|12 Months Ended|
Dec. 31, 2018
|Related Party Transactions [Abstract]|
3. RELATED-PARTY TRANSACTIONS
We have several agreements that govern our relationship with Cellectis. We also pay management fees for services they provide, primarily information technology, legal, human resources, finance and accounting, and communications. We perform the Cellectis’ U.S. operations payroll services. We record nearly all of the management fees in general and administrative expense in our statement of operations. We incurred management fee expenses of $2.3 million in 2018, $2.0 million in 2017, and $3.2 million in 2016.
The Cellectis also has guaranteed our headquarters lease agreement as described in Note 8. Cellectis’ guarantee of our obligations under the sale-leaseback transaction will terminate at the end of the second consecutive calendar year in which our tangible net worth exceeds $300 million. We also license our technology from the Cellectis and owe them royalties on any revenue we generate from sales of product as well as a percentage of any sublicense revenues we generate. Any amounts borrowed from the Cellectis bear floating-rate interest specified in the agreements.
During the year ended December 31, 2018, Cellectis purchased 550,000 shares of common stock in our follow-on offering at the public offering price of $15.00 per share. In addition, in connection with the vesting on June 14, 2018, of restricted stock units for certain of our and Cellectis’ employees and nonemployees, Cellectis purchased 63,175 shares of our common stock at a price of $19.49 per share (the closing price reported on the NASDAQ Global Market on June 14, 2018) directly from such employees and nonemployees in private transactions pursuant to share purchase agreements dated June 13, 2018.
TALEN technology was invented by researchers at the University of Minnesota and Iowa State University and exclusively licensed to Cellectis. We obtained from Cellectis an exclusive license for the TALEN technology for commercial use in plants. TALEN technology is the primary gene-editing technology used by us today. We have not paid any royalties to date for this license because we had not yet commercialized a product.
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://fasb.org/us-gaap/role/ref/legacyRef