Related Party Transactions
|9 Months Ended|
Sep. 30, 2011
|Related Party Transactions [Abstract]|
|Related Party Transactions||
7. Related Party Transactions
Shell and Raízen
Prior to June, 2011 Shell was our largest shareholder and transactions between us and Shell were considered related party transactions. As discussed in Note 3, "Collaborative Research and Development Agreements", Shell transferred full ownership of our common stock to Raízen, Shell's joint venture with Cosan S.A. in Brazil. Based on our analysis and effective, as of July 1, 2011, Shell is no longer considered a related party. Before June 30, 2011, related party receivables, related party deferred revenue, and related party collaboration research and development revenue were primarily comprised of transactions under our five-year collaborative research agreement and a license agreement with Shell. These agreements expire in 2012. The revenues earned from Shell are included in the collaborative research and development on our statement of operations. Collaborative research and development revenue received from Shell accounted for 52% and 61% of our revenues for the nine months ended September 30, 2011 and 2010, respectively.
At the time of the transfer, Raízen became our largest shareholder with approximately 5.6 million shares of our common stock with rights to appoint a member to our board of directors. In September 2011, we entered into a joint development agreement directly with Raízen to deploy our CodeEvolver directed evolution technology platform to develop an improved first generation ethanol process for producing ethanol made from sugar. There has been no material financial activity under this agreement thru September 30, 2011.
Exela PharmaSci, Inc.
We signed a license agreement with Exela PharmaSci, Inc. ("Exela") in 2007. A member of our board of directors is also on the board of directors of Exela. Under the terms of the agreement, Exela would pay us a royalty based on their achievement of certain commercial goals.
During the three and nine months ended September 30, 2011, we recognized $120,000 and $450,000, respectively of revenue related to this arrangement, shown in our condensed consolidated statement of operations as collaborative research and development revenue. We did not recognize any revenue from Exela prior to 2011. As of September 30, 2011, we have no amounts owed from Exela.
The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. 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