What changed in this filing

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Item 9A. Controls and Procedures

2021-03-01 compared with 2020-03-02 · 734 added, 835 removed, 1213 unchanged (56% of the section changed)

3 unchanged sentences

The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.

accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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Our internal control over financial reporting includes those policies and procedures that:

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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Exhibits, Financial Statement Schedules

The following consolidated financial statements of Precigen, Inc.

(a) The following consolidated financial statements of Precigen, Inc.

and its subsidiaries, and the independent registered public accounting firm reports thereon, are included in Part II, Item 8 of this Annual Report:

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and Subsidiaries

Reports of Independent Registered Public Accounting Firm as of and for the Year Ended December 31, 2019

Report of Independent Registered Public Accounting Firm as of and for the Two Years Ended December 31, 2018

Reports of Independent Registered Public Accounting Firm for the Years Ended December 31, 2020 and 2019

Report of Independent Registered Public Accounting Firm for the Year Ended December 31, 2018

Consolidated Balance Sheets as of December 31, 2020 and 2019

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The following exhibits are filed with this Annual Report or incorporated by reference:

Controlled Equity OfferingSM Sales Agreement between the Company and Cantor Fitzgerald & Co., dated November 11, 2015 (6)

Agreement and Plan of Merger, dated as of January 24, 2017, by and among the Company, GenVec and Intrexon GV Holding, Inc.

3.1* Amended and Restated Articles of Incorporation (17)

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10.2†* Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 9, 2014 (4)

Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Restricted Stock Agreement (4)

Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Incentive Stock Option Agreement (4)

Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Nonqualified Stock Option Agreement (4)

Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 11, 2015 (5)

Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 9, 2016 (7)

Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 28, 2017 (9)

Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective as of June 7, 2018 (11)

Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective as of June 12, 2019 (16)

2013 Amended and Restated Omnibus Incentive Plan of the Company, as amended, Restricted Stock Unit Agreement, by and between the Company and Randal J.

Kirk, effective as of April 1, 2019 (15)

2013 Amended and Restated Omnibus Incentive Plan of the Company, as amended, Form of Restricted Stock Unit Agreement for Officers (10)

2013 Amended and Restated Omnibus Incentive Plan of the Company, as amended, Form of Restricted Stock Unit Agreement for Directors (10)

10.2A†* Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Restricted Stock Agreement (4)

10.2B†* Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Incentive Stock Option Agreement (4)

10.2C†* Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Nonqualified Stock Option Agreement (4)

10.2D†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 11, 2015 (5)

10.2E†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 9, 2016 (6)

10.2F†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 28, 2017 (7)

10.2G†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective as of June 7, 2018 (9)

10.2H†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective as of June 12, 2019 (14)

10.2I†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective January 5, 2020 (19)

10.2J†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective as of June 19, 2020 (21)

10.2K†* 2013 Amended and Restated Omnibus Incentive Plan of the Company, as amended, Form of Restricted Stock Unit Agreement for Officers (8)

10.2L†* 2013 Amended and Restated Omnibus Incentive Plan of the Company, as amended, Form of Restricted Stock Unit Agreement for Directors (8)

10.3* 2019 Incentive Plan of the Company for Non-Employee Service Providers, effective as of June 12, 2019 (14)

10.4†* Form of Continuing Employment Agreement (13)

Second Amended and Restated Employment Agreement, dated as of August 31, 2006, between the Company and Thomas D.

10.5†* Employment Agreement, dated January 1, 2020, by and between the Company and Helen Sabzevari, Ph.D.

10.6†* Executive Chairman Compensation Arrangement, by and between the Company and Randal J.

10.7#* Exclusive Channel Collaboration Agreement, dated as of March 26, 2014, by and between the Company and Intrexon Energy Partners, LLC (2)

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10.9* Securities Issuance Agreement by and among the Company, The University of Texas System Board of Regents on behalf of The University of Texas MD Anderson Cancer Center dated as of January 13, 2015 (3)

Securities Issuance Agreement by and among the Company, The University of Texas System Board of Regents on behalf of The University of Texas MD Anderson Cancer Center dated as of January 13, 2015 (3)

Registration Rights Agreement by and among the Company, The University of Texas System Board of Regents on behalf of The University of Texas MD Anderson Cancer Center dated as of January 13, 2015 (3)

10.10#* Exclusive License Agreement, dated October 5, 2018, by and between Precigen, Inc.

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and Precigen, Inc.

Convertible Note issued to ARES TRADING S.A., dated December 28, 2018 (14)

Stock Purchase Agreement, dated October 29, 2019, by and between the Company and TS AquaCulture (17)

10.14* Stock and Asset Purchase Agreement, dated January 1, 2020, by and between the Company and TS Biotechnology Holdings, LLC (15)

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23.2 Consent of PricewaterhouseCoopers LLP

Certification of Randal J.

Kirk, Executive Chairman (Principal Executive Officer) of Precigen, Inc., pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.1 Certification of Helen Sabzevari, Chief Executive Officer (Principal Executive Officer) of Precigen, Inc., pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Sterling, Chief Financial Officer (Principal Financial Officer) of Precigen, Inc., pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Randal J.

Kirk, Executive Chairman (Principal Executive Officer) of Precigen, Inc., pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.1** Certification of Helen Sabzevari, Chief Executive Officer (Principal Executive Officer) of Precigen, Inc., pursuant to 18 U.S.C.

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(5) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 17, 2015.

Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 12, 2015.

(6) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 13, 2016.

Amendment No.

2 to the Registration Statement on Form S-4, filed with the Securities and Exchange Commission on May 11, 2017.

(7) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 30, 2017.

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(14) Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 9, 2019.

Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 31, 2019.

(15) Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 2, 2020.

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(17) Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 4, 2020.

(18) Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 2, 2020.

(19) Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 11, 2020.

(20) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 4, 2020.

(21) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 19, 2020.

(22) Registration Statement on Form S-3, filed with the Securities and Exchange Commission on June 22, 2020.

(23) Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 9, 2020.

** Furnished herewith

† Indicates management contract or compensatory plan.

Portions of the exhibit (indicated by asterisks) have been omitted as permitted by the Securities and Exchange Commission.

Financial Statement Schedules

# Portions of the exhibit (indicated by asterisks) have been omitted in compliance with Item 601 of Regulation S-K.

The response to Item 15(a)2 is incorporated herein by reference.

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PRECIGEN, INC.

/S/ RANDAL J.

Executive Chairman

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/S/ RANDAL J.

Executive Chairman and

Chairman of the Board of Directors

(Principal Executive Officer)

/S/ HELEN SABZEVARI

Chief Executive Officer

Helen Sabzevari

Chief Executive Officer and Director

Signature Title Date

/S/ HELEN SABZEVARI Chief Executive Officer and Director

(Principal Executive Officer) 3/1/2021

Helen Sabzevari

Chief Financial Officer

STERLING Chief Financial Officer

(Principal Accounting and Financial Officer) 3/1/2021

/S/ STEVEN FRANK

/S/ RANDAL J.

KIRK Executive Chairman 3/1/2021

ALVAREZ Director 3/1/2021

/S/ STEVEN FRANK Director 3/1/2021

/S/ VINITA D.

/S/ FRED HASSAN

GUPTA Director 3/1/2021

/S/ FRED HASSAN Director 3/1/2021

/S/ JEFFREY B.

KINDLER Director 3/1/2021

MITCHELL Director 3/1/2021

/S/ ROBERT B.

SHAPIRO Director 3/1/2021

TURLEY Director 3/1/2021

Index to the Financial Statements and Schedules

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and Subsidiaries

Reports of Independent Registered Public Accounting Firm as of and for the Year Ended December 31, 2019

Report of Independent Registered Public Accounting Firm as of and for the Two Years Ended December 31, 2018

Reports of Independent Registered Public Accounting Firm for the Years Ended December 31, 2020 and 2019

Report of Independent Registered Public Accounting Firm for the Year Ended December 31, 2018

Consolidated Balance Sheets as of December 31, 2020 and 2019

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Precigen, Inc.

(formerly Intrexon Corporation) and subsidiaries (the "Company") as of December 31, 2019, the related consolidated statements of operations, comprehensive loss, shareholders' and total equity, and cash flows, for the year ended December 31, 2019, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Precigen, Inc.

and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, shareholders' and total equity, and cash flows, for the years then ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.

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These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition - Collaboration and Licensing Revenues - Refer to Notes 2 and 6 to the financial statements

Critical Audit Matter Description

The Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

As the nature of the promises in the Company's collaboration and licensing agreements are highly integrated and interrelated, the Company typically combines most of its promises into a single performance obligation.

Options to acquire additional services are considered to determine if they constitute material rights.

The Company utilizes judgment to determine the most appropriate method to measure its progress of performance under the agreement, primarily based on inputs necessary to fulfill the performance obligation.

The Company evaluates its measure of progress to recognize revenue each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

The Company's measure of performance and revenue recognition involves significant judgment and assumptions, including, but not limited to, estimated costs and timelines to complete its performance obligations.

The Company evaluates modifications and amendments to its contracts to determine whether any changes should be accounted for prospectively or on a cumulative catch-up basis.

For the year ended December 31, 2019, the Company's total revenue from continuing operations was $90.7 million, of which $14.1 million relates to collaboration and licensing revenues.

Given the judgments necessary to estimate total contract costs and revenue for the performance obligation used to recognize revenue for certain collaboration and licensing contracts, auditing such estimates required extensive audit effort due to the complexity of collaboration and licensing contracts and the high degree of auditor judgment applied when performing audit procedures and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management's estimates of total contract costs and revenue for the performance obligation used to recognize revenue for certain collaboration and licensing contracts included the following, among others:

We tested the operating effectiveness of controls over contract revenue, including those over the estimates of total contract costs and revenue for performance obligations.

We selected a sample of collaboration and licensing contracts and performed the following:

Evaluated whether the contracts were properly included in management's calculation of contract revenue based on the terms and conditions of each contract, including whether transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation.

Compared the transaction price to the consideration expected to be received based on current rights and obligations under the contracts and any modifications that were agreed upon with the customers.

Tested management's identification of the distinct performance obligation(s) by evaluating whether the underlying technology license, services, or both were highly interdependent and interrelated.

Evaluated management's determination of the contractual term and the appropriateness of management's method to measure its progress over that term.

Tested the accuracy and completeness of the total contract costs incurred to date for the performance obligation.

Evaluated the estimates of total contract costs and revenue for the performance obligation by:

Comparing costs incurred to date to the costs management estimated to be incurred to date.

Evaluating management's ability to achieve the estimates of total contract costs by performing corroborating inquiries with the Company's project managers and financial analysts, and comparing the estimates to management's work plans and cost estimates.

We evaluated management's ability to estimate total contract costs accurately by comparing actual costs to management's historical estimates for performance obligations that have been fulfilled.

Tested the mathematical accuracy of management's calculation of revenue for the performance obligation.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill - Trans Ova Reporting Unit - Refer to Notes 2 and 11 to the financial statements

Critical Audit Matter Description

The Company's goodwill balance was $63.8 million as of December 31, 2019.

The Company's goodwill balance was $54.4 million as of December 31, 2020, of which $16.6 million is allocated to the Trans Ova reporting unit.

The Company's evaluation of goodwill for impairment involves the comparison of the fair value of the reporting unit to its carrying amount.

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The discount rate utilizes a risk adjusted weighted average cost of capital.

During the Company's annual goodwill impairment test, the Company determined it was more-likely-than-not that the fair value of the Trans Ova reporting unit was less than the carrying amount.

As a result, the Company compared the carrying amount of the Trans Ova reporting unit to the fair value as of the measurement date and determined the carrying amount exceeded the fair value, resulting in a $29.6 million goodwill impairment charge.

Given the significant estimates and assumptions management makes to estimate the fair value of the Trans Ova reporting unit and the sensitivity of Trans Ova's operations to changes in these estimates, performing audit procedures to evaluate the

reasonableness of management's estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

Given the significant estimates and assumptions management makes to estimate the fair value of the Trans Ova reporting unit and the sensitivity of Trans Ova's valuation to changes in these estimates, performing audit procedures to evaluate the reasonableness of management's estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

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• We tested the operating effectiveness of controls over management's goodwill impairment evaluation, including those over the determination of the Trans Ova reporting unit fair value, such as controls related to management's forecasts and selection of the discount rate.

We evaluated management's ability to accurately forecast revenues and operating margins by comparing actual results to management's historical forecasts and external information.

• We evaluated management's ability to accurately forecast revenues and operating margins by comparing actual results to management's historical forecasts, as well as external information.

• We evaluated the reasonableness of management’s forecasts by comparing the forecasts to (1) historical results, (2) internal communications to management and the Board of Directors, (3) industry growth projections, and (4) forecasted information prepared in the prior year.

• With the assistance of our fair value specialists, we evaluated the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rate selected by management.

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We have audited the internal control over financial reporting of Precigen, Inc.

(formerly Intrexon Corporation) and subsidiaries (the "Company") as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

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Opinion on the Financial Statements

We have audited the consolidated balance sheet of Precigen, Inc.

(formerly known as Intrexon Corporation) and its subsidiaries (the "Company") as of December 31, 2018, and the related consolidated statements of operations, comprehensive loss, changes in shareholders' and total equity and cash flows for each of the two years in the period ended December 31, 2018, including the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

We have audited the consolidated statements of operations, comprehensive loss, shareholders’ and total equity and cash flows of Precigen, Inc.

(formerly known as Intrexon Corporation) and its subsidiaries (the “Company”) for the year ended December 31, 2018, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company's Ability to Continue as a Going Concern

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The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenues from contracts with customers in 2018.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/ s / PricewaterhouseCoopers LLP

Raleigh, North Carolina

March 1, 2019, except for the effects of discontinued operations discussed in Note 3 and the change in composition of reportable segments discussed in Note 20, as to which the date is March 2, 2020.

Atlanta, Georgia

March 1, 2019, except for the effects of discontinued operations discussed in the Transactions with TS Biotechnology Holdings, LLC and Darling Ingredients, Inc .

section within Note 3 and the change in composition of reportable segments discussed in Note 20, as to which the date is March 2, 2020, and the effects of discontinued operations discussed in the MBP Titan section within Note 3, as to which the date is March 1, 2021.

We served as the Company's auditor from 2006 to 2019.

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Cash and cash equivalents $ 51,792 $ 65,793

Restricted cash

Short-term investments 48,325 9,260

Equity securities

Related parties, net

Trade, less allowance for credit losses of $ 4,825 and $ 5,201 as of December 31, 2020 and 2019, respectively

16,487 20,650

Related parties, less allowance for credit losses of $ 1,509 and $ 2,312 as of December 31, 2020 and 2019, respectively

Notes 3,689 2,942

Other 232 2,030

Inventory 11,359 16,097

Prepaid expenses and other 7,192 5,827

Current assets held for sale

Current assets held for sale or abandonment 9,853 111,444

Total current assets 148,948 234,643

Equity securities, noncurrent

Property, plant and equipment, net 34,924 43,952

Intangible assets, net 65,396 68,346

Goodwill 54,363 54,119

Investments in affiliates — 1,461

Right-of-use assets 9,353 11,803

Noncurrent assets held for sale

Other assets 1,603 1,349

Noncurrent assets held for sale or abandonment — 40,090

Total assets $ 314,587 $ 455,763

The accompanying notes are an integral part of these consolidated financial statements.

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(Amounts in thousands, except share data) 2020 2019

Liabilities and Total Equity

Liabilities and Shareholders' Equity

Current liabilities

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Related party payables 19 51

Current liabilities held for sale

Current liabilities held for sale or abandonment 14,047 50,538

Total current liabilities 42,127 122,912

Long-term debt, net of current portion, including $ 0 and $ 25,000 to related parties as of December 31, 2020 and 2019, respectively

171,522 186,321

Deferred revenue, net of current portion, including $ 21,205 and $ 30,182 from related parties as of December 31, 2020 and 2019, respectively

23,023 48,136

Lease liabilities, net of current portion 7,744 10,119

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Other long-term liabilities 100 —

Long-term liabilities held for sale

Long-term liabilities held for sale or abandonment — 13,730

Total liabilities 247,413 384,052

Commitments and contingencies (Note 17)

Common stock, no par value, 400,000,000 shares and 200,000,000 shares authorized as of December 31, 2019 and 2018, respectively;

Shareholders' equity

Common stock, no par value, 400,000,000 shares authorized as of December 31, 2020 and 2019;

and 187,663,207 shares and 163,274,880 shares issued and outstanding as of December 31, 2020 and 2019, respectively

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Accumulated deficit ( 1,823,390 ) ( 1,652,869 )

Accumulated other comprehensive loss

Total Precigen shareholders' equity

Noncontrolling interests

Total liabilities and total equity

Accumulated other comprehensive income (loss) 3,997 ( 27,468 )

Total shareholders' equity 67,174 71,711

Total liabilities and shareholders' equity $ 314,587 $ 455,763

The accompanying notes are an integral part of these consolidated financial statements.

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Collaboration and licensing revenues, including $ 3,053 , $ 11,832 , and $ 55,573 from related parties in 2020, 2019, and 2018, respectively

$ 21,208 $ 14,059 $ 69,540

Product revenues 24,349 23,780 28,486

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Selling, general and administrative 91,704 98,634 125,162

Impairment loss

Impairment of goodwill — 29,820 —

Impairment of other noncurrent assets 920 990 —

Total operating expenses 189,781 257,511 520,845

Operating loss ( 86,603 ) ( 166,789 ) ( 369,667 )

Other Income (Expense), Net

Other Expense, Net

Unrealized and realized appreciation (depreciation) in fair value of equity securities and preferred stock, net — 8,291 ( 28,273 )

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Interest and dividend income 2,451 3,871 19,017

Other income, net

Total other income (expense), net

Other income (expense), net ( 165 ) 3,445 470

Total other expense, net ( 16,114 ) ( 2,059 ) ( 17,259 )

Equity in net loss of affiliates ( 1,138 ) ( 2,416 ) ( 8,986 )

Loss from continuing operations before income taxes ( 103,855 ) ( 171,264 ) ( 395,912 )

Income tax benefit (expense)

Income tax benefit 82 930 15,425

Loss from continuing operations ( 103,773 ) ( 170,334 ) ( 380,487 )

Loss from discontinued operations, net of income tax benefit ( 66,748 ) ( 153,582 ) ( 134,219 )

Net loss $ ( 170,521 ) $ ( 323,916 ) $ ( 514,706 )

Net loss attributable to the noncontrolling interests — 1,592 5,370

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(Amounts in thousands) 2020 2019 2018

Net loss $ ( 170,521 ) $ ( 323,916 ) $ ( 514,706 )

Other comprehensive income (loss):

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Gain (loss) on foreign currency translation adjustments 4,502 1,087 ( 13,073 )

Release of cumulative foreign currency translation adjustments to net loss from discontinued operations 26,957 — —

Comprehensive loss ( 139,056 ) ( 322,761 ) ( 527,838 )

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(Amounts in thousands, except share data)

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Total

Shareholders'

Noncontrolling

Equity Noncontrolling

Interests Total

Shares Amount

Balances at December 31, 2017 122,087,040 $ — $ 1,397,005 $ ( 15,554 ) $ ( 847,820 ) $ 533,631 $ 12,914 $ 546,545

Cumulative effect of adoption of ASU 2016-09

Cumulative effect of adoption of ASC 606 — — — ( 104 ) 26,611 26,507 — 26,507

Stock-based compensation expense — — 36,174 — — 36,174 122 36,296

Exercises of stock options and warrants

Shares issued upon vesting of restricted stock units and for exercises of stock options and warrants 70,159 — 297 — — 297 2,039 2,336

Shares issued as payment for services 909,980 — 10,695 — — 10,695 — 10,695

Shares issued in private placement

Shares and warrants issued in business combination

Acquisitions of noncontrolling interests

Shares issued as payment of deferred consideration

Shares and warrants issued in public offerings, net of issuance costs 6,900,000 — 82,374 — — 82,374 5,616 87,990

Equity component of convertible debt, net of issuance costs and deferred taxes — — 36,868 — — 36,868 — 36,868

Shares issued pursuant to share lending agreement 7,479,431 — — — — — — —

Shares issued for reacquired in-process research and development 22,573,856 — 159,323 — — 159,323 — 159,323

Adjustments for noncontrolling interests — — ( 724 ) — — ( 724 ) 724 —

Noncash dividend

Other comprehensive income

Net loss — — — — ( 509,336 ) ( 509,336 ) ( 5,370 ) ( 514,706 )

Other comprehensive loss — — — ( 12,954 ) — ( 12,954 ) ( 178 ) ( 13,132 )

Balances at December 31, 2018 160,020,466 $ — $ 1,722,012 $ ( 28,612 ) $ ( 1,330,545 ) $ 362,855 $ 15,867 $ 378,722

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(Amounts in thousands, except share data)

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Total

Shareholders'

Noncontrolling

Equity Noncontrolling

Interests Total

Shares Amount

Balances at December 31, 2018 160,020,466 $ — $ 1,722,012 $ ( 28,612 ) $ ( 1,330,545 ) $ 362,855 $ 15,867 $ 378,722

Cumulative effect of adoption of ASC 606

Stock-based compensation expense — — 18,881 — — 18,881 69 18,950

Shares issued upon vesting of restricted stock units and for exercises of stock options and warrants 1,028,144 — 63 — — 63 250 313

Shares issued for accrued compensation 150,908 — 1,102 — — 1,102 — 1,102

Shares issued as payment for services 2,075,362 — 10,446 — — 10,446 — 10,446

Shares and warrants issued in public offerings, net of issuance costs — — — — — — 6,611 6,611

Equity component of convertible debt, net of issuance costs and deferred taxes

Shares issued pursuant to share lending agreement

Shares issued for reacquired in-process research and development

Adjustments for noncontrolling interests — — ( 456 ) — — ( 456 ) 456 —

Other comprehensive loss

Deconsolidation of subsidiary — — — — — — ( 21,672 ) ( 21,672 )

Net loss — — — — ( 322,324 ) ( 322,324 ) ( 1,592 ) ( 323,916 )

Other comprehensive income — — — 1,144 — 1,144 11 1,155

Balances at December 31, 2019 163,274,880 $ — $ 1,752,048 $ ( 27,468 ) $ ( 1,652,869 ) $ 71,711 $ — $ 71,711

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(Amounts in thousands, except share data)

Capital Accumulated

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shareholders'

Noncontrolling

Shares Amount

Balances at December 31, 2019 163,274,880 $ — $ 1,752,048 $ ( 27,468 ) $ ( 1,652,869 ) $ 71,711

Stock-based compensation expense — — 18,366 — — 18,366

Shares issued upon vesting of restricted stock units and for exercises of stock options and warrants

Shares issued upon vesting of restricted stock units and for exercises of stock options 877,249 — 117 — — 117

Shares issued for accrued compensation 1,955,405 — 5,100 — — 5,100

Shares issued as payment for services 413,911 — 1,006 — — 1,006

Shares and warrants issued in public offerings, net of issuance costs

Adjustments for noncontrolling interests

Deconsolidation of subsidiary

Shares issued in private placement 5,972,696 — 35,000 — — 35,000

Shares issued upon conversion of long-term debt 13,051,802 — 56,827 — — 56,827

Shares issued in conjunction with settlement agreement 2,117,264 — 18,103 — — 18,103

Net loss — — — — ( 170,521 ) ( 170,521 )

Release of cumulative translation adjustment to loss from discontinued operations — — — 26,957 — 26,957

Other comprehensive income — — — 4,508 — 4,508

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Cash flows from operating activities

Net loss $ ( 170,521 ) $ ( 323,916 ) $ ( 514,706 )

Adjustments to reconcile net loss to net cash used in operating activities:

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Loss on abandonment and disposals of assets, net 4,442 3,071 20,928

Impairment loss

Impairment of goodwill 9,635 87,862 —

Impairment of other noncurrent assets 13,326 32,627 60,504

Gain on sale of discontinued operations ( 672 ) — —

Loss on release of cumulative foreign currency translation adjustments to loss from discontinued operations 26,957 — —

Reacquisition of in-process research and development — — 236,748

Loss on settlement agreement 11,436 — —

Unrealized and realized (appreciation) depreciation on equity securities and preferred stock, net 106 ( 7,833 ) 30,200

Noncash dividend income — ( 48 ) ( 14,841 )

Amortization of premiums (discounts) on investments, net

Amortization of discounts on investments, net ( 699 ) ( 1,005 ) ( 771 )

Equity in net loss of affiliates 1,176 6,730 11,608

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Shares issued as payment for services 1,006 10,446 10,695

Provision for bad debts

Provision for credit losses 899 3,242 1,779

Accretion of debt discount and amortization of deferred financing costs 10,587 9,459 4,378

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Changes in operating assets and liabilities:

Trade 2,214 ( 262 ) ( 2,698 )

Related parties 258 967 11,003

Other 1,853 ( 656 ) ( 542 )

Inventory 2,511 4,100 ( 478 )

Prepaid expenses and other ( 812 ) ( 2,262 ) 1,006

Other assets ( 142 ) 333 652

Accounts payable ( 1,097 ) ( 5,349 ) 4,680

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Deferred revenue ( 21,045 ) 7,423 ( 38,578 )

Deferred consideration

Lease liabilities ( 887 ) ( 995 ) —

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Sales and maturities of investments 133,000 166,495 65,975

Purchases of preferred stock and warrants

Proceeds from sales of equity securities — 23,456 217

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Return of investment in affiliate — 125 2,598

Cash received (paid) in asset acquisitions

Cash received in asset acquisitions — — 15,500

Purchases of property, plant and equipment ( 7,527 ) ( 37,883 ) ( 41,587 )

Proceeds from sale of assets 6,484 688 2,267

Issuances of notes receivable

Proceeds from sale of discontinued operations, net of cash sold 64,240 — —

Proceeds from repayment of notes receivable 2,942 — —

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Proceeds from issuance of shares and warrants in public offerings, net of issuance costs — 6,611 87,990

Acquisitions of noncontrolling interests

Advances from lines of credit 10,005 11,757 4,561

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Payments of long-term debt ( 490 ) ( 618 ) ( 623 )

Payments of deferred consideration for acquisitions

Proceeds from stock option and warrant exercises 117 313 2,336

Payment of stock issuance costs

Net cash provided by financing activities 32,705 8,138 309,795

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Beginning of year 68,434 110,182 75,545

End of year $ 52,250 $ 68,434 $ 110,182

The accompanying notes are an integral part of these consolidated financial statements.

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Significant noncash activities

Stock received as consideration for collaboration agreements

Receivables converted to preferred stock

Stock and warrants issued in business combinations

Stock issued to acquire noncontrolling interests

Stock issued for reacquired in-process research and development

Fair value of stock received as consideration for collaboration agreements $ — $ 4,530 $ —

Fair value of stock issued for reacquired in-process research and development — — 159,323

Fair value of stock issued upon conversion of long-term debt 56,827 — —

Fair value of stock issued in conjunction with settlement agreement 18,103 — —

Long-term debt issued to a related party in an asset acquisition — — 30,000

Noncash dividend to shareholders

Accrued compensation paid in equity awards 5,100 1,102 —

Purchases of property and equipment included in accounts payable and other accrued liabilities 277 694 2,267

Purchases of equipment financed through debt — — 234

Receivable recorded in anticipation of dissolution of affiliate

Sales of assets included in receivables 4,227 — —

The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of December 31, 2020 and 2019 as shown above:

Cash and cash equivalents $ 51,792 $ 65,793

Restricted cash

Cash and cash equivalents included in current assets held for sale

Cash and cash equivalents included in current assets held for sale or abandonment — 2,223

Restricted cash included in other assets 458 418

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Precigen, Inc.

("Precigen"), formerly known as Intrexon Corporation, a Virginia corporation, is a synthetic biology company with an increasing focus on its discovery and clinical stage activities to advance the next generation of gene and cellular therapies to target the most urgent and intractable challenges in immuno-oncology, autoimmune disorders, and infectious diseases.

Precigen also continues to advance its methane bioconversion business and its established bovine genetics company.

There have been no commercialized products derived either directly by Precigen or through its collaborations or joint ventures ("JVs") to date.

("Precigen"), a Virginia corporation, is a synthetic biology company with an increasing focus on its discovery and clinical stage activities to advance the next generation of gene and cellular therapies to target the most urgent and intractable challenges in immuno-oncology, autoimmune disorders, and infectious diseases.

PGEN Therapeutics, Inc.

("PGEN Therapeutics"), formerly known as Precigen, Inc., a dedicated discovery and clinical stage biopharmaceutical company advancing the next generation of gene and cellular therapies using precision technology to target urgent and intractable diseases in immuno-oncology, autoimmune disorders, and infectious diseases, is a wholly owned subsidiary of Precigen with primary operations in Maryland.

("PGEN Therapeutics") is a dedicated discovery and clinical stage biopharmaceutical company advancing the next generation of gene and cell therapies using precision technology to target urgent and intractable diseases in immuno-oncology, autoimmune disorders, and infectious diseases.

PGEN Therapeutics is a wholly owned subsidiary of Precigen with primary operations in Maryland.

Precigen ActoBio, Inc.

("ActoBio"), formerly known as ActoBio Therapeutics, Inc., is pioneering a proprietary class of microbe-based biopharmaceuticals that enable expression and local delivery of disease-modifying therapeutics and is a wholly owned subsidiary of Precigen with primary operations in Belgium.

Exemplar Genetics, LLC ("Exemplar") is committed to enabling the study of life-threatening human diseases through the development of miniswine research models and services, as well as enabling the production of cells and organs in its genetically engineered swine for regenerative medicine applications and is a wholly owned subsidiary of Precigen with primary operations in Iowa.

Effective October 1, 2019, Precigen transferred substantially all of its proprietary methane bioconversion platform assets to a new wholly owned subsidiary, MBP Titan LLC ("MBP Titan"), with primary operations in California.

MBP Titan's proprietary methane bioconversion platform is designed to turn natural gas into more valuable and usable energy and chemical products through novel, highly engineered bacteria that utilize specific energy feedstocks.

Prior to October 1, 2019, MBP Titan was an operating division within Precigen.

There was no impact to the accompanying consolidated financial statements resulting from the transfer of these assets.

("ActoBio") is pioneering a proprietary class of microbe-based biopharmaceuticals that enable expression and local delivery of disease-modifying therapeutics and is a wholly owned subsidiary of Precigen with primary operations in Belgium.

Exemplar Genetics, LLC, doing business as Precigen Exemplar ("Exemplar"), is committed to enabling the study of life-threatening human diseases through the development of MiniSwine Yucatan miniature pig research models and services, as well as enabling the production of cells and organs in its genetically engineered swine for regenerative medicine applications and is a wholly owned subsidiary of Precigen with primary operations in Iowa.

Trans Ova Genetics, L.C.

("Trans Ova"), Progentus, L.C.

("Progentus"), and ViaGen, L.C.

("ViaGen"), providers of advanced reproductive technologies, including services and products sold to cattle breeders and other producers, are wholly owned subsidiaries with primary operations in California, Iowa, Maryland, Missouri, New York, Oklahoma, Texas, and Washington.

("Trans Ova") and Progentus, L.C.

("Progentus"), providers of reproductive technologies, including services and products sold to cattle breeders and other producers, are wholly owned subsidiaries with primary operations in California, Iowa, Maryland, Missouri, Texas, Washington, and Wisconsin.

Effective October 1, 2019, Precigen transferred substantially all of its proprietary methane bioconversion platform assets to a wholly owned subsidiary, MBP Titan LLC ("MBP Titan").

MBP Titan's proprietary technology is designed to convert natural gas into more valuable and usable energy and chemical products through novel, highly engineered bacteria that utilize specific energy feedstocks.

Prior to October 1, 2019, the operation transferred to MBP Titan was an operating division within Precigen.

Beginning in the second quarter of 2020, the Company suspended MBP Titan's operations and began the process to wind down MBP Titan's activities and has substantially completed the wind down by December 31, 2020.

With the exception of certain assets and obligations with which the Company has a continuing involvement after the wind down, MBP Titan has been presented as discontinued operations for all periods presented.

See Note 3 for further discussion.

Through April 8, 2019, Precigen consolidated AquaBounty Technologies, Inc.

("AquaBounty"), a company focused on improving productivity in commercial aquaculture and whose common stock is listed on the Nasdaq Stock Market.

After remeasuring its retained interest in AquaBounty, Precigen recorded a loss on deconsolidation of $ 2,648 , which is included in other income, net, on the accompanying consolidated statement of operations for the year ended December 31, 2019 .

The deconsolidation resulted in the derecognition of the carrying amount of $ 38,682 in net assets that are no longer reported in the accompanying consolidated balance sheet during the year ended December 31, 2019 .

See Notes 10 , 11 , and 12 for additional discussion of material impacts to the accompanying consolidated balance sheet as of December 31, 2019 .

After deconsolidating the entity in April 2019, Precigen accounted for these equity securities using the fair value option.

In October 2019, the independent members of the Company's board of directors, with the recommendation of the audit committee and an independent special committee of the Board, unanimously approved the sale of the Company's common shares held in AquaBounty to an affiliate of Third Security, LLC ("Third Security"), a related party, for $ 21,587 , resulting in the recognition of a realized gain of $ 7,348 which is included in unrealized and realized appreciation (depreciation) in fair value of equity securities and preferred stock, net, on the accompanying consolidated statement of operations for the year ended December 31, 2019 .

On January 31, 2020, Precigen completed the sale of the majority of its bioengineering assets and operations, which are presented as discontinued operations for all periods presented.

On April 9, 2019, AquaBounty completed an underwritten public offering that resulted in Precigen no longer having the contractual right to control AquaBounty's board of directors, and accordingly, Precigen deconsolidated AquaBounty resulting in a loss on deconsolidation of $ 2,648 , which is included in other income, net, on the accompanying consolidated statement of operations for the year ended December 31, 2019.

After deconsolidating the entity in April 2019, Precigen held its AquaBounty equity securities, which was an equity method investment that the Company accounted for using the fair value option, until October 2019 when the independent members of the Company's board of directors, with the recommendation of the audit committee and an independent special committee of the Board, unanimously approved the sale of the Company's common shares held in AquaBounty to an affiliate of Third Security, LLC ("Third Security"), a related party, for $ 21,587 , resulting in the recognition of a realized gain of $ 7,348 which is included in unrealized and realized appreciation in fair value of equity securities and preferred stock, net, on the accompanying consolidated statement of operations for the year ended December 31, 2019.

On January 31, 2020, Precigen completed the sale of the majority of its non-healthcare assets and operations to an affiliate of Third Security, which are presented as discontinued operations for all periods presented.

See Notes 3 and 14 for further discussion.

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Liquidity and Going Concern

Management believes that existing liquid assets as of December 31, 2019 , as well as amounts secured subsequent to December 31, 2019 and before the issuance of these consolidated financial statements, will allow the Company to continue its operations for at least a year from the issuance date of these consolidated financial statements.

Management believes that existing liquid assets as of December 31, 2020, along with the net proceeds from the underwritten public offering in January 2021 (Note 23), will allow the Company to continue its operations for at least a year from the issuance date of these consolidated financial statements.

These consolidated financial statements are presented in United States dollars and are prepared under accounting principles generally accepted in the United States of America ("U.S.

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Additionally, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

During the year ended December 31, 2019 , the Company incurred a net loss attributable to Precigen of $ 322,324 and, as of December 31, 2019 , has an accumulated deficit of $ 1,652,869 .

During the year ended December 31, 2020, the Company incurred a net loss of $ 170,521 and, as of December 31, 2020, had an accumulated deficit of $ 1,823,390 .

Management expects operating losses and negative cash flows to continue for the foreseeable future and, as a result, the Company will require additional capital to fund its operations and execute its business plan.

In the absence of a significant source of recurring revenue, the Company's long-term success is dependent upon its ability to continue to raise additional capital in order to fund ongoing research and development, reduce uses of cash for operating and investing activities for nonhealthcare businesses, obtain regulatory approval of its products, successfully commercialize its products, generate revenue, meet its obligations and, ultimately, attain profitable operations.

Upon the original issuance of the Company's financial statements as of and for the year ended December 31, 2018, the Company's resources of cash, cash equivalents, and short-term investments were not sufficient to fund the Company's planned operations through one year after the date the 2018 consolidated financial statements were originally issued and accordingly, there was substantial doubt about the Company's ability to continue as a going concern.

In the absence of a significant source of recurring revenue, the Company's long-term success is dependent upon its ability to continue to raise additional capital in order to fund ongoing research and development, reduce uses of cash for operating and investing activities for non-healthcare functions, obtain regulatory approval of its product candidates, successfully commercialize its product candidates, generate revenue, meet its obligations and, ultimately, attain profitable operations.

Upon the original issuance of the Company's financial statements for the year ended December 31, 2018, the Company's resources of cash, cash equivalents, and short-term investments were not sufficient to fund the Company's planned operations through one year after the date the 2018 consolidated financial statements were originally issued and accordingly, there was substantial doubt about the Company's ability to continue as a going concern.

The analysis used to determine the Company's ability to continue as a going concern did not include cash sources outside of the Company's direct control that management expected to be available within the twelve months following the original issuance of the 2018 consolidated financial statements.

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The Company's ability to raise additional capital in the equity and debt markets, should the Company choose to do so, was dependent on a number of factors, including, but not limited to, the market demand for the Company's common stock, which itself is subject to a number of business risks and uncertainties, as well as the uncertainty that the Company would be able to raise such additional capital at a price or on terms that were favorable to the Company.

Should the Company not be able to secure additional funding though these means, the Company could have had to engage in any or all of the following activities:

Should the Company not have been able to secure additional funding through these means, the Company could have had to engage in any or all of the following activities:

(i) shift internal investments from subsidiaries and platforms whose potential for value creation was longer-term to near-term opportunities;

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Principles of Consolidation

The accompanying consolidated financial statements reflect the operations of the Company and its subsidiaries.

The accompanying consolidated financial statements reflect the operations of Precigen and its subsidiaries.

All intercompany accounts and transactions have been eliminated.

Revenue Recognition (For the Years Ended December 31, 2019 and 2018)

Effective January 1, 2018, the Company applies Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606").

Under ASC 606, the Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that are within the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer, (ii) identify the promises and distinct performance obligations in the contract, (iii) determine the

transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligations.

Risks and Uncertainties

COVID-19 has had and continues to have an extensive impact on the global health and economic environments.

Commencing in the second half of March 2020, the Company's healthcare business began to experience delays to certain of its clinical trials as a result of COVID-19.

For example, starting in March 2020, ActoBio temporarily suspended the last cohort of the Phase 1b/2a clinical trial for AG019 as a proactive measure to protect the welfare and safety of patients, caregivers, clinical site staff, its employees, and contractors.

The temporary suspension of the AG019 trial was voluntary and was not related to any patient safety issues in the study.

The voluntary suspension of the AG019 trial was lifted in June 2020, and the study is recruiting patients again.

Additionally, from April to May 2020, enrollment of new patients in the Company's PRGN-3005

Phase 1 trial was temporarily suspended due to a mandated hold on certain early and late-stage clinical trials at the Fred Hutchinson Cancer Research Center in Seattle that was instituted in light of the COVID-19 pandemic.

The temporary suspension of the PRGN-3005 trial was not related to safety issues in the studies, and in May 2020, recruitment resumed in the PRGN-3005 Phase 1 trial.

Furthermore, uncertainty regarding the duration and severity of the ongoing pandemic may adversely impact the Company's clinical as well as preclinical pipeline candidates in the future.

The Company is closely monitoring the impact of COVID-19 on these and other aspects of its business, including Trans Ova and Exemplar.

Given the dynamic nature of these circumstances, the full impact of the COVID-19 pandemic on the Company's ongoing business, results of operations, and overall financial performance in future periods cannot be reasonably estimated at this time, and it could have a material adverse effect on the Company's results of operations, cash flows, and financial position, including resulting impairments to goodwill and long-lived assets and additional credit losses.

See Note 3 for further discussion of the impact of COVID-19 on MBP Titan.

Revenue Recognition

To determine revenue recognition for arrangements that are within the scope of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), the Company performs the following five steps:

(i) identify the contract(s) with a customer, (ii) identify the promises and distinct performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligations.

Collaboration and licensing revenues

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The Company's product and service revenues are generated primarily through Trans Ova and include sales of advanced reproductive technologies, including the Company's bovine embryo transfer and in vitro fertilization processes and from genetic preservation and sexed semen processes and applications of such processes to other livestock, as well as sales of livestock and embryos produced using these processes and used in production.

Exemplar also generates product and service revenues through the development and sale of genetically engineered miniature swine models.

As each promised product or service is distinct, the Company recognizes the transaction price as revenue at a point in time when control of the promised product is transferred to the customer or when the promised service is rendered.

Payment terms are typically due within 30 days of invoicing, which occurs prior to or when revenue is recognized.

Revenue Recognition (For the Year Ended December 31, 2017)

Collaboration and licensing revenues

The Company historically generated collaboration and licensing revenue through agreements with collaborators and licensing agreements whereby the collaborators or the licensee obtain exclusive access to the Company's proprietary technologies for use in the research, development, and commercialization of products and/or treatments in a contractually specified field of use.

Generally, the terms of these agreements provide that the Company receives some or all of the following:

(i) upfront payments upon consummation of the agreement;

(ii) reimbursements for costs incurred by the Company for research and development and/or manufacturing efforts related to specific applications provided for in the agreement;

(iii) milestone payments upon the achievement of specified development, regulatory, and commercial activities;

and (iv) royalties on sales of products arising from the collaboration or licensing agreement.

The Company's collaboration and licensing agreements typically contain multiple elements, or deliverables, including technology licenses, research and development services, and in certain cases manufacturing services.

The Company identifies the deliverables within the agreements and evaluates which deliverables represent separate units of accounting.

Analyzing the agreements to identify deliverables requires the use of judgment.

A deliverable is considered a separate unit of accounting when the deliverable has value to the collaborator or licensee on a standalone basis based on the consideration of the relevant facts and circumstances for each agreement.

Consideration received is allocated at the inception of the agreement to all identified units of accounting based on their relative selling price.

When available, the relative selling price for each deliverable is determined using vendor specific objective evidence ("VSOE") of the selling price or third-party evidence of the selling price, if VSOE does not exist.

If neither VSOE nor third-party evidence of the selling price exists, the Company uses its best estimate of the selling price for the deliverable.

The amount of allocable consideration is limited to amounts that are fixed or determinable.

The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units.

The Company recognizes the revenue allocated to each unit of accounting as the Company delivers the related goods or services.

If the Company determines that certain deliverables should be treated as a single unit of accounting, then the revenue is recognized using either a proportional performance or straight-line method, depending on whether the Company can reasonably estimate the level of effort required to complete its performance obligations under an arrangement and whether such performance obligations are provided on a best-efforts basis.

As the Company cannot reasonably estimate its performance

obligations related to its collaborators or licensees, the Company recognizes revenue on a straight-line basis over the period it expects to complete its performance obligations, which is reevaluated each reporting period.

The terms of the Company's agreements may provide for milestone payments upon achievement of certain defined events.

The Company applies the Milestone Method for recognizing milestone payments.

Under the Milestone Method, the Company recognizes consideration that is contingent upon the achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone is substantive in its entirety.

A milestone is considered substantive when it meets all of the following criteria:

The consideration is commensurate with either the entity's performance to achieve the milestone or the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from the entity's performance to achieve the milestone;

The consideration relates solely to past performance;

The consideration is reasonable relative to all of the deliverables and payment terms within the arrangement.

In the event that a milestone is not considered substantive, the Company recognizes the milestone consideration as revenue using the same method applied to upfront payments.

Research and development services are a deliverable satisfied by the Company in accordance with the terms of the collaboration and licensing agreements and the Company considers these services to be inseparable from the license to the core technology;

therefore, reimbursements of services performed are recognized as revenue.

Because reimbursement (i) is contingent upon performance of the services by the Company, (ii) does not include a profit component, and (iii) does not relate to any future deliverable, the revenue is recognized during the period in which the related services are performed and collection of such amounts is reasonably assured.

Payments received for manufacturing services will be recognized when the earnings process related to the manufactured materials has been completed.

Royalties to be received under the agreements will be recognized as earned.

From time to time, the Company and certain collaborators may cancel their agreements, relieving the Company of any further performance obligations under the agreement.

When no further performance obligations are required of the Company under an agreement, the Company recognizes the remaining balance of deferred revenue.

Product and service revenues

Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) services have been rendered or delivery has occurred such that risk of loss has passed to the customer, (iii) the price is fixed or determinable, and (iv) collection from the customer is reasonably assured.

Research and Development

The Company considers that regulatory requirements inherent in the research and development of new products preclude it from capitalizing such costs.

Research and development expenses include salaries and related costs of research and development personnel, including stock-based compensation expense, costs to acquire or reacquire technology rights, consultants, facilities, materials and supplies associated with research and development projects as well as various laboratory studies.

Costs incurred in conjunction with collaboration and licensing arrangements are included in research and development.

Research and development expenses include salaries and related costs of research and development personnel, including stock-based compensation expense, costs to acquire or reacquire technology rights, contract research organizations and consultants, facilities, materials and supplies associated with research and development projects as well as various laboratory studies.

Costs incurred in conjunction with collaboration and licensing arrangements are included in

research and development.

Indirect research and development costs include depreciation, amortization, and other indirect overhead expenses.

The Company has research and development arrangements with third parties that include upfront and milestone payments.

As of December 31, 2019 and 2018 , the Company had research and development commitments from continuing operations with third parties that had not yet been incurred totaling $ 15,369 and $ 11,801 , respectively.

As of December 31, 2020 and 2019, the Company had research and development commitments with third parties that had not yet been incurred totaling $ 12,054 and $ 14,664 , respectively.

The commitments are generally cancellable by the Company at any time upon written notice.

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As of December 31, 2020 and 2019, the Company had cash equivalent investments in highly liquid money market accounts at major financial institutions of $ 30,164 and $ 47,238 , respectively.

Restricted Cash

Restricted cash represented funds deposited with the United States Treasury, as required by a court decision resulting from litigation against Trans Ova (Note 17 ).

Short-term and Long-term Investments

Short-term Investments

As of December 31, 2020, short-term investments include United States government debt securities and certificates of deposit.

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Equity Securities

The Company has historically held equity securities of private and publicly traded companies, including investments received and/or purchased from certain collaborators.

The Company historically held equity securities of private and publicly traded companies, including investments received and/or purchased from certain collaborators.

The Company evaluated whether to elect the fair value option on an individual investment basis.

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The Company accounts for its investments in private companies using either the equity method, as discussed below, or the measurement alternative method for equity securities without readily determinable fair values, which represented cost and any adjustments for impairment or observable price changes in certain transactions.

In June 2019, in connection with its collaboration agreement with Surterra Holdings, Inc.

("Surterra"), the Company received common shares of Surterra's parent company, SH Parent, Inc.

("SH Parent") and accounted for these common shares using the measurement alternative method.

As of December 31, 2019 , there have been no adjustments for impairment or observable price changes for the SH Parent common shares and these shares have been reclassified to current assets held for sale as of December 31, 2019, and were subsequently sold in January 2020 (Note 3 ).

Equity securities that the Company did not intend to sell within one year were classified as noncurrent in the consolidated balance sheets.

See Notes 3 and 18 for additional discussion of certain equity securities.

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Due to the Company's mix of fixed and variable rate securities holdings, the Company's investment portfolio is susceptible to changes in interest rates.

As of December 31, 2019 , there were no gross unrealized losses on the Company's short-term investments.

As of December 31, 2020, gross unrealized losses on the Company's short-term investments were not material.

From time to time, the Company may liquidate some or all of its investments to fund operational needs or other activities, such as capital expenditures or business acquisitions, or distribute its equity securities to shareholders as a stock dividend.

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Equity Method Investments

The Company accounts for its investments in each of its JVs and for its investments in start-up entities backed by the Harvest Intrexon Enterprise Fund I, LP ("Harvest"), all of which are related parties, using the equity method of accounting based upon relative ownership interest.

The Company accounts for its investments in each of its joint ventures ("JVs") and in start-up entities backed by the Harvest Intrexon Enterprise Fund I, LP ("Harvest"), all of which are related parties, using the equity method of accounting based upon relative ownership interest.

The Company's investments in these entities are included in investments in affiliates in the accompanying consolidated balance sheets.

See additional discussion related to certain of the Harvest start-up entities in Note 4 and to certain of the Company's JVs in Note 5 .

Effective in April 2019, the Company accounted for its investment in AquaBounty, using the fair value option until the Company sold the investment in October 2019.

See Note 1 for additional discussion regarding AquaBounty.

See additional discussion related to certain of the Harvest start-up entities in Notes 4 and 17 and to certain of the Company's JVs in Note 5.

Variable Interest Entities

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If both of these criteria are satisfied, the Company is identified as the primary beneficiary of the VIE.

As of December 31, 2019 and 2018 , the Company determined that certain of its collaborators and JVs as well as Harvest were VIEs.

As of December 31, 2020 and 2019, the Company determined that certain of its collaborators and JVs were VIEs.

It also determined Harvest was a VIE as of December 31, 2019.

The Company was not the primary beneficiary for these entities since it did not have the power to direct the activities that most significantly impact the economic performance of the VIEs.

The Company's aggregate investment balances of these VIEs as of December 31, 2019 and 2018 , were $ 1,461 and $ 3,341 , respectively, which represents the Company's maximum risk

of loss related to the identified VIEs.

See Note 5 for discussion of the Company's future funding commitments for the significant JVs.

Accounts Receivables

Accounts receivables consist of credit extended to the Company's customers in the normal course of business and are reported net of an allowance for doubtful accounts.

The Company reviews its customer accounts on a periodic basis and records bad debt expense for specific amounts the Company evaluates as uncollectible.

The Company's aggregate investment balances of these VIEs as of December 31, 2020 and 2019, were $ 0 and $ 1,461 , respectively, which represents the Company's maximum risk of loss related to the identified VIEs.

See Note 5 for discussion of the Company's future funding commitments for its significant JVs.

Accounts Receivable

Effective January 1, 2020, the Company applies FASB Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13").

This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including accounts receivable.

The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance.

The Company is exposed to credit losses primarily through sales of products and services by Trans Ova and Exemplar in the normal course of business.

The Company's expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customers' accounts receivables.

The Company's monitoring activities include timely account reconciliation, routine follow-up

on past due accounts, and consideration of customers' financial condition, as well as macroeconomic conditions.

Past due status is determined based upon contractual terms.

Amounts are written off at the point when collection attempts have been exhausted.

Management estimates uncollectible amounts considering such factors as current economic conditions and historic and anticipated customer performance.

This estimate can fluctuate due to changes in economic, industry, or specific customer conditions that may require adjustment to the allowance recorded by the Company.

Management has included amounts believed to be uncollectible in the allowance for doubtful accounts.

The following table shows the activity in the allowance for doubtful receivable accounts from continuing operations for the years ended December 31, 2019 , 2018 , and 2017 :

Balances are written off at the point when collection attempts have been exhausted.

Estimates are used to determine the loss allowance, which is based on assessment of anticipated payment and other historical, current, and future information that is reasonably available.

The following table shows the activity in the allowance for credit losses for the years ended December 31, 2020, 2019, and 2018:

2020 2019 2018

Beginning balance $ 7,513 $ 4,991 $ 4,631

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Property, plant and equipment are stated at cost, less accumulated depreciation and amortization.

Major additions or betterments are capitalized and repairs and maintenance are generally expensed as incurred.

Major additions or betterments are capitalized and repairs and maintenance are expensed as incurred.

Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets.

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Furniture and fixtures 1 – 7

Equipment 1 – 9

Breeding stock 2 – 4

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Operating Leases

The Company adopted ASC Topic 842, Leases ("ASC 842"), effective January 1, 2019.

Under ASC 842, the Company determines if an arrangement is a lease at inception.

The Company determines if an arrangement is a lease at inception.

Operating leases are included as right-of-use assets ("ROU Assets") and lease liabilities on the consolidated balance sheets.

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The initial measurement of the ROU Asset also includes any lease payments made, adjusted for lease incentives.

For leases that contain non-lease payments, the Company accounts for the lease and non-lease components as a single lease component.

For leases that contain fixed non-lease payments, the Company accounts for the lease and non-lease components as a single lease component.

Variable lease payments, which primarily include payments for non-lease components such as maintenance costs, are excluded from the ROU Assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred.

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Goodwill is reviewed for impairment at least annually.

The Company performs a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the goodwill impairment test.

If this is the case, the goodwill impairment test is required.

The Company may elect to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the goodwill impairment test.

If this is the case, the quantitative goodwill impairment test is required.

If it is more-likely-than-not that the fair value of a reporting unit is greater than the carrying amount, the quantitative goodwill impairment test is not required.

If the quantitative goodwill impairment test is required or elected to be performed, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill).

If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must record the impairment charge for the excess carrying amount, which is limited to the amount of goodwill allocated to the reporting unit.

If the quantitative goodwill impairment test is performed, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill).

If the fair value of the reporting unit is less than its carrying amount, the entity must record the impairment charge for the excess carrying amount, which is limited to the amount of goodwill allocated to the reporting unit.

If the fair value of the reporting unit exceeds its carrying amount, no goodwill impairment charge is necessary.

The Company performs its annual impairment review of goodwill in the fourth quarter, or sooner if a triggering event occurs prior to the annual impairment review.

In April 2019, as a result of the Company's change in segments (Notes 2 and 20 ), one of the Company's prior reporting units was separated into various reporting units.

Accordingly, the Company performed a relative fair value allocation of certain of its goodwill to the applicable reporting units and reviewed the reallocated goodwill for impairment.

The fair value of the reporting units are primarily determined based on the income approach.

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To assess the reasonableness of the calculated reporting unit fair values, the Company compares the sum of the reporting units' fair values to its market capitalization (per share stock price times the number of shares outstanding) and calculates an implied control premium (the excess of the sum of the reporting units' fair values over the market capitalization) and then assesses the reasonableness of its implied control premium.

See Notes 3 and 11 for additional discussion regarding goodwill impairment charges recorded in the year ended December 31, 2019.

See Notes 3 and 11 for additional discussion regarding goodwill impairment charges recorded in the years ended December 31, 2020 and 2019.

Intangible Assets

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These intangible assets are subject to amortization, were recorded at fair value at the date of acquisition, and are stated net of accumulated amortization.

Indefinite-lived intangible assets consist of in-process research and development technologies acquired in mergers or acquisitions and were recorded at fair value at the dates of the respective acquisitions.

The Company amortizes long-lived intangible assets to reflect the pattern in which the economic benefits of the intangible asset are expected to be realized.

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Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable.

Indefinite-lived intangible assets, including in-process research and development, are tested for impairment annually, or more frequently if events or circumstances between annual tests indicate that the asset may be impaired.

Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of their fair value to carrying value, without consideration of any recoverability test.

The Company monitors the progression of its in-process research and development, as the likelihood of success is contingent upon commercial development or regulatory approval.

See Notes 3 and 10 for additional discussion of impairment of long-lived assets for the three years ended December 31, 2020.

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The Company allocated the proceeds received in July 2018 from the issuance of Precigen's 3.50 % convertible senior notes due 2023 (the "Convertible Notes") between long-term debt (liability component) and additional paid-in capital (equity component) within the consolidated balance sheet.

The original value assigned to long-term debt is the estimated fair value as of the issuance date of a similar debt instrument without a conversion option.

The original value assigned to additional paid-in capital represents the value of the conversion option and is calculated by deducting the fair value of the long-term debt from the principal amount of the Convertible Notes and is not remeasured as long as it continues to meet the requirements for equity classification.

The original value assigned to long-term debt was the estimated fair value as of the issuance date of a similar debt instrument without a conversion option.

The original value assigned to additional paid-in capital represented the value of the conversion option and was calculated by deducting the fair value of the long-term debt from the principal amount of the Convertible Notes and is not remeasured as long as it continues to meet the requirements for equity

classification.

The original value of the conversion option will accrete to the carrying value of the long-term debt and result in additional noncash interest expense over the expected life of the Convertible Notes using the effective interest method.

Debt issuance costs related to the Convertible Notes are also allocated between long-term debt and additional paid-in capital based on the original value assigned to each.

Debt issuance costs allocated to long-term debt reduced the original carrying value and will accrete to the carrying value of the long-term debt and result in additional noncash interest expense over the expected life of the Convertible Notes using the effective interest method.

Debt issuance costs allocated to additional paid-in capital are recorded as reduction of the original value assigned to the conversion option.

Debt issuance costs related to the Convertible Notes were also allocated between long-term debt and additional paid-in capital based on the original value assigned to each.

Debt issuance costs allocated to long-term debt reduced the original carrying value and accrete to the carrying value of the long-term debt and result in additional noncash interest expense over the expected life of the Convertible Notes using the effective interest method.

Debt issuance costs allocated to additional paid-in capital were recorded as reduction of the original value assigned to the conversion option.

See Note 12 for the further discussion of the Convertible Notes.

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Penalties, if any, are recorded in selling, general and administrative expenses.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Tax Act") was signed into law and significantly revised United States corporate income tax law by, among other things, reducing the corporate income tax rate to 21% effective January 1, 2018, eliminating the corporate alternative minimum tax and implementing a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings from foreign subsidiaries.

The United States Securities and Exchange Commission ("SEC") Staff issued Staff Accounting Bulletin No.

118 to address the application of U.S.

GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed, including computations, in reasonable detail to complete the accounting for certain income tax effects of the Tax Act.

The Company recognized provisional tax impacts related to revaluation of most of the Company's domestic deferred tax assets, the impact of revaluation of those deferred tax assets on the Company's valuation allowance and elimination of the corporate alternative minimum tax, and included those amounts in the consolidated financial statements for the year ended December 31, 2017.

The Company completed its accounting for the Tax Act in the fourth quarter of 2018, and there were no significant adjustments to the previously recorded provisional amounts.

In addition, the Tax Act implemented a new minimum tax on global intangible low-taxed income ("GILTI").

A company can elect an accounting policy to account for GILTI in either of the following ways:

As a period charge in the future period in which the tax arises;

As part of deferred taxes related to the investment or subsidiary.

The Company elected to account for GILTI as a period charge in the period in which the tax arises.

There was no impact to the accompanying consolidated financial statements as of and for the years ended December 31, 2019 and 2018 .

See Note 13 for additional discussion of the Tax Act.

The Company accounts for the minimum tax on global intangible low-taxed income ("GILTI") as a period charge in the period in which the tax arises.

There was no impact from GILTI to the accompanying consolidated financial statements.

Share-Based Payments

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The Black-Scholes option pricing model requires the use of assumptions for estimated expected volatility, estimated expected term of stock options, risk-free rate, estimated expected dividend yield, and the fair value of the underlying common stock at the date of grant.

Since Precigen does not have sufficient history to estimate the expected volatility of its common stock price, expected volatility is based on a blended approach that utilizes the volatility of Precigen's common stock and the volatility of peer public entities that are similar in size and industry.

Precigen estimates the expected term of all options based on previous history of exercises.

Through 2019, since Precigen did not have sufficient history to estimate the expected volatility of its common stock price, expected volatility was based on a blended approach that utilized the volatility of Precigen's common stock and the volatility of peer public entities that were similar in size and industry.

Beginning in 2020, for stock options with an expected term where there is sufficient history available, expected volatility is based on the volatility of Precigen's common stock.

For any stock options where sufficient history is not available for the expected term, expected volatility is based on the blended approach discussed above.

Precigen estimates the expected term of options based on previous history of exercises unless certain terms of the stock option require a different expected term that more appropriately reflects the estimated life of the stock option.

The risk-free rate is based on the United States Treasury yield curve in effect at the time of grant for the expected term of the option.

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The assumptions used in the Black-Scholes option pricing model for the years ended December 31, 2020, 2019 and 2018 are set forth in the table below:

2020 2019 2018

Valuation assumptions

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Risk-free interest rate 0.36 %– 1.80 %

1.53 %– 2.58 %

2.33 %– 3.06 %

Grant date fair value for the Company's restricted stock units ("RSUs") is based on the fair value of the underlying common stock as determined based on the quoted market price on the Nasdaq on the date of grant.

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Segment Information

The Company realigned its business in April 2019, and as a result, its chief operating decision maker ("CODM") now regularly reviews disaggregated financial information for various operating segments.

The Company's chief operating decision maker ("CODM") regularly reviews disaggregated financial information for various operating segments.

As of December 31, 2020, the Company's reportable segments were (i) PGEN Therapeutics;

(ii) ActoBio;

(iii) MBP Titan;

and (iv) Trans Ova.

(iii) Trans Ova;

and (iv) the Human Biotherapeutics division, which is an operating division of Precigen.

All of Precigen's consolidated subsidiaries and operating divisions that did not meet the quantitative thresholds to report separately are combined and reported in a single category, All Other.

See Note 1 for a description of each of these reportable segments.

See Note 1 for a description of PGEN Therapeutics, ActoBio, and Trans Ova.

See Note 20 for a description of the Human Biotherapeutics division.

Corporate expenses, which are not allocated to the segments and are managed at a consolidated level, include costs associated with general and administrative functions, including the Company's finance, accounting, legal, human resources, information technology, corporate communication, and investor relations functions.

Corporate expenses exclude interest expense, depreciation and amortization, stock-based compensation expense, and equity in net loss of affiliates and include unrealized and realized gains and losses on the Company's securities portfolio as well as dividend income.

The Company's segment presentation has been recast to retrospectively reflect the change from one reportable segment to multiple reportable segments.

Corporate expenses exclude interest expense, depreciation and amortization, stock-based compensation expense, loss on settlement agreement, and equity in net loss of affiliates and include unrealized and realized gains and losses on the Company's securities portfolio as well as dividend income.

See Note 20 for further discussion of the Company's segments.

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Recently Adopted Accounting Pronouncements

The Company adopted ASC 842 on January 1, 2019 using the modified retrospective method as of the adoption date without restating prior periods.

In addition, the Company elected to use the package of practical expedients which allowed the Company to not have to reassess whether expired or existing contracts contain leases under the new definition of a lease or the lease classification for expired or existing leases under ASC Topic 840.

As a result of the adoption of ASC 842, the Company recorded ROU Assets and lease liabilities of $ 30,000 and $ 32,300 , respectively, as of January 1, 2019 for continuing operations.

The difference between the ROU Assets and lease liabilities primarily represents the balance of deferred rent as of December 31, 2018 that resulted from historical straight-lining of operating leases expense, which was reclassified upon adoption to reduce the measurement of the ROU Assets.

There was no impact to accumulated deficit.

In June 2018, the FASB issued Accounting Standards Update ("ASU") 2018-07, Compensation-Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07").

The provisions of ASU 2018-07 expand the scope of ASC Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees.

The Company adopted this standard effective January 1, 2019, and there was no material impact to the accompanying consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808):

Clarifying the Interaction between Topic 808 and Topic 606 ("ASU 2018-18").

The provisions of ASU 2018-18 clarify when certain transactions between collaborative arrangement participants should be accounted for under ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), and incorporates unit-of-account guidance consistent with ASC 606 to aid in this determination.

The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, and is effective for the Company for the year ending December 31, 2020.

The Company is currently evaluating the impact that the implementation of this standard will have on the Company's consolidated financial statements.

The provisions of ASU 2018-18 clarify when certain transactions between collaborative arrangement participants should be accounted for under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), and incorporates unit-of-account guidance consistent with ASC 606 to aid in this determination.

The Company adopted this standard effective January 1, 2020, and there was no impact to the accompanying consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810):

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Indirect interests held through related parties that are under common control are no longer considered to be the equivalent of direct interests in their entirety and instead should be considered on a proportional basis.

This guidance more closely aligns with accounting of how indirect interests held through related parties under common control are considered for determining whether a reporting entity must consolidate a VIE.

The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, and is effective for the Company for the year ending December 31, 2020.

The Company is currently evaluating the impact that the implementation of this standard will have on the Company's consolidated financial statements.

The Company adopted this standard effective January 1, 2020, and there was no impact to the accompanying consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40):

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ASU 2018-15 also specifies the financial statement presentation of capitalized implementation costs and related amortization, in addition to required disclosures for material capitalized implementation costs related to hosting arrangements that are service contracts.

The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, and is effective for the Company for the year ending December 31, 2020.

The Company is currently evaluating the impact that the implementation of this standard will have on the Company's consolidated financial statements.

The Company adopted this standard effective January 1, 2020, on a prospective basis, and there was no material impact to the accompanying consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820):

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Disclosures related to the transfer of assets between Level 1 and Level 2 hierarchies have been eliminated and various additional disclosures related to Level 3 fair value measurements have been added, modified, or removed.

The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, and is effective for the Company for the year ending December 31, 2020.

The Company is currently evaluating the impact that the implementation of this standard will have on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") .

The provisions of ASU 2016-13 modify the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, and is effective for the Company for the year ending December 31, 2020.

The Company is currently evaluating the impact that the implementation of this standard will have on the Company's consolidated financial statements.

The Company adopted this standard effective January 1, 2020, and there was no impact to the accompanying consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, which modifies the impairment model for receivables to utilize an expected loss methodology in place of the previous incurred loss methodology, and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The Company adopted this standard effective January 1, 2020, and there was no material impact to the accompanying consolidated financial statements.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06" ) .

The provisions of ASU 2020-06 simplify accounting for convertible instruments by removing major separation models required under current U.S.

Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features.

ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception.

ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas.

The amendments in ASU 2020-06 are effective for annual periods beginning after December 15, 2021.

Early adoption is permitted but no earlier than annual periods beginning after December 15, 2020.

The guidance must be adopted as of the beginning of the fiscal year of adoption.

The Company is currently evaluating the impact of the new standard on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes ("ASU 2019-12").

The provisions of ASU 2019-12 are intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities.

ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted.

An entity that elects early adoption must adopt all the amendments in the same period.

Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.

The Company is currently evaluating the impact of the new standard on its consolidated financial statements.

Discontinued Operations

On January 1, 2020, the Company and TS Biotechnology Holdings, LLC ("TS Biotechnology"), a related party and an entity managed by Third Security, entered into a Stock and Asset Purchase Agreement pursuant to which the Company agreed to sell a majority of the Company's bioengineering assets and operations to TS Biotechnology for $ 53,000 and certain contingent payment rights (the "TS Biotechnology Sale").

As a result of market uncertainty driven by the COVID-19 pandemic and the state of the energy sector raising significant challenges for the strategic alternatives pursued by MBP Titan, beginning in the second quarter of 2020 and throughout the remainder of 2020, the Company suspended MBP Titan's operations, preserved certain of MBP Titan's intellectual property, terminated all of its personnel, and undertook steps to dispose of its other assets and obligations.

The wind down of MBP Titan's activities was substantially complete by December 31, 2020, with the final disposition of certain property and equipment

and the facility operating lease occurring in January 2021.

See Note 23 for further discussion of the facility operating lease.

This discontinuation of operations represented the continuation of a strategic shift, that the Company commenced as part of the Transactions defined and discussed below, to becoming a primarily healthcare company advancing technologies and products that address complex healthcare challenges.

The assets, liabilities, and expenses related to the discontinued operations of MBP Titan are reclassified and presented as discontinued operations in the accompanying consolidated financial statements for all periods.

After the wind down of MBP Titan, certain assets and contractual obligations which were previously managed by MBP Titan continue to be managed at the Precigen corporate level.

These remaining assets and contractual obligations include the Company's equity interest in and collaboration agreements with Intrexon Energy Partners and Intrexon Energy Partners II, including the associated deferred revenue remaining under each collaboration agreement (Notes 5 and 6), as well as the associated intellectual property developed by MBP Titan to date.

These assets, liabilities, and related historical revenue and equity losses are included in the Company's operating results from continuing operations in the accompanying consolidated financial statements for all periods presented as a result of the Company's continuing involvement.

The carrying values of the major classes of assets and liabilities included in assets and liabilities held for abandonment for MBP Titan as of December 31, 2020 and 2019, are as follows:

Property, plant and equipment, net $ 586 $ 17,017

Goodwill — 9,635

Right-of-use assets 9,131 13,425

Other assets 136 636

Total assets held for sale or abandonment $ 9,853 $ 40,713

Lease liabilities, current $ 1,890 $ 1,548

Other current liabilities 619 1,657

Lease liabilities, net of current portion 11,538 13,730

Total liabilities held for sale or abandonment $ 14,047 $ 16,935

The following table presents the financial results of discontinued operations of MBP Titan:

Year Ended December 31,

2020 2019 2018

Operating expenses (1) $ 40,692 $ 37,423 $ 33,830

Operating loss ( 40,692 ) ( 37,423 ) ( 33,830 )

Loss before income taxes ( 40,692 ) ( 37,423 ) ( 33,830 )

Loss from discontinued operations $ ( 40,692 ) $ ( 37,423 ) $ ( 33,830 )

(1) Includes a goodwill impairment charge of $ 9,635 and an impairment charge on property, plant and equipment and ROU Assets of $ 12,406 recorded in 2020 in conjunction with the suspension of MBP Titan's operations discussed above.

The following table presents the significant non-cash items and purchases of property, plant and equipment for the discontinued operations for MBP Titan that are included in the accompanying consolidated statements of cash flows.

Year Ended December 31,

2020 2019 2018

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization $ 2,474 $ 3,647 $ 3,493

Impairment of goodwill 9,635 — —

Impairment of other noncurrent assets 12,406 — —

Stock-based compensation expense ( 34 ) 1,345 1,870

Cash flows from investing activities

Purchases of property, plant and equipment ( 88 ) ( 2,114 ) ( 3,558 )

Transactions with TS Biotechnology Holdings, LLC and Darling Ingredients, Inc.

On January 1, 2020, the Company and TS Biotechnology Holdings, LLC ("TS Biotechnology"), a related party and an entity managed by Third Security, entered into a Stock and Asset Purchase Agreement pursuant to which the Company agreed to sell a majority of the Company's non-healthcare assets and operations to TS Biotechnology for $ 53,000 and certain contingent payment rights (the "TS Biotechnology Sale").

The TS Biotechnology Sale closed on January 31, 2020.

The assets and operations sold in the TS Biotechnology Sale included the following wholly owned subsidiaries, as well as certain equity securities held in Oragenics, Inc.

("Oragenics") and SH Parent that were directly related to the subsidiaries sold:

Intrexon Produce Holdings, Inc.

is the parent company of the Company's non-browning apple subsidiaries, Okanagan Specialty Fruits, Inc.

The assets and operations sold in the TS Biotechnology Sale included the following wholly owned subsidiaries, as well as certain equity securities that were directly related to the subsidiaries sold:

• Intrexon Produce Holdings, Inc., the parent company of two companies focused on the development and sale of non-browning apples, Okanagan Specialty Fruits, Inc.

and Fruit Orchard Holdings, Inc.;

(collectively referred herein as "Okanagan");

Intrexon UK Holdings, Inc.

is the parent company of Oxitec Limited and subsidiaries, which is a pioneering company in biological insect solutions (referred to herein as "Oxitec");

ILH Holdings, Inc.

includes the Company's fine chemicals operations that were focused primarily on microbial production of therapeutic compounds ("Fine Chemicals");

Blue Marble AgBio LLC which was formed in January 2020 and includes the Company's agriculture biotechnology assets and operations which were previously a division within Precigen ("AgBio").

• Intrexon UK Holdings, Inc., the parent company of Oxitec Limited and its subsidiaries, which focused on biological insect solutions;

• ILH Holdings, Inc., a company focused on the production of certain fine chemicals focused primarily on microbial production of therapeutic compounds;

• Blue Marble AgBio LLC which was formed in January 2020 and included certain agriculture biotechnology assets and operations that were previously an operating division within Precigen.

Additionally, on January 2, 2020, the Company sold its equity interest in EnviroFlight, LLC ("EnviroFlight"), a JV with Darling Ingredients, Inc.

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The Transactions were approved by the Company's independent members of the board of directors in December 2019.

The Transactions represent a strategic shift of the Company towards the Company becoming a primarily healthcare company

advancing technologies and products that address complex healthcare challenges.

The Transactions represented a strategic shift of the Company towards the Company becoming a primarily healthcare company advancing technologies and products that address complex healthcare challenges.

The assets, liabilities, and operations related to the Transactions are reclassified and presented as discontinued operations in the accompanying consolidated financial statements for all periods.

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These impairment charges are included in loss from discontinued operations in the accompanying consolidated statement of operations for the year ended December, 31, 2019.

As of December 31, 2019, the Company has estimated $ 942 of selling costs related to the Transactions.

The carrying values of the major classes of assets and liabilities included in assets and liabilities held for sale for the Transactions are as follows:

December 31, 2019

TS Biotechnology Sale

EnviroFlight Sale

Upon the closing of the TS Biotechnology Sale in January 2020, the cumulative foreign currency translation losses totaling $ 26,957 were released to earnings and included in loss from discontinued operations.

See further discussion below.

The carrying values of the major classes of assets and liabilities included in assets and liabilities held for sale for the Transactions as of December 31, 2019 are as follows:

TS Biotechnology Sale EnviroFlight Sale Total

Cash and cash equivalents $ 2,223 $ — $ 2,223

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Deferred revenue, current (1) $ 8,723 $ — $ 8,723

Operating lease liabilities, current

Other current liabilities

Deferred revenue, net of current portion (2)

Operating lease liabilities, net of current portion

Other long-term liabilities

Total liabilities held for sale

Includes deferred revenue, current, from related parties of $ 1,243 .

Includes deferred revenue, net of current portion, from related parties of $ 6,836 .

December 31, 2018

TS Biotechnology Sale

EnviroFlight Sale

Cash and cash equivalents

Other current assets

Property, plant and equipment, net

Intangible assets, net

Investments in affiliates

Other noncurrent assets

Total assets held for sale

Deferred revenue, current (1)

Lease liabilities, current 2,459 — 2,459

Other current liabilities 3,058 41 3,099

Deferred revenue, net of current portion (2) 19,410 — 19,410

Lease liabilities, net of current portion 12,623 — 12,623

Other long-term liabilities 1,019 — 1,019

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(2) Includes deferred revenue, net of current portion, from related parties of $ 6,836 .

The following tables present the financial results of discontinued operations:

The following tables present the financial results of discontinued operations related to the Transactions:

Year Ended December 31, 2020

TS Biotechnology Sale

EnviroFlight Sale

TS Biotechnology Sale EnviroFlight Sale Total

Revenues (1) $ 1,294 $ — $ 1,294

Operating expenses 896 — 896

Operating loss

Operating income 398 — 398

Gain on sale of discontinued operations 633 39 672

Loss on release of cumulative foreign currency translation adjustment ( 26,957 ) — ( 26,957 )

Other expense, net ( 129 ) — ( 129 )

Equity in net loss of affiliates — ( 38 ) ( 38 )

Loss before income taxes

Income tax benefit

Loss from discontinued operations

Includes revenue recognized from related parties of $ 3,042 .

Includes the impairment charge of $ 89,679 related to the Transactions discussed above.

Income (loss) before income taxes ( 26,055 ) 1 ( 26,054 )

Income tax expense ( 2 ) — ( 2 )

Income (loss) from discontinued operations $ ( 26,057 ) $ 1 $ ( 26,056 )

(1) Includes revenues recognized from related parties of $ 436 .

Year Ended December 31, 2019

TS Biotechnology Sale

EnviroFlight Sale

TS Biotechnology Sale EnviroFlight Sale Total

Revenues (1) $ 12,307 $ — $ 12,307

Operating expenses (2) 116,091 10,794 126,885

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(1) Includes revenue recognized from related parties of $ 3,042 .

Includes an impairment charge of $ 60,504 recorded in 2018 related to Oxitec's developed technology targeting the Aedes Aegypti mosquito and a $ 5,057 loss on disposal of certain leasehold improvements, equipment and other fixed assets in conjunction with the closing of one of Oxitec's research and development facilities in Brazil.

(2) Includes the impairment charge of $ 89,679 related to the Transactions discussed above.

Year Ended December 31, 2018

TS Biotechnology Sale

EnviroFlight Sale

TS Biotechnology Sale EnviroFlight Sale Total

Revenues (1) $ 9,396 $ — $ 9,396

Operating expenses (2) 111,039 470 111,509

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(1) Includes revenue recognized from related parties of $ 4,665 .

Includes an impairment charge of $ 2,950 recorded as part of its annual impairment assessment of indefinite-lived intangible assets.

The following table presents the significant non-cash items, investments in EnviroFlight and purchases of property, plant and equipment for the discontinued operations that are included in the accompanying consolidated statements of cash flows.

(2) Includes an impairment charge of $ 60,504 recorded in 2018 related to Oxitec's developed technology targeting the Aedes Aegypti mosquito and a $ 5,057 loss on disposal of certain leasehold improvements, equipment and other fixed assets in conjunction with the closing of one of Oxitec's research and development facilities in Brazil.

The following table presents the significant non-cash items, investments in EnviroFlight and purchases of property, plant and equipment for the discontinued operations for the Transactions that are included in the accompanying consolidated statements of cash flows.

Year Ended December 31,

2020 2019 2018

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization $ — $ 5,107 $ 9,007

Impairment loss

Impairment of goodwill — 58,042 —

Impairment of other noncurrent assets — 31,637 60,504

Gain on sale of discontinued operations ( 672 ) — —

Loss on release of cumulative foreign currency translation adjustment 26,957 — —

Unrealized and realized depreciation on equity securities and preferred stock, net 106 458 1,927

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The Company accounted for its investment in EnviroFlight using the equity method of accounting.

The Company accounted for its equity securities held in Oragenics, one of its collaborators and a related party, using the fair value option.

Oragenics was considered an equity method investment through September 30, 2018.

The Company accounted for certain equity securities held in one of its collaborators using the fair value option, and the collaborator was considered an equity method investment through September 30, 2018.

Summarized financial data for equity method investments included in discontinued operations during the periods below are shown in the following tables.

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Noncurrent assets 30,549

Total assets 31,252

Current liabilities 2,352

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Total liabilities 2,440

Net assets $ 28,812

Year Ended December 31,

2020 2019 2018

Revenues $ 16 $ 510 $ 268

Operating expenses 92 9,159 12,709

Operating loss ( 76 ) ( 8,649 ) ( 12,441 )

Where applicable, the notes to the consolidated financial statements have been updated to reflect information pertaining to the Company's continuing operations.

Other, net — 21 39

Net loss $ ( 76 ) $ ( 8,628 ) $ ( 12,402 )

Where applicable, the notes to the accompanying consolidated financial statements have been updated to reflect information pertaining to the Company's continuing operations.

Out-of-Period Adjustment

During the year ended December 31, 2020, the Company recorded an out-of-period adjustment of $ 26,572 to loss from discontinued operations which relates to the effect of cumulative foreign translation losses associated with the entities sold in the TS Biotechnology Sale.

This charge, which is entirely noncash, should have been recorded in the year ended December 31, 2019 as an additional impairment charge included in loss from discontinued operations.

There was no impact to net loss from continuing operations, cash and short-term investments, cash flows, or Segment Adjusted EBITDA.

The error also had no impact on the cash consideration received upon closing of the TS Biotechnology Sale nor the representations and warranties made by the Company in the transaction.

The Company evaluated the effects of this out-of-period adjustment, both qualitatively and quantitatively, and concluded that this adjustment was not material to the Company's financial position or results of operations for the years ended December 31, 2020 and 2019.

Mergers and Acquisitions

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See Note 12 for additional discussion of the convertible promissory notes.

GenVec Acquisition

In June 2017, pursuant to an Agreement and Plan of Merger (the "GenVec Merger Agreement"), the Company acquired 100 % of the outstanding shares of GenVec, Inc.

("GenVec"), a clinical-stage company and pioneer in the development of AdenoVerse gene delivery technology.

Pursuant to the GenVec Merger Agreement, the former shareholders of GenVec received an aggregate of 684,240 shares of the Company's common stock and have the right to receive contingent consideration equal to 50 % of any milestone or royalty payments received under one of GenVec's collaboration agreements, provided such payments are received within three years after the closing of the transaction.

The Company also assumed warrants held by certain former shareholders of GenVec.

The results of GenVec's operations subsequent to the acquisition date have been included in the consolidated financial statements.

The fair value of the total consideration transferred was $ 17,582 .

The acquisition date fair value of each class of consideration transferred is presented below:

Common shares

Contingent consideration

The fair value of the shares of the Company's common stock issued was based on the quoted closing price of the Company's common stock immediately prior to the closing of the acquisition.

The fair value of the warrants assumed was estimated using the Black-Scholes option-pricing model.

The fair value of the contingent consideration was determined using a probability weighted discounted cash flows model and is considered a freestanding financial instrument and recorded at fair value each reporting period.

The estimated fair value of assets acquired and liabilities assumed at the acquisition date is shown below:

Cash and cash equivalents

Short-term investments

Trade receivables

Other receivables

Prepaid expenses and other

Property and equipment

Intangible assets

Other noncurrent assets

Total assets acquired

Accounts payable

Accrued compensation and benefits

Other accrued expenses

Other long-term liabilities

Deferred tax liabilities

Total liabilities assumed

Net assets acquired

Total consideration

The acquired intangible assets include developed technology, the fair value of which was determined using the multi-period excess earning method, which is a variation of the income approach that converts future cash flows to single discounted present value amounts.

The intangible assets are being amortized over a useful life of eleven years .

Goodwill, which is not deductible for tax purposes, represents the assembled workforce and the anticipated buyer-specific synergies arising from the combination of the Company's and GenVec's technology.

Acquisition-related costs totaling $ 507 are included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2017.

Unaudited Condensed Pro Forma Financial Information

GenVec's results of operations subsequent to the acquisition are included in the consolidated statements of operations.

The following unaudited condensed pro forma financial information for the year ended December 31, 2017, is presented as if the acquisition had been consummated on January 1, 2016:

Year Ended December 31,

Loss from continuing operations before income taxes

Net loss attributable to the noncontrolling interests

Net loss attributable to Precigen

Investments in Joint Ventures

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The Company's investment in Intrexon Energy Partners was $( 425 ) and $( 423 ) as of December 31, 2020 and 2019, respectively, and is included in other accrued liabilities in the accompanying consolidated balance sheets, which represents the Company's equity in losses for contractually committed contributions to Intrexon Energy Partners.

See Note 3 for additional discussion regarding the Company's investment in Intrexon Energy Partners.

Intrexon Energy Partners II

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The Company's investment in Intrexon Energy Partners II was $( 435 ) and $( 435 ) as of December 31, 2020 and 2019, respectively, and is included in other accrued liabilities in the accompanying consolidated balance sheets, which represents the Company's equity in losses for contractually committed contributions to Intrexon Energy Partners II.

See Notes 3 and 17 for additional discussion regarding the Company's investment in Intrexon Energy Partners II.

Intrexon T1D Partners

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The T1D Investors made initial capital contributions, totaling $ 10,000 in the aggregate, in exchange for pro rata membership interests in Intrexon T1D Partners totaling 50 %.

additional capital contributions of up to $ 5,000 , at the request of Intrexon T1D Partners' board of managers, which consisted of two members appointed by the Company and three members appointed by a majority of the T1D Investors.

Precigen committed to make capital contributions of up to $ 5,000 , and the T1D Investors, as a group and pro rata in accordance with their respective membership interests in Intrexon T1D Partners, committed to make additional capital contributions of up to $ 5,000 , at the request of Intrexon T1D Partners' board of managers, which consisted of two members appointed by the Company and three members appointed by a majority of the T1D Investors.

The Company satisfied its commitment in 2018.

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Collaboration and Licensing Revenue

The Company's collaborations and licensing agreements provide for multiple promises to be satisfied by the Company and typically include a license to the Company's technology platforms, participation in collaboration committees, and performance of certain research and development services.

The Company's collaborations and licensing agreements may provide for multiple promises to be satisfied by the Company and typically include a license to the Company's technology platforms, participation in collaboration committees, and performance of certain research and development services.

Based on the nature of the promises in the Company's collaboration and licensing agreements, the Company typically combines most of its promises into a single performance obligation because the promises are highly interrelated and not individually distinct.

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See Note 2 for additional discussion of the Company's revenue recognition policy related to collaboration and licensing payments.

The Company determines whether collaborations and licensing agreements are individually significant for disclosure based on a number of factors, including total revenue recorded by the Company pursuant to collaboration and licensing agreements, collaborators or licensees with either majority-owned subsidiaries or equity method investments, or other qualitative factors.

The Company determines whether collaborations and licensing agreements are individually significant for disclosure based on a number of factors, including total revenue recorded by the Company pursuant to collaboration and licensing agreements, collaborators or licensees with equity method investments, or other qualitative factors.

Collaboration and licensing revenues generated from consolidated subsidiaries are eliminated in consolidation.

Amounts for periods subsequent to January 1, 2018 reflect revenue recognition under ASC 606.

The following table summarizes the amounts recorded as revenue from continuing operations in the consolidated statements of operations for each significant counterparty to a collaboration or licensing agreement for the years ended December 31, 2019 , 2018 and 2017 .

The following table summarizes the amounts recorded as revenue in the consolidated statements of operations for each significant counterparty to a collaboration or licensing agreement for the years ended December 31, 2020, 2019 and 2018.

Year Ended December 31,

2020 2019 2018

ZIOPHARM Oncology, Inc.

$ 200 $ 2,171 $ 16,298

Ares Trading S.A.

Oragenics, Inc.

3,053 ( 564 ) 1,353

Intrexon T1D Partners, LLC — — 2,502

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Intrexon Energy Partners II, LLC — 1,217 2,998

Fibrocell Science, Inc.

S & I Ophthalmic, LLC

Castle Creek Biosciences, Inc.

17,810 3,713 1,394

Harvest start-up entities (1) — 4,862 14,447

For the years ended December 31, 2019 , 2018 , and 2017 , revenue recognized from collaborations with Harvest start-up entities include Exotech Bio, Inc.;

AD Skincare, Inc.;

and Thrive Agrobiotics, Inc.

For the years ended December 31, 2018 and 2017 , revenue recognized from collaborations with Harvest start-up entities also include Genten Therapeutics

For the year ended December 31, 2017 , revenue recognized from collaborations with Harvest start-up entities also include Relieve Genetics.

Other 145 64 12,444

Total (2) $ 21,208 $ 14,059 $ 69,540

(1) For the years ended December 31, 2019 and 2018, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.;

Exotech Bio, Inc.;

and AD Skincare, Inc.

For the year ended December 31, 2018, revenue recognized from collaborations with Harvest start-up entities also include Genten Therapeutics and CRS Bio.

(2) Collaboration and licensing revenues recognized for the years ended December 31, 2020, 2019 and 2018, include the recognition of $ 20,205 , $ 7,505 , and $ 39,446 , respectively, associated with upfront and milestone payments which were previously deferred.

The following is a summary of the terms of the Company's significant collaborations and licensing agreements from continuing operations.

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Pursuant to the ECC, ZIOPHARM received a license to the Company's technology platform within the field of oncology as defined more specifically in the agreement.

Upon execution of the ECC, the Company received 3,636,926 shares of ZIOPHARM's common stock valued at $ 17,457 as upfront consideration.

In addition to the promises discussed above, the Company transferred two clinical product candidates to ZIOPHARM for which $ 1,115 of the upfront consideration was allocated and recognized as collaboration revenue in 2011.

The remaining $ 16,342 of upfront consideration was allocated to a single performance obligation as discussed above.

The Company was entitled to additional shares of common stock at the date of the dosing of the first patient in a Phase II clinical trial of a product candidate created, produced or developed by ZIOPHARM using the Company's technology ("ZIOPHARM Milestone").

In October 2012, the ZIOPHARM Milestone was achieved and the Company received 3,636,926 shares of ZIOPHARM's common stock valued at $ 18,330 as milestone consideration.

Upon adoption of ASC 606, the Company recorded a cumulative catch-up adjustment of $ 873 related to milestone consideration.

The Company allocated the ZIOPHARM Milestone to the two performance obligations and recognized those in a manner similar to the discussion above.

The Company received reimbursement payments for research and development services provided and manufacturing services for Company materials provided to ZIOPHARM during the ECC.

The Company received upfront consideration upon execution of the ECC in the form of ZIOPHARM common shares valued at $ 17,457 , shares of ZIOPHARM common stock valued at $ 18,330 as consideration upon achievement of a milestone in 2012, and reimbursements for research and development services performed during the ECC.

In March 2015, in conjunction with the worldwide License and Collaboration Agreement ("Merck Agreement") with Ares Trading S.A.

("Ares Trading"), a wholly owned subsidiary of Merck KGaA, and ZIOPHARM discussed below, the Company and ZIOPHARM amended their existing ECC.

The amendment modified the scope of the ECC in connection with the Merck Agreement and provided that the Company would pay to ZIOPHARM 50 % of all payments received for upfront fees, milestones and royalties under the Merck Agreement.

The amendment modified the scope of the ECC

in connection with the Merck Agreement and provided that the Company would pay to ZIOPHARM 50 % of all payments received for upfront fees, milestones and royalties under the Merck Agreement.

See discussion of the Merck Agreement below.

In September 2015, the Company entered into its second ECC with ZIOPHARM ("ZIOPHARM ECC 2").

Pursuant to the ECC, ZIOPHARM received a license to the Company's technology platform to develop and commercialize novel biotherapeutics for the treatment of patients with graft-versus-host disease.

Upon execution of ZIOPHARM ECC 2, the Company received a technology access fee of $ 10,000 .

The Company received reimbursement payments for research and development services provided pursuant to the agreement during the ECC and manufacturing services for Company materials provided to ZIOPHARM during the ECC.

In December 2017, the Company and ZIOPHARM mutually agreed to terminate ZIOPHARM ECC2 and accordingly, the Company recognized the remaining balance of the deferred revenue associated with ZIOPHARM ECC2 totaling $ 28,943 .

In June 2016, the Company amended each of its two existing collaboration agreements with ZIOPHARM and as a result the rate of the royalty that the Company is entitled to receive on certain products commercialized pursuant to the agreements was reduced from 50 % to 20 % .

As consideration for execution of the amendments, ZIOPHARM issued the Company 100,000 shares of ZIOPHARM's Series 1 Preferred Stock valued at $ 120,000 .

In June 2016, the Company amended the ECC and a prior ECC that was mutually terminated in December 2017 to reduce the rate of royalty that the Company was entitled to receive on certain products commercialized pursuant to the agreements.

As consideration for execution of the amendments, ZIOPHARM issued the Company shares of ZIOPHARM's Series 1 Preferred Stock.

The Company allocated the consideration received to each ECC based on the cumulative value of upfront and milestone payments previously received pursuant to that ECC.

Upon adoption of ASC 606, the Company recognized a cumulative catch-up adjustment of $ 32,422 as a result of the contract modification requiring a cumulative catch-up under ASC 606 versus prospective recognition under previous revenue recognition accounting standards.

See Note 18 for additional discussion of the terms of the preferred stock and the accounting treatment.

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Pursuant to the terms of the ZIOPHARM License Agreement, the Company granted ZIOPHARM an exclusive, worldwide, royalty-bearing, sub-licensable license to research, develop and commercialize (i) products utilizing the Company's RheoSwitch gene switch ("RTS") to express IL-12 (the "IL-12 Products") for the treatment of cancer, (ii) chimeric antigen receptor ("CAR") products directed to (a) CD19 for the treatment of cancer (the "CD19 Products"), and (b) a second target, subject to the rights of the Company to pursue such target under the Merck Agreement, and (iii) T-cell receptor ("TCR") products (the "TCR Products") designed for neoantigens for the treatment of cancer or the treatment and prevention of human papilloma virus ("HPV") to the extent that the primary reason for such treatment or prevention is to prevent cancer, which is referred to as the HPV Field.

The Company has also granted ZIOPHARM an exclusive, worldwide, royalty-bearing, sub-licensable license for certain patents relating to the Company's Sleeping Beauty technology to research, develop and commercialize TCR Products for both neoantigens and shared antigens for the treatment of

cancer and in the HPV Field.

ZIOPHARM will be solely responsible for all aspects of the research, development and commercialization of the exclusively licensed products for the treatment of cancer.

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In consideration of the licenses and other rights granted by the Company, ZIOPHARM will pay the Company an annual license fee of $ 100 and agreed to reimburse the Company $ 1,000 , paid in four quarterly installments, with respect to historical Gorilla IL-12 Products (the "historical Gorilla reimbursements").

ZIOPHARM will make milestone payments, payable upon the initiation of later stage clinical trials and upon the approval of exclusively licensed products in various jurisdictions, totaling up to an additional $ 52,500 for each of four exclusively licensed products, up to an aggregate of $ 210,000 .

ZIOPHARM will make milestone payments, payable upon the initiation of later stage clinical trials and upon the approval of exclusively licensed programs in various jurisdictions, totaling up to an additional $ 52,500 for each of four exclusively licensed programs, up to an aggregate of $ 210,000 .

In addition, ZIOPHARM will pay the Company tiered royalties ranging from low-single digits to high-single digits on the net sales derived from the sales of any approved IL-12 Products and CAR products.

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Further, the Company is entitled to receive all rights and financial considerations with respect to all other CAR products, subject to the CAR royalties due to ZIOPHARM for such products.

The ZIOPHARM License Agreement will terminate on a product-by-product and/or country-by-country basis upon the expiration of the later to occur of (i) the expiration of the last to expire patent claim for a licensed product, or (ii) 12 years after the first commercial sale of a licensed product in such country.

The ZIOPHARM License Agreement will terminate on a product-by-product and/or country-by-country basis upon the expiration of

the later to occur of (i) the expiration of the last to expire patent claim for a licensed product, or (ii) 12 years after the first commercial sale of a licensed product in such country.

In addition, ZIOPHARM may terminate the ZIOPHARM License Agreement on a country-by-country or program-by-program basis following written notice to the Company, and either party may terminate the ZIOPHARM License Agreement following notice of a material breach.

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Prior to the execution of the ZIOPHARM License Agreement, the Company had $ 51,084 of deferred revenue remaining from the original ECC, which was related to the Company's obligations to perform under that agreement.

Replacement of the original ECC with the ZIOPHARM License Agreement is a contract modification under ASC 606 that represents the termination of the original agreement and the creation of a new agreement as the remaining rights, obligations, and services to be exchanged, which are limited to the Transition Services, are distinct from those under the ECC.

Replacement of the original ECC with the ZIOPHARM License Agreement was a contract modification under ASC 606 that represented the termination of the original agreement and the creation of a new agreement as the remaining rights, obligations, and services to be exchanged, which were limited to the Transition Services, were distinct from those under the ECC.

Therefore, the Company reviewed the various forms of consideration in the ZIOPHARM License Agreement to determine the transaction price.

As the Company's obligations under the ZIOPHARM License Agreement are only related to the Transition Services and no other obligations under the ECC remain, a portion of the previously deferred revenue from the ECC should be relieved, which the Company determined to be $ 49,329 , and the remaining $ 1,755 was included in the transaction price.

As the Company's obligations under the ZIOPHARM License Agreement were only related to the Transition Services and no other obligations under the ECC remained, a portion of the previously deferred revenue from the ECC was relieved, which the Company determined to be $ 49,329 , and the remaining $ 1,755 was included in the transaction price.

The initial annual license payment of $ 100 was also included in the transaction price.

The remaining annual license payments and potential milestone payments were constrained at the modification date and will only be recognized when the payments become probable of being

The remaining annual license payments and potential milestone payments were constrained at the modification date and will only be recognized when the payments become probable of being received.

Royalty payments from sales of ZIOPHARM products developed pursuant to the ZIOPHARM License Agreement will be recognized when the sales occur.

The Company recognized payments from Transition Services as those services were performed and recognized the transaction price of $ 1,855 as it performed the Transition Services required under the ZIOPHARM License Agreement.

The Company also reviewed the consideration paid and potential consideration to be paid to ZIOPHARM as part of the ZIOPHARM License Agreement, which includes the $ 158,376 of ZIOPHARM preferred stock returned by the Company and potential royalty payments to ZIOPHARM from sales of the Company's CAR products.

The Company also reviewed the consideration paid and potential consideration to be paid to ZIOPHARM as part of the ZIOPHARM License Agreement, which included the $ 158,376 of ZIOPHARM preferred stock returned by the Company and potential royalty payments to ZIOPHARM from sales of the Company's CAR products.

The Company determined the exchange of its investment in ZIOPHARM preferred stock for certain CAR rights previously licensed under the ECC (i.e., in-process research and development) and the relief of performance obligations to ZIOPHARM under the ECC constituted an exchange for distinct goods and services.

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Potential royalty payments to ZIOPHARM will be expensed as incurred as they relate to distinct goods or services.

The Company determined that the Gorilla Program represents a separate collaboration agreement under the scope of ASC 808, Collaborative Arrangements, ("ASC 808") and will not be included in the accounting for the ZIOPHARM License Agreement under ASC 606.

The Company determined that the Gorilla Program represented a separate collaboration agreement under the scope of ASC 808, Collaborative Arrangements, ("ASC 808") and was not included in the accounting for the ZIOPHARM License Agreement under ASC 606.

The Company recognized $ 500 of the historical Gorilla reimbursements on the contract modification date and recognized the remaining amounts when receipt became probable.

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The remaining value acquired of $ 108,527 was considered in-process research and development related to the reacquired rights under the Merck Agreement and expensed immediately.

The potential future royalty payments to Ares Trading do not represent consideration paid to a customer and will be recorded when the payments are probable.

potential future royalty payments to Ares Trading do not represent consideration paid to a customer and will be recorded when the payments are probable.

See Note 12 for additional discussion of this transaction.

Oragenics Collaborations

In June 2015, the Company entered into an ECC with Oragenics.

Oragenics Collaboration

In June 2015, the Company entered into an ECC with Oragenics, a related party at the time.

Pursuant to the ECC, at the transaction effective date, Oragenics received a license to the Company's technology platform within the field of biotherapeutics for use in certain treatments of oral mucositis and other diseases and conditions of the oral cavity, throat, and esophagus.

Upon execution of the ECC, the Company received a technology access fee of a $ 5,000 convertible promissory note maturing on or before December 31, 2015 as upfront consideration.

Prior to the maturity date, Oragenics had the right to convert the promissory note into shares of Oragenics' common stock, subject to its shareholders' approval.

In December 2015, Oragenics converted the promissory note into 338,100 shares of Oragenics' common stock.

Upon execution of the ECC, the Company received a technology access fee of a $ 5,000 convertible promissory note, which was subsequently converted to shares of Oragenics' common stock.

These shares were sold in the TS Biotechnology Sale (Note 3).

Following an amendment in November 2017, the Company is entitled to up to $ 37,500 of potential one-time payments for development and commercial milestones under the ECC.

The Company receives reimbursement payments for research and development services provided pursuant to the agreement during the ECC and manufacturing services for Company materials provided to Oragenics during the ECC.

Oragenics will pay the Company royalties as a percentage in the low-teens of net sales derived from the sale of products developed from the ECC, as defined in the agreement.

Oragenics is responsible for funding the further development of products under the ECC towards the goal of commercialization, conducting preclinical and clinical development of product candidates, as well as for other aspects of commercialization or manufacturing of the product candidates.

The term of the ECC commenced in June 2015 and may be

terminated by either party in the event of certain material breaches defined in the agreement and may be terminated voluntarily by Oragenics upon 90 days written notice to the Company.

In July 2020, the Company and Oragenics mutually agreed to terminate the ECC, and accordingly, the Company recognized the remaining balance of deferred revenue associated with the ECC totaling $ 2,823 .

Following the termination of the ECC, Oragenics is no longer a related party.

Intrexon T1D Partners Collaboration

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In November 2018, the Company completed an asset acquisition with the T1D Investors, resulting in the Company owning 100 % of the membership interest of Intrexon T1D Partners including all rights under the ECC (Note 5).

Genten Therapeutics Collaboration

In September 2016, the Company entered into an ECC with Genten Therapeutics, an affiliate of Harvest and a related party.

Genten Therapeutics was formed for the purpose of entering into the ECC and developing and commercializing products using the Company's technology for expression of gluten peptides, alone or in combination with immunomodulatory cytokines, to reestablish immune tolerance for patients with celiac disease.

Upon execution of the ECC, the Company received a technology access fee in the form of a $ 1,500 cash payment and equity in Genten Therapeutics valued at $ 3,000 as upfront consideration.

The Company received reimbursement payments for research and development services provided pursuant to the ECC.

In September 2018, the Company completed an asset acquisition with Harvest, resulting in the Company owning 100 % of the equity interests of Genten Therapeutics including all rights under the ECC (Note 4 ).

CRS Bio Collaboration

In September 2016, the Company entered into an ECC with CRS Bio, an affiliate of Harvest and a related party.

CRS Bio was formed for the purpose of entering into the ECC and developing and commercializing products through targeted delivery of antibodies for treatment of chronic rhinosinusitis with and without nasal polyps, by utilizing the Company's technology to block inflammatory mediators in the nasal passage, leading to improved breathing and, importantly, patients' quality of life.

Upon execution of the ECC, the Company received a technology access fee in the form of equity in CRS Bio valued at $ 2,100 .

The Company received reimbursement payments for research and development services provided pursuant to the ECC.

In September 2018, the Company completed an asset acquisition with Harvest, resulting in the Company owning 100 % of the equity interests of CRS Bio including all rights under the ECC (Note 4 ).

Relieve Genetics Collaboration

In March 2016, the Company entered into an ECC with Relieve Genetics, an affiliate of Harvest and a related party.

Relieve Genetics was formed for the purpose of entering into the ECC and developing and commercializing products using a viral vector expressing interleukin-10 for the treatment of chronic neuropathic pain resultant from cancer in humans.

Upon execution of the ECC, the Company received a technology access fee in the form of equity in Relieve Genetics valued at $ 4,333 as upfront consideration.

The Company received reimbursement payments for research and development services provided pursuant to the ECC.

In September 2018, the Company completed an asset acquisition with Harvest, resulting in the Company owning 100 % of the equity interests of Relieve Genetics including all rights under the ECC (Note 4 ).

Genten Therapeutics, CRS Bio, and Relieve Genetics Collaborations

In 2016, the Company entered into three separate ECCs with Genten Therapeutics, CRS Bio, and Relieve Genetics, all affiliates of Harvest and related parties.

The total upfront consideration received for the three collaborations was $ 10,933 , which mostly consisted of equity interests in these entities.

The Company also received reimbursements for research and development services provided pursuant to the ECCs.

In September 2018, the Company completed an asset acquisition with Harvest, resulting in the Company owning 100 % of the equity interests in these entities, including all rights under the ECCs (Note 4).

Intrexon Energy Partners Collaboration

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The term of the ECC commenced in March 2014 and continues until March 2034 unless terminated prior to that date by either party in the event of certain material breaches defined in the agreement and may be terminated voluntarily by Intrexon Energy Partners upon 90 days written notice to the Company.

The ECC is not active while the IEP Investors evaluate the status of the project and their desired future development activities.

Intrexon Energy Partners II Collaboration

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termination prior to that date may be initiated (i) by either party in the event of certain material breaches defined in the agreement or (ii) may be terminated voluntarily by Intrexon Energy Partners II upon 90 days written notice to the Company.

Exotech Bio Collaboration

In March 2016, the Company entered into an ECC with Exotech Bio, Inc.

("Exotech Bio"), an affiliate of Harvest and a related party.

Exotech Bio was formed for the purpose of entering into the ECC and developing and commercializing products using exosomes carrying a RNA payload designed to kill, suppress, or render immune-visible a cancer cell.

Upon execution of the ECC, the Company received a technology access fee in the form of equity in Exotech Bio valued at $ 5,000 as upfront consideration.

In June 2018, the Company and Exotech Bio amended the ECC, which resulted in the expansion of the defined field of use and the Company's ownership in Exotech Bio increasing to 49 % .

The amendment also eliminated potential future milestone payments and royalties for which the Company was previously entitled.

The Company receives reimbursement payments for research and development services provided pursuant to the ECC.

The ECC may be terminated by either party in the event of certain material breaches defined in the agreement and may be terminated voluntarily by Exotech Bio upon 90 days written notice to the Company.

AD Skincare Collaboration

In June 2016, the Company entered into an ECC with AD Skincare, Inc.

("AD Skincare"), an affiliate of Harvest and a related party.

AD Skincare was formed for the purpose of entering into the ECC and developing an advanced topical delivery system to improve the efficacy of biologically active ingredients aimed at improving signs of aging human skin.

Upon execution of the ECC, the Company received a technology access fee in the form of equity in AD Skincare valued at $ 4,333 as upfront consideration.

The Company is also entitled to up to $ 2,000 of potential payments for substantive and non-substantive development milestones for each product developed under the ECC, as well as up to $ 17,000 in one-time commercial milestones.

The Company receives reimbursement payments for research and development services provided pursuant to the ECC.

AD Skincare will pay the Company royalties as a percentage in the low double-digits on the quarterly net sales of products developed under the ECC, as defined in the agreement.

AD Skincare is responsible for the development and commercialization of the product candidates.

The term of the ECC commenced in June 2016 and continues until terminated pursuant to the ECC agreement.

The ECC may be terminated by either party in the event of certain material breaches defined in the agreement and may be terminated voluntarily by AD Skincare upon 90 days written notice to the Company.

Fibrocell Science Collaborations

In October 2012, the Company entered into an ECC ("Fibrocell ECC 1") with Fibrocell Science, Inc.

("Fibrocell"), a then publicly traded cell and gene therapy company focused on diseases affecting the skin and connective tissue and a related party until the acquisition of Fibrocell by a third party as discussed below.

Pursuant to Fibrocell ECC 1, at the transaction effective date, Fibrocell received a license to the Company's technology platform to develop and commercialize genetically modified and non-genetically modified autologous fibroblasts and autologous dermal cells in the United States of America.

Upon execution of Fibrocell ECC 1, the Company received a technology access fee of 87,835 shares of Fibrocell's common stock valued at $ 7,576 as upfront consideration.

The Company receives reimbursement payments for research and development services provided pursuant to the agreement during Fibrocell ECC 1 and manufacturing services for Company materials provided to Fibrocell during Fibrocell ECC 1.

On a quarterly basis, Fibrocell will pay the Company royalties of 7 % of net sales up to $ 25,000 and 14 % of net sales above $ 25,000 on each product developed from Fibrocell ECC 1, as defined in the agreement.

If Fibrocell uses the Company's technology platform to improve the production of a current or new Fibrocell product not developed from Fibrocell ECC 1, Fibrocell will pay the Company quarterly royalties equal to 33 % of the cost of goods sold savings generated by the improvement, as defined in the agreement.

Fibrocell is responsible for conducting preclinical and clinical development of product candidates associated with Fibrocell ECC 1, as well as for other aspects of commercialization and manufacturing of the product candidates.

The term of the ECC commenced in October 2012 and continues until terminated pursuant to the ECC agreement.

The ECC may be terminated by

either party in the event of certain material breaches defined in the agreement and may be terminated voluntarily by Fibrocell upon 90 days written notice to the Company.

In June 2013, the Company and Fibrocell entered into an amendment to the Fibrocell ECC 1.

The amendment expanded the field of use defined in the ECC agreement.

Under the terms of the amendment to the Fibrocell ECC 1, the Company received 82,919 shares of Fibrocell's common stock valued at $ 7,612 as a supplemental technology access fee.

In April 2019, Fibrocell entered into a collaboration agreement with a Castle Creek Pharmaceuticals, LLC to develop and commercialize a product in the field of the Fibrocell ECC 1.

Pursuant to the terms of the Fibrocell ECC 1, the Company is entitled to 50 % of sublicensing fees and accordingly, received $ 3,750 during the year ended December 31, 2019 .

In December 2015, the Company entered into a second ECC with Fibrocell ("Fibrocell ECC 2").

Pursuant to the ECC, at the transaction effective date, Fibrocell received a license to the Company's technology platform to develop and commercialize genetically-modified fibroblasts to treat chronic inflammatory and degenerative diseases of the joint, including arthritis and related conditions.

Upon execution of the ECC, the Company received a technology access fee of $ 10,000 .

The Company is also entitled to (i) up to $ 30,000 of potential one-time payments for certain development and regulatory milestones for the first product developed under Fibrocell ECC 2, (ii) up to $ 30,000 of potential payments for certain regulatory milestones for each additional product developed under Fibrocell ECC 2, and (iii) up to $ 22,500 of potential payments for certain sales milestones for each product developed under Fibrocell ECC 2.

Fibrocell will pay the Company royalties as a percentage in the low double-digits of net sales derived from the sale of products developed from Fibrocell ECC 2, as defined in the agreement.

Fibrocell is responsible for conducting preclinical and clinical development of product candidates associated with Fibrocell ECC 2, as well as for other aspects of commercialization and manufacturing of the product candidates.

The term of the ECC commenced in December 2015 and continues until terminated pursuant to the ECC agreement.

The ECC may be terminated by either party in the event of certain material breaches defined in the agreement and may be terminated voluntarily by Fibrocell upon 90 days written notice to the Company.

In December 2019, Fibrocell was acquired by Castle Creek Pharmaceutical Holdings, Inc.

("Castle Creek"), a privately held company focused on developing medicine for rare genetic disorders.

See Note 18 for further discussion of the impact of the Castle Creek acquisition on the Company's investments in Fibrocell.

Thrive Agrobiotics Collaboration

In September 2015, the Company entered into an ECC with Thrive Agrobiotics, Inc.

("Thrive Agrobiotics"), an affiliate of Harvest and a related party.

Thrive Agrobiotics was formed for the purpose of entering into the ECC and developing and commercializing products to improve the overall growth and feed efficiency in piglets.

Upon execution of the ECC, the Company received a technology access fee in the form of equity in Thrive Agrobiotics valued at $ 1,667 as upfront consideration.

The Company is also entitled to up to $ 5,500 of potential payments for development and commercial milestones for each product developed under the ECC.

The Company receives reimbursement payments for research and development services provided pursuant to the agreement during the ECC.

Thrive Agrobiotics will pay the Company royalties as a percentage in the lower-double digits on the quarterly gross profits of product sales from products developed under the ECC, as defined in the agreement.

Thrive Agrobiotics is responsible for the development and commercialization of the product candidates.

The term of the ECC commenced in September 2015 and continues until terminated pursuant to the ECC agreement.

The ECC may be terminated by either party in the event of certain material breaches defined in the agreement and may be terminated voluntarily by Thrive Agrobiotics upon 90 days written notice to the Company.

The ECC is not active while the IEPII Investors evaluate the status of the project and their desired future development activities.

Exotech Bio, AD Skincare, and Thrive Agrobiotics Collaborations

In 2015 and 2016, the Company entered into three separate ECCs with Exotech Bio, Inc.

("Exotech Bio"), AD Skincare, Inc.

("AD Skincare"), and Thrive Agrobiotics, Inc.

("Thrive Agrobiotics"), all affiliates of Harvest and related parties at the time.

The total upfront consideration received for the three collaborations was $ 11,000 , which consisted of equity interests in each of these entities.

The Company also received reimbursements for research and development services provided pursuant to the ECCs.

In conjunction with a settlement agreement with Harvest (Note 17), these ECCs were terminated in December 2020, and the previously licensed technology rights reverted to the Company pursuant to the ECCs.

The Company wrote off the remaining balance of deferred revenue associated with these ECCs totaling $ 6,993 as an offset to the loss recognized on the settlement agreement.

Castle Creek Collaborations

In October 2012, the Company entered into an ECC (the "2012 Castle Creek ECC") with Castle Creek Biosciences, Inc.

("Castle Creek", formerly known as Fibrocell Science, Inc.).

Castle Creek was a publicly traded cell and gene therapy company focused on diseases affecting the skin and connective tissue and a related party until it was acquired in December 2019 by Castle Creek Pharmaceutical Holdings, Inc.

("Castle Creek Pharmaceutical"), a privately held company focused on developing medicine for rare genetic disorders.

Pursuant to the 2012 Castle Creek ECC, at the transaction effective date, Castle Creek received a license to the Company's technology platform to develop and commercialize genetically modified and non-genetically modified autologous fibroblasts and autologous dermal cells in the United States of America.

The Company received (i) upfront consideration upon execution of the ECC in the form of Castle Creek common stock valued at $ 7,576 , (ii) shares of Castle Creek common stock valued at $ 7,612 as consideration for a 2013 amendment which expanded the field of use defined in the agreement, (iii) sublicensing fees totaling $ 3,750 in the form of cash in 2019, and (iv) reimbursements for research and development services performed during the ECC.

In March 2020, the Company and Castle Creek terminated the 2012 Castle Creek ECC by mutual agreement ("Termination Agreement") with the parties agreeing that the two drug product candidates, FCX-007 and FCX-013, pursuant to the ECC would be treated as "Retained Products" under the terms of the 2012 Castle Creek ECC.

As Retained Products, Castle Creek retains a license under the 2012 Castle Creek ECC to continue to develop and commercialize the Retained Products within the field of use of the 2012 Castle Creek ECC for so long as Castle Creek continues to pursue such development and commercialization.

No further licenses to the Company's technology within the field of use are provided to Castle Creek.

On a quarterly basis, Castle Creek will pay the Company royalties of 7 % of net sales up to $ 25,000 and 14 % of net sales above $ 25,000 on each Retained Product from the 2012 Castle Creek ECC, as defined in the agreement.

Additionally, the Termination Agreement provides for the Company to perform certain drug product manufacturing activities related to the Retained Products.

The Termination Agreement was accounted for as a new contract, and the remaining deferred revenue from the 2012 Castle Creek ECC is being recognized prospectively as the manufacturing activities are performed.

In December 2015, the Company entered into a second ECC with Castle Creek (the "2015 Castle Creek ECC").

Pursuant to the ECC, at the transaction effective date, Castle Creek received a license to the Company's technology platform to develop and commercialize genetically-modified fibroblasts to treat chronic inflammatory and degenerative diseases of the joint, including arthritis and related conditions.

In February 2020, the Company and Castle Creek mutually agreed to terminate the 2015 Castle Creek ECC, and accordingly, the Company recognized the remaining balance of deferred revenue associated with the 2015 Castle Creek ECC totaling $ 10,000 .

Deferred Revenue

Deferred revenue primarily consists of consideration received for the Company's collaboration and licensing agreements.

Deferred revenue from continuing operations consists of the following:

Deferred revenue consisted of the following:

Collaboration and licensing agreements $ 23,420 $ 50,593

Prepaid product and service revenues 2,126 2,805

Other 277 435

Total $ 25,823 $ 53,833

Current portion of deferred revenue $ 2,800 $ 5,697

Long-term portion of deferred revenue 23,023 48,136

The following table summarizes the remaining balance of deferred revenue from continuing operations associated with upfront and milestone payments for each significant counterparty to a collaboration or licensing agreement as of December 31, 2019 and 2018 , including the estimated remaining performance period as of December 31, 2019 .

Average Remaining Performance Period (Years)

ZIOPHARM Oncology, Inc.

Total $ 25,823 $ 53,833

Revenue is recognized under collaboration and licensing agreements as services are performed.

Certain of the arrangements are not active while the other party evaluates the status of the project and its desired future development activities.

The following table summarizes the remaining balance of deferred revenue associated with upfront and milestone payments for each significant counterparty to a collaboration or licensing agreement as of December 31, 2020 and 2019, as well as the estimated remaining performance period as of December 31, 2020.

Average Remaining Performance Period (Years) December 31,

Oragenics, Inc.

0.0 $ — $ 2,864

Intrexon Energy Partners, LLC 3.2 8,362 8,362

Intrexon Energy Partners II, LLC 3.9 12,843 12,843

Fibrocell Science, Inc.

Castle Creek Biosciences, Inc.

1.0 379 17,697

Harvest start-up entities (1) 0.0 — 6,993

As of December 31, 2019 and 2018 , the balance of deferred revenue for collaborations with Harvest start-up entities includes Exotech Bio, AD Skincare, and Thrive Agrobiotics.

Other 2.2 1,836 1,834

Total $ 23,420 $ 50,593

(1) As of December 31, 2019, the balance of deferred revenue for collaborations with Harvest start-up entities includes Thrive Agrobiotics, Exotech Bio, and AD Skincare.

Short-term Investments

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The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of available-for-sale investments as of December 31, 2020:

Losses Aggregate

United States government debt securities $ 48,048 $ 14 $ ( 1 ) $ 48,061

Certificates of deposit 264 — — 264

Total $ 48,312 $ 14 $ ( 1 ) $ 48,325

The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of available-for-sale investments as of December 31, 2019:

Losses Aggregate

United States government debt securities $ 8,989 $ 7 $ — $ 8,996

Certificates of deposit 264 — — 264

Total $ 9,253 $ 7 $ — $ 9,260

See Notes 2 and 8 for further discussion on the Company's method for determining the fair value of its assets.

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Changes in market interest rates and bond yields cause certain investments to fall below their cost basis, resulting in unrealized losses on investments.

The unrealized losses of the Company's investments as of December 31, 2018 were primarily a result of unfavorable changes in interest rates subsequent to the initial purchase of these investments, and there were none as of December 31, 2019 .

As of December 31, 2018 , the Company did not consider any of its debt security investments to be other-than-temporarily impaired.

When evaluating its debt security investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer, the Company's ability and intent to hold the security and whether it is more likely than not that it will be required to sell the investment before recovery of its cost basis.

The unrealized losses of the Company's investments were primarily a result of unfavorable changes in interest rates subsequent to the initial purchase of these investments and are not significant as of December 31, 2020.

Fair Value Measurements

The carrying amount of cash and cash equivalents, restricted cash, receivables, accounts payable, accrued compensation and benefits, other accrued liabilities, and related party payables approximate fair value due to the short maturity of these instruments.

The carrying amount of cash and cash equivalents, receivables, accounts payable, accrued compensation and benefits, other accrued liabilities, and related party payables approximate fair value due to the short maturity of these instruments.

The following table presents the placement in the fair value hierarchy of financial assets that are measured at fair value on a recurring basis, including the items for which the fair value option has been elected, as of December 31, 2020:

Quoted Prices in Active Markets

Significant Other Observable Inputs

Significant Unobservable Inputs

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Level 3) December 31,

United States government debt securities $ — $ 48,061 $ — $ 48,061

Other — 264 — 264

Total $ — $ 48,325 $ — $ 48,325

Quoted Prices in Active Markets

Significant Other Observable Inputs

Significant Unobservable Inputs

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Level 3) December 31,

United States government debt securities $ — $ 8,996 $ — $ 8,996

Equity securities

The method used to estimate the fair value of the Level 1 assets in the tables above is based on observable market data as these equity securities are publicly-traded.

Other — 264 — 264

Total $ — $ 9,260 $ — $ 9,260

The method used to estimate the fair value of the Level 2 short-term debt investments in the tables above is based on professional pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets.

The methods used to estimate the fair value of the Level 2 equity securities in the tables above are based on the quoted market price of the publicly-traded security, adjusted for adjusted for a discount for lack of marketability.

The Company owned preferred stock in certain of its collaborators, and these investments were classified as Level 3 within the fair value hierarchy.

See Note 18 for additional discussion of these investments in preferred stock.

The following table summarizes the changes in the Level 3 investments during the years ended December 31, 2019 and 2018 .

During 2019, the Company's equity securities of AquaBounty (Note 1) and preferred stock owned in one of its collaborators (Note 18) were classified as Level 3 within the fair value hierarchy prior to disposition.

The following table summarizes the changes in the Level 3 investments during the year ended December 31, 2019.

Beginning balance $ 191

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Dividend income from investments in preferred stock 48

Net unrealized appreciation (depreciation) in the fair value of the investments in equity securities and preferred stock

Return of preferred stock

Net unrealized appreciation in the fair value of the investments in equity securities and preferred stock 7,446

Proceeds from sale of equity securities ( 21,587 )

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Ending balance $ —

There were no transfers of assets between levels of the fair value hierarchy during the year ended December 31, 2019 .

The carrying values of the Company's long-term debt, excluding the Convertible Notes, approximates fair value due to the length of time to maturity and/or the existence of interest rates that approximate prevailing market rates.

The calculated fair value of the Convertible Notes (Note 12 ) was approximately $ 126,000 and $ 141,000 as of December 31, 2019 and 2018 , respectively, and is based on the recent third-party trades of the instrument as of the balance sheet dates.

The calculated fair value of the Convertible Notes (Note 12) was approximately $ 165,000 and $ 126,000 as of December 31, 2020 and 2019, respectively, and is based on the recent third-party trades of the instrument as of the balance sheet date.

The fair value of the Convertible Notes is classified as Level 2 within the fair value hierarchy as there is not an active market for the Convertible Notes, however, third-party trades of the instrument are considered observable inputs.

The Convertible Notes are reflected on the accompanying consolidated balance sheets at amortized cost, which was $ 168,147 and $ 157,560 as of December 31, 2020 and 2019, respectively.

The Company's contingent consideration liabilities (Note 4 ) are measured on a recurring basis and were $ 585 as of December 31, 2019 and 2018 .

These fair value measurements were based on significant inputs not observable in the market and thus represented a Level 3 measurement.

A significant change in unobservable inputs could result in a significant impact on the fair value of the Company's contingent consideration liabilities.

The contingent consideration liabilities are remeasured to fair

value at each reporting date until the contingencies are resolved, and those changes in fair value are recognized in earnings.

There were no changes in the fair value of the Level 3 liabilities during the years ended December 31, 2019 and 2018 .

Inventory from continuing operations consists of the following:

During the year ended December 31, 2020, the Company's contingent consideration liability, which was $ 585 as of December 31, 2019, was reduced to $ 0 as the period for potential payment of this contingent consideration expired without payment in June 2020.

The contingent consideration liability was remeasured to fair value at each reporting date until the contingency was resolved, and those changes in fair value were recognized in earnings.

The changes in the fair value of the Level 3 liability during the years ended December 31, 2020 and 2019 were as follows:

Beginning balance $ 585 $ 585

Change in fair value of contingent consideration recognized in selling, general, and administrative expenses ( 585 ) —

Ending balance $ — $ 585

See Notes 10 and 11 for discussion of non-recurring fair value estimates used in calculating impairment charges recorded during the year ended December 31, 2020.

Inventory consists of the following:

Supplies, embryos and other production materials $ 2,060 $ 2,282

Work in process 2,348 3,702

Livestock 5,047 7,553

Feed 1,904 2,560

Total inventory $ 11,359 $ 16,097

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Furniture and fixtures 1,228 1,025

Equipment 31,150 33,707

Leasehold improvements 6,260 6,607

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Construction and other assets in progress 2,754 5,229

69,876 80,215

Accumulated depreciation and amortization ( 34,952 ) ( 36,263 )

Property, plant and equipment, net $ 34,924 $ 43,952

The deconsolidation of AquaBounty (Note 1 ) in April 2019 resulted in the reduction of $ 24,186 of property, plant and equipment, net on the accompanying consolidated balance sheet during the year ended December 31, 2019.

During the year ended December 31, 2019, the Company recorded $ 448 of property, plant and equipment impairment losses in conjunction with the closing of two of its operating units during the third quarter of 2019.

Depreciation expense was $ 7,449 , $ 8,222 and $ 8,946 for the years ended December 31, 2020, 2019 and 2018, respectively.

During the year ended December 31, 2020, the Company recorded impairment losses of $ 920 , which is included in impairment of other noncurrent assets on the accompanying consolidated statement of operations, primarily related to right-of-use assets at certain of the Company's leased locations.

During the year ended December 31, 2019, the Company recorded impairment losses of $ 448 , which is included in impairment of other noncurrent assets on the accompanying consolidated statement of operations, related to the impairment of property, plant and equipment in conjunction with the closing of two of its operating units during the third quarter of 2019.

Goodwill and Intangible Assets, Net

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Beginning of year $ 54,119 $ 83,992

Impairment — ( 29,820 )

Foreign currency translation adjustments 244 ( 53 )

The Company had $ 43,643 and $ 13,823 of cumulative impairment losses as of December 31, 2019 and 2018 , respectively.

For the year ended December 31, 2019, the Company recorded $ 29,820 of goodwill impairment charges.

During the Company's annual goodwill impairment test, the Company determined it was more-likely-than-not that the fair value of the Trans Ova reporting unit was less than its carrying amount.

End of year $ 54,363 $ 54,119

The Company had $ 43,643 of cumulative impairment losses as of December 31, 2020 and 2019.

For the year ended December 31, 2019, during the Company's annual goodwill impairment test, the Company determined it was more-likely-than-not that the fair value of the Trans Ova reporting unit was less than its carrying amount.

As a result, the Company compared the carrying amount of the Trans Ova reporting unit to the fair value and determined the carrying amount exceeded the fair value resulting in a $ 29,642 goodwill impairment charge for the excess carrying value.

Additionally, the Company recorded $ 178 of goodwill impairment charges in conjunction with the closing of two of its reporting units in the third quarter of 2019.

Additionally, the Company recorded $ 178 of goodwill impairment in conjunction with the closing of two of its reporting units during the third quarter of 2019.

See Note 20 for information regarding goodwill by reportable segment.

Intangible assets consist of the following as of December 31, 2020:

Weighted Average Useful Life (Years)

Gross Carrying Amount

Accumulated Amortization

Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net

Patents, developed technologies and know-how 16.0 $ 96,927 $ ( 34,412 ) $ 62,515

Customer relationships 6.4 10,850 ( 9,340 ) 1,510

Trademarks 8.4 5,900 ( 4,529 ) 1,371

Total $ 113,677 $ ( 48,281 ) $ 65,396

Intangible assets consist of the following as of December 31, 2019:

Gross Carrying Amount

Accumulated Amortization

Gross Carrying Amount Accumulated Amortization Net

Patents, developed technologies and know-how $ 90,659 $ ( 26,619 ) $ 64,040

Customer relationships 10,700 ( 8,440 ) 2,260

In the fourth quarter of 2018, the Company recorded a $ 16,027 loss related to the abandonment of certain developed technologies that the Company ceased using in the fourth quarter of 2018.

Trademarks 5,900 ( 3,854 ) 2,046

Total $ 107,259 $ ( 38,913 ) $ 68,346

In the year ended December 31, 2018, the Company recorded a $ 16,027 loss related to the abandonment of certain developed technologies that the Company ceased using in the fourth quarter of 2018.

The Company does not expect to use these technologies as a defensive asset or market them for sale in the future.

Because these technologies were used in combination with other technologies, the identifiable cash flows did not result in an impairment;

Because these technologies were used in combination with other technologies, the identifiable cash flows did not result in an impairment loss;

however, because the Company made a decision to abandon the assets, it recorded the charge to research and development expense.

The deconsolidation of AquaBounty (Note 1 ) in April 2019 resulted in the reduction of $ 11,567 of net intangible assets, primarily related to patents, developed technologies, and know-how, on the accompanying consolidated balance sheet during the year ended December 31, 2019.

Amortization expense was $ 7,593 , $ 7,920 and $ 11,666 for the years ended December 31, 2020, 2019 and 2018, respectively.

Estimated aggregate amortization expense for definite lived intangible assets is expected to be as follows:

Thereafter 34,191

Total $ 65,396

Lines of Credit and Long-Term Debt

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Trans Ova has a $ 5,000 revolving line of credit with First National Bank of Omaha that matures on April 1, 2021.

The line of credit bears interest at the greater of 2.95 % above the London Interbank Offered Rate or 3.00 % , and the actual rate was 4.76 % as of December 31, 2019 .

As of December 31, 2019 , there was an outstanding balance of $ 1,695 .

The line of credit bears interest at the greater of the U.S.

Prime Rate or 3.00 %, and the actual rate was 3.25 % as of December 31, 2020.

As of December 31, 2020, there was no outstanding balance.

The amount available under the line of credit is based on eligible accounts receivable and inventory up to the maximum principal amount and was $ 5,000 as of December 31, 2020.

The line of credit is collateralized by certain of Trans Ova's assets and contains certain restricted covenants that include maintaining minimum tangible net worth and working capital and maximum allowable annual capital expenditures.

Trans Ova was in compliance with these covenants as of December 31, 2019 .

Exemplar has a $ 700 revolving line of credit with American State Bank that matures on October 31, 2021.

The line of credit bears interest at 4.00 % per annum.

As of December 31, 2019 , there was an outstanding balance of $ 227 .

As of December 31, 2020, there was no outstanding balance.

Long-Term Debt

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Long-term debt, less current portion $ 171,522 $ 186,321

The deconsolidation of AquaBounty (Note 1 ) in April 2019 resulted in the reduction of $ 4,030 of long-term debt on the accompanying consolidated balance sheet during the year ended December 31, 2019.

Convertible Debt

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The Convertible Notes are senior unsecured obligations of Precigen and bear interest at a rate of 3.50 % per year, payable semiannually in arrears on January 1 and July 1 of each year beginning on January 1, 2019.

The Convertible Notes mature on July 1, 2023, unless earlier repurchased or converted.

The Convertible Notes are convertible into cash, shares of Precigen's common stock or a combination of cash and shares, at Precigen's election.

The Convertible Notes mature on July 1, 2023 and are repayable in cash, unless earlier repurchased or converted.

Upon conversion by the holders, the Convertible Notes are convertible into cash, shares of Precigen's common stock or a combination of cash and shares, at Precigen's election.

The initial conversion rate of the Convertible Notes is 58.6622 shares of Precigen common stock per $ 1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $ 17.05 per share of common stock).

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The Indenture contains customary events of default, as defined in the agreement, and, if any of the events occur, could require repayment of a portion or all of the Convertible Notes, including accrued and unpaid interest.

Additionally, the Indenture provides that Precigen shall not consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of its properties and assets to, another entity, unless (i) the surviving entity is organized under the laws of the United States and such entity expressly assumes all of Precigen's obligations under the Convertible Notes and the Indenture;

and the Indenture;

and (ii) immediately after such transaction, no default or event of default has occurred and is continuing under the Indenture.

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Year Ended December 31,

2020 2019 2018

Cash interest expense $ 7,000 $ 7,000 $ 3,462

4 unchanged sentences

In September 2018, ActoBio issued $ 30,000 of convertible promissory notes (the "ActoBio Notes") to a related party in conjunction with an asset acquisition with Harvest (Note 4).

The ActoBio Notes have a maturity date of September 6, 2020, accrue interest at 3.0 % compounded annually ("accrued PIK interest"), are convertible into shares of ActoBio common stock at any time by the holder, and are automatically convertible in shares of ActoBio common stock upon the closing of certain financing events as defined in the ActoBio Notes.

If the ActoBio Notes have not been converted to ActoBio common stock by the maturity date, ActoBio can pay the principal and accrued PIK interest in cash or with shares of Precigen common stock at its election.

There are no embedded features that are required to be separated from the debt host and accounted for separately, so the ActoBio Notes were recorded at $ 30,000 .

The ActoBio Notes, which accrued interest at 3.0 % compounded annually ("accrued PIK interest"), matured in September 2020.

The Company issued 6,293,402 shares of Precigen common stock upon conversion of the outstanding principal balance and accrued PIK interest at maturity.

Interest expense was $ 616 , $ 921 , and $ 290 for the years ended December 31, 2020, 2019 and 2018, respectively.

As of December 31, 2019 , the carrying value of the ActoBio Notes, including accrued interest, was $ 31,211 .

Precigen and PGEN Therapeutics Convertible Note

In December 2018, in conjunction with the Merck Purchase Agreement (Note 6), Precigen and PGEN Therapeutics jointly and severally issued a $ 25,000 convertible note (the "Merck Note") to Ares Trading in exchange for cash.

The Merck Note has a maturity date of June 28, 2021 and will be converted to Precigen common stock on the first trading day following maturity if not otherwise converted prior to that date.

Prior to maturity, Ares Trading may convert the Merck Note, at their election, into (i) Precigen common stock at any time, (ii) Precigen common stock upon the Company's closing of qualified financing as defined in the agreement, (iii) PGEN Therapeutics equity upon PGEN Therapeutics closing a qualified financing as defined in the agreement, and (iv) PGEN Therapeutics common stock upon the closing of a qualified initial public offering ("IPO") of PGEN Therapeutics common stock.

In the event of a conversion upon a qualified IPO, the conversion price will be 90 % of the IPO price.

There is no stated interest rate on the Merck Note.

However, in the event Ares Trading elects to convert the Merck Note into PGEN Therapeutics equity, the Merck Note accrues interest at a rate of 5 % per year ("PIK interest") and will be converted with the outstanding principal.

The Company determined that the potential PIK interest and IPO conversion discount represented embedded derivatives requiring bifurcation from the debt host but had no significant value as of December 31, 2019 .

The Merck Note had a maturity date of June 28, 2021 although it automatically converted to Precigen common stock on the first trading day following the second anniversary of issuance, which is December 2020, if not otherwise converted prior to that date.

In October 2020, pursuant to the terms of the Merck Note, Ares Trading voluntarily elected to convert the entire $ 25,000 outstanding into 6,758,400 shares of Precigen common stock.

The shares are restricted from resale by Ares Trading for a period of 180 days from the date of issuance.

Notes Payable

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Future Maturities

Future maturities of long-term debt are as follows:

Future maturities of long-term debt as of December 31, 2020 are as follows:

Thereafter 1,855

Total $ 203,735

The components of loss from continuing operations before income taxes are presented below:

Year Ended December 31,

2020 2019 2018

Domestic $ ( 97,313 ) $ ( 167,990 ) $ ( 394,580 )

Foreign ( 6,542 ) ( 3,274 ) ( 1,332 )

Loss from continuing operations before income taxes $ ( 103,855 ) $ ( 171,264 ) $ ( 395,912 )

The components of income tax expense (benefit) from continuing operations are presented below:

The components of income tax benefit from continuing operations are presented below:

Year Ended December 31,

2020 2019 2018

United States federal income taxes:

Current $ — $ — $ ( 31 )

Deferred 37 ( 561 ) ( 11,855 )

Foreign income taxes:

Current 74 34 68

Deferred ( 204 ) ( 230 ) 635

State income taxes:

Income tax expense (benefit) from continuing operations

Income tax expense (benefit) from continuing operations for the years ended December 31, 2019 , 2018 and 2017 differed from amounts computed by applying the applicable United States federal corporate income tax rate of 21% for 2019 and 2018 , and 34% for 2017, to loss before income taxes as a result of the following:

Current — — 113

Deferred 11 ( 173 ) ( 4,355 )

Income tax benefit from continuing operations $ ( 82 ) $ ( 930 ) $ ( 15,425 )

Income tax benefit from continuing operations for the years ended December 31, 2020, 2019 and 2018 differed from amounts computed by applying the applicable United States federal corporate income tax rate of 21% to loss before income taxes as a result of the following:

2020 2019 2018

Computed statutory income tax benefit from continuing operations $ ( 21,810 ) $ ( 35,965 ) $ ( 83,141 )

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Nondeductible officer compensation 728 595 294

Gain on dividend distribution of AquaBounty common stock

Impairment of goodwill — 273 —

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Acquisition and internal restructuring transaction costs — 260 52

Provisional impact of the Tax Act

Enacted changes in foreign tax rates and foreign tax reforms

Reacquired in-process research and development — — 2,696

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United States-foreign rate differential ( 21 ) ( 76 ) 215

Other, net ( 306 ) ( 72 ) ( 3,517 )

( 21,391 ) ( 31,948 ) ( 91,941 )

Change in valuation allowance for deferred tax assets 21,309 31,018 76,516

Total income tax expense (benefit) from continuing operations

Total income tax benefit from continuing operations $ ( 82 ) $ ( 930 ) $ ( 15,425 )

The tax effects of temporary differences that comprise the deferred tax assets and liabilities included in continuing operations as of December 31, 2020 and 2019, are as follows:

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Allowance for doubtful accounts $ 1,816 $ 2,140

Inventory 289 415

Equity securities and investments in affiliates 570 11,933

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Investments in subsidiaries included in discontinued operations — 8,592

Net operating and capital loss carryforwards

Net operating, capital loss, and interest expense carryforwards 275,519 196,663

Total deferred tax assets 397,066 364,252

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Deferred tax liabilities

Property, plant and equipment

Right-of-use assets 5,011 8,091

Intangible assets

Long-term debt 7,604 9,987

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Activity within the valuation allowance for deferred tax assets included in continuing operations during the years ended December 31, 2020, 2019 and 2018 was as follows:

2020 2019 2018

Valuation allowance at beginning of year $ 349,008 $ 292,217 $ 211,078

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Discontinued operations treated as asset sales 7,977 10,585 3,832

Discontinued operations related to MBP Titan 8,019 9,663 8,735

Adoption of ASC 842 — 512 —

Adoption of ASC 606 — — ( 7,477 )

Adoption of ASU 2016-09

Provisional impact of the Tax Act

Equity component of long-term debt — — ( 13,367 )

Change in deferred state tax rate — — ( 8,666 )

Changes in foreign tax rates and foreign tax reforms

Foreign currency translation adjustment 1,035 ( 75 ) ( 885 )

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As a result, utilization of portions of the net operating losses may be subject to annual limitations, however as of December 31, 2020, all such limited losses applicable to Precigen, other than losses inherited via acquisition, have been fully utilized.

As of December 31, 2019 , approximately $ 42,100 of the Company's domestic net operating losses were inherited via acquisition, including $ 13,376 acquired via the acquisition of GenVec, and are limited based on the value of the target at the time of the transaction.

As of December 31, 2020, approximately $ 42,100 of the Company's domestic net operating losses were inherited via acquisition and are limited based on the value of the target at the time of the transaction.

As of December 31, 2020, the Company has net operating loss carryforwards for United States federal income tax purposes of approximately $ 756,200 available to offset future taxable income, including approximately $ 503,500 generated after 2017, United States capital loss carryforwards of approximately $ 211,500 , and federal and state research and development tax credits of approximately $ 10,200 , prior to consideration of annual limitations that may be imposed under Section 382.

Net operating loss carryforwards generated prior to 2018 will begin to expire in 2022 , and capital loss carryforwards will expire if unutilized by 2024.

Net operating loss carryforwards generated prior to 2018 will begin to expire in 2022, and capital loss carryforwards will expire if unutilized beginning in 2024.

The Company's foreign subsidiaries included in continuing operations have foreign loss carryforwards of approximately $ 82,300 , most of which do not expire.

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Future distributions of accumulated earnings of the Company's direct foreign subsidiaries may be subject to United States income and foreign withholding taxes.

In the year ended December 31, 2017, the Company recorded a net provisional income tax benefit of $ 2,185 upon enactment of the Tax Act, which is comprised of several items.

Amounts related to the remeasurement of most of the Company's domestic deferred tax assets as a result of the United States corporate rate change to 21% as part of the Tax Act are $ 87,473 , which was fully offset by a reduction in the Company's valuation allowance.

The Company's net United States deferred tax liability that is not offset by a valuation allowance was similarly written down, and the Company recorded a provisional deferred tax benefit of $ 1,730 .

The Company also recorded a provisional current tax benefit of $ 455 related to the expected refundability of accumulated corporate alternative minimum tax credits.

The Company provisionally estimated its transition tax exposure to be zero , as any accumulated earnings in foreign subsidiaries are offset by accumulated deficits in other foreign subsidiaries.

The Company completed its accounting for the Tax Act in the fourth quarter of 2018, and there were no significant adjustments to the previously recorded provisional amounts.

Additionally, in December 2017, Belgium enacted significant tax reform measures, the most significant of which to the Company is the limitation on the utilization of accumulated losses in years after 2017.

After that date, loss carryforwards can only be used to offset 70% of taxable income that exceeds a certain threshold.

As a result, the Company recorded adjustments to its net deferred tax assets and valuation allowances.

These adjustments resulted in a net deferred tax liability of $ 2,307 , which was recorded as a component of deferred tax expense for the year ended December 31, 2017.

The Company and its subsidiaries do not have material unrecognized tax benefits as of December 31, 2020.

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Issuances of Precigen Common Stock

Concurrent with entering into the TS Biotechnology Sale on January 1, 2020, the Company also entered into a subscription agreement with TS Biotechnology pursuant to which TS Biotechnology purchased 5,972,696 shares of the Company's common stock for $ 35,000 on January 31, 2020.

In January 2018, Precigen closed a public offering of 6,900,000 shares of its common stock, including 1,000,000 shares of common stock purchased by affiliates of Third Security.

The net proceeds of the offering were $ 82,374 , after deducting underwriting discounts of $ 3,688 and offering expenses of $ 188 , all of which were capitalized.

In December 2017, the Company entered into a securities purchase agreement with an affiliate of Third Security for the private placement of 1,207,980 shares of the Company's common stock for gross proceeds of $ 13,686 .

See Notes 12, 17, and 23 for discussion regarding additional issuances of Precigen common stock.

Share Lending Agreement

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In October 2018, certain investors exercised warrants acquired from the January 2018 offering, resulting in additional net proceeds of $ 4,316 , including $ 3,077 from Precigen.

In January 2017, in conjunction with the listing by AquaBounty of their common stock on the Nasdaq Stock Market, Precigen purchased $ 25,000 of additional AquaBounty common stock and subsequently distributed shares of AquaBounty common stock as a dividend to Precigen shareholders.

Dividends to Shareholders

In January 2017, the Company distributed to its shareholders 1,776,557 shares of AquaBounty common stock valued at $ 22,385 .

The distribution constituted a dividend to shareholders of record as of January 9, 2017.

In connection with the distribution and pursuant to the terms of the Company's equity incentive plans, the conversion terms of all outstanding options for shares of the Company's common stock as of January 9, 2017 were adjusted to reflect the value of the distribution with respect to shares of the Company's common stock by decreasing the exercise prices and increasing the number outstanding options.

This adjustment resulted in 46,766 additional outstanding options at a weighted average exercise price of $ 31.11 .

Components of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

Unrealized gain (loss) on investments

Loss on foreign currency translation adjustments

Total accumulated other comprehensive loss

Components of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows:

Unrealized gain on investments $ 13 $ 7

Income (loss) on foreign currency translation adjustments 3,984 ( 27,475 )

Total accumulated other comprehensive income (loss) $ 3,997 $ ( 27,468 )

See Note 3 for further discussion of the release of cumulative losses on foreign currency translation adjustments upon the closing of the TS Biotechnology Sale.

Share-Based Payments

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Year Ended December 31,

2020 2019 2018

Cost of products $ 10 $ 20 $ 78

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Discontinued operations ( 1,380 ) 3,852 5,742

Total $ 18,366 $ 18,950 $ 36,296

Precigen Stock Option Plans

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The 2019 Plan permits the grant of share-based awards, including stock options, restricted stock awards, and RSUs, to non-employee service providers, including board members.

As of December 31, 2019 , there were 5,000,000 shares authorized for issuance under the 2019 Plan, of which no awards were outstanding and 4,087,444 were available for grant.

As of December 31, 2020, there were 5,000,000 shares authorized for issuance under the 2019 Plan, of which 845,248 stock options and 551,083 RSUs were outstanding and 2,432,624 shares were available for grant.

Stock options may be granted with an exercise price equal to or greater than the stock's fair market value at the date of grant.

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Stock option activity was as follows:

Number of Shares

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (Years)

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years)

Balances at December 31, 2017 11,382,747 $ 28.99 7.32

Adjustment due to dividend (Note 14)

Granted 1,470,339 14.26

Exercised ( 45,159 ) ( 6.59 )

Forfeited ( 929,596 ) ( 21.48 )

Expired ( 785,268 ) ( 26.25 )

Balances at December 31, 2018 11,093,063 27.95 6.81

Granted 1,556,575 6.52

Exercised ( 19,887 ) ( 3.17 )

Forfeited ( 1,236,326 ) ( 24.92 )

Expired ( 2,371,143 ) ( 38.53 )

Balances at December 31, 2019 9,022,282 21.94 6.10

Granted 5,693,498 10.03

Exercised ( 30,061 ) ( 3.88 )

Forfeited ( 976,324 ) ( 15.47 )

Expired ( 2,453,499 ) ( 26.53 )

Balances at December 31, 2020 11,255,896 15.53 7.25

Exercisable at December 31, 2020 5,437,667 19.61 5.61

Total unrecognized compensation costs related to unvested awards as of December 31, 2019 were $ 16,057 , and are expected to be recognized over a weighted-average period of approximately two years .

Total unrecognized compensation costs related to unvested awards as of December 31, 2020 were $ 13,842 , and are expected to be recognized over a weighted-average period of approximately 2.75 years.

The weighted average grant date fair value of options granted during 2020, 2019 and 2018 was $ 2.98 , $ 3.79 and $ 7.94 , respectively.

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The following table summarizes additional information about stock options outstanding as of December 31, 2020:

Options Outstanding

Options Exercisable

Range of Exercise Prices

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Life (Years)

Aggregate Intrinsic Value

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Life (Years)

Aggregate Intrinsic Value

Options Outstanding Options Exercisable

Range of Exercise Prices Number of Options Weighted Average Exercise Price Weighted Average Remaining Life (Years) Aggregate Intrinsic Value Number of Options Weighted Average Exercise Price Weighted Average Remaining Life (Years) Aggregate Intrinsic Value

$ 1.55 — $ 5.95 3,259,685 $ 4.63 8.92 $ 18,157 1,271,310 $ 3.11 8.73 $ 9,018

$ 6.06 — $ 15.09 2,261,216 11.01 8.23 1,325 345,788 9.09 4.76 689

$ 15.80 — $ 20.94 3,028,309 18.85 7.38 — 1,216,258 19.82 5.62 —

$ 21.13 — $ 36.84 2,303,371 26.33 4.32 — 2,200,996 26.52 4.22 —

$ 37.88 — $ 47.35 403,315 42.26 4.01 — 403,315 42.26 4.01 —

11,255,896 $ 15.53 7.25 $ 19,482 5,437,667 $ 19.61 5.61 $ 9,707

The following table summarizes additional information about stock options outstanding as of December 31, 2019:

Options Outstanding

Options Exercisable

Range of Exercise Prices

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Life (Years)

Aggregate Intrinsic Value

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Life (Years)

Aggregate Intrinsic Value

RSU activity was a follows:

Number of Restricted Stock Units

Weighted Average Grant Date Fair Value

Weighted Average Remaining Contractual Term (Years)

Options Outstanding Options Exercisable

$ 3.17 — $ 8.60 1,612,219 $ 6.40 8.08 $ 473 585,144 $ 5.61 5.95 $ 194

$ 8.77 — $ 20.68 1,278,121 15.55 6.53 — 753,064 15.89 5.20 —

$ 20.94 1,646,500 20.94 6.51 — 892,000 20.94 6.02 —

$ 21.00 — $ 29.47 1,976,645 23.71 6.06 — 1,585,940 23.71 5.79 —

$ 29.56 — $ 65.08 2,508,797 34.46 4.38 — 2,448,046 34.47 4.33 —

9,022,282 $ 21.94 6.10 $ 473 6,264,194 $ 24.89 5.20 $ 194

RSU activity was as follows:

Number of Restricted Stock Units Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (Years)

Balances at December 31, 2017 — $ — 0.00

Granted 1,069,126 13.84

Vested ( 25,000 ) ( 15.82 )

Forfeited ( 73,785 ) ( 13.47 )

Balances at December 31, 2018 970,341 13.82 1.43

Granted 2,278,460 6.59

Vested ( 1,159,165 ) ( 8.74 )

Forfeited ( 307,654 ) ( 8.99 )

Balances at December 31, 2019 1,781,982 8.71 1.24

Total unrecognized compensation costs related to unvested RSU awards as of December 31, 2019 were $ 10,795 and are expected to be recognized over a weighted-average period of approximately two years .

Granted 3,157,390 3.09

Vested ( 2,802,593 ) ( 3.99 )

Forfeited ( 409,067 ) ( 8.59 )

Balances at December 31, 2020 1,727,712 6.11 0.42

Total unrecognized compensation costs related to unvested RSU awards as of December 31, 2020 were $ 4,188 and are expected to be recognized over a weighted-average period of approximately 0.75 years.

Precigen currently uses authorized and unissued shares to satisfy share award exercises.

The Company's Executive Chairman ("Executive Chairman"), who previously served as the Company's Chief Executive Officer ("CEO") until January 1, 2020, receives a base salary of $ 200 per month payable in fully-vested shares of Precigen common stock with such shares subject to a three -year lock-up on resale.

The monthly number of shares of common stock was calculated based on the closing price on the last trading day of each month and the shares were issued pursuant to the terms of a Restricted Stock Unit Agreement ("RSU Agreement") between Precigen and the Executive Chairman pursuant to the terms of the 2013 Plan.

The RSU Agreement, which is subject to renewal annually by the compensation committee of the board of directors of the Company, expired March 31, 2019.

In April 2019, the Company entered into a new RSU agreement through March 31, 2020, pursuant to which the base salary and lock-up terms remained unchanged and the number of fully-vested shares of Precigen common stock paid monthly was subsequently calculated based on the volume weighted average of the price of Precigen common stock over the 30 day period ending on the last calendar day of each month.

The Company's Executive Chairman ("Executive Chairman"), who previously served as the Company's Chief Executive Officer ("CEO") until January 1, 2020, and as an employee and executive officer until September 24, 2020, received a base salary of $ 200 per month through March 31, 2020, payable in fully-vested shares of Precigen common stock with such shares subject to a three-year lock-up on resale.

The monthly number of shares of common stock was calculated based on the closing price on the last trading day of each month through March 2019 and based on the volume weighted average of the price of Precigen common stock over the 30 day period ending on the last calendar day of each month thereafter, and the shares were issued pursuant to the terms of a Restricted Stock Unit Agreement ("RSU Agreement") between Precigen and the Executive Chairman pursuant to the terms of the 2013 Plan.

The RSU Agreement expired March 31, 2020.

The fair value of the shares issued as compensation for services is included in selling, general, and administrative expenses in the Company's consolidated statements of operations and totaled $ 454 , $ 1,868 , and $ 1,956 for the years ended December 31, 2020, 2019 and 2018, respectively.

In September 2020, the Company's board of directors, upon the recommendation of the compensation committee of the board, approved a new compensation arrangement for the Executive Chairman.

The new arrangement consists of (i) an annual retainer of $ 100 payable in cash or, at the Executive Chairman's election, shares of Precigen common stock;

(ii) an annual grant of fully

vested stock options having a grant date fair value of $ 250 ;

and (iii) an annual grant of RSUs having a grant date fair value of $ 250 .

The compensation arrangement begins in calendar year 2021, and the foregoing elements were prorated for the nine months of 2020 not covered by the Executive Chairman's previous compensation arrangement discussed above.

The terms of the equity awards granted to the Executive Chairman are pursuant to the 2019 Plan.

Operating Leases

The Company leases certain facilities and equipment under operating leases.

Leases with a lease term of twelve months or less are considered short term leases and are not recorded on the balance sheet, and expense for these leases is recognized over the

term of the lease.

The Company's leases have remaining terms of one to ten years , some of which may include options to extend the lease and some of which may include options to terminate the lease within one year .

In these leases, the Company uses judgment to determine whether it is reasonably possible to extend the lease beyond the initial term or terminate before the initial term ends and the length of the possible extension or early termination .

Leases with a lease term of twelve months or less are considered short-term leases and are not recorded on the balance sheet, and expense for these leases is recognized over the term of the lease.

All other leases have remaining terms of one to nine years , some of which may include options to extend the lease and some of which may include options to terminate the lease within one year .

The Company uses judgment to determine whether it is reasonably possible to extend the lease beyond the initial term or terminate before the initial term ends and the length of the possible extension or early termination .

The leases are renewable at the option of the Company and do not contain residual value guarantees, covenants, or other restrictions.

The Company's finance leases are not material.

The components of lease costs from continuing operations were as follows:

The components of lease costs were as follows:

Year Ended December 31,

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Variable lease costs 842 845

As of December 31, 2019 , maturities of lease liabilities, excluding short-term leases, for continuing operations were as follows:

Lease costs $ 6,183 $ 6,708

As of December 31, 2020, maturities of lease liabilities, excluding short-term and variable leases, for continuing operations were as follows:

Thereafter 867

Present value adjustment ( 2,510 )

Total $ 10,401

Current portion of operating lease liabilities $ 2,657

Long-term portion of operating lease liabilities 7,744

Total $ 10,401

Other information related to operating leases in continuing operations was as follows:

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Year Ended December 31,

Supplemental Cash Flows Information

Supplemental disclosure of cash flow information

Cash paid for operating lease liabilities $ 4,012 $ 3,877

Operating lease right-of-use assets added in exchange for new lease liabilities 417 1,137

At December 31, 2018, future minimum lease payments under operating leases for continuing operations having initial or remaining noncancelable lease terms in excess of one year were as follows:

Commitments and Contingencies

Contingencies

In March 2012, Trans Ova was named as a defendant in a licensing and patent infringement suit brought by XY, LLC ("XY") alleging that certain of Trans Ova's sale of semen-sorting products and services breached a 2004 licensing agreement and infringed on patents related to semen sorting that XY allegedly owned.

Trans Ova filed a number of counterclaims in the case.

The matter proceeded to a jury trial in the United States District Court for the District of Colorado in January 2016.

The jury determined that XY and Trans Ova had each breached the licensing agreement and that Trans Ova had infringed XY's patents.

In April 2016, the court issued its post-trial order, awarding $ 528 in damages to Trans Ova and $ 6,066 in damages to XY.

The order also provided Trans Ova with the ability to continue to practice XY's technology, subject to an ongoing royalty obligation of 12.5 % of gross proceeds on Trans Ova's standard sorted semen products, plus a 2 % enhancement on those products utilizing "reverse-sorted semen", or semen that is frozen before being sorted.

In addition, the court assigned a $ 5.00 minimum royalty for a straw of sexed semen.

Both parties appealed the district court's order.

In May 2018, the Court of Appeals for the Federal Circuit denied Trans Ova's appeal of its claims for antitrust, breach of contract and patent invalidity (except as to one patent, for which the Federal Circuit affirmed invalidity in a separate, same-day ruling in a third-party case).

The Federal Circuit remanded the district court's calculation of the ongoing royalty and instructed the district court to re-calculate the ongoing royalty in light of post-verdict economic factors.

In March 2019, the district court clarified the royalty base and reset the royalty rates consistent with the Federal Circuit's opinion.

The district court increased the royalty rate on Trans Ova's standard sorted semen products to 18.75 % .

For the reverse-sort enhancement, however, it applied a weighted, blended royalty of 12.63 % to Trans Ova's entire in vitro fertilization service cycle that utilizes reverse-sorted semen.

The district court also changed the minimum royalty for a straw of sexed semen to $ 6.25 for a 2-million cell straw (prorated appropriately for straws of higher cell counts), and assigned a minimum royalty for a sexed embryo at $ 6.25 per embryo.

The new royalty rates were made retroactive to February 2016 (the end date of the trial).

Since the inception of the 2004 licensing agreement, Trans Ova has remitted payments to XY pursuant to the terms of that agreement, or pursuant to the terms of the district court's April 2016 post-trial order and its March 2019 post-remand order, and has recorded these payments in cost of services in the consolidated statements of operations for the respective periods.

For the period from inception of the 2004 licensing agreement through the district court's April 2016 order, aggregate royalty and license payments were $ 3,170 , of which $ 2,759 had not yet been deposited by XY.

In 2016, the Company recorded the expense

of $ 4,228 , representing the excess of the net damages awarded to XY, including prejudgment interest, over the liability previously recorded by Trans Ova for uncashed checks previously remitted to XY.

In August 2016, Trans Ova deposited the net damages amount, including prejudgment interest, into the district court's registry, to be held until the appeals process was complete and final judgment amounts were determined.

These amounts were included in restricted cash and other accrued liabilities on the accompanying consolidated balance sheet as of December 31, 2018.

After the appeal, the district court subsequently released the funds held in its registry to XY in January 2019.

As for post-trial damages, Trans Ova continued to remit payment to XY every quarter based on the original ongoing royalty rates set by the district court, though XY refused to cash those checks.

Under the district court's March 2019 post-remand order clarifying the royalty base and resetting the royalty rates, Trans Ova recalculated royalties owed from February 2016 through the first quarter of 2019, plus any applicable pre- and post-judgment interest, and remitted that payment, totaling $ 5,801 , to XY in May 2019.

In June 2019, XY deposited the $ 5,801 into the district court's registry while the parties resolve two separate disputes over the appropriate calculation of royalties.

In the first dispute, XY filed a motion claiming over $ 1,000 in additional back royalties.

Trans Ova contested XY's motion.

On February 6, 2020, the district court denied XY's motion without prejudice, holding that XY failed to satisfy its obligation under the court's local rules to meaningfully confer with Trans Ova before filing its motion.

The district court held that, if XY chooses to re-file its motion, it must include a substantial certificate of conferral demonstrating that it seriously and in good faith tried to resolve its disputes with Trans Ova.

In the second dispute, Trans Ova moved for partial relief from judgment after XY's last patent covering standard sorting expired in December 2019.

Trans Ova is seeking an appropriate reduction in its royalty obligation in light of the fact that XY's only non-expired patents are limited to reverse sorting.

Trans Ova's motion is pending before the court.

During the year ended December 31, 2019, the Company recorded additional royalty expense of $ 383 based on the recalculation of royalties owed XY from February 2016 through December 2018.

This amount is included in selling, general and administrative expenses on the accompanying consolidated statement of operations.

In December 2016, XY filed a complaint for patent infringement, trade secret misappropriation, and various state law claims against Trans Ova in the United States District Court for the Western District of Texas in Waco, Texas.

Since the claims in the 2016 complaint directly relate to the parties' other litigation, Trans Ova filed and was granted a motion to transfer the case to Colorado district court.

That court subsequently dismissed nine of the complaint's twelve counts, including all five non-patent counts and four patent counts.

The court subsequently dismissed a fifth patent count after ruling that the patent was invalid, leaving only two patent counts left in the case.

In February 2019, a Wisconsin district court invalidated one of the two remaining patents, which XY had asserted against another competitor.

That ruling prompted the Colorado district court to stay the two remaining patent counts and enter final judgment against XY's ten other dismissed counts.

The 2016 litigation is administratively closed, pending XY's appeal to the Federal Circuit, wherein XY is appealing the district court's dismissal of four of its patent causes of action.

XY is not appealing one of the five dismissed patent counts or any of the dismissed non-patent causes of action.

The Federal Circuit hearing is scheduled for March 5, 2020.

Separately, after initially appealing the Wisconsin court's invalidation of the sixth patent, XY subsequently withdrew its appeal.

Trans Ova shall continue to utilize the technology consistent with the determinations of the court proceedings.

Nonetheless, these disputes remain subject to a number of uncertainties, including the outcome of appellate proceedings, the possibility of further claims by XY, and the impact of these matters on Trans Ova's ability to utilize the technology.

On December 1, 2020, Trans Ova settled one of two patent infringement lawsuits brought by XY, LLC ("XY").

The lawsuit, originally filed in 2012, was tried and appealed between 2016 and 2020.

On December 1, 2020, the parties reached a settlement resolving all remaining disputes.

As part of that settlement, Trans Ova remitted to XY a settlement payment, which, in addition to all the other monies Trans Ova had previously paid XY, constituted full payment and satisfaction of the judgment, including pre-judgment interest, post-judgment interest, costs, and all past, current and future royalty obligations under the judgment.

In exchange, XY released and forever discharged Trans Ova from all obligations arising out of the judgment.

In addition, XY dismissed with prejudice its pending appeal.

On January 8, 2021, the parties filed a stipulation of case termination with the district court.

The second patent infringement lawsuit brought on by XY was filed in December 2016.

On March 20, 2019, the United States District Court for the District of Colorado entered judgment under Rule 54(b) as to ten of the twelve counts of the operative complaint, dismissed those patent counts from the case, and stayed the remaining two counts of patent infringement pending XY's appeal of the Rule 54(b) judgment.

While XY's appeal was pending, one of the two patents remaining in the case was separately invalidated in a different district court proceeding, which XY did not appeal.

As to the ten dismissed counts in the suit XY brought against Trans Ova, XY appealed dismissal of only four of them, each alleging patent infringement.

On July 31, 2020, the United States Court of Appeals for the Federal Circuit reversed the district court's dismissal of those four patent counts and remanded the case for further proceedings.

The Court is assessing next steps of the case, including an amended scheduling order.

While this patent infringement lawsuit is pending, Trans Ova shall continue to utilize the technology consistent with the determinations of the court proceedings.

Nonetheless, these disputes remain subject to a number of uncertainties, including the outcome of district court and appellate proceedings, the possibility of further claims by XY, and the impact of these matters on Trans Ova's ability to utilize the technology.

Trans Ova and the Company could elect to enter into a settlement agreement in order to avoid the further costs and uncertainties of litigation.

In October 2018, the Company received a subpoena from the Division of Enforcement of the SEC informing the Company of a non-public, fact-finding investigation concerning the Company's disclosures regarding its methane bioconversion platform.

The Company has produced documents to, and met with, the staff of the SEC and is voluntarily cooperating with their investigation.

In November 2019, the staff of the SEC informed the Company that its investigative work was largely completed.

The Company and the staff of the SEC are currently in discussions, and there can be no assurance regarding the ultimate outcome of the investigation.

The Company produced documents to, and met with, the staff of the SEC and voluntarily cooperated with the SEC investigation.

In September 2020, the Company reached a final settlement with the SEC regarding the matter.

Under the terms of the settlement, the Company, without admitting or denying the allegations of the SEC, consented to the entry of an administrative order requiring that the Company:

(i) cease and desist from committing or causing any violations and future violations under Section 13(a) of the Securities Exchange Act of 1934, as amended, and Rules 13a-11 and 12b-20 promulgated thereunder;

and (ii) pay a $ 2,500 civil money penalty to the SEC.

In October 2020, three purported shareholder class action lawsuits, captioned Abadilla v.

Precigen, Inc., F/K/A Intrexon Corp., et al , Chen v.

Precigen, Inc.

F/K/A Intrexon Corp., et al , and Seppen v.

Precigen, Inc.

F/K/A Intrexon Corp., et al , were filed in the U.S.

District Court for the Northern District of California on behalf of certain purchasers of the Company's common stock.

The complaints name as defendants the Company and certain of its current and former officers.

The plaintiffs' claims track the allegations in the SEC's administrative order described above.

The plaintiffs seek compensatory damages, interest, and an award of reasonable attorneys' fees and costs and have filed motions to consolidate these claims.

In December 2020, a derivative shareholder action, captioned Edward D.

Wright, derivatively on behalf of Precigen, Inc.

F/K/A Intrexon Corp.

Alvarez et al , was filed in the Circuit Court for Fairfax County in Virginia on behalf of Precigen, Inc.

The complaint names as defendants current directors and certain officers.

The plaintiff's claims track the allegations in the SEC's administrative order described above.

The plaintiff seeks damages, forfeiture of benefits received by defendants, and an award of reasonable attorneys' fees and costs.

The Company intends to defend the lawsuits vigorously;

however, there can be no assurances regarding the ultimate outcome of these lawsuits.

On July 10, 2020, the Company received a notice of arbitration from Harvest pursuant to the Collaboration Investment Opportunity Agreement dated March 13, 2015.

In December 2020, the Company entered into an agreement with Harvest to resolve matters related to the parties' contractual and equity relationships and to settle all claims made in connection with the notice of arbitration noted above.

Pursuant to the settlement agreement, the Company issued 2,117,264 shares of its common stock to Harvest valued at $ 18,103 in consideration of (i) the termination of the ECC agreements with Thrive Agrobiotics, Exotech Bio, and AD Skincare, which the Company had $ 6,993 of deferred revenue remaining related to these ECCs prior to the settlement agreement;

(ii) the return of the Company's ownership interest in these Harvest start-up entities that had a total value of $ 326 prior to the settlement agreement;

(iii) the commitment of Harvest to take reasonable commercial efforts to transfer its membership interests in Intrexon Energy Partners II;

and (iv) mutual irrevocable and unconditional releases of

The Company wrote off the investment balances and netted the deferred revenue balances associated with the eliminated service obligation against the consideration paid, resulting in a loss on the settlement agreement of $ 11,436 which is included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2020.

Outstanding receivables from these Harvest start-up entities related to research and development services performed by the Company under the ECC agreements, which had been fully reserved in 2019, were also forgiven as part of the settlement agreement and written off by the Company.

Following the settlement agreement, these Harvest start-up entities are no longer related parties.

The Company has previously entered into strategic collaborations, including ECCs and JVs, to fund and develop products enabled by its technologies.

These relationships involve complex interests, and the Company's interests may diverge with those of its collaborators, which can occur as a result of operations under those collaborations, business or technological developments, or as the Company transitions away from, or terminates, strategic collaborations.

The Company has had, and has, disagreements and disputes with certain collaborators and JV partners, including Harvest, the IEP Investors, and the IEPII Investors.

While the Company believes it has the right to payment with respect to work performed for all of its collaborations and JVs, consistent with its policy for accounting for accounts receivable, the Company has fully reserved the amount of any disputed accounts receivable that remained outstanding as of December 31, 2019.

These disagreements and disputes may result

in litigation, unfavorable settlements or concessions by the Company, adverse regulatory action, or management distraction, any of which could harm the Company's business or results of operations.

The Company may become subject to other claims, assessments and governmental investigations from time to time in the ordinary course of business.

The Company has had, and has, disagreements and disputes with certain collaborators and JV partners, including the IEP Investors and the IEPII Investors.

While the Company believes it is entitled to payment for work performed per its collaborations and JVs, consistent with its policy for accounting for accounts receivable, the Company has fully reserved the amount of any disputed accounts receivable that remained outstanding as of December 31, 2020 and 2019.

These disagreements and disputes result in management distraction and may result in litigation, unfavorable settlements, or concessions by the Company, or adverse regulatory action, any of which could harm the Company's business or operations.

In the course of its business, the Company is involved in litigation or legal matters, including governmental investigations.

Such matters are subject to many uncertainties and outcomes are not predictable with assurance.

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Third Security and Affiliates

The Company's Executive Chairman and Chairman of the board of directors 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 Precigen'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 provided the Company with certain professional, legal, financial, administrative, and other support services necessary to support the Company and its Executive Chairman.

The Services Agreement provided for a term of one year , could be terminated by the Company at any time, and could be extended only by agreement of the parties, including approval of a majority of the independent members of Precigen's board of directors.

The independent members of Precigen's board of directors, with the recommendation of the audit committee of the board of directors, subsequently approved extensions of the Services Agreement through January 1, 2020 at which point it was not further extended.

Under the Services Agreement, as consideration for providing these services, Third Security was entitled to a fee paid in the form of fully-vested shares of Precigen common stock that approximates $ 800 per month.

Through 2018, the number of shares of common stock was calculated based on the closing price of the Company's common stock on the 15th day of each month and issued to Third Security at the end of the month.

The Company's Executive Chairman is also the Senior Managing Director and Chairman of Third Security and owns 100 % of the equity interests of Third Security.

Through December 2019, the Company was party to a Services Agreement ("Services Agreement") with Third Security pursuant to which Third Security provided the Company with certain professional, legal, financial, administrative, and other support services necessary to support the Company and its Executive Chairman.

In 2018, the number of shares of common stock was calculated based on the closing price of the Company's common stock on the 15th day of each month and issued to Third Security at the end of the month.

In 2019, the number of shares of common stock was calculated based on the volume weighted average of the closing price of the Company's common stock over the 30-day period ending on the 15th day of the calendar month when the applicable services were provided.

Through May 2019, 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.

Following the effectiveness of the 2019 Plan in June 2019, subsequent payments made by the Company under the Services Agreement constitute, in the aggregate, an award under the 2019 Plan and are subject to the terms of the 2019 Plan (Note 15 ).

For the years ended December 31, 2019 , 2018 and 2017 , the Company issued 1,606,062 shares, 696,033 shares, and 500,650 shares, respectively, with values of $ 8,233 , $ 8,324 , and $ 8,704 , respectively, to Third Security as payment for services pursuant to the Services Agreement.

The Services Agreement was not extended and was allowed to expire on January 1, 2020.

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 was $ 26 , $ 47 , and $ 409 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

For the years ended December 31, 2019 and 2018, the Company issued 1,606,062 shares and 696,033 shares, respectively, with values of $ 8,233 and $ 8,324 , respectively, to Third Security as payment for services rendered pursuant to the Services Agreement.

Following the expiration of the Services Agreement, the Company entered into a new agreement with Third Security under which the Company reimburses Third Security for certain tax-related services performed by Third Security as requested by the Company.

The Company also reimburses Third Security for certain out-of-pocket expenses incurred on the Company's behalf prior to and after the expiration of the Services Agreement under a separate agreement.

The total expenses incurred by the Company under these arrangements were $ 159 , $ 26 , and $ 47 for the years ended December 31, 2020, 2019 and 2018, respectively.

The Company also subleases certain administrative offices to Third Security.

The significant terms of the lease mirror the terms of the Company's lease with the landlord, and the Company recorded sublease income of $ 83 , $ 89 , and $ 89 for the years ended December 31, 2020, 2019 and 2018, respectively.

See also Note 15 regarding compensation arrangements between the Company and its Executive Chairman.

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No shares of Series A Preferred Stock had been issued under the Preferred Stock Equity Facility.

The Company also subleases certain administrative offices to Third Security.

The significant terms of the lease mirror the terms of the Company's lease with the landlord, and the Company recorded sublease income of $ 89 , $ 89 , and $ 43 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

See Notes 1, 3, and 14 regarding additional transactions with affiliates of Third Security.

Transactions with ECC Parties

Entities controlled by Third Security are considered related parties and are disclosed below.

The Company also disclosed entity relationships below where it holds more than a de minimis equity interest, including equity securities received as upfront or milestone consideration, and that also are party to a collaboration with the Company.

In June 2016, the Company received 100,000 shares of Series 1 Preferred Stock (the "Preferred Shares") of ZIOPHARM, with a per share stated value of $ 1,200 , as consideration for amending their two previously existing ECC agreements (Note 6 ).

The Company received a monthly dividend, paid in additional Preferred Shares, equal to $ 12.00 per Preferred Share held per month divided by the stated value of the Preferred Shares.

The Company elected the fair value option to account for the Preferred Shares whereby the value of the Preferred Shares was adjusted to fair value as of each reporting date and unrealized gains and losses were reported in the consolidated statements of operations.

Collaborators in which the Company holds more than a de minimis equity interest, including interests received as upfront or milestone payments through collaborations, are considered related parties.

The Company held Series 1 Preferred Stock (the "Preferred Shares") of ZIOPHARM previously acquired through collaborations.

In conjunction with the ZIOPHARM License Agreement in October 2018 (Note 6), the Company returned to ZIOPHARM all of the Preferred Shares owned or accrued by the Company as of the effective date of the agreement.

During the years ended December 31, 2018 and 2017 , the Company recognized $ 14,793 and $ 16,717 of dividend income in the accompanying consolidated statements of operations, respectively.

Following the transaction in October 2018, ZIOPHARM is no longer considered a related party.

In March 2017, Fibrocell sold Series A Convertible Preferred Stock (the "Convertible Preferred Shares") convertible into shares of Fibrocell common stock and warrants to purchase shares of Fibrocell common stock to certain institutional and accredited investors, including the Company and affiliates of Third Security.

The Company paid $ 1,161 in exchange for 1,161 Convertible Preferred Shares and warrants to acquire 99,769 shares of Fibrocell common stock.

The Convertible Preferred Shares accrued dividends at 4 % per annum, compounded quarterly, increasing the stated value of the shares.

The Company also holds a promissory note which was convertible into shares of Fibrocell common stock ("convertible note") and warrants to purchase shares of Fibrocell common stock.

The Company elected the fair value option to account for these investments whereby the values of investments were adjusted to fair value as of each reporting date and unrealized gains and losses were reported in the consolidated statements of operations.

As of December 31, 2018, the fair value of the Company's investment in Fibrocell preferred stock totaled $ 191 , and the value of the convertible note and warrants totaled $ 120 , all of which are included in other assets on the accompanying consolidated balance sheet.

The Company also owned common shares of Fibrocell previously acquired through collaborations and other transactions, and the fair value of these common shares was $ 640 as of December 31, 2018.

In December 2019, Fibrocell was acquired by Castle Creek, and as a result, the Company received $ 1,280 in December 2019 for its common shares and received a total of $ 3,311 in January 2020 for the Convertible Preferred Shares and the convertible note, including accrued interest thereon.

The $ 3,311 is included in other receivables on the accompanying consolidated balance sheet as of December 31, 2019.

The Company recognized a total gain of $ 3,222 on the change in fair value of these instruments, which is included in total other income (expense), net, in the accompanying consolidated statement of operations for the year ended December 31, 2019.

Subsequent to the acquisition by Castle Creek, Fibrocell is no longer a related party.

During 2018, the Company mutually terminated each of its ECC agreements with Histogenics Corporation ("Histogenics"), OvaScience, Inc., and Synthetic Biologics, Inc.

("Synthetic Biologics").

Upon termination of these ECCs, the Company recognized the remaining deferred revenue totaling $ 11,877 .

In December 2017, the Company purchased certain property and equipment comprising the pilot plant production facility for its energy programs for $ 2,812 from Intrexon Energy Partners.

The Company intends to use the pilot plant to support the collaborations with Intrexon Energy Partners and Intrexon Energy Partners II and its own research programs.

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 statement of operations and totaled $ 1,839 for the year ended December 31, 2017.

In September 2017, the commitment period for Harvest was terminated and, as a result, the agreement with Harvest terminated.

The termination of the agreement had no effect on the existing collaborations with Harvest-controlled entities.

See Note 4 for further discussion of the asset acquisition of certain Harvest entities.

During the year ended December 31, 2018, the Company recognized $ 14,793 of dividend income in the accompanying consolidated statement of operations.

Following the transaction in October 2018, ZIOPHARM is no longer a related party.

The Company held Series A Convertible Preferred Stock (the "Convertible Preferred Shares"), a convertible note, common shares of Castle Creek, and warrants to purchase shares of Castle Creek common stock previously acquired through collaborations and other transactions.

As a result of the acquisition of Castle Creek by Castle Creek Pharmaceutical in December 2019, the Company received $ 1,280 in December 2019 for its shares of Castle Creek common stock and received a total of $ 3,311 in January 2020 for the Convertible Preferred Shares and the convertible note, including accrued interest thereon.

The $ 3,311 is included in receivables on the accompanying consolidated balance sheet as of December 31, 2019.

The Company recognized a total gain of $ 3,222 on the change in fair value of these instruments, which is included in total other expense, net, in the accompanying consolidated statement of operations for the year ended December 31, 2019.

Subsequent to the acquisition by Castle Creek Pharmaceutical, Castle Creek is no longer a related party.

During 2018, the Company mutually terminated ECC agreements with three separate related parties which resulted in the recognition of the remaining deferred revenue associated with these ECCs totaling $ 11,877 .

Net Loss per Share

The following table presents the computation of basic and diluted net loss per share:

2020 2019 2018

Historical net loss per share:

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Net loss from continuing operations attributable to Precigen per share, basic and diluted

$ ( 0.62 ) $ ( 1.09 ) $ ( 2.90 )

Net loss from discontinued operations attributable to Precigen per share, basic and diluted

( 0.40 ) ( 1.00 ) ( 1.03 )

Net loss attributable to Precigen per share, basic and diluted

$ ( 1.02 ) $ ( 2.09 ) $ ( 3.93 )

The following potentially dilutive securities as of December 31, 2020, 2019, and 2018, have been excluded from the above computations of diluted weighted average shares outstanding for the years then ended as they would have been anti-dilutive:

2020 2019 2018

Convertible debt 11,732,440 21,323,068 18,955,668

Options 11,255,896 9,022,282 11,093,063

Restricted stock units 1,727,712 1,781,982 970,341

Through March 31, 2019, the Company was a single operating segment.

In April 2019, the Company initiated efforts to better deploy resources, realize inherent synergies, and position the Company for growth with a core focus on healthcare and initiated plans to achieve this through various corporate activities, ultimately resulting in the closing of the Transactions in January 2020 (Note 3 ).

Beginning in the second quarter of 2019, the Company's CODM assessed the operating performance of and allocated resources for several operating segments using Segment Adjusted EBITDA.

Warrants 133,264 133,264 133,264

Total 24,849,312 32,260,596 31,152,336

The Company realigned its business in April 2019, and as a result, its CODM began regularly reviewing disaggregated financial information for various operating segments.

The Company's CODM assesses the operating performance of and allocates resources for several operating segments using Segment Adjusted EBITDA.

Management believes this financial metric is a key indicator of operating results since it excludes noncash revenues and expenses that are not reflective of the underlying business performance of an individual enterprise.

The Company defines Segment Adjusted EBITDA as net loss before (i) interest expense, (ii) income tax expense or benefit, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) loss on impairment of goodwill and other long-lived assets, (vi) equity in net loss of affiliates, and (vii) recognition of previously deferred revenue associated with upfront and milestone payments as well as cash outflows from capital expenditures and investments in affiliates.

The Company defines Segment Adjusted EBITDA as net loss before (i) interest expense, (ii) income tax expense or benefit, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) loss on settlement agreements where noncash consideration is paid, (vi) adjustments for accrued bonuses paid in equity awards, (vii) loss on impairment of goodwill and other noncurrent assets, (viii) equity in net loss of affiliates, and (ix) recognition of previously deferred revenue associated with upfront and milestone payments as well as cash outflows from capital expenditures and investments in affiliates.

For the year ended December 31, 2020, the Company modified the current period definition of Segment Adjusted EBITDA to exclude adjustments recorded to reverse the difference of bonuses accrued as of December 31, 2019 compared to the value of equity awards granted, as the Company determined in March 2020 that those accrued bonuses would be paid through the grant of equity awards instead of cash.

The Company also excluded noncash losses associated with settlement agreements.

Segment Adjusted EBITDA for the years ended December 31, 2019 and 2018, were not impacted by these changes.

Because the Company uses Segment Adjusted EBITDA as its primary measure of segment performance, it has included this measure in its discussion of segment operating results.

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The CODM does not use total assets by segment to evaluate segment performance or allocate resources, and accordingly, these amounts are not required to be disclosed.

The Company's CODM now regularly reviews disaggregated financial information for each of the Company's operating segments.

The Company's segment presentation has been recast to retrospectively reflect the change from one reportable segment to the newly identified reportable segments, including goodwill and also excludes consideration of all of the businesses included in the Transactions (Note 3 ).

For the year ended December 31, 2019 , the Company's reportable segments are (i) PGEN Therapeutics, (ii) ActoBio, (iii) MBP Titan, and (iv) Trans Ova.

These identified reportable segments met the quantitative thresholds for the year ended December 31, 2019 , to be reported separately.

See Note 1 for a description of each of these reportable segments.

The All Other category as reported below reflects Precigen's other operating segments that do not meet the quantitative thresholds to report separately.

The Company has also recast 2018 and 2017 segment information on the same basis as the 2019 presentation.

The Company's segment presentation excludes amounts related to the businesses included in the Transactions and the operations of MBP Titan which are reported as discontinued operations (Note 3).

For the year ended December 31, 2020, the Company's reportable segments were (i) PGEN Therapeutics, (ii) ActoBio, (iii) Trans Ova, and (iv) the Human Biotherapeutics division.

These identified reportable segments met the quantitative thresholds to be reported separately for the year ended December 31, 2020.

See Note 1 for a description of PGEN Therapeutics, ActoBio, and Trans Ova.

The Company's Human Biotherapeutics division is an operating division within Precigen which in 2020 and 2019 included the Company's majority-owned subsidiary, Triple-Gene LLC, and its collaborations with Castle Creek (Note 6).

The All Other category as reported below reflects Precigen's other operating segments that do not meet the quantitative thresholds to be reported separately.

Information by reportable segment was as follows:

PGEN Therapeutics

PGEN Therapeutics ActoBio Trans Ova Human Biotherapeutics All Other Total

Balances at December 31, 2018 $ 15,232 $ 1,788 $ 46,236 $ — $ 20,736 $ 83,992

Reallocations from changes to reporting units — — — 482 ( 482 ) —

Impairments — — ( 29,642 ) — ( 178 ) ( 29,820 )

Foreign currency translation adjustments — ( 53 ) — — — ( 53 )

Balances at December 31, 2019 15,232 1,735 16,594 482 20,076 54,119

Reallocations from changes to reporting units

Foreign currency translation adjustments — 244 — — — 244

1 unchanged sentence

Year Ended December 31, 2020

PGEN Therapeutics

PGEN Therapeutics ActoBio Trans Ova Human Biotherapeutics All Other Total

Revenues from external customers $ 776 $ 3,053 $ 71,186 $ 17,810 $ 10,299 $ 103,124

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Year Ended December 31, 2019

PGEN Therapeutics

PGEN Therapeutics ActoBio Trans Ova Human Biotherapeutics All Other Total

Revenues from external customers $ 2,227 $ ( 364 ) $ 68,672 $ 3,713 $ 12,514 $ 86,762

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Year Ended December 31, 2018

PGEN Therapeutics

PGEN Therapeutics ActoBio Trans Ova Human Biotherapeutics All Other Total

Revenues from external customers $ 29,021 $ 6,684 $ 75,178 $ — $ 30,213 $ 141,096

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Year Ended December 31,

2020 2019 2018

Total segment revenues from reportable segments $ 98,168 $ 87,448 $ 112,898

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Total consolidated revenues $ 103,178 $ 90,722 $ 151,178

The table below reconciles Segment Adjusted EBITDA for reportable segments to consolidated net loss before income taxes:

The table below reconciles Segment Adjusted EBITDA for reportable segments to consolidated net loss from continuing operations before income taxes:

Year Ended December 31,

2020 2019 2018

Segment Adjusted EBITDA for reportable segments $ ( 32,987 ) $ ( 51,214 ) $ ( 51,359 )

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Depreciation and amortization ( 15,042 ) ( 16,142 ) ( 20,612 )

Impairment loss

Impairment losses ( 920 ) ( 30,810 ) —

Reacquisition of in-process research and development — — ( 236,748 )

Loss on settlement agreement ( 11,436 ) — —

Stock-based compensation expense ( 19,746 ) ( 15,098 ) ( 30,554 )

Adjustment related to accrued bonuses paid in equity awards 2,833 — —

Equity in net loss of affiliates ( 1,138 ) ( 2,416 ) ( 8,986 )

Other 11 67 —

Unallocated corporate costs ( 37,566 ) ( 46,011 ) ( 74,609 )

Eliminations ( 5,713 ) ( 14,306 ) ( 2,343 )

Consolidated net loss from continuing operations before income taxes $ ( 103,855 ) $ ( 171,264 ) $ ( 395,912 )

As of December 31, 2019 and 2018 , the Company had $ 6,724 and $ 10,011 , respectively, of long-lived assets in foreign countries from continuing operations.

The Company recognized revenues from continuing operations derived in foreign countries totaling $ 1,401 , $ 6,255 , and $ 13,771 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

As of December 31, 2020 and 2019, the Company had $ 5,908 and $ 6,724 , respectively, of long-lived assets in foreign countries.

The Company recognized revenues derived in foreign countries totaling $ 595 , $ 1,401 , and $ 6,255 for the years ended December 31, 2020, 2019 and 2018, respectively.

Quarterly Financial Information (Unaudited)

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Three Months Ended

2020 June 30,

2020 September 30,

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Net loss attributable to Precigen per share, basic and diluted $ ( 0.35 ) $ ( 0.26 ) $ ( 0.18 ) $ ( 0.23 )

During the fourth quarter of 2019, the Company recorded a goodwill impairment charge related to the Trans Ova reporting unit (Note 11 ) as well as impairment charges on certain assets held for sale (Note 3 ).

(1) During the fourth quarter of 2020, the Company recorded a loss on settlement agreement related to Harvest (Note 17).

Three Months Ended

2019 June 30,

2019 September 30,

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Net loss attributable to Precigen per share, basic and diluted $ ( 0.40 ) $ ( 0.25 ) $ ( 0.35 ) $ ( 1.09 )

During the fourth quarter of 2018, the Company reacquired certain in-process research and development from ZIOPHARM, Ares Trading, and Intrexon T1D Partners, all of which were immediately expensed (Notes 5 and 6 ).

The Company also recorded a loss on abandonment of certain of its intangible assets (Note 11 ).

The Company also recognized the remaining balance of deferred revenue associated with Histogenics and Synthetic Biologics upon the mutual termination of the ECCs with these entities (Note 18 ).

(1) During the fourth quarter of 2019, the Company recorded a goodwill impairment charge related to the Trans Ova reporting unit (Note 11) as well as impairment charges on certain assets held for sale (Note 3).

Defined Contribution Plans

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The Company makes contributions to the plans in accordance with terms specified in the plan agreement.

The Company's contributions to the plans for continuing operations were $ 1,427 , $ 1,662 and $ 1,545 in 2019 , 2018 and 2017 , respectively.

The Company's contributions to the plans were $ 873 , $ 1,186 and $ 1,392 for the years ended December 31, 2020, 2019 and 2018, respectively.

Subsequent Events

In January 2020, the Company completed the Transactions discussed in Note 3 .

In February 2020, the Company and Fibrocell mutually agreed to terminate Fibrocell ECC 2.

The Company is considering the impact of this termination on its 2020 financial results.

In January 2021, the Company closed a public offering of 17,250,000 shares of its common stock, resulting in net proceeds of approximately $ 121,200 , after deducting underwriting discounts and estimated capitalizable offering expenses.

In January 2021, the Company executed termination and recapture agreements with the landlord of the leased facility used in MBP Titan's operations, thereby relieving the Company of all of its obligations related to the facility which were originally due to expire in July 2025.

The Company will record the impact of this termination as discontinued operations in the Company's consolidated financial statements during the first quarter of 2021.

As of December 31, 2020, the right-of-use asset related to the lease was $ 9,131 and the lease liability was $ 13,428 , which are included in current assets held for sale or abandonment and current liabilities held for sale or abandonment, respectively, in the consolidated balance sheet.

Following January 2021, the Company has no further payment obligations under the lease.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures