Cost Allocations

The condensed combined financial statements reflect allocations of certain expenses from the financial statements of the Former Parent, including research and development expenses and general and administrative expenses. These allocations include, but are not limited to, executive management, employee compensation and benefits, facilities and operations, information technology, business development, financial services (such as accounting, audit, and tax), legal, insurance, and share-based compensation. Some of these services will continue to be provided to the Former Parent on a temporary basis following the Distribution under a transition services agreement. See Note 2 for discussion of these costs and the methodology used to allocate them.

These allocations to the Company are reflected in the condensed combined statement of operations and comprehensive loss as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	23,048	$	17,396	$	84,772	$	52,070
General and administrative	9,676		6,900		43,053		25,678
Total	$	32,724	$	24,296	$	127,825	$	77,748

Management believes these cost allocations are a reasonable reflection of services provided to, or the benefit derived by, the Company during the periods presented. The allocations may not, however, be indicative of the actual expenses that would have been incurred had the Company operated as a standalone public company. Actual costs that may have been incurred if the Company had been a standalone public company would depend on a number of factors, including the chosen organizational structure, what corporate functions the Company might have performed directly or outsourced and strategic decisions the Company might have made in areas such as executive management, legal and other professional services, and certain corporate overhead functions.

Share-Based Compensation

As discussed in Note 5, Share-based compensation, Biohaven employees participated in the Former Parent’s share-based compensation plans, the costs of which have been allocated to the Company and recorded in research and development and general and administrative expenses in the condensed combined statements of operations and comprehensive loss.

Net Transfers From Former Parent

Net transfers from Former Parent represent the net effect of transactions between the Company and the Former Parent. The components of net transfers from Former Parent are as follows:


	Nine Months Ended September 30,
		2022		2021
General financing activities		$	187,519	$	365,360
Corporate cost allocations, excluding share-based compensation		49,898		25,077
Net transfers from Former Parent as reflected in the Combined Statement of Cash Flows		237,417		390,437
Share-based compensation		77,927		52,671
Issuance of Former Parent common shares to repurchase non-controlling interest in a subsidiary		60,000		—
Issuance of Former Parent common shares as payment for IPR&D asset acquisition		58,747		—
Issuance of Former Parent common shares as payment for business acquisition		—		10,673
Issuance of Former Parent common shares as payment for Artizan investment		—		6,000
Issuance of Former Parent common shares as payment for license and consulting agreements		1,779		7,929
Other non-cash adjustments		(1,173)		(1,071)
Net transfers from Former Parent as reflected in the Combined Statement of Changes in Equity		$	434,697	$	466,639

Related Party Agreements

License Agreement with Yale

On September 30, 2013, the Company entered into the Yale Agreement with Yale (see Note 6). The Company’s Chief Executive Officer is one of the inventors of the patents that the Company has licensed from Yale and, as such, is entitled to a specified share of the glutamate product-related royalty revenues that may be received by Yale under the Yale Agreement.

In January 2021, the Company entered into the Yale MoDE Agreement with Yale (see Note 6 for detail). Under the license agreement, the Company acquired exclusive, worldwide rights to Yale's intellectual property directed to its MoDE platform. As part of consideration for this license, the Company paid Yale University an upfront cash payment of $1,000 and 11,668 common shares of the Former Parent valued at approximately $1,000.

For the three and nine months ended September 30, 2022, the Company recorded $333 and $2,333, respectively, in research and development expense related to the Yale MoDE Agreement and Yale Agreement (the "Yale Agreements"). For the three and nine months ended September 30, 2021, the Company recorded $0 and $150 in research and development expense related to the the "Yale Agreements. As of September 30, 2022, the Company did not owe any amounts to Yale, which is related to the Yale MoDE SRA.