|9 Months Ended|
Sep. 30, 2018
|Related Party Transactions [Abstract]|
Due from related parties consists of receivables due from another subsidiary of Cellectis related to payroll services provided by Calyxt to this other subsidiary of Cellectis.
Due to related parties consists of license fees, amounts owed under the intercompany management agreement, and interest charged on outstanding amounts. Amounts due to Cellectis 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 Cellectis, in which the Company pays Cellectis a monthly fee for certain services provided by Cellectis, 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 $975 thousand and $466 thousand for the three months ended September 30, 2018 and 2017, respectively. For the three months ended September 30, 2018 and 2017, the Company classified $918 thousand and $414 thousand, respectively, as a component of sales, general, and administrative expenses while $57 thousand and $52 thousand, respectively, were classified as a component of R&D expenses. The Company recorded expenses associated with the management agreement of $1,954 and $1,361 thousand for the nine months ended September 30, 2018 and 2017, respectively. For the nine months ended September 30, 2018 and 2017, the Company classified $1,817 thousand and $1,244 thousand, respectively, as a component of sales, general, and administrative expenses, while $137 thousand and $117 thousand, respectively, were classified as a component of R&D expenses.
As of September 30, 2018, and December 31, 2017, the Company had short-term Cellectis obligations of $1.9 million and $1.4 million, respectively, consisting of amounts owed under the intercompany management agreement for services provided by Cellectis and costs incurred by Cellectis on behalf of the Company.
Cellectis entered into a Lease Guaranty with the landlord for the Company’s new headquarters, whereby Cellectis has guaranteed all of 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. On November 10, 2017, Calyxt 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 Calyxt’s outstanding common stock.
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 for the TALEN 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.
During the nine months ended September 30, 2018, Cellectis purchased 550,000 shares of common stock in the Company’s 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 employees and nonemployees of the Company and Cellectis, Cellectis purchased 63,175 shares of common stock of the Company 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.
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