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Collaborative Research and Development Agreements, Government Programs and Licenses
12 Months Ended
Dec. 31, 2015
Research and Development [Abstract]  
Collaborative Research and Development Agreements, Government Programs and Licenses
COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENTS, DISTRIBUTION AGREEMENTS AND LICENSES
Unilever—In October 2011, the Company entered into a joint research and development agreement with Unilever (the Company’s fourth agreement with Unilever), which expanded its current research and development efforts. In September 2015, the Company and Unilever extended this joint development agreement through September 30, 2017. In September 2013, the Company and Unilever entered into a commercial supply agreement for at least 10,000 MT of the Company’s algae oil. In May 2014, Unilever announced the initial introduction of the Company's sustainable algae oil into one of its biggest soap brands, Lux. In March 2016, the Company entered into a multi-year global supply agreement with Unilever, which includes a broad portfolio of our algae oils for Unilever to purchase for use in personal care products. Production of these oils will take place at the Solazyme Bunge Renewable Oils facility in Brazil and pricing terms are based upon actual production cost plus a defined contribution margin. The agreement contains certain minimum and maximum sales volumes and is subject to other terms and conditions.
Algenist® Distribution Partners—The Company has distribution contracts with Sephora S.A. to distribute the Algenist® product line in Sephora stores in the U.S. and other countries. The Company is obligated to fund minimum marketing expenditures under the agreement with Sephora EMEA. The Company has also granted a license to Sephora Americas and Sephora EMEA to use the Algenist® trademarks and logos to advertise and promote the product line. In March 2011, the Company entered into an agreement with QVC, Inc. (“QVC”) and launched the sale of its Algenist® product line through QVC’s multimedia platform. In July 2014, the Company entered into an agreement with ULTA Beauty to sell the Algenist® line in its retail stores throughout the United States.
Bunge—In May 2011, the Company entered into a joint development agreement (“JDA”) with Bunge, a global agribusiness and food company, that extended through May 2013. In September 2013, the Company and Bunge agreed to extend the JDA, effective from May 2013 through September 2014. Pursuant to the JDA, the Company and Bunge jointly developed microbe-derived oils and explored the production of such oils from Brazilian sugarcane feedstock. The JDA also provided for Bunge to provide research funding to the Company through September 2014, payable quarterly in advance throughout the research term.
In March 2015, the Company entered into an additional JDA with Bunge to jointly develop a unique food ingredient. Research funding of $2.0 million was paid to the Company through September 30, 2015 related to this JDA. The additional JDA was rolled into a project plan between the Solazyme Bunge JV and the Company in October 2015 and that the Solazyme Bunge JV will provide research funding to the Company covering periods through December 2018, payable quarterly in advance throughout the research term. Unamortized deferred revenue balance related to this JDA agreement with Bunge of $0.7 million as of October 2015 is being recognized over the remaining term of the project plan with Solazyme Bunge JV through December 31, 2018.
ADM—In November 2012, the Company and ADM entered into the Collaboration Agreement, establishing a collaboration for the production of algae triglyceride oil products at the Clinton Facility. In January 2014, the Company began commercial scale production of its products at the Clinton Facility using the Company’s proprietary technology. Under the terms of the Collaboration Agreement, the Company paid ADM annual fees for use and operation of a portion of the Clinton Facility, a portion of which could be paid in Company common stock. In March 2013, the Company issued a series of warrants to ADM for payment in stock, in lieu of cash, at its election, of future annual fees for use and operation of a portion of the Clinton Facility. Downstream processing of products produced at the Clinton Facility is being done at a facility in Galva, Iowa ("Galva Facility") operated by a wholly owned subsidiary of ANP. On October 29, 2015, the Company provided to ADM a notice of termination of the Operating Agreement entered into with ADM in November 2012 related to the production of products at the Clinton Facility. As a result of the termination of the Operating Agreement, the Strategic Collaboration Agreement with ADM automatically terminated on February 26, 2016. In December 2015, the Company entered a termination agreement with ADM. The Company has made net cash payments of approximately $2.4 million in the fourth quarter of 2015 and another $3.4 million in common stock and cash to be paid during the year ended December 31, 2016 associated with the ADM and ANP termination arrangements. See 2015 Exit Plan in Note 3.
In January 2013, the Company granted to ADM a warrant (“ADM Warrant”) to purchase 500,000 shares of the Company’s common stock, which vests in equal monthly installments over five years, commencing in November 2013. In addition, the Company shall grant to ADM a warrant (“ADM Extension Warrant”) covering an additional 500,000 shares of the Company’s common stock upon the extension of the Collaboration Agreement for each further five year term. The measurement date of the ADM Warrant was established in July 2013 when the Company agreed that vesting of the ADM Warrant would commence in November 2013. The Company recognized on a straight-line basis, the fair value of the ADM Warrant to rent expense beginning on the measurement date and over the lease term. As part of the termination of the Operating Agreement and Strategic Collaboration Agreement with ADM in December 2015, the Company also entered into a warrant exchange agreement ("Warrant Exchange") with ADM, as amended on February 17, 2016, whereby ADM agreed to exchange all warrants outstanding from the Company for (1) 1,121,914 shares of the Company's common stock, which is equal to $3.1 million divided by the average daily closing share price of the Company's common stock over the five consecutive trading days ending on the trading day prior to December 28, 2015, (2) $1.25 million paid to ADM in cash no later than February 19, 2016 and (3) a number of shares of the Company's common stock equal to $1.25 million divided by the average daily closing share price of the Company's common stock over five consecutive trading days ending on the trading day prior to April 1, 2016. The Company may choose to pay cash in lieu of all or a portion of the second tranche of shares. All outstanding warrants issued to ADM, including the ADM Warrants, were canceled and no longer exercisable effective on December 28, 2015.
Mitsui—In February 2013, the Company entered into a multi-year agreement with Mitsui & Co., Ltd. (“Mitsui”) to jointly develop a suite of triglyceride oils for use primarily in the oleochemical industry. The Company recognized $2.1 million and $1.5 million of revenue related to substantive milestones achieved under the Mitsui joint development agreement during the years ended December 31, 2015 and 2014, respectively.