Commitments and Contingencies

Leases

On April 6, 2005, the Company entered into a non-cancellable operating lease (the Lease) for its office, warehouse and laboratory facilities in Exton, Pennsylvania. The lease agreement had an original term of 8 years. On February 17, 2012, the Company entered into an amended and restated lease (the Amended Lease) for an additional term of 10 years through the year 2023. The Lease and the Amended Lease provide for rent payments escalating on a periodic basis. In accordance with ASC 840-20, Operating Leases, the Company accounts for total minimum payments under the lease on a straight-line basis over the life of the lease. The difference between actual rent payments and payments accounted for using the straight-line basis are reflected as deferred rent on the Company’s Consolidated Balance Sheets. The Company has the option to renew the lease for an additional 5 years at fair market value. Rental expense totaled approximately $1.6 million for both the years ended December 31, 2018 and 2017.

Collaboration with Related Party (Intrexon)

The Company is a party to two separate exclusive channel collaboration agreements with Intrexon, a related party. Pursuant to the agreements, the Company is Intrexon’s exclusive channel collaborator in the research, development and commercialization of products in certain defined fields. The Company is required to pay future royalties, as well as development and commercialization milestones, under these agreements. See Note 12 for additional details.

Contractual Obligations

The following table summarizes the Company’s minimum contractual obligations as of December 31, 2018:



	Payments due by period
($ in thousands)	Total		2019		2020		2021		2022		2023		2024 and thereafter
Operating lease obligations (1)	6,197		1,416		1,471		1,471		1,471		368		—
Debt obligations (2)	21,968		—		—		21,968		—		—		—
Total ⁽³⁾	$	28,165	$	1,416	$	1,471	$	23,439	$	1,471	$	368	$	—


(1)	Operating lease obligations are stated based on the Amended Lease agreement for the office, warehouse and laboratory facilities executed in February 2012.

(2)

Obligations under the Notes issued in connection with the 2016 Private Placement which includes principal and accrued interest through September 7, 2021, based on stated fixed rates, as the Company has elected to accrue interest. The Notes have a maturity date of the earlier of (i) September 7, 2026 and (ii) one-hundred and eighty (180) days after the date on which the Company’s product candidate, FCX-007, is approved by the FDA for the treatment of RDEB. However, each Note holder has the right to require the Company to repay all or any portion of the unpaid principal and accrued interest from time to time on or after September 7, 2021. See details within Note 6.

(3)

This table does not include (a) any milestone payments which may become payable to third parties under license agreements as the timing and likelihood of such payments are not known, (b) any royalty payments to third parties as the amounts of such payments, timing and/or the likelihood of such payments are not known, and (c) contracts that are entered into in the ordinary course of business which are not material in the aggregate in any period presented above.