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Related Party Transactions
9 Months Ended
Sep. 30, 2017
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions
Third Security and Affiliates
The Company's CEO and Chairman of the board of directors of the Company is also the Senior Managing Director and CEO of Third Security and owns 100% of the equity interests of Third Security.
In November 2015, the independent members of Intrexon's board of directors, with the recommendation of the audit committee of the board of directors, approved the execution of a Services Agreement ("Services Agreement") with Third Security pursuant to which Third Security provides the Company with certain professional, legal, financial, administrative, and other support services necessary to support the Company and its CEO. As consideration for providing these services, Third Security is entitled to a fee of $800 per month to be paid in the form of fully-vested shares of the Company's common stock. The number of shares of common stock is calculated based on the closing price of the Company's common stock on the 15th day of each month. The payments made by the Company under the Services Agreement constitute, in the aggregate, an award under the 2013 Plan and are subject to the terms of the 2013 Plan (Note 15). The Services Agreement had a term of one year, can be terminated by the Company at any time, and may be extended only by agreement of the parties, including approval of a majority of the independent members of Intrexon's board of directors. In October 2016, the independent members of Intrexon's board of directors, with the recommendation of the audit committee of the board of directors, approved an extension of the Services Agreement through December 31, 2016. In December 2016, the independent members of Intrexon's board of directors, with the recommendation of the audit committee of the board of directors, approved an extension of the Services Agreement through December 31, 2017. For the three months ended September 30, 2017 and 2016, the Company issued 118,828 shares and 89,326 shares, respectively, with values of $2,251 and $2,132, respectively, to Third Security as payment for services pursuant to the Services Agreement. For the nine months ended September 30, 2017 and 2016, the Company issued 329,649 shares and 254,496 shares, respectively, with values of $6,506 and $6,542, respectively, to Third Security as payment for services pursuant to the Services Agreement. In addition to the foregoing Services Agreement, the Company reimburses Third Security for certain out-of-pocket expenses incurred on the Company's behalf, and the total expenses incurred by the Company under this arrangement were $4 and $156 for the three months ended September 30, 2017 and 2016, respectively, and $428 and $301 for the nine months ended September 30, 2017 and 2016, respectively.
See also Note 15 regarding compensation arrangements between the Company and its CEO.
Transactions with ECC Parties
In addition to entities controlled by Third Security, any entity in which the Company holds equity securities, including securities received as upfront or milestone consideration, and which also are party to a collaboration with the Company are considered to be related parties.
The Company holds promissory notes convertible into shares of Fibrocell common stock ("convertible note") and warrants to purchase shares of Fibrocell common stock. As of September 30, 2017 and December 31, 2016, the value of the convertible note and warrants totaled $4,172 and $1,642, respectively, and is included in other assets on the accompanying consolidated balance sheets. See Note 7 for additional discussion of the Company's investments in Fibrocell.
In May 2017, the Company purchased a promissory note from Oragenics ("Oragenics' Promissory Note") with a principal value of $2,400 which matures in May 2019 and accrues interest at a rate of 12% per annum. This note is included in other assets on the accompanying consolidated balance sheet as of September 30, 2017. See Note 19 for additional discussion regarding the Oragenics Promissory Note.
Other Related Parties
In June 2015, the Company entered into an agreement with Harvest, an investment fund sponsored by Harvest Capital Strategies, LLC, and a related party based on ownership in the fund by affiliates of Third Security. Harvest was established to invest in life science research and development start-up opportunities that the Company offered to Harvest with exclusive rights of first-look and first negotiation. Based on this agreement, Harvest established six new collaboration entities, each of which entered into an ECC with the Company in a designated field. The terms of such ECCs were negotiated between the Company and Harvest. As consideration for providing exclusive rights of first-look and first negotiation for start-up opportunities, the Company received a portion of the management fee collected by the fund sponsor of Harvest. These fees are included in other income in the accompanying consolidated statements of operations and totaled $613 for the three months ended September 30, 2017 and 2016, and $1,839 and $1,871 for the nine months ended September 30, 2017 and 2016, respectively. In September 2017, the commitment period for Harvest was terminated and, as a result, our agreement with Harvest terminated. The termination of the agreement had no effect on the already-established collaborations with Harvest-sponsored entities.