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Investments in Joint Ventures
3 Months Ended
Mar. 31, 2014
Equity Method Investments And Joint Ventures [Abstract]  
Investments in Joint Ventures

5. Investments in Joint Ventures

Intrexon Energy Partners

On March 26, 2014, the Company and certain investors (the “Investors”), including an affiliate of Third Security, LLC (“Third Security”), entered into a Limited Liability Company Agreement which governs the affairs and conduct of business of Intrexon Energy Partners, a joint venture formed to optimize and scale-up the Company’s gas-to-liquid bioconversion platform for the production of certain fuels and lubricants. The Company contributed technology for a 50% membership interest in Intrexon Energy Partners. The Investors made initial capital contributions, totaling $25,000 in the aggregate, in exchange for pro rata membership interests in Intrexon Energy Partners totaling 50%. In addition, Intrexon has committed to make additional capital contributions of up to $25,000, and the Investors, as a group and pro rata in accordance with their respective membership interests in Intrexon Energy Partners, have committed to make additional capital contributions of up to $25,000, at the request of Intrexon Energy Partners’ Board of Managers (the “IEP Board”) and subject to certain limitations. The Company and the Investors have the right, but not the obligation, to make additional capital contributions above these limits when and if solicited by the IEP Board.

Intrexon Energy Partners is governed by the IEP Board which has five members. Two members of the IEP Board are designated by the Company and three members of the IEP Board are designated by a majority of the Investors.

See discussion of the Company’s ECC with Intrexon Energy Partners at Note 6. See discussion of a concurrent private placement securities purchase made by the Investors at Note 12.

OvaXon

On December 18, 2013, the Company and OvaScience entered into a Limited Liability Company Agreement (“OvaXon LLC Agreement”) which governs the affairs and conduct of business of OvaXon, a joint venture to create new applications for improving human and animal health. OvaXon leverages experience and technology from both the Company and OvaScience. Both the Company and OvaScience made an initial capital contribution of $1,500 in January 2014 for a 50% membership interest in OvaXon. In cases in which the board of managers of OvaXon (“OvaXon Board”) determines that additional capital contributions are necessary in order for OvaXon to conduct business and comply with its obligations under the ECC (Note 6), each of the Company and OvaScience have the right, but not the obligation, to make additional capital contributions to OvaXon subject to the OvaXon LLC Agreement.

OvaXon is governed by the OvaXon Board which has four members. The Company, as well as OvaScience, has the initial right to appoint two members to the OvaXon Board. For so long as OvaScience and/or any of its affiliates is a member of OvaXon and holds at least 25% interest in OvaXon, OvaScience will have the sole authority to select and appoint on behalf of OvaXon each of the representatives of OvaXon on the ECC committees, and one such appointee will be an “Executive Officer” of OvaXon under the terms of the ECC with final authority to resolve certain ECC committee disputes.

As of March 31, 2014 OvaXon had total assets of $2,995 and total liabilities of $190. OvaXon incurred a net loss of $194 for the three months ended March 31, 2014. The Company’s investment in OvaXon was $1,403 as of March 31, 2014.

 

S & I Ophthalmic

On September 30, 2013, the Company and Sun Pharmaceutical Subsidiary entered into a Limited Liability Company Agreement (“Sun LLC Agreement”) which governs the affairs and the conduct of business of S & I Ophthalmic, a joint venture to develop therapies for the treatment of ocular diseases. S & I Ophthalmic leverages experience and technology from both the Company and Sun Pharmaceutical. Both the Company and Sun Pharmaceutical Subsidiary made an initial capital contribution of $5,000 in October 2013 for a 50% membership interest in S & I Ophthalmic. In cases in which the board of managers of S & I Ophthalmic (“S & I Board”) determines that additional capital contributions are necessary in order for S & I Ophthalmic to conduct business and comply with its obligations under the ECC (Note 6), each of the Company and Sun Pharmaceutical Subsidiary have committed to making additional capital contributions to S&I Ophthalmic subject to certain limits defined in the agreement. Each has the right, but not the obligation, to make additional capital contributions above the defined limits when and if solicited by the S & I Board.

Beginning on the seventh anniversary of the effective date of the Sun LLC Agreement, and upon the second anniversary thereafter, the Company, as well as Sun Pharmaceutical Subsidiary, may make a cash offer to purchase all of the other party’s interest in S & I Ophthalmic. Upon receipt of such an offer, the other party must either agree to tender its interests at the offered price or submit a counteroffer at a price higher than the original offer. Such offer and counteroffer may continue until one party agrees to the other’s price.

S & I Ophthalmic is governed by the S & I Board which has four members. The Company, as well as Sun Pharmaceutical Subsidiary, has the initial right to appoint two members to the S & I Board. For so long as Sun Pharmaceutical Subsidiary and/or any of its affiliates is a member of S & I Ophthalmic and holds a percentage interest in S & I Ophthalmic that is at least equal to the percentage held by the Company and/or its affiliates, Sun Pharmaceutical Subsidiary will have the sole authority to select and appoint on behalf of S & I Ophthalmic each of the representatives of the S & I Ophthalmic on the ECC committees, and one such appointee will be an “Empowered Representative” of the S & I Ophthalmic under the terms of the ECC with final authority to resolve certain ECC committee disputes.

As of March 31, 2014 and December 31, 2013, S & I Ophthalmic had total assets of $9,231 and $9,850, respectively, and total liabilities of $542 and $283, respectively. S & I Ophthalmic incurred a net loss of $878 for the three months ended March 31, 2014. The Company’s investment in S & I Ophthalmic was $4,345 and $4,784 as of March 31, 2014 and December 31, 2013, respectively.