17. SOLAZYME ROQUETTE NUTRITIONALS, LLC

In November 2010, the Company entered into a joint venture agreement with Roquette, one of the largest global starch and starch-derivatives companies. The purpose of the joint venture, Solazyme Roquette Nutritionals, LLC ("Solazyme Roquette Nutritionals" or the "JV") is to engage in manufacturing, distribution, sales, marketing and support of products and services related to the use of microalgae to which the Company has not applied its targeted recombinant technology, in a fermentation production process to produce materials for use in the following fields: (i) human foods and beverages, (ii) animal feed and (iii) nutraceuticals. The JV is 50% owned by the Company and 50% by Roquette and is governed by a four member board of directors, two from each parent company. Solazyme Roquette Nutritionals will determine the approach to research, development, marketing, sales, distribution and manufacture of products in such fields. While Solazyme Roquette Nutritionals will establish a manufacturing platform for the products, Roquette has committed to provide expertise and resources with respect to manufacturing, including such volumes of corn-based dextrose feedstock as the JV may request subject to the terms of a manufacturing agreement.

The JV agreement contemplates three development stages. In Phase 1, Roquette will build and own a pilot plant with a capacity of approximately 300 MT/year for the dedicated use of Solazyme Roquette Nutritionals. In Phase 2, Roquette will build and own a commercial plant with a capacity of approximately 5,000 MT/year for the dedicated use of Solazyme Roquette Nutritionals. Solazyme Roquette Nutritionals will have the right, but not the obligation, to purchase and acquire the commercial plant built during Phase 2 for construction of the plant to be built in Phase 3. Subject to the approval of the board of directors of Solazyme Roquette Nutritionals to enter into Phase 3, Roquette will provide debt and equity financing to build a commercial plant, expected to be sited at a Roquette wet mill with a capacity of approximately 50,000 metric tons per year to be owned by Solazyme Roquette Nutritionals.

The Company's initial contribution is the licensing of certain intellectual property (the "IP") to the JV. Roquette is required to provide funds to Solazyme Roquette Nutritionals for working capital, lend additional funds to the JV to provide working capital during Phase 1 and Phase 2 and lend additional funds to the JV to provide working capital during Phase 3. Roquette has also agreed to provide funds to Solazyme Roquette Nutritionals to be used as equity in construction of the Phase 3 facility and to provide debt financing to Solazyme Roquette Nutritionals for construction of the Phase 3 facility, subject to the approval to proceed with construction.

Both parent companies will be significantly involved in the operations and ultimate success of the JV and thus have joint control over the JV. The Company has identified the JV as a variable interest entity ("VIE") and has analyzed whether or not it is the primary beneficiary in the JV under the provisions of ASC 810 (formerly FIN 46R) "Consolidation of Variable Interest Entities". The Company has concluded that it is not at risk and thus is not the primary beneficiary in the JV based on several factors, including but not limited to: the full return of all of its IP should the JV dissolve, the financing of the JV operations, oversight for building the pilot facility and no control on the board of directors. Under the provisions of ASC 810 upon conclusion that the party is not the primary beneficiary other US GAAP should be followed.

The Company has accounted for the JV under the equity method of accounting as prescribed by FASB ASC 323 Investments — Equity Method and Joint Ventures. Under the equity method, the Company measured its investment in the membership interests of the JV at the Company's carrying value of the IP initially licensed and contributed to the JV which was $0 as all amounts related to this IP have previously been expensed as research and development by the Company. The JV is 50% owned by the Company and 50% owned by Roquette, with equal voting rights. Under the agreement, in consideration for the Company's IP contribution to the JV and in order to apply an equal contribution value to both investors in the JV, the Company received a payment relating to the license from the JV in December 2010 of $15.0 million and is expected to receive a further payment in December 2011. The first payment from the JV was recorded as license fee revenue in the 2010 consolidated statement of operations. Under the equity method, the Company's share of profits and losses are to be included in "Income (Loss) from Equity Method Investments, net" in the operating income section of the Consolidated Statements of Operations. During the nine months ended September 30, 2011, the Company recorded no amounts as its proportionate share of the JV's net loss as the Company's carrying basis in the JV is $0 and is not required to contribute further assets to the JV.

In addition the Company had a receivable due from the JV totaling $2.2 million and $0.1 million as of September 30, 2011 and December 31, 2010, respectively, which represented JV related expenses that were incurred by the Company, and reimbursable from the JV. The reimbursements were offset against the Company's related operating expense.

Summarized information on the JV's balance sheets and income statements as of September 30, 2011 and December 31, 2010, and the period from December 16, 2010 (date of inception) to December 31, 2010 and for the nine months ended September 30, 2011, was as follows (in thousands):


	September 30, 2011		December 31, 2010
Cash	$	2,898	$	500
Other current assets		150		57

Total current assets		3,048		557
Property and equipment		15		—
Intangible asset		15,000		15,000

Total assets	$	18,063	$	15,557

Current liabilities	$	7,265	$	109
JV Partners' Capital (Net)		10,798		15,448

Total liabilities and partners' capital (net)	$	18,063	$	15,557


	Nine Months Ended September 30,
	2011			2010
Net sales	$	126			—
Net loss	$	(4,650	)		—