordance with generally accepted accounting principles. On November 10, 2017, the Company agreed to indemnify Cellectis for any obligations incurred by Cellectis under the Lease Guaranty. This indemnification agreement will become effective at such time as Cellectis owns 50% or less of the Company’s outstanding common stock.
TALEN technology was invented by researchers at the University of Minnesota and Iowa State University and exclusively licensed to Cellectis. The Company obtained from Cellectis an exclusive license to the technology for commercial use in plants. TALEN technology is the primary gene-editing technology used by the Company today. The Company will be required to pay a royalty to Cellectis on future sales for the licensing of the technology.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/presentationRef