|9 Months Ended|
Sep. 30, 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 Calyxt 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. All interest expense in the statements of operations relates to interest accruing on amounts due to the Parent.
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 $466 thousand and $430 thousand for the three months ended September 30, 2017 and 2016, respectively. For the three months ended September 30, 2017 and 2016, the Company classified $414 thousand and $385 thousand, respectively, as a component of sales, general, and administrative expenses, while $52 thousand and $45 thousand, respectively, were classified as a component of R&D expenses. The Company recorded expenses associated with the management agreement of $1,361 and $1,343 thousand for the nine months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, the Company classified $1,244 thousand and $1,207 thousand, respectively, as a component of sales, general, and administrative expenses, while $117 thousand and $136 thousand, respectively, were classified as a component of R&D expenses.
The Parent entered into a Lease Guaranty with the Landlord, whereby the Parent has guaranteed the Company’s obligations under the Lease Agreement. Cellectis’ guarantee of Calyxt’s obligations under the sale-leaseback transaction will terminate at the end of the second consecutive calendar year in which Calyxt’s tangible net worth exceeds $300 million, as determined in accordance with generally accepted accounting principles.
TALEN technology was invented by researchers at the University of Minnesota and Iowa State University and exclusively licensed to Cellectis. Calyxt obtained from Cellectis an exclusive license to the technology for commercial use in plants. TALEN technology is the primary gene-editing technology used by Calyxt 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