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Related Party Transactions

9 Months Ended

Sep. 30, 2019

(12)	Related Party Transactions

In June 2019, the Company issued to Ginkgo an aggregate of 6,340,771 shares of common stock at a purchase price per share of $9.00, and Pre-Funded Warrants to purchase an aggregate of 2,548,117 shares of common stock at an exercise price of $9.00 per share, with $8.99 of such exercise price paid at the closing of the offering. The net proceeds to the Company were approximately $79.9 million.

The Pre-Funded Warrants may be exercised at any time until all of the Pre-Funded Warrants are exercised in full to the extent that, after giving effect to such issuance after exercise, Ginkgo would not beneficially own in excess of 19.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance. See Note 7 for further details of the transaction.

In 2017, the Company established a technology collaboration with Ginkgo, to enable the discovery of new living medicines. In June 2019 the Company expanded its collaboration and entered into an agreement with Ginkgo for the research and development of engineered microbial therapeutic products. Under the agreement the Company made a prepayment to Ginkgo of $30.0 million for its foundry services that will be provided to the Company over an initial term of five years. At September 30, 2019, the Company had remaining balances of $9.2 million and $20.5 million of current and non-current pre-paid research and development related to this transaction. Upon the expiration of such initial term and, if applicable, such additional period, any portion of the prepayment that has not been used to purchase services from Ginkgo will be retained by Ginkgo. For the three and nine months ended September 30, 2019, the Company used $0.3 million of the pre-paid research and development expenses.